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Exhibit 2.1
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AGREEMENT AND PLAN OF MERGER
between
XXXXXXX REAL ESTATE, INC.
and
XXXXXX PROPERTIES CORPORATION
Dated as of October 30, 1995
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TABLE OF CONTENTS
Page
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1. The Merger and Amendment of Xxxxxx Partnership Agreement..................... 1
1.1 The Merger.............................................................. 1
1.2 The Closing............................................................. 1
1.3 Effective Time.......................................................... 2
1.4 Amendment of Xxxxxx Operating Limited Partnership Agreement............. 2
1.5 Transfer of Securities of Xxxxxx Management Corporation................. 2
1.6 Amendments of Governing Documents of Xxxxxx Subsidiaries................ 2
1.7 Release and Termination................................................. 3
1.8 Severance Pay Plan and Agreements....................................... 3
2. Charter and Bylaws of the Surviving Corporation.............................. 3
2.1 Charter................................................................. 3
2.2 Bylaws.................................................................. 3
3. Directors and Officers of the Surviving Corporation.......................... 3
3.1 Directors............................................................... 3
3.2 Officers................................................................ 4
4. Xxxxxx Stock................................................................. 4
4.1 Conversion of the Xxxxxx Stock.......................................... 4
4.2 Exchange of Certificates Representing Xxxxxx Common Stock............... 5
4.3 Return of Exchange Fund................................................. 7
5. Representations and Warranties of Xxxxxx..................................... 7
5.1 Existence; Good Standing; Authority; Compliance With Law................ 7
5.2 Authorization, Validity and Effect of Agreements........................ 8
5.3 Capitalization.......................................................... 9
5.4 Subsidiaries............................................................ 11
5.5 Other Interests......................................................... 11
5.6 No Violation............................................................ 12
5.7 SEC Documents........................................................... 12
5.8 Litigation.............................................................. 13
5.9 Absence of Certain Changes.............................................. 13
5.10 Taxes................................................................... 14
5.11 Books and Records....................................................... 15
5.12 Properties.............................................................. 15
5.13 Leases.................................................................. 17
5.14 Rents................................................................... 18
5.15 Environmental Matters................................................... 18
5.16 Employee Benefit Plans.................................................. 19
(i)
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PAGE
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5.17 Labor Matters.......................................................... 20
5.18 No Brokers............................................................. 20
5.19 Opinion of Financial Advisor........................................... 20
5.20 Xxxxxxx Share Ownership................................................ 20
5.21 Related Party Transactions............................................. 20
5.22 Contracts and Commitments.............................................. 21
5.23 Development Rights..................................................... 21
5.24 Certain Payments Resulting From Transactions........................... 21
5.25 Indemnification Claims................................................. 22
5.26 Disclosure............................................................. 22
5.27 Status of Holden Court and Holden Court Escrow......................... 22
5.28 Tenant Improvements.................................................... 22
5.29 Status of Options to Purchase Real Property............................ 22
5.30 Definition of Xxxxxx'x Knowledge....................................... 23
6. Representations and Warranties of Xxxxxxx................................... 23
6.1 Existence; Good Standing; Authority; Compliance With Law............... 23
6.2 Authorization, Validity and Effect of Agreements....................... 24
6.3 Capitalization......................................................... 24
6.4 Subsidiaries........................................................... 25
6.5 Other Interests........................................................ 25
6.6 No Violation........................................................... 25
6.7 SEC Documents.......................................................... 25
6.8 Litigation............................................................. 26
6.9 Absence of Certain Changes............................................. 27
6.10 Taxes.................................................................. 27
6.11 Books and Records...................................................... 28
6.12 Properties............................................................. 28
6.13 Environmental Matters.................................................. 29
6.14 Employee Benefit Plans................................................. 30
6.15 Labor Matters.......................................................... 30
6.16 No Brokers............................................................. 31
6.17 Opinion of Financial Advisor........................................... 31
6.18 Xxxxxx Stock Ownership................................................. 31
6.19 Related Party Transactions............................................. 31
6.20 Contracts and Commitments.............................................. 31
6.21 Development Rights..................................................... 32
6.22 Xxxxxxx Common Stock................................................... 32
6.23 Convertible Securities................................................. 32
6.24 Disclosure............................................................. 32
6.25 Definition of Xxxxxxx'x Knowledge...................................... 32
7. Covenants................................................................... 33
(ii)
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PAGE
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7.1 Acquisition Proposals................................................. 33
7.2 Conduct of Businesses................................................. 34
7.3 Meetings of Stockholders.............................................. 36
7.4 Filings; Other........................................................ 37
7.5 Inspection of Records................................................. 38
7.6 Publicity............................................................. 38
7.7 Registration Statement................................................ 38
7.8 Listing Application................................................... 39
7.9 Further Action........................................................ 39
7.10 Affiliates of Xxxxxx.................................................. 39
7.11 Expenses.............................................................. 40
7.12 Indemnification....................................................... 40
7.13 Reorganization........................................................ 42
7.14 Certain Benefits...................................................... 42
7.15 Dividends............................................................. 43
7.16 IRS Private Letter Ruling............................................. 44
8. Conditions.................................................................. 44
8.1 Conditions to Each Party's Obligation to Effect the Merger............ 44
8.2 Conditions to Obligations of Xxxxxx to Effect the Merger.............. 45
8.3 Conditions to Obligation of Xxxxxxx to Effect the Merger.............. 46
9. Termination................................................................. 47
9.1 Termination........................................................... 47
9.2 Effect of Termination................................................. 49
9.3 Payment of Termination Amount or Expenses............................. 50
9.4 Extension; Waiver..................................................... 51
10. General Provisions......................................................... 51
10.1 Nonsurvival of Representations, Warranties and Agreements............ 51
10.2 Notices............................................................... 52
10.3 Assignment; Binding Effect; Benefit................................... 52
10.4 Entire Agreement...................................................... 53
10.5 Confidentiality....................................................... 53
10.6 Amendment............................................................. 54
10.7 Governing Law......................................................... 54
10.8 Counterparts......................................................... 54
10.9 Headings.............................................................. 55
10.10 Interpretation........................................................ 55
10.11 Waivers............................................................... 55
10.12 Incorporation......................................................... 55
10.13 Severability......................................................... 55
10.14 Enforcement of Agreement.............................................. 55
10.15 Certain Definitions................................................... 55
10.16 Schedules............................................................. 56
(iii)
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EXHIBIT A - Form of Amended and Restated Agreement of Limited Partnership
of Xxxxxxx Operating Limited Partnership Agreement
EXHIBIT B-1 - Consents of Limited Partner of Xxxxxx Operating Limited
Partnership
EXHIBIT B-2 - Consent of General Partner of Xxxxxx Operating Limited
Partnership
EXHIBIT B-3 - Acknowledgment of Xxxxxxx Real Estate, Inc. to the Amended
and Restated Agreement of Limited Partnership of Xxxxxx
Operating Limited Partnership
EXHIBIT C - Intentionally Omitted
EXHIBIT D - Form of Affiliate Letter
EXHIBIT E - Form of Tenant's Estoppel Certificate
EXHIBIT F - Purchase and Sale of Securities
EXHIBIT G - Xxxxxx Properties Corporation Severance Pay Plan
EXHIBIT H-1 - Form of First Amendment to Indemnification Agreement
EXHIBIT H-2 - Acknowledgment of Xxxxxxx Real Estate, Inc. to the First
Amendment of the Indemnification Agreements
EXHIBIT I - Form of Seventh Amendment to Agreement of Limited Partnership of
Xxxxxx Operating Limited Partnership Agreement
EXHIBIT J - Severance Agreements
EXHIBIT K - Consulting Agreement with Xxxxxxx Xxxxxx
Schedules
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Schedule 1.7 Contracts to be Released
Schedule 5.2 Ancillary Agreements
Schedule 7.12 Xxxxxx'x Directors' and Officers' Insurance Coverage
Schedule 8.1(f) Required Consents
Schedule 8.3(f) Leases and REA Agreements Requiring Estoppel Certificates
(iv)
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AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and entered
into as of October 30, 1995, between Xxxxxxx Real Estate, Inc., a Maryland
corporation ("Xxxxxxx"), and Xxxxxx Properties Corporation, a Maryland
corporation ("Xxxxxx").
RECITALS
A. The Board of Directors of Xxxxxxx and the Board of Directors of
Xxxxxx each have determined that a business combination between Xxxxxxx and
Xxxxxx is in the best interests of their respective companies and stockholders
and presents an opportunity for their respective companies to achieve long-term
strategic and financial benefits, and accordingly have agreed to effect the
merger provided for herein upon the terms and subject to the conditions set
forth herein.
B. It is intended that the merger provided for herein, for federal
income tax purposes, shall qualify as a reorganization within the meaning of
Section 368(a)(1)(A) of the Internal Revenue Code of 1986, as amended (the
"Code"), and for financial accounting purposes shall be accounted for as a
"purchase."
X. Xxxxxxx and Xxxxxx have each received a fairness opinion from their
respective financial advisors relating to the transactions contemplated hereby
as more fully described herein.
X. Xxxxxxx and Xxxxxx desire to make certain representations, warranties
and agreements in connection with the merger.
NOW, THEREFORE, in consideration of the foregoing, and of the
representations, warranties, covenants and agreements contained herein, the
parties hereto hereby agree as follows:
ARTICLE 1
1. The Merger and Amendment of Xxxxxx Partnership Agreement.
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1.1 THE MERGER. Subject to the terms and conditions of this Agreement,
at the Effective Time (as defined in Section 1.3 hereof), Xxxxxx shall be
merged with and into Xxxxxxx in accordance with this Agreement and the separate
corporate existence of Xxxxxx shall thereupon cease (the "Merger"). Xxxxxxx
shall be the surviving corporation in the Merger (sometimes hereinafter
referred to as the "Surviving Corporation"). The Merger shall have the effects
specified in Section 3-114 of the Maryland General Corporation Law (the
"MGCL").
1.2 THE CLOSING. Subject to the terms and conditions of this Agreement,
the closing of the Merger (the "Closing") shall take place (a) at the offices
of Xxxxxxx, Procter & Xxxx,
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Xxxxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx, at 9:00 a.m., local time, on the first
business day immediately following the day on which the last of the
conditions set forth in Article 8 shall be fulfilled or waived in accordance
herewith or (b) at such other time, date or place as the parties hereto may
agree. The date on which the Closing occurs is hereinafter referred to as the
"Closing Date."
1.3 EFFECTIVE TIME. If all the conditions to the Merger set forth in
Article 8 shall have been fulfilled or waived in accordance herewith and this
Agreement shall not have been terminated as provided in Article 9, the parties
hereto shall cause Articles of Merger satisfying the requirements of the MGCL
to be properly executed, verified and delivered for filing in accordance with
the MGCL on the Closing Date. The Merger shall become effective upon the
acceptance for record of the Articles of Merger by the State Department of
Assessments and Taxation of Maryland in accordance with the MGCL or at such
later time which the parties hereto shall have agreed upon and designated in
such filing in accordance with applicable law as the effective time of the
Merger (the "Effective Time").
1.4 AMENDMENT OF XXXXXX OPERATING LIMITED PARTNERSHIP AGREEMENT. As a
result of the consummation of the Merger, Xxxxxxx will acquire the general
partnership interests and those limited partnership units ("TOP Units") in the
Xxxxxx Operating Limited Partnership, a Delaware limited partnership ("TOP"),
which are currently owned by Xxxxxx. In connection with the consummation of
the Merger, the Limited Partnership Agreement of TOP (the "TOP Partnership
Agreement") will be amended and restated substantially in the form of Exhibit A
hereto. The execution of such agreement by Xxxxxx will be authorized by a
majority of Xxxxxx'x independent directors who are not affiliates of any of the
Limited Partners (as such term is defined in the TOP Partnership Agreement).
Concurrently with the execution of this Agreement, Xxxxxx and Limited Partners
of TOP holding at least 386,984 TOP Units will execute an agreement in the form
of Exhibit B hereto consenting to, among other things, the Merger and the
amendment and restatement, effective as of the Effective Time, of the TOP
Partnership Agreement.
1.5 TRANSFER OF SECURITIES OF XXXXXX MANAGEMENT CORPORATION. In
connection with the consummation of the Merger, a designee or designees of
Xxxxxxx will acquire from Xxxxxxx Xxxxxx and Xxxxxxx Xxxxxx (collectively, the
"Tuckers") all of the outstanding securities of Xxxxxx Management Corporation
("TMC") (other than securities owned by TOP). Concurrently with the execution
of this Agreement, the Tuckers will execute an agreement in the form of Exhibit
F hereto agreeing, among other things, to such transfer, effective as of the
Effective Time.
1.6 AMENDMENTS OF GOVERNING DOCUMENTS OF XXXXXX SUBSIDIARIES. In
connection with the Closing, the Articles of Incorporation, Bylaws, partnership
agreements and equivalent documents for the Xxxxxx Subsidiaries (as defined in
Section 5.1 hereof) will be amended to change the name of the entity (and, six
months after the Effective Time, no such entity shall use the name "Xxxxxx")
and to make certain other changes to such documents in order to reflect the
Merger and the transactions contemplated by this Agreement. Xxxxxx and the
Xxxxxx Subsidiaries will take all actions which are necessary to effectuate
such amendments and will use their best efforts to cause all of the
stockholders in any Xxxxxx Subsidiary and all
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of the partners in any Xxxxxx Subsidiary to approve such amendments and to take
such other actions to effectuate such amendments and the transactions
contemplated by this Agreement as may be reasonably requested by Xxxxxxx.
1.7 RELEASE AND TERMINATION. Concurrently with the execution of this
Agreement, the parties listed on Schedule 1.7 hereto will execute releases
providing for, among other things, the termination of all contracts and
agreements listed on Schedule 1.7 hereto. Pursuant to such releases, all such
contracts shall be terminated and released, effective as of the Effective Time,
and the parties to such contracts agree to waive any and all rights they may
have under such contracts or agreements.
1.8 SEVERANCE PAY PLAN AND AGREEMENTS. In connection with the execution
of this Agreement, Xxxxxx has adopted the Xxxxxx Properties Corporation
Severance Pay Plan (the "Severance Plan") for its employees, as set forth in
Exhibit G hereto, and, prior to the Effective Time, Xxxxxx will use its
reasonable best efforts to enter into individual employment or severance
agreements (the "Severance Agreements") with the following employees: Xxxxxxx
Xxxxxx, Xxxxxxx Xxxxxx, Xxxxxx Xxxxxxxxx, Xxxxxx Xxxx, Xxxxx Xxxxxx and Xxxxxxx
Xxxxxx, in the respective forms set forth in Exhibit J hereto and a consulting
agreement with Xxxxxxx Xxxxxx in the form set forth in Exhibit K hereto.
Xxxxxxx agrees that after the Effective Time, it will assume and be bound by
the terms of the Severance Plan and Severance Agreements. Prior to the
Effective Time, and as soon as practicable after this Agreement is signed,
Xxxxxx shall supply Xxxxxxx with the calculation of the actual severance
payments that would be payable pursuant to the Severance Agreements assuming
the covered individual's employment terminated in a Covered Termination (as
defined in the Severance Agreements).
ARTICLE 2
2. Charter and Bylaws of the Surviving Corporation.
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2.1 CHARTER. The Charter (as defined in the MGCL) of Xxxxxxx in effect
immediately prior to the Effective Time shall be the Charter of the Surviving
Corporation, until duly amended in accordance with applicable law.
2.2 BYLAWS. The Bylaws of Xxxxxxx in effect immediately prior to the
Effective Time shall be the Bylaws of the Surviving Corporation, until duly
amended in accordance with applicable law.
ARTICLE 3
3. Directors and Officers of the Surviving Corporation.
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3.1 DIRECTORS. The directors of Xxxxxxx immediately prior to the
Effective Time shall be the directors of the Surviving Corporation as of the
Effective Time.
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3.2 OFFICERS. The officers of Xxxxxxx immediately prior to the Effective
Time shall be the officers of the Surviving Corporation as of the Effective
Time.
ARTICLE 4
4. Xxxxxx Stock.
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4.1 CONVERSION OF THE XXXXXX STOCK.
(a) At the Effective Time, each share of the Common Stock, $.01 par
value per share, of Xxxxxxx ("Xxxxxxx Common Stock") outstanding immediately
prior to the Effective Time shall remain outstanding and shall represent one
share of the Common Stock, $.01 par value per share, of the Surviving
Corporation.
(b) At the Effective Time, each share of Common Stock, par value
$.001 per share, of Xxxxxx (the "Xxxxxx Common Stock") issued and outstanding
immediately prior to the Effective Time (other than those shares of Xxxxxx
Common Stock to be canceled pursuant to Section 4.1(d)) shall, by virtue of the
Merger and without any action on the part of Xxxxxx, Xxxxxxx or the holders of
any of the securities of any of these corporations, be converted into the right
to receive 0.665 of a share of Xxxxxxx Common Stock; provided, however, that in
the event that at the Effective Time the Closing Price (as such term is
hereinafter defined) of a share of Xxxxxxx Common Stock is less than $16 per
share but more than $15.50 per share, then each share of Xxxxxx Common Stock
will be converted into the right to receive that percentage of a share of
Xxxxxxx Common Stock (determined to the nearest one-thousandth of a share) as
is determined by dividing $10.64 by the Closing Price; and provided, further,
that in the event that at the Effective Time, the Closing Price of a share of
Xxxxxxx Common Stock is $15.50 per share or less, then each share of Xxxxxx
Common Stock will be converted into the right to receive 0.686 of a share of
Xxxxxxx Common Stock (the applicable percentage of a share of Xxxxxxx Common
Stock to be issued upon such conversion is hereinafter referred to as the
"Exchange Ratio"); and provided further that if between the date of this
Agreement and the Effective Time the outstanding shares of Xxxxxxx Common Stock
shall have been changed into a different number of shares or a different class
or series, by reason of any stock dividend, subdivision, reclassification,
recapitalization, split, combination or exchange of shares, the Exchange Ratio
shall be correspondingly adjusted to reflect such stock dividend, subdivision,
reclassification, recapitalization, split, combination or exchange of shares.
For purposes of this Agreement, the term "Closing Price" shall mean the average
per share closing price of Xxxxxxx Common Stock as reported on the New York
Stock Exchange ("NYSE") over the twenty (20) trading days immediately preceding
the fifth (5th) day prior to the date of the Closing.
(c) As a result of the Merger and without any action on the part of
the holder thereof, at the Effective Time, all shares of Xxxxxx Common Stock
shall cease to be outstanding, shall be canceled and retired and shall cease to
exist and each holder of a certificate (a "Certificate") representing any
shares of Xxxxxx Common Stock shall thereafter cease to have any rights with
respect to such shares of Xxxxxx Common Stock, except the right
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to receive, without interest, shares of Xxxxxxx Common Stock and cash in lieu of
fractional shares of Xxxxxxx Common Stock in accordance with Sections 4.1(b)
and 4.2(e) upon the surrender of such Certificate.
(d) Each share of Xxxxxx Common Stock issued and held in Xxxxxx'x
treasury at the Effective Time, if any, by virtue of the Merger, shall cease to
be outstanding, shall be canceled and retired and shall cease to exist and no
payment of any consideration shall be made with respect thereto.
(e) At the Effective Time, Xxxxxx'x obligations with respect to each
stock option set forth in Section 5.3 of the Xxxxxx Disclosure Letter (as
defined in Article 5 hereof) that will not automatically terminate by its terms
at the Effective Time (the "Existing Xxxxxx Options") shall be assumed by
Xxxxxxx (the "Assumed Options"), subject to the provisions and amendments
described in this Section. The Assumed Options shall continue to have, and be
subject to, the same terms and conditions as set forth in the stock option
plans and agreements (as in effect immediately prior to the Effective Time)
pursuant to which the Existing Xxxxxx Options were issued, except that (i) all
references to Xxxxxx shall be deemed to be references to Xxxxxxx, (ii) each
option shall be exercisable for that number of whole shares of Xxxxxxx Common
Stock equal to the product of the number of shares of Xxxxxx Common Stock
covered by such option immediately prior to the Effective Time multiplied by
the Exchange Ratio and rounded to the nearest whole number of shares of Xxxxxxx
Common Stock and (iii) the exercise price per share of Xxxxxxx Common Stock
under such option shall be equal to the exercise price per share of Xxxxxx
Common Stock under the Existing Xxxxxx Option divided by the Exchange Ratio and
rounded to the nearest cent. The adjustment provided herein with respect to
any Existing Xxxxxx Options that are "incentive stock options" (as defined in
Section 422 of the Code) shall be and is intended to be effected in a manner
that is consistent with Section 424(a) of the Code. Xxxxxxx shall (i) reserve
for issuance the number of shares of Xxxxxxx Common Stock that will become
issuable upon the exercise of such Assumed Options pursuant to this Section
4.1(e) and (ii) promptly after the Effective Time issue to each holder of an
outstanding Existing Xxxxxx Option a document evidencing the assumption by
Xxxxxxx of Xxxxxx'x obligations with respect thereto under this Section.
Nothing in this Section or this Agreement shall affect the schedule of vesting
as set forth in Section 5.3 of the Xxxxxx Disclosure Letter with respect to
Xxxxxx Stock Options to be assumed by Xxxxxxx as provided in this Section.
4.2 EXCHANGE OF CERTIFICATES REPRESENTING XXXXXX COMMON STOCK.
(a) As of the Effective Time, Xxxxxxx shall deposit, or shall cause
to be deposited, with an exchange agent selected by Xxxxxxx on or prior to the
Effective Time (the "Exchange Agent"), for the benefit of the holders of shares
of Xxxxxx Common Stock, for exchange in accordance with this Article 4,
certificates representing the shares of Xxxxxxx Common Stock and the cash in
lieu of fractional shares (such cash and certificates for shares of Xxxxxxx
Common Stock being hereinafter referred to as the "Exchange Fund") to be issued
pursuant to Section 4.1 and paid pursuant to this Section 4.2 in exchange for
outstanding shares of Xxxxxx Common Stock.
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(b) Promptly after the Effective Time, Xxxxxxx shall cause the
Exchange Agent to mail to each holder of record of a Certificate or
Certificates (i) a letter of transmittal which shall specify that delivery
shall be effected, and risk of loss and title to the Certificates shall pass,
only upon delivery of the Certificates to the Exchange Agent and shall be in
such form and have such other provisions as Xxxxxxx may reasonably specify and
(ii) instructions for use in effecting the surrender of the Certificates in
exchange for certificates representing shares of Xxxxxxx Common Stock and cash
in lieu of fractional shares. Upon surrender of a Certificate for cancellation
to the Exchange Agent together with such letter of transmittal, duly executed
and completed in accordance with the instructions thereto, the holder of such
Certificate shall be entitled to receive in exchange therefor (x) a certificate
representing the number of whole shares of Xxxxxxx Common Stock to which such
holder shall be entitled, and (y) a check representing the amount of cash in
lieu of fractional shares, if any, plus the amount of any dividends, or
distributions, if any, pursuant to paragraph (c) below, after giving effect to
any required withholding tax, and the Certificate so surrendered shall
forthwith be canceled. No interest will be paid or accrued on the cash in lieu
of fractional shares or on the dividend or distribution, if any, payable to
holders of Certificates pursuant to this Section 4.2. In the event of a
transfer of ownership of Xxxxxx Common Stock which is not registered in the
transfer records of Xxxxxx, a Certificate representing the proper number of
shares of Xxxxxxx Common Stock, together with a check for the cash to be paid
in lieu of fractional shares plus, to the extent applicable, the amount of any
dividend or distribution, if any, payable pursuant to paragraph (c) below, may
be issued to such a transferee if the Certificate representing shares of such
Xxxxxx Common Stock is presented to the Exchange Agent, accompanied by all
documents required to evidence and effect such transfer and to evidence that
any applicable stock transfer taxes have been paid.
(c) Notwithstanding any other provisions of this Agreement, no
dividends or other distributions on Xxxxxxx Common Stock shall be paid with
respect to any shares of Xxxxxx Common Stock represented by a Certificate until
such Certificate is surrendered for exchange as provided herein; provided,
however, that subject to the effect of applicable laws, following surrender of
any such Certificate, there shall be paid to the holder of the certificates
representing whole shares of Xxxxxxx Common Stock issued in exchange therefor,
without interest, (i) at the time of such surrender, the amount of dividends or
other distributions with a record date after the Effective Time theretofore
payable with respect to such whole shares of Xxxxxxx Common Stock and not paid,
less the amount of any withholding taxes which may be required thereon, and
(ii) at the appropriate payment date, the amount of dividends or other
distributions with a record date after the Effective Time but prior to
surrender and a payment date subsequent to surrender payable with respect to
such whole shares of Xxxxxxx Common Stock, less the amount of any withholding
taxes which may be required thereon.
(d) At and after the Effective Time, there shall be no transfers on
the stock transfer books of Xxxxxx of the shares of Xxxxxx Common Stock which
were outstanding immediately prior to the Effective Time. If, after the
Effective Time, Certificates are presented to the Surviving Corporation, they
shall be canceled and exchanged for certificates for shares of Xxxxxxx Common
Stock and cash in lieu of fractional shares, if any, in accordance with this
Section 4.2. Certificates surrendered for exchange by any person constituting
an "affiliate" of Xxxxxx for purposes of Rule 145, as such rule may be amended
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from time to time ("Rule 145"), of the rules and regulations promulgated under
the Securities and Exchange Act of 1933, as amended (the "Securities Act"),
shall not be exchanged until Xxxxxxx has received an Affiliate Letter in the
form of Exhibit D attached hereto, from such person as provided in Section 7.10.
(e) No fractional shares of Xxxxxxx Common Stock shall be issued
pursuant hereto. In lieu of the issuance of any fractional share of Xxxxxxx
Common Stock pursuant to Section 4.1(b), each holder of Xxxxxx Common Stock
upon surrender of a Certificate for exchange shall be paid an amount in cash
(without interest), rounded to the nearest cent, determined by multiplying (i)
the Closing Price by (ii) the fraction of a share of Xxxxxxx Common Stock which
such holder would otherwise be entitled to receive under this Article 4.
4.3 RETURN OF EXCHANGE FUND. Any portion of the Exchange Fund (including
the proceeds of any investments thereof and any shares of Xxxxxxx Common Stock)
that remains unclaimed by the former stockholders of Xxxxxx one year after the
Effective Time shall be delivered to the Surviving Corporation. Any former
stockholders of Xxxxxx who have not theretofore complied with this Article 4
shall thereafter look only to the Surviving Corporation for payment of their
shares of Xxxxxxx Common Stock and cash in lieu of fractional shares (plus
dividends and distributions to the extent set forth in Section 4.2(c), if any),
as determined pursuant to this Agreement, without any interest thereon. None
of Bradley, Tucker, the Exchange Agent or any other person shall be liable to
any former holder of shares of Xxxxxx Common Stock for any amount properly
delivered to a public official pursuant to applicable abandoned property,
escheat or similar laws. In the event any Certificate shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming such Certificate to be lost, stolen or destroyed and, if required by
the Surviving Corporation, the posting by such person of a bond in such
reasonable amount as the Surviving Corporation may direct as indemnity against
any claim that may be made against it with respect to such Certificate, the
Exchange Agent or the Surviving Corporation will issue in exchange for such
lost, stolen or destroyed Certificate the shares of Xxxxxxx Common Stock and
cash in lieu of fractional shares (plus, to the extent applicable, dividends
and distributions payable pursuant to Section 4.2(c)).
ARTICLE 5
5. Representations and Warranties of Xxxxxx.
-----------------------------------------
Except as set forth in the disclosure letter delivered at or prior to the
execution hereof to Xxxxxxx, which shall refer to the relevant Sections of this
Agreement (the "Xxxxxx Disclosure Letter"), Xxxxxx represents and warrants to
Xxxxxxx as follows:
5.1 EXISTENCE; GOOD STANDING; AUTHORITY; COMPLIANCE WITH LAW. Xxxxxx is
a corporation duly incorporated, validly existing and in good standing under
the laws of the State of Maryland. Xxxxxx is duly licensed or qualified to do
business as a foreign corporation and is in good standing under the laws of any
other state of the United States in which the character of the properties owned
or leased by it therein or in which the transaction of its
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business makes such qualification necessary, except where the failure to be so
licensed or qualified would not have a material adverse effect on the business,
results of operations or financial condition of Xxxxxx and the Xxxxxx
Subsidiaries (as defined below) taken as a whole (a "Xxxxxx Material Adverse
Effect"). Xxxxxx has all requisite corporate power and authority to own,
operate, lease and encumber its properties and carry on its business as now
conducted. Each of the Xxxxxx Subsidiaries is a corporation or partnership duly
incorporated or organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation or organization, has the corporate or
partnership power and authority to own its properties and to carry on its
business as it is now being conducted, and is duly qualified to do business and
is in good standing in each jurisdiction in which the ownership of its property
or the conduct of its business requires such qualification, except for
jurisdictions in which such failure to be so qualified or to be in good standing
would not have a Xxxxxx Material Adverse Effect. Neither Xxxxxx nor any of the
Xxxxxx Subsidiaries is in violation of any order of any court, governmental
authority or arbitration board or tribunal, or any law, ordinance, governmental
rule or regulation to which Xxxxxx or any Xxxxxx Subsidiary or any of their
respective properties or assets is subject, where such violation would have a
Xxxxxx Material Adverse Effect. Xxxxxx and the Xxxxxx Subsidiaries have obtained
all licenses, permits and other authorizations and have taken all actions
required by applicable law or governmental regulations in connection with their
business as now conducted, where the failure to obtain any such license, permit
or authorization or to take any such action would have a Xxxxxx Material Adverse
Effect. Copies of the Charter or other equivalent documents, Bylaws,
organizational documents and partnership and joint venture agreements (and in
each such case, all amendments thereto) of Xxxxxx and each of the Xxxxxx
Subsidiaries are listed in Section 5.1 of the Xxxxxx Disclosure Letter, and the
copies of such documents, which have previously been delivered or made available
to Xxxxxxx and its counsel, are true and correct. For the purposes of this
Agreement, the term "Xxxxxx Subsidiary" shall include any of the entities listed
under such heading in Section 5.4 of the Xxxxxx Disclosure Letter.
5.2 AUTHORIZATION, VALIDITY AND EFFECT OF AGREEMENTS. Each of Xxxxxx and
the Xxxxxx Subsidiaries has the requisite power and authority to enter into the
transactions contemplated hereby and to execute and deliver this Agreement and
the agreements and documents listed in Schedule 5.2 to this Agreement (the
"Ancillary Agreements") to which it is a party. The Board of Directors of
Xxxxxx has, by resolutions duly adopted by unanimous vote, approved this
Agreement, the Merger and the transactions contemplated by this Agreement and
has agreed to recommend that the holders of Xxxxxx Common Stock adopt and
approve this Agreement, the Merger and the transactions contemplated by this
Agreement at the Xxxxxx stockholders' meeting which will be held in accordance
with the provisions of Section 7.3. In connection with the foregoing, the
Board of Directors of Xxxxxx has taken such actions and votes as are necessary
on its part to render the provisions of the Control Share Acquisition Statute,
the Business Combination Statute and all other applicable takeover statutes of
the MGCL and any other applicable takeover statutes of any other state,
inapplicable to this Agreement, the Merger and the transactions contemplated by
this Agreement. As of the date hereof, all of the directors and executive
officers of Xxxxxx have indicated that they presently intend to vote all shares
of Xxxxxx Common Stock which they own to approve this Agreement, the Merger,
and the transactions contemplated by this Agreement at the Xxxxxx stockholders
meeting which will be held in accordance with the
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provisions of Section 7.3. Subject only to the approval of this Agreement and
the transactions contemplated hereby by the holders of two-thirds of the
outstanding shares of Xxxxxx Common Stock, the execution by Xxxxxx and the
Xxxxxx Subsidiaries of this Agreement, the Ancillary Agreements to which they
are parties and the consummation of the transactions contemplated by this
Agreement and the Ancillary Agreements has been duly authorized by all requisite
corporate or partnership action on the part of such entities. This Agreement
constitutes, and the Ancillary Agreements to which they are parties (when
executed and delivered pursuant hereto) will constitute, the valid and legally
binding obligations of Xxxxxx and the Xxxxxx Subsidiaries, enforceable against
Xxxxxx and each of the Xxxxxx Subsidiaries in accordance with their respective
terms, subject to applicable bankruptcy, insolvency, moratorium or other
similar laws relating to creditors' rights and general principles of equity.
5.3 CAPITALIZATION.
(a) The authorized capital stock of Xxxxxx consists of 90,000,000
shares of Xxxxxx Common Stock and 10,000,000 shares of preferred stock, $.001
par value per share (the "Xxxxxx Preferred Stock"). As of the date hereof,
there are 10,828,283 shares of Xxxxxx Common Stock issued and outstanding, and
no shares of Xxxxxx Preferred Stock are issued and outstanding. All such
issued and outstanding shares of Xxxxxx Common Stock are duly authorized,
validly issued, fully paid, nonassessable and free of preemptive rights.
Except for the TOP Units and the Existing Xxxxxx Options, Xxxxxx has no
outstanding bonds, debentures, notes or other obligations the holders of which
have the right to vote (or which are convertible into or exercisable for
securities having the right to vote) with the stockholders of Xxxxxx on any
matter. Except for the TOP Units and the Existing Xxxxxx Options (all of which
have been issued under the Xxxxxx Properties Corporation 1993 Share Option Plan
(the "Xxxxxx Stock Option Plan")), there are not at the date of this Agreement
any existing options, warrants, calls, subscriptions, convertible securities,
or other rights, agreements or commitments which obligate Xxxxxx to issue,
transfer or sell any shares of capital stock of Xxxxxx. Section 5.3 of the
Xxxxxx Disclosure Letter sets forth a full list of the Existing Xxxxxx Options,
including the name of the person to whom such stock options have been granted,
the number of shares subject to each option, the per share exercise price for
each option and the vesting schedule for each option. Except as set forth in
Section 5.3 of the Xxxxxx Disclosure Letter, the vesting schedule of all
Existing Xxxxxx Options shall not be changed or affected by the execution of
this Agreement or the Ancillary Agreements or the consummation of the
transactions contemplated by this Agreement or the Ancillary Agreements.
Pursuant to the terms of the Xxxxxx Stock Option Plan, at the Effective Time,
all Existing Xxxxxx Options will be assumed by Xxxxxxx in accordance with the
provisions of Section 4.1(e). Except as set forth in Section 5.3 of the Xxxxxx
Disclosure Letter, there are no agreements or understandings to which Xxxxxx or
any Xxxxxx Subsidiary is a party with respect to the voting of any shares of
Xxxxxx Common Stock or which restrict the transfer of any such shares, nor does
Xxxxxx have knowledge of any such agreements or understandings with respect to
the voting of any such shares or which restrict the transfer of any such
shares. Except for TOP Units held by Limited Partners, there are no
outstanding contractual obligations of Xxxxxx or any Xxxxxx Subsidiary to
repurchase, redeem or otherwise acquire any shares of capital stock,
partnership interests or any other securities of Xxxxxx or any Xxxxxx
Subsidiary. Except as set forth in Section 5.3 of the Xxxxxx Disclosure
Letter, neither
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Xxxxxx nor any Xxxxxx Subsidiary is under any obligation, contingent or
otherwise, by reason of any agreement to register any of their securities under
the Securities Act. After the Effective Time, except to the extent set forth in
Section 4.1(e), the Surviving Corporation will have no obligation to issue,
transfer or sell any shares of capital stock or other equity interest of Xxxxxx
or the Surviving Corporation pursuant to any Xxxxxx Stock Option Plan or any
other Xxxxxx Benefit Plan (as defined in Section 5.16 hereof).
(b) The sole general partner of TOP is Xxxxxx. As of the date
hereof, there are issued and outstanding 11,287,100 TOP Units, 10,828,283 of
which are owned by Xxxxxx and the remainder of which are owned by the persons
and in the amounts set forth in Section 5.3 of the Xxxxxx Disclosure Letter.
All such issued and outstanding TOP Units are duly authorized, validly issued,
fully paid, and free of preemptive rights. The TOP Units owned by Xxxxxx and,
to the best knowledge of Xxxxxx, the TOP Units owned by the Limited Partners,
are subject only to the restrictions on transfer set forth in the TOP
Partnership Agreement and those imposed by applicable securities laws. Except
as set forth in Section 5.3 of the Xxxxxx Disclosure Letter, TOP has not issued
or granted, and is not a party to, any commitments of any kind relating to, or
any agreements or understandings with respect to, TOP Units or any other
interest in TOP or any securities convertible into TOP Units or such interests.
(c) TOP and Xxxxxx Financing Corporation, a Delaware corporation
("TFC"), are the only partners in Xxxxxx Financing Partnership, a Delaware
partnership ("TFP"). As of the date hereof and at all times during its
existence, TFC is and has been a wholly-owned subsidiary of Xxxxxx, which owns
all of the 100 issued and outstanding shares of common stock, par value $.01
per share, of TFC. As of the date hereof, 99% of the issued and outstanding
units of partnership interests in TFP ("TFP Units"), are held by TOP and 1% are
held by TFC. All such issued and outstanding TFP Units are duly authorized,
validly issued, fully paid, and free of preemptive rights. The TFP Units are
subject only to the restrictions on transfer set forth in the TOP Partnership
Agreement, the partnership agreement of TFP and that certain Indenture, dated
as of June 1, 1994, by and between TFP, Bankers Trust Company of California,
N.A. and Bankers Trust (the "Indenture") and those imposed by applicable
securities laws. TFP has not otherwise issued or granted, and is not a party
to, any commitments of any kind relating to, or any agreements or
understandings with respect to, TFP Units or any other interest in TFP or any
securities convertible into TFP Units or such interests. TFP has financed all
of the properties which it owns through a transaction which, as of the date
hereof, qualifies as a real estate mortgage investment conduit (a "REMIC")
under Section 860D of the Code. As part of the REMIC, TFP issued a
$100,000,000 interest-bearing promissory note to a certain trust, which is
governed by the Indenture. As of the date hereof, TFP has complied with all of
the covenants contained in Section 1008 and Section 1009 of the Indenture and
no Default or Event of Default (as defined in the Indenture), or any event the
occurrence of which, with notice or lapse of time, will become a Default or
Event of Default under Article 5 of the Indenture, has occured or is occurring.
The execution of this Agreement and the Ancillary Agreements and the
consummation of the transactions contemplated by this Agreement and the
Ancillary Agreements will not violate or result in a violation of the covenants
in Section 1008 and Section 1009 of the Indenture (subject to the receipt of the
consent of the Indenture Trustee) and will not result in a default or Event
of Default (as defined in the Indenture), or any event the occurrence of which,
with notice or
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lapse of time, will become a Default or Event of Default under Article 5 of the
Indenture. TFP is not subject to regulation under the Public Utility Holding
Company Act of 1935 or the Federal Power Act and neither TFP or TOP is required
to be registered as an "investment company" within the meaning of the
Investment Company Act of 1940. The beneficial ownership of this trust is
represented by 413 certificates in six different classes (A, B, C, D, E and R).
The Class A, Class B, Class C, Class D and Class E certificates qualify for
treatment as "regular interests" in the REMIC. The Class R certificates
represent the sole class of "residual interests" in the REMIC.
5.4 SUBSIDIARIES. Except as set forth in Section 5.4 of the Xxxxxx
Disclosure Letter, Xxxxxx owns directly or indirectly each of the outstanding
shares of capital stock or all of the partnership or other equity interests of
each of the Xxxxxx Subsidiaries. Each of the outstanding shares of capital
stock in each of the Xxxxxx Subsidiaries having corporate form is duly
authorized, validly issued, fully paid and nonassessable. Except as set forth
in Section 5.4 of the Xxxxxx Disclosure Letter, each of the outstanding shares
of capital stock of, or partnership or other equity interests in, each of the
Xxxxxx Subsidiaries is owned, directly or indirectly, by Xxxxxx free and clear
of all liens, pledges, security interests, claims or other encumbrances. The
following information for each Xxxxxx Subsidiary is set forth in Section 5.4 of
the Xxxxxx Disclosure Letter: (i) its name and jurisdiction of incorporation
or organization; (ii) its authorized capital stock or share capital or
partnership or other interests; (iii) the name of each stockholder or owner of
a partnership or other equity interest and the number of issued and outstanding
shares of capital stock or share capital or percentage ownership for
non-corporate entities held by it and (iv) the name of the general partners, if
applicable. TFC and Xxxxxx Properties Investment, Inc. are the only Xxxxxx
Subsidiaries which are "qualified REIT subsidiaries" as such term is defined
under Section 856(i) of the Code.
5.5 OTHER INTERESTS. Except for interests in the Xxxxxx Subsidiaries as
set forth in Section 5.4 of the Xxxxxx Disclosure Letter, neither Xxxxxx nor
any Xxxxxx Subsidiary owns directly or indirectly any interest or investment
(whether equity or debt) in any corporation, partnership, joint venture, trust
or other entity (other than investments in short-term investment securities).
With respect to the interests set forth in Section 5.4 of the Xxxxxx Disclosure
Letter, Xxxxxx or the applicable Xxxxxx Subsidiary, as the case may be, is a
partner or stockholder in good standing, owns such interests free and clear of
all liens, pledges, security interests, claims, options or other encumbrances,
is not in breach of any provision of any agreement, document or contract
governing such entity's rights in or to the interests owned or held, all of
which agreements, documents and contracts are set forth in Section 5.4 of the
Xxxxxx Disclosure Letter, and have not been modified or amended since their
description therein, and are in full force and effect and, to the best of the
knowledge of Xxxxxx, the other parties to such agreements, documents or
contracts are not in breach of any of their respective obligations under such
agreements, documents or contracts, and to the best of the knowledge of Xxxxxx,
if such other entities were included within the definition of Xxxxxx
Subsidiaries for purposes of this Agreement, there would be no exceptions or
breaches to the representations and warranties made in this Article for Xxxxxx
Subsidiaries.
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5.6 NO VIOLATION. Except as set forth in Section 5.6 of the Xxxxxx
Disclosure Letter, neither the execution and delivery by Xxxxxx and the Xxxxxx
Subsidiaries of this Agreement or the Ancillary Agreements nor the consummation
by Xxxxxx and the Xxxxxx Subsidiaries of the transactions contemplated by this
Agreement and the Ancillary Agreements in accordance with their terms, will:
(i) conflict with or result in a breach of any provisions of the Charter,
Bylaws, organizational documents, partnership agreements, or joint venture
agreements of Xxxxxx or any Xxxxxx Subsidiary; (ii) result in a breach or
violation of, a default under, or the triggering of any payment or other
material obligations pursuant to, or accelerate vesting under, the Xxxxxx Stock
Option Plan, or any grant or award made thereunder; (iii) violate, or conflict
with, or result in a breach of any provision of, or constitute a default (or an
event which, with notice or lapse of time or both, would constitute a default)
under, or result in the termination or in a right of termination or
cancellation of, or accelerate the performance required by, or result in the
creation of any lien, security interest, charge or encumbrance upon any of the
properties of Xxxxxx or the Xxxxxx Subsidiaries under, or result in being
declared void, voidable or without further binding effect, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, deed of trust
or any license, franchise, permit, lease, contract, agreement or other
instrument, commitment or obligation to which Xxxxxx or any of the Xxxxxx
Subsidiaries is a party, or by which Xxxxxx or any of the Xxxxxx Subsidiaries
or any of their properties is bound or affected, except for any of the
foregoing matters which, individually or in the aggregate, would not have a
Xxxxxx Material Adverse Effect; or (iv) other than the filings provided for in
Article 1 of this Agreement, or required under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 0000 (xxx "XXX Xxx"), the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), the Securities Act or applicable state
securities and "Blue Sky" laws (collectively, the "Regulatory Filings"),
require any consent, approval or authorization of, or declaration, filing or
registration with, any governmental or regulatory authority, except where the
failure to obtain any such consent, approval or authorization of, or
declaration, filing or registration with, any governmental or regulatory
authority would not have a Xxxxxx Material Adverse Effect.
5.7 SEC DOCUMENTS. A complete list of the registration statements of
Xxxxxx filed with the United States Securities and Exchange Commission ("SEC")
in connection with Xxxxxx'x initial public offering of Xxxxxx Common Stock, and
all exhibits, amendments and supplements thereto (the "Xxxxxx Registration
Statement"), and each (A) registration statement, (B) annual report on Form
10-K, (C) quarterly report on Form 10-Q, (D) current report on Form 8-K, (E)
proxy statement or information statement, and (F) other reports filed with the
SEC pursuant to the requirements of the Exchange Act (in all such cases,
including all exhibits, amendments and supplements thereto), prepared by Xxxxxx
or any of the Xxxxxx Subsidiaries or relating to properties of Xxxxxx or the
Xxxxxx Subsidiaries (including registration statements covering mortgage
pass-through certificates) since the effective date of the Xxxxxx Registration
Statement, is set forth in Section 5.7 of the Xxxxxx Disclosure Letter, and
copies of such documents, in the form (including exhibits and any amendments
thereto) filed with the SEC, have previously been provided or made available to
Xxxxxxx or its counsel (collectively, the "Xxxxxx Reports"). The Xxxxxx
Reports were filed with the SEC in a timely manner and constitute all forms,
reports and documents required to be filed by Xxxxxx under the Securities Act,
the Exchange Act and the rules and regulations promulgated thereunder (the
"Securities Laws"). As of their respective dates, the Xxxxxx Reports (i)
complied as to form
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in all material respects with the applicable requirements of the Securities Laws
and (ii) did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading. Each of the consolidated balance sheets of Xxxxxx
included in or incorporated by reference into the Xxxxxx Reports (including the
related notes and schedules) fairly presents the consolidated financial position
of Xxxxxx and the Xxxxxx Subsidiaries as of its date and each of the
consolidated statements of income, retained earnings and cash flows of Xxxxxx
included in or incorporated by reference into the Xxxxxx Reports (including any
related notes and schedules) fairly presents the results of operations, retained
earnings or cash flows, as the case may be, of Xxxxxx and the Xxxxxx
Subsidiaries for the periods set forth therein (subject, in the case of
unaudited statements, to normal year-end audit adjustments which would not be
material in amount or effect), in each case in accordance with generally
accepted accounting principles consistently applied during the periods involved,
except as may be noted therein and except, in the case of the unaudited
statements, as permitted by Form 10-Q of the SEC. Except as and to the extent
set forth on the consolidated balance sheet of Xxxxxx and the Xxxxxx
Subsidiaries at December 31, 1994, including all notes thereto, or as set forth
in the Xxxxxx Reports or in Section 5.7 of the Xxxxxx Disclosure Letter, neither
Xxxxxx nor any of the Xxxxxx Subsidiaries has any material liabilities or
obligations of any nature (whether accrued, absolute, contingent or otherwise)
that would be required to be reflected on, or reserved against in, a balance
sheet of Xxxxxx or in the notes thereto, prepared in accordance with generally
accepted accounting principles consistently applied, except liabilities arising
in the ordinary course of business since such date and liabilities for expenses
of attorneys, accountants and investment bankers incurred in connection with the
Merger.
5.8 LITIGATION. There are (i) no continuing orders, injunctions or
decrees of any court, arbitrator or governmental authority to which Xxxxxx or
any Xxxxxx Subsidiary is a party or by which any of its properties or assets
are bound or, to the reasonable best knowledge of Xxxxxx, to which any of its
directors, officers, employees or agents is a party or by which any of their
properties or assets are bound, and (ii) no actions, suits or proceedings
pending against Xxxxxx or any Xxxxxx Subsidiary or, to the reasonable best
knowledge of Xxxxxx, against any of its directors, officers, employees or
agents or, to the reasonable best knowledge of Xxxxxx, threatened against
Xxxxxx or any Xxxxxx Subsidiary or against any of its directors, officers,
employees or agents, at law or in equity, or before or by any federal or state
commission, board, bureau, agency or instrumentality, that in the case of
clause (i) or (ii), are reasonably likely, individually or in the aggregate, to
have a Xxxxxx Material Adverse Effect.
5.9 ABSENCE OF CERTAIN CHANGES. Except as disclosed in the Xxxxxx
Reports filed with the SEC prior to the date hereof or as set forth in Section
5.9 of the Xxxxxx Disclosure Letter, since December 31, 1994, Xxxxxx and the
Xxxxxx Subsidiaries have conducted their business only in the ordinary course
of such business and there has not been (i) any Xxxxxx Material Adverse Effect;
(ii) as of the date hereof, any declaration, setting aside or payment of any
dividend or other distribution with respect to the Xxxxxx Common Stock, except
dividends of $0.36 per share paid on January 16, 1995 and April 14, 1995 and
$0.25 per share paid on July 14, 1995 and October 16, 1995, (iii) any material
commitment, contractual obligation,
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borrowing, capital expenditure or transaction (each, a "Commitment") entered
into by a Xxxxxx or any of the Xxxxxx Subsidiaries outside the ordinary
course of business except for commitments for expenses of attorneys, accountants
and investment bankers incurred in connection with the Merger; or (iv) any
material change in Xxxxxx'x accounting principles, practices or methods.
5.10 TAXES. Except as set forth in Section 5.10 of the Xxxxxx Disclosure
Letter:
(a) Xxxxxx and each of the Xxxxxx Subsidiaries has paid or caused to
be paid all federal, state, local, foreign, and other taxes, including without
limitation, income taxes, estimated taxes, alternative minimum taxes, excise
taxes, sales taxes, use taxes, value-added taxes, gross receipts taxes,
franchise taxes, capital stock taxes, employment and payroll-related taxes,
withholding taxes, stamp taxes, transfer taxes, windfall profit taxes,
environmental taxes and property taxes, whether or not measured in whole or in
part by net income, and all deficiencies, or other additions to tax, interest,
fines and penalties (collectively, "Taxes"), owed by it through the date
hereof.
(b) Xxxxxx and each of the Xxxxxx Subsidiaries has timely filed all
federal, state, local and foreign tax returns required to be filed by any of
them through the date hereof, and all such returns completely and accurately
set forth the amount of any Taxes relating to the applicable period.
(c) Neither the Internal Revenue Service ("IRS") nor any other
governmental authority is now asserting by written notice to Xxxxxx or any
Xxxxxx Subsidiary or, to the knowledge of Xxxxxx or the Xxxxxx Subsidiaries,
threatening to assert against Xxxxxx or any Xxxxxx Subsidiary any deficiency or
claim for additional Taxes. There is no dispute or claim concerning any Tax
liability of Xxxxxx or any Xxxxxx Subsidiary, either claimed or raised by any
governmental authority, or as to which any officer of Xxxxxx or any Xxxxxx
Subsidiary has reason to believe may be claimed or raised by any federal or
state governmental authority. No claim has ever been made by a taxing
authority in a jurisdiction where Xxxxxx does not file reports and returns that
Xxxxxx is or may be subject to taxation by that jurisdiction. There are no
security interests on any of the assets of Xxxxxx or any Xxxxxx Subsidiary that
arose in connection with any failure (or alleged failure) to pay any Taxes.
Other than the agreement dated June 5, 1995, (the "1995 Closing Agreement")
Xxxxxx has never entered into a closing agreement pursuant to Section 7121 of
the Code.
(d) Except as to matters in connection with the 1995 Closing
Agreement, Xxxxxx has not received written notice of any audit of any tax
return filed by Xxxxxx, and Xxxxxx has not been notified by any tax authority
that any such audit is contemplated or pending. Neither Xxxxxx nor any of the
Xxxxxx Subsidiaries has executed or filed with the IRS or any other taxing
authority any agreement now in effect extending the period for assessment or
collection of any income or other taxes, and no extension of time with respect
to any date on which a tax return was or is to be filed by Xxxxxx is in force.
True, correct and complete copies of all federal, state and local income or
franchise tax returns filed by Xxxxxx and each of the Xxxxxx Subsidiaries and
all communications relating thereto have been delivered to Xxxxxxx or made
available to representatives of Xxxxxxx.
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(e) Xxxxxx and each Xxxxxx Subsidiary has withheld and paid all
taxes required to have been withheld and paid in connection with amounts paid
or owing to any employee, independent contractor, creditor, stockholder or
other party.
(f) Each of the Xxxxxx Subsidiaries of which all the outstanding
capital stock is owned solely by Xxxxxx is a Qualified REIT Subsidiary as
defined in Section 856(i) of the Code. TOP, TFP and each of the other Xxxxxx
Subsidiaries listed as a partnership in Section 5.4 of the Xxxxxx Disclosure
Letter are, and have been at all times, properly classified as partnerships for
federal income tax purposes and not as publicly-traded partnerships.
(g) For its taxable year ended December 31, 1993, Xxxxxx made all
federal and applicable state and local elections to qualify as a real estate
investment trust. None of such elections has been terminated or revoked. For
its taxable year ended December 31, 1993 and at all times thereafter up to and
including the date hereof, Xxxxxx has qualified to be treated as a real estate
investment trust ("REIT") within the meaning of Sections 856-860 of the Code,
including, without limitation, the requirements of Sections 856 and 857 of the
Code. Xxxxxx has qualified as a REIT for every year in which it existed. For
the periods described in the preceding sentence, Xxxxxx has met all
requirements necessary to be treated as a REIT for purposes of the income tax
provisions of those states in which Xxxxxx is subject to income tax and which
provide for the taxation of REITs in a manner similar to the treatment of REITs
under Sections 856-860 of the Code.
5.11 BOOKS AND RECORDS.
(a) The books of account and other financial records of Xxxxxx and
each of the Xxxxxx Subsidiaries are true, complete and correct in all material
respects, have been maintained in accordance with good business practices, and
are accurately reflected in all material respects in the financial statements
included in the Xxxxxx Reports.
(b) The minute books and other records of Xxxxxx and each of the
Xxxxxx Subsidiaries have been made available to Xxxxxxx, contain in all
material respects accurate records of all meetings and accurately reflect in
all material respects all other corporate action of the stockholders and
directors and any committees of the Board of Directors of Xxxxxx and each of
the Xxxxxx Subsidiaries and all actions of the partners of each of the Xxxxxx
Subsidiaries.
5.12 PROPERTIES. All of the real estate properties owned by Xxxxxx and
each of the Xxxxxx Subsidiaries are set forth in Section 5.12 of the Xxxxxx
Disclosure Letter. Except as set forth in Section 5.12 of the Xxxxxx
Disclosure Letter, Xxxxxx and each Xxxxxx Subsidiary own fee simple title to
each of the real properties identified in the Xxxxxx Disclosure Letter (the
"Xxxxxx Properties"), free and clear of liens, mortgages or deeds of trust,
claims against title, charges which are liens, security interests or other
encumbrances on title (collectively, "Encumbrances") and the Xxxxxx Properties
are not subject to any rights of way, written agreements, laws, ordinances and
regulations affecting building use or occupancy, or reservations of an interest
in title (collectively, "Property Restrictions"), except for (i) Property
Restrictions imposed or promulgated by law or any governmental body or
authority
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with respect to real property, including zoning regulations, that do not
adversely affect the current use of the property, materially detract from
the value of or materially interfere with the present use of the property, (ii)
Encumbrances and Property Restrictions disclosed on existing title reports or
current surveys (in either case copies of which title reports and surveys have
been delivered or made available to Xxxxxxx and are listed in Section 5.12 of
the Xxxxxx Disclosure Letter), and (iii) mechanics', carriers', workmen's or
repairmen's liens and other Encumbrances, 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 Xxxxxx Properties
subject thereto or affected thereby, and do not otherwise materially impair
business operations conducted by Xxxxxx and the Xxxxxx Subsidiaries and which
have arisen or been incurred only in the ordinary course of business. Except as
set forth in Section 5.12 of the Xxxxxx Disclosure Letter, valid policies of
title insurance have been issued insuring Xxxxxx'x or the applicable Xxxxxx
Subsidiary's fee simple title to each of the Xxxxxx Properties in amounts at
least equal to the purchase price thereof, and such policies are, at the date
hereof, in full force and effect and no claim has been made against any such
policy and Xxxxxx has no knowledge of any facts or circumstances which would
constitute the basis for such a claim. To the best knowledge of Xxxxxx, (i) no
certificate, permit or license from any governmental authority having
jurisdiction over any of the Xxxxxx Properties or any agreement, easement or
other right which is necessary to permit the lawful use and operation of the
buildings and improvements on any of the Xxxxxx Properties or which 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 Xxxxxx Properties (a "REA
Agreement") has not been obtained and is not in full force and effect, and there
is no pending threat of modification or cancellation of any of same nor is
Xxxxxx nor any Xxxxxx Subsidiary currently in default under any REA Agreement
and the Xxxxxx Properties are in full compliance with all governmental permits,
licenses and certificates; (ii) no written notice of any violation of any
federal, state or municipal law, ordinance, order, regulation or requirement
affecting any portion of any of the Xxxxxx Properties has been issued by any
governmental authority; (iii) there are no material structural defects relating
to any of the Xxxxxx Properties; (iv) there is no Xxxxxx Property whose building
systems are not in working order in any material respect; (v) there is no
physical damage to any Xxxxxx Property in excess of $10,000 for which there is
no insurance in effect covering the full cost of the restoration; or (vi) there
is no current renovation or restoration or tenant improvements to any Xxxxxx
Property or any portion thereof, the cost of which exceeds $10,000, except in
each instance as set forth in Section 5.12 of the Xxxxxx Disclosure Letter.
Except as noted in Section 5.12 of the Xxxxxx Disclosure Letter, the use and
occupancy of each of the Xxxxxx Properties complies in all material respects
with all applicable codes and zoning laws and regulations, and Xxxxxx has no
knowledge of any pending or threatened proceeding or action that will in any
manner affect the size of, use of, improvements on, construction on, or access
to any of the Xxxxxx Properties, with such exceptions as are not material and do
not interfere with the use made and proposed to be made of such Xxxxxx
Properties. Neither Xxxxxx nor any of the Xxxxxx Subsidiaries has received any
notice to the effect that (A) any betterment assessments have been levied
against, or any condemnation or rezoning proceedings are pending or threatened
with respect to any of the Xxxxxx Properties or (B) any zoning, building or
similar law, code, ordinance, order or regulation is or will be violated by the
continued maintenance, operation or use of any buildings or other
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improvements on any of the Xxxxxx Properties or by the continued maintenance,
operation or use of the parking areas.
5.13 LEASES.
(a) Section 5.13 of the Xxxxxx Disclosure Letter sets forth a true,
accurate and complete rent roll for each of the Xxxxxx Properties (the "Rent
Roll") as of September 30, 1995. The Rent Roll includes, without limitation,
the name of the Tenant, the space leased, the lease expiration date, security
and other deposits, prepaid rent (for more than 30 days), percentage rent, pro
rata share of operating expenses, taxes, charges and assessments. Section 5.13
of the Xxxxxx Disclosure Letter contains a list of known defaults and a list of
any extraordinary clauses including, without limitation, any "kick-out"
clauses, cotenancy requirements or exclusions, "go-dark" clauses, or clauses
requiring any future funding of tenant improvements.
(b) Except as noted in Section 5.13 of the Xxxxxx Disclosure Letter,
as of the last day of the calendar month immediately preceding the date hereof,
(i) each of the leases and tenancies for all or any portion of the Xxxxxx
Properties (the "Xxxxxx Leases") is valid and subsisting and in full force and
effect, has not been amended, modified or supplemented; (ii) the tenant under
each of the Xxxxxx Leases is in actual possession of the leased premises; (iii)
no tenants are in arrears for the payment of rent for any month preceding the
month of the date of this Agreement or otherwise in default of such tenant's
lease obligations as to which Xxxxxx has given notice of default to such
tenant; and (iv) neither Xxxxxx nor any Xxxxxx Subsidiary has received any
written notice from any tenant of any intention to vacate. Except as set forth
in Section 5.13 of the Xxxxxx Disclosure Letter, neither Xxxxxx nor any Xxxxxx
Subsidiary has collected payment of rent (other than security deposits)
accruing for a period which is more than one month beyond the date of
collection.
(c) Xxxxxx has previously delivered or made available to Xxxxxxx a
true and correct copy of all Xxxxxx Leases.
(d) Except as shown in Section 5.13 of the Xxxxxx Disclosure Letter,
as of the last day of the calendar month immediately preceding the date hereof,
no tenant under any of the Xxxxxx Leases has asserted any claim of which Xxxxxx
or any Xxxxxx Subsidiary has received written notice which would materially
affect the collection of rent from such tenant and neither Xxxxxx nor any
Xxxxxx Subsidiary has received written notice of any material default or breach
on the part of Xxxxxx or any Xxxxxx Subsidiary under any of the Xxxxxx Leases
which has not been cured.
(e) Section 5.13 of the Xxxxxx Disclosure Letter sets forth a
complete and correct list, as of the date hereof, of all written or oral
commitments made by Xxxxxx or any Xxxxxx Subsidiary to lease any of the Xxxxxx
Properties or any portion thereof which has not yet been reduced to a written
lease. Xxxxxx has provided true and correct copies of all such written
commitments to Xxxxxxx and Section 5.13 of the Xxxxxx Disclosure Letter
provides with respect to each such oral commitment the principal terms of such
commitment, including, if applicable, (i) the space to be occupied, (ii) the
name of the tenant, (iii) the length of the
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original term thereof any any right or option to renew or extend the lease
term, (iv) the monthly minimum rental, (v) rental escalations, (vi) the
terms with respect to percentage rent or other overage rent, (vii) any
provisions for tenant allowances and tenant build-out and (viii) the right of
any third-party broker to any outstanding brokerage or other commission
incidental thereto and all other financial terms.
(f) Except as set forth in Section 5.13 of the Xxxxxx Disclosure
Letter all material leases pursuant to which Xxxxxx or any Xxxxxx Subsidiary,
as lessee, leases real or personal property are in good standing, valid and
effective in accordance with their respective terms, and there is not, under
any of such leases, any material existing default or any event which with
notice or lapse of time or both would constitute such a default, nor do any of
such leases contain any provision which would preclude the Surviving
Corporation from occupying and using the leased premises for the same purposes
and upon substantially the same rental and other terms as are applicable to the
occupation and use by Xxxxxx and the Xxxxxx Subsidiaries.
5.14 RENTS. The rents and other income and charges set forth in Section
5.13 of the Xxxxxx Disclosure Letter are the actual rents, income and charges
presently being charged by Xxxxxx and the Xxxxxx Subsidiaries under the Xxxxxx
Leases. No space is occupied rent free or at a rental rate reduced from the
rate stated in Section 5.13 of the Xxxxxx Disclosure Letter. Other than set
forth in Section 5.13 of the Xxxxxx Disclosure Letter, no tenant under any of
the Xxxxxx Leases is entitled to any purchase option, concessions, allowances,
abatements, set-offs, rebates or refunds or has prepaid any rents or other
charges for more than one month. None of the Xxxxxx Leases and none of the
rents or other amounts payable thereunder have been assigned, pledged or
encumbered, other than to lenders, as described in Section 5.22 of the Xxxxxx
Disclosure Letter. Except as set forth in Section 5.22 of the Xxxxxx
Disclosure Letter, no brokerage or leasing commission or other compensation
will be due or payable to any person, firm, corporation or other entity with
respect to or on account of any of the Xxxxxx Leases or any extensions or
renewals thereof on and after the Effective Time.
5.15 ENVIRONMENTAL MATTERS. Except as set forth in Section 5.15 of the
Xxxxxx Disclosure Letter, none of Xxxxxx, any Xxxxxx Subsidiary or, to the best
knowledge of Xxxxxx, any other person has caused or permitted (a) the unlawful
presence of any hazardous substances, hazardous materials, toxic substances or
waste materials (collectively, "Hazardous Materials") on any of the Xxxxxx
Properties, or (b) any unlawful spills, releases, discharges or disposal of
Hazardous Materials to have occurred or be presently occurring on or from any
of the Xxxxxx Properties as a result of any construction on or operation and
use of such properties, which presence or occurrence would, individually or in
the aggregate, have a Xxxxxx Material Adverse Effect; and in connection with
the construction on or operation and use of the Xxxxxx Properties, neither
Xxxxxx nor any of the Xxxxxx Subsidiaries has failed to comply, in any material
respect, with any applicable local, state or federal environmental law,
regulation, ordinance or administrative and judicial order relating to the
generation, recycling, reuse, sale, storage, handling, transport and disposal
of any Hazardous Materials.
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5.16 EMPLOYEE BENEFIT PLANS.
(a) All employee benefits plans (within the meaning of Section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"))
and other benefit arrangements covering employees of Xxxxxx and the Xxxxxx
Subsidiaries, other than any multiemployer plan (within the meaning of Section
3(37) of ERISA) (the "Xxxxxx Benefit Plans") are listed in Section 5.16(a) of
the Xxxxxx Disclosure Letter. True and complete copies of the Xxxxxx Benefit
Plans have been provided or made available to Xxxxxxx. To the extent
applicable, the Xxxxxx Benefit Plans have been administered in all material
respects in accordance with their terms and comply, in all material respects,
with the applicable requirements of ERISA and the Code. Any Xxxxxx Benefit
Plan intended to be qualified under Section 401(a) of the Code has received a
favorable determination letter from the IRS or a determination letter request
has been filed with the IRS with respect to any such plan and is still pending.
No Xxxxxx Benefit Plan is covered by Title IV of ERISA or Section 412 of the
Code. No Xxxxxx Benefit Plan nor Xxxxxx or any Xxxxxx Subsidiary has incurred
any liability or penalty under Section 4975 of the Code or Section 502(i) of
ERISA. There are no pending or anticipated claims against or otherwise
involving any of the Xxxxxx Benefit Plans and no suit, action or other
litigation (excluding claims for benefits incurred in the ordinary course of
Xxxxxx Benefit Plan activities) has been brought against or with respect to any
such Xxxxxx Benefit Plan. All material contributions required to be made as of
the date hereof to the Xxxxxx Benefit Plans have been made or provided for.
Except as otherwise required by Sections 601 through 608 of ERISA, Section
4980B of the Code and applicable state laws or as set forth in the Severance
Plan or the Severance Agreements, Xxxxxx does not maintain or contribute to any
plan or arrangement which provides or has any liability to provide life
insurance, medical or other employee welfare benefits to any employee or former
employee upon his retirement or termination of employment and Xxxxxx has never
represented, promised or contracted (whether in oral or written form) to any
employee or former employee that such benefits would be provided. Except as
set forth in the Severance Plan or the Severance Agreements, as disclosed in
the Xxxxxx Reports or in Section 5.16(a) of the Xxxxxx Disclosure Letter, the
execution of, and performance of the transactions contemplated in, this
Agreement will not (either alone or upon the occurrence of any additional
subsequent events directly related to the transaction contemplated herein) (i)
constitute an event under any Xxxxxx Benefit Plan that will or may result in
any payment (whether of severance pay or otherwise), acceleration, forgiveness
of indebtedness, vesting, distribution, increase in benefits or obligations to
fund benefits with respect to any employee, director or consultant of Xxxxxx or
any Xxxxxx Subsidiary pursuant to any Xxxxxx Benefit Plan or (ii) result in the
triggering or imposition of any restrictions or limitations on the right of
Xxxxxx or Xxxxxxx to amend or terminate any Xxxxxx Benefit Plan. No payment or
benefit which will be required to be made pursuant to the terms of any
agreement, commitment or Xxxxxx Benefit Plan (including the Severance Plan and
the Severance Agreements and the Consulting Agreement with Xxx Xxxxxx), as a
result of the transactions contemplated by this Agreement, to any officer,
director or employee of Xxxxxx or any of the Xxxxxx Subsidiaries, could be
characterized as an "excess parachute payment" within the meaning of Section
280G of the Code.
(b) Except as listed in Schedule 5.16(b) of the Xxxxxx Disclosure
Letter, neither Xxxxxx nor any Xxxxxx Subsidiary contributes to or has any
liability to contribute to a
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multiemployer plan. All contributions have been made as required by the terms of
each of the plans listed in Schedule 5.16(b) of the Xxxxxx Disclosure Letter
and the terms of any related collective bargaining agreements and neither Xxxxxx
nor any Xxxxxx Subsidiary has any knowledge or received any notice that any such
plan is in reorganization, that increased contributions are required to avoid a
reduction in plan benefits or the imposition of any excise tax, that any such
plan is or has been funded at a rate less than required under section 412 of the
Code, or that any such plan is insolvent.
5.17 LABOR MATTERS. Except as set forth in Section 5.17 of the Xxxxxx
Disclosure Letter, neither Xxxxxx nor any Xxxxxx Subsidiary is a party to, or
bound by, any collective bargaining agreement, contract or other agreement or
understanding with a labor union or labor union organization. There is no
unfair labor practice or labor arbitration proceeding pending or, to the
knowledge of Xxxxxx, threatened against Xxxxxx or any of the Xxxxxx
Subsidiaries relating to their business, except for any such proceeding which
would not have a Xxxxxx Material Adverse Effect. To the knowledge of Xxxxxx,
there are no organizational efforts with respect to the formation of a
collective bargaining unit presently being made or threatened involving
employees of Xxxxxx or any of the Xxxxxx Subsidiaries.
5.18 NO BROKERS. Neither Xxxxxx nor any of the Xxxxxx Subsidiaries has
entered into any contract, arrangement or understanding with any person or firm
which may result in the obligation of such entity or Xxxxxxx to pay any
finder's fees, brokerage or agent's commissions or other like payments in
connection with the negotiations leading to this Agreement or the consummation
of the transactions contemplated hereby, except that Xxxxxx has retained
PaineWebber Incorporated ("PaineWebber") and those entities listed in Section
5.18 of the Xxxxxx Disclosure Letter, as its financial advisors, the
arrangements with which have been disclosed in writing to Xxxxxxx prior to the
date hereof. Other than the foregoing arrangements and Xxxxxxx'x arrangement
with Alex. Xxxxx & Sons Incorporated ("Alex. Xxxxx"), Xxxxxx is not aware of
any claim for payment of any finder's fees, brokerage or agent's commissions or
other like payments in connection with the negotiations leading to this
Agreement or the consummation of the transactions contemplated hereby.
5.19 OPINION OF FINANCIAL ADVISOR. Xxxxxx has received the opinion of
PaineWebber, to the effect that, as of the date hereof, the Exchange Ratio is
fair to the holders of Xxxxxx Common Stock from a financial point of view, and
has delivered a true and correct copy of such opinion to Xxxxxxx.
5.20 XXXXXXX SHARE OWNERSHIP. Neither Xxxxxx nor any of the Xxxxxx
Subsidiaries owns any shares of Xxxxxxx Common Stock or other securities
convertible into any shares of Xxxxxxx Common Stock.
5.21 RELATED PARTY TRANSACTIONS. Set forth in Section 5.21 of the Xxxxxx
Disclosure Letter is a list of all arrangements, agreements and contracts
(except for the Severance Plan and the Severance Agreements) entered into by
Xxxxxx or any of the Xxxxxx Subsidiaries (which are or will be in effect as of
or after the date of this Agreement) with (i) any consultant (X) involving
payments in excess of $25,000 or (Y) which may not be terminated at will by
Xxxxxx or the Xxxxxx Subsidiary which is a party thereto, (ii) any person who
is an officer,
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director or affiliate of Xxxxxx or any of the Xxxxxx Subsidiaries, any relative
of any of the foregoing or any entity of which any of the foregoing is an
affiliate or (iii) any person who acquired Xxxxxx Common Stock in a private
placement. All such documents are listed in Section 5.21 of the Xxxxxx
Disclosure Letter and the copies of such documents, which have previously been
provided or made available to Xxxxxxx and its counsel, are true and correct
copies. All of the management, leasing or other contracts to which TMC, TMLP or
any affiliate of Xxxxxx is a party, receives income from or has obligations or
liabilities arising out of are listed on Schedule 5.21 of the Xxxxxx Disclosure
Letter.
5.22 CONTRACTS AND COMMITMENTS. Section 5.22 of the Xxxxxx Disclosure
Letter sets forth (i) all notes, debentures, bonds and other evidence of
indebtedness which are secured or collateralized by mortgages, deeds of trust
or other security interests in the Xxxxxx Properties or personal property of
Xxxxxx and each of the Xxxxxx Subsidiaries and (ii) each Commitment entered
into by Xxxxxx or any of the Xxxxxx Subsidiaries which may result in total
payments by or liability of Xxxxxx or any Xxxxxx Subsidiary in excess of
$10,000 except for the Severance Plan and the Severance Agreements. Copies of
the foregoing are listed in Section 5.22 of the Xxxxxx Disclosure Letter and
the copies of such documents, which have previously been provided or made
available to Xxxxxxx and its counsel, are true and correct. None of Xxxxxx or
any of the Xxxxxx Subsidiaries has received any notice of a default that has
not been cured under any of the documents described in clause (i) above or is
in default respecting any payment obligations thereunder beyond any applicable
grace periods except where such default would not have a Xxxxxx Material
Adverse Effect. All joint venture agreements to which Xxxxxx or any of the
Xxxxxx Subsidiaries is a party are set forth in Section 5.22 of the Xxxxxx
Disclosure Letter and neither Xxxxxx nor any of the Xxxxxx Subsidiaries is in
default with respect to any obligations, which individually or in the aggregate
are material, thereunder.
5.23 DEVELOPMENT RIGHTS. Set forth in Section 5.23 of the Xxxxxx
Disclosure Letter is a list of all agreements entered into by Xxxxxx or any of
the Xxxxxx Subsidiaries relating to the development or construction of the
Xxxxxx Properties and a description of the current status of each such
development. The copies of such agreements are listed in Section 5.23 of the
Xxxxxx Disclosure Letter, and such copies, which have previously been provided
to Xxxxxxx and its counsel, are true and correct. All work to be performed,
payments to be made and actions to be taken by Xxxxxx or any of the Xxxxxx
Subsidiaries prior to the date hereof pursuant to any agreement entered into
with a governmental body or authority in connection with the development of the
Xxxxxx Properties, including any Development Agreement relating to a site
approval, zoning reclassification or other similar action (e.g., Local
Improvement District, Road Improvement District, Environmental Mitigation,
etc.) has been performed, paid or taken, as the case may be, and Xxxxxx is not
aware of any planned or proposed work, payments or actions that may be required
after the date hereof pursuant to such agreements.
5.24 CERTAIN PAYMENTS RESULTING FROM TRANSACTIONS. Except for the
Severance Plan and the Severance Agreements and the vesting of options as set
forth in Section 5.3 of the Xxxxxx Disclosure Letter, the execution of, and
performance of the transactions contemplated by, this Agreement will not
(either alone or upon the occurrence of any additional or subsequent events)
(i) constitute an event under any Xxxxxx Benefit Plan, policy, practice,
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agreement or other arrangement or any trust or loan (the "Employee
Arrangements") that will or may result in any payment (whether of severance pay
or otherwise), acceleration, forgiveness of indebtedness, vesting, distribution,
increase in benefits or obligation to fund benefits with respect to any
employee, director or consultant of Xxxxxx or any of the Xxxxxx Subsidiaries, or
(ii) result in the triggering or imposition of any restrictions or limitations
on the right of Xxxxxx or Xxxxxxx to amend or terminate any Employee Arrangement
and receive the full amount of any excess assets remaining or resulting from
such amendment or termination, subject to applicable taxes. No payment or
benefit which will be required to be made pursuant to the terms of any
agreement, commitment or Xxxxxx Benefit Plan (including the Severance Plan and
the Severance Agreements), as a result of the transactions contemplated by this
Agreement, to any officer, director or employee of Xxxxxx or any of the Xxxxxx
Subsidiaries, could be characterized as an "excess parachute payment" within the
meaning of Section 280G of the Code.
5.25 INDEMNIFICATION CLAIMS. No indemnification or other claims have been
made by Xxxxxx, any Xxxxxx Subsidiary, or any other person against the TTC
Principals or the TTC Guarantors (as such terms are defined in the TOP
Partnership Agreement) under Section 14 or any other section or provision of
the TOP Partnership Agreement or any other agreement to which Xxxxxx or any
Xxxxxx Subsidiary is a party and, to the best knowledge of Xxxxxx, no facts or
circumstances exist which could give rise to any such claim.
5.26 DISCLOSURE. The representations, warranties and statements made by
Xxxxxx in this Agreement, the Ancillary Agreements and in the Xxxxxx Disclosure
Letter and in the certificates and other documents delivered pursuant hereto do
not contain any untrue statement of a material fact, and, when taken together,
do not omit to state any material fact necessary to make such representations,
warranties and statements, in light of the circumstances under which they are
made, not misleading.
5.27 STATUS OF HOLDEN COURT AND HOLDEN COURT ESCROW. Section 5.27 of the
Xxxxxx Disclosure Letter sets forth a description of the current status of the
Holden Court Escrow Agreement established in connection with the contribution
of One North State to TOP and a description of the status of efforts with the
City of Chicago to secure fee simple title to Holden Court as required by the
Holden Court Escrow Agreement.
5.28 TENANT IMPROVEMENTS. Section 5.28 of the Xxxxxx Disclosure Letter
contains (i) a list of any unfunded tenant improvements being conducted by
Xxxxxx or any Xxxxxx Subsidiary in excess of $10,000 and (ii) to the best
knowledge of Xxxxxx, the aggregate amount of all unfunded tenant improvements
for all Xxxxxx Properties. Xxxxxx and each Xxxxxx Subsidiary has delivered or
made available true and correct copies of any and all contracts, plans,
specifications and agreements in connection with all tenant improvements in
excess of $10,000.
5.29 STATUS OF OPTIONS TO PURCHASE REAL PROPERTY. All options of Xxxxxx
or any of the Xxxxxx Subsidiaries to purchase real property, including a
description of the current status, conditions and contingencies relating to
each of such options, are set forth in Section 5.29 of the Xxxxxx Disclosure
Letter.
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5.30 DEFINITION OF XXXXXX'X KNOWLEDGE. As used in this Agreement, the
phrase "to the knowledge of Xxxxxx" or "to the best knowledge of Xxxxxx" (or
words of similar import) means the knowledge or the best knowledge of those
individuals identified in Section 5.30 of the Xxxxxx Disclosure Letter, and
includes any fact, matter or circumstance which any of such individuals, as an
ordinary and prudent business person employed in the same capacity in the same
type and size of business as Xxxxxx, should have known.
ARTICLE 6
6. Representations and Warranties of Xxxxxxx.
------------------------------------------
Except as set forth in the disclosure letter delivered at or prior to the
execution hereof to Xxxxxx, which shall refer to the relevant Sections of this
Agreement (the "Xxxxxxx Disclosure Letter"), Xxxxxxx represents and warrants to
Xxxxxx as follows:
6.1 EXISTENCE; GOOD STANDING; AUTHORITY; COMPLIANCE WITH LAW. Xxxxxxx is
a corporation duly incorporated, validly existing and in good standing under
the laws of the State of Maryland. Xxxxxxx is duly licensed or qualified to do
business as a foreign corporation and is in good standing under the laws of any
other state of the United States in which the character of the properties owned
or leased by it therein or in which the transaction of its business makes such
qualification necessary, except where the failure to be so licensed or
qualified would not have a material adverse effect on the business, results of
operations or financial condition of Xxxxxxx and the Xxxxxxx Subsidiaries (as
defined below) taken as a whole (a "Xxxxxxx Material Adverse Effect"). Xxxxxxx
has all requisite corporate power and authority to own, operate, lease and
encumber its properties and carry on its business as now conducted. Each of
the Xxxxxxx Subsidiaries is a corporation duly incorporated, validly existing
and in good standing under the laws of its jurisdiction of incorporation or
organization, has the corporate power and authority to own its properties and
to carry on its business as it is now being conducted, and is duly qualified to
do business and is in good standing in each jurisdiction in which the ownership
of its property or the conduct of its business requires such qualification,
except for jurisdictions in which such failure to be so qualified or to be in
good standing would not have a Xxxxxxx Material Adverse Effect. Neither
Xxxxxxx nor any Xxxxxxx Subsidiary is in violation of any order of any court,
governmental authority or arbitration board or tribunal, or any law, ordinance,
governmental rule or regulation to which Xxxxxxx or any Xxxxxxx Subsidiary or
any of their respective properties or assets is subject, where such violation
would have a Xxxxxxx Material Adverse Effect. Xxxxxxx and the Xxxxxxx
Subsidiaries have obtained all licenses, permits and other authorizations and
have taken all actions required by applicable law or governmental regulations
in connection with their business as now conducted, where the failure to obtain
any such license, permit or authorization or to take any such action would have
a Xxxxxxx Material Adverse Effect. Copies of the Charter and other equivalent
documents and Bylaws (and all amendments thereto) of Xxxxxxx and each of the
Xxxxxxx Subsidiaries are listed in Section 6.1 of the Xxxxxxx Disclosure
Letter, and the copies of such documents, which have previously been delivered
or made available to Xxxxxx or its counsel, are true and correct copies. For
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purposes of this Agreement, the term "Xxxxxxx Subsidiary" shall include any of
the entities set forth under such heading in Section 6.4 of the Xxxxxxx
Disclosure Letter.
6.2 AUTHORIZATION, VALIDITY AND EFFECT OF AGREEMENTS. Xxxxxxx has the
requisite corporate power and authority to enter into the transactions
contemplated hereby and to execute and deliver this Agreement and the Ancillary
Agreements to which it is a party. The Board of Directors of Xxxxxxx has, by
resolutions duly adopted by unanimous vote approved this Agreement, the Merger
and the other transactions contemplated by this Agreement and has agreed to
recommend that the holders of Xxxxxxx Common Stock adopt and approve this
Agreement, the Merger and the transactions contemplated by this Agreement at
the Xxxxxxx stockholders' meeting which will be held in accordance with the
provisions of Section 7.3. In connection with the foregoing, the Board of
Directors of Xxxxxxx has taken such actions and votes as are necessary on its
part to render the provisions of the Control Share Acquisition Statute, the
Business Combination Statute and all other applicable takeover statutes of the
MGCL and any other applicable takeover statutes of any other state,
inapplicable to this Agreement, the Merger, and the transactions contemplated
by this Agreement. As of the date hereof, all of the directors and executive
officers of Xxxxxxx have indicated that they presently intend to vote all
shares of Xxxxxxx Common Stock which they own to approve this Agreement, the
Merger, and the transactions contemplated by this Agreement at the Xxxxxxx
stockholders meeting which will be held in accordance with the provisions of
Section 7.3. Subject only to the approval of this Agreement and the
transactions contemplated hereby by the holders of a majority of the
outstanding shares of Xxxxxxx Common Stock, the execution by Xxxxxxx of this
Agreement, the Ancillary Agreements and the consummation of the transactions
contemplated by this Agreement and the Ancillary Agreements has been duly
authorized by all requisite corporate action on the part of Xxxxxxx. This
Agreement constitutes, and the Ancillary Agreements to which it will become a
party (when executed and delivered pursuant hereto) will constitute, the valid
and legally binding obligations of Xxxxxxx, enforceable against Xxxxxxx in
accordance with their respective terms, subject to applicable bankruptcy,
insolvency, moratorium or other similar laws relating to creditors' rights and
general principles of equity.
6.3 CAPITALIZATION. The authorized capital stock of Xxxxxxx consists of
80,000,000 shares of Xxxxxxx Common Stock, 20,000,000 shares of preferred
stock, par value $.01 per share (the "Xxxxxxx Preferred Stock"), and 50,000,000
shares of excess stock, par value $.01 per share ("Xxxxxxx Excess Stock"). As
of the date hereof, there are 11,226,606 shares of Xxxxxxx Common Stock issued
and outstanding, and no shares of Xxxxxxx Preferred Stock or Xxxxxxx Excess
Stock are issued and outstanding. All such issued and outstanding shares of
Xxxxxxx Common Stock are duly authorized, validly issued, fully paid,
nonassessable and free of preemptive rights. Xxxxxxx has no outstanding bonds,
debentures, notes or other obligations the holders of which have the right to
vote (or which are convertible into or exercisable for securities having the
right to vote) with the stockholders of Xxxxxxx on any matter. There are not
at the date of this Agreement any existing options, warrants, calls,
subscriptions, convertible securities, or other rights, agreements or
commitments which obligate Xxxxxxx to issue, transfer or sell any shares of
Xxxxxxx Common Stock, other than the issuance by Xxxxxxx of up to 297,875
shares of Xxxxxxx Common Stock upon the exercise of stock options issued
pursuant to Xxxxxxx'x stock option plans. There are no agreements or
understandings to
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which Xxxxxxx or any Xxxxxxx Subsidiary is a party with respect to the voting of
any shares of Xxxxxxx Common Stock or which restrict the transfer of any such
shares, nor does Xxxxxxx have knowledge of any such agreements or understandings
with respect to the voting of any such shares or which restrict the transfer of
such shares.
6.4 SUBSIDIARIES. Xxxxxxx owns all of the outstanding shares of capital
stock of each of the Xxxxxxx Subsidiaries. All of the outstanding shares of
capital stock of each of the Xxxxxxx Subsidiaries are duly authorized, validly
issued, fully paid and nonassessable, and are owned, by Xxxxxxx free and clear
of all liens, pledges, security interests, claims or other encumbrances. The
following information for each Xxxxxxx Subsidiary is set forth in Section 6.4
of the Xxxxxxx Disclosure Letter: (i) its name and jurisdiction of
incorporation or organization and (ii) its authorized capital stock.
6.5 OTHER INTERESTS. Except for interests in the Xxxxxxx Subsidiaries
and the securities of other publicly traded REITs, neither Xxxxxxx nor any
Xxxxxxx Subsidiary owns directly or indirectly any interest or investment
(whether equity or debt) in any corporation, partnership, joint venture, trust
or other entity (other than investments in short-term investment securities).
6.6 NO VIOLATION. Except as set forth in Section 6.6 of the Xxxxxxx
Disclosure Letter, neither the execution and delivery by Xxxxxxx of this
Agreement or the Ancillary Agreements nor the consummation by Xxxxxxx of the
transactions contemplated by this Agreement and the Ancillary Agreements in
accordance with their terms, will: (i) conflict with or result in a breach of
any provisions of the Articles of Incorporation or Bylaws of Xxxxxxx; (ii)
result in a breach or violation of, a default under, or the triggering of any
payment or other material obligations pursuant to, or accelerate vesting under,
any of Xxxxxxx'x stock option plans, or any grant or award under any of the
foregoing; (iii) violate, or conflict with, or result in a breach of any
provision of, or constitute a default (or an event which, with notice or lapse
of time or both, would constitute a default) under, or result in the
termination or in a right of termination or cancellation of, or accelerate the
performance required by, or result in the creation of any lien, security
interest, charge or encumbrance upon any of the properties of Xxxxxxx or any of
the Xxxxxxx Subsidiaries under, or result in being declared void, voidable, or
without further binding effect, any of the terms, conditions or provisions of
any note, bond, mortgage, indenture, deed of trust or any license, franchise,
permit, lease, contract, agreement or other instrument, commitment or
obligation to which Xxxxxxx or any of the Xxxxxxx Subsidiaries is a party, or
by which Xxxxxxx or any of the Xxxxxxx Subsidiaries or any of their properties
is bound or affected, except for any of the foregoing matters which,
individually or in the aggregate, would not have a Xxxxxxx Material Adverse
Effect; or (iv) other than the Regulatory Filings, require any consent,
approval or authorization of, or declaration, filing or registration with, any
governmental or regulatory authority except where the failure to obtain any
such consent, approval or authorization of, or declaration, filing or
registration with, any governmental or regulatory authority would not have a
Xxxxxxx Material Adverse Effect.
6.7 SEC DOCUMENTS. A complete list of Xxxxxxx SEC filings, including the
Form 10-K for the fiscal year ended December 31, 1993 filed by Xxxxxxx'x
predecessor entity,
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Xxxxxxx Real Estate Trust ("Xxxxxxx Trust"), and each (A) registration
statement, (B) annual report of Form 10-K, (C) quarterly report on Form 10-Q,
(D) current report on Form 8-K, (E) proxy statement or information statement,
and (F) any other report filed with the SEC pursuant to the Exchange Act, (in
all such cases, including all exhibits, amendments and supplements thereto)
prepared by Xxxxxxx or Xxxxxxx Trust or relating to their properties since
December 31, 1993, are set forth in Section 6.7 of the Xxxxxxx Disclosure
Letter, and copies of which, in the form (including exhibits and any amendments
thereto) filed with the SEC, have previously been provided or made available to
Xxxxxx or its counsel (collectively, the "Xxxxxxx Reports"). The Xxxxxxx
Reports were filed with the SEC in a timely manner and constitute all forms,
reports and documents required to be filed by Xxxxxxx (including for this
purpose the Xxxxxxx Trust) under the Securities Laws subsequent to December 31,
1993. As of their respective dates, the Xxxxxxx Reports (i) complied as to form
in all material respects with the applicable requirements of the Securities Laws
and (ii) did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading. Each of the consolidated balance sheets of Xxxxxxx
included in or incorporated by reference into the Xxxxxxx Reports (including the
related notes and schedules) fairly presents the consolidated financial position
of Xxxxxxx and the Xxxxxxx Subsidiaries as of its date and each of the
consolidated statements of income, retained earnings and cash flows of Xxxxxxx
included in or incorporated by reference into the Xxxxxxx Reports (including any
related notes and schedules) fairly presents the results of operations, retained
earnings or cash flows, as the case may be, of Xxxxxxx and the Xxxxxxx
Subsidiaries for the periods set forth therein (subject, in the case of
unaudited statements, to normal year-end audit adjustments which would not be
material in amount or effect), in each case in accordance with generally
accepted accounting principles consistently applied during the periods involved,
except as may be noted therein and except, in the case of the unaudited
statements, as permitted by Form 10-Q of the SEC. Except as and to the extent
set forth on the consolidated balance sheet of Xxxxxxx and the Xxxxxxx
Subsidiaries at December 31, 1994, including all notes thereto, or as set forth
in the Xxxxxxx Reports, neither Xxxxxxx nor any of the Xxxxxxx Subsidiaries has
any material liabilities or obligations of any nature (whether accrued,
absolute, contingent or otherwise) that would be required to be reflected on, or
reserved against in, a balance sheet of Xxxxxxx or in the notes thereto,
prepared in accordance with generally accepted accounting principles
consistently applied, except liabilities arising in the ordinary course of
business since such date and liabilities for expenses of attorneys, accountants
and investment bankers incurred in connection with the Merger.
6.8 LITIGATION. There are (i) no continuing orders, injunctions or
decrees of any court, arbitrator or governmental authority to which Xxxxxxx or
any Xxxxxxx Subsidiary is a party or by which any of its properties or assets
are bound or, to the reasonable best knowledge of Xxxxxxx, to which any of its
directors, officers, employees or agents is a party or by which any of their
properties or assets are bound, and (ii) no actions, suits or proceedings
pending against Xxxxxxx or any Xxxxxxx Subsidiary or, to the reasonable best
knowledge of Xxxxxxx, against any of its directors, officers, employees or
agents or, to the reasonable best knowledge of Xxxxxxx, threatened against
Xxxxxxx or any Xxxxxxx Subsidiary or against any of its directors, officers,
employees or agents, at law or in equity, or before or by any federal or state
commission, board, bureau, agency or instrumentality, that, in the case of
clause (i) or
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(ii), are reasonably likely, individually or in the aggregate, to have
a Xxxxxxx Material Adverse Effect.
6.9 ABSENCE OF CERTAIN CHANGES. Except as disclosed in the Xxxxxxx
Reports filed with the SEC prior to the date hereof, since December 31, 1994,
Xxxxxxx and the Xxxxxxx Subsidiaries have conducted their business only in the
ordinary course of such business and there has not been (i) any Xxxxxxx
Material Adverse Effect; (ii) as of the date hereof, any declaration, setting
aside or payment of any dividend or other distribution with respect to the
Xxxxxxx Common Stock, except dividends of $0.33 per share paid on March 31,
June 30, 1995 and September 29, 1995; or (iii) any material change in Xxxxxxx'x
accounting principles, practices or methods.
6.10 TAXES. Except as set forth in Section 6.10 of the Xxxxxxx Disclosure
Letter:
(a) Xxxxxxx and each of the Xxxxxxx Subsidiaries has paid or caused
to be paid Taxes, owed by it through the date hereof.
(b) Xxxxxxx and each of the Xxxxxxx Subsidiaries has timely filed
all federal, state, local and foreign tax returns required to be filed by any
of them through the date hereof, and all such returns completely and accurately
set forth the amount of any Taxes relating to the applicable period.
(c) Neither the IRS nor any other governmental authority is now
asserting by written notice to Xxxxxxx or any Xxxxxxx Subsidiary or, to the
knowledge of Xxxxxxx or the Xxxxxxx Subsidiaries, threatening to assert against
Xxxxxxx any deficiency or claim for additional Taxes. There is no dispute or
claim concerning any Tax liability of Xxxxxxx, either claimed or raised by any
governmental authority, or as to which any officer of Xxxxxxx has reason to
believe may be claimed or raised by any governmental authority. No claim has
ever been made by a taxing authority in a jurisdiction where Xxxxxxx does not
file reports and returns that Xxxxxxx is or may be subject to taxation by that
jurisdiction. There are no security interests on any of the assets of Xxxxxxx
or any Xxxxxxx Subsidiary that arose in connection with any failure (or alleged
failure) to pay any Taxes. Xxxxxxx has never entered into a closing agreement
pursuant to Section 7121 of the Code.
(d) Xxxxxxx has not received written notice of any audit of any tax
return filed by Xxxxxxx, no such audit is in progress, and Xxxxxxx has not been
notified by any tax authority that any such audit is contemplated or pending.
Neither Xxxxxxx nor any of the Xxxxxxx Subsidiaries has executed or filed with
the IRS or any other taxing authority any agreement now in effect extending the
period for assessment or collection of any income or other taxes, and no
extension of time with respect to any date on which a tax return was or is to
be filed by Xxxxxxx is in force. True, correct and complete copies of all
federal, state and local income or franchise tax returns filed by Xxxxxxx and
each of the Xxxxxxx Subsidiaries and all communications relating thereto have
been delivered to Xxxxxx or made available to representatives of Xxxxxx.
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(e) Xxxxxxx and each Xxxxxxx Subsidiary has withheld and paid all
taxes required to have been withheld and paid in connection with amounts paid
or owing to any employee, independent contractor, creditor, stockholder or
other party.
(f) Each of the Xxxxxxx Subsidiaries of which all the outstanding
capital stock is owned solely by Xxxxxxx is a Qualified REIT Subsidiary as
defined in Section 856(i) of the Code.
(g) For all applicable tax years as to which Xxxxxxx'x federal
income tax returns are subject to audit and Xxxxxxx is subject to assessment
for taxes reportable therein, and at all times thereafter up to and including
the date hereof, Xxxxxxx has qualified to be treated as a REIT within the
meaning of Sections 856-860 of the Code, including, without limitation, the
requirements of Sections 856 and 857 of the Code. For the periods described in
the preceding sentence, Xxxxxxx has met all requirements necessary to be
treated as a REIT for purposes of the income tax provisions of each state in
which Xxxxxxx is subject to income tax and which provides for the taxation of
REITs in a manner similar to the treatment of REITs under Sections 856-860 of
the Code, but, with respect to each such state, only for such periods for which
Xxxxxxx'x income tax returns are subject to audit and Xxxxxxx is subject to
assessment for taxes reportable therein.
6.11 BOOKS AND RECORDS. The books of account and other financial records
of Xxxxxxx and each of the Xxxxxxx Subsidiaries are true, complete and correct
in all material respects, have been maintained in accordance with good business
practices, and are accurately reflected in all material respects in the
financial statements included in the Xxxxxxx Reports. The minute books and
other records of Xxxxxxx and each of the Xxxxxxx Subsidiaries have been made
available to Xxxxxx, contain in all material respects accurate records of all
meetings and accurately reflect in all material respects all other corporate
action of the shareholders and directors and any committees of the Board of
Directors of Xxxxxxx and each of the Xxxxxxx Subsidiaries.
6.12 PROPERTIES. All of the real estate properties owned by Xxxxxxx and
each of the Xxxxxxx Subsidiaries are set forth in Section 6.12 of the Xxxxxxx
Disclosure Letter. Except as set forth in Section 6.12 of the Xxxxxxx
Disclosure Letter, Xxxxxxx owns fee simple title to each of the real properties
identified in the Xxxxxxx Disclosure Letter (the "Xxxxxxx Properties"), free
and clear of Encumbrances. The Xxxxxxx Properties are not subject to any
Property Restrictions, except for (i) Encumbrances and Property Restrictions
set forth in Section 6.12 of the Xxxxxxx Disclosure Letter, (ii) Property
Restrictions imposed or promulgated by law or any governmental body or
authority with respect to real property, including zoning regulations that do
not adversely affect the current use of the property, materially detract from
the value or materially interfere with the present use of the property, (iii)
Encumbrances and Property Restrictions disclosed on existing title reports or
current surveys (in either case copies of which title reports and surveys have
been delivered or made available to Xxxxxx and are listed in Section 6.12 of
the Xxxxxxx Disclosure Letter), and (iv) mechanics , carriers , workmen's or
repairmen's liens and other Encumbrances, 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
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with the present use of any of the Xxxxxxx Properties subject thereto or
affected thereby, and do not otherwise materially impair business operations
conducted by Xxxxxxx and the Xxxxxxx Subsidiaries and which have arisen or been
incurred only in the ordinary course of business. Such Encumbrances and
Property Restrictions described in Section 6.12 of the Xxxxxxx Disclosure
Letter are not convertible into shares of capital stock of Xxxxxxx or any
Xxxxxxx Subsidiary nor does Xxxxxxx or any Xxxxxxx Subsidiary hold a
participating interest therein. Xxxxxxx is the named insured in the title
insurance policies set forth in Section 6.12 of the Xxxxxxx Disclosure Letter.
Such policies are maintained with respect to each of the Xxxxxxx Properties in
an amount of (i) the cost of acquisition of such property or (ii) the cost of
construction by Xxxxxxx and the Xxxxxxx Subsidiaries of the improvements
located on such property (measured at the time of such construction), except,
in each case, (x) as listed in Section 6.12 of the Xxxxxxx Disclosure Letter or
(y) where the failure to maintain such title insurance would not have a Xxxxxxx
Material Adverse Effect. Such policies are, at the date hereof, in full force
and effect and no claim has been made against any such policy. To the best
knowledge of Xxxxxxx, (i) no certificate, permit or license from any
governmental authority having jurisdiction over any of the Xxxxxxx Properties
or any agreement, easement or other right which is necessary to permit the
lawful use and operation of the buildings and improvements on any of the
Xxxxxxx Properties or which 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 Xxxxxxx Properties has not been obtained and is not in full force and
effect, and there is no pending threat of modification or cancellation of any
of same; (ii) no written notice of any violation of any federal, state or
municipal law, ordinance, order, regulation or requirement affecting any
portion of any of the Xxxxxxx Properties has been issued by any governmental
authority; (iii) there are no structural defects relating to any of the Xxxxxxx
Properties; (iv) there is no Xxxxxxx Property whose building systems are not in
working order in any material respect; (v) there is no physical damage to any
Xxxxxxx Property in excess of $10,000 for which there is no insurance in effect
covering the full cost of the restoration; or (vi) there is no current
renovation or restoration to any Xxxxxxx Property, the cost of which exceeds
$10,000. Except as noted in Section 6.12 of the Xxxxxxx Disclosure Letter,
Xxxxxxx and the Xxxxxxx Subsidiaries have valid and subsisting leases for all
leased Xxxxxxx Properties, the use and occupancy of each of the Xxxxxxx
Properties complies in all material respects with all applicable codes and
zoning laws and regulations, and Xxxxxxx has no knowledge of any pending or
threatened proceeding or action that will in any manner affect the size of, use
of, improvements on, construction on, or access to any of the Xxxxxxx
Properties, with such exceptions as are not material and do not interfere with
the use made and proposed to be made of such Xxxxxxx Properties. Neither
Xxxxxxx nor any of the Xxxxxxx Subsidiaries has received any notice to the
effect that (A) any condemnation or rezoning proceedings are pending or
threatened with respect to any of the Xxxxxxx Properties or (B) any zoning,
building or similar law, code, ordinance, order or regulation is or will be
violated by the continued maintenance, operation or use of any buildings or
other improvements on any of the Xxxxxxx Properties or by the continued
maintenance, operation or use of the parking areas.
6.13 ENVIRONMENTAL MATTERS. None of Xxxxxxx, any Xxxxxxx Subsidiary or,
to the best knowledge of Xxxxxxx, any other person has caused or permitted (a)
the unlawful presence of any Hazardous Materials on any of the Xxxxxxx
Properties, or (b) any unlawful spills, releases, discharges or disposal of
Hazardous Materials to have occurred or be presently
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occurring on or from any of the Xxxxxxx Properties as a result of any
construction on or operation and use of such properties, which presence or
occurrence would, individually or in the aggregate, have a Xxxxxxx Material
Adverse Effect; and in connection with the construction on or operation and use
of the Xxxxxxx Properties, neither Xxxxxxx nor any of the Xxxxxxx Subsidiaries
has failed to comply, in any material respect, with any applicable local, state
or federal environmental law, regulation, ordinance or administrative and
judicial order relating to the generation, recycling, reuse, sale, storage,
handling, transport and disposal of any Hazardous Materials.
6.14 EMPLOYEE BENEFIT PLANS. All employee benefits plans (within the
meaning of Section 3(3) of ERISA) and other benefit arrangements covering
employees of Xxxxxxx and the Xxxxxxx Subsidiaries (the "Xxxxxxx Benefit Plans")
are listed in Section 6.14 of the Xxxxxxx Disclosure Letter. True and complete
copies of the Xxxxxxx Benefit Plans have been provided or made available to
Xxxxxx. To the extent applicable, the Xxxxxxx Benefit Plans have been
administered in all material respects in accordance with their terms and
comply, in all material respects, with the applicable requirements of ERISA and
the Code. Any Xxxxxxx Benefit Plan intended to be qualified under Section
401(a) of the Code has received a favorable determination letter from the IRS
or a determination letter request has been filed with the IRS with respect to
any such plan and is still pending. No Xxxxxxx Benefit Plan is covered by
Title IV of ERISA or Section 412 of the Code. No Xxxxxxx Benefit Plan nor
Xxxxxxx or any of the Xxxxxxx Subsidiaries has incurred any liability or
penalty under Section 4975 of the Code or Section 502(i) of ERISA. There are
no pending or anticipated claims against or otherwise involving any of the
Xxxxxxx Benefit Plans and no suit, action or other litigation (excluding claims
for benefits incurred in the ordinary course of Xxxxxxx Benefit Plan
activities) has been brought against or with respect to any such Xxxxxxx
Benefit Plan. All material contributions required to be made as of the date
hereof to the Xxxxxxx Benefit Plans have been made or provided for. Neither
Xxxxxxx nor any entity under common control with Xxxxxxx within the meaning of
ERISA Section 4001 has contributed to, or been required to contribute to, any
multiemployer plan (as defined in Sections 3(37) and 4001(a)(3) of ERISA).
Except as otherwise required by Sections 601 through 608 of ERISA, Section
4980B of the Code and applicable state laws, Bradley does not maintain or
contribute to any plan or arrangement which provides or has any liability to
provide life insurance, medical or other employee welfare benefits to any
employee or former employee upon his retirement or termination of employment
and Xxxxxxx has never represented, promised or contracted (whether in oral or
written form) to any employee or former employee that such benefits would be
provided. Except as disclosed in the Xxxxxxx Reports, the execution of, and
performance of the transactions contemplated in, this Agreement will not
(either alone or upon the occurrence of any additional subsequent events
directly related to the transaction contemplated herein) constitute an event
under any Xxxxxxx Benefit Plan that will or may result in any payment (whether
of severance pay or otherwise), acceleration, forgiveness of indebtedness,
vesting, distribution, increase in benefits or obligations to fund benefits
with respect to any employee, director or consultant of Xxxxxxx or any Xxxxxxx
Subsidiary.
6.15 LABOR MATTERS. Neither Xxxxxxx nor any Xxxxxxx Subsidiary is a party
to, or bound by, any collective bargaining agreement, contract or other
agreement or understanding with a labor union or labor union organization.
There is no unfair labor practice or labor
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arbitration proceeding pending or, to the knowledge of Xxxxxxx, threatened
against Xxxxxxx or any of the Xxxxxxx Subsidiaries relating to their business,
except for any such proceeding which would not have a Xxxxxxx Material Adverse
Effect. To the knowledge of Xxxxxxx, there are no organizational efforts with
respect to the formation of a collective bargaining unit presently being made
or threatened involving employees of Xxxxxxx or any of the Xxxxxxx
Subsidiaries.
6.16 NO BROKERS. Neither Xxxxxxx nor any of the Xxxxxxx Subsidiaries has
entered into any contract, arrangement or understanding with any person or firm
which may result in the obligation of such entity or Xxxxxx to pay any finder s
fees, brokerage or agent's commissions or other like payments in connection
with the negotiations leading to this Agreement or the consummation of the
transactions contemplated hereby, except that Xxxxxxx has retained Alex. Xxxxx
as its financial advisor, the arrangements with which have been disclosed in
writing to Xxxxxx prior to the date hereof. Other than the foregoing
arrangements and Xxxxxx'x arrangements set forth in Section 5.18 of this
Agreement and Section 5.18 of the Xxxxxx Disclosure Letter, Xxxxxxx is not
aware of any claim for payment of any finder's fees, brokerage or agent s
commissions or other like payments in connection with the negotiations leading
to this Agreement or the consummation of the transactions contemplated hereby.
6.17 OPINION OF FINANCIAL ADVISOR. Xxxxxxx has received the opinion of
Alex. Xxxxx to the effect that, as of the date hereof, the Exchange Ratio is
fair to the holders of Xxxxxxx Common Stock from a financial point of view, and
has delivered a true and correct copy of such opinion to Xxxxxx.
6.18 XXXXXX STOCK OWNERSHIP. Neither Xxxxxxx nor any of the Xxxxxxx
Subsidiaries owns any shares of capital stock of Xxxxxx or other securities
convertible into capital stock of Xxxxxx.
6.19 RELATED PARTY TRANSACTIONS. Set forth in Section 6.19 of the Xxxxxxx
Disclosure Letter is a list of all arrangements, agreements and contracts
entered into by Xxxxxxx or any of the Xxxxxxx Subsidiaries (which are or will
be in effect as of or after the date of this Agreement) with (i) any consultant
in excess of $25,000 or which may not be terminated at will by Xxxxxxx, (ii)
any person who is an officer, director or affiliate of Xxxxxxx or any of the
Xxxxxxx Subsidiaries, any relative of any of the foregoing or any entity of
which any of the foregoing is an affiliate or (iii) any person who acquired
Xxxxxxx Common Stock in a private placement. All such documents are listed in
Section 6.19 of the Xxxxxxx Disclosure Letter and the copies of such documents,
which have previously been provided or made available to Xxxxxx and its
counsel, are true and correct.
6.20 CONTRACTS AND COMMITMENTS. Section 6.20 of the Xxxxxxx Disclosure
Letter sets forth (i) all notes, debentures, bonds and other evidence of
indebtedness which are secured or collateralized by mortgages, deeds of trust
or other security interests in the Xxxxxxx Properties or personal property of
Xxxxxxx and each of the Xxxxxxx Subsidiaries and (ii) each Commitment entered
into by Xxxxxxx or any of the Xxxxxxx Subsidiaries which may result in total
payments or liability in excess of $10,000. Copies of the foregoing are listed
in Section 6.20 of the Xxxxxxx Disclosure Letter and the copies of such
documents, which have
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previously been provided or made available to Xxxxxx and its counsel, are true
and correct copies. None of Xxxxxxx or any of the Xxxxxxx Subsidiaries has
received any notice of a default that has not been cured under any of the
documents described in clause (i) above or is in default respecting any payment
obligations thereunder beyond any applicable grace periods, except where such
default would not have a Xxxxxxx Material Adverse Effect. All options of
Xxxxxxx or any of the Xxxxxxx Subsidiaries to purchase real property are set
forth in Section 6.20 of the Xxxxxxx Disclosure Letter and such options and
Xxxxxxx'x or any of the Xxxxxxx Subsidiaries rights thereunder are in full
force and effect. All joint venture agreements to which Xxxxxxx or any of the
Xxxxxxx Subsidiaries is a party are set forth in Section 6.20 of the Xxxxxxx
Disclosure Letter and neither Xxxxxxx nor any of the Xxxxxxx Subsidiaries is in
default with respect to any obligations, which individually or in the aggregate
are material, thereunder.
6.21 DEVELOPMENT RIGHTS. Set forth in Section 6.21 of the Xxxxxxx
Disclosure Letter is a list of all agreements entered into by Xxxxxxx or any of
the Xxxxxxx Subsidiaries relating to the development or construction of real
estate properties. The copies of such agreements are listed in Section 6.21 of
the Xxxxxxx Disclosure Letter and the copies of such documents, which have
previously been provided or made available to Xxxxxx and its counsel, are true
and correct.
6.22 XXXXXXX COMMON STOCK. The issuance and delivery by Xxxxxxx of shares
of Xxxxxxx Common Stock in connection with the Merger and this Agreement have
been duly and validly authorized by all necessary corporate action on the part
of Xxxxxxx except for the approval of its stockholders contemplated by this
Agreement. The shares of Xxxxxxx Common Stock to be issued in connection with
the Merger and this Agreement, when issued in accordance with the terms of this
Agreement, will be validly issued, fully paid, nonassessable and free of
preemptive rights.
6.23 CONVERTIBLE SECURITIES. Xxxxxxx has no outstanding options, warrants
or other securities exercisable for, or convertible into, shares of Xxxxxxx
Common Stock, the terms of which would require any anti-dilution adjustments by
reason of the consummation of the transactions contemplated hereby.
6.24 DISCLOSURE. The representations, warranties and statements made by
Xxxxxxx in this Agreement, the Ancillary Agreements and in the Xxxxxxx
Disclosure Letter and in the certificates and other documents, delivered
pursuant hereto do not contain any untrue statement of a material fact, and,
when taken together, do not omit to state any material fact necessary to make
such representations, warranties and statements, in light of the circumstances
under which they are made, not misleading.
6.25 DEFINITION OF XXXXXXX'X KNOWLEDGE. As used in this Agreement, the
phrase to the knowledge of Xxxxxxx or to the best knowledge of Xxxxxxx (or
words of similar import) means the knowledge or the best knowledge of those
individuals identified in Section 6.25 of the Xxxxxxx Disclosure Letter, and
includes any fact, matter or circumstance which any of such individuals, as an
ordinary and prudent business person employed in the same capacity in the same
type and size of business as Xxxxxxx, should have known.
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ARTICLE 7
7. Covenants.
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7.1 ACQUISITION PROPOSALS. Unless and until this Agreement shall have
been terminated in accordance with its terms, Xxxxxx agrees and covenants (a)
that neither it nor any Xxxxxx Subsidiary shall, and each of them shall direct
and use its best efforts to cause its respective officers, directors,
employees, agents and representatives (including, without limitation, any
investment banker, attorney or accountant retained by it or any of the Xxxxxx
Subsidiaries) not to, directly or indirectly, initiate, solicit or encourage
any inquiries or the making or implementation of any proposal or offer
(including, without limitation, any proposal or offer to its stockholders) with
respect to a merger, acquisition, tender offer, exchange offer, consolidation
or similar transaction involving, or any purchase of 10% or more of the assets
or any equity securities or partnership interests (including, without
limitation, TOP Units) of, Xxxxxx or any Xxxxxx Subsidiary, other than the
transactions contemplated by this Agreement (any such proposal or offer being
hereinafter referred to as an "Acquisition Proposal") or engage in any
negotiations concerning, or provide any confidential information or data to, or
have any discussions with, any person relating to an Acquisition Proposal, or
otherwise facilitate any effort or attempt to make or implement an Acquisition
Proposal; (b) that Xxxxxx will immediately cease and cause to be terminated any
existing activities, discussions or negotiations with any parties conducted
heretofore with respect to any of the foregoing and will take the necessary
steps to inform the individuals or entities referred to above of the
obligations undertaken in this Section 7.1; and (c) that Xxxxxx will notify
Xxxxxxx immediately if any such inquiries or proposals are received by, any
such information is requested from, or any such negotiations or discussions are
sought to be initiated or continued with, it; PROVIDED, HOWEVER, that nothing
contained in this Section 7.1 shall prohibit the Board of Directors of Xxxxxx,
from (i) furnishing information to or entering into discussions or negotiations
with, any person or entity that makes an unsolicited bona fide Acquisition
Proposal, if, and only to the extent that, (A) the Board of Directors of
Xxxxxx, after consultation with and based upon the advice of Xxxxx, Xxxxx &
Xxxxx, or another nationally recognized law firm selected by Xxxxxx, determines
in good faith that such action is required for the Board of Directors to comply
with its fiduciary duties to stockholders under applicable law, (B) prior to
furnishing such information to, or entering into discussions or negotiations
with, such person or entity, Xxxxxx provides written notice to Xxxxxxx to the
effect that it is furnishing information to, or entering into discussions or
negotiations with, such person or entity, and (C) Xxxxxx keeps Xxxxxxx informed
of the status of any such discussions or negotiations; and (ii) to the extent
applicable, complying with Rule 14e-2 and Rule 14a-9 promulgated under the
Exchange Act with regard to an Acquisition Proposal. Notwithstanding anything
to the contrary set forth herein, nothing in this Section 7.1 shall (x) permit
Xxxxxx to terminate this Agreement (except as specifically provided in Article
9 hereof), (y) except as specifically provided in Article 9 hereof, permit
Xxxxxx or any Xxxxxx Subsidiary to enter into any agreement with respect to an
Acquisition Proposal during the term of this Agreement (it being agreed that
during the term of this Agreement, neither Xxxxxx nor any Xxxxxx Subsidiary
shall enter into any agreement with any person that provides for, or in any way
facilitates, an Acquisition Proposal), or (z) affect any other obligation of
any party under this Agreement.
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7.2 CONDUCT OF BUSINESSES.
(a) Prior to the Effective Time, except as specifically permitted by
this Agreement, unless the other party has consented in writing thereto,
Xxxxxxx
and Xxxxxx:
(i) Shall use their reasonable best efforts, and shall cause
each of their respective Subsidiaries to use their reasonable best efforts, to
preserve intact their business organizations and goodwill and keep available
the services of their respective officers and employees;
(ii) Shall confer on a regular basis with one or more
representatives of the other to report operational matters of materiality and,
subject to Section 7.1, any proposals to engage in material transactions;
(iii) Shall promptly notify the other of any material
emergency or other material change in the condition (financial or otherwise),
business, properties, assets, liabilities, prospects or the normal course of
their businesses or in the operation of their properties, any material
governmental complaints, investigations or hearings (or communications
indicating that the same may be contemplated), or the breach in any material
respect of any representation or warranty contained herein; and
(iv) Shall promptly deliver to the other true and correct copies
of any report, statement or schedule filed with the SEC subsequent to the date
of this Agreement.
(b) Prior to the Effective Time, unless Xxxxxxx has consented as set
forth below in this clause (b) Xxxxxx:
(i) Shall, and shall cause each Xxxxxx Subsidiary to, conduct
its operations according to their usual, regular and ordinary course in
substantially the same manner as heretofore conducted, subject to clauses
(ii)-(xii) below;
(ii) Shall not, and shall cause each Xxxxxx Subsidiary not to,
acquire, enter into an option to acquire or exercise an option or contract to
acquire additional real property, incur additional indebtedness, encumber
assets or commence construction of, or enter into any agreement or commitment
to develop or construct, shopping centers or any other type of real estate
projects (including, but not limited, to options to purchase real property
listed on Section 5.29 of the Xxxxxx Disclosure Letter), except that (i) Xxxxxx
may incur additional indebtedness under the Amended and Restated Revolving
Credit Agreement dated as of June 27, 1994 among TOP, Xxxxxx and The First
National Bank of Boston, as agent, and (ii) except that Xxxxxx may extend the
maturity of the current mortgage financing encumbering the Pavilion at Mequon
until June 30, 1996 upon the same terms and conditions which are currently in
effect for such financing;
(iii) Shall not amend its Charter or Bylaws, and shall cause
each Xxxxxx Subsidiary not to amend its Charter, Bylaws, joint venture
documents, partnership agreements or equivalent documents except (A) as
contemplated by this Agreement or (B) in
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the event that the Merger is not consummated prior to April 1, 1996, Xxxxxx may
adopt an amendment to the TOP Partnership Agreement, substantially in the form
of Exhibit I hereto;
(iv) Shall not (A) except pursuant to the exercise of options,
warrants, conversion rights and other contractual rights existing on the date
hereof and disclosed pursuant to this Agreement, issue any shares of its
capital stock, effect any stock split, reverse stock split, stock dividend,
recapitalization or other similar transaction, (B) grant, confer or award any
option, warrant, conversion right or other right not existing on the date
hereof to acquire any shares of its capital stock, (C) increase any
compensation or enter into or amend any employment agreement with any of its
present or future officers or directors, or (D) adopt any new employee benefit
plan (including any stock option, stock benefit or stock purchase plan) other
than the Severance Plan and the Severance Agreements or amend any existing
employee benefit plan in any material respect, except for changes which are
less favorable to participants in such plans (in connection with the foregoing,
Xxxxxx hereby agrees that (i) the aggregate payments which may be paid after
the date hereof under the Xxxxxx Property Manager Bonus Program shall not
exceed $150,000 and (ii) Xxxxxx shall award a maximum of $25,000 as bonus
compensation for employees who are not executive officers at or immediately
prior to the Effective Time);
(v) Shall not (A) declare, set aside or pay any dividend or
make any other distribution or payment with respect to any shares of its
capital stock, except in compliance with Section 7.15 of this Agreement, or (B)
except in connection with the use of shares of capital stock to pay the
exercise price or tax withholding in connection with the Xxxxxx Stock Option
Plan, directly or indirectly redeem, purchase or otherwise acquire any shares
of its capital stock or capital stock of any of the Xxxxxx Subsidiaries, or
make any commitment for any such action;
(vi) Shall not, and shall not permit any of the Xxxxxx
Subsidiaries to, sell, lease or otherwise dispose of (A) any Xxxxxx Properties
or any portion thereof or any of the capital stock of or partnership or other
interests in any of the Xxxxxx Subsidiaries or (B) except in the ordinary
course of business, any of its other assets which are material, individually or
in the aggregate;
(vii) Shall not, and shall not permit any of the Xxxxxx
Subsidiaries to, make any loans, advances or capital contributions to, or
investments in, any other person;
(viii) Shall not, and shall not permit any of the Xxxxxx
Subsidiaries to, pay, discharge or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, 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, or contemplated by, the
most recent consolidated financial statements (or the notes thereto) of Xxxxxx
included in the Xxxxxx Reports or incurred in the ordinary course of business
consistent with past practice;
(ix) Shall not, and shall not permit any of the Xxxxxx
Subsidiaries to, enter into any Commitment which may result in total payments
or liability by or to it in excess
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of $25,000 (provided, however, that nothing contained in this clause (ix) shall
permit Xxxxxx or any Xxxxxx Subsidiary to take any action prohibited by the
other provisions of this Section 7.2); provided further, that notwithstanding
anything in this Section 7.2(b) to the contrary, Xxxxxx'x current Senior Vice
President of Asset Management shall be permitted on behalf of Xxxxxx or a
Xxxxxx Subsidiary to enter into a Commitment (A) to make any repairs and/or
prevent damage to any Xxxxxx Properties as is necessary in the event of an
emergency situation as long as he uses his reasonable best efforts to contact
Xxxxxxx prior to entering into such Commitment and provides Xxxxxxx with a copy
of such Commitment on the day after such Commitment is entered into and (B) to
the extent that the failure to enter into such Commitment will result in Xxxxxx
being in default under the terms of any of the Xxxxxx Leases so long as Xxxxxx
has provided Xxxxxxx with five days prior written notice that it is entering
into such Commitment;
(x) Except for the Severance Plan and the Severance Agreements,
shall not, and shall not permit any of the Xxxxxx Subsidiaries to, enter into
any Commitment with any officer, director, consultant or affiliate of Xxxxxx or
any of the Xxxxxx Subsidiaries;
(xi) Shall provide Xxxxxxx with a reasonable opportunity to
review any comment on any federal income tax returns filed by Xxxxxx or any
Xxxxxx Subsidiary prior to the Effective Time; and
(xii) Shall not, without prior notification and consultation
with Xxxxxxx, terminate any employee under circumstances which would result in
severance payments to such employee pursuant to the Severance Plan or pay any
severance benefits to any employee under the terms of the Severance Plan on
account of such employee's purported termination for Good Reason (within the
meaning of the Severance Plan) on account of a substantial adverse change in
his position, authorities, responsibilities or status.
Xxxxxxx shall respond to any consent requested by Xxxxxx pursuant to this
Section 7.2(b) within five (5) business days of the receipt of such request.
In the event no response is received by Xxxxxx by the expiration of such five
business day period, such consent shall be deemed given.
(c) Notwithstanding anything to the contrary set forth in this
Agreement and without limiting any of the other rights of Xxxxxxx set forth
herein, between the date of this Agreement and the Effective Time, Xxxxxxx and
the Xxxxxxx Subsidiaries may enter into leases with respect to all or any
portion of the Xxxxxxx Properties, acquire, lease, enter into an option to
acquire, lease or exercise an option or contract to acquire, additional real
property, incur additional indebtedness, encumber assets or commence
construction of, or enter into any agreement or commitment to develop or
construct, shopping centers or other real estate projects.
7.3 MEETINGS OF STOCKHOLDERS. Each of Xxxxxxx and Xxxxxx will take all
action necessary in accordance with applicable law and its Charter and Bylaws
to convene a meeting of its stockholders as promptly as practicable to consider
and vote upon the approval of this Agreement and the transactions contemplated
hereby. The Board of Directors of Xxxxxxx and
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Xxxxxx each shall recommend that its stockholders approve this Agreement and
the transactions contemplated hereby and Xxxxxxx and Xxxxxx each shall use
their reasonable best efforts to obtain such approval, including, without
limitation, by timely mailing the joint proxy statement/prospectus contained in
the Form S-4 (as defined in Section 7.7 hereof) to their respective
stockholders; PROVIDED, HOWEVER, that nothing contained in this Section 7.3
shall prohibit the Board of Directors of Xxxxxxx or the Board of Directors of
Xxxxxx from failing to make such recommendation or using their reasonable best
efforts to obtain such approval if the Board of Directors of Xxxxxxx or Xxxxxx,
as the case may be, has determined in good faith, after consultation with and
based upon the advice of Xxxxx, Xxxxx & Xxxxx or Xxxxxxx, Procter & Xxxx, or
another nationally recognized firm selected by Xxxxxx or Xxxxxxx, as the case
may be, that such action is necessary for such Board of Directors to comply
with its fiduciary duties to its stockholders under applicable law. Xxxxxxx
and Xxxxxx shall coordinate and cooperate with respect to the timing of such
meetings and shall use their reasonable best efforts to hold such meetings on
the same day. It shall be a condition to the mailing of the Form S-4 that (i)
Xxxxxxx shall have received a "comfort" letter from Coopers & Xxxxxxx LLP,
independent public accountants for Xxxxxx, dated as of a date within two
business days before the date on which the Form S-4 shall become effective,
with respect to the financial statements of Xxxxxx included or incorporated in
the Form S-4, in form and substance reasonably satisfactory to Xxxxxxx, and
customary in scope and substance for "comfort" letters delivered by independent
public accountants in connection with registration statements and proxy
statements similar to the Form S-4, and (ii) Xxxxxx shall have received a
"comfort" letter from KPMG Peat Marwick LLP, independent public accountants for
Xxxxxxx, dated as of a date within two business days before the date on which
the Form S-4 shall become effective, with respect to the financial statements
of Xxxxxxx included or incorporated in the Form S-4, in form and substance
reasonably satisfactory to Xxxxxx, and customary in scope and substance for
"comfort" letters delivered by independent public accountants in connection with
registration statements and proxy statements similar to the Form S-4.
7.4 FILINGS; OTHER ACTION. Subject to the terms and conditions herein
provided, Xxxxxx and Xxxxxxx shall: (a) to the extent required, promptly make
their respective filings and thereafter make any other required submissions
under the HSR Act with respect to the Merger; (b) use all reasonable best
efforts to cooperate with one another in (i) determining which filings are
required to be made prior to the Effective Time with, and which consents,
approvals, permits or authorizations are required to be obtained prior to the
Effective Time from, governmental or regulatory authorities of the United
States, the several states and foreign jurisdictions and any third parties in
connection with the execution and delivery of this Agreement, and the Ancillary
Agreements and the consummation of the transactions contemplated by such
agreements and (ii) timely making all such filings and timely seeking all such
consents, approvals, permits or authorizations; (c) use all reasonable best
efforts to obtain in writing any consents required from third parties to
effectuate the Merger, such consents to be in reasonably satisfactory form to
Xxxxxx and Xxxxxxx; and (d) use all reasonable best efforts to take, or cause
to be taken, all other action and do, or cause to be done, all other things
necessary, proper or appropriate to consummate and make effective the
transactions contemplated by this Agreement and the Ancillary Agreements. If,
at any time after the Effective Time, any further action is necessary or
desirable to carry out the purpose of this Agreement or the Ancillary
Agreements, the proper officers and directors of Xxxxxxx and
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Xxxxxx shall take all such necessary action.
7.5 INSPECTION OF RECORDS. From the date hereof to the Effective Time,
each of Xxxxxx and Xxxxxxx shall allow all designated officers, attorneys,
accountants and other representatives of the other access at all reasonable
times to the records and files, correspondence, audits and properties, as well
as to all information relating to commitments, contracts, titles and financial
position, or otherwise pertaining to the business and affairs, of Xxxxxx and
Xxxxxxx and their respective subsidiaries.
7.6 PUBLICITY. Xxxxxxx and Xxxxxx shall consult with each other before
issuing any press release or otherwise making any public statements with
respect to this Agreement or any transaction contemplated herein and shall not
issue any such press release or make any such public statement without the
prior consent of the other party, which consent shall not be unreasonably
withheld; PROVIDED, HOWEVER, that a party may, without the prior consent of the
other party, issue such press release or make such public statement as may be
required by law or the rules of the NYSE if it has used its reasonable best
efforts to consult with the other party and to obtain such party's consent but
has been unable to do so in a timely manner.
7.7 REGISTRATION STATEMENT. Xxxxxxx and Xxxxxx shall cooperate and
promptly prepare and Xxxxxxx shall file with the SEC as soon as practicable a
Registration Statement on Form S-4 under the Securities Act, with respect to
the shares of Xxxxxxx Common Stock issuable in the Merger, a portion of which
Form S-4 shall also serve as the joint proxy statement with respect to the
meetings of the stockholders of Xxxxxx and of Xxxxxxx in connection with the
Merger (in its entirety, the Form S-4"). The respective parties will cause
the Form S-4 to comply as to form in all material respects with the applicable
provisions of the Securities Act, the Exchange Act and the rules and
regulations thereunder. Each of Xxxxxxx and Xxxxxx shall furnish all
information about itself and its business and operation and all necessary
financial information to the other as the other may reasonably request in
connection with the preparation of the Form S-4. Xxxxxxx shall use its
reasonable best efforts, and Xxxxxx will cooperate with Xxxxxxx, to have the
Form S-4 declared effective by the SEC as promptly as practicable. Xxxxxxx
shall use its reasonable best efforts to obtain, prior to the effective date of
the Form S-4, all necessary state securities law or Blue Sky permits or
approvals required to carry out the transactions contemplated by this Agreement
and will pay all expenses incident thereto. Xxxxxxx agrees that the Form S-4
and each amendment or supplement thereto at the time of mailing thereof and at
the time of the respective meetings of stockholders of Xxxxxxx and Xxxxxx, will
not include an untrue statement of a material fact or omit 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;
PROVIDED, HOWEVER, that the foregoing shall not apply to the extent that any
such untrue statement of a material fact or omission to state a material fact
was made by Xxxxxxx in reliance upon and in conformity with information
concerning Xxxxxx furnished to Xxxxxxx by Xxxxxx for use in the Form S-4.
Xxxxxx agrees that the information provided by it for inclusion in the Form S-4
and each amendment or supplement thereto, at the time of mailing thereof and at
the time of the respective meetings of stockholders of Xxxxxxx and Xxxxxx, will
not include an untrue statement of a material fact or omit 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
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made, not misleading. Xxxxxxx will advise and deliver copies (if any) to
Xxxxxx, promptly after it receives notice thereof, of the time when the Form
S-4 has become effective or any supplement or amendment has been filed, the
issuance of any stop order, the suspension of the qualification of the Xxxxxxx
Common Stock issuable in connection with the Merger for offering or sale in any
jurisdiction, or any request by the SEC for amendment of the Form S-4 or
comments thereon and responses thereto or requests by the SEC for additional
information.
7.8 LISTING APPLICATION. Xxxxxxx shall promptly prepare and submit to
the NYSE a listing application covering the shares of Xxxxxxx Common Stock
issuable in the Merger, and shall use its best efforts to obtain, prior to the
Effective Time, approval for the listing of such Xxxxxxx Common Stock, subject
to official notice of issuance.
7.9 FURTHER ACTION. Each party hereto shall, subject to the fulfillment
at or before the Effective Time of each of the conditions of performance set
forth herein or the waiver thereof, perform such further acts and execute such
documents as may reasonably be required to effect the Merger. Without limiting
the foregoing, at the Closing, Xxxxxx shall deliver, deeds, affidavits or other
documents necessary for Xxxxxxx to obtain endorsements to existing title
insurance policies or new title insurance policies which (i) insure that
Xxxxxxx is the general partner (by merger) of the record owner of the Xxxxxx
Properties, subject only to the Encumbrances and (ii) contain a so-called
non-imputation endorsement (such non-imputation endorsement insuring that
Xxxxxxx will not be charged with the imputed knowledge of Xxxxxx, the Xxxxxx
Subsidiaries and Affiliates thereof). In connection with the Closing, Xxxxxx
and each Xxxxxx Subsidiary shall use its best efforts to deliver to Xxxxxxx
such deeds, bills of sale, assignments, certificates and affidavits as are
required to effectuate the consummation of the transactions described herein.
7.10 AFFILIATES OF XXXXXX.
(a) At least 30 days prior to the Closing Date, Xxxxxx shall deliver
to Xxxxxxx a list of names and addresses of those persons who were, in Xxxxxx s
reasonable judgment, at the record date for its stockholders meeting to
approve the Merger, affiliates (each such person, an Affiliate") of Xxxxxx
within the meaning of Rule 145. Xxxxxx shall provide Xxxxxxx such information
and documents as Xxxxxxx shall reasonably request for purposes of reviewing
such list. Xxxxxx shall use its reasonable best efforts to deliver or cause to
be delivered to Xxxxxxx, prior to the Closing Date, from each of the Affiliates
of Xxxxxx identified in the foregoing list, an Affiliate Letter in the form
attached hereto as Exhibit X. Xxxxxxx shall be entitled to place legends as
specified in such Affiliate Letters on the certificates evidencing any shares
of Xxxxxxx Common Stock to be received by such Affiliates pursuant to the terms
of this Agreement, and to issue appropriate stop transfer instructions to the
transfer agent for the shares of Xxxxxxx Common Stock, consistent with the
terms of such Affiliate Letters.
(b) Xxxxxxx shall file the reports required to be filed by it under
the Exchange Act and the rules and regulations adopted by the SEC thereunder,
and it will take such further action as any Affiliate of Xxxxxx may reasonably
request, all to the extent required from time to time to enable such Affiliate
to sell shares of Xxxxxxx Common Stock
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received by such Affiliate in the Merger without registration under the
Securities Act pursuant to (i) Rule 145(d)(1) or (ii) any successor rule or
regulation hereafter adopted by the SEC.
7.11 EXPENSES. Subject to the provisions of Article 9, all costs and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expenses, except
that (a) the filing fee in connection with the HSR Act filing, if any, (b) the
filing fee in connection with the filing of the Form S-4 or Proxy
Statement/Prospectus with the SEC and (c) the expenses incurred for printing
and mailing the Form S-4, shall be shared equally by Xxxxxx and Xxxxxxx. All
costs and expenses for professional services rendered pursuant to the
transactions contemplated by this Agreement including, but not limited to,
investment banking and legal services, will be paid by each party incurring
such services.
7.12 INDEMNIFICATION.
(a) Xxxxxxx agrees that all rights to indemnification or exculpation
now existing in favor of the directors, officers, employees, advisors and
agents of Xxxxxx and the Xxxxxx Subsidiaries (including, without limitation,
TOP) as provided in their respective charters or By-Laws in effect as of the
date hereof with respect to matters occurring at or prior to the Effective Time
shall survive the Merger and shall continue in full force and effect. For a
period of six years after the Effective Time, Xxxxxxx shall not amend, repeal
or otherwise modify the provisions in its Charter and Bylaws providing for
exculpation of director liability and indemnification in any manner that would
materially and adversely affect the rights thereunder of individuals who at any
time prior to the Effective Time were directors, officers, employees, advisors
or agents of Xxxxxx in respect of actions or omissions occurring at or prior to
the Effective Time (including, without limitation, the transactions
contemplated by this Agreement), unless such modification is required by law;
PROVIDED, HOWEVER, that in the event any claim or claims are asserted or made
either prior to the Effective Time or within such six year period, all rights
to indemnification in respect of any such claim or claims shall continue until
disposition of any and all such claims. In connection with the execution of
this Agreement, all directors of Xxxxxx shall enter into amendments to their
existing indemnification agreements with Xxxxxx and Xxxxxxx, substantially in
the form of Exhibit H hereto, which will be effective as of the Effective Time.
Nothing in the following paragraphs of this Section 7.12 shall create an
inference, either by omission or inclusion, that limits in any way the rights
set forth herein.
(b) In addition to the rights provided in Section 7.12(a) above, in
the event of any threatened or actual claim, action, suit, proceeding or
investigation, whether civil, criminal or administrative, including, without
limitation, any action by or on behalf of any or all security holders of Xxxxxx
or Xxxxxxx or by or in the right of Xxxxxx or Xxxxxxx or any 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 Effective
Time, a director of Xxxxxx (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 is or was a director of Xxxxxx or
any of the Xxxxxx Subsidiaries (including, without limitation, TOP) or any
action or omission by such person in his capacity as a director, or (ii) this
Agreement or
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the transactions contemplated by this Agreement, whether in any case asserted
or arising before or after the Effective Time, Xxxxxxx on one hand and the
Indemnified Parties on the other hand, hereto agree to cooperate and use their
reasonable best efforts to defend against and respond thereto. It is
understood and agreed that, after the Effective Time, Xxxxxxx shall indemnify
and hold harmless, as and to the full extent permitted by applicable law, each
Indemnified Party against any losses, claims, liabilities, 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, proceeding or investigation. In addition, after the Effective Time, in
the event of any such threatened or actual claim, action, suit, proceeding or
investigation, Xxxxxxx shall promptly pay and advance expenses and costs
incurred by each Indemnified Person as they become due and payable in advance
of the final disposition of any claim, action, suit, proceeding or
investigation to the fullest extent and in the manner permitted by law.
Notwithstanding the foregoing, Xxxxxxx shall pay for only one counsel and one
local counsel for all Indemnified Parties unless the use of one such counsel
and one local counsel for such Indemnified Parties would present such counsel
with a conflict of interest, in which case Xxxxxxx shall employ other counsel
to the extent necessary to avoid a conflict of interest with any counsel or
party involved in the matter. Notwithstanding anything to the contrary set
forth in this Agreement, Xxxxxxx (i) shall not be liable for any settlement
effected without its prior written consent, and (ii) shall not have any
obligation hereunder to any Indemnified Party if a court of competent
jurisdiction shall determine in a final and non-appealable order that
indemnification of such Indemnified Party in the manner contemplated hereby is
prohibited by applicable law. In the event of such a final and non-appealable
determination by a court that such indemnification is prohibited by applicable
law, the Indemnified Person shall promptly refund to Xxxxxxx the amount of all
expenses theretofore advanced pursuant hereto. Any Indemnified Party wishing
to claim indemnification under this Section, upon learning of any such claim,
action, suit, proceeding or investigation, shall promptly notify Xxxxxxx of
such claim and the relevant facts and circumstances with respect thereto,
provided that the failure to provide such notice shall not affect the
obligations of Xxxxxxx except to the extent such failure to notify materially
prejudices Xxxxxxx'x ability to defend such claim, action, suit, proceeding or
investigation.
(c) At or prior to the Effective Time, Xxxxxxx shall purchase
directors liability insurance policy coverage for Xxxxxx'x directors and
Executive Officers as provided in Schedule 7.12 hereto.
(d) This Section 7.12 is intended for the irrevocable benefit of,
and to grant third party rights to, the Indemnified Parties and their
successors, assigns and heirs and shall be binding on all successors and
assigns of Xxxxxxx. Each of the Indemnified Parties shall be entitled to
enforce the covenants contained in this Section 7.12 and Xxxxxxx acknowledges
and agrees that each Indemnified Party would suffer irreparable harm and that
no adequate remedy at law exists for a breach of such covenants.
(e) To the extent permitted by law, all rights of indemnification for
the benefit of any director of Xxxxxx shall be mandatory rather than
permissive.
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(f) Any determination required to be made with respect to whether a
party's conduct complies with the standards set forth in the Charter or By-Laws
of the Surviving Corporation or under applicable law shall be made by (i)
Sidley & Austin or (ii) in the event Sidley & Austin shall not be available to
make such determination, then Skadden, Arps, Slate, Xxxxxxx & Xxxx or (iii) in
the event that neither Sidley & Austin nor Skadden, Arps, Slate, Xxxxxxx & Xxxx
shall be available to make such determination, then Xxxxxxxx & Xxxxx, or (iv)
in the event that none of Sidley & Austin, Skadden, Arps, Slate, Xxxxxxx & Xxxx
or Xxxxxxxx & Xxxxx shall be available to make such determination, then O
Melveny & Xxxxx (in each case whose reasonable fees and expenses shall be paid
by the Surviving Corporation).
(g) Notwithstanding anything to the contrary set forth in this
Agreement, in the event any Indemnified Party is required to file suit against
Xxxxxxx to enforce the indemnity obligations provided for in this Section, it
shall be entitled to all expenses, including reasonable attorneys fees and
expenses, which it has incurred in enforcing its rights hereunder.
(h) In the event that Xxxxxxx or any of its successors or assigns
(i) consolidates with or merges into any other person or entity and shall not
be the continuing or surviving corporation or 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 the successors and assigns of Xxxxxxx assume
the obligations set forth in this Section.
7.13 REORGANIZATION. From and after the date hereof and until the
Effective Time, neither Xxxxxxx nor Xxxxxx nor any of their respective
subsidiaries or other affiliates shall (i) knowingly take any action, or
knowingly fail to take any action, that would jeopardize qualification of the
Merger as a reorganization within the meaning of Section 368(a)(1)(A) of the
Code or (ii) enter into any contract, agreement, commitment or arrangement with
respect to the foregoing. Following the Effective Time, Xxxxxxx shall use its
best efforts to conduct its business in a manner that would not jeopardize the
characterization of the Merger as a reorganization within the meaning of
Section 368(a) of the Code.
7.14 CERTAIN BENEFITS.
(a) Xxxxxxx agrees that Xxxxxx and the Xxxxxx Subsidiaries, and the
Surviving Corporation and its subsidiaries after the Effective Time, will
provide benefit plans to employees of Xxxxxx and the Xxxxxx Subsidiaries that,
at the option of Xxxxxxx, either (i) will be no less favorable, in the
aggregate, than those provided by Xxxxxxx and the Xxxxxxx Subsidiaries to their
employees or (ii) will, in the aggregate, be no less favorable than those
provided by Xxxxxx and the Xxxxxx Subsidiaries to their employees immediately
prior to the date of this Agreement. Nothing contained in this Agreement shall
be construed to grant any right of continued employment to any present employee
of Xxxxxx or any of the Xxxxxx Subsidiaries.
(b) Except for normal increases in the ordinary course of business
that are consistent with past practices and cost increases of third party
providers necessary to maintain
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benefits at current levels that, in the aggregate, do not result in a material
increase in benefits or compensation expense to Xxxxxx or any of the Xxxxxx
Subsidiaries or as set forth in Section 5.16 of the Xxxxxx Disclosure Letter,
Xxxxxx will not, and will not permit any of the Xxxxxx Subsidiaries to, adopt
or amend (except as may be required by law and except for the establishment of
the Severance Plan and the Severance Agreements) any bonus, profit sharing,
compensation, severance, termination, stock option, pension, retirement,
deferred compensation, employment or other employee benefit agreements, trusts,
plans, funds or other arrangements for the benefit or welfare of any director,
officer or employee that increase in any manner the compensation, retirement,
welfare or fringe benefits of any director, officer or employee or pay any
benefit not required by any existing plan or arrangement (including without
limitation the granting of stock options) or take any action or grant any
benefit not expressly required under the terms of any existing agreements,
trusts, plans, funds or other such arrangements or enter into any contract,
agreement, commitment or arrangement to any of the foregoing.
7.15 DIVIDENDS.
(a) Prior to the Effective Time, Xxxxxx and Xxxxxxx shall cooperate
and coordinate with each other so that (i) the record date for regular
quarterly dividends and distributions with respect to the fourth quarter of
1995 and thereafter until the Effective Time shall occur on the same date, (ii)
the payment date for each such regular quarterly dividend and distribution
shall be on the last day of such applicable quarter, and (iii) the amount of
each such regular quarterly dividend and distribution shall not exceed $.25 per
quarter for Xxxxxx and $.33 per quarter for Xxxxxxx.
(b) For its taxable year ending at the Effective Time (the "Short
Taxable Year") Xxxxxx will not have any (i) net income from foreclosure
property as defined by Section 857(b)(4) of the Code or (ii) net income
derived from prohibited transactions as defined by Section 857(b)(6) of the
Code. Immediately prior to the Effective Time, Xxxxxx will cause to be
distributed a dividend (within the meaning of Section 316 of the Code) to its
stockholders (the "Merger Dividend") of an amount such that (i) Xxxxxx'x real
estate investment trust taxable income as defined in Section 857(b)(2) of the
Code for the Short Taxable Year shall equal zero; (ii) Xxxxxx'x current and
accumulated earnings and profits as described in Section 312 of the Code for
the Short Taxable Year shall equal zero; and (iii) Xxxxxx'x deduction for
dividends paid during the taxable year (within the meaning of Sections 561 and
857(a)(1) of the Code and determined without regard to "capital gain dividends"
within the meaning of Section 857(b) of the Code) for the Short Taxable Year
will equal or exceed the amount set forth in Section 857(a)(1)(A) and (B) of
the Code.
(c) Xxxxxx will do all things necessary to ensure that it continues
to meet all of the requirements to be treated as a REIT for all purposes under
the Code and the income tax provisions of the State of Illinois (and any other
state in which Xxxxxx is subject to tax and which provides for the taxation of
REITs in a manner similar to the treatment of REITs under Sections 856-860 of
the Code) and shall make any and all required filings in connection therewith,
including providing Xxxxxxx with all information, documentation and assistance
Xxxxxxx may reasonably request in order for Xxxxxxx to mail the stockholder
demand letters
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required by Treasury Regulation [Section] 1.857-8 within 30 days after the
Effective Time and to take any other actions that may be necessary or
appropriate for Xxxxxxx, as the Surviving Corporation, to take in order to
maintain Xxxxxx'x status as a REIT through the Effective Time.
(d) Xxxxxxx shall pay a dividend in connection with the Closing to
its stockholders in an amount per share equal to the quotient obtained by
dividing (x) the Merger Dividend per share paid by Xxxxxx pursuant to Section
7.15(b) by (y) the Exchange Ratio.
(e) Until the Effective Time, Xxxxxxx shall not declare, set aside
or pay any dividend or make any other distribution or payment with respect to
any of its respective shares of capital stock which is extraordinary. For
the purposes of this Agreement, a dividend, distribution or payment with
respect to capital stock shall be considered extraordinary if (a) the Board
of Directors of Xxxxxxx designates such cash payment as extraordinary when
declared or (b) the amount by which any cash payment exceeds 200% of the most
recent cash dividend declared by the Board of Directors of Xxxxxxx.
7.16 IRS PRIVATE LETTER RULING. Xxxxxx shall cooperate and assist Xxxxxxx
in submitting an application for and obtaining the private letter ruling from
the IRS which is described in Section 8.3(i) hereto.
ARTICLE 8
8. Conditions.
-----------
8.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER. The
respective obligation of each party to effect the Merger and the other
transactions contemplated herein shall be subject to the fulfillment at or
prior to the Effective Time of the following conditions, any or all of which
may be waived, in whole or in part by the parties hereto, to the extent
permitted by applicable law:
(a) This Agreement and the transactions contemplated hereby shall
have been approved by the requisite vote of stockholders of Xxxxxxx and Xxxxxx.
(b) The waiting period applicable to the consummation of the Merger
under the HSR Act, if applicable, shall have expired or been terminated.
(c) Neither of the parties hereto shall be subject to any order,
ruling or injunction of a court of competent jurisdiction which prohibits the
consummation of the transactions contemplated by this Agreement. In the event
any such order, ruling or injunction shall have been issued, each party agrees
to use its best efforts to have any such order, ruling or injunction lifted,
stayed or reversed.
(d) The Form S-4 shall have been declared effective by the SEC under
the Securities Act, and no stop order suspending the effectiveness of the Form
S-4 shall have been
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issued by the SEC, and no proceedings for that purpose shall have been
initiated or, to the knowledge of Xxxxxxx or Xxxxxx, threatened by the SEC.
(e) Xxxxxxx shall have obtained the approval for the listing of the
shares of Xxxxxxx Common Stock issuable in the Merger on the NYSE, subject to
official notice of issuance.
(f) The consents set forth in Schedule 8.1(f) hereof shall have been
obtained. All other consents, authorizations, orders and approvals of (or
filings or registrations with) any governmental commission, board, other
regulatory body or third parties required to be made or obtained by Xxxxxxx,
Xxxxxx and their respective subsidiaries and affiliated entities in connection
with the execution, delivery and performance of this Agreement and the
Ancillary Agreements shall have been obtained or made, except where the failure
to have obtained or made any such consent, authorization, order, approval,
filing or registration, would not have (i) a Xxxxxx Material Adverse Effect or
(ii) a Xxxxxxx Material Adverse Effect, as the case may be.
8.2 CONDITIONS TO OBLIGATIONS OF XXXXXX TO EFFECT THE MERGER. The
obligation of Xxxxxx to effect the Merger shall be subject to the fulfillment
at or prior to the Closing Date of the following conditions, unless waived by
Xxxxxx:
(a) Each of the representations and warranties of Xxxxxxx contained
in this Agreement shall be true and correct in all material respects as of the
date of this Agreement and as of the Effective Time as though made on and as of
the Effective Time and Xxxxxx shall have received a certificate, dated the
Closing Date, signed on behalf of Xxxxxxx by the President of Xxxxxxx to the
foregoing effect.
(b) Xxxxxxx shall have performed or complied in all material
respects with all agreements and covenants required by this Agreement to be
performed or complied with by it on or prior to the Effective Time, and Xxxxxx
shall have received a certificate, dated the Closing Date, signed on behalf of
Xxxxxxx by the President of Xxxxxxx to the foregoing effect.
(c) Xxxxxx shall have received the opinion of Xxxxx, Xxxxx & Xxxxx,
or another nationally recognized law firm selected by Xxxxxx, dated not less
than five business days prior to the date the Form S-4 is declared effective by
the SEC, reasonably acceptable to Xxxxxx, and subject to customary conditions
and qualifications (including reliance, in part, on representations of Xxxxxxx
and Xxxxxx and certain stockholders of Xxxxxx), to the effect that the Merger
will be treated for federal income tax purposes as a tax-free reorganization
qualifying under the provisions of Sections 368(a)(1)(A) of the Code, which
opinion shall not have been withdrawn or modified in any material respect.
(d) At closing, Xxxxxx shall have received the opinion of Xxxxxxx,
Procter & Xxxx, or another nationally recognized law firm selected by Xxxxxxx,
in form and substance reasonably satisfactory to Xxxxxx, to the effect that,
for all applicable tax years for which Xxxxxxx'x federal income tax returns are
subject to audit and Xxxxxxx is subject to assessment
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for taxes reportable therein and through the date of the Closing, Xxxxxxx has
qualified to be taxed as a REIT under Sections 856 through 860 of the Code.
(e) From the date of this Agreement through the Effective Time,
there shall not have occurred any change concerning Xxxxxxx or any of the
Xxxxxxx Subsidiaries that has had or could be reasonably likely to have a
Xxxxxxx Material Adverse Effect and Xxxxxx shall have received a certificate,
dated the Closing Date, signed on behalf of Xxxxxxx by the President of Xxxxxxx
to the foregoing effect.
8.3 CONDITIONS TO OBLIGATION OF XXXXXXX TO EFFECT THE MERGER. The
obligations of Xxxxxxx to effect the Merger shall be subject to the fulfillment
at or prior to the Closing Date of the following conditions, unless waived by
Xxxxxxx:
(a) Each of the representations and warranties of Xxxxxx contained
in this Agreement shall be true and correct in all material respects as of the
date of this Agreement and as of the Effective Time as though made on and as of
the Effective Time, and Xxxxxxx shall have received a certificate, dated the
Closing Date, signed on behalf of Xxxxxx by the President of Xxxxxx to the
foregoing effect.
(b) Xxxxxx shall have performed or complied in all material respects
with all agreements and covenants required by this Agreement to be performed or
complied with by it on or prior to the Effective Time, and Xxxxxxx shall have
received a certificate, dated the Closing Date, signed on behalf of Xxxxxx by
the President of Xxxxxx to the foregoing effect.
(c) Xxxxxxx shall have received the opinion of Xxxxxxx, Procter &
Xxxx, or another nationally recognized law firm selected by Xxxxxxx, dated not
less than five business days prior to the date the Form S-4 is declared
effective by the SEC, reasonably acceptable to Xxxxxxx, and subject to
customary conditions and qualifications (including reliance, in part, on
representations of Xxxxxxx and Xxxxxx and certain stockholders of Xxxxxx), to
the effect that the Merger will be treated for federal income tax purposes as a
tax-free reorganization qualifying under the provisions of Sections
368(a)(1)(A) of the Code, which opinion shall not have been withdrawn or
modified in any material respect.
(d) At closing, Xxxxxxx shall have received (i) the opinion of
Xxxxx, Xxxxx & Xxxxx, or another nationally recognized law firm selected by
Xxxxxx, in form and substance reasonably satisfactory to Xxxxxxx, to the effect
that, for the taxable year ended December 31, 1995 and for the short taxable
year ending at the date of the Closing, Xxxxxx has qualified to be taxed as a
REIT under Sections 856 through 860 of the Code and (ii) the opinion of Coopers
& Xxxxxxx LLP, independent public accountants for Xxxxxx, in form and substance
reasonably satisfactory to Xxxxxxx, to the effect that for the taxable years
ended December 31, 1993 and December 31, 1994, Xxxxxx qualified to be taxed as
a REIT under Section 856 through 860 of the Code.
(e) From the date of this Agreement through the Effective Time,
there shall not have occurred any change concerning Xxxxxx or any of the Xxxxxx
Subsidiaries, that has had or could be reasonably likely to have a Xxxxxx
Material Adverse Effect and Xxxxxxx shall
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have received a certificate, dated the Closing Date, signed on behalf of Xxxxxx
by the President of Xxxxxx to the foregoing effect.
(f) Xxxxxx shall have obtained and delivered to Xxxxxxx estoppel
certificates dated no earlier than 45 days prior to the Effective Time with
respect to (x) each of the leases and REA Agreements set forth on Schedule
8.3(f) hereof and (y) leases representing a total of 50% of the total rented
space of each Xxxxxx Property, other than rented space represented by the
leases listed on Schedule 8.3(f) hereof. Such estoppel certificates shall
either be (x) substantially in the form of Exhibit E hereto or (y) in the form
required by the applicable lease.
(g) Xxxxxx and all of the limited partners of TOP shall have
executed the amended and restated TOP Partnership Agreement in the form
attached hereto as Exhibit B and the transfers of securities contemplated by
Section 1.5 of this Agreement and all of the actions described in Section 1.6
of this Agreement have been consummated or shall have occurred.
(h) Xxxxxxx shall have obtained a letter from Coopers & Xxxxxxx LLP,
independent public accountants for Xxxxxx, in form and substance reasonably
satisfactory to Xxxxxxx, certifying that (i) Xxxxxx has satisfied the
requirements of Section 7.15(b) of this Agreement and (ii) for federal income
tax purposes, Xxxxxx will not have any accumulated or current earnings or
profits immediately prior to the Effective Time.
(i) Xxxxxxx shall have received a private letter ruling from the
IRS, in form and substance reasonably satisfactory to Xxxxxxx, to the effect
that following the consummation of the Merger, each of TFC and Xxxxxx
Properties Investment, Inc. will qualify as a qualified REIT subsidiary of
Xxxxxxx under Section 856(i) of the Code.
ARTICLE 9
9. Termination.
------------
9.1 TERMINATION. This Agreement may be terminated and abandoned at any
time prior to the Effective Time, whether before or after approval and adoption
of this Agreement by the stockholders of Xxxxxx and Xxxxxxx:
(a) by mutual written consent of Xxxxxxx and Xxxxxx; or
(b) by either Xxxxxxx or Xxxxxx if any United States federal or
state court of competent jurisdiction or other governmental entity shall have
issued an order, decree or ruling or taken any other action permanently
restraining, enjoining or otherwise prohibiting the Merger and such order,
decree, ruling or other action shall have become final and non-appealable,
provided that the party seeking to terminate shall have used its best efforts
to appeal such order, decree, ruling or other action; or
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(c) by Xxxxxxx upon a breach of any representation, warranty,
covenant or agreement on the part of Xxxxxx set forth in this Agreement, or if
any representation or warranty of Xxxxxx shall have become untrue, in either
case such that the conditions set forth in Section 8.3(a) or Section 8.3(b), as
the case may be, would be incapable of being satisfied by June 30, 1996;
PROVIDED, HOWEVER, that, in any case, a willful breach shall be deemed to cause
such conditions to be incapable of being satisfied for purposes of this Section
9.1(c);
(d) by Xxxxxx upon a breach of any representation, warranty,
covenant or agreement on the part of Xxxxxxx set forth in this Agreement, or if
any representation or warranty of Xxxxxxx shall have become untrue, in either
case such that the conditions set forth in Section 8.2(a) or Section 8.2(b), as
the case may be, would be incapable of being satisfied by June 30, 1996;
PROVIDED, HOWEVER, that, in any case, a willful breach shall be deemed to cause
such conditions to be incapable of being satisfied for purposes of this Section
9.1(d);
(e) by Xxxxxxx if (i) the Board of Directors of Xxxxxx shall have
failed to make, or shall have withdrawn, amended, modified or changed its
approval or recommendation of this Agreement or any of the transactions
contemplated hereby; (ii) Xxxxxx shall have failed as soon as practicable to
mail the Form S-4 to its stockholders or to include the recommendation of its
Board of Directors of this Agreement and the transactions contemplated hereby
in the Form S-4; (iii) the Board of Directors of Xxxxxx shall have recommended
that stockholders of Xxxxxx accept or approve an Acquisition Proposal by a
person other than Xxxxxxx (or Xxxxxx or its Board shall have resolved to do
such); or (iv) Xxxxxx or its Board of Directors shall have resolved to do any
of the foregoing;
(f) by Xxxxxx, if the Board of Directors of Xxxxxx recommends to
Xxxxxx'x stockholders approval or acceptance of a Acquisition Proposal by a
person other than Xxxxxxx, but only in the event that the Board of Directors of
Xxxxxx, after consultation with and based upon the advice of Xxxxx, Xxxxx &
Xxxxx or another nationally recognized law firm, has determined in good faith
that such action is necessary for the Board of Directors of Xxxxxx to comply
with its fiduciary duties to its stockholders under applicable law;
(g) by either Xxxxxxx or Xxxxxx if this Agreement and the
transactions contemplated hereby shall have failed to receive the requisite
vote for approval and adoption by the stockholders of Xxxxxxx or Xxxxxx upon
the holding of a duly convened stockholder meeting;
(h) by Xxxxxx if (i) the Board of Directors of Xxxxxxx shall have
failed to make, or shall have withdrawn, amended, modified or changed its
approval or recommendation of this Agreement or the Merger or (ii) if the Board
of Directors of Xxxxxxx recommends to Xxxxxxx'x stockholders approval or
acceptance of a proposal by a person other than Xxxxxx to acquire 50% or more
of the assets or stock of Xxxxxxx, by way of merger, tender offer, exchange
offer or similar transaction; or
(i) by either Xxxxxxx or Xxxxxx, if the Merger shall not have been
consummated on or before June 30, 1996 (other than due to the failure of the
party seeking to
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terminate this Agreement to perform its obligations under this Agreement
required to be performed by it at or prior to the Effective Time).
The right of any party hereto to terminate this Agreement pursuant to this
Section 9.1 shall remain operative and in full force and effect regardless of
any investigation made by or on behalf of any party hereto, any person
controlling any such party or any of their respective employees, officers,
directors, agents, representatives or advisors, whether prior to or after the
execution of this Agreement.
9.2 EFFECT OF TERMINATION.
(a) In the event of the termination and abandonment of this
Agreement pursuant to Section 9.1 hereof, this Agreement shall forthwith become
void and have no effect, without any liability on the part of any party hereto
or its affiliates, directors, officers or stockholders and all rights and
obligations of any party hereto shall cease except for agreements contained in
Section 10.5; PROVIDED, HOWEVER, that nothing contained in this Section 9.2
shall relieve any party from liability for any breach of this Agreement or
shall relieve Xxxxxx from any liability under this Article 9.
(b) If (x) Xxxxxxx terminates this Agreement pursuant to Section
9.1(e)(iii) or pursuant to 9.1(c) as a result of a willful breach by Xxxxxx or
(y) Xxxxxx terminates this Agreement pursuant to Section 9.1(f), then Xxxxxx
shall pay to Xxxxxxx an amount (the "Termination Amount") in cash equal to the
sum of (i) $3,000,000, plus (ii) Xxxxxxx'x out-of-pocket costs and expenses,
in connection with this Agreement and the transactions contemplated hereby,
including, without limitation, fees and disbursements of accountants, attorneys
and investment bankers, up to a maximum of $2,000,000 in accordance with the
provisions of Section 9.3.
(c) If Xxxxxxx terminates this Agreement pursuant to Section
9.1(e)(i), 9.1(e)(ii), 9.1(e)(iv) or 9.1(c) (except for a termination because
of a willful breach by Xxxxxx in which case the provisions of Section 9.2(b)
will apply), Xxxxxx shall pay all of Xxxxxxx'x out-of-pocket costs and
expenses, in connection with this Agreement and the transactions contemplated
hereby, including, without limitation, fees and disbursements of accountants,
attorneys and investment bankers up to a maximum of $2,000,000 ("Expenses") in
accordance with the provisions of Section 9.3.
(d) If at any time prior to or within one year after termination of
this Agreement (unless such termination was pursuant to Section 9.1(a), (b),
(d), (g), (h) or (i)) Xxxxxx enters into an agreement relating to an
Acquisition Proposal with a person other than Xxxxxxx or Xxxxxx'x Board of
Directors recommends or resolves to recommend to Xxxxxx'x stockholders approval
or acceptance of an Acquisition Proposal with a person other than Xxxxxxx,
then, upon the entry into such agreement or the making of such recommendation
or resolution, Xxxxxx shall pay to Xxxxxxx the Termination Amount in accordance
with the provisions of Section 9.3 which amount shall be reduced by any monies
previously paid by Xxxxxx to Xxxxxxx pursuant to Section 9.2(b) or Section
9.2(c).
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(e) At any time prior to or within one year after termination of
this Agreement, Xxxxxx shall not enter into any agreement relating to an
Acquisition Proposal with a person other than Xxxxxxx unless such agreement
provides that such person shall, upon the execution of such agreement, pay any
Termination Amount due Xxxxxxx under this Section 9.2. All such amounts shall
be paid in accordance with the provisions of Section 9.3.
(f) The parties acknowledge and agree that the provisions for
payment of Expenses and/or the Termination Amount are included herein in order
to induce Xxxxxxx to enter into this Agreement and to reimburse Xxxxxxx for
incurring the costs and expenses related to entering into this Agreement and
consummating the transactions contemplated by this Agreement. The parties
hereto agree that Xxxxxxx'x rights to payment of the Expenses and/or
Termination Amount shall be in addition to any other rights or remedies under
contract, at law or in equity to which Xxxxxxx may be entitled.
(g) Notwithstanding any provision to the contrary herein, the
aggregate amount of the Termination Amount or Expenses, as the case may be,
payable to Xxxxxxx pursuant to this Section 9.2 shall be subject to the
limitations set forth in Section 9.3.
9.3 PAYMENT OF TERMINATION AMOUNT OR EXPENSES.
(a) In the event that Xxxxxx is obligated to pay Xxxxxxx the
Termination Amount and/or Expenses pursuant to Section 9.2 (the "Section 9.2
Amount"), Xxxxxx (or any other person to the extent provided by Section 9.2(d))
shall pay to Xxxxxxx from the applicable Section 9.2 Amount deposited into
escrow in accordance with the next sentence, an amount equal to the lesser of
(m) the Section 9.2 Amount and (n) the sum of (1) the maximum amount that can
be paid to Xxxxxxx without causing Xxxxxxx 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)(A)-(H) or
856(c)(3)(A)-(I) of the Code ("Qualifying Income"), as determined by Xxxxxxx s
certified public accountants, plus (2) in the event Xxxxxxx receives either (X)
a letter from Xxxxxxx'x counsel indicating that Xxxxxxx has received a ruling
from the IRS described in Section 9.3(b)(ii) or (Y) an opinion from Xxxxxxx s
counsel as described in Section 9.3(b)(ii), an amount equal to the Section 9.2
Amount less the amount payable under clause (1) above. To secure Xxxxxx s
obligation to pay these amounts, Xxxxxx shall deposit into escrow an amount in
cash equal to the Section 9.2 Amount with an escrow agent selected by Xxxxxxx
and on such terms (subject to Section 9.3(b)) as shall be agreed upon by
Xxxxxxx and the escrow agent. The payment or deposit into escrow of the
Section 9.2 Amount pursuant to this Section 9.3(a) shall be made within three
days of the event which gives rise to the payment of the Section 9.2 Amount by
wire transfer or bank check.
(b) The escrow agreement shall provide that the Section 9.2 Amount
in escrow or any portion thereof shall not be released to Xxxxxxx unless the
escrow agent receives any one or combination of the following: (i) a letter
from Xxxxxxx'x certified public accountants indicating the maximum amount that
can be paid by the escrow agent to Xxxxxxx without causing Xxxxxxx 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
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subsequent letter from Xxxxxxx'x accountants revising that amount, in which
case the escrow agent shall release such amount to Xxxxxxx, or (ii) a letter
from Xxxxxxx'x counsel indicating that Xxxxxxx received a ruling from the IRS
holding that the receipt by Xxxxxxx of the Section 9.2 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, Xxxxxxx s
legal counsel has rendered a legal opinion to the effect that the receipt by
Xxxxxxx of the Section 9.2 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 Section 9.2 Amount to Xxxxxxx. Xxxxxx agrees to amend this
Section 9.3 at the request of Xxxxxxx in order to (x) maximize the portion of
the Section 9.2 Amount that may be distributed to Xxxxxxx hereunder without
causing Xxxxxxx to fail to meet the requirements of Sections 856(c)(2) and (3)
of the Code, (y) improve Xxxxxxx'x chances of securing a favorable ruling
described in this Section 9.3(b) or (z) assist Xxxxxxx in obtaining a favorable
legal opinion from its counsel as described in this Section 9.3(b); provided
that Xxxxxxx'x legal counsel has rendered a legal opinion to Xxxxxxx to the
effect that such amendment would not cause Xxxxxxx to fail to meet the
requirements of Section 856(c)(2) or (3) of the Code. The escrow agreement
shall also provide that any portion of the Section 9.2 Amount held in escrow
for five years shall be released by the escrow agent to Xxxxxx. Xxxxxx shall
not be a party to such escrow agreement and shall not bear any cost of or have
liability resulting from the escrow agreement.
(c) Notwithstanding anything to the contrary set forth in this
Agreement, in the event Xxxxxxx is required to file suit to seek all or a
portion of Termination Amount and/or the Expenses, it shall be entitled to all
expenses, including attorneys fees and expenses, which it has incurred in
enforcing its rights hereunder; provided that payment of such expenses shall be
subject to the limitations of Section 9.3(a) (determined as if such expenses
were included in the Section 9.2 Amount).
9.4 EXTENSION; WAIVER. At any time prior to the Effective Time, any
party hereto, by action taken by its Board of Directors, may, to the extent
legally allowed, (a) extend the time for the performance of any of the
obligations or other acts of the other parties hereto, (b) waive any
inaccuracies in the representations and warranties made to such party contained
herein or in any document delivered pursuant hereto and (c) waive compliance
with any of the agreements or conditions for the benefit of such party
contained herein. Any agreement on the part of a party hereto to any such
extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party.
ARTICLE 10
10. General Provisions.
-------------------
10.1 NONSURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. All
representations, warranties and agreements in this Agreement or in any
instrument delivered pursuant to this Agreement shall not survive the Merger,
PROVIDED, HOWEVER, that the
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agreements contained in Article 4, the last sentence of Section 7.4 and
Sections 7.10, 7.12, 7.13 and 7.14 and this Article 10 shall survive the
Merger.
10.2 NOTICES. Any notice required to be given hereunder shall be in
writing and shall be sent by facsimile transmission (confirmed by any of the
methods that follow), courier service (with proof of service), hand delivery or
certified or registered mail (return receipt requested and first-class postage
prepaid) and addressed as follows:
If to Xxxxxxx: E. Xxxxxxxx Xxxxxx, President
Xxxxxxx Real Estate, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Fax No. (000) 000-0000
With copies to: Xxxxxxx X. Xxxx, P.C.
Goodwin, Procter & Hoar
Exchange Place
Boston, MA 02109
Fax No. (617) 523-1231
If to Tucker: Kenneth L. Tucker, President
Tucker Properties Corporation
40 Skokie Boulevard
Northbrook, IL 60062
Fax No. (708) 272-9931
With copies to: Edward J. Schneidman, Esq.
Mayer, Brown & Platt
190 S. LaSalle Street
Chicago, IL 60603-3441
Fax No. (312) 701-7711
or to such other address as any party shall specify by written notice so given,
and such notice shall be deemed to have been delivered as of the date so
delivered.
10.3 ASSIGNMENT; BINDING EFFECT; BENEFIT. Neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned by any of
the parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties. Subject to the preceding sentence, this
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and assigns. Notwithstanding anything
contained in this Agreement to the contrary, except for the provisions of
Article 4 and Sections 7.10, 7.12, 7.13 and 7.14(b), nothing in this Agreement,
expressed or implied, is intended to confer on any person other than the
parties hereto or their respective heirs, successors, executors, administrators
and assigns any rights, remedies, obligations or liabilities under or by reason
of this Agreement.
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10.4 ENTIRE AGREEMENT. This Agreement, the Exhibits, the Tucker
Disclosure Letter and the Bradley Disclosure Letter and any documents delivered
by the parties in connection herewith constitute the entire agreement among the
parties with respect to the subject matter hereof and supersede all prior
agreements and understandings among the partes with respect thereto. No
addition to or modification of any provision of this Agreement shall be binding
upon any party hereto unless made in writing and signed by all parties hereto.
10.5 CONFIDENTIALITY.
(a) As used herein, Confidential Material means, with respect to
either party hereto (the "Providing Party"), all information, whether oral,
written or otherwise, furnished to the other party hereto (the "Receiving
Party") or such Receiving Party's directors, officers, partners, Affiliates (as
defined in Rule 12b-2 under the Exchange Act), employees, agents or
representatives (collectively, "Representatives"), by the Providing Party and
all reports, analyses, compilations, studies and other material prepared by the
Receiving Party or its Representatives (in whatever form maintained, whether
documentary, computer storage or otherwise) containing, reflecting or based
upon, in whole or in part, any such information. The term "Confidential
Material" does not include information which (i) is or becomes generally
available, to the public other than as a result of a disclosure by the
Receiving Party, its Representatives or anyone to whom the Receiving Party or
any of its Representatives transmit any Confidential Material in violation of
this Agreement, (ii) is or becomes known or available to the Receiving Party on
a non-confidential basis from a source (other than the Providing Party or one
of its Representatives) who is not, to the knowledge of the Receiving Party
after reasonable inquiry, prohibited from transmitting the information to the
Receiving Party or its Representatives by a contractual, legal, fiduciary or
other obligation or (iii) is contained in the Form S-4.
(b) Subject to paragraph (c) below or except as required by law, the
Confidential Material will be kept confidential and will not, without the prior
written consent of the Providing Party, be disclosed by the Receiving Party or
its Representatives, in whole or in part, and will not be used by the Receiving
Party or its Representatives, directly or indirectly, for any purpose other
than in connection with this Agreement, the Merger or the evaluating,
negotiating or advising with respect to a transaction contemplated herein.
Moreover, each Receiving Party agrees to transmit Confidential Material to its
Representatives only if and to the extent that such Representatives need to
know the Confidential Material for purposes of such transaction and are
informed by such Receiving Party of the confidential nature of the Confidential
Material and of the terms of this Section. In any event, each Receiving Party
will be responsible for any actions by its Representatives which are not in
accordance with the provisions hereof.
(c) In the event that either Receiving Party, its Representatives or
anyone to whom such Receiving Party or its Representatives supply the
Confidential Material, are requested (by oral questions, interrogatories,
requests for information or documents, subpoena, civil investigative demand,
any informal or formal investigation by any government or governmental agency
or authority or otherwise in connection with legal process) to disclose any
Confidential Material, such Receiving Party agrees (i) to immediately notify
the Providing
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Party of the existence, terms and circumstances surrounding such a request,
(ii) to consult with the Providing Party on the advisability of taking legal
available steps to resist or narrow such request and (iii) if disclosure of
such information is required, to furnish only that portion of the Confidential
Material which, in the opinion of such Receiving Party's counsel, such
Receiving Party is legally compelled to disclose and to cooperate with any
action by the Providing Party to obtain an appropriate protective order or
other reliable assurance that confidential treatment will be accorded the
Confidential Material (it being agreed that the Providing Party shall,
reimburse the Receiving Party for all reasonable out-of-pocket expenses
incurred by the Receiving Party in connection with such cooperation).
(d) In the event of the termination of this Agreement in accordance
with its terms, promptly upon request from either Providing Party, the
Receiving Party shall, except to the extent prevented by law, redeliver to the
Providing Party or destroy all tangible Confidential Material and will not
retain any copies, extracts or other reproductions thereof in whole or in part.
Any such destruction shall be certified in writing to the Providing Party by an
authorized officer of the Receiving Party supervising the same.
Notwithstanding the foregoing, each Receiving Party and one Representative
designated by each Receiving Party shall be permitted to retain one permanent
file copy of each document constituting Confidential Material.
(e) Tucker and Bradley agree that prior to and within one year after
the termination of this Agreement they shall not solicit for employment,
whether as an employee or independent contractor, any person who is (or has
been within a period of one year) employed by the other, without the written
consent of the other.
10.6 AMENDMENT. This Agreement may be amended by the parties hereto, by
action taken by their respective Board of Directors, at any time before or
after approval of matters presented in connection with the Merger by the
stockholders of Tucker and Bradley, but after any such stockholder approval, no
amendment shall be made which by law requires the further approval of
stockholders without obtaining such further approval. This Agreement may not
be amended except by an instrument in writing signed on behalf of each of the
parties hereto.
10.7 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Maryland without regard to its rules
of conflict of laws. Each of Tucker and Bradley hereby irrevocably and
unconditionally consents to submit to the exclusive jurisdiction of the courts
of the State of Maryland and of the United States of America located in the
State of Maryland (the "Maryland Courts") for any litigation arising out of or
relating to this Agreement and the transactions contemplated hereby (and agrees
not to commence any litigation relating thereto except in such courts), waives
any objection to the laying of venue of any such litigation in the Maryland
Courts and agrees not to plead or claim in any Maryland Court that such
litigation brought therein has been brought in any inconvenient forum.
10.8 COUNTERPARTS. This Agreement may be executed by the parties
hereto in separate counterparts, each of which so executed and delivered shall
be an original, but all such counterparts shall together constitute one and the
same instrument. Each counterpart may
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consist of a number of copies hereof each signed by less than all, but together
signed by all of the parties hereto.
10.9 HEADINGS. Headings of the Articles and Sections of this
Agreement are for the convenience of the parties only, and shall be given no
substantive or interpretive effect whatsoever.
10.10 INTERPRETATION. In this Agreement, unless the context otherwise
requires, words describing the singular number shall include the plural and
vice versa, and words denoting any gender shall include all genders and words
denoting natural persons shall include corporations and partnerships and vice
versa.
10.11 WAIVERS. Except as provided in this Agreement, no action taken
pursuant to this Agreement, including, without limitation, any investigation by
or on behalf of any party, shall be deemed to constitute a waiver by the party
taking such action of compliance with any representations, warranties,
covenants or agreements contained in this Agreement. The waiver by any party
hereto of a breach of any provision hereunder shall not operate or be construed
as a waiver of any prior or subsequent breach of the same or any other
provision hereunder.
10.12 INCORPORATION. The Tucker Disclosure Letter and the Bradley
Disclosure Letter and all Exhibits and Schedules attached hereto and thereto
and referred to herein and therein are hereby incorporated herein and made a
part hereof for all purposes as if fully set forth herein.
10.13 SEVERABILITY. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of
this Agreement is so broad as to be unenforceable, the provision shall be
interpreted to be only so broad as is enforceable.
10.14 ENFORCEMENT OF AGREEMENT. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement was not performed in accordance with its specific terms or was
otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions thereof in any Maryland
Court, this being in addition to any other remedy to which they are entitled at
law or in equity.
10.15 CERTAIN DEFINITIONS.
(a) As used in this Agreement, the word Subsidiary or
Subsidiaries when used with respect to any party means any corporation,
partnership, joint venture, business trust or other entity, of which such party
directly or indirectly owns or controls at least a majority of the securities
or other interests having by their terms ordinary voting power
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to elect a majority of the board of directors or others performing similar
functions with respect to such corporation or other organization.
(b) As used in this Agreement, the word person means an
individual, a corporation, a partnership, an association, a joint-stock
company, a trust, a limited liability company, any unincorporated organization
or any other entity.
(c) As used in this Agreement, the word affiliate shall have the
meaning set forth in Rule 12b-2 of the Exchange Act.
10.16 SCHEDULES. Any fact or item disclosed in one section of any
Disclosure Letter or schedule hereto ("Schedule") shall be deemed to be
disclosed with respect to any other relevant section of such Disclosure Letter
or Schedule, whether or not an explicit cross-reference appears.
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IN WITNESS WHEREOF, the parties have executed this Agreement and caused
the same to be duly delivered on their behalf on the day and year first written
above.
BRADLEY REAL ESTATE, INC.
ATTEST:
By: /s/ William B. King By: /s/ E. Lawrence Miller
----------------------------- -----------------------------
Name: William B. King Name: E. Lawrence Miller
Title: Secretary Title: President & CEO
TUCKER PROPERTIES CORPORATION
ATTEST:
By: /s/ Richard H. Tucker By: /s/ Kenneth L. Tucker
----------------------------- -----------------------------
Name: Richard H. Tucker Name: Kenneth L. Tucker
Title: Secretary Title: President
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