1
EXHIBIT III
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AMENDED AND RESTATED STOCK PURCHASE AGREEMENT
BY AND BETWEEN
MERIDIAN INDUSTRIAL TRUST, INC.,
AS SELLER
AND
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA,
AS PURCHASER
COMMON STOCK
(par value $.001 per share)
June 12, 1997
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TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS............................................................... 1
Section 1.1 Definition................................................................. 1
ARTICLE II PURCHASE OF COMMON STOCK.................................................. 6
Section 2.1 Purchase of Shares; Closing................................................ 6
Section 2.2 Dividend Adjustment........................................................ 7
ARTICLE III REPRESENTATIONS AND WARRANTIES............................................ 7
Section 3.1 Representations and Warranties of the Company.............................. 7
Section 3.2 Representations and Warranties of Purchaser................................ 15
ARTICLE IV CONDITIONS PRECEDENT TO CLOSING........................................... 17
Section 4.1 Conditions Precedent to Obligations of Purchaser........................... 17
Section 4.2 Conditions Precedent to Obligations of the Company......................... 19
ARTICLE V COVENANTS................................................................. 20
Section 5.1 Furnishing of Information.................................................. 20
Section 5.2 Real Estate Investment Trust............................................... 21
Section 5.3 Sale of Shares by Purchaser................................................ 21
Section 5.4 Approvals.................................................................. 21
Section 5.5 Registration Rights Agreement.............................................. 21
Section 5.6 Excepted Holder Agreements................................................. 21
Section 5.7 Notification of Certain Matters............................................ 21
Section 5.8 Nomination of Board Member................................................. 22
Section 5.9 Shareholders' Meeting; Preparation of Proxy Statement...................... 22
Section 5.10 Publicity and Reports...................................................... 23
Section 5.11 Conduct of Business........................................................ 23
Section 5.12 Negative Covenants of the Company.......................................... 23
Section 5.13 Inspection Rights.......................................................... 24
Section 5.14 [Reserved]................................................................. 24
Section 5.15 Real Estate Operating Company.............................................. 24
Section 5.16 Amendment to Investor Rights Agreement..................................... 24
Section 5.17 Delivery of Certain Documents.............................................. 24
Section 5.18 Further Assurances......................................................... 24
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ARTICLE VI MISCELLANEOUS............................................................. 25
Section 6.1 Survival of Provisions............................................... 25
Section 6.2 Termination.......................................................... 25
Section 6.3 No Waiver; Modification in Writing................................... 26
Section 6.4 Communications....................................................... 26
Section 6.5 Execution in Counterparts............................................ 26
Section 6.6 Binding Effect; Assignment........................................... 26
Section 6.7 Governing Law........................................................ 27
Section 6.8 Expenses............................................................. 27
Section 6.9 Severability of Provisions........................................... 27
Section 6.10 Headings............................................................. 27
Section 6.11 Integration.......................................................... 27
Section 6.12 Enforcement of Covenants............................................. 27
Section 6.13 Waiver by Jury Trial................................................. 28
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EXHIBITS
Exhibit A Form of Registration Rights Agreement
Exhibit B Form of Excepted Holder Agreement
SCHEDULES
Schedule 3.1(c) List of Rights to Acquire Equity Securities; Voting
Restrictions;Etc.
Schedule 3.1(d) List of Third Party Consents
Schedule 3.1(i) List of Governmental Consents, Etc.
Schedule 3.1(o) List of Certain Liabilities
Schedule 3.1(s) List of Ownership in Subsidiaries
Schedule 3.1(y) List of Merger, Sale of Equity and Sale of Assets
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AMENDED AND RESTATED STOCK PURCHASE AGREEMENT
AMENDED AND RESTATED STOCK PURCHASE AGREEMENT, dated as of June 12, 1997,
by and among Meridian Industrial Trust, Inc., a Maryland corporation (the
"COMPANY"), and The Prudential Insurance Company of America, a New Jersey
insurance company (the "PURCHASER").
RECITALS
WHEREAS, the Company and the Purchaser have entered into that certain
Stock Purchase Agreement dated as of May 27, 1997 (the "Existing Stock Purchase
Agreement");
WHEREAS, under the Existing Stock Purchase Agreement, the Purchaser agreed
to purchase from the Company, and the Company agreed to sell to the Purchaser,
3,548,256 shares of Common Stock;
WHEREAS, the Purchaser and the Company desire to increase the number of
shares of Common Stock to be sold to the Purchaser by an additional 253,447
shares from 3,548,256 shares to 3,801,703 shares; and
WHEREAS, the Purchaser and Company desire to amend and restate the
Existing Stock Purchase Agreement to provide for an increase the number of
shares purchased by Purchaser from 3,548,256 shares to 3,801,703 shares and as
otherwise set forth herein;
NOW THEREFORE, In consideration of the mutual covenants and agreements set
forth herein and for good and valuable consideration, the receipt of which is
hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definition. As used in this Agreement, and unless the context
requires a different meaning, the following terms have the meanings indicated:
"Accrued Dividends Per Share" means the product of (i) the dividends per
Share distributed by the Company for the quarter ending September 30, 1997
multiplied by (ii) the Dividend Adjustment.
"Affiliate" means a Person that directly, or indirectly through one or
more intermediaries, controls, or is controlled by, or is under common control
with, a specified Person.
"Agreement" means this Stock Purchase Agreement, as the same may be
amended, restated, supplemented or otherwise modified from time to time in
accordance with the terms hereof.
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"Approval" means any approval, authorization, consent, qualification or
registration, or any waiver of the foregoing, or any notice, statement or other
communication required to be filed with or delivered to any Governmental Entity
or any other Person.
"Benefit Plans" means all employee benefit plans and collective
bargaining, labor and employment agreements or other similar benefit
arrangements to which the Company or any Subsidiary of the Company will be a
party at the Closing or by which the Company or any Subsidiary of the Company
will be bound at the Closing, including (A) any profit-sharing, deferred
compensation, bonus, stock option, stock purchase, pension, retainer,
consulting, retirement, severance, welfare or incentive plan, agreement or
arrangement, (B) any plan, agreement or arrangement providing for "fringe
benefits" or perquisites to employees, officers, directors or agents, including
benefits relating to automobiles, clubs, vacation, child care, parenting,
sabbatical, sick leave, medical, dental, hospitalization, life insurance and
other types of insurance, (C) any employment agreement not terminable on 30 days
(or less) written notice or (D) any other "employee benefit plan" within the
meaning of Section 3(3) of ERISA.
"Books and Records" means the books and records of the Company and each of
its Subsidiaries, including without limitation financial data (including
projections) and operating data covering each of such entities, their
businesses, operations and financial performance.
"Business Day" means any day except Saturday, Sunday and any day which
shall be a legal holiday or a day on which banking institutions in the State of
New York generally are authorized or required by law or other government actions
to close.
"Bylaws" means the Company's Second Amended and Restated Bylaws dated as
of January 26, 1996, as amended from time to time.
"Charter" means the Company's Third Amended and Restated Articles of
Incorporation dated as of March 30, 1996, as amended from time to time.
"Closing" has the meaning provided therefor in Section 2.1(b) of this
Agreement.
"Closing Date" has the meaning provided therefor in Section 2.1(b) of this
Agreement.
"Code" means the Internal Revenue Code of 1986, as amended, and the rules
and regulations thereunder as in effect on the date hereof.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the Company's common stock, par value $.001 per
share.
"Company" means Meridian Industrial Trust, Inc., a Maryland corporation.
"Confidential Information" has the meaning provided therefor in Section
5.1(b) of this Agreement.
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"Current SEC Reports" means the 1996 Form 10-K, the 1997 Form 10-Q and the
1997 Proxy Statement.
"Dividend Adjustment" means the quotient of (x) the number of calendar
days between July 1, 1997 (including such date) and the Closing Date (excluding
such date) divided by (y) 92 days.
"Employee and Director Stock Plan" means the Company's Amended and
Restated Employee and Director Stock Plan dated as of January 26, 1996, as
amended through the date hereof, a true, correct and complete copy of which has
been delivered to Purchaser prior to the date hereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended (or, with respect to any provision thereof referred to herein, any
corresponding provision of any succeeding law).
"Excepted Holder Agreement" means the Excepted Holder Agreement,
substantially in the form of Exhibit B hereto, as the same may be amended,
restated, supplemented or otherwise modified in accordance with its terms.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the Commission promulgated thereunder.
"Existing Stock Purchase Agreement" means the Stock Purchase Agreement,
dated as of May 27, 1997, entered into between the Purchaser and the Company.
"Governmental Entity" means any agency, bureau, commission, court,
department, official, political subdivision, tribunal or other instrumentality
of any government, whether federal, state or local, domestic or foreign.
"▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Act of 1976, as amended and related rules, regulations and published
interpretations thereunder.
"Initial Purchase Price" means the aggregate purchase price for the Shares
based on the price per Share set forth in Section 2(a).
"Investor Rights Agreement" means that certain Amended and Restated
Investor Rights Agreement dated as of February 23, 1996 by and among the Company
and certain shareholders of the Company.
"Law" means any constitutional provision, statute or other law, rule,
regulation or interpretation of any thereof and any Order of any Governmental
Entity (including environmental laws).
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
encumbrance, charge or security interest of any kind in or on such asset or the
revenues or income thereon or therefrom.
"Material Adverse Effect" shall have the meaning set forth in Section
3.1(a).
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"Minimum Ownership Level" means, at any time, 10% of the outstanding
shares of Common Stock on a fully diluted basis.
"NYSE" means the New York Stock Exchange.
"Order" means any decree, injunction, judgment, order, ruling, assessment
or writ.
"Person" means an individual or a corporation, partnership, trust,
incorporated or unincorporated association, limited liability company, joint
venture, joint stock company, government (or an agency or political subdivision
thereof) or other entity of any kind.
"Proxy Statement" shall have the meaning set forth in Section 5.9.
"Purchaser" means The Prudential Insurance Company of America and its
successors and permitted assigns.
"Recommendations" shall have the meaning set forth in Section 3.1(u).
"REIT" shall have the meaning set forth in Section 3.1(q).
"Registration Rights Agreement" means the Registration Rights Agreement,
substantially in the form of Exhibit A hereto, as the same may be amended,
restated, supplemented or otherwise modified in accordance with its terms.
"REOC" shall have the meaning set forth in Section 3.1(k).
"Rule 144" means Rule 144 under the Securities Act of 1933, as amended,
and any successor rule thereto.
"SEC Documents" shall have the meaning set forth in Section 3.1(x).
"SEC Financial Statements" shall have the meaning set forth in Section
3.1(x).
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder.
"Separate Account Purchaser" shall have the meaning set forth in Section
5.14.
"Series B Preferred Stock" means the shares of Series B Preferred Stock,
par value $.001 per share, of the Company.
"Shareholders' Meeting" shall have the meaning set forth in Section 5.9.
"Shares" means the shares of Common Stock purchased by Purchaser pursuant
to this Agreement.
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"Subsequent Purchasers" shall mean the purchasers, if any, of shares of
Common Stock as contemplated by Section 5.14.
"Subsidiary" means, with respect to any Person, (a) a corporation, a
majority of whose capital stock with voting power, under ordinary circumstances,
to elect directors is at the time, directly or indirectly, owned by such Person,
by a Subsidiary of such Person or by such Person and a Subsidiary thereof or (b)
any other Person (other than a corporation) in which such Person, a Subsidiary
thereof or such Person and a Subsidiary thereof, directly or indirectly, at the
date of determination thereof has at least a majority ownership interest.
"Taxes" means all taxes, charges, fees, levies, duties, imposts,
withholdings, restrictions, fines, interest, penalties, additions to tax or
other assessments or charges, including, but not limited to, income, excise,
property, withholding, sales, use, gross receipts, value added and franchise
taxes, license recording, documentation and registration fees and custom duties
imposed by any Governmental Entity.
"Tax Return" means a report, return or other information required to be
filed by a Person with or submitted to a Governmental Entity with respect to
Taxes, including, where permitted or required, combined or consolidated returns
for any group of entities that includes the Person.
"Termination Date" means the earlier of (i) September 30, 1997 and (ii)
the record date established by the Board of Directors of the Company for the
distribution of dividends for the fiscal quarter of the Company ended September
30, 1997.
"Transaction Documents" means this Agreement, the Registration Rights
Agreement, the Excepted Holder Agreement and all other documents executed in
connection therewith.
"Transfer" shall have the meaning set forth in Section 3.2(b).
"1996 Form 10-K" means the Company's annual report on Form 10-K for the
year ended December 31, 1996 filed with the Commission.
"1997 Form 10-Q" means the Company's quarterly report on Form 10-Q for the
fiscal quarter ended March 31, 1997 filed with the Commission.
"1997 Proxy Statement" means that certain Proxy Statement dated April 14,
1997 in respect of the annual meeting of the shareholders of the Company held on
May 16, 1997.
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ARTICLE II
PURCHASE OF COMMON STOCK
Section 2.1 Purchase of Shares; Closing.
(a) Subject to the terms and conditions herein set forth and the
Dividend Adjustment, the Company will sell to Purchaser, and Purchaser will
purchase from the Company, 3,801,703 shares of Common Stock at a purchase price
of $19.728 per Share (the "Initial Purchase Price").
(b) The purchase and sale of the Shares will take place at a closing
(the "CLOSING") to be held at the offices of O'Melveny & ▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ or such other location as may be
mutually agreed upon by the parties hereto on a date mutually agreed upon by the
parties hereto, provided that the Closing shall occur on or before the earlier
of (i) the fifth calendar day after all conditions set forth in Article IV have
been satisfied or waived by the appropriate party and (ii) the Termination Date.
The date and time at which the Closing is to be concluded is the "CLOSING DATE."
(c) Delivery of the Shares shall be made at the Closing by delivery
to Purchaser, against payment of the Initial Purchase Price therefor as provided
herein, of a share certificate representing the total number of Shares or, at
Purchaser's option, issuance of the Shares in book entry form.
(d) Payment of the Initial Purchase Price shall be made by or on
behalf of Purchaser by wire transfer of immediately available funds to an
account of the Company (the number for which account shall have been furnished
to Purchaser at least two Business Days prior to the Closing Date), or certified
or official bank check payable in immediately available funds to the order of
the Company.
Section 2.2 Dividend Adjustment. In addition to the Initial Purchase
Price, Purchaser shall pay to the Company, promptly after receipt of dividends
for the quarter ended September 30, 1997, an amount equal to the product of (x)
Accrued Dividends Per Share (x) multiplied by (y) 3,801,703 shares. Payment of
such Dividend Adjustment shall be made in the manner as set forth in Section
2.1(d) or as otherwise agreed to by Purchaser and the Company.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1 Representations and Warranties of the Company. The Company
represents and warrants as of the date hereof as follows.
(a) Organization and Good Standing. (i) The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Maryland. Each Subsidiary of the Company is a corporation or other
entity duly organized, validly existing and, with respect to each Subsidiary
that is a corporation, in good standing under the laws of its state of
incorporation or formation, as the case may
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be. The Company and each Subsidiary of the Company is duly qualified or licensed
and, with respect to each Subsidiary that is a corporation, in good standing as
a foreign corporation and authorized to do business, in each jurisdiction in
which the ownership or leasing of its properties or the character of its
operations makes such qualification, licensing or authorization necessary,
except where the failure to obtain such qualification, license, authorization or
good standing would not individually or in the aggregate reasonably be expected
to have a material adverse effect upon the assets, liabilities, financial
condition, earnings or operations of the Company and its Subsidiaries taken as a
whole or any transaction contemplated by the Transaction Documents (any such
material adverse effect, whether individually or in the aggregate, a "MATERIAL
ADVERSE EFFECT"). The Company and each Subsidiary of the Company has all
requisite corporate power and authority to own its assets and to carry on its
business as presently proposed to be conducted except where a lack of such
corporate power or authority could not reasonably be expected to have a Material
Adverse Effect.
(ii) The Company has delivered to Purchaser true, correct and
complete copies of the Charter and the Bylaws of the Company.
(b) Authorizations. The Company has all requisite corporate power
and authority to execute, deliver and perform its obligations under the
Transaction Documents. The execution and delivery by the Company of the
Transaction Documents and the consummation of the transactions contemplated
thereby have been duly and validly authorized by the Company.
(c) Capitalization. As of the date hereof, the equity capitalization
of the Company is as set forth in the balance sheet of the Company included in
the 1997 Form 10-Q, except for any shares of Common Stock issued under the
Employee and Director Stock Plan since March 31, 1997. At the Closing Date, all
of the outstanding shares of stock of the Company will be duly and validly
issued, fully paid and non-assessable and not subject to any preemptive rights
of other shareholders. Except as set forth in the Current SEC Reports and in
Schedule 3.1(c), a certificate (certified by the Chief Executive Officer or
Chief Financial Officer of the Company) delivered to Purchaser on or prior to
the Closing Date or contemplated by the Employee and Director Stock Plan, (i)
there are no outstanding securities or indebtedness convertible into,
exchangeable for, or carrying the right to acquire, Common Stock or other equity
securities of the Company, or subscriptions, warrants, options, rights, or other
arrangements or commitments obligating the Company to issue or dispose of any
Common Stock or other equity securities or any ownership therein, (ii) there is
no agreement or arrangement restricting the voting or transfer of any equity
securities of the Company, and (iii) there are no outstanding contractual
obligations, commitments, understandings or arrangements of the Company or any
of its Subsidiaries to repurchase, redeem or otherwise acquire, require or make
any payment in respect of any shares of equity securities of the Company or such
Subsidiary. Except with respect to statutory restrictions of general
application, as provided in the Charter with respect to the Series B Preferred
Stock and the terms of the Company's Second Amended and Restated Revolving
Credit Agreement with The First National Bank of Boston and certain other Banks
named therein, there are no legal, contractual or other restrictions on the
payment of dividends or other distributions or amounts on or in respect of the
Common Stock. As of the date hereof, except as contemplated by the Registration
Rights Agreement and the Investor Rights Agreement, there are no agreements or
arrangements to which any of the Company or its Subsidiaries is a party pursuant
to which the Company is or could be required to register shares of Common Stock
or other securities under the Securities Act.
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(d) Conflicting Agreements and Other Matters. Neither the Company
nor any of its Subsidiaries is a party to any contract or agreement or subject
to any charter or other corporate restriction compliance with which could
reasonably be expected to have a Material Adverse Effect. Assuming the filing of
a Form D with the Commission, the listing of the Shares on the NYSE and the
accuracy of the representations and warranties of, and the performance of the
agreements of, Purchaser set forth in Section 3.2 and elsewhere herein, neither
the execution and delivery of the Transaction Documents nor fulfillment of nor
compliance with the terms and provisions thereof, nor the issuance of the Shares
will (i) violate any provision of any Law presently in effect or in effect at
the Closing Date having applicability to the Company or any Subsidiary or any of
their properties, except such violations as could not reasonably be expected to
have a Material Adverse Effect, (ii) conflict with or result in a breach of or
constitute a default under the Charter or Bylaws of the Company or any
organizational document of its Subsidiaries, (iii) except as set forth in
Schedule 3.1(d), require any consent, approval or notice under, or conflict with
or result in a breach of, constitute a default or accelerate any right under,
any note, bond, mortgage, license, indenture or loan or credit agreement, or any
other agreement or instrument, to which the Company or any of its Subsidiaries
is a party or by which any of their respective properties is bound, except such
consents, approvals, notices, conflicts, breaches or defaults as could not
reasonably be expected to have a Material Adverse Effect or (iv) result in, or
require the creation or imposition of, any Lien upon or with respect to any of
the properties now owned or hereafter acquired by the Company or any of its
Subsidiaries. Neither the Company nor any of its Subsidiaries is bound by any
agreement which would impose upon Purchaser any personal obligation or personal
liability which is greater than the personal obligations and personal
liabilities imposed upon Purchaser under this Agreement, the Registration Rights
Agreement and the Excepted Holder Agreement to be entered into by the Company
and Purchaser pursuant to Sections 5.5 and 5.6 hereof. In addition, the Company
is not aware of any facts or circumstances that, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
(e) Due Execution, etc. This Agreement, constitutes, and when
executed and delivered by the Company at the Closing each of the Registration
Rights Agreement and the Excepted Holder Agreement will constitute, a legal,
valid and binding obligation of the Company, enforceable in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights generally and to general principles of equity.
(f) Litigation, Proceeding, etc. There is no action, suit, notice of
violation, proceeding or investigation pending or, to the best knowledge of the
Company, threatened against or affecting the Company or any of its Subsidiaries
or any of their respective properties before or by any Governmental Entity which
(i) challenges the legality, validity or enforceability of any of the
Transaction Documents or the Shares or (ii) could (individually or in the
aggregate) reasonably be expected to have a Material Adverse Effect or (iii)
would (individually or in the aggregate) impair the ability of the Company to
perform fully on a timely basis any obligations which it has under any of the
Transaction Documents.
(g) No Default or Violation. Neither the Company nor any of its
Subsidiaries is (i) in default under or in violation of any indenture, loan or
credit agreement or any other agreement or instrument to which it is a party or
by which it or any of its properties is bound, except such defaults or
violations as could not reasonably be expected to have a Material Adverse
Effect, (ii) in violation of any Order of any Governmental Entity, except for
such violations as could not reasonably be expected to have a Material Adverse
Effect, or
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(iii) in violation of any Law which could reasonably be expected to (A)
adversely affect the legality, validity or enforceability of the Transaction
Documents, (B) have a Material Adverse Effect or (C) adversely impair the
Company's ability or obligation to perform fully on a timely basis any
obligation which it has under the Transaction Documents.
(h) Status of Shares. Subject to approval of the shareholders of the
Company, which approval shall be solicited pursuant to Section 5.9 prior to the
Closing, the issuance and sale of the Shares have been duly authorized by all
necessary corporate action on the part of the Company and such Shares, when
delivered to Purchaser at the Closing against payment therefor as provided
herein, will be validly issued, fully paid and non-assessable and the issuance
and sale of the Shares is not and will not be subject to preemptive rights of
any other shareholder of the Company.
(i) Governmental Consents, etc. Except as may be required under any
applicable securities law in connection with the performance by the Company of
its obligations under the Registration Rights Agreement, and except for the
filing of a Form D with the Commission and the listing of the Shares on the
NYSE, and assuming the accuracy of the representations and warranties of, and
the performance of the agreements of, Purchaser set forth in Section 3.2 and
elsewhere herein, no authorization, consent, approval, waiver, license,
qualification or formal exemption from, nor any filing, declaration,
qualification or registration with, any Governmental Entity or any securities
exchange is required in connection with the execution, delivery or performance
by the Company of this Agreement and the issuance, sale or delivery of the
Shares except for those that (i) have been made or obtained by the Company as of
the date hereof or (ii) are set forth in Schedule 3.1(i) and by the Closing
shall be made or received by the Company. At the Closing Date, the Company will
have made all filings and given all notices to Governmental Entities and
obtained all necessary ordinances, registrations, declarations, approvals,
orders, consents, qualifications, franchises, certificates, permits and
authorizations from any Governmental Entity, to own or lease its properties and
to conduct its facilities and businesses as currently conducted, except where
failure to do so could not reasonably be expected to have a Material Adverse
Effect. At the Closing Date, all such registrations, declarations, approvals,
orders, consents, qualifications, franchises, certificates, permits and
authorizations, the failure of which to file, give notice of or obtain could
reasonably be expected to have a Material Adverse Effect, will be in full force
and effect. The assets of the Company qualify as exempt assets for purposes of
the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act and no filing under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act is
required in connection with the sale and issuance of the Shares hereunder.
(j) Private Offering. Neither the Company nor any Person acting on
its behalf has taken or will take any action (including, without limitation, any
offering of any securities of the Company under circumstances which would
require the integration of such offering with the offering of the Shares under
the Securities Act) which might subject the offering, issuance or sale of the
Shares to the registration requirements of Section 5 of the Securities Act.
(k) ERISA.
(i) Company Status. The Company currently qualifies as a "real
estate operating company" ("REOC") within the meaning of 29 C.F.R. Section
2510.3-101(e), and has qualified as a REOC during all valuation periods
within the meaning of 29 C.F.R. Section 2510.3-101(d)(5).
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(ii) Benefit Plans. To the extent applicable, the Benefit
Plans comply, in all material respects, with the requirements of ERISA and
the Code (including reporting requirements). Neither any Benefit Plan nor
the Company or any Subsidiary of the Company has incurred any liability or
penalty under Section 4975 of the Code or Section 502(i) of ERISA. Each
Benefit Plan has been maintained and administered in all material respects
in compliance with its terms and with ERISA and the Code to the extent
applicable thereto. There are no pending, or to the knowledge of the
Company threatened, material claims (other than claims for benefits
pursuant to the terms of any such plan) against or otherwise involving any
of the Benefit Plans and no action has been brought against or with
respect to any Benefit Plan, and neither the Company nor any Subsidiary of
the Company incurred any material liability to any party with respect to
any Benefit Plan. All contributions required to be made to the Benefit
Plans have been made or provided for as of the date hereof. No Benefit
Plan is subject to Title IV of ERISA and neither the Company nor any
Subsidiary of the Company has, within six years prior to the date of this
Agreement, contributed to or had any obligation to contribute to any
employee benefit plan subject to Title IV of ERISA. For purposes of this
Section 3.1(k), (i) the term "COMPANY" includes any entity required to be
aggregated with the Company pursuant to Code Section 414(b),(c),(m) or (o)
and (ii) provisions of ERISA or the Code include regulations prescribed
under such provisions.
(iii) The terms of this transaction are not less favorable to
Purchaser than the terms that would be available generally in an
arms'-length transaction between unrelated parties.
(l) Financial Statements. The consolidated balance sheets and
statements of operations of the Company and its consolidated Subsidiaries as of
the last day of its latest complete fiscal year and the related consolidated
statements of operations, shareholders' equity and cash flows for the fiscal
year then ended, reported on by the independent public accountants (and, with
respect to the Company, filed with the Commission on Form 10-K) for the years
ended December 31, 1995 and December 31, 1996 and the consolidated balance
sheets and statements of operations of the Company and its consolidated
Subsidiaries as of the fiscal quarter ended March 31, 1997 and the related
consolidated statements of operations, shareholders' equity and cash flows for
the fiscal quarter then ended (and, with respect to the Company, included in the
1997 Form 10-Q), present fairly in all material respects the financial position
of the Company and its consolidated Subsidiaries as of the dates indicated and
the results of operations of the Company and its consolidated Subsidiaries, for
the periods specified. Such financial statements have been prepared in
conformity with generally accepted accounting principles applied on a consistent
basis and all adjustments necessary for a fair presentation of results for such
periods have been made (subject, in the case of unaudited financial statements,
to normal year-end audit adjustments).
(m) Insurance. At Closing, the Company and its Subsidiaries will
have (i) "all risk" property insurance, including fire, flood, earthquake,
extended coverage and rental loss insurance and (ii) general commercial
liability insurance, under terms and in such amounts and covering such risks
that are customary for properties similar to those of the Company and its
Subsidiaries. There are currently no outstanding material losses for which the
Company or any of its Subsidiaries has failed to give or present notice or claim
under any policy. Policies for all the insurance are in full force and effect
and none of the Company or its Subsidiaries is in default in any material
respect under any of the policies.
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(n) Information Provided. Neither this Agreement, the schedules and
exhibits hereto, the Current SEC Reports nor any other written document
delivered to Purchaser in connection with the transactions contemplated hereby
contain any untrue statement of a material fact or omit any material fact
necessary to make the statements herein or therein, as the case may be, in light
of the circumstances under which it was made, not misleading, and all material
information regarding the Company and its Subsidiaries is provided therein.
(o) No Other Liabilities. Except as set forth in Schedule 3.1(o),
neither the Company nor any Subsidiary of the Company will have any material
liability, whether absolute, accrued, contingent or otherwise, except
liabilities (i) reflected on the consolidated balance sheet of the Company and
its Subsidiaries as at March 31, 1997, or (ii) liabilities that (1) are incurred
by the Company and its Subsidiaries after March 31, 1997 in the ordinary course
of business and (2) could not reasonably be expected to have a Material Adverse
Effect.
(p) No Brokers or Finders. No agent, broker, finder or investment or
commercial banker, or other Person or firm engaged by or acting on behalf of the
Company in connection with the negotiation, execution or performance of this
Agreement is or will be entitled to any brokerage or finder's or similar fee or
other commission as a result of this Agreement other than any such fees or
commissions that have been disclosed to Purchaser and as to which the Company
shall have full and sole responsibility.
(q) Taxes; REIT Status. Each of the Company and its Subsidiaries has
filed all Tax Returns that are required to be filed with any Governmental Entity
and has paid all Taxes due pursuant to the Tax Returns or any assessment
received by it or otherwise required to be paid, except Taxes being contested in
good faith by appropriate proceedings and for which adequate reserves or other
provisions are maintained, and except for the filing of Tax Returns as to which
the failure to file could not, individually or in the aggregate, have a Material
Adverse Effect. The Company (i) elected to be taxed as a "real estate investment
trust" as defined in Section 856 of the Code ("REIT") effective for each of the
taxable years since the Company has been incorporated, (ii) has not revoked such
election, (iii) qualifies for taxation as a REIT for each such taxable year and
for its current taxable year and (iv) has not sold or otherwise disposed of any
assets which could give rise to a material amount of tax pursuant to any
election made by the Company under Notice 88-19, 1988-1 C.B. 486 and does not
expect to effect any such sale or other disposition.
(r) Compliance with Laws. Neither the Company nor any of its
Subsidiaries has been in or is in, and none of them has received notice of,
violation of or default with respect to, any Law or any decision, ruling, order
or award of any arbitrator applicable to it or its business, properties or
operations, except for violations or defaults that, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
(s) Subsidiaries.
(i) The 1996 Form 10-K sets forth a correct and complete list
of all of the Company's Subsidiaries as of the date hereof.
(ii) As of the date hereof, except as set forth on Schedule
3.1(s), all outstanding shares of capital stock or other evidences of
equity ownership of each Subsidiary of the Company are duly
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17
authorized, validly issued, fully paid and nonassessable and are owned
directly or indirectly, beneficially and of record by the Company, free
and clear of all Liens.
(t) Material Contracts. (i) The 1997 Form 10-Q, the 1996 Form 10-K
and Schedule 3.1(c) includes a correct and complete list of the following with
respect to the Company and any of its Subsidiaries: (1) agreements with any
shareholder having beneficial ownership of 5% or more of the shares of common
stock of the Company or such Subsidiary then issued and outstanding, director or
officer of the Company or such Subsidiary and all shareholders' agreements and
voting trusts; and (2) agreements not made in the ordinary course of business
and which could reasonably by expected to result in a Material Adverse Effect.
(ii) All property management agreements to which the Company
is a party provide for a right (without payment of any penalty or
termination fee) of the Company to terminate such agreement upon 30-day
prior written notice and the Company shall deliver each such agreement
reasonably requested by Purchaser within 10 days after the date of such
request.
(u) Recommendations. The Board of Directors of the Company, at a
meeting duly called and held, has duly (i) determined that the Transaction
Documents and the transactions contemplated thereby, taken as a whole, are in
the best interests of the Company and its shareholders, (ii) resolved to
recommend that holders of shares of Common Stock and Series B Preferred Stock
approve the Transaction Documents and the transactions contemplated thereby
(collectively, the "RECOMMENDATIONS") and (iii) approved the Transaction
Documents and the transactions contemplated thereby.
(v) Shareholder Approval. The affirmative vote of a majority of the
shares of the Common Stock and the Series B Preferred Stock, voting together as
a single class, voted at the duly convened shareholders meeting of the Company
(or any other duly convened meeting of the holders of the Common Stock and the
Series B Preferred Stock) is the only vote of the holders of any class or series
of the equity securities of the Company necessary to approve the Transaction
Documents and the transactions contemplated thereby.
(w) No Restrictions on Shares. As of the Closing Date, subject to
satisfaction of Section 4.1(l), no provision of the Charter or Bylaws of the
Company, any other agreement, indenture or other instrument to which the Company
or its properties are subject, or any Law applicable to the Company (i), except
as provided in the Excepted Holder Agreement, directly or indirectly restricts
or impairs the right or ability of Purchaser to vote, or otherwise to exercise
the rights and receive the benefits of a shareholder with respect to the Shares,
including, without limitation, restrictions based upon the size of the security
holdings of Purchaser, the business in which it is engaged or other
considerations applicable to it and not to security holders generally, or (ii)
provides any other security holder of the Company with any preemptive rights.
(x) SEC Documents. The Company has filed with the Commission all
reports, schedules, forms, statements and other documents required by the
Exchange Act to be filed by the Company (collectively, and in each case
including all exhibits and schedules thereto and documents incorporated by
reference therein, the "SEC DOCUMENTS"). The Company has delivered or made
available to Purchaser all SEC Documents. As of their respective dates, except
to the extent revised or superseded by a subsequent filing with the Commission,
the SEC Documents complied in all material respects with the requirements of the
Securities Act or the Exchange Act, as the case may be, and none of the SEC
Documents (including any and all financial
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statements included therein) as of such dates contained any untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The consolidated
financial statements of the Company and its Subsidiaries included in all SEC
Documents, including any amendments thereto (the "SEC FINANCIAL STATEMENTS"),
comply as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the Commission with
respect thereto.
(y) No Merger Agreements. As of the date hereof, except as set forth
in Schedule 3.1(y), none of Company or its Subsidiaries has entered into any
agreement with any Person which has not been terminated as of the date of this
Agreement and under which there remains any liability or obligation thereof with
respect to a merger or consolidation with any of the Company or its
Subsidiaries, or any other acquisition of a substantial amount of the assets of
the Company or its Subsidiaries.
Section 3.2 Representations and Warranties of Purchaser.
(a) Investment Intent. Purchaser represents and warrants to the
Company that the Shares to be acquired by it hereunder are being acquired for
its own account for investment and with no intention of distributing or
reselling such Shares or any part thereof or interest therein in any transaction
which would be in violation of the securities laws of the United States of
America or any State or any foreign country or jurisdiction.
(b) Transfer Restrictions. If Purchaser should decide to dispose of
any of the Shares, Purchaser understands and agrees that it may do so only
pursuant to an effective registration statement under the Securities Act or
pursuant to an exemption from registration under the Securities Act. In
connection with any offer, resale, pledge or other transfer (individually and
collectively, a "TRANSFER") of any Shares other than pursuant to an effective
registration statement, the Company may require that the transferor of such
Shares provide to the Company an opinion of counsel which opinion shall be
reasonably satisfactory in form and substance to the Company, to the effect that
such Transfer is being made pursuant to an exemption from, or in a transaction
not subject to, the registration requirements of the Securities Act and any
State or foreign securities laws. Purchaser agrees to the imprinting, so long as
appropriate, of substantially the following legend on certificates representing
the Shares:
THE SHARES OF COMMON STOCK (THE "SHARES") EVIDENCED HEREBY
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT AS
SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER
AGREES THAT IT WILL NOT OFFER, RESELL, PLEDGE OR OTHERWISE TRANSFER
(INDIVIDUALLY AND COLLECTIVELY, A "TRANSFER") THE SHARES EVIDENCED HEREBY,
EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, OR (B) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT SUCH AS THE EXEMPTION SET FORTH IN RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE). IF THE PROPOSED TRANSFER IS TO BE MADE
OTHER THAN PURSUANT TO CLAUSE (A) ABOVE, THE HOLDER MUST, PRIOR TO SUCH
TRANSFER, FURNISH TO THE COMPANY AND THE TRANSFER AGENT SUCH
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CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THEY MAY REASONABLY
REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT OR ANY STATE OR FOREIGN SECURITIES LAW.
The legend set forth above may be removed if and when the Shares
represented by such certificate are disposed of pursuant to an effective
registration statement under the Securities Act or the opinion of counsel
referred to above has been provided to the Company. The share certificates shall
also bear legends regarding permitted ownership levels of Shares and any
additional legends required by applicable Federal, State or foreign securities
Laws or necessary under applicable tax Laws, which legends may be removed when,
in the opinion of counsel to the Company, the same are no longer required under
the Charter or the applicable requirements of such securities or tax Laws.
Purchaser agrees that, in connection with any Transfer of Shares by it pursuant
to an effective registration statement under the Securities Act, Purchaser will
comply with all prospectus delivery requirements of the Securities Act. The
Company makes no representation, warranty or agreement as to the availability of
any exemption from registration under the Securities Act with respect to any
resale of Shares.
(c) Stop Transfer Instruction. Purchaser agrees that the Company
shall be entitled to make a notation on its records and give instructions to any
transfer agent for the Shares in order to implement the restrictions on transfer
set forth in this Agreement.
(d) Purchaser Status. Purchaser represents and warrants to, and
covenants and agrees with, the Company that (i) at the time it was offered the
Shares, it was, (ii) at the date hereof, it is, and (iii) at the Closing Date,
it will be, a "qualified institutional buyer" as defined in Rule 144A under the
Securities Act or an "accredited investor" as defined in Rule 501 under the
Securities Act, and has such knowledge, sophistication and experience in
business and financial matters so as to be capable of evaluating the Company and
an investment in the Shares, and is able to bear the economic risk of such
investment.
(e) Authority. Purchaser represents and warrants to the Company
that, assuming the accuracy of the representation of the Company in Section
3.1(i) hereof, (i) as of the Closing Date, the purchase of the Shares to be
purchased by it has been duly and properly authorized and this Agreement has
been duly executed and delivered by it or on its behalf and constitutes the
valid and legally binding obligation of Purchaser, enforceable against it in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights generally and to general principles
of equity; (ii) the purchase of the Shares to be purchased by it does not
conflict with or violate (A) its charter or by-laws or (B) any Law applicable to
it in a manner that could materially hinder or impair the completion of the
transactions contemplated hereby; and (iii) the purchase of Shares to be
purchased by it does not impose any penalty or other onerous condition on
Purchaser that could materially hinder or impact the completion of the
transactions contemplated hereby.
(f) Access to Information. Purchaser acknowledges as of the date of
approval by the Finance Committee of the Board of Directors of Purchaser that it
has been afforded (i) the opportunity to ask such questions as it has deemed
necessary of, and to receive answers from, representatives of the Company
concerning the terms and conditions of the offering of the Shares and the merits
and risks of investing in the
III-18
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Shares; (ii) access to information about the Company, the Company's financial
condition, pro forma results of operations, business properties, management and
prospects sufficient to enable it to evaluate its investment in the Shares; and
(iii) the opportunity to obtain such additional information which the Company
possesses or can acquire without unreasonable effort or expense that is
necessary to verify the accuracy and completeness of the information contained
in the SEC Documents.
(g) Reliance. Purchaser also understands and acknowledges that (i)
the Shares are being offered and sold without registration under the Securities
Act in a transaction that is exempt from the registration provisions of the
Securities Act and (ii) the availability of such exemption depends in part on,
and that the Company and, for purposes of the opinion to be delivered to
Purchaser pursuant to Section 4.1(a) hereof, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P. will rely
upon, the accuracy and truthfulness of the foregoing representations and
Purchaser hereby consents to such reliance.
(h) No Brokers or Finders. No agent, broker, finder or investment or
commercial banker, or other Person or firm engaged by or acting on behalf of any
Purchaser in connection with the negotiation, execution or performance of this
Agreement is or will be entitled to any brokerage or finder's or similar fee or
other commission as a result of this Agreement other than any such fees or
commission that have been disclosed to the Company and as to which Purchaser
shall have full and sole responsibility.
ARTICLE IV
CONDITIONS PRECEDENT TO CLOSING
Section 4.1 Conditions Precedent to Obligations of Purchaser. The
obligations of Purchaser to purchase the Shares are subject, at the Closing
Date, to the prior or simultaneous satisfaction or waiver by it of the following
conditions:
(a) Purchaser shall have received an opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇
L.L.P., counsel for the Company; provided that the form of opinion shall be
negotiated to reasonable satisfaction of Purchaser and its counsel on or before
June 12, 1997. In rendering the foregoing opinion, such counsel may rely as to
factual matters upon certificates or other documents furnished by directors and
officers of the Company and by government officials, and upon such other
documents as such counsel deem appropriate as a basis for such opinion. Such
counsel may specify the jurisdictions in which they are admitted to practice and
that they are not admitted to practice in any other jurisdiction and are not
experts in the law of any other jurisdiction. To the extent such opinion
concerns the laws of any other such jurisdiction, such counsel may either
provide an opinion of counsel admitted to practice in such jurisdiction (which
counsel shall be reasonably acceptable to Purchaser) in lieu of its own opinion
or rely upon the opinion of such counsel. Purchaser hereby agrees that the firm
of ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ is acceptable to Purchaser for purposes of
providing such opinions involving the laws of the State of Maryland. To the
extent that any opinion rendered by counsel admitted to practice in another
jurisdiction or relied upon by ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P., including any exception
or limitation thereto, is materially different from the opinion to be delivered
at Closing by ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P. such opinion shall be reasonably
satisfactory to Purchaser and a copy of such opinion shall be delivered to
Purchaser at the Closing.
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(b) The representations and warranties made by the Company herein
shall be true and correct in all material respects on the date hereof and on and
as of the Closing Date (except as otherwise limited by their terms to the date
hereof) with the same effect as though such representations and warranties had
been made on and as of the Closing Date and the Company shall have complied in
all material respects with all agreements required to be performed by it
hereunder at or prior to the Closing Date.
(c) There shall not have occurred any event which has had, or could
reasonably be expected to have, a Material Adverse Effect subsequent to March
31, 1997.
(d) At the Closing Date, Purchaser shall have received a
certificate, dated the Closing Date, signed by the Chief Executive Officer of
the Company in such capacity and not individually to the effect set forth in
Sections 4.1(b) and (c), and stating that the conditions specified in this
Section 4.1 have been satisfied at the Closing Date.
(e) At the Closing Date, Purchaser shall have received a
certificate, dated the Closing Date, signed by the Secretary or an Assistant
Secretary of the Company in such capacity and not individually and certifying
(i) that attached thereto is a true, correct and complete copy of (A) the
Charter, (B) Bylaws and (C) resolutions duly adopted by the Board of Directors
of the Company authorizing the execution and delivery of the Transaction
Documents and all other documents to be executed in connection therewith and the
issuance and sale of the Shares, (ii) the incumbency of officers executing this
Agreement and the other Transaction Documents, and (iii) that attached thereto
is a specimen of the share certificate for the Common Stock.
(f) No Law or Order shall have been enacted, entered, issued,
promulgated or enforced by any Governmental Entity which prohibits or restricts
the transactions contemplated by this Agreement. No Governmental Entity shall
have notified any party to this Agreement that consummation of the transactions
contemplated by this Agreement would constitute a violation of any Law of any
jurisdiction or that it intends to commence proceedings to restrain or prohibit
such transactions or force divestiture or rescission, unless such Governmental
Entity shall have withdrawn such notice and abandoned any such proceedings prior
to the time which otherwise would have been the Closing Date.
(g) The Company shall have entered into the Registration Rights
Agreement for the benefit of Purchaser, and Purchaser shall have received a copy
of such Registration Rights Agreement duly executed by the Company in favor of
Purchaser.
(h) The shareholders of the Company shall have duly approved the
issuance of the Shares as contemplated by the Transaction Documents at the
Shareholders' Meeting.
(i) All Approvals set forth in Schedule 3.1(d) and Schedule 3.1(i)
shall have been received or the applicable waiting periods shall have expired.
(j) The Finance Committee of the Board of Directors of Purchaser
shall have duly authorized the purchase of the Shares pursuant to this Agreement
and the execution, delivery and performance by Purchaser of its obligations
under this Agreement.
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(k) Purchaser shall be reasonably satisfied that the Company is
qualified as a "real estate operating company" within the meaning of 29 C.F.R.
Section 2510.3-101(e).
(l) The Company shall have taken all actions necessary to ensure
that Purchaser shall have full voting rights with respect to each of the Shares
(including, without limitation, obtaining approvals of the Board of Directors of
the Company and amending the Charter or By Laws of the Company, as applicable).
Section 4.2 Conditions Precedent to Obligations of the Company. The
obligation of the Company to issue and sell the Shares hereunder is subject, at
the Closing Date, to the prior or simultaneous satisfaction or waiver by it of
the following conditions:
(a) The representations and warranties made by Purchaser herein
shall be true and correct in all material respects on the date hereof and on and
as of the Closing Date with the same effect as though such representations and
warranties had been made on and as of the Closing Date (except as otherwise
limited by their terms to the date hereof) and Purchaser shall have complied in
all material respects with all agreements required to be performed by it
hereunder at or prior to the Closing Date and Purchaser shall have provided such
evidence thereof as the Company may reasonably request.
(b) No Law or Order shall have been enacted, entered, issued,
promulgated or enforced by any Governmental Entity which prohibits or restricts
the transactions contemplated by this Agreement. No Governmental Entity shall
have notified any party to this Agreement that consummation of the transactions
contemplated by this Agreement would constitute a violation of any Law of any
jurisdiction or that it intends to commence proceedings to restrain or prohibit
such transactions or force divestiture or rescission, unless such Governmental
Entity shall have withdrawn such notice and abandoned any such proceedings prior
to the time which otherwise would have been the Closing Date.
(c) The shareholders of the Company shall have duly approved the
issuance of the Shares as contemplated by the Transaction Documents at the
Shareholders' Meeting.
(d) All Approvals set forth in Schedule 3.1(d) and Schedule 3.1(i)
shall have been received or the applicable waiting periods shall have expired.
(e) The Finance Committee of the Board of Directors of Purchaser
shall have duly authorized the purchase of the Shares pursuant to this Agreement
and the execution, delivery and performance by Purchaser of its obligations
under this Agreement.
(f) The Shares owned by Purchaser will not cause the Company to be
treated as the owner of a 9.8% or more interest in any tenant of the Company
listed on Annex 1 to the Excepted Holder Agreement attached hereto as Exhibit B.
(g) At the Closing Date, the Company shall have received a
certificate, dated the Closing Date, signed by the managing director of
Purchaser in such capacity and not individually to the effect set forth in
Section 4.2(a) and certifying that attached thereto is a true, correct and
complete copy of resolutions duly
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adopted by the Finance Committee of the Board of Directors of Purchaser
authorizing the purchase of the Shares.
ARTICLE V
COVENANTS
Section 5.1 Furnishing of Information. (a) As long as Purchaser owns
Shares representing at least the Minimum Ownership Level, from and after the
Closing Date the Company will promptly furnish to Purchaser all reports filed by
it pursuant to Section 13(a) or 15(d) of the Exchange Act (or if the Company is
not at the time required to file reports pursuant to said Section 13(a) or
15(d), annual and quarterly reports comparable to those required by Sections
13(a) or 15(d) of the Exchange Act) and all material non-confidential filings or
notifications made with any Governmental Entity. As long as the Company is
required to deliver to Purchaser the reports described in the first sentence of
this Section 5.1, upon request of Purchaser, the Company shall deliver to
Purchaser, the executive summary and all other documents delivered to the Board
of Directors of the Company in connection with any prior meeting of the Board of
Directors of the Company.
(b) Purchaser shall limit access to any confidential information received
by it pursuant to this Section 5.1 and Section 5.13 hereof ("Confidential
Information") to its executives and employees assigned to review and analyze the
Confidential Information. Purchaser shall not disseminate, or in any way
disclose, directly or indirectly, to any other person, firm or corporation any
Confidential Information without receiving prior written permission from the
Company; provided, however, that Purchaser may divulge such information to its
accountants, attorneys, investment advisors and other advisors in connection
with evaluation of the investment in the Shares or for other legitimate business
purposes, and Purchaser may divulge the Confidential Information to the extent
that it is legally obligated to do so. If Purchaser is legally obligated to
disclose any of the Confidential Information, Purchaser shall use best efforts
to provide the Company with prompt notice so that the Company may seek a
protective order or other appropriate remedy. In the event that the Company is
not able to obtain such protective order or other remedy within a reasonable
time from the giving of notice to the Company as aforesaid, Purchaser will
furnish only that portion of the Confidential Information which it is legally
required to disclose.
Section 5.2 Real Estate Investment Trust. The Company shall use its best
efforts to continue to qualify as a REIT and so long as Purchaser holds Shares
representing, in the aggregate, at least the Minimum Ownership Level, the
Company shall not, without Purchaser's written consent, take any action that
could reasonably be expected to disqualify the Company as a REIT.
Section 5.3 Sale of Shares by Purchaser. Purchaser hereby agrees that
during the ninety (90) day period commencing on the Closing Date it will not
sell, assign, transfer or otherwise in any manner dispose of any of the Shares,
other than sales, assignments, transfers or dispositions: (i) in connection with
any merger or consolidation of the Company; (ii) pursuant to a tender or
exchange offer for shares of Common Stock; (iii) to an Affiliate of Purchaser,
provided that such Person agrees to be bound by the terms and conditions of this
Agreement and the Registration Rights Agreement, including, without limitation,
Section 6 of the Registration Rights Agreement; (iv) as a result of any pledge
by Purchaser of the Shares as security for any indebtedness
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or guaranty of Purchaser, provided that such pledgee agrees to be bound by the
terms and conditions of this Agreement and the Registration Rights Agreement,
including, without limitation, Section 6 of the Registration Rights Agreement,
upon the exercise of its rights under such pledge; or (v) in private
transactions pursuant to one or more exemptions from registration under the
Securities Act.
Section 5.4 Approvals. The Company and Purchaser each agree to cooperate
and use their reasonable best efforts to obtain (and will immediately prepare
all registrations, filings and applications, requests and notices preliminary
to) all approvals that may be necessary or which may be reasonably requested by
the Company or Purchaser to consummate the transactions contemplated by this
Agreement. The Company shall, prior to the Closing Date, take all actions
necessary to ensure that Purchaser shall have full voting rights with respect to
each of the Shares (including, without limitation, obtaining approvals of the
Board of Directors of the Company and amending the Charter or Bylaws of the
Company, as applicable).
Section 5.5 Registration Rights Agreement. On or before the Closing Date,
the Company and Purchaser shall enter into an Registration Rights Agreement
substantially in the form of Exhibit A.
Section 5.6 Excepted Holder Agreements. On or before the Closing Date, the
Company and Purchaser shall enter into an Excepted Holder Agreement
substantially in the form of Exhibit B.
Section 5.7 Notification of Certain Matters. The Company shall give prompt
notice to Purchaser, and Purchaser shall give prompt notice to the Company, of
(a) the occurrence, or failure to occur, of any event that causes any
representation or warranty contained in any Transaction Document to be untrue or
inaccurate in any material respect at any time from the date of this Agreement
to the Closing Date and (b) any failure of the Company, on the one hand, or
Purchaser, on the other hand, to comply with or satisfy, in any material
respect, any covenant, condition or agreement to be complied with or satisfied
by it under any Transaction Document.
Section 5.8 Nomination of Board Member. The Company shall use its
commercially reasonable efforts to cause the Board of Directors of the Company
to increase the size of the Board of Directors by one person and to elect a
designee of the Purchaser to fill such vacancy and shall endorse the selection
of such designee for appointment as a member of the Board Affairs Committee of
the Board of Directors promptly after the Closing Date; provided that, on or
prior to the Closing Date, the Company receives written notice executed by
Purchaser, which notice shall name such designee and shall provide all other
information relating to such designee as the Company may be required to disclose
to its stockholders in connection with such appointment.
Section 5.9 Shareholders' Meeting; Preparation of Proxy Statement. The
Company shall, in accordance with applicable law, as soon as practicable
following the execution and delivery of this Agreement, prepare and file with
the Commission a proxy statement in form and substance reasonably satisfactory
to Purchaser (such proxy statement, including the form of proxy and all such
other materials distributed in connection therewith, as amended or supplemented
from time to time, the "PROXY STATEMENT"). Purchaser will cooperate with the
Company in the preparation of the Proxy Statement and will provide the Company
with material and information required to be included therein. The Company shall
use its commercially reasonable efforts to cause the Proxy Statement to be
mailed to its shareholders at the earliest practicable date. The Company shall
call a meeting of its shareholders (the "SHAREHOLDERS MEETING") to be held as
promptly as
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practicable after the date hereof (but not before July 9, 1997) for the purpose,
among other things, of considering and taking action upon the issuance of the
shares of Common Stock to Purchaser and the Subsequent Purchasers, if any, as
contemplated hereunder and shall use its commercially reasonable efforts to
obtain and furnish the information required to be included by it in the Proxy
Statement and, after consultation with Purchaser, respond promptly to any
comments made by the Commission with respect to the Proxy Statement and any
preliminary version thereof. The Company will, through its Board of Directors,
include the Recommendations in the Proxy Statement and shall solicit and use its
reasonable best efforts to obtain proxies in favor of the issuance of the shares
of Common Stock to Purchaser and the Subsequent Purchasers, if any, as
contemplated hereunder. The Company shall cause the Proxy Statement and the
distribution thereof to comply in all material respects with the Exchange Act
and ensure that the Proxy Statement will not, at the date the Proxy Statement
(or any amendment thereof or supplement thereto) is first mailed to shareholders
and at the time of the Shareholders' Meeting, be false or misleading with
respect to any material fact, or omit to state any material fact required to be
stated therein or necessary in order to make the statements made therein, in the
light of the circumstances under which they are made, not misleading or
necessary to correct any statement in any earlier communication with respect to
the solicitation of proxies for the Shareholders' Meeting which has become false
or misleading. None of the information relating solely to Purchaser as a
shareholder of the Company that is supplied by Purchaser in writing specifically
for inclusion or incorporation by reference in the Proxy Statement will, at the
time the Proxy Statement is filed with the Commission and at the time of the
Shareholders' Meeting, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements made therein not misleading, in the light of the circumstances
under which they were made. The obligations of the Company to distribute the
Proxy Statement and convene the Shareholders Meeting pursuant to this Section
5.9 shall not be affected by the withdrawal or modification of the
Recommendations.
Section 5.10 Publicity and Reports. Except as may be required by
applicable Law, or by obligations pursuant to any listing agreement with a
national securities exchange, neither the Company nor Purchaser shall, without
the approval of the other party, issue any press release or make any public
statement with respect to the transactions contemplated hereby or that refer to
such other party.
Section 5.11 Conduct of Business. The Company covenants and agrees that
until the earlier of the Closing Date or the termination of this Agreement, the
Company shall, and shall cause its Subsidiaries to, continue to engage in an
efficient and economical manner solely in a business of the same general type as
conducted by it on the date of this Agreement in the ordinary course, consistent
with past practices; and use its reasonable best efforts to preserve the
business of the Company and its Subsidiaries and to preserve the goodwill of
customers and others having business relations with the Company and its
Subsidiaries.
Section 5.12 Negative Covenants of the Company. The Company covenants and
agrees as follows, and shall not enter into any agreement or take any other
action inconsistent with the following, in each case until the earlier of the
Closing Date or the termination of this Agreement, except as specifically
contemplated by this Agreement or to the extent such action shall not reasonably
be expected to result in a Material Adverse Effect.
(a) Charter documents. The Company shall not amend the Charter
or Bylaws and shall not permit any of its Subsidiaries to amend its
organizational documents.
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(b) Mergers, Etc. Except as shall have been previously agreed
in writing by the parties, the Company shall not, and shall not permit any of
its Subsidiaries to, merge or consolidate with any Person, sell, lease, license
or otherwise dispose of all or substantially all of its assets (whether now
owned or hereafter acquired) to any Person or acquire all or substantially all
of the assets or the business of any Person, in each case whether in one
transaction or in a series of transactions pursuant to which Company or such
Subsidiary shall not be the surviving entity.
Section 5.13 Inspection Rights. The Company shall keep proper books of
record and account, in which full and correct entries shall be made of all
financial transactions and the assets and business of the Company in accordance
with generally accepted accounting principles, and the Company shall cause its
Subsidiaries to do the same. As long as Purchaser owns shares representing at
least the Minimum Ownership Level, the Company shall, upon reasonable notice by
Purchaser, provide Purchaser with reasonable access to all Books and Records
during regular business hours and allow Purchaser to make copies and abstracts
thereof and the Company shall cause its Subsidiaries to do the same. Purchaser
shall have the right to consult from time to time with management of the Company
at its place of business regarding operating and financial matters of the
Company and its Subsidiaries. Purchaser shall be bound by the provisions of
Section 5.1(b) with respect to information obtained pursuant to this Section.
Section 5.14 [Reserved].
Section 5.15 Real Estate Operating Company. The Company shall continue to
operate as a REOC for so long as Purchaser holds Shares representing in the
aggregate at least the Minimum Ownership Level.
Section 5.16 Amendment to Investor Rights Agreement. The Company shall use
its best efforts in order to obtain all necessary consents in order (i) to
provide Purchaser and the Subsequent Purchasers rights that are pari passu with
those of each of the Company's shareholders party to the Investor Rights
Agreement under the penultimate paragraph of Section 2(b) and Section 2(c)(i)
and (ii) of the Investor Rights Agreement and (ii) to provide that such
shareholders shall not have any right to be included in the shelf registration
to be filed by the Company for the benefit of the Purchaser and the Subsequent
Purchasers.
Section 5.17 Delivery of Certain Documents. The Company shall deliver at
least ten days prior to the scheduled date of the Shareholders Meeting, all
agreements, contracts, promissory notes, letters of intent and similar documents
that (i) have been entered into by the Company or any of its Subsidiaries
between March 31, 1997 and the date that is no more than 15 days prior to the
scheduled date for the Shareholders Meeting, (ii) have not been terminated and
(iii) relate to an acquisition or sale of assets, stock or other equity interest
or the incurrence or guarantee of indebtedness by the Company or such
Subsidiary, involving a maximum purchase price or obligation of more than
$75,000,000.
Section 5.18 Further Assurances. Promptly upon request by the other party,
each party shall, and shall cause its Subsidiaries to, take, execute,
acknowledge, deliver, file, re-file, register and re-register, any and all such
further acts, certificates, assurances and other instruments as the requesting
party may require from time to time in order to carry out more effectively the
purposes of each Transaction Document and to better transfer, preserve, protect
and confirm to the requesting party the rights granted or now or hereafter
intended to be granted to the requesting party under each Transaction Document.
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ARTICLE VI
MISCELLANEOUS
Section 6.1 Survival of Provisions. The representations, warranties and
covenants of the Company and Purchaser made herein shall remain operative and in
full force and effect pursuant to their terms (a) regardless of (i) any
investigation made by or on behalf of Purchaser or the Company, as the case may
be, or (ii) acceptance of any of the Shares and payment by Purchaser therefor
and (b) except as specifically provided otherwise, after the Closing Date.
Section 6.2 Termination. This Agreement and the transactions contemplated
by this Agreement may be terminated at any time prior to the Closing Date as
follows and in no other manner:
(a) By either the Company or Purchaser if the Closing has not
occurred on or prior to the Termination Date;
(b) By mutual consent of Purchaser and the Company;
(c) By Purchaser at any time on or prior to June 12, 1997, if the
Finance Committee of the Board of Directors of Purchaser shall not have
authorized the purchase of the Shares pursuant to this Agreement on or before
such date;
(d) By the Company at any time on or prior to August 5, 1997;
(e) By Purchaser if (i) the Board of Directors of the Company shall
have withdrawn or modified the Recommendations in a manner adverse to Purchaser
or (ii) the shareholders shall have failed to approve the issuance of the Shares
pursuant to this Agreement at the Shareholders Meeting; and
(f) By either Purchaser, on the one hand, or the Company, on the
other hand, with written notice to the other party if there has been a
misrepresentation or material breach on the part of the Company or Purchaser,
respectively, in their respective representations, warranties and covenants set
forth herein.
In the event that this Agreement should be terminated pursuant to Section
6.2, all further obligations of the parties under this Agreement shall
terminate, provided, however, that a termination under Section 6.2(f) shall not
relieve any party of any liability for a breach of, or any misrepresentation
under, this Agreement or be deemed to constitute a waiver of any available
remedy for any such breach of misrepresentation; provided, further, that in the
event of a termination pursuant to Section 6.2(e) or the failure of the Company
to obtain the consents set forth in Schedule 3.1(d) and 3.1(i), Company shall
pay Purchaser within five business days after such termination, a fee equal to
$1,500,000. Notwithstanding anything in the foregoing to the contrary, no party
that is in material breach of this Agreement shall be entitled to terminate this
Agreement except with the consent of the other party.
Section 6.3 No Waiver; Modification in Writing.
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(a) No failure or delay on the part of the Company or Purchaser in
exercising any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. The remedies provided for herein are cumulative
and are not exclusive of any remedies that may be available to the Company or
Purchaser at law or in equity. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given
without the written consent of the Company, on the one hand, and Purchaser, on
the other hand, provided that notice of any such waiver shall be given to each
party hereto as set forth below. Any amendment, supplement or modification of or
to any provision of this Agreement, or any waiver of any provision of this
Agreement, shall be effective only in the specific instance and for the specific
purpose for which made or given. Except where notice is specifically required by
this Agreement, no notice to or demand on any party hereto in any case shall
entitle the other party to any other or further notice or demand in similar or
other circumstances.
Section 6.4 Communications. All notices and demands provided for hereunder
shall be in writing, and shall be given by registered or certified mail, return
receipt requested, telex, telegram, telecopy, courier service or personal
delivery, and, if to Purchaser, addressed to ▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, with copies to: O'Melveny & ▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Fax No. (▇▇▇) ▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq., or
to the Company at: Meridian Industrial Trust, Inc., ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇, Attention: Chief
Executive Officer, with a copy to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq., ▇▇▇▇▇▇ & ▇▇▇▇▇▇
L.L.P., ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Fax No.: (214)
▇▇▇-▇▇▇▇ or to such other address as Purchaser and Company, as the case may be,
may designate in writing, and shall be deemed given when received.
Section 6.5 Execution in Counterparts. This Agreement may be executed in
any number of counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original and all of which counterparts,
taken together, shall constitute one and the same agreement.
Section 6.6 Binding Effect; Assignment. Except as provided in Section 5.3
hereof, the rights and obligations of the parties under this Agreement may not
be assigned to any other person; provided, however, that (i) prior to the
Closing, Purchaser may assign part or all of its rights under this Agreement to
Strategic Value Investors, L.L.C. or its successor ("SVI") so long as SVI agrees
to bound by the terms of this Agreement and the Registration Rights Agreement
(and Purchaser shall be released from its obligations under this Agreement and
the Registration Rights Agreement to the extent of such assignment) and agrees
to enter into an Excepted Holder Agreement substantially in the form of Exhibit
B hereto if such assignment would result in SVI owning shares representing more
than 8.5% of the issued and outstanding shares of Common Stock of the Company on
the Closing Date; and provided further, that Purchaser shall not have any
further rights under Section 5.8 if it assigns its rights hereunder and
thereunder to SVI and (ii) after the Closing the Company may assign its rights
hereunder to any successor entity to the Company, whether pursuant to a sale of
substantially all of the Company's assets, or the merger or consolidation of the
Company, that agrees to be bound by the terms and conditions hereof and the
other Transactional Documents. Except as expressly provided in this Agreement,
this Agreement shall not be construed so as to confer any right or benefit upon
any Person other than the parties to this Agreement, and their respective
successors and permitted assigns.
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This Agreement shall be binding upon the Company and Purchaser, and their
respective successors and permitted assigns.
Section 6.7 Governing Law. THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACT
MADE UNDER THE LAWS OF THE STATE OF MARYLAND, AND FOR ALL PURPOSES SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF SAID STATE, WITHOUT REGARD TO
PRINCIPLES OF CONFLICT OF LAWS.
Section 6.8 Expenses. Each of the parties hereto shall pay its own
respective costs and expenses incurred in connection with the negotiation,
execution and performance of this Agreement. Notwithstanding the foregoing, the
costs and expenses of preparing and distributing the Proxy Statement and
obtaining and complying with the antitrust requirements of any Governmental
Entity shall be paid by the Company.
Section 6.9 Severability of Provisions. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
Section 6.10 Headings. The Article and Section headings and Table of
Contents used or contained in this Agreement are for convenience of reference
only and shall not affect the construction of this Agreement.
Section 6.11 Integration. This Agreement (including the exhibits hereto)
constitutes the entire agreement among the parties with respect to the purchase
and sale of the Shares and there are no promises or undertakings with respect
thereto relative to the subject matter hereof not expressly set forth or
referred to herein or in exhibits hereto.
Section 6.12 Enforcement of Covenants. The Company agrees that a violation
on its part of the covenants contained in Section 5.8 shall cause irreparable
damage to Purchaser and, consequently, the Company further agrees that Purchaser
shall be entitled, as a matter of right, to an injunction restraining any
violation of such covenants by the Company. Such right to an injunction shall be
cumulative with any and all other remedies Purchaser may have, including, but
not limited to, recover of damages.
Section 6.13 Waiver by Jury Trial. Each party waives any right to a trial
by jury in any action, suit or other proceeding to enforce or defend any right
under any Transaction Document or any amendment, instrument, document or
agreement delivered, or which in the future may be delivered, in connection with
any Transaction Document and agrees that any such action, suit or other
proceeding shall be tried before a court and not before a jury.
[Remainder of this page intentionally left blank]
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed by its duly authorized officer as of the date first written
above.
MERIDIAN INDUSTRIAL
TRUST, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
____________________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chief Executive Officer
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
____________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
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