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EXHIBIT 2.2
GUARANTY AGREEMENT
This Guaranty Agreement (this "Agreement") is executed as of September
25, 2000 by GLENBOROUGH REALTY TRUST INCORPORATED ("Guarantor") in favor of ▇▇▇▇
GARDENS, LLC ("▇▇▇▇ Gardens").
WHEREAS, ▇▇▇▇ Gardens and one or more affiliates (the "Affiliates") of
Guarantor have entered into a Purchase Agreement of even date herewith (the
"Purchase Agreement") pursuant to which ▇▇▇▇ Gardens and one or more of its
affiliates has agreed to purchase and the Affiliates have agreed to sell certain
residential real property (collectively, the "Properties"), subject to the terms
and conditions set forth in the Purchase Agreement; and
WHEREAS, contemporaneously with the execution and delivery of the
Purchase Agreement, Guarantor and ▇▇▇▇ Gardens have entered into that certain
Stock Purchase Agreement (the "Stock Purchase Agreement") pursuant to which,
among other things, Guarantor has agreed to purchase and ▇▇▇▇ Gardens has agreed
to sell certain shares of the equity securities of Guarantor, subject to the
terms and conditions set forth therein; and
NOW, THEREFORE, in consideration of the premises hereof, the parties
have agreed as follows:
SECTION 1. GUARANTY.
1.1 Guaranty of Obligations. Guarantor hereby irrevocably and
unconditionally guaranties to ▇▇▇▇ Gardens (and its successors
and assigns) the prompt performance of each and all of the
obligations of the Affiliates arising under (a) Section 4(e) of
the Purchase Agreement regarding the Transferors' obligations to
cure monetary liens, and (b) Section 6(c) of the Purchase
Agreement regarding the delivery of the closing documents to
Buyer (the "Guaranteed Obligations") as and when the same shall
be due. Guarantor irrevocably and unconditionally covenants and
agrees that it is liable, jointly and severally with the
Affiliates, and each of them, for the primary performance by the
Affiliates, and each of them, of the Guaranteed Obligations
respective obligations arising under or related to the Purchase
Agreement.
1.2 Nature of Guaranty. The obligations of Guarantor set forth herein
are an irrevocable, absolute and continuing guaranty of
performance, are joint and several and are not a guaranty of
collection. The obligations of Guarantor hereunder may not be
revoked by Guarantor and shall continue to be effective
notwithstanding any attempted revocation by Guarantor. The fact
that at any time, or from time to time, the Guaranteed
Obligations may be increased or reduced, shall not release or
discharge the obligations of Guarantor to ▇▇▇▇ Gardens hereunder.
The allegations of Guarantor hereunder may be enforced by ▇▇▇▇
Gardens and its assigns.
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1.3 No Set Off. The Guaranteed Obligations and the liabilities and
obligations of Guarantor to ▇▇▇▇ Gardens hereunder, shall not be
reduced, discharged or released because or by reason of any
existing or future offset, claim or defense of the Affiliates, or
any other party, against ▇▇▇▇ Gardens or against payment or
performance of the Guaranteed Obligations or any of them, whether
such offset, claim or defense arises in connection with the
Guaranteed Obligations (or the transactions creating the
Guaranteed Obligations) or otherwise.
1.4 Payment by Guarantor, Limitation of Liability. If on the Closing
Date (as defined in the Purchase Agreement), the Affiliates, or
any of them, shall fail or be in breach of their respective
Guaranteed Obligations to be performed prior to, at or in
connection with the Closing (as defined in the Purchase
Agreement) and ▇▇▇▇ Gardens shall be prepared to perform those of
its obligations required to be performed at or in connection with
the Closing, Guarantor shall, immediately upon demand by ▇▇▇▇
Gardens, and without presentment, protest, notice of protest,
notice of nonpayment, notice of intention to accelerate, or any
other notice whatsoever, pay to ▇▇▇▇ Gardens, by wire transfer of
immediately available funds, the sum of $15 million in full
satisfaction of Guarantor's obligations under Section 1.1 above.
Notwithstanding the foregoing, in the event that the Closing (as
defined in the Purchase Agreement) shall occur, Guarantor shall
be released from and with respect to all of the Guaranteed
Obligations.
1.5 Obligations of Guarantor After the Closing. Notwithstanding the
consummation of the transactions contemplated at the Closing,
unless the parties to the Purchase Agreement or the Equity
Exchange Agreement shall otherwise specifically agree (and
reference this Section 1.5 with regard thereto), the Guarantor
hereby irrevocably and unconditionally guarantees to ▇▇▇▇ Gardens
(and its successors and assigns) the prompt performance of each
and all of the obligations (the "Purchase Agreement Obligations")
of the Affiliates arising under or related to the Purchase
Agreement and the transactions contemplated therein as and when
the same shall be due, including any Purchase Agreement
Obligations arising from and after the Closing Date, and such
guarantee shall survive the Closing and this Agreement shall
remain in full force and effect with respect thereto.
1.6 No Duty to Pursue Others. It shall not be necessary for ▇▇▇▇
Gardens (and Guarantor hereby waives any rights which Guarantor
may have to require ▇▇▇▇ Gardens) in order to enforce the payment
provided for herein by Guarantor, first to (i) institute suit or
exhaust its remedies against any of the Affiliates or others
liable with respect to: the Purchase Agreement Obligations or the
Guaranteed Obligations or any other person, (ii) enforce or
exhaust any of ▇▇▇▇ Gardens' rights or remedies against any
collateral which shall be given to secure the Purchase Agreement
Obligations or the Guaranteed Obligations, (iii) enforce ▇▇▇▇
Gardens' rights or remedies available to ▇▇▇▇ Gardens against any
other guarantors of the Purchase Agreement Obligations or
Guaranteed Obligations, (iv) join the Affiliates or any others
liable on or with respect to the Purchase Agreement Obligations
or the Guaranteed Obligations in any actions seeking to
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enforce this Agreement, or (v) resort to any other means of
obtaining payment or performance of or with respect to the
Purchase Agreement Obligations or the Guaranteed Obligations.
1.7 No Mitigation Required. ▇▇▇▇ Gardens shall not be required to
mitigate damages or take any other action to reduce, collect or
enforce the Guaranteed Obligations or the Purchase Agreement
Obligations.
1.8 Waivers. Guarantor agrees to the provisions of the Purchase
Agreement and hereby waives notice of (i) any amendment or
extension thereof or of any of the Purchase Agreement Obligations
or the Guaranteed Obligations, (ii) the execution and delivery by
the Affiliates, or any of them, and ▇▇▇▇ Gardens of any other
agreement relating to the Purchase Agreement, the Purchase
Agreement Obligations or the Guaranteed Obligations, whether or
not resulting in an increase of the Purchase Agreement
Obligations or the Guaranteed Obligations, (iii) the occurrence
of any breach by the Affiliates, or any of them, under the
Purchase Agreement or (iv) any assignment by ▇▇▇▇ Gardens of its
rights under this Agreement or with respect to the Purchase
Agreement, or any of them.
SECTION 2. ALTERNATIVE TRANSACTIONS.
2.1 No Solicitation of Alternative Transactions. Unless and until
the Purchase Agreement shall have been terminated in accordance
with its terms, Guarantor, for itself and on behalf of the
Affiliates and each of their respective subsidiaries and
affiliates, agrees to refrain, directly and indirectly, and to
cause their respective officers, directors, employees, agents and
representatives (including, without limitation, any investment
banker, attorney or accountant retained by any of them) to
refrain from soliciting or encouraging any person or entity with
respect to any transaction (an "Alternative Transaction"), the
consummation of which would make impossible or delay the Closing
or the consummation of the transactions contemplated thereat.
2.2 Unsolicited Proposals. Notwithstanding the provisions of
Section 2.1 above, Guarantor may and may permit the Affiliates
to furnish information to or enter into discussions or
negotiations with any person that makes an unsolicited bona fide
Acquisition Proposal to acquire all or substantially all of the
Properties, whether by merger, purchase of partnership interest
or assets or otherwise, if the Board of Directors of the
Guarantor determines in good faith that the Acquisition Proposal,
if consummated, could result in an Alternative Transaction more
favorable to the Guarantor's stockholders from a financial point
of view than the consummation of the transactions contemplated
pursuant to the Purchase Agreement (any such Proposal being
referred to herein as a "Superior Proposal"). For purposes of
this Agreement, the term "Acquisition Proposal" shall mean any
inquiry or the making or implementation of any proposal or offer
with respect to a merger, acquisition, or similar transaction
involving the direct or indirect purchase of the Properties. For
the purpose of the first sentence of this Section 2.2,
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"substantially all" shall mean, with respect to any Proposal, a
Proposal to engage in an Alternative Transaction, the
consummation of which would have the effect of requiring the
Guarantor or the Affiliates to assign, transfer or convey,
directly or indirectly, whether by merger, purchase of
partnership interests or assets or otherwise, to a third party
not controlled by or under common control with the Guarantor,
Properties that are the subject of the Purchase Agreement and
which represent, in the aggregate, not less than eighty-five
percent (85%) of the purchase price to be paid by ▇▇▇▇ Gardens
with respect to all of the Properties. If the Board of Directors
is prepared to accept a Superior Proposal, then Guarantor shall
have the right to terminate this Agreement by delivering 48 hours
written notice that the Board of Directors is prepared to accept
the Superior Proposal, and not later than 1:00 p.m. Dallas, Texas
time, on the first business day commencing after the passage of
such 48 hour notice period, paying to Guarantor by wire transfer
of immediately available funds, the sum of $15 million.
2.3 Merger or Consolidation. Subject to the remainder of this Section
2.3, nothing in this Agreement, the Stock Purchase Agreement or
in the Purchase Agreement, shall be deemed to prevent in any
manner the taking of any action by Guarantor with respect to any
merger, consolidation or sale of all or substantially all of the
assets of Guarantor or of the Affiliates or any of them, in the
event that the Board of Directors of Guarantor shall determine,
based upon advice of outside legal counsel, that the failure to
take such action would be inconsistent with such Board of
Directors' fiduciary duties to Guarantor's stockholders under
applicable law. In the event that any action taken by Guarantor,
the Affiliates, or the Board of Directors of Guarantor pursuant
to the preceding sentence, shall be inconsistent with, make
impossible or delay the consummation of the transactions
contemplated at the Closing, the Guarantor shall have the right
to terminate this Agreement by giving ▇▇▇▇ Gardens 48 hours
written notice that the Board of Directors is prepared to take
such action, and not later than 1.00 p.m. Dallas, Texas time
on the first business day commencing after the passage of such 48
hour notice period, paying to ▇▇▇▇ Gardens by wire transfer of
immediately available funds, the sum of $15 million.
2.4 Release of Obligations. Receipt by Guarantor of the sum of $15
million pursuant to the provisions of Section 2.2 or 2.3 above,
shall constitute ▇▇▇▇ Gardens' sole and exclusive remedy for any
termination of this Agreement pursuant to Sections 2.2 or 2.3
above. In the event that Guarantor shall pay to ▇▇▇▇ Gardens the
sum of $15 million pursuant to Section 2.2 or 2.3 above, each of
the respective parties to the Stock Purchase Agreement shall be
deemed released from their respective obligations thereunder; and
each of the Stock Purchase Agreement shall be deemed of no
further force and effect. Notwithstanding any termination of this
Agreement pursuant to Section 2.2 or 2.3 above, the obligations
of the Affiliates provided for in Section 13(a) of the Purchase
Agreement to return the ▇▇▇▇▇▇▇ money of ▇▇▇▇ Gardens under the
Purchase Agreement shall survive and each of the conditions
precedent to such obligations shall be deemed satisfied. Each of
the parties hereto shall execute and deliver such further
instruments, documents or
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agreements, including such affidavits or certificates as may be
required by the Title Company (as defined in the Purchase
Agreement) with respect to the return of the ▇▇▇▇▇▇▇ Money to
▇▇▇▇ Gardens as shall be reasonably required to give effect to
the provisions of this Section 2.4.
Section 3. MISCELLANEOUS.
3.1 Representations and Warranties of Guarantor. The representations
and warranties of ▇▇▇▇ Gardens set forth in Section 2.1 of the
Stock Purchase Agreement are hereby incorporated by reference and
made a part hereof.
3.2 Representations and Warranties of ▇▇▇▇ Gardens. The
representations and warranties of Guarantor set forth in Section
2.2 of the Stock Purchase Agreement are hereby incorporated by
reference and made a part hereof.
3.3 Miscellaneous. The provisions of Article 7 of the Stock Purchase
Agreement is hereby incorporated try reference in its entirety
and made a part hereof.
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IN WITNESS WHEREOF, the parties have executed this Guaranty Agreement as
of the day and date first above written.
GLENBOROUGH REALTY TRUST
INCORPORATED
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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(Printed) Name:
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Title:
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▇▇▇▇ GARDENS, LLC
By:
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(Printed) Name:
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Title:
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