AGREEMENT AND PLAN OF MERGER DATED AS OF DECEMBER 4, 2012 BY AND AMONG SILVER BAY REALTY TRUST CORP., a Maryland corporation SILVER BAY OPERATING PARTNERSHIP L.P., a Delaware limited partnership PROVIDENT RESIDENTIAL REAL ESTATE FUND LLC a Minnesota...
Exhibit 2.5
AGREEMENT AND PLAN OF MERGER
DATED AS OF DECEMBER 4, 2012
BY AND AMONG
SILVER BAY REALTY TRUST CORP.,
a Maryland corporation
SILVER BAY OPERATING PARTNERSHIP L.P.,
a Delaware limited partnership
PROVIDENT RESIDENTIAL REAL ESTATE FUND LLC
a Minnesota limited liability company
AND
SB RESI I MERGER SUB LLC
a Minnesota limited liability company
TABLE OF CONTENTS
ARTICLE I |
THE MERGER |
2 |
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Section 1.01 |
THE MERGER |
2 |
Section 1.02 |
EFFECTIVE TIME |
2 |
Section 1.03 |
EFFECT OF THE MERGER |
2 |
Section 1.04 |
ORGANIZATIONAL DOCUMENTS |
2 |
Section 1.05 |
CONVERSION OF RESI EQUITY INTERESTS |
3 |
Section 1.06 |
CANCELLATION AND RETIREMENT OF RESI EQUITY INTERESTS |
4 |
Section 1.07 |
CONVERSION OF MERGER SUB MEMBER INTERESTS |
4 |
Section 1.08 |
FRACTIONAL INTERESTS |
4 |
Section 1.09 |
CALCULATION OF MERGER CONSIDERATION |
4 |
Section 1.10 |
TRANSACTION COSTS |
5 |
Section 1.11 |
DISSENTERS’ RIGHTS |
5 |
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ARTICLE II |
CLOSING; TERM OF AGREEMENT |
5 |
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Section 2.01 |
CLOSING |
5 |
Section 2.02 |
PAYMENT OF MERGER CONSIDERATION |
5 |
Section 2.03 |
TAX WITHHOLDING |
6 |
Section 2.04 |
FURTHER ACTION |
7 |
Section 2.05 |
TERM OF THE AGREEMENT |
7 |
Section 2.06 |
EFFECT OF TERMINATION |
7 |
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ARTICLE III |
REPRESENTATIONS AND WARRANTIES OF THE OPERATING PARTNERSHIP AND MERGER SUB |
7 |
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Section 3.01 |
ORGANIZATION; AUTHORITY |
7 |
Section 3.02 |
DUE AUTHORIZATION |
8 |
Section 3.03 |
CONSENTS AND APPROVALS |
8 |
Section 3.04 |
NO VIOLATION |
9 |
Section 3.05 |
VALIDITY OF REIT SHARES AND OP UNITS |
9 |
Section 3.06 |
OPERATING PARTNERSHIP AGREEMENT |
9 |
Section 3.07 |
LIMITED ACTIVITIES |
9 |
Section 3.08 |
COMPLIANCE WITH LAWS |
9 |
Section 3.09 |
LITIGATION |
9 |
Section 3.10 |
NO IMPLIED REPRESENTATIONS OR WARRANTIES |
9 |
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ARTICLE IV |
REPRESENTATIONS AND WARRANTIES OF RESI |
10 |
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Section 4.01 |
ORGANIZATION; AUTHORITY |
10 |
Section 4.02 |
DUE AUTHORIZATION |
10 |
Section 4.03 |
CAPITALIZATION |
10 |
Section 4.04 |
CONSENTS AND APPROVALS |
10 |
Section 4.05 |
NO VIOLATION |
11 |
Section 4.17 |
NO INSOLVENCY PROCEEDINGS |
11 |
Section 4.18 |
SECURITIES LAW MATTERS |
11 |
Section 4.19 |
NO IMPLIED REPRESENTATIONS OR WARRANTIES |
11 |
Section 4.20 |
NO SIDE LETTERS |
11 |
Section 4.21 |
SURVIVAL OF REPRESENTATIONS AND WARRANTIES OF RESI |
11 |
TABLE OF CONTENTS
(continued)
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Page |
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Section 4.11 |
HOLDBACK FOR REPRESENTATION, WARRANTY AND INDEMNITY AGREEMENT |
11 |
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ARTICLE V |
COVENANTS AND OTHER AGREEMENTS |
12 |
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Section 5.01 |
PRE-CLOSING COVENANTS |
12 |
Section 5.02 |
CONSENT AND WAIVER OF RIGHTS UNDER ORGANIZATIONAL DOCUMENTS |
13 |
Section 5.03 |
ADDITIONAL CONSIDERATION |
13 |
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ARTICLE VI |
ADDITIONAL AGREEMENTS |
13 |
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Section 6.01 |
COMMERCIALLY REASONABLE EFFORTS BY THE REIT, THE OPERATING PARTNERSHIP AND RESI |
13 |
Section 6.02 |
TAX MATTERS |
14 |
Section 6.03 |
WITHHOLDING CERTIFICATE |
14 |
Section 6.04 |
TAX ADVICE |
14 |
Section 6.05 |
ALTERNATE TRANSACTION |
14 |
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ARTICLE VII |
CONDITIONS PRECEDENT |
14 |
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Section 7.01 |
CONDITION TO EACH PARTY’S OBLIGATIONS |
14 |
Section 7.02 |
CONDITIONS TO OBLIGATIONS OF RESI |
15 |
Section 7.03 |
CONDITIONS TO OBLIGATION OF THE OPERATING PARTNERSHIP AND MERGER SUB |
16 |
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ARTICLE VIII |
GENERAL PROVISIONS |
17 |
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Section 8.01 |
NOTICES |
17 |
Section 8.02 |
DEFINITIONS |
17 |
Section 8.03 |
COUNTERPARTS |
23 |
Section 8.04 |
ENTIRE AGREEMENT; THIRD-PARTY BENEFICIARIES |
23 |
Section 8.05 |
GOVERNING LAW |
23 |
Section 8.06 |
ASSIGNMENT |
23 |
Section 8.07 |
JURISDICTION |
23 |
Section 8.08 |
DISPUTE RESOLUTION |
24 |
Section 8.09 |
SEVERABILITY |
25 |
Section 8.10 |
RULES OF CONSTRUCTION |
25 |
Section 8.11 |
EQUITABLE REMEDIES |
25 |
Section 8.12 |
TIME OF THE ESSENCE |
25 |
Section 8.13 |
DESCRIPTIVE HEADINGS |
25 |
Section 8.14 |
NO PERSONAL LIABILITY CONFERRED |
26 |
TABLE OF CONTENTS
Schedule 3.01(c) |
OPERATING PARTNERSHIP SUBSIDIARIES |
Schedule 4.03 |
MEMBERS OF RESI |
Schedule 4.09 |
SIDE LETTERS |
Schedule 5.03 |
ADDITIONAL CONSIDERATION |
Schedule 7.03(f) |
OPINION OF XXXXXX & XXXXXXXXX LLP |
Exhibit A |
LIST OF PARTICIPATING ENTITIES |
Exhibit B |
CHARTER AND BYLAWS OF THE REIT |
Exhibit C |
OPERATING PARTNERSHIP AGREEMENT |
Exhibit D |
MANAGEMENT AGREEMENT |
Exhibit E |
PROPERTY MANAGEMENT AND ACQUISITION SERVICES AGREEMENT |
Exhibit F-1 |
REGISTRATION RIGHTS AGREEMENT FOR REIT SHARES ISSUED TO TWO HARBORS AND THE PRE-FORMATION PARTICIPANTS IN THE PROVIDENT ENTITIES |
Exhibit F-2 |
REGISTRATION RIGHTS AGREEMENT FOR REIT SHARES TO BE ISSUED IN CONNECTION WITH REDEMPTION OF OP UNITS |
Exhibit G |
INVESTOR LOCK-UP AGREEMENT |
Exhibit H |
FORMATION TRANSACTION DOCUMENTATION |
Exhibit I |
AUTOMATED VALUATION MODEL |
Exhibit J |
REPRESENTATION, WARRANTY AND INDEMNIFICATION AGREEMENT |
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this “Agreement”) is made and entered into as of December 4, 2012, by and among Silver Bay Operating Partnership L.P., a Delaware limited partnership (the “Operating Partnership”), Silver Bay Realty Trust Corp., a Maryland corporation (the “REIT”), Provident Residential Real Estate Fund LLC, a Minnesota limited liability company (“RESI”), SB RESI I Merger Sub LLC, a wholly owned merger subsidiary of the Operating Partnership and a Minnesota limited liability company (“Merger Sub”) and for purposes of Section 2.04, Provident Real Estate Advisors, LLC (“Provident”) in its capacity as the managing member of RESI. Certain capitalized terms are defined in Section 8.02 of this Agreement.
WHEREAS, pursuant to this Agreement, concurrently with the completion of the IPO (as defined below), the Merger Sub will merge with and into RESI, with RESI as the surviving entity (the “Merger”), pursuant to which each membership interest in RESI (a “RESI Equity Interest”) will be converted automatically as set forth herein into the right to receive cash, without interest, common units of limited partnership interest in the Operating Partnership (the “OP Units”) or REIT Shares, or a combination of the foregoing;
described above and will elect to be taxed and operate as a real estate investment trust within the meaning of Section 856 of the Code, externally managed by PRCM Real Estate Advisers LLC; and
WHEREAS, Silver Bay Management LLC, as general partner of the Operating Partnership, has approved and authorized the Merger and the other Formation Transactions in accordance with the Minnesota Limited Liability Company Act (the “Minnesota Act”) and the Limited Partnership Agreement of the Operating Partnership;
Section 1.05 CONVERSION OF RESI EQUITY INTERESTS.
(a) Under and subject to the terms and conditions of the respective Formation Transaction Documentation, as the result of an irrevocable election indicated on an Election Form submitted by a Pre-Formation Participant or as a result of the failure of a Pre-Formation Participant to submit an Election Form, each Pre-Formation Participant is irrevocably bound to accept and entitled to receive, as a result of and upon consummation of the Merger or other Formation Transactions, the cash, REIT Shares or OP Units determined in accordance with Section 1.05(b).
(b) At the Effective Time, by virtue of the Merger and without any action on the part of the Operating Partnership, RESI or the holders of any interest in RESI, except as set forth in Section 1.06, each RESI Equity Interest shall be converted automatically into the right to receive its Merger Consideration in either cash, OP Units or REIT Shares as set forth herein. Each holder of a RESI Equity Interest that receives OP Units in the Merger shall upon receipt of such OP Units and the delivery of an Election Form or a counterpart signature page to the Operating Partnership Agreement and such other documents and instruments as may be required in the sole discretion of the REIT to effect such holder’s admission as a limited partner of the Operating Partnership, be admitted as a limited partner of the Operating Partnership in accordance with the Minnesota Act and the Operating Partnership Agreement.
Subject to Section 1.08 and Section 2.02(c), the amount of cash, number of OP Units or number of REIT Shares comprising the Merger Consideration for each RESI Equity Interest so converted shall be as follows:
(i) Cash. If such holder of the RESI Equity Interest is not an Accredited Investor, but has made a Valid Election to receive cash and has submitted a Sale Consent (as defined below), such holder shall receive from the Operating Partnership the Elected Cash Amount. If such holder of the RESI Equity Interest is an Accredited Investor who has made a Valid Election to receive cash and who has submitted a Sale Consent, such holder shall receive the Elected Cash Amount subject to the limitations contained in the following provisions:
(A) to the extent the amount of cash that would be paid to Pre-Formation Participants in the Formation Transactions, as a result of electing to receive cash (including Valid Elections under this Agreement), exceeds the Maximum Cash Amount Available for Proration, such holder shall receive as its Merger Consideration its Pro-Rata Share in cash from the Operating Partnership and the balance of its Merger Consideration from the REIT in a number of REIT Shares determined by subtracting from such holder’s Merger Consideration the number of REIT Shares representing the quotient obtained by dividing the cash received by the IPO Price; and
(B) to the extent such distribution of REIT Shares to such holder of a RESI Equity Interest would result in a violation of the restrictions on ownership and transfer set forth in Section 7.2.1 of the REIT’s charter (the “Ownership Limits”), such holder shall receive
(x) the maximum number of REIT Shares that would not result in such a violation of the Ownership Limits, and
(y) that number of OP Units equal to the remaining number of REIT Shares not distributed as a result of the application of the foregoing clause (x) unless the Board of Directors of the REIT excepts such Person from the Ownership Limits.
(ii) OP Units. If such holder of a RESI Equity Interest has made a Valid Election to receive OP Units or has not submitted an Election Form, such holder shall receive the Elected OP Unit Amount from the Operating Partnership; and
(iii) REIT Shares. If such holder of a RESI Equity Interest has made a Valid Election and has submitted a Sale Consent to receive REIT Shares, such holder shall receive the Elected REIT Share Amount from the REIT; provided that to the extent the payment in the form of REIT Shares to such holder would result in a violation of the Ownership Limits, such Contributor shall receive:
(x) the maximum number of REIT Shares that would not result in such a violation of the Ownership Limits, and
(y) that number of OP Units equal to the remaining number of REIT Shares not received as a result of the application of the foregoing clause (x) unless the Board of Directors of the REIT excepts such Person from the Ownership Limits.
(c) At the Closing, the Operating Partnership shall issue to the REIT a number of OP Units equal to the number of REIT Shares issued by the REIT hereunder.
the Merger Consideration shall be performed in good faith by, or under the direction of, Provident and, absent manifest error, shall be final and binding upon the holders of RESI Equity Interests.
ARTICLE II
CLOSING; TERM OF AGREEMENT
Section 2.02 PAYMENT OF MERGER CONSIDERATION.
(a) As soon as reasonably practicable after the Effective Time, the Surviving Entity (or its successor in interest) shall deliver to each holder of RESI Equity Interests which have been converted into the right to receive the Merger Consideration pursuant to Section 1.05(b) hereof, the Merger Consideration payable to such holder in the amounts and form provided in Section 1.05(b) hereof. The issuance of the OP Units pursuant to Section 1.05(b) and admission of the recipients thereof as limited partners of the Operating Partnership shall be evidenced by an amendment to the Operating Partnership Agreement, and the Operating Partnership shall deliver, or cause to be delivered, an executed
copy of such amendment to each Pre-Formation Participant receiving OP Units hereunder. Any certificate representing REIT Shares issuable as Merger Consideration shall bear the following legend:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION, UNLESS THE TRANSFEROR DELIVERS TO THE CORPORATION AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION, TO THE EFFECT THAT THE PROPOSED SALE, TRANSFER OR OTHER DISPOSITION MAY BE EFFECTED WITHOUT REGISTRATION UNDER THE ACT AND UNDER APPLICABLE STATE SECURITIES OR “BLUE SKY” LAWS.
In addition, each such certificate representing REIT Shares so issuable shall bear a legend reflecting certain transfer and other restrictions for the purpose of maintaining the REIT’s status as a real estate investment trust under the Code, in accordance with applicable Law
(b) The Surviving Entity (or its successor in interest) shall not be liable to any holder of RESI Equity Interests for any portion of the Merger Consideration delivered to a public official pursuant to any applicable abandoned property, escheat or similar Law.
(c) The Operating Partnership as of the date hereof is, and Merger Sub as of the date of its formation will be, a disregarded entity for federal income tax purposes. The parties intend that the Merger pursuant to this Agreement will occur simultaneously with the contributions (including the contribution of the IPO proceeds by the REIT to the Operating Partnership) described in the recitals as part of a single plan. The parties further intend that, solely for federal income tax purposes, (i) any payment of cash and/or REIT Shares for RESI Equity Interests will be treated as a sale of such RESI Equity Interests to the REIT by the holder and a purchase of a proportionate share of the assets of RESI by the REIT followed by a drop-down of such assets into the Operating Partnership governed by Section 721 of the Code and (ii) the payment of OP Units for RESI Equity Interests will be treated as a contribution of the RESI Equity Interests to the Operating Partnership by the holder in a transaction governed by Section 721 of the Code and an acquisition by the Operating Partnership of a proportionate share of the assets of RESI. Notwithstanding the foregoing, the parties further agree that if the Merger is deemed to be a “merger” of RESI and the Operating Partnership for federal income tax purposes, (i) the payment of cash and/or REIT Shares for RESI Equity Interests shall be treated as a sale of such RESI Equity Interests by the holder and a purchase of such RESI Equity Interests by the Operating Partnership for the cash and/or REIT Shares so paid under the terms of this Agreement in accordance with Treasury Regulations Section 1.708-1(c)(4), and (ii) each such holder of RESI Equity Interests who accepts cash and/or REIT Shares shall explicitly agree and consent (the “Sale Consent”) to such treatment in their Election Form as a condition to electing such consideration. Notwithstanding Section 1.05(b) and any holder’s election as to the form of their Merger Consideration, if any holder (other than a holder that is not an Accredited Investor) fails to execute a Sale Consent prior to the Closing, such holder’s Merger Consideration shall consist solely of OP Units. Any cash paid as the Merger Consideration for a RESI Equity Interest to a holder that is not an Accredited Investor shall be paid only after the receipt of a Sale Consent from such holder.
for all purposes of this Agreement as having been paid to the holder of RESI Equity Interests in respect of which such deduction and withholding was made. To the extent the amount required to be withheld exceeds the amount of cash receivable by the holder, the excess withheld amount shall be treated as a loan from the payor to the holder, which shall be due immediately from the holder and shall bear interest at the rate of fifteen percent (15%) per annum (or, if less, the maximum rate allowable under applicable Law).
Section 2.04 FURTHER ACTION. If, at any time after the Effective Time, the Surviving Entity shall determine or be advised that any deeds, bills of sale, assignments, assurances or any other actions or things are necessary or desirable to vest, perfect or confirm of record or otherwise in the Surviving Entity the right, title or interest in, to or under any of the rights, properties or assets of RESI acquired or to be acquired by the Surviving Entity as a result of, or in connection with, the Merger or otherwise to carry out this Agreement, the Surviving Entity shall be authorized to execute and deliver, in the name and on behalf of RESI or otherwise, all such deeds, bills of sale, assignments and assurances and to take and do, in the name and on behalf of RESI or otherwise, all such other actions and things as may be necessary or desirable to vest, perfect or confirm any and all right, title and interest in, to and under such rights, properties or assets in the Surviving Entity or otherwise to carry out this Agreement. At the Closing, Provident shall deliver or cause to be delivered to the Surviving Entity all the books and records of RESI. At the request of the Surviving Entity, Provident shall promptly provide access to the representatives, agents and attorneys of the Surviving Entity to the books, records and related documents of Provident required or deemed necessary by the Surviving Entity, and shall use commercially reasonable efforts and cooperate fully with the Surviving Entity to effect this Section 2.04.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE REIT,
THE OPERATING PARTNERSHIP AND MERGER SUB
Each of the REIT, the Operating Partnership and Merger Sub hereby represents and warrants to RESI, severally as to itself, as follows:
Section 3.01 ORGANIZATION; AUTHORITY
(a) The REIT is a corporation duly organized, validly existing and in good standing under the Laws of the State of Maryland. The REIT has all requisite power and authority to enter this Agreement and the other Formation Transaction Documentation and to carry out the transactions contemplated hereby and thereby, and to own, lease or operate its property and to carry on its business as
presently conducted and, to the extent required under applicable Law, is qualified to do business and is in good standing in each jurisdiction in which the nature of its business or the character of its property make such qualification necessary, other than in such jurisdictions where the failure to be so qualified would not have a REIT Material Adverse Effect.
(b) Each of the Operating Partnership and Merger Sub is duly incorporated or formed, is validly existing and in good standing under the Laws of its jurisdiction of incorporation or formation, as applicable, and upon the effectiveness of the Operating Partnership Agreement, will have all requisite power and authority to enter into this Agreement and the other Formation Transaction Documentation and to carry out the transactions contemplated hereby and thereby, and to own, lease and/or operate its property and to carry on its business as presently conducted and each of the Operating Partnership and Merger Sub, to the extent required under applicable Laws, is qualified to do business and is in good standing in each jurisdiction in which the nature of its business or the character of its property make such qualification necessary, other than such failures to be so qualified as would not, individually or in the aggregate, reasonably be expected to have a REIT Material Adverse Effect.
(c) Schedule 3.01(c) sets forth as of the date hereof each Subsidiary of the Operating Partnership (each an “Operating Partnership Subsidiary”), all of which are, directly or indirectly, wholly owned by the Operating Partnership. Each Operating Partnership Subsidiary is duly organized or formed, is validly existing and is in good standing under the Laws of its jurisdiction of organization or formation, as applicable, has all requisite power and authority to own, lease and/or operate its property and to carry on its business as presently conducted and, to the extent required under applicable Laws, is qualified to do business and is in good standing in each jurisdiction in which the nature of its business or the character of its property make such qualification necessary, other than such failures to be so qualified as would not, individually or in the aggregate, reasonably be expected to have a REIT Material Adverse Effect.
Formation Participants under the organizational documents of the applicable Provident Entity, the failure of which to obtain would not, individually or in the aggregate, reasonably be expected to have a REIT Material Adverse Effect.
Section 3.05 VALIDITY OF REIT SHARES AND OP UNITS. The REIT Shares to be issued pursuant to this Agreement will have been duly authorized by the REIT and, when issued against the consideration therefor, will be validly issued, fully paid and non-assessable and free and clear of all Liens created by the REIT (other than Liens created by the charter of the REIT). The OP Units to be issued pursuant to this Agreement will have been duly authorized and, when issued against the consideration therefor, will be validly issued by the Operating Partnership, free and clear of all Liens created by the Operating Partnership (other than any Liens created by the Operating Partnership Agreement).
shall not be deemed to have made any other representation or warranty in connection with this Agreement or the transactions contemplated hereby. All representations, warranties and covenants of the REIT, the Operating Partnership and Merger Sub contained in this Agreement (other than Section 3.05) shall expire at the Closing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF RESI; HOLDBACK
Except as disclosed in the schedules attached hereto, RESI represents and warrants to the REIT, the Operating Partnership and Merger Sub that the following statements are true and correct as of the date hereof and shall be true and correct as of the Closing Date:
Section 4.03 CAPITALIZATION. Schedule 4.03 sets forth as of the date hereof the ownership of RESI. All of the issued and outstanding equity interests of RESI are duly authorized, validly issued and fully paid and are not subject to preemptive rights, transfer restrictions, or appraisal, dissenters’ or other similar rights under the organizational documents of or any contract to which RESI is a party or otherwise bound, except for statutory dissenters’ rights in respect of the Merger pursuant to Section 322B.383 of the Minnesota Act. There are no outstanding rights to purchase, subscriptions, warrants, options or any other security convertible into or exchangeable for equity interests in RESI.
Section 4.09 NO SIDE LETTERS. Except as set forth on Schedule 4.09, RESI has no side letters or other writing with the holders of the RESI Equity Interests which have the effect of establishing rights under, or altering or supplementing, the terms of RESI’s Organizational Documents.
Section 4.11 HOLDBACK FOR REPRESENTATION, WARRANTY AND INDEMNITY AGREEMENT. From and after the Closing, RESI agrees to indemnify and hold harmless the REIT, the Operating Partnership and Merger Sub and their respective officers, directors, affiliates, employees, agents and representatives, including the Surviving Entity (each an “Indemnified Party” and collectively, the “Indemnified Parties”), against any Claim (as defined in the Representation, Warranty and Indemnity Agreement) under the Representation, Warranty and Indemnity Agreement made pursuant to a Claim Notice (as defined therein) delivered before the first anniversary of the Closing Date to the extent relating to RESI or its properties or assets. The amount of Losses recoverable by the Indemnified Parties under this Section 4.11 shall be the Final Working Capital Amount (it being understood that nothing in this Section 4.11 or elsewhere in this Agreement shall affect the Indemnified Parties’ rights to recover for any breach of the representations, warranties and covenants contained in this Agreement). Any
Losses arising under this Section 4.11 shall be satisfied first from the Final Working Capital Amount and then pursuant to Article III of the Representation, Warranty and Indemnity Agreement.
ARTICLE V
COVENANTS AND OTHER AGREEMENTS
(a) (i) declare, set aside or pay any dividends or distributions in respect of any RESI Equity Interests without the written consent of the REIT, which shall not be unreasonably withheld, (ii) issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any RESI Equity Interests or make any other changes to the equity capital structure of RESI or (iii) purchase, redeem or otherwise acquire any RESI Equity Interests or any other securities thereof;
(b) issue, deliver, sell, transfer, dispose, mortgage, pledge, assign or otherwise encumber, or cause the issuance, delivery, sale, transfer, disposition, mortgage, pledge, assignment or other encumbrance of, any limited liability company or other equity interests in RESI or any Subsidiary of RESI or any other assets of RESI;
(c) amend, modify or terminate any lease, contract or other instruments relating to the Properties, except in the ordinary course of business consistent with past practice;
(d) amend its Organizational Documents;
(e) adopt a plan of liquidation, dissolution, merger, consolidation, restructuring, recapitalization or reorganization;
(f) materially alter the manner of keeping RESI’s books, accounts or records or the accounting practices therein reflected;
(g) file an entity classification election pursuant to Treasury Regulation Section 301.7701-3(c) on Internal Revenue Service Form 8832 (Entity Classification Election) to treat RESI as an association taxable as a corporation for United States federal income tax purposes; make or change any other Tax elections; settle or compromise any claim, notice, audit report or assessment in respect of Taxes; change any annual Tax accounting period; adopt or change any method of Tax accounting; file any amended Tax return; enter into any Tax allocation agreement, Tax sharing agreement, Tax indemnity agreement or closing agreement relating to any Tax; surrender of any right to claim a Tax refund; or consent to any extension or waiver of the statute of limitations period applicable to any Tax claim or assessment;
(h) terminate or amend any existing insurance policies affecting the Properties that results in a reduction in insurance coverage for the Properties;
(i) knowingly cause or permit RESI to violate, or fail to use commercially reasonable efforts to cure any violation of, any applicable Laws; or
(j) authorize, commit or agree to take any of the foregoing actions.
ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.01 COMMERCIALLY REASONABLE EFFORTS BY THE REIT, THE OPERATING PARTNERSHIP AND RESI. Each of the REIT, the Operating Partnership and Merger Sub, on the one hand, and RESI, on the other hand, shall use commercially reasonable efforts and cooperate with each other in (a) promptly determining whether any filings are required to be made or consents, approvals, waivers, permits or authorizations are required to be obtained (under any applicable Law or regulation or from any Governmental Authority or third party) in connection with the transactions contemplated by this Agreement, and (b) promptly making (or causing to be made) any such filings, in furnishing information required in connection therewith and in timely seeking to obtain any such consents, approvals, waivers, permits and authorizations.
Section 6.02 TAX MATTERS.
(a) RESI shall timely file or cause to be timely filed when due all Tax returns required to be filed by or with respect to it on or prior to the Closing Date and shall pay or cause to be paid all Taxes shown due thereon. All such Tax returns (including, for the avoidance of doubt, any amended Tax returns) shall be prepared in a manner consistent with past practice, except as otherwise required by applicable Law.
(b) The Operating Partnership shall prepare or cause to be prepared and file or cause to be filed all income Tax returns of RESI which are due after the Closing Date. All such income Tax returns (including, for the avoidance of doubt, any amended Tax returns) shall be prepared in a manner consistent with past practice, except as otherwise required by applicable Law. With respect to income Tax returns of RESI which are due after the Closing Date, but which include a period prior to the Closing Date, the Operating Partnership shall deliver such income Tax returns to Provident no later than ten (10) days prior to the due date (including extensions) for filing such income Tax returns for its review and approval, which approval shall not be unreasonably withheld.
(c) The Operating Partnership shall prepare or cause to be prepared all other Tax returns of RESI which are due after the Closing Date.
ARTICLE VII
CONDITIONS PRECEDENT
Section 7.01 CONDITION TO EACH PARTY’S OBLIGATIONS. The respective obligation of each party to effect the Merger and to consummate the other transactions contemplated by this Agreement to occur on the Closing Date is subject to the satisfaction or waiver on or prior to the Effective Time, of the following conditions:
(a) REGISTRATION STATEMENT. The Registration Statement shall have become effective under the Securities Act and shall not be the subject of any stop order or proceedings by the SEC seeking a stop order. This condition may not be waived by any party.
(b) NO INJUNCTION. No Governmental Authority shall have enacted, issued, promulgated, enforced or entered any statute, rule, regulation, executive order, decree, judgment, injunction, stay or other order (whether temporary, preliminary or permanent), in any case which is in effect and which prevents or prohibits consummation of the Merger or any of the transactions contemplated in this Agreement nor shall any of the same brought by a Governmental Authority of competent jurisdiction be pending that seeks the foregoing.
(c) OPERATING PARTNERSHIP AGREEMENT. The Operating Partnership Agreement, in substantially the form attached hereto as Exhibit C (with such changes as may be agreed to by the Operating Partnership, the REIT and Provident), shall have been executed and delivered by the partners of the Operating Partnership and shall be in full force and effect and, except as contemplated by Section 2.02(a) or the other Formation Transaction Documents, shall not have been amended or modified.
(d) IPO CLOSING. The closing of the IPO shall occur substantially concurrently with the Closing.
(e) CONSENTS. All necessary consents and approvals of Governmental Authorities or third parties for RESI to consummate the Merger shall have been obtained.
(f) FORMATION TRANSACTIONS. The Formation Transactions shall have been or shall simultaneously be consummated in accordance with the timing set forth in the respective Formation Transaction Documentation.
(g) MANAGEMENT AGREEMENT. The REIT shall have received a copy of the Management Agreement in substantially the form attached as Exhibit D (with such changes as may be agreed to by the Operating Partnership, the REIT and Provident) executed by the parties thereto.
(h) PROPERTY MANAGEMENT AND ACQUISITION SERVICES AGREEMENT. The Operating Partnership shall have received a copy of the Property Management and Acquisition Services Agreement in substantially the form attached as Exhibit E (with such changes as may be agreed to by the Operating Partnership, the REIT and Provident) executed by the parties thereto.
(b) PERFORMANCE BY THE REIT, THE OPERATING PARTNERSHIP AND MERGER SUB. Except as would not have a REIT Material Adverse Effect, each of the REIT, the Operating Partnership and Merger Sub shall have performed all agreements and covenants required by this Agreement to be performed or complied with by it on or prior to the Closing Date and RESI shall have received a certificate to that effect dated the Closing Date and signed on behalf of each of the REIT, the Operating Partnership and Merger Sub by an authorized Person.
(b) PERFORMANCE BY RESI. RESI shall have performed in all material respects all agreements and covenants required by this Agreement to be performed or complied with by it on or prior to the Closing Date and the REIT, the Operating Partnership, and Merger Sub shall have received a certificate to that effect dated the Closing Date and signed on behalf of RESI by an authorized Person. Provident shall have performed in all material respects all agreements and covenants under the Representation, Warranty and Indemnity Agreement to be performed or complied with by it on or prior to the Closing Date and the REIT, the Operating Partnership and Merger Sub shall have received a certificate to that effect dated the Closing Date and signed on behalf of Provident by an authorized Person.
(d) REPRESENTATION, WARRANTY AND INDEMNITY AGREEMENT. Provident shall have entered into the Representation, Warranty and Indemnity Agreement.
(e) LOCK-UP AGREEMENTS.
(i) Each of the Pre-Formation Participants that will receive REIT Shares in connection with the Formation Transactions shall have entered into the Investor Lock-Up Agreement substantially in the form attached as Exhibit G.
(ii) Each officer and director of the REIT named in the Registration Statement shall have entered into a Management Lock-Up Agreement providing for a 180-day lock-up period in a form acceptable to the REIT and Operating Partnership.
(iii) Xxxxx Xxxxxxx and each partner of Pine River Domestic Management L.P. who receives shares of the REIT in connection with the IPO or the Formation Transactions, whether directly, through a distribution by Two Harbors, or otherwise, shall have entered into the Extended Lock-Up Agreement providing for a one-year lock-up period in a form acceptable to the REIT and Operating Partnership.
(g) TERMINATION OF PROVIDENT AGREEMENTS WITH MANAGER. Those certain Property Management Agreements and Letter Agreements by and between the Manager and each Provident Entity, each dated as of March 26, 2012 shall have been terminated and any Termination Fee (as defined in the Letter Agreements) that would otherwise be payable under such agreements shall have been waived.
ARTICLE VIII
GENERAL PROVISIONS
if to the REIT, the Operating Partnership or Merger Sub to:
Silver Bay Realty Trust Corp.
000 Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxx 00000
Attention: Chief Executive Officer
if to RESI to:
c/o Provident Real Estate Advisors LLC
00000 - 00xx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxx 00000
Attention: Chief Investment Officer
Section 8.02 DEFINITIONS. For purposes of this Agreement, the following terms shall have the following meanings:
(a) “Accredited Investor” has the meaning set forth under Regulation D of the Securities Act.
(b) “Acquisition Cash Amount” means an amount of cash contributed by Two Harbors LLC to Two Harbors Property to purchase additional properties between the Initial Valuation and the Closing and to renovate such additional properties.
(c) “Additional Purchase Price” has the meaning set forth in Schedule 5.03.
(d) “Adjusted Acquisition Cost” means, with respect to a property, (i) the actual purchase price and commissions paid for such property by a Participating Entity plus (ii) (a) if the property was leased or available for lease as of the date of the Valuation, the actual capitalized renovation costs incurred as of such date or (b) if such property is not leased or available for lease as of the date of the Valuation, the estimated renovation cost for such property calculated in a manner agreed to by the REIT, Two Harbors and Provident.
(e) “Adjusted Cash Date” has the meaning set forth in Section 8.02(hhh).
(f) “Affiliate” means, with respect to any Person, a Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with the specified Person. For the purposes of this definition, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”) as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise.
(g) “Aggregate Merger Consideration” means the maximum number of REIT Shares to be issued to holders of RESI Equity Interests in the Merger (or the aggregate of such REIT Shares, OP Units and amounts paid in cash of equivalent amount, as the context requires), which maximum number shall be equal to the product determined by multiplying a number of shares to be agreed upon between Provident, Two Harbors and the REIT by a fraction the numerator of which is the Valuation of the Properties of RESI and the denominator of which is the sum of the aggregate Valuation of the properties of the Participating Entities, plus the Acquisition Cash Amount and any Subsequent Acquisition Cash Amount to the extent not applied to the properties reflected in the Valuations.
(h) “Allocated Share of the Aggregate Merger Consideration” means the dollar amount of distributions that would be allocated to a Pre-Formation Participant that is a holder of a RESI Equity Interest in accordance with Section 6.02 of the Limited Liability Company Operating Agreement of RESI if the Properties were sold for a dollar amount equal to the product determined by multiplying the Aggregate Merger Consideration by the IPO Price.
(i) “Allocated Share of the Additional Consideration” means the dollar amount of distributions that would be allocated to a Pre-Formation Participant that is a holder of RESI Equity Interests in accordance with Section 6.02 the Limited Liability Company Operating Agreement of RESI in respect of the Additional Consideration, after taking into account the distributions to such Pre-Formation Participant of its Allocated Share of the Aggregate Merger Consideration.
(j) “Alternate Transaction” means (i) a contribution of the assets held by RESI to the Operating Partnership in exchange for the amount of cash and the number of OP Units and/or REIT Shares that were to be issued pursuant to this Agreement, (ii) a contribution by each holder of direct or indirect equity interests in RESI to the Operating Partnership in exchange for the amount of cash and the number of OP Units and/or REIT Shares that would have otherwise been received by such holder of direct or indirect equity interests pursuant to this Agreement, (iii) the restructuring of the Merger as either (x) a merger of RESI with and into either the REIT or the Operating Partnership or a wholly owned
subsidiary of the REIT or (y) a merger of a wholly owned subsidiary of the REIT or the Operating Partnership with and into RESI, in each case in exchange for the amount of cash and the number of OP Units and/or REIT Shares that were to be issued pursuant to this Agreement, or (iv) any other transaction pursuant to which the REIT, the Operating Partnership or any of their Subsidiaries acquire the assets held by RESI or each holder of direct or indirect equity interests in RESI in a transaction pursuant to which each holder of direct or indirect interests in RESI receives the amount of cash, the number of OP Units and/or the number of REIT Shares that were to be received by such holder pursuant to this Agreement (or a portion thereof equal in value to the value of the portion of such assets acquired by the REIT, the Operating Partnership or any of their Subsidiaries pursuant to such Alternate Transaction).
(k) “AVM Date” has the meaning set forth in Section 8.02(hhh).
(l) “Business Day” means any day that is not a Saturday, Sunday or legal holiday in the State of Minnesota.
(m) “Code” means the Internal Revenue Code of 1986, as amended, together with the rules and regulations promulgated or issued thereunder.
(n) “Dissenting Interest” has the meaning set forth in Section 1.11.
(o) “Elected Cash Amount” means, in the case of a Pre-Formation Participant that has made a Valid Election to receive its Merger Consideration in the form of cash, an amount of cash equal to the product determined by multiplying the number of REIT Shares to which such holder of RESI Equity Interests would have been entitled as Merger Consideration by the IPO Price.
(p) “Elected OP Unit Amount” means, in the case of a Pre-Formation Participant that has made a Valid Election to receive its Merger Consideration in the form of OP Units, a number of OP Units equal to the number of REIT Shares to which such holder of RESI Equity Interests would have been entitled as Merger Consideration.
(q) “Elected REIT Share Amount” means, in the case of a Pre-Formation Participant that has made a Valid Election to receive its Merger Consideration in the form of REIT Shares the number of REIT Shares constituting the Merger Consideration.
(r) “Election Form” means the forms provided to each holder of Pre-Formation Interests to make such holder’s irrevocable elections with respect to consideration to be received in the Formation Transaction.
(s) “Environmental Laws” means all federal, state and local Laws governing pollution or the protection of human health or the environment.
(t) “Extended Lock-Up Agreement” means that certain Lock-Up Agreement, by and between the REIT and certain partners of Pine River Domestic Management L.P. and Xxxxx Xxxxxxx.
(u) “Final Working Capital Amount” has the meaning set forth in Schedule 5.03.
(v) “Formation Transaction Documentation” means all of the agreements and plans of merger relating to all Merger Entities (including this Agreement) and all contribution agreements of the Contribution Entities and Two Harbors LLC and related documents and agreements substantially in the forms accompanying the Proxy Statement for the Special Meetings of Members dated November 14, 2012 and identified in Exhibit H hereto, pursuant to which all of the Participating Entities and/or the
equity interests in the Participating Entities held by the Pre-Formation Participants are to be acquired by the REIT or the Operating Partnership, directly or indirectly, as part of the Formation Transactions.
(w) “Formation Transactions” means the transactions contemplated by this Agreement and the other Formation Transaction Documentation.
(x) “Governmental Authority” means any government or agency, bureau, board, commission, court, department, official, political subdivision, tribunal or other instrumentality of any government, whether federal, state or local, domestic or foreign.
(y) “Initial Valuation” means the first Valuation conducted, the results of which are included in the Registration Statement.
(z) “Investor Lock-Up Agreement” means that certain Lock-Up Agreement, by and between the underwriters and each Pre-Formation Participant receiving REIT Shares.
(aa) “IPO Closing Date” means the closing date of the IPO.
(bb) “IPO Price” means the initial public offering price of a REIT Share in the IPO.
(cc) “Laws” means laws, statutes, rules, regulations, codes, orders, ordinances, judgments, injunctions, decrees and policies of any Governmental Authority, including, without limitation, zoning, land use or other similar rules or ordinances.
(dd) “Liens” means all pledges, claims, liens, charges, restrictions, controls, easements, rights of way, exceptions, reservations, leases, licenses, grants, covenants and conditions, encumbrances and security interests of any kind or nature whatsoever.
(ee) “Limited Liability Company Operating Agreement” of RESI means the Limited Liability Company Operating Agreement of Provident Residential Real Estate Fund LLC dated as of October 14, 2010.
(ff) “Management Agreement” means that certain management agreement among the REIT, the Operating Partnership and PRCM Real Estate Advisers LLC to be dated as of the Closing Date.
(gg) “Management Lock-Up Agreement” means that certain Lock-Up Agreement, by and between the underwriters and each executive officer and director of the REIT and/or the Operating Partnership.
(hh) “Manager” means PRCM Real Estate Advisers LLC, a Delaware limited liability company.
(ii) “Maximum Cash Amount” means an amount of cash determined by multiplying the (i) IPO Price by (ii) the Provident Consideration by (iii) 10%.
(jj) “Maximum Cash Amount Available for Proration” means the Maximum Cash Amount less amounts payable in the Formation Transactions to Pre-Formation Participants in the Provident Entities that are not Accredited Investors and the amount of cash merger consideration that would be otherwise potentially payable to Persons that have exercised dissenters’ rights in connection with a Merger.
(kk) “Merger Consideration” means, with respect to a Pre-Formation Participant in RESI, the number of REIT Shares equal to the product determined by multiplying the Aggregate Merger Consideration by a fraction the numerator of which is a Pre-Formation Participant’s Allocated Share of the Aggregate Merger Consideration and the denominator of which is the product determined by multiplying the Aggregate Merger Consideration by the IPO Price which shall be payable in the Elected REIT Share Amount, the Elected Cash Amount, the Elected OP Unit Amount or otherwise in OP Units as provided hereunder.
(ll) “Operating Partnership Agreement” means the agreement of limited partnership of the Operating Partnership, as amended and restated and in effect immediately prior to the Effective Time.
(mm) “Operating Subsidiary” means Silver Bay Property Corp., a Delaware corporation.
(nn) “Organizational Documents” means the articles of organization, member control agreement, limited liability company agreement or operating agreement of RESI or any similar documents.
(oo) “Participating Entity” means a Contribution Entity, a Merger Entity or Two Harbors Property, as applicable. As used herein, “Participating Entities” refer to each Participating Entity, collectively.
(pp) “Permitted Liens” means (i) Liens, or deposits made to secure the release of such Liens, securing Taxes, the payment of which is not delinquent or the payment of which (including, without limitation, the amount or validity thereof) is being contested in good faith by appropriate proceedings for which adequate reserves have been made in accordance with GAAP; (ii) zoning, entitlement, building and other land use Laws imposed by governmental agencies having jurisdiction over the Properties; (iii) covenants, conditions, restrictions, easements for public utilities, encroachments, rights of access or other non-monetary matters that do not materially impair the use of the Properties for the purposes for which they are currently being used or proposed to be used in connection with the relevant Person’s business; (iv) Liens arising under leases in effect as of the Closing Date; (v) any exceptions contained in any title policy delivered by RESI relating to the Properties as of the Closing Date, none of which substantially and materially impair the use of the Properties for the purposes for which they are currently being used in connection with the relevant Person’s business or relating to or arising from any unfilled obligations of RESI or any previous owner of a Property or Lien voluntarily incurred by RESI or any previous owner of a Property; and (vi) mechanics’, carriers’, workers’, repairers’ and similar Liens arising or incurred in the ordinary course of business that are not yet due and payable and which are not, in the aggregate, material to the business, operations and financial condition of the Properties so encumbered.
(qq) “Person” means an individual, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization or other entity.
(rr) “Pre-Formation Interests” means the interests held by the Pre-Formation Participants in the Participating Entities.
(ss) “Pre-Formation Participants” means the holders of the direct and indirect equity interests in the relevant Participating Entities immediately prior to the Formation Transactions.
(tt) “Pro-Rata Share” means an amount of cash equal to the product determined by multiplying the Maximum Cash Available for Proration by a fraction the numerator of which is the Elected Cash Amount of the Pre-Formation Participant in RESI and the denominator of which is the elected cash amounts of all Pre-Formation Participants in the Provident Entities.
(uu) “Property Management and Acquisition Services Agreement” means that certain property management and acquisition services agreement between the Operating Partnership and the Operating Subsidiary to be dated as of the Closing Date.
(vv) “Provident Consideration” means the maximum number of REIT shares to be issued to the members of the Provident Entities in exchange for their interest in the Provident Entities.
(ww) “Provident Entities” means, collectively, the Contribution Entities and the Merger Entities.
(xx) “REIT Material Adverse Effect” means any material adverse change in any of the assets, business, condition (financial or otherwise), results of operation or prospects of the REIT and its Subsidiaries, taken as a whole.
(yy) “Representation, Warranty and Indemnity Agreement” means the Representation, Warranty and Indemnity Agreement, dated as of the date hereof, by and among the REIT, the Operating Partnership and Provident, in substantially the form attached as Exhibit J.
(zz) “RESI Material Adverse Effect” means any material adverse change in any of the assets, business, condition (financial or otherwise), results of operation or prospects of RESI.
(aaa) “Side Letter” means that certain letter agreement to be entered into by and among the REIT, the Manager, the Operating Subsidiary, Two Harbors, Two Harbors Property and Provident.
(bbb) “Securities Act” means the Securities Act of 1933, as amended, the rules and regulations promulgated thereunder.
(ccc) “Subsequent Acquisition Cash Amount” means, if a Subsequent Valuation shall be required, any additional amount funded by Two Harbors LLC to purchase additional properties between such Subsequent Valuation and the Closing.
(ddd) “Subsidiary” of any Person means any corporation, partnership, limited liability company, joint venture, trust or other legal entity of which such Person owns (either directly or through or together with another Subsidiary of such Person) either (i) a general partner, managing member or other similar interest, or (ii)(A) fifty percent (50%) or more of the voting power of the voting capital stock or other equity interests, or (B) fifty percent (50%) or more of the outstanding voting capital stock or other voting equity interests of such corporation, partnership, limited liability company, joint venture or other legal entity.
(eee) “Tax” means all federal, state, local and foreign income, gross receipts, license, property, withholding, sales, franchise, employment, payroll, goods and services, stamp, environmental, customs duties, capital stock, social security, transfer, alternative minimum, excise and other taxes, tariffs or governmental charges of any nature whatsoever, including estimated taxes, together with penalties, interest or additions to Tax with respect thereto, whether or not disputed.
(fff) “Two Harbors Consideration” means the maximum number of REIT Shares to be issued to Two Harbors LLC in exchange for its interest in Two Harbors Property.
(ggg) “Valid Election” means, with respect to any RESI Equity Interest, an irrevocable election to receive all or a portion of the Merger Consideration in the form of cash, or OP Units or REIT Shares as indicated on the properly completed and timely received Election Form of the holder of such RESI Equity Interest or an Election Form as to which any deficiencies have been waived by the REIT. In no event shall a holder of any RESI Equity Interest be entitled to receive Merger Consideration in excess of the number of REIT Shares to which it is entitled as Merger Consideration, with each OP Unit being treated as a REIT Share and the amount of cash being treated as a number of REIT Shares equal to such amount of such cash divided by the IPO Price.
(hhh) “Valuation” means (i) the dollar amount determined by the most recent application of the Automated Valuation Model described on Exhibit I hereto on all properties owned by a Participating Entity that were acquired on or before August 31, 2012 (the “AVM Date”) plus (ii) the Adjusted Acquisition Cost of all properties owned by a Participating Entity that were acquired on or after September 1, 2012 (the “Adjusted Cash Date”).
Section 8.05 GOVERNING LAW. This Agreement shall be governed by, and construed in accordance with, the Laws of the State of Delaware, regardless of any Laws that might otherwise govern under applicable principles of conflicts of laws thereof, except to the extent the Laws of the State of Minnesota are mandatorily applicable to the Merger.
from attachment or execution, that the action is brought in an inconvenient forum, or that the venue of the action is improper.
(a) Upon any dispute, controversy or claim arising out of or relating to this Agreement or the enforcement, breach, termination or validity thereof (“Dispute”), the party raising the Dispute will give written notice to the other parties to the Dispute describing the nature of the Dispute following which the parties to such Dispute shall attempt for a period of ten (10) Business Days from receipt by the parties of notice of such Dispute to resolve such Dispute by negotiation between representatives of the parties hereto who have authority to settle such Dispute. All such negotiations shall be confidential and any statements or offers made therein shall be treated as compromise and settlement negotiations for purposes of any applicable rules of evidence and shall not be admissible as evidence in any subsequent proceeding for any purpose. The statute of limitations applicable to the commencement of a lawsuit shall apply to the commencement of an arbitration hereunder, except that no defense based on the running of the statute of limitations will be available based upon the passage of time during any such negotiation. Regardless of the foregoing, a party shall have the right to seek immediate injunctive relief pursuant to Section 8.08(c) below without regard to any such ten (10) Business Day negotiation period.
(b) Any Dispute (including the determination of the scope or applicability of this agreement to arbitrate) that is not resolved pursuant to Section 8.08(a) above shall be submitted to final and binding arbitration in Hennepin County, Minnesota, before one neutral and impartial arbitrator, in accordance with the Laws of the State of Delaware for agreements made in and to be performed in that State. The arbitration shall be administered by JAMS, Inc. (“JAMS”) pursuant to its Comprehensive Arbitration Rules and Procedures, as in effect on the date hereof. One arbitrator shall be appointed by JAMS in accordance with its Comprehensive Arbitration Rules and Procedures, as in effect on the date hereof. The arbitrator shall designate the place and time of the hearing. The hearing shall be scheduled to begin as soon as practicable and no later than sixty (60) days after the appointment of the arbitrator (unless such period is extended by the arbitrator for good cause shown) and shall be conducted as expeditiously as possible. The award, which shall set forth the arbitrator’s findings of fact and conclusions of law, shall be filed with JAMS and mailed to the parties no later than thirty (30) days after the close of the arbitration hearing. The arbitration award shall be final and binding on the parties and not subject to collateral attack. Judgment upon the arbitration award may be entered in any federal or state court having jurisdiction thereof.
(c) Notwithstanding the parties’ agreement to submit all Disputes to final and binding arbitration before JAMS, the parties shall have the right to seek and obtain temporary or preliminary injunctive relief in any court having jurisdiction thereof. Such courts shall have authority to, among other things, grant temporary or provisional injunctive relief in order to protect any party’s rights under this Agreement. Without prejudice to such provisional remedies as may be available under the jurisdiction of a court, the arbitral tribunal shall have full authority to grant provisional remedies and to direct the parties to request that any court modify or vacate any temporary or preliminary relief issued by such court, and to award damages for the failure of any party to respect the arbitral tribunal’s orders to that effect.
(d) The prevailing party shall be entitled to recover its costs and reasonable attorneys’ fees, and the non-prevailing party shall pay all expenses and fees of JAMS, all costs of the stenographic record, all expenses of witnesses or proofs that may have been produced at the direction of
the arbitrator, and the fees, costs, and expenses of the arbitrator. The arbitrator shall allocate such costs and designate the prevailing party or parties for these purposes.
Section 8.10 RULES OF CONSTRUCTION.
(a) The parties hereto agree that they have had the opportunity to be represented by counsel during the negotiation, preparation and execution of this Agreement and, therefore, waive the application of any law, regulation, holding or rule of construction providing that ambiguities in an agreement or other document will be construed against the party drafting such agreement or document.
(b) The words “hereof,” “herein” and “herewith” and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole and not to any particular provision of this Agreement, and article, section, paragraph, exhibit and schedule references are to the articles, sections, paragraphs, exhibits and schedules of this Agreement unless otherwise specified. Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.” All terms defined in this Agreement shall have the defined meanings contained herein when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein. The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such terms. Unless explicitly stated otherwise herein, any agreement, instrument or statute defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument or statute as from time to time, amended, qualified or supplemented, including (in the case of agreements and instruments) by waiver or consent and (in the case of statutes) by succession of comparable successor statutes and all attachments thereto and instruments incorporated therein. References to a Person are also to its permitted successors and assigns.
[SIGNATURE PAGES FOLLOW]
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SILVER BAY REALTY TRUST CORP., | ||
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Name: Xxxxx X. Xxxxxx | |
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SILVER BAY OPERATING PARTNERSHIP L.P., a Delaware limited partnership | ||
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SILVER BAY REALTY TRUST CORP., | |
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SB RESI I MERGER SUB LLC, | ||
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SILVER BAY OPERATING PARTNERSHIP L.P., a Delaware limited partnership, its Managing Member | |
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[Signature Page to Provident Residential Real Estate Fund LLC Agreement and Plan of Merger]
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PROVIDENT RESIDENTIAL REAL ESTATE FUND LLC, a Minnesota limited liability company | |||
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PROVIDENT REAL ESTATE ADVISORS LLC, | |
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PROVIDENT REAL ESTATE ADVISORS LLC, a Minnesota limited liability company | |||
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[Signature Page to Provident Residential Real Estate Fund LLC Agreement and Plan of Merger]