Exhibit 10.28
PURCHASE AGREEMENT
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Xxxxxxxx Properties Acquisition Partners, L.P.
(Partnership Interests)
THIS AGREEMENT, made as of the 12th day of June, 1996 (the
"Agreement"), by and between Xxxxxxxx Properties Limited, Inc., a Delaware
corporation (the "Purchaser"), each of the limited partners of Xxxxxxxx
Properties Acquisition Partners, L.P., a Delaware limited partnership (the
"Limited Partnership"), as set forth on Exhibit A (each, a "Seller" and,
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collectively, "Sellers"), and Xxxxxxxx Property Acquisition, L.P., a Delaware
limited partnership ("PPA" and collectively with the Sellers, the "Partners").
R E C I T A T I O N S:
A. The Partners constitute all of the present partners of and own 100%
of the present partnership interests in the Limited Partnership.
B. The Limited Partnership is the owner of certain properties
described in Exhibit B attached hereto (each, a "Property" and, collectively,
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the "Properties").
C. Purchaser intends to form PPL REIT (as defined herein) as a
publicly traded real estate investment trust ("REIT"), as defined in Section
856 - 860 of the federal Internal Revenue Code of 1986, as amended, which will
directly or indirectly own interests in the Properties and other office and
industrial properties and developable land acquired in connection with its
initial public offering and thereafter.
D. Purchaser intends that PPL REIT will be an "umbrella partnership"
REIT, or "UPREIT," and that PPL REIT or a wholly-owned subsidiary of PPL REIT
will serve as the general partner of the Limited Partnership upon and after the
Closing (as defined herein).
E. For its respective share of the Purchase Price (as defined herein)
and other consideration, and upon the terms and conditions hereinafter set
forth, each Seller has agreed to sell all of its partnership interest in the
Limited Partnership to the Purchaser, and the Purchaser has agreed to purchase
the Seller's
entire partnership interest in the Limited Partnership; At the same time, PPA's
general partner interest in the Limited Partnership will be converted to a
limited partner interest in the Limited Partnership.
NOW, THEREFORE, in consideration of the premises and in consideration
of the mutual covenants, promises and undertakings of the parties hereinafter
set forth, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged by the parties, it is agreed:
1. DEFINITIONS. Certain of the defined terms used in this Agreement
are defined below:
"Affiliate" shall mean, with respect to any person, any person
controlling, controlled by or under common control with, such person.
"Appraisal" shall mean the appraisal rendered by the Appraiser in
accordance with the Engagement Letter, dated April 24, 1996, between the Limited
Partnership and the Appraiser, attached as Exhibit C.
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"Appraiser" shall mean Xxxxxxxx Associates, Inc.
"Brokerage Commission" shall mean the amount that would be paid to
a party not affiliated with Purchaser for brokerage services upon a sale of the
Properties, as determined by the Appraiser as of the Appraisal Date.
"Cash Flow" shall mean Net Operating Revenues, as defined in
Article II of the Partnership Agreement.
"Closing" shall mean the closing of the purchase and sale (or
exchange) of the partnership interests of the Limited Partnership pursuant to
this Agreement.
"Closing Date" shall mean the date on which the Closing occurs.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Common Shares" shall mean the common stock or shares of PPL REIT.
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"ERISA" shall mean the Employee Retirement Income and Security Act
of 1974, as amended.
"Excess Purchaser Equity" shall mean 50% of the excess, if any, of
(i) the Purchaser Equity over (ii) the Target Equity. Any Excess Purchaser
Equity shall be allocated to American, Ameritech and Idaho (each as defined in
Exhibit A) 16.6666%, 41.6666% and 41.6666%, respectively.
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"IPO" means the proposed initial public offering of securities in
PPL REIT.
"Net Equity Value" shall mean the
(i) the Properties Fair Market Value,
plus
(ii) the Other Assets Value,
plus
(iii) any cash and short-term deposits (excluding escrowed funds
controlled by third parties) of the Limited Partnership on the
date of the Appraisal,
minus
(iv) the amount of the indebtedness of the Limited Partnership as of
the date of the Appraisal, as reflected on Exhibit D,
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minus
(v) the Prepayment Penalty Impact,
minus
(vi) the Transaction Costs,
but in no event less than $117.5 million.
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"Offering Price" shall mean the initial price at which Common
Shares are sold in the IPO.
"Other Assets Value" shall be the net book value of all assets
and liabilities on the GAAP balance sheet of the Limited Partnership (determined
on an accrual basis) as of the date of the Appraisal, other than cash and
short-term deposits (but including escrowed funds controlled by third parties),
indebtedness (as reflected on Exhibit D) and the Properties.
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"PPA" means Xxxxxxxx Property Acquisition, L.P., a Delaware
limited partnership which is the sole general partner of the Limited
Partnership.
"PPA Affiliate" shall mean PPA, PPA Corp., any partner of PPA,
any shareholder of Purchaser or PPA Corp. and any partner or shareholder of any
entity that owns or is owned, directly or indirectly, by Purchaser, PPA Corp.,
PPA or one or more of their respective partners or shareholders; provided,
however, that none of the Sellers and none of PPL REIT, the Limited Partnership
or any direct or indirect subsidiary of PPL REIT or the Limited Partnership
shall be considered a PPA Affiliate.
"PPA Corp." means Xxxxxxxx Property Acquisition, Inc., a
Delaware corporation which is the sole general partner of PPA.
"PPL REIT" means a corporation or real estate investment trust
to be formed by the Purchaser to operate as a REIT under the Code to conduct the
IPO, and to directly or indirectly acquire interests in the Properties, other
real and personal property and related service businesses.
"Partner's Organizational Documents" shall mean, as applicable, the
current (i) partnership agreement of each Partner organized as a limited
partnership, (ii) operative trust documents of each Partner organized as a
common law or business trust, including but not limited to the trust agreement
or indenture, or (iii) effective authorizing statute and operative governing or
authorizing documents of each Partner organized as a state agency, each as
amended.
"Partnership Agreement" shall mean the Amended and Restated
Agreement of Limited Partnership of the Limited
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Partnership, dated as of July 13, 1990, as amended by the First, Second and
Third Amendments to Amended and Restated Agreement of Limited Partnership of the
Limited Partnership, dated as of July 13, 1990, January 11, 1991, and May 20,
1993, respectively.
"Prepayment Penalty Impact" shall mean eighty five percent
(85%) of the total of the prepayment fees and penalties actually paid on the
indebtedness secured by the Properties on the date of the Closing, if any;
Exhibit D summarizes the prepayment fees and penalties that would be payable
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under the terms of the agreements governing the indebtedness secured by the
Properties if such indebtedness were due and paid in full on the date of the
Closing.
"Properties" shall mean the real properties and improvements
thereon in which the Limited Partnership owns an interest on the date of the
Appraisal.
"Properties Fair Market Value" shall mean the value of the
Properties as determined by the Appraisal.
"Purchase Price" shall mean the sum of
(i) the Net Equity Value,
plus
(ii) the positive or negative amount equal to (a) Cash Flow
attributable to the period beginning on the day after the date of
the Appraisal and ending on the day before the Closing Date
(determined on an accrual basis), plus (b) amounts spent or
accrued for tenant improvements, leasing commissions, capital
improvements and other related costs during such period, minus
(c) Cash Flow distributed to the Partners during that period,
but in no event less than $120.0 million.
"Purchaser Equity" shall mean the value of any cash, Common Shares,
interests in the Limited Partnership, or leasing, management or other service
agreements directly or indirectly received or retained by Purchaser or any PPA
Affiliate in
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consideration of the sale, contribution, or transfer of properties or
management, leasing and development businesses, or interests therein or in the
Limited Partnership, directly or indirectly to PPL REIT, the Limited Partnership
or any direct or indirect subsidiary thereof in connection with the IPO. For
this purpose, the value of any Common Shares or interests in the Limited
Partnership that are redeemable for Common Shares shall be the Offering Price.
The value of any leasing, management or other service agreement referred to
above, if any, shall be the net present value of any expected net profit to be
earned by PPL REIT or its direct or indirect subsidiaries after the Closing
under such agreements. Amounts received by Affiliates that are entities and that
are not wholly owned (either directly or indirectly) by Purchaser or a PPA
Affiliate shall be included in Purchaser Equity only to the extent of the direct
or indirect ownership interest of Purchaser and the PPA Affiliates.
"Target Equity" shall mean the sum of (i) $72 million and (ii) any
amounts invested on or after May 1, 1996, by the Purchaser or any PPA Affiliate
(other than the Limited Partnership) in properties that are acquired by PPL REIT
or the Limited Partnership in connection with the IPO. For this purpose, amounts
invested by PPA Affiliates that are entities and that are not wholly owned
(either directly or indirectly) by Purchaser or PPA Affiliates shall be included
in Target Equity only to the extent of the direct or indirect ownership interest
of Purchaser and the PPA Affiliates.
"Transaction Costs" shall mean (i) .35% of the Properties Fair
Market Value plus (ii) the Brokerage Commission.
2. ASSIGNMENT BY PURCHASER: The Purchaser may, without the consent of
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the Partners, assign its rights and obligations hereunder to PPL REIT or to any
PPA Affiliate (i) formed in connection with structuring and completing the IPO
and (ii) controlled by Purchaser and/or one or more of its shareholders;
provided that prior to the effectiveness and as a condition precedent to any
such assignment, the assignee shall execute and deliver to the Partners a
written instrument of assumption in the form of Exhibit E. Notwithstanding the
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foregoing, no assignment shall act as a release or novation of any duty,
obligation, or liability of Purchaser hereunder, and Purchaser shall remain
directly and primarily responsible therefor. Purchaser shall
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also be responsible for the performance hereunder of any permitted assigns. Any
assignment or attempted assignment that does not comply with all of the terms
and conditions hereof shall be null and void.
3. TRANSFER CONSIDERATION: For the consideration and in accordance
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with and subject to the other terms and conditions herein set forth:
3.1 Exxon: If the Closing occurs, Exxon (as defined in Exhibit A)
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shall sell and assign all of its partnership interest in the Limited
Partnership at the Closing to the Purchaser, and the Purchaser shall
purchase and accept such interest and become a substituted limited
partner with respect to such partnership interest, in exchange for cash
equal to Exxon's share of the Purchase Price.
3.2 American, Ameritech and Idaho: If the Closing occurs, American,
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Ameritech and Idaho shall each sell all of their respective partnership
interests in the Limited Partnership at the Closing to the Purchaser,
and the Purchaser shall purchase and accept such interest and become a
substituted limited partner with respect to such partnership interest,
in exchange for:
(a) a number of Common Shares equal to (i) 50% of their
respective shares of the Purchase Price and any Excess Purchaser Equity
divided by (ii) the Offering Price; and
(b) cash equal to 50% of their respective shares of the
Purchase Price and any Excess Purchaser Equity.
3.3 PPA. PPA (as defined in Exhibit A) shall exchange its interest
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in the Limited Partnership for new interests in the Limited Partnership
which are redeemable for Common Shares with a value, based on the
Offering Price, equal to PPA's share of the Purchase Price.
3.4 Allocation of Purchase Price Among Partners. A Partner's share
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of the Purchase Price is the amount that such Partner would receive
under paragraph 5.5 (c) of the Partnership Agreement if (i) all assets
and liabilities of the Limited Partnership were transferred to the
Purchaser
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for an amount equal to the Purchase Price, (ii) the provision of
paragraph 5.5(c)(iv) relating to the payment of a "Disposition Fee," is
deemed inapplicable and is disregarded, except to the extent such fees
have been previously earned and accrued on the books of the Limited
Partnership, and (iii) the provisions of paragraph 5.5(a), (b), (d) and
(e) are deemed inapplicable and are disregarded. In allocating the
Purchase Price among the Partners, no item shall be accounted for to
the extent such item was included in the calculation of the Purchase
Price. A model of the allocation of the Purchase Price, assuming
various hypothetical Purchase Prices, is attached as Exhibit F hereto
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to illustrate an example of the allocation pursuant to this Section
3.4.
3.5 Right of Inspection: Without limiting any Partner's rights
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to inspect and copy books and records of the Limited Partnership under
Section 12.1 of the Partnership Agreement (which rights shall survive
the Closing and continue in effect as to each Partner in connection
with any matter arising out of or related to the period prior to
Closing), each Seller and each Seller's authorized representatives
shall have the right to inspect and verify the calculation of the
Purchase Price and the allocation of the Purchase Price, and to receive
from PPA upon request reasonably detailed recapitulations thereof.
3.6 Estimated Purchase Price; Post-Closing Adjustments; Disputes.
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Not less than ten (10) business days prior to the Closing, PPA shall
make a good faith estimate of the Purchase Price and the allocation of
the Purchase Price pursuant to Section 3.4, and shall provide to each
Seller and to the Purchaser a reasonably detailed written statement
showing the calculations thereof. The consideration paid to the
Partners at Closing shall be based upon such estimated Purchase Price,
subject to any modification as to which the parties agree prior to
Closing. Within thirty (30) calendar days after the Closing, PPA shall
reconcile with actual receipts and expenditures any accruals included
in the calculations of Other Assets Value and Cash Flow in determining
the Purchase Price, shall adjust the Purchase Price accordingly and
shall provide to (a) each Seller and to the Purchaser written
statements
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showing, in reasonable detail, the calculation of such adjusted
Purchase Price and the allocation of such adjusted Purchase Price
pursuant to Section 3.4 and (b) each of Ameritech, American and Idaho
and to the Purchaser written statements certified by Coopers & Xxxxxxx
or another "Big 6" accounting firm showing, in reasonable detail, the
calculation of Excess Purchaser Equity. Purchaser and the Partners
agree to settle, in cash, within ten (10) business days thereafter (or,
if Purchaser or any Seller disputes PPA's calculation of the Purchase
Price, within ten (10) business days after the determination of the
Purchase Price by an independent auditor as provided below) any
differences between the Purchase Price as estimated for purposes of the
Closing and the Purchase Price as finally determined in accordance with
this Section 3.6. Any payments required to be made by the Partners to
settle the adjustment shall be made pro rata by each Partner in
accordance with the percentage of the Purchase Price received by the
Partner at Closing. All payments to settle the adjustment shall be made
by the methods specified in Section 7 as applicable to the Closing.
Purchaser and the Partners agree that any dispute regarding the
calculation of the adjustment to the Purchase Price hereunder shall be
resolved by one "big 6" firm of independent auditors selected by
Sellers acting collectively. Purchaser and the Partners agree that any
dispute regarding the calculation of the Excess Purchaser Equity
hereunder shall be resolved by one "big 6" firm of independent auditors
selected by Ameritech, American and Idaho acting collectively. If a
dispute arises regarding the calculation of both the Purchase Price and
the Excess Purchaser Equity, Purchaser and Sellers agree that a single
"big 6" firm of independent auditors selected by Sellers acting
collectively shall resolve both disputes.
3.7 Conduct of Partnership Business. PPA (a) represents and
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warrants to each Seller that, since year-end 1995, the business of the
Limited Partnership has been conducted in the ordinary course
consistent with past practice and (b) agrees that the business of the
Limited Partnership will continue to be conducted in the ordinary
course consistent with past practice until the earlier to occur of the
Closing Date or the termination of this Agreement, including without
limitation, distributions of
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Net Operating Revenues (as defined in the Partnership Agreement),
(c) agrees that until the earlier to occur of the Closing Date or the
termination of this Agreement, no prepayments of the indebtedness
secured by the Properties shall be made without the consent of the
Sellers and, (d) represents and warrants that, to its knowledge, the
Limited Partnership has never incurred any unrelated business taxable
income. Without limiting the foregoing, PPA agrees not to establish or
maintain any reserves in excess of $500,000 through the Closing Date.
This paragraph 3.7 is not intended to alter any of the provisions of
the Partnership Agreement or otherwise applicable to the conduct of the
Limited Partnership's business following a termination of the Agreement
prior to Closing.
3.8 Additional Cost Adjustment. If the Purchase Price exceeds
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$126.3 million, American, Ameritech, and Idaho agree to reimburse Exxon
for the fees (up to a maximum aggregate amount of $60,000) and expenses
(up to a maximum aggregate amount of $15,000) incurred by Exxon to VCK
Capital Advisors, Ltd. Each of American, Ameritech, and Idaho shall be
responsible for a proportionate share of such reimbursement in
accordance with the same respective percentages set forth in the
definition of Excess Purchaser Equity. If the estimated Purchase Price
determined in accordance with paragraph 3.6 above exceeds $126.3
million, the Purchaser will deduct such reimbursements (against Exxon's
written statement therefor) from the respective cash amounts otherwise
payable to American, Ameritech, and Idaho at Closing and shall add such
reimbursements to the cash amount otherwise payable to Exxon at
Closing. If (i) deductions are made in accordance with the preceding
sentence but the Purchase Price as finally determined in accordance
with paragraph 3.6 above does not exceed $126.3 million, Exxon shall
repay such deducted amounts to American, Ameritech, and Idaho, or
(ii) if the estimated Purchase Price is less than $126.3 million but
the final Purchase Price exceeds such amount, American, Ameritech, and
Idaho shall pay such reimbursable amounts to Exxon, in each case by
deduction or additional payment, as necessary, in accordance with the
procedures for post-Closing adjustments set forth in paragraph 3.6
above.
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4. PARTNERS' REPRESENTATIONS AND WARRANTIES: To induce the Purchaser
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to enter into this Agreement and perform its obligations hereunder, each Partner
severally, but not jointly, makes the following representations and warranties
to the Purchaser; provided, however, that each Partner makes the following
representations and warranties with respect to itself and its partnership
interest in the Limited Partnership only, and no Partner has any duties or
obligations with respect to the representations or warranties of any other
Partner; and provided further, that the Partners acknowledge and agree that the
Purchaser and its permitted assigns are entitled to rely and have relied upon
each:
4.1 Organization and Power: The Partner is either (a) an
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ERISA, common law or business trust validly existing as a trust under
federal law or the laws of its state of formation, (b) a state agency
and has full trust power and authority to enter into and perform its
obligations under this Agreement or (c) a limited partnership duly
validly existing as a limited partnership under the laws of its state
of formation.
4.2 Authority and Binding Effect: The execution and delivery
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of this Agreement and the performance by the Partner of its obligations
hereunder have been duly authorized by all necessary trust, partnership
or state action. This Agreement constitutes the legal, valid and
binding agreement of the Partner, enforceable against Partner in
accordance with its terms, subject to (i) limitations under applicable
law on rights to indemnification, (ii) the effects of any applicable
bankruptcy, reorganization, moratorium or similar laws and (iii)
general principles of equity and (iv) limitations imposed by the
"prohibited transaction" provisions of ERISA.
4.3 No Encumbrances; Right to Sell: (a) The Partner is the
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sole owner of a partnership interest in the Limited Partnership in the
percentage set forth on Exhibit A, (b) the Partner has good title to
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its partnership interest in the Limited Partnership, (c) the Partner's
partnership interest in the Limited Partnership is free and clear of
any liens, encumbrances, pledges and security interests whatsoever
other than as created pursuant to the Xxxxxxxxxxx
00
Xxxxxxxxx, (x) the Partner has not granted any other person or entity
an option to purchase or a right of first refusal upon its partnership
interest in the Limited Partnership and (e) except for any consents
required by the Partnership Agreement and the satisfaction of the
requirements contained in Article IX of the Partnership Agreement, no
consent of any third party is required in order for such Partner to
perform its obligations hereunder.
4.4 No Violation: The execution and delivery of, and the
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performance by each Partner of such Partner's obligations under this
Agreement do not and will not (a) contravene, or constitute a default
under, any (i) provisions of the Partner's Organizational Documents or,
(ii) to the knowledge of the Partner, without investigation, and
subject to paragraph 6(a)(ii)(B), (x) any material law or regulation
applicable to the Partner, provided that no representation or warranty
is made by any Seller with respect to the limitations imposed by the
"prohibited transaction" provisions of ERISA, (y) assuming compliance
with the conditions and requirements relating to transfers of
partnership interests in the partnership contained in the Partnership
Agreement, any material agreement, note, mortgage, indenture, lease,
franchise, license or other instrument to which the Partner is a party
or by which it is bound, or (z) any material judgement, injunction,
order or decree binding upon such the Partner or its assets or to which
such Partner's partnership interest in the Limited Partnership is
subject, except in each case where any such contravention or default
would not have the effect of preventing the Partner from performing its
obligations under this Agreement, or (b) result in the creation of any
lien or other encumbrance on the Partner's partnership interest in the
Limited Partnership; provided, however, that no representation or
warranty is made by any Seller with respect to any law or regulation
applicable to the Seller, or any agreement, note, mortgage, indenture,
lease, franchise, license or other instrument, or any judgment,
injunction, order or decree, which might be binding upon the Seller or
its assets, in either case by reason of the Seller's status as a
limited partner of the Limited Partnership.
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4.5 No Litigation. To the Partner's knowledge, without
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investigation, and subject to paragraph 6(a)(ii)(B), there is no
action, suit or proceeding, pending or threatened in writing, against
or affecting the Partner in any court or before any arbitrator or
before any governmental body or agency which challenges the validity or
enforceability of this Agreement.
4.6 Binding Stock Election: American, Ameritech and Idaho each
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acknowledge that, as of the date hereof, (a) each such Seller is
irrevocably bound to accept Common Shares as part of each such Seller's
transfer consideration in the proportions described in paragraph 3
hereto, (b) that it can fend for itself, (c) that it can bear the
economic risk of its investment in Common Shares, (d) that it has such
knowledge and experience in financial and business matters that they
are capable of evaluating the merits and risks of an investment in
Common Shares and (e) that it is acquiring the Common Shares for
investment and not with the present intention of participating in a
distribution.
4.7 No Broker. Each Partner warrants and represents to the
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Purchaser that the Partner has not retained any real estate broker,
business broker, finder or other person entitled to a commission or
other compensation in connection with this transaction other than VCK
Capital Advisors, Ltd., for whose costs and expenses Purchaser shall
not be liable in any event in excess of any amounts paid by Purchaser
prior to the date hereof; and provided further, that this
representation and warranty shall exclude any (i) compensation payable
by the Limited Partnership to the Appraiser and (ii) payment to PPA or
any PPA Affiliate of any "Disposition Fee" (as defined in the
Partnership Agreement) previously earned and accrued on the books of
the Limited Partnership. Any commissions or other compensation payable
to any underwriter in connection with the IPO shall be payable only by
Purchaser.
5. PURCHASER'S REPRESENTATIONS AND WARRANTIES: To induce the Partners
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to enter into this Agreement and to sell or transfer their respective
partnership interests in the Limited Partnership to the Purchaser, the Purchaser
hereby makes the following
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representations and warranties, upon each of which the Purchaser acknowledges
and agrees that the Partners are entitled to rely and have relied:
5.1 Identity of Directors, Partners and Officers.
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Exhibit G sets forth all of the partners of PPA and all of
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the officers, directors and shareholders of Purchaser and
PPA Corp.
5.2 Organization and Power: The Purchaser is a corporation duly
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incorporated, validly existing and in good standing under the laws
of the State of Delaware, and has full corporate power and authority to
enter into and perform its obligations under this Agreement.
5.3 Authority and Binding Effect: The execution and delivery
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of this Agreement and the performance by the Purchaser of its
obligations hereunder have been duly authorized by all necessary
corporate action. This Agreement constitutes the legal, valid and
binding agreement of the Purchaser, enforceable against Purchaser in
accordance with its terms, subject to (i) limitations under applicable
law on rights to indemnification, (ii) the effects of any applicable
bankruptcy, reorganization, moratorium or similar laws and (iii)
general principles of equity.
5.4 No Violation: The execution and delivery of the Agreement
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by the Purchaser and the performance by the Purchaser of its
obligations hereunder do not and will not (a) contravene, or constitute
a default under, any (i) provisions of its Articles of Incorporation or
Bylaws, (ii) applicable law or regulation, (iii) agreement, note,
mortgage, indenture, lease, franchise, license or other instrument to
which Purchaser is a party or by which it is bound, or (iv) judgment,
injunction, order, decree or other instrument binding upon the
Purchaser or its assets, or (b) result in the creation of any lien or
other encumbrance on any asset of the Purchaser.
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5.5 No Litigation. To the Purchaser's knowledge, without
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investigation, there is no action, suit or proceeding, pending or
threatened in writing, against or affecting the Purchaser in any court
or before any arbitrator or before any governmental body or agency
which in any manner raises any question affecting the validity or
enforceability of this Agreement or any other agreement or instrument
to which the Purchaser is a party or by which it is bound and that is
to be used in connection with, or is contemplated by, this Agreement.
5.6 No Broker. Purchaser warrants and represents to each Partner
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that the Purchaser has not retained any real estate broker, business
broker, finder or other person entitled to a commission or other
compensation in connection with this transaction, excluding any (i)
compensation payable by the Limited Partnership to the Appraiser and
(ii) payment to PPA or any PPA Affiliate of any "Disposition Fee" (as
defined in the Partnership Agreement) previously earned and accrued on
the books of the Limited Partnership. Any commissions or other
compensation payable to any underwriter in connection with the IPO
shall be payable only by Purchaser.
5.7 REOC Status. Purchaser warrants and represents to each Partner
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that the Limited Partnership is a "real estate operating company,"
within the meaning of the regulations issued by the United States
Department of Labor at section 2510.3-101 of part 2510 of chapter XXV,
title 29 of the United States Code of Federal Regulations.
5.8 Securities Law. Purchaser understands that the sale of the
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partnership interests in the Limited Partnership hereunder has not been
registered under the Securities Act of 1933, as amended (the "1933
Act"), or any state securities laws. Purchaser will not sell, transfer
or otherwise dispose of such interests, directly or indirectly, without
an effective registration under the 1933 Act and such state securities
laws or a valid exemption therefrom.
5.9 HSR Act. Purchaser represents and warrants that as a result of
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the transactions to be consummated by
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Purchaser, Sellers are not required to file notice pursuant to the Xxxx
Xxxxx Xxxxxx Antitrust Improvements Act of 1976, as amended, with
respect to the sale and purchase of the partnership interests pursuant
to this Agreement.
5.10 No Capital Gains Dividends Contemplated.
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Purchaser does not currently contemplate PPL REIT making
within one year after the Closing any capital gain
dividends, within the meaning of Section 857(b)(3)(C) of the
Code.
6. CONDITIONS PRECEDENT:
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(a) Purchaser's Conditions. The Purchaser's obligations hereunder,
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including the Purchaser's obligation to close the transaction contemplated
hereby and to pay or transfer consideration to the Sellers, are subject to the
satisfaction of the following conditions precedent and the compliance by the
Sellers, with the following covenants:
(i) Assignments: Simultaneously with the Purchaser's delivery
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to each Seller of the purchase consideration to which each Seller is
entitled under paragraph 3 hereof, each Seller shall have delivered to
or for the benefit of the Purchaser, on or before the Closing, an
Assignment pursuant to the provisions of paragraph 7 hereof, fully
executed by such Seller.
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(ii) Representations and Warranties True and Correct:
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(A) Each Seller shall deliver to Purchaser at Closing a
certificate signed by an authorized party stating that its
representations and warranties made in this Agreement are true
and correct in all material respects as of the date of the
Closing (with such modifications of the representations made
in paragraphs 4.4(a)(ii) and 4.5 as may be necessary as
provided in subparagraph (B) below) as if then made.
(B) Seller shall, in the certificate delivered in
accordance with subparagraph (a) or in another writing
delivered to Purchaser before Closing, modify the
representations and warranties given by it in paragraphs
4.4(a)(ii) and 4.5 on the date hereof if, after execution of
this Agreement and before Closing, the Seller gains knowledge
of any matter that causes such representations and warranties
made on the date hereof, or as of the date of such subsequent
certification, to be untrue in any material respect. Prior to
the Closing, Seller shall confirm or modify the
representations and warranties in paragraphs 4.4(a)(ii) and
4.5 in a writing delivered to Purchaser within five business
days after Purchaser's request therefor; provided, that
Purchaser may make only one such request. If modified, the
representations and warranties made by Seller in paragraphs
4.4(a)(ii) and 4.5 as so modified by the certificate or
writing shall be deemed to have been made on the date hereof
and shall supersede, replace and cancel the previous forms of
such representations and warranties given by it for all
purposes hereof, including but not limited to paragraph 9(a).
The Seller shall use its best efforts to promptly provide the
Purchaser with material information on the nature of any
modifications, in sufficient detail to permit Purchaser to
evaluate the effects, if any, of the facts underlying such
modifications on (i) the Seller's interest in the Limited
Partnership and (ii) the transactions contemplated by this
Agreement.
17
(C) Notwithstanding any provision to the contrary
contained herein, Seller shall not have any liability
whatsoever and shall not be deemed to be in breach of this
Agreement, and Purchaser shall not have any remedy at law or
in equity or any right to damages, indemnification or any
other entitlement to reimbursement of any kind with respect
thereto, as a result of any of Seller's representations and
warranties contained in paragraphs 4.4(a)(ii) or 4.5 being or
becoming untrue subsequent to the date of this Agreement if
such representations and warranties, as modified in writing to
Purchaser at or prior to Closing, would be true and correct in
all material respects according to their terms. However, if
Purchaser determines in good faith that, as a result of
matters disclosed in any such modification, it would be
impractical or inadvisable for Purchaser to proceed with the
transactions contemplated by this Agreement, Purchaser shall
have the sole and exclusive right and remedy not to consummate
the transactions contemplated herein due to the failure of a
condition precedent to be satisfied, but Purchaser shall have
no other rights or remedies of any kind. The parties
recognize, however, that Purchaser may, in its sole
discretion, waive the satisfaction of any such condition
precedent, but shall have no obligation to do so.
(iii) Acquisition of all Partnership Interests: At Closing,
----------------------------------------
the Purchaser shall have acquired from the Sellers all of their limited
partnership interests in the Limited Partnership, it being agreed that
if the Purchaser cannot acquire all of such partnership interests in
the Limited Partnership at Closing, the Purchaser shall have the
absolute right, if it so elects, to decline to close the transactions
contemplated by this Agreement.
(iv) Public Offering: The closing of the IPO shall have
---------------
occurred.
(v) FIRPTA. Each Seller shall deliver to the Purchaser a
------
duly executed certification setting forth the Seller's address and
Federal tax identification number and certifying that the Seller is not
a "foreign person" for
18
purposes of the provisions of Section 1445 (as may be amended) of the
Code.
(b) Sellers' Conditions. The respective obligations of the Sellers
-------------------
hereunder, including each Seller's obligation to sell and assign its partnership
interest in the Limited Partnership as contemplated hereby, are subject to the
satisfaction of the following conditions precedent and the compliance by the
Purchaser and its assigns, if any, with the following covenants (except that
only the conditions set forth in Section 6(b)(i)-(v) shall apply to Exxon):
(i) Delivery of Purchase Price Estimate: Not less than ten
-----------------------------------
(10) business days prior to Closing, each Seller shall have received a
written estimate of the Purchase Price as provided in paragraph 3.6.
(ii) Receipt of Purchase Consideration: Simultaneously with
---------------------------------
each Seller's delivery to the Purchaser of an Assignment pursuant to
the provisions of paragraph 7 hereof, each Seller shall have received
the purchase consideration to which each Seller is entitled under
paragraph 3 hereof.
(iii) Representations and Warranties True and Correct:
-----------------------------------------------
Purchaser and its assigns, if any, shall deliver to each Seller at
Closing a certificate signed by an authorized party stating that their
representations and warranties made in this Agreement are true and
correct as of the date of the Closing as if then made and that the
Purchaser and its assigns, if any, have performed all of its covenants
and other obligations under this Agreement. In addition, Purchaser and
each of its permitted assigns shall represent and warrant to each
Seller that none of them is a "party in interest" to any Seller within
the meaning of Section 3(14) of ERISA (or that, to the extent that
Purchaser is a "party in interest," an exemption from the "prohibited
transaction" rules of ERISA is available).
(iv) Receipt of Legal Opinion: Each Seller shall have been
------------------------
furnished with a legal opinion of Hunton & Xxxxxxxx, counsel for the
Purchaser and its assigns, if any, or such other counsel approved by
Sellers in writing, in the form attached hereto as Exhibit H; In
---------
addition, each Seller shall
19
have been furnished with a legal opinion of Hunton & Xxxxxxxx, or such
other counsel approved by Sellers in writing, that (a) it will
recognize no income or gain upon its sale and assignment of its
partnership interest in the Limited Partnership that would constitute
unrelated business taxable income ("UBTI") (within the meaning of
Section 512 of the Code) and (b) the transactions contemplated hereby
will not result in any income or gain to the Limited Partnership that
would constitute UBTI that would be allocable to any of the partners of
the Limited Partnership.
(v) Public Offering: The closing of the IPO shall have
---------------
occurred.
(vi) PPL REIT Management. PPL REIT's senior management, as
-------------------
reflected in the prospectus distributed in connection with the IPO,
shall include substantially all of the senior managers of the Purchaser
currently rendering substantial senior management services to the
Limited Partnership, including Xxxxxxx Xxxxxxx.
(vii) Reliance on corporate, securities and tax opinions:
--------------------------------------------------
Ameritech, American and Idaho shall each receive letters entitling them
to rely on the opinions of Hunton & Xxxxxxxx to PPL REIT (or its Board)
with respect to general corporate (or trust, if PPL REIT is organized
as a trust), securities and tax matters included as exhibits to the
registration statement filed by PPL REIT with the Securities and
Exchange Commission in connection with the IPO. The opinions shall be
in form and substance customary in initial public offerings of similar
securities by a REIT involving an UPREIT structure and holding
properties and organized and operating in substantially the same manner
as PPL REIT. Such opinions shall specifically cover the due formation
and valid existence of PPL REIT, the due authorization and issuance of
the Common Shares issued to the Sellers pursuant to this Agreement, and
the execution, authorization and delivery by, and the enforceability
against, PPL REIT, of this Agreement, the Registration Rights Agreement
and any other agreements in favor of the Sellers executed pursuant to
this Agreement. Ameritech, American and Idaho shall also receive from
Hunton & Xxxxxxxx substantially the same opinions that Hunton &
Xxxxxxxx renders to the underwriters
20
of the IPO under the related underwriting agreement, other than opinions
covering (i) matters not affecting them or (ii) agreements or instruments
to which they are not parties.
(viii) Ownership Limitation. The Articles of Incorporation or
--------------------
Declaration of Trust, as applicable, of PPL REIT shall include customary
ownership limitation provisions designed to prevent ownership by any person
of more than 9.9% of any class of stock of PPL REIT, with such exceptions
as are necessary to permit greater ownership by Purchaser and its
Affiliates.
(ix) IPO Proceeds. The gross proceeds raised in the IPO shall be at
------------
least $200 million.
(x) One Class of Securities. Upon the closing of the IPO, PPL REIT
-----------------------
shall have issued only Common Shares of a single series, and no other class
of stock or other securities or rights to obtain or acquire other
securities shall have been issued or shall be outstanding, except for
options to purchase Common Shares granted to officers or trustees/directors
of PPL REIT which are outstanding upon the closing of the IPO, as disclosed
in the prospectus used in connection with the IPO.
(xi) QIU. A "qualified independent underwriter," as defined in
---
Schedule E of the Bylaws of the National Association of Securities Dealers,
Inc. (or any successor rule or provision), shall have delivered to PPL REIT
a letter in customary form with respect to the Offering Price.
(xii) Registration Rights Agreement. PPL REIT shall have executed and
-----------------------------
delivered to each of Ameritech, American and Idaho a registration rights
agreement in substantially the form attached as Exhibit J.
---------
(c) Waiver. (i) Purchaser may waive all or part of any or all of the
------
conditions set forth in Section 6(a), (ii) Exxon, for itself, may waive all or
part of any or all of the conditions set forth in Section 6(b)(i)-(v) and
(iii) each of Ameritech, American and Idaho, for itself, may waive all or part
of any or all of the conditions set forth in Section 6(b)(i)-(xii), in each case
in the sole discretion of the waiving party and only by a
21
writing signed by the waiving party and delivered by the waiving party to each
other party hereto.
7. CLOSING: Closing shall occur, if at all, upon the closing of the IPO,
-------
which shall be no later than December 31, 1996, unless said date has been
extended by written agreement executed by the Purchaser and each of the
Partners. If the Closing has not occurred by the date provided in the foregoing
sentence, this Agreement shall automatically terminate and be of no further
force or effect, other than paragraph 13 which shall survive the termination. At
the Closing, each Seller shall deliver to Purchaser an assignment of such
Seller's entire partnership interest in the Limited Partnership, in the form
attached hereto as Exhibit I, fully executed and acknowledged (individually, the
---------
"Assignment" and collectively, the "Assignments"). Notwithstanding anything to
the contrary in the Partnership Agreement, the Assignments shall be effective on
the Closing Date. The Closing will occur at the offices of the Purchaser, or
such other place as the Purchaser and the Sellers may mutually agree. At the
Closing, the Purchaser will (a) deliver the cash portion of the Purchase Price
and Excess Purchaser Equity to the Sellers by wire transfer of immediately
available funds (to the respective accounts specified by each Seller at least
five days prior to Closing) pursuant to the provisions of paragraphs 3.1 and
3.2(b), (b) deliver the balance of the Purchase Price and Excess Purchaser
Equity in the form of certificates representing Common Shares pursuant to the
provisions of paragraph 3.2(a) to American, Ameritech and Idaho or, upon written
instructions to the Purchaser, their custodian designee(s) and (c) deliver to
PPA such documentation as is necessary to evidence its ownership of the
interests in the Limited Partnership to which it is entitled hereunder, and
comply with any reasonable requests to further or better evidence PPA's
ownership.
8. LIABILITY OF PURCHASER; ASSUMPTION OF OBLIGATIONS; INDEMNIFICATION OF
---------------------------------------------------------------------
SELLERS: (a) At Closing, Purchaser will accept the assignment of the Sellers'
interests in the Limited Partnership and assume all of Sellers' duties under the
Partnership Agreement accruing from and after Closing. Purchaser agrees to
indemnify and hold the Sellers harmless from and against any and all claims,
demands, debts, liabilities, expenses and causes of action, including reasonable
attorney's fees, which
22
relate to liabilities or obligations of Purchaser arising from Purchaser's
ownership of the interests and which arise as a result of events that occur from
and after Closing.
(b) If the Closing occurs, Purchaser shall indemnify and save and hold
harmless Sellers from and against any loss, cost, claim, expense (including,
without limitation, reasonable attorneys' fees and expenses) and liability
whatsoever on or with respect to or in connection with all contracts,
agreements, leases, obligations, duties, and liabilities of the Limited
Partnership (the "Indemnified Obligations") and any claim asserted against any
of Sellers by a person or persons with respect thereto at any time or times. It
is expressly stipulated and agreed that the Indemnified Obligations as to which
Purchaser shall indemnify Sellers (A) include, without limitation, any claims of
liabilities of any of Sellers based on actual or alleged NEGLIGENCE of any of
Sellers or the Limited Partnership or based on actual or alleged STRICT
LIABILITY of any of Sellers or the Limited Partnership and (B) exclude the
obligation of Sellers under this Agreement.
(c) Each Seller shall promptly notify Purchaser of any claim or action
of a third party against such Seller with respect to an Indemnified Obligation
for which such Seller may seek indemnification. Upon receipt of such notice,
Purchaser shall have the right, at its expense, to participate in and assume the
defense of such claim or action. If Purchaser does assume the defense of such
claim or action, such Seller shall cooperate fully with Purchaser in the defense
of such claim or action, and such Seller may at its election continue to
participate in the defense and may retain its own counsel at such Seller's
expense. No Seller shall settle or compromise any claim or action against it for
which an indemnity claim is made or is expected to be made under this section
without the consent of Purchaser, which consent shall not unreasonably be
delayed or withheld.
(d) It is expressly stipulated and understood that if Purchaser or PPA
causes the Limited Partnership to admit partners, to borrow funds or to sell or
participate in the sale of securities of any nature incident to the Closing for
any purpose whatsoever (including, without limitation, the IPO), none of Sellers
shall be required to or shall incur any liability or responsibility whatsoever
(either in an individual capacity or in
23
any capacity as a partner) in connection with the admission of such partners,
repayment of any such loan indebtedness or in connection with such borrowing
transaction or sale of securities in the IPO or otherwise, or with respect to
any covenant, agreement, representation, warranty, or undertaking of the Limited
Partnership, PPA or Purchaser, in connection with such admission, borrowing
transaction or sale of securities, nor shall any of Sellers (either in an
individual capacity or in any capacity as a partner of the Limited Partnership)
provide or make or be responsible in any respect for any information provided
to, or any warranty or representation whatsoever made to or for the benefit of,
any lender, underwriter, or any other person in connection with any such
admission, loan or sale of securities or to induce any person to be admitted to
the Limited Partnership or to make or advance any such loan or purchase any such
securities (including, without limitation, pursuant to the IPO) or assist PPA,
the Limited Partnership or Purchaser in admitting such partners, obtaining any
such loan or issuing or selling any such securities. If any such admission to
the Limited Partnership, loan transaction or sale of securities in connection
with the IPO or otherwise shall be effected by Purchaser or the Limited
Partnership, Purchaser and PPA shall indemnify and save and hold harmless
Sellers from and against any loss, cost, claim, expense (including, without
limitation, reasonable attorneys' fees and expenses) and liability whatsoever.
Effective upon the Closing, PPA hereby releases each of the Sellers from any
further obligations, liabilities, or duties under the Partnership Agreement or
any contract or agreement of the Limited Partnership.
(e) Each of the Limited Partnership and PPA hereby releases each of the
Sellers from any further obligations, liabilities or duties to the Limited
Partnership or any Partner from and after the Closing under the Partnership
Agreement, applicable law or any contract or agreement of the Limited
Partnership.
(f) From and after the Closing, each of the Sellers hereby releases
each of the other Sellers from any further obligations, liabilities or duties to
the Limited Partnership or, in connection with the Limited Partnership, to any
Seller, arising under the Partnership Agreement or the Act (as defined in the
Partnership Agreement). Effective as of the Closing, each Seller acknowledges
that, to its knowledge, it has no claim or cause of
24
action against any other Seller in connection with the Limited Partnership that
has not been disclosed in writing to such other Seller prior to Closing. This
paragraph 8(f) shall not release any Seller from any obligation such Seller may
have to pay or refund amounts to another Seller under paragraphs 3.6 or 3.8 of
this Agreement.
9. WAIVER; INDEMNIFICATION; SURVIVAL:
---------------------------------
(a) Each representation and warranty of a Partner herein shall
survive the Closing of the transaction contemplated hereby, without regard to
any investigation conducted by or on behalf of the Purchaser. Each Partner,
severally and not jointly, does hereby indemnify and hold Purchaser harmless
from and against any out-of-pocket costs and expenses (including reasonable
attorneys' fees and costs) that may at any time be incurred by the Purchaser,
whether before or after Closing, as a result of any breach by such Partner of
any of such Partner's representations, warranties, covenants or obligations set
forth herein. Notwithstanding any other provision to the contrary contained in
this Agreement or in any agreement contemplated by this Agreement, the Partners
shall not have any obligation to make any such indemnification payments which,
in the aggregate, exceed the lesser of (i) Purchaser's out-of pocket costs and
expenses (including reasonable attorneys' fees and costs) and (iii) $3 million.
Notwithstanding the foregoing, unless the Purchaser shall have filed suit
against a Seller alleging a breach or alleged breach of said Seller's
warranties, representations, covenants or obligations and seeking
indemnification pursuant to the preceding sentence within eighteen (18) months
following the Closing, all such warranties, representations, covenants and
obligations shall be terminated and of no further force and effect, and the
Purchaser will have no right thereafter to make, file or prosecute any claims
against such Seller arising out of the breach or alleged breach thereof.
(b) Each representation and warranty of the Purchaser herein
shall survive the Closing of the transaction contemplated hereby, without regard
to any investigation conducted by or on behalf of the Partners. The Purchaser
does hereby indemnify and hold the Partners harmless from and against any
claims, costs, penalties, damages, losses, liabilities and expenses (including
reasonable attorneys' fees and costs) that may at any time be
25
incurred by the Partners, whether before or after Closing, as a result of any
breach by Purchaser of any of Purchaser's representations, warranties, covenants
or obligations set forth herein or in any other document delivered by such
Partner pursuant hereto.
10. DEFAULT:
-------
In the event that any Seller shall default in its obligation to
deliver its limited partnership interest in the Limited Partnership to Purchaser
in accordance with the terms of this Agreement (a "Defaulting Seller"), the
Purchaser shall, in addition to a claim for indemnification against such
Defaulting Seller pursuant to Section 9 of this Agreement, have the right to
bring an action for specific performance, it being acknowledged that each
partnership interest in the Limited Partnership which is the subject matter of
this Agreement, is unique in nature and that an action for damages may not
provide an adequate remedy to the Purchaser in the event of such default.
In the event of default by the Purchaser, the Partners shall have such
remedies as against the Purchaser as shall be available at law or in equity.
In the event of any litigation or dispute between the parties arising
out of or in any way connected with this Agreement, resulting in any litigation,
then the prevailing party in such litigation shall be entitled to recover its
costs of prosecuting and/or defending such action, including, without
limitation, reasonable attorneys' fees and costs at trial and all appellate
levels. The provisions of this paragraph shall survive the Closing of the
transaction contemplated hereby.
11. TRANSFER RESTRICTIONS: American, Ameritech and Idaho each acknowledges
---------------------
and agrees that (i) the Common Shares have not been, and will not be when
received by them, registered under the Securities Act of 1933, as amended (the
"Act"), and may not be sold or transferred by them except pursuant to a
registration statement effective under the Act or an applicable exemption from
the Act, (ii) it is acquiring Common Shares for investment and not with a view
toward distribution and, (ii) without the consent of the managing underwriter of
the IPO, for a period of one year after the Closing Date, it will not offer,
sell, contract to sell
26
or otherwise transfer or dispose of any Common Shares that it receives
hereunder.
12. SELLER CONSENTS: If the Closing occurs, each Partner consents to the
---------------
transfer or, in the case of PPA, conversion, by each of the other Partners of
its partnership interest in the Limited Partnership at Closing and agrees that
all of the conditions and requirements under the Partnership Agreement with
respect to the transfer or, in the case of PPA, conversion of each Partner's
partnership interest in the Limited Partnership as contemplated by this
Agreement have been satisfied. American, Ameritech and Idaho each consents to
the inclusion in the prospectus and press releases prepared in connection with
the IPO of (i) its name, (ii) descriptions of (A) its interest in the Limited
Partnership prior to the Closing, (B) its Common Share ownership after the IPO
and (C) this Agreement and documents and agreements ancillary to, or prepared or
executed in connection with, this Agreement, and (iii) related matters;
provided, however, that such references shall be provided to the parties for
-------- -------
their review and comment not less than ten (10) days before first public use and
their comments thereon shall be considered in good faith by Purchaser and PPL
REIT; provided, however, that no Seller shall have any liability or obligation
whatsoever with respect to any such prospectus or press release or any
information therein. Neither Exxon's name nor any derivative thereof shall be
disclosed, referred to or otherwise used in any prospectuses, press releases or
other agreements or material prepared in connection with the IPO except with
Exxon's prior written consent, which may be withheld in Exxon's sole discretion.
13. FAILED DEAL COSTS: Notwithstanding any provision to the contrary
-----------------
contained herein or in the Partnership Agreement, in the event that the
Purchaser shall not consummate its purchase of the partnership interests of the
Sellers as provided for herein for any reason other than a default by a Seller,
the Limited Partnership shall reimburse each non-defaulting Seller's out-of-
pocket fees and expenses incurred in connection with this Agreement, including
fees and expenses of attorneys and real estate advisors, promptly upon
presentation by such Seller of documentation of its fees and expenses, provided
that the Limited Partnership shall not have any obligation to reimburse any
Seller for its fees and expenses in an amount in excess of $100,000.
27
14. BOARD SEAT:
----------
(a) Ameritech, American and Idaho acting as a group shall have the right,
exercisable at any time between the date hereof and the first anniversary of the
IPO by giving written notice to PPL REIT, to nominate one person who is
acceptable to Ameritech, American and Idaho acting as a group, on the one hand,
and Purchaser (or its permitted assign), on the other hand (the "Nominee"), as a
member of the board of directors (or trustees, if PPL REIT is organized as a
trust) of PPL REIT.
(b) Within, (i) 30 days after receipt of such notice, if the IPO has not
closed prior to receipt of the notice, Purchaser (or its permitted assign) shall
cause its shareholders to elect the Nominee to the board of PPL REIT and, (ii)
60 days after receipt of such notice, if the IPO has closed before receipt of
the notice, Purchaser (or its permitted assign) shall (A) prepare and file with
the Securities and Exchange Commission ("SEC") a notice of a special meeting of
the PPL REIT shareholders to be held within six weeks of the mailing of the
notice to the PPL shareholders, to which notice a proxy statement shall be
attached in which the Nominee is presented for election to the board with
customary language of support from management, (B) mail such proxy statement to
the PPL shareholders by means customary for proxy statement mailings and (C) if
a quorum is not present on the scheduled meeting date, continue such meeting in
the manner provided by applicable law until a quorum is present.
(d) If the Nominee is nominated before the IPO has closed, the Nominee
shall agree to promptly cooperate with management in preparing the registration
statement required in connection with the IPO and any amendments thereto,
including providing all information required to be included therein by
applicable law and signing the registration statement or a consent to the use of
the Nominee's name therein which shall be filed as an exhibit thereto, and
otherwise cooperating in the manner required of all members of the board in
connection with the IPO. If the Nominee is nominated after the IPO has closed,
the Nominee shall promptly cooperate with management in preparing the special
meeting notice and proxy statement, including providing all information required
to be included therein by applicable law.
28
(e) The right to nominate the Nominee shall not be exercisable in the
six week period prior to the projected closing date of the IPO as set forth in a
writing delivered to American, Ameritech and Idaho no earlier than two weeks
prior to the start of such six week period, or in the two month period after the
closing of the IPO.
(f) The Nominee shall serve a term commencing on the date of the
Nominee's election and expiring not earlier than the first anniversary of the
Nominee's election.
15. MISCELLANEOUS:
-------------
15.1 Completeness; Modification; Waiver. This Agreement
----------------------------------
constitutes the entire agreement between the parties hereto with
respect to the transactions contemplated hereby and supersedes all
prior discussions, understandings, agreements and negotiations between
the parties hereto. This Agreement may be modified only by a written
instrument duly executed by the parties hereto. No term or condition of
this Agreement shall be deemed waived in whole or in part, except by an
instrument in writing signed by an authorized representative of each
party which references specifically the term or condition to be waived
and which states explicitly that the term or condition is waived. No
waiver of any term or condition hereof by any party hereto shall be
deemed or construed to be (a) a waiver by such party of any other term
or condition hereof or (b) a waiver of such term or condition for any
party, any period or any purpose other than as expressly set forth in
the written instrument.
15.2 No Assignments. The Partners and, except as described in
--------------
paragraph 2 above, the Purchaser, may not assign this Agreement or
their rights hereunder. Any assignment or attempted assignment that
does not comply with all of the terms and conditions hereof shall be
null and void.
15.3 Successors and Assigns. This Agreement shall bind
----------------------
and inure to the benefit of the parties hereto and their
respective permitted successors and assigns.
29
15.4 Days. If any action is required to be performed, or if
----
any notice, consent or other communication is given, on a day that is a
Saturday or Sunday or a legal holiday in the jurisdiction in which the
action is required to be performed or in which is located the intended
recipient of such notice, consent or other communication, such
performance shall be deemed to be required, and such notice, consent or
other communication shall be deemed to be given, on the first business
day following such Saturday, Sunday or legal holiday. Unless otherwise
specified herein, all references herein to a "day" or "days" shall
refer to calendar days and not business days.
15.5 Governing Law; Venue. This Agreement and all documents
--------------------
referred to herein shall be governed by and construed and interpreted
in accordance with the laws of the State of Delaware. Any and all
disputes, unless all of the parties to the dispute otherwise agree,
shall be brought and maintained within that state, and the parties
hereby waive any right to bring an action in any other jurisdiction. If
any judicial authority holds or declares that the law of another
jurisdiction is applicable, this Agreement shall remain enforceable
under the laws of that jurisdiction.
15.6 Counterparts. To facilitate execution, this Agreement may
------------
be executed in as many counterparts as may be required. It shall not be
necessary that the signature on behalf of all parties hereto appear on
each counterpart hereof. All counterparts hereof shall collectively
constitute a single agreement.
15.7 Severability. If any term, covenant or condition of this
------------
Agreement, or the application thereof to any person or circumstance,
shall to any extent be invalid or unenforceable, the remainder of this
Agreement, or the application of such term, covenant or condition to
other persons or circumstances, shall not be affected thereby, and each
term, covenant or condition of this Agreement shall be valid and
enforceable to the fullest extent permitted by law.
15.8 Costs. Regardless of whether Closing occurs hereunder,
-----
and except as otherwise expressly provided in
30
paragraphs 3.8, 8, 9 or 13 or elsewhere herein, each party hereto shall
be responsible for its own costs in connection with this Agreement and
the transactions contemplated hereby, including without limitation fees
of attorneys and accountants, except that the fees and expenses of the
Appraiser shall be born by the Limited Partnership as provided in the
Engagement Letter. The Limited Partnership shall not bear any costs of
the IPO or the proposed formation of PPL REIT.
15.9 Notices. All notices, requests, demands and other
-------
communications hereunder shall be in writing and shall be delivered by
hand, transmitted by facsimile transmission, sent prepaid by Federal
Express (or a comparable overnight delivery service) or sent by the
United States mail, certified, postage prepaid, return receipt
requested, at the addresses and with such copies as designated below.
Any notice, request, demand or other communication delivered or sent in
the manner aforesaid shall be deemed given or made (as the case may be)
when actually delivered to the intended recipient.
If to Exxon, Ameritech, American, or Idaho:
to their respective addresses set forth
on Exhibit A
---------
With a copy to, if to Ameritech:
Winston & Xxxxxx
00 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Xxxxxx X. XxXxxxxxx, Esq.
and
With a copy to, if to Idaho
Xxxxxx Pepper & Shefelmen
0000 Xxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx, Xx., Esq.
31
If to PPA or Purchaser:
Xxxxxxxx Properties Limited, Inc.
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn: Xx. Xxxxxx X. August
With a copy to:
Hunton & Xxxxxxxx
000 X. Xxxx Xxxxxx
Xxxxxxxxxx Xxxxx, Xxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attn: Xxxx Xxxxxx, Esq.
or to such other address as the intended recipient may have specified
in a notice to the other party. Any party hereto may change its address
or designate different or other persons or entities to receive copies
by notifying the other party in a manner described in this paragraph.
15.10 Incorporation by Reference. All of the
--------------------------
exhibits attached hereto are by this reference incorporated
herein and made a part hereof.
15.11 Survival. Subject to paragraph 9 hereof, all of the
--------
representations, warranties, covenants and agreements of the Partners
and the Purchaser (and any assigns of the Purchaser) made in, or
pursuant to, this Agreement shall survive Closing and shall not merge
into the Assignment or any other document or instrument executed and
delivered in connection herewith, including without limitation the
indemnification of the Partners by Purchaser contemplated by paragraphs
8 and 9 above.
15.12 Further Assurances. (a) Each Seller agrees to comply
------------------
with reasonable information requests by the Purchaser and its
representatives after the date hereof which are reasonably designed to
elicit whether and to what extent Purchaser is a "party in interest" to
any Seller within the meaning of Section 3(14) of the ERISA. Such
requests will include requesting from each Seller a representation and
warranty, upon which Purchaser may rely
32
in making the representation and warranty referred to in the second
sentence of Section 6(b)(iii), with respect to whether and to what
extent such Seller owns direct or indirect ownership interests in the
entities set forth on a list to be submitted to the Sellers within 14
days of the date hereof and specifically identified as being submitted
for such purpose. Each Seller agrees to respond to such submission in
writing to Purchaser within thirty (30) business days of receipt of the
submission.
(b) Each Partner and the Purchaser each covenant and agree
further to sign, execute and deliver, or cause to be signed, executed
and delivered, and to do or make, or cause to be done or made, upon the
written request of the other party, any and all customary agreements,
instruments, papers, deeds, acts or things, supplemental, confirmatory
or otherwise, as may be customary in transactions of the type
contemplated by this Agreement and in respect of the organization and
operation of an UPREIT partnership and reasonably required by either
party hereto for the purpose of or in connection with (i) consummating
the sale of the partnership interests in the Limited Partnership, (ii)
with respect to American, Ameritech and Idaho, the issuance of Common
Shares hereunder and (ii) reflecting after the Closing that the Sellers
are no longer partners of the Limited Partnership.
15.13 No Partnership or Third Party Beneficiary. This
-----------------------------------------
Agreement does not and shall not be construed to create a partnership,
joint venture or any other relationship between the parties hereto
except the relationship of the Partners and Purchaser specifically
established hereby; provided, however, that nothing herein shall be
construed as changing the relationship of the Partners as partners of
the Limited Partnership. No person or party is intended to be or shall
be construed to be a third party beneficiary of this agreement or any
provision hereof.
15.14 Time of Essence. Time is of the essence with
---------------
respect to every provision hereof.
15.15 Headings. Headings are included herein for convenience
--------
of reference only, and shall in no way be
33
construed to define, alter, or modify any of the provisions hereof.
IN WITNESS WHEREOF, each Partner and the Purchaser have executed this
Agreement as of the date set forth above.
PURCHASER:
---------
XXXXXXXX PROPERTIES LIMITED, INC.,
a Delaware corporation
By: /s/ Xxxxxx X. August
----------------------------------
Name: Xxxxxx X. August
--------------------------------
Title: President and COO
-------------------------------
Date: May 17, 1996
--------------------------------
34
PARTNERS:
--------
PPA:
---
XXXXXXXX PROPERTY ACQUISITION, L.P.,
a Delaware limited partnership
By: Xxxxxxxx Property Acquisition, Inc.,
a Delaware corporation, its general
partner
By: /s/ Xxxxxx X. August
--------------------------------
Name: Xxxxxx X. August
------------------------------
Title: President
-----------------------------
Date: May 17, 1996
------------------------------
EXXON:
-----
The Bank of New York, as Custodian for AEtna
Life Insurance Company under a separate
account custody agreement dated as of August
13, 1986, and as Trustee under a master
annuity trust fund agreement with EXXON
CORPORATION, effective as of January 1, 1984
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxx
-----------------------------------
Title: Vice President
----------------------------------
Date: May 23, 1996
-----------------------------------
IDAHO:
-----
PUBLIC EMPLOYEE RETIREMENT SYSTEM OF IDAHO
By: /s/ Xxxx X. Xxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxx
-----------------------------------
35
Title: Executive Director
----------------------------------
Date: May 21, 1996
-----------------------------------
36
AMERITECH:
---------
By State Street Bank and Trust Company, as
Trustee of AMERITECH PENSION TRUST
By: /s/ X. Xxxxxxxx
-------------------------------------
Name: X. Xxxxxxxx
-----------------------------------
Title: Vice President
----------------------------------
Date: June 11, 1996
-----------------------------------
AMERICAN:
--------
Nationsbank, as Trustee of THE AMERICAN
AIRLINES, INC. MASTER FIXED BENEFIT TRUST
By: /s/ Xxxxxxxxx Xxxxx
-------------------------------------
Name: Xxxxxxxxx Xxxxx
-----------------------------------
Title: Client Service Offices
----------------------------------
Date: May 20, 1996
-----------------------------------
37
EXHIBIT INDEX
EXHIBIT A - PARTNERS OF THE LIMITED PARTNERSHIP
EXHIBIT B - PROPERTIES
EXHIBIT C - APPRAISAL ENGAGEMENT LETTER
EXHIBIT D - DEBT BALANCES, REPAYMENT SCHEDULE AND PREPAYMENT
PENALTY CALCULATIONS
EXHIBIT E - FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
EXHIBIT F - ILLUSTRATIVE EXAMPLES OF PURCHASE PRICE ALLOCATION
EXHIBIT G - IDENTITY OF PARTNERS, OFFICERS AND DIRECTORS
EXHIBIT H - LEGAL OPINIONS
EXHIBIT I - ASSIGNMENT OF INTERESTS AND ASSUMPTION AGREEMENT
EXHIBIT J - REGISTRATION RIGHTS AGREEMENT
