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AGREEMENT AND PLAN OF MERGER
by and among
BERKSHIRE REALTY HOLDINGS, L.P.,
BRI ACQUISITION SUB, LP,
BERKSHIRE APARTMENTS, INC.
and
BRI OP LIMITED PARTNERSHIP
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April 13, 1999
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TABLE OF CONTENTS
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ARTICLE 1
THE MERGER.............................................................2
Section 1.1 The Partnership Merger....................................2
Section 1.2 Closing; Effective Time...................................2
Section 1.3 Certificate and Agreement of Limited Partnership;
Officers..................................................2
Section 1.4 Conversion of Seller OP Units.............................3
Section 1.5 Conversion of Units Owned by Seller General Partner.......3
Section 1.6 Parent and Seller-Owned Interests.........................4
Section 1.7 Conversion of Interests in Buyer Operating Partnership....4
Section 1.8 Cancellation and Retirement of Seller OP Units............4
Section 1.9 Interest Elections........................................4
Section 1.10 Payment for Seller OP Units...............................5
Section 1.11 Further Assurances........................................6
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF SELLER GENERAL PARTNER AND THE
SELLER PARTNERSHIP.....................................................6
Section 2.1 Organization, Standing and Power..........................6
Section 2.2 Authority; Noncontravention; Consents.....................7
Section 2.3 Information Supplied......................................8
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF PARENT AND BUYER OPERATING
PARTNERSHIP............................................................8
Section 3.1 Organization, Standing and Power..........................8
Section 3.2 Authority; Noncontravention; Consents.....................9
Section 3.3 Information Supplied.....................................10
ARTICLE 4
COVENANTS.............................................................11
Section 4.1 Reasonable Best Efforts; Additional Actions..............11
Section 4.2 Notification of Certain Matters..........................11
Section 4.3 Consent Solicitation Statement; Securities Filings.......11
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ARTICLE 5
CONDITIONS TO CONSUMMATION OF THE PARTNERSHIP MERGER..................12
Section 5.1 Conditions to Each Party's Obligations to Effect the
Partnership Merger.......................................12
Section 5.2 Conditions to Seller General Partner's and the Seller
Partnership's Obligations to Effect the
Partnership Merger.......................................13
Section 5.3 Conditions to Parent's and Buyer Operating Partnership's
Obligations to Effect the Partnership....................14
ARTICLE 6
TERMINATION...........................................................15
Section 6.1 Termination..............................................15
Section 6.2 Procedure for and Effect of Termination..................15
ARTICLE 7
MISCELLANEOUS.........................................................15
Section 7.1 Amendment and Modification...............................15
Section 7.2 Waiver of Compliance; Consents...........................15
Section 7.3 Survival.................................................15
Section 7.4 Notices..................................................15
Section 7.5 Assignment...............................................17
Section 7.6 GOVERNING LAW............................................17
Section 7.7 Counterparts.............................................17
Section 7.8 Enforcement..............................................18
Section 7.9 Interpretation...........................................18
Section 7.10 Entire Agreement.........................................18
Section 7.11 No Third Party Beneficiaries.............................18
Section 7.12 Severability.............................................18
Section 7.13 Tax Election.............................................18
EXHIBITS
Exhibit A Partnership Agreement
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of April 13, 1999, by and among
BERKSHIRE REALTY HOLDINGS, L.P., a Delaware limited partnership ("Parent"), BRI
ACQUISITION SUB, LP, a Delaware limited partnership ("Buyer Operating
Partnership"), BERKSHIRE APARTMENTS, INC., a Delaware corporation ("Seller
General Partner"), and BRI OP LIMITED PARTNERSHIP, a Delaware limited
partnership (the "Seller Partnership").
WHEREAS, the respective Boards of Directors (or comparable body or
entity) of Parent, BRI Acquisition, LLC ("Buyer") and Berkshire Realty Company,
Inc., a Delaware corporation (the "Seller"), have approved the acquisition of
the Seller and its assets (including, without limitation, the Seller's direct
and indirect interest in the Seller Partnership) by Parent on the terms and
subject to the conditions set forth in the Agreement and Plan of Merger, dated
as of April 13, 1999 (the "Merger Agreement"), by and among Parent, Buyer and
the Seller;
WHEREAS, it is proposed that, immediately prior to the merger of the
Buyer and Seller as contemplated by the Merger Agreement (the "Merger"), Buyer
Operating Partnership will merge with and into the Seller Partnership (the
"Partnership Merger") on the terms and subject to the conditions of this
Agreement;
WHEREAS, the Board of Directors of Seller General Partner, in light of
and subject to the terms and conditions set forth herein, (i) approved this
Agreement and (ii) resolved to recommend that the holders of Seller OP Units
adopt this Agreement and approve the Partnership Merger;
WHEREAS, Parent, Buyer Operating Partnership, Seller General Partner
and the Seller Partnership desire to make certain representations, warranties,
covenants and agreements in connection with the Partnership Merger and also to
prescribe various conditions thereto; and
WHEREAS, capitalized terms used herein and not otherwise defined have
the respective meanings given them in the Merger Agreement.
NOW THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained herein, and intending to be legally bound
hereby, the parties hereto agree as follows:
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ARTICLE 1
THE MERGER
Section 1.1 The Partnership Merger. Upon the terms and subject to the
conditions of this Agreement, at the Effective Time (as defined in Section 1.2)
and in accordance with the Revised Uniform Limited Partnership Act of the State
of Delaware (the "DRULPA"), Buyer Operating Partnership shall be merged with and
into the Seller Partnership, with the Seller Partnership as the surviving
partnership in the Partnership Merger (the "Surviving Operating Partnership").
At the Effective Time, the separate existence of Buyer Operating Partnership
shall cease and the other effects of the Partnership Merger shall be as set
forth in Section 17-211 of the DRULPA.
Section 1.2 Closing; Effective Time. Provided that the conditions set
forth in Article 5 have been satisfied (or waived by the appropriate party), the
closing of the Partnership Merger (the "Closing") shall take place at the place
of the closing of the Merger set forth in Section 1.2(a) of the Merger
Agreement, on the Closing Date immediately prior to the closing of the Merger,
or at such other place, at such other time or on such other date as the parties
hereto may mutually agree. At the Closing, the parties hereto shall cause a
certificate of merger (the "Certificate of Merger") to be executed and filed
with the Secretary of State of the State of Delaware in accordance with the
DRULPA. The Partnership Merger shall become effective as of the date and time of
such filing, or such other time within 24 hours after such filing as the parties
hereto shall agree to be set forth in the Certificate of Merger (the "Effective
Time"), which, in either case, shall be immediately prior to the effective time
of the Merger. If the closing date of the Merger has been extended as
contemplated under Section 1.2(b) of the Merger Agreement, then for purposes of
the conditions set forth in Section 5.3 hereof, all references in the lettered
subsections thereof to the term "Closing Date" shall be deemed to mean the
Satisfaction Date, and the certificates and other documents to be delivered by
the parties pursuant to Section 5.3 hereof shall be delivered on and as of the
Satisfaction Date. The parties hereto agree that none of the conditions set
forth in Section 5.3 shall be required to be satisfied at any time after the
Satisfaction Date.
Section 1.3 Certificate and Agreement of Limited Partnership; Officers.
(a) At the Effective Time, and without any further action on
the part of Buyer Operating Partnership or the Seller Partnership, the agreement
of limited partnership and the certificate of limited partnership of the Seller
Partnership, as in effect immediately prior to the Effective Time, shall become,
from and after the Effective Time, the agreement of limited partnership and the
certificate of limited partnership of the Surviving Operating Partnership, until
thereafter amended as provided therein and under applicable law.
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(b) The officers of the Seller Partnership immediately prior
to the Effective Time shall become, from and after the Effective Time, the
officers of the Surviving Operating Partnership, until their respective
successors are duly elected or appointed and shall qualify or their earlier
resignation or removal.
Section 1.4 Conversion of Seller OP Units. The Seller OP Units issued
and outstanding immediately prior to the Effective Time (other than Seller OP
Units owned by Seller General Partner, which shall be treated as set forth in
Section 1.5, and other than Seller OP Units to be canceled in accordance with
Section 1.6) shall, at the Effective Time, be converted into the following (the
consideration set forth in clauses (a), (b) and (c) below being collectively
referred to as the "Merger Consideration"):
(a) for each Seller OP Unit with respect to which an
election to receive a Class A Preferred Unit (as defined below) has
been effectively made pursuant to Section 1.9 and not revoked or lost
("Class A Electing Units"), the right to receive one fully paid and
nonassessable "Class A Preferred Unit" (each, a "Class A Preferred
Unit") as defined in the partnership agreement of Parent attached
hereto as Exhibit A (the "Partnership Agreement");
(b) for each Seller OP Unit with respect to which an
election to receive a Class B Unit (as defined below) has been
effectively made pursuant to Section 1.9 and not revoked or lost
("Class B Electing Units"), the right to receive one fully paid and
nonassessable "Class B Unit" as defined in the Partnership Agreement
(each, a "Class B Unit"); and
(c) for each Seller OP Unit, other than Class A
Electing Units and Class B Electing Units, the right to receive in
cash, without interest, an amount equal to the Common Merger
Consideration (the "Cash Election Price").
Notwithstanding the foregoing, if between the date of this Agreement
and the Effective Time the outstanding Seller OP Units, Class A Preferred Units
(if any) or Class B Units (if any) shall have been changed into a different
number of units or a different class by reason of any distribution, dividend,
subdivision, reclassification, recapitalization, split, combination or exchange
of Seller OP Units, Class A Preferred Units (if any) or Class B Units (if any),
the Merger Consideration shall be correspondingly adjusted to reflect such
distribution, dividend, subdivision, reclassification, recapitalization, split,
combination or exchange.
Section 1.5 Conversion of Units Owned by Seller General Partner. The
Seller OP Units that are owned by Seller General Partner immediately prior to
the Effective Time (collectively, the "Seller GP Interest") shall, at the
Effective Time, by virtue of the Partnership Merger and without any action on
the part of
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Seller General Partner, be converted into a 1% general partnership interest in
the Surviving Operating Partnership.
Section 1.6 Parent and Seller-Owned Interests. Each Seller OP Unit that
is owned by Parent or the Seller immediately prior to the Effective Time shall,
at the Effective Time, by virtue of the Partnership Merger and without any
action on the part of Parent or the Seller, automatically be canceled and
retired and cease to exist, and no consideration shall be delivered in exchange
therefor.
Section 1.7 Conversion of Interests in Buyer Operating Partnership. The
aggregate limited partnership interests in Buyer Operating Partnership issued
and outstanding immediately prior to the Effective Time shall, at the Effective
Time, by virtue of the Partnership Merger and without any action on the part of
Parent, be converted into a 99% limited partnership interest in the Surviving
Operating Partnership. The aggregate general partnership interests in Buyer
Operating Partnership issued and outstanding immediately prior to the Effective
Time shall, at the Effective Time, by virtue of the Partnership Merger and
without any action on the part of Buyer, automatically be canceled and retired
and cease to exist, and no consideration shall be delivered in exchange
therefor.
Section 1.8 Cancellation and Retirement of Seller OP Units. Each Seller
OP Unit converted into the right to receive the Merger Consideration pursuant to
Section 1.4 shall no longer be outstanding and shall automatically be canceled
and retired and shall cease to exist, and each holder of a Seller OP Unit shall
cease to have any rights with respect thereto, except for the right to receive
the Merger Consideration, if any, applicable thereto.
Section 1.9 Interest Elections.
(a) Subject to Section 1.9(e), each holder of a Seller OP Unit
shall be entitled, with respect to all, but not less than all, of such holder's
Seller OP Units, to make an unconditional election, on or prior to the Election
Date (as defined in Section 1.9(b)), to receive (i) Class A Preferred Units or
Class B Units (a "Non-Cash Election") or (ii) the Cash Election Price (a "Cash
Election"), on the basis hereinafter set forth.
(b) Buyer Operating Partnership shall prepare, and the Seller
Partnership shall mail pursuant to Section 4.3(a), a form of election, which
form shall be subject to the reasonable approval of Seller General Partner (the
"Form of Election"). The Form of Election shall be used by each holder of a
Seller OP Unit to designate such holder's election to exchange all, but not less
than all, of the Seller OP Units held by such holder into either Class A
Preferred Units, Class B Units or the Cash Election Price. Any such holder's
election to receive Class A Preferred Units, Class B Units or the Cash Election
Price shall be deemed to have been properly made only if Parent shall have
received at its principal executive office, not later than
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5:00 p.m., New York City time on the date that is five business days before the
scheduled date of the Seller Shareholders Meeting (the "Election Date"), a Form
of Election specifying whether such holder elects to receive Class A Preferred
Units, Class B Units or the Cash Election Price and otherwise properly completed
and signed. The Form of Election shall state therein the date that constitutes
the Election Date.
(c) A Form of Election may be revoked by any holder of a
Seller OP Unit only by written notice received by Parent prior to 5:00 p.m., New
York City time, on the Election Date. In addition, all Forms of Election shall
automatically be revoked if the Partnership Merger has been abandoned.
(d) The reasonable determination of Parent shall be binding as
to whether or not elections to receive Class A Preferred Units, Class B Units or
the Cash Election Price have been properly made or revoked pursuant to this
Section 1.9 and when elections and revocations were received by it. If Parent
determines that any election to receive Class A Preferred Units, Class B Units
or the Cash Election Price was not properly made, the Seller OP Units with
respect to which such election was not properly made shall be treated by Parent
as Seller OP Units for which a Cash Election was made, and such Seller OP Units
shall be converted in accordance with Section 1.4(c). Parent may, with the
agreement of Seller General Partner, make such rules as are consistent with this
Section 1.9 for the implementation of the elections provided for herein as shall
be necessary or desirable fully to effect such elections.
(e) Parent reserves the right to require any holder of Seller
OP Units, as a condition to making a Non-Cash Election with respect to such
holder's Seller OP Units, to (i) represent to Parent that such holder is an
"Accredited Investor" (as such term is defined under Rule 501 promulgated under
the Securities Act) and (ii) agree to abide by the terms of the Partnership
Agreement and to become a party thereto.
Section 1.10 Payment for Seller OP Units.
(a) Payment. Promptly after the Effective Time, Parent shall
pay the Merger Consideration to which holders of Seller OP Units shall be
entitled at the Effective Time pursuant to Section 1.4(c). Parent shall be
entitled to deduct and withhold, from the consideration otherwise payable
pursuant to Section 1.4(c) to any former holder of Seller OP Units, such amounts
as Parent is required to deduct and withhold with respect to the making of such
payment under the Code or any provision of state, local or foreign tax law. To
the extent that amounts are so withheld by Parent, such withheld amounts shall
be treated for all purposes of this Agreement as having been paid to the former
holder of Seller OP Units in respect of which such deduction and withholding was
made by Parent.
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(b) No Further Ownership Rights in Seller OP Units. The Merger
Consideration delivered in accordance with the terms of Article 1 shall be
deemed to have been issued (or paid, as applicable) in full satisfaction of all
rights pertaining to the Seller OP Units.
Section 1.11 Further Assurances. If, at any time after the Effective
Time, the Surviving Operating Partnership 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 Operating Partnership the right, title or interest in, to or under any
of the rights, properties or assets of the Seller Partnership acquired or to be
acquired by the Surviving Operating Partnership as a result of, or in connection
with, the Partnership Merger or otherwise to carry out this Agreement, the
Surviving Operating Partnership shall be authorized to execute and deliver, in
the name and on behalf of each of Buyer Operating Partnership and the Seller
Partnership or otherwise, all such deeds, bills of sale, assignments and
assurances and to take and do, in the name and on behalf of each of Buyer
Operating Partnership and the Seller Partnership 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 Operating Partnership or otherwise to carry out this
Agreement.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
OF SELLER GENERAL PARTNER AND THE SELLER PARTNERSHIP
Each of Seller General Partner and the Seller Partnership represents
and warrants to Parent and Buyer Operating Partnership as follows:
Section 2.1 Organization, Standing and Power. Each of Seller General
Partner and Seller Partnership is duly organized and validly existing under the
Laws of Delaware. Each of Seller General Partner and Seller Partnership has the
requisite corporate or limited partnership power and authority to carry on its
business as now being conducted. Each of Seller General Partner and Seller
Partnership is duly qualified or licensed to do business as a foreign
corporation or limited partnership and is in good standing in each jurisdiction
in which the nature of its business or the ownership or leasing of its
properties makes such qualification or licensing necessary, other than in such
jurisdictions where the failure to be so qualified or licensed, individually or
in the aggregate, would not have a Seller Material Adverse Effect. Each of
Seller General Partner and Seller Partnership has delivered to Parent complete
and correct copies of its Certificate of Incorporation and By-laws or similar
organizational documents, in each case, as amended to the date of this
Agreement.
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Section 2.2 Authority; Noncontravention; Consents.
(a) Each of Seller General Partner and Seller Partnership has
the requisite corporate or limited partnership power and authority to enter into
this Agreement and, subject to the Seller Partner Approval, to consummate the
transactions contemplated by this Agreement to which it is a party. The
execution and delivery of this Agreement by Seller General Partner and Seller
Partnership and the consummation by Seller General Partner and Seller
Partnership of the transactions contemplated by this Agreement to which Seller
General Partner and/or Seller Partnership is a party have been duly authorized
by all necessary corporate or limited partnership action on the part of Seller
General Partner and Seller Partnership, except for and subject to the Seller
Partner Approval. This Agreement has been duly executed and delivered by Seller
General Partner and Seller Partnership and constitutes a valid and binding
obligation of each of Seller General Partner and Seller Partnership, enforceable
against each of Seller General Partner and Seller Partnership in accordance with
and subject to its terms, subject to applicable bankruptcy, insolvency,
moratorium or other similar Laws relating to creditors' rights and general
principles of equity.
(b) The execution and delivery of this Agreement by each of
Seller General Partner and Seller Partnership does not, and the consummation of
the transactions contemplated by this Agreement to which it is a party and
compliance by it with the provisions of this Agreement will not, require any
consent, approval or notice under, or conflict with, or result in any violation
of, or default (with or without notice or lapse of time, or both) under, or give
rise to a right of termination, cancellation or acceleration of any obligation
or to loss of a benefit under, or result in the creation of any Lien upon any of
the properties or assets of Seller General Partner, Seller Partnership or any of
their Subsidiaries under, (i) the Certificate of Incorporation or the By-laws or
the comparable certificate of incorporation or organizational documents or
partnership or similar agreement (as the case may be) of Seller General Partner,
Seller Partnership or any of their Subsidiaries, each as amended or supplemented
to the date hereof, (ii) any loan or credit agreement, note, bond, mortgage,
indenture, reciprocal easement agreement, lease, joint venture agreement,
development agreement, benefit plan or other agreement, instrument, permit,
concession, franchise or license applicable to Seller General Partner, Seller
Partnership or any of their Subsidiaries or their respective properties or
assets or (iii) subject to the governmental filings and other matters referred
to in the following sentence, any judgment, order, decree, statute, law,
ordinance, rule or regulation (collectively, "Laws") applicable to Seller
General Partner, Seller Partnership or any of their Subsidiaries, or their
respective properties or assets, other than, in the case of clause (ii) (other
than such items relating to the incurrence of indebtedness) or (iii), any such
conflicts, violations, defaults, rights, loss or Liens that individually or in
the aggregate would not reasonably be expected to (x) have a Seller Material
Adverse Effect or (y) prevent or delay beyond December 31, 1999 the consummation
of the transactions contemplated by this Agreement. No consent, approval, order
or
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authorization of, or registration, declaration or filing with, any federal,
state or local government or any court, administrative or regulatory agency or
commission or other governmental authority or agency, domestic or foreign (a
"Governmental Entity"), is required by or with respect to Seller General
Partner, Seller Partnership or any of their Subsidiaries in connection with the
execution and delivery of this Agreement or the consummation by Seller General
Partner or Seller Partnership of the transactions contemplated by this
Agreement, except for (i) the filing of the Certificate of Merger with the
Secretary of State of the State of Delaware, (ii) any filings required under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), (iii) the filing of a Form D with the SEC and (iv) such other consents,
approvals, orders, authorizations, registrations, declarations and filings (A)
as are set forth in Schedule 2.5 to the Seller Disclosure Letter, (B) as may be
required under (y) federal, state or local environmental Laws or (z) the "blue
sky" laws of various states, to the extent applicable or (C) which, if not
obtained or made, would not prevent or delay beyond December 31, 1999 the
consummation of any of the transactions contemplated by this Agreement or
otherwise prevent or delay beyond December 31, 1999 Seller from performing its
obligations under this Agreement in any material respect or have, individually
or in the aggregate, a Seller Material Adverse Effect.
Section 2.3 Information Supplied. None of the information supplied by
Seller General Partner or the Seller Partnership for inclusion or incorporation
by reference in the Consent Solicitation Statement (as defined in Section 4.3)
or the other Solicitation Documents (as defined Section 4.3) shall, at the time
the Solicitation Documents are mailed to the holders of Seller OP Units and at
the Closing Date, contain any untrue statement of material fact or omit to state
any material fact necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
OF PARENT AND BUYER OPERATING PARTNERSHIP
Each of Parent and Buyer Operating Partnership represents and warrants
to Seller General Partner and the Seller Partnership as follows:
Section 3.1 Organization, Standing and Power.
(a) Parent is a limited partnership duly organized and validly
existing under the Laws of Delaware and has the requisite power and authority to
carry on its business as now being conducted. Parent is duly qualified or
licensed to do business as a foreign limited partnership and is in good standing
in each jurisdiction in which the nature of its business or the ownership or
leasing of its
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properties makes such qualification or licensing necessary, other than in such
jurisdictions where the failure to be so qualified or licensed, individually or
in the aggregate, would not have a material adverse effect on the ability of
Parent to consummate the transactions contemplated by this Agreement. Parent has
delivered to Seller complete and correct copies of its organizational documents
as amended or supplemented to the date of this Agreement. Attached hereto as
Exhibit A is a complete and correct copy of the Partnership Agreement. The
Partnership Agreement has not been amended subsequent to the date hereof, except
for such amendments as are permitted under Section 4.3(c) of the Merger
Agreement.
(b) Buyer Operating Partnership is a limited partnership duly
organized and validly existing under the Laws of Delaware and has the requisite
power and authority to carry on its business as now being conducted. Buyer
Operating Partnership is duly qualified or licensed to do business as a foreign
limited partnership and is in good standing in each jurisdiction in which the
nature of its business or the ownership or leasing of its properties makes such
qualifications or licensing necessary, other than in such jurisdictions where
the failure to be so qualified or licensed, individually or in the aggregate,
would not have a material adverse effect on the ability of Buyer Operating
Partnership to consummate the transactions contemplated by this Agreement. Buyer
Operating Partnership has delivered to Seller complete and correct copies of its
organizational documents as amended or supplemented to the date of this
Agreement.
(c) Parent and Buyer Operating Partnership are newly formed
and, except for activities incident to the acquisition of Seller Partnership,
neither Parent nor Buyer Operating Partnership has (i) engaged in any business
activities of any type or kind whatsoever or (ii) acquired any property of any
type or kind whatsoever.
Section 3.2 Authority; Noncontravention; Consents.
(a) Each of Parent and Buyer Operating Partnership has the
requisite power and authority to enter into this Agreement and to consummate the
transactions contemplated by this Agreement to which it is a party. The
execution and delivery of this Agreement by Parent and Buyer Operating
Partnership and the consummation by Parent and Buyer Operating Partnership of
the transactions contemplated by this Agreement to which Parent and/or Buyer
Operating Partnership is a party have been duly authorized by all necessary
partnership action on the part of Parent and Buyer Operating Partnership
(including, without limitation, the issuance of the Class A Preferred Units and
the Class B Units in the Partnership Merger). This Agreement has been duly
executed and delivered by Parent and Buyer Operating Partnership and constitutes
a valid and binding obligation of each of Parent and Buyer Operating
Partnership, enforceable against each of Parent and Buyer Operating Partnership
in accordance with and subject to its terms, subject to applicable
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bankruptcy, insolvency, moratorium or other similar Laws relating to creditors'
rights and general principles of equity.
(b) The execution and delivery of this Agreement by each of
Parent and Buyer Operating Partnership does not, and the consummation of the
transactions contemplated by this Agreement to which Parent and/or Buyer is a
party and compliance by each of Parent and Buyer Operating Partnership with the
provisions of this Agreement will not, conflict with, or result in any violation
of or default (with or without notice or lapse of time, or both) under, or give
rise to a right of termination, cancellation or acceleration of any material
obligation or to loss of a material benefit under, or result in the creation of
any Lien upon any of the properties or assets of Parent or any of its
Subsidiaries under, (i) the organizational documents of Parent (including the
Partnership Agreement) or Buyer Operating Partnership or the comparable
certificate of incorporation or organizational documents or partnership or
similar agreement (as the case may be) of any other Subsidiary of the Parent,
each as amended or supplemented to the date of this Agreement, (ii) any loan or
credit agreement, note, bond, mortgage, indenture, reciprocal easement
agreement, lease or other agreement, instrument, permit, concession, franchise
or license applicable to Parent or any of its Subsidiaries or their respective
properties or assets or (iii) subject to the governmental filings and other
matters referred to in the following sentence, any Laws applicable to Parent or
any of its Subsidiaries or their respective properties or assets, other than, in
the case of clause (ii) or (iii), any such conflicts, violations, defaults,
rights, loss or Liens that individually or in the aggregate would not reasonably
be expected to (x) have a Parent Material Adverse Effect or (y) prevent the
consummation of the transactions contemplated by this Agreement. No consent,
approval, order or authorization of, or registration, declaration or filing
with, any Governmental Entity is required by or with respect to Parent or any of
its Subsidiaries in connection with the execution and delivery of this Agreement
by Parent or Buyer Operating Partnership or the consummation by Parent or Buyer
Operating Partnership of any of the transactions contemplated by this Agreement,
except for (i) the filing of the Certificate of Merger with the Secretary of
State of the State of Delaware, (ii) such filings as may be required in
connection with the payment of any Transfer Taxes, (iii) any filings required
under the HSR Act, (iv) the filing of a Form D with the SEC and (v) such other
consents, approvals, orders, authorizations, registrations, declarations and
filings (A) as may be required under federal, state or local environmental Laws,
(B) the "blue sky" laws of various states, to the extent applicable, or (C)
which, if not obtained or made, would not prevent or delay beyond December 31,
1999 the consummation of any of the transactions contemplated by this Agreement
or otherwise prevent Parent or Buyer Operating Partnership from performing its
obligations under this Agreement in any material respect or have, individually
or in the aggregate, a Parent Material Adverse Effect.
Section 3.3 Information Supplied. None of the information supplied by
Parent or Buyer Operating Partnership for inclusion or incorporation by
reference in the Consent Solicitation Statement or the other Solicitation
Documents shall, at the
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time the Solicitation Documents are mailed to the holders of Seller OP Units and
at the Closing Date, contain any untrue statement of material fact or omit to
state any material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
ARTICLE 4
COVENANTS
Section 4.1 Reasonable Best Efforts; Additional Actions. Upon the terms
and subject to the conditions of this Agreement, each of the parties hereto
shall use all reasonable best efforts to take, or cause to be taken, all
actions, and to do or cause to be done, and to assist and cooperate with the
other parties in doing, all things necessary, proper or advisable to consummate
and make effective as promptly as practicable the transactions contemplated by,
and in connection with, this Agreement. In connection with and without limiting
the foregoing, Seller General Partner shall take all necessary action to obtain
the requisite consent of the holders of Seller OP Units to adopt this Agreement
and approve the Partnership Merger prior to the closing of the Merger.
Section 4.2 Notification of Certain Matters. Each of Seller General
Partner and the Seller Partnership shall give notice to Parent and Buyer
Operating Partnership, and each of Parent and Buyer Operating Partnership shall
give notice to Seller General Partner and the Seller Partnership, promptly upon
becoming aware of (a) any occurrence, or failure to occur, of any event, which
occurrence or failure to occur has caused or would reasonably be expected to
cause any representation or warranty that is qualified as to materiality in this
Agreement to be untrue or inaccurate or any representation or warranty that is
not so qualified to be untrue or inaccurate in any material respect at any time
after the date hereof and prior to the Closing Date and (b) any material failure
on its part to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it hereunder; provided that the delivery of any
notice pursuant to this Section 4.2 shall not limit or otherwise affect the
remedies available hereunder to the party receiving such notice.
Section 4.3 Consent Solicitation Statement; Securities Filings.
(a) Seller Partnership and Parent shall jointly and promptly
prepare a Consent Solicitation Statement soliciting the written consent of the
holders of Seller OP Units to the adoption of this Agreement and the approval of
the Partnership Merger (the "Consent Solicitation Statement"), which Consent
Solicitation Statement shall contain a description of the terms of the Class A
Preferred Units and the Class B Units and the recommendation of Seller General
Partner's Board of Directors that the holders of Seller OP Units consent to the
adoption of this Agreement and the approval of the Partnership Merger. The
Consent Solicitation
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Statement shall comply as to form in all material respects with the requirements
of the Securities Act and the rules and regulations thereunder applicable to an
offering of securities exempt from registration under the Securities Act
pursuant to Rule 506 thereunder. As soon as practicable following the mailing of
the Proxy Statement in connection with the Merger, Seller Partnership shall mail
the Consent Solicitation Statement, together with a form of written consent, a
Form of Election and any other documents relating thereto (collectively, the
"Solicitation Documents"), to the holders of Seller OP Units. Seller Partnership
and Parent shall consult and cooperate with each other in the preparation of the
Solicitation Documents. All mailings to the holders of Seller OP Units in
connection with the Partnership Merger, including the Solicitation Documents,
shall be subject to the prior review, comment and approval of Parent (such
approval not to be unreasonably withheld or delayed). Parent shall take all
actions required to be taken under any applicable federal and state securities
laws in connection with the issuance of the Class A Preferred Units and the
Class B Units in the Partnership Merger pursuant to this Agreement, including
but not limited to the filing with the SEC of a "Notice of Sale of Securities
Pursuant to Regulation D" on Form D.
(b) Parent, on the one hand, and Seller Partnership, on the
other hand, shall each advise the other promptly if, prior to the Closing Date,
it obtains knowledge of any facts that would make it necessary to amend any of
the Solicitation Documents in order to render the statements therein not false
or misleading or to comply with applicable law. Seller Partnership and Parent
shall promptly amend or supplement any information in such documents if and to
the extent that such information has become false or misleading, and Seller
Partnership shall take all steps necessary to disseminate the amended documents
or supplements to the holders of Seller OP Units, in each case, as and to the
extent required by applicable law.
ARTICLE 5
CONDITIONS TO CONSUMMATION OF THE PARTNERSHIP MERGER
Section 5.1 Conditions to Each Party's Obligations to Effect the
Partnership Merger. The respective obligations of each party hereto to effect
the Partnership Merger is subject to the satisfaction on or prior to the Closing
Date of each of the following conditions, any and all of which may be waived in
whole or in part by the parties hereto with respect to such party's conditions,
to the extent permitted by applicable law:
(a) Conditions to the Merger. All of the conditions to the
closing of the Merger shall have been satisfied or waived in accordance with the
terms of the Merger Agreement (other than those set forth in Section 6.2(h),
6.2(i) or 6.3(f) of the Merger Agreement).
13
(b) Unitholders' Consent. The requisite consent of the holders
of the Seller OP Units to adopt this Agreement and approve the Partnership
Merger shall have been obtained; and
(c) No Injunctions or Restraints. No temporary restraining
order, preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the Partnership Merger or any of the other transactions
contemplated hereby shall be in effect.
(d) HSR Act. All applicable waiting periods (and any
extensions thereof) under the HSR Act shall have expired or otherwise been
terminated.
Section 5.2 Conditions to Seller General Partner's and the Seller
Partnership's Obligations to Effect the Partnership Merger. The obligation of
Seller General Partner and the Seller Partnership to effect the Partnership
Merger is also subject to the satisfaction (or waiver by Seller General Partner
and the Seller Partnership) on or prior to the Closing Date of each of the
following additional conditions:
(a) Accuracy of Representations and Warranties. All
representations and warranties made by each of Parent and Buyer Operating
Partnership herein shall be true and correct in all material respects (except
for representations having a materiality, Parent Material Adverse Effect or
Buyer Material Adverse Effect qualification, which shall be true and correct in
all respects) as of the date of the Agreement and as of the Closing Date with
the same force and effect as though such representations and warranties had been
made on and as of the Closing Date, except for representations and warranties
that are made as of a specified date or time, which shall be true and correct in
all material respects (except for representations having a materiality, Parent
Material Adverse Effect or Buyer Material Adverse Effect qualification, which
shall be true and correct in all respects) only as of such specific date or
time.
(b) Compliance with Covenants. Each of Parent and Buyer
Operating Partnership shall have performed in all material respects all
obligations and agreements, and complied in all material respects with
covenants, contained in this Agreement to be performed or complied with by it
prior to or as of the Closing Date.
(c) Officer's Certificate. Seller General Partner and the
Seller Partnership shall have received a certificate of Parent, dated as of the
Closing Date, signed by an executive officer of Parent to evidence satisfaction
of the conditions set forth in Sections 5.2(a) and (b).
14
Section 5.3 Conditions to Parent's and Buyer Operating Partnership's
Obligations to Effect the Partnership. The obligation of Parent and Buyer
Operating Partnership to effect the Partnership Merger is also subject to the
satisfaction (or waiver by Parent and Buyer Operating Partnership) at or prior
to the Closing Date of each of the following additional conditions:
(a) Accuracy of Representations and Warranties. All
representations and warranties made by each of Seller General Partner and the
Seller Partnership herein shall be true and correct in all material respects
(except for representations having a materiality or Seller Material Adverse
Effect qualification, all of which shall be true and correct in all respects) as
of the date of this Agreement and as of the Closing Date, with the same force
and effect as though such representations and warranties had been made on and as
of the Closing Date, except for representations and warranties that are made as
of a specified date or time, which shall be true and correct in all material
respects (except for representations having a materiality or Seller Material
Adverse Effect qualification, which shall be correct in all respects) only as of
such specific date or time.
(b) Compliance with Covenants. Each of Seller General Partner
and the Seller Partnership shall have performed in all material respects all
obligations and agreements, and complied in all material respects with
covenants, contained in this Agreement to be performed or complied with by it
prior to or as of the Closing Date.
(c) Officer's Certificate. Parent and Buyer Operating
Partnership shall have received a certificate of Seller General Partner, dated
as of the Closing Date, signed by an executive officer of Seller General Partner
to evidence satisfaction of the conditions set forth in Sections 5.3(a) and (b).
Notwithstanding anything to the contrary in this Agreement,
none of the initiation, threat or existence of any legal action of any kind with
respect to this Agreement or the Merger Agreement or any transaction
contemplated hereby or thereby, including without limitation any action
initiated, threatened or maintained by any stockholder of the Seller or any
holders of Seller OP Units, whether alleging rights with respect to Dissenting
Shares, claims under any Federal or state securities law, contract or tort
claims, for breach of fiduciary duty or otherwise, will constitute a failure of
the conditions set forth in Sections 5.2(a), 5.2(b), 5.3(a) or 5.3(b) (and no
such action shall cause an executive officer of Seller General Partner or of
Parent to be unable to deliver a certificate attesting to compliance with such
conditions) unless that action has resulted in the granting of injunctive relief
that prevents the consummation of the Partnership Merger and the other
transaction contemplated hereby or thereby, and such injunctive relief has not
been dissolved or vacated.
15
ARTICLE 6
TERMINATION
Section 6.1 Termination. This Agreement shall terminate, without any
further action on the part of the parties hereto, upon the termination of the
Merger Agreement in accordance with its terms. This Agreement may be terminated
and the transactions contemplated hereby may be abandoned at any time prior to
the Closing Date by the mutual written consent of the parties hereto.
Section 6.2 Procedure for and Effect of Termination. If this Agreement
is terminated as provided herein, no party hereto shall have any liability or
further obligation to any other party under the terms of this Agreement.
ARTICLE 7
MISCELLANEOUS
Section 7.1 Amendment and Modification. Subject to applicable law, this
Agreement may be amended, modified or supplemented only by a written agreement
signed by each of the parties hereto at any time prior to the Closing Date with
respect to any of the terms contained herein; provided, however, that after this
Agreement is adopted by the holders of Seller OP Units, no such amendment shall
be made which requires the approval of such holders.
Section 7.2 Waiver of Compliance; Consents. Any failure of Parent or
Buyer Operating Partnership, on the one hand, or Seller General Partner or the
Seller Partnership, on the other hand, to comply with any obligation, covenant,
agreement or condition herein may, subject to Section 7.1, be waived by Parent
and Buyer Operating Partnership or Seller General Partner and the Seller
Partnership, respectively, only by a written instrument signed by the party
granting such waiver, but such waiver or failure to insist upon strict
compliance with such obligation, covenant, agreement or condition shall not
operate as a waiver of, or estoppel with respect to, any subsequent or other
failure. Whenever this Agreement requires or permits consent by or on behalf of
any party hereto, such consent shall be given in writing in a manner consistent
with the requirements for a waiver of compliance as set forth in this Section
7.2 and in Section 7.1.
Section 7.3 Survival. The respective representations and warranties of
Parent and Buyer Operating Partnership and Seller General Partner and the Seller
Partnership contained herein shall not survive the Closing hereunder.
Section 7.4 Notices. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be delivered
16
personally, sent by overnight courier (providing proof of delivery) to the
parties or sent by telecopy (providing confirmation of transmission) at the
following addresses or telecopy numbers (or at such other address or telecopy
number for a party as shall be specified by like notice):
(a) if to Parent or Buyer Operating Partnership, to:
Berkshire Realty Holdings, L.P.
Xxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx
Telecopier: (000) 000-0000
with a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxx X. Xxxxx, Esq.
Xxxxxxx X. Xxxxxxxxx, Esq.
Telecopier: (000) 000-0000
and
Xxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Telecopier: (000) 000-0000
and
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxx, Esq.
Xxxxx X. Xxxxxxx, Esq.
Telecopier: (000) 000-0000
17
(b) if to Seller General Partner or the Seller
Partnership, to:
Berkshire Realty Company, Inc.
Xxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: President
Telecopier: (000) 000-0000
with a copy to:
Xxxx and Xxxx LLP
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
Xxxxxxx X. Xxxxxx, Esq.
Telecopier: (000) 000-0000
and
Xxxxx & Xxxxxxxxx LLP
0000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Telecopier: (000) 000-0000
All notices shall be deemed given only when actually received.
Section 7.5 Assignment. This Agreement and all of the provisions hereof
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, but neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned by any of
the parties hereto without the prior written consent of the other parties.
Section 7.6 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE, REGARDLESS OF
THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICT OF
LAWS THEREOF.
Section 7.7 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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Section 7.8 Enforcement. The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed by Seller General Partner and Seller Partnership in accordance with
their specific terms or were otherwise breached. It is accordingly agreed that
Parent and Buyer Operating Partnership shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement by Seller General Partner and
Seller Partnership and to enforce specifically the terms and provisions of this
Agreement in any federal court located in Delaware or in Chancery Court in
Delaware, this being in addition to any other remedy to which they are entitled
at law or in equity. The parties acknowledge that Seller General Partner and
Seller Partnership shall not be entitled to an injunction or injunctions to
prevent breaches of this Agreement by Parent or Buyer Operating Partnership or
to enforce specifically the terms and provisions of this Agreement and that
Seller General Partner's and Seller Partnership's sole and exclusive remedy with
respect to any such breach shall be the remedy set forth in Section 7.2 of the
Merger Agreement. In addition, each of the parties hereto (a) consents to submit
itself (without making such submission exclusive) to the personal jurisdiction
of any federal court located in Delaware or Chancery Court located in Delaware
in the event any dispute arises out of this Agreement or any of the transactions
contemplated by this Agreement and (b) agrees that it will not attempt to deny
or defeat such personal jurisdiction by motion or other request for leave from
any such court.
Section 7.9 Interpretation. The article and Section headings contained
in this Agreement are solely for the purpose of reference, are not part of the
agreement of the parties and shall not in any way affect the meaning or
interpretation of this Agreement.
Section 7.10 Entire Agreement. The Merger Agreement (including the
schedules, exhibits, documents or instruments referred to herein) and this
Agreement together embody the entire agreement and understanding of the parties
hereto in respect of the subject matter hereof and thereof and supersede all
prior agreements and understandings, both written and oral, among the parties,
or between any of them, with respect to the subject matter hereof and thereof.
Section 7.11 No Third Party Beneficiaries. This Agreement is not
intended to, and does not, create any rights or benefits of any party other than
the parties hereto.
Section 7.12 Severability. In the event that any one or more of the
provisions contained in this Agreement or in any other instrument referred to
herein, shall, for any reason, be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not affect
any other provision of this Agreement or any other such instrument.
Section 7.13 Tax Election. The parties hereby agree that an election
pursuant to Section 754 of the Internal Revenue Code shall be made for the
Seller
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Partnership and each partnership which is a subsidiary of the Seller Partnership
(or shall be in effect) with respect to any transfers of interests in the Seller
Partnership pursuant to the Merger and the Partnership Merger.
[Signatures appear on next page]
20
IN WITNESS WHEREOF, the Parent, Buyer Operating Partnership, Seller
General Partner and the Seller Partnership have caused this Agreement and Plan
of Merger to be signed by a person duly authorized to do so as of the date first
above written.
BERKSHIRE REALTY HOLDINGS, L.P.
By: /s/ Xxxxxxx Xxxxx
-----------------
Name:
Title:
BRI ACQUISITION SUB, LP
By: /s/ Xxxxxxx Xxxxx
-----------------
Name:
Title:
BERKSHIRE APARTMENTS, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------
Name:
Title:
BRI OP LIMITED PARTNERSHIP
By: BERKSHIRE APARTMENTS, INC., its
general partner
By: /s/ Xxxxx X. Xxxxxxxx
---------------------
Name:
Title:
