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Exhibit 2(a)
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AGREEMENT AND PLAN OF MERGER
Among
CITYFRONT CENTER, L.L.C.,
CITYFRONT ACQUISITION TRUST
and
THE CHICAGO DOCK AND CANAL TRUST
Dated as of December 27, 1996
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TABLE OF CONTENTS
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ARTICLE I
The Merger
SECTION 1.01. The Merger 2
SECTION 1.02. Closing 2
SECTION 1.03. Effective Time 2
SECTION 1.04. Effects of the Merger 2
SECTION 1.05. Declaration of Trust and By-laws 3
SECTION 1.06. Trustees 3
SECTION 1.07. Officers 3
ARTICLE II
Effect of the Merger on the Capital Stock of
Sub and the Company; Exchange of Certificates
SECTION 2.01. Effect on Capital Stock 3
SECTION 2.02. Exchange of Certificates 4
ARTICLE III
Representations and Warranties of the Company
SECTION 3.01. Organization 6
SECTION 3.02. Subsidiaries 6
SECTION 3.03. Capitalization 7
SECTION 3.04. Authority 8
SECTION 3.05. Consent and Approvals; No Violations 8
SECTION 3.06. SEC Reports and Financial Statements 9
SECTION 3.07. Absence of Certain Changes or Events 10
SECTION 3.08. No Undisclosed Liabilities 11
SECTION 3.09. Information Supplied 11
SECTION 3.10. Benefit Plans 11
SECTION 3.11. Contracts; Indebtedness 14
SECTION 3.12. Litigation 14
SECTION 3.13. Compliance with Applicable Law 14
SECTION 3.14. Tax Matters 15
SECTION 3.15. State Takeover Statutes. 16
SECTION 3.16. Environmental Matters 16
SECTION 3.17. Real Property. 17
SECTION 3.18. Leases 17
SECTION 3.19. Title to Property. 18
SECTION 3.20. REIT Qualification. 18
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SECTION 3.21. Required Vote 18
SECTION 3.22. Brokers 19
SECTION 3.23. Opinion of Financial Advisor 19
SECTION 3.24. Violations; Eminent Domain 19
ARTICLE IV
Representations and Warranties of Parent and Sub
SECTION 4.01. Organization 19
SECTION 4.02. Authority 19
SECTION 4.03. Consents and Approvals; No Violations 20
SECTION 4.04. Information Supplied 21
SECTION 4.05. Interim Operations of Sub 21
SECTION 4.06. Brokers 21
SECTION 4.07. Financing 21
SECTION 4.08. Litigation 21
ARTICLE V
Covenants
SECTION 5.01. Covenants of the Company 22
SECTION 5.02. No Solicitation 25
SECTION 5.03. Other Actions 28
ARTICLE VI
Additional Agreements
SECTION 6.01. Shareholder Approvals; Preparation of
Proxy Statement 28
SECTION 6.02. Access to Information 29
SECTION 6.03. Reasonable Efforts 29
SECTION 6.04. Company Stock Options 30
SECTION 6.05. Fees and Expenses 31
SECTION 6.06. Indemnification; Directors and Officers
Insurance 32
SECTION 6.07. Obligations of Sub 34
SECTION 6.08. Certain Litigation 34
SECTION 6.09. Severance Policy and Other Agreements 34
SECTION 6.10. Redemption of Rights 35
SECTION 6.11. Payment of Certain Fees and
Expenses 35
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ARTICLE VII
Conditions Precedent
SECTION 7.01. Conditions to Each Party's Obligation
To Effect the Merger 35
SECTION 7.02. Conditions to the Company's Obligation
to Effect the Merger 36
SECTION 7.03. Conditions to the Parent's and Sub's
Obligations to Effect the Merger 37
ARTICLE VIII
Termination and Amendment
SECTION 8.01. Termination 39
SECTION 8.02. Effect of Termination 41
SECTION 8.03. Amendment 41
SECTION 8.04. Extension; Waiver 41
ARTICLE IX
Miscellaneous
SECTION 9.01. Nonsurvival of Representations,
Warranties and Agreements 41
SECTION 9.02. Notices 42
SECTION 9.03. Interpretation 43
SECTION 9.04. Counterparts 43
SECTION 9.05. Entire Agreement; No Third Party
Beneficiaries 44
SECTION 9.06. Governing Law 44
SECTION 9.07. Publicity 44
SECTION 9.08. Assignment 44
SECTION 9.09. Enforcement 44
Section 9.10. Exculpation of Shareholders, Trustees,
Officers, Agents and Beneficiaries 45
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of December 27, 1996 among
CityFront Center, L.L.C., a Delaware limited liability company ("Parent"),
CityFront Acquisition Trust, an Illinois business trust and a 99% owned
subsidiary of Parent ("Sub"), and The Chicago Dock and Canal Trust, an Illinois
business trust (the "Company").
WHEREAS the board of directors of Parent and the respective trustees of
Sub and the Company have approved the acquisition of the Company by Parent on
the terms and subject to the conditions set forth in this Agreement;
WHEREAS, the Company, Newsweb Corporation, an Illinois corporation
("Newsweb"), and CDCT Acquisition Trust, an Illinois business trust, were
parties to that certain Agreement and Plan of Merger (the "Prior Merger
Agreement"), dated as of September 27, 1996, that the Company has terminated in
accordance with the terms thereof;
WHEREAS, in furtherance of the acquisition of the Company by Parent,
the board of directors of Parent and the respective trustees of Sub and the
Company have each approved the merger of the Company with and into Sub (the
"Merger"), upon the terms and subject to the conditions set forth in this
Agreement, whereby each issued and outstanding Common Share of beneficial
interest, without par value, of the Company (a "Share"), other than Shares
owned directly or indirectly by the Company, will be converted into the right
to receive $25.00 per share in cash;
WHEREAS, the trustees of the Company have adopted resolutions approving
the Merger and recommending that the Company's shareholders approve this
Agreement and the Merger;
WHEREAS, Parent, Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger and also to prescribe various conditions to the Merger.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, Parent, Sub and the Company hereby agree as follows:
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ARTICLE I
THE MERGER
SECTION 1.01. The Merger. Upon the terms and subject to the
conditions set forth in this Agreement, the Company shall be merged with and
into Sub at the Effective Time (as defined in Section 1.03). Following the
Effective Time, the separate existence of the Company shall cease and Sub shall
continue as the surviving trust (the "Surviving Company") and shall succeed to
and assume all of the rights and obligations of the Company. At the election
of Parent, any direct or indirect wholly owned subsidiary (as defined in
Section 9.03) of Parent may be substituted for Sub as a constituent company in
the Merger. In such event, the parties agree to execute an appropriate
amendment to this Agreement in order to reflect the foregoing.
SECTION 1.02. Closing. The closing of the Merger will take place at
10:00 a.m. on a date to be mutually agreed by Parent and the Company (and,
failing such agreement, on the second business day) after satisfaction or
waiver of the conditions set forth in Article VII (the "Closing Date"), at the
offices of Sidley & Austin, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
unless another date, time or place is agreed to in writing by the parties
hereto.
SECTION 1.03. Effective Time. Subject to the provisions of this
Agreement, as soon as practicable on or after the Closing Date, the parties
shall file articles of merger or other appropriate documents (in any such case,
the "Articles of Merger") executed in accordance with the relevant provisions
of the Amended and Restated Declaration of Trust, as amended (including the
amendment contemplated by the Trust Amendment described in Section 7.01), of
the Company (as so amended, the "Declaration of Trust") and any applicable laws
of the State of Illinois and shall make all other filings or recordings
required under the Declaration of Trust and the laws of the State of Illinois.
The Merger shall become effective at such time as the Articles of Merger are
duly filed with the Recorder of Deeds of ▇▇▇▇ County, Illinois, or at such
other time as Sub and the Company shall agree should be specified in the
Articles of Merger consistent with the provisions of the Declaration of Trust
(the time the Merger becomes effective being hereinafter referred to as the
"Effective Time").
SECTION 1.04. Effects of the Merger. Upon consummation of the Merger,
the Surviving Company shall have all of the rights, privileges, immunities and
franchises, as of a
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public or a private nature, of each of the constituent companies and all
property, real, personal and mixed, and all debts due on whatever account,
including subscriptions to shares of capital stock, and all other choses in
action, and all and every other interest, of or belonging to or due to each of
the constituent companies, shall be taken and deemed to be transferred to and
vested in such Surviving Company without further act or deed, and the title to
any real estate, or any other interest therein, vested in either of the
constituent companies shall not revert or be in any way impaired by reason of
such Merger, and such Merger shall have the other effects set forth in the
Declaration of Trust or applicable law.
SECTION 1.05. Declaration of Trust and By-laws. (a) The Declaration of
Trust, as in effect immediately prior to the Effective Time shall be the
declaration of trust of the Surviving Company until thereafter changed or
amended as provided therein or by applicable law.
(b) The Bylaws of Sub as in effect immediately prior to the Effective
Time shall be the bylaws of the Surviving Company, until thereafter changed or
amended as provided therein or by applicable law.
SECTION 1.06. Trustees. The trustees of Sub immediately prior to the
Effective Time shall be the trustees of the Surviving Company, until the
earlier of their resignation or removal or until their respective successors
are duly elected and qualified, as the case may be.
SECTION 1.07. Officers. The officers of Sub immediately prior to the
Effective Time shall be the officers of the Surviving Company, until the
earlier of their resignation or removal or until their respective successors
are duly elected and qualified, as the case may be.
ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF
SUB AND THE COMPANY; EXCHANGE OF CERTIFICATES
SECTION 2.01. Effect on Capital Stock. As of the Effective Time, by
virtue of the Merger and without any action on the part of the holder of any
Shares or any shares of capital stock of Sub:
(a) Capital Stock of Sub. Each issued and outstanding share of
capital stock of Sub shall be
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converted into and become one fully paid and nonassessable Common Share of
beneficial interest, without par value, of the Surviving Company.
(b) Cancellation of Treasury Stock. Each Share that is owned by the
Company or by any subsidiary of the Company shall automatically be canceled
and retired and shall cease to exist, and no consideration shall be
delivered in exchange therefor.
(c) Conversion of Shares. Each Share issued and outstanding (other
than Shares to be canceled in accordance with Section 2.01(b)) shall be
converted into the right to receive $25.00 in cash (the "Merger
Consideration"). As of the Effective Time, all such Shares shall no longer
be outstanding and shall automatically be canceled and retired and shall
cease to exist, and each holder of a certificate representing any such
Shares shall cease to have any rights with respect thereto, except the
right to receive the Merger Consideration, without interest.
SECTION 2.02. Exchange of Certificates. (a) Paying Agent. Prior to
the Effective Time, Parent shall designate LaSalle National Bank (or such other
bank or trust company reasonably acceptable to the Company) to act as paying
agent in the Merger (the "Paying Agent"), and Parent shall, at or prior to the
Effective Time, deposit or cause to be deposited with the Paying Agent in a
separate fund established for the benefit of the holders of Shares (the
"Payment Fund") funds in an amount necessary for the payment of the Merger
Consideration upon surrender of certificates representing Shares as part of the
Merger pursuant to Section 2.01 (it being understood that any and all interest
earned on funds made available to the Paying Agent pursuant to this Agreement
shall be turned over to Parent). At the Effective Time, Parent shall also make
available to the Surviving Company funds in an amount necessary for the payment
of the Option Consideration (as defined in Section 6.04). Arrangements shall
be made with the Paying Agent such that holders of Shares and Company Stock
Options are deemed to have received payment of the Merger Consideration and
Option Consideration prior to the expiration of the Company's taxable year
ending with the Merger for Federal income tax purposes.
(b) Exchange Procedure. As soon as reasonably practicable after the
Effective Time, the Paying Agent shall mail to each holder of record of a
certificate or certificates that immediately prior to the Effective Time
represented Shares (the "Certificates"), (i) a letter of transmittal (which
shall specify
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that delivery shall be effected, and risk of loss and title to the Certificates
shall pass, only upon delivery of the Certificates to the Paying Agent and
shall be in a form and have such other provisions as Parent and the Company may
reasonably specify) and (ii) instructions for use in effecting the surrender of
the Certificates in exchange for the Merger Consideration. Upon surrender of a
Certificate for cancellation to the Paying Agent, together with such letter of
transmittal, duly executed, and such other documents as may reasonably be
required by the Paying Agent, the holder of such Certificate shall be entitled
to receive in exchange therefor the amount of cash into which the Shares
theretofore represented by such Certificate shall have been converted pursuant
to Section 2.01, and the Certificate so surrendered shall forthwith be
canceled. In the event of a transfer of ownership of Shares that is not
registered in the transfer records of the Company, payment may be made to a
person other than the person in whose name the Certificate so surrendered is
registered, if such Certificate shall be properly endorsed or otherwise be in
proper form for transfer and the person requesting such payment shall pay any
transfer or other taxes required by reason of the payment to a person other
than the registered holder of such Certificate or establish to the satisfaction
of the Surviving Company that such tax has been paid or is not applicable.
Until surrendered as contemplated by this Section 2.02, each Certificate shall
be deemed at any time after the Effective Time to represent only the right to
receive upon such surrender the amount of cash, without interest, into which
the Shares theretofore represented by such Certificate shall have been
converted pursuant to Section 2.01. No interest will be paid or will accrue on
the cash payable upon the surrender of any Certificate.
(c) No Further Ownership Rights in Shares. All cash paid upon the
surrender of Certificates in accordance with the terms of this Article II shall
be deemed to have been paid in full satisfaction of all rights pertaining to
the Shares theretofore represented by such Certificates. At the Effective
Time, the stock transfer books of the Company shall be closed, and there shall
be no further registration of transfers on the stock transfer books of the
Surviving Company of the Shares that were outstanding immediately prior to the
Effective Time. If, after the Effective Time, Certificates are presented to
the Surviving Company or the Paying Agent for any reason, they shall be
canceled and exchanged as provided in this Article II.
(d) Termination of Payment Fund. Any portion of the Payment Fund
which remains undistributed to the holders of Shares for six months after the
Effective Time shall be delivered to Parent, upon demand, and any holders of
Shares who have not
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theretofore complied with this Article II and the instructions set forth in the
letter of transmittal mailed to such holders after the Effective Time shall
thereafter look only to Parent for payment of the Merger Consideration to which
they are entitled.
(e) No Liability. None of Parent, Sub, the Company or the Paying
Agent shall be liable to any person in respect of any cash delivered to a
public official pursuant to any applicable abandoned property, escheat or
similar law. If any Certificates shall not have been surrendered prior to
seven years after the Effective Time (or immediately prior to such earlier date
on which any payment pursuant to this Article II would otherwise escheat to or
become the property of any Governmental Entity (as defined in Section 3.05)),
the cash payment in respect of such Certificate shall, unless otherwise
provided by applicable law, become the property of the Surviving Company, free
and clear of all claims or interests of any person previously entitled thereto.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Sub as
follows:
SECTION 3.01. Organization. The Company is a business trust duly
organized, validly existing and in good standing under the laws of the State of
Illinois and has all requisite trust power and authority to carry on its
business as now being conducted. The Company is duly qualified or licensed to
do business and in good standing in each jurisdiction in which the property
owned, leased or operated by it or the nature of the business conducted by it
makes such qualification or licensing necessary, except in such jurisdictions
where the failure to be so duly qualified or licensed and in good standing
would not have a material adverse effect (as defined in Section 9.03) on the
Company or prevent or materially delay the consummation of the Merger. The
Company has delivered to Parent a complete and correct copy of its Declaration
of Trust, as in effect on the date of this Agreement.
SECTION 3.02. Subsidiaries. Item 3.02 of the letter from the Company
to Parent dated the date hereof, which letter relates to this Agreement and is
designated therein as the Company Disclosure Letter (the "Company Disclosure
Letter"), lists each subsidiary of the Company. Except as set forth in
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Item 3.02 of the Company Disclosure Letter, all of the outstanding shares of
capital stock of each such subsidiary are owned by the Company, by another
wholly owned subsidiary of the Company or by the Company and another wholly
owned subsidiary of the Company, free and clear of all pledges, claims, liens,
charges, encumbrances and security interests of any kind or nature whatsoever
(collectively, "Liens"), and are duly authorized, validly issued, fully paid
and nonassessable. Except for the capital stock of its subsidiaries and except
as set forth in Item 3.02 of the Company Disclosure Letter, the Company does
not own, directly or indirectly, any capital stock or other ownership interest
in any corporation, partnership, joint venture or other entity.
SECTION 3.03. Capitalization. The authorized capital stock of the
Company consists of 20,000,000 Shares and 1,000,000 Preferred Shares of
beneficial interest, without par value (the "Preferred Shares"). At the close
of business on August 30, 1996, (i) 5,783,800 Shares were issued and
outstanding, (ii) 160,400 Shares were held by the Company in its treasury and
(iii) options to purchase 694,028 Shares ("Company Stock Options") issued
pursuant to the Company's stock option plans and agreements were outstanding.
As of the date hereof there are no Preferred Shares outstanding. Except as set
forth above, as of the date of this Agreement, no shares of capital stock or
other voting securities of the Company are issued, reserved for issuance or
outstanding. All outstanding shares of capital stock of the Company are, and
all shares which may be issued will be, when issued, duly authorized, validly
issued, fully paid and nonassessable and not subject to preemptive rights.
There are no bonds, debentures, notes or other indebtedness of the Company
having the right to vote (or convertible into, or exchangeable for, securities
having the right to vote) on any matters on which shareholders of the Company
may vote. Except for Company Stock Options and the rights to purchase Shares
(the "Rights") issued pursuant to the Rights Agreement dated as of July 20,
1988 between the Company and ▇▇▇▇▇▇ Trust and Savings Bank, as rights agent
(the "Rights Agreement"), and except as set forth in Item 3.03 of the Company
Disclosure Letter, as of the date of this Agreement, there are no securities,
options, warrants, calls, rights, commitments, agreements, arrangements or
undertakings of any kind to which the Company or any of its subsidiaries is a
party or by which any of them is bound obligating the Company or any of its
subsidiaries to issue, deliver or sell, or cause to be issued, delivered or
sold, additional shares of capital stock or other voting securities of the
Company or of any of its subsidiaries or obligating the Company or any of its
subsidiaries to issue, grant, extend or enter into any such security, option,
warrant, call, right, commitment, agreement, arrangement or
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undertaking. Except for redemption of the Rights pursuant to Section 6.10 and
except as set forth on Item 3.03 of the Company Disclosure Letter, as of the
date of this Agreement, there are no outstanding contractual obligations of the
Company or any of its subsidiaries (i) to repurchase, redeem or otherwise
acquire any shares of capital stock of the Company or (ii) to vote or to
dispose of any shares of the capital stock of any of the Company's
subsidiaries.
SECTION 3.04. Authority. The trustees of the Company, at a meeting
duly called and held, at which all trustees were present, have duly and
unanimously adopted resolutions approving this Agreement, the Trust Amendment
and the Merger, determining that the terms of the Merger are fair to, and in
the best interests of the Company's shareholders and recommending that the
Company's shareholders approve and adopt this Agreement, the Trust Amendment
and the Merger. The Company has the requisite trust power and authority to
execute and deliver this Agreement and, subject to the approval and adoption of
this Agreement, the Trust Amendment and the Merger by the holders of at least
two-thirds of the Shares outstanding and entitled to vote thereon (the "Company
Shareholder Approvals"), to consummate the transactions contemplated hereby.
The execution, delivery and performance of this Agreement and the consummation
by the Company of the Merger and of the other transactions contemplated hereby
have been duly authorized by all necessary trust action on the part of the
Company and no other trust proceedings on the part of the Company are necessary
to authorize this Agreement or to consummate the transactions so contemplated
(in each case, other than, with respect to the Merger, the Company Shareholder
Approvals). This Agreement has been duly executed and delivered by the Company
and, assuming this Agreement constitutes a valid and binding obligation of
Parent and Sub, constitutes a valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, subject to
applicable bankruptcy, insolvency, moratorium or other similar laws relating to
creditors' rights generally and to general principles of equity.
SECTION 3.05. Consent and Approvals; No Violations. Except as set
forth in Item 3.05 of the Company Disclosure Letter, except for filings,
permits, authorizations, consents and approvals as may be required under, and
other applicable requirements of, the Securities Exchange Act of 1934, as
amended (the "Exchange Act") (including the filing with the Securities and
Exchange Commission ("SEC") of a proxy statement in definitive form relating to
any required Company Shareholder Approval (the "Proxy Statement")), the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), the laws of the State of Illinois, the laws of other states in
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which the Company is qualified to do or is doing business and state takeover
laws, and except for the Company Shareholder Approvals and the filing with the
Recorder of Deeds of ▇▇▇▇ County, Illinois of the Trust Amendment and the
Articles of Merger following receipt of the Company Shareholder Approvals,
neither the execution, delivery or performance of this Agreement by the Company
nor the consummation by the Company of the transactions contemplated hereby
will (i) conflict with or result in any breach of any provision of the
Declaration of Trust or Bylaws of the Company or of the similar organizational
documents of any of its subsidiaries, (ii) require any filing with, or permit,
authorization, consent or approval of, any Federal, state or local government
or any court, tribunal, administrative agency or commission or other
governmental or other regulatory authority or agency, domestic, foreign or
supranational (a "Governmental Entity") (except where the failure to obtain
such permits, authorizations, consents or approvals or to make such filings
would not have a material adverse effect on the Company or would not reasonably
be expected to prevent or materially delay the consummation of the Merger),
(iii) result in a violation or breach of, or constitute (with or without due
notice or lapse of time or both) a default (or give rise to any right of
termination, amendment, cancellation or acceleration) under, any of the terms,
conditions or provisions of any loan or credit agreement, note, bond, mortgage,
indenture, lease, permit, concession, franchise, license, contract, partnership
agreement or other instrument or obligation to which the Company or any of its
subsidiaries is a party or by which any of them or any of their properties or
assets may be bound or (iv) violate any order, writ, injunction, decree,
statute, rule or regulation applicable to the Company, any of its subsidiaries
or any of their properties or assets, except in the case of clauses (iii) or
(iv) for violations, breaches or defaults that would not, individually or in
the aggregate, have a material adverse effect on the Company or that would not,
individually or in the aggregate, be reasonably expected to prevent or
materially delay the consummation of the Merger.
SECTION 3.06. SEC Reports and Financial Statements. The Company and
each of its subsidiaries has filed with the SEC, and has heretofore made
available to Parent true and complete copies of, all forms, reports, schedules,
statements and other documents required to be filed by it since April 30, 1995,
under the Exchange Act or the Securities Act of 1933, as amended (the
"Securities Act") (such forms, reports, schedules, statements and other
documents, including any financial statements or schedules included therein,
are referred to as the "Company SEC Documents"). The Company SEC Documents, at
the time filed, (a) did not contain any untrue statement of a material fact or
omit
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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 and (b) complied in all material respects with the
applicable requirements of the Exchange Act and the Securities Act, as the case
may be, and the applicable rules and regulations of the SEC thereunder. Except
to the extent revised or superseded by a subsequently filed Company Filed SEC
Document (as defined in Section 3.07), none of the Company SEC Documents
contains an untrue statement of a material fact or omits to state a material
fact required to be stated or incorporated by reference therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. The financial statements of the Company
included in the Company SEC Documents comply as to form in all material
respects with applicable accounting requirements and with the published rules
and regulations of the SEC with respect thereto, have been prepared in
accordance with generally accepted accounting principles applied on a
consistent basis during the periods involved (except as may be indicated in the
notes thereto or, in the case of the unaudited statements, as permitted by Form
10-Q of the SEC) and fairly present (subject, in the case of the unaudited
statements, to normal, recurring audit adjustments) the consolidated financial
position of the Company and its consolidated subsidiaries as at the dates
thereof and the consolidated results of their operations and cash flows for the
periods then ended.
SECTION 3.07. Absence of Certain Changes or Events. Except as
disclosed in the Company SEC Documents filed and publicly available prior to
the date of this Agreement (the "Company Filed SEC Documents") or as disclosed
in Item 3.07 of the Company Disclosure Letter, since April 30, 1996, the
Company and its subsidiaries have conducted their respective businesses only in
the ordinary course, and there has not been (i) through the date hereof any
material adverse change with respect to the Company, (ii) any declaration,
setting aside or payment of any dividend or other distribution with respect to
its capital stock or any redemption, purchase or other acquisition of any of
its capital stock, other than the Company's regular quarterly dividend of $.04
per Share paid on June 1, 1996, $.06 per Share paid on September 1, 1996 and
$.08 per Share paid on December 2, 1996, (iii) any split, combination or
reclassification of any of its capital stock or any issuance or the
authorization of any issuance of any other securities in respect of, in lieu of
or in substitution for shares of its capital stock, (iv) any damage,
destruction or loss, whether or not covered by insurance, that has or
reasonably could be expected to have a material adverse effect on the Company,
(v) any revaluation by the Company of any
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of its material assets or (vi) any material change in accounting methods,
principles or practices by the Company.
SECTION 3.08. No Undisclosed Liabilities. Except as and to the extent
set forth in the Company's Annual Report on Form 10-K for the fiscal year ended
April 30, 1996 previously filed with the SEC under the Exchange Act, as of
April 30, 1996, neither the Company nor any of its subsidiaries had any
liabilities or obligations of any nature, whether or not accrued, contingent or
otherwise, that would be required by generally accepted accounting principles
to be reflected on a consolidated balance sheet of the Company and its
subsidiaries (or disclosed in the notes thereto). Since April 30, 1996 and to
the date of this Agreement, except as and to the extent set forth in the
Company Filed SEC Documents or as disclosed in Item 3.08 of the Company
Disclosure Letter, neither the Company nor any of its subsidiaries has incurred
any liabilities of any nature, whether or not accrued, contingent or otherwise,
that would be required by generally accepted accounting principles to be
reflected on a consolidated balance sheet of the Company and its subsidiaries
(or disclosed in the notes thereto) and that would be reasonably expected to
have a material adverse effect on the Company.
SECTION 3.09. Information Supplied. None of the information supplied
or to be supplied by the Company specifically for inclusion or incorporation by
reference in the Proxy Statement, will, at the time the Proxy Statement is
first mailed to the Company's shareholders or at the time of the Shareholders
Meeting (as defined in Section 6.01), contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading, except that no
representation or warranty is made by the Company with respect to statements
made or incorporated by reference therein based on information supplied by
Parent or Sub specifically for inclusion or incorporation by reference therein.
The Proxy Statement will comply as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations thereunder.
SECTION 3.10. Benefit Plans. (a) Except as disclosed in the Company
Filed SEC Documents or as disclosed in Item 3.10 of the Company Disclosure
Letter, since the date of the most recent audited financial statements included
in the Company Filed SEC Documents, there has not been any adoption or
amendment in any material respect by the Company or any of its subsidiaries of
any collective bargaining agreement or any bonus, pension, profit sharing,
deferred compensation, incentive compensation, stock ownership, stock purchase,
stock option, phantom stock,
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retirement, vacation, severance, disability, death benefit, hospitalization,
medical or other plan, arrangement or understanding (whether or not legally
binding) providing benefits to any current or former employee, officer or
trustee or director of the Company or any of its subsidiaries (collectively,
"Benefit Plans"). Except as disclosed in the Company Filed SEC Documents or in
Item 3.10 of the Company Disclosure Letter, there exist no employment,
consulting, severance, termination or indemnification agreement, arrangements
or understandings between the Company or any of its subsidiaries and any
current or former employee, officer or director of the Company or any of its
subsidiaries.
(b) Item 3.10 of the Company Disclosure Letter contains a list and
brief description of all "employee pension benefit plans" (as defined in
Section 3(2) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")) (sometimes referred to herein as "Pension Plans"), "employee welfare
benefit plans" (as defined in Section 3(1) of ERISA) and all other Benefit
Plans maintained, or contributed to, by the Company or any of its subsidiaries
for the benefit of any current or former employees, officers or trustees or
directors of the Company or any of its subsidiaries. The Company has delivered
to Parent true, complete and correct copies of (i) each Benefit Plan (or, in
the case of any unwritten Benefit Plans, descriptions thereof), (ii) the most
recent annual report on Form 5500 filed with the Internal Revenue Service with
respect to each Benefit Plan (if any such report was required), (iii) the most
recent summary plan description for each Benefit Plan for which such summary
plan description is required and (iv) each trust agreement and group annuity
contract relating to any Benefit Plan.
(c) Except as disclosed in Item 3.10 of the Company Disclosure Letter,
all Pension Plans (i) have been the subject of determination letters from the
Internal Revenue Service to the effect that such Pension Plans are qualified
and exempt from Federal income taxes under Section 401(a) and 501(a),
respectively, of the Internal Revenue Code of 1986, as amended (the "Code"),
and no such determination letter has been revoked nor, to the best knowledge of
the Company, has revocation been threatened, nor has any such Pension Plan been
amended since the date of its most recent determination letter or application
therefor in any respect that would adversely affect its qualification or
materially increase its costs, (ii) currently comply in all material respects
in form and in operation with all applicable laws, including but not limited to
ERISA and the Code and have been operated and administered in accordance with
their respective terms, and (iii) have been operated so as to qualify, where
appropriate, for both Federal and state tax purposes, for
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income tax exclusions to its participants, tax-exempt income for its funding
vehicle and the allowance of deductions and credits with respect to
contributions thereto.
(d) Except as disclosed in Item 3.10 of the Company Disclosure Letter,
no Pension Plan that the Company or any of its subsidiaries maintains, or to
which the Company or any of its subsidiaries is obligated to contribute, other
than any Pension Plan that is a "multiemployer plan" (as such term is defined
in Section 4001(a)(3) of ERISA; collectively, the "Multiemployer Pension
Plans"), had, as of the respective last annual valuation date for each such
Pension Plan, an "unfunded benefit liability" (as such term is defined in
Section 4001(a)(18) of ERISA), based on actuarial assumptions which have been
furnished to Parent. None of the Pension Plans has an "accumulated funding
deficiency" (as such term is defined in Section 302 of ERISA or Section 412 of
the Code), whether or not waived. None of the Company, any of its
subsidiaries, any officer of the Company or any of its subsidiaries or any of
the Benefit Plans which are subject to ERISA, including the Pension Plans, any
trusts created thereunder or any trustee or administrator thereof, has engaged
in a "prohibited transaction" (as such term is defined in Section 406 of ERISA
or Section 4975 of the Code) or any other breach of fiduciary responsibility
that could subject the Company, any of its subsidiaries or any officer of the
Company or any of its subsidiaries to any material tax or penalty on prohibited
transactions imposed by such Section 4975 or to any material liability under
Section 502(i) or (1) of ERISA. None of such Benefit Plans or trusts has been
terminated, nor has there been any "reportable event" (as that term is defined
in Section 4043 of ERISA) with respect thereto, during the last five years.
Neither the Company nor any of its subsidiaries has suffered or otherwise
caused a "complete withdrawal", or a "partial withdrawal" (as such terms are
defined in Section 4203 and Section 4205, respectively, of ERISA) since the
effective date of such Sections 4203 and 4205 with respect to any of the
Multiemployer Pension Plans.
(e) With respect to any Benefit Plan that is an employee welfare
benefit plan, except as disclosed in Item 3.10 of the Company Disclosure
Letter, (i) no such Benefit Plan is unfunded or funded through a "welfare
benefits fund", as such term is defined in Section 419(e) of the Code, (ii)
each such Benefit Plan that is a "group health plan", as such term is defined
in Section 5000(b)(1) of the Code, complies with the applicable requirements of
Section 4980B(f) of the Code or state continuation coverage laws and (iii) each
such Benefit Plan (including any such Plan covering retirees or other former
employees) may be amended or terminated without material
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liability to the Company or any of its subsidiaries on or at any time after the
consummation of the Merger.
SECTION 3.11. Contracts; Indebtedness. (a) Except as disclosed in
the Company Filed SEC Documents or as set forth in Item 3.11 of the Company
Disclosure Letter, there are no contracts or agreements that are material to
the business, properties, assets, financial condition or results of operations
of the Company and its subsidiaries, taken as a whole. Neither the Company nor
any of its subsidiaries is in violation of or in default under (nor does there
exist any condition which upon the passage of time or the giving of notice
would cause such a violation of or default under) any loan or credit agreement,
note, bond, mortgage, indenture, lease, permit, concession, franchise, license
or any other contract, agreement, arrangement or understanding, to which it is
a party or by which it or any of its properties or assets is bound, except for
violations or defaults that could not reasonably be expected to result in a
material adverse effect on the Company.
(b) Set forth in Item 3.11 of the Company Disclosure Letter is (i) a
list of all agreements, instruments and other obligations pursuant to which any
indebtedness for borrowed money or capitalized lease obligations of the Company
or any of its subsidiaries in an aggregate principal amount in excess of
$100,000 is outstanding or may be incurred and (ii) the respective principal
amounts outstanding thereunder.
SECTION 3.12. Litigation. As of the date of this Agreement, except as
disclosed in Item 3.12 of the Company Disclosure Letter there is no suit,
claim, action, proceeding or investigation pending or, to the best knowledge of
the Company, threatened against the Company or any of its subsidiaries or any
of their respective properties that could reasonably be expected to have a
material adverse effect on the Company or prevent or materially delay the
consummation of the Merger. As of the date of this Agreement, neither the
Company nor any of its subsidiaries or any of their respective properties is
subject to any outstanding order, writ, injunction or decree that could
reasonably be expected to have a material adverse effect on the Company or
prevent or materially delay the consummation of the Merger.
SECTION 3.13. Compliance with Applicable Law. The Company and its
subsidiaries hold all permits, licenses, variances, exemptions, orders,
concessions, franchises, and approvals of all Governmental Entities necessary
for the lawful conduct of their respective businesses (the "Company Permits"),
except for failures to hold such permits, licenses, variances,
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exemptions, orders, concessions, franchises and approvals that would not have a
material adverse effect on the Company or prevent or materially delay the
consummation of the Merger. The Company and its subsidiaries are in compliance
with the terms of the Company Permits, except where the failure so to comply
would not have a material adverse effect on the Company or prevent or
materially delay the consummation of the Merger. Except as disclosed in the
Company Filed SEC Documents, to the best knowledge of the Company, the
businesses of the Company and its subsidiaries are not being conducted in
violation of any law, ordinance or regulation of any Governmental Entity,
except for possible violations that would not have a material adverse effect on
the Company or prevent or materially delay the consummation of the Merger.
Except as set forth in Item 3.13 of the Company Disclosure Letter, as of the
date of this Agreement, to the best knowledge of the Company no investigation
or review by any Governmental Entity with respect to the Company or any of its
subsidiaries is pending or threatened, nor has any Governmental Entity
indicated an intention to conduct any such investigation or review, other than,
in each case, those the outcome of which would not be reasonably expected to
have a material adverse effect on the Company or prevent or materially delay
the consummation of the Merger.
SECTION 3.14. Tax Matters. Except as set forth in Item 3.14 of the
Company Disclosure Letter:
(a) The Company and each of its subsidiaries has filed all Federal
income tax returns and all other material income tax returns and reports
required to be filed by it. The Company and each of its subsidiaries has
paid (or the Company has paid on its subsidiaries' behalf) all income taxes
shown as due on such returns.
(b) No material income tax return of the Company or any of its
subsidiaries is under audit or examination by any taxing authority, and no
written notice of such an audit or examination has been received by the
Company or any of its subsidiaries. Each material deficiency resulting
from any audit or examination relating to income taxes by any taxing
authority has been paid, except for deficiencies being contested in good
faith. No material issues relating to income taxes were raised in writing
by the relevant taxing authority during any presently pending audit or
examination, and no material issues relating to income taxes were raised in
writing by the relevant taxing authority in any completed audit or
examination that
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can reasonably be expected to recur in a later taxable period.
(c) There is no agreement or other document extending, or having the
effect of extending, the period of assessment or collection of any income
taxes and no power of attorney with respect to any income taxes has been
executed or filed with any taxing authority.
(d) No material liens for taxes exist with respect to any assets or
properties of the Company or any of its subsidiaries, except for statutory
liens for taxes not yet due.
(e) None of the Company or any of its subsidiaries is a party to or is
bound by any tax sharing agreement, tax indemnity obligation or similar
agreement.
SECTION 3.15. State Takeover Statutes. The provisions of Section
5/11.75 of the IBCA are inapplicable to the Merger and this Agreement and the
transactions contemplated by this Agreement. To the best knowledge of the
Company, no other state takeover statute or similar statute or regulation
applies or purports to apply to the Merger, this Agreement or any of the
transactions contemplated by this Agreement.
SECTION 3.16. Environmental Matters. (a) Except as set forth in Item
3.16 of the Company Disclosure Letter, neither the Company nor any of its
subsidiaries has (i) to the knowledge of the Company, placed, held, located,
released, transported or disposed of any Hazardous Substances (as defined
below) on, under, from or at any of the Company's or any of its subsidiaries'
properties or any other properties, other than in a manner that would not
reasonably be expected to result in a material adverse effect on the Company,
(ii) any knowledge or reason to know of the presence of any Hazardous
Substances on, under or at any of the Company's or any of its subsidiaries'
properties or any other property but arising from the Company's or any of its
subsidiaries' properties, other than in a manner that would not reasonably be
expected to result in a material adverse effect on the Company, or (iii)
received any written notice (A) of any violation of any statute, law,
ordinance, regulation, rule, judgment, decree or order of any Governmental
Entity relating to any matter of pollution, protection of the environment,
environmental regulation or control or regarding Hazardous Substances on, under
or emanating from any of the Company's or any of its subsidiaries' properties
or any other
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properties (collectively, "Environmental Laws"), (B) of the institution or
pendency of any suit, action, claim, proceeding or investigation by any
Governmental Entity or any third party in connection with any such violation,
(C) requiring the response to or remediation of Hazardous Substances at or
arising from any of the Company's or any of its subsidiaries' properties or any
other properties or (D) demanding payment for response to or remediation of
Hazardous Substances at or arising from any of the Company's or any of its
subsidiaries' properties or any other properties, except in each case for the
notices set forth in Item 3.16 of the Company Disclosure Letter and except for
notices relating to matters that are not material. For purposes of this
Agreement, the term "Hazardous Substance" shall mean any toxic or hazardous
materials or substances, including asbestos, buried contaminants, chemicals,
flammable explosives, radioactive materials, petroleum and petroleum products
and any substances defined as, or included in the definition of, "hazardous
substances", "hazardous wastes," "hazardous materials" or "toxic substances"
under any Environmental Law.
(b) Except as set forth in Item 3.16 of the Company Disclosure Letter,
no Environmental Law imposes any obligation upon the Company or its
subsidiaries arising out of or as a condition to any transaction contemplated
by this Agreement including any requirement to modify or to transfer any permit
or license, any requirement to file any notice or other submission with any
Governmental Entity, the placement of any notice, acknowledgment or covenant in
any land records, or the modification of or provision of notice under any
agreement, consent order or consent decree. No Lien has been placed upon any
of the Company's or it subsidiaries' properties under any Environmental Law.
SECTION 3.17. Real Property. Item 3.17 of the Company Disclosure
Letter contains a brief description of each parcel of real property owned by
the Company or its subsidiaries (the "Company Real Property") (showing the
record title holder, legal description, permanent index number, location,
improvements, the uses being made thereof and any indebtedness secured by a
mortgage or other encumbrance thereon) and of each option held by the Company
or its subsidiaries to acquire any real property.
SECTION 3.18. Leases. (a) Item 3.18 of the Company Disclosure Letter
contains (i) a list of each parcel of Company Real Property that is subject to
or encumbered by any lease (a "Company Lease"), and (ii) a list of each lease
or similar agreement under which the Company or any of its subsidiaries is
lessee of, or holds or operates, any real property owned by any third person,
in each case, which sets forth the parties to the
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lease, annual rental, expiration date, renewal and purchase options, if any,
uses being made thereof and the location and legal description of the real
property covered by such lease.
(b) Except as set forth in Item 3.18 of the Company Disclosure Letter,
(i) all rental payments due under each Company Lease have been paid during the
period from May 1, 1996 through August 31, 1996, and (ii) to the Company's
knowledge, no lessee is in material default, and no condition or event exists
which with the giving of notice or the passage of time, or both, would
constitute a material default by any lessee, under any Company Lease.
(c) The Company has delivered to Sub and Parent, or has given Sub and
Parent an opportunity to inspect, true, correct and complete copies of each
Company Lease and the copies so delivered or made available for inspection
constitute in each case the entire agreement of the parties thereto.
SECTION 3.19. Title to Property. Except as set forth in Item 3.19 of
the Company Disclosure Letter, the Company and its subsidiaries have good, and
with respect to the Company Real Property, marketable title to all of the
material assets reflected on the consolidated financial statements of the
Company included in the Company Filed SEC Documents as being owned by the
Company or its subsidiaries and all material assets thereafter acquired by the
Company or its subsidiaries (except to the extent that such assets have
thereafter been disposed of in the ordinary course of business consistent with
past practice), subject to no Liens.
SECTION 3.20. REIT Qualification. The Company (i) has elected to be
taxed as a real estate investment trust (a "REIT") within the meaning of the
Code and has qualified as a REIT at all times from January 22, 1962 through
April 30, 1996, (ii) except for the transactions contemplated by this
Agreement, has operated, and intends to continue to operate, in such a manner
as to qualify as a REIT for the period from May 1, 1996 through the day prior
to the Effective Time, and (iii) except for the transactions contemplated by
this Agreement, has not taken or omitted to take any action which is likely to
result in a challenge to its status as a REIT. Each of the wholly owned
subsidiaries of the Company is a "qualified REIT subsidiary", as defined in
Section 856(i) of the Code.
SECTION 3.21. Required Vote. The affirmative vote of the holders of
at least two-thirds of the Shares outstanding is the only vote of the holders
of any class or series of capital stock of the Company necessary under
applicable law or otherwise
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to approve the Merger and this Agreement and the transactions contemplated
hereby.
SECTION 3.22. Brokers. No broker, investment banker, financial
advisor or other person, other than ▇▇▇▇▇▇ Brothers Inc., the fees and expenses
of which will be paid by the Company, is entitled to any broker's, finder's,
financial advisor's or other similar fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of the Company.
SECTION 3.23. Opinion of Financial Advisor. The Company has received
the opinion of ▇▇▇▇▇▇ Brothers Inc., dated the date of this Agreement, to the
effect that, as of the date of this Agreement, the Merger Consideration to be
received in the Merger by the Company's shareholders is fair to the Company's
shareholders from a financial point of view, and such opinion has not been
withdrawn or modified.
SECTION 3.24. Violations; Eminent Domain. Except as set forth in Item
3.24 of the Company Disclosure Letter, there are no pending, or to the
Company's knowledge, threatened (a) zoning, building, fire or health code
violations or violations of other governing requirements or regulations with
respect to the Company Real Property that have not previously been corrected,
or (b) eminent domain, condemnation or other governmental taking of the Company
Real Property.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF PARENT AND SUB
Parent and Sub represent and warrant to the Company as follows:
SECTION 4.01. Organization. Parent is a limited liability company
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization and has all requisite limited liability
company power and authority to carry on its business as now being conducted.
Sub is a business trust duly organized, validly existing and in good standing
under the laws of the State of Illinois and has all requisite trust power and
authority to carry on its business as now conducted.
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SECTION 4.02. Authority. Parent and Sub have requisite limited
liability company or trust power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. The
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized by all necessary
limited liability company or trust action on the part of Parent and Sub
(including approval of the Merger and this Agreement by the board of directors
of Parent) and no other limited liability company or trust proceedings on the
part of Parent and Sub are necessary to authorize this Agreement or to
consummate such transactions. No vote of Parent's members is required to
approve this Agreement or the transactions contemplated hereby. This Agreement
has been duly executed and delivered by Parent and Sub, as the case may be,
and, assuming this Agreement constitutes a valid and binding obligation of the
Company, constitutes a valid and binding obligation of each of Parent and Sub
enforceable against them in accordance with its terms, subject to applicable
bankruptcy, insolvency, moratorium or other similar laws relating to creditors'
rights generally and to general principles of equity.
SECTION 4.03. Consents and Approvals; No Violations. Except for
filings, permits, authorizations, consents and approvals as may be required
under, and other applicable requirements of, the Exchange Act, the HSR Act, the
laws of the State of Illinois, the laws of other states in which Parent is
qualified to do or is doing business and state takeover laws, neither the
execution, delivery or performance of this Agreement by Parent and Sub nor the
consummation by Parent and Sub of the transactions contemplated hereby will (i)
conflict with or result in any breach of any provision of the respective
certificate of incorporation or declaration of trust or bylaws of Parent and
Sub, (ii) require any filing with, or permit, authorization, consent or
approval of, any Governmental Entity (except where the failure to obtain such
permits, authorizations, consents or approvals or to make such filings would
not be reasonably expected to prevent or materially delay the consummation of
the Merger), (iii) result in a violation or breach of, or constitute (with or
without due notice or lapse of time or both) a default (or give rise to any
right of termination, amendment, cancellation or acceleration) under, any of
the terms, conditions or provisions of any loan or credit agreement, note,
bond, mortgage, indenture, permit, concession, franchise, license, lease,
contract, agreement or other instrument or obligation to which Parent or any of
its subsidiaries is a party or by which any of them or any of their properties
or assets may be bound or (iv) violate any order, writ, injunction, decree,
statute, rule or regulation applicable to Parent, any of its subsidiaries or
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any of their properties or assets, except in the case of clauses (iii) and (iv)
for violations, breaches or defaults which would not, individually or in the
aggregate, be reasonably expected to prevent or materially delay the
consummation of the Merger.
SECTION 4.04. Information Supplied. None of the information supplied
or to be supplied by Parent or Sub specifically for inclusion or incorporation
by reference in the Proxy Statement will, at the time the Proxy Statement is
first mailed to the Company's shareholders or 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 in order to make the
statements therein, in light of the circumstances under which they are made,
not misleading.
SECTION 4.05. Interim Operations of Sub. Sub was formed solely for
the purpose of engaging in the transactions contemplated hereby, has engaged in
no other business activities and has conducted its operations only as
contemplated hereby.
SECTION 4.06. Brokers. No broker, investment banker, financial
advisor or other person is entitled to any broker's, finder's, financial
advisor's or other similar fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Parent or Sub.
SECTION 4.07. Financing. (a) Parent has on hand or available through
committed bank facilities all funds necessary to purchase all of the Shares
pursuant to the Merger and to pay all fees and expenses related to the
transactions contemplated by this Agreement. True and correct copies of all
such financing commitments have been furnished to the Company.
(b) Parent has liquid net assets of at least $25 million as of the date
hereof and will have at least such amount of liquid net assets at all times
while this Agreement is in effect up to and including the date funds are
deposited into the Payment Fund by Parent in an amount necessary to pay the
Merger Consideration and the date funds are made available to the Surviving
Company to pay the Option Consideration.
SECTION 4.08. Litigation. As of the date of this Agreement except as
disclosed in Item 4.08 of letter from Parent to the Company dated the date
hereof, which letter relates to this Agreement and is designated therein as the
Parent Disclosure Letter (the "Parent Disclosure Letter"), there is no suit,
claim, action, proceeding or investigation pending or, to the best
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knowledge of Parent, threatened against Parent or any of its subsidiaries that
could reasonably be expected to prevent or materially delay the consummation of
the Merger. As of the date of this Agreement, neither Parent nor any of its
subsidiaries is subject to any outstanding order, writ, injunction or decree
that could reasonably be expected to prevent or materially delay the
consummation of the Merger.
ARTICLE V
COVENANTS
SECTION 5.01. Covenants of the Company. Except as set forth on Item
5.01 of the Company Disclosure Letter, during the period from the date of this
Agreement through the Effective Time, the Company agrees as to itself and its
subsidiaries that (except as expressly contemplated or permitted by this
Agreement, or to the extent that Parent shall otherwise consent in writing):
(a) Ordinary Course. The Company shall, and shall cause its
subsidiaries to, carry on their respective businesses in the usual, regular and
ordinary course in substantially the same manner as heretofore conducted and
shall use all reasonable efforts to preserve intact their present business
organizations, keep available the services of their present officers and key
employees and preserve their relationships with persons having business
dealings with the Company and its subsidiaries.
(b) Dividends; Changes in Stock. The Company shall not, and shall not
permit any of its subsidiaries to, (i) declare or pay any dividends on or make
other distributions in respect of any of its capital stock except for dividends
by a direct or indirect wholly owned subsidiary of the Company to its parent or
regular quarterly dividends on the Shares in an amount not to exceed $.08 per
Share for the dividend payable on December 1, 1996 and $.10 per Share for each
regular quarterly dividend thereafter, (ii) split, combine or reclassify any of
its capital stock or issue or authorize or propose the issuance of any other
securities in respect of, in lieu of or in substitution for shares of its
capital stock or (iii) repurchase, redeem or otherwise acquire any shares of
capital stock of the Company or its subsidiaries or any other securities
thereof or any rights, warrants or options to acquire any such shares or other
securities, except the redemption of the Rights pursuant to Section 6.10.
(c) Issuance of Securities. The Company shall not and shall not
permit any of its subsidiaries to, issue, deliver, sell, pledge or encumber, or
authorize or propose the issuance, delivery, sale, pledge or encumbrance of,
any shares of its
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capital stock of any class or any securities convertible into, or any rights,
warrants, calls, subscriptions or options to acquire, any such shares or
convertible securities, or any other ownership interest (including stock
appreciation rights or phantom stock), other than the issuance of Shares upon
the exercise of Company Stock Options outstanding on the date of this
Agreement, the issuance to trustees of the Company of options to purchase an
aggregate of 3,500 Shares pursuant the 1988 Trustee's Stock Option Plan and the
issuance of Shares upon the exercise of Rights pursuant to the Rights
Agreement.
(d) Governing Documents. Except for the Trust Amendment, the Company
shall not, and shall not permit any of its subsidiaries to, amend or propose to
amend its Declaration of Trust or articles of incorporation or bylaws (or
similar organizational documents).
(e) No Acquisitions. The Company shall not, and shall not permit any
of its subsidiaries to, acquire or agree to acquire (i) by merging or
consolidating with, or by purchasing a substantial equity interest in or
substantial portion of the assets of, or by any other manner, any business or
any corporation, partnership, limited liability company, joint venture,
association, trust or other business organization or division thereof or (ii)
any asset having a value in excess of $25,000 or any assets having an aggregate
value in excess of $250,000, except U.S. Treasury securities with maturities of
less than one year.
(f) No Dispositions. Other than dispositions in the ordinary course
of business consistent with past practice which are not material to the Company
and its subsidiaries taken as a whole, the Company shall not, and shall not
permit any of its subsidiaries to, sell, lease, license, encumber or otherwise
dispose of, or agree to sell, lease, license, encumber or otherwise dispose of,
any of its assets.
(g) Indebtedness. The Company shall not, and shall not permit any of
its subsidiaries to, (i) incur any indebtedness for borrowed money or guarantee
any such indebtedness or issue or sell any debt securities or warrants or
rights to acquire any debt securities of the Company or any of its
subsidiaries, guarantee any debt securities of others, enter into any
"keep-well" or other agreement to maintain any financial statement condition of
another person or enter into any arrangement having the economic effect of any
of the foregoing, except for working capital borrowings incurred in the
ordinary course of business consistent with past practice, or (ii) make any
loans, advances or capital contributions to, or investments in, any other
person,
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other than (A) to the Company or any direct or indirect wholly owned subsidiary
of the Company or (B) any advance to employees in accordance with past
practice.
(h) Advice of Changes; Filings. The Company shall promptly advise
Parent of any material adverse change with respect to the Company. The Company
shall provide to Parent (or its counsel) copies of all filings made by the
Company with any Governmental Entity in connection with this Agreement and the
transactions contemplated hereby.
(i) Tax Matters. The Company shall not make any tax election that
would have a material effect on the tax liability of the Company or any of its
subsidiaries. The Company shall, before filing or causing to be filed any
material income tax return of the Company or any of its subsidiaries, consult
with Parent and its advisors as to the positions and elections that may be
taken or made with respect to such return, and shall take such positions or
make such elections as the Company and Parent shall jointly agree or, failing
such agreement, shall take positions or make elections consistent with its past
practices.
(j) Capital Expenditures. Neither the Company nor any of its
subsidiaries shall make or agree to make any new capital expenditure or
expenditures that, individually, exceeds $25,000 or, in the aggregate, exceed
$500,000.
(k) Discharge of Liabilities. The Company shall not, and shall not
permit any of its subsidiaries to, pay, discharge, settle or satisfy any
claims, liabilities or obligations (absolute, accrued, asserted or unasserted,
contingent or otherwise), other than the payment, discharge, settlement or
satisfaction, in the ordinary course of business consistent with past practice
or in accordance with their terms, of liabilities recognized or disclosed in
the most recent consolidated financial statements (or the notes thereto) of the
Company included in the Company Filed SEC Documents or incurred since the date
of such financial statements in the ordinary course of business consistent with
past practice.
(l) Material Contracts. Except in the ordinary course of business,
neither the Company nor any of its subsidiaries shall (i) enter into, modify in
any material respect, amend in any material respect or terminate any material
contract or agreement to which the Company or such subsidiary is a party or
(ii) waive, release or assign any material rights or claims.
(m) Employee Matters. Neither the Company nor any of its subsidiaries
shall (i) grant any increases in the
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compensation of any of its trustees or directors, officers or key employees,
except for increases required under employment agreements existing on the date
hereof, and increases for officers and employees in the ordinary course of
business consistent with past practice that, in any event, do not increase such
officer's or employee's aggregate compensation by more than 5% over such
employee's aggregate compensation in effect on the date hereof, (ii) pay or
agree to pay any pension retirement allowance or other employee benefit not
required or contemplated by any of the existing Benefit Plans as in effect on
the date hereof to any such trustee or director, officer or key employee,
whether past or present, (iii) enter into any new, or materially amend any
existing, employment, severance or termination agreement with any such trustee
or director, officer or key employee or (iv) except as required to comply with
applicable law, become obligated under any new Benefit Plan which was not in
existence on the date hereof, or amend any such plan or arrangement in
existence on the date hereof if such amendment would have the effect of
enhancing any benefits thereunder. The Company shall provide Parent with
copies of any amendments to any Benefit Plan prior to the Effective Time.
(n) Accounting. The Company shall not adopt any material change,
other than in the ordinary course of business consistent with past practice or
as required by the SEC or by law, in its accounting policies, procedures or
practices.
(o) Agreement with respect to Chicago Music and Dance Theater, Inc.
The Company acknowledges its right to repurchase certain property subject and
pursuant to that certain Agreement of Sale and Purchase between the Company and
Chicago Music and Dance Theater, Inc. dated as of August 31, 1994, as amended
(the "Theater Agreement"). The Company shall neither exercise any such right
to repurchase the subject property nor modify or amend the Theater Agreement in
any respect without the prior consent of Parent, which consent shall not be
unreasonably withheld.
In the event the Company shall request Parent to consent in writing to an
action otherwise prohibited by this Section 5.01, Parent shall use its
reasonable best efforts to respond in a prompt and timely fashion, but may
otherwise respond affirmatively or negatively in its sole discretion.
SECTION 5.02. No Solicitation. (a) The Company and its subsidiaries
and their respective officers, trustees, employees, representatives, agents or
affiliates (including, without limitation, any investment banker, financial
advisor, attorney or accountant retained by the Company or any of its
subsidiaries) shall immediately cease any discussions or
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negotiations with any parties that may be ongoing with respect to a Takeover
Proposal (as hereinafter defined). The Company shall not, nor shall it permit
any of its subsidiaries to, and it shall use its best efforts to cause its
officers, trustees, employees, agents, affiliates or any investment banker,
financial advisor, attorney, accountant or other representative retained by it
or any of its subsidiaries not to, directly or indirectly, (i) solicit,
initiate or knowingly encourage (including by way of furnishing information,
other than the Company SEC Documents), or knowingly take any other action to
facilitate, any inquiries or the making of any proposal which constitutes, or
would reasonably be expected to lead to, any Takeover Proposal or (ii)
participate in any discussions or negotiations regarding any Takeover Proposal;
provided, however, that if the trustees of the Company determine in good faith,
after consultation with the Company's outside counsel, that such action is
necessary in order for the trustees of the Company to comply with their
fiduciary duties to the Company's shareholders under applicable law, the
Company may, in response to an unsolicited Takeover Proposal, and subject to
compliance with Section 5.02(c), (x) furnish information with respect to the
Company to any person pursuant to a confidentiality agreement containing terms
no less favorable to the Company than the form entered into between the Company
and Parent and (y) participate in negotiations regarding such Takeover
Proposal. For purposes of this Agreement, "Takeover Proposal" means any
inquiry, proposal or offer from any person relating to any direct or indirect
acquisition or purchase of 10% or more of the assets of the Company and its
subsidiaries taken as a whole or 10% or more of any class of equity securities
of the Company or any of its subsidiaries, any tender offer or exchange offer
that if consummated would result in any person beneficially owning 10% or more
of any class of equity securities of the Company or any of its subsidiaries, or
any merger, consolidation, business combination, sale of substantially all the
assets, recapitalization, liquidation, dissolution or similar transaction
involving the Company or any of its subsidiaries, other than the transactions
contemplated by this Agreement.
(b) Except as set forth in this Section 5.02, neither the trustees of
the Company nor any committee thereof shall (i) withdraw or modify, or propose
to withdraw or modify, in a manner adverse to Parent, the approval or
recommendation by such trustees or such committee of the Merger or this
Agreement, (ii) approve or recommend, or propose to approve or recommend, any
Takeover Proposal or (iii) cause the Company to enter into any letter of
intent, agreement in principle, acquisition agreement or other similar
agreement (each, an "Acquisition Agreement") with respect to any Takeover
Proposal. Notwithstanding the foregoing, in the event that the trustees of the
Company
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determine in good faith, after consultation with the Company's outside counsel,
that such action is necessary in order for the trustees of the Company to
comply with their fiduciary duties to the Company's shareholders under
applicable law, the trustees of the Company may (subject to the following
sentences) withdraw or modify their approval or recommendation of the Merger
and this Agreement (or not recommend it before the Proxy Statement is sent to
shareholders), approve or recommend a Superior Proposal (as defined below) or
terminate this Agreement, but in each case only at a time that is after the
third business day following Parent's receipt of written notice (a "Notice of
Superior Proposal") advising Parent that the trustees of the Company have
received a Superior Proposal and specifying the material terms and conditions
of such Superior Proposal. In addition, if the Company proposes to terminate
this Agreement, it shall upon such times set forth in Section 6.05(b) pay to
Parent the Expenses and Termination Fee (each as defined in Section 6.05(b)).
For purposes of this Agreement, a "Superior Proposal" means any bona fide
proposal, not subject to any material financing contingency, made by a third
party to acquire, directly or indirectly, for consideration consisting of cash
and/or securities, all of the Shares then outstanding or all or substantially
all the assets of the Company and otherwise on terms which the trustees of the
Company determine in its good faith judgment (based on the advice of a
financial advisor of nationally recognized reputation) to be more favorable to
the Company's shareholders than the Merger.
(c) In addition to the obligations of the Company set forth in
paragraphs (a) and (b) of this Section 5.02, the Company shall promptly advise
Parent of any request for information (other than the Company SEC Documents) or
of any Takeover Proposal and the material terms and conditions of such request
or Takeover Proposal.
(d) Nothing contained in this Section 5.02 shall prohibit the Company
from taking and disclosing to its shareholders a position contemplated by Rule
14e-2(a) promulgated under the Exchange Act or from making any disclosure to
the Company's shareholders if, in the good faith judgment of the trustees of
the Company, after consultation with the Company's outside counsel, failure so
to disclose would be inconsistent with their fiduciary duties to the Company's
shareholders under applicable law; provided, however, neither the Company nor
its trustees nor any committee thereof shall, except as permitted by Section
5.02(b), withdraw or modify, or propose to withdraw or modify, its or their
position with respect to this Agreement or the Merger or approve or recommend,
or propose to approve or recommend, a Takeover Proposal.
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SECTION 5.03. Other Actions. The Company shall not, and shall not
permit any of its subsidiaries to, take any action that would, or that could
reasonably be expected to, result in (i) any of the representations and
warranties of the Company set forth in this Agreement that are qualified as to
materiality becoming untrue, (ii) any of such representations and warranties
that are not so qualified becoming untrue in any material respect, or (iii) any
of the conditions set forth in Section 7.01 or Section 7.03 not being satisfied
(subject to the Company's right to take actions specifically permitted by
Section 5.02).
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.01. Shareholder Approvals; Preparation of Proxy Statement.
(a) The Company shall as soon as practicable following the date hereof, duly
call, give notice of, convene and hold a meeting of its shareholders (the
"Shareholders Meeting") for the purpose of obtaining the Company Shareholder
Approvals. The Company shall, through its trustees, recommend to its
shareholders that the Company Shareholder Approvals be given; provided, that in
the event that the trustees of the Company determine in good faith, after
consultation with the Company's outside counsel, that such action is necessary
in order for the trustees of the Company to comply with their fiduciary duties
to the Company's shareholders under applicable law, the trustees of the Company
may decline to make such recommendation.
(b) The Company shall as soon as practicable following the date
hereof, prepare and file a preliminary Proxy Statement with the SEC and shall
use its reasonable efforts to respond to any comments of the SEC or its staff
and cause the Proxy Statement to be mailed to the Company's shareholders as
promptly as practicable after responding to all such comments to the
satisfaction of such staff. Parent shall as soon as practicable following the
date hereof supply such information for inclusion in the Proxy Statement as
shall reasonably be requested by the Company. The Company shall notify Parent
promptly of the receipt of any comments from the SEC or its staff and of any
request by the SEC or its staff for amendments or supplements to the Proxy
Statement or for additional information, will supply Parent with copies of all
correspondence between the Company or any of its representatives, on the one
hand, and the SEC or its staff, on the other hand, with respect to the Proxy
Statement or the Merger and will cooperate with Parent and its representatives
in the preparation of any responses to such correspondence. If at any
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time prior to the Shareholders Meeting there shall occur any event that should
be set forth in an amendment or supplement to the Proxy Statement, the Company
shall promptly prepare and mail to its shareholders such an amendment or
supplement. The Company shall give Parent and its counsel the opportunity to
review any Proxy Statement, or any amendment or supplement thereto, prior to
its being filed with the SEC.
(c) At the Shareholders Meeting, Parent agrees to cause all Shares
owned by Parent or any affiliate of Parent to be voted in favor of the Company
Shareholder Approvals.
SECTION 6.02. Access to Information. Upon reasonable notice and
subject to restrictions contained in confidentiality agreements to which the
Company is subject, the Company shall, and shall cause each of its subsidiaries
to, afford to Parent and to the officers, employees, accountants, counsel and
other representatives of Parent (including, without limitation, surveyors,
structural engineers, appraisers and other consultants) access, during normal
business hours during the period prior to the Effective Time, to all their
respective properties, books, contracts, commitments and records and, during
such period, the Company shall (and shall cause each of its subsidiaries to)
furnish promptly to Parent (a) a copy of each report, schedule, registration
statement and other document filed or received by it during such period
pursuant to the requirement of the Federal or state securities laws or the
Federal tax laws and (b) all other information concerning its business,
properties and personnel as Parent may reasonably request. Notwithstanding
anything contained herein to the contrary, the Company shall not be required to
provide access to its properties for the purpose of enabling Parent or its
authorized representatives to conduct further environmental-related tests,
observations, reviews, surveys or soil borings or otherwise cooperate with
Parent or any of its representatives with respect to any of the same. Except
as otherwise agreed to by the Company, unless and until the consummation of the
Merger, and notwithstanding termination of this Agreement, the terms of the
Confidentiality Agreement dated as of June 26, 1996 between MCL Construction
Corporation, an affiliate of Parent, and the Company (the "Confidentiality
Agreement"), which Parent has agreed to be bound by pursuant to the letter
agreement dated as of December 2, 1996 from Parent to the Company, shall apply
to all information furnished thereunder or hereunder.
SECTION 6.03. Reasonable Efforts. Each of the Company, Parent and Sub
agree to use its reasonable efforts to take, or cause to be taken, all actions
necessary to comply promptly with all legal requirements that may be imposed on
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itself with respect to the Merger (which actions shall include furnishing all
information required under the HSR Act and in connection with approvals of or
filings with any other Governmental Entity) and shall promptly cooperate with
and furnish information to each other in connection with any such requirements
imposed upon any of them or any of their subsidiaries in connection with the
Merger. Each of the Company, Parent and Sub shall, and shall cause its
subsidiaries to, use its reasonable efforts to take all reasonable actions
necessary to obtain (and shall cooperate with each other in obtaining) any
consent, authorization, order or approval of, or any exemption by, any
Governmental Entity or other public or private third party required to be
obtained or made by Parent, Sub, the Company or any of their subsidiaries in
connection with the Merger or the taking of any action contemplated thereby or
by this Agreement, except that no party need waive any substantial rights or
agree to any substantial limitation on its operations or to dispose of any
assets.
SECTION 6.04. Company Stock Options. At the Effective Time, each
holder of a then outstanding Company Stock Option, whether or not then
exercisable, shall, in settlement thereof and without any action by such
holder, be deemed to have made a disposition of such Company Stock Option to
the Company and shall receive from the Company for each Share subject to such
Company Stock Option an amount (subject to any applicable withholding tax) in
cash equal to the excess, if any, of the Merger Consideration over the per
Share exercise price of such Company Stock Option (such amount being
hereinafter referred to as the "Option Consideration"); provided, however, that
with respect to any person subject to Section 16(a) of the Exchange Act who may
incur liability as a result of such disposition, any such disposition shall be
made, and any such amount shall be paid, as soon as practicable after the first
date payment can be made without liability to such person under Section 16(b)
of the Exchange Act. Any option to purchase Shares which prior to the date
hereof has ceased to be exercisable by reason of the termination of employment
or service with the Company of any employee or trustee of the Company shall not
be deemed to be an outstanding Company Stock Option for purposes of this
Section 6.04. Upon receipt of the Option Consideration, each Company Stock
Option shall be canceled. The disposition of any Company Stock Option to the
Company in exchange for the Option Consideration shall be deemed a release of
any and all rights the holder had or may have had in respect of such Company
Stock Option. Prior to the Effective Time, the Company shall use its best
efforts to obtain all necessary consents or releases from holders of Company
Stock Options and to take all such other lawful action as may be necessary to
give effect to the
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transactions contemplated by this Section 6.04 (except for such action that may
require the approval of the Company's shareholders). Except as otherwise
agreed to by the parties, (a) the Company's 1982, 1986, 1988, 1991 and 1993
Employees' Stock Option Plans and 1988 and 1993 Trustee's Stock Options Plans
shall terminate as of the Effective Time and the provisions in any other plan,
program or arrangement providing for the issuance or grant of any other
interest in respect of the capital stock of the Company shall be canceled as of
the Effective Time and (b) the Company shall take all action necessary to
ensure that following the Effective Time no participant in the Company's 1982,
1986, 1988, 1991 and 1993 Employees' Stock Option Plans and 1988 and 1993
Trustees' Stock Option Plans or other plans, programs or arrangements shall
have any right thereunder to acquire equity securities of the Company, the
Surviving Company or any subsidiary of the Company or the Surviving Company and
to terminate all such plans, programs or arrangements.
SECTION 6.05. Fees and Expenses. (a) Except as provided below in
this Section 6.05, all fees and expenses incurred in connection with the
Merger, this Agreement and the transactions contemplated by this Agreement
shall be paid by the party incurring such fees or expenses, whether or not the
Merger is consummated.
(b) The Company shall pay, or cause to be paid, in same day funds to
Parent the sum of (x) the Expenses (as hereinafter defined) and (y) $3,500,000
(the "Termination Fee") under the circumstances and at the times set forth as
follows:
(i) if Parent or Sub terminates this Agreement under Section
8.01(e), and at the time of such termination there is no pending Takeover
Proposal, the Company shall pay the Expenses and the Termination Fee upon
demand;
(ii) if Parent or Sub terminates this Agreement under Section 8.01(e)
and at the time of such termination a Takeover Proposal shall then be
pending, the Company shall pay the Expenses, upon demand; in addition, if
within twelve months after such termination, the Company shall enter into
an Acquisition Agreement providing for a Takeover Proposal or a Takeover
Proposal shall be consummated, the Company shall pay the Termination Fee
concurrently with the earlier of the entering into of such Acquisition
Agreement or the consummation of such Takeover Proposal;
(iii) if the Company terminates this Agreement under Section 8.01(f),
the Company shall pay the Expenses concurrently therewith; in addition, if
within twelve months
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after such termination, the Company shall enter into an Acquisition
Agreement providing for a Takeover Proposal or a Takeover Proposal shall be
consummated, the Company shall pay the Termination Fee concurrently with
the earlier of the entering into of such Acquisition Agreement or the
consummation of such Takeover Proposal; and
(iv) if, at the time of any other termination of this Agreement (other
than (A) a termination by the Company pursuant to Section 8.01(g) or (B)
provided that the Company is not at the time of such termination in breach
of its obligations under Section 5.02 or Section 6.03, a termination
pursuant to Section 8.01(a), Section 8.01(b)(i) or Section 8.01(b)(iii)), a
Takeover Proposal shall have been made (other than a Takeover Proposal made
prior to the date hereof), the Company shall pay the Expenses, if
terminated by the Company, concurrently therewith or, if terminated by
Parent, upon demand; in addition, if within twelve months of such
termination, the Company shall enter into an Acquisition Agreement
providing for a Takeover Proposal or a Takeover Proposal shall be
consummated, the Company shall pay the Termination Fee concurrently with
the earlier of the entering into of such Acquisition Agreement or the
consummation of such Takeover Proposal.
"Expenses" shall mean documented out-of-pocket fees and expenses up to an
aggregate $750,000 incurred prior to any termination of this Agreement or
otherwise paid by or on behalf of Parent or Sub in connection with the Merger
or the consummation of any of the transactions contemplated by this Agreement,
including all fees and expenses of law firms, commercial banks, investment
banking firms, accountants, experts and consultants to Parent or Sub. In no
event shall more than one Termination Fee be payable.
SECTION 6.06. Indemnification; Directors and Officers Insurance. (a)
The declaration of trust and bylaws of the Surviving Company shall contain the
provisions with respect to indemnification set forth in the Declaration of
Trust and Bylaws of the Company on the date of this Agreement, which provisions
shall not be amended, repealed or otherwise modified for a period of six years
after the Effective Time in any manner that would adversely affect the rights
thereunder of persons who at any time prior to the Effective Time were
identified as prospective indemnitees under the Declaration of Trust or Bylaws
of the Company in respect of actions or omissions occurring at or prior to the
Effective Time (including, without limitation, the transactions contemplated by
this Agreement), unless such modification is required by law.
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(b) From and after the Effective Time, the Surviving Company shall
indemnify, defend and hold harmless the present and former officers, trustees
or directors, agents and employees of the Company and its subsidiaries
(collectively, the "Indemnified Parties") against all losses, expenses, claims,
damages, liabilities or amounts that are paid in settlement of, with the
approval of Parent and the Surviving Company (which approval shall not be
unreasonably withheld), or otherwise in connection with, any claim, action,
suit, proceeding or investigation (a "Claim"), based in whole or in part on or
pertaining to (i) the fact that such person is or was such a trustee or
director, officer, agent or employee of the Company or any subsidiary and
arising out of actions or omissions occurring at or prior to the Effective Time
(including the transactions contemplated by this Agreement) or (ii) the Prior
Merger Agreement and all actions by any Indemnified Party in connection
therewith, in each case to the fullest extent permitted under the laws of the
State of Illinois and the Declaration of Trust (and, from and after the
Effective Time, shall pay expenses in advance of the final disposition of any
such action or proceeding to each Indemnified Party to the fullest extent
permitted by the Declaration of Trust and the laws of the State of Illinois,
upon receipt from the Indemnified Party to whom expenses are advanced of the
undertaking to repay such advances contemplated by the Declaration of Trust).
Parent hereby guarantees the Surviving Company's obligations to the Indemnified
Parties pursuant to this Section 6.06.
(c) Parent will provide, or cause the Surviving Company to
provide, for a period of not less than six years after the Effective Time, the
Company's current trustees and officers an insurance and indemnification policy
(copies of which shall be provided to such trustees and officers prior to the
Closing Date) that provides coverage for events occurring at or prior to the
Effective Time (the "D&O Insurance") that is no less favorable than the
Company's existing policy or, if substantially equivalent insurance coverage is
unavailable, the best available coverage; provided, however, that Parent and
the Surviving Company shall not be required to pay an annual premium for the
D&O Insurance in excess of one and one-half times the last annual premium paid
by the Company prior to the date hereof, but in such case shall purchase as
much such coverage as possible for such amount.
(d) This Section 6.06 shall survive the consummation of the Merger and
is intended to be for the benefit of, and shall be enforceable by, the
Indemnified Parties referred to herein, their heirs and personal
representatives and shall be binding on
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Parent and Sub and the Surviving Company and their respective successors and
assigns.
SECTION 6.07. Obligations of Sub. Subject to the terms and conditions
set forth in this Agreement, Parent shall take all actions necessary to cause
Sub to perform its obligations under this Agreement and to consummate the
Merger on the terms and conditions set forth in this Agreement.
SECTION 6.08. Certain Litigation. The Company agrees that it shall
not settle any litigation commenced after the date hereof against the Company
or any of its trustees by any shareholder of the Company relating to the Merger
or this Agreement, without the prior written consent of Parent. In addition,
the Company shall not voluntarily cooperate with any third party that may
hereafter seek to restrain or prohibit or otherwise oppose the Merger and shall
cooperate with Parent and Sub to resist any such effort to restrain or prohibit
or otherwise oppose the Merger, unless the trustees of the Company determine in
good faith, after consultation with the Company's outside counsel, that failing
so to cooperate with such third party or cooperating with Parent or Sub, as the
case may be, would be inconsistent with their fiduciary duties under applicable
law.
SECTION 6.09. Severance Policy and Other Agreements. (a) With respect
to any officer who is covered by a severance policy separate from the standard
severance policy for the Company's employees (which separate severance policy
is described in Item 6.09 of the Company Disclosure Letter), Parent shall
maintain (or shall cause the Surviving Company to maintain) such separate
policy as in effect as of the Effective Time until the first anniversary of the
Effective Time, and, as to all other officers and employees, Parent shall
maintain (or shall cause to be maintained) the Company's standard severance
policy as in effect as of the Effective Time for a period of at least six
months from the Effective Time.
(b) Parent shall honor or cause to be honored all severance agreements,
employment agreements, death benefit agreements and non-competition agreements
with the Company's officers and employees disclosed in Item 6.09 of the Company
Disclosure Letter.
(c) Parent and its subsidiaries shall, until the first anniversary of
the Effective Time, provide reasonable and customary outplacement services
("Outplacement Services") to employees of the Company whose employment is
terminated without
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cause, which Outplacement Services provided to such employees shall include
one-on-one counseling and assistance.
SECTION 6.10. Redemption of Rights. The Company shall take all
actions necessary to redeem the Rights pursuant to the terms of the Rights
Agreement effective immediately prior to the Effective Time, provided, that
this Agreement has not been terminated prior thereto in accordance with its
terms.
SECTION 6.11. Payment of Certain Fees and Expenses. Parent hereby
acknowledges that the Company has terminated the Prior Merger Agreement and
that as a result of such termination and the execution of this Agreement the
Company has become liable to Newsweb for a fee equal to $3,500,000 (the
"Breakup Fee") and up to an aggregate of $750,000 of Expenses (as defined in
Section 6.05(b) of the Prior Merger Agreement) (the "Breakup Expenses"). In
addition, Parent agrees that liability for and payment of the Breakup Fee and
the Breakup Expenses by the Company shall not be deemed a breach of any
representation or warranty, covenant or agreement or a failure to comply with
any condition to the Merger contained in this Agreement.
ARTICLE VII
CONDITIONS PRECEDENT
SECTION 7.01. Conditions to Each Party's Obligation To Effect the
Merger. The respective obligation of each party to effect the Merger shall be
subject to the satisfaction prior to the Closing Date of the following
conditions:
(a) Company Shareholder Approvals. The Company Shareholder Approvals
shall have been obtained.
(b) HSR Period. The waiting period (and any extension thereof)
applicable to the consummation of the Merger under the HSR Act shall have
expired or been terminated.
(c) No Injunctions Or Restraints. No statute, rule, regulation,
executive order, decree, temporary restraining order, preliminary or
permanent injunction or other order issued by any court of competent
jurisdiction or other Governmental Entity or other legal restraint or
prohibition preventing the consummation of the Merger shall be in effect;
provided, however, that each of the parties shall have used reasonable
efforts to prevent the entry of any
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such injunction or other order and to appeal as promptly as possible any
injunction or other order that may be entered.
(d) Trust Amendment. The Amendment set forth in Exhibit I hereto (the
"Trust Amendment") of the Amended and Restated Declaration Trust (as
amended and in effect on the date of this Agreement) shall have been
approved by the holders of at least two-thirds of the Shares outstanding
and entitled to vote thereon at the Shareholders Meeting and the Trust
Amendment shall have been duly filed with the Recorder of Deeds of ▇▇▇▇
County, Illinois.
SECTION 7.02. Conditions to the Company's Obligation to Effect the
Merger. The obligation of the Company to effect the Merger shall be subject to
the satisfaction at or prior to the Closing Date of the following additional
conditions:
(a) Performance of Obligations; Representations and Warranties. Parent
and Sub shall have performed in all material respects each of their
obligations and complied in all material respects with each of their
agreements and covenants contained in this Agreement required to be
performed or complied with on or prior to the Closing Date, each of the
representations and warranties of Parent and Sub contained in this
Agreement that is qualified by materiality shall be true and correct on and
as of the Closing Date as if made on and as of such date (other than to the
extent that any such representation and warranty, by its terms, is
expressly limited to a specific date, in which case such representation and
warranty shall be true and correct as of such date) and each of the
representations and warranties that is not so qualified shall be true and
correct in all material respects on and as of the Closing Date as if made
on and as of such date (other than to the extent that any such
representation and warranty, by its terms, is expressly limited to a
specific date, in which case such representation and warranty shall be true
and correct as of such date), in each case except as contemplated or
permitted by this Agreement.
(b) Officer's Certificate. Parent shall have furnished to the Company
a certificate, dated the Closing Date, signed on behalf of Parent by an
appropriate officer of Parent, certifying to the effect that the conditions
set forth in this Section 7.02, insofar as they relate to Parent, have been
satisfied in full.
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(c) Other Documents. Parent and Sub shall have furnished to the
Company at the closing of the Merger such other customary documents,
certificates or instruments as the Company may reasonably request
evidencing compliance by Parent and Sub with the terms of this Agreement.
(d) Fairness Opinion. The opinion received by the Company from ▇▇▇▇▇▇
Brothers Inc., dated the date of this Agreement, to the effect that the
Merger Consideration to be received in the Merger by the Company's
shareholders is fair to the Company's shareholders from a financial point
of view shall not have been withdrawn or modified.
(e) Tax Opinion. Parent shall have furnished to the Company the
opinion of Parent's counsel, in form and substance satisfactory to the
Company, and containing customary qualifications, limitations and
assumptions for opinions of this nature, to the effect that for Federal
income tax purposes:
(i) the Merger will be treated as a sale by the Company of
all its assets to Sub for the Merger Consideration and the assumption
of the Company's liabilities, followed by the distribution of the
Merger Consideration by the Company to the Company's shareholders in
complete liquidation of the Company;
(ii) as to whether gain or loss will be recognized by each
of the Company's shareholders measured by the difference between (x)
the amount of Merger Consideration received by such shareholder and
(y) such shareholder's adjusted basis in its Shares of the Company;
and
(iii) no portion of the Merger Consideration received by the
Company's shareholders will be treated as a distribution described in
Section 301 of the Code.
SECTION 7.03. Conditions to the Parent's and Sub's Obligations to
Effect the Merger. The obligations of Parent and Sub to effect the Merger
shall be subject to the satisfaction at or prior to the Closing Date of the
following additional conditions:
(a) Performance of Obligations; Representations and Warranties. The
Company shall have performed in all material respects each of its
obligations and complied in all material respects with each of its
agreements and covenants contained in this Agreement required to be
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performed or complied with on or prior to the Closing Date, each of the
representations and warranties of the Company contained in this Agreement
that is qualified by materiality shall be true and correct on and as of the
Closing Date as if made on and as of such date (other than to the extent
that any such representation and warranty, by its terms, is expressly
limited to a specific date, in which case such representation and warranty
shall be true and correct as of such date) and each of the representations
and warranties that is not so qualified shall be true in all material
respects on and as of the Closing Date as if made on and as of such date
(other than to the extent that any such representation and warranty is, by
its terms, expressly limited to a specific date, in which case such
representation and warranty shall be true and correct as of such date), in
each case except as contemplated or permitted by this Agreement.
(b) Absence of Certain Changes. Since the date of this Agreement,
there shall have occurred no material adverse change with respect to the
Company, other than changes relating to the Company's industry or the
economy in general and not specifically related to the Company and its
subsidiaries and changes described in Item 7.03(b) of the Company
Disclosure Letter. Each of Parent and Sub acknowledges that there may be
disruptions to the Company's business as a result of the announcement of
the Merger and any changes attributable thereto shall not constitute a
material adverse change.
(c) Officer's Certificate. The Company shall have furnished to Parent
a certificate, dated the Closing Date, signed by an appropriate officer of
the Company, certifying to the effect that the conditions set forth in this
Section 7.03, insofar as they relate to the Company, have been satisfied.
(d) Estoppel Certificates. To the extent the Company is entitled to
receive same under the terms of the agreements specified in Item 7.03(d) of
the Company Disclosure Letter, the Company shall have furnished to Parent
estoppel certificates addressed to Parent and Sub, dated not more than 30
days prior to the Closing Date from the persons listed in Item 7.03(d) of
the Company Disclosure Letter, in the form required under the terms of such
agreements to be delivered by each such person.
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(e) Consent. The Company shall have obtained consents to the Merger
from each of the persons described in Item 7.03(e) of the Company
Disclosure Letter.
(f) Other Documents. The Company shall have furnished to Parent at
the closing of such Merger such other customary documents, certificates or
instruments as Parent may reasonably request evidencing compliance by the
Company with the terms of this Agreement.
ARTICLE VIII
TERMINATION AND AMENDMENT
SECTION 8.01. Termination. This Agreement may be terminated at any
time prior to the Effective Time, whether before or after approval of the terms
of this Agreement by the Shareholders of the Company:
(a) by mutual written consent of Parent and the Company;
(b) by either Parent or the Company:
(i) if any Governmental Entity shall have issued an order,
decree or ruling or taken any other action permanently enjoining,
restraining or otherwise prohibiting the consummation of the Merger
and such order, decree or ruling or other action shall have become
final and nonappealable;
(ii) if, at the Shareholders Meeting (including any adjournment
thereof) (x) this Agreement and the Merger or (y) the Trust Amendment
shall fail to be adopted and approved by the requisite vote of the
shareholders of the Company;
(iii) if the Merger shall not have been consummated on or before
May 31, 1997, unless the failure to consummate the Merger is the result
of a material breach of this Agreement by the party seeking to
terminate this Agreement;
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(c) by Parent or Sub, if the Company shall have failed to perform in
any material respect any material obligation or to comply in any material
respect with any material agreement or covenant of the Company to be
performed or complied with by it under this Agreement, which failure cannot
be or has not been cured within 20 business days after the giving of
written notice thereof to the Company;
(d) by Parent or Sub, if there has been a breach of any of the
representations and warranties of the Company set forth in this Agreement
that are qualified as to materiality or there has been a material breach of
any such representations and warranties that are not so qualified, in each
case which breach cannot be or has not been cured within 20 business days
after the giving of written notice thereof to the Company;
(e) by Parent or Sub, if (i) the trustees of the Company or any
committee thereof shall have withdrawn or modified in a manner adverse to
Parent or Sub their approval or recommendation of the Merger or this
Agreement, or approved or recommended any Takeover Proposal or (ii) the
trustees of the Company or any committee thereof shall have resolved to do
any of the foregoing;
(f) by the Company in accordance with Section 5.02(b), provided it has
complied with all provisions thereof, including the notice provisions
therein, and that it complies with applicable requirements relating to the
payment (to the extent required to be paid upon such termination) of the
Expenses and the Termination Fee; or
(g) by the Company, if Sub or Parent shall have (i) failed to perform
in any material respect any material obligation or to comply in any
material respect with any material agreement or covenant of Sub or Parent
to be performed or complied with by it under this Agreement or (ii)
breached in any material respect any of their respective representations or
warranties contained in this Agreement, which failure or breach described
in clause (i) or (ii) above is incapable of being cured or has not been
cured within 20 business days after the giving of written notice thereof to
Parent or Sub, as applicable.
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SECTION 8.02. Effect of Termination. In the event of a termination of
this Agreement by either the Company or Parent as provided in Section 8.01,
this Agreement shall forthwith become void and there shall be no liability or
obligation on the part of Parent, Sub or the Company or their respective
officers or directors, except with respect to Section 3.22, Section 4.06, the
last sentence of Section 6.02, Section 6.05, this Section 8.02 and Article IX;
provided, however, that nothing herein shall relieve any party for liability
for any breach hereof.
SECTION 8.03. Amendment. This Agreement may be amended by the parties
hereto, by action taken or authorized by their respective trustees or board of
directors at any time before or after obtaining the Company Shareholder
Approvals (if required by law or the Declaration of Trust), but, after any such
approval, no amendment shall be made which by law or the Declaration of Trust
requires further approval by such Shareholders without obtaining such further
approval. This Agreement may not be amended except by an instrument in writing
signed on behalf of each of the parties hereto.
SECTION 8.04. Extension; Waiver. At any time prior to the Effective
Time, the parties hereto, by action taken or authorized by their respective
trustees or board of directors, may, to the extent legally allowed, (i) extend
the time for the performance of any of the obligations or other acts of the
other parties hereto, (ii) waive any inaccuracies in the representations and
warranties contained herein or in any document delivered pursuant hereto or
(iii) waive compliance with any of the agreements or conditions contained
herein. Any agreement on the part of a party hereto to any such extension or
waiver shall be valid only if set forth in a written instrument signed on
behalf of such party. The failure of any party to this Agreement to assert any
of its rights under this Agreement or otherwise shall not constitute a waiver
of those rights.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Nonsurvival of Representations, Warranties and
Agreements. None of the representations and warranties in this Agreement or in
any instrument delivered pursuant to this Agreement shall survive the Effective
Time. This Section 9.01 shall not limit any covenant or agreement of the
parties which by its terms contemplates performance after the Effective Time of
the Merger.
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SECTION 9.02. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally,
telecopied (which is confirmed), sent by overnight courier (providing proof of
delivery) or mailed by registered or certified mail (return receipt requested)
to the parties at the following addresses (or at such other address for a party
as shall be specified by like notice):
(a) if to Parent or Sub, to
CityFront Center, L.L.C.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy No.: 312/525-3823
with a copy to :
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, Ltd.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Telecopy No.: 312/207-6400
(b) if to the Company, to
The Chicago Dock and Canal Trust
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telecopy No.: 312/467-9647
with a copy to:
Sidley & Austin
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy No: 312/853-7036
and:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
500 Madison Street, #3700
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Telecopy No: 312/715-5155
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SECTION 9.03. Interpretation. When a reference is made in this
Agreement to an Article or a Section, such reference shall be to an Article or
a Section of this Agreement unless otherwise indicated. The table of contents
and headings contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this Agreement.
Whenever the words "include," "includes" or "including" are used in this
Agreement, they shall be deemed to be followed by the words "without
limitation." The phrase "made available" in this Agreement shall mean that the
information referred to has been made available if requested by the party to
whom such information is to be made available. As used in this Agreement, the
term "subsidiary" of any person means another person, an amount of the voting
securities, other voting ownership or voting partnership interests of which is
sufficient to elect at least a majority of its Board of Directors or other
governing body (or, if there are no such voting interests, 50% or more of the
equity interests of which) is owned directly or indirectly by such first
person. As used herein, "knowledge," as it relates to the Company, means, with
respect to any matter, that any executive officer or trustee of the Company has
actual knowledge of such matter. As used in this Agreement, "material adverse
change" or "material adverse effect" means, when used in connection with the
Company, any change or effect (or any development that, insofar as can
reasonably be foreseen is likely to result in any change or effect) that,
individually or in the aggregate with any such other changes or effects, is
materially adverse to the business, properties, assets, financial condition or
results of operations of the Company and its subsidiaries taken as a whole;
provided, however, that in determining whether a material adverse effect has
occurred there shall be excluded any effect on the Company and its subsidiaries
caused by, relating to or arising out of the actions taken or omitted to be
taken by the Company and its officers, trustees, employees, representatives and
agents in connection with the Company's pursuit, prior to the date hereof, of
strategic alternatives other than a business combination transaction with
Parent or any of its affiliates (including without limitation the execution of
the Prior Merger Agreement and the other documents executed in connection
therewith and any actions taken in connection therewith or in respect thereof),
in each case including without limitation all attorneys', investment bankers',
accountants' and other fees and expenses incurred in connection therewith or as
a result of any actions, suits or proceedings relating thereto.
SECTION 9.04. Counterparts. This Agreement may be executed in two or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when two or more counterparts have been signed by
each of the
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parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.
SECTION 9.05. Entire Agreement; No Third Party Beneficiaries. This
Agreement (including the Confidentiality Agreement and the other documents and
the instruments referred to herein) (a) constitute the entire agreement and
supersede all prior agreements and understandings, both written and oral, among
the parties with respect to the subject matter hereof, and (b) except as
provided in Sections 6.04, 6.06, and 6.09, are not intended to confer upon any
person other than the parties hereto any rights or remedies hereunder.
SECTION 9.06. Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of Illinois without regard
to any applicable conflicts of law.
SECTION 9.07. Publicity. Except as otherwise required by law or the
rules of the Nasdaq Stock Market, for so long as this Agreement is in effect,
neither the Company nor Parent shall, or shall permit any of its subsidiaries
to, issue or cause the publication of any press release or other public
announcement with respect to the transactions contemplated by this Agreement
without the consent of the other party, which consent shall not be unreasonably
withheld.
SECTION 9.08. Assignment. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties, except that Parent may assign, in its
sole discretion, any or all of its rights, interests and obligations hereunder
to any Affiliate of Parent, provided Parent guarantees the obligation of such
assignees through the Closing Date. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of and be enforceable by
the parties and their respective successors and assigns.
SECTION 9.09. Enforcement. The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached.
It is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in the United States District Court
for the Northern District of Illinois or in a Illinois state court located in
▇▇▇▇ County, Illinois, this being in addition to any other remedy to which they
are entitled at law or in equity. In addition, each of the parties hereto (i)
consents to submit such party to the
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personal jurisdiction of the United States District Court for the Northern
District of Illinois or any Illinois state court located in ▇▇▇▇ County,
Illinois in the event any dispute arises out of this Agreement or any of the
transactions contemplated hereby, (ii) agrees that such party will not attempt
to deny or defeat such personal jurisdiction by motion or other request for
leave from any such court, (iii) agrees that such party will not bring any
action relating to this Agreement or any of the transactions contemplated
hereby in any court other than the United States District Court for the
Northern District of Illinois or a Illinois state court located in ▇▇▇▇ County,
Illinois and (iv) waives any right to trial by jury with respect to any claim
or proceeding related to or arising out of this Agreement or any of the
transactions contemplated hereby.
Section 9.10. Exculpation of Shareholders, Trustees, Officers, Agents
and Beneficiaries. In furtherance of and not in limitation of Section 5.2 and
Article VIII of the Declaration of Trust, Parent, Sub and the Company expressly
acknowledge and agree that no shareholder, trustee, officer, agent or
beneficiary of the Company shall be or be held personally liable for or on
account of any demand, contract, debt, liability, tort, claim, damage, judgment
or decree arising out of, or preservation of, the property of the Company, the
conduct of the business of the Company, the transactions contemplated by this
Agreement or the Prior Merger Agreement and all actions taken in connection
therewith. Every act or thing that shall be done or omitted, and every power
exercised or obligation incurred by the trustees of the Company, or any of
them, in the administration of the Company or in connection with any business,
property or concerns of the Company, whether ostensibly in their own names or
in their trust capacity, shall be deemed to have been done, omitted, exercised
or incurred by them as trustees and not as individuals; and every person
contracting or dealing with the trustees or having any debt, claim or judgment
against them or any of them shall look only to the funds and property of the
Company for payment or satisfaction.
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IN WITNESS WHEREOF, Parent, Sub and the Company have caused this
Agreement to be signed by their respective officers thereunto duly authorized
as of the date first written above.
CITYFRONT CENTER, L.L.C.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Manager
CITYFRONT ACQUISITION TRUST
By: CityFront Center, L.L.C.
Its: Trustee
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Manager
THE CHICAGO DOCK & CANAL TRUST
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
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Subject as hereinafter provided, each of the undersigned hereby
unconditionally guarantees all of the obligations, including obligations of
payment and performance, of Parent and Sub under the foregoing Agreement and
Plan of Merger among CityFront Center, L.L.C., CityFront Acquisition Trust and
The Chicago Dock & Canal Trust dated December 27, 1996 (the "Agreement"). The
obligations of MCL Chicago Homes, Inc. ("MCL"), hereunder shall be unlimited as
to amount. The obligations of each of the undersigned (other than MCL)
pursuant to this guarantee shall be limited to their respective maximum equity
commitment amounts in Parent as set forth opposite each of their respective
names and each such person's obligations in respect of such guarantee shall be
reduced to the extent of any cash amounts actually contributed by such person
to the equity of Parent, provided however each such persons's obligations
hereunder shall be increased by any distributions or return of equity to such
persons or the application of such contribution capital for a purpose not
related to the performance of Parent's or Sub's obligations under the
Agreement. This guarantee may be signed in counterparts and each such person
shall be bound upon delivery to the Company of the counterpart containing such
signature.
MCL CHICAGO HOMES, INC.
BY /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
/s/ ▇▇▇▇ ▇▇▇▇
-------------------------------
▇▇▇▇ ▇▇▇▇ $15,000,000
/s/ Peer ▇▇▇▇▇▇▇▇
-------------------------------
Peer ▇▇▇▇▇▇▇▇ $10,000,000
/s/ ▇▇▇ ▇▇▇▇▇
-------------------------------
▇▇▇ ▇▇▇▇▇ $15,000,000
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇ $10,000,000
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇
-------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇ $10,000,000
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52
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇ $5,000,000
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ $5,000,000
▇▇▇▇ Partners L.L.C.
$5,000,000
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------
Its: President
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EXHIBIT I
CERTIFICATE OF AMENDMENT
OF
DECLARATION OF TRUST
OF
THE CHICAGO DOCK AND CANAL TRUST
The Chicago Dock and Canal Trust does hereby certify that the Amended
and Restated Declaration of Trust dated September 16, 1986 and recorded in the
office of the Recorder of Deeds of ▇▇▇▇ County, Illinois on September 16, 1986
as Doc. No. 86-418338, as amended by Certificate of Amendment of Declaration of
Trust dated September 19, 1989 and recorded in the office of the Recorder of
Deeds of ▇▇▇▇ County, Illinois on October 6, 1989 as Doc. No. 89-476310 and as
subsequently amended by Certificate of Amendment of Declaration of Trust dated
September 22, 1993 and recorded in the office of the Recorder of Deeds of ▇▇▇▇
County, Illinois on October 4, 1993 as Doc. No. 93-789669 is hereby further
amended as follows:
1. Numbered clause 3 of the second paragraph of Article III is hereby
amended and restated in its entirety as follows:
"3. to sell and convey, mortgage, pledge, lease as lessor, with leases
commencing immediately or in futuro and for terms extending beyond the term
of this trust, and otherwise dispose of all or any part of the property and
assets of this trust; provided, however, that no real property owned by the
trustees may be sold without the favorable vote or written approval of
two-thirds (2/3) of the duly qualified and acting trustees; and provided
further that (i) any sale, conveyance, lease or other disposition of all or
substantially all of the property and assets of this trust (otherwise than
by mortgage or pledge), (ii) any sale of all or any part of the property
and assets of this trust for any shares, bonds or other securities or
obligations of the purchaser, or any other consideration, as a step in
proceedings looking toward the merger, consolidation, dissolution or
termination of this trust or the carrying out of any plan of reorganization
or rearrangement of the business or properties conducted or held hereunder
or (iii) any merger of this trust into or with any Person (as defined in
Article XI) or any merger of any Person into or with this
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trust, may be made only upon the favorable vote or written approval of
two-thirds (2/3) of the duly qualified and acting trustees, and upon the
favorable vote of the holders of at least two-thirds (2/3) the outstanding
common shares of this trust (and upon any favorable vote required by the
provisions of any series of preferred shares which may at the time be
outstanding), or their proxies, voting at a meeting called for that
purpose, pursuant to notice as hereinafter provided."
2. The third sentence of Section 4.7 is hereby amended and restated in its
entirety to read as follows:
"The limitation on beneficial ownership of common shares set forth in
this Section 4.7 shall not apply to any (i) acquisition of common shares
pursuant to a cash tender offer made for all outstanding shares of the trust
(including securities convertible into shares) in conformity with applicable
federal and state securities laws where two-thirds (2/3) of the outstanding
shares (not including shares or securities convertible into shares held by the
tender offeror and/or any Affiliate or Associate (each as defined in Article XI
hereof) thereof) are duly tendered and accepted pursuant to the cash tender
offer, (ii) acquisition of common shares pursuant to a merger involving this
trust consummated in compliance with the provisions of Article XIII or (iii)
acquisition of common shares by an underwriter in a public offering of common
shares."
3. A new Article XIII is hereby added which shall read in its entirety
as follows:
"ARTICLE XIII
MERGERS INVOLVING THE TRUST
Sec. 13.1. Procedure for Merger. This trust may be merged into or with
any Person (as defined in Article XI) or any Person may be merged into or with
this trust, in each case in the following manner (such Person into or with
which this trust is to be merged or such Person to be merged into or with this
trust, as the case may be, being hereinafter designated as the "Merging
Person"):
The trustees of this trust shall, by resolution adopted by the
favorable vote or written approval of at least two-thirds (2/3) of the
duly qualified and acting trustees of this trust, and the board of
directors, trustees or other appropriate governing body of the
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Merging Person shall duly, approve a plan of merger setting forth:
1. The name of this trust and the name of the Merging Person proposing
to merge, and a statement identifying whether this trust or the Merging
Person is to be the surviving entity in such merger (such surviving entity
being hereinafter designated as the "Surviving Entity").
2. The terms and conditions of the proposed merger and the mode of
carrying the same into effect.
3. The manner and basis of converting the shares of this trust and the
shares or other equity interests of the Merging Person into shares,
obligations or other securities of the Surviving Entity, or into shares,
obligations or other securities of any Person which immediately before or
immediately after the merger is effected is the owner of all of the
outstanding voting securities of the Surviving Entity, or into cash or
other property, or into any combination of the foregoing.
4. A statement of any changes in the declaration of trust or articles
of incorporation of the Surviving Entity to be effected by such merger.
5. Such other provisions with respect to the proposed merger as are
deemed necessary or desirable by the trustees of this trust and the board
of directors, trustees or other appropriate governing body of the Merging
Person, including provisions, if any, under which the proposed merger may
be abandoned prior to the filing of articles of merger in accordance with
Section 13.4.
In connection with any merger effected pursuant to the provisions of this
trust, this trust shall comply with the provisions in this trust and the
merging Person shall comply with the applicable provisions of the laws of the
state under which it is organized or its declaration of trust, as the case may
be.
Sec. 13.2. Call of Shareholders' Meeting. The trustees of this trust,
upon approving such plan of merger, shall by resolution, direct that the plan
be submitted to a vote at a meeting of shareholders of this trust, which may be
either an annual or a special meeting. Written notice shall be given to each
shareholder of record entitled to vote at such meeting in accordance with the
provisions of this trust for the giving of
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notice of meetings of shareholders. Such notice, whether the meeting be an
annual or special meeting, shall include a copy or a summary of the plan of
merger.
Sec. 13.3. Approval by Shareholders. The plan of merger shall be
approved by the shareholders of this trust upon receiving the favorable vote of
the holders of at least two-thirds (2/3) of the outstanding common shares of
this trust (and upon receiving any favorable vote required by the provisions of
any series of preferred shares which may at the time be outstanding), or their
proxies, voting at a meeting called for that purpose, pursuant to notice as
herein provided.
Sec. 13.4. Filing of Articles of Merger. Upon any required approval of
the plan of merger upon behalf of this trust or the Merging Person, articles of
merger shall be executed by this trust and the Merging Person and filed in the
office of the Recorder of Deeds of ▇▇▇▇ County, Illinois. Such articles of
merger shall set forth:
(1) The plan of merger; and
(2) A statement that, with respect to each party to such plan of
merger whose shareholders shall be entitled to vote thereon, that such
plan of merger was duly adopted by the affirmative vote of the holders
of outstanding shares or other equity interests of such party having
not less than the minimum number of votes necessary to adopt such plan.
Sec. 13.5. Effective Date of Merger. The merger contemplated by the
plan of merger shall become effective upon the filing of an executed copy of
the articles of merger described in Section 13.4 relating to the merger in the
office of the Recorder of Deeds of ▇▇▇▇ County, Illinois, or on a later
specified date, not later than 30 days subsequent to such date of filing of
such articles of merger, as provided in such plan of merger.
Sec. 13.6. Effect of Merger. Whenever a merger involving this trust
has been effected in accordance with the provisions of this trust and a plan of
merger, (i) the several parties to such plan of merger shall be a single
entity, which shall be that entity designated in such plan of merger as the
Surviving Entity, (ii) the separate existence of all parties to such plan of
merger, except the Surviving Entity, shall cease, (iii) the Surviving Entity
shall thereupon and thereafter possess all the rights, privileges, immunities,
and franchises, as of a public or
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57
a private nature, of each of the merging parties and all property, real,
personal and mixed, and all debts due on whatever account, including
subscriptions to shares, and all other choses in action and all and every other
interest of or belonging to or due to each of the parties so merged shall be
taken and deemed to be transferred to and vested in such single Surviving
Entity without further act or deed and title to any real estate, or any
interest therein, vested in any of such parties shall not revert or be in any
way impaired by reason of such merger, (iv) such Surviving Entity shall
thenceforth be responsible and liable for all the liabilities and obligations
of each of the parties so merged and any claim existing or action or proceeding
pending by or against any of such parties may be prosecuted to judgment as if
such merger had not taken place or such Surviving Entity may be substituted in
its place and neither the rights of creditors nor any liens upon the property
of any of such parties so merged shall be impaired by such merger, (v) the
provisions of this trust shall be deemed to be amended to the extent, if any,
that changes in this trust are stated in such plan of merger and (vi) when such
merger has been effected, the shares or other equity interests of the entity to
be converted under the terms of such plan of merger shall cease to exist and
the holders of such shares or other equity interests so converted shall be
entitled only to the money, securities or other property into which those
shares or other equity interests shall have been converted in accordance with
such plan of merger."
IN WITNESS WHEREOF, said The Chicago Dock and Canal Trust has caused
this certificate to be executed by its President and its Secretary as of this
__ day of __________, 1997.
______________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President
Attest: __________________________
Secretary
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