EXECUTION
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AMENDED AND RESTATED STOCK PURCHASE AGREEMENT
BY AND BETWEEN
MERIDIAN INDUSTRIAL TRUST, INC.,
AS SELLER
AND
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA,
AS PURCHASER
COMMON STOCK
(par value $.001 per share)
June 12, 1997
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TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.1 Definition. . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II PURCHASE OF COMMON STOCK. . . . . . . . . . . . . . . . . . . . 6
Section 2.1 Purchase of Shares; Closing . . . . . . . . . . . . . . . . . 6
Section 2.2 Dividend Adjustment.. . . . . . . . . . . . . . . . . . . . . 7
ARTICLE III REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . . . 7
Section 3.1 Representations and Warranties of the Company.. . . . . . . . 7
Section 3.2 Representations and Warranties of Purchaser.. . . . . . . . . 15
ARTICLE IV CONDITIONS PRECEDENT TO CLOSING . . . . . . . . . . . . . . . . 17
Section 4.1 Conditions Precedent to Obligations of Purchaser. . . . . . . 17
Section 4.2 Conditions Precedent to Obligations of the Company. . . . . . 19
ARTICLE V COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 5.1 Furnishing of Information.. . . . . . . . . . . . . . . . . . 20
Section 5.2 Real Estate Investment Trust. . . . . . . . . . . . . . . . . 21
Section 5.3 Sale of Shares by Purchaser.. . . . . . . . . . . . . . . . . 21
Section 5.4 Approvals.. . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 5.5 Registration Rights Agreement.. . . . . . . . . . . . . . . . 21
Section 5.6 Excepted Holder Agreements. . . . . . . . . . . . . . . . . . 21
Section 5.7 Notification of Certain Matters.. . . . . . . . . . . . . . . 21
Section 5.8 Nomination of Board Member. . . . . . . . . . . . . . . . . . 22
Section 5.9 Shareholders' Meeting; Preparation of Proxy Statement . . . . 22
Section 5.10 Publicity and Reports . . . . . . . . . . . . . . . . . . . . 23
Section 5.11 Conduct of Business . . . . . . . . . . . . . . . . . . . . . 23
Section 5.12 Negative Covenants of the Company . . . . . . . . . . . . . . 23
Section 5.13 Inspection Rights . . . . . . . . . . . . . . . . . . . . . . 24
Section 5.14 [Reserved]. . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 5.15 Real Estate Operating Company . . . . . . . . . . . . . . . . 24
Section 5.16 Amendment to Investor Rights Agreement. . . . . . . . . . . . 24
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PAGE
Section 5.17 Delivery of Certain Documents . . . . . . . . . . . . . . . . 24
Section 5.18 Further Assurances. . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE VI MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 6.1 Survival of Provisions. . . . . . . . . . . . . . . . . . . . 25
Section 6.2 Termination.. . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 6.3 No Waiver; Modification in Writing. . . . . . . . . . . . . . 26
Section 6.4 Communications. . . . . . . . . . . . . . . . . . . . . . . . 26
Section 6.5 Execution in Counterparts.. . . . . . . . . . . . . . . . . . 26
Section 6.6 Binding Effect; Assignment. . . . . . . . . . . . . . . . . . 26
Section 6.7 Governing Law.. . . . . . . . . . . . . . . . . . . . . . . . 27
Section 6.8 Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 6.9 Severability of Provisions. . . . . . . . . . . . . . . . . . 27
Section 6.10 Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 6.11 Integration.. . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 6.12 Enforcement of Covenants. . . . . . . . . . . . . . . . . . . 27
Section 6.13 Waiver by Jury Trial. . . . . . . . . . . . . . . . . . . . . 28
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PAGE
EXHIBITS
Exhibit A Form of Registration Rights Agreement
Exhibit B Form of Excepted Holder Agreement
SCHEDULES
Schedule 3.1(c) List of Rights to Acquire Equity Securities; Voting
Restrictions;Etc.
Schedule 3.1(d) List of Third Party Consents
Schedule 3.1(i) List of Governmental Consents, Etc.
Schedule 3.1(o) List of Certain Liabilities
Schedule 3.1(s) List of Ownership in Subsidiaries
Schedule 3.1(y) List of Merger, Sale of Equity and Sale of Assets
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AMENDED AND RESTATED STOCK PURCHASE AGREEMENT
AMENDED AND RESTATED STOCK PURCHASE AGREEMENT, dated as of June 12, 1997,
by and among Meridian Industrial Trust, Inc., a Maryland corporation (the
"COMPANY"), and The Prudential Insurance Company of America, a New Jersey
insurance company (the "PURCHASER").
RECITALS
WHEREAS, the Company and the Purchaser have entered into that certain
Stock Purchase Agreement dated as of May 27, 1997 (the "Existing Stock
Purchase Agreement");
WHEREAS, under the Existing Stock Purchase Agreement, the Purchaser
agreed to purchase from the Company, and the Company agreed to sell to the
Purchaser, 3,548,256 shares of Common Stock;
WHEREAS, the Purchaser and the Company desire to increase the number of
shares of Common Stock to be sold to the Purchaser by an additional 253,447
shares from 3,548,256 shares to 3,801,703 shares; and
WHEREAS, the Purchaser and Company desire to amend and restate the
Existing Stock Purchase Agreement to provide for an increase the number of
shares purchased by Purchaser from 3,548,256 shares to 3,801,703 shares and
as otherwise set forth herein;
NOW THEREFORE, In consideration of the mutual covenants and agreements
set forth herein and for good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 DEFINITION. As used in this Agreement, and unless the
context requires a different meaning, the following terms have the meanings
indicated:
"Accrued Dividends Per Share" means the product of (i) the dividends per
Share distributed by the Company for the quarter ending September 30, 1997
MULTIPLIED by (ii) the Dividend Adjustment.
"Affiliate" means a Person that directly, or indirectly through one or
more intermediaries, controls, or is controlled by, or is under common
control with, a specified Person.
"Agreement" means this Stock Purchase Agreement, as the same may be
amended, restated, supplemented or otherwise modified from time to time in
accordance with the terms hereof.
"Approval" means any approval, authorization, consent, qualification or
registration, or any waiver of the foregoing, or any notice, statement or
other communication required to be filed with or delivered to any
Governmental Entity or any other Person.
"Benefit Plans" means all employee benefit plans and collective
bargaining, labor and employment agreements or other similar benefit
arrangements to which the Company or any Subsidiary of the Company will be a
party at the Closing or by which the Company or any Subsidiary of the Company
will be bound at the Closing, including (A) any profit-sharing, deferred
compensation, bonus, stock option, stock purchase, pension, retainer,
consulting, retirement, severance, welfare or incentive plan, agreement or
arrangement, (B) any plan, agreement or arrangement providing for "fringe
benefits" or perquisites to employees, officers, directors or agents,
including benefits relating to automobiles, clubs, vacation, child care,
parenting, sabbatical, sick leave, medical, dental, hospitalization, life
insurance and other types of insurance, (C) any employment agreement not
terminable on 30 days (or less) written notice or (D) any other "employee
benefit plan" within the meaning of Section 3(3) of ERISA.
"Books and Records" means the books and records of the Company and each
of its Subsidiaries, including without limitation financial data (including
projections) and operating data covering each of such entities, their
businesses, operations and financial performance.
"Business Day" means any day except Saturday, Sunday and any day which
shall be a legal holiday or a day on which banking institutions in the State
of New York generally are authorized or required by law or other government
actions to close.
"Bylaws" means the Company's Second Amended and Restated Bylaws dated as
of January 26, 1996, as amended from time to time.
"Charter" means the Company's Third Amended and Restated Articles of
Incorporation dated as of March 30, 1996, as amended from time to time.
"Closing" has the meaning provided therefor in Section 2.1(b) of this
Agreement.
"Closing Date" has the meaning provided therefor in Section 2.1(b) of
this Agreement.
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"Code" means the Internal Revenue Code of 1986, as amended, and the
rules and regulations thereunder as in effect on the date hereof.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the Company's common stock, par value $.001 per
share.
"Company" means Meridian Industrial Trust, Inc., a Maryland corporation.
"Confidential Information" has the meaning provided therefor in Section
5.1(b) of this Agreement.
"Current SEC Reports" means the 1996 Form 10-K, the 1997 Form 10-Q and
the 1997 Proxy Statement.
"Dividend Adjustment" means the quotient of (x) the number of calendar
days between July 1, 1997 (including such date) and the Closing Date
(excluding such date) DIVIDED by (y) 92 days.
"Employee and Director Stock Plan" means the Company's Amended and
Restated Employee and Director Stock Plan dated as of January 26, 1996, as
amended through the date hereof, a true, correct and complete copy of which
has been delivered to Purchaser prior to the date hereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended (or, with respect to any provision thereof referred to herein, any
corresponding provision of any succeeding law).
"Excepted Holder Agreement" means the Excepted Holder Agreement,
substantially in the form of EXHIBIT B hereto, as the same may be amended,
restated, supplemented or otherwise modified in accordance with its terms.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission promulgated thereunder.
"Existing Stock Purchase Agreement" means the Stock Purchase Agreement,
dated as of May 27, 1997, entered into between the Purchaser and the Company.
"Governmental Entity" means any agency, bureau, commission, court,
department, official, political subdivision, tribunal or other
instrumentality of any government, whether federal, state or local, domestic
or foreign.
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"Xxxx-Xxxxx-Xxxxxx Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended and related rules, regulations and
published interpretations thereunder.
"Initial Purchase Price" means the aggregate purchase price for the
Shares based on the price per Share set forth in Section 2(a).
"Investor Rights Agreement" means that certain Amended and Restated
Investor Rights Agreement dated as of February 23, 1996 by and among the
Company and certain shareholders of the Company.
"Law" means any constitutional provision, statute or other law, rule,
regulation or interpretation of any thereof and any Order of any Governmental
Entity (including environmental laws).
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
encumbrance, charge or security interest of any kind in or on such asset or
the revenues or income thereon or therefrom.
"Material Adverse Effect" shall have the meaning set forth in Section
3.1(a).
"Minimum Ownership Level" means, at any time, 10% of the outstanding
shares of Common Stock on a fully diluted basis.
"NYSE" means the New York Stock Exchange.
"Order" means any decree, injunction, judgment, order, ruling,
assessment or writ.
"Person" means an individual or a corporation, partnership, trust,
incorporated or unincorporated association, limited liability company, joint
venture, joint stock company, government (or an agency or political
subdivision thereof) or other entity of any kind.
"Proxy Statement" shall have the meaning set forth in Section 5.9.
"Purchaser" means The Prudential Insurance Company of America and its
successors and permitted assigns.
"Recommendations" shall have the meaning set forth in Section 3.1(u).
"REIT" shall have the meaning set forth in Section 3.1(q).
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"Registration Rights Agreement" means the Registration Rights Agreement,
substantially in the form of EXHIBIT A hereto, as the same may be amended,
restated, supplemented or otherwise modified in accordance with its terms.
"REOC" shall have the meaning set forth in Section 3.1(k).
"Rule 144" means Rule 144 under the Securities Act of 1933, as amended,
and any successor rule thereto.
"SEC Documents" shall have the meaning set forth in Section 3.1(x).
"SEC Financial Statements" shall have the meaning set forth in Section
3.1(x).
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder.
"Separate Account Purchaser" shall have the meaning set forth in Section
5.14.
"Series B Preferred Stock" means the shares of Series B Preferred Stock,
par value $.001 per share, of the Company.
"Shareholders' Meeting" shall have the meaning set forth in Section 5.9.
"Shares" means the shares of Common Stock purchased by Purchaser
pursuant to this Agreement.
"Subsequent Purchasers" shall mean the purchasers, if any, of shares of
Common Stock as contemplated by Section 5.14.
"Subsidiary" means, with respect to any Person, (a) a corporation, a
majority of whose capital stock with voting power, under ordinary
circumstances, to elect directors is at the time, directly or indirectly,
owned by such Person, by a Subsidiary of such Person or by such Person and a
Subsidiary thereof or (b) any other Person (other than a corporation) in
which such Person, a Subsidiary thereof or such Person and a Subsidiary
thereof, directly or indirectly, at the date of determination thereof has at
least a majority ownership interest.
"Taxes" means all taxes, charges, fees, levies, duties, imposts,
withholdings, restrictions, fines, interest, penalties, additions to tax or
other assessments or charges, including, but not limited to, income, excise,
property, withholding, sales, use, gross receipts, value added and franchise
taxes, license recording, documentation and registration fees and custom
duties imposed by any Governmental Entity.
5
"Tax Return" means a report, return or other information required to be
filed by a Person with or submitted to a Governmental Entity with respect to
Taxes, including, where permitted or required, combined or consolidated
returns for any group of entities that includes the Person.
"Termination Date" means the earlier of (i) September 30, 1997 and (ii)
the record date established by the Board of Directors of the Company for the
distribution of dividends for the fiscal quarter of the Company ended
September 30, 1997.
"Transaction Documents" means this Agreement, the Registration Rights
Agreement, the Excepted Holder Agreement and all other documents executed in
connection therewith.
"Transfer" shall have the meaning set forth in Section 3.2(b).
"1996 Form 10-K" means the Company's annual report on Form 10-K for the
year ended December 31, 1996 filed with the Commission.
"1997 Form 10-Q" means the Company's quarterly report on Form 10-Q for
the fiscal quarter ended March 31, 1997 filed with the Commission.
"1997 Proxy Statement" means that certain Proxy Statement dated April
14, 1997 in respect of the annual meeting of the shareholders of the Company
held on May 16, 1997.
ARTICLE II
PURCHASE OF COMMON STOCK
Section 2.1 PURCHASE OF SHARES; CLOSING.
(a) Subject to the terms and conditions herein set forth and the
Dividend Adjustment, the Company will sell to Purchaser, and Purchaser will
purchase from the Company, 3,801,703 shares of Common Stock at a purchase
price of $19.728 per Share (the "Initial Purchase Price").
(b) The purchase and sale of the Shares will take place at a
closing (the "CLOSING") to be held at the offices of O'Melveny & Xxxxx LLP,
000 Xxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000 or such other location as
may be mutually agreed upon by the parties hereto on a date mutually agreed
upon by the parties hereto, provided that the Closing shall occur on or
before the earlier of (i) the fifth calendar day after all conditions set
forth in Article IV have been satisfied or waived by the appropriate party
and (ii) the Termination Date. The date and time at which the Closing is to
be concluded is the "CLOSING DATE."
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(c) Delivery of the Shares shall be made at the Closing by
delivery to Purchaser, against payment of the Initial Purchase Price therefor
as provided herein, of a share certificate representing the total number of
Shares or, at Purchaser's option, issuance of the Shares in book entry form.
(d) Payment of the Initial Purchase Price shall be made by or on
behalf of Purchaser by wire transfer of immediately available funds to an
account of the Company (the number for which account shall have been
furnished to Purchaser at least two Business Days prior to the Closing Date),
or certified or official bank check payable in immediately available funds to
the order of the Company.
Section 2.2 DIVIDEND ADJUSTMENT. In addition to the Initial Purchase
Price, Purchaser shall pay to the Company, promptly after receipt of
dividends for the quarter ended September 30, 1997, an amount equal to the
product of (x) Accrued Dividends Per Share (x) MULTIPLIED by (y) 3,801,703
shares. Payment of such Dividend Adjustment shall be made in the manner as
set forth in Section 2.1(d) or as otherwise agreed to by Purchaser and the
Company.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company represents and warrants as of the date hereof as follows.
(a) ORGANIZATION AND GOOD STANDING. (i) The Company is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Maryland. Each Subsidiary of the Company is a
corporation or other entity duly organized, validly existing and, with
respect to each Subsidiary that is a corporation, in good standing under the
laws of its state of incorporation or formation, as the case may be. The
Company and each Subsidiary of the Company is duly qualified or licensed and,
with respect to each Subsidiary that is a corporation, in good standing as a
foreign corporation and authorized to do business, in each jurisdiction in
which the ownership or leasing of its properties or the character of its
operations makes such qualification, licensing or authorization necessary,
except where the failure to obtain such qualification, license, authorization
or good standing would not individually or in the aggregate reasonably be
expected to have a material adverse effect upon the assets, liabilities,
financial condition, earnings or operations of the Company and its
Subsidiaries taken as a whole or any transaction contemplated by the
Transaction Documents (any such material adverse effect, whether individually
or in the aggregate, a "MATERIAL ADVERSE EFFECT"). The Company and each
Subsidiary of the Company has all requisite corporate power and authority to
own its assets and to carry on its business as presently proposed to be
conducted except where a lack of such corporate power or authority could not
reasonably be expected to have a Material Adverse Effect.
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(ii) The Company has delivered to Purchaser true, correct and
complete copies of the Charter and the Bylaws of the Company.
(b) AUTHORIZATIONS. The Company has all requisite corporate power
and authority to execute, deliver and perform its obligations under the
Transaction Documents. The execution and delivery by the Company of the
Transaction Documents and the consummation of the transactions contemplated
thereby have been duly and validly authorized by the Company.
(c) CAPITALIZATION. As of the date hereof, the equity
capitalization of the Company is as set forth in the balance sheet of the
Company included in the 1997 Form 10-Q, except for any shares of Common Stock
issued under the Employee and Director Stock Plan since March 31, 1997. At
the Closing Date, all of the outstanding shares of stock of the Company will
be duly and validly issued, fully paid and non-assessable and not subject to
any preemptive rights of other shareholders. Except as set forth in the
Current SEC Reports and in SCHEDULE 3.1(c), a certificate (certified by the
Chief Executive Officer or Chief Financial Officer of the Company) delivered
to Purchaser on or prior to the Closing Date or contemplated by the Employee
and Director Stock Plan, (i) there are no outstanding securities or
indebtedness convertible into, exchangeable for, or carrying the right to
acquire, Common Stock or other equity securities of the Company, or
subscriptions, warrants, options, rights, or other arrangements or
commitments obligating the Company to issue or dispose of any Common Stock or
other equity securities or any ownership therein, (ii) there is no agreement
or arrangement restricting the voting or transfer of any equity securities of
the Company, and (iii) there are no outstanding contractual obligations,
commitments, understandings or arrangements of the Company or any of its
Subsidiaries to repurchase, redeem or otherwise acquire, require or make any
payment in respect of any shares of equity securities of the Company or such
Subsidiary. Except with respect to statutory restrictions of general
application, as provided in the Charter with respect to the Series B
Preferred Stock and the terms of the Company's Second Amended and Restated
Revolving Credit Agreement with The First National Bank of Boston and certain
other Banks named therein, there are no legal, contractual or other
restrictions on the payment of dividends or other distributions or amounts on
or in respect of the Common Stock. As of the date hereof, except as
contemplated by the Registration Rights Agreement and the Investor Rights
Agreement, there are no agreements or arrangements to which any of the
Company or its Subsidiaries is a party pursuant to which the Company is or
could be required to register shares of Common Stock or other securities
under the Securities Act.
(d) CONFLICTING AGREEMENTS AND OTHER MATTERS. Neither the Company
nor any of its Subsidiaries is a party to any contract or agreement or
subject to any charter or other corporate restriction compliance with which
could reasonably be expected to have a Material Adverse Effect. Assuming the
filing of a Form D with the Commission, the listing of the Shares on the NYSE
and the accuracy of the representations and warranties of, and the
performance of the agreements of, Purchaser set forth in Section 3.2 and
elsewhere herein, neither the execution and delivery of the Transaction
Documents nor fulfillment of nor compliance with the terms and
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provisions thereof, nor the issuance of the Shares will (i) violate any
provision of any Law presently in effect or in effect at the Closing Date
having applicability to the Company or any Subsidiary or any of their
properties, except such violations as could not reasonably be expected to
have a Material Adverse Effect, (ii) conflict with or result in a breach of
or constitute a default under the Charter or Bylaws of the Company or any
organizational document of its Subsidiaries, (iii) except as set forth in
SCHEDULE 3.1(d), require any consent, approval or notice under, or conflict
with or result in a breach of, constitute a default or accelerate any right
under, any note, bond, mortgage, license, indenture or loan or credit
agreement, or any other agreement or instrument, to which the Company or any
of its Subsidiaries is a party or by which any of their respective properties
is bound, except such consents, approvals, notices, conflicts, breaches or
defaults as could not reasonably be expected to have a Material Adverse
Effect or (iv) result in, or require the creation or imposition of, any Lien
upon or with respect to any of the properties now owned or hereafter acquired
by the Company or any of its Subsidiaries. Neither the Company nor any of
its Subsidiaries is bound by any agreement which would impose upon Purchaser
any personal obligation or personal liability which is greater than the
personal obligations and personal liabilities imposed upon Purchaser under
this Agreement, the Registration Rights Agreement and the Excepted Holder
Agreement to be entered into by the Company and Purchaser pursuant to
Sections 5.5 and 5.6 hereof. In addition, the Company is not aware of any
facts or circumstances that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
(e) DUE EXECUTION, ETC. This Agreement, constitutes, and when
executed and delivered by the Company at the Closing each of the Registration
Rights Agreement and the Excepted Holder Agreement will constitute, a legal,
valid and binding obligation of the Company, enforceable in accordance with
its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating
to or affecting creditors' rights generally and to general principles of
equity.
(f) LITIGATION, PROCEEDING, ETC. There is no action, suit, notice
of violation, proceeding or investigation pending or, to the best knowledge
of the Company, threatened against or affecting the Company or any of its
Subsidiaries or any of their respective properties before or by any
Governmental Entity which (i) challenges the legality, validity or
enforceability of any of the Transaction Documents or the Shares or (ii)
could (individually or in the aggregate) reasonably be expected to have a
Material Adverse Effect or (iii) would (individually or in the aggregate)
impair the ability of the Company to perform fully on a timely basis any
obligations which it has under any of the Transaction Documents.
(g) NO DEFAULT OR VIOLATION. Neither the Company nor any of its
Subsidiaries is (i) in default under or in violation of any indenture, loan
or credit agreement or any other agreement or instrument to which it is a
party or by which it or any of its properties is bound, except such defaults
or violations as could not reasonably be expected to have a Material Adverse
Effect, (ii) in violation of any Order of any Governmental Entity, except for
such violations as
9
could not reasonably be expected to have a Material Adverse Effect, or (iii)
in violation of any Law which could reasonably be expected to (A) adversely
affect the legality, validity or enforceability of the Transaction Documents,
(B) have a Material Adverse Effect or (C) adversely impair the Company's
ability or obligation to perform fully on a timely basis any obligation which
it has under the Transaction Documents.
(h) STATUS OF SHARES. Subject to approval of the shareholders of
the Company, which approval shall be solicited pursuant to Section 5.9 prior
to the Closing, the issuance and sale of the Shares have been duly authorized
by all necessary corporate action on the part of the Company and such Shares,
when delivered to Purchaser at the Closing against payment therefor as
provided herein, will be validly issued, fully paid and non-assessable and
the issuance and sale of the Shares is not and will not be subject to
preemptive rights of any other shareholder of the Company.
(i) GOVERNMENTAL CONSENTS, ETC. Except as may be required under
any applicable securities law in connection with the performance by the
Company of its obligations under the Registration Rights Agreement, and
except for the filing of a Form D with the Commission and the listing of the
Shares on the NYSE, and assuming the accuracy of the representations and
warranties of, and the performance of the agreements of, Purchaser set forth
in Section 3.2 and elsewhere herein, no authorization, consent, approval,
waiver, license, qualification or formal exemption from, nor any filing,
declaration, qualification or registration with, any Governmental Entity or
any securities exchange is required in connection with the execution,
delivery or performance by the Company of this Agreement and the issuance,
sale or delivery of the Shares except for those that (i) have been made or
obtained by the Company as of the date hereof or (ii) are set forth in
SCHEDULE 3.1(i) and by the Closing shall be made or received by the Company.
At the Closing Date, the Company will have made all filings and given all
notices to Governmental Entities and obtained all necessary ordinances,
registrations, declarations, approvals, orders, consents, qualifications,
franchises, certificates, permits and authorizations from any Governmental
Entity, to own or lease its properties and to conduct its facilities and
businesses as currently conducted, except where failure to do so could not
reasonably be expected to have a Material Adverse Effect. At the Closing
Date, all such registrations, declarations, approvals, orders, consents,
qualifications, franchises, certificates, permits and authorizations, the
failure of which to file, give notice of or obtain could reasonably be
expected to have a Material Adverse Effect, will be in full force and effect.
The assets of the Company qualify as exempt assets for purposes of the
Xxxx-Xxxxx-Xxxxxx Act and no filing under the Xxxx-Xxxxx-Xxxxxx Act is
required in connection with the sale and issuance of the Shares hereunder.
(j) PRIVATE OFFERING. Neither the Company nor any Person acting
on its behalf has taken or will take any action (including, without
limitation, any offering of any securities of the Company under circumstances
which would require the integration of such offering with the offering of the
Shares under the Securities Act) which might subject the offering, issuance
or sale of the Shares to the registration requirements of Section 5 of the
Securities Act.
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(k) ERISA.
(i) COMPANY STATUS. The Company currently qualifies as a "real
estate operating company" ("REOC") within the meaning of 29 C.F.R. Section
2510.3-101(e), and has qualified as a REOC during all valuation periods
within the meaning of 29 C.F.R. Section 2510.3-101(d)(5).
(ii) BENEFIT PLANS. To the extent applicable, the Benefit Plans
comply, in all material respects, with the requirements of ERISA and the
Code (including reporting requirements). Neither any Benefit Plan nor the
Company or any Subsidiary of the Company has incurred any liability or
penalty under Section 4975 of the Code or Section 502(i) of ERISA. Each
Benefit Plan has been maintained and administered in all material respects
in compliance with its terms and with ERISA and the Code to the extent
applicable thereto. There are no pending, or to the knowledge of the
Company threatened, material claims (other than claims for benefits
pursuant to the terms of any such plan) against or otherwise involving any
of the Benefit Plans and no action has been brought against or with respect
to any Benefit Plan, and neither the Company nor any Subsidiary of the
Company incurred any material liability to any party with respect to any
Benefit Plan. All contributions required to be made to the Benefit Plans
have been made or provided for as of the date hereof. No Benefit Plan is
subject to Title IV of ERISA and neither the Company nor any Subsidiary of
the Company has, within six years prior to the date of this Agreement,
contributed to or had any obligation to contribute to any employee benefit
plan subject to Title IV of ERISA. For purposes of this Section 3.1(k),
(i) the term "COMPANY" includes any entity required to be aggregated with
the Company pursuant to Code Section 414(b),(c),(m) or (o) and (ii)
provisions of ERISA or the Code include regulations prescribed under such
provisions.
(iii) The terms of this transaction are not less favorable to
Purchaser than the terms that would be available generally in an arms'-
length transaction between unrelated parties.
(l) FINANCIAL STATEMENTS. The consolidated balance sheets and
statements of operations of the Company and its consolidated Subsidiaries as of
the last day of its latest complete fiscal year and the related consolidated
statements of operations, shareholders' equity and cash flows for the fiscal
year then ended, reported on by the independent public accountants (and, with
respect to the Company, filed with the Commission on Form 10-K) for the years
ended December 31, 1995 and December 31, 1996 and the consolidated balance
sheets and statements of operations of the Company and its consolidated
Subsidiaries as of the fiscal quarter ended March 31, 1997 and the related
consolidated statements of operations, shareholders' equity and cash flows for
the fiscal quarter then ended (and, with respect to the Company, included in the
1997 Form 10-Q), present fairly in all material respects the financial position
of the Company and its consolidated Subsidiaries as of the dates indicated and
the results of operations of the Company
11
and its consolidated Subsidiaries, for the periods specified. Such financial
statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis and all adjustments
necessary for a fair presentation of results for such periods have been made
(subject, in the case of unaudited financial statements, to normal year-end
audit adjustments).
(m) INSURANCE. At Closing, the Company and its Subsidiaries will
have (i) "all risk" property insurance, including fire, flood, earthquake,
extended coverage and rental loss insurance and (ii) general commercial
liability insurance, under terms and in such amounts and covering such risks
that are customary for properties similar to those of the Company and its
Subsidiaries. There are currently no outstanding material losses for which
the Company or any of its Subsidiaries has failed to give or present notice
or claim under any policy. Policies for all the insurance are in full force
and effect and none of the Company or its Subsidiaries is in default in any
material respect under any of the policies.
(n) INFORMATION PROVIDED. Neither this Agreement, the schedules
and exhibits hereto, the Current SEC Reports nor any other written document
delivered to Purchaser in connection with the transactions contemplated
hereby contain any untrue statement of a material fact or omit any material
fact necessary to make the statements herein or therein, as the case may be,
in light of the circumstances under which it was made, not misleading, and
all material information regarding the Company and its Subsidiaries is
provided therein.
(o) NO OTHER LIABILITIES. Except as set forth in SCHEDULE 3.1(o),
neither the Company nor any Subsidiary of the Company will have any material
liability, whether absolute, accrued, contingent or otherwise, except
liabilities (i) reflected on the consolidated balance sheet of the Company
and its Subsidiaries as at March 31, 1997, or (ii) liabilities that (1) are
incurred by the Company and its Subsidiaries after March 31, 1997 in the
ordinary course of business and (2) could not reasonably be expected to have
a Material Adverse Effect.
(p) NO BROKERS OR FINDERS. No agent, broker, finder or investment
or commercial banker, or other Person or firm engaged by or acting on behalf
of the Company in connection with the negotiation, execution or performance
of this Agreement is or will be entitled to any brokerage or finder's or
similar fee or other commission as a result of this Agreement other than any
such fees or commissions that have been disclosed to Purchaser and as to
which the Company shall have full and sole responsibility.
(q) TAXES; REIT STATUS. Each of the Company and its Subsidiaries
has filed all Tax Returns that are required to be filed with any Governmental
Entity and has paid all Taxes due pursuant to the Tax Returns or any
assessment received by it or otherwise required to be paid, except Taxes
being contested in good faith by appropriate proceedings and for which
adequate reserves or other provisions are maintained, and except for the
filing of Tax Returns as to which the failure to file could not, individually
or in the aggregate, have a Material Adverse Effect. The Company (i) elected
to be taxed as a "real estate investment trust" as defined in Section 856 of
12
the Code ("REIT") effective for each of the taxable years since the Company
has been incorporated, (ii) has not revoked such election, (iii) qualifies
for taxation as a REIT for each such taxable year and for its current taxable
year and (iv) has not sold or otherwise disposed of any assets which could
give rise to a material amount of tax pursuant to any election made by the
Company under Notice 88-19, 1988-1 C.B. 486 and does not expect to effect any
such sale or other disposition.
(r) COMPLIANCE WITH LAWS. Neither the Company nor any of its
Subsidiaries has been in or is in, and none of them has received notice of,
violation of or default with respect to, any Law or any decision, ruling,
order or award of any arbitrator applicable to it or its business, properties
or operations, except for violations or defaults that, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
(s) SUBSIDIARIES.
(i) The 1996 Form 10-K sets forth a correct and complete list of
all of the Company's Subsidiaries as of the date hereof.
(ii) As of the date hereof, except as set forth on SCHEDULE
3.1(s), all outstanding shares of capital stock or other evidences of
equity ownership of each Subsidiary of the Company are duly authorized,
validly issued, fully paid and nonassessable and are owned directly or
indirectly, beneficially and of record by the Company, free and clear of
all Liens.
(t) MATERIAL CONTRACTS. (i) The 1997 Form 10-Q, the 1996 Form
10-K and Schedule 3.1(c) includes a correct and complete list of the
following with respect to the Company and any of its Subsidiaries: (1)
agreements with any shareholder having beneficial ownership of 5% or more of
the shares of common stock of the Company or such Subsidiary then issued and
outstanding, director or officer of the Company or such Subsidiary and all
shareholders' agreements and voting trusts; and (2) agreements not made in
the ordinary course of business and which could reasonably by expected to
result in a Material Adverse Effect.
(ii) All property management agreements to which the Company is a
party provide for a right (without payment of any penalty or termination
fee) of the Company to terminate such agreement upon 30-day prior written
notice and the Company shall deliver each such agreement reasonably
requested by Purchaser within 10 days after the date of such request.
(u) RECOMMENDATIONS. The Board of Directors of the Company, at a
meeting duly called and held, has duly (i) determined that the Transaction
Documents and the transactions contemplated thereby, taken as a whole, are in
the best interests of the Company and its shareholders, (ii) resolved to
recommend that holders of shares of Common Stock and Series B
13
Preferred Stock approve the Transaction Documents and the transactions
contemplated thereby (collectively, the "RECOMMENDATIONS") and (iii) approved
the Transaction Documents and the transactions contemplated thereby.
(v) SHAREHOLDER APPROVAL. The affirmative vote of a majority of
the shares of the Common Stock and the Series B Preferred Stock, voting
together as a single class, voted at the duly convened shareholders meeting
of the Company (or any other duly convened meeting of the holders of the
Common Stock and the Series B Preferred Stock) is the only vote of the
holders of any class or series of the equity securities of the Company
necessary to approve the Transaction Documents and the transactions
contemplated thereby.
(w) NO RESTRICTIONS ON SHARES. As of the Closing Date, subject to
satisfaction of Section 4.1(l), no provision of the Charter or Bylaws of the
Company, any other agreement, indenture or other instrument to which the
Company or its properties are subject, or any Law applicable to the Company
(i), except as provided in the Excepted Holder Agreement, directly or
indirectly restricts or impairs the right or ability of Purchaser to vote, or
otherwise to exercise the rights and receive the benefits of a shareholder
with respect to the Shares, including, without limitation, restrictions based
upon the size of the security holdings of Purchaser, the business in which it
is engaged or other considerations applicable to it and not to security
holders generally, or (ii) provides any other security holder of the Company
with any preemptive rights.
(x) SEC DOCUMENTS. The Company has filed with the Commission all
reports, schedules, forms, statements and other documents required by the
Exchange Act to be filed by the Company (collectively, and in each case
including all exhibits and schedules thereto and documents incorporated by
reference therein, the "SEC DOCUMENTS"). The Company has delivered or made
available to Purchaser all SEC Documents. As of their respective dates,
except to the extent revised or superseded by a subsequent filing with the
Commission, the SEC Documents complied in all material respects with the
requirements of the Securities Act or the Exchange Act, as the case may be,
and none of the SEC Documents (including any and all financial statements
included therein) as of such dates contained any untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The consolidated
financial statements of the Company and its Subsidiaries included in all SEC
Documents, including any amendments thereto (the "SEC FINANCIAL STATEMENTS"),
comply as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the Commission with
respect thereto.
(y) NO MERGER AGREEMENTS. As of the date hereof, except as set
forth in SCHEDULE 3.1(y), none of Company or its Subsidiaries has entered
into any agreement with any Person which has not been terminated as of the
date of this Agreement and under which there remains any liability or
obligation thereof with respect to a merger or consolidation with any of
14
the Company or its Subsidiaries, or any other acquisition of a substantial
amount of the assets of the Company or its Subsidiaries.
Section 3.2 REPRESENTATIONS AND WARRANTIES OF PURCHASER.
(a) INVESTMENT INTENT. Purchaser represents and warrants to the
Company that the Shares to be acquired by it hereunder are being acquired for
its own account for investment and with no intention of distributing or
reselling such Shares or any part thereof or interest therein in any
transaction which would be in violation of the securities laws of the United
States of America or any State or any foreign country or jurisdiction.
(b) TRANSFER RESTRICTIONS. If Purchaser should decide to dispose
of any of the Shares, Purchaser understands and agrees that it may do so only
pursuant to an effective registration statement under the Securities Act or
pursuant to an exemption from registration under the Securities Act. In
connection with any offer, resale, pledge or other transfer (individually and
collectively, a "TRANSFER") of any Shares other than pursuant to an effective
registration statement, the Company may require that the transferor of such
Shares provide to the Company an opinion of counsel which opinion shall be
reasonably satisfactory in form and substance to the Company, to the effect
that such Transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities
Act and any State or foreign securities laws. Purchaser agrees to the
imprinting, so long as appropriate, of substantially the following legend on
certificates representing the Shares:
THE SHARES OF COMMON STOCK (THE "SHARES") EVIDENCED HEREBY HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT AS
SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER
AGREES THAT IT WILL NOT OFFER, RESELL, PLEDGE OR OTHERWISE TRANSFER
(INDIVIDUALLY AND COLLECTIVELY, A "TRANSFER") THE SHARES EVIDENCED HEREBY,
EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, OR (B) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT SUCH AS THE EXEMPTION SET FORTH IN RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE). IF THE PROPOSED TRANSFER IS TO BE MADE
OTHER THAN PURSUANT TO CLAUSE (A) ABOVE, THE HOLDER MUST, PRIOR TO SUCH
TRANSFER, FURNISH TO THE COMPANY AND THE TRANSFER AGENT SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THEY MAY REASONABLY
REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT OR ANY STATE OR FOREIGN SECURITIES LAW.
15
The legend set forth above may be removed if and when the Shares
represented by such certificate are disposed of pursuant to an effective
registration statement under the Securities Act or the opinion of counsel
referred to above has been provided to the Company. The share certificates
shall also bear legends regarding permitted ownership levels of Shares and
any additional legends required by applicable Federal, State or foreign
securities Laws or necessary under applicable tax Laws, which legends may be
removed when, in the opinion of counsel to the Company, the same are no
longer required under the Charter or the applicable requirements of such
securities or tax Laws. Purchaser agrees that, in connection with any
Transfer of Shares by it pursuant to an effective registration statement
under the Securities Act, Purchaser will comply with all prospectus delivery
requirements of the Securities Act. The Company makes no representation,
warranty or agreement as to the availability of any exemption from
registration under the Securities Act with respect to any resale of Shares.
(c) STOP TRANSFER INSTRUCTION. Purchaser agrees that the Company
shall be entitled to make a notation on its records and give instructions to
any transfer agent for the Shares in order to implement the restrictions on
transfer set forth in this Agreement.
(d) PURCHASER STATUS. Purchaser represents and warrants to, and
covenants and agrees with, the Company that (i) at the time it was offered
the Shares, it was, (ii) at the date hereof, it is, and (iii) at the Closing
Date, it will be, a "qualified institutional buyer" as defined in Rule 144A
under the Securities Act or an "accredited investor" as defined in Rule 501
under the Securities Act, and has such knowledge, sophistication and
experience in business and financial matters so as to be capable of
evaluating the Company and an investment in the Shares, and is able to bear
the economic risk of such investment.
(e) AUTHORITY. Purchaser represents and warrants to the Company
that, assuming the accuracy of the representation of the Company in Section
3.1(i) hereof, (i) as of the Closing Date, the purchase of the Shares to be
purchased by it has been duly and properly authorized and this Agreement has
been duly executed and delivered by it or on its behalf and constitutes the
valid and legally binding obligation of Purchaser, enforceable against it in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights generally and to
general principles of equity; (ii) the purchase of the Shares to be purchased
by it does not conflict with or violate (A) its charter or by-laws or (B) any
Law applicable to it in a manner that could materially hinder or impair the
completion of the transactions contemplated hereby; and (iii) the purchase of
Shares to be purchased by it does not impose any penalty or other onerous
condition on Purchaser that could materially hinder or impact the completion
of the transactions contemplated hereby.
(f) ACCESS TO INFORMATION. Purchaser acknowledges as of the date
of approval by the Finance Committee of the Board of Directors of Purchaser
that it has been afforded (i) the opportunity to ask such questions as it has
deemed necessary of, and to receive answers from,
16
representatives of the Company concerning the terms and conditions of the
offering of the Shares and the merits and risks of investing in the Shares;
(ii) access to information about the Company, the Company's financial
condition, pro forma results of operations, business properties, management
and prospects sufficient to enable it to evaluate its investment in the
Shares; and (iii) the opportunity to obtain such additional information which
the Company possesses or can acquire without unreasonable effort or expense
that is necessary to verify the accuracy and completeness of the information
contained in the SEC Documents.
(g) RELIANCE. Purchaser also understands and acknowledges that
(i) the Shares are being offered and sold without registration under the
Securities Act in a transaction that is exempt from the registration
provisions of the Securities Act and (ii) the availability of such exemption
depends in part on, and that the Company and, for purposes of the opinion to
be delivered to Purchaser pursuant to Section 4.1(a) hereof, Xxxxxx & Xxxxxx
L.L.P. will rely upon, the accuracy and truthfulness of the foregoing
representations and Purchaser hereby consents to such reliance.
(h) NO BROKERS OR FINDERS. No agent, broker, finder or investment
or commercial banker, or other Person or firm engaged by or acting on behalf
of any Purchaser in connection with the negotiation, execution or performance
of this Agreement is or will be entitled to any brokerage or finder's or
similar fee or other commission as a result of this Agreement other than any
such fees or commission that have been disclosed to the Company and as to
which Purchaser shall have full and sole responsibility.
ARTICLE IV
CONDITIONS PRECEDENT TO CLOSING
Section 4.1 CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER. The
obligations of Purchaser to purchase the Shares are subject, at the Closing
Date, to the prior or simultaneous satisfaction or waiver by it of the
following conditions:
(a) Purchaser shall have received an opinion of Xxxxxx & Xxxxxx
L.L.P., counsel for the Company; PROVIDED that the form of opinion shall be
negotiated to reasonable satisfaction of Purchaser and its counsel on or
before June 12, 1997. In rendering the foregoing opinion, such counsel may
rely as to factual matters upon certificates or other documents furnished by
directors and officers of the Company and by government officials, and upon
such other documents as such counsel deem appropriate as a basis for such
opinion. Such counsel may specify the jurisdictions in which they are
admitted to practice and that they are not admitted to practice in any other
jurisdiction and are not experts in the law of any other jurisdiction. To
the extent such opinion concerns the laws of any other such jurisdiction,
such counsel may either provide an opinion of counsel admitted to practice in
such jurisdiction (which counsel shall be
17
reasonably acceptable to Purchaser) in lieu of its own opinion or rely upon
the opinion of such counsel. Purchaser hereby agrees that the firm of
Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx is acceptable to Purchaser for purposes of
providing such opinions involving the laws of the State of Maryland. To the
extent that any opinion rendered by counsel admitted to practice in another
jurisdiction or relied upon by Xxxxxx & Xxxxxx L.L.P., including any
exception or limitation thereto, is materially different from the opinion to
be delivered at Closing by Xxxxxx & Xxxxxx L.L.P. such opinion shall be
reasonably satisfactory to Purchaser and a copy of such opinion shall be
delivered to Purchaser at the Closing.
(b) The representations and warranties made by the Company herein
shall be true and correct in all material respects on the date hereof and on
and as of the Closing Date (except as otherwise limited by their terms to the
date hereof) with the same effect as though such representations and
warranties had been made on and as of the Closing Date and the Company shall
have complied in all material respects with all agreements required to be
performed by it hereunder at or prior to the Closing Date.
(c) There shall not have occurred any event which has had, or
could reasonably be expected to have, a Material Adverse Effect subsequent to
March 31, 1997.
(d) At the Closing Date, Purchaser shall have received a
certificate, dated the Closing Date, signed by the Chief Executive Officer of
the Company in such capacity and not individually to the effect set forth in
Sections 4.1(b) and (c), and stating that the conditions specified in this
Section 4.1 have been satisfied at the Closing Date.
(e) At the Closing Date, Purchaser shall have received a
certificate, dated the Closing Date, signed by the Secretary or an Assistant
Secretary of the Company in such capacity and not individually and certifying
(i) that attached thereto is a true, correct and complete copy of (A) the
Charter, (B) Bylaws and (C) resolutions duly adopted by the Board of
Directors of the Company authorizing the execution and delivery of the
Transaction Documents and all other documents to be executed in connection
therewith and the issuance and sale of the Shares, (ii) the incumbency of
officers executing this Agreement and the other Transaction Documents, and
(iii) that attached thereto is a specimen of the share certificate for the
Common Stock.
(f) No Law or Order shall have been enacted, entered, issued,
promulgated or enforced by any Governmental Entity which prohibits or
restricts the transactions contemplated by this Agreement. No Governmental
Entity shall have notified any party to this Agreement that consummation of
the transactions contemplated by this Agreement would constitute a violation
of any Law of any jurisdiction or that it intends to commence proceedings to
restrain or prohibit such transactions or force divestiture or rescission,
unless such Governmental Entity shall have withdrawn such notice and
abandoned any such proceedings prior to the time which otherwise would have
been the Closing Date.
18
(g) The Company shall have entered into the Registration Rights
Agreement for the benefit of Purchaser, and Purchaser shall have received a
copy of such Registration Rights Agreement duly executed by the Company in
favor of Purchaser.
(h) The shareholders of the Company shall have duly approved the
issuance of the Shares as contemplated by the Transaction Documents at the
Shareholders' Meeting.
(i) All Approvals set forth in SCHEDULE 3.1(d) and SCHEDULE 3.1(i)
shall have been received or the applicable waiting periods shall have expired.
(j) The Finance Committee of the Board of Directors of Purchaser
shall have duly authorized the purchase of the Shares pursuant to this
Agreement and the execution, delivery and performance by Purchaser of its
obligations under this Agreement.
(k) Purchaser shall be reasonably satisfied that the Company is
qualified as a "real estate operating company" within the meaning of 29
C.F.R. Section 2510.3-101(e).
(l) The Company shall have taken all actions necessary to ensure
that Purchaser shall have full voting rights with respect to each of the
Shares (including, without limitation, obtaining approvals of the Board of
Directors of the Company and amending the Charter or By Laws of the Company,
as applicable).
Section 4.2 CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY. The
obligation of the Company to issue and sell the Shares hereunder is subject,
at the Closing Date, to the prior or simultaneous satisfaction or waiver by
it of the following conditions:
(a) The representations and warranties made by Purchaser herein
shall be true and correct in all material respects on the date hereof and on
and as of the Closing Date with the same effect as though such
representations and warranties had been made on and as of the Closing Date
(except as otherwise limited by their terms to the date hereof) and Purchaser
shall have complied in all material respects with all agreements required to
be performed by it hereunder at or prior to the Closing Date and Purchaser
shall have provided such evidence thereof as the Company may reasonably
request.
(b) No Law or Order shall have been enacted, entered, issued,
promulgated or enforced by any Governmental Entity which prohibits or
restricts the transactions contemplated by this Agreement. No Governmental
Entity shall have notified any party to this Agreement that consummation of
the transactions contemplated by this Agreement would constitute a violation
of any Law of any jurisdiction or that it intends to commence proceedings to
restrain or prohibit such transactions or force divestiture or rescission,
unless such Governmental Entity shall have withdrawn such notice and
abandoned any such proceedings prior to the time which otherwise would have
been the Closing Date.
19
(c) The shareholders of the Company shall have duly approved the
issuance of the Shares as contemplated by the Transaction Documents at the
Shareholders' Meeting.
(d) All Approvals set forth in SCHEDULE 3.1(d) and SCHEDULE 3.1(i)
shall have been received or the applicable waiting periods shall have expired.
(e) The Finance Committee of the Board of Directors of Purchaser
shall have duly authorized the purchase of the Shares pursuant to this
Agreement and the execution, delivery and performance by Purchaser of its
obligations under this Agreement.
(f) The Shares owned by Purchaser will not cause the Company to be
treated as the owner of a 9.8% or more interest in any tenant of the Company
listed on Annex 1 to the Excepted Holder Agreement attached hereto as EXHIBIT B.
(g) At the Closing Date, the Company shall have received a
certificate, dated the Closing Date, signed by the managing director of
Purchaser in such capacity and not individually to the effect set forth in
Section 4.2(a) and certifying that attached thereto is a true, correct and
complete copy of resolutions duly adopted by the Finance Committee of the
Board of Directors of Purchaser authorizing the purchase of the Shares.
ARTICLE V
COVENANTS
Section 5.1 FURNISHING OF INFORMATION. (a) As long as Purchaser
owns Shares representing at least the Minimum Ownership Level, from and after
the Closing Date the Company will promptly furnish to Purchaser all reports
filed by it pursuant to Section 13(a) or 15(d) of the Exchange Act (or if the
Company is not at the time required to file reports pursuant to said Section
13(a) or 15(d), annual and quarterly reports comparable to those required by
Sections 13(a) or 15(d) of the Exchange Act) and all material
non-confidential filings or notifications made with any Governmental Entity.
As long as the Company is required to deliver to Purchaser the reports
described in the first sentence of this Section 5.1, upon request of
Purchaser, the Company shall deliver to Purchaser, the executive summary and
all other documents delivered to the Board of Directors of the Company in
connection with any prior meeting of the Board of Directors of the Company.
(b) Purchaser shall limit access to any confidential information
received by it pursuant to this Section 5.1 and Section 5.13 hereof
("CONFIDENTIAL INFORMATION") to its executives and employees assigned to
review and analyze the Confidential Information. Purchaser shall not
disseminate, or in any way disclose, directly or indirectly, to any other
person, firm or corporation any Confidential Information without receiving
prior written permission from the
20
Company; PROVIDED, HOWEVER, that Purchaser may divulge such information to
its accountants, attorneys, investment advisors and other advisors in
connection with evaluation of the investment in the Shares or for other
legitimate business purposes, and Purchaser may divulge the Confidential
Information to the extent that it is legally obligated to do so. If
Purchaser is legally obligated to disclose any of the Confidential
Information, Purchaser shall use best efforts to provide the Company with
prompt notice so that the Company may seek a protective order or other
appropriate remedy. In the event that the Company is not able to obtain
such protective order or other remedy within a reasonable time from the
giving of notice to the Company as aforesaid, Purchaser will furnish only
that portion of the Confidential Information which it is legally required to
disclose.
Section 5.2 REAL ESTATE INVESTMENT TRUST. The Company shall use its
best efforts to continue to qualify as a REIT and so long as Purchaser holds
Shares representing, in the aggregate, at least the Minimum Ownership Level,
the Company shall not, without Purchaser's written consent, take any action
that could reasonably be expected to disqualify the Company as a REIT.
Section 5.3 SALE OF SHARES BY PURCHASER. Purchaser hereby agrees
that during the ninety (90) day period commencing on the Closing Date it will
not sell, assign, transfer or otherwise in any manner dispose of any of the
Shares, other than sales, assignments, transfers or dispositions: (i) in
connection with any merger or consolidation of the Company; (ii) pursuant to
a tender or exchange offer for shares of Common Stock; (iii) to an Affiliate
of Purchaser, provided that such Person agrees to be bound by the terms and
conditions of this Agreement and the Registration Rights Agreement,
including, without limitation, Section 6 of the Registration Rights
Agreement; (iv) as a result of any pledge by Purchaser of the Shares as
security for any indebtedness or guaranty of Purchaser, provided that such
pledgee agrees to be bound by the terms and conditions of this Agreement and
the Registration Rights Agreement, including, without limitation, Section 6
of the Registration Rights Agreement, upon the exercise of its rights under
such pledge; or (v) in private transactions pursuant to one or more
exemptions from registration under the Securities Act.
Section 5.4 APPROVALS. The Company and Purchaser each agree to
cooperate and use their reasonable best efforts to obtain (and will
immediately prepare all registrations, filings and applications, requests and
notices preliminary to) all approvals that may be necessary or which may be
reasonably requested by the Company or Purchaser to consummate the
transactions contemplated by this Agreement. The Company shall, prior to the
Closing Date, take all actions necessary to ensure that Purchaser shall have
full voting rights with respect to each of the Shares (including, without
limitation, obtaining approvals of the Board of Directors of the Company and
amending the Charter or Bylaws of the Company, as applicable).
21
Section 5.5 REGISTRATION RIGHTS AGREEMENT. On or before the Closing
Date, the Company and Purchaser shall enter into an Registration Rights
Agreement substantially in the form of EXHIBIT A.
Section 5.6 EXCEPTED HOLDER AGREEMENTS. On or before the Closing
Date, the Company and Purchaser shall enter into an Excepted Holder Agreement
substantially in the form of EXHIBIT B.
Section 5.7 NOTIFICATION OF CERTAIN MATTERS. The Company shall give
prompt notice to Purchaser, and Purchaser shall give prompt notice to the
Company, of (a) the occurrence, or failure to occur, of any event that causes
any representation or warranty contained in any Transaction Document to be
untrue or inaccurate in any material respect at any time from the date of
this Agreement to the Closing Date and (b) any failure of the Company, on the
one hand, or Purchaser, on the other hand, to comply with or satisfy, in any
material respect, any covenant, condition or agreement to be complied with or
satisfied by it under any Transaction Document.
Section 5.8 NOMINATION OF BOARD MEMBER. The Company shall use its
commercially reasonable efforts to cause the Board of Directors of the
Company to increase the size of the Board of Directors by one person and to
elect a designee of the Purchaser to fill such vacancy and shall endorse the
selection of such designee for appointment as a member of the Board Affairs
Committee of the Board of Directors promptly after the Closing Date; PROVIDED
THAT, on or prior to the Closing Date, the Company receives written notice
executed by Purchaser, which notice shall name such designee and shall
provide all other information relating to such designee as the Company may be
required to disclose to its stockholders in connection with such appointment.
Section 5.9 SHAREHOLDERS' MEETING; PREPARATION OF PROXY STATEMENT.
The Company shall, in accordance with applicable law, as soon as practicable
following the execution and delivery of this Agreement, prepare and file with
the Commission a proxy statement in form and substance reasonably
satisfactory to Purchaser (such proxy statement, including the form of proxy
and all such other materials distributed in connection therewith, as amended
or supplemented from time to time, the "PROXY STATEMENT"). Purchaser will
cooperate with the Company in the preparation of the Proxy Statement and will
provide the Company with material and information required to be included
therein. The Company shall use its commercially reasonable efforts to cause
the Proxy Statement to be mailed to its shareholders at the earliest
practicable date. The Company shall call a meeting of its shareholders (the
"SHAREHOLDERS MEETING") to be held as promptly as practicable after the date
hereof (but not before July 9, 1997) for the purpose, among other things, of
considering and taking action upon the issuance of the shares of Common Stock
to Purchaser and the Subsequent Purchasers, if any, as contemplated hereunder
and shall use its commercially reasonable efforts to obtain and furnish the
information required to be included by it in the Proxy Statement and, after
consultation with Purchaser, respond promptly to any comments made by the
Commission with respect to the Proxy Statement and any preliminary version
thereof. The Company will, through its Board of Directors, include the
Recommendations
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in the Proxy Statement and shall solicit and use its reasonable best efforts
to obtain proxies in favor of the issuance of the shares of Common Stock to
Purchaser and the Subsequent Purchasers, if any, as contemplated hereunder.
The Company shall cause the Proxy Statement and the distribution thereof to
comply in all material respects with the Exchange Act and ensure that the
Proxy Statement will not, at the date the Proxy Statement (or any amendment
thereof or supplement thereto) is first mailed to shareholders and at the
time of the Shareholders' Meeting, be false or misleading with respect to any
material fact, or omit to state any material fact required to be stated
therein or necessary in order to make the statements made therein, in the
light of the circumstances under which they are made, not misleading or
necessary to correct any statement in any earlier communication with respect
to the solicitation of proxies for the Shareholders' Meeting which has become
false or misleading. None of the information relating solely to Purchaser as
a shareholder of the Company that is supplied by Purchaser in writing
specifically for inclusion or incorporation by reference in the Proxy
Statement will, at the time the Proxy Statement is filed with the Commission
and at the time of the Shareholders' Meeting, contain any untrue statement of
a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements made therein not misleading, in
the light of the circumstances under which they were made. The obligations
of the Company to distribute the Proxy Statement and convene the Shareholders
Meeting pursuant to this Section 5.9 shall not be affected by the withdrawal
or modification of the Recommendations.
Section 5.10 PUBLICITY AND REPORTS. Except as may be required by
applicable Law, or by obligations pursuant to any listing agreement with a
national securities exchange, neither the Company nor Purchaser shall,
without the approval of the other party, issue any press release or make any
public statement with respect to the transactions contemplated hereby or that
refer to such other party.
Section 5.11 CONDUCT OF BUSINESS. The Company covenants and agrees
that until the earlier of the Closing Date or the termination of this
Agreement, the Company shall, and shall cause its Subsidiaries to, continue
to engage in an efficient and economical manner solely in a business of the
same general type as conducted by it on the date of this Agreement in the
ordinary course, consistent with past practices; and use its reasonable best
efforts to preserve the business of the Company and its Subsidiaries and to
preserve the goodwill of customers and others having business relations with
the Company and its Subsidiaries.
Section 5.12 NEGATIVE COVENANTS OF THE COMPANY. The Company covenants
and agrees as follows, and shall not enter into any agreement or take any
other action inconsistent with the following, in each case until the earlier
of the Closing Date or the termination of this Agreement, except as
specifically contemplated by this Agreement or to the extent such action
shall not reasonably be expected to result in a Material Adverse Effect.
(a) CHARTER DOCUMENTS. The Company shall not amend the
Charter or Bylaws and shall not permit any of its Subsidiaries to amend its
organizational documents.
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(b) MERGERS, ETC. Except as shall have been previously
agreed in writing by the parties, the Company shall not, and shall not permit
any of its Subsidiaries to, merge or consolidate with any Person, sell,
lease, license or otherwise dispose of all or substantially all of its assets
(whether now owned or hereafter acquired) to any Person or acquire all or
substantially all of the assets or the business of any Person, in each case
whether in one transaction or in a series of transactions pursuant to which
Company or such Subsidiary shall not be the surviving entity.
Section 5.13 INSPECTION RIGHTS. The Company shall keep proper books
of record and account, in which full and correct entries shall be made of all
financial transactions and the assets and business of the Company in
accordance with generally accepted accounting principles, and the Company
shall cause its Subsidiaries to do the same. As long as Purchaser owns
shares representing at least the Minimum Ownership Level, the Company shall,
upon reasonable notice by Purchaser, provide Purchaser with reasonable access
to all Books and Records during regular business hours and allow Purchaser to
make copies and abstracts thereof and the Company shall cause its
Subsidiaries to do the same. Purchaser shall have the right to consult from
time to time with management of the Company at its place of business
regarding operating and financial matters of the Company and its
Subsidiaries. Purchaser shall be bound by the provisions of Section 5.1(b)
with respect to information obtained pursuant to this Section.
Section 5.14 [Reserved].
Section 5.15 REAL ESTATE OPERATING COMPANY. The Company shall
continue to operate as a REOC for so long as Purchaser holds Shares
representing in the aggregate at least the Minimum Ownership Level.
Section 5.16 AMENDMENT TO INVESTOR RIGHTS AGREEMENT. The Company
shall use its best efforts in order to obtain all necessary consents in order
(i) to provide Purchaser and the Subsequent Purchasers rights that are PARI
PASSU with those of each of the Company's shareholders party to the Investor
Rights Agreement under the penultimate paragraph of Section 2(b) and Section
2(c)(i) and (ii) of the Investor Rights Agreement and (ii) to provide that
such shareholders shall not have any right to be included in the shelf
registration to be filed by the Company for the benefit of the Purchaser and
the Subsequent Purchasers.
Section 5.17 DELIVERY OF CERTAIN DOCUMENTS. The Company shall deliver
at least ten days prior to the scheduled date of the Shareholders Meeting,
all agreements, contracts, promissory notes, letters of intent and similar
documents that (i) have been entered into by the Company or any of its
Subsidiaries between March 31, 1997 and the date that is no more than 15 days
prior to the scheduled date for the Shareholders Meeting, (ii) have not been
terminated and (iii) relate to an acquisition or sale of assets, stock or
other equity interest or the incurrence or guarantee of indebtedness by the
Company or such Subsidiary, involving a maximum purchase price or obligation
of more than $75,000,000.
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Section 5.18 FURTHER ASSURANCES. Promptly upon request by the other
party, each party shall, and shall cause its Subsidiaries to, take, execute,
acknowledge, deliver, file, re-file, register and re-register, any and all
such further acts, certificates, assurances and other instruments as the
requesting party may require from time to time in order to carry out more
effectively the purposes of each Transaction Document and to better transfer,
preserve, protect and confirm to the requesting party the rights granted or
now or hereafter intended to be granted to the requesting party under each
Transaction Document.
ARTICLE VI
MISCELLANEOUS
Section 6.1 SURVIVAL OF PROVISIONS. The representations, warranties
and covenants of the Company and Purchaser made herein shall remain operative
and in full force and effect pursuant to their terms (a) regardless of (i)
any investigation made by or on behalf of Purchaser or the Company, as the
case may be, or (ii) acceptance of any of the Shares and payment by Purchaser
therefor and (b) except as specifically provided otherwise, after the Closing
Date.
Section 6.2 TERMINATION. This Agreement and the transactions
contemplated by this Agreement may be terminated at any time prior to the
Closing Date as follows and in no other manner:
(a) By either the Company or Purchaser if the Closing has not
occurred on or prior to the Termination Date;
(b) By mutual consent of Purchaser and the Company;
(c) By Purchaser at any time on or prior to June 12, 1997, if the
Finance Committee of the Board of Directors of Purchaser shall not have
authorized the purchase of the Shares pursuant to this Agreement on or before
such date;
(d) By the Company at any time on or prior to August 5, 1997;
(e) By Purchaser if (i) the Board of Directors of the Company
shall have withdrawn or modified the Recommendations in a manner adverse to
Purchaser or (ii) the shareholders shall have failed to approve the issuance
of the Shares pursuant to this Agreement at the Shareholders Meeting; and
(f) By either Purchaser, on the one hand, or the Company, on the
other hand, with written notice to the other party if there has been a
misrepresentation or material breach on the part of the Company or Purchaser,
respectively, in their respective representations, warranties and covenants
set forth herein.
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In the event that this Agreement should be terminated pursuant to
Section 6.2, all further obligations of the parties under this Agreement
shall terminate, PROVIDED, however, that a termination under Section 6.2(f)
shall not relieve any party of any liability for a breach of, or any
misrepresentation under, this Agreement or be deemed to constitute a waiver
of any available remedy for any such breach of misrepresentation; PROVIDED,
FURTHER, that in the event of a termination pursuant to Section 6.2(e) or the
failure of the Company to obtain the consents set forth in Schedule 3.1(d)
and 3.1(i), Company shall pay Purchaser within five business days after such
termination, a fee equal to $1,500,000. Notwithstanding anything in the
foregoing to the contrary, no party that is in material breach of this
Agreement shall be entitled to terminate this Agreement except with the
consent of the other party.
Section 6.3 NO WAIVER; MODIFICATION IN WRITING.
(a) No failure or delay on the part of the Company or Purchaser in
exercising any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. The remedies provided for herein are
cumulative and are not exclusive of any remedies that may be available to the
Company or Purchaser at law or in equity. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions
hereof may not be given without the written consent of the Company, on the
one hand, and Purchaser, on the other hand, provided that notice of any such
waiver shall be given to each party hereto as set forth below. Any
amendment, supplement or modification of or to any provision of this
Agreement, or any waiver of any provision of this Agreement, shall be
effective only in the specific instance and for the specific purpose for
which made or given. Except where notice is specifically required by this
Agreement, no notice to or demand on any party hereto in any case shall
entitle the other party to any other or further notice or demand in similar
or other circumstances.
Section 6.4 COMMUNICATIONS. All notices and demands provided for
hereunder shall be in writing, and shall be given by registered or certified
mail, return receipt requested, telex, telegram, telecopy, courier service or
personal delivery, and, if to Purchaser, addressed to 0 Xxxxxx Xxxxx, 0xx
Xxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000, Fax No.: (000) 000-0000, Attention:
Xxxxxxx X. Xxxxxx, with copies to: O'Melveny & Xxxxx LLP, 000 Xxxx 00xx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Fax No. (000) 000-0000, Attention: Xxxxxx
X. Xxxxxxx, Esq., or to the Company at: Meridian Industrial Trust, Inc., 00
Xxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, Fax No.:
(000) 000-0000, Attention: Chief Executive Officer, with a copy to Xxxxxxx X.
Xxxxxxx, Esq., Xxxxxx & Xxxxxx L.L.P., 0000 Xxxx Xxxxxx, Xxxxx 0000, Xxxxxx,
Xxxxx 00000, Fax No.: (000) 000-0000 or to such other address as Purchaser
and Company, as the case may be, may designate in writing, and shall be
deemed given when received.
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Section 6.5 EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts, each of which counterparts, when so
executed and delivered, shall be deemed to be an original and all of which
counterparts, taken together, shall constitute one and the same agreement.
Section 6.6 BINDING EFFECT; ASSIGNMENT. Except as provided in
Section 5.3 hereof, the rights and obligations of the parties under this
Agreement may not be assigned to any other person; PROVIDED, HOWEVER, that
(i) prior to the Closing, Purchaser may assign part or all of its rights
under this Agreement to Strategic Value Investors, L.L.C. or its successor
("SVI") so long as SVI agrees to bound by the terms of this Agreement and the
Registration Rights Agreement (and Purchaser shall be released from its
obligations under this Agreement and the Registration Rights Agreement to the
extent of such assignment) and agrees to enter into an Excepted Holder
Agreement substantially in the form of EXHIBIT B hereto if such assignment
would result in SVI owning shares representing more than 8.5% of the issued
and outstanding shares of Common Stock of the Company on the Closing Date;
and PROVIDED FURTHER, that Purchaser shall not have any further rights under
Section 5.8 if it assigns its rights hereunder and thereunder to SVI and (ii)
after the Closing the Company may assign its rights hereunder to any
successor entity to the Company, whether pursuant to a sale of substantially
all of the Company's assets, or the merger or consolidation of the Company,
that agrees to be bound by the terms and conditions hereof and the other
Transactional Documents. Except as expressly provided in this Agreement,
this Agreement shall not be construed so as to confer any right or benefit
upon any Person other than the parties to this Agreement, and their
respective successors and permitted assigns. This Agreement shall be binding
upon the Company and Purchaser, and their respective successors and permitted
assigns.
Section 6.7 GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER THE LAWS OF THE STATE OF MARYLAND, AND FOR ALL PURPOSES
SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF SAID STATE, WITHOUT REGARD
TO PRINCIPLES OF CONFLICT OF LAWS.
Section 6.8 EXPENSES. Each of the parties hereto shall pay its own
respective costs and expenses incurred in connection with the negotiation,
execution and performance of this Agreement. Notwithstanding the foregoing,
the costs and expenses of preparing and distributing the Proxy Statement and
obtaining and complying with the antitrust requirements of any Governmental
Entity shall be paid by the Company.
Section 6.9 SEVERABILITY OF PROVISIONS. Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction shall, as
to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
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Section 6.10 HEADINGS. The Article and Section headings and Table of
Contents used or contained in this Agreement are for convenience of reference
only and shall not affect the construction of this Agreement.
Section 6.11 INTEGRATION. This Agreement (including the exhibits
hereto) constitutes the entire agreement among the parties with respect to
the purchase and sale of the Shares and there are no promises or undertakings
with respect thereto relative to the subject matter hereof not expressly set
forth or referred to herein or in exhibits hereto.
Section 6.12 ENFORCEMENT OF COVENANTS. The Company agrees that a
violation on its part of the covenants contained in Section 5.8 shall cause
irreparable damage to Purchaser and, consequently, the Company further agrees
that Purchaser shall be entitled, as a matter of right, to an injunction
restraining any violation of such covenants by the Company. Such right to an
injunction shall be cumulative with any and all other remedies Purchaser may
have, including, but not limited to, recover of damages.
Section 6.13 WAIVER BY JURY TRIAL. Each party waives any right to a
trial by jury in any action, suit or other proceeding to enforce or defend
any right under any Transaction Document or any amendment, instrument,
document or agreement delivered, or which in the future may be delivered, in
connection with any Transaction Document and agrees that any such action,
suit or other proceeding shall be tried before a court and not before a jury.
[Remainder of this page intentionally left blank]
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed by its duly authorized officer as of the date first written above.
MERIDIAN INDUSTRIAL
TRUST, INC.
By:______________________________
Name:
Title:
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By:_____________________________
Name: Xxxxxxx X. Xxxxxx
Title: Managing Director
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SCHEDULE
STOCK PURCHASE AGREEMENTS
The following table (a) identifies three Stock Purchase Agreements dated
June 12, 1997 that have been entered into by the Company as Seller and are
substantially identical to the Amended and Restated Stock Purchase Agreement
dated June 12, 1997 by and between the Company as Seller and The Prudential
Insurance Company of America, as Purchaser that is filed with this report
(the "Filed Stock Purchase Agreement") and (b) sets forth material
differences between each of those three Stock Purchase Agreements and the
Filed Stock Purchase Agreement.
PURCHASER # OF SHARES OTHER
Strategic Performance Fund-II, Inc. 1,013,788 common shares The purchaser has no right to designate
individuals for nomination to the Company's
board of directors or appointment to any
committee of that board.
The Prudential Variable Contract Real 506,894 common shares The purchaser has no right to designate
Property Partnership individuals for nomination to the Company's
board of directors or appointment to any
committee of that board.
The Prudential Insurance Company of America, 1,744,128 common shares The purchaser has no right to designate
on behalf of a single client insurance individuals for nomination to the Company's
company separate account contained in Group board of directors or appointment to any
Annuity Contract No. GA-9032 committee of that board.
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