Exhibit 2.1
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AGREEMENT AND PLAN OF MERGER
Dated as of October 28, 2001
by and among
CALWEST INDUSTRIAL PROPERTIES, LLC,
ROOSTER ACQUISITION CORP.,
CABOT INDUSTRIAL TRUST
and
CABOT INDUSTRIAL PROPERTIES, L.P.
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TABLE OF CONTENTS
ARTICLE I THE TENDER OFFER 2
Section 1.1 The Offer.......................................2
Section 1.2 Company Action..................................5
ARTICLE II THE MERGER...............................................7
Section 2.1 The Merger......................................7
Section 2.2 Closing.........................................8
Section 2.3 Effective Times.................................8
Section 2.4 Merger Consideration............................8
Section 2.5 Organizational Documents........................9
Section 2.6 Officers of the Surviving Entity................9
Section 2.7 Cabot Common Share Options......................9
ARTICLE III EFFECTS OF THE Merger; EXCHANGE OF CERTIFICATES.........10
Section 3.1 [Intentionally Omitted]........................10
Section 3.2 Payment for Securities/Exchange
of Certificates..............................10
ARTICLE IV REPRESENTATIONS AND WARRANTIES..........................14
Section 4.1 Representations and Warranties of Cabot........14
Section 4.2 Representations and Warranties of CalWest
and Rooster Acquisition Corp..................38
ARTICLE V COVENANTS RELATING TO CONDUCT OF BUSINESS PENDING
THE MERGER..............................................41
Section 5.1 Conduct of Business by Cabot and Cabot LP......41
ARTICLE VI ADDITIONAL COVENANTS....................................45
Section 6.1 Access to Information; Confidentiality.........45
Section 6.2 Reasonable Efforts; Notification...............45
Section 6.3 Tax Treatment..................................46
Section 6.4 No Solicitation of Transaction.................46
Section 6.5 Public Announcements...........................48
Section 6.6 Employee Arrangements..........................48
Section 6.7 Indemnification; Directors'/Trustees'
and Officers' Insurance.......................49
Section 6.8 Assistance; Cabot LP Merger....................51
Section 6.9 Tax Returns....................................52
ARTICLE VII CONDITIONS PRECEDENT....................................52
Section 7.1 Conditions to Each Party's Obligation to Effect
the Merger....................................52
ARTICLE VIII TERMINATION, AMENDMENT AND WAIVER.......................54
Section 8.1 Termination....................................54
Section 8.2 Expenses.......................................56
Section 8.3 Effect of Termination..........................58
Section 8.4 Amendment......................................58
Section 8.5 Extension; Waiver..............................58
ARTICLE IX GENERAL PROVISIONS......................................58
Section 9.1 Nonsurvival of Representations and Warranties..59
Section 9.2 Notices........................................59
Section 9.3 Interpretation.................................60
Section 9.4 Counterparts...................................60
Section 9.5 Entire Agreement; No Third-Party
Beneficiaries................................60
Section 9.6 Governing Law..................................60
Section 9.7 Assignment.....................................60
Section 9.8 Enforcement....................................60
Section 9.9 Annex I; Exhibits; Disclosure Letter...........61
Section 9.10 Limitation of Liability of Shareholders,
Trustees and Officers of Cabot...............61
Section 9.11 Jurisdiction; Venue............................61
Section 9.12 Waiver of Trial by Jury........................61
ARTICLE X CERTAIN DEFINITIONS.....................................61
Section 10.1 Certain Definitions............................61
ANNEXES, EXHIBITS AND SCHEDULES
Annex I - Conditions to the Offer
Exhibit A - Opinion of ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇
Exhibit B - Parties to Shareholder Agreements
Exhibit C - Contingent WARN Notice
Schedule 10.1(a) - Cabot Knowledge Persons
Schedule 10.1(b) - CalWest Knowledge Persons
[A copy of any exhibit or schedule to this Agreement which has been omitted
from this filing will be provided to the Commission upon request.]
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of
October 28, 2001, by and among CALWEST INDUSTRIAL PROPERTIES, LLC, a California
limited liability company ("CalWest"), ROOSTER ACQUISITION CORP., a Maryland
corporation, ("Rooster Acquisition Corp.", and together with CalWest and any
other Subsidiary of CalWest, the "CalWest Parties"), CABOT INDUSTRIAL TRUST, a
Maryland real estate investment trust ("Cabot"), and CABOT INDUSTRIAL
PROPERTIES, L.P., a Delaware limited partnership ("Cabot LP").
RECITALS
A. It is proposed that CalWest, through Rooster Acquisition Corp.,
will acquire all of the issued and outstanding common shares of beneficial
interest, par value $.01 per share, of Cabot (the "Cabot Common Shares"),
including the associated Preferred Share Purchase Rights (the "Rights") issued
pursuant to the Amended and Restated Rights Agreement, dated as of September
10, 1998, between Cabot and EquiServe Limited Partnership (as successor to
BankBoston, N.A.), as Rights Agent, as amended by the Amendment to Rights
Agreement (the "Cabot Rights Agreement"), which are not beneficially owned by
the CalWest Parties.
B. It is proposed that CalWest will cause Rooster Acquisition Corp.
to make a cash tender offer (as such may be amended from time to time as
permitted by this Agreement, the "Offer") in compliance with Section 14(d)(1)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
the rules and regulations promulgated thereunder to acquire each issued and
outstanding Cabot Common Share for $24.00 per share (such amount, or any
greater amount per share paid pursuant to the Offer, being hereinafter referred
to as the "Per Share Amount"), net to the seller in cash, subject to reduction
only for any federal backup withholding or share transfer taxes payable by such
seller, upon the terms and subject to the conditions of this Agreement,
including Annex I hereto.
C. If Rooster Acquisition Corp. acquires the Cabot Common Shares
tendered pursuant to the Offer, it is proposed that Rooster Acquisition Corp.
shall merge (the "Merger") with and into Cabot with Cabot surviving in
accordance with the Maryland General Corporation Law ("MGCL") and Title 8 of the
Corporations and Associations Article of the Annotated Code of Maryland ("Title
8"), pursuant to which each outstanding Cabot Common Share shall be converted
into the right to receive the Per Share Amount upon the terms and subject to the
conditions provided herein.
D. The Board of Trustees of Cabot (the "Cabot Board of Trustees") has
received the written opinion (the "Fairness Opinion") of ▇.▇. ▇▇▇▇▇▇ Securities
Inc. (the "Cabot Financial Advisor") that, based on, and subject to the various
assumptions and qualifications set forth in such opinion, as of the date of such
opinion, the consideration to be received by holders of Cabot Common Shares
pursuant to this Agreement is fair from a financial point of view to such
holders (other than CalWest and its affiliates).
E. The Cabot Board of Trustees has unanimously (i) determined that the
Transaction Documents, the Offer, the Merger and the other transactions
contemplated thereby, taken together, are fair to, advisable and in the best
interests of Cabot and its shareholders, (ii) voted to (A) approve this
Agreement and the transactions contemplated hereby, including the Merger and (B)
recommend acceptance and approval by the holders of Cabot Common Shares of this
Agreement, the Offer, the Merger and the other transactions contemplated thereby
and by the Transaction Documents (as hereinafter defined) and that such holders
tender their Cabot Common Shares in the Offer, (iii) taken all action necessary
to render the Cabot Rights Agreement inapplicable to the Offer and the Merger,
without any payment to the holders of the Rights, (iv) taken all action
necessary to waive the application of the Ownership Limit (as hereinafter
defined) to the purchase or ownership of any Cabot Common Shares acquired
pursuant to the Offer, the Merger or otherwise pursuant to the Transaction
Documents, and (v) taken all actions necessary to render inapplicable to each of
the transactions contemplated by the Transaction Documents or exempt such
transactions from the provisions of any "fair price", "moratorium", "control
share" or other takeover defense or similar statute or regulation that would
otherwise govern such transactions and the parties hereto, including the
provisions of MGCL Title 3, Subtitles 6, 7 and Title 8.
F. CalWest and the Board of Directors of Rooster Acquisition Corp.
have each approved this Agreement, the Offer, the Merger and the other
transactions contemplated hereby.
G. Simultaneously with, and as a condition to, the
execution and delivery of this Agreement, CalWest and Rooster Acquisition Corp.
have received the opinion of ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇, dated the date hereof,
in the form attached hereto as Exhibit A (the "REIT Opinion").
H. Simultaneously with the execution and delivery of this
Agreement, (i) the trustees and executive officers of Cabot and their respective
Affiliates, as identified on Exhibit B hereto, have entered into Shareholder
Agreements (collectively, the "Shareholder Agreements") each dated as of the
date hereof, with CalWest, Rooster Acquisition Corp., Cabot and Cabot LP,
pursuant to which, among other things, such holders have agreed to tender their
shares into the Offer and vote their shares in favor of the Merger, this
Agreement and the other transactions contemplated hereby and thereby and, in
some instances, sell their common units of limited partnership interest in Cabot
LP ("LP Units") to CalWest; and (ii) certain holders of LP Units who are not
trustees or executive officers of Cabot have entered into LP Unitholder
Agreements (collectively, the "Unitholder Agreements") each dated as of the date
hereof, with CalWest, Rooster Acquisition Corp., Cabot and Cabot LP, pursuant to
which, among other things, such holders have agreed to convert their LP Units
into Cabot Common Shares and tender such Common Shares into the Offer.
I. Simultaneously with the execution and delivery of this Agreement,
Cabot has entered into a Share Option Agreement (the "Option Agreement"), dated
as of the date hereof, with CalWest and Rooster Acquisition Corp.
J. CalWest and Cabot intend that, for federal income tax
purposes, the Offer and Merger shall be treated as a taxable purchase of
Cabot Common Shares directly by CalWest and the existence of Rooster
Acquisition Corp. shall be disregarded.
K. Certain capitalized terms used in this Agreement are defined
in Article X.
AGREEMENT
In consideration of the representations, warranties, covenants and
agreements contained in this Agreement, the parties agree as follows:
ARTICLE I
THE TENDER OFFER
Section 1.1. The Offer.
(a) Provided that this Agreement shall not have been
terminated in accordance with Article VIII and subject to the conditions set
forth in Annex I (including that none of the events or conditions set forth
therein shall have occurred and be existing) (the "Tender Offer Conditions"),
Rooster Acquisition Corp. shall, and CalWest shall cause Rooster Acquisition
Corp. to, commence (within the meaning of Rule 14d-2 under the Exchange Act)
the Offer to purchase at the Per Share Amount all of the issued and outstanding
Cabot Common Shares (including any and all Rights) as promptly as reasonably
practicable, but in no event later than five (5) Business Days following the
first public announcement by Rooster Acquisition Corp. and Cabot of the
execution of this Agreement, and shall take the actions specified in Section 1.1
(c). The obligation of Rooster Acquisition Corp. to accept for payment and pay
for any Cabot Common Shares tendered pursuant to the Offer shall be subject
only to the satisfaction of the Tender Offer Conditions. Cabot agrees that no
Cabot Common Shares held by Cabot or any Cabot Subsidiary will be tendered
pursuant to the Offer.
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(b) CalWest and Rooster Acquisition Corp. expressly reserve
the right from time to time, without the consent of Cabot, to waive any Tender
Offer Condition, irrevocably increase the Per Share Amount or make any other
changes to the terms and conditions of the Offer; provided, however, that
without the prior written consent of Cabot, Rooster Acquisition Corp. shall not,
and CalWest shall cause Rooster Acquisition Corp. not to, (i) except as set
forth in Section 1.1(e), decrease the Per Share Amount or change the form of
consideration payable in the Offer, (ii) decrease the number of Cabot Common
Shares sought in the Offer, (iii) modify or amend the Tender Offer Conditions
or impose conditions to the Offer in addition to the Tender Offer Conditions,
(iv) waive the Minimum Condition or (v) except as provided in Section 1.1(d),
extend the Offer if all of the Tender Offer Conditions are satisfied. Upon the
terms and subject to the satisfaction or waiver of the conditions of the Offer
and this Agreement (including the Tender Offer Conditions), Rooster Acquisition
Corp. shall, and CalWest shall cause Rooster Acquisition Corp. to, accept for
payment and pay for all Cabot Common Shares validly tendered and not withdrawn
prior to the expiration of the Offer as promptly as possible after expiration
of the Offer, unless terminated in accordance with its terms. CalWest shall
provide or cause to be provided to Rooster Acquisition Corp. on a timely basis
funds sufficient to accept for payment and pay for any and all Cabot Common
Shares that Rooster Acquisition Corp. becomes obligated to accept for payment
and pay for pursuant to the Offer. Unless required by Law (as evidenced by the
legal opinion of a nationally recognized U.S. law firm reasonably acceptable to
CalWest and Cabot), commencing with the consummation of the Offer until the
Merger Effective Time, Cabot, CalWest and Rooster Acquisition Corp. shall each
use their respective commercially reasonable efforts to not take any action
which is reasonably likely to cause Cabot to fail to qualify as a REIT for
purposes of the Code.
(c) The Offer shall be made by means of an offer to purchase
(the "Offer to Purchase") subject only to the Tender Offer Conditions. As soon
as reasonably practicable on the date the Offer is commenced, Rooster
Acquisition Corp. shall file with the Securities and Exchange Commission
(the "SEC") a Tender Offer Statement on Schedule TO (together with all
amendments and supplements thereto, the "Schedule TO") with respect to the
Offer that will comply in all material respects with the provisions of all
applicable federal securities laws as to form, and will contain (including
as exhibits) or incorporate by reference the Offer to Purchase, forms of
the related letter of transmittal and summary advertisement and any other
documents required to be filed in connection with the Offer (which
documents, together with any supplements or amendments thereto, are
referred to collectively herein as the "Offer Documents"), which shall be
mailed to the holders of Cabot Common Shares and to holders of LP Units
("LP Unitholders"). Rooster Acquisition Corp. agrees to correct promptly
the Schedule TO and the Offer Documents if and to the extent that they
shall have become false or misleading in any material respect (and Cabot
and Cabot LP, with respect to information supplied by them specifically for
use in the Schedule TO or the Offer Documents, shall promptly notify
Rooster Acquisition Corp. and its counsel of any required corrections of
such information and shall reasonably cooperate with Rooster Acquisition
Corp. with respect to correcting such information) and to supplement the
Schedule TO or the Offer Documents to include any information that shall
become necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading (and Cabot and
Cabot LP shall supplement the information provided by them specifically for
use in the Schedule TO or the Offer Documents to include any information
that shall become necessary in order to make the statements therein that
are based on such provided information, in light of the circumstances under
which they were made, not misleading), and to take all steps necessary to
cause the Schedule TO, as so corrected or supplemented, to be filed with
the SEC and the Offer Documents, as so corrected or supplemented, to be
disseminated to holders of Cabot Common Shares and LP Unitholders, in each
case to the extent required by applicable federal securities laws. Cabot
and its counsel shall be given a reasonable opportunity to review and
comment on the Schedule TO and the Offer Documents before they are filed
with the SEC and before they are distributed to holders of Cabot Common
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Shares and LP Unitholders. Rooster Acquisition Corp. shall provide Cabot
and its counsel copies of any written comments and telephone notification
of any oral comments that Rooster Acquisition Corp. or its counsel receive
from the SEC or its staff with respect to the Schedule TO or the Offer
Documents promptly after receipt of such comments. Rooster Acquisition
Corp. shall use its commercially reasonable efforts to respond to such
comments promptly, shall provide Cabot and its counsel with a reasonable
opportunity to participate in all communications with the SEC and its
staff, including meetings and telephone conferences, relating to the
Schedule TO and the Offer Documents, and shall provide Cabot and its
counsel copies of any written responses and telephonic notification of any
verbal responses by Rooster Acquisition Corp. or its counsel.
(d) So long as this Agreement has not been terminated in
accordance with the terms hereof, and subject to the terms and conditions
hereof (including the Tender Offer Conditions), the Offer shall expire at
midnight, Eastern Standard Time, on the date that is twenty (20) Business Days
after the date on which the Offer is commenced; provided, that without the
consent of Cabot, Rooster Acquisition Corp. may (i) from time to time, extend
the Offer, if at the scheduled expiration date of the Offer any of the Tender
Offer Conditions shall not have been satisfied or waived, until such time as
such Tender Offer Conditions are satisfied or waived, (ii) from time to time,
extend the Offer for any period required by any rule, regulation, interpretation
or position of the SEC or the staff thereof applicable to the Offer or (iii)
extend the Offer for a total of not more than five (5) Business Days beyond the
initial expiration date or the latest expiration date that would otherwise be
permitted under clauses (i) or (ii) of this sentence if, on such expiration
date, the Cabot Common Shares validly tendered pursuant to the Offer and not
withdrawn are sufficient to satisfy the Minimum Condition (as defined in Annex
I) but, together with all other Cabot Common Shares owned by Rooster Acquisition
Corp., are entitled to cast less than 90.0% of the votes entitled to be cast on
the Merger. So long as this Agreement is in effect, the Offer has been commenced
and the Tender Offer Conditions have not been satisfied or waived, Rooster
Acquisition Corp. shall cause the Offer not to expire subject, however, to
CalWest's right of termination under this Agreement; provided, however, that
Rooster Acquisition Corp. shall not be required to extend the Offer any time
beyond (i) December 28, 2001, if the Minimum Condition is not satisfied on
December 28, 2001, or any date thereafter, at CalWest's option, if the Minimum
Condition continues to be unsatisfied on such date, or (ii) the date that is 120
days from the date of this Agreement. Notwithstanding the foregoing, in the
event that the Tender Offer Conditions have not been satisfied as the result of
the occurrence an event specified in clause (k) of Annex I, Rooster Acquisition
Corp. shall be required to extend the Offer until such time (but in no event
longer than thirty (30) Business Days after the date on which Rooster
Acquisition Corp. first invokes such Tender Offer Condition as a reason for not
consummating the Offer) as CalWest's bridge loan lender funds the Bridge Loan
Commitment (as defined in Annex I); provided, further, that during such thirty
(30) Business Day period, Rooster Acquisition Corp. shall use its commercially
reasonable efforts, subject to any contractual restrictions binding upon CalWest
or Rooster Acquisition Corp. pursuant to the Commitment Letter (as defined in
Annex I), to obtain financing for the Offer and the Merger on terms
substantially similar and at least as favorable as the terms of the Commitment
Letter. Rooster Acquisition Corp. may, in addition, provide a "subsequent offer
period" (as contemplated by Rule 14d-11 under the Exchange Act) of not less than
three (3) Business Days following its acceptance for payment of Cabot Common
Shares in the Offer.
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(e) The parties understand and agree that the Per Share Amount
has been calculated based upon, among other things, the accuracy of the
representation and warranty set forth in Section 4.1(c) and that, in the event
the number of outstanding Cabot Common Shares, other outstanding shares of
beneficial interest of Cabot, or share equivalents of Cabot issuable upon the
exercise of, or subject to, options or other agreements exceeds the amounts
specifically set forth in Section 4.1(c) (including as a result of any stock
split, reverse stock split, stock dividend, including any dividend or
distribution of securities convertible into beneficial shares or share
equivalents of Cabot, recapitalization, or other like change occurring after the
date of this Agreement, but excluding any Cabot Common Shares or units of Cabot
LP issued pursuant to the Cabot Option Plans, in accordance with, and subject
to, Section 2.7), the Per Share Amount shall be appropriately adjusted. The
provisions of this Section 1.1(e) shall not, however, affect the representation
and warranty set forth in Section 4.1(c).
Section 1.2 Company Action.
(a) Cabot hereby approves of and consents to the Offer and
represents and warrants that the Cabot Board of Trustees at a meeting duly
called and held on October 28, 2001, unanimously (A) determined that this
Agreement, the Offer, the Merger and the other transactions contemplated
hereby, taken together, are fair to, advisable and in the best interests of
Cabot and its shareholders; (B) voted to (1) approve the Transaction Documents
and the transactions contemplated thereby, including the Merger and (2)
recommend acceptance and approval by the holders of Cabot Common Shares of this
Agreement, the Offer, the Merger, the Transaction Documents and the other
transactions contemplated hereby or thereby and that such holders tender their
Cabot Common Shares in the Offer; (C) took all other action necessary to render
the Cabot Rights Agreement inapplicable to the Offer and the Merger, without any
payment to the holders of the Rights; (D) took all action necessary to waive the
application of the ownership limit (the "Ownership Limit") set forth in the
Cabot Charter (as hereinafter defined) to the purchase or ownership of any Cabot
Common Shares acquired pursuant to the Offer, the Merger, or otherwise pursuant
to the Transaction Documents; and (E) took all actions necessary to render
inapplicable to each of the transactions contemplated by the Transaction
Documents or exempt such transactions from the provisions of any "fair price",
"moratorium", "control share acquisition" or other takeover defense or similar
statute or regulation that would otherwise govern such transactions and the
parties hereto, including the provisions of the Takeover Statutes (as
hereinafter defined). Subject to the terms of this Agreement, Cabot consents to
the inclusion of such recommendations and approvals in the Offer Documents.
Cabot hereby represents and warrants that the Cabot Financial Advisor has
delivered to the Cabot Board of Trustees its written Fairness Opinion that,
subject to the various assumptions and qualifications set forth therein, as of
the date of such opinion, the consideration to be received by holders of Cabot
Common Shares pursuant to this Agreement, the Offer and the Merger is fair from
a financial point of view to such holders (other than CalWest and its
affiliates). Cabot has been authorized by the Cabot Financial Advisor to permit,
subject to the prior review and consent of the Cabot Financial Advisor and its
counsel (such consent not to be unreasonably withheld) (i) the inclusion of the
Fairness Opinion in the Schedule 14D-9 (as hereinafter defined) and the Proxy
Statement (as hereinafter defined) and (ii) references to the identity of the
Cabot Financial Advisor and to the Fairness Opinion's substance and conclusions
in the Offer Documents. Cabot represents and warrants that it has been advised
by each of its Trustees and executive officers that they intend to tender all
Cabot Common Shares beneficially owned by them to Rooster Acquisition Corp.
pursuant to the Offer.
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(b) Cabot hereby agrees to file with the SEC, on the day of
the filing by CalWest and Rooster Acquisition Corp. of the Schedule TO with
respect to the Offer, a Tender Offer Solicitation/Recommendation Statement
on Schedule 14D-9 (together with any and all amendments, supplements and
exhibits thereto, the "Schedule 14D-9") that will (i) comply in all
material respects as to form with the provisions of all applicable federal
securities laws, (ii) reflect the recommendations and actions of the Cabot
Board of Trustees referred to in Section 1.2(a) and (iii) include the
Fairness Opinion, in each case subject to the terms of this Agreement.
Cabot agrees to include such Schedule 14D-9 in the mailing of the Offer
Documents by Rooster Acquisition Corp. to the holders of Cabot Common
Shares promptly after the commencement of the Offer. Cabot agrees promptly
to correct the Schedule 14D-9 if and to the extent that it shall become
false or misleading in any material respect (and CalWest and Rooster
Acquisition Corp., with respect to information supplied by them
specifically for use in the Schedule 14D-9, shall promptly notify Cabot and
its counsel of any required corrections of such information and shall
reasonably cooperate with Cabot with respect to correcting such
information) and to supplement the information contained in the Schedule
14D-9 to include any information that shall become necessary in order to
make the statements therein, in light of the circumstances under which they
were made, not misleading (and CalWest and Rooster Acquisition Corp. shall
supplement the information provided by them specifically for use in the
Schedule 14D-9 to include any information that shall become necessary in
order to make the statements therein that are based on such provided
information, in light of the circumstances under which they were made, not
misleading), and Cabot shall take all steps necessary to cause the Schedule
14D-9, as so corrected or supplemented, to be filed with the SEC and
disseminated to the holders of Cabot Common Shares, to the extent required
by applicable federal securities laws. CalWest and its counsel shall be
given a reasonable opportunity to review and comment on the Schedule 14D-9
before it is filed with the SEC or disseminated to the holders of Cabot
Common Shares. Cabot shall provide CalWest and its counsel copies of any
written comments and telephone notification of any oral comments that Cabot
or its counsel receive from the SEC or its staff with respect to the
Schedule 14D-9 promptly after receipt of such comments. Cabot shall use its
commercially reasonable efforts to respond to such comments promptly, shall
provide CalWest and its counsel with a reasonable opportunity to
participate in all communications with the SEC and its staff, including
meetings and telephone conferences, relating to the Schedule 14D-9, and
shall provide CalWest and its counsel copies of any written responses and
telephonic notification of any verbal responses by Cabot or its counsel.
(c) In connection with the Offer, Cabot shall promptly, or
cause its transfer agent to promptly, following execution of this Agreement
furnish Rooster Acquisition Corp. with mailing labels containing the names and
addressees of all record holders of Cabot Common Shares, a non-objecting
beneficial owners list and security position listings of Cabot Common Shares
held in stock depositories, each as of a recent date, and shall promptly furnish
Rooster Acquisition Corp. with such additional information, including updated
lists of shareholders and LP Unitholders, mailing labels and security position
listings for the holders of Cabot Common Shares and LP Unitholders, and such
other information and assistance as Rooster Acquisition Corp. or its agents may
reasonably request for the purpose of communicating the Offer to the record and
beneficial holders of Cabot Common Shares and LP Units. Subject to the
requirements of applicable Law, and except for such steps as are appropriate to
disseminate the Offer Documents and any other documents necessary to consummate
the Merger, CalWest and Rooster Acquisition Corp. and their Affiliates,
associates, agents and advisors shall hold in confidence and use only in
connection with the Offer, and the Merger the information contained in any such
labels, listings and files, and, if this Agreement shall be terminated, will
promptly deliver to Cabot all copies of such information then in their
possession.
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(d) Promptly upon the acceptance for payment and payment for
Cabot Common Shares by Rooster Acquisition Corp. pursuant to the Offer
(including upon acceptance for payment and payment for Cabot Common Shares
pursuant to the Offer during the subsequent offering period, if any), Rooster
Acquisition Corp. shall be entitled to designate up to such number of trustees,
rounded up to the nearest whole number, on the Cabot Board of Trustees as will
give Rooster Acquisition Corp., subject to compliance with Section 14(f) of the
Exchange Act, representation on the Cabot Board of Trustees equal to the product
of the number of trustees on the Cabot Board of Trustees (giving effect to any
increase in the number of trustees pursuant to this Section 1.2(d)) multiplied
by a fraction the numerator of which shall be the number of Cabot Common Shares
beneficially owned by CalWest, Rooster Acquisition Corp. and their Affiliates
and the denominator of which shall be the total number of Cabot Common Shares
outstanding at such time. At such time, Cabot shall also cause, if requested by
Rooster Acquisition Corp., (i) each committee of the Cabot Board of Trustees,
(ii) the board of directors of each of Cabot's Subsidiaries and (iii) each
committee of each such Subsidiary board to include individuals designated by
Rooster Acquisition Corp. constituting up to the same percentage of each such
committee or board as Rooster Acquisition Corp. designees constitute on the
Cabot Board of Trustees. Cabot shall, upon request by Rooster Acquisition Corp.,
promptly take all actions necessary to cause the Rooster Acquisition Corp.'s
designees to be elected to the Cabot Board of Trustees in accordance with the
terms of this Section 1.2(d), including by increasing the size of the Cabot
Board of Trustees and/or, at Cabot's election, securing the resignations of such
number of trustees as is necessary to enable the designees of Rooster
Acquisition Corp. to be elected to the Cabot Board of Trustees in accordance
with the terms of this Section 1.2(d). In the event that designees of Rooster
Acquisition Corp. are elected to the Cabot Board of Trustees, until the Merger
Effective Time, those continuing members of the Cabot Board of Trustees who are
not designees, Affiliates or associates (within the meaning of the federal
securities laws) of Rooster Acquisition Corp. shall be deemed the "Independent
Trustees" for purposes of the provisions of this Agreement. Subject to
applicable law, Cabot shall promptly take all action necessary pursuant to
Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder in order
to fulfill its obligations under this Section 1.2(d) and shall include in the
Schedule 14D-9 mailed to holders of Cabot Common Shares promptly after the
commencement of the Offer (or an amendment thereto or an information statement
pursuant to Rule 14f-1 if Rooster Acquisition Corp. has not theretofore
designated trustees or timely provided the requisite information) such
information with respect to Cabot and its officers and trustees as is required
under Section 14(f) and Rule 14f-1 in order to fulfill its obligations under
this Section 1.2(d). Rooster Acquisition Corp. will promptly supply Cabot and be
solely responsible for any information with respect to itself and its nominees,
officers, trustees and Affiliates required by Section 14(f) and Rule 14f-1.
Notwithstanding anything in this Agreement to the contrary, following the time
trustees designated by Rooster Acquisition Corp. are elected to the Cabot Board
of Trustees and prior to the Merger Effective Time, the affirmative vote of a
majority of the Independent Trustees shall be required to (i) amend or terminate
this Agreement on behalf of Cabot, (ii) exercise or waive any of Cabot's rights
or remedies hereunder, (iii) extend the time for performance of obligations of
Rooster Acquisition Corp. hereunder, (iv) take any other action by Cabot in
connection with this Agreement required to be taken by the Cabot Board of
Trustees, or (v) take any action taken by Cabot in connection with the
transactions contemplated by this Agreement, and such affirmative majority vote
shall be sufficient to take any such action.
7
ARTICLE II
THE MERGER
Section 2.1 The Merger.
(a) Upon the terms and subject to the conditions set forth
in this Agreement, at the Merger Effective Time (as defined in Section
2.3), Rooster Acquisition Corp. shall be merged with and into Cabot in
accordance with the MGCL and Title 8 and the Articles of Merger and the
separate corporate existence of Rooster Acquisition Corp. shall cease and
Cabot shall continue as the Surviving Entity (in such capacity, the
"Surviving Entity"). Notwithstanding any other provision of this Agreement,
neither CalWest nor Rooster Acquisition Corp. shall be obligated to
effectuate the Merger unless the Offer shall have been consummated and in
accordance therewith Rooster Acquisition Corp. shall have acquired that
number of Cabot Common Shares at least equal to the Minimum Condition.
(b) The Merger shall have the effects set forth in the MGCL
and Title 8. Accordingly, from and after the Merger Effective Time, the
Surviving Entity shall have all the properties, rights, privileges,
purposes and powers and debts, duties and Liabilities of Cabot.
Section 2.2 Closing. The closing of the Merger (the "Closing")
will take place at 10:00 a.m. Eastern Standard Time as promptly as practicable
but in no event later than the third (3rd) Business Day after the satisfaction
or waiver of the conditions (other than those conditions that by their nature
are to be satisfied at Closing, but subject to the fulfillment or waiver of
those conditions) set forth in Article VII (the "Closing Date"), at the offices
of ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇,
unless another date or place is agreed to in writing by the parties.
Section 2.3 Effective Time. On the Closing Date, Cabot and Rooster
Acquisition Corp. shall execute and file the Articles of Merger in accordance
with, and shall make all other filings or recordings and take all such other
action required with respect to the Merger under, the MGCL and Title 8. Unless
Cabot and CalWest agree otherwise, the Merger shall become effective when the
Articles of Merger have been accepted for record by the Maryland Department or
at such other time specified in the Articles of Merger (the "Merger Effective
Time"), it being understood that the parties shall cause the Merger Effective
Time to occur as soon as practicable after the Closing.
Section 2.4 Merger Consideration.
(a) At the Merger Effective Time, by virtue of the Merger
and without any further action on the part of Rooster Acquisition Corp.,
Cabot or the Cabot Common Shareholders, each Cabot Common Share issued and
outstanding immediately prior to the Merger Effective Time (other than any
Cabot Common Shares that are owned by the CalWest Parties, which Cabot
Common Shares shall be cancelled as provided below) shall be converted into
the right to receive the greater of the Per Share Amount, or any higher
price paid per Cabot Common Share in the Offer, in cash, without interest
thereon (the "Merger Consideration"), upon surrender of the Certificate (as
defined in Section 3.2(b)) formerly evidencing such share. All such Cabot
Common Shares, when so converted, shall no longer be outstanding and shall
automatically be canceled and retired and shall cease to exist, and each
holder of a Certificate representing any such shares shall cease to have
any rights with respect thereto, except the right to receive the Merger
Consideration to be paid in consideration therefor upon the surrender of
such Certificates in accordance with Section 3.2, without interest.
(b) At the Merger Effective Time, by virtue of the Merger
and without any further action on the part of Rooster Acquisition Corp., Cabot
or the Cabot Common Shareholders:
(i) Each Cabot Common Share issued and outstanding
immediately prior to the Merger Effective Time that is
owned by the CalWest Parties shall automatically be
canceled and retired and shall cease to exist, each
holder of a Certificate evidencing any such shares shall
cease to have any rights with respect thereto, and no
payment, distribution or other consideration shall be
made with respect thereto; and
8
(ii) Each share of common stock, par value $1.00 per share,
of Rooster Acquisition Corp. issued and outstanding
immediately prior to the Merger Effective Time shall
be converted into and become one validly issued, fully
paid and nonassessable common share of beneficial
interest, par value $.01 per share, of the Surviving
Entity and shall constitute the only outstanding common
shares of beneficial interest of the Surviving Entity.
Section 2.5 Organizational Documents. The Amended and Restated
Declaration of Trust of Cabot shall continue to be the Declaration of Trust of
the Surviving Entity following the Merger Effective Time until further amended
in accordance with Title 8, and the Bylaws of Cabot shall continue to be the
Bylaws of the Surviving Entity following the Merger until further amended in
accordance with Title 8.
Section 2.6 Officers of the Surviving Entity. From and after the
Merger Effective Time, the officers of Rooster Acquisition Corp. shall be the
officers of the Surviving Entity, and such officers shall serve until their
successors have been duly elected or appointed (in the case of officers) and
qualified, or until their death, resignation or removal from office in
accordance with the Surviving Entity's organizational documents.
Section 2.7 Cabot Common Share Options.
(a) At the Merger Effective Time, each outstanding option
(including dividend equivalent units ("DEUs")) (collectively, the "Cabot
Options") to purchase Cabot Common Shares or LP Units granted under the
Cabot Long Term Incentive Plan (the "LTIP") and the Cabot 1999 Long Term
Incentive Plan (the "1999 LTIP"; together with the LTIP, the "Cabot Option
Plans"), whether or not then vested or exercisable, shall be cancelled and
of no further force and effect and the holder of any such option shall be
entitled to receive, from and after the Merger Effective Time, an amount in
cash equal to the product of (i) the number of Cabot Common Shares or LP
Units provided for in such Cabot Option and (ii) the excess, if any, of the
Merger Consideration over the exercise price per share or unit provided for
in such Cabot Option, which cash payment shall be treated as compensation
and shall be net of any applicable Tax. Notwithstanding the foregoing, if
the exercise price per share provided for in any Cabot Option exceeds the
Merger Consideration, no cash shall be paid with regard to such Cabot
Option to the holder of such Cabot Option. Prior to the Merger Effective
Time, CalWest and Cabot shall establish a procedure to effect the surrender
of Cabot Options contemplated by this Section 2.7(a).
(b) Each of Cabot and Cabot LP covenants that the Cabot Option
Plans shall terminate as of the Merger Effective Time and all awards issued
under such Cabot Option Plans shall be terminated and the provisions in any
other plan, program, arrangement or agreement providing for the issuance or
grant of any other interest in respect of the equity interests of Cabot or
any of the Cabot Subsidiaries (including, without limitation, Cabot LP)
shall be of no further force or effect and shall be deemed to be terminated
as of the Merger Effective Time and no holder of a Cabot Option or any
participant in any Cabot Option Plan shall have any right thereunder to (i)
acquire any securities of Cabot, Cabot LP, the Surviving Entity or any
Subsidiary thereof, or (ii) receive any additional payment or benefit with
respect to any award previously granted under the Cabot Option Plans.
Section 2.8 Termination of DRIP. Cabot shall terminate Cabot's 1999
Dividend Reinvestment and Share Purchase Plan (the "DRIP"), effective prior to
the Merger Effective Time, and ensure that no purchase or other rights under
the DRIP enable the purchaser or holder of such rights to acquire any interest
in the Surviving Entity, CalWest or any CalWest Subsidiary, including Rooster
Acquisition Corp., as a result of such purchase or the exercise of such rights
at or after the Merger Effective Time.
9
ARTICLE III
EFFECTS OF THE MERGER; EXCHANGE OF CERTIFICATES
Section 3.1 [Intentionally omitted.]
Section 3.2 Payment for Securities/Exchange of Certificates.
(a) Paying Agent. At the Merger Effective Time, CalWest
shall deposit or cause to be deposited with a bank or trust company
designated by CalWest and reasonably acceptable to Cabot (the "Paying
Agent"), for the benefit of the holders of Cabot Common Shares and for
payment in accordance with this Article III, through the Paying Agent, cash
in an amount sufficient to pay the aggregate amount of the Merger
Consideration (such cash being hereinafter referred to as the "Payment
Fund"), payable pursuant to Section 2.3 in exchange for outstanding Cabot
Common Shares. Any income from investment of such Payment Fund will be
payable solely to CalWest.
(b) Exchange Procedures.
(i) Within five (5) Business Days after the
Merger Effective Time, the Paying Agent shall mail to each
holder of record of a certificate or certificates which,
immediately prior to the Merger Effective Time, evidenced
outstanding Cabot Common Shares (each, a "Certificate"),
which holder's Cabot Common Shares were converted into the
right to receive the Merger Consideration as set forth in
Section 2.4: (A) a letter of transmittal (a "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 to the Paying Agent
and shall be in such form and have such other provisions as the
Surviving Entity may reasonably specify; and (B) instructions
for use in effecting the surrender of the Certificates in
exchange for the applicable Merger Consideration.
(ii) Upon surrender of a Certificate for cancellation
to the Paying Agent, together with a Letter of Transmittal,
duly executed, and any other documents reasonably required by
the Paying Agent or the Surviving Entity, (A) the holder of such
Certificate shall be entitled to receive in exchange therefor
the applicable amount of the Merger Consideration, payable by
check, which such holder has the right to receive pursuant to
the provisions of Section 2.4; and (B) the Certificate so
surrendered shall forthwith be canceled. Until so surrendered,
each such Certificate shall represent the right to receive the
aggregate Merger Consideration relating thereto.
(iii) In the event of a transfer of ownership of Cabot
Common Shares which is not registered in the transfer records of
Cabot, the appropriate amount of the Merger Consideration may
be paid to a transferee if the Certificate representing such
Cabot Common Shares is presented to the Paying Agent properly
endorsed or accompanied by appropriate stock powers and
otherwise in proper form for transfer and accompanied by all
documents reasonably required by the Paying Agent to evidence
and effect such transfer and to evidence that any applicable
Taxes have been paid. Until surrendered as contemplated by this
Section 3.2, each such Certificate shall be deemed at any time
after the Merger Effective Time to represent only the right to
receive upon such surrender the appropriate amount of the
applicable Merger Consideration.
10
(c) Tax Characterization. CalWest and Cabot intend that, for
federal income tax purposes, the portions of the transactions contemplated
hereby constituting the Offer and Merger shall be treated as a taxable purchase
of Cabot's Common Shares directly by CalWest and that the existence of Rooster
Acquisition Corp. shall be disregarded.
(d) No Further Ownership Rights. All Merger Consideration
paid upon the surrender for exchange of the Certificates representing Cabot
Common Shares in accordance with the terms hereof shall be deemed to have been
paid in full satisfaction of all rights pertaining to such Cabot Common Shares
and, after the Merger Effective Time, there shall be no further registration of
transfers on the transfer books of the Surviving Entity, of the Cabot Common
Shares that were outstanding immediately prior to the Merger Effective Time.
If, after the Merger Effective Time, Certificates are presented to the
Surviving Entity, for any reason, they shall be canceled and exchanged as
provided in this Article III.
(e) Termination of Payment Fund. Any portion of the Payment
Fund (including any interest and other income received with respect thereto)
that remains undistributed to the former Cabot Common Shareholders on the date
180 days after the Merger Effective Time shall be delivered to the Surviving
Entity upon demand, and any former Cabot Common Shareholders who have not
theretofore received any applicable Merger Consideration to which they are
entitled under this Article III, shall thereafter look only to the Surviving
Entity for payment of their claims with respect thereto and only as general
creditors thereof.
(f) No Liability. None of CalWest, the Surviving Entity or
Rooster Acquisition Corp. shall be liable to any holder of Cabot Common
Shares for any part of the Merger Consideration delivered to a public
official pursuant to any applicable abandoned property, escheat or similar
Law. Any amounts remaining unclaimed by holders of any such shares
immediately prior to the time at which such amounts would otherwise escheat
to, or become property of, any federal, state or local government or any
court, regulatory or administrative agency or commission, governmental
arbitrator or other governmental authority or instrumentality, domestic or
foreign (a "Governmental Entity"), shall, to the extent permitted by
applicable Law, become the property of the Surviving Entity free and clear
of any claims or interest of any such holders or their successors, assigns
or personal representatives previously entitled thereto.
(g) Lost, Stolen or Destroyed Certificates. If 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 CalWest or the Surviving Entity, the
posting by such Person of a bond in such reasonable amount as CalWest or the
Surviving Entity may direct as indemnity against any claim that may be made
against it with respect to such Certificate, the Paying Agent shall issue
in exchange for such lost, stolen or destroyed Certificate the appropriate
amount of the Merger Consideration.
(h) Withholding of Tax. CalWest, the Surviving Entity or
the Paying Agent shall be entitled to deduct and withhold from the Merger
Consideration otherwise payable pursuant to this Agreement to any holder of
Cabot Common Shares or any LP Unitholder such amount as CalWest, the Surviving
Entity, any Affiliate of the Surviving Entity or the Paying Agent is required to
deduct and withhold with respect to the making of such payment under the Code or
any provision of state, local or foreign Tax Law. To the extent that amounts are
so withheld by the Surviving Entity or the Paying Agent, such withheld amounts
shall be (i) paid over to the applicable Governmental Entity in accordance with
applicable Law and (ii) treated for all purposes of this Agreement as having
been paid to the former holder of a Certificate in respect of which such
deduction and withholding was made by the Surviving Entity or the Paying Agent.
11
(i) No Dissenters' Rights. No dissenters' or appraisal
rights shall be available with respect to the Merger or the other transactions
contemplated hereby; provided, that the requirements of Section 3-202(c) of the
MGCL have been complied with.
(j) Shareholders' Meeting.
(i) If required by applicable law to consummate the
Merger, Cabot, acting through the Cabot Board of Trustees, shall, in
accordance with the Cabot Charter, Cabot By-Laws and applicable Law and
provided that this Agreement shall not have been terminated:
(A) duly call, give notice of, convene and hold a
special meeting of the holders of Cabot Common Shares (the
"Cabot Common Shareholder Meeting") as promptly as practicable
following the acceptance for payment and payment for Cabot
Common Shares by Rooster Acquisition Corp. pursuant to the
Offer for the purpose of considering and taking action upon
the approval of the Merger and the adoption of this Agreement;
(B) as promptly as practicable, prepare and file with
the SEC a preliminary proxy statement or information statement
relating to the Merger and this Agreement and use its
commercially reasonable efforts, subject to the terms of this
Agreement, (1) to obtain and furnish the information required
to be included by the SEC in the proxy statement or
information statement and, after consultation with CalWest, to
respond promptly to any comments made by the SEC with respect
to the preliminary proxy statement or information statement
and cause a definitive proxy statement (the "Proxy Statement")
or information statement, including any amendment or
supplement thereto, to be mailed to its shareholders;
provided, that no amendment or supplement to the Proxy
Statement or information statement will be made by Cabot
without consultation with CalWest and its counsel and (2) to
obtain the necessary approvals of the Merger and this
Agreement by its shareholders; and
(C) subject to the terms of this Agreement, include
in the Proxy Statement or information statement (i) the
recommendation of the Cabot Board of Trustees that
shareholders of Cabot vote in favor of the approval of the
Merger and this Agreement and (ii) the Fairness Opinion.
(ii) The CalWest Parties shall vote, or cause to
be voted, as the case may be, all of the Cabot Common Shares purchased in the
Offer or otherwise acquired or owned by such parties in favor of the approval
of the Merger and this Agreement.
(k) Merger Without Meeting of Shareholders. Notwithstanding
Section 3.2(j), if the CalWest Parties shall own, in the aggregate, Cabot
Common Shares entitled to cast at least 90.0% of all the votes entitled to be
cast on the Merger, pursuant to the Offer or otherwise (including pursuant to
the Option Agreement), the parties hereto shall take all necessary and
appropriate action to cause the Merger to become effective as soon as
practicable after acceptance for payment of and payment for the Cabot Common
Shares by Rooster Acquisition Corp. pursuant to the Offer without a meeting of
shareholders of Cabot, in accordance with Section 3-106 of the MGCL, including
providing notice, as promptly as practicable, of the Merger to each shareholder
of record of Cabot in accordance with Section 3-106(d) of the MGCL.
12
(l) Additional Actions. If, at any time after the Merger
Effective Time, CalWest shall consider or be advised that any deeds, bills
of sale, assignments, assurances or any other documents, actions or things are
necessary or desirable to vest, perfect or confirm of record or otherwise in
Rooster Acquisition Corp. its right, title or interest in, to or under any of
the rights, properties or assets of CalWest and Rooster Acquisition Corp., Cabot
or Cabot LP, or otherwise to carry out this Agreement, the officers of Rooster
Acquisition Corp. shall be authorized to execute and deliver, in the name and on
behalf of CalWest, Rooster Acquisition Corp., Cabot or Cabot LP, all such deeds,
bills of sale, assignments, assurances and other documents and to take and do,
in the name and on behalf of CalWest, Rooster Acquisition Corp., Cabot or Cabot
LP, all such other actions and things as may be necessary or desirable to vest,
perfect or confirm any and all right, title and interest in, to and under such
rights, properties or assets in Rooster Acquisition Corp. or otherwise to carry
out this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1 Representations and Warranties of Cabot. Cabot and
Cabot LP represent and warrant to CalWest and Rooster Acquisition Corp.
as follows:
(a) Organization, Standing and Trust Power of Cabot. Cabot is
a real estate investment trust duly organized, validly existing and in
good standing under the Laws of the State of Maryland and has all of the
requisite trust power, authority and all necessary government approvals or
licenses to own, lease, operate its properties, and to carry on its
business as now being conducted. Cabot is duly qualified or licensed to do
business and is in good standing in each jurisdiction in which the nature
of the business it is conducting, or the ownership, operation or leasing
of its properties or the management of properties for others makes such
qualification or licensing necessary, other than in such jurisdictions
where the failure to be so qualified or licensed, individually or in the
aggregate, will not constitute a Cabot Material Adverse Effect. Cabot has
heretofore made available to CalWest complete and correct copies of Cabot's
declaration of trust, as amended through the date hereof (the "Cabot
Charter"), and by-laws, as amended through the date hereof (the "Cabot
By-laws"). The Cabot Charter and the Cabot By-laws are each in full force
and effect. Each jurisdiction in which Cabot is qualified or licensed to do
business and each assumed name under which it conducts business in any
jurisdiction are identified in Section 4.1(a) of the disclosure letter,
dated the date hereof and delivered to CalWest in connection with the
execution and delivery of this Agreement (the "Cabot Disclosure Letter").
(b) Cabot Subsidiaries; Interests in Other Persons. Each Cabot
Subsidiary that is a corporation is duly organized, validly existing and
in good standing under the Laws of its jurisdiction of incorporation and
has all of the requisite corporate power and authority and all necessary
government approvals and licenses to own, lease, operate its
properties, and to carry on its business as now being conducted, except
where the failure to have such approvals or licenses would not,
individually or in the aggregate, constitute a Cabot Material Adverse
Effect. Each Cabot Subsidiary, including Cabot LP, that is a
partnership, limited liability company or trust is duly organized,
validly existing and in good standing under the Laws of its
13
jurisdiction of organization and has the requisite power and authority
and all necessary government approvals and licenses to own, lease,
operate its properties, and to carry on its business as now being
conducted, except where the failure to have such approvals or licenses
would not, individually or in the aggregate, constitute a Cabot
Material Adverse Effect. Each Cabot Subsidiary, including Cabot LP, is
duly qualified or licensed to do business and is in good standing in
each jurisdiction in which the nature of its business or the ownership,
operation or leasing of its properties or the management of properties
for others makes such qualification or licensing necessary, other than
in such jurisdictions where the failure to be so qualified or licensed
would not, individually or in the aggregate, constitute a Cabot
Material Adverse Effect. All outstanding shares of stock of each Cabot
Subsidiary that is a corporation have been duly authorized, are validly
issued, fully paid and nonassessable, and are not subject to any
preemptive rights and are owned by Cabot and/or another Cabot
Subsidiary, except as disclosed in Section 4.1(b)(i) of the Cabot
Disclosure Letter, and are so owned free and clear of all pledges,
claims, liens, charges, encumbrances and security interests of any kind
or nature whatsoever (collectively, "Liens"). All equity interests in
each Cabot Subsidiary, including Cabot LP, that is a partnership,
limited liability company, trust or other entity have been duly
authorized and are validly issued and are owned by Cabot and/or another
Cabot Subsidiary, except as disclosed in Section 4.1(b)(i) of the Cabot
Disclosure Letter, and are so owned free and clear of all Liens. Except
as set forth in Section 4.1(b)(i) or Section 4.1(c)(i)(D) of the Cabot
Disclosure Letter, there are no outstanding options, warrants or other
rights to acquire ownership interests from any Cabot Subsidiary. Cabot
has heretofore made available to CalWest complete and correct copies of
the charter, by-laws or other organizational documents of each of the
Cabot Subsidiaries, each as amended to the date hereof and each as in
full force and effect. Section 4.1(b)(i) of the Cabot Disclosure Letter
sets forth (A) all Cabot Subsidiaries and their respective
jurisdictions of incorporation or organization, (B) each owner and the
respective amount of such owner's equity interest in each Cabot
Subsidiary and (C) a list of each jurisdiction in which each Cabot
Subsidiary is qualified or licensed to do business and each assumed
name under which each such Cabot Subsidiary conducts business in any
jurisdiction.
(ii) Except for the stock of, or other equity
interests in, the Cabot Subsidiaries, and the other interests
disclosed in Section 4.1(b)(ii) of the Cabot Disclosure
Letter (the "Cabot Other Interests"), neither Cabot nor any
of the Cabot Subsidiaries owns any stock or other ownership
or equity interest in any Person. Neither Cabot nor any Cabot
Subsidiary has violated any provision of any organizational
documents governing or otherwise relating to its rights in
any Cabot Other Interest that constitutes a Cabot Material
Adverse Effect.
14
(c) Capital Structure.
(i) Shares
(A) The authorized shares of beneficial interest of
Cabot consist of (1) 140,900,000 Common Shares, (2)
1,000,000 Series A Junior Participating Preferred
Shares of Beneficial Interest, par value $0.01 per
share (the "Junior Participating Preferred Shares"),
(3) 1,300,000 8.625% Series B Cumulative Redeemable
Preferred Shares of Beneficial Interest, par value
$0.01 per share (the "Series B Preferred Shares"),
(4) 2,600,000 8.625% Series C Cumulative Redeemable
Preferred Shares of Beneficial Interest, par value
$0.01 per share (the "Series C Preferred Shares"),
(5) 200,000 8.375% Series D Cumulative Redeemable
Preferred Shares of Beneficial Interest, par value
$0.01 per share (the "Series D Preferred Shares"),
(6) 200,000 8.375% Series E Cumulative Redeemable
Preferred Shares of Beneficial Interest, par value
$0.01 per share (the "Series E Preferred Shares"),
(7) 1,800,000 8.5% Series F Cumulative Redeemable
Preferred Shares of Beneficial Interest, par value
$0.01 per share (the "Series F Preferred Shares"),
(8) 600,000 8.875% Series G Cumulative Redeemable
Preferred Shares of Beneficial Interest, par value
$0.01 per share (the "Series G Preferred Shares"),
and (9) 1,400,000 8.95% Series H Cumulative
Redeemable Preferred Shares of Beneficial Interest,
par value $0.01 per share (the "Series H Preferred
Shares"; together with the Series B Preferred Shares,
Series C Preferred Shares, Series D Preferred Shares,
Series E Preferred Shares, Series F Preferred Shares
and Series G Preferred Shares, the "Preferred
Shares").
(B) As of the date of this Agreement, (1)
41,246,584 Common Shares are issued and outstanding and (2)
no Junior Participating Preferred Shares, Series B
Preferred Shares, Series C Preferred Shares, Series D
Preferred Shares, Series E Preferred Shares, Series F
Preferred Shares, Series G Preferred Shares or Series H
Preferred Shares are issued and outstanding.
(C) As of the date of this Agreement, (1) 5,738,454
Common Shares are reserved for issuance upon exercise of
outstanding Cabot Options (including DEUs) and
623,335 Common Shares are reserved for issuance under
the Cabot Option Plans, (2) 2,426,255 Common Shares
are reserved for issuance upon exchange of LP Units
(as defined below) for Cabot Common Shares pursuant
to the Second Amended and Restated Agreement of
Limited Partnership of Cabot LP (the "Cabot LP
Agreement"), (3) 1,500,000 Common Shares are reserved
for issuance pursuant to the 1999 Dividend
Reinvestment and Share Purchase Plan and (4) 750,000
Common Shares are reserved for issuance upon the
exercise of a Common Share Purchase Warrant dated
September 5, 2000, (5) 1,300,000 Series B Preferred
Shares are reserved for issuance upon conversion of
15
the Series B Preferred Units (defined below), (6)
2,600,000 Series C Preferred Shares are reserved for
issuance upon conversion of the Series C Preferred
Units (defined below), (7) 200,000 Series D Preferred
Shares are reserved for issuance upon conversion of
the Series D Preferred Units (defined below), (8)
200,000 Series E Preferred Shares are reserved for
issuance upon conversion of the Series E Preferred
Units (defined below), (9) 1,800,000 Series F
Preferred Shares are reserved for issuance upon
conversion of the Series F Preferred Units (defined
below), (10) 600,000 Series G Preferred Shares are
reserved for issuance upon conversion of the Series G
Preferred Units (defined below), and (11) 1,400,000
Series H Preferred Shares are reserved for issuance
upon conversion of the Series H Preferred Units
(defined below).
(D) Except as set forth in this Section 4.1(c) or
in Section 4.1(c)(i)(D) of the Cabot Disclosure Letter,
there are issued and outstanding or reserved for issuance:
(1) no shares, Voting Debt or other equity securities
of Cabot; (2) no restricted Cabot Common Shares,
performance share awards or DEUs relating to the
equity interests of Cabot or Cabot LP, (3) no
securities of Cabot or any Cabot Subsidiary or
securities or assets of any other entity convertible
into or exchangeable for shares, Voting Debt or other
equity securities of Cabot or any Cabot Subsidiary;
and (4) no subscriptions, options, warrants,
conversion rights, stock appreciation rights, calls,
claims, rights of first refusal, rights (including
preemptive rights), commitments, arrangements or
agreements to which Cabot or any Cabot Subsidiary is
a party or by which it is bound in any case
obligating Cabot or any Cabot Subsidiary to issue,
deliver, sell, purchase, redeem or acquire, or cause
to be issued, delivered, sold, purchased, redeemed or
acquired, additional shares, Voting Debt or other
equity securities of Cabot or of any Cabot
Subsidiary, or obligating Cabot or any Cabot
Subsidiary to grant, extend or enter into any such
subscription, option, warrant, conversion right,
share appreciation right, call, right, commitment,
arrangement or agreement. All outstanding shares of
Cabot are, and all shares reserved for issuance will
be, upon issuance in accordance with the terms
specified in the instruments or agreements pursuant
to which they are issuable, duly authorized, validly
issued, fully paid and nonassessable and not subject
to or issued in violation of, any preemptive right,
purchase option, call option, right of first refusal,
subscription or any other similar right.
(E) Except as set forth in Section 4.1(c)(i)(E)
of the Cabot Disclosure Letter, all dividends or
distributions on securities of Cabot or any Cabot
Subsidiary that have been declared or authorized prior
to the date of this Agreement have been paid in full.
16
(ii) Partnership Units
(A) As of the date of this Agreement,
(1) 41,246,584 units of general partner interest in
Cabot LP (the "GP Units"), (2) 2,426,255 LP Units, (3)
1,300,000 8.625% Series B Cumulative Redeemable
Preferred Units (the "Series B Preferred Units"), (4)
2,600,000 8.625% Series C Cumulative Redeemable
Preferred Units (the "Series C Preferred Units"), (5)
200,000 8.375% Series D Cumulative Redeemable Preferred
Units (the "Series D Preferred Units"), (6) 200,000
8.375% Series E Cumulative Redeemable Preferred Units
(the "Series E Preferred Units"), (7) 1,800,000 8.5%
Series F Cumulative Redeemable Preferred Units (the
"Series F Preferred Units"), (8) 600,000 8.875% Series
G Cumulative Redeemable Preferred Units (the "Series G
Preferred Units"), and (9) 1,400,000 8.95% Series H
Cumulative Redeemable Preferred Units (the "Series H
Preferred Units"; together with the Series B Preferred
Units, Series C Preferred Units, Series D Preferred
Units, Series E Preferred Units, Series F Preferred
Units and Series G Preferred Units, the "Preferred
Units") are validly issued and outstanding, are not
subject to preemptive rights and any capital
contributions required to be made by the holders
thereof have been made.
(B) Cabot is the sole general partner of Cabot LP
and as of the date of this Agreement holds 41,246,584
GP Units, representing 100% of the outstanding GP
Units in Cabot LP. Section 4.1(c)(ii)(B) of the Cabot
Disclosure Letter sets forth the name, number and
class of GP Units, LP Units and Preferred Units held
by each partner in Cabot LP. Except as disclosed in
Section 4.1(c)(ii)(B) of the Cabot Disclosure Letter,
all holders of LP Unitholders have executed and
delivered to CalWest and Rooster Acquisition Corp.
Shareholder Agreements.
(C) Each LP Unit may, under certain circumstances
and subject to certain conditions set forth in the Cabot LP
Agreement, be converted to Cabot Common Shares on a
one-for-one basis. The holders of Series B Preferred
Units have the right, under certain circumstances, to
exchange such units for Series B Preferred Shares on
a one-for-one basis pursuant to the terms of the
Series B Preferred Units. The holders of Series C
Preferred Units have the right, under certain
circumstances, to exchange such units for Series C
Preferred Shares on a one-for-one basis pursuant to
the terms of the Series C Preferred Units. The
holders of the Series D Preferred Units have the
right, under certain circumstances, to exchange such
units for Series D Preferred Shares on a one-for-one
basis pursuant to the terms of the Series D Preferred
Units. The holders of Series E Preferred Units have
the right, under certain circumstances, to exchange
such units for Series E Preferred Shares on a
one-for-one basis pursuant to the terms of the Series
E Preferred Units. The holders of Series F Preferred
Units have the right, under certain circumstances, to
exchange such units for Series F Preferred Shares on
a one-for-one basis pursuant to the terms of the
17
Series F Preferred Units. The holders of Series G
Preferred Units have the right, under certain
circumstances, to exchange such units for Series G
Preferred Shares on a one-for-one basis pursuant to
the terms of the Series G Preferred Units. The
holders of Series H Preferred Units have the right,
under certain circumstances, to exchange such units
for Series H Preferred Shares on a one-for-one basis
pursuant to the terms of the Series H Preferred
Units. As of the date of this Agreement, no notice
has been received by Cabot or Cabot LP of the
exercise of any of the rights set forth in this
paragraph (C), which are not reflected in this
Section 4.1(c).
(iii) Miscellaneous
(A) Except for the Transaction Documents and
except as set forth in Section 4.1(c)(iii)(A) or Section
4.1(c)(iii)(B) of the Cabot Disclosure Letter, there are
not any (i) shareholder agreements, voting trusts, proxies
or other agreements or understandings relating to the
voting of any shares of Cabot or partnership
interests in Cabot LP or any ownership interests in
any Cabot Subsidiary or (ii) agreements or
understandings relating to the sale or transfer
(including agreements imposing transfer restrictions)
of any shares of Cabot or any ownership interests in
any Cabot Subsidiary, to which Cabot or any Cabot
Subsidiary is a party or by which it is bound. Except
as set forth in Section 4.1(c)(iii)(A) of the Cabot
Disclosure Letter, there are no restrictions on
Cabot's ability to vote the equity interests of any
of the Cabot Subsidiaries.
(B) Except as set forth in Section 4.1(c)(iii)(B)
of the Cabot Disclosure Letter, no holder of securities in
Cabot or any Cabot Subsidiary has any right to have such
securities registered by Cabot or any Cabot
Subsidiary, as the case may be.
(C) Except as set forth in Section 4.1(b)(i) or
Section 4.1(c)(iii)(C) of the Cabot Disclosure Letter and
except for LP Units, there are not any Cabot
Subsidiaries in which any officer or director of
Cabot or any Cabot Subsidiary owns any stock or other
securities. There are no agreements or understandings
between Cabot or any Cabot Subsidiary and any Person
that could cause such Person to be treated as holding
any share, stock or security in Cabot or any Cabot
Subsidiary as an agent for, or nominee of, Cabot or
any Cabot Subsidiary.
(D) All prior issuances of securities were in all
material respects made in compliance with and not in
violation of all applicable federal and state securities
laws.
(d) Authority; No Violations; Consents and Approval; LP Units.
18
(i) Cabot has all requisite power and authority to enter
into the Transaction Documents and to consummate the transactions
contemplated thereby, subject, solely with respect to the
consummation of the Merger, to receipt of the Cabot Common
Shareholder Approval and the acceptance for record of the
Articles of Merger by the Maryland Department. Each Cabot
Subsidiary that is a party to any Transaction Document has all
requisite power and authority to enter into such Transaction
Document and to consummate the transactions contemplated
thereby. The execution and delivery of the Transaction
Documents and the consummation of the transactions
contemplated hereby or thereby have been duly authorized by
all necessary action on the part of Cabot and each applicable
Cabot Subsidiary, subject, solely with respect to the
consummation of the Merger, to receipt of the Cabot Common
Shareholder Approval. Such Transaction Documents have been
duly executed and delivered by Cabot and each applicable Cabot
Subsidiary and subject, solely with respect to the
consummation of the Merger, to receipt of the Cabot Common
Shareholder Approval, constitute legal, valid and binding
obligations of Cabot and each applicable Cabot Subsidiary,
enforceable against Cabot and each Cabot Subsidiary in
accordance with their terms, except as such enforceability may
be limited by bankruptcy, insolvency, reorganization,
moratorium and other Laws of general applicability relating to
or affecting creditors' rights and by general principles of
equity (regardless of whether such enforceability is
considered in a proceeding in equity or at Law).
(ii) Except as set forth in Section 4.1(d)(ii) of the
Cabot Disclosure Letter and except for the Cabot Common Shareholder
Approval, the execution and delivery of the Transaction Documents
by Cabot or each applicable Cabot Subsidiary do not, and the
consummation of the transactions contemplated thereby, and
compliance with the provisions thereof, will not conflict
with, or result in any violation of, or default (with or
without notice or lapse of time, or both) under, or give rise
to a right of termination, cancellation or acceleration of any
obligation, or the loss of a benefit under, or give rise to a
right of purchase under, result in the creation of any Lien
upon any of the properties or assets of Cabot or any of the
Cabot Subsidiaries under, require the consent or approval of
any third party or otherwise result in a detriment or default
to Cabot or any of the Cabot Subsidiaries under, any provision
of (A) the Cabot Charter or the Cabot By-laws or any provision
of the comparable charter or organizational documents of any
of the Cabot Subsidiaries, (B) any loan or credit agreement or
note, except for the Triggered Loans (as defined below) or any
bond, mortgage, indenture, lease or other agreement,
instrument, permit, concession, franchise or license
applicable to Cabot or any of the Cabot Subsidiaries, or to
which their respective properties or assets are bound or any
guarantee by Cabot or any of the Cabot Subsidiaries of any of
the foregoing, (C) any joint venture or other ownership
arrangement or any Material Contract (as defined in Section
4.1(u)(i)) except for the Triggered Loans (as defined below)
or (D) assuming the consents, approvals, authorizations or
permits and filings or notifications referred to in Section
4.1(d)(iii) are duly and timely obtained or made and the Cabot
Common Shareholder Approval has been obtained, any Law or
Order applicable to or binding upon Cabot or any of the Cabot
Subsidiaries, or any of their respective properties or assets,
other than, in the case of clauses (B) (except with respect to
the Triggered Loans), (C) and (D), any such conflicts,
violations, defaults, rights, Liens or detriments that,
individually or in the aggregate, would not constitute a Cabot
Material Adverse Effect. For the purposes of this Agreement,
the term "Triggered Loans" means the loans identified as
"Triggered Loans" in Section 4.1(d)(ii) of the Cabot
19
Disclosure Letter.
(iii) Except as set forth in Section 4.1(d)(iii) of
the Cabot Disclosure Letter, no consent, approval, order or
authorization of, or registration, declaration or filing with,
notice to or permit from, any Governmental Entity, is required
by or on behalf of Cabot or any of the Cabot Subsidiaries in
connection with the execution and delivery of the Transaction
Documents by Cabot and each of the applicable Cabot
Subsidiaries or the consummation by Cabot or the applicable
Cabot Subsidiaries of the transactions contemplated hereby or
thereby, except for: (A) the filing with the SEC of (1) (a) if
required by the rules and regulations of the SEC, a proxy or
information statement in preliminary and definitive form
relating to the Cabot Common Shareholder Meeting held in
connection with the Merger, if any, or (b) other documents
otherwise required in connection with the transactions
contemplated hereby and (2) such reports under Section 13(a)
of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and such other compliance with the Exchange
Act and the rules and regulations thereunder, as may be
required in connection with the Transaction Documents and the
transactions contemplated thereby; (B) the filing of the
Articles of Merger, and the acceptance for record of the
Articles of Merger by, the Maryland Department; (C) such
filings and approvals as may be required by any applicable
state securities or "blue sky" Laws; (D) such filings as may
be required in connection with state or local transfer taxes;
and, (E) except with respect to the Merger, any such consent,
approval, order, authorization, registration, declaration,
filing or permit that the failure to obtain or make,
individually or in the aggregate, would not constitute a Cabot
Material Adverse Effect.
(iv) The holders of Preferred Units do not and will
not have any right to (A) cause the redemption of such
Preferred Units, (B) exchange such Preferred Units for any
other securities, or (C) convert, redeem or receive a
distribution with respect to such Preferred Units, in each
case solely as a result of the Offer, the Merger, or the other
transactions contemplated by the Transaction Documents.
(e) SEC Documents.
(i) Each of Cabot and Cabot LP has made available to
CalWest a true and complete copy of each report, schedule,
registration statement, other statement (including proxy
statements) and information filed by Cabot and Cabot LP with
the SEC since its inception and prior to or on the Closing
Date (the "Cabot SEC Documents"), which are all the documents
(other than preliminary material) that each of Cabot and Cabot
LP was required to file with the SEC between its inception and
the
20
Closing Date pursuant to the federal securities laws and the
SEC rules and regulations thereunder. Section 4.1(e)(i) of the
Cabot Disclosure Letter accurately lists each Cabot SEC
Document filed prior to the date of this Agreement. As of
their respective dates, the Cabot SEC Documents complied in
all material respects with the requirements of the Securities
Act of 1933, as amended (the "Securities Act"), or the
Exchange Act, as the case may be, and the rules and
regulations of the SEC thereunder applicable to such Cabot SEC
Documents and none of the Cabot SEC Documents contained any
untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances
under which they were made, not misleading, except to the
extent such statements have been modified or superseded by
later Cabot SEC Documents filed and publicly available prior
to the date of this Agreement. Neither Cabot nor Cabot LP has
any outstanding and unresolved comments from the SEC with
respect to any of the Cabot SEC Documents. None of the Cabot
SEC Documents is the subject of any confidential treatment
request by Cabot or Cabot LP. The consolidated financial
statements of Cabot and Cabot LP (including the notes thereto)
included in the Cabot SEC Documents complied as to form in all
material respects with the applicable accounting requirements
and the published rules and regulations of the SEC with
respect thereto, were prepared in accordance with generally
accepted accounting principles ("GAAP") applied on a
consistent basis during the periods involved (except as may be
indicated in the notes thereto, or, in the case of the
unaudited statements, as permitted by Rule 10-01 of Regulation
S-X of the SEC) and fairly presented, in accordance with
applicable requirements of GAAP and the applicable rules and
regulations of the SEC (subject, in the case of the unaudited
statements, to normal, recurring adjustments, none of which
are material), the assets, liabilities and the consolidated
financial position of Cabot and the Cabot Subsidiaries, taken
as a whole, and Cabot LP as of their respective dates and the
consolidated statements of income and the consolidated cash
flows of Cabot and the Cabot Subsidiaries taken as a whole,
and Cabot LP for the periods presented therein. The books of
account and other financial records of Cabot and the Cabot
Subsidiaries are accurately reflected in all material respects
in the financial statements included in the Cabot SEC
Documents. Other than Cabot and Cabot LP, no Cabot Subsidiary
is required to make any filing with the SEC.
(ii) The GP Units, LP Units and the Preferred Units are
not registered under Section 12 of the Exchange Act.
21
(iii) Section 4.1(e)(iii) of the Cabot Disclosure
Letter sets forth a true and complete copy of the unaudited
consolidated balance sheet of Cabot as at September 30, 2001
(the "Balance Sheet") and the unaudited consolidated
statements of income for the nine months ended September 30,
2001 and September 30, 2000 (together with the Balance Sheet,
the "Interim Financial Information"). The Interim Financial
Information was prepared in accordance with GAAP (except for
the absence of footnotes) applied on a basis consistent with
the consolidated financial statements included in the Cabot
SEC Documents and fairly presents (subject to normal recurring
adjustments, none of which are material), the assets,
liabilities, consolidated financial position and consolidated
statements of income of Cabot and the Cabot Subsidiaries taken
as a whole as at and for the periods indicated. The books of
account and other financial records of Cabot and the Cabot
Subsidiaries are accurately reflected in all material respects
in the Interim Financial Information. A true, complete and
correct copy of the Interim Financial Information is included
in Cabot's press release issued to the media and public
October 24, 2001. The Interim Financial Information has been
reviewed by Cabot's independent public accountants in
accordance with the American Institute of Certified Public
Accountants' Statement on Auditing Standards No. 71.
(iv) The Quarterly Report on Form 10-Q for the quarter
ended September 30, 2001 will include without change the Interim
Financial Information; provided that the financial statements
included in such Form 10-Q may include line items that have been
combined in the Interim Financial Information.
(f) Absence of Certain Changes or Events. Except as disclosed in
Section 4.1(f) of the Cabot Disclosure Letter, since the Balance Sheet
date, Cabot and the Cabot Subsidiaries have conducted their business
only in the ordinary course consistent with past practice and there
has not been: (1) (A) a Cabot Material Adverse Effect; (B) any
declaration, setting aside or payment of any dividend or other
distribution (whether in cash, stock or property) with respect to any
of Cabot's Common Shares or any ownership interest in Cabot LP; (C)
any amendment of any term of any outstanding security of Cabot or any
Cabot Subsidiary; (D) any repurchase, redemption or other acquisition
by Cabot or any Cabot Subsidiary of any outstanding shares of stock or
other securities of, or other ownership interests in, Cabot or any
Cabot Subsidiary; (E) any change in any method of accounting or
accounting practice or any material change in any tax method or
election by Cabot or any Cabot Subsidiary; (F) any (i) amendment of
any employment, consulting, severance, retention or any other
agreement between Cabot and any officer or trustee of Cabot; (ii)
grant of any severance or termination pay to any trustee, director or
officer of Cabot or any Cabot Subsidiary; (iii) entering into of any
employment agreement with any trustee, director or officer of Cabot or
any Cabot Subsidiary; (iv) material increase in any benefits payable
22
under any existing severance or termination pay policies or
employment agreements; or (v) increase in compensation, bonus or other
benefits payable to trustees, directors or officers of Cabot or a
Cabot Subsidiary; (G) any change, event, effect, damage, destruction,
loss relating to the business or operations of Cabot that has
constituted, or would constitute, a Cabot Material Adverse Effect; (H)
any incurrence, assumption or guarantee by Cabot or any Cabot
Subsidiary of any indebtedness for borrowed money other than in the
ordinary course of business consistent with past practices; (I) any
creation or assumption by Cabot or any Cabot Subsidiary of any Lien in
an amount, individually or in the aggregate, in excess of $1,000,000
on any asset other than in the ordinary course of business consistent
with past practices; or (J) any making of any loan, advance or capital
contribution to or investment in any Person; or (2) any split,
combination or reclassification of any of Cabot's stock or any
issuance or the authorization of any issuance of any other securities
in respect of, in lieu of or in substitution for, or giving the right
to acquire by exchange or exercise, shares of its stock or any
issuance of an ownership interest in, any Cabot Subsidiary.
(g) No Undisclosed Material Liabilities. Except as set forth
in Section 4.1(g)(i) of the Cabot Disclosure Letter or as otherwise
would not constitute a Cabot Material Adverse Effect, there are no
Liabilities of Cabot or any of the Cabot Subsidiaries, whether
accrued, contingent, absolute or determined, and, except with respect
to the environmental matters which are the subject of the
representations and warranties in Section 4.1(o), there is no existing
condition, situation or set of circumstances that could reasonably be
expected to result in such a Liability, other than: (i) Liabilities
adequately provided for on the Balance Sheet or (ii) Liabilities
incurred in the ordinary course of business consistent with past
practice subsequent to the Balance Sheet date. Section 4.1(g)(ii) of
the Cabot Disclosure Letter sets forth a complete list of all loan or
credit agreements, notes, bonds, mortgages, indentures and other
agreements and instruments pursuant to which any indebtedness of Cabot
or any Cabot Subsidiary, is outstanding or may be incurred and the
respective principal amounts outstanding thereunder as of the date of
this Agreement. For purposes of this Section 4.1(g), "indebtedness"
means, with respect to any Person, without duplication (i) all
obligations of such Person for borrowed money, or with respect to
deposits or advances of any kind to such person, (ii) all obligations
of such Person evidenced by bonds, debentures, notes or similar
instruments, (iii) all obligations of such Person upon which interest
charges are customarily paid, (iv) all obligations of such Person
under conditional sale or other title retention agreements relating to
property purchased by such Person, (v) all obligations of such Person
issued or assumed as the deferred purchase price of property or
services (excluding obligations of such person or creditors for raw
materials, inventory, services and supplies incurred in the ordinary
course of such Person's business, consistent with past practice), (vi)
all capitalized lease obligations of such Person, (vii) all
obligations of such Person under interest rate or currency hedging
transactions (valued at the termination value thereof), (viii) all
letters of credit issued for the account of such Person, and (ix) all
guarantees and arrangements having the economic effect of a guarantee
of such Person of any indebtedness of any other Person.
23
(h) No Default. Neither Cabot nor any of the Cabot Subsidiaries
is in default or violation (and no event has occurred which, with
notice or the lapse of time or both, would constitute a default or
violation) of any term, condition or provision of (A) the Cabot Charter or
the Cabot By-laws or the comparable charter or organizational documents of
any of the Cabot Subsidiaries, (B) any loan or credit agreement or note,
including any Triggered Loan or any bond, mortgage, indenture, lease or
other agreement, instrument, permit, concession, franchise or license to
which Cabot or any of the Cabot Subsidiaries is now a party or by which
Cabot or any of the Cabot Subsidiaries or any of their respective
properties or assets is bound, or (C) any Law or Order applicable to or
binding upon Cabot or any of the Cabot Subsidiaries or any of their
respective properties or assets, except, in the case of clauses (B) and
(C), for defaults or violations which, individually or in the aggregate,
have not constituted and would not constitute a Cabot Material Adverse
Effect.
(i) Compliance with Applicable Laws. Cabot and the Cabot
Subsidiaries hold all permits, licenses, certificates, registrations,
variances, exemptions, orders, franchises and approvals of all
Governmental Entities necessary or required by any applicable Law or
Order for the lawful conduct of their respective businesses (together
with the Cabot Environmental Permits (as hereinafter defined), the
"Cabot Permits"), except where the failure so to hold, individually or
in the aggregate, does not and would not constitute a Cabot Material
Adverse Effect. Cabot and the Cabot Subsidiaries are in compliance
with the terms of the Cabot Permits, except where the failure to so
comply, individually or in the aggregate, does not and would not
constitute a Cabot Material Adverse Effect. Except as would not
constitute a Cabot Material Adverse Effect, the businesses of Cabot
and the Cabot Subsidiaries are not being conducted in violation of any
Law or Order. No investigation or review by any Governmental Entity
with respect to Cabot or any of the Cabot Subsidiaries is pending or,
to the Knowledge of Cabot, is threatened, other than those the outcome
of which, individually or in the aggregate, would not constitute a
Cabot Material Adverse Effect.
(j) Litigation. Except as set forth in Section 4.1(j) of the
Cabot Disclosure Letter, there is no litigation, arbitration, claim,
investigation, suit, action or proceeding pending or, to the Knowledge
of Cabot, threatened against or affecting Cabot or any Cabot
Subsidiary or any of their respective property or assets that,
individually or in the aggregate, constitutes or would constitute a
Cabot Material Adverse Effect, nor is there any such litigation,
arbitration, claim, investigation, suit, action or proceeding or any
Order outstanding against Cabot or any Cabot Subsidiary or any of
their respective properties or assets which in any manner challenges
or seeks to prevent or enjoin, alter or materially delay the Merger,
the Offer or the transactions contemplated by the Transaction
Documents or could reasonably be expected to, individually or in the
aggregate, (A) constitute a Cabot Material Adverse Effect, (B) cause
any of the transactions contemplated by the Transaction Documents to
be rescinded following their consummation, including the Offer or the
Merger, or (C) materially adversely affect the rights of CalWest and
Rooster Acquisition Corp. to own their respective or Cabot's or any
Cabot Subsidiary's assets and to operate their respective or Cabot's
or any Cabot Subsidiary's business.
24
(k) Taxes.
(i) Each of Cabot and the Cabot Subsidiaries has timely
filed all Tax Returns required to be filed by it (after giving
effect to any filing extension properly granted by a Governmental
Entity having authority to do so or otherwise permitted by Law).
Each such Tax Return was, at the time filed, true, correct and
complete in all material respects. Cabot and each Cabot Subsidiary
has paid (or Cabot has paid on behalf of such Cabot Subsidiary),
within the time and in the manner prescribed by Law, all material
Taxes that are due and payable. The most recent financial
statements contained in the Cabot SEC Documents filed with the SEC
prior to the date of this Agreement reflect an adequate reserve or
accrued liabilities or expenses for all material Taxes due and
payable by Cabot and the Cabot Subsidiaries as a group for all
taxable periods and portions thereof through the date of such
financial statements. Cabot and the Cabot Subsidiaries (as a group)
have established on their books and records (which may, but are not
required to, be reflected only on the books and records of Cabot or
Cabot LP) reserves or accrued liabilities or expenses that are
adequate for the payment of all Taxes for which Cabot or any Cabot
Subsidiary is liable but are not yet due and payable. Since the
date of the most recent audited financial statements included in
the Cabot SEC Documents, (A) Cabot has incurred no liability for
any material Taxes under Sections 857(b), 860(c) or 4981 of the
Code or IRS Notice 88-19 or Treasury Regulation Section
1.337(d)-5T, including, without limitation, any material Tax
arising from a prohibited transaction described in Section
857(b)(6) of the Code, and (B) neither Cabot nor any of the Cabot
Subsidiaries has incurred any material liability for Taxes other
than in the ordinary course of business. No deficiencies for
material Taxes have been asserted or assessed in writing by a
Governmental Entity against Cabot or any of the Cabot Subsidiaries,
and no requests for waivers of the time to assess any such material
Taxes have been granted and remain in effect or are pending. No
claim is pending or proposed by any Governmental Entity in any
jurisdiction where Cabot or any Cabot Subsidiary does not file Tax
Returns that Cabot or any Cabot Subsidiary is or may be subject to
taxation by such jurisdiction, nor to the Knowledge of Cabot are
there any facts that could reasonably be expected to give rise to
such a claim.
25
(ii) Cabot (A) for each taxable year of Cabot's existence
(other than its first taxable year ended December 31, 1997) through
its taxable year ended December 31, 2000, has been subject to
taxation as a real estate investment trust (a "REIT") within the
meaning of the Code and has satisfied the requirements to qualify
as a REIT for such years, (B) has operated consistent with the
requirements for qualification and taxation as a REIT for the
period from December 31, 2000 through the date hereof, (C) has not
taken any action or omitted to take any action which would
reasonably be expected to result in a successful challenge by the
Internal Revenue Service to its status as a REIT, and no such
challenge is pending, or to Cabot's Knowledge, threatened. Each
Cabot Subsidiary which files Tax Returns as a partnership for
federal income tax purposes has since its acquisition by Cabot been
classified for federal income tax purposes as a partnership and not
as an association taxable as a corporation, or a "publicly traded
partnership" within the meaning of Section 7704(b) of the Code that
is treated as a corporation for federal income tax purposes under
Section 7704(a) of the Code. Except in the case of Cabot Advisors,
Inc. or any subsidiary thereof, each Cabot Subsidiary which is a
corporation has been since its formation classified as a qualified
REIT subsidiary under Section 856(i) of the Code. Neither Cabot nor
any Cabot Subsidiary holds any asset (x) the disposition of which
would be subject to rules similar to Section 1374 of the Code as
announced in IRS Notice 88-19 or Treasury Regulation Section
1.337(d)-5T or (y) that is subject to a consent filed pursuant to
Section 341(f) of the Code. Except as set forth in Section
4.1(k)(ii) of the Cabot Disclosure Letter, none of the property
owned by Cabot or any Cabot Subsidiary is property described in
Section 1221(a)(1) of the Code.
(iii) As of the date of this Agreement, Cabot does not have
any earnings and profits attributable to Cabot or any other
corporation in any non-REIT year within the meaning of Section 857
of the Code. Cabot is not subject to any adjustment under Section
481 of the Code.
(iv) All material Taxes which Cabot or the Cabot Subsidiaries
are required by Law to withhold or collect, including material
Taxes required to have been withheld in connection with amounts
paid or owing to any employee, independent contractor, creditor,
shareholder or other third party and sales, gross receipts and use
taxes, have been duly withheld or collected and, to the extent
required, have been paid over to the proper Governmental Entities
or are held in separate bank accounts for such purpose. There are
no Liens for material Taxes upon the assets of Cabot or the Cabot
Subsidiaries except for statutory Liens for Taxes not yet due.
(v) Except as set forth in Section 4.1(k)(v) of the Cabot
Disclosure Letter, (a) the Tax Returns of Cabot or any Cabot
Subsidiary have not been audited by any taxing authority, (b) there
are no audits by and contests with any taxing authority currently
being conducted with regard to material Taxes or Tax Returns of
Cabot or any Cabot Subsidiary and, to the Knowledge of Cabot, there
are no audits pending with or proposed by any taxing authority with
respect to any material Taxes or Tax Returns, and (c) there are not
any unresolved questions or claims concerning any liability for
Taxes of Cabot or any Cabot Subsidiary that were raised by any
Governmental Entity in a written communication to Cabot or any
Cabot Subsidiary.
26
(vi) Except as set forth in Section 4.1(k)(vi) of the Cabot
Disclosure Letter, neither Cabot nor the Cabot Subsidiaries are a
party to any Tax allocation or sharing agreement.
(vii) Cabot does not have any material liability for the
Taxes of any Person other than Cabot and the Cabot Subsidiaries
and the Cabot Subsidiaries do not have any material liability for
the Taxes of any Person other than Cabot and the Cabot Subsidiaries
(A) under Treasury Regulation Section 1.1502-6 (or any similar
provision of state, local or foreign Law), (B) to the Knowledge
of Cabot as a transferee or successor or (C) by contract.
(viii) Except as set forth in Section 4.1(k)(viii) of the
Cabot Disclosure Letter, neither Cabot nor the Cabot Subsidiaries
have made any payments, are obligated to make any payments, or are
parties to an agreement that could obligate them to make any
payments that will not be deductible under Section 280G of the
Code. Cabot and the Cabot Subsidiaries have disclosed to the
Internal Revenue Service all positions taken on their federal
income tax returns which could give rise to a substantial
understatement of Tax under Section 6662 of the Code.
(ix) All material elections with respect to Taxes
affecting Cabot or any Cabot Subsidiary as of the date hereof that
are not reflected in Tax Returns are set forth in Section
4.1(k)(ix) of the Cabot Disclosure Letter.
(l) Pension and Benefit Plans; ERISA. (i) Except as set
forth in Section 4.1(l)(i) of the Cabot Disclosure Letter, all
"employee pension benefit plans," as defined in Section 3(2) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
maintained or contributed to by Cabot or any trade or business (whether
or not incorporated) which is under common control, or which is treated
as a single employer, with Cabot under Section 414(b), (c), (m) or (o) of
the Code (a "Cabot ERISA Affiliate") or to which Cabot or any of the
Cabot Subsidiaries or any Cabot ERISA Affiliate contributed or is
obligated to contribute thereunder within six years prior to the Merger
Effective Time intended to qualify under Section 401 of the Code (the
"Cabot Pension Plans") have received a favorable determination letter
from the IRS and, to the Knowledge of Cabot, such determination has not
been modified, revoked or limited, and, to the Knowledge of Cabot as of
the Closing Date, nothing has occurred with respect to the operation of
the Cabot Pension Plans that could reasonably be expected to cause the
loss of such qualification or the imposition of any material Liability,
penalty or Tax under ERISA or the Code.
(ii) Except as set forth in Section 4.1(l)(ii) of the Cabot
Disclosure Letter, neither Cabot nor any Cabot ERISA Affiliate
currently sponsors, contributes to, maintains or has liability
(whether contingent or otherwise) under (i) a "multiemployer plan"
(as defined in Section 4001(a)(3) of ERISA) or (ii) an employee
benefit plan that was subject to Part 3 of Subtitle B of Title I of
ERISA, or Section 412 of the Code, or Title IV of ERISA.
(iii) There is no violation of ERISA or the Code that would
result in any material liability, penalty or Tax under ERISA or the
Code with respect to (A) the filing of applicable reports,
documents, and notices with the Secretary of Labor and the
Secretary of the Treasury regarding all "employee benefit plans,"
as defined in Section 3(3) of ERISA, and all other employee
compensation and benefit arrangements or payroll practices,
including, without limitation, severance pay, sick leave, vacation
pay, salary continuation for disability, consulting or other
compensation agreements, retirement, deferred compensation, bonus
(including, without limitation, any retention bonus plan),
long-term incentive, stock option, stock purchase, hospitalization,
medical insurance, life insurance and scholarship programs
maintained by Cabot or any of the Cabot Subsidiaries or with
respect to which Cabot or any of the Cabot Subsidiaries has any
liability or the Cabot Pension Plans (all such plans, including
Cabot Pension Plans, being hereinafter referred to as the "Cabot
Employee Benefit Plans") or (B) the furnishing of such documents to
the participants or beneficiaries of Cabot Employee Benefit Plans.
27
(iv) Each Cabot Employee Benefit Plan, related trust (or
other funding or financing arrangement) and all amendments thereto
are listed in Section 4.1(l)(iv) of the Cabot Disclosure Letter,
true and complete copies of which have been made available to
CalWest, as have the most recent summary plan descriptions,
administrative service agreements, the three (3) most recent Form
5500s and, with respect to any Cabot Employee Benefit Plan intended
to be qualified pursuant to Section 401(a) of the Code, a current
IRS determination letter.
(v) Each of the Cabot Employee Benefit Plans is, and its
administration is and has been, in material compliance with, and
none of Cabot nor any of the Cabot Subsidiaries has received any
claim, notice or information that any such Cabot Employee Benefit
Plan is not in compliance with, its terms (except for those terms
which are inconsistent with changes required by statutes,
regulations and rulings for which changes are not yet required to
be made, in which case such plans have been administered in
accordance with the provisions of those statutes, regulations and
rulings) and all applicable Laws, regulations, rulings and all
other applicable governmental Laws, regulations and orders, and
prohibited transaction exemptions, including, without limitation,
the requirements of ERISA, bonding requirements and the furnishing
of documents to the participants and beneficiaries (and other
individuals entitled to such documents) of each such plan. Except
as described in Section 4.1(l)(v) of the Cabot Disclosure Letter,
to the Knowledge of Cabot, there is no material liability for
breaches of fiduciary duty in connection with Cabot Employee
Benefit Plans, and neither Cabot nor any of the Cabot Subsidiaries
or any "party in interest" or "disqualified person" with respect to
the Cabot Employee Benefit Plans has engaged in a non-exempt
"prohibited transaction" within the meaning of Section 4975 of the
Code or Section 406 of ERISA.
(vi) There are no actions, disputes, suits, claims,
arbitration or legal, administrative or other proceeding or
governmental investigation pending (other than routine claims for
benefits) or, to the Knowledge of Cabot, threatened, alleging any
breach of the terms of any Cabot Employee Benefit Plan or of any
fiduciary duties thereunder or violation of any applicable Law with
respect to any such Cabot Employee Benefit Plan.
(vii) Except for the payments contemplated by Section 2.7 and
except as described in Section 4.1(l)(vii), Section 4.1(k)(viii) or
Section 4.1(l)(xv) of the Cabot Disclosure Letter, neither the
execution and delivery of this Agreement nor the consummation of
the transactions contemplated hereby will (A) result in any payment
(including, but not limited to, any retention bonuses, parachute
payments or noncompetition payments) becoming due to any employee
or former employee or group of employees or former employees of
Cabot or any of the Cabot Subsidiaries; (B) increase any benefits
otherwise payable under any Cabot Employee Benefit Plan; (C) result
in the acceleration of the time of payment or vesting of any such
rights or benefits; or (D) otherwise result in the payment of any
"excess parachute payment" within the meaning of Section 280G of
the Code with respect to a current or former employee of Cabot or
any of the Cabot Subsidiaries. Except as described in Section
4.1(l)(vii) of the Cabot Disclosure Letter, there are no severance
agreements, noncompetition agreements or employment agreements
between Cabot or any of the Cabot Subsidiaries and any employee of
Cabot or such Cabot Subsidiary. True and complete copies of all
severance agreements and employment agreements described in Section
4.1(l)(vii) of the Cabot Disclosure Letter have been provided to
CalWest.
28
(viii) Except as set forth in Section 4.1(l)(viii) of the
Cabot Disclosure Letter, neither Cabot nor any of the Cabot
Subsidiaries has any consulting agreement or arrangement, whether
oral or written, with any Person involving annual compensation in
excess of $50,000.
(ix) All contributions, premiums and other payments required
by Law or any Cabot Employee Benefit Plan or applicable collective
bargaining agreement have been made under any such plan to any
fund, trust or account established thereunder or in connection
therewith by the due date thereof, and no amounts are or will be
due to the Pension Benefit Guaranty Corporation as of the Closing
Date (except for premiums in the ordinary course of business); and
any and all contributions, premiums and other payments with respect
to compensation or service before and through the Closing Date, or
otherwise with respect to periods before and through the Closing
Date, due from any of Cabot or its ERISA Affiliates to, under or on
account of each Cabot Employee Benefit Plan shall have been paid
prior to the Closing Date or shall have been fully reserved and
provided for or accrued on the Cabot financial statements.
(x) Except as set forth in Section 4.1(l)(x) of the Cabot
Disclosure Letter, no stock or other security issued by Cabot or
any of the Cabot Subsidiaries forms or has formed a part of the
assets of any Cabot Employee Benefit Plan.
(xi) Except as set forth in Section 4.1(l)(xi) of the Cabot
Disclosure Letter, no Cabot Employee Benefit Plan that is a
"welfare benefit plan" as defined in Section 3(1) of ERISA provides
for continuing benefits or coverage for any participant or
beneficiary or covered dependent of a participant after such
participant's termination of employment, except to the extent
required under Section 4980B of the Code and Parts 6 and 7 of
Subtitle B of Title I of ERISA, or any similar state law. Except as
set forth in Section 4.1(l)(xi) of the Cabot Disclosure Letter, all
Cabot Employee Benefit Plans that provide medical, dental health or
long-term disability benefits are fully insured and claims with
respect to any participant or covered dependent under such Cabot
Employee Benefit Plan could not reasonably result in any uninsured
liability to Cabot, any Cabot Subsidiary or CalWest or Rooster
Acquisition Corp. Cabot and the Cabot ERISA Affiliates have
complied in all material respects with the requirements of Section
4980B of the Code and Parts 6 and 7 of Subtitle B of Title I of
ERISA regarding health care coverage under Cabot Employee Benefit
Plans.
(xii) Except as set forth in Section 4.1(l)(xii) of the Cabot
Disclosure Letter, no amount has been paid by Cabot or any of the
Cabot ERISA Affiliates, and no amount is expected to be paid by
Cabot or any of the Cabot ERISA Affiliates, which would be subject
to the provisions of Section 162(m) of the Code such that all or a
part of such payments would not be deductible by the payor.
29
(xiii) Except as set forth in Section 4.1(l)(xiii) of the
Cabot Disclosure Letter, without limiting any other provision of
this Section 4.1(l), no event has occurred and, to the Knowledge of
Cabot, no condition exists, with respect to any Cabot Employee
Benefit Plan, that has subjected or could subject Cabot or any
Cabot ERISA Affiliate, or any Cabot Employee Benefit Plan or any
successor thereto, to any Tax, fine, penalty or other liability
(other than, in the case of Cabot, a Cabot ERISA Affiliate and the
Cabot Employee Benefit Plans, a liability arising in the normal
course to make contributions or payments, as applicable, when
ordinarily due under a Cabot Employee Benefit Plan with respect to
employees of Cabot and the Cabot Subsidiaries). No event has
occurred and, to the Knowledge of Cabot, no condition exists, with
respect to any Cabot Employee Benefit Plan that could subject
CalWest and Rooster Acquisition Corp. or any of its Affiliates, or
any plan maintained by CalWest and Rooster Acquisition Corp. or any
Affiliate (other than an Affiliate which becomes such pursuant to
the transactions contemplated by this Agreement) thereof, to any
material Tax, fine, penalty or other liability, that would not have
been incurred by CalWest and Rooster Acquisition Corp. or any of
its Affiliates, or any such plan, but for the transactions
contemplated hereby. No plan other than a Cabot Employee Benefit
Plan is or will be directly or indirectly binding on CalWest and
Rooster Acquisition Corp. by virtue of the transactions
contemplated hereby. CalWest, Rooster Acquisition Corp. and their
Affiliates, including on and after the Closing Date, Cabot and any
Cabot ERISA Affiliate, to the Knowledge of Cabot, shall have no
liability for, under, with respect to or otherwise in connection
with any plan, which liability arises under ERISA or the Code, by
virtue of Cabot or any Cabot Subsidiary being aggregated in a
controlled group or affiliated service group with any Cabot ERISA
Affiliate for purposes of ERISA or the Code at any relevant time
prior to the Closing Date (other than a liability from providing
benefits arising in the ordinary course of business).
(xiv) Each Cabot Employee Benefit Plan may be unilaterally
amended or terminated in its entirety by Cabot or the Surviving
Entity without liability except as to benefits accrued thereunder
prior to amendment or termination.
(xv) All individual employment, termination, severance,
change in control, retention bonus, post-employment and other
compensation agreements, arrangements and plans existing prior to
the execution of this Agreement or which will exist prior to the
Closing, which are between Cabot or a Cabot Subsidiary and any
current or former director, officer or employee thereof, including
the name and title of such current or former director, officer or
employee, the type of agreement and the amount of any estimated
severance payment (including estimated gross up) owed thereunder
due solely to the transactions contemplated by this Agreement, are
listed in Section 4.1(1)(vii) or Section 4.1(l)(xv) of the Cabot
Disclosure Letter (collectively, the "Cabot Severance Agreements").
30
(xvi) Cabot has not granted any options intended to be
"incentive stock options" pursuant to the Code.
(m) Labor and Employment Matters.
(i) Except as set forth in Section 4.1(m)(i) of the Cabot
Disclosure Letter, neither Cabot nor any of the Cabot Subsidiaries
is a party to any collective bargaining agreement or other current
labor agreement with any labor union or organization, and there is
no question involving current union representation of employees of
Cabot or any of the Cabot Subsidiaries, nor does Cabot or any of
the Cabot Subsidiaries know of any activity or proceeding of any
labor organization (or representative thereof) or employee group
(or representative thereof) to organize any such employees.
(ii) There is no unfair labor practice charge, decision,
side letter, letter agreements, letters of understanding or
settlement agreements or grievance arising out of a collective
bargaining agreement or other grievance procedure pending, or, to
the Knowledge of Cabot, threatened against Cabot or any of the
Cabot Subsidiaries.
(iii) Except as set forth in Section 4.1(j) of the Cabot
Disclosure Letter, there is no complaint, lawsuit or proceeding in
any forum by or on behalf of any present or former employee, any
applicant for employment or any classes of the foregoing, alleging
breach of any express or implied contract of employment, any Law or
regulation governing employment or the termination thereof or other
discriminatory, wrongful or tortious conduct in connection with the
employment relationship pending, or, to the Knowledge of Cabot,
threatened against Cabot or any of the Cabot Subsidiaries.
(iv) There is no strike, slowdown, representation or
certification campaign or work stoppage or lockout with respect to
the employees of Cabot or the Cabot Subsidiaries pending, or, to
the Knowledge of Cabot, threatened, against or involving Cabot or
any of the Cabot Subsidiaries.
(v) To the Knowledge of Cabot, the employees of Cabot and
the Cabot Subsidiaries are lawfully authorized to work in the
United States according to federal immigration Laws.
(vi) There is no proceeding, claim, suit, action or
governmental investigation pending or, to the Knowledge of Cabot,
threatened, with respect to which any current or former director,
officer, employee or agent of Cabot or any of the Cabot
Subsidiaries is claiming indemnification from Cabot or any of the
Cabot Subsidiaries.
(vii) Except as set forth in Section 4.1(m)(vii) of the Cabot
Disclosure Letter and except for such matters as would not,
individually or in the aggregate, constitute a Cabot Material
Adverse Effect, there are no pending administrative matters with
any federal, provincial, state or local agencies regarding (i)
violations or alleged violations of any federal, provincial, state
or local wage and hour law or any federal, provincial, state or
local law with respect to discrimination on the basis of race,
color, creed, national origin, religion or any other basis under
such federal, provincial, state or local law, (ii) any claimed
violation of Title VII of the 1964 Civil Rights Acts, as amended,
(iii) any allegation or claim arising out of Executive Order 11246
or any other applicable order relating to governmental contractors
or state contractors, or (iv) any violation or alleged violation of
the Age Discrimination and Employment Act, as amended, or any other
federal, provincial, state or local statute or ordinance, or any
other applicable laws with respect to wages, hours, employment
practices and terms and conditions of employment.
31
(n) Intangible Property. Cabot and the Cabot Subsidiaries own,
possess or have adequate rights to use all trademarks, trade names,
patents, service marks, brand marks, brand names, computer programs,
databases, industrial designs and copyrights (including any registrations
or applications for registration of any of the foregoing) currently used
in the operation of the businesses of each of Cabot and the Cabot
Subsidiaries (collectively, the "Cabot Intangible Property"), except where
the failure to possess or have adequate rights to use such property,
individually or in the aggregate, would not constitute a Cabot Material
Adverse Effect. All of the Cabot Intangible Property is owned or licensed
by Cabot or the Cabot Subsidiaries free and clear of any and all Liens,
except as would not, individually or in the aggregate, constitute a Cabot
Material Adverse Effect, and neither Cabot nor any such Cabot Subsidiary
has forfeited or otherwise relinquished any Cabot Intangible Property.
Except as set forth in Section 4.1(n) of the Cabot Disclosure Letter, to
the Knowledge of Cabot, the use of Cabot Intangible Property by Cabot or
the Cabot Subsidiaries does not in any material respect conflict with,
infringe upon, violate or interfere with or constitute an appropriation of
any right, title, interest or goodwill, including any intellectual
property right, trademark, trade name, patent, service ▇▇▇▇, brand ▇▇▇▇,
brand name, software license, invention, computer program, database,
industrial design, copyright or any pending application therefor, of any
other Person. Except as set forth in Section 4.1(n) of the Cabot
Disclosure Letter, there have been no claims made against Cabot or any
Cabot Subsidiary, and neither Cabot nor any of the Cabot Subsidiaries has
received any notice of any claim that any of the Cabot Intangible Property
is invalid or conflicts with the asserted rights of any other Person or
has not been used or enforced or has failed to have been used or enforced
in a manner that would result in the abandonment, cancellation or
unenforceability of any of the Cabot Intangible Property, except as would
not, individually or in the aggregate, constitute a Cabot Material Adverse
Effect.
(o) Environmental Matters. Except as described in Section 4.1(o)
of the Cabot Disclosure Letter:
(i) neither Cabot, Cabot LP nor any of Cabot Subsidiaries is
in violation of any applicable Law or Order relating to pollution
or protection of human health and safety, the environment
(including indoor or ambient air, surface water, groundwater, land
surface or subsurface), natural resources or wildlife, including
laws and regulations relating to the release or threatened release
of any chemical, compound, pollutant, contaminant, waste, toxic
substance, product, solid gas, liquid, or material which is
hazardous or toxic, including asbestos or any substance containing
asbestos, polychlorinated biphenyls and petroleum or petroleum
products (including crude oil and any fraction thereof)
(collectively, "Hazardous Materials") or to the manufacture,
management, possession, presence, generation, processing,
distribution, use, treatment, storage, disposal, transportation,
abatement, removal, remediation or handling of, or exposure to,
Hazardous Materials (collectively, "Environmental Laws"), except
for any violation which does not constitute a Cabot Material
Adverse Effect;
32
(ii) Cabot, Cabot LP and the Cabot Subsidiaries have all
material permits, authorizations and approvals required under any
applicable Environmental Laws ("Environmental Permits");
(iii) neither Cabot, the Cabot LP, nor the Cabot Subsidiaries
have received any notice of, and there are no pending or, to the
Knowledge of Cabot, threatened administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, investigation or
proceedings relating to Hazardous Materials or any Environmental
Law against or affecting Cabot, Cabot LP or any of the Cabot
Subsidiaries or any of the Cabot Properties (as hereinafter
defined);
(iv) neither Cabot, the Cabot LP, nor the Cabot Subsidiaries
have received any notice of, and Cabot does not have any Knowledge
of, any occurrence, condition or circumstance that would
reasonably be expected to give rise to a claim or liability under
or pursuant to any Environmental Law;
(v) to the Knowledge of Cabot, there is not any restriction
on the ownership, occupancy, use or transferability of any of the
Cabot Properties in connection with any Environmental Law or
release, threatened release or disposal or any Hazardous Material;
(vi) Cabot, Cabot LP and the Cabot Subsidiaries have not
used, and have not permitted the use of, any Cabot Property (as
defined in Section 4.1(p)) for activities or operations that
involve the handling, use, processing, manufacturing, generating,
producing, storing, refining, recycling, transporting, spilling,
pumping, pouring, emitting, emptying, discharging, injecting,
burying, leaching, dumping, disposing of or releasing into the
environment or otherwise dealing with any Hazardous Material,
except for Hazardous Materials utilized in the ordinary course of
maintaining such real properties or utilized in the ordinary
course of business of the tenant of such Cabot Properties,
provided such use would not, in the ordinary course of business,
reasonably be expected to give rise to Liability under any
Environmental Laws;
(vii) to the Knowledge of Cabot, there is not any seepage,
leaking, escaping, leaching, discharging, injection, release,
emission, spill, pumping, pouring, emptying, dumping or other
release or threatened release of Hazardous Materials into the
environment at or from any Cabot Properties, including any land or
water on, at, under or adjacent to any such Cabot Properties, or
on, at, under or from land or water from which Hazardous Materials
might seep, flow or drain into such land or water;
(viii) no Cabot Property is included or, to the Knowledge of
Cabot, proposed for inclusion on the National Priorities List
issued by the United States Environmental Protection Agency
("EPA") pursuant to applicable Environmental Laws, or on the
Comprehensive Environmental Response, Compensation and Liability
Information System list, and no such real property has been
identified by the EPA as a potential CERCLA site or to the
Knowledge of Cabot included, or proposed for inclusion, on any
analogous list or inventory issued pursuant to any other
Environmental Law or issued by any other Governmental Entity
having or claiming jurisdiction under Environmental Laws or with
respect to such real property; and
33
(ix) Cabot and the Cabot LP do not have any Knowledge of any
occurrence, condition or circumstance (including, without
limitation, any investigation, remediation, claim or notice)
involving or relating to the actual or suspected presence of any
mold, fungi, or other microbial/microbiological contaminants, or
any other indoor air contaminants, at any Cabot Property.
(p) Properties. Except as listed in Section 4.1(p)(i) of the Cabot
Disclosure Letter, Cabot or a Cabot Subsidiary owns fee simple title to or
has a valid leasehold interest in each of the real properties identified
in Section 4.1(p)(i) of the Cabot Disclosure Letter (each, a "Cabot
Property" and collectively, the "Cabot Properties"), which are all of the
real estate properties owned by them, in each case (except as provided
below) free and clear of liens, mortgages or deeds of trust, claims
against title, charges which are liens, security interests or other
encumbrances on title ("Encumbrances"). Section 4.1(p)(i) of the Cabot
Disclosure Letter further identifies which of the Cabot Properties are
owned in fee simple by Cabot or a Cabot Subsidiary and which of the Cabot
Properties are subject to a ground lease. Except as set forth in Section
4.1(p)(i) of the Cabot Disclosure Letter, no other Person has any
ownership interest in any of the Cabot Properties and any such ownership
interest so scheduled does not materially interfere with the present use
of any of the Cabot Properties subject thereto or affected thereby. Except
as set forth in Section 4.1(p)(i) of the Cabot Disclosure Letter, none of
the Cabot Properties is subject to any restriction on the sale or other
disposition thereof or on the financing or release of financing thereon.
The Cabot Properties are not subject to any rights of way, agreements, or
Laws affecting building use or occupancy, or reservations of an interest
in title (collectively, "Property Restrictions") or Encumbrances, except
for (collectively, the "Permitted Title Exceptions") (A) Encumbrances and
Property Restrictions set forth in Section 4.1(p)(i) of the Cabot
Disclosure Letter, (B) Property Restrictions imposed or promulgated by Law
or any Governmental Entity or included in any Cabot space lease with
respect to real property, including zoning regulations, provided that they
do not materially adversely affect the currently intended use of any Cabot
Property, (C) Encumbrances and Property Restrictions disclosed on existing
title policies or existing surveys (in either case copies of which title
policies or surveys have been delivered or made available to CalWest), and
(D) mechanics', carriers', workmen's, repairmen's and materialmen's liens
and other Liens, Property Restrictions and other limitations of any kind,
if any, which individually and in the aggregate will be paid in full in
the ordinary course of business.
(ii) Except as provided in Section 4.1(p)(ii) of the Cabot
Disclosure Letter, valid policies of title insurance or updates or
endorsements have been issued, insuring Cabot's or the applicable
Cabot Subsidiaries' fee simple title or leasehold estate to each
of the Cabot Properties in amounts at least equal to the purchase
price paid for such Cabot Properties at the time of the issuance
of each such policy, subject only to the Permitted Title
Exceptions and the matters disclosed in Section 4.1(p)(ii) of the
Cabot Disclosure Letter, and such policies are, at the date hereof
and will be as of the consummation of the Offer, in full force and
effect and no material claim has been made against any such
policy.
(iii) Section 4.1(p)(iii) of the Cabot Disclosure Letter
lists (i) each of the Cabot Properties which are under development
as of the date of this Agreement and describes the status of such
development as of the date hereof, and (ii) all properties
currently proposed for acquisition, development or commencement of
construction prior to the Merger Effective Time by Cabot and the
Cabot Subsidiaries.
34
(iv) Except as provided in Section 4.1(p)(iv) of the Cabot
Disclosure Letter, (i) all requisite certificates, permits and
licenses from each Governmental Entity having jurisdiction over
each of the Cabot Properties and all agreements, easements or
other rights which are necessary to permit the lawful use and
operation of the buildings and improvements on any of the Cabot
Properties or which are necessary to permit the lawful use and
operation of all driveways, roads and other means of egress and
ingress to and from any of the Cabot Properties have been obtained
and are in full force and effect, and there are no pending threats
of modification or cancellation of any of the same, the absence of
which would reasonably be expected to have a material adverse
effect on such Cabot Property, (ii) Cabot and the Cabot
Subsidiaries have not been notified in writing of any violation of
any Law or Order issued by any Governmental Entity which would
reasonably be expected to have a material adverse effect on such
Cabot Property, (iii) Cabot and the Cabot Subsidiaries have not
been notified in writing of any structural defects relating to any
Cabot Property which would reasonably be expected to have a
material adverse effect on such Cabot Property, (iv) Cabot and the
Cabot Subsidiaries have not been notified in writing of any Cabot
Property whose building systems are not in working order so as to
have a material adverse effect on such Cabot Property, or (v)
Cabot and the Cabot Subsidiaries have not been notified in writing
of any physical damage to any Cabot Property which would
reasonably be expected to have a material adverse effect on such
Cabot Property for which there is not insurance in effect covering
the cost of the restoration and the loss of revenue (subject to a
reasonable deduction or retention limit).
(v) Except as set forth in Section 4.1(p)(v) of the Cabot
Disclosure Letter, none of Cabot or any Cabot Subsidiary has
received any written or published notice to the effect that (i)
any condemnation or involuntary rezoning proceedings are pending
or threatened with respect to any of the Cabot Properties or (ii)
any zoning, building or similar law, code, ordinance, order or
regulation is or will be violated by the continued maintenance,
operation or use of any buildings or other improvements on any of
the Cabot Properties or by the continued maintenance, operation or
use of the parking areas which would reasonably be expected to
have a material adverse effect on such Cabot Property. Except as
set forth in Section 4.1(p)(v) of the Cabot Disclosure Letter, (i)
all work required to be performed, payments required to be made
and actions required to be taken prior to the date hereof pursuant
to any agreement entered into with a Governmental Entity in
connection with a site approval, zoning reclassification or other
similar action relating to any Cabot Properties (e.g., Local
Improvement District, Road Improvement District, Environmental
Mitigation (as defined herein)) have been performed, paid or
taken, as the case may be, and (ii) there are no planned, and
there has been no proposal by or to Cabot or any Cabot Subsidiary
regarding, payments or actions that may be required after the date
hereof pursuant to such agreements. As used in this Agreement,
"Environmental Mitigation" means investigation, clean-up, removal
action, remedial action, restoration, repair, response action,
corrective action, monitoring, sampling and analysis,
installation, reclamation, closure or post-closure in response to
any actual or suspected environmental condition or Hazardous
Materials.
35
(vi) The rent rolls previously provided by Cabot to CalWest
(the "Cabot Rent Roll") list each Cabot Space Lease (as defined
herein) in effect as of the dates set forth therein, and, except
for immaterial omissions or discrepancies, all information set
forth in the Cabot Rent Roll is true, correct and complete as of
the date thereof. "Cabot Space Lease" means each lease or other
right of occupancy affecting or relating to a property in which
Cabot LP (or an entity in which it directly or indirectly has an
interest) is the landlord, either pursuant to the terms of the
lease agreement or as successor to any prior landlord, but
excluding any ground lease. Cabot has made available to CalWest
true, correct and complete copies of all Cabot Space Leases,
including all amendments, modifications, supplements, renewals,
extensions and guarantees related thereto, as of the date hereof.
Except as set forth in Section 4.1(p)(vi) of the Cabot Disclosure
Letter, none of Cabot or any Cabot Subsidiary, on the one hand,
nor, to the Knowledge of Cabot, any other party, on the other
hand, is in default under any Cabot Space Lease, except for such
defaults that, individually or in the aggregate, do not and would
not constitute a Cabot Material Adverse Effect.
(vii) As of the date of this Agreement, Section 4.1(p)(vii)
of the Cabot Disclosure Letter sets forth a complete and correct
list, of all material leases which have been executed, but are
either not yet included on the Rent Roll or relate to property not
yet open for business.
(viii) Except as set forth on Section 4.1(p)(viii) of the
Cabot Disclosure Letter and except as would not, individually or
in the aggregate, constitute a Cabot Material Adverse Effect, no
tenants have been granted options to purchase or rights of first
refusal under their applicable leases which would require consent
or be triggered by the Merger.
(ix) Section 4.1(p)(ix) of the Cabot Disclosure Letter
contains a list, as of the date hereof, of (A) all unfunded tenant
improvements due from Cabot or any Cabot Subsidiary in excess of
$50,000 in any instance, (B) all outstanding leasing commissions
in excess of $10,000 in any instance and (C) all committed capital
expenditures in excess of $50,000 in any instance, excluding
capital expenditures related to Cabot's development projects.
(x) Except as set forth in Section 4.1(p)(x) of the Cabot
Disclosure Letter, there are no written agreements which restrict
Cabot or any Cabot Subsidiary, including Cabot LP, from
transferring any of the Cabot Properties.
(xi) Except as set forth on Section 4.1(p)(xi) of the Cabot
Disclosure Letter, Cabot and each of the Cabot Subsidiaries have
good and sufficient title to, or are permitted to use under valid
and existing leases, all their personal and nonreal properties and
assets reflected in their books and records as being owned by them
(including those reflected in the consolidated balance sheet of
Cabot as of December 31, 2000, except as since sold or otherwise
disposed of in the ordinary course of business) or used by them in
the ordinary course of business, free and clear of all Liens and
Encumbrances, except such as are reflected on the consolidated
balance sheet of Cabot as of December 31, 2000, and the notes
thereto, and except for (A) immaterial Liens for current taxes not
yet due and payable, and liens or encumbrances which are normal to
the business of Cabot and the Cabot Subsidiaries and (B)
imperfections of title or leasehold interest, easements or
encumbrances, if any, as do not materially interfere with the
present use of the properties or assets subject thereto or
affected thereby.
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(q) Insurance. Section 4.1(q) of the Cabot Disclosure Letter
contains a true and complete list, type of insurance, carrier, coverages
(including limits) and term, of all policies of casualty, Liability and
other types of insurance (except title insurance) carried by Cabot or any
Cabot Subsidiary. All such policies are in full force and effect and
neither Cabot nor any Cabot Subsidiary has received from any insurance
company notice of any material defects or deficiencies affecting the
insurability of Cabot or any Cabot Subsidiary or any of their respective
assets thereunder. Cabot and each of the Cabot Subsidiaries maintains
insurance with financially responsible insurers in such amounts and
covering such risks as are in accordance with normal industry practice for
companies engaged in businesses similar to those of Cabot and each of the
Cabot Subsidiaries (taking into account the cost and availability of such
insurance). Except as set forth in this Section 4.1(q), neither Cabot nor
any of the Cabot Subsidiaries has received any written notice of
cancellation or termination with respect to any existing insurance policy
of Cabot or any of the Cabot Subsidiaries.
(r) Opinion of Financial Advisor. The Cabot Board of Trustees
has received the written opinion of the Cabot Financial Advisor to the
effect that, based on, and subject to the various assumptions and
qualifications set forth in such opinion, as of the date of such opinion,
the consideration to be received by holders of Common Shares (other than
CalWest and its Affiliates) pursuant to this Agreement is fair from a
financial point of view to such holders (other than CalWest and its
Affiliates). A copy of the written opinion of the Cabot Financial Advisor
has been delivered to CalWest.
(s) Vote Required. The affirmative vote of the holders of Cabot
Common Shares casting at least two-thirds of the votes entitled to be cast
(the "Cabot Common Shareholder Approval") is the only vote of the holders
of any class or series of the Cabot Common Shares or other securities
required to approve this Agreement, the Merger and the other transactions
contemplated by the Transaction Documents and is only necessary in the
event that the Cabot Common Shares purchased pursuant to the Offer or
otherwise owned by Rooster Acquisition Corp. represent less than 90.0% of
all the votes entitled to be cast on the Merger.
(t) Brokers. Except for the fees and expenses payable to the
Cabot Financial Advisor pursuant to the engagement letter set forth in
Section 4.1(t) of the Cabot Disclosure Letter, no broker, investment
banker or other Person is entitled to any broker's, finder's or other
similar fee or commission in connection with the transactions contemplated
by the Transaction Documents based upon arrangements made by or on behalf
of Cabot, and any Cabot Subsidiary or any Affiliate thereof.
(u) Contracts.
(i) Section 4.1(u)(i) of the Cabot Disclosure Letter lists
all Material Contracts of Cabot. Except as set forth in Section
4.1(u)(i) of the Cabot Disclosure Letter, all Material Contracts
are valid, binding and enforceable and in full force and effect,
except where such failure to be so valid, binding and enforceable
and in full force and effect do not and would not, individually or
in the aggregate, constitute a Cabot Material Adverse Effect, and
there are no defaults or violations thereunder, nor does there
exist any condition which upon the passage of time or the giving of
notice or both would cause such a violation of or a default
thereunder, except those defaults or violations that do not and
would not, individually or in the aggregate, constitute a Cabot
Material Adverse Effect. For purposes of this Agreement, "Material
Contracts" shall mean (i) any loan agreement, indenture, note,
bond, debenture, mortgage or any other document, agreement or
instrument evidencing a capitalized lease obligation or other
indebtedness to any Person, (ii) each commitment, contractual
obligation, capital expenditure or transaction entered into by
Cabot or any Cabot Subsidiary which may result in total payments by
or liability of Cabot or any Cabot Subsidiary in excess of $250,000
individually or $1,000,000 in the aggregate, other than leases
37
listed on Section 4.1(p)(vii) of the Cabot Disclosure Letter, (iii)
any other agreements filed or required to be filed as exhibits to
the Cabot SEC Documents pursuant to Item 601(b)(10) of Regulation
S-K of Title 17, Part 229 of the Code of Federal Regulations, (iv)
any interest rate cap, interest rate collar, interest rate swap,
currency hedging transaction and any other agreement relating to a
similar transaction to which Cabot or any Cabot Subsidiary is a
party or an obligor with respect thereto and (v) any agreement,
commitment, instrument or obligation of a type described in
Sections 4.1(u)(ii) through 4.1(u)(x).
(ii) All mortgages on any of the assets of Cabot or Cabot LP
are listed in Section 4.1(u)(ii) of the Cabot Disclosure Letter.
The Offer, the Merger and the other transactions contemplated by
the Transaction Documents will not trigger any due-on-sale
provision on any of such mortgages, except as set forth in Section
4.1(d)(ii) of the Cabot Disclosure Letter, and will not require the
consent of any mortgage lender, except as set forth in Sections
4.1(d)(ii) of the Cabot Disclosure Letter.
(iii) Except as set forth in Section 4.1(u)(iii) of the Cabot
Disclosure Letter, there is no confidentiality agreement,
non-competition agreement or other contract or agreement that
contains covenants that restrict Cabot's ability to conduct its
business in any location.
(iv) Except as set forth in Section 4.1(u)(iv) of the Cabot
Disclosure Letter, there are no indemnification agreements entered
into by and between Cabot and any director or officer of Cabot or
any of the Cabot Subsidiaries.
(v) Except as set forth in Section 4.1(u)(v) of the Cabot
Disclosure Letter, none of Cabot or any Cabot Subsidiary is a party
to any agreement which would restrict any of them from prepaying
any of their indebtedness without penalty or premium at any time or
which requires any of them to maintain any amount of indebtedness
with respect to any of the Cabot Properties.
(vi) Except as set forth in Section 4.1(u)(vi) of the Cabot
Disclosure Letter, none of Cabot or any Cabot Subsidiary is a party
to any agreement relating to the management of any Cabot Property
by any Person other than Cabot or a Cabot Subsidiary.
(vii) None of Cabot or any Cabot Subsidiary is a party to any
agreement pursuant to which Cabot or any Cabot Subsidiary manages
or provides services with respect to any real properties other than
Cabot Properties, except for the agreements listed in Section
4.1(u)(vii) of the Cabot Disclosure Letter.
(viii) Section 4.1(u)(viii) of the Cabot Disclosure Letter
lists all agreements entered into by Cabot or any Cabot Subsidiary
providing for the sale of, or option to sell, any Cabot Properties
or the purchase of, or option to purchase, by Cabot or any Cabot
Subsidiary, on the one hand, or the other party thereto, on the
other hand, any real estate not yet consummated as of the date
hereof.
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(ix) Except as set forth in Section 4.1(u)(ix) of the Cabot
Disclosure Letter, none of Cabot or any Cabot Subsidiary has any
material continuing contractual liability (A) for indemnification
or otherwise under any agreement relating to the sale of real
estate previously owned, whether directly or indirectly, by Cabot
or any Cabot Subsidiary or (B) to pay any additional purchase price
for any of the Cabot Properties.
(x) Except as set forth in Section 4.1(u)(x) of the Cabot
Disclosure Letter, neither Cabot nor any Cabot Subsidiary has
entered into or is subject, directly or indirectly, to any Tax
Protection Agreements. As used herein, a "Tax Protection Agreement"
is an agreement, oral or written, (A) that has as one of its
purposes to permit a Person to take the position that such Person
could defer federal taxable income that otherwise might have been
recognized upon a transfer of property to Cabot LP or any other
Cabot Subsidiary that is treated as a partnership for federal
income tax purposes, and that (i) prohibits or restricts in any
manner the disposition of any assets of Cabot or any Cabot
Subsidiary, (ii) requires that Cabot or any Cabot Subsidiary
maintain, put in place, or replace indebtedness, whether or not
secured by one or more of the Cabot Properties, or (iii) requires
that Cabot or any Cabot Subsidiary offer to any Person at any time
the opportunity to guarantee or otherwise assume, directly or
indirectly (including, without limitation, through a "deficit
restoration obligation", guarantee (including, without limitation,
a "bottom" guarantee), indemnification agreement or other similar
arrangement), the risk of loss for federal income tax purposes for
indebtedness or other liabilities of Cabot or any Cabot Subsidiary,
(B) that specifies or relates to a method of taking into account
book-tax disparities under Section 704(c) of the Code with respect
to one or more assets of Cabot or a Cabot Subsidiary, or (C) that
requires a particular method for allocating one or more liabilities
of Cabot or any Cabot Subsidiary under Section 752 of the Code.
Neither Cabot nor any Cabot Subsidiary is in violation of or in
default under any Tax Protection Agreement.
(v) Rule 16b-3. Cabot and Cabot LP have taken all necessary
action, including causing the Cabot Board of Trustees to adopt resolutions
authorizing and approving the Merger, this Agreement and the other
transactions contemplated by the Transaction Documents, to exempt such
transactions under Rule 16b-3 of the Exchange Act from the provisions of
Section 16(b) of the Exchange Act.
(w) Inapplicability of Takeover Statutes, Cabot Rights Agreement
and Certain Charter and Bylaw Provisions. (i) Cabot has taken all
appropriate and necessary actions to exempt the Offer, the Merger, the
Transaction Documents and the other transactions contemplated thereby from
the restrictions of Subtitles 6 and 7 of Title 3 of the MGCL and Title 8
(collectively, the "Takeover Statute"). Cabot and the Cabot Board of
Trustees have taken all appropriate and necessary actions to (A) amend the
Cabot Rights Agreement to (1) exempt CalWest and Rooster Acquisition Corp.
from the definition of an Acquiring Person (as defined in the Cabot Rights
Agreement) thereunder due solely to the Transaction Documents and the
transactions contemplated thereby (including the Merger and the Offer) and
(2) provide that no Distribution Date (as defined in the Cabot Rights
Agreement) shall be deemed to have occurred as a result of the Transaction
Documents or the transactions contemplated thereby (including the Merger
and the Offer), (B) render any takeover defense or other provision
contained in the Cabot Charter or Cabot By-laws inapplicable in the Offer,
the Merger, the Transaction Documents and the other transactions
contemplated thereby and (C) render any and all limitations on ownership
of (1) Cabot Common Shares as set forth in the Cabot Charter and (2) the
limited partner interests in Cabot LP as set forth in the Cabot LP
Agreement, including the Ownership Limit inapplicable to the Offer, the
Merger, the Transaction Documents and the other transactions contemplated
thereby.
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(x) Related Party Transactions. Except as expressly described
in the Cabot SEC Documents or as set forth in Section 4.1(x) of the Cabot
Disclosure Letter, there are no material arrangements, agreements or
contracts entered into by Cabot or any of the Cabot Subsidiaries, on the
one hand, and any Person who is an officer, director or affiliate of Cabot
or any Cabot Subsidiary, any relative of the foregoing or an entity of
which any of the foregoing is an Affiliate or an Associate, on the other
hand. Copies of all such documents have been made available to CalWest.
(y) Disclosure Documents.
(i) Each document required to be filed by Cabot with the SEC
in connection with the Offer, the Merger, the Transaction Documents
and the other transactions contemplated thereby (the "Cabot
Disclosure Documents"), including the Schedule 14D-9 (including
information required by 14f-1 under the Exchange Act), the Proxy
Statement or information statement containing the information
required by Regulation 14A, if any, to be filed by Cabot with the
SEC in connection with the Merger and any amendments or supplements
thereto, will, when filed, comply in all material respects with the
provisions of applicable federal securities laws.
(ii) At the time the Schedule 14D-9 and the Proxy Statement
or information statement containing the information required by
Regulation 14A, if any, including any amendment or supplement
thereto filed with the SEC, is first mailed, published or given to
the Cabot Common Shareholders and at the time of the Cabot Common
Shareholder Meeting, each of the Schedule 14D-9 and the Proxy
Statement or information statement containing the information
required by Regulation 14A as supplemented or amended, if
applicable, will not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make
the statements made therein, in the light of the circumstances
under which they were made, not misleading. At the time of the
filing of any Cabot Disclosure Document (other than the Proxy
Statement) filed after the date of this Agreement, such Cabot
Disclosure Document will not contain any untrue statement of a
material fact or omit to state a material fact necessary in order
to make the statements made therein, in the light of the
circumstances under which they were made, not misleading. The
representations and warranties contained in Section 4.1(y)(i) and
this Section 4.1(y)(ii) will not apply to information furnished in
writing to Cabot by CalWest specifically for inclusion in a Cabot
Disclosure Document.
(iii) Neither the information supplied or to be supplied in
writing by or on behalf of Cabot or any Cabot Subsidiary for
inclusion in, nor the information incorporated by reference from
documents filed by Cabot or any Cabot Subsidiary with the SEC into,
the Schedule TO and the Offer Documents will, on the date the
Schedule TO and the Offer Documents are filed with the SEC or on
the date they are first published, sent or given to Cabot Common
Shareholders, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading.
(iv) Cabot shall promptly correct the Schedule 14D-9 if and
to the extent that it shall have become false or misleading in any
material respect and Cabot shall take all steps necessary to cause
such document as so corrected to be filed with the SEC and
disseminated to Cabot's shareholders to the extent required by
applicable federal securities laws.
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(z) Beneficial Ownership of Cabot Common Shares. Neither Cabot
nor the Cabot Subsidiaries "beneficially own" (as defined in Rule 13d-3
promulgated under the Exchange Act) any of the outstanding Cabot Common
Shares or Preferred Shares.
(aa) Investment Company Act of 1940. Neither Cabot nor any of
the Cabot Subsidiaries is, or at the Merger Effective Time will be,
required to be registered as an investment company under the Investment
Company Act of 1940, as amended.
Section 4.2 Representations and Warranties of CalWest and
Rooster Acquisition Corp. CalWest and Rooster Acquisition Corp. represent
and warrant to Cabot and Cabot LP as follows:
(a) Organization, Standing and Power of CalWest and Rooster
Acquisition Corp. CalWest is a limited liability company duly formed
and validly existing under the laws of the State of California and is
in good standing with the Secretary of State of California. Rooster
Acquisition Corp. is a corporation duly formed and validly existing
under MGCL, is in good standing with the Maryland Department and is a
wholly owned subsidiary of CalWest. CalWest has made available to
Cabot complete and correct copies of the organizational documents of
Rooster Acquisition Corp., which are in full force and effect as of
the date hereof.
(b) Authority; No Violations; Consents and Approvals.
(i) CalWest and Rooster Acquisition Corp. have all
requisite power and authority to enter into the Transaction
Documents to which they are parties and to consummate the
transactions contemplated thereby. The execution and delivery
of the Transaction Documents and the consummation of the
transactions contemplated hereby or thereby have been duly
authorized by all necessary action on the part of CalWest and
Rooster Acquisition Corp.
(ii) The Transaction Documents to which CalWest and
Rooster Acquisition Corp. are parties have been duly executed
and delivered by each of CalWest and Rooster Acquisition
Corp., as the case may be, and, constitute valid and binding
obligations of each of CalWest and Rooster Acquisition Corp.,
as the case may be, enforceable against them in accordance
with their terms, except as such enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium and
other Laws of general applicability relating to or affecting
creditors' rights and by general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law).
(iii) The execution and delivery of the Transaction
Documents by CalWest and Rooster Acquisition Corp. do not, and
the consummation of the transactions contemplated thereby, and
compliance by CalWest and Rooster Acquisition Corp. with the
provisions thereof, will not conflict with, or result in any
violation of, or default (with or without notice or lapse of
time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any material obligation or the
loss of a material benefit under, or give rise to a right of
purchase under or result in the creation of any Lien upon any
of the properties or assets of such parties under, require the
consent or approval of any third party or otherwise result in
a material detriment to such parties under, any provision of
(A) the limited liability company agreement of CalWest or the
charter or by-laws of Rooster Acquisition Corp., (B) any
material contract, agreement or commitment of CalWest and
Rooster Acquisition Corp., or any guarantee by CalWest and
Rooster Acquisition Corp., (C) any joint venture or other
ownership arrangement or (D) assuming the consents, approvals,
authorizations or permits and filings or notifications
referred to in Section 4.2(B)(iv) are duly and timely obtained
or made, any Law or Order applicable to or binding on CalWest
and Rooster Acquisition Corp. or any of their respective
properties or assets, other than, in the case of clauses (B),
(C) and (D), any such conflicts, violations, defaults, rights,
Liens or detriments that, individually or in the aggregate,
would not reasonably be expected to materially impair or delay
the ability of CalWest and Rooster Acquisition Corp. to
perform its obligations under any of the Transaction Documents
or prevent the consummation by CalWest and Rooster Acquisition
Corp. of any of the transactions contemplated thereby.
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(iv) No consent, approval, order or authorization of, or
registration, declaration or filing with, or permit from, any
Governmental Entity is required by or on behalf of CalWest and
Rooster Acquisition Corp. in connection with the execution and
delivery by CalWest and Rooster Acquisition Corp. of the
Transaction Documents to which CalWest and Rooster Acquisition
Corp. is a party or the consummation by CalWest and Rooster
Acquisition Corp. of the transactions contemplated thereby,
except for: (A) compliance with the Securities Act and the
Exchange Act and the rules and regulations thereunder as may
be required in connection with the Transaction Documents and
the transactions contemplated thereby; (B) with respect to the
Merger, the filing of the Articles of Merger with, and
acceptance for recording of the Articles of Merger by, the
Maryland Department; (C) such filings and approvals as may be
required by any applicable state securities or "blue sky"
Laws, Takeover Statute or Environmental Laws; and (D) any such
consent, approval, order, authorization, registration,
declaration, filing or permit that the failure to obtain or
make would not reasonably be expected to materially impair or
delay the ability of CalWest and Rooster Acquisition Corp. to
perform its obligations hereunder or under any of the other
Transaction Documents or prevent the consummation by them of
any of the transactions contemplated thereby.
(c) Funding. CalWest has afforded Cabot and its advisors an
opportunity to review in full the Commitment Letter (as defined in
Annex I) and the loan agreement to be entered into between CalWest
and its lender upon the consummation of the Offer, and, as of the
date hereof, no amendments or modifications have been made thereto
or authorized by CalWest or Rooster Acquisition Corp. CalWest and
Rooster Acquisition Corp. hereby covenant and agree that, without
the prior written consent of Cabot, neither CalWest nor Rooster
Acquisition Corp. shall amend or alter, or consent to any amendment
or alteration of, the Commitment Letter or the associated loan
agreement or loan documents in any respect relating to the
obligations of CalWest's bridge lender to fund the Bridge Loan
Commitment. As of the date hereof, the Commitment Letter is
effective and has not been withdrawn or modified by the bridge
lender. Subject to the failure of any conditions contained in the
Commitment Letter, Rooster Acquisition Corp. will have available,
and CalWest will cause Rooster Acquisition Corp. to have available,
at the time of acceptance for payment and payment for all Cabot
Common Shares that Rooster Acquisition Corp. becomes obligated to
accept for payment and pay for pursuant to the Offer and to
consummate the Offer, the Merger and the other transactions
contemplated by the Transaction Documents, in each case, in
accordance with the terms of this Agreement (including the Tender
Offer Conditions).
(d) Documents Relating to Offer. The Schedule TO, the Offer
and the Offer Documents shall comply in all material respects with
the applicable requirements of the federal securities laws as to
form, except that no representation or warranty is made by CalWest
and Rooster Acquisition Corp. with respect to information provided
by Cabot or Cabot LP specifically for use in the Offer Documents.
At the time of the filing of any Cabot Disclosure Document, none of
the information that may be supplied in writing by CalWest and
Rooster Acquisition Corp. or any of their Affiliates specifically
for use in such document will contain any untrue statement of a
material fact or omit to state any material fact necessary in order
to make the statements therein, in light of the circumstances under
which they were made, not misleading. At the time the Schedule TO
is first mailed, published or given to the Cabot Common
Shareholders, it will not contain any untrue statement of a
material fact or omit to state any material fact necessary in order
to make the statements therein, in light of the circumstances under
which they were made, not misleading, except that no representation
or warranty is made by CalWest or Rooster Acquisition Corp. with
respect to information provided by Cabot or Cabot LP specifically
for use in the Offer Documents.
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(e) No Other Business. Rooster Acquisition Corp. was formed
solely for the purpose of engaging in the transactions contemplated
hereby, has engaged in no other business activities and has
conducted its operations only as contemplated thereby.
(f) Brokers. No broker, investment banker or other person is
entitled to any broker's, finder's or other similar fee or
commission in connection with the transactions contemplated by the
Transaction Documents based upon arrangements made by or on behalf
of CalWest and Rooster Acquisition Corp., for which fee or
commission Cabot or any Cabot Subsidiary may be liable.
(g) Litigation. There is no litigation, arbitration, claim,
investigation, suit, action or proceeding pending or, to the
Knowledge of CalWest, threatened against or affecting CalWest and
Rooster Acquisition Corp., nor is there any Order outstanding
against CalWest or Rooster Acquisition Corp. which would reasonably
be expected to, individually or in the aggregate, (A) cause any of
the transactions contemplated by the Transaction Documents to be
rescinded following their consummation, including the Offer or the
Merger, or (B) materially impair or delay the ability of CalWest or
Rooster Acquisition Corp. to perform its obligations hereunder or
under any of the other Transaction Documents or prevent the
consummation by them of any of the transactions contemplated
thereby.
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ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS PENDING THE MERGER
------------------------------------------------------------
Section 5.1 Conduct of Business by Cabot and Cabot LP.
(a) During the period from the date of this Agreement to the
earlier of the termination of this Agreement or the Merger Effective Time,
Cabot shall, and shall cause each of the Cabot Subsidiaries (including
Cabot LP) to (i) carry on its businesses in the usual, regular and ordinary
course consistent with past practice and in compliance in all material
respects with applicable Law, in each case, with no less diligence and
effort than would be applied in the absence of this Agreement and (ii) to
the extent consistent with the foregoing clause (i), use its commercially
reasonable efforts to preserve intact its current business organization,
goodwill, ongoing businesses, Cabot's status as a REIT within the meaning
of the Code and its relationships with customers, suppliers, distributors,
lessors, creditors, employees, contractors and others having business
dealings with it with the intention that its goodwill and ongoing
businesses shall be unimpaired at the Merger Effective Time. On a regular
and frequent basis, and from time to time promptly upon CalWest's
reasonable request, Cabot shall confer with CalWest and report on
operational matters. Cabot shall promptly (but in any event within two (2)
Business Days) advise CalWest orally and in writing of any Cabot Material
Adverse Effect or any matter which would constitute a Cabot Material
Adverse Effect (including any litigation having potential Liability to
Cabot or any Cabot Subsidiary (other than litigation arising out of or
relating to personal injury claims that are covered by applicable
insurance) in excess of $250,000 or any complaint, investigation or hearing
by any Governmental Entity involving Cabot or any Cabot Subsidiary). Cabot
shall promptly provide to CalWest (and its counsel) copies of all filings
made by Cabot with any Governmental Entity in connection with this
Agreement and the transactions contemplated hereby, including any Cabot SEC
Document filed after the date of this Agreement.
(b) Without limiting the generality of the foregoing, during the
period from the date of this Agreement to the earlier of the termination of
this Agreement or the Merger Effective Time, except as otherwise expressly
provided by this Agreement or the Transaction Documents or to the extent
consented to by CalWest in advance and in writing, Cabot shall not and
shall not authorize or commit or agree to, and shall cause the Cabot
Subsidiaries (including Cabot LP) not to (and not to authorize or commit or
agree to):
(i) (A) declare, set aside or pay any dividends on, or make
any other actual, constructive or deemed distributions (whether in
cash, shares, property or otherwise) in respect of, any of
Cabot's shares, stock or the partnership interests, shares, stock
or other equity interests in any Cabot Subsidiary that is not
directly or indirectly wholly-owned by Cabot, except for
distributions (i) on the Cabot Common Shares declared with
respect to the quarter ended September 30, 2001 and (ii) on the
Preferred Units as required by their terms, and provided, that
Cabot may make dividend payments it is required to make by the
Code in order to maintain REIT status and those that are
sufficient to eliminate any federal tax liability, (B) split,
combine or reclassify any shares, stock, partnership interests or
other equity interests or issue or authorize the issuance of any
securities in respect of, in lieu of or in substitution for
shares of such shares, stock, partnership interests or other
equity interests or (C) purchase, redeem (except for the
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redemption of LP Units for shares of Public Common Shares in
accordance with their terms) or otherwise acquire any Cabot
Common Shares, stock, other equity interests or securities of
Cabot or the partnership interests, stock, other equity interests
or securities of any Cabot Subsidiary or any options, warrants or
rights to acquire, or security convertible into, Cabot Common
Shares, stock, other equity interest or securities of Cabot or
the partnership interests, stock or other equity interests in any
Cabot Subsidiary, except in connection with the use of Cabot
Common Shares or LP Units to pay the exercise price or Tax
withholding obligation upon the exercise of a Cabot Option as
presently permitted under any Cabot Option Plan;
(ii) (A) classify or re-classify any unissued Cabot Common
Shares, shares of stock, units, interests, any other voting or
redeemable securities (including LP Units or other partnership
interests) or stock based performance units of Cabot or any Cabot
Subsidiary; (B) change the number of issued and outstanding Cabot
Common Shares, shares of stock, units, interests, any other
voting or redeemable securities (including LP Units or other
partnership interests) or stock based performance units of Cabot
or Cabot Subsidiaries, (C) authorize for issuance, issue,
deliver, sell, or grant any option or other right in respect of,
any Cabot Common Shares, shares of stock, units, interests, any
other voting or redeemable securities (including LP Units or
other partnership interests), or stock based performance units of
Cabot or any Cabot Subsidiary or any securities convertible into,
or any rights, warrants or options to acquire, any such shares,
units, interests, voting securities or convertible or redeemable
securities (except, with respect to the foregoing clause (A), (B)
and (C), (1) as required under the Cabot LP Agreement as
presently in effect, (2) in connection with the exercise of
outstanding Cabot Options under the Cabot Option Plan or the
exchange of units of Cabot LP for Cabot Common Shares or other
units of partnership interest of Cabot LP, pursuant to the terms
of such units, (3) the issuance of DEUs for the fiscal year
ending on the earlier of (a) December 31, 2001 and (b) the Merger
Effective Time as required by existing Cabot Options (including
DEUs) and (4) as required under the Option Agreement) or (D)
amend or waive any option to acquire Cabot Common Shares;
(iii) amend the Cabot Charter or the Cabot By-laws, the Cabot
LP Agreement or any other comparable charter or organizational
documents of any Cabot Subsidiary (including any joint venture
agreement to which Cabot or any Cabot Subsidiary is a party),
except as otherwise contemplated by this Agreement;
(iv) (A) merge, consolidate or enter into any other business
combination transaction with any Person, except as provided in
Section 6.4, (B) acquire (by merger, consolidation or
acquisition) any corporation, partnership or other entity or (C)
purchase any equity interest in or all or substantially all of
the assets of, any Person or any division or business thereof;
45
(v) (A) enter into any new commitments obligating Cabot
or any Cabot Subsidiary to make capital expenditures in excess of
$1,500,000 in the aggregate for each successive period of
forty-five (45) days following the date hereof, not including
tenant allowances under existing leases and the commitments set
forth in Section 5.1(b)(v) of the Cabot Disclosure Letter,
provided Cabot shall be permitted to enter into a commitment to
make repairs and/or prevent damage to any Cabot Properties as is
necessary in the event of an emergency situation as long as Cabot
provides CalWest with a copy of such commitment within two (2)
Business Days after such commitment is entered into, (B) acquire,
enter into any option to acquire, or exercise an option or other
right or election or enter into any other commitment or
contractual obligation (each, a "Commitment") for the acquisition
of any real property or other transaction (other than (i) any
Commitment referred to in Section 5.1(b)(v) of the Cabot
Disclosure Letter, (ii) any exchange of real property pursuant to
Section 1031 of the Code referred to in Section 5.1(b)(v) of the
Cabot Disclosure Letter or (iii) entering into leases for
property of less than 100,000 square feet and incurring any
reasonable and customary expenditures related thereto), (C)
commence construction of, or enter into any Commitment to develop
or construct, other real estate projects involving in excess of
$250,000 (other than any Commitment referred to in Section
5.1(b)(v) of the Cabot Disclosure Letter), (D) incur additional
indebtedness (secured or unsecured) except for working capital
under its revolving line(s) of credit and Commitments for
indebtedness described in Section 5.1(b)(v) of the Cabot
Disclosure Letter or (E) modify, amend, terminate or enter into
any commitment to modify, amend or terminate any indebtedness in
existence as of the date hereof;
(vi) sell, mortgage, subject to Lien (or, in the case of an
involuntary Lien, failed to take action within thirty (30) days
of the creation thereof to have such Lien removed) or otherwise
dispose of any of the Cabot Properties, except those that are (A)
permitted by Section 5.1(b)(v), or (B) made in the ordinary
course of business and subject of a binding contract in existence
on the date of this Agreement;
(vii) sell, lease, mortgage, subject to Lien or otherwise
dispose of any of its personal or intangible property, except
in transactions made in the ordinary course of business and which
are not material, individually or in the aggregate;
(viii) except as set forth in Section 5.1(b)(viii) of the
Cabot Disclosure Letter, (A) assume or guarantee the
indebtedness of another Person, enter into any "keep well" or
other agreement to maintain any financial statement condition of
another Person or enter into any arrangement having the economic
effect of any of the foregoing, (B) prepay, refinance or amend
any existing indebtedness, (C) make any loans, advances, capital
contributions or investments in any other Person or (D) pledge or
otherwise encumber shares of capital stock or securities in Cabot
or any Cabot Subsidiary;
46
(ix) (A) make or rescind any express or deemed material
election relating to Taxes (unless Cabot reasonably determines,
after prior consultation with CalWest, that such action is (i)
required by Law; or (ii) necessary or appropriate to preserve
Cabot's status as a REIT or the partnership status of Cabot LP or
any other Cabot Subsidiary which files Tax Returns as a
partnership for federal tax purposes (in which case, Cabot or
Cabot LP, as the case may be, shall make such election in a
timely manner); provided, that nothing in this Agreement shall
preclude Cabot from designating dividends paid by it as "capital
gain dividends" within the meaning of Section 857 of the Code
(with the prior written consent of CalWest, which will not be
unreasonably withheld), or (B) elect to pay tax on any capital
gain realized after January 1, 2001;
(x) (A) fail to maintain its books and records in all
material respects in accordance with GAAP consistently applied,
(B) change any of its methods, principles or practices of
accounting in effect other than as required by GAAP; provided,
that with the consent of CalWest, which shall not be unreasonably
withheld, Cabot may implement a change in method of accounting
for federal income tax purposes with respect to classifying
certain property as personal property rather than real property,
(C) settle or compromise any claim, action, suit, litigation,
proceeding, arbitration, investigation, audit or controversy
relating to Taxes, except in the case of settlements or
compromises relating to Taxes on real property or sales Taxes in
an amount not to exceed, individually or in the aggregate,
$250,000, or change any of its methods of reporting income or
deductions for federal income tax purposes from those employed in
the preparation of its federal income Tax Return for the taxable
year ended December 31, 2000, or (D) revalue in any material
respect any of its assets, including writing-off accounts
receivable, except, in each of the foregoing cases, as may be
required by the SEC, applicable Law or GAAP (in which case, Cabot
shall promptly inform CalWest of such changes);
(xi) other than as set forth in Section 6.6(d) and except
as set forth in Section 5.1(b)(xi) of the Cabot Disclosure
Letter, (A) adopt any new employee benefit plan, incentive plan,
severance plan, bonus plan, compensation, special remuneration,
retirement, health, life, disability, stock option or similar
plan, grant new stock appreciation rights or amend any existing
plan or rights, (B) enter into or amend any employment agreement
or similar agreement or arrangement or, except in the ordinary
course consistent with past practice, grant or become obligated
to grant any increase in the compensation or benefits of officers
or employees, (C) grant any severance or termination pay, or any
increase thereof, to any trustee, officer or employee, except
payments made pursuant to written agreements or plans outstanding
on the date hereof, the material terms of which are disclosed in
Section 5.1(b)(xi) of the Cabot Disclosure Letter and copies of
which have been provided to CalWest, (D) increase the number of
its full-time permanent employees by an amount inconsistent with
past practice or (E) change any actuarial or other assumption
used to calculate funding obligations with respect to any Cabot
Pension Plan, or change the manner in which contributions to any
Cabot Pension Plan are made or the basis on which such
contributions are determined, except, in each of the foregoing
cases, as may be required by Law (in which case, Cabot shall
promptly inform CalWest of such action);
47
(xii) settle or compromise any material litigation, including
any shareholder derivative or class action claims (without
regard to materiality), arising out of or in connection with any
of the transactions contemplated by this Agreement, or waive,
release or assign any material rights or claims;
(xiii) enter into or amend or otherwise modify any agreement
or arrangement with Persons that are Affiliates or Associates
of Cabot or any Cabot Subsidiary or, as of the date of this
Agreement, are employees, officers or trustees or directors of
Cabot or any Cabot Subsidiary without the prior written consent
of CalWest and the approval of a majority of the "independent"
members of the Cabot Board of Trustees;
(xiv) authorize, recommend, propose or announce an intention
to adopt a plan of complete or partial liquidation,
dissolution, merger, consolidation, restructuring,
recapitalization or other reorganization of Cabot or any of the
Cabot Subsidiaries;
(xv) fail to use its commercially reasonable efforts to
maintain with financially responsible insurance companies
insurance, insurance coverage substantially similar to insurance
coverage maintained by Cabot and the Cabot Subsidiaries on the
date hereof;
(xvi) (A) amend or terminate, or waive compliance with the
terms of or breaches under, any material term of any Material
Contract or enter into a new contract, agreement or arrangement
that, if entered into prior to the date of this Agreement, would
have been required to be listed in Section 4.1(u)(i) of the Cabot
Disclosure Letter or (B) other than in the ordinary course of
business consistent with past practice, waive, release, grant or
transfer any rights of material value;
(xvii) enter into any Tax Protection Agreement;
(xviii) fail to use its commercially reasonable efforts to
comply or remain in compliance with all material terms and
provisions of any agreement relating to any outstanding
indebtedness (as defined in Section 4.1(g)) of Cabot or any Cabot
Subsidiary;
(xix) take any action that would, or that would reasonably
be expected to, result in (A) any of the representations and
warranties of Cabot set forth in this Agreement becoming untrue
or incorrect or (B) any of the Tender Offer Conditions or Section
7.1 not being satisfied;
(xx) fail to (A) duly and timely file all material reports,
Tax Returns and other material documents required to be filed
with all Governmental Entities and other authorities (including
the New York Stock Exchange), subject to extensions permitted by
Law, provided Cabot notifies CalWest and its counsel that it is
availing itself of such extensions and provided such extensions
48
do not adversely affect Cabot's status as a qualified REIT under
the Code or (B) fail to cause all such reports and other
documents to be complete and accurate in all material respects
when filed;
(xxi) fail to pay any Taxes or other material debts when due;
(xxii) sell, securitize, factor or otherwise transfer any
accounts receivable;
(xxiii) pay, discharge or satisfy any claims, Liabilities or
obligations (absolute, accrued, asserted or unasserted,
contingent or otherwise), other than the payment, discharge or
satisfaction, in the ordinary course of business consistent with
past practice or in accordance with their terms, of Liabilities
reflected or reserved against in the balance sheet of Cabot dated
as of June 30, 2001 contained in the Quarterly Report on Form
10-Q for the quarter ended June 30, 2001 of Cabot;
(xxiv) except as described in Section 5.1(b)(xxiv) of the
Cabot Disclosure Letter, change the ownership of any Cabot
Subsidiary;
(xxv) accept a promissory note in payment of the exercise
price payable under any option to purchase Cabot Common Shares;
(xxvi) accelerate the collection of receivables or defer the
payment of payables, or modify the payment terms of any
receivables or payables, in each case which, either individually
or in the aggregate, in a manner that would be material to Cabot;
or
(xxvii) agree in writing or otherwise to take any action
inconsistent with any of the foregoing.
ARTICLE VI
ADDITIONAL COVENANTS
--------------------
Section 6.1 Access to Information; Confidentiality. Cabot shall, and
shall cause each of the Cabot Subsidiaries to, afford to CalWest and the
Rooster Subsidiaries and their officers, employees, accountants, counsel,
financial advisors and other representatives, reasonable access during
normal business hours and upon reasonable advance notice during the period
prior to the Merger Effective Time to all of its properties (but not for
the purpose of any invasive physical testing), offices, books, contracts,
commitments, personnel and records and, during such period, Cabot shall,
and shall cause each of the Cabot Subsidiaries to, furnish reasonably
promptly to CalWest and its counsel (a) a copy of each report, schedule,
registration statement and other document filed by it during such period
pursuant to the requirements of federal or state securities Laws and (b)
all other information (financial or otherwise) concerning its business,
properties and personnel as CalWest and the CalWest Subsidiaries may
49
reasonably request. Cabot shall also instruct Cabot's employees, counsel
and financial advisors to cooperate reasonably with CalWest in its
investigation of the business of Cabot and the Cabot Subsidiaries. Each of
CalWest and the CalWest Subsidiaries will hold, and will cause its
respective officers, employees, accountants, counsel, financial advisors
and other representatives and Affiliates to hold, any nonpublic information
in confidence to the extent required by, and in accordance with, and will
comply with the provisions of the letter agreement between Cabot and dated
as of May 23, 2001, as amended to date (as so amended, the "Confidentiality
Agreement").
Section 6.2 Reasonable Efforts; Notification.
--------------------------------
(a) Upon the terms and subject to the conditions set forth in this
Agreement, each of CalWest, Rooster Acquisition Corp., Cabot and Cabot LP
agrees to use its commercially reasonable efforts to take, or cause to be
taken, all actions and to do, or cause to be done, and to assist and
cooperate with the other parties in doing, all things necessary, proper or
advisable to fulfill all conditions applicable to such party pursuant to
this Agreement and to consummate and make effective, in the most
expeditious manner practicable, the Offer, the Merger and the other
transactions contemplated by the Transaction Documents, including (i) the
obtaining of all necessary, proper or advisable actions or nonactions,
waivers, consents and approvals from Governmental Entities and the making
of all necessary, proper or advisable registrations, filings and notices
and the taking of all reasonable steps as may be necessary to obtain an
approval, waiver or exemption from any Governmental Entity; (ii) the
obtaining of all necessary, proper or advisable consents, approvals,
waivers or exemptions from non-governmental third parties; and (iii) the
execution and delivery of any additional documents or instruments
necessary, proper or advisable to consummate the transactions contemplated
by, and to fully carry out the purposes of the Transaction Documents. In
addition, each of CalWest, Rooster Acquisition Corp., Cabot and Cabot LP
agrees to use its commercially reasonable efforts to defend any lawsuits or
other legal proceedings, whether judicial or administrative, challenging
the Merger, this Agreement or the transactions contemplated by the
Transaction Documents, including seeking to have any stay, temporary
restraining order, injunction, or restraining order or other order
adversely affecting the ability of the parties to consummate the
transactions contemplated by the Transaction Documents entered by any court
or other Governmental Entity vacated or reversed. If, at any time after the
Merger Effective Time, any further action is necessary or desirable to
carry out the purpose of this Agreement, the proper officers, directors or
partners, of CalWest, Rooster Acquisition Corp., Cabot and Cabot LP shall
take all such necessary action. From the date of this Agreement through the
Merger Effective Time, Cabot shall timely file, or cause to be filed, with
the SEC all Cabot SEC Documents required to be so filed.
(b) Cabot shall give prompt notice to CalWest and CalWest and
Rooster Acquisition Corp. shall give prompt notice to Cabot, if (i) any
representation or warranty made by it contained in this Agreement that is
qualified as to materiality becomes untrue or inaccurate in any respect or
any such representation or warranty that is not so qualified becomes untrue
or inaccurate in any material respect or (ii) it fails to comply with or
satisfy in any material respect any covenant, condition or agreement to be
50
complied with or satisfied by it under this Agreement; provided, however,
that no such notification shall affect the representations, warranties,
covenants or agreements of the parties or the conditions to the obligations
of the parties under this Agreement.
Section 6.3 Tax Treatment.
-------------
(a) CalWest, Rooster Acquisition Corp. and Cabot shall report the
portions of the transactions contemplated hereby consisting of the Merger in
accordance with the treatment contemplated by Section 3.2(c) and each shall
use its respective best efforts to cause such portions of such transactions
to be so treated for federal income tax purposes.
(b) Unless required by Law (as evidenced by the legal opinion of a
nationally recognized U.S. law firm reasonably acceptable to CalWest and
Cabot), neither CalWest and Rooster Acquisition Corp., on the one hand, nor
Cabot and Cabot LP, on the other hand, will take or omit to take any
action, or permit any status to exist, prior to the Merger Effective Time,
that would or may jeopardize, or that is inconsistent with, Cabot's status
as a REIT under the Code or the status of Cabot LP or any Cabot Subsidiary
organized and existing as a partnership or limited liability company under
the Laws of its jurisdiction of organization (a "Cabot Subsidiary
Partnership") as a partnership for purposes of Taxes for any period.
(c) Unless prohibited by Law (as evidenced by the legal opinion of
a nationally recognized U.S. law firm reasonably acceptable to CalWest and
Cabot) or this Agreement, up to the Merger Effective Time, Cabot, each
Cabot Subsidiary and any Affiliate of any of them, shall be permitted to
take or omit to take any action in order to maintain Cabot's status as a
REIT under the Code or the status of Cabot LP or any Cabot Subsidiary
Partnership as a partnership for purposes of Taxes for any period.
Section 6.4 No Solicitation of Transactions.
-------------------------------
(a) Cabot shall and shall cause the Cabot Subsidiaries (including
Cabot LP) to, and Cabot and Cabot LP shall take all actions reasonably
necessary to cause their respective Affiliates, officers, directors,
employees, financial advisors (including the Cabot Financial Advisor),
counsel and any other agents to, immediately cease any discussions,
negotiations or communications with any party or parties with respect to
any Competing Transaction (as hereinafter defined). Cabot also agrees to
promptly request each person that has heretofore executed a confidentiality
agreement in connection with its consideration of acquiring (whether by
merger, acquisition, stock sale, asset sale or otherwise) Cabot or any
Cabot Subsidiary, if any, to return all confidential information heretofore
furnished to such person by or on behalf of Cabot or any Cabot Subsidiary.
(b) Cabot shall not, nor shall it permit any Cabot Subsidiary to,
nor shall it authorize or permit any officer, trustee, director or employee
of, or any investment banker, attorney, agent or other advisor or
representative of, Cabot or any Cabot Subsidiary to (i) solicit or
initiate, encourage, participate in, or facilitate, directly or indirectly,
any inquiries relating to, or the submission of, any proposal or offer,
whether in writing or otherwise, from any Person or group (as defined in
Section l3(d)(3) of the Exchange Act) other than CalWest, Rooster
Acquisition Corp. or any affiliates thereof (a "Third Party") to acquire
beneficial ownership (as defined under Rule 13(d) of the Exchange Act) of
all or more than 15% of the assets of Cabot and the Cabot Subsidiaries,
51
taken as a whole, or 15% or more of any class of equity securities (or
voting debt) of Cabot or Cabot LP pursuant to a merger, consolidation or
other business combination, sale of shares of beneficial interest, sale of
assets, tender offer, exchange offer or similar transaction or series of
related transactions, which is structured to permit such Third Party to
acquire beneficial ownership of more than 15% of the assets of Cabot and
the Cabot Subsidiaries, taken as a whole, or 15% or more of any class of
equity securities (or voting debt) in Cabot or Cabot LP (a "Competing
Transaction"); (ii) directly or indirectly, solicit, initiate, encourage,
facilitate or participate in any discussions or negotiations regarding, or
furnish to any Person or group (as defined in Section l3(d)(3) of the
Exchange Act) any information or data with respect to or access to the
properties, offices, books, records, officers, directors or employees of,
or take any other action to knowingly, directly or indirectly, facilitate,
solicit or encourage the making of any proposal that constitutes, or may
reasonably be expected to lead to, any Competing Transaction; or (iii)
enter into any Acquisition Agreement, approve or recommend or resolve to
approve or recommend any Competing Transaction or enter into any agreement
(written or oral) requiring it to abandon, terminate or fail to consummate
the Offer, the Merger and the other transactions contemplated by this
Agreement. Notwithstanding the foregoing sentence, prior to the expiration
of the Offer, if Cabot receives a bona fide, written proposal or offer for
a Competing Transaction by a Third Party, which the Cabot Board of Trustees
determines in good faith (after consultation with Cabot's independent
financial advisor and outside counsel) (A) is on terms which are more
favorable from a financial point of view to the holders of Cabot Common
Shares than the Offer, the Merger, and the other transactions contemplated
by this Agreement, (B) would result in such Third Party owning, directly or
indirectly, all or substantially all of the Cabot Common Shares then
outstanding (or of the surviving entity in a merger) or all or
substantially all of the assets of Cabot and the Cabot Subsidiaries, (C) is
not subject to any material contingency, including any contingency relating
to financing (provided that if such contingency related to financing is
substantially similar in substance, and not less favorable to Cabot than,
the Commitment Letter MAE Section (as defined in Annex I), it shall not be
considered a material contingency), to which neither the Cabot Board of
Trustees determines may likely be overcome or addressed nor the other party
thereto has reasonably demonstrated in its written offer its ability to
overcome or address, including the receipt of government consents or
approvals (including any such approval required under the HSR Act), (D)
does not contain a "right of first offer" or "right of first refusal" with
respect to any revised Offer that CalWest or Rooster Acquisition Corp. may
make, (E) is reasonably capable of being consummated (provided, that the
Cabot Board of Trustees and any of its advisors shall be permitted to
contact such Third Party and its advisors solely for the purpose of
clarifying the proposal and any material contingencies and the capability
of consummation) and (F) was not solicited, encouraged or facilitated by
Cabot in breach of this Section 6.4(b) (a "Superior Competing
Transaction"), then, prior to acceptance by Rooster Acquisition Corp. for
payment and payment by Rooster Acquisition Corp. for Cabot Common Shares
pursuant to the Offer, Cabot may, in response to an unsolicited request
therefor and subject to a good faith determination by the Cabot Board of
Trustees (after consultation with its outside counsel) that the failure to
take such action likely would be inconsistent with its duties under
Maryland law and compliance by Cabot with Section 6.4(c), furnish
information with respect to Cabot and the Cabot Subsidiaries to, and
participate in discussions and negotiations directly or through its
representatives with, such Third Party, subject to a confidentiality
agreement not materially less favorable to Cabot than the Confidentiality
Agreement and which contains a one (1) year prohibition against such Third
Party soliciting the employment of any employee of Cabot or any Cabot
Subsidiary. In addition, except concurrently with Cabot's termination of
this Agreement in accordance with Section 8.1(d), neither the Cabot Board
of Trustees nor any committee thereof shall (i) take any action (A) to
redeem the Rights, (B) to waive or amend any provision of the Cabot Rights
Agreement or (C) make any determination under, the Cabot Rights Agreement,
in any such case to permit or facilitate the consummation of a Competing
52
Transaction (provided that notwithstanding the foregoing, the Cabot Board
of Trustees may delay the distribution of the Rights under the Cabot Rights
Agreement so long as no person or group of persons has become an "acquiring
person" for purposes of the Cabot Rights Agreement), (ii) take any action
to waive the Ownership Limit with respect to any Competing Transaction,
(iii) take any action necessary to render the provisions of any "fair
price", "moratorium", "control share acquisition" or other takeover defense
or similar statute or regulation (including the provisions of the Takeover
Statute) inapplicable to any Competing Transaction, or (iv) propose, agree
or resolve to do any of the foregoing. Nothing contained in this Agreement
shall prevent the Cabot Board of Trustees from complying with Rule 14d-9
and Rule 14e-2 promulgated under the Exchange Act. Cabot agrees to promptly
notify CalWest if the Cabot Board of Trustees determines that a Competing
Transaction is not a Superior Competing Transaction.
(c) In addition to the obligations set forth in Sections 6.4(a)
and (b), Cabot shall advise CalWest orally and in writing of (i) any
Competing Transaction or any inquiry with respect to or which could
reasonably be expected to lead to any Competing Transaction received by any
officer or trustee of Cabot or, to the Knowledge of Cabot, any financial
advisor, attorney or other advisor or representative of Cabot, (ii) the
material terms and conditions of such Competing Transaction (including a
copy of any written proposal) and (iii) the identity of the person making
the proposal or offer for any such Competing Transaction or inquiry
immediately (but in any event within twenty-four (24) hours) following
receipt by Cabot or any officer or trustee of Cabot or, to the Knowledge of
Cabot, any financial advisor, attorney or other advisor or representative
of Cabot of such Competing Transaction proposal or inquiry. Cabot will
promptly inform CalWest and Rooster Acquisition Corp. (orally and in
writing) of the status and details of any such Competing Transaction
proposal or inquiry (including amendments or changes or proposed amendments
or changes thereto), and, in any event shall promptly inform CalWest and
Rooster Acquisition Corp. (orally and in writing) of any material
developments regarding such proposal or inquiry. Cabot agrees to promptly
notify CalWest if the Cabot Board of Trustees determines that a Competing
Transaction is not a Superior Competing Transaction.
(d) Cabot shall not determine to accept a Superior Competing
Transaction unless (i) it has complied in all material respects with this
Section 6.4, (ii) the Cabot Board of Trustees determines in good faith
(after consultation with its outside counsel) that the failure to take such
action likely would be inconsistent with its duties under Maryland law,
(iii) not fewer than forty-eight (48) hours prior to taking such action,
CalWest is notified orally and in writing of such Board's intention to take
such action and (iv) the Cabot Board of Trustees determines in good faith
(after consultation with Cabot's independent financial advisor and outside
counsel) that such Competing Transaction continues to be a Superior
Competing Transaction after (A) taking into account any amendment of the
terms of the Offer or Merger by CalWest or Rooster Acquisition Corp. and/or
any proposal by CalWest to amend the terms of the Transaction Documents,
the Offer or the Merger and (B) negotiating in good faith with CalWest
concerning any such new proposal by CalWest prior to the expiration of such
48-hour period.
53
Section 6.5 Public Announcements. Cabot and CalWest shall consult with
each other before issuing any press release or otherwise making any public
statements with respect to this Agreement or any of the transactions
contemplated by the Transaction Documents and shall not issue any such
press release or make any such public statement without the prior consent
of the other party, which consent shall not be unreasonably withheld or
delayed; provided, however, that a party may, without the prior consent of
the other party, issue such press release or make such public statement as
may be required by Law or the applicable rules of any stock exchange if it
has used its commercially reasonable efforts to consult with the other
party and to obtain such party's consent but has been unable to do so prior
to the time such press release or public statement is required to be filed
pursuant to such Law or rules. In this regard, the parties shall make a
joint public announcement of the transactions contemplated by the
Transaction Documents no later than (i) the close of trading on the New
York Stock Exchange on the day this Agreement is signed, if such signing
occurs during regular business hours on a Business Day or (ii) the opening
of trading on the New York Stock Exchange on the Business Day following the
date on which this Agreement is signed, if such signing does not occur
during a Business Day.
Section 6.6 Employee Arrangements.
---------------------
(a) Cabot Severance Agreements. On the Closing Date, CalWest shall
pay or cause to be paid the amounts due to Cabot's senior executive
officers under such senior executive officers' Cabot Severance Agreements,
which amounts due are set forth in Section 4.1(1)(xv) of the Cabot
Disclosure Letter.
(b) WARN Act. On October 29, 2001, Cabot will cause to be mailed or
personally delivered to all full-time employees, defined for purposes of
this provision as all employees who have worked for an average of at least
20 hours per week and have been employed by Cabot for at least six of the
twelve months prior to October 29, 2001, at Cabot's operation in Boston,
Massachusetts, notices which would be sufficient to comply with the terms
of the Worker Adjustment and Retraining Notification Act ("Contingent WARN
Notice") and any applicable analogous state plant closing statutes
(together "Plant Closing Acts"). The Contingent WARN Notice shall be in the
form attached hereto as Exhibit C hereto.
(c) Employee Severance. As of the Merger Effective Time, all
employees of Cabot, Cabot LP and all other Cabot Subsidiaries
(collectively, the "Cabot Employees") shall be terminated. As of the date
of this Agreement, the Cabot Severance Plan has been amended to provide (a)
that RREEF Management Company (and its successors and assigns) shall be
treated as an "Affiliate, purchaser or transferee" for purposes of
determining whether a Cabot Employee has received an offer of employment
for purposes of the Cabot Severance Plan; (b) that as a condition to
receiving any payment under the Cabot Severance Plan, the Cabot Employee
must execute a general release in favor of Cabot and Cabot LP (and their
successors and affiliates); and (c) any amount payable under the Cabot
Severance Plan shall be offset by any amount the Cabot Employee receives
pursuant to any state or federal plant closing act, excluding amounts
received by a Cabot Employee with respect to any benefits other than
salary.
54
(d) Cabot Options. Cabot and each Cabot Subsidiary, including
Cabot LP, shall take all actions as may be necessary under the Cabot Option
Plans to effect the cancellations described in Section 2.7 and shall comply
with all requirements regarding tax withholding in connection therewith. In
addition to the foregoing and subject to the terms of the Cabot Option
Plans and applicable Law, Cabot and Cabot LP shall take all actions
necessary to cause the Cabot Option Plans to be terminated at or prior to
the Merger Effective Time, and to satisfy CalWest that no holder of Cabot
Options or other awards under such plans or programs or participant in the
Cabot Option Plans, will have any right to acquire any interest in the
Surviving Entity, CalWest or any CalWest Subsidiary, including Rooster
Acquisition Corp., as a result of the exercise of Cabot Options or other
awards or rights pursuant to such Cabot Option Plans at or after the Merger
Effective Time.
(e) Cabot 2001 Bonus Plan. Pursuant to, and in accordance with the
terms of, the Cabot 2001 Bonus Plan, Cabot shall, and shall be permitted
to, pay the bonuses identified on Schedule 5.1(b)(xi) of the Cabot
Disclosure Letter upon the earlier to occur of (i) the Merger Effective
Time and (ii) February 1, 2002.
(f) 401(k) Plan. Unless otherwise agreed by Cabot, Cabot LP and
CalWest, immediately prior to the effective time of any transaction (or
series of transactions) in which Cabot and Cabot LP become members of the
CalWest controlled group, within the meaning of Section 414(b), (c), (m) or
(o) of the Code, and if directed to do so by CalWest, Cabot and Cabot LP
will take such action (and cause their subsidiaries to take such action) as
is necessary to terminate its 401(k) Plan (the "Cabot 401(k) Plan") and
also will take all necessary action to ensure that each Cabot Employee is
fully vested in his or her account balance under the Cabot 401(k) Plan.
(g) COBRA Payments. In the event that the employment of any employee
of Cabot is terminated at or within six (6) months after the Merger Effective
Time and in the event that such employee obtains insurance pursuant to the
Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA"), the
Surviving Entity shall pay a portion of the premium owed by such employee
under the COBRA plan equal to the premium paid by Cabot under the Cabot
Employee Benefit Plans in which such employee participated prior to the
Closing Date. Such premiums shall be paid for a period of time equal to the
lesser of (x) the period of months upon which such employee severance
payment has been calculated and (y) 18 months from the date of termination
of employment.
Section 6.7 Indemnification; Directors'/Trustees' and Officers' Insurance.
-------------------------------------------------------------
(a) CalWest and Rooster Acquisition Corp. agree that all rights to
indemnification existing in favor of, and all exculpations and limitations
of the personal liability of, the trustees and officers of Cabot (the
"Indemnified Parties") provided for in the Cabot Charter or the Cabot
By-laws, as well as indemnification agreements, as in effect as of the date
hereof with respect to matters occurring at or prior to the Merger
Effective Time, including the Merger, shall continue in full force and
effect in accordance with their terms; 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 disposition of such Claim.
For a period of six (6) years after the Merger Effective Time, the
Surviving Entity shall, and CalWest will cause the Surviving Entity to,
cause to be maintained in effect the existing trustees', directors' and
officers' liability insurance and fiduciary insurance policies with an
55
amount of coverage not less than 100% of the amount of existing coverage,
or policies that are no less favorable to the Indemnified Parties, and with
an amount of coverage not less than 100% of the amount of existing
coverage, than the policies which are currently maintained by Cabot, with
respect to claims arising from facts or events which occurred at or before
the Merger Effective Time, so long as such policies are available for an
annual premium which is no more than 200% of the current annual premium for
the existing policies; provided, that if such policies are not available
for an annual premium of no more than 200% of the current annual premium,
then policies in an amount and scope as great as can be obtained for an
annual premium of 200% of the current annual premium shall be obtained.
(b) This Section 6.7 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 CalWest, Cabot and the Surviving
Entity. Each of the Indemnified Parties shall be entitled to enforce the
covenants contained in this Section 6.7.
(c) In the event that the Surviving Entity or any of its successors
or assigns (i) consolidates with or merges into any other person or entity and
shall not be the continuing or surviving entity of such consolidation or
merger or (ii) transfers or conveys all or substantially all of its
properties and assets to any person or entity, then, and in each such case,
proper provision shall be made so that the successors, assigns and
transferees of the Surviving Entity, as the case may be, assume the
obligations set forth in this Section 6.7.
Section 6.8 Assistance; Cabot LP Merger.
---------------------------
(a) From and after the date of this Agreement, if CalWest
requests, Cabot and the Cabot Subsidiaries shall cooperate, and shall use
their commercially reasonable efforts to cause Cabot's attorneys,
accountants and other representatives to cooperate, in connection with any
financing efforts (including the refinancing or assumption of existing
indebtedness) of CalWest and Rooster Acquisition Corp. or their Affiliates
(including providing assistance in the preparation of one or more offering
circulars, private placement memoranda, registration statements or other
offering documents relating to debt and/or equity financing) and any other
filings that may be made by CalWest and Rooster Acquisition Corp. or their
Affiliates, including, if applicable, with the SEC, all at the sole expense
of CalWest and Rooster Acquisition Corp. (or their Affiliates). From and
after the acceptance for payment and payment for Cabot Common Shares by
Rooster Acquisition Corp. in the Offer, if CalWest requests, Cabot shall
create new subsidiaries and effect mergers and/or conversions of or among
wholly-owned Cabot Subsidiaries at the direction of CalWest and,
immediately prior to the Merger Effective Time, shall transfer any assets
and/or Liabilities to such entities at the direction of CalWest, all at the
expense of CalWest; provided, however, that Cabot shall not be required to
undertake any action pursuant to this sentence if doing so would result in
Cabot being unable to satisfy the conditions to the obligations of CalWest
and Rooster Acquisition Corp. to close the Merger set forth in Article VII
or if doing so would be inconsistent with any other existing agreements.
Cabot shall cooperate with CalWest in obtaining surveys, title commitments
and/or policies and appraisals with respect to the Cabot Properties (it
being understood that such activities shall be conducted at CalWest's (or a
CalWest Subsidiary's) expense).
56
(b) Upon the consummation of the Offer, if there remain
outstanding any LP Units (other than those held by any of the CalWest
Parties), then CalWest, Rooster Acquisition Corp., Cabot and Cabot LP shall
take all actions reasonably necessary to effect a merger of a wholly owned
subsidiary of CalWest or Rooster Acquisition Corp. with and into Cabot LP
with Cabot LP surviving such merger (the "LP Merger") and pursuant to which
each then outstanding LP Unit shall be exchanged and cancelled for the
right to receive an amount equal to the product of (i) the number of Cabot
Common Shares for which such LP Unit may have been converted immediately
prior to the Merger Effective Time, multiplied by (ii) the Per Share
Amount, or such greater amount as is offered to the holders of Cabot Common
Shares pursuant to the Offer, including amending the Second Amended and
Restated Agreement of Limited Partnership of Cabot LP, dated February 4,
1998, as amended, to provide that such merger will not cause a liquidation,
dissolution or winding-up of Cabot LP. Notwithstanding anything to the
contrary contained herein, CalWest, Rooster Acquisition Corp., Cabot and
Cabot LP hereby agree that the Merger and such LP Merger shall be
consummated concurrently.
Section 6.9 Tax Returns.
-----------
(a) CalWest shall cause there to be an interim closing of the books
under Section 706 of the Code with respect to Cabot LP effective as of the
Merger Effective Time for purposes of dividing and allocating Cabot LP's
income for the taxable year in which the Merger occurs.
(b) After the Merger Effective Time, CalWest shall prepare and file,
or cause to be prepared and filed, all Tax Returns required to be filed by
Cabot and the Cabot Subsidiaries for all periods with the applicable taxing
authority on or before the due date (including extensions, if any) for
filing such Tax Returns.
Section 6.10 Environmental Matters. Cabot and the Cabot Subsidiaries shall
make available to CalWest and Rooster Acquisition Corp. such environmental
investigations, studies, tests, reviews, or other written analysis within
the possession or control of Cabot or any Cabot Subsidiary in relation to
any property or facility now or previously owned, leased or operated by
Cabot or any Cabot Subsidiary, which have previously not been provided to
CalWest or Rooster Acquisition Corp.
Section 6.11 Cabot and Cabot LP Joint Ventures. During the period from the
date hereof until the Merger Effective Time, Cabot and Cabot LP shall use
commercially reasonable efforts and cause their respective Subsidiaries to
use their commercially reasonable efforts to effect such transactions on
such terms as are reasonably requested by CalWest or Rooster Acquisition
Corp. regarding the joint ventures to which Cabot, Cabot LP and their
respective Subsidiaries are a party, including (a) the sale by Cabot
Ventures II, LLC's of its interest in TC Rancho Cucamonga LLC to Teachers
REA, LLC; (b) the purchase by Cabot LP of CCP Industrial Member, LLC's
interest in CCP-Cabot Industrial Investors I, LLC; (c) the purchase by
Cabot LP of CCP-Industrial Member, LLC's interest in CCP-Cabot Industrial
Investors II, LLC; and (d) the purchase by Cabot LP of ▇▇▇▇▇▇ & ▇▇▇▇▇▇
Industrial Properties, LLC's interest in ▇▇▇▇▇▇▇ Business Center, LLC.
57
ARTICLE VII
CONDITIONS PRECEDENT
--------------------
Section 7.1 Conditions to Each Party's Obligation to Effect the
Merger. The respective obligations of Cabot and Rooster Acquisition Corp.
to effect the Merger on the Closing Date are subject to the satisfaction or
waiver on or prior to the Closing Date of the following conditions:
(a) if required by Title 8, this Agreement and the Merger shall
have been approved by the Cabot Common Shareholders in accordance with
Title 8 and any other applicable Laws (including the proper filing and
dissemination of the Proxy Statement or any information statement, if
required);
(b) there shall be no Law or Order (which Order or other action
the parties hereto shall use their commercially reasonable efforts to
vacate or lift) which prohibits, enjoins, restrains or precludes the
consummation of the Merger under applicable Law; and
(c) Rooster Acquisition Corp. shall have accepted for payment
and paid for, pursuant to the terms and conditions of the Offer, all
Cabot Common Shares duly tendered pursuant to the Offer and not
withdrawn.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
---------------------------------
Section 8.1 Termination. This Agreement may be terminated and the Offer,
the Merger and the adoption, execution and delivery of the other transactions
contemplated by the Transaction Documents may be abandoned at any time prior
to the Merger Effective Time (notwithstanding any approval of the Merger,
this Agreement or any of the other transactions contemplated by this Agreement
or any other Transaction Document by the Cabot Common Shareholders):
(a) by the mutual written consent of Cabot and CalWest;
(b) by Cabot or CalWest, if any Governmental Entity shall have
issued an Order permanently enjoining, restraining or otherwise
prohibiting the acceptance for payment of, or payment for, Cabot
Common Shares pursuant to the Offer, or issued a similar Order with
respect to the Merger or any of the material transactions contemplated
by the other Transaction Documents and such Order shall have become
final and nonappealable; provided, that the party seeking to terminate
this Agreement pursuant to this clause (b) shall have used all
commercially reasonable efforts to remove or to reverse such Order;
58
(c) by Cabot, if (i) Rooster Acquisition Corp. shall have failed
to commence the Offer within the five (5) Business Day period provided
in Section 1.1(a), subject to the terms of Section 1.1(a) (including
the Tender Offer Conditions), (ii) if Rooster Acquisition Corp.
terminates or withdraws the Offer without accepting for payment and
promptly paying for all Cabot Common Shares validly tendered for
payment and not withdrawn thereunder in breach of this Agreement,
(iii) the Offer shall have expired (or shall have been required to
expire pursuant to the terms of this Agreement) without the acceptance
for payment and prompt payment for all Cabot Common Shares validly
tendered for payment and not withdrawn thereunder or (iv) if the Offer
has not been consummated on or before the date that is 120 days from
the date of this Agreement; provided, that the right to terminate this
Agreement pursuant to the foregoing clauses (c)(i), (ii), (iii) and
(iv) shall not be available to Cabot if Cabot's (or any Cabot
Subsidiary's) failure to fulfill any obligation under this Agreement
has been the proximate cause of, or resulted in, such event or
condition;
(d) by Cabot, prior to the consummation of the Offer, if it
determines to accept a proposal or offer for a Superior Competing
Transaction; provided, however, that this Agreement may not be so
terminated under this Section 8.1(d) unless (i) the Cabot Board of
Trustees determines in good faith (after consultation with its outside
counsel) that the failure to take such action likely would be
inconsistent with its duties under Maryland law, (ii) not fewer than
forty-eight (48) hours prior to taking such action, CalWest is
notified orally and in writing of such Board's intention to take such
action and (iii) the Cabot Board of Trustees determines in good faith
(after consultation with Cabot's independent financial advisor and
outside counsel) that such Competing Transaction continues to be a
Superior Competing Transaction after (A) taking into account any
amendment of the terms of the Offer or Merger by CalWest or Rooster
Acquisition Corp. and/or any proposal by CalWest to amend the terms of
the Transaction Documents, the Offer or the Merger and (B) negotiating
in good faith with CalWest concerning any such new proposal by CalWest
prior to the expiration of such 48-hour period;
(e) by CalWest, prior to consummation of the Offer, if (i) the
Cabot Board of Trustees shall have withdrawn or adversely modified its
approvals or recommendations of the Offer, the Merger, the Transaction
Documents or the transactions contemplated thereby (it being
understood, however, that for all purposes of this Agreement, the fact
that Cabot has supplied any person with information regarding Cabot or
has entered into discussions or negotiations with such person as
permitted by, or without violating, this Agreement, or the disclosure
of such facts, shall not be deemed in and of itself a withdrawal or
modification of such approvals or recommendations); or (ii) the Cabot
Board of Trustees shall have (A) recommended to the Cabot Common
Shareholders that they approve or accept a Competing Transaction
rather than the transactions contemplated by the Transaction Documents
or (B) determined to accept a proposal or offer for a Superior
Competing Transaction;
(f) by CalWest, (i) if the Offer terminates or expires without
CalWest and Rooster Acquisition Corp. having purchased any Cabot
Common Shares thereunder or (ii) if the Offer has not been consummated
on or before the later of (A) December 28, 2001 if the Minimum
Condition is not satisfied on December 28, 2001, or any date
thereafter, at CalWest's option, if the Minimum Condition continues to
be unsatisfied on such date (in accordance with Section 1.1(d)), or
(B) the date that is 120 days from the date of this Agreement
59
(provided, that the right to terminate this Agreement pursuant to the
foregoing clauses (f)(i) and (ii) shall not be available to CalWest if
CalWest's (or any CalWest Subsidiary's) failure to fulfill any
obligation under this Agreement has been the proximate cause of, or
resulted in, such event or condition);
(g) by CalWest, if any of the following events shall occur and
be continuing or conditions exist (any such event or condition, a
"Terminating Cabot Breach"):
(i) prior to the acceptance for payment by
Rooster Acquisition Corp. of Cabot Common Shares pursuant
to the Offer, any of the representations and warranties
of Cabot contained in this Agreement and qualified by the
term Cabot Material Adverse Effect shall not be true and
correct as of the date of determination or the date
hereof (except to the extent that any such representation
or warranty, by its terms, is expressly limited to a
specific date, in which case CalWest's right to terminate
pursuant to this clause (i) shall be triggered only if
such representation or warranty shall not be true and
correct as of such date); or
(ii) prior to the acceptance for payment by
Rooster Acquisition Corp. of Cabot Common Shares pursuant
to the Offer, any of the representations and warranties
of Cabot contained in this Agreement and qualified by
materiality (not including those that are qualified by
the term Cabot Material Adverse Effect) shall not be true
and correct as of the date of determination or the date
hereof (except to the extent that any such representation
or warranty, by its terms, is expressly limited to a
specific date, in which case CalWest's right to terminate
pursuant to this clause (ii) shall be triggered only if
such representation or warranty shall not be true and
correct as of such date), except where the failure of any
such representation or warranty to be so true and
correct, together with all other representations and
warranties qualified by materiality (not including those
that are qualified by the term Cabot Material Adverse
Effect) which are not true and correct, would not
constitute a Cabot Material Adverse Effect; or
(iii) prior to the acceptance for payment by
Rooster Acquisition Corp. of Cabot Common Shares pursuant
to the Offer, the representations and warranties of Cabot
contained in this Agreement and not qualified by
materiality or the term Cabot Material Adverse Effect
shall not be true and correct in all material respects as
of the date of determination, the date hereof or, with
respect to the representations and warranties expressly
limited to a specific date, as of such specific dates; or
(iv) Cabot shall have failed to perform or
comply with, in all material respects, each of its
agreements contained in this Agreement required to be
performed at or prior to the date of determination;
provided, however, that if such Terminating Cabot Breach
is capable of being cured by Cabot within ten (10) Business Days
after the notification of the occurrence of the Terminating Cabot
Breach and prior to the Merger Effective Time through the exercise
of its commercially reasonable efforts and is so cured within such
period, so long as Cabot continues to exercise such commercially
reasonable efforts, CalWest may not terminate this Agreement under
this Section 8.1(g); or
60
(h) by Cabot, if any of the following events shall occur and be
continuing or conditions exist: (i) any of the representations and
warranties of any CalWest Party contained in this Agreement that are
qualified as to materiality shall not be true and correct and any such
representations and warranties that are not so qualified shall not be
true and correct in any material respect, in each case as of the date
of determination (except to the extent that any such representation or
warranty, by its terms, is expressly limited to a specific date, in
which case such representation or warranty shall not be true and
correct as of such date), except where the failure to be so true and
correct would not reasonably be expected to prevent or materially
delay the consummation of the Offer, the Merger or any other
transaction contemplated by the Transaction Documents and except where
the failure of such representation or warranty to be so true and
correct was principally caused by general economic changes, changes in
the U.S. financial markets generally, changes that affect REITs
generally or changes that generally affect real estate properties of
the type generally owned by Cabot; or (ii) the CalWest Parties shall
have failed to perform in all material respects each of their
agreements contained in this Agreement required to be performed at or
prior to the date of determination (any such event or condition, a
"Terminating CalWest Breach"); provided, however, that such
Terminating CalWest Breach must be reasonably likely to materially
adversely affect the consummation of the Offer or the Merger, if such
Terminating CalWest Breach is capable of being cured by CalWest prior
to the Merger Effective Time through the exercise of its commercially
reasonable efforts, so long as CalWest continues to exercise such
commercially reasonable efforts, Cabot may not terminate this
Agreement under this Section 8.1(h).
The right of any party hereto to terminate this Agreement pursuant to this
Section 8.1 shall remain operative and in full force and effect regardless
of any investigation made by or on behalf of any party hereto, any person
controlling or controlled by any such party or any of their respective
officers, directors or trustees, whether prior to or after the execution of
this Agreement.
Section 8.2 Expenses.
--------
(a) Except as otherwise specified in this Section 8.2 or agreed in
writing by the parties, all out-of-pocket costs and expenses incurred
in connection with this Agreement, the Offer, the Merger and the other
transactions contemplated hereby shall be paid by the party incurring such
cost or expense (with respect to such party, its "Expenses"); provided,
however, that if the Merger is consummated, all Expenses of Cabot and Cabot
LP shall be paid by the Surviving Entity and its subsidiaries; provided,
further, that any filing fees under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), shall be split
equally between Cabot and CalWest.
61
(b) Cabot and Cabot LP agree that if this Agreement shall be
terminated pursuant to Section 8.1(g), then Cabot and Cabot LP will pay to
CalWest, or to such party or parties as directed by CalWest, an amount
equal to (i) in the event of a termination pursuant to Section 8.1(g)(i),
Section 8.1g(ii) or Section 8.1(g)(iii), the Break-Up Expenses (as
hereinafter defined) or (ii) in the event of a termination pursuant to
Section 8.1(g)(iv), $15,000,000. Cabot and Cabot LP also agree that if this
Agreement
(i) is terminated pursuant to Section 8.1(c)(iii), Section
8.1(c)(iv) or Section 8.1(f) and (A) following the first public
announcement of this Agreement and on or before the date of any
such termination, a plan or proposal with respect to a Competing
Transaction is publicly disclosed or announced or is otherwise
reported in the media, (B) thereafter, but prior to such
termination, Cabot failed to publicly reaffirm its
recommendations and approvals of the Offer, Merger and other
transactions contemplated by the Transaction Documents in
response to any such plan or proposal or any material
modification thereof and (C) within 180 days of the date of such
termination, Cabot shall consummate a Competing Transaction or
enter into an Acquisition Agreement (or resolves or announces an
intention to do so) providing for a Competing Transaction that is
ultimately consummated (in each case, regardless of whether such
Competing Transaction is the same Competing Transaction which was
proposed or announced as of the date of termination); or
(ii) is terminated pursuant to Section 8.1(g) (other than
as a result of a breach by Cabot of Section 6.4) and (A) on or
before the date of any such termination, there has been or there
is proposed by a Third Party to Cabot to consummate, or a Third
Party shall have publicly announced, following the first public
announcement of this Agreement, a plan or proposal with respect
to, a Competing Transaction and (B) within 360 days of the date
of such termination, Cabot shall consummate a Competing
Transaction or enter into an Acquisition Agreement (or resolves
or announces an intention to do so) providing for a Competing
Transaction that is ultimately consummated (in each case,
regardless of whether such Competing Transaction is the same
Competing Transaction which was proposed or announced as of the
date of termination); or
(iii) is terminated pursuant to Section 8.1(g) as a result
of a breach by Cabot of Section 6.4 and within 360 days of the
date of such termination, Cabot shall consummate a Competing
Transaction or enter into an Acquisition Agreement (or resolves
or announces an intention to do so) providing for a Competing
Transaction that is ultimately consummated; or
(iv) is terminated pursuant to Section 8.1(d) or (e),
62
then, Cabot and Cabot LP shall pay to CalWest, or as directed by CalWest,
an amount equal to the Break-Up Fee (as defined below) plus any Break-Up
Expenses (unless such Break-Up Expenses or an amount equal to $15,000,000
was paid theretofore pursuant to the first sentence of this Section
8.2(b)). Payment of any of such amounts shall be made, as directed by
CalWest, by prompt wire transfer of immediately available funds, but in no
event later than one (1) Business Day after the amount is due as provided
herein.
(c) For purposes of this Agreement, the "Break-Up Fee" shall be an
amount equal to $35,000,000.
(d) For purposes of this Agreement, the "Break-Up Expenses" shall be
an amount equal to the out-of-pocket expenses of CalWest or any of its
affiliates incurred in connection with the Offer, the Merger, this
Agreement and the other transactions contemplated by the Transaction
Documents (including all attorneys', accountants', investment bankers',
consultants', appraisers', insurers' and financing sources' fees and
expenses), but in no event in an amount greater than $17,500,000.
(e) Notwithstanding anything to the contrary in this Agreement
(other than in the case of a willful or intentional breach of this
Agreement, including such a breach of Section 6.4), CalWest expressly
acknowledges and agrees that, with respect to any termination of this
Agreement pursuant to Section 8.1(d), (e) or (g) in circumstances where the
Break-Up Fee and/or the Break-Up Expenses are payable in accordance with
Section 8.2(b), the payment of the Break-Up Fee and/or the Break-Up
Expenses shall constitute liquidated damages with respect to any claim for
damages or any other claim which CalWest would otherwise be entitled to
assert against Cabot, the Cabot LP or any Cabot Subsidiary or any of their
respective assets, or against any of their respective trustees, directors,
officers, employees, partners or shareholders, with respect to this
Agreement and the transactions contemplated by the Transaction Documents
and shall constitute the sole and exclusive remedy available to CalWest.
The parties hereto expressly acknowledge and agree that, in light of the
difficulty of accurately determining actual damages with respect to the
foregoing upon any termination of this Agreement pursuant to Section
8.1(d), (e) or (g) in circumstances where the Break-Up Fee and/or the
Break-Up Expenses are payable in accordance with Section 8.2(b), the right
to payment under any of such subsections of Section 8.1: (i) constitutes a
reasonable estimate of the damages that will be suffered by reason of any
such proposed or actual termination of this Agreement pursuant to said
section, and (ii) shall be in full and complete satisfaction of any and all
damages arising as a result of the foregoing. Except for nonpayment of the
amounts set forth in Section 8.2(b), CalWest hereby agrees that, upon any
termination of this Agreement pursuant to Section 8.1(d), (e) or (g) in
circumstances where the Break-Up Fee and/or the Break-Up Expenses are
payable in accordance with Section 8.2(b), in no event (other than in the
case of an intentional or willful breach of this Agreement, including such
a breach of Section 6.4) shall CalWest (A) seek to obtain any recovery or
judgment against Cabot, the Cabot LP or any Cabot Subsidiary or any of
their respective assets, or against any of their respective trustees,
directors, officers, employees, partners or shareholders, or (B) be
entitled to seek or obtain any other damages of any kind, including,
without limitation, consequential, indirect or punitive damages.
Section 8.3 Effect of Termination. In the event of termination of this
Agreement by either Cabot or CalWest as provided in Section 8.1, this
Agreement shall forthwith become void and have no effect, without any
liability or obligation on the part of CalWest and Rooster Acquisition
Corp., Cabot or Cabot LP, other than the last sentence of Section 6.1,
Section 8.1, Section 8.2, this Section 8.3 and Article IX and except to the
extent that such termination results from a breach by a party of any of its
covenants or agreements set forth in this Agreement.
Section 8.4 Amendment. This Agreement may be amended by the parties in
writing by action of their Board of Trustees or Boards of Directors, as the
case may be, at any time before or after the Cabot Common Shareholder
Approval is obtained and prior to the filing of the Articles of Merger with
the Maryland Department with respect to the Merger; provided, however,
63
that, after the Cabot Common Shareholder Approval is obtained, no such
amendment, modification or supplement shall alter the amount or change the
form of the Merger Consideration to be delivered to Cabot's shareholders or
alter or change any of the terms or conditions of this Agreement if such
alteration or change would adversely affect Cabot's shareholders.
Section 8.5 Extension; Waiver. At any time prior to the Merger Effective
Time, each of Cabot and CalWest may (a) extend the time for the performance
of any of the obligations or other acts of the other party, (b) waive any
inaccuracies in the representations and warranties of the other party
contained in this Agreement or in any document delivered pursuant to this
Agreement or (c) subject to the provisions of Section 8.4, waive compliance
with any of the agreements or conditions of the other party contained in
this Agreement. Any agreement on the part of a party to any such extension
or waiver shall be valid only if set forth in an instrument in writing
signed on behalf of such party. The failure of any party to this Agreement
to assert any of its rights under this Agreement or otherwise shall not
constitute a waiver of those rights.
ARTICLE IX
GENERAL PROVISIONS
------------------
Section 9.1 Nonsurvival of Representations and Warranties. None of the
representations and warranties in this Agreement or in any instrument
delivered pursuant to this Agreement shall survive (i) in the case of
representations and warranties made by either of Cabot and the Cabot LP,
the acceptance for payment of any Cabot Common Shares pursuant to the Offer
or (ii) in the case of representations and warranties made by any of the
CalWest Parties, the Merger Effective Time. This Section 9.1 shall not
limit any covenant or agreement of the parties which by its terms
contemplates performance after the Merger Effective Time.
Section 9.2 Notices. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing (and also made
orally if so required pursuant to any Section of the Agreement) and shall
be deemed given if delivered personally, sent by overnight courier
(providing proof of delivery) to the parties or sent by telecopy (providing
confirmation of transmission) at the following addresses or telecopy
numbers (or at such other address or telecopy number for a party as shall
be specified by like notice):
(a) if to CalWest, to
CalWest Industrial Properties, LLC
c/o RREEF America L.L.C.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn.: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ & Sutcliffe LLP
Old Federal Bank Building
400 Sansome Street
Attn.: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
if to Cabot, to
Cabot Industrial Trust
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn.: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn.: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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Section 9.3 Interpretation. When a reference is made in this Agreement to
an Article or a Section, such reference shall be to an Article or a Section
of this Agreement unless otherwise indicated. The table of contents and
headings contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words "include," "includes" or "including" are used
in this Agreement, they shall be deemed to be followed by the words
"without limitation." The words "hereof", "herein" and "hereby" refer to
this Agreement.
Section 9.4 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement
and shall become effective when one or more counterparts have been signed
by each of the parties and delivered to the other parties.
Section 9.5 Entire Agreement; No Third-Party Beneficiaries. This
Agreement, the Confidentiality Agreement, the Shareholder Agreements, the
Unitholder Agreements, the Option Agreement and the Amendment to Rights
Agreement constitute the entire agreement and supersede all prior
agreements and understandings, both written and oral, between the parties
with respect to the subject matter of this Agreement, and there are no
other or additional agreements between CalWest, Rooster Acquisition Corp.,
or any of their respective affiliates, on the one hand, and any holders of
Cabot Common Shares or LP Unitholders or their respective affiliates, on
the other hand, relating to, arising from or otherwise entered into in
connection with this Agreement and the transactions contemplated hereby.
Except for the provisions of Sections 6.6 and 6.7, this Agreement is not
intended to confer upon any Person other than the parties hereto any rights
or remedies.
Section 9.6 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF MARYLAND, WITHOUT
REGARD TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF.
Section 9.7 Assignment. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement shall be assigned or
delegated, in whole or in part, by operation of Law or otherwise by any of
the parties without the prior written consent of the other parties, except
that CalWest and Rooster Acquisition Corp. may transfer to their Affiliates
and financing sources without the consent of Cabot or Cabot LP; provided,
CalWest continues to be liable for the performance of all of the
obligations and payments to be made by the CalWest Parties and such
assignees hereunder if and only to the extent that such assignees do not
timely perform such obligations in all respects. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of, and
be enforceable by, the parties and their respective successors and assigns.
65
Section 9.8 Enforcement. The parties agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions of this Agreement in any
court of the United States, this being in addition to any other remedy to
which they are entitled at Law or in equity.
Section 9.9 Annex I; Exhibits; Disclosure Letter. Annex I, the Exhibits
referred to herein and the Cabot Disclosure Letter (and all exhibits or
attachments thereto) are intended to be and hereby are specifically made a
part of this Agreement.
Section 9.10 Limitation of Liability of Shareholders, Trustees and
Officers of Cabot. No obligation or Liabilities of Cabot which may arise at
any time under this Agreement or any obligation or Liability which may be
incurred by it pursuant to any other instrument, transaction or undertaking
contemplated hereby or thereby shall be personally binding upon, nor shall
resort for the enforcement thereof be had to, the property of any of
Cabot's shareholders, trustees, officers, employees or agents solely as a
result of their status, and solely in their capacities as, shareholders,
trustees, officers, employees or agents, as the case may be, regardless of
whether such obligation or Liability is in the nature of contract, tort or
otherwise. Nothing contained herein shall act to limit the Liability of
Cabot's trustees, officers, employees or agents to Cabot or limit the
ability of any shareholder of Cabot to bring a derivative action on behalf
of Cabot against its trustees, officers, employees or agents.
Section 9.11 Jurisdiction; Venue. THE PARTIES HEREBY IRREVOCABLY SUBMIT
TO THE JURISDICTION OF THE COURTS OF THE STATE OF MARYLAND AND THE FEDERAL
COURTS OF THE UNITED STATES OF AMERICA LOCATED IN THE STATE OF MARYLAND
SOLELY IN RESPECT OF THE INTERPRETATION AND ENFORCEMENT OF THE PROVISIONS
OF THIS AGREEMENT AND OF THE DOCUMENTS REFERRED TO IN THIS AGREEMENT, AND
IN RESPECT OF THE TRANSACTIONS CONTEMPLATED HEREBY, AND HEREBY WAIVE, AND
AGREE NOT TO ASSERT, AS A DEFENSE IN ANY ACTION, SUIT OR PROCEEDING FOR THE
INTERPRETATION OR ENFORCEMENT HEREOF OR OF ANY SUCH DOCUMENT, THAT IT IS
NOT SUBJECT THERETO OR THAT SUCH ACTION, SUIT OR PROCEEDING MAY NOT BE
BROUGHT OR IS NOT MAINTAINABLE IN SAID COURTS OR THAT THE VENUE THEREOF MAY
NOT BE APPROPRIATE OR THAT THIS AGREEMENT OR ANY SUCH DOCUMENT MAY NOT BE
ENFORCED IN OR BY SUCH COURTS, AND THE PARTIES HERETO IRREVOCABLY AGREE
THAT ALL CLAIMS WITH RESPECT TO SUCH ACTION OR PROCEEDING SHALL BE HEARD
AND DETERMINED IN SUCH A MARYLAND STATE OR FEDERAL COURT. THE PARTIES
HEREBY CONSENT TO AND GRANT ANY SUCH COURT JURISDICTION OVER THE PERSON OF
SUCH PARTIES AND OVER THE SUBJECT MATTER OF SUCH DISPUTE AND AGREE THAT
MAILING OF PROCESS OR OTHER PAPERS IN CONNECTION WITH ANY SUCH ACTION OR
PROCEEDING IN THE MANNER PROVIDED IN SECTION 9.2 OR IN SUCH OTHER MANNER AS
MAY BE PERMITTED BY APPLICABLE LAWS, SHALL BE VALID AND SUFFICIENT SERVICE
THEREOF.
Section 9.12 Waiver of Trial by Jury. EACH PARTY ACKNOWLEDGES AND AGREES
THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO
INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT
(A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN
THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (B) EACH
SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER,
(C) EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) EACH SUCH PARTY
HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE
WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.12.
66
ARTICLE X
CERTAIN DEFINITIONS
-------------------
Section 10.1 Certain Definitions. For purposes of this Agreement:
"Acquisition Agreement" means any letter of intent, agreement in
principle, merger agreement, stock purchase agreement, asset purchase
agreement, acquisition agreement, option agreement or similar agreement
relating to a Competing Transaction.
"Affiliate" of any Person has the meaning assigned thereto by Rule
12b-2 under the Exchange Act.
"Amendment to Rights Agreement" means the Amendment to Rights
Agreement dated as of October 28, 2001.
"Articles of Merger" means the articles of merger with respect to the
Merger, containing the provisions required by, and executed in accordance
with, the MGCL.
"Associate" of any Person has the meaning assigned thereto by Rule
12b-2 under the Exchange Act.
"Business Day" means any day other than a Saturday, Sunday or a day on
which banking institutions in New York, New York are authorized or
obligated by law or executive order to be closed.
"Cabot Material Adverse Effect" means, with respect to Cabot, any
change, event or effect that shall have occurred that, when taken together
with all other adverse changes, events or effects that have occurred, is or
is reasonably likely to (i) be materially adverse to the business,
operations, properties, condition (financial or otherwise), assets or
Liabilities of Cabot and the Cabot Subsidiaries taken as a whole or (ii)
prevent or materially delay the performance by Cabot or Cabot LP of any of
its obligations under this Agreement or the consummation of the Offer, the
Merger or the other transactions contemplated by the Transaction Documents,
not including the effect of general economic changes, changes in the U.S.
financial markets generally, changes that affect REITs generally and
changes that generally affect real estate properties of the type generally
owned by Cabot, in each case that are a principal cause of such change,
event or effect.
"Cabot Rights Agreement" shall mean the Amended and Restated Rights
Agreement dated September 10, 1998 between Cabot and EquiServe Limited
Partnership (as successor to BankBoston, N.A.), as rights agent, as amended
by the Amendment to Rights Agreement.
"Cabot Subsidiary" means Cabot LP and each other Subsidiary of Cabot.
"CalWest Subsidiary" means Rooster Acquisition Corp. and each other
Subsidiary of CalWest.
"CERCLA" means the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, as amended from time to time.
67
"Code" means the Internal Revenue Code of 1986, as amended.
"Knowledge", or any similar expression, shall mean (i) with respect to
Cabot (or any Cabot Subsidiaries), the actual knowledge of the persons set
forth on Schedule 10.1(a) after due inquiry; and (ii) with respect to
CalWest (or any of its Subsidiaries), the actual knowledge of the persons
set forth on Schedule 10.1(b) after due inquiry.
"Law" means any Federal, state, local or foreign statute, law,
regulation, permit, license, approval, authorization, rule, ordinance or
code of any Governmental Entity, including any judicial or administrative
interpretation thereof.
"Liabilities" means any and all debts, liabilities and obligations of
any nature whatsoever, whether accrued or fixed, absolute or contingent,
including those arising under any Law, those arising under any contract,
agreement, commitment, instrument, permit, license, franchise or
undertaking and those arising as a result of any act or omission.
"Maryland Department" means the State Department of Assessments and
Taxation of Maryland.
"Order" means any award, judgment, injunction, consent, ruling, decree
or order (whether temporary, preliminary or permanent) issued, adopted,
granted, awarded or entered by any Governmental Entity or private
arbitrator.
"Person" means an individual, corporation, partnership, limited
liability company, joint venture, association, trust, unincorporated
organization or other entity.
"Securities Act" means the Securities Act of 1933, as amended.
"Subsidiary" of any Person means any corporation, partnership, limited
liability company, joint venture or other legal entity of which such Person
(either directly or through or together with another Subsidiary of such
Person) owns more than 50% of the voting stock or value of such
corporation, partnership, limited liability company, joint venture or other
legal entity.
"Tax" or "Taxes" shall mean any federal, state, local and foreign
income, gross receipts, license, withholding, property, recording, stamp,
sales, use, franchise, employment, payroll, excise, environmental and other
taxes, tariffs or governmental charges of any nature whatsoever, together
with penalties, interest or additions thereto.
"Tax Return" shall mean any return, declaration, report, claim for
refund, or information return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.
68
"Transaction Documents" means this Agreement, the Option Agreement,
the Shareholder Agreements and all other agreements, instruments and
documents to be executed by Cabot and Cabot LP in connection with the
transactions contemplated by such agreements.
"Voting Debt" shall mean bonds, debentures, notes or other
indebtedness having the right to vote (or convertible into, or exchangeable
for, securities having the right to vote) on any matters on which holders
of equity interests in Cabot, any Cabot Subsidiary, CalWest and Rooster
Acquisition Corp., as applicable, may vote.
* * * * *
69
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be signed by their respective officers thereunto duly authorized, all as
of the date first written above.
CALWEST INDUSTRIAL PROPERTIES, LLC
By: RREEF America L.L.C., its Manager
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title:
ROOSTER ACQUISITION CORP.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title:
CABOT INDUSTRIAL TRUST
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇
Title: Chairman, Chief Executive Officer
CABOT INDUSTRIAL PROPERTIES, L.P.
By: Cabot Industrial Trust, its
Sole General Partner
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇
Title: Chairman, Chief Executive Officer
70
ANNEX I
Tender Offer Conditions. Notwithstanding any other provision of the Offer,
neither CalWest nor Rooster Acquisition Corp. shall be required to accept
for payment or, subject to any applicable rules and regulations of the SEC,
including Rule 14e-1(c) promulgated under the Exchange Act (relating to the
obligation of Rooster Acquisition Corp. to pay for or return tendered Cabot
Common Shares after termination or withdrawal of the Offer), pay for, and
(subject to any such rules or regulations) may delay the acceptance for
payment of any tendered Cabot Common Shares and (except as provided in the
Merger Agreement) amend or terminate the Offer as to any tendered Cabot
Common Shares if (i) there shall not have been validly tendered and not
withdrawn prior to the expiration of the Offer Cabot Common Shares
representing two-thirds of the outstanding Cabot Common Shares on a fully
diluted basis, after giving effect to the exercise or conversion of all
options, rights, LP Units and other securities exercisable or convertible
into such voting securities (the "Minimum Condition"), (ii) any consent
identified in Section 4.1(d)(iii) of the Cabot Disclosure Letter shall not
have been obtained prior to the expiration of the Offer, (iii) any
applicable waiting period (and any extension thereof) under the HSR Act
shall not have expired or been terminated prior to the expiration of the
Offer, or (iv) at any time after the date of the Merger Agreement and prior
to the time of acceptance for payment of any such Cabot Common Shares, any
of the following events shall occur and be continuing or conditions exist:
(a) there shall have been any action taken, or any Law, temporary
restraining order, preliminary or permanent injunction or other order
issued by any court of competent jurisdiction or other Governmental Entity
or other legal restraint or prohibition which (i) prohibits, restrains,
limits or makes illegal the acceptance for payment, payment for or purchase
of Cabot Common Shares or the consummation of the Offer, the Merger or the
other material transactions contemplated by the Transaction Documents, (ii)
renders Rooster Acquisition Corp. unable to accept for payment, pay for or
purchase some or all of the Cabot Common Shares tendered and not withdrawn
pursuant to the Offer, or (iii) imposes material limitations on the ability
of Rooster Acquisition Corp. to effectively exercise full rights of
ownership of the Cabot Common Shares to be acquired in the Offer, including
the right to vote such Cabot Common Shares, or the assets or business of
Cabot and the Cabot Subsidiaries; or
(b) there shall be officially threatened in writing or pending any
suit, action or proceeding by any Governmental Entity challenging the
acquisition by CalWest or Rooster Acquisition Corp. of any Cabot Common
Shares, seeking to restrain or prohibit consummation of the Offer or the
Merger, or seeking to place limitations on the ownership of Cabot Common
Shares or the assets and business of Cabot or the Cabot Subsidiaries by
CalWest or Rooster Acquisition Corp.; or
(c) the Merger Agreement shall have been terminated in accordance
with its terms; or
(d) since the date of the Merger Agreement there shall have
occurred a Cabot Material Adverse Effect; or
-1-
(e) (i) any of the representations and warranties of Cabot
contained in this Agreement which are qualified by the term Cabot Material
Adverse Effect, shall not be true and correct; (ii) any of the
representations and warranties of Cabot contained in this Agreement which
are qualified by materiality (not including those that are qualified by the
term Cabot Material Adverse Effect), shall not be true and correct, except
where the failure of any such representation or warranty to be so true and
correct, together with all other representations and warranties qualified
by materiality (not including those that are qualified by the term Cabot
Material Adverse Effect) which are not true and correct, would not
constitute a Cabot Material Adverse Effect; and (iii) the representations
and warranties of Cabot contained in this Agreement which are not qualified
by materiality or the term Cabot Material Adverse Effect shall not be true
and correct in all material respects, in each of the foregoing cases, as of
the date of determination or the date hereof (except to the extent that any
such representation or warranty, by its terms, is expressly limited to a
specific date, in which case, as of such specific date); or
(f) Cabot shall have breached or failed to perform or comply with,
in all material respects, each of its covenants and agreements contained in
the Merger Agreement required to be performed at or prior to the date of
determination; or
(g) the Cabot Board of Trustees (i) shall have withdrawn or
modified in a manner adverse to Rooster Acquisition Corp. (including by
amendment of the Schedule 14D-9) any of its approvals or recommendations
set forth in Section 1.2(a), including as to the Offer, the Merger or this
Agreement, (ii) recommended or approved any Competing Transaction or
Superior Competing Transaction or (iii) shall have publicly proposed or
resolved to do any of the foregoing; or
(h) the Rights shall have become exercisable; or
(i) Cabot shall have failed to deliver a bring-down letter, dated
the date of the consummation of the Offer, to the REIT Tax Opinion of
▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇; or
(j) CalWest shall have failed to receive an officer's certificate
executed by Cabot's Chief Executive Officer and Chief Financial Officer on
behalf of Cabot, dated the date of consummation of the Offer, to the effect
that none of the events or conditions set forth in paragraphs (d), (e),
(f), (g) and (h) have occurred; or
(k) the failure by CalWest's lender(s) to fund the bridge loan
commitment (the "Bridge Loan Commitment") provided by such lenders(s) to
finance the purchase by CalWest or Rooster Acquisition Corp. of the Cabot
Common Shares pursuant to the Commitment Letter, dated as of October 28,
2001, with ▇▇▇▇▇▇▇ Sachs Mortgage Company (the "Commitment Letter"), dated
as of the date hereof, as a result of the occurrence of a Material Adverse
Change (as such term is defined in the section of the Commitment Letter
designated "Material Adverse Change" (the "Commitment Letter MAE Section");
provided that if after compliance with Section 1.1(d) of the Agreement,
CalWest shall have obtained other financing for the Offer and the Merger on
terms substantially similar and at least as favorable as the terms of the
Commitment Letter and such other financing is available and funded at the
time of the consummation of the Offer, then the event specified in this
clause (k) shall be deemed to have been cured;
-2-
which, in the reasonable discretion of CalWest, in any such case, and
regardless of the circumstances (including any action or inaction by
CalWest) giving rise to such condition, makes it inadvisable to proceed
with the Offer or the acceptance for payment of or payment for the Cabot
Common Shares (tendered and not withdrawn pursuant to the Offer).
The foregoing conditions are for the sole benefit of Rooster
Acquisition Corp. and may (subject to the terms of the Merger Agreement) be
asserted or waived by Rooster Acquisition Corp., in whole or in part, at
any time and from time to time, in the sole discretion of Rooster
Acquisition Corp., as the case may be. The failure by Rooster Acquisition
Corp. at any time to exercise any of the foregoing rights shall not be
deemed a waiver of any such right and each such right shall be deemed an
ongoing right which may be asserted at any time and from time to time.
The capitalized terms used in this Annex I shall have the meanings
set forth in the Agreement to which it is annexed, except that the term
"Merger Agreement" shall be deemed to refer to the Agreement to which this
Annex I is annexed.
-3-