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Exhibit 10.39
EXECUTION COPY
CORPORATE PROPERTY INVESTORS
Three ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ Plaza
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇▇▇
PURCHASE AND EXCHANGE AGREEMENT
November 15, 1996
To the Purchaser Described Below
Dear Sirs:
Pursuant to and on the terms of this Purchase and Exchange
Agreement, Corporate Property Investors, a voluntary association of the type
commonly known as a Massachusetts business trust ("CPI"), agrees to sell, and
State Street Bank and Trust Company, a Massachusetts banking corporation, not
individually but solely in its capacity as Trustee of the Telephone Real Estate
Equity Trust (the "Purchaser") agrees to buy, certain voting Series A Common
Shares of Beneficial Interest, par value $1 per share, in CPI, together with
related beneficial interests in the shares of common stock, par value $.10 per
share, of Corporate Realty Consultants, Inc., a Delaware corporation ("CRC"),
held in the CRC Trust (as hereinafter defined), in exchange for Purchaser's
sale, assignment, transfer and conveyance to CPI or one of its affiliates of the
Partnership Interests (as hereinafter defined).
SECTION 1. Definitions. As used herein the following terms have the
following meanings:
"Assignment Agreements" means each of the assignment agreements
dated as of the Closing Date, substantially in the form of Exhibit B,
effecting Purchaser's sale, assignment, transfer and conveyance of the
Partnership Interests to CPI or one of its affiliates.
"Bellwether I" shall have the meaning set forth in the definition of
the term "Partnership".
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"Bellwether II" shall have the meaning set forth in the definition
of the term "Partnership".
"Braintree" shall have the meaning set forth in the definition of
the term "Partnership".
"Braintree Completion Date" means the later of the date upon which
(a) the "punch list" items (as such term is customarily used in the real
estate industry) shall have been completed with respect to the Braintree
Expansion and the general partner of Braintree shall have received final
lien waivers from all general contractors with respect thereto and (b) at
least 95% of the retail space in the Braintree Expansion (based ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇) is leased, occupied and open for
business and Braintree shall have received final use and occupancy
certificates from each of the tenants thereof.
"Braintree Expansion" means the renovation, expansion and leasing of
Braintree's South Shore Plaza retail center located in Braintree,
Massachusetts, which, among other things, contemplates the addition of
204,000 square feet of gross leasable area thereto and the addition of a
two-level, 1,100 space parking structure.
"Braintree Expansion Costs" shall have the meaning set forth in
Section 4.1.7.
"Braintree Notice of Disagreement" shall have the meaning set forth
in Section 4.1.7.
"Braintree Statement" shall have the meaning set forth in Section
4.1.7.
"business day" means a day other than a Saturday, Sunday or other
day on which banks in the State of New York or the Commonwealth of
Massachusetts are authorized to be closed.
"Closing" shall have the meaning set forth in Section 2.2.
"Closing Date" means November 15, 1996.
"Code" means the Internal Revenue Code of 1986, as amended to date.
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"Commission" means the Securities and Exchange Commission or any
successor federal agency charged with responsibility for enforcing the
United States federal securities laws.
"Common Share" means any shares of beneficial interest of any class
of CPI that are designated Common Shares pursuant to the Declaration of
Trust as of the date of this Purchase and Exchange Agreement, and shares
of any class or classes authorized after the date of this Purchase and
Exchange Agreement or resulting from the reclassification of any of the
foregoing which have no preference in respect of dividends or amounts
payable in the event of any voluntary or involuntary liquidation,
dissolution or winding-up of CPI and which are not subject to redemption
by CPI (except as the Trustees of CPI may deem necessary so that CPI may
qualify as a Real Estate Investment Trust in accordance with the terms of
Section 5.12 of the Declaration of Trust).
"CPI" shall have the meaning set forth in the preamble, and shall
include any successor thereto.
"CRC" shall have the meaning set forth in the preamble, and shall
include any successor thereto.
"CRC Shares" means shares of Common Stock, par value $.10 per share,
of CRC.
"CRC Trust" means the Trust created by the CRC Trust Agreement,
under which the depositing holders of Common Shares have ratable
beneficial interests in the CRC Shares deposited in the CRC Trust.
"CRC Trust Agreement" means the Trust Agreement dated as of October
30, 1979, among the shareholders of CPI at that date, CRC and the Bank of
Montreal Trust Company, as successor Trustee.
"Declaration of Trust" means the Second Amended and Restated
Declaration of Trust executed as of March 16, 1995, as amended, of CPI.
"EMI Cambridge" shall have the meaning set forth in the definition
of the term "Partnership".
"EMI Santa ▇▇▇▇" shall have the meaning set forth in the definition
of the term "Partnership".
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"EMI Two" shall have the meaning set forth in the definition of the
term "Partnership".
"Encumbrance" means any security interest, lien, charge, claim or
other encumbrance or restriction of any other nature or kind, other than
those granted by this Purchase and Exchange Agreement, the Declaration of
Trust or the CRC Trust Agreement.
"Evaluation Material" shall have the meaning set forth in Section
2.4.
"Hotel" shall have the meaning set forth in the definition of the
term "Partnership".
"▇▇▇▇▇▇▇▇▇▇" shall have the meaning set forth in the definition of
the term "Partnership".
"1934 Act" means the Securities Exchange Act of 1934 and the rules
and regulations of the Commission thereunder, all as in effect from time
to time.
"Partnership" means each of Bellwether Properties I, Limited
Partnership, a Massachusetts limited partnership ("Bellwether I"),
Bellwether Properties II, Limited Partnership, a Massachusetts limited
partnership ("Bellwether II"), Braintree Property Associates, L.P., a
Massachusetts limited partnership ("Braintree"), EMI Cambridge Limited
Partnership, a Massachusetts limited partnership ("EMI Cambridge"), EMI
Santa ▇▇▇▇ Limited Partnership, a California limited partnership ("EMI
Santa ▇▇▇▇"), EMI Two Limited Partnership, a Connecticut limited
partnership ("EMI Two"), ▇▇▇▇▇▇▇▇▇▇ Associates, L.P., a New York limited
Partnership ("▇▇▇▇▇▇▇▇▇▇") and Cambridge Hotel Associates, a Pennsylvania
limited partnership ("Hotel").
"Partnership Interests" shall mean the interests (including the
rights and obligations related thereto) of State Street Bank and Trust
Company, in its capacity as Trustee of the Telephone Real Estate Equity
Trust, that are set forth in those agreements and other documents listed
in Schedule 6.2.1.
"Preference Shares" means any shares of beneficial interest of any
class or series of CPI that are designated Preference Shares pursuant to
the Declaration of Trust.
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"Purchaser" shall have the meaning set forth in the preamble.
"Purchase Price" means $131.32 per Share, which amount includes the
portion thereof ($.44 as of December 31, 1995, as determined by ▇▇▇▇▇▇▇▇
Associates, Inc.) per Common Share which represents the fair value of the
beneficial interest which the certificate for such Common Share represents
(at the ratio of 1/10th of a CRC Share per Common Share) in the CRC Shares
held in the CRC Trust.
"Real Estate Investment Trust" or "REIT" means "real estate
investment trust" as defined in Section 856 of the Code, or such other
entity as may, under the corresponding section or sections of any United
States income tax law at the time in effect, be entitled to substantially
the same treatment in respect of liability for Federal income taxes as a
"real estate investment trust", as so defined, is entitled pursuant to
Sections 856 through 860 of the Code, as in effect on the date of this
Purchase and Exchange Agreement.
"REOC" shall have the meaning set forth in Section 4.1.6.
"Release" means a release dated as of the Closing Date,
substantially in the form of Exhibit C hereto.
"Securities Act" means the Securities Act of 1933 and the rules and
regulations of the Commission thereunder, all as in effect from time to
time.
"Series A Shares" means voting Series A Common Shares of Beneficial
Interest, par value $1, in CPI.
"Shares" means the Common Shares (with their related beneficial
interests in CRC Shares held in the CRC Trust) purchased by the Purchaser
from CPI pursuant to Section 2.
"Statement" shall have the meaning set forth in Section 2.3.1.
"Total Working Capital Value" means the sum of the Working Capital
Values for each Partnership other than Hotel.
"Trust Company" means State Street Bank and Trust Company, a
Massachusetts banking corporation.
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"Undistributed Cash Flow" of a Partnership means the amount of such
Partnership's adjusted undistributed cash flow, computed in accordance
with Schedule 1 hereto.
"Working Capital Value" for any Partnership (other than Hotel)
means, as of the Closing Date, the sum of (i) the Purchaser's
proportionate share of (a) the cash and cash equivalents, short-term
investments (excluding, in the case of Braintree, the portion thereof
attributable to unexpended capital contributions made to Braintree by its
partners in connection with the Braintree Expansion, receivables (net of
allowances for doubtful collections and exclusive of any "straight-line"
rent receivable) and prepaid taxes, prepaid utilities and other prepaid
expenses of such Partnership minus (b) the liabilities of such Partnership
(including any unpaid tenant inducements payable by such Partnership, but
excluding the principal amount of mortgage liabilities and other long-term
indebtedness), and such Partnership's Undistributed Cash Flow, all of the
items referred to in clauses (a) and (b) computed (to the extent
applicable) in accordance with generally accepted accounting principals
applied consistently with the most recently prepared audited financial
statements of such Partnership, plus (ii) the Purchaser's proportionate
share of such Partnership's Undistributed Cash Flow. The method of
computation of Working Capital Value for each Partnership is more
particularly described on Schedule 1 hereto, in a manner consistent with
the definition thereof.
SECTION 2. Sale and Purchase of Shares; Adjustments.
SECTION 2.1. Sale and Purchase of Shares; Sale and Assignment of
Partnership Interests; Delivery of Shares. Subject to the terms and
conditions of and in reliance upon the representations and warranties set
forth in this Purchase and Exchange Agreement, (a) CPI agrees to sell to
the Purchaser, and the Purchaser agrees to purchase from CPI, on the
Closing Date, at a price per Share equal to the Purchase Price, 5,764,544
Shares (and, in connection therewith, CRC agrees to sell to the Purchaser,
and the Purchaser agrees to purchase from CRC, 576,454.4 CRC Shares, which
CRC Shares the Purchaser and CRC agree shall be issued directly to the
trustee of the CRC Trust and deposited in the CRC Trust to be held
thereafter for the ratable
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benefit of the holders of Common Shares pursuant to the terms of the CRC
Trust Agreement), (b) the Purchaser agrees to sell, assign, transfer and
convey to CPI or one or more of its affiliates all of the Purchaser's
right, title and interest in and to the Partnership Interests, (c) CPI
agrees to deliver to Purchaser such Common Shares or an amount of cash in
lieu thereof as CPI may be required to deliver pursuant to Section 2.3.3
hereof and (d) Purchaser agrees to deliver to CPI such Common Shares as
Purchaser may be required to deliver pursuant to Section 2.3.3 hereof.
SECTION 2.2. Closings. The purchase by and the sale of Shares to the
Purchaser and the sale, assignment, transfer and conveyance of the
Partnership Interests by the Purchaser to CPI (the "Closing") shall take
place on the Closing Date at the offices of Cravath, Swaine & ▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or at such other place as may be
mutually agreed by the parties.
At least five business days prior to the Closing Date, the Purchaser
may, by written notice to CPI, specify one or more beneficiaries of the
Purchaser as the entities to make the purchase or purchases of Shares
hereunder. Except as the context otherwise requires, each such entity
shall be deemed the "Purchaser" for all purposes of this Purchase and
Exchange Agreement to the same extent as if it had executed and delivered
a copy of this Purchase and Exchange Agreement, provided that the
Purchaser referenced in the first paragraph of this Purchase and Exchange
Agreement shall remain liable for all of its obligations hereunder.
At least five business days prior to the Closing Date, CPI may, by
written notice to the Purchaser, specify one or more affiliates of CPI as
the entities to acquire all or any part of the Partnership Interests
pursuant hereto, provided that CPI shall remain liable for all of its
obligations hereunder.
At the Closing, (a) CPI will deliver to the Purchaser one
certificate, registered in the name of the Purchaser, representing the
number of Shares set forth in Section 2.1 (unless the Purchaser has at
least two business days prior to the Closing Date specified in writing to
CPI a different name or names and/or different number of certificates
representing the same aggregate number of such Shares) and (b) CRC shall
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deliver to the trustee of the CRC Trust one certificate, registered in the
name of such trustee, representing the number of CRC Shares to be
deposited in the CRC Trust in accordance with Section 2.1, each against
the sale, assignment, transfer and conveyance by the Purchaser to CPI or
its specified affiliates of the Partnership Interests in each Partnership
pursuant to one or more Assignment Agreements, all as may be reasonably
requested by CPI. The Certificate representing the Shares that is
delivered to the Purchaser shall include the following descriptive legend:
"The holder of the shares represented by this certificate also
holds a beneficial interest in shares of stock of Corporate Realty
Consultants, Inc. ("CRC") held in a trust under a Trust Agreement
dated as of October 30, 1979, among shareholders of the Trust, CRC
and the Trustee thereunder."
SECTION 2.3. Adjustments.
SECTION 2.3.1. Working Capital Value Statement. Within 45 days
after the Closing Date, CPI shall prepare and deliver to Purchaser a
statement (the "Statement") setting forth CPI's determination of the
Total Working Capital Value, the Working Capital Value of each
Partnership and the elements and calculation thereof, all as set
forth in Schedule 1 hereto and consistent with the definitions
related thereto, along with a Certificate of the Chief Financial
Officer, Chief Accounting Officer or Controller of CPI to the effect
that the Statement was prepared substantially in accordance with the
requirements therefor as provided herein. From the Closing Date
through the date which is 30 days after receipt by the Purchaser of
the Statement, CPI shall provide the Purchaser (and its
representatives) with reasonable access to any books, records,
working papers or other information reasonably necessary or useful
in the preparation or calculation of the Statement or any Notice of
Disagreement (as defined hereafter). The Statement shall become
final and binding upon both parties hereto on the 31st day following
delivery thereof to the Purchaser unless the Purchaser delivers
written Notice of Disagreement (a "Notice of Disagreement") with the
Statement to
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CPI prior to such date. Any Notice of Disagreement shall specify in
reasonable detail the nature of any disagreement so asserted and
shall relate solely to the preparation of the Statement and the
calculation of the Working Capital Values and the Total Working
Capital Value.
SECTION 2.3.2. Disputes. If a Notice of Disagreement is
received by CPI in a timely manner pursuant to Section 2.3.1, then
the Total Working Capital Value set forth in the Statement, as
adjusted pursuant hereto, shall become final and binding upon the
parties hereto on the earlier of (i) the date Purchaser and CPI
resolve, in writing, any differences they may have with respect to
any matters specified in the Notice of Disagreement or (ii) the date
any disputed matters are finally resolved in writing by the
Arbitrator. During the 30-day period following the delivery of the
Notice of Disagreement, CPI and the Purchaser shall seek in good
faith to resolve, in writing, any differences which they may have
with respect to any matter specified in the Notice of Disagreement
and each shall provide the other (including any of their respective
representatives) with reasonable access to any books, records,
working papers or other information reasonably necessary or useful
in the preparation or calculation of the Statement, any Notice of
Disagreement, the Working Capital Values and the Total Working
Capital Value or otherwise with respect to any thereof. At the end
of such 30-day period, if there has been no resolution of the
matters specified in the Notice of Disagreement, then CPI and the
Purchaser shall submit to an arbitrator (the "Arbitrator") for
review and resolution any and all matters (and only such matters)
arising under this Section which remain in dispute. The Arbitrator
shall be ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ L.L.P., or if such firm is unable or
unwilling to act, such other nationally recognized independent
public accounting firm as shall be agreed upon, in writing, by CPI
and the Purchaser. The Arbitrator shall render a decision resolving
the matters submitted to the Arbitrator within 30 days following
submission thereto. The costs of any arbitration (including the fees
of the Arbitrator) shall be borne 50% by CPI and 50% by the
Purchaser. Except as specified above, each
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of CPI and the Purchaser shall bear their own costs and expenses
incurred in connection with any arbitration.
SECTION 2.3.3. Adjustment Mechanics. Within 7 days after the
date that the Total Working Capital Value set forth in the Statement
(as adjusted according to the procedures set forth in Section 2.3)
becomes final and binding on the parties: (a) if the Total Working
Capital Value is a positive number, then the number of Shares to be
sold to, and purchased by, the Purchaser hereunder shall be
increased by an amount equal to (i) the Total Working Capital Value
(reduced by any amount paid pursuant to the proviso below) divided
by (ii) the Purchase Price, and CPI shall deliver to the Purchaser a
certificate, registered in the name of the Purchaser (or such other
name as may be designated by the Purchaser pursuant to Section 2.2)
representing such number of Shares (and, in connection therewith,
CRC agrees to deliver to the Purchaser a number of CRC Shares equal
to 10% of such number of Shares, which CRC Shares the Purchaser and
CRC agree shall be issued directly to the trustee of the CRC Trust
and deposited in the CRC Trust to be held thereafter for the ratable
benefit of the holders of Common Shares pursuant to the terms of the
CRC Trust Agreement); provided, however, that the Purchaser may
elect, at its option, to receive up to $10,000,000 of the Total
Working Capital Value in cash in lieu of all or any portion of the
Shares otherwise deliverable pursuant to this Section 2.3.3(a), or
(b) if the Total Working Capital Value is a negative number,
then the number of Shares sold to, and purchased by, the Purchaser
hereunder shall be reduced by an amount equal to (i) the absolute
value of the Total Working Capital Value divided by (ii) the
Purchase Price, and the Purchaser shall deliver to CPI such number
of Shares (and, in connection therewith, CPI and CRC shall cause a
number of CRC Shares equal to 10% of such number of Shares to be
withdrawn from the CRC Trust and delivered to CRC). In connection
with any delivery of Shares by the Purchaser pursuant to this
Section 2.3.3(b), the Purchaser shall deliver to CPI the certificate
or certificates delivered pursuant to Section 2.2 hereof (together
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with an undated stock power executed in blank) and, upon receipt
thereof, CPI shall deliver to the Purchaser one certificate,
registered in the name of the Purchaser (or such other name as may
be designated by the Purchaser pursuant to Section 2.2) representing
5,764,544 Shares less the number of Shares returned to CPI pursuant
to this Section 2.3.3(b).
SECTION 2.4. Evaluation Material. CPI has delivered to the Purchaser
its Annual Report for the year 1995, its Proxy Statement for the 1996
Annual Meeting of its shareholders and its Six Month Report for the six
months ended June 30, 1996 (collectively called the "Evaluation
Material").
SECTION 3. Conditions.
SECTION 3.1. Conditions to Purchaser's Obligations. The obligations
of the Purchaser to purchase the Shares and sell, assign, transfer and
convey the Partnership Interests on the Closing Date shall be subject to
the following conditions at the Closing Date:
(a) The Purchaser shall have received a certificate of the President
or a Vice-President of CPI dated the Closing Date to the effect that (A)
the representations and warranties of CPI contained in Section 6 of this
Purchase and Exchange Agreement are true and correct in all material
respects as of such date as if made on and as of such date and (B) the
covenants, agreements and conditions that CPI was required to perform or
comply with have been fulfilled in all material respects.
(b) The Purchaser's Committee of Special Investments shall have
approved the execution, delivery and performance by the Purchaser of this
Purchase and Exchange Agreement and the transactions contemplated hereby.
(c) The Purchaser shall have received (i) a Certificate of the
Secretary of CPI certifying as to the accuracy of the copies of the
Declaration of Trust of CPI, the CRC Trust Agreement and the Trustees
Regulations of CPI provided to the Purchaser and (ii) a Certificate of the
Secretary of CRC certifying as to the accuracy of the copies of the
Certificate of
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Incorporation and by-laws of CRC provided to the Purchaser.
(d) The general partner of each of the Partnerships shall have
consented in writing to the transfer by the Purchaser of its Partnership
Interest in such Partnership.
(e) The Purchaser shall have received from Cravath, Swaine & ▇▇▇▇▇,
counsel for CPI (who may rely with respect to any matters of Massachusetts
law involved therein on an opinion of Peabody & ▇▇▇▇▇▇, Massachusetts
counsel for CPI, a signed copy of which, addressed to Purchaser, shall
accompany such opinion of Cravath, Swaine & ▇▇▇▇▇), a favorable opinion
dated the Closing Date, and reasonably satisfactory in scope and form to
the Purchaser, to the effect set forth in Sections 6.1.1, 6.1.2, 6.1.3,
6.1.4(i), 6.1.7, 6.1.14, 6.1.15 (the first and second sentences thereof),
6.1.16(i), 6.1.19, 6.1.24 and 6.1.25 and, to the knowledge of such
counsel, after having made due inquiry, Sections 6.1.5, 6.1.6, 6.1.17,
6.1.18 and 6.1.23, and as to:
(i) the exemption from the registration and prospectus
delivery requirements of the Securities Act of the offer, sale and
delivery to the Purchaser of the Shares then to be purchased by the
Purchaser;
(ii) that CPI qualified as a REIT for its taxable year ended
December 31, 1995 and that its organization and method of operation
for its current taxable year should enable it to continue so to
qualify;
(iii) that CPI is not, and upon consummation of the
transactions contemplated hereby will not be, closely held within
the meaning of Section 856(h) of the Code, based upon information
furnished by CPI as to the relevant facts concerning the Purchaser
and the holders of CPI's outstanding Common Shares and its other
securities; and
(iv) the due execution and delivery by authorized
representatives of CPI and CRC, respectively, of all instruments and
documents signed by or on behalf of CPI and CRC and delivered to the
Purchaser on the Closing Date.
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(f) The purchase of and payment for the Shares to be purchased by
the Purchaser on the Closing Date on the terms and conditions herein
provided shall not violate any applicable law or governmental regulation
and the Purchaser shall have received such certificates or other evidence
as it may reasonably request to establish compliance with this condition.
(g) All proceedings in connection with the transactions contemplated
hereby, and all documents and instruments incident to such transactions,
shall be reasonably satisfactory in substance and form to the Purchaser,
and the Purchaser shall have received all such counterpart originals or
certified or other copies of such documents as the Purchaser may
reasonably request.
(h) From the date of this Purchase and Exchange Agreement to and
including the Closing Date there shall not have been any material adverse
change in the business, assets, operations, properties, prospects or
condition, financial or otherwise, of CPI and its subsidiaries taken as a
whole.
(i) The Purchaser shall have received from CPI an executed Release.
(j) The Purchaser shall have received from CPI an executed statement
in the form of Exhibit D attached hereto.
(k) The Purchaser shall have received a fairness opinion issued by
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated in form and substance satisfactory to
the Purchaser.
SECTION 3.2. Conditions to CPI's Obligations. The obligation of CPI
to sell the Shares and acquire the Partnership Interests on the Closing
Date shall be subject to the following conditions at the Closing Date:
(a) CPI shall have received a certificate of the President or a
Vice-President of the Purchaser dated the Closing Date to the effect that
(i) the representations and warranties of the Purchaser contained in
Section 6 of this Purchase and Exchange Agreement are true and correct in
all material respects as of such date as if made on and as of such date
and (ii) the covenants, agreements and conditions that the
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Purchaser was required to perform or comply with have been fulfilled in
all material respects.
(b) CPI shall have received a Certificate of the Secretary or an
Assistant Secretary of the Trust Company certifying as to the due
organization of the Trust Company and as to the accuracy of the copies of
the declaration of trust and other organizational documents of the
Purchaser provided to CPI.
(c) CPI shall have received from Paul, Hastings, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
LLP, counsel for the Purchaser (who may rely with respect to any matters
of Massachusetts law involved therein on an opinion of Massachusetts
counsel for the Purchaser, a signed copy of which, addressed to CPI, shall
accompany such opinion of Paul, Hastings, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP), a
favorable opinion dated the Closing Date and reasonably satisfactory in
scope and form to CPI, to the effect set forth in Sections 6.2.2, 6.2.3(i)
and 6.2.5, and to the knowledge of such counsel, after having made due
inquiry, Section 6.2.4, and as to:
(i) the exemption from the registration and prospectus
delivery requirements of the Securities Act of the sale, assignment,
transfer and conveyance to CPI of the Partnership Interests; and
(ii) the due execution and delivery by authorized
representatives of the Purchaser, respectively, of all instruments
and documents signed by or on behalf of the Purchaser and delivered
to CPI on the Closing Date.
(d) The acquisition by CPI of the Partnership Interests on the
Closing Date on the terms and conditions herein provided shall not violate
any applicable law or governmental regulation and CPI shall have received
such certificates or other evidence as it may reasonably request to
establish compliance with this condition.
(e) All proceedings in connection with the transactions contemplated
hereby, and all documents and instruments incident to such transactions,
shall be reasonably satisfactory in substance and form to CPI, and CPI
shall have received all such counterpart originals or certified or other
copies of such documents as CPI may reasonably request.
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(f) From the date of this Purchase and Exchange Agreement to and
including the Closing Date there shall not have been any material adverse
change in the business, assets, operations, properties, prospects or
condition, financial or otherwise, of the Partnerships, taken as a whole.
(g) Subject to Section 4.1.7, the Purchaser shall have paid to CPI
cash in an amount equal to 70% of the excess of (i) $166,077,257 over (ii)
the total amount of cash contributed by the partners of Braintree to
Braintree with respect to the Braintree Expansion as of the Closing Date
(consistent with the amount specified in Section 6.1.29), such amount to
be discounted at a rate of 5-3/8% per annum to give effect to CPI's good
faith projected funding schedule for the completion of such expansion set
forth in Schedule 6.1.29(b).
(h) Purchaser shall have delivered to CPI evidence reasonably
satisfactory to CPI of the delivery of the (i) notice to discuss to Fifth
and ▇▇▇▇ ▇▇▇▇▇▇ Investors Corporation with respect to the transfer of the
Purchaser's Partnership Interest in ▇▇▇▇▇▇▇▇▇▇ as required by Section 12.1
of the Agreement of Limited Partnership of ▇▇▇▇▇▇▇▇▇▇ Associates L.P., and
(ii) notice to Waterford Associates, L.P. as to the transfer of the
Purchaser's Partnership Interest in EMI Two (a general partner and limited
partner of Crystal Mall Associates Limited Partnership) as required by
Section 11.04 of the Amended and Restated Agreement and Certificate of
Limited Partnership of Crystal Mall Associates Limited Partnership.
(i) CPI shall have received the approval of its shareholders to the
transactions contemplated by this Purchase and Exchange Agreement.
(j) CPI shall have received from the Purchaser an executed Release.
(k) CPI shall have received an agreement executed by Waterford
Associates, L.P. pursuant to which such entity shall agree to contribute
$1,000 to the capital of Crystal Mall Associates Limited Partnership to
avoid the termination thereof pursuant to Section 708 of the Code and such
contribution shall have been made.
(l) CPI shall have received from Purchaser a duly executed
certificate of non-foreign status in the form presented by Treasury
Regulation ss. 1.1445-1(b)(2).
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SECTION 4. Covenants.
SECTION 4.1. CPI agrees with the Purchaser as follows:
SECTION 4.1.1 From the date of this Purchase and Exchange Agreement
through the Closing Date, CPI shall not issue any Common Shares or
Preference Shares by virtue of any reclassification, recapitalization,
split-up, subdivision, declaration of a stock dividend or otherwise,
except pursuant to plans, arrangements and agreements existing on the date
hereof.
SECTION 4.1.2. CPI has not, either by itself or through any agent on
its behalf, offered to sell any Common Shares, or solicited any offers to
buy Common Shares and will not so offer or solicit offers, so as thereby
to bring the issuance and sale of Shares pursuant to this Purchase and
Exchange Agreement or any other securities in violation of the Securities
Act, the Massachusetts Uniform Securities Act, the New Jersey Uniform
Securities Law or the New York State ▇▇▇▇▇▇ Act or any other state
securities or real estate syndication or similar laws.
SECTION 4.1.3. Until a class of CPI's equity securities has been
registered under Section 12 of the 1934 Act or CPI has become obligated to
file reports under Section 15(d) of the 1934 Act, CPI shall, within 120
days after the close of each fiscal year of CPI, furnish to the Purchaser
or any permitted transferee of the Shares, as long as it owns any Shares,
the following statements prepared in accordance with generally accepted
accounting principles consistently applied and reported upon by Ernst &
Young LLP or such other independent public accountants of recognized
standing as may be retained by CPI from time to time: (i) a balance sheet
of CPI as of the end of such fiscal year and (ii) statements of income,
cash flow and shareholders' equity for such fiscal year, in each case
setting forth in comparative form the corresponding figures for the
preceding fiscal year. Until a class of CPI's equity securities has been
registered under Section 12 of the 1934 Act or CPI has become obligated to
file reports under Section 15(d) of the 1934 Act, CPI shall, within 60
days after the close of each of
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the first three quarters of each fiscal year of CPI, furnish to the
Purchaser or any permitted transferee of the Shares as long as it owns any
Shares (1) a balance sheet of CPI as of the end of such quarter and (2)
statements of income, cash flow and shareholders' equity for the portion
of such fiscal year preceding the end of such quarter, in each case
setting forth in comparative form the corresponding figures for the
corresponding period of the preceding fiscal year.
SECTION 4.1.4. Until a class of CPI's equity securities has been
registered under Section 12 of the 1934 Act or CPI has become obligated to
file reports under Section 15(d) of the 1934 Act, CPI shall promptly
furnish to the Purchaser or any transferee of the Shares such other
information with respect to the finances, business, operations, affairs,
prospects, condition, properties and assets of CPI and CRC as from time to
time may be reasonably requested by the Purchaser or such transferee, it
being understood that CPI shall determine whether or not any such request
is reasonable, giving effect to all relevant circumstances.
SECTION 4.1.5. CPI will provide prior notice to the Purchaser of any
change in the business of CPI or of any other event (including any
issuance of securities of CPI, any acquisition or disposition or other
material corporate event) which CPI, based upon its knowledge of
Purchaser, believes would adversely affect the status under the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") of the
Purchaser's continued ownership of the Shares.
SECTION 4.1.6. From and after the Closing Date, CPI agrees (a) to
consider the effects of any material acquisition of property, any material
disposition of property or any material corporate reorganization upon
CPI's status as a "real estate operating company" (a "REOC"), as defined
in regulation 2910.3-101 of the United States Department of Labor
promulgated under ERISA, prior to entering into any such transaction, (b)
promptly to notify the Purchaser if CPI intends to consummate any such
transaction that CPI reasonably believes would create a substantial risk
that CPI no longer would qualify as a ▇▇▇▇,
▇▇
▇▇
(c) within 45 days after the end of any fiscal quarter of CPI with respect
to which CPI reasonably believes that all or any portion of its dividends
payable to Purchaser during such fiscal quarter would be treated as
unrelated business taxable income pursuant to Section 856(h)(3)(C) of the
Code, CPI shall deliver to the Purchaser a certificate of the Chief
Financial Officer, Chief Accounting Officer, Treasurer or Controller of
CPI setting forth such officer's reasonable estimate as to the amount of
any such income and (d) to deliver to the Purchaser a copy of the annual
opinion of counsel rendered to CPI with regard to CPI's status as a REOC
promptly upon receipt thereof and to cause any such opinion expressly to
permit the Purchaser's reliance thereon.
SECTION 4.1.7. Within 90 days after the Braintree Completion Date,
CPI shall prepare and deliver to the Purchaser a written statement (the
"Braintree Statement") setting forth the aggregate actual costs of the
Braintree Expansion (the "Braintree Expansion Costs"). From the Braintree
Completion Date through the date that is 30 days after the delivery of the
Braintree Statement, CPI shall provide the Purchaser (and its
representatives) with reasonable access to any books, records, working
papers or other information reasonably necessary or useful in the
preparation of the Braintree Statement. The Braintree Statement shall
become final and binding upon the parties hereto on the 31st day following
delivery thereof to the Purchaser unless the Purchaser delivers written
notice of disagreement (a "Braintree Notice of Disagreement") with the
Braintree Statement to CPI prior to such date. Any Notice of Disagreement
shall specify in reasonable detail the nature of any disagreement so
asserted and shall relate solely to the preparation of the Braintree
Statement and the calculation of the Braintree Expansion Costs. If a
Braintree Notice of Disagreement is received by CPI in a timely manner
pursuant to this Section 4.1.7, then the Braintree Expansion Costs set
forth in the Braintree Statement, as adjusted pursuant hereto, shall
become final and binding upon the parties hereto on the earlier of (a) the
date the Purchaser and CPI resolve, in writing, any differences they may
have with respect to any matters specified in the Braintree Notice of
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Disagreement and (b) the date any disputed matters are finally resolved in
writing by an arbitrator who shall be selected and compensated in the same
manner as described in Section 2.3.2 hereof; provided, however, that if
any audit by the Purchaser or an arbitrator pursuant to this Section 4.1.7
results in a final determination that the Braintree Expansion Costs were
less than 95% of the costs initially asserted by CPI in the Braintree
Statement, then CPI shall bear 100% of the costs of any such audit or
arbitration.
SECTION 4.1.8. Upon final determination of the Braintree Expansion
Costs in accordance with Section 4.1.7 hereof, CPI promptly shall
reimburse the Purchaser in cash for 70% of the amount, if any, by which
(a) the excess, if any, of $166,077,257 over the Braintree Expansion Costs
exceeds (b) $3,750,000.
SECTION 5. Transfer and Registration.
SECTION 5.1. Investment Statements. The Purchaser hereby represents and
warrants to CPI that (1) the Purchaser will purchase the Shares to be purchased
by it hereunder for investment and not with a view to their public sale or
distribution, nor with any present intention of selling or distributing any such
Shares or beneficial interests in CRC Shares, (2) the Purchaser will purchase
such Shares (a) for its own account (including any separate accounts maintained
by the Purchaser) or (b) for the account of one or more pension or trust funds
of which it either acts as sole trustee (or in any other fiduciary capacity)
with sole investment discretion or otherwise has the authority to make the
representations contained in this Section 5.1; and that in each case such Shares
(and any CRC Shares delivered to the Purchaser upon a termination of the CRC
Trust) will be acquired by it or such funds for the purpose of investment and
not with a view to, or for sale in connection with, the public distribution
thereof, nor with any present intention of publicly distributing the same (other
than in accordance with the registration provisions hereof) and (3) the
Purchaser has conducted its own due diligence investigation with respect to the
business and operations of CPI and CRC.
The Purchaser further represents and warrants to CPI (i) that the
Purchaser understands that such Shares
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(and any CRC Shares delivered to the Purchaser upon a termination of the CRC
Trust) have not been registered under the Securities Act by reason of their
issuance in a transaction exempt from the registration requirements of the
Securities Act pursuant to Section 4(2) thereof, (ii) that such Shares (and any
CRC Shares delivered to the Purchaser upon a termination of the CRC Trust) will
not be disposed of unless such disposition is either registered under the
Securities Act or is exempt from registration under that Act and (iii) that CPI
has no obligation to register such Shares (or CRC Shares so delivered to the
Purchaser) other than as set forth herein.
The Purchaser also understands and agrees that, if any CRC Shares shall be
delivered to the Purchaser upon a termination of the CRC Trust, the Purchaser
shall be bound by and entitled to the benefits of the provisions of Article
FOURTH of CRC's Certificate of Incorporation (a copy of which has been delivered
to the Purchaser) restricting transfers of, and providing rights to
registrations under the Securities Act of, any such CRC Shares. Each certificate
for CRC Shares so delivered will bear the legend prescribed by said Article
FOURTH.
SECTION 5.2. Permissible Transfers. Except in accordance with this Section
5, the Purchaser shall not effect any Transfer of Restricted Shares (both as
hereinafter defined) or of any interest or right to purchase the same other
than:
(a) a Transfer from the Purchaser to another person or persons
acting as nominee or nominees or trustee or trustees for the Purchaser or,
if the Purchaser is acting as nominee or trustee in making the purchases
hereunder, to a different nominee or trustee for the same person as the
Purchaser is so acting;
(b) a Transfer to the Purchaser from one or more other person or
persons acting as nominee or nominees or trustee or trustees for the
Purchaser;
(c) a Transfer by the Purchaser, if it is a trustee for a pension or
trust fund, in connection with the dissolution of such fund or in
connection with the Transfer or distribution of all or part of the assets
of such fund to another pension or trust fund for which the Purchaser or
another corporate trustee is acting as trustee; or
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(d) a Transfer by a pension or trust fund to another pension or
trust fund the investment discretion for which is exercised by the same
trustee or other fiduciary or director.
In the event that the Purchaser shall Transfer any Restricted Shares in a manner
contemplated by this Section 5.2, the Purchaser shall cause its transferee or
transferees to agree in writing to take and hold such securities subject to the
provisions of this Section 5.
SECTION 5.3. Certain Definitions. As used in this Section 5 (and elsewhere
herein with reference to this Section 5), the following terms shall have the
following respective meanings:
"Transfer" means, as to any Restricted Shares, any sale, assignment or
transfer of any of such Restricted Shares or of any interest therein or right to
subscribe therefor, whether or not such transfer would constitute a "sale" as
that term is defined in Section 2(3) of the Securities Act.
"Restricted Shares" means the Shares and any other securities issued as a
dividend or other distribution on or as a result of a subdivision, combination
or reclassification of any Shares, in each case, prior to the effective
registration of the Transfer thereof under the Securities Act.
"Registration Expenses" means the expenses so described in Section 5.8.
"Selling Expenses" means the expenses so described in Section 5.8.
"Underwriter" means each person who is or may be deemed to be an
"underwriter", as that term is defined in Section 2(11) of the Securities Act,
in respect of Restricted Shares which shall have been registered by CPI under
the Securities Act pursuant to any of the provisions of this Section 5.
"CPI Counsel" means Cravath, Swaine & ▇▇▇▇▇, or such other counsel as
shall at the time be serving as counsel to CPI.
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"Holder's Counsel" shall mean counsel for the holder of the Restricted
Shares in question, which counsel shall be reasonably satisfactory to CPI.
SECTION 5.4. Transfer Legends. Each certificate for Restricted Shares,
including each certificate issued to any transferee, shall be stamped or
otherwise imprinted with a legend (in addition to any legends otherwise required
by the Declaration of Trust of CPI) in substantially the following form (unless
otherwise permitted by the provisions of Section 5.5 or unless such Restricted
Shares shall have been effectively registered under the Securities Act and sold
or otherwise disposed of pursuant to the registration statement covering such
Restricted Shares):
"The shares represented by this certificate were issued pursuant to a Purchase
and Exchange Agreement dated as of November 15, 1996, between Corporate Property
Investors and the original purchaser of such shares (copies of which Agreement
are on file at the principal office of the issuer of such shares), have not been
registered under the Securities Act of 1933 and may not be sold, assigned or
transferred until the applicable provisions of Section 5 of such Agreement have
been complied with."
SECTION 5.5. Notice of Proposed Transfers; Requests for Registration. The
holder of any Restricted Shares by acceptance thereof agrees, prior to any
Transfer of any such Restricted Shares (other than a Transfer referred to in
paragraphs (a) to (d), inclusive, of Section 5.2), to give written notice to CPI
of such holder's intention to effect such Transfer and to comply in all other
respects with the provisions of this Section 5.5. Each notice shall describe in
detail the manner, method of disposition and circumstances of the proposed
Transfer and shall be accompanied by (i) a written opinion of Holder's Counsel
addressed to CPI stating whether in the opinion of such counsel such proposed
Transfer involves a transaction requiring registration of the Restricted Shares
under the Securities Act, and (ii) if in the opinion of such counsel
registration is required, a written request that CPI effect the registration of
such Restricted Shares under the Securities Act, subject to the limitations
contained in Section 5.10. Upon receipt by CPI of any such notice, opinion and,
if necessary, request, the following provisions shall apply:
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(a) Not more than 20 calendar days after such receipt, CPI Counsel
shall render an opinion to CPI as to whether such counsel concurs in the
opinion of Holder's Counsel. CPI Counsel shall furnish copies of such
opinion to CPI, Holder's Counsel and the shareholder giving such notice.
If CPI Counsel shall not render such opinion within such 20 calendar days,
its opinion shall be deemed to concur with the opinion of Holder's
Counsel.
(b) If in the opinion of Holder's Counsel and CPI Counsel the
proposed Transfer of Restricted Shares may be effected without
registration under the Securities Act, the shareholder shall thereupon be
entitled to transfer such Restricted Shares in accordance with the terms
of the notice delivered to CPI; provided, however, that the transferee of
such Restricted Shares shall agree in writing to take and hold such
securities subject to the applicable provisions of this Section 5. Each
certificate evidencing the Restricted Shares issued upon the Transfer (and
each certificate evidencing any untransferred balance of the original
Restricted Shares) shall bear the legend set forth in Section 5.4 unless
in the opinion of CPI Counsel such legend is not necessary.
(c) If in the opinion of both Holder's Counsel and CPI Counsel the
proposed Transfer of the Restricted Shares may not be effected without
registration under the Securities Act, CPI shall use its best efforts to
effect such registration, all in accordance with the request of the
prospective seller and the provisions and conditions of this Section 5.
Upon the effectiveness of such registration the Restricted Shares may be
transferred to the extent permitted by law and the legend thereon shall be
removed promptly upon delivery of certificates therefor to CPI.
(d) If in the opinion of Holder's Counsel the proposed Transfer of
Restricted Shares may be effected without registration under the
Securities Act, but CPI Counsel shall not concur in such opinion, Holder's
Counsel at their option may submit the question to the staff of the
Commission for an advisory opinion and, in the event that the
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staff of the Commission shall issue a "no action" letter or other
favorable advisory opinion which, in the view of CPI Counsel, shall be
conclusive with respect to the proposed Transfer, the shareholder shall be
entitled to transfer the Restricted Shares covered by such "no action"
letter or other favorable advisory opinion on the basis and in accordance
with the terms thereof; provided, however, that the transferee of such
Restricted Shares shall agree in writing to take and hold such securities
subject to the provisions of this Section 5.
The holder of Restricted Shares giving the notice under this Section 5.5
shall not Transfer such Restricted Shares unless and until (i) the favorable
opinions of Holder's Counsel and CPI Counsel referred to in paragraph (b) shall
have been given, (ii) registration of such Restricted Shares under the
Securities Act shall have become effective or (iii) the "no action" letter or
other favorable advisory opinion referred to in paragraph (d) shall have been
received and reviewed by CPI Counsel and, in addition, in the case of (i) and
(iii), the written agreement referred to in paragraphs (b) and (d),
respectively, shall have been made. Nothing contained in this Section 5 shall
preclude a holder of Restricted Shares from entering into an agreement to
Transfer the same if such agreement requires compliance with the conditions set
forth in this Section 5.5.
Section 5.6. Required Registration. Whenever CPI shall be required
pursuant to Section 5.5 to effect the registration of any Restricted Shares
under the Securities Act, CPI shall promptly give written notice of such
proposed registration to all holders of outstanding Restricted Shares and,
subject to the provisions of Section 5.10, shall use its best efforts to effect
the registration under the Securities Act of the Restricted Shares which CPI has
been requested to register pursuant to Section 5.5 and all other Restricted
Shares the holders of which shall have made written requests (stating the
proposed method of disposition of such securities by the prospective seller) to
CPI for the registration thereof within 20 calendar days after the mailing of
such written notice by CPI.
Section 5.7. Incidental Registration. If CPI shall propose to register any
Common Shares or other
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securities which are convertible into or exchangeable for Common Shares
(otherwise than pursuant to Section 5.6) on Form ▇-▇, ▇▇▇▇ ▇-▇, Form S-3, Form
S-11 or any similar form then in effect, it shall give written notice to all
holders of outstanding Restricted Shares of its intention and, upon the written
request of the holder of any such Restricted Shares given within 20 calendar
days after the mailing of such notice (which request shall state the proposed
method of disposition of such Restricted Shares), CPI shall use its best efforts
to cause all Restricted Shares the holders of which have requested registration
to be included under the proposed registration for disposition in accordance
with the proposed method thereof stated in the respective shareholder's request;
provided, however, that CPI may, in lieu of including any of or all such
Restricted Shares under the proposed registration, elect to effect a separate
registration thereof if its proposed registration relates to an underwritten
public offering and the Underwriters thereof object to the inclusion of any of
or all such Restricted Shares under such registration. In the event CPI shall
elect to effect a separate registration in accordance with the provisions of the
preceding sentence, CPI shall use its best efforts to cause such separate
registration to become effective not later than 90 days after the effectiveness
of its originally proposed registration. If CPI determines, prior to the
effectiveness of its originally proposed registration, not to proceed with such
registration, CPI shall have no further obligation under this Section 5.7 to
register any Restricted Shares.
SECTION 5.8. Registration Procedures and Expenses. If and whenever CPI is
required by the provisions of this Section 5 to use its best efforts to effect
the registration of any Restricted Shares under the Securities Act, CPI shall,
as expeditiously as possible,
(a) select underwriters, counsel and independent accountants for CPI
of recognized standing and competence in connection with such
registration;
(b) prepare and file (or cause to be prepared and filed) with the
Commission a registration statement with respect to such Restricted Shares
and use its best efforts to cause such registration statement to become
effective;
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(c) prepare and file (or cause to be prepared and filed) with the
Commission such amendments and supplements to such registration statement
as may be necessary to keep such registration statement effective for nine
months from the date of its effectiveness;
(d) furnish each seller such number of copies of the registration
statement and the prospectus forming a part of such registration statement
(including each preliminary prospectus) as such seller may reasonably
request;
(e) use its best efforts to register or qualify (or cause to be
registered or qualified) the securities covered by such registration
statement under the securities or blue sky laws of such jurisdictions as
each seller shall reasonably request (including, without limitation, the
New York State Real Estate Syndicate Act, the Massachusetts Uniform
Securities Act and the New Jersey Real Estate Syndicate Offerings Law),
and do any and all other acts and things which may be necessary or
advisable to enable such seller to consummate the disposition of the
Restricted Shares during the period provided in paragraph (c) of this
Section 5.8; provided, however, that in no event shall CPI be obligated to
qualify to do business in any jurisdiction where it is not now so
qualified, to take any action which would subject it to the service of
process in suits other than those arising out of the offer or sale of the
securities covered by such registration statement in any jurisdiction
where it is not now so subject or to conform the composition of its assets
at the time to the securities or blue sky laws of such jurisdiction;
(f) notify each seller of any Restricted Shares covered by such
registration statement, during the period when a prospectus relating
thereto is required to be delivered under the Securities Act, of the
happening of any event which causes the prospectus forming a part of such
registration statement to include an untrue statement of a material fact
or to omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of
the circumstances under which they were made, and at the request of any
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such seller prepare and furnish such seller a reasonable number of copies
of any supplement to or any amendment of such prospectus necessary so as
to render such prospectus, as amended or supplemented, in compliance with
the provisions of the Securities Act;
(g) engage a transfer agent and registrar for the Restricted Shares
at least by the effective date of the first registration of any of such
Restricted Shares;
(h) give serious consideration to the listing of the Restricted
Shares on an appropriate national securities exchange as promptly after
the effectiveness of such first registration as the Trustees of CPI deem
advisable;
(i) use its best efforts to procure a comfort letter or letters for
the benefit of the underwriters of such registration which substantially
conform with the requirements of the American Institute of Certified
Public Accountants' Statement of Auditing Standards No. 72 from
independent accounts for CPI of recognized standing and competence in
connection with such registration;
(j) use its best efforts to deliver customary closing opinions of
counsel for CPI in connection with such registration; and
(k) make customary representations and warranties to the
underwriters in connection with such registration.
All expenses (except for the compensation of regular employees of CPI,
which shall be paid in any event by CPI) incurred by CPI in complying with this
Section 5.8, including, without limitation, all registration and filing fees,
printing expenses, expenses of complying with securities or blue sky laws
(including fees and disbursements of counsel for CPI, counsel for the
Underwriters and counsel representing selling shareholders owning a majority of
the Restricted Shares being registered), all fees and disbursements of counsel
for CPI and any accountants' fees and expenses incident to or required by any
such registration are herein called "Registration Expenses", which shall be
borne as provided in Section 5.9. All
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underwriting fees and commissions to be incurred by any seller and all fees and
disbursements of counsel for any seller (other than counsel described in the
second parenthetical phrase in the preceding sentence) are herein called
"Selling Expenses", which shall be borne by the seller or sellers in such
proportions as they may agree upon; provided, however, that if such sellers
cannot otherwise agree, they shall bear such expenses (other than their
individual counsel fees which shall be borne by them directly) in direct
proportion to the number of Restricted Shares which they are having registered.
It shall be a condition precedent to the obligation of CPI to take any
action pursuant to this Section 5.8 for the benefit of a prospective seller of
Restricted Shares that (x) CPI shall have received an undertaking satisfactory
to it from such seller (A) to pay all Registration Expenses required to be paid
by such seller pursuant to Section 5.9 and all Selling Expenses to be incurred
by or for account of such seller and (B) to notify CPI of the happening of any
event within the knowledge of such seller which causes the prospectus referred
to in Section 5.8(d), as it may be amended or supplemented, to include an untrue
statement of a material fact or to omit to state any material fact required to
be stated therein or necessary to make the statements therein not misleading in
the light of the circumstances under which they were made, in each case with
respect to such seller, and (y) such seller shall furnish to CPI such
information regarding such seller, the Restricted Shares held by such seller and
the intended method of disposition of such Restricted Shares as CPI shall
reasonably request and as shall be required by applicable law in connection with
the action to be taken by CPI.
SECTION 5.9. Allocation of Expenses. If and whenever CPI is required by
the provisions of this Section 5 to use its best efforts to effect the
registration of any of its securities under the Securities Act, CPI shall pay
all Registration Expenses in connection with
(a) (i) the first two registrations of any Restricted Shares
consummated pursuant to Sections 5.5 and 5.6 and (ii) each of the third,
fourth, fifth and sixth registrations of any Restricted Shares consummated
pursuant to Sections 5.5 and 5.6, so long as each such
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registration is effected pursuant to a request or requests from a
prospective seller or sellers (including Purchaser) to register at least
5% of the outstanding Common Shares (including as "outstanding" for such
purpose any Common Shares issuable upon conversion of any outstanding
securities of CPI which may then be converted); provided, however, that if
the full number of Restricted Shares covered by a request pursuant to
Section 5.5 is not in fact sold pursuant to any such registration as a
result of the inclusion of any additional outstanding or newly issued
securities of CPI in such registration, such registration shall not be
counted for purposes of this clause (a) of Section 5.9; and
(b) each registration pursuant to Section 5.7.
The Registration Expenses in connection with any other registration of its
Restricted Shares which CPI shall be required to use its best efforts to effect
pursuant to any of the provisions of this Section 5, and all Selling Expenses in
connection with any registration of its Restricted Shares pursuant to this
Section 5, shall be borne by the seller or sellers of such Restricted Shares in
such proportions as they may agree upon; provided, however, that if such sellers
cannot otherwise agree, they shall bear such expenses (other than their
individual counsel fees which shall be borne by them directly) in direct
proportion to the number of Restricted Shares which they are having registered.
SECTION 5.10. Limitations on Obligations to Register and Right To Sell
Restricted Shares. Anything in this Section 5 to the contrary notwithstanding:
(a) if CPI has not theretofore registered an offering of Common
Shares or other securities which are convertible into or exchangeable for
Common Shares under the Securities Act, CPI shall not be obligated to
effect any registration under Section 5.5 or Section 5.6 unless it shall
have received a request or requests pursuant to Section 5.5 or Section 5.6
or any similar provision of any other agreement from a prospective seller
or sellers (including the Purchaser) to register at least 10% of the
outstanding Common Shares (including as "outstanding" for such purpose any
Common Shares issuable upon
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conversion of any outstanding securities of CPI which may then be
converted);
(b) if CPI has theretofore registered an offering of Common Shares
or other securities which are convertible into or exchangeable for Common
Shares under the Securities Act, CPI shall not be obligated to effect any
registration under Section 5.5 or Section 5.6 unless it shall have
received a request or requests from a prospective seller or sellers
(including Purchaser) to register Common Shares with a minimum value of
$15 million, based on the current value of shareholder's equity per Common
Share as of the December 31 immediately preceding the date of the first
such request. For purposes of the preceding sentence, the "current value
of shareholder's equity per Common Share" shall be deemed to be the
average of the daily closing prices for the thirty consecutive business
days commencing no more than forty-five business days before the day in
question. The closing price for each day shall be the last reported sale
price regular way or, in case no such reported sale takes place on such
day, the average of the last reported bid and asked prices regular way, in
either case on the principal national securities exchange on which the
Common Shares are admitted to trading or listed, or if not listed or
admitted to trading on any national securities exchange, the average of
highest reported bid and lowest reported asked prices on the
over-the-counter market on the day in question as reported by the National
Association of Securities Dealers, Inc. Automated Quotation System (or any
successor to such system), or a similarly generally accepted reporting
service, or if not so available, the "current value of shareholder's
equity per Common Share" shall be determined in an appraisal conducted by
▇▇▇▇▇▇▇▇ Associates, Inc. or such other independent person of recognized
standing as shall have been selected by the Trustees of CPI to determine
the net asset value of CPI;
(c) CPI shall not be required to register Restricted Shares under
the Securities Act pursuant to Section 5.5 or Section 5.6 more than once
in any consecutive 12-month period; provided, that if the full number of
Restricted Shares covered by a request pursuant to Section 5.5 is
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not in fact sold pursuant to any such registration as a result of the
inclusion of any additional outstanding or newly issued securities of CPI
in such registration, such registration shall not be counted for purposes
of this clause (c) of Section 5.10;
(d) CPI shall not be obligated to effect any registration pursuant
to Section 5.5 or Section 5.6 if such registration would require an audit
of CPI as of a date other than its fiscal year end unless the seller
requesting such registration agrees to bear responsibility for the
expenses of such an audit; and
(e) any registration statement prepared pursuant to this Section 5
shall be subject to such restrictions or limitations as may be required by
law to the sales price or sales method of the Restricted Shares included
in such registration statement; provided, however, that, if upon the
effectiveness of any such registration statement CPI will be engaged in a
primary distribution of its securities, CPI may require the prospective
seller or sellers whose Restricted Shares are included in such
registration statement to agree not to sell any such Restricted Shares for
a period of 90 days after the effective date of such registration
statement.
SECTION 5.11. Indemnification. In the event of any registration of
Restricted Shares pursuant to this Section 5, CPI shall indemnify and hold
harmless the Purchaser, its officers, directors or trustees and each seller of
Restricted Shares covered by a registration pursuant to this Section 5 and each
Underwriter of such Restricted Shares and each person, if any, who controls the
Purchaser or such seller or Underwriter within the meaning of the Securities
Act, against any losses, claims, damages or liabilities and any action in
respect thereof, joint or several, to which the Purchaser or such seller,
Underwriter or controlling person may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any registration statement
under which such securities were registered under the Securities Act, any
preliminary prospectus or final prospectus contained therein, or
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any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading; and
CPI will reimburse the Purchaser and each such seller, Underwriter and
controlling person for any legal or any other expenses reasonably incurred by
any of them in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that CPI will not be liable in
any such case to the extent that any such loss, claim, damage, liability or
action arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in such registration statement,
preliminary prospectus, prospectus or amendment or supplement thereto in
reliance upon and in conformity with information furnished to CPI in writing by
the Purchaser or such seller specifically for use therein, or by any Underwriter
distributing or selling the Restricted Shares of such seller, specifically for
use in the preparation thereof. This indemnity will be in addition to any
liability which CPI may otherwise have.
A party from whom indemnity may be sought pursuant to the provisions of
this Section 5.11 shall not be liable for such indemnity with respect to any
claim as to which indemnity is sought unless the party seeking such indemnity
shall have notified such indemnifying party in writing of the nature of such
claim promptly after such indemnified party becomes aware of the assertion
thereof; provided, however, that the failure so to notify such indemnifying
party shall not relieve such party from any liability which it may have to such
indemnified party otherwise than on account of the provisions of this Section
5.11 or if the failure to give such notice promptly shall not have been
prejudicial to such indemnifying party. Any indemnifying party may participate
(with counsel reasonably satisfactory to the indemnified party) in, and to the
extent that it shall wish, may direct (at its own expense and either
individually or jointly with any other indemnifying party), the defense of any
suit brought to enforce such claim; provided, that if a party seeking such
indemnity shall give notice to such indemnifying party that in its good faith
judgment an important general interest of such party is involved in such
proceeding, such party seeking indemnity shall have the right to control (at its
own expense), with the participation of the indemnifying party, the
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defense against or settlement of any such proceeding. If any indemnifying party
elects to assume the defense of any such suit and retains counsel satisfactory
to such indemnified party, such indemnifying party will not be liable to such
indemnified party for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense of such suit, other than
reasonable costs of investigation. No indemnifying party shall be liable for any
compromise or settlement of any such action effected without its consent.
Insofar as the foregoing indemnity agreement may permit indemnification
for liabilities under the Securities Act of any person who is a partner or
controlling person of an Underwriter within the meaning of Section 15 of the
Securities Act and who, at the effective date of the registration statement, is,
or is named to be, a Trustee of CPI, if a claim for indemnification for any such
liabilities (except payment for expenses incurred in the successful defense of
any action, suit or proceeding) is asserted by such a person, CPI will submit to
a court of competent jurisdiction (unless in the opinion of counsel for CPI the
matter has already been settled by controlling precedent) the question of
whether or not such indemnification is against public policy and unenforceable,
and such person and CPI will be governed by the final adjudication of such
issue.
It shall be a condition precedent to the obligation of CPI to take any
action pursuant to Section 5.8 that CPI shall have received an undertaking
satisfactory to it from each prospective seller of the Restricted Shares to be
registered under each registration pursuant to this Section 5, and from any
Underwriter of such Restricted Shares, to indemnify and hold harmless (in the
same manner and to the same extent as set forth in the preceding paragraphs of
this Section 5.11) CPI and each of its Trustees, officers and "control" persons
within the meaning of that term under the Securities Act, against any losses,
claims, damages or liabilities to which CPI or any such Trustee, officer or
control person may become subject under the Securities Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in such registration statement, any preliminary
prospectus or final prospectus
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contained therein, or any amendment or supplement thereto, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was in
reliance upon and in conformity with information furnished to CPI in writing by
such seller or Underwriter, as the case may be, specifically for use therein;
and such persons will reimburse CPI and each of its Trustees, officers and
control persons for any legal or other expenses reasonably incurred by any of
them in connection with investigating or defending any such loss, claim, damage,
liability or action. This indemnity will be in addition to any liability which
such seller or Underwriter may otherwise have.
SECTION 5.12. 1934 Act Registration. CPI shall cause at least one class of
its securities to be registered pursuant to Section 12 of the 1934 Act within 90
calendar days after the effective date of the first registration statement
pertaining to Common Shares or other securities which are convertible into or
exchangeable for Common Shares filed by CPI under the Securities Act or as
otherwise required by the 1934 Act and shall thereafter (i) cause such
securities to remain registered under such Section 12, (ii) file within the
requisite period of time all reports required to be filed by issuers having
securities registered pursuant to such Section 12, (iii) file such other
documents as may be required to be filed pursuant to Rule 144 under the
Securities Act as a condition to the sale of restricted or control securities
and (iv) provide such other information as may be required to be provided
pursuant to Rule 144A under the Securities Act as in effect on the date of this
Purchase and Exchange Agreement.
CPI covenants that, so long as the Purchaser shall hold any Common Shares
or CRC Shares, it will give to the Purchaser prompt written notice of (i) the
filing and effectiveness of any registration statement filed by CPI under the
1934 Act pursuant to the preceding paragraph, relating to any class of
securities of CPI or CRC, and (ii) the number of shares of such class of
securities outstanding at the time such registration statement becomes
effective. CPI also covenants that it will furnish to the Purchaser any
information which
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it may reasonably require for the purpose of completing Form 144, or any other
comparable form, in connection with any proposed sale by the Purchaser pursuant
to Rule 144 under the Securities Act, as then in effect, or any other comparable
rule, of any Common Share or any CRC Shares.
SECTION 5.13. More Favorable Rights. CPI agrees that if it shall hereafter
afford to any person or entity registration rights with respect to Restricted
Shares more favorable than those provided in this Section 5, it will forthwith
make such more favorable rights available to the Purchaser with respect to the
Restricted Shares held by the Purchaser.
SECTION 6. Representations and Warranties.
SECTION 6.1. Representations and Warranties of CPI. CPI (and, with respect
to the representations and warranties applicable to it, CRC) represents and
warrants to the Purchaser as follows:
SECTION 6.1.1. CPI is a voluntary association of the type commonly
known as a business trust duly organized and existing under the laws of
the Commonwealth of Massachusetts, has all the requisite power to own and
deal with real and other property, conduct its business as it is now
conducted and perform this Purchase and Exchange Agreement and is duly
qualified to do business and in good standing in Massachusetts and in each
jurisdiction, if any, in which the nature of the business transacted or
the character of the property owned by it therein makes such qualification
necessary. This Purchase and Exchange Agreement has been duly authorized,
executed and delivered by CPI and constitutes CPI's legal, valid and
binding agreement enforceable against CPI in accordance with its terms
(subject to any applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or other similar laws affecting creditors'
rights generally from time to time in effect and to general principles of
equity, regardless of whether such enforceability is considered in a
proceeding in equity or at law, and except as the enforceability of the
indemnification provisions hereof may be limited by federal securities law
and public policy considerations).
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SECTION 6.1.2. The Shares to be delivered to the Purchaser on the
Closing Date in accordance with this Purchase and Exchange Agreement will
have all the rights and privileges applicable to Series A Shares as
provided in the Declaration of Trust and, when so delivered against
payment therefor, will be duly authorized, validly issued, fully paid and
non-assessable, and the delivery to the Purchaser of certificates for the
Shares will pass to the Purchaser good and valid title thereto, free of
any Encumbrance.
SECTION 6.1.3. The Declaration of Trust and the Trustees'
Regulations of CPI, in the forms certified by the Secretary of CPI and
delivered to the Purchaser on the date hereof, are and at the Closing will
be in full force and effect.
SECTION 6.1.4. The execution and delivery by CPI of this Purchase
and Exchange Agreement, each Assignment Agreement, the Release and the
certificates representing the Shares and performance of this Purchase and
Exchange Agreement, each Assignment Agreement and the Release and
compliance with the provisions hereof and thereof do not and, in the case
of the Release and the Assignment Agreements, upon their execution and
delivery will not (i) violate any provision of any applicable law or of
the Declaration of Trust or Trustees' Regulations, (ii) conflict with or
result in any breach of any of the terms, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of any
Encumbrance upon any of the properties or assets of CPI pursuant to, any
material indenture, mortgage, deed of trust, bank loan or credit agreement
or other agreement or instrument to which CPI is a party or by which it or
any of its properties may be bound or (iii) require any consent under any
such material indenture, mortgage, deed of trust, bank loan or credit
agreement or other agreement or instrument other than consents (A) that
have been obtained or the procurement of which is a condition to the
closing of the transactions contemplated hereby or (B) the failure to
obtain of which is not reasonably likely to have a material adverse effect
upon the assets, business or operations of CPI, CRC and their subsidiaries
taken as a whole
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or the ability of CPI and CRC to consummate the transactions contemplated
hereby.
SECTION 6.1.5. CPI has not, either directly or through any agent,
offered any Common Shares or other securities for sale, or solicited any
orders to buy the same, or otherwise approached or negotiated in respect
thereof, in such manner as to require registration under the Securities
Act, the Massachusetts Uniform Securities Act, the New Jersey Uniform
Securities Law or the New York State ▇▇▇▇▇▇ Act of such Common Shares,
such other securities or any Shares to be sold hereunder.
SECTION 6.1.6. Except as described in the Evaluation Material, there
is no action, proceeding or investigation pending or, to the knowledge of
CPI, threatened, against CPI in which there is a reasonable possibility of
an adverse decision that would materially adversely affect the condition,
business or prospects of CPI or any of its properties or assets, or which
questions the validity of this Purchase and Exchange Agreement, the
Shares, any Assignment Agreement, the Release or any action to be taken
pursuant to this Purchase and Exchange Agreement, any Assignment Agreement
or the Release.
SECTION 6.1.7. No consent, approval, order or authorization of, or
registration, declaration or filing with, any governmental or public body
or authority on the part of CPI is required in connection with the valid
execution, delivery and performance of this Purchase and Exchange
Agreement, any Assignment Agreement, the Release or the offer, sale and
delivery of the Shares, as contemplated hereby.
SECTION 6.1.8. CPI has no present intention of making any public
distribution of any equity securities.
SECTION 6.1.9. Each of CPI, CPI's subsidiaries and CRC have filed
all Federal tax returns and all material state and local income, franchise
and other tax returns, reports and statements required to have been filed
to date. All material taxes shown to be due on such returns have been
paid. There is no material audit, examination, investigation, dispute or
claim
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concerning any taxes of any of CPI, CPI's subsidiaries or CRC raised by
any taxing authority in writing or as to which any of the Trustees and
officers of CPI, other directors and officers of CPI's subsidiaries and
the directors and officers of CRC have actual knowledge. There are no
settlements or closing agreements with respect to any taxes of CPI or CRC
with respect to which any material amounts remain to be paid. Neither CPI
nor CRC is a party to any tax sharing agreement.
SECTION 6.1.10. CPI has endeavored and will endeavor to operate in
such manner as to qualify as a real estate investment trust under Sections
856-860 of the Code.
SECTION 6.1.11. The Evaluation Material does not contain any untrue
statement of a material fact. The balance sheets of CPI as at December 31,
1995, and June 30, 1996, and the related statements of income, cash flow
and shareholders' equity for the twelve months then ended and six months
then ended, respectively, included in the Evaluation Material, fairly
present the financial condition of CPI as at such dates and the results of
operations of CPI for the periods ended on such dates, all in accordance
with generally accepted accounting principles consistently applied. Since
June 30, 1996, there has been no material adverse change in the business,
operations, financial condition, results of operations or prospects of CPI
and its subsidiaries. The balance sheets of the Partnerships (other than
Hotel) as at December 31, 1995, and the related statements of income, cash
flow and partner capital for the twelve months then ended, previously
delivered to the Purchaser, fairly present the financial condition of such
Partnerships (taken as a whole) as at such date, and all such balance
sheets were prepared in accordance with generally accepted accounting
principles consistently applied. Since December 31, 1995, there has been
no material adverse change in the business, operations, financial
condition, results of operations or prospects of the Partnerships (other
than Braintree and Hotel) taken as whole.
SECTION 6.1.12. As of the date of this Purchase and Exchange
Agreement, CPI is a ▇▇▇▇
▇▇
▇▇
and, immediately following the consummation of the transactions
contemplated hereby and based upon information available to CPI concerning
the Purchaser and the holders of CPI's outstanding Common Shares and its
other securities, CPI shall not be a "pension-held REIT" within the
meaning of Section 856(h) of the Code.
SECTION 6.1.13. CPI in its Federal income tax return for the taxable
year ended December 31, 1995, elected to be treated as a Real Estate
Investment Trust.
SECTION 6.1.14. CRC is a duly organized and validly existing
corporation under the laws of the State of Delaware, has all the requisite
power to own and deal with real and other property, and is duly qualified
to do business and in good standing in the jurisdiction, if any, in which
the nature of the business transacted or the character of the property
owned by it therein makes such qualification necessary.
SECTION 6.1.15. Upon its acquisition of the Shares, the Purchaser
will also acquire related beneficial interests in the CRC Shares held in
the CRC Trust. The CRC Shares held in the CRC Trust are duly authorized,
validly issued, fully paid and non-assessable, and the delivery to the
Purchaser pursuant to this Purchase and Exchange Agreement of certificates
for the Shares will pass to the Purchaser good and valid title to their
related beneficial interests in the CRC Shares held in the CRC Trust, free
of any Encumbrance except as set forth in Article FOURTH of CRC's
Certificate of Incorporation. All but 74.3 of the outstanding CRC Shares
are held by the CRC Trust or by the Bank of Montreal Trust Company, as
trustee, ratably on behalf of the holders of CPI's outstanding Preference
Shares.
SECTION 6.1.16. The execution and delivery by each of CPI and CRC of
this Purchase and Exchange Agreement and the certificates representing the
Shares and performance of this Purchase and Exchange Agreement and
compliance with the provisions hereof do not (i) violate any provision of
CRC's Certificate of Incorporation, its By-laws or the Trust Agreement
establishing the CRC Trust or (ii) conflict with or result in
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any breach of any of the terms, conditions or provisions of, or constitute
a default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any of the properties or assets of CRC pursuant
to, any material indenture, mortgage, deed of trust, bank loan or credit
agreement or other agreement or instrument to which CRC is a party or by
which it or any of its properties may be bound or (iii) require any
consent under any such material indenture, mortgage, deed of trust, bank
loan or credit agreement or other agreement or instrument other than
consents (A) that have been obtained or the procurement of which is a
condition to the closing of the transactions contemplated hereby or (B)
the failure to obtain of which is not reasonably likely to have a material
adverse effect upon the assets, business or operations of CPI, CRC and
their subsidiaries taken as a whole or the ability of CPI and CRC to
consummate the transactions contemplated hereby.
SECTION 6.1.17. CRC has not, either directly or through any agent,
offered any CRC Shares or other securities for sale, or solicited any
orders to buy the same, or otherwise approached or negotiated in respect
thereof, in such manner as to require registration under the Securities
Act, the Massachusetts Uniform Securities Act, the New Jersey Uniform
Securities Law or the New York State ▇▇▇▇▇▇ Act of such CRC Shares, such
other securities or any Shares to be sold hereunder.
SECTION 6.1.18. Except as described in the Evaluation Material,
there is no action, proceeding or investigation pending or, to the
knowledge of CPI, threatened, against CRC in which there is a reasonable
possibility of an adverse decision that would materially adversely affect
the condition, business or prospects of CPI and CRC taken as a whole, or
which questions the validity of this Purchase and Exchange Agreement, the
CRC Shares or any action taken by CPI or CRC pursuant to this Purchase and
Exchange Agreement.
SECTION 6.1.19. No consent, approval, order or authorization of, or
registration, declaration or filing with, any governmental or public body
or authority on the part of CRC is required in connection with the valid
execution, delivery and
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performance of this Purchase and Exchange Agreement or the issuance for
deposit in the CRC Trust of CRC Shares as contemplated hereby.
SECTION 6.1.20. CRC has no present intention of making any public
distribution of any CRC Shares.
SECTION 6.1.21. The financial information concerning CRC set forth
in the Annual Report and Six Month Report of CPI included in the
Evaluation Material fairly summarizes the financial condition of CRC at
such dates and the results of operations of CRC for the periods indicated
in such information, all in accordance with generally accepted accounting
principles consistently applied. Since June 30, 1996, there has been no
adverse change in the business, operations, financial condition, results
of operations or prospects of CRC and its subsidiaries that are material
in the context of CPI (and its subsidiaries) and CRC, taken as a whole.
SECTION 6.1.22. CPI is not in violation of any provision of its
Declaration of Trust or Trustees' Regulations. CRC is not in violation of
any provision of the CRC Trust.
SECTION 6.1.23. CRC is not in violation of any provision of its
Certificate of Incorporation or By-laws.
SECTION 6.1.24. The Certificate of Incorporation of CRC, as amended,
in the form certified by the Secretary of CRC and heretofore delivered to
the Purchaser, is and at the Closing will be in full force and effect.
SECTION 6.1.25. The CRC Trust Agreement in the form certified by the
Secretary of CRC and heretofore delivered to the Purchaser, is and at the
Closing will be in full force and effect.
SECTION 6.1.26. The total number of Preference Shares which CPI
shall have authority to issue shall be 209,249 and the total number of
Common Shares which CPI shall have authority to issue shall be 36,089,872
Common Shares plus such number (if any) of additional Common Shares as
shall be required for issuance pursuant to Share
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Purchase Contracts entered into under CPI's 1994 Plan for Shareholder
Contractual Purchases of Shares (the "1994 Plan") and 1997 Plan for
Shareholder Contractual Purchases of Shares (the "1997 Plan"); provided,
however, that (a) upon the issuance of all Common Shares issuable pursuant
to the terms of Share Purchase Contracts entered into under the 1994 Plan
(the "1994 Contracts"), the number of Common Shares authorized to be
issued shall be reduced by the excess (if any) of 1,105,894 over the
number of authorized but unissued Common Shares as shall then have been
issued subsequent to November 1, 1996, pursuant to such 1994 Contracts;
(b) upon the issuance of all Common Shares issuable pursuant to the terms
of Share Purchase Contracts entered into under the 1997 Plan (the "1997
Contracts"), the number of Common Shares authorized to be issued shall be
reduced by the excess (if any) of 1,100,000 over the number of authorized
but unissued Common Shares as shall then have been issued subsequent to
January 1, 1997, pursuant to such 1997 Contracts; (c) upon the issuance of
all Common Shares issuable pursuant to all Employee Share Purchase Plan
Contracts entered into under CPI's Employee Share Purchase Plan, as
amended ("Employee Contracts"), the number of Common Shares authorized to
be issued as aforesaid shall be reduced by the excess (if any) of 12,513
(as adjusted to reflect non-vested shares acquired by CPI) over the total
number of authorized but unissued Common Shares as shall then have been
issued subsequent to June 15, 1994, pursuant to Employee Contracts; (d)
upon the issuance of all Common Shares issuable pursuant to Share Purchase
Agreements providing for the issuance of up to 1,788,948 Common Shares
directly, or upon the conversion or exchange of securities convertible
into or exchangeable for Common Shares, the number of Common Shares
authorized to be issued shall be reduced by the excess (if any) of
1,788,948 over the number of authorized but unissued Common Shares as
shall have been issued subsequent to November 1, 1996 pursuant to such
Share Purchase Agreements; (e) upon the termination or expiration of the
Trust's 1993 Share Option Plan for Employees and all options granted
thereunder ("1993 Share Options"), the number of Common Shares authorized
to be issued as aforesaid shall be reduced by the excess (if any) of
1,000,000
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over the total number of Common Shares as shall then have been
issued upon the exercise of 1993 Share Options granted on or after
November 2, 1993; (f) upon the issuance of all Common Shares
issuable upon conversion of the First Series Preference Shares, the
number of Common Shares authorized to be issued as aforesaid shall
be reduced by the excess (if any) of 1,600,000 over the number of
authorized but unissued Common Shares as shall then have been issued
subsequent to June 15, 1994 upon conversion of such First Series
Preference Shares; (g) upon the issuance of all Common Shares
issuable in exchange for interests in properties (whether direct or
indirect through ownership of interests in legal entities) pursuant
to contracts entered into on or before January 31, 1997 ("Bellwether
Contracts"), the number of Common Shares authorized to be issued
shall be reduced by the excess (if any), of 6,000,000 over the
number of authorized but unissued Common Shares as shall have been
issued subsequent to November 1, 1996 pursuant to such Bellwether
Contracts; and (h) upon the issuance of all Common Shares (excluding
those utilized in (g) above) issuable in exchange for interests in
▇▇▇▇▇▇▇▇▇▇ Associates L.P., a New York limited partnership (or in a
successor to the assets thereof or in the underlying assets
thereof), on or before December 31, 2000 ("▇▇▇▇▇▇▇▇▇▇ Exchanges"),
the number of Common Shares authorized to be issued shall be reduced
by the excess (if any) of 1,800,000 over the number of authorized
but unissued Common Shares as shall then have been issued subsequent
to November 1, 1996 pursuant to such ▇▇▇▇▇▇▇▇▇▇ Exchanges. As of
November 14, 1996 there were outstanding 21,189,229 Common Shares
(excluding 404,967 Common Shares held by CPI in its treasury),
209,249 Preference Shares and 2,270,120.9 shares of common stock of
CRC. Since November 14, 1996, neither CPI nor CRC has effected any
change in its authorized classes of beneficial interest (whether by
way of reclassification, recapitalization, subdivision, stock splits
or otherwise). Neither CPI nor CRC is required to file, pursuant to
the requirements of Section 12 of the 1934 Act, a registration
statement relating to any of its securities.
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SECTION 6.1.27. Since January 1, 1975, CPI has been, and CPI
continues to be, primarily engaged directly in the management or
development of real estate.
SECTION 6.1.28. Schedule 6.2.1 contains a correct and complete
list of all of the organizational documents of each of the
Partnerships, true and correct copies of which have been delivered
to the Purchaser.
SECTION 6.1.29. Attached as Schedules 6.1.29(a) and 6.1.29(b)
are the current budget and schedule of estimated draw-down dates for
the Braintree Expansion, respectively. As of the date of this
Purchase and Exchange Agreement, Braintree's partners have made cash
contributions to Braintree with respect to the Braintree Expansion
in an aggregate amount equal to $130,902,043, of which CPI and the
Purchaser have contributed $39,270,613 and $91,631,430 respectively,
in cash.
SECTION 6.1.30. All conditions to the transfer of the
Partnership Interests have been met and neither any such transfer
nor any other transaction contemplated hereby is a violation or
breach of any of the Partnership Agreements or any other agreement,
contract or understanding to which any Partnership is a party or by
which it or any of its assets may be bound.
SECTION 6.1.31. CPI (a) will acquire the Partnership Interests
for the purpose of investment and not with a view to, or for sale in
connection with, the public distribution thereof, nor with any
present intention of publicly distributing the same and (b) is
familiar with the business and operations of the Partnerships and
has conducted its own due diligence investigation with respect
thereto.
SECTION 6.1.32. CPI, in its capacity as general partner of the
Partnerships, does not have actual knowledge of any contingent or
other liabilities of the Partnerships that are not reflected in the
financial statements of the Partnerships referred to in Section
6.1.11 and that are reasonably likely to have a material adverse
effect upon the Purchaser as a withdrawing
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limited partner of the Purchaser's Partnerships. To the actual
knowledge of CPI, in its capacity as general partner of the
Partnerships, the Purchaser has satisfied all of its obligations
under each of the Partnerships from which it is withdrawing in
connection with the transactions contemplated hereby.
SECTION 6.1.33. Each of CPI and CRC are in compliance in all
material respects with all applicable laws, ordinances, rules,
regulations, and requirements of governmental authorities except
where the failure to comply therewith would not, together with all
other such failures, reasonably be expected to have a material
adverse effect on the assets, business or operations of CPI, CRC and
their subsidiaries taken as a whole.
SECTION 6.2. Representations and Warranties of Purchaser. The
Purchaser hereby represents and warrants to CPI as follows:
SECTION 6.2.1. To the Purchaser's knowledge, Schedule 6.2.1
contains a correct and complete list of all of the organizational
documents of each of the Partnerships. The Purchaser owns the
Partnership Interests free and clear of all Encumbrances other than
those contained in the documents set forth in Schedule 6.2.1.
SECTION 6.2.2. The Trust Company is duly organized and
existing under the laws of the Commonwealth of Massachusetts and is
duly appointed and acting as the sole trustee of the Telephone Real
Estate Equity Trust, the Purchaser has all the requisite power to
own and deal with its real and other property, conduct its business
as it is now conducted and perform this Purchase and Exchange
Agreement, each Assignment Agreement and the Release and is duly
qualified to do business and in good standing in each jurisdiction,
if any, in which the nature of the business transacted or the
character of the property owned by it therein makes such
qualification necessary. The Purchaser is the successor-in-interest
to the Trust Company, as Trustee for the ▇▇▇▇ System Trust ("▇▇▇▇")
in respect of all rights and claims of ▇▇▇▇ in, to or against the
Partnerships, whether as a partner, creditor, beneficiary or other
claimant. This
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Purchase and Exchange Agreement has been duly authorized, executed
and delivered by Purchaser and each of the Assignment Agreements and
the Release has been duly authorized by Purchaser and shall be duly
executed and delivered by Purchaser at the Closing and this Purchase
and Exchange Agreement and each Assignment Agreement (upon its
execution and delivery) and the Release (upon its execution and
delivery) constitute (or will constitute upon execution and
delivery) Purchaser's legal, valid and binding agreement enforceable
in accordance with its terms (subject to any applicable bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium or other
similar laws affecting creditors' rights generally from time to time
in effect and to general principles of equity, regardless of whether
such enforceability is considered in a proceeding in equity or at
law, and except as the enforceability of the indemnification
provisions hereof may be limited by federal securities law and
public policy considerations).
SECTION 6.2.3. The execution and delivery by Purchaser of this
Purchase and Exchange Agreement, each of the Assignment Agreements
and the Release and the performance of this Purchase and Exchange
Agreement, each of the Assignment Agreements and the Release, and
compliance with the provisions hereof and thereof do not and, in the
case of the Release and the Assignment Agreements, upon their
execution and delivery will not (i) violate any provision of ERISA,
or any other applicable law or of the organizational documents of
the Purchaser or (ii) conflict with or result in any breach of any
of the terms, conditions or provisions of or constitute a default
under, or result in the creation or imposition of any lien, charge
or encumbrance upon any of the properties or assets of Purchaser
pursuant to, any material indenture, mortgage, deed of trust, bank
loan or credit agreement or other agreement or instrument to which
Purchaser is a party or by which it or any of its properties may be
bound.
SECTION 6.2.4. There is no action, proceeding or investigation
pending or, to the knowledge of Purchaser, threatened, against
Purchaser in which there is a reasonable possibility of an adverse
decision that questions
47
47
the validity of this Purchase and Exchange Agreement, any Assignment
Agreement, the Release, the Partnership Interests or any action to
be taken pursuant to this Purchase and Exchange Agreement.
SECTION 6.2.5. No consent, approval, order or authorization
of, or registration, declaration or filing with, any governmental or
public body or authority on the part of Purchaser is required in
connection with the valid execution, delivery and performance of
this Purchase and Exchange Agreement, any Assignment Agreement, the
Release, Purchaser's sale, assignment, transfer and conveyance of
the Partnership Interests or Purchaser's acquisition of the Shares,
all as contemplated hereby.
SECTION 7. Applicability of Declaration of Trust. Notwithstanding
any other provisions of this Purchase and Exchange Agreement, the rights of the
Purchaser to hold and transfer the Shares shall at all times be subject to the
provisions of Sections 5.12, Purchasers Disclosures; Redemption of Shares, and
5.13, Right to Refuse to Transfer Shares; Certain Transfers Void, of the
Declaration of Trust of CPI and to all rights granted to the Trustees of CPI
thereunder.
SECTION 8. Assignment. This Purchase and Exchange Agreement may not
be assigned by CPI or the Purchaser prior to the Closing Date without, in the
case of a transfer by the Purchaser, the consent of CPI and, in the case of a
transfer by CPI, the consent of the Purchaser. After the Closing Date, all
representations, warranties, covenants and agreements contained in this Purchase
and Exchange Agreement shall bind and inure to the benefit of CPI and the
Purchaser and their respective successors and assigns (including without
limitation transferees of any or all Shares to be purchased hereunder by the
Purchaser if such transferees acquired such Shares prior to the public offering
thereof), except as any provision may by its terms be otherwise limited. After
the Closing Date, the Purchaser shall not assign this Purchase and Exchange
Agreement or any of its rights, privileges or obligations hereunder to any party
other than such a transferee without the prior written consent of CPI.
SECTION 9. Governing Law. This Purchase and Exchange Agreement shall
be governed by and construed and enforced in accordance with the internal laws
of the State
48
48
of New York, without regard to the principles of the conflicts of laws thereof.
SECTION 10. Jurisdiction; Consent to Service of Process. (a) Each of
the Purchaser and CPI hereby irrevocably and unconditionally submits, for itself
and its property, to the nonexclusive jurisdiction of any New York State court
or Federal court of the United States of America sitting in New York City, and
any appellate court from any thereof, in any action or proceeding arising out of
or relating to this Purchase and Exchange Agreement, or for recognition or
enforcement of any judgment, and CPI and the Purchaser hereby irrevocably and
unconditionally agree that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. CPI and the Purchaser agree that a
final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Purchase and Exchange Agreement shall affect
any right that the Purchaser or CPI may otherwise have to bring any action or
proceeding relating to this Purchase and Exchange Agreement against the other or
its properties in the courts of any jurisdiction.
(b) CPI and the Purchaser hereby irrevocably and unconditionally
waive, to the fullest extent they may legally and effectively do so, any
objection which they may now or hereafter have to the laying of venue of any
suit, action or proceeding arising out of or relating to this Purchase and
Exchange Agreement in any New York State or Federal court sitting in New York
City. CPI and the Purchaser hereby irrevocably waive, to the fullest extent
permitted by law, the defense of an inconvenient forum to the maintenance of
such action or proceeding in any such court.
(c) CPI and the Purchaser irrevocably consent to service of process
in the manner provided for notices in Section 13. Nothing in this Purchase and
Exchange Agreement will affect the right of any party to this Purchase and
Exchange Agreement to serve process in any other manner permitted by law.
SECTION 11. Waiver of Jury Trial. Each party hereto hereby waives,
to the fullest extent permitted by applicable law, any right it may have to a
trial by jury in respect of any litigation directly or indirectly arising out
of, under or in connection with this Purchase and Exchange Agreement. Each party
hereto (a) certifies that no
49
49
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 and (b) acknowledges that it and the other party
hereto have been induced to enter into this Purchase and Exchange Agreement by,
among other things, the mutual waivers and certifications in this Section 11.
SECTION 12. Brokers Fees. The Purchaser shall indemnify CPI and CPI
shall indemnify the Purchaser against any claim for brokerage or other
commissions relative to this Purchase and Exchange Agreement or to the
transactions contemplated hereby based in any way on agreements, arrangements or
understandings made or alleged to have been made by the indemnifying party.
SECTION 13. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given when delivered
or mailed by first-class registered or certified mail (air mail when being sent
outside the United States) postage prepaid, addressed (a) if to the Purchaser,
at its address set forth in Exhibit A hereto, or at such other address as may be
furnished in writing by the Purchaser to CPI, or (b) if to CPI, Three ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇ Plaza, 305 East 47th Street, New York, N.Y. 10017, or at such other
address as CPI shall have furnished to the Purchaser in writing.
SECTION 14. Survival of Provisions. The representations, warranties
and covenants set forth in Sections 2, 4, 5, 6, 7, 12 and 15 shall survive the
purchase of Shares under this Purchase and Exchange Agreement.
SECTION 15. Expenses. Except as otherwise provided herein, each of
CPI and the Purchaser shall bear its own respective direct and indirect costs
and expenses incurred by it in connection with the negotiation, preparation,
execution and performance of this Purchase and Exchange Agreement and the
transactions contemplated hereby, whether or not the transactions contemplated
hereby are consummated, including, without limitation, all fees and of agents,
representatives, counsel, accountants and, in the case of the Purchaser, the
fees and expenses of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated. Notwithstanding the
foregoing, any and all transfer, documentary, gains, recording, sales and use
taxes and charges, and any other similar liabilities to governmental
authorities, incurred with respect to the transactions contemplated hereby shall
be borne equally by CPI and the Purchaser.
50
50
SECTION 16. Entire Agreement; Section Headings. This Purchase and
Exchange Agreement sets forth the entire agreement of the parties hereto, and
supersedes the provisions of any prior agreement or understanding of the parties
hereto, with respect to the subject matter hereof. The descriptive headings of
the several sections of this Purchase and Exchange Agreement are inserted for
convenience only and do not constitute a part of this Purchase and Exchange
Agreement.
SECTION 17. Counterparts. This Purchase and Exchange Agreement may
be executed in counterparts, each of which shall be an original.
The Purchaser understands that the name "Corporate Property
Investors" is the designation of the Trustees under its Declaration of Trust.
Neither the shareholders nor the Trustees or officers, employees or agents of
the trust created thereby shall be liable hereunder and all persons
51
51
shall look solely to the trust estate for the payment of any claims hereunder or
for the performance hereof.
Very truly yours,
CORPORATE PROPERTY INVESTORS,
by /s/ Corporate Property Investors
--------------------------------
Name:
Title:
CORPORATE REALTY CONSULTANTS,
INC.,
by /s/ Corporate Realty
Consultants, Inc.
--------------------------
Name:
Title:
Accepted and agreed to:
STATE STREET BANK AND TRUST
COMPANY, not individually
but solely in its capacity
as Trustee of the Telephone
Real Estate Equity Trust,
by /s/ State Street Bank and Trust Company
---------------------------------------
Name:
Title:
52
Exhibit A
Name and Address
of Purchaser
-----------------
The State Street Bank and Trust
Company, not in its individual
capacity but solely as trustee for
Telephone Real Estate Equity Trust
▇/▇ ▇▇&▇
▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Mr. ▇▇▇▇▇▇ ▇▇▇▇▇
53
Exhibit B
Assignment Agreements
54
[Form of]
PARTNERSHIP INTEREST ASSIGNMENT
This Partnership Interest Assignment ("Assignment") is made on [the
Closing Date] by and between STATE STREET BANK AND TRUST COMPANY, a
Massachusetts banking corporation, not individually but solely in its capacity
as Trustee of the Telephone Real Estate Equity Trust ("Assignor"), and
[ ](1) ("Assignee"), with reference to the following:
A. Assignor owns the rights of State Street Bank and Trust Company,
in its capacity either as Trustee of the Telephone Real Estate Equity Trust
(successor-in-interest to the ▇▇▇▇ System Trust), that are set forth in those
agreements and other documents listed on Schedule A annexed hereto
(collectively, the "Partnership Agreement"), which constitutes the
organizational documents of [Name of Partnership], a [ ] limited
partnership (the "Partnership"), as amended to the date hereof.
B. Assignor now wishes to assign to Assignee all of Assignor's
interest in and to the Partnership and the Partnership Agreement and to cause
Assignee to become a substituted limited partner of the Partnership in the place
and stead of Assignor.
NOW, THEREFORE, the parties agree as follows:
1. Assignment. For good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Assignor hereby assigns and
transfers to Assignee, its successors and assigns, effective as of the date
hereof, all of Assignor's right, title and interest (whether as partner,
creditor, beneficiary or other claimant) in and to the Partnership, the
Partnership Agreement and all of the Partnership's rights, interests and assets
of any nature whatsoever, whether now existing or hereafter arising, including,
without limitation, all of Assignor's right, title and interest in and to all
distributions of cash or property made by the Partnership after the date hereof,
all of Assignor's rights to the repayment of any moneys advanced or otherwise
lent to the
--------
(1) Designee of CPI.
55
2
Partnership that have not been repaid as of the date hereof, all of Assignor's
right, title and interest in and to all allocations of profits, losses and tax
credits for tax purposes arising with respect to Assignor's interest in the
Partnership after the date hereof and all of Assignor's capital account
attributable to Assignor's interest in the Partnership (all of the foregoing
being collectively referred to herein as the "Partnership Interest").
2. Substitution of Assignee as Limited Partner. Assignor and
Assignee intend that, effective as of the date hereof, Assignee shall be
substituted as a limited partner in the Partnership in the place and stead of
Assignor. Upon Assignee's request, Assignor shall execute and deliver to each of
the remaining partners in the Partnership and to Assignee an amendment to the
Partnership Agreement, in form and substance reasonably satisfactory to each of
the remaining partners and Assignee, effecting the substitution of Assignee from
and after the date hereof in the place and stead of Assignor as a partner of the
Partnership.
3. Acceptance and Assumption. Effective as of the date hereof,
Assignee hereby accepts the assignment to it of all of Assignor's right, title
and interest in and to the Partnership Interest, hereby agrees to become a
substituted limited partner in the Partnership from and after the date hereof in
the place and stead of Assignor and, to the extent of the Partnership Interest
and as otherwise provided by law, hereby assumes and agrees to be bound by all
of the obligations of Assignor under the Partnership Agreement arising after the
date hereof, whether known or unknown, fixed or contingent and howsoever
arising; provided, however, that the liabilities and obligations assumed by
Assignee hereunder do not include (i) any claims related to Federal, state or
local income, franchise, sales, property, transfer, document recording or other
taxes of Assignor or the Partnership accruing prior to the date hereof or by
reason of the assignment and transfer contemplated hereby or (ii) any other
liabilities or obligations of Assignor or the Partnership accruing prior to the
date hereof.
4. Further Assurances. Assignor shall, at any time and from time to
time after the date hereof, upon the request of Assignee, execute, acknowledge
and deliver all such further acts, deeds, assignments, transfers, conveyances,
powers of attorney and assurances, and take all such further actions, as shall
be necessary or desirable to give effect to the transactions hereby consummated
and to collect and reduce to the possession of Assignee any and all
56
3
of the interests and assets hereby transferred to Assignee. Without limiting the
generality of the foregoing, Assignor hereby appoints Assignee, and its
nominees, successors and assigns, the true and lawful attorney of Assignor, with
full power of substitution, in the name of Assignee or in the name of Assignor
but for the benefit and at the expense of Assignee, to demand and receive from
time to time the benefits of the right and title to the Partnership Interest
hereby conveyed, transferred and assigned, to give receipts and releases for and
in respect of the same, or any part thereof, and from time to time to institute
and prosecute in the name of Assignor or otherwise, for the benefit of Assignee,
any and all proceedings at law, in equity or otherwise, which Assignee, its
nominees, successors or assigns, may deem proper in order to collect, assert or
enforce the right or title to the Partnership Interest hereby conveyed,
transferred and assigned, or intended so to be, to defend and compromise any and
all actions, suits or proceedings in respect of the Partnership Interest, and to
do any and all such acts and things in relation thereto as Assignee, its
nominees, successors or assigns, shall deem advisable; Assignor hereby declaring
that the appointment hereby made and the powers hereby granted are coupled with
an interest and are and shall be irrevocable by Assignor.
5. Counterparts. This Assignment may be executed in counterparts
with the same effect as if all parties hereto had executed the same document.
All counterparts shall be construed together and shall constitute a single
Assignment.
6. Governing Law. This Assignment shall be construed and interpreted
in accordance with, and governed and enforced in all respects by, the laws of
the State of [ ] without giving effect to the conflict of laws principles of
such State.
Assignor understands that the name "Corporate Property Investors" is
the designation of the Trustees under its Declaration of Trust. Neither the
shareholders nor the Trustees or officers, employees or agents of the trust
created thereby shall be liable hereunder and all persons
57
4
shall look solely to the trust estate for the payment of any claims hereunder or
for the performance hereof.
IN WITNESS WHEREOF, Assignor and Assignee have executed this
Partnership Interest Assignment as of the date and year first above written.
STATE STREET BANK AND TRUST
COMPANY, not individually but
solely in its capacity as Trustee
of the Telephone Real Estate Equity
Trust,
by
-------------------------------
Name:
Title:
[ASSIGNEE],
by
-------------------------------
Name:
Title:
Consent to Assignment:
The undersigned, as general
partner of the Partnership
referred to above, hereby
consents to the foregoing
assignment.
[GENERAL PARTNER],
by
---------------------------
Name:
Title:
58
NOTARIAL ACKNOWLEDGMENTS
[To be Attached]
59
Schedule A
to
Assignment
ORGANIZATIONAL DOCUMENTS
[This schedule will contain the same items listed on Schedule 6.2.1 to the
Purchase and Exchange Agreement]
60
Exhibit C
[Form of]
GENERAL RELEASE
In consideration of, among other things, the premises and mutual
covenants contained in that certain Purchase and Exchange Agreement (the
"Agreement") dated as of November 15, 1996, between Corporate Property
Investors, a voluntary association of the type commonly known as a Massachusetts
business trust ("CPI"), and State Street Bank and Trust Company, not
individually but solely in its capacity as Trustee of the Telephone Real Estate
Equity Trust, a trust organized and existing under the laws of the State of New
York (the "Purchaser"), and the mutual covenants contained herein, the parties
hereto hereby agree as follows:
1. All capitalized terms used but not otherwise defined herein shall
have the meanings ascribed to such terms in the Agreement.
2. Each of CPI (both individually and in its capacity as a general
partner of the Partnerships) and Corporate Realty Consultants, Inc., a Delaware
corporation ("CRC"), hereby forever releases and discharges the Purchaser, any
beneficiary of the Purchaser, AT&T Investment Management Corporation and their
respective, trustees, directors, officers and employees (collectively, the
"Purchaser Releasees") from, and waives and relinquishes any and all claims,
demands, debts, liabilities, obligations, actions, causes of action, suits, sums
of money, accounts, reckonings, covenants, contracts, controversies, agreements,
promises and rights whatsoever, whenever arising, known or unknown, suspected or
unsuspected, contingent or fixed, liquidated or unliquidated, matured or
unmatured, in law, equity or otherwise (collectively, "Claims") that CPI or CRC
ever had, now has, or hereafter can, shall or may have against the Purchaser
Releasees for, upon, or by reason of any matter, cause, transaction or thing
whatsoever occurring at any time prior to the date hereof including, without
limitation, any additional capital contributions to any of the Partnerships
accruing on or after the date hereof (except for the capital contribution being
made on November 15, 1996 pursuant to Section 3.2(g) of the Agreement);
provided, however, that nothing contained herein shall be deemed to release any
person from its obligations under the Agreement, the Assignment Agreements or
any other
61
2
documents delivered pursuant to the express provisions thereof or to release the
Purchaser from any obligations to CPI under any written agreement pursuant to
which the Purchaser or any predecessor in interest acquired Common Shares or
Preference Shares.
3. The Purchaser (in its capacity as a limited partner of the
Partnerships and otherwise in its capacity as a trustee for the Telephone Real
Estate Equity Trust) hereby forever releases and discharges each of CPI, CRC,
all of their respective subsidiaries and partners, and all the respective
trustees, directors, officers and employees of each of them (collectively, the
"CPI Releasees") from, and waives and relinquishes any and all Claims that
Purchaser ever had, now has, or hereafter can, shall or may have against the CPI
Releasees for, upon or by reason of, any matter, cause, transaction or thing
whatsoever occurring at any time prior to the date hereof; provided, however,
that nothing contained herein shall be deemed to release any person from its
obligations under the Agreement, the Assignment Agreements or any other
documents delivered pursuant to the express provisions thereof or to release CPI
or CRC from any obligations to the Purchaser (i) under any written agreement
pursuant to which the Purchaser or any predecessor in interest acquired Common
Shares or Preference Shares or (ii) that may arise solely by virtue of the
Purchaser's ownership of any such Common Shares or Preference Shares.
4. This Release shall be binding upon the parties hereto and their
respective successors and permitted assigns. No party hereto may assign either
this Release or any of its rights, interests or obligations hereunder without
the prior written approval of the other party.
5. This Release constitutes the entire agreement among the parties
hereto with respect to the subject matter hereof. It is expressly understood and
agreed that this Release may not be altered, amended, modified or otherwise
changed in any respect whatsoever, except by a writing duly executed and
delivered by all of the parties hereto.
6. THIS RELEASE SHALL BE CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, AND GOVERNED AND ENFORCED IN ALL RESPECTS BY, THE LAWS OF THE STATE OF NEW
YORK WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES OF SUCH STATE. THE
PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREE TO SUBMIT TO PERSONAL
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND TO WAIVE ANY OBJECTION
AS TO VENUE IN THE COUNTY OF NEW YORK, STATE OF NEW YORK IN CONNECTION
62
3
WITH ALL MATTERS RELATING TO THIS RELEASE AND/OR THE CLAIMS. EACH PARTY HERETO
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING
OUT OF, UNDER OR IN CONNECTION WITH THIS RELEASE. EACH PARTY ACKNOWLEDGES THAT
IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS RELEASE BY,
AMONG OTHER THINGS THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 6.
7. If any provisions of this Release are determined by a court of
competent jurisdiction to be invalid or unenforceable, in whole or in part, the
remaining provisions, and any partially invalid or unenforceable provisions, to
the extent valid and enforceable, shall nevertheless be binding and valid and
enforceable.
8. This Release may be executed in one or more counterparts, each of
which shall be deemed an original but all of which together will constitute one
and the same instrument.
9. This Release shall not be effective unless and until executed by
all of the parties hereto.
10. The Purchaser understands that the name "Corporate Property
Investors" is the designation of the Trustees under its Declaration of Trust.
Neither the shareholders nor the Trustees or officers, employees or agents of
the trust created thereby shall be liable hereunder and all persons shall look
solely to the trust estate for the payment of any claims hereunder or for the
performance hereof.
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Release as of the ____ day of November, 1996.(1)
CORPORATE PROPERTY INVESTORS,
By:
--------------------------------
Name:
Title:
----------
(1) This Release should be dated as of the Closing Date.
63
4
CORPORATE REALTY CONSULTANTS, INC.,
By:
--------------------------------
Name:
Title:
STATE STREET BANK AND TRUST
COMPANY, not individually but
solely in its capacity as Trustee
of the Telephone Real Estate Equity
Trust,
By:
--------------------------------
Name:
Title:
64
Exhibit D
Statement pursuant to Treasury
Regulation Section 1.897-2(h)
In accordance with Treasury Regulation Section 1.897-2(h), Corporate
Property Investors, a Massachusetts business trust ("CPI"), hereby states that
its Series A Common Shares do not represent a "United States real property
interest" within the meaning of Section 897(c) of the Internal Revenue Code of
1986, as amended (the "Code"), because CPI has determined based upon its
corporate records that it currently is a "domestically-controlled REIT" within
the meaning of Section 897(h)(4)(B) of the Code.
Under penalties of perjury, I declare that (i) I have examined this
statement, (ii) to the best of my knowledge and belief, this statement is true,
correct and complete and (iii) I have authority to sign this statement on behalf
of CPI.
Dated: ________________
By:
--------------------------------
Name:
Title:
Subscribed to and sworn
before me this __ of
__________, 1996.
State of New York
County of New York
-----------------------
Notary Public
[Seal]
65
SCHEDULE 1
Computation of Working Capital Values
66
2
As used on the preceding page, "Undistributed C/F - Per Partnership
Equity" means (x) income before extraordinary items plus depreciation less
principal payments on mortgages, for the period commencing on January 1, 1996,
and ending on the Closing Date, all computed in accordance with generally
accepted accounting principles applied consistently with the most recently
prepared audited financial statements, minus (y) all distributions of "Net Cash
Flow" or "Excess Cash Available" actually made in respect of such period on or
before the Closing Date.
67
SCHEDULE 6.1.29(a)
Braintree Expansion Budget
68
SCHEDULE 6.1.29(b)
Braintree Expansion Scheduled Drawdown Dates and Amounts(1)
December 1, 1996 $15,000,000
February 1, 1997 15,000,000
May 1, 1997 5,175,214
----------
(1) Scheduled dates and amounts are estimates only. Amounts are aggregate
amounts to be contributed by the partners of Braintree.
69
SCHEDULE 6.2.1
Partnership Interests(2)
1. Bellwether Properties I, Limited Partnership, a Massachusetts limited
partnership.
a. Agreement and Certificate of Limited Partnership of Bellwether
Properties I, Limited Partnership dated as of October 15, 1984.
2. Bellwether Properties II, Limited Partnership, a Massachusetts limited
partnership.
a. Agreement and Certificate of Limited Partnership of Bellwether
Properties II, Limited Partnership dated as of October 15, 1984.
3. Braintree Property Associates, L.P., a Massachusetts limited partnership.
a. Agreement and Certificate of Limited Partnership of Braintree Property
Associates, L.P. dated as of November 24, 1981.
4. EMI Cambridge Limited Partnership, a Massachusetts limited partnership.
a. Agreement and Certificate of Limited Partnership of EMI Cambridge
Limited Partnership dated as of December 13, 1982.
b. Amended and Restated Agreement and Certificate of Limited Partnership
of EMI Cambridge Limited Partnership dated as of July 18, 1983.
----------
(2) This schedule contains a list of the documents that Cravath has in its
files to date.
70
2
5. EMI Santa ▇▇▇▇ Limited Partnership, a California limited partnership.
a. Agreement and Certificate of Limited Partnership of EMI Santa ▇▇▇▇
Limited Partnership dated as of January 18, 1983.
6. EMI Two Limited Partnership, a Connecticut limited partnership.
a. Amended and Restated Agreement and Certificate of Limited Partnership
of EMI Two Limited Partnership dated as of August 9, 1984.
b. Amendment No. 1 to Partnership Agreement dated as of December 15, 1995.
c. Second Amended and Restated Certificate of Limited Partnership of EMI
Two Limited Partnership dated as of March 1, 1996.
7. ▇▇▇▇▇▇▇▇▇▇ Associates L.P., a New York limited partnership.
a. Agreement of Limited Partnership of ▇▇▇▇▇▇▇▇▇▇ Associates L.P. dated as
of December 30, 1981.
b. Certificate of Limited Partnership of ▇▇▇▇▇▇▇▇▇▇ Associates L.P. dated
as of December 30, 1981.
c. First Amendment to Agreement of Limited Partnership of ▇▇▇▇▇▇▇▇▇▇
Associates L.P. dated as of December 29, 1982.
d. Second Amendment to Agreement of Limited Partnership of ▇▇▇▇▇▇▇▇▇▇
Associates L.P. dated as of January 3, 1983.
e. Third Amendment to Agreement of Limited Partnership of ▇▇▇▇▇▇▇▇▇▇
Associates L.P. dated as of February 4, 1987.
f. Partnership Interest Assignment dated as of December 27, 1990.
g. Partnership Interest Assignment dated as of December 27, 1990.
71
3
h. Fourth Amendment to Agreement of Limited Partnership of ▇▇▇▇▇▇▇▇▇▇
Associates L.P. dated as of December 27, 1990.
i. Letter Agreements dated November 14, 1990, December 11, 1990, December
19, 1990, December 27, 1990, February 11, 1991, March 8, 1991, June 6,
1991, September 11, 1991, January 10, 1992, June 14, 1992, December 14,
1992 and May 18, 1994.
8. Cambridge Hotel Associates, a Pennsylvania limited partnership.
a. Cambridge Hotel Associates Agreement of Limited Partnership dated as of
January 18, 1984.
b. Letter Agreement dated October 19, 1995.
