AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of October 30, 1997, by and
among GP Development Corporation, a Maryland corporation ("Target"),
Kranzco Realty Trust, a Maryland real estate investment trust ("Acquiror"),
KR Atlanta, Inc., a Maryland corporation and wholly-owned subsidiary of
Acquiror ("Newco"), and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. Mittental, ▇▇▇▇
▇▇▇▇▇, J. ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇▇, who are all
of the shareholders of Target (collectively, the "Shareholders," and each,
a "Shareholder").
WHEREAS, the Board of Directors of each of Target and Acquiror have
determined that it is in the best interests of their respective entities
and shareholders to consummate the business combination transaction
provided for herein, pursuant to which Target will, on the terms and
subject to the conditions set forth herein, merge with and into Newco;
WHEREAS, each of the Shareholders has consented to the Merger of
Target with and into Newco;
WHEREAS, the parties hereto desire to make certain covenants,
representations, warranties and agreements in connection with the merger
and also to prescribe certain conditions to the merger.
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements contained herein, and intending
to be legally bound hereby, the parties hereto hereby agree as follows:
ARTICLE I
THE MERGER
SECTION 1.01 The Merger.
(a) Upon the terms and subject to the conditions hereof and in
accordance with the Maryland General Corporation Law, as amended (the
"MGCL"), simultaneously with the Closing contemplated by the Contracts (as
such terms are used in that certain Agreement of even date herewith between
Target and Acquiror relating to the contracts set forth on Exhibit A
thereto (the "Contracts Agreement"), and upon the satisfaction or waiver of
the conditions set forth in Article V and Article VI, unless the parties
shall otherwise agree in writing, a closing (the "Merger Closing") of the
merger of Target with and into Newco in accordance with this Agreement with
the separate corporate existence of Target thereupon ceasing (the "Merger")
shall take place at such time and place as the parties shall agree in
writing. The date on which the Merger Closing occurs is hereinafter
referred to as the "Merger Closing Date".
(b) Concurrently with the Merger Closing, Articles of Merger (the
"Maryland Merger Certificate"), in form and substance reasonably
satisfactory to Acquiror and Target, providing for the merger of Target
with and into Newco shall be duly prepared, executed and filed by Newco, as
the surviving corporation (the "Surviving Corporation"), with the State
Department of Assessment and Taxation of Maryland (the "SDAT") in
accordance with the relevant provisions of the MGCL and the Merger shall
become effective upon the effective date of the acceptance for record by
the SDAT of the Maryland Merger Certificate, or at such later time (but not
more than 30 days thereafter) as the parties shall have agreed upon and
designated in the Maryland Merger Certificate in accordance with the MGCL.
The date and time the Merger becomes effective is referred to herein as the
"Effective Time".
SECTION 1.02 Effects of the Merger; Merger Consideration.
(a) The Merger shall have the effects set forth in the MGCL and as
hereinafter set forth. Immediately following the Merger, the Surviving
Corporation shall (i) continue its corporate existence under the laws of
the State of Maryland, (ii) be a wholly-owned, subsidiary of Acquiror and
(iii) succeed to all rights, assets, liabilities and obligations of Target
in accordance with the MGCL. At the Effective Time, in accordance with the
relevant provision of the MGCL, the separate existence of Target shall
cease and the Surviving Corporation shall succeed, without other transfer,
to all the rights and property of Target and shall be subject to all the
debts and liabilities of each in the manner provided by the MGCL.
(b) At the Effective Time each share of common stock, par value $.01
per share, of Newco issued and outstanding immediately prior to the
Effective Time shall remain outstanding and by reason of the Merger and
without any action by the holder thereof represent one validly issued,
fully paid and non-assessable share of common stock, par value $.01 per
share, of the Surviving Corporation. Subject to adjustment as contemplated
by Sections 4 and 12 of the Contracts Agreement, at the Effective Time,
each share of Target's common stock, par value $.01 per share (the "Target
Common Stock") issued and outstanding, shall be converted, by reason of the
Merger and without any action by the holder thereof, into its pro rata
portion (based on the number of shares of Target Common Stock outstanding)
of (i) the sum of $400,000 and (ii) such number of common shares of
beneficial interest, par value $.01 per share, of Acquiror (the "Acquiror
Common Shares") as would in the aggregate have a Fair Market Value (as
defined below) of one million six hundred thousand dollars ($1,600,000),
upon the surrender of the certificate(s) representing the shares of Target
Common Stock (collectively, the "Merger Consideration"); provided, however,
that (i) the portion of the Merger Consideration payable to ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇ shall consist solely of cash, (ii) the other Shareholders shall
share pro rata in the remaining portion of the cash consideration (subject
to the election by such Shareholders to distribute the cash otherwise), and
(iii) Target may elect in its sole and absolute discretion upon written
notice to Acquiror not less than three (3) days prior to the Merger Closing
Date, that the portion of the Merger Consideration payable in Acquiror
Common Shares be increased and the portion of the Merger Consideration
payable in cash be reduced in such proportion as Target shall elect
(provided, that ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇'▇ portion of the Merger Consideration
shall consist solely of cash), so long as the aggregate Merger
Consideration is two million dollar ($2,000,000) (subject to adjustment as
contemplated by Sections 4 and 12 of the Contracts Agreement).
Notwithstanding the foregoing, the Shareholders of Target may elect any
distribution of Merger Consideration among the Shareholders as they may
designate in a written notice to Acquiror not less than three (3) days
prior to the Merger Closing Date (provided, that ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇'▇
portion of the Merger Consideration shall consist solely of cash). In the
event Merger Consideration is adjusted pursuant to Sections 4 or 12 of the
Contracts Agreement, the portions of the Merger Consideration payable in
cash and Acquiror Common Shares shall be adjusted proportionally, subject
to Target's election to increase the number of Acquiror Common Shares
pursuant to clause (iii) above. Upon filing of the Maryland Merger
Certificate, Acquiror will pay the cash portion of the Consideration by
wire transfer of immediately available funds to the account designated in
writing by the Shareholders and will deliver certificates evidencing the
Acquiror Common Shares. The "Fair Market Value" of an Acquiror Common
Share shall be the closing price of an Acquiror Common Share on the New
York Stock Exchange on the last trading day immediately prior to the Merger
Closing Date. In the event that any public announcement of the
transactions contemplated by this Agreement (or the Contracts Agreement) is
made by Acquiror prior to the Merger Closing Date, the Fair Market Value
shall be determined on the day immediately preceding such announcement. No
fractional shares of Acquiror Common Shares shall be issued and therefore
any fractional share shall be rounded up to a whole share if the fraction
is more than .50 and down (eliminating such fractional share) if the
fraction is less than .51 and any additional whole share shall become part
of the Merger Consideration.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF TARGET AND THE SHAREHOLDERS
Target and each of the Shareholders, severally and not jointly,
represent and warrant to Acquiror and Newco as follows:
SECTION 2.01 Organization and Good Standing. Target is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Maryland and has all requisite corporate power and
authority to own, operate, lease and encumber its properties and assets and
to carry on its business as it is now being conducted. Target is not
required to be qualified or licensed to do business as a foreign
corporation in any other jurisdiction. Target was incorporated in the
State of Maryland on October 9, 1997 (its "Formation Date").
SECTION 2.02 Capitalization of Target. The authorized stock of
Target consists of 5,000 shares of Target Common Stock, of which 1,000
shares are issued and outstanding as of the date hereof. All of the issued
and outstanding shares of Target Common Stock are owned beneficially and of
record by the Shareholders, free of any liens, claims or other
encumbrances, and have been duly authorized and are validly issued, fully
paid and nonassessable and are free of preemptive rights with no personal
liability attaching to the ownership thereof. Target has no other
outstanding securities, whether debt or equity, derivative or direct, of
any nature and there are no options or rights existing to acquire any
authorized or outstanding securities of Target.
SECTION 2.03 Authority of Target. Target and the Shareholders have
all requisite power (corporate, in the case of Target) and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated by this Agreement and the Contracts Agreement, and to take all
other actions required to be taken by them pursuant to the provisions
hereof and thereof. The execution, delivery and performance by Target of
this Agreement and the Contracts Agreement, the consummation by Target of
the transactions contemplated by this Agreement and the Contracts
Agreement, have been duly and validly authorized and approved by all
requisite corporate action of Target and no other corporate proceedings on
the part of Target are necessary to authorize the execution, delivery and
performance of this Agreement and the Contracts Agreement and to consummate
the transactions contemplated by this Agreement and the Contracts
Agreement. This Agreement and the Contracts Agreement have been duly and
validly executed and delivered by Target and each of the Shareholders, as
the case may be, and constitute valid and binding agreements of Target and
the Shareholders, as the case may be, enforceable against Target and the
Shareholders in accordance with their respective terms.
SECTION 2.04 Consents and Approvals; No Violations. Except for the
filing and recordation of the Maryland Merger Certificate, as required by
the MGCL, no filing or registration with, and no consent, authorization,
declaration or approval of, any governmental body, court, arbitration
board, tribunal or authority ("Governmental Entity"), or any third party,
is necessary for the execution, delivery and performance by Target or the
Shareholders of this Agreement or the Contracts Agreement. The execution,
delivery and performance by Target and the Shareholders of this Agreement
and the Contracts Agreement, as the case may be, will not (i) constitute
any violation or breach of any provision of the charter or By-laws of
Target, or (ii) constitute any violation or breach of any provision of, or
constitute a default (or an event which, with the giving of notice or the
passage of time or both, would constitute a default) under, or result in
the termination or in a right of termination or cancellation of, or
accelerate the performance required by, or result in the creation of any
liens, pledges, mortgages, deeds of trust, security interests, claims
against title, charges, options or other encumbrances ("Encumbrances") upon
any of the assets of Target or the Shareholders under, or result in being
declared void, voidable or without further binding effect, any of the
terms, conditions or provisions of any agreement to which any of Target or
the Shareholders is a party.
SECTION 2.05 Assets and Liabilities. Attached as Schedule 2.05 is a
list of all contracts and agreements to which Target is a party and a list
of all of Target's assets and direct, indirect and contingent liabilities.
Target has no other assets, liabilities, or obligations of any nature,
direct, indirect or contingent, other than those set forth on Schedule
2.05. Since its Formation Date, Target has never owned any assets other
than its interest in the contracts and agreements listed on Schedule 2.05
and cash in bank accounts, or engaged in any business activity. Target has
delivered to Acquiror true, correct and complete copies of the contracts
and agreements listed on Schedule 2.05.
SECTION 2.06 Litigation. There are no, and have never been any
orders, injunctions, judgements or decrees of any court, arbitrator or
other Governmental Entity, to which Target is or has been a party or by
which any of Target' properties are, or have been bound. There are no, and
have never been any, actions, suits or proceedings pending (or to Target's
knowledge, threatened), at law or in equity, against Target.
SECTION 2.07 Compliance with Applicable Law. Target is not in
violation of any order of any Governmental Entity, or any law, ordinance,
governmental rule or regulation to which Target is subject.
SECTION 2.08 Taxes. Target has timely filed all federal, state,
local and foreign tax returns required to be filed by it through the date
hereof and such returns are complete, accurate and comply with all
applicable law and Target has paid all taxes required to be paid by it.
True, correct and complete copies of all federal, state, local and foreign
tax returns filed by Target and all communications relating thereto have
been delivered to Acquiror. There are no claims or assessments for the
collection of any taxes from Target, which have been asserted, are pending,
or, to the knowledge of Target, threatened.
SECTION 2.09 Brokers or Finders. Except as set forth in the
Contracts Agreement, no broker or finder had any part in bringing about the
Merger.
SECTION 2.10 Vote Required. Each of the Shareholders consents to
and has executed written consents in favor of the Merger and execution,
delivery and performance by Target of this Agreement.
SECTION 2.11 Parent Shares. Neither Target, the Shareholders, nor
any of their affiliates or associates, beneficially own any voting shares
of Acquiror, directly or indirectly.
SECTION 2.12 Employee Benefit Plans. Target has no employees or
employee benefits plans.
SECTION 2.13 Public Reports. Target has received from Acquiror and
reviewed copies of (i) Acquiror's Annual Report on Form 10-K for the year
ended December 31, 1996, (ii) Acquiror's Quarterly Report on Form 10-Q for
the three months ended ▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇▇▇) Acquiror's Quarterly Report on
Form 10-Q for the six months ended June 30, 1997, (iv) Acquiror's Form 8-K
dated March 14, 1997, as amended by ▇▇▇▇▇▇▇▇'▇ ▇▇▇▇ ▇-▇/▇ dated May 6,
1997, (v) the Proxy Statement/Prospectus dated January 30, 1997 relating to
the Merger of Union Property Investor's and KRT Union Corp., a wholly-owned
subsidiary of Acquiror and (vi) Acquiror's Annual Report to its
shareholders relating the year ended December 31, 1996 (collectively, the
"Public Reports").
SECTION 2.14 Investor Representations. Solely for the purposes of
this Section 2.14, the term "Shareholder" or "Shareholders" shall be deemed
to exclude ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇. (a) Except for the materials set forth in
Section 2.13 and any information requested by and furnished to Target and
the Shareholders, as described in (b) and (c) below, neither Target nor the
Shareholders have been furnished any other material or literature relating
to the Merger, Acquiror or Acquiror Common Shares.
(b) Target and the Shareholders have been afforded full and
complete access to all information and other materials relating to Acquiror
and its affiliates and the, properties, financial condition and operation
of Acquiror, and any other matters relating to the Merger, Acquiror and the
Acquiror Common Shares which Target or the Shareholders have requested, or
deemed necessary in evaluating the merits and risks of acquiring Acquiror
Common Shares, and have been afforded the opportunity to obtain any
additional information necessary to verify the accuracy of any information
set forth in the documents.
(c) Target and the Shareholders have had the opportunity to have
answered any questions concerning the financial condition or business or
other information with respect to Acquiror and its affiliates and the
properties, financial condition and operation of Acquiror or with respect
to the merits and risks of an acquisition of Acquiror Common Shares, and
Target and Shareholder have received complete and satisfactory answers to
all such questions.
(d) No representation to Target or the Shareholders has been
made with respect to any tax or economic benefits to be derived from an
investment in Acquiror Common Shares or as to any other matter. Target and
the Shareholders are relying solely upon their own knowledge and upon the
advice of their personal advisors with respect to the tax, economic and
other aspects of an investment in Acquiror Common Shares.
(e) Target and the Shareholders have carefully reviewed and
understand the Public Reports and other information provided by Acquiror
and they have such knowledge and experience in financial, business and real
estate matters that they are capable of evaluating the merits and risks of
an acquisition of Acquiror Common Shares and of making an informed
investment decision.
(f) Target and the Shareholders have retained their own counsel,
accountant and/or other advisors as to the legal, tax and related matters
concerning the Merger and the acquisition of Acquiror Common Shares.
(g) Target and the Shareholders understand that the acquisition
of Acquiror Common Shares involves the purchase of a security which may not
be sold for a period of one year after the Merger Closing Date and which
has not been registered under the Securities Act of 1933, as amended (the
"Securities Act"), and therefore cannot be sold unless either such security
is subsequently registered under said Act or an exemption from such
registration is available.
(h) Each Shareholder is not acquiring Acquiror Common Shares as
a result of or subsequent to any advertisement, article, notice or other
communication published in any newspaper, magazine or similar media or
broadcast over television or radio, or presented at any meeting or seminar.
(i) Each Shareholder is over 21 years of age, has adequate means
of providing for his current needs and personal contingencies and has no
need for liquidity of an investment in Acquiror Common Shares and is able
to bear the economic risk of the acquisition of Acquiror Common Shares.
(j) Each Shareholder has (i) a net worth, when combined with the
net worth of that person's spouse, in excess of $1 million, or (ii) has had
adjusted gross income for calendar years 1995 and 1996 and expects to have
adjusted gross income for calendar year 1997, of at least $200,000 for each
such year.
(k) Each Shareholder is acquiring the Acquiror Common Shares in
the Merger for his own account, as principal, for investment and not with a
view to the resale or distribution of any interest therein (other than the
bona fide gifts contemplated by Section 7.13).
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF ACQUIROR AND NEWCO
Acquiror and Newco, jointly and severally, represent and warrant to
Target and each of the Shareholders as follows:
SECTION 3.01 Organization and Good Standing. (i) Acquiror is a real
estate investment trust duly formed and existing by virtue of the laws of
the State of Maryland and is in good standing with the SDAT, (ii) Newco is
a corporation duly incorporated, validly existing and in good standing
under with the SDAT, and (iii) each of Acquiror and Newco has all requisite
trust or corporate power, as the case may be, to own and operate, lease and
encumber its properties and assets and to carry on its business as it is
now being conducted.
SECTION 3.02 Capitalization of Newco and Acquiror. All of the
issued and outstanding shares of stock of Newco are owned beneficially and
of record by Acquiror. The authorized shares of beneficial interest of
Acquiror consist of 100,000,000 shares of beneficial interest. As of June
27, 1997, Acquiror had issued and outstanding 10,334,796 common shares of
beneficial interest; 11,155 Series A-1 Increasing Rate Cumulative
Convertible Preferred Shares of Beneficial Interest; 195,631 9.75% Series
B-1 Cumulative Convertible Preferred Shares of Beneficial Interest; 907,578
9.75% Series B-2 Cumulative Convertible Preferred Shares of Beneficial
Interest; and 311,850 Series C Cumulative Redeemable Preferred Shares of
Beneficial Interest. All of the issued and outstanding shares of
beneficial interest of Acquiror have been duly authorized and are validly
issued, fully paid and nonassessable.
SECTION 3.03 Authority of Acquiror and Newco. Each of Acquiror and
Newco has all requisite trust or corporate power and authority, as the case
may be, to execute and deliver this Agreement and the Contracts Agreement,
as the case may be, and to consummate the transactions contemplated by this
Agreement and the Contracts Agreement, as the case may be, and to take all
other actions required to be taken by it pursuant to the provisions hereof
and thereof. The execution, delivery and performance by each of Acquiror
and Newco of this Agreement and the Contracts Agreement, as the case may
be, and the consummation by each of Acquiror and Newco of the transactions
contemplated by this Agreement and the Contracts Agreement, as the case may
be, have been duly and validly authorized and approved by all requisite
trust or corporate action of Acquiror and Newco, as the case may be, and no
other trust or corporate proceedings on the part of Acquiror or Newco, as
the case may be, are necessary to authorize the execution, delivery and
performance of this Agreement and the Contracts Agreement, as the case may
be, or to consummate the transactions contemplated by this Agreement and
the Contracts Agreement, as the case may be. This Agreement and the
Contracts Agreement have been duly and validly executed and delivered by
Acquiror or Newco, as the case may be, and constitutes a valid and binding
agreement of Acquiror or Newco, as the case may be, enforceable against
Acquiror or Newco, as the case may be, in accordance with its terms.
SECTION 3.04 Consents and Approvals; No Violations. Except for
applicable requirements of state Blue Sky laws, if any, and the filing and
recordation of the Maryland Merger Certificate, no filing or registration
with, and no consent, authorization, declaration or approval of, any
Governmental Entity, or any third party, is necessary for the execution,
delivery and performance by Acquiror or Newco of this Agreement or the
Contracts Agreement or the consummation of the transactions contemplated by
this Agreement or the Contracts Agreement. Neither the execution, delivery
and performance by Acquiror or Newco of this Agreement or the Contracts
Agreement nor the consummation by Acquiror or Newco of the transactions
contemplated by this Agreement or the Contracts Agreement will (i)
constitute any violation or breach of any provision of the charter of
Acquiror or Newco, or (ii) constitute any violation or breach of any
provision of, or constitute a default (or an event which, with the giving
of notice or the passage of time or both, would constitute a default)
under, or result in the termination or in a right of termination or
cancellation of, or accelerate the performance required by, or result in
the creation of any Encumbrances upon any of the properties of the Company
under, or result in being declared void, voidable or without further
binding effect, any of the terms, conditions or provisions of any
agreement, or any license, franchise, permit, concession, lease, contract,
or other instrument, or other obligation to which the Company is a party,
or by which the Company or any of its properties is bound or affected.
SECTION 3.05 Brokers or Finders. Except as set forth in the
Contracts Agreement, no broker or finder had any part in bringing about the
Merger.
SECTION 3.06 Acquiror Common Shares. Acquiror has reserved for
issuance a sufficient number of Acquiror Common Shares to satisfy its
obligations under Section 1.02(b). The Acquiror Common Shares to be issued
in connection with the Merger will be validly issued, fully paid and non-
assessable shares at the time so issued. There are no preemptive rights
with respect to the Acquiror Common Shares. As of the date hereof,
Acquiror satisfies the conditions set forth in Rule 144(c)(1) promulgated
by the Securities and Exchange Commission under the Securities Act and will
take commercially reasonable efforts to continue to satisfy such
requirements so that the Shareholders may sell the Acquiror Common Shares
pursuant to Rule 144 under the Securities Act during the Effectiveness
Period (as such term is defined in the Registration Rights Agreement
attached as Exhibit A hereto). As of October 31, 1997, Acquiror has
10,347,064 common shares of beneficial interest outstanding and attached as
Schedule 3.06 hereto is the average daily trading volume of the Acquiror
Common Shares as reported by the New York Stock Exchange for the period
beginning October 1, 1996 and ending October 30, 1997.
SECTION 3.07 Financing. Acquiror has, or will have on or prior to
the Closing Date, financing sufficient to pay the cash portion of the
Consideration.
ARTICLE IV
COVENANTS
SECTION 4.01 Target Pre-Closing Obligations.
(a) Except as expressly contemplated by this Agreement, during the
period from the date of this Agreement and continuing until the earlier of
the Effective Time or the termination of this Agreement in accordance with
its terms, Target will not engage in any business or activity or acquire
any assets, amend or propose to amend its charter or By-laws, encumber any
of its assets, issue any securities or options to acquire securities,
authorize or pay any dividend, make any loans or guarantees, enter into any
agreements or incur any liabilities except as contemplated by the Contract
Agreement or take any action that is reasonably likely to result in any of
Target's representations or warranties contained in this Agreement being
untrue, or result in any of the conditions to the Merger set forth in this
Agreement not being satisfied and Target will use reasonable efforts to
preserve its existing assets.
(b) During the period from the date of this Agreement and
continuing until the earlier of the Effective Time or the termination of
this Agreement in accordance with its terms, Target or a Shareholder, as
the case may be, shall promptly notify Acquiror of any change in Target's
condition (financial or otherwise), business, properties, assets,
liabilities or the occurrence of any governmental complaints,
investigations or hearings (or communications indicating that the same may
be contemplated), or the breach or potential or threatened breach of any of
Target's or a Shareholder's representations or warranties contained in this
Agreement.
SECTION 4.02 No Solicitations. Target will immediately cease any
existing discussions or negotiations with any third parties conducted prior
to the date hereof with respect to any merger, business combination, sale
of any of the assets of Target, sale of shares of capital stock by Target
or assignment of the Contracts or purchase or sale of the Properties or
similar transaction involving such party or any of its subsidiaries or
divisions and not have any other discussions relating to the foregoing with
any third party prior to the earlier of the Effective Time or termination
of this Agreement.
SECTION 4.03 Access to Information.
(a) Upon reasonable notice, Target shall afford to the officers,
employees, accountants, counsel and other representatives of Acquiror
("Acquiror Representatives"), reasonable access, during normal business
hours during the period prior to the Effective Time, to all its properties,
books, contracts and records and, during such period, Target shall furnish
promptly to Acquiror all information concerning Target, its business,
properties and personnel as Acquiror may reasonably request. Acquiror
Representatives shall be permitted to make copies of the files of Target,
as Acquiror shall reasonably request.
SECTION 4.04 Efforts to Consummate. Subject to the terms and
conditions of this Agreement, in addition to the matters otherwise
specifically set forth in this Agreement, each of the parties hereto agrees
to use reasonable efforts to take, or cause to be taken, all actions, and
to do, or cause to be done, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement including, without limitation,
(i) the preparation and filing of all other forms, registrations and
notices required to be filed to consummate the Merger and the transactions
hereby contemplated and the taking of such actions as are necessary to
obtain any requisite approvals, consents, orders, exemptions, or waivers
(including, without limitation, any Target Consents) by any public or
private third party and (ii) such actions as may be required to permit, on
or prior to the Effective Time, the Acquiror Common Shares to be issued
upon the Merger to be listed on the NYSE (subject to official notice of
issuance).
SECTION 4.05 No Breach of Representations and Warranties. Each of
Target, the Shareholders, Acquiror and Newco agree that it will not take
any action that would cause or constitute, or would, if it had been taken
prior to the date hereof, have caused or constituted, a breach of any of
its respective representations or warranties. Each of the parties hereto
shall, in the event of, or promptly after the occurrence of, or promptly
after obtaining knowledge of the occurrence of or the impending or
threatened occurrence of, any fact or event which would cause or constitute
a breach of any of the representations or warranties, give notice to the
other parties of such fact or event; and such notifying party shall use its
or their reasonable efforts to prevent or promptly to remedy such breach.
The giving of such notice shall not act as a waiver of any breach
hereunder. Notwithstanding the foregoing or anything contained in Section
6.01 hereof, nothing in this Agreement shall prohibit Acquiror from doing
any act or taking any action which would result in a change in the capital
structure of Acquiror as set forth in Section 3.02, and any such resulting
change in the capital structure of Acquiror shall not be considered a
breach of the representations and warranties contained in, or a default
under, this Agreement.
SECTION 4.06 Public Announcements. In addition to the provisions of
Section 20 of the Contracts Agreement, the parties hereto agree that,
except as otherwise required by law, Securities and Exchange Commission
reporting requirements or the rules of the NASD or the NYSE, they shall not
issue or cause the publication of any press release or other public
announcement with respect to the Merger and the transactions contemplated
by this Agreement or the Contracts Agreement without prior written approval
of the other party, which approval shall not be unreasonably withheld.
SECTION 4.07 Listing. Acquiror shall take all action necessary or
desirable to cause the Acquiror Common Shares to be listed on the NYSE on
or prior to the first anniversary of the Effective Time.
ARTICLE V
CONDITIONS TO ACQUIROR'S AND NEWCO'S OBLIGATIONS
All obligations of Acquiror and Newco under this Agreement are subject
to the fulfillment, at the Closing, of each of the following conditions,
any or all of which may be waived in whole or in part, at or prior to the
Closing, by Acquiror in its sole discretion:
SECTION 5.01 Representations and Warranties. All representations
and warranties of Target and the Shareholders contained in this Agreement
shall be true and correct in all material respects, at and as of the
Closing as though such representations and warranties were made at and as
of such time, except for those representations and warranties that are
expressly made as of a specified earlier date.
SECTION 5.02 Covenants. Target and the Shareholders shall have
performed and complied in all material respects with all agreements and
conditions on their part required by this Agreement to be performed or
complied with on or prior to the Closing.
SECTION 5.03 Officer's Certificate. Acquiror shall have received a
certificate of an executive officer of Target, dated the date of the
Closing, certifying to the fulfillment of the conditions specified in
Section 6.01 and Section 6.02.
SECTION 5.04 Approvals and Consents. Acquiror shall have received
(in form and substance reasonably satisfactory to Acquiror) all filings,
registrations, consents, authorizations, declarations or approvals
necessary to consummate the transactions contemplated by this Agreement.
Acquiror shall have also obtained the approval for the listing of the
Acquiror Common Shares issuable in the Merger on the NYSE, subject to
official notice of issuance.
SECTION 5.05 Injunctions. No court, agency or other authority
shall have issued any order, decree or judgment to set aside, restrain,
enjoin or prevent, and no statute, rule, regulation, executive order,
decree or injunction shall have been enacted, entered, promulgated or
enforced by any United States court or Governmental Entity of competent
jurisdiction which prohibits restrains, enjoins, sets aside or prevents,
the consummation of the Merger or the transactions hereby contemplated.
SECTION 5.06 Contracts Agreement. The closing of the transactions
contemplated by the Contracts Agreement shall take place simultaneously
with the Merger.
SECTION 5.07 Registration Rights Agreement. The Shareholders shall
have entered into the Registration Rights Agreement in the form annexed
hereto as Exhibit A.
SECTION 5.08 Merger. The Maryland Merger Certificate shall have
been executed by Target and delivered to Newco.
ARTICLE VI
CONDITIONS TO TARGET'S OBLIGATIONS
All obligations of Target under this Agreement are subject to the
fulfillment, at the Closing, of each of the following conditions, any or
all of which may be waived in whole or in part, at or prior to the Closing,
by Target in its sole discretion:
SECTION 6.01 Representations and Warranties. All representations
and warranties of Acquiror and Newco contained in this Agreement shall be
true and correct in all material respects, at and as of the Closing as
though such representations and warranties were made at and as of such
time, except for those representations and warranties that are expressly
made as of a specified earlier date.
SECTION 6.02 Covenants. Acquiror and Newco shall each have
performed and complied in all material respects with all agreements and
conditions on their respective parts required by this Agreement to be
performed or complied with prior to or on the Closing.
SECTION 6.03 Officer's Certificate. Target shall have received a
certificate of an executive officer of each of Acquiror and Newco, dated
the date of the Closing, certifying to the fulfillment of the conditions
specified in Section 6.01 and Section 6.02.
SECTION 6.04 Approvals and Consents. Acquiror shall have obtained
the approval for the listing of the Acquiror Common Shares issuable in the
Merger on the NYSE, subject to official notice of issuance.
SECTION 6.05 Injunctions. No court, agency or other authority shall
have issued any order, decree or judgment to set aside, restrain, enjoin or
prevent, and no statute, rule, regulation, executive order, decree or
injunction shall have been enacted, entered, promulgated or enforced by any
United States court or Governmental Entity of competent jurisdiction which
prohibits restrains, enjoins, sets aside or prevents, the consummation of
the Merger or the transactions hereby contemplated.
SECTION 6.06 Contracts Agreement. The closing of the transactions
contemplated by the Contracts Agreement shall take place simultaneously
with the Merger.
SECTION 6.07 Registration Rights Agreement. Acquiror shall have
entered into the Registration Rights Agreement in the form annexed hereto
as Exhibit A.
SECTION 6.08 Merger. The Maryland Merger Certificate shall have
been executed by Acquiror and Newco and delivered to Target.
ARTICLE VII
GENERAL
SECTION 7.01 Notices. All notices and other communications
hereunder shall be in writing (and shall be deemed given upon receipt) if
delivered personally, sent by facsimile transmission (receipt of which is
confirmed) or by registered or certified mail, return receipt requested, to
the parties at the following addresses (or at such other address for a
party as shall be specified by like notice):
if to Target or any Shareholder, to:
GP Development Corporation
c/o ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ & Associates, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ and Garten
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
if to Acquiror or Newco, to:
Kranzco Realty Trust
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, President
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Aronsohn & ▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
SECTION 7.02 Descriptive Headings. The descriptive headings herein
are inserted for convenience only and are not intended to be part of or to
affect the meaning or interpretation of this Agreement.
SECTION 7.03 Assignment; Binding Effect; Benefit. Neither this
Agreement nor any of the rights, interests or obligations hereunder shall
be assigned by any of the parties hereto (whether by operation of law or
otherwise) without the prior written consent of the other parties. Subject
to the preceding sentence, this Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors
and assigns.
SECTION 7.04 Counterparts. This Agreement may be executed in two or
more counterparts, all of which shall be considered one and the same
agreement and shall become effective when two or more counterparts have
been signed by each of the parties and delivered to the other parties, it
being understood that all parties need not sign the same counterpart.
SECTION 7.05 Entire Agreement. This Agreement, together with the
Contracts Agreement and the Registration Rights Agreement, constitutes the
entire agreement and supersede all prior contracts and understandings, both
written and oral, among the parties with respect to the subject matter
hereof. To the extent that the terms or conditions of this Agreement or
the Registration Rights Agreement conflict with or are inconsistent with
the terms of the Contracts Agreement, the terms and conditions of the
Contracts Agreement shall prevail and be controlling.
SECTION 7.06 Governing Law and Consent to Jurisdiction. This
Agreement shall be governed by and construed in accordance with the laws of
the State of Maryland without regard to any applicable principles of
conflicts of law. Each of Target, the Shareholders, Acquiror and Newco
hereby consents to submit to the exclusive jurisdiction of the courts of
the state of Maryland and of the United States of America located in the
city and state of Maryland (the "Maryland Courts") for any litigation
arising out of or relating to this Agreement and the transactions
contemplated hereby and agrees not to commence any litigation relating
thereto except in such courts, waives any objection to the laying of venue
of any such litigation in the Maryland Courts and agrees not to plead or
claim that such litigation brought in any Maryland Court has been brought
in an inconvenient forum.
SECTION 7.07 Fees and Expenses. Except as otherwise set forth
herein, each of the parties hereto shall bear its own expenses associated
with the negotiation and execution of the Agreement and the consummation of
the transactions hereby by this Agreement including, without limitation,
investment banking, legal and accounting fees and expenses.
SECTION 7.08 Non-Recourse. This Agreement and all documents,
agreements, understandings and arrangements relating to this transaction
have been executed by the undersigned in his capacity as an officer or
trustee of Acquiror which has been formed as a Maryland real estate trust
pursuant to a Declaration of Trust of Kranzco Realty Trust, dated June 17,
1992, as amended and restated, and not individually, and none of the
trustees, officers or shareholders of Acquiror shall be bound or have any
personal liability hereunder or thereunder. Each party hereto shall look
solely to the assets of Acquiror for satisfaction of any liability of
Acquiror in respect of this Agreement and all documents, agreements,
understandings and arrangements relating to this transaction, and will not
seek recourse or commence an action against any of the trustees, officers
or shareholders of Acquiror or any of their personal assets for the
performance or payment of any obligation hereunder or thereunder. The
foregoing shall also apply to any future documents, agreements,
understandings, arrangements and transactions between the parties hereto.
SECTION 7.09 Limitation of Liability.
(a) Notwithstanding anything to the contrary contained herein,
except as set forth in the Contracts Agreement, in the event of a default
by Target under any provision of this Agreement, no corporation, trust,
person or other entity affiliated with Target, as a shareholder, officer,
director or agent of Target or otherwise, or any person who participated in
the negotiation or documentation of the transactions contemplated hereby,
shall have any personal liability, financial or otherwise, in law or in
equity, for any performance required herein or in the Contract Agreement.
(b) In the event of a breach by the Shareholders under any
provision of this Agreement, the liability of each Shareholder for such
breach shall be limited to the amount of the Merger Consideration received,
or to be received, by such Shareholder.
SECTION 7.10 Enforcement. The parties hereto agree that irreparable
damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with its specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions hereof in
any Maryland Court, this being in addition to any other remedy to which
they are entitled at law or in equity. The prevailing party in any
proceeding brought to enforce any provision of the Agreement shall be
entitled to recover the reasonable fees and costs of its counsel, plus all
other costs of such proceeding.
SECTION 7.11 Severability. Any term or provision of this Agreement
which is invalid or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining
terms and provisions of this Agreement or affecting the validity or
enforceability of any of the terms or provisions of this Agreement in any
other jurisdiction. If any provision of this Agreement is so broad as to
be unenforceable, the provision shall be interpreted to be only so broad as
is enforceable.
SECTION 7.12 Termination. This Agreement shall terminate upon the
mutual written agreement of the parties hereto or upon the termination of
the Contracts Agreement.
SECTION 7.13 Lock-up Period. Each Shareholder hereby agrees that,
for a period of one year after the Merger Closing Date, he will not offer,
sell, contract to sell, grant any option for the sale of, or otherwise
dispose of, directly or indirectly, any shares of Common Stock of Acquiror,
or securities convertible into or exercisable or exchangeable for shares of
Common Stock of Acquiror or other securities of Acquiror. Each Shareholder
agrees to the imprinting of the following legend on certificates
representing the Acquiror Common Shares:
THE SHARES EVIDENCED HEREBY ARE SUBJECT TO A LOCK-UP AGREEMENT
WHICH PROHIBITS THE OFFER, SALE, CONTRACT TO SELL, GRANT ANY OPTION
FOR THE SALE OF, OR OTHER DISPOSITION OF, DIRECTLY OR INDIRECTLY, SUCH
SHARES, UNTIL: [insert lock-up expiration date].
Notwithstanding the first sentence of this Section 7.13, ▇▇▇▇ ▇.
▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ may in the aggregate transfer up to $200,000
worth of the Acquiror Common Share received by them as part of the Merger
Consideration (as valued on the Merger Closing Date) to up to 8 people
pursuant to a bona fide gift; provided, however, that the recipient of any
such gift of Acquiror Common Shares agrees to sign a letter in favor of the
Company (i) representing that no consideration was paid for such shares,
and (ii) agreeing to be bound by the provisions of Sections 7.13 and 7.14
of this Agreement.
SECTION 7.14 Transfer Restrictions. If after the expiration of the
lock-up period referred to in Section 7.13 above, any Shareholder should
decide to dispose of any Acquiror Common Shares, such Shareholder covenants
and agrees that it shall do so only pursuant to an effective registration
statement under the Securities Act or pursuant to an exemption from
registration under the Securities Act. In connection with any offer,
resale or other transfer (individually and collectively, a "Transfer") of
any Acquiror Common Shares other than pursuant to an effective registration
statement, Acquiror may require that the transferor of such shares provide
to Acquiror an opinion of counsel experienced in the area of applicable
securities laws selected by the transferor, which counsel shall be and the
form and substance of which opinion shall be, satisfactory to Acquiror, to
the effect that such Transfer is being made pursuant to an exemption from,
or in a transaction not subject to, the registration requirements of the
Securities Act or any State or foreign securities laws. In connection with
any such Transfer pursuant to an effective registration statement or upon
receipt of an opinion described above, Acquiror shall take such action as
may be necessary as a result of the existence of the legend referred to
below, to facilitate such Transfer as the Shareholder may reasonably
request. The Shareholders agree to the imprinting of the following legend
on certificates representing the Acquiror Common Shares:
THE SHARES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE
FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER AGREES THAT
IT WILL NOT OFFER, RESELL, PLEDGE OR OTHERWISE TRANSFER THE SHARES
EVIDENCED HEREBY, EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, OR (B) PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT. THE COMPANY MAY REQUIRE
AN OPINION OF COUNSEL, IN FORM AND SUBSTANCE AND BY COUNSEL
SATISFACTORY TO THE COMPANY, AS TO THE AVAILABILITY OF AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT AND COMPLIANCE WITH STATE
SECURITIES LAWS.
SECTION 7.15 Amendment. This Agreement may be amended by the
parties hereto at any time before the Effective Time. This Agreement may
not be amended except by a written instrument signed on behalf of each of
the parties hereto.
SECTION 7.16 Extension; Waiver. At any time prior to the Effective
Time, the parties hereto may, to the extent legally allowed, (i) extend the
time for the performance of any of the obligations or other acts of the
other parties hereto, (ii) waive any inaccuracies in the representations
and warranties contained in this Agreement, and (iii) waive compliance with
any of the agreements or conditions contained herein. Any agreement on the
part of a party hereto to any such extension or waiver shall be valid only
if set forth in a written instrument signed on behalf of such party.
SECTION 7.17 Interpretation. In this Agreement, unless the context
otherwise requires, words describing the singular number shall include the
plural and vice versa, and words denoting any gender shall include all
genders and words denoting natural persons shall include corporations and
partnerships and vice versa.
* * *
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be signed by their respective officers thereunto duly authorized as of the
date first written above.
KRANZCO REALTY TRUST GP DEVELOPMENT CORPORATION
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ By: /s/▇▇▇▇ ▇▇▇▇▇
--------------------------------- -----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Name: ▇▇▇▇ ▇▇▇▇▇
------------------------------- ---------------------------
Title: President Title: Vice President
------------------------------ --------------------------
KR ATLANTA, INC. SHAREHOLDERS OF TARGET:
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------- -----------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------- /s/▇▇▇▇▇▇▇ ▇. Mittental
---------------------------
Title:
------------------------------ ▇▇▇▇▇▇▇ ▇. Mittental
--------------------------
/s/▇▇▇▇ ▇▇▇▇▇
--------------------------
▇▇▇▇ ▇▇▇▇▇
/s/J. ▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------
J. ▇▇▇▇ ▇▇▇▇▇▇▇▇
/s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
/s/▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇
