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EXHIBIT 99.2
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AMENDED AND RESTATED
STOCK PURCHASE AGREEMENT
BETWEEN
LEND LEASE PORTFOLIO MANAGEMENT, INC.,
AS SELLING SHAREHOLDER
AND
AMERICAN REALTY TRUST, INC.,
AS PURCHASER
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DATED AS OF AUGUST 25, 1998
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AMENDED AND RESTATED
STOCK PURCHASE AGREEMENT
This Amended and Restated Stock Purchase Agreement (the "Agreement") is
entered into this 25th day of August, 1998, between Lend Lease Portfolio
Management, Inc. (the "Selling Shareholder") and American Realty Trust, Inc.
(the "Purchaser").
W I T N E S S E T H:
WHEREAS, the Selling Shareholder and the Purchaser entered into that
certain Stock Purchase Agreement dated as of the 23rd day of December, 1997, and
now desire to amend and restate such agreement in its entirety herein;
WHEREAS, the Selling Shareholder owns 1,685,556 outstanding shares of
beneficial interest of EQK Realty Investors I, par value $0.01 per share (the
"Common Stock");
WHEREAS, the Selling Shareholder desires to sell to the Purchaser all
of the shares of Common Stock owned by such Selling Shareholder for the
consideration set forth herein; and
WHEREAS, the Purchaser desires to purchase from the Selling Shareholder
such shares of Common Stock on the terms and subject to the conditions set forth
herein; and
WHEREAS, immediately after the execution of this Agreement, the
Purchaser will file a Registration Statement on Form S-3 (the "Registration
Statement") for registration of 105,655 shares of its Preferred Stock (as
defined in Section 1.2) under the Securities Act of 1933, as amended (the
"Securities Act").
NOW, THEREFORE, in consideration of the mutual agreements contained
herein, and subject to and on the terms and conditions herein set forth, the
parties hereto, intending to be legally bound, agree as follows:
ARTICLE I
PURCHASE AND SALE OF THE SHARES
Section 1.1. PURCHASE AND SALE OF SHARES. On the Closing Date (as
defined in Section 1.3), pursuant to the terms and conditions of this Agreement,
the Selling Shareholder shall sell and transfer to the Purchaser, and the
Purchaser shall purchase and accept from the Selling Shareholder, 1,685,556
shares of Common Stock (collectively, the "Shares") for the Purchase Price (as
defined in Section 1.2).
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Section 1.2. PURCHASE PRICE. The aggregate purchase price payable by
the Purchaser to the Selling Shareholder for the Shares shall be $505,667.00
payable exclusively as 50,566 shares of Series F Cumulative Convertible
Preferred Stock, par value $2.00 per share, with a stated liquidation value of
$10.00 per share, of the Purchaser (such shares, the "Preferred Stock", and the
aggregate liquidation value of the Preferred Stock so delivered to the Selling
Shareholder, the "Purchase Price").
Section 1.3. CLOSING. The closing of the purchase and sale of the
Shares contemplated hereby (the "Closing") will take place at the offices of
▇▇▇▇▇▇▇ & ▇▇▇▇▇ L.L.P., in Dallas, Texas, at a mutually agreeable time,
following the satisfaction of each of the conditions described in Sections 4.1
and 4.2 hereof, or on such other day as may be mutually agreed upon in writing
by the Purchaser and the Selling Shareholder (the "Closing Date"). Prior to the
Closing Date, (i) the Selling Shareholder shall have delivered or caused to be
delivered to The Depository Trust Company ("DTC") or a participant thereof (a
"Participant") the certificate or certificates representing the Shares, along
with a duly executed stock power attached thereto and such other assignments or
instruments of conveyance and transfer, in form and substance reasonably
satisfactory to the Purchaser and its counsel, as shall be effective to vest in
the Purchaser all of the Selling Shareholder's right, title and interest in and
to the Shares, and (ii) the Purchaser shall have delivered or caused to be
delivered to DTC or a Participant the certificate or certificates representing
the Preferred Stock, registered in the name of "CEDE & CO.", as DTC's nominee,
along with an irrevocable instruction letter to DTC instructing DTC to release
the Preferred Stock to the Selling Shareholder upon delivery and release by the
Selling Shareholders of the Shares to Purchaser. Notwithstanding the foregoing,
the procedures for delivery of the Shares and the Preferred Stock set forth
above may be varied, if necessary, in order to comply with the standard
practices and procedures of DTC.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1. REPRESENTATIONS AND WARRANTIES BY THE SELLING SHAREHOLDER.
The Selling Shareholder hereby covenants with, represents and warrants to the
Purchaser as follows:
(A) Shares. The Shares are now, and on the Closing Date will
be, owned of record and beneficially by the Selling Shareholder free
and clear of any security interest, pledge, option, lien, claim,
commitment, proxy, equity, right, restriction on transfer or
encumbrance of any nature whatsoever (collectively, "Encumbrances").
The Shares constitute all of the Common Stock owned by the Selling
Shareholder. There are no Encumbrances whatsoever, fixed or contingent,
that directly or indirectly, (i) provide for the sale, pledge or other
transfer or disposition of any of the Shares held by the Selling
Shareholder, any interest therein or any rights with respect thereto,
or relate to the voting, disposition, exercise, conversion or control
of the Shares or (ii) obligate the Selling Shareholder to grant, offer
or enter into any of the foregoing. Except as provided for herein and
except for any restrictions on transfer under applicable state and
federal securities laws, upon the Closing, the Purchaser will acquire
valid and indefeasible title to the Shares free and clear of any
Encumbrance.
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(B) Non-Contravention. The execution, delivery and performance
of this Agreement and the consummation of the transactions contemplated
hereby by the Selling Shareholder will not result in a violation or
breach of or constitute a default under any term or provision of
articles of incorporation or bylaws of the Selling Shareholder.
(C) No Conflicts. The execution and delivery of this Agreement
by the Selling Shareholder, and the consummation of the transactions
contemplated hereby, will not conflict with or violate any agreement,
law, rule, regulation, ordinance, order, writ, injunction, judgment or
decree applicable to or binding on the Selling Shareholder.
(D) Organization, Qualification and Authority of the Selling
Shareholder. The Selling Shareholder is duly incorporated, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation. The Selling Shareholder has all requisite corporate
power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby and otherwise perform its obligations
hereunder. This Agreement has been duly authorized, executed and
delivered by the Selling Shareholder and constitutes a legal, valid and
binding agreement of the Selling Shareholder, enforceable against the
Selling Shareholder in accordance with its terms, subject to
bankruptcy, court or regulatory agency order and the exercise of such
equitable remedies as may be applicable or available to the Selling
Shareholder.
(E) No Consents or Approvals. The Selling Shareholder is not
required to submit any notice, report or other filing with any
governmental or regulatory authority or instrumentality, and no waiver,
consent, approval or authorization of any governmental or regulatory
authority or any other person is required to be obtained or made by the
Selling Shareholder, in connection with the execution, delivery or
performance of this Agreement or the consummation of the transactions
contemplated hereby.
(F) No Commission. The Selling Shareholder has not employed
any broker, agent, finder or advisor in connection with any transaction
contemplated by this Agreement. The Selling Shareholder hereby
indemnifies the Purchaser against any liability for a broker's
commission or agent or finder's fee of any description incurred by the
Selling Shareholder with respect to any transaction contemplated by
this Agreement.
(G) Litigation. As of the date hereof, except with respect to
that certain lawsuit styled ▇▇▇▇▇▇▇ ▇▇▇▇▇, et. al.v. EQK Realty
Investors I, et. al. and filed in the Superior Court of the
Commonwealth of Massachusetts under Civil Action No. 98-0582, no
action, suit, proceeding or governmental investigation is pending or,
to the knowledge of the Selling Shareholder, threatened that seeks to
delay or prevent the consummation of the transactions contemplated by
this Agreement.
(H) Disclosure. No representation or warranty by the Selling
Shareholder in this Agreement nor any certificate, schedule, statement,
document or instrument furnished or to be furnished to the Purchaser
pursuant hereto, or in connection with the execution or performance of
this Agreement, contains or will contain any untrue statement of a
material
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fact or, subject to any applicable qualifications contained in such
certificate, schedule, statement, document or instrument, omits or will
omit to state a material fact necessary in order to make any statement
herein or therein not misleading, in light of the circumstances under
which they were made.
(I) Solvency. The Selling Shareholder is not now insolvent,
nor will it be rendered insolvent by the consummation of the
transactions contemplated by this Agreement. As used in this Section
2.1(I), "insolvent" means, for the Selling Shareholder, that the sum of
the present fair saleable value of its assets does not and/or will not
exceed its debts and other probable liabilities, and the term "debts"
includes any legal liability, whether matured or unmatured, liquidated
or unliquidated, absolute, fixed or contingent, disputed or secured or
unsecured.
(J) Institutional Accredited Investor Status. The Selling
Shareholder is an institutional "accredited investor" within the
meaning of subparagraph (3) of Rule 501(a) under the Securities Act.
Section 2.2. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. The
Purchaser represents and warrants to, and agrees with, the Selling Shareholder
as follows:
(A) Organization and Authority of the Purchaser. The Purchaser
has been duly incorporated, is validly existing and is in good standing
under the laws of the State of Georgia, has all requisite corporate
power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby and otherwise carry out its
obligations hereunder. This Agreement has been duly authorized,
executed and delivered by the Purchaser and constitutes a legal, valid
and binding agreement of the Purchaser, enforceable against the
Purchaser in accordance with its terms, subject to bankruptcy, court or
regulatory agency order and the exercise of such equitable remedies as
may be applicable or available to the Purchaser.
(B) Litigation. As of the date hereof, no action, suit,
proceeding or governmental investigation is pending or, to the
knowledge of the Purchaser, threatened that seeks to delay or prevent
the consummation of the transactions contemplated by this Agreement.
(C) Non-Contravention. The execution, delivery and performance
of this Agreement and the consummation of the transactions contemplated
hereby by the Purchaser will not result in a violation or breach of or
constitute a default under any term or provision of the articles of
incorporation or bylaws of the Purchaser.
(D) No Conflicts. The execution and delivery of this Agreement
by the Purchaser, and the consummation of the transactions contemplated
hereby and thereby, will not conflict with or violate any agreement,
law, rule, regulation, ordinance, order, writ, injunction, judgment or
decree applicable to or binding on the Purchaser.
(E) No Consents or Approvals. The Purchaser is not required to
submit any notice, report or other filing with any governmental or
regulatory authority or
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instrumentality, and no waiver, consent, approval or authorization of
any governmental or regulatory authority or any other person is
required to be obtained or made by the Purchaser, in connection with
the execution, delivery or performance of this Agreement or the
consummation of the transactions contemplated hereby, other than (i)
the filing of the Registration Statement with the Securities and
Exchange Commission (the "SEC"), (ii) the filing of a certificate of
merger for EQK Realty Investors I ("EQK") and ART Newco, L.L.C. with
the Secretary of State of the Commonwealth of Massachusetts, (iii) the
filing of a Schedule 13D with the SEC, and (iv) any such other filings,
consents or approvals that may be necessary or required solely by
reason of EQK's (as opposed to any other third party's) participation
in the transactions contemplated hereby.
(F) Purchase Price. The Purchaser has authorized the issuance
of the number of shares of Preferred Stock necessary to consummate the
transactions contemplated by this Agreement. The Preferred Stock will,
upon consummation of the transactions contemplated by this Agreement,
be owned of record and beneficially by the Selling Shareholder free and
clear of any Encumbrances. There are no Encumbrances whatsoever, fixed
or contingent, that directly or indirectly, (i) provide for the sale,
pledge or other transfer or disposition of any of the Preferred Stock,
any interest therein or any rights with respect thereto, or relate to
the voting, disposition, exercise, conversion or control of the
Preferred Stock or (ii) obligate the Purchaser to grant, offer or enter
into any of the foregoing. Except as provided for herein and except for
any restrictions on transfer under applicable state and federal
securities laws, upon the Closing, the Selling Shareholder will acquire
valid and indefeasible title to the Preferred Stock free and clear of
any Encumbrance.
(G) Commission. Purchaser hereby indemnifies the Selling
Shareholder against any liability for a broker's commission, finder's
fee or other fee of any description incurred by the Purchaser with
respect to any transaction contemplated by this Agreement.
(H) Disclosure. No representation or warranty by the Purchaser
in this Agreement nor any certificate, schedule, statement, document or
instrument furnished or to be furnished to the Selling Shareholder
pursuant hereto, or in connection with the negotiation, execution or
performance of this Agreement, contains or will contain any untrue
statement of a material fact or, subject to any applicable
qualifications contained in such certificate, schedule, statement,
document or instrument, omits or will omit to state a material fact
necessary in order to make any statement herein or therein not
misleading in light of the circumstances under which they were made.
(I) Registration and Listing of the Preferred Stock. Following
the execution of this Agreement by the Selling Shareholder, Purchaser
will promptly take such actions as are necessary and within its control
to cause the Preferred Stock to become (i) registered under the
Securities Act pursuant to the Registration Statement, and (ii) listed,
and thereafter to continue to be listed, for trading on the New York
Stock Exchange or another national securities exchange, including,
without limitation, the Nasdaq Stock Market (such securities exchange,
the "Securities Exchange").
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ARTICLE III
ADDITIONAL AGREEMENTS OF THE PARTIES
Section 3.1. TRANSFER TAXES. The Purchaser will pay all transfer,
federal, state or local taxes, if any, payable in connection with the transfer
of the Shares pursuant to this Agreement, and the Selling Shareholder will pay
all transfer, federal, state or local taxes, if any, payable in connection with
the transfer or issuance of the Preferred Stock pursuant to this Agreement.
Section 3.2. CONFIDENTIALITY. The Purchaser and the Selling
Shareholder, and each of their respective officers, directors, representatives
and agents ("Representatives"), if any, agree to treat all information exchanged
by the parties hereto and their Representatives in connection with the
transactions contemplated herein, as confidential, including all notes,
analyses, compilations, studies or other documents, whether prepared by any
party hereto or others, which contain or otherwise reflect such information
(collectively, the "Confidential Information"). Except as required by law, the
Purchaser and the Selling Shareholder agree that they shall not disclose any
Confidential Information to third parties without the express written consent of
each other party hereto. The obligations of the Purchaser and the Selling
Shareholder hereunder will continue in full force and effect until Closing, and,
if this Agreement is terminated, will remain in full force and effect. The
Purchaser and the Selling Shareholder further agree that they (and their
Representatives) will not use any of the Confidential Information for any reason
or purpose other than to evaluate the transactions contemplated by this
Agreement.
The term "Confidential Information" does not include information which
(i) is or becomes generally available to the public other than as a result of
disclosure in breach of this Section 3.2 by any party hereto or any
Representative, (ii) was available to any party hereto on a non-confidential
basis prior to its disclosure to such party by any other party hereto or their
respective Representatives, or (iii) was or is disclosed to any party hereto on
a non-confidential basis from a source other than any other party hereto or
their respective Representatives, provided that such source was or is, to the
best of such party's knowledge, at the time of such disclosure, not prohibited
from transmitting the information to such party or such party's Representatives
by a contractual, legal or fiduciary obligation.
Section 3.3. REGULATORY AND OTHER AUTHORIZATIONS. Each of the parties
hereto will use its commercially reasonable efforts to obtain the
authorizations, consents, orders and approvals of governmental authorities that
may be or become necessary for the performance of his, her or its obligations
pursuant to this Agreement and the consummation of the transactions contemplated
hereby and will cooperate fully with each other in promptly seeking to obtain
such authorizations, consents, orders and approvals as may be necessary for the
performance of their respective obligations pursuant to this Agreement. The
parties hereto will not take any action that will have the effect of delaying,
impairing or impeding the receipt of any required approvals and will use
reasonable efforts to secure such approvals as promptly as possible.
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Section 3.4. SATISFACTION OF CONDITIONS. Each of the parties hereto
will use his, her or its reasonable efforts to satisfy at or prior to the
Closing Date each of the conditions to the other party's obligations set forth
in Article IV hereof.
Section 3.5. FURTHER ASSURANCES. At any time and from time to time
after the Closing, the parties agree to cooperate with each other, to execute
and deliver such other documents, instruments of transfer or assignment, files,
books and records and do all such further acts and things as may be reasonably
required to carry out the transactions contemplated by this Agreement.
Section 3.6. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations, warranties and covenants made pursuant to or in connection with
this Agreement shall survive (A) the execution and delivery of this Agreement,
(B) any investigation at any time made by or on behalf of the parties hereto and
(C) for a period of one year thereafter, the Closing. If the Closing does not
take place, each representation, warranty and covenant shall terminate upon the
termination of this Agreement pursuant to Section 5.1.
Section 3.7. COVENANT NOT TO PURCHASE ADDITIONAL COMMON STOCK. In
consideration for Purchaser's purchase of Shares from Selling Shareholder,
Selling Shareholder hereby covenants that it will not purchase or otherwise
acquire any additional shares of Common Stock for a period commencing on the
date hereof and ending 42 months after the Closing Date.
Section 3.8. RESTRICTIONS ON TRANSFER OF PREFERRED STOCK. Selling
Shareholder understands that it may be deemed to be an "affiliate" of EQK within
the meaning of Rule 145 ("Rule 145") promulgated under the Securities Act and
the applicable regulations promulgated by the Securities and Exchange Commission
(the "SEC"), although nothing contained herein should be construed as an
admission of such fact. Selling Shareholder further understands that, if it were
in fact an affiliate under the Securities Act, its ability to sell, assign or
transfer the Preferred Stock may be restricted unless such transaction is made
in conformity with the provisions of Rule 145. Selling Shareholder understands
that the Preferred Stock may only be sold (i) pursuant to the Registration
Statement or another registration statement with respect to the Preferred Stock
which has been declared effective by the SEC, (ii) in transactions which comply
with the provisions of Rule 145, or (iii) in a transaction that is exempt from
registration under the Securities Act. Purchaser hereby covenants to maintain
the effectiveness of the Registration Statement for a period of two years after
the Closing Date and to provide the Selling Shareholder or the Securities
Exchange, as applicable, upon the request of the Selling Shareholder, with a
resale prospectus relating to the Preferred Stock during such two-year period.
Purchaser further covenants that, during such two year period, Purchaser shall
use all reasonable efforts to make all filings of the nature specified in
paragraph (c)(1) of Rule 144 of the Securities Act.
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ARTICLE IV
CONDITIONS TO CLOSING
Section 4.1. CONDITIONS TO OBLIGATION OF THE SELLING SHAREHOLDER TO
CLOSE. The obligation of the Selling Shareholder to consummate the Closing is
subject to the fulfillment, at or prior to the Closing, of each of the following
conditions, unless waived in writing by the Selling Shareholder:
(A) Regulatory and Other Authorizations. All authorizations,
consents, approvals and orders of, and notices to, governmental
authorities or instrumentalities necessary for the performance by the
Selling Shareholder of this Agreement and the consummation by the
Selling Shareholder of the sale of the Shares and the other
transactions contemplated by this Agreement shall have been obtained or
made, and there shall be in effect no preliminary or permanent
injunction or other order of a court or governmental or regulatory
agency of competent jurisdiction directing that the transactions
contemplated herein, or any of them, not be consummated (collectively,
an "Order").
(B) Representations and Warranties. The representations and
warranties of the Purchaser contained in this Agreement shall be true
and correct in all material respects at the date hereof, and at and as
of the Closing Date, as if they were made at and as of the Closing
Date, except for any representations and warranties made or given as of
a specific date, which shall be true and correct in all material
respects as of such date; and the Purchaser shall have performed or
complied in all material respects with all obligations, agreements and
covenants required by this Agreement to be performed or complied with
by it on or prior to the Closing Date.
(C) Certificate. The Purchaser shall have delivered to the
Selling Shareholder a certificate of the Purchaser, dated the Closing
Date, to the effect that the condition specified in paragraph (B) of
this Section 4.1 has been satisfied.
(D) Transfer of Preferred Stock. All legal instruments and
other documents required for the Purchaser to effect the transfer of
the Preferred Stock to the Selling Shareholder free and clear of all
liens and encumbrances shall have been duly executed.
(E) Approval of Merger Agreement. The Board of Trustees and
shareholders of EQK shall have approved the Amended and Restated
Agreement and Plan of Merger dated as of August 25, 1998 by and among
the Purchaser, ART Newco, L.L.C., Basic Capital Management, Inc., EQK
and the Selling Shareholder (the "Merger Agreement") and the
transactions contemplated thereby, including without limitation the
amendment and restatement of EQK's Amended and Restated Declaration of
Trust and the execution of the new advisory agreement, identified in
the Merger Agreement, between EQK and Basic Capital Management, Inc.
(F) Effectiveness of Registration Statements. The Registration
Statement shall have been declared effective by the SEC and no stop
order suspending effectiveness of the Registration Statement shall have
been issued by the SEC on or prior to the Closing Date.
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In addition, the Purchaser's registration statement on Form S-4 (the
"Form S-4 Registration Statement") with respect to the issuance of
Preferred Shares in connection with the Merger Agreement shall have
been declared effective by the SEC and no stop order suspending the
effectiveness of the Form S-4 Registration Statement shall have been
issued by the SEC on or prior to the Closing Date.
(G) Sale of Harrisburg East Mall and Acquisition of Oak Tree
Village. EQK shall have (i) sold the real property known as the
"Harrisburg East Mall," paid off the related mortgages thereon and
distributed the net proceeds of such sale to the EQK shareholders,
including the Selling Shareholder, and (ii) acquired from the
Purchaser, upon terms and conditions mutually acceptable to EQK and the
Purchaser, that certain retail shopping center known as the "Oak Tree
Village" and located in Lubbock, Texas.
Section 4.2. CONDITIONS TO OBLIGATION OF THE PURCHASER TO CLOSE. The
obligation of the Purchaser to consummate the Closing is subject to the
fulfillment, prior to or at the Closing, of each of the following conditions,
unless waived in writing by the Purchaser:
(A) Regulatory and Other Authorizations. All authorizations,
consents, approvals and orders of, and notices to, governmental
authorities or instrumentalities necessary for the performance by the
Purchaser of this Agreement and the consummation by the Purchaser of
the purchase of the Shares and the other transactions contemplated
hereunder shall have been obtained or made and there shall be no Order
in effect.
(B) Representations and Warranties. The representations and
warranties of the Selling Shareholder contained in this Agreement shall
be true and correct in all material respects at the date hereof, and at
and as of the Closing Date, as if they were made at and as of the
Closing Date, except for any representations and warranties made or
given as of a specified date, which shall be true and correct in all
material respects as of such date.
(C) Certificate. The Selling Shareholder shall have delivered
to the Purchaser a certificate of the Selling Shareholder, dated the
Closing Date, to the effect that the condition specified in paragraph
(B) of this Section 4.2 has been satisfied.
(D) Transfer of Shares. All legal instruments and other
documents required for the Selling Shareholder to effect the transfer
of the Shares owned by the Selling Shareholder to the Purchaser free
and clear of all liens and encumbrances shall have been duly executed.
(E) Approval of Merger Agreement. The Board of Trustees and
shareholders of EQK shall have approved the Merger Agreement and the
transactions contemplated thereby (collectively, the "Merger-Related
Transactions"), including, without limitation, the amendment and
restatement of EQK's Amended and Restated Declaration of Trust, the
execution of a new advisory agreement between EQK and Basic Capital
Management, Inc., and the election of the new Board of Trustees. The
Selling Shareholder hereby agrees to vote in favor of the
Merger-Related Transactions.
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(F) Effectiveness of Registration Statements. The Registration
Statement and the Form S-4 Registration Statement shall each have been
declared effective by the SEC and no stop order suspending
effectiveness of the Registration Statement or the Form S-4
Registration Statement shall have been issued by the SEC on or prior to
the Closing Date.
(G) Sale of Harrisburg East Mall and Acquisition of Oak Tree
Village. EQK shall have (i) sold the real property known as the
"Harrisburg East Mall," paid off the related mortgages thereon and
distributed the net proceeds of such sale to the EQK shareholders,
including the Selling Shareholder, and (ii) acquired from the
Purchaser, upon terms and conditions mutually acceptable to EQK and the
Purchaser, that certain retail shopping center known as the "Oak Tree
Village" and located in Lubbock, Texas.
ARTICLE V
TERMINATION
Section 5.1. TERMINATION. Notwithstanding anything in this Agreement to
the contrary, this Agreement may be terminated only (A) by the mutual written
consent of the Purchaser and the Selling Shareholder, (B) by either the
Purchaser, on the one hand, or the Selling Shareholder, on the other hand, at
any time, in the event of a breach by the other party which breach remains
uncured for ten (10) calendar days after notice in writing of such breach is
delivered to the breaching party, or (C) by either the Purchaser, on the one
hand, or the Selling Shareholder, on the other hand, by written notice to the
other if the Closing has not occurred prior to December 15, 1998, unless the
Closing has not occurred solely by reason of the failure of the party seeking to
terminate this Agreement to perform or observe any of the covenants or
agreements hereof to be performed by such party prior thereto.
Section 5.2. EFFECT OF TERMINATION. In the event of the termination of
this Agreement pursuant to Section 5.1, this Agreement, other than with respect
to the parties' respective indemnification obligations under Sections 2.1(F) and
2.2(G), the parties' obligations under Section 3.2, and the parties' obligations
under Sections 7.1 and 7.2, will thereafter become void and have no effect, and
there will be no liability on the part of any party or its stockholders or
directors or officers in respect thereof, except that nothing herein will
relieve any party from liability for any breach of this Agreement occurring
prior to such termination.
ARTICLE VI
INDEMNIFICATION
Section 6.1. INDEMNIFICATION BY THE SELLING SHAREHOLDER. Subject to the
terms of this Article VI, the Selling Shareholder shall indemnify and hold
harmless the Purchaser and each of its officers, directors, employees and
controlling persons from any liability, damage, loss, penalty, cost or expense,
including reasonable attorneys' fees and costs of investigating and defending
lawsuits, complaints, actions or other pending or threatened litigation, after
receiving full credit for the amount of any payments actually received as a
result of insurance coverage ("Costs") arising from or
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attributable to any breach of or inaccuracy in any representation, warranty,
covenant or agreement made by the Selling Shareholder herein; provided, however,
the Purchaser shall give the Selling Shareholder written notice as soon as
practicable after the discovery thereof of any suspected breach of or inaccuracy
in any representation, warranty, covenant or agreement made by the Selling
Shareholder, and if the Selling Shareholder is able to cure such breach or
inaccuracy within ten days after receipt of such written notice, without any
Costs being incurred by the Purchaser, the indemnification provisions set forth
in this Section 6.1 shall not apply with respect to such breach or inaccuracy.
Section 6.2. THE SELLING SHAREHOLDER'S LIMITATION ON LIABILITY.
Notwithstanding any other provision in this Agreement, the obligation of the
Selling Shareholder to indemnify the Purchaser and its officers, directors,
employees and controlling persons pursuant to Section 6.1 against any Costs
sustained by reason of any claim made under Section 6.1 shall be limited to
claims as to which the Purchaser has given to the Selling Shareholder written
notice thereof; provided, however, that any delay or failure to notify the
Selling Shareholder of any claim shall not relieve the Selling Shareholder from
any liability except to the extent that the Selling Shareholder demonstrates
that the defense of such action is materially prejudiced by such delay or
failure to notify.
Section 6.3. INDEMNIFICATION BY THE PURCHASER. The Purchaser shall
indemnify and hold harmless the Selling Shareholder and each of its officers,
directors, employees and controlling persons, if any, from any Costs arising
from or attributable to any breach of or inaccuracy in any representation,
warranty, covenant or agreement made by the Purchaser herein; provided, however,
the Selling Shareholder shall give the Purchaser written notice as soon as
practicable after the discovery thereof of any suspected breach of or inaccuracy
in any representation, warranty, covenant or agreement made by the Purchaser,
and if the Purchaser is able to cure such breach or inaccuracy within ten days
after receipt of such written notice, without any Costs being incurred by the
Selling Shareholder, the indemnification provisions set forth in this Section
6.3 shall not apply with respect to such breach or inaccuracy.
Section 6.4. THE PURCHASER'S LIMITATION ON LIABILITY. Notwithstanding
any other provision in this Agreement, the obligation of the Purchaser to
indemnify the Selling Shareholder pursuant to Section 6.3 against any Costs
sustained by reason of any claim made under Section 6.3 shall be limited to
claims as to which the Selling Shareholder has given to the Purchaser written
notice thereof; provided, however, that any delay or failure to notify the
Purchaser of any claim shall not relieve the Purchaser from any liability except
to the extent that the Purchaser demonstrates that the defense of such action is
materially prejudiced by such delay or failure to notify.
Section 6.5. PROCEDURES FOR THIRD PARTY CLAIMS. Within twenty (20) days
after the assertion by any third party of any claim against any indemnitee that,
in the judgment of such indemnitee, may result in the incurrence by such
indemnitee of Costs for which such indemnitee would be entitled to
indemnification pursuant to this Agreement, such indemnitee shall deliver to the
indemnitor a written notice (the "Indemnity Notice") describing in reasonable
detail such claim; provided, however, that any delay or failure to notify the
indemnitor of any claim shall not relieve it from any liability except to the
extent that the indemnitor demonstrates that the defense of such action is
materially prejudiced by such delay or failure to notify. In the case of third
party claims, the indemnitor shall, within ten (10) days of receipt of notice of
such claim, notify the indemnitee
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of its intention to assume the defense of such claim. If the indemnitor shall
assume the defense of the claim, the indemnitor shall have the right and
obligation (A) to conduct any proceedings or negotiations in connection
therewith and necessary or appropriate to defend the indemnitee, (B) to take all
other required steps or proceedings to settle or defend any such claims, and (C)
to employ counsel to contest any such claim or liability in the name of the
indemnitee or otherwise. If defendants in any action include the indemnitee and
the indemnitor, and the indemnitee shall have been advised by its counsel in
writing that there may be legal defenses available to the indemnitee which are
different from or in addition to those available to the indemnitor, the
indemnitee shall have the right to employ its own counsel in such action, and,
in such event, the fees and expenses of such counsel shall be borne by the
indemnitor. If the indemnitor shall not assume the defense of any such claim or
litigation resulting therefrom, the indemnitee may defend against any such claim
or litigation in such manner as it may deem appropriate and the indemnitee may
settle such claim or litigation on such terms as it may deem appropriate;
provided, however, that any such settlement shall be subject to the prior
consent of the indemnitor, which consent shall not be unreasonably withheld.
Within ten (10) days after final determination with respect to a third party
claim, the indemnitor shall pay to the indemnitee the Costs incurred by
indemnitee in respect of which indemnity may be sought pursuant to this Section
6.5. In the case of a non-third party claim, payment of damages incurred by the
indemnitee shall be made by the indemnitor within ten (10) days after receipt of
the Indemnity Notice by indemnitor.
A final determination of a disputed claim as to damages shall be (A) a
judgment of any court determining the validity of a disputed claim, if no appeal
is pending from such judgment or if the time to appeal therefrom has elapsed,
(B) an award of any arbitration determining the validity of such disputed claim,
if there is not pending any motion to set aside such award or if the time within
which to move to set such award aside has elapsed, (C) a written agreement as to
the termination of the dispute with respect to such claim signed by all of the
parties thereto or their attorneys, (D) a written acknowledgment of the
indemnitor that he, she or it no longer disputes the validity of such claim, or
(E) such other evidence of final determination of a disputed claim as shall be
acceptable to the parties.
ARTICLE VII
MISCELLANEOUS
Section 7.1. EXPENSES. Unless otherwise indicated, the parties will
bear their own respective expenses (including, but not limited to, all
compensation and expenses of counsel, financial advisers, finders, brokers,
consultants, actuaries and independent accountants) incurred in connection with
the negotiation, preparation and execution of this Agreement and consummation of
the transactions contemplated hereby.
Section 7.2. PUBLIC DISCLOSURE. Each of the parties to this Agreement
hereby agrees with each other party that, except as may be required to comply
with the requirements of applicable law, no press release or similar public
announcement or communication will be made or caused to be made concerning the
execution or performance of this Agreement unless specifically approved in
advance by all parties.
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Section 7.3. GOVERNING LAW. This Agreement will be deemed to be made in
and in all respects will be interpreted, construed and governed by and in
accordance with the internal, substantive law of the State of Georgia without
reference to principles of conflicts of laws.
Section 7.4. NOTICES. Any notices and other communications required or
permitted under this Agreement shall be in writing and shall be deemed to have
been duly given when delivered to the appropriate party at the following
addresses:
(i) if to the Purchaser:
American Realty Trust, Inc.
c/o Basic Capital Management, Inc.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
(ii) if to the Selling Shareholder:
Lend Lease Portfolio Management, Inc.
▇▇▇▇-▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: General Counsel
or at such other place or places or to such other persons as shall be designated
in writing by the parties to this Agreement in the manner herein provided.
Section 7.5. SECTION HEADINGS. The section headings contained in this
Agreement are for reference purposes only and will not in any way affect
interpretation of this Agreement.
Section 7.6. COUNTERPARTS. This Agreement may be executed in
counterparts, each of which, when so executed and delivered, shall be deemed to
be an original and all of which, when taken together, shall constitute one and
the same agreement. Signatures on this Agreement may be communicated by
facsimile transmission and shall be binding upon the parties transmitting the
same by facsimile transmission. Counterparts with original signatures shall be
provided to the other party within five (5) days of the applicable facsimile
transmission, provided, however, that the failure to provide the original
counterpart shall have no effect on the validity or the binding nature of the
Agreement.
Section 7.7. ASSIGNMENT. Except as provided in the following sentence,
this Agreement may not be assigned, by operation of law or otherwise. The
Purchaser may assign its rights under this Agreement in whole or in part to a
wholly owned subsidiary of the Purchaser that will take title to the Shares and
will assume all obligations of the Purchaser hereunder; provided, however, in
such event, the Purchaser will remain fully liable for the fulfillment of all
such obligations. This Agreement will be binding upon and inure to the benefit
of successors and assigns of the parties hereto.
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Section 7.8. MISCELLANEOUS. This Agreement (A) constitutes the entire
agreement and supersedes all prior agreements and understandings, both written
and oral, among the parties, with respect to the subject matter hereof; and (B)
is not intended to confer upon any other persons any rights or remedies
hereunder. If any provision in this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions will not in any way be affected or impaired thereby.
Section 7.9. SPECIFIC PERFORMANCE. The parties hereto acknowledge and
agree that the breach of the provisions of this Agreement by the Selling
Shareholder or the Purchaser could not be adequately compensated with monetary
damages, and the parties hereto agree, accordingly, that injunctive relief and
specific performance shall be appropriate remedies to enforce the provisions of
this Agreement and waive any claim or defense that there is an adequate remedy
at law for such breach; provided, however, that nothing herein shall limit the
remedies available and all remedies herein are in addition to any remedies
available at law or otherwise.
Section 7.10. AMENDMENTS AND WAIVERS. No amendment of any provision of
this Agreement shall be valid unless the same shall be in writing and signed by
each party to this Agreement. No waiver by any party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
SELLING SHAREHOLDER:
LEND LEASE PORTFOLIO MANAGEMENT, INC.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
----------------------------------
Title: Vice President
---------------------------------
PURCHASER:
AMERICAN REALTY TRUST, INC.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Title: Senior Vice President
---------------------------------
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