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EXHIBIT D
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AGREEMENT AND PLAN OF MERGER
AMONG
USRP GP, LLC
US RETAIL PARTNERS LIMITED PARTNERSHIP,
IRST WASHINGTON REALTY TRUST, INC.,
AND
FIRST WASHINGTON REALTY LIMITED PARTNERSHIP
DATED AS OF SEPTEMBER 27, 2000
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TABLE OF CONTENTS
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RECITALS.................................................... 1
ARTICLE I THE MERGERS...................................... 2
1.1 The Company Merger............................... 2
1.2 The Partnership Merger........................... 3
1.3 Closing.......................................... 3
1.4 Effective Time................................... 3
1.5 Effect of the Company Merger on the
Organizational Documents of the Company............. 3
1.6 Effect of the Partnership Merger on Agreement of
Limited Partnership................................. 3
1.7 Effect of Mergers on Management.................. 3
1.8 Liquidating Distribution......................... 3
ARTICLE II EFFECT OF THE COMPANY MERGER ON THE STOCK AND
MEMBERSHIP INTERESTS OF THE CONSTITUENT ENTITIES; PAYMENT
FOR SHARES................................................ 4
2.1 Effect on Equity Interests....................... 4
2.2 Payment for Shares............................... 5
2.3 Company Preferred Stock.......................... 6
2.4 No Dissenters' Rights............................ 6
ARTICLE III EFFECT OF THE PARTNERSHIP MERGER ON THE
PARTNERSHIP INTERESTS OF THE CONSTITUENT PARTNERSHIPS;
PAYMENT FOR INTERESTS....................................... 6
3.1 Effect on Partnership Interests.................. 6
3.2 Payment of Exiting Partner Consideration......... 7
3.3 Appraisal Rights................................. 8
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF MERGERCO AND
MERGERLP.................................................. 8
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE COMPANY.... 8
ARTICLE VI CONDUCT OF BUSINESS PENDING THE MERGERS......... 8
ARTICLE VII ADDITIONAL AGREEMENTS.......................... 9
7.1 Stockholders Meeting............................. 9
7.2 Partner Approval................................. 10
7.3 Officers' and Directors' Indemnification......... 10
7.4 Status of Employees.............................. 11
ARTICLE VIII CONDITIONS TO THE MERGERS..................... 12
8.1 Conditions to the Obligations of Each Party to
Effect the Mergers.................................. 12
8.2 Conditions to Obligations of MergerCo and
MergerLP............................................ 12
8.3 Conditions to Obligations of the Company and
FWOP................................................ 14
ARTICLE IX TERMINATION..................................... 14
9.1 Termination...................................... 14
ARTICLE X GENERAL PROVISIONS............................... 14
10.1 Defined Terms................................... 14
10.2 Non-Survival of Representations, Warranties,
Covenants and Agreements............................ 14
10.3 Miscellaneous Provisions........................ 14
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EXHIBITS
Exhibit 1.6 Form of Surviving Partnership Agreement
Exhibit 2.1(c) Balance of Assumed Loans on Merger Agreement Properties
Exhibit 7.4 Form of Release
Exhibit 8.2(f) Employee Expenses
Exhibit 8.2(i) Transaction Expenses
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GLOSSARY OF DEFINED TERMS
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"Agreement"................................................. 1
"Appraisal Rights Provisions"............................... 8
"Articles of Company Merger"................................ 3
"Articles of Partnership Merger"............................ 3
"Asset Sale"................................................ 1
"Certificate of Company Merger"............................. 3
"Certificate of Partnership Merger"......................... 3
"Certificates".............................................. 5
"Claim"..................................................... 10
"Closing"................................................... 3
"Closing Date".............................................. 3
"Code"...................................................... 3
"Common Stock Consideration"................................ 4
"Common Unit"............................................... 6
"Company"................................................... 1
"Company Board"............................................. 1
"Company Bylaws"............................................ 10
"Company Charter"........................................... 10
"Company Common Stock"...................................... 1
"Company Letter of Transmittal"............................. 5
"Company Merger Consideration".............................. 5
"Company Merger"............................................ 1
"Company Options"........................................... 12
"Company Preferred Stock"................................... 1
"Consent Solicitation Materials"............................ 10
"Continuing Partner"........................................ 7
"Continuing Partner Consideration".......................... 7
"D&O Insurance"............................................. 11
"Dissenting Units".......................................... 8
"DLLCA"..................................................... 3
"DRULPA".................................................... 3
"Effective Time"............................................ 3
"Exchange Agent"............................................ 5
"Excluded Liabilities"...................................... 13
"Exiting Partner"........................................... 7
"Exiting Partner Cash Consideration"........................ 6
"FWM"....................................................... 12
"FWOP"...................................................... 1
"G&C"....................................................... 13
"General Partner"........................................... 1
"Indemnified Parties"....................................... 10
"Limited Partnership Interest Purchase Agreement"........... 1
"Master Agreement".......................................... 2
"MergerCo".................................................. 1
"MergerLP Common Unit"...................................... 7
"MergerLP Partnership Agreement"............................ 3
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PAGE
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"MergerLP Preferred Unit"................................... 1
"MergerLP".................................................. 1
"Mergers"................................................... 1
"MGCL"...................................................... 1
"MRULPA".................................................... 1
"Partner Approval".......................................... 10
"Partnership Liquidating Distribution"...................... 2
"Partnership Merger Consideration".......................... 7
"Partnership Merger"........................................ 1
"Plan of Liquidation"....................................... 1
"Preferred Stock Consideration"............................. 4
"Proxy Statement"........................................... 9
"Real Estate Purchase Agreement"............................ 1
"Recapitalization".......................................... 2
"Sale of the Limited Partnership Interest".................. 2
"SDAT"...................................................... 3
"Securities Act"............................................ 7
"Series B Preferred Unit Cash Consideration"................ 6
"Series B Preferred Unit"................................... 6
"Special Committee"......................................... 1
"Special Meeting"........................................... 9
"Stock Exchange Fund"....................................... 5
"Surviving Company"......................................... 3
"Transaction Documents"..................................... 2
"Transactions".............................................. 1
"Unit Exchange Fund"........................................ 7
"Units"..................................................... 6
"USRP I".................................................... 1
"USRP LP"................................................... 1
"Voting Agreement Stockholders"............................. 2
"Voting Agreement".......................................... 2
"Woodmoor Contribution Agreement"........................... 13
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (the "Agreement"), dated as of September 27,
2000, by and among USRP GP, LLC, a Delaware limited liability company
("MergerCo"), US Retail Partners Limited Partnership, a Delaware limited
partnership ("MergerLP"), First Washington Realty Trust, Inc., a Maryland
corporation (the "Company"), and First Washington Realty Limited Partnership, a
Maryland limited partnership ("FWOP").
RECITALS
WHEREAS, the Board of Directors of the Company (the "Company Board") and
the members of MergerCo have approved the merger of the Company with and into
MergerCo (the "Company Merger") in accordance with Section 3-105 of the Maryland
General Corporation Law (the "MGCL") and, upon the terms and subject to the
conditions set forth in this Agreement, when the Company Merger becomes
effective (i) each share of common stock, par value $.01 per share, of the
Company (the "Company Common Stock") issued and outstanding immediately prior to
the Effective Time (as hereinafter defined) will be converted, subject to the
terms and conditions hereof, into the right to receive the Common Stock
Consideration (as defined herein), and (ii) each share of Series A Cumulative
Participating Convertible Preferred Stock, par value $.01 per share, of the
Company (the "Company Preferred Stock") issued and outstanding immediately prior
to the Effective Time will be converted, subject to the terms and conditions
hereof, into the right to receive the Preferred Stock Consideration (as defined
herein);
WHEREAS, the Company Board, based upon the recommendation of a duly
appointed special committee thereof of independent directors (the "Special
Committee"), has (i) adopted a resolution declaring that the liquidation of the
Company is advisable and adopted a plan of liquidation (the "Plan of
Liquidation"), (ii) adopted a resolution declaring that the Mergers (as defined
herein), the Asset Sale (as defined herein), the Sale of the Limited Partnership
Interest (as defined herein) (the Mergers, the Asset Sale and the Sale of the
Limited Partnership Interest and the other transactions contemplated or required
by the Master Agreement (as defined herein) are collectively referred to herein
as the "Transactions") are advisable on substantially the terms and conditions
set forth herein, and in the other Transaction Documents (as defined herein),
and (iii) directed that the Plan of Liquidation and the Transactions be
submitted for consideration by the Company's stockholders at a special meeting
of the stockholders;
WHEREAS, the Company as the sole general partner of FWOP (the "General
Partner"), has deemed it advisable and in the best interests of its limited
partners that FWOP merge with and into MergerLP (the "Partnership Merger" and
together with the Company Merger, the "Mergers") in accordance with Section
10-208 of the Maryland Revised Uniform Limited Partnership Act (the "MRULPA")
and, upon the terms and subject to the conditions set forth in this Agreement,
when the Partnership Merger becomes effective, the Continuing Partners (as
defined herein) shall receive preferred units in MergerLP (each a "MergerLP
Preferred Unit") and the Exiting Partners (as defined herein) shall receive cash
for their Units (as defined herein);
WHEREAS, the General Partner has, in light of and subject to the terms and
conditions set forth herein, (i) determined that the Partnership Merger and the
other transactions contemplated or required by this Agreement are advisable on
substantially the terms and conditions set forth herein, and (ii) directed that
the Partnership Merger and such other transactions be submitted for
consideration and approval by the holders of Units entitled to vote thereon;
WHEREAS, simultaneously with the execution of this Agreement (a) the
Company, FWOP, and certain of their respective subsidiaries will enter into a
certain Real Estate Purchase Agreement with USRP I, LLC ("USRP I") (the "Real
Estate Purchase Agreement"), pursuant to which USRP I will purchase, and the
Company and FWOP will sell, certain real estate assets and equity interests
specified therein (the "Asset Sale"), (b) the Company and USRP LP, LLC, an
affiliate of MergerCo ("USRP LP"), will enter into a certain Limited Partnership
Interest Purchase and Sale Agreement (the "Limited Partnership Interest Purchase
Agreement") and (c) MergerCo, MergerLP, USRP I, U.S. Retail Partners, LLC, USRP
LP, the
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Company, FWOP and certain direct and indirect subsidiaries of the Company and
FWOP will enter into a certain Master Agreement (the "Master Agreement" and,
together with this Agreement, the Limited Partnership Interest Purchase
Agreement and the Real Estate Purchase Agreement, the "Transaction Documents"),
each of which is subject to the terms and conditions set forth therein;
WHEREAS, as a condition to the Mergers and, subject to the approval of the
limited partners of FWOP, FWOP will recapitalize the Company's general
partnership interest in FWOP into a 1% general partnership interest and a
limited partnership interest classified as the Series A Common Units that
represents the Company's then-remaining interest in FWOP (the
"Recapitalization") immediately after the consummation of the Asset Sale;
WHEREAS, as a further condition to the Mergers, immediately following the
consummation of the Asset Sale but prior to the Effective Time, the Company and
FWOP will cause the conditions set forth in Section 8.2(e) through (k) hereof to
be satisfied or waived;
WHEREAS, as a further condition to the Mergers, FWOP will distribute to its
partners in accordance with the terms of Section 13.2 of the FWOP Partnership
Agreement (as defined herein), the net proceeds of the Asset Sale, after certain
adjustments are made thereto, promptly after the conditions set forth in Section
8.2(e) through (k) hereof have been satisfied or waived (the "Partnership
Liquidating Distribution") and immediately thereafter (but prior to the
Effective Time), the Company will distribute, or irrevocably resolve to
distribute, a liquidating distribution to its stockholders in accordance with
the Company Charter (the "Company Liquidating Distribution");
WHEREAS, after the Partnership Liquidating Distribution is made and after
all other conditions precedent to the Mergers have been satisfied, the Company
will sell and assign (the "Sale of the Limited Partnership Interest") all of its
right, title and interest in all of the limited partnership interests held by it
to USRP LP, subject to the terms and conditions of the Limited Partnership
Interest Purchase Agreement;
WHEREAS, the Company and MergerCo intend that, for Federal income tax
purposes, the Mergers, the Asset Sale and the Sale of Limited Partnership
Interest will be treated as a taxable sale of assets by the Company, in exchange
for cash and the assumption of the liabilities and a liquidating distribution of
such cash to the stockholders of the Company and the partners of FWOP;
WHEREAS, FWOP and MergerLP intend that, for Federal income tax purposes,
the Partnership Merger will be treated as (i) a taxable sale by the Exiting
Partners of their interests in FWOP to MergerCo in exchange for cash and (ii) a
tax-free contribution by the Continuing Partners of their interests in FWOP to
MergerLP in exchange for the MergerLP Preferred Units;
WHEREAS, as a condition to the willingness of MergerCo to enter into this
Agreement, certain stockholders of the Company (the "Voting Agreement
Stockholders") have entered into a voting agreement with MergerCo (the "Voting
Agreement"), pursuant to which each Voting Agreement Stockholder has agreed,
among other things, to vote certain of his shares of Company Common Stock in
favor of the approval of the Transactions upon the terms and subject to the
conditions set forth therein; and
WHEREAS, MergerCo, MergerLP, the Company, and FWOP desire to make certain
representations, warranties, covenants and agreements in connection with the
Transactions, and also to prescribe various conditions to the Transactions.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein, MergerCo, MergerLP, the Company and FWOP hereby agree as follows:
ARTICLE 1
THE MERGERS
1.1 The Company Merger. Subject to the terms and conditions of this
Agreement, at the Effective Time, the Company and MergerCo shall consummate the
Company Merger pursuant to which (a) the Company shall be merged with and into
MergerCo, (b) MergerCo shall be the successor or surviving
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company in the Company Merger (sometimes hereinafter referred to as the
"Surviving Company") and shall continue to be governed by the laws of the State
of Delaware, and (c) the separate corporate existence of the Company shall
cease. The Company Merger shall have the effects specified in Section 3-114 of
the MGCL and Section 18-209 of the Delaware Limited Liability Company Act (the
"DLLCA").
1.2 The Partnership Merger. Subject to the terms and conditions of this
Agreement, at the Effective Time, FWOP and MergerLP shall consummate the
Partnership Merger pursuant to which (a) FWOP shall be merged with and into
MergerLP, (b) MergerLP shall be the successor or surviving partnership in the
Partnership Merger and shall continue to be governed by the laws of the State of
Delaware, and (c) the separate existence of FWOP shall cease. The Partnership
Merger shall have the effects specified in Section 10-208 of the MRULPA and
Section 17-211 of the Delaware Revised Uniform Limited Partnership Act (the
"DRULPA").
1.3 Closing. The closing of the Mergers (the "Closing") shall occur as
promptly as practicable (but in no event earlier than January 12, 2001) after
all of the conditions set forth in Article VIII shall have been satisfied or, if
permissible, waived by the party entitled to the benefit of the same, and,
subject to the foregoing, shall take place at such time and on a date to be
specified by the parties (the "Closing Date"). The Closing shall take place at
the offices of ▇▇▇▇▇▇▇, Procter & ▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, unless another place is agreed to by the parties hereto.
1.4 Effective Time. As promptly as practicable after all of the conditions
set forth in Article VIII shall have been satisfied or, if permissible, waived
by the party entitled to the benefit of the same, (i) MergerCo and the Company
shall duly execute and file (x) articles of merger (the "Articles of Company
Merger") with the State Department of Assessments and Taxation of the State of
Maryland (the "SDAT") in accordance with Section 3-109 of the MGCL and (y) a
certificate of merger (the "Certificate of Company Merger") with the Secretary
of State of the State of Delaware in accordance with Section 18-209(c) of the
DLLCA and (ii) and FWOP and MergerLP shall duly execute and file (x) articles of
merger (the "Articles of Partnership Merger") with the SDAT in accordance with
Section 10-208 of the MRULPA and (y) a certificate of merger (the "Certificate
of Partnership Merger") with the Secretary of State of the State of Delaware in
accordance with Section 17-211(c) of the DRULPA. The Mergers shall become
effective (the "Effective Time") at such time as (x) the Articles of Company
Merger and the Articles of Partnership Merger are accepted for record by SDAT
and (y) the Certificate of Company Merger and the Certificate of Partnership
Merger are accepted for record by the Secretary of State of the State of
Delaware or such later time as MergerCo and the Company shall specify therein.
1.5 Effect of the Company Merger on the Organizational Documents of the
Company. The operating agreement of MergerCo, as in effect immediately prior to
the Effective Time, shall be the operating agreement of the Surviving Company
following the Effective Time until further amended in accordance with the DLLCA,
and the Charter and Bylaws of the Company in effect prior to the Effective Time
shall not govern the business or affairs of the Surviving Company.
1.6 Effect of the Partnership Merger on Agreement of Limited
Partnership. In connection with the Closing, the Agreement of Limited
Partnership of MergerLP as in effect immediately prior to the Effective Time
(the "MergerLP Partnership Agreement") will be amended to make certain changes
in order to reflect the Partnership Merger and the other Transactions. The
MergerLP Partnership Agreement shall be amended and restated to contain
substantially the terms set forth in Exhibit 1.6 hereto and shall govern the
business and affairs of MergerLP following the Partnership Merger.
1.7 Effect of Mergers on Management. The manager of MergerCo immediately
prior to the Effective Time shall be the initial manager of the Surviving
Company and the officers of MergerCo immediately prior to the Effective Time
shall be the initial officers of the Surviving Company, each to hold office in
accordance with the terms of the operating agreement of the Surviving Company in
effect at the Effective Time.
1.8 Liquidating Distribution. The Company hereby confirms that the
Transactions shall constitute its plan of liquidation within the meaning of
Section 562(b)(1) of the Internal Revenue Code of 1986, as amended (the "Code").
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1.9 Alternative Structures. Prior to the consummation of the Mergers,
MergerLP shall have the right, at its election, to restructure the Partnership
Merger so that, rather than merging directly into MergerLP, FWOP would merge
into a limited liability company that is wholly owned by MergerLP; provided that
any such restructuring would not have an adverse financial effect on the
stockholders of the Company or the limited partners of FWOP. In the event Merger
LP makes such an election, the parties agree to make appropriate conforming
amendments to the Transaction Documents and any related agreements.
ARTICLE II
EFFECT OF THE COMPANY MERGER ON THE STOCK
AND MEMBERSHIP INTERESTS
OF THE CONSTITUENT ENTITIES; PAYMENT FOR SHARES
2.1 Effect on Equity Interests. As of the Effective Time, automatically by
virtue of the Company Merger and without any action on the part of any
stockholder of the Company or any party hereto:
(a) Each membership interest of MergerCo issued and outstanding immediately
prior to the Effective Time shall remain outstanding following the Effective
Time.
(b) Each share of Company Common Stock or Company Preferred Stock that is
owned by the Company, or by any wholly owned Company Subsidiary of the Company
shall automatically be canceled and retired and shall cease to exist, and no
cash or other consideration shall be delivered or deliverable in exchange
therefor.
(c) Each share of Company Common Stock issued and outstanding immediately
prior to the Effective Time (other than shares owned by the Company or any of
its wholly owned Subsidiaries) shall be converted automatically into the right
to receive an amount obtained by dividing (i) the sum of (A) $83,166,740 and (B)
the difference (it being understood that if the amount described in the
following clause (1) is less than the amount described in the following clause
(2), then such difference shall be subtracted from, rather than added to, the
amount set forth in the preceding clause (A)), if any, between (1) the aggregate
amount of the outstanding balance (including principal and any accrued and
unpaid interest) of the Assumed Loans for the Merger Agreement Properties (as
such terms are defined in the Real Estate Purchase Agreement) set forth on
Exhibit 2.1(c), and (2) the aggregate amount of the outstanding balance
(including principal and any accrued and unpaid interest) of the Assumed Loans
for the Merger Agreement Properties on the Closing Date, excluding for this
purpose the $3,000,000 loan on the Woodmoor property referred to in Section
8.2(n), by (ii) the sum of (A) the number of shares of Company Common Stock
issued and outstanding immediately prior to the Effective Time and (B) the
number of additional shares of Company Common Stock that would be outstanding
immediately prior to the Effective Time if all holders (other than the Company)
of Company Preferred Stock, Common Units or Preferred Units had converted their
Company Preferred Stock (including any accrued but unpaid dividends thereon),
Common Units or Preferred Units (including any accrued but unpaid distributions
thereon), as the case may be, into Company Common Stock immediately prior to the
Effective Time and rounded to the nearest one hundredth cent (the "Common Stock
Consideration"), which Common Stock Consideration shall be payable to the holder
thereof in cash, without any interest thereon.
(d) All shares of Company Common Stock, when converted as provided in
Section 2.1(c), shall no longer be outstanding and shall automatically cease to
exist, and each Certificate (as hereinafter defined) previously representing
such shares shall thereafter represent only the right to receive the Common
Stock Consideration. The holders of Certificates previously representing shares
of Company Common Stock outstanding immediately prior to the Effective Time
shall cease to have any rights with respect to the Company Common Stock except
as otherwise provided herein or by law.
(e) Each share of Company Preferred Stock issued and outstanding
immediately prior to the Effective Time, other than those shares referred to in
Section 2.1(b), shall be converted automatically into the right to receive an
amount equal to the sum of (A) the product of 1.282051282051 and the Common
Stock Consideration and (B) any accrued and unpaid dividends on such share of
Company Preferred Stock and rounded to the nearest one hundredth cent (the
"Preferred Stock Consideration" and together with the
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Common Stock Consideration, the "Company Merger Consideration"), which Preferred
Stock Consideration shall be payable to the holder thereof in cash, without any
interest thereon.
(f) All shares of Company Preferred Stock, when converted as provided in
Section 2.1(e), shall no longer be outstanding and shall automatically cease to
exist, and each Certificate (as hereinafter defined) previously representing
such shares shall thereafter represent only the right to receive the Preferred
Stock Consideration in accordance with Section 2.1(e). The holders of
Certificates previously representing shares of Company Preferred Stock
outstanding immediately prior to the Effective Time shall cease to have any
rights with respect to the Company Preferred Stock except as otherwise provided
herein or by law.
2.2 Payment for Shares.
(a) From and after the Effective Time, the Company's transfer agent,
American Stock Transfer & Trust Company, shall act as exchange agent (the
"Exchange Agent"). Prior to the Effective Time, MergerCo shall deposit, or take
all steps necessary to cause to be deposited, with the Exchange Agent the
aggregate Company Merger Consideration (such aggregate Company Merger
Consideration being hereinafter referred to as the "Stock Exchange Fund") that
holders of shares of Company Common Stock and shares of Company Preferred Stock
shall be entitled to receive pursuant to Section 2.1.
(b) Promptly, and in any event within three business days after the
Effective Time, MergerCo shall cause the Exchange Agent to mail to each holder
of record of a certificate(s) that immediately prior to the Effective Time
represented shares of Company Common Stock or Company Preferred Stock
("Certificates") (i) a letter of transmittal (the "Company Letter of
Transmittal") which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon delivery of the
Certificates duly endorsed to the Exchange Agent and in such form and with such
other provisions as MergerCo may reasonably specify and (ii) instructions for
use in effecting the surrender of the Certificates and receiving the aggregate
Common Stock Consideration or Preferred Stock Consideration, as applicable, in
respect thereof. Upon surrender of a Certificate for cancellation to the
Exchange Agent together with such Company Letter of Transmittal, duly executed
and completed in accordance with the instructions thereto, the holder of such
Certificate shall be entitled to receive in exchange therefor a check
representing the amount of the aggregate Common Stock Consideration or Preferred
Stock Consideration, as applicable, to which such holder shall be entitled,
after giving effect to any required withholding tax, and the Certificate so
surrendered shall be canceled forthwith. In the event of a transfer of ownership
of Company Common Stock or Company Preferred Stock which is not registered in
the transfer records of the Company, checks for the aggregate Common Stock
Consideration or Preferred Stock Consideration, as applicable, to which such
holder shall be entitled may be issued and paid to such a transferee if the
Certificate representing shares of such Company Common Stock or Company
Preferred Stock is presented to the Exchange Agent, accompanied by all documents
required to evidence and effect such transfer and by evidence reasonably
acceptable to the Exchange Agent that any applicable stock transfer taxes have
been paid. Immediately following the Effective Time, the Exchange Agent shall
make appropriate arrangements for the immediate payment of the applicable Common
Stock Consideration or Preferred Stock Consideration to the beneficial owners of
any shares of Company Common Stock or Company Preferred Stock that are held in
book-entry or other electronic form and for which at the Effective Time there is
no Certificate representing the ownership thereof.
(c) At and after the Effective Time, there shall be no transfers on the
stock transfer books of the Company of any shares of Company Common Stock or
Company Preferred Stock which were outstanding immediately prior to the
Effective Time. If, after the Effective Time, Certificates are presented to the
Surviving Company, they shall be canceled and exchanged for the aggregate Common
Stock Consideration or Preferred Stock Consideration, as applicable, in respect
thereof in accordance with this Section 2.2.
(d) Any portion of the Stock Exchange Fund (including the proceeds of any
investments thereof) that remains unclaimed by the former holders of Company
Common Stock or Company Preferred Stock for 180 days after the Effective Time
shall be delivered to the Surviving Company. Any former holder of Company Common
Stock or Company Preferred Stock who has not theretofore complied with this
Section 2.2 shall thereafter look only to the Surviving Company for payment of
any Common Stock Consideration, or Preferred Stock Consideration, as applicable,
as determined pursuant to this Agreement to
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be owing to such Exiting Partner, without any interest thereon. None of
MergerCo, the Company, the Exchange Agent or any other Person shall be liable to
any former holder of shares of Company Common Stock or Company Preferred Stock
for any amount properly delivered to a public official pursuant to applicable
abandoned property, escheat or similar laws. In the event any Certificate shall
have been lost, stolen or destroyed, upon the making of an affidavit of that
fact by the Person claiming such Certificate to be lost, stolen or destroyed
and, if required by the Surviving Company, the posting by such Person of a bond
in such reasonable amount as the Surviving Company may direct as indemnity
against any claim that may be made against it with respect to such Certificate,
the Exchange Agent or the Surviving Company will issue and pay in exchange for
such lost, stolen or destroyed Certificate the Common Stock Consideration or
Preferred Stock Consideration, as applicable.
2.3 Company Preferred Stock. In accordance with the terms of the Company
Charter, each holder of Company Preferred Stock shall receive in connection with
the Company Liquidating Distribution an amount per share of Company Preferred
Stock, in the aggregate, equal to what such holder would have received had such
holder converted all of its shares of Company Preferred Stock into Company
Common Stock immediately prior to the consummation of the Transactions. In
furtherance thereof, each holder of Company Preferred Stock shall receive from
the Company (in addition to the Preferred Stock Consideration payable to such
holder by MergerCo pursuant to Section 2.1(e)), in connection with the Company
Liquidating Distribution, an amount per share of Company Preferred Stock equal
to what each holder would have received had such holder converted its shares of
Company Preferred Stock into Company Common Stock immediately prior to the
Company Liquidating Distribution.
2.4 No Dissenters' Rights. No dissenters' or appraisal rights shall be
available to the holders of Company Common Stock or Company Preferred Stock with
respect to the Transactions.
ARTICLE III
EFFECT OF THE PARTNERSHIP MERGER ON THE PARTNERSHIP INTERESTS
OF THE CONSTITUENT PARTNERSHIPS; PAYMENT FOR INTERESTS
3.1 Effect on Partnership Interests. As of the Effective Time,
automatically by virtue of the Partnership Merger and without any action on the
part of any holder of Units in FWOP or any party hereto:
(a) The general partnership interest in FWOP shall be converted into
the general partnership interest in MergerLP, entitling the holder thereof
to the same economic interest in MergerLP as it held in FWOP prior to the
Effective Time.
(b) The limited partnership interests in FWOP held by Exiting Partners
(as defined herein) immediately prior to the Effective Time shall be
converted into the right to receive: (i) for each common unit of limited
partnership interest in FWOP (each, a "Common Unit"), an amount equal to
the Common Stock Consideration payable to the holder thereof in cash,
without any interest thereon (the "Common Unit Cash Consideration") and
(ii) for each Series B Preferred Unit in FWOP (each, a "Series B Preferred
Unit", and together with the Common Units, the "Units"), an amount equal to
the Preferred Stock Consideration (the "Series B Preferred Unit Cash
Consideration", and together with the Common Unit Cash Consideration and
the Series A Preferred Unit Cash Consideration, the "Exiting Partner Cash
Consideration"), which Exiting Partner Cash Consideration shall be payable
to the holder thereof in cash, without any interest thereon. All Units so
converted shall no longer be outstanding and shall automatically cease to
exist, and each Unit shall thereafter represent only the right to receive
the applicable amount of cash specified above.
(c) The limited partnership interests in FWOP held by Continuing
Partners (as defined herein) immediately prior to the Effective Time shall
be converted automatically into: (i) for each Common Unit, one MergerLP
Preferred Unit with an initial capital account in MergerLP equal to the
Common Unit Cash Consideration, and (ii) for each Series B Preferred Unit,
1.282051282051 MergerLP Preferred Units with an initial capital account in
MergerLP equal to the Series B Preferred Unit Cash Consideration. All Units
so converted shall no longer be outstanding and shall automatically cease
to
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exist, and each Unit shall thereafter represent only the right to receive
that number of MergerLP Preferred Units specified above (the MergerLP
Preferred Units issuable in respect of any given Unit pursuant to this
Section 3.1(c) are referred to herein as, the "Continuing Partner
Consideration" and together with the Exiting Partner Consideration, the
"Partnership Merger Consideration").
(d) Each Unit, if any, reclassified after the date of this Agreement
as a "Series A Common Unit" in the Recapitalization shall be converted
automatically into one common unit of MergerLP (each, a "MergerLP Common
Unit").
(e) As used in this Section 3.1, the term "Exiting Partner" means any
holder of Units that elects, or is deemed to have elected, to receive cash
in exchange for its Units, in connection with the Partnership Merger, by
delivering to FWOP written notice of such election no later than twenty
(20) Business Days from the date that the Consent Solicitation Materials
(as defined herein) are sent to such holder, and the term "Continuing
Partner" means any holder of Units that elects to receive MergerLP
Preferred Units in exchange for its Units, in connection with the
Partnership Merger, by delivering to FWOP (y) written notice of such
election and (z) an investor questionnaire that confirms certain matters
with respect to such holder, including its status as an "accredited
investor" under Rule 501 promulgated under the Securities Act of 1933, as
amended (the "Securities Act") no later than twenty (20) Business Days from
the date that the Consent Solicitation Materials are sent to such holder.
Each holder that fails to deliver a timely election notice and/or an
investor questionnaire that confirms the matters set forth above within
such twenty (20) Business Day period shall be deemed to be an Exiting
Partner.
3.2 Payment of Exiting Partner Consideration.
(a) Prior to the Effective Time, MergerLP shall deposit, or take all steps
necessary to cause to be deposited, with the Exchange Agent the aggregate
Exiting Partner Consideration for all Units held by Exiting Partners (such
Exiting Partner Consideration being hereinafter referred to as, the "Unit
Exchange Fund") that Exiting Partners shall be entitled to receive pursuant to
Section 3.1(b). FWOP shall deliver to the Exchange Agent a record of all Units
held by Exiting Partners, specifying the actual number of Common Units and
Series B Preferred Units held by each such holder and the address shown on
FWOP's books and records for each such holder.
(b) Promptly, and in any event within three business days after the
Effective Time, MergerLP shall cause the Exchange Agent to mail to each Exiting
Partner a letter of transmittal (the "Partnership Letter of Transmittal") with
instructions for receiving the Common Unit Cash Consideration or the Series B
Preferred Unit Cash Consideration, as applicable, in respect of each Unit held
by such Exiting Partner. Upon returning a Partnership Letter of Transmittal,
duly executed and completed in accordance with the instructions thereto, the
holder of such Units shall be entitled to receive a check representing the
amount of the Common Unit Cash Consideration and/or Series B Preferred Unit Cash
Consideration, as applicable, to which such holder shall be entitled, after
giving effect to any required withholding tax. In the event of a transfer of
ownership of a Unit which is not reflected in the record as delivered by FWOP to
the Exchange Agent, checks for the aggregate Common Unit Cash Consideration or
the Series B Preferred Unit Cash Consideration, as applicable, to which such
holder shall be entitled may be issued and paid to such transferee if all
documentation reasonably required by the Exchange Agent to evidence and effect
such transfer and payment of any applicable transfer taxes has been delivered to
the Exchange Agent.
(c) Any portion of the Unit Exchange Fund (including the proceeds of any
investments thereof) that remains unclaimed by the Exiting Partners for 180 days
after the Effective Time shall be delivered to MergerLP. Any Exiting Partner who
has not theretofore complied with this Section 3.2 shall thereafter look only to
MergerLP for payment of any Common Unit Cash Consideration or the Series B
Preferred Unit Cash Consideration, as applicable, as determined pursuant to this
Agreement to be owing to such Exiting Partner, without any interest thereon.
None of MergerCo, MergerLP, FWOP, the Exchange Agent or any other Person shall
be liable to any Exiting Partner for any amount properly delivered to a public
official pursuant to applicable abandoned property, escheat or similar laws.
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3.3 Appraisal Rights.
(a) Notwithstanding anything in this Agreement to the contrary, any Units
which are issued and outstanding immediately prior to the Effective Time and
which are held by the limited partners of FWOP who have filed with FWOP no later
than twenty (20) Business Days from the date that the Consent Solicitation
Materials (as defined herein) are sent to such holder, written objections to the
Plan of Liquidation, and who have not voted such Units in favor of the Plan of
Liquidation and the Transactions ("Dissenting Units"), will not be converted at
the Effective Time as described in Section 3.1 hereof, but, will thereafter
constitute only the right to receive payment of the fair value of such Units in
accordance with the applicable provisions of Maryland law (the "Appraisal Rights
Provisions"); provided, however, that all Units held by limited partners who
shall have failed to perfect (in accordance with Section 3-203 of the MGCL) or
who effectively shall have withdrawn or lost their rights to appraisal of such
Units under the Appraisal Rights Provisions shall thereupon be deemed to have
been converted, as of the Effective Time, into the right to receive the Common
Unit Cash Consideration or the Series B Preferred Unit Cash Consideration, as
applicable, without interest thereon, in the manner provided in Section 3.1.
Persons who have perfected statutory rights with respect to Dissenting Units as
aforesaid will not receive the Common Unit Cash Consideration or the Series B
Preferred Unit Cash Consideration, as applicable, as provided in this Agreement
and will have only such rights as are provided by the Appraisal Rights
Provisions with respect to such Dissenting Units. FWOP shall give MergerLP
prompt notice of any demands received by FWOP for the exercise of appraisal
rights with respect to any Units and MergerCo shall have the right to
participate in all negotiations and proceedings with respect to such demands.
FWOP shall not, except with the prior written consent of MergerCo or as required
by law, make any payment with respect to, or settle or offer to settle, any such
demands.
(b) Each dissenting limited partner who becomes entitled under Maryland law
to payment for Dissenting Units shall receive payment therefor after the
Effective Time from MergerLP in accordance with Maryland law, and such Units
shall be canceled.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
MERGERCO AND MERGERLP
MergerCo and MergerLP, jointly and severally, represent and warrant to the
Company and FWOP as to each of the matters described in Section 5 of the Master
Agreement, with the same force and effect as if such representations and
warranties were set forth herein, and such representations and warranties are
hereby incorporated herein by reference with the same force and effect as if set
forth herein.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF
THE COMPANY AND FWOP
Except as set forth in the Exhibits to the Master Agreement delivered at or
prior to the execution hereof to MergerCo, the Company and FWOP, jointly and
severally, represent and warrant to MergerCo and MergerLP as to each of the
matters described in Section 4 of the Master Agreement, with the same force and
effect as if such representations and warranties were set forth herein, and such
representations and warranties are hereby incorporated herein by reference with
the same force and effect as if set forth herein.
ARTICLE VI
CONDUCT OF BUSINESS PENDING THE MERGERS
During the period from the date of this Agreement to the Effective Time,
the Company agrees to conduct its business, and to cause the Company
Subsidiaries (as defined in the Master Agreement) to conduct their
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respective businesses, and to observe all of the agreements, covenants and
obligations, and to cause each of the Company Subsidiaries to observe all the
agreements, covenants and obligations, in the manner described in Section 7 of
the Master Agreement, and such agreements, covenants and obligations are hereby
incorporated herein by reference with the same force and effect as if set forth
herein.
ARTICLE VII
ADDITIONAL AGREEMENTS
7.1 Stockholders Meeting.
(a) The Company, acting through the Company Board, shall, in accordance
with applicable law:
(i) duly call, give notice of, convene and hold a special meeting of
its stockholders (the "Special Meeting") as soon as practicable following
the execution of this Agreement solely for the purpose of considering and
taking action upon the Plan of Liquidation and the Transactions;
(ii) as promptly as practicable, prepare and, subject to the approval
of MergerCo (which approval shall not be unreasonably withheld or delayed),
file with the SEC a preliminary proxy statement relating to the Plan of
Liquidation and the Transactions;
(iii) use its reasonable best efforts to (A) obtain and furnish the
information required to be included by the SEC in a definitive proxy
statement (the "Proxy Statement") and, subject to the approval of MergerCo
(which approval shall not be unreasonably withheld or delayed), to respond
promptly to any comments made by the SEC with respect to the preliminary
proxy statement and cause the Proxy Statement to be mailed promptly to its
stockholders, and (B) obtain the necessary approval of the Plan of
Liquidation and the Transactions by its stockholders; and
(iv) subject to the duties of the Company Board to the Company's
stockholders as provided in Section 7.10 of the Master Agreement, include
in the Proxy Statement the recommendation of the Company Board that
stockholders of the Company vote in favor of the approval of the Plan of
Liquidation and the Transactions.
(b) Each of the Company and FWOP, on the one hand, and MergerCo and
MergerLP, on the other hand, agree promptly to correct any information provided
by either of them for use in the Proxy Statement or the Consent Solicitation
Materials (as defined herein) if and to the extent that such information shall
have become false or misleading, and the Company and FWOP further agree to take
all necessary steps to cause the Proxy Statement and the Consent Solicitation
Materials as so corrected to be disseminated to the stockholders of the Company
and the limited partners of FWOP, respectively, and, if required, filed with the
SEC, in each case to the extent required by applicable federal securities laws.
(c) None of the information supplied by the Company or FWOP specifically
for inclusion or incorporation by reference in (i) the Proxy Statement, (ii) the
Consent Solicitation Materials, or (iii) the Other Filings (as defined in the
Master Agreement), will, at the respective times filed with the SEC or other
Governmental Entity or, in addition, in the case of the Proxy Statement and the
Consent Solicitation Materials, as of the date it or any amendment or supplement
thereto is mailed to stockholders or limited partners, respectively, or at the
time of any meeting of stockholders to be held in connection with the Plan of
Liquidation and the Transactions, 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 the light of the
circumstances under which they are made, not misleading. The Proxy Statement
will comply as to form in all material respects with the requirements of the
Exchange Act and the rules and regulations promulgated thereunder, except that
neither the Company nor FWOP makes any representation, warranty or covenant with
respect to information concerning MergerCo or MergerLP included in the Proxy
Statement and the Consent Solicitation Materials based on information supplied
by MergerCo or MergerLP for inclusion in the Proxy Statement or the Consent
Solicitation Materials.
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(d) None of the information with respect to MergerCo or MergerLP supplied
by MergerCo or MergerLP in writing specifically for inclusion or incorporation
by reference in (i) the Proxy Statement, (ii) the Consent Solicitation
Materials, or (iii) the Other Filings, will, at the respective times filed with
the SEC or other Governmental Entity or, in addition, in the case of the Proxy
Statement and the Consent Solicitation Materials, as of the date it or any
amendment or supplement thereto is mailed to stockholders or the limited
partners, respectively, or at the time of any meeting of stockholders to be held
in connection with the Plan of Liquidation and the Transactions, 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
the light of the circumstances under which they are made, not misleading.
7.2 Partner Approval. Promptly upon execution of this Agreement, but after
such materials have been reviewed and approved by MergerCo (which approval shall
not be unreasonably withheld or delayed), the Company shall distribute customary
consent solicitation materials (the "Consent Solicitation Materials") to the
partners of FWOP to seek the approval of a Majority-in-Interest of the Limited
Partners (as defined in the FWOP Partnership Agreement) (the "Partner Approval")
for the Partnership Merger, the Recapitalization and any other matters
reasonably requested by the parties hereto, in the manner required by the FWOP
Partnership Agreement.
7.3 Officers' and Directors' Indemnification.
(a) In the event of any threatened or actual claim, action, suit, demand,
proceeding or investigation, whether civil, criminal or administrative,
including, without limitation, any such claim, action, suit, demand, proceeding
or investigation in which any Person who is now, or has been at any time prior
to the date hereof, or who becomes, prior to the Effective Time, a director or
officer of the Company or any of the Company Subsidiaries (the "Indemnified
Parties") is, or is threatened to be, made a party based in whole or in part on,
or arising in whole or in part out of, or pertaining to the fact that he or she
is or was a director or officer of the Company or any of the Company
Subsidiaries, or is or was serving at the request of the Company or any of the
Company Subsidiaries as a director or officer of another corporation,
partnership, joint venture, trust or other enterprise, the parties hereto agree
to cooperate and use their reasonable best efforts to defend against and respond
thereto. It is understood and agreed that after the Effective Time the Surviving
Company shall indemnify and hold harmless, as and to the full extent permitted
by the Company's Charter (the "Company Charter") and the Company Bylaws (the
"Company Bylaws") in effect on the date hereof, each Indemnified Party against
any losses, claims, damages, liabilities, costs, expenses (including reasonable
attorneys' fees and expenses), judgments, fines and amounts paid in settlement
in connection with any such threatened or actual claim, action, suit, demand,
proceeding or investigation, and in the event of any such threatened or actual
claim, action, suit, demand, proceeding or investigation (whether asserted or
arising before or after the Effective Time), (A) the Surviving Company shall
promptly pay expenses as incurred in advance of the final disposition of any
claim, suit, proceeding or investigation to each Indemnified Party to the full
extent permitted by law, subject to the provision by such Indemnified Party of
an undertaking to reimburse the amounts so advanced in the event of a final
non-appealable determination by a court of competent jurisdiction that such
Indemnified Party is not entitled to such amounts, (B) the Indemnified Parties
may retain one counsel satisfactory to them (subject to the consent of the
Surviving Company, which shall not be unreasonably withheld) and the Surviving
Company shall pay all reasonable fees and expenses of such counsel for the
Indemnified Parties within 30 days after statements therefor are received, and
(C) the Surviving Company shall use its reasonable best efforts to assist in the
vigorous defense of any such matter; provided, however, that the Surviving
Company shall not be liable for any settlement effected without its prior
written consent; and provided, further that the Surviving Company shall have no
obligation hereunder to any Indemnified Party when and if a court of competent
jurisdiction shall ultimately determine, and such determination shall have
become final and non-appealable, that indemnification of such Indemnified Party
in the manner contemplated hereby is prohibited by applicable law. Any
Indemnified Party wishing to claim indemnification under this Section 7.3, upon
learning of any such claim, action, suit, demand, proceeding or investigation,
shall promptly notify the Surviving Company of such claim and the relevant facts
and circumstances with respect thereto; provided that the failure to so notify
shall not affect the obligations of the Surviving Company except to the extent
such failure to notify materially prejudices the Surviving Company.
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(b) MergerCo agrees that all rights to indemnification existing in favor
of, and all limitations on the personal liability of, the directors and officers
of the Company and the Company Subsidiaries provided for in the Company Charter
and Company Bylaws as in effect as of the date hereof with respect to matters
occurring prior to the Effective Time shall continue in full force and effect
for a period of six (6) years from the Effective Time; provided, however, that
all rights to indemnification in respect of any claims (each a "Claim") asserted
or made within such period shall continue until the final disposition of such
Claim. Prior to the Closing Date, the Company shall purchase an extended
reporting period endorsement under the Company's existing directors' and
officers' liability insurance coverage ("D&O Insurance") for the Company's
directors and officers in a form acceptable to the Company which shall provide
such directors and officers with coverage for six (6) years following the
Effective Time of not less than the existing coverage under, and having terms
not materially less favorable on the whole to the insured Persons than the D&O
Insurance coverage presently maintained by the Company so long as the cost is no
more than 150% of the cost of such D&O Insurance for the year ended December 31,
2000, provided that the Company agrees to cooperate in good faith with MergerCo
in order to obtain the lowest premium for the above referenced coverage. In the
event that such amount is insufficient for the above referenced coverage, the
Company may spend up to that amount to purchase such lesser coverage as may be
obtained by that amount.
(c) This Section 7.3 is intended for the irrevocable benefit of, and to
grant third party rights to, the Indemnified Parties and shall be binding on all
successors and assigns of the Surviving Company. Each of the Indemnified Parties
shall be entitled to enforce the covenants contained in this Section 7.3.
7.4 Status of Employees.
(a) The Company shall terminate the employment of all of its employees, and
shall cause the employment of all employees of the Company Subsidiaries to be
terminated, prior to the Effective Time. The Company shall be responsible for
(i) payment of all wages and salaries and satisfaction of all medical, dental,
health, or life benefits, workers' compensation and disability claims incurred
by any employee prior to the Effective Time, including the retention bonuses
described below, and (ii) payment of accrued vacation, holiday, sick or personal
time not taken by an employee prior to the Effective Time and for payment of all
bonuses and commissions, if any, to which the employees are entitled, and in no
event shall MergerCo or MergerLP be required to assume any liability with
respect to such claims in connection with the Mergers. The Company agrees to pay
prior to the Effective Time all accrued benefits to participants or retirees and
extinguish all contingent benefits (including all outstanding Company Options
(as defined herein) and all restricted or contingent stock awards) in accordance
with the terms of the Employee Programs, including all severance payments, if
any, owed to terminated employees or to have such accrued benefits and
contingent benefits assumed by FWM, Inc. pursuant to the Management Agreement
(as defined herein) on terms and conditions reasonably acceptable to MergerCo
(including a full and irrevocable release of MergerCo of all obligations
thereunder). Each of the employees receiving a retention bonus in exchange for
such employee's continued service to the Company from the date hereof until the
Effective Time shall execute and deliver a release, substantially on the terms
of Exhibit 7.4(a), or FRW, Inc. shall indemnify and hold MergerCo harmless from
any and all claims that would otherwise be released under Exhibit 7.4(a). The
Company shall ensure that all individuals whose qualifying event occurs on or
prior to the Effective Time (and such individuals' qualified beneficiaries) are
notified of and provided with the continuation of group health coverage required
by the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, and
similar state and local laws.
(b) The Company agrees that it shall extinguish or otherwise assign to FRW,
Inc. all liabilities and obligations, if any, (including, without limitation,
the liability and obligation for all wages, salary, vacation pay, holiday pay,
sick leave pay, personal leave pay, severance pay and unemployment, medical,
dental, health, workers' compensation and disability benefits) for those former
employees of the Company or any of the Companies Subsidiaries who retired or
terminated employment prior to the Effective Time, including, without
limitation, those employees terminated in connection with the Company's
obligation under Section 7.4(a).
(c) The Company acknowledges and agrees that MergerCo has the right to
interview and discuss employment terms and issues with such employees prior to
and after the Effective Time. MergerCo
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specifically reserves the right, on or after the Effective Time, to employ or
reject any of the employees of the Company or any of the Company Subsidiaries or
other applicants in its sole and absolute discretion; provided that MergerCo
shall provide to the Company a list of employees to whom MergerCo intends to
offer employment at the Effective Time. Nothing in this Agreement shall be
construed as a commitment or obligation of MergerCo to accept for employment, or
otherwise continue the employment of, any of the Company's employees.
(d) Prior to the Effective Time, the Company shall take all steps necessary
to comply with the Worker Adjustment Retraining and Notification Act, 29 U.S.C.
Sections 2101 et. seq. and any corresponding state and local laws with respect
to its employees and the employees of each of the Company Subsidiaries.
ARTICLE VIII
CONDITIONS TO THE MERGERS
8.1 Conditions to the Obligations of Each Party to Effect the Mergers. The
respective obligations of each party to effect the Mergers shall be subject to
the fulfillment or waiver, where permissible, at or prior to the Closing Date,
of each of the conditions set forth in Section 6.1 of the Master Agreement.
8.2 Conditions to Obligations of MergerCo and MergerLP. The obligations of
MergerCo to effect the Company Merger and of MergerLP to effect the Partnership
Merger respectively, shall be further subject to the following conditions:
(a) Transaction Conditions. Each of the conditions set forth in
Section 6.2 of the Master Agreement shall have been fulfilled or waived.
(b) Performance and Obligations of the Company. The Company and the
Company Subsidiaries shall have performed in all material respects all
obligations required to be performed by it under the Master Agreement and
under this Agreement, including, without limitation, the covenants
contained in Articles VI and VII hereof.
(c) Recapitalization. The Recapitalization shall have occurred.
(d) Management Company. Messrs. ▇▇▇▇▇▇▇ and ▇▇▇▇▇ shall have sold all
of the shares of capital stock in First Washington Management, Inc. ("FWM")
owned by them to MergerLP for one dollar ($1.00).
(e) Benefit Plans. All Employee Programs shall have been assigned to
FRW, Inc. on terms and conditions reasonably acceptable to MergerCo
(including full and irrevocable releases of MergerCo and its affiliates of
all obligations thereunder) or terminated pursuant to their terms without
any further liabilities on the part of the Company and the Company
Subsidiaries.
(f) Employees. All employees of the Company and the Company
Subsidiaries shall have been terminated as of the Effective Time. Prior to
making the Partnership Liquidating Distribution, FWOP shall have paid all
amounts and taken any other actions required by Section 7.4 hereof,
including the payment of retention bonuses, or any employment agreement,
law or regulation to be taken in connection therewith. An estimate of such
amounts is set forth in Exhibit 8.2(f), however such estimate is for
illustrative purposes only and may not be indicative of the actual amount
required to be paid.
(g) Unvested Stock. Each share of restricted Company Common Stock
issued pursuant to an Employee Program which is outstanding immediately
prior to the Asset Sale, whether or not then vested or unrestricted, shall
have become fully vested and unrestricted. All obligations with respect to
contingent Company Common Stock shall have been settled in cash prior to
the Partnership Liquidating Distribution.
(h) Options. Each option (collectively, the "Company Options") to
purchase Company Common Stock granted under the Company's Stock Option Plan
which is outstanding immediately prior to the consummation of the Asset
Sale, whether or not then vested or exercisable, shall have become fully
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vested and exercisable. Prior to making the Partnership Liquidating
Distribution, in return for the cancellation of outstanding Company Options
required by Section 7.4(a) FWOP shall have paid to each holder of an
unexercised Option a cash settlement amount equal to the product of (a) the
number of shares of Company Common Stock provided for in such Option and
(b) the excess, if any, of the total amount per share of Company Common
Stock to be received by stockholders of the Company in connection with the
Transactions over the exercise price per share provided for in such Option,
which cash payment shall have been treated as compensation and shall have
been net of any applicable tax.
(i) Transaction Expenses. Prior to making the Partnership Liquidating
Distribution, FWOP shall have paid all expenses related to the negotiation
of and preparation for the Transactions incurred by the Company or any of
the Company Subsidiaries. An estimate of such items and the amount of each
is set forth in Exhibit 8.2(i), however, such estimate is for illustrative
purposes only and may not be indicative of the actual amount required to be
paid.
(j) Other Accrued Liabilities. Prior to making the Partnership
Liquidating Distribution, FWOP shall have paid all accrued liabilities of
the Company and the Company Subsidiaries, other than accounts payable and
accrued expenses, incurred in each case, in the ordinary course of business
and deducted from Net Working Capital (as defined in the Master Agreement),
and other than any contingent liabilities and any liabilities referred to
in Exhibit 4.14 or in Section 8.8 of the Master Agreement (the "Excluded
Liabilities").
(k) Repayment of Credit Facility. Prior to making the Partnership
Liquidating Distribution, FWOP shall have repaid the existing indebtedness
and any other obligations or liabilities (e.g. attorneys' fees and
premiums) under that certain Credit Agreement, dated May 19, 2000, between
First Union National Bank and FWOP, and such indebtedness shall have been
canceled and retired. All liens, security interests, guarantees and other
documents, rights and interests of the holders of such indebtedness with
respect to such debt shall have been terminated and released in form and
substance reasonably satisfactory to MergerCo prior to FWOP making the
Partnership Liquidating Distribution.
(l) Partnership Liquidating Distribution. After payment of all
amounts set forth in Section 8.2(f), (g), (h), (i), (j) and (k) above from
the proceeds of the Asset Sale, FWOP shall have distributed, or irrevocably
resolved to distribute, the remaining proceeds of the Asset Sale to its
partners as follows: each holder of a Preferred Unit shall receive from
FWOP (in addition to any amounts received from MergerLP pursuant to Section
3.1(b) or any MergerLP Preferred Units received pursuant to Section 3.1(c),
in connection with the Partnership Liquidating Distribution, an amount per
Preferred Unit equal to the amount per share payable per share of Company
Preferred Stock pursuant to Section 2.3 hereof.
(m) Payment of Dividends. All accrued and unpaid dividends on the
Company Preferred Stock shall have been paid prior to the Company
Liquidating Distribution, and the Company Liquidating Distribution shall
have been made.
(n) Woodmoor Financing. FWOP shall have (i) borrowed and retained in
reserve $3,000,000 of qualified non-recourse financing (within the meaning
of Section 465(b)(6) of the Code that also constitutes a non-recourse
liability with the meaning of Treasury Regulation Section 1.752-1(a)(2))
secured by the parcels of real property known as Woodmoor Shopping Center
located in Silver Spring, Maryland, on terms and conditions reasonably
acceptable to MergerCo, and (ii) offered G&C Properties Corporation, a
Maryland corporation ("G&C") the opportunity to provide a Bottom Guaranty
Election in the form attached as Exhibit N to that certain Contribution
Agreement by and between G&C and FWOP, dated September 3, 1999 (the
"Woodmoor Contribution Agreement"), in each case with respect to $1,500,000
of such financing, in exchange for a complete and irrevocable release of
the Bottom Guaranty applicable to the Bottom Guaranty Property (as such
terms are defined in the Woodmoor Contribution Agreement) immediately prior
thereto.
(o) Opinion Relating to REIT and Partnership Status. MergerCo shall
have received an opinion dated as of the Closing Date of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇,
in a form and substance reasonably acceptable to
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MergerCo, regarding the qualification of the Company as a REIT under the
Code and the treatment of FWOP and all other Company Subsidiaries (which
are organized as partnerships or limited liability companies or which file
Tax Returns (as defined in the Master Agreement) as partnerships) as
partnerships and not as associations taxable as corporations or publicly
traded partnerships for Federal income tax purposes since the acquisition
of such Company Subsidiaries by the Company.
(p) Officer's Certificate. The Company shall have furnished MergerCo
and MergerLP with a certificate dated as of the Closing Date signed on its
behalf by its Chief Executive Officer to the effect that the conditions set
forth in Sections 8.1 and 8.2 have been satisfied.
(q) Title Matters. The Company shall have furnished MergerCo and
MergerLP with such affidavits as may be reasonably and customarily required
by Title Company (as defined in the Master Agreement) to issue so-called
"date down" endorsements to owner's policies of title insurance without
exception for parties-in-possession (other than tenants under the Leases
(as defined in the Master Agreement) or mechanics' or materialmen's liens).
(r) Updated Rent Roll. The Company shall have furnished MergerCo and
MergerLP with an updated Rent Roll (as defined in the Master Agreement) for
each Merger Agreement Property (as defined in the Master Agreement) dated
no earlier than five (5) days prior to Closing certified by an authorized
representative of the Company as accurate and complete in all material
respects.
8.3 Conditions to Obligations of the Company and FWOP. The obligations of
the Company to effect the Company Merger and of FWOP to effect the Partnership
Merger, respectively, are further subject to the following conditions:
(a) Transaction Conditions. Each of the conditions set forth in
Section 6.1 and 6.3 of the Master Agreement shall have been fulfilled or
waived.
(b) Member's Certificate. MergerCo, on behalf of itself and Merger
LP, shall have furnished the Company with a certificate dated as of the
Closing Date signed on its behalf by its managing member to the effect that
the conditions set forth in Sections 8.1 and 8.3 have been satisfied.
ARTICLE IX
TERMINATION
9.1 Termination. This Agreement may be terminated at any time prior to the
Effective Time, whether before or after stockholder or partner approval thereof,
in accordance with the provisions of Section 10.1 of the Master Agreement, and
any such termination shall have the effects specified in Section 10.2 of the
Master Agreement.
ARTICLE X
GENERAL PROVISIONS
10.1 Defined Terms. All terms used herein but not defined shall have the
meanings ascribed to such terms in the Master Agreement.
10.2 Non-Survival of Representations, Warranties, Covenants and
Agreements. Except for Sections 2.2, 3.2, 7.3 and this Section 10.2 none of the
representations, warranties, covenants and agreements contained in this
Agreement or in any instrument delivered pursuant to this Agreement shall
survive the Effective Time, and thereafter there shall be no liability on the
part of MergerCo, MergerLP, the Company or FWOP or any of their respective
officers, directors or stockholders in respect thereof. Except as expressly set
forth in this Agreement or the Master Agreement, there are no representations or
warranties of any party hereto, express or implied.
10.3 Miscellaneous Provisions. The provisions of Section 11.1 through
Section 11.22 of the Master Agreement are incorporated herein by reference with
the same force and effect as if set forth herein.
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IN WITNESS WHEREOF, MergerCo, MergerLP, the Company and FWOP have caused
this Agreement to be executed as of the date first written above by their
respective officers thereunto duly authorized.
FIRST WASHINGTON REALTY TRUST, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President and CEO
FIRST WASHINGTON REALTY
LIMITED PARTNERSHIP
By: FIRST WASHINGTON REALTY
TRUST, INC., its general partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President and CEO
USRP GP, LLC
By: U.S. RETAIL PARTNERS, LLC,
its sole member
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Executive V.P.
US RETAIL PARTNERS LIMITED
PARTNERSHIP
By: USRP GP, LLC, its general
partner
By: U.S. RETAIL PARTNERS, LLC,
its sole member
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Executive V.P.
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