PURCHASE AND SALE AGREEMENT BY AND BETWEEN CARE INVESTMENT TRUST INC. AS THE COMPANY, AND TIPTREE FINANCIAL PARTNERS, L.P., AS THE PURCHASER DATED AS OF MARCH 16, 2010
Exhibit 10.1
EXECUTION COPY
BY AND BETWEEN
AS THE COMPANY,
AND
TIPTREE FINANCIAL PARTNERS, L.P.,
AS THE PURCHASER
DATED AS OF MARCH 16, 2010
EXECUTION COPY
PURCHASE
AND SALE AGREEMENT (this “Agreement”), dated as
of March 16, 2010, by and
between Care Investment Trust Inc., a Maryland corporation (the “Company”), and Tiptree
Financial Partners, L.P., a Delaware limited partnership (the “Purchaser”). Certain
capitalized terms have the meanings given to such terms in Article IX.
WHEREAS, on the terms and subject to the conditions set forth in this Agreement, the Company
desires to sell, and the Purchaser desires to purchase from the Company, Company Common Stock as
more fully described herein (the “Sale Transaction”);
WHEREAS, in furtherance of the Sale Transaction, it is proposed: (i) that the Company sell the
Purchased Shares to the Purchaser upon the terms and subject to the conditions set forth in this
Agreement, and (ii) that the Company make a cash tender offer for any and all of the outstanding
shares of Company Common Stock at the Offer Price, upon the terms and subject to the conditions set
forth in this Agreement (such cash tender offer, as it may be amended from time to time in
accordance with this Agreement, the “Offer”); and
WHEREAS, the board of directors of the Company (the “Company Board”) has approved this
Agreement and, to the extent applicable, such other transactions, in accordance with the
requirements of the MGCL.
NOW, THEREFORE, in consideration of the foregoing and the representations, warranties,
covenants and agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby,
the parties hereto agree as follows:
ARTICLE I
PURCHASE AND SALE
PURCHASE AND SALE
1.1 Agreement to Sell and Purchase. On the terms and subject to the conditions set
forth in this Agreement, the Company agrees to issue and sell, and the Purchaser agrees to
purchase, that number of shares of Company Common Stock equal to the Share Quantity (the
“Purchased Shares”) at the Closing upon payment of the Purchase Price in accordance with
Section 1.2.
1.2 Payment of Purchase Price. In consideration of the agreement by the Company to
issue and sell the Purchased Shares to the Purchaser as set forth in Section 1.1, on the
terms and subject to the conditions set forth in the Escrow Agreement, the Purchase Price shall be
paid to the Company; provided, however, that, instead of the Escrow Agent releasing
the Purchase Price to the Company and having the Company, in turn, transfer funds to the Paying
Agent in an amount sufficient to pay for the shares tendered (and not withdrawn) in the Offer, at
the Closing, an amount equal to the Purchase Price shall be released by the Escrow Agent to the
Paying Agent on behalf of the Company in accordance with the terms of the Escrow Agreement.
ARTICLE II
THE PRE-CLOSING AND THE CLOSING
THE PRE-CLOSING AND THE CLOSING
2.1 Pre-Closing. If, as of 9:00 a.m., New York City time, on any date on which the
Offer is scheduled to expire (as set forth in the Offer Documents, including any dates to which the
Offer has been extended in accordance with Section 6.1(c) hereof and the Offer Documents)
(i) 10,300,000 shares of Company Common Stock have been tendered and not withdrawn pursuant to the
Offer, (ii) each of the Offer Conditions set forth in subsections (b) through (i) of Annex
I attached hereto have been satisfied or waived by the Company in accordance with the terms of
Annex I, and (iii) each of the conditions set forth in Section 7.3 have been
satisfied or waived by the Purchaser, (any such date, the “Pre-Closing Date”), the
Purchaser shall, no later than 11:00 a.m., New York City time, on such Pre-Closing Date, deposit an
amount of cash equal to the Maximum Amount with the Escrow Agent, to be held and released by the
Escrow Agent pursuant to the terms of the Escrow Agreement. For the avoidance of doubt,
notwithstanding anything in this Agreement to the contrary, the only conditions to the obligations
of the Purchaser to deposit the Maximum Amount with the Escrow Agent pursuant to this Section
2.1 shall be those conditions set forth in preceding sentence, and the only condition to the
Purchaser’s obligation to purchase the Purchased Shares pursuant to Section 1.1 shall be
that, subject to the satisfaction of the Minimum Condition without waiver or modification thereof,
the Company has accepted for payment all shares of Company Common Stock validly tendered (and not
withdrawn) as of the expiration of the Offer.
2.2 Closing. The closing of the Sale Transaction (the “Closing”) shall occur
upon acceptance for payment by the Company of the shares validly tendered (and not withdrawn) as of
the expiration of the Offer or at such other time as the parties hereto may agree (the date on
which the Closing occurs, the “Closing Date”). The Closing shall take place at the offices
of XxXxxxxxx Will & Xxxxx LLP, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000, or at such other location as
the parties hereto may agree in writing.
2.3 Transactions to be Effected with respect to Closing.
(a) No later than 3:00 p.m., New York City time, on the Expiration Date, the Company shall
notify the Purchaser of the number of shares of Company Common Stock tendered (and not withdrawn)
in connection with the Offer as of the expiration of the Offer. If less than 16,500,000 shares of
Company Common Stock have been tendered and not withdrawn in connection with the Offer as notified
by the Company pursuant to the preceding sentence and the Purchaser wishes to purchase additional
shares of Company Common Stock pursuant to this Agreement, the Purchaser shall, no later than 3:30
p.m., New York City time, on the Expiration Date, notify the Company of the number of additional
shares that it elects to purchase by written notice (the “Additional Share Notice”)
delivered to the Company. No later than 4:00 p.m., New York City time, on the Expiration Date, (i)
the Company shall deliver to the Purchaser a certificate, signed by the chief executive officer and
chief financial officer of the Company, setting forth the Share Quantity (after taking into account
any additional shares set forth in the Additional Share Notice, if delivered by the Purchaser
pursuant to the preceding sentence) and
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the Purchase Price and (ii) the Purchaser and the Company shall complete, execute and deliver
to the Escrow Agent the Joint Written Direction, substantially in the form attached as Exhibit A to
the Escrow Agreement (the “Joint Written Direction”), which shall set forth the Purchase
Price specified in the certificate delivered to the Purchaser pursuant to the preceding sentence;
provided, however, that if manifest error exists with respect to the calculation of
the Purchase Price, then the parties shall, in good faith, promptly resolve such error. The Joint
Written Direction shall provide (i) that the Purchase Price is to be distributed to the Paying
Agent with respect to the Offer on behalf of the Company as soon as possible following receipt
thereof, and (ii) after payment of the Purchase Price, the remaining balance of escrow funds shall
be distributed to the Purchaser in accordance with the terms thereof.
(b) At the Closing, upon receipt by the Paying Agent on behalf of the Company of the Purchase
Price, the Company shall, or shall instruct its transfer agent to, deliver to the Purchaser that
number of shares of Company Common Stock equal to the Share Quantity in book-entry form to one or
more accounts designated by the Purchaser at least one (1) Business Day prior to the Closing Date.
2.4 Closing Deliverables. In addition to any other documents to be delivered under
other provisions of this Agreement, at the Closing, the Company shall deliver to the Purchaser such
other customary instruments of transfer, assumptions, filings or documents, in form and substance
reasonably satisfactory to the Purchaser, as may be required to give effect to the Sale
Transaction.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except (i) as disclosed or incorporated by reference in any Company SEC Document or (ii) as
disclosed in the disclosure letter, dated as of the date of this Agreement and delivered by the
Company to the Purchaser immediately prior to the execution and delivery of this Agreement (the
“Company Disclosure Schedule”), which disclosure shall be subject to Section 10.4,
the Company represents and warrants to the Purchaser, as of the date hereof and as of the
Pre-Closing Date, as follows:
3.1 Corporate Organization, Standing and Power. The Company is a corporation duly
organized, validly existing and in good standing under the Laws of its jurisdiction of
incorporation. Each of the Company’s Subsidiaries which is a corporation is a corporation duly
organized and validly existing under the Laws of its jurisdiction of incorporation. Each of the
Company’s Subsidiaries which is a limited liability company, limited partnership, business trust or
other form of legal entity is an entity duly organized and validly existing under the Laws of its
jurisdiction of organization. Each of the Company and its Subsidiaries has all requisite
corporate, partnership or similar power and authority to own, lease and operate its properties and
assets and to carry on its business as now being conducted and is duly qualified to do business in
each jurisdiction in which the failure to be so qualified would
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not, individually or in the aggregate, have or be reasonably be expected to have a Company
Material Adverse Effect. The Company has furnished or made available to the Purchaser a complete
and correct copy of the Company Charter and Company Bylaws, and any other charter or organizational
documents, each as amended, of the Company and each of its Subsidiaries. Neither the Company nor
any of its Subsidiaries is in violation of any of the provisions of its certificate or articles of
incorporation or bylaws or other charter or organizational documents, each as amended.
3.2 Capitalization.
(a) The authorized capital stock of the Company consists of 250,000,000 shares of common
stock, par value of $.001 per share (the “Company Common Stock”); and 100,000,000 shares of
preferred stock, par value $.001 per share (the “Company Preferred Stock”). As of March
12, 2010, (i) 20,224,548 shares of Company Common Stock are issued and outstanding, all of which
are duly authorized, validly issued, fully paid and non-assessable, (ii) 435,000 shares of Company
Common Stock are reserved for issuance upon the exercise of outstanding Company Warrants, (iii) no
shares of Company Common Stock are reserved for issuance upon vesting and settlement of Company
RSUs, and (iv) 30,000 shares of Company Common Stock are reserved for issuance upon the settlement
of Company Performance Share Awards. As of the date of this Agreement, no shares of Company
Preferred Stock are outstanding. There are no bonds, debentures, notes or other indebtedness or
securities of the Company that have the right to vote (or that are convertible into, or
exchangeable for, securities having the right to vote) on any matters on which stockholders of the
Company may vote. Except as set forth above or as set forth in Section 3.2(a) of the Company
Disclosure Schedule, as of the date of this Agreement, no shares of capital stock or other voting
securities of the Company are issued, reserved for issuance or outstanding and no shares of capital
stock or other voting securities of the Company shall be issued or become outstanding after the
date of this Agreement other than as contemplated by this Agreement or upon exercise, vesting or
settlement of Company Warrants, Company Performance Share Awards and Company RSUs outstanding as of
the date of this Agreement. Section 3.2(a) of the Company Disclosure Schedule sets forth a
complete and correct list, as of the date of this Agreement, of all rights to purchase any issued
or unissued capital stock of the Company and each of its Subsidiaries, or obligating the Company or
any of its Subsidiaries to issue, grant or sell any shares of capital stock of, or other equity
interests in, or securities convertible into equity interests in, the Company or any of its
Subsidiaries. All shares of Company Common Stock subject to issuance as described above shall,
upon issuance on the terms and conditions specified in the instruments pursuant to which they are
issuable, be duly authorized, validly issued, fully paid and non-assessable.
(b) Except as contemplated by this Agreement or as set forth in Section 3.2(b) of the Company
Disclosure Schedule, neither the Company nor any of its Subsidiaries has any contractual or other
obligation to repurchase, redeem or otherwise acquire any shares of Company Common Stock or any
capital stock of any of the Company’s Subsidiaries, or make any investment (in the form of a loan,
capital contribution or otherwise) in any of the Company’s Subsidiaries or any other Person, except
in connection with the acceptance of shares of Company
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Common Stock in payment of the exercise price or withholding Taxes incurred by any holder in
connection with the exercise of Company Warrants or the vesting and settlement of Company
Restricted Shares, Company Performance Share Awards and Company RSUs. Except as set forth in
Section 3.2(b) of the Company Disclosure Schedule, all of the outstanding shares of capital stock
and voting securities of each Subsidiary of the Company are owned, directly or indirectly, by the
Company and are duly authorized, validly issued, fully paid and non-assessable, and those shares of
capital stock and voting securities of each of the Company’s Subsidiaries owned by the Company,
directly or indirectly, are free and clear of all Liens. Except as otherwise set forth in this
Section 3.2, there are no outstanding subscriptions, options, warrants, puts, calls,
rights, exchangeable or convertible securities or other commitments or agreements of any character
relating to the issued or unissued capital stock or other securities of any such Subsidiary, or
otherwise obligating the Company or any such Subsidiary to issue, transfer, sell, purchase, redeem
or otherwise acquire any such securities.
(c) Except as contemplated by this Agreement, neither the Company nor any of its Subsidiaries
owns, or has any contractual or other obligation to acquire, any equity securities or other
securities of any Person (other than Subsidiaries of the Company) or any direct or indirect equity
or ownership interest in any other business.
(d) Upon issuance and delivery of the Purchased Shares to the Purchaser in accordance with the
terms and conditions of this Agreement (including receipt of the Company Stockholder Approval), the
Purchased Shares (i) will be free and clear of all Liens (except for any restrictions on transfer
or other Liens imposed by or under the Company Charter or the Company Bylaws or by applicable Law),
(ii) will not be subject to any preemptive rights, and (iii) will be duly authorized, validly
issued, fully paid and non-assessable.
3.3 Authority; No Violation.
(a) The Company has all necessary corporate power and authority to execute and deliver this
Agreement and the Related Agreements and, subject to obtaining the Company Stockholder Approval, to
consummate the Contemplated Transactions. The execution and delivery of this Agreement and the
Related Agreements and the consummation of the Contemplated Transactions have been duly and validly
authorized by the Company Board, and no other corporate proceedings on the part of the Company are
necessary to authorize or approve this Agreement or the Related Agreements or to consummate the
Contemplated Transactions (other than the Company Stockholder Approval). This Agreement and the
Related Agreements have been duly and validly executed and delivered by the Company and, assuming
due authorization, execution and delivery by the Purchaser and, in the case of the Escrow
Agreement, the Escrow Agent, this Agreement and the Related Agreements each constitute the valid
and binding obligation of the Company, enforceable against the Company in accordance with its
terms, except as such enforcement may be limited by (i) the effect of bankruptcy, insolvency,
reorganization, receivership, conservatorship, arrangement, moratorium or other Laws affecting or
relating to the rights of creditors generally or (ii) the rules governing the availability of
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specific performance, injunctive relief or other equitable remedies and general principles of
equity, regardless of whether considered in a proceeding in equity or at law.
(b) Neither the execution and delivery of this Agreement and the Related Agreements by the
Company nor the consummation by the Company of the Contemplated Transactions, nor compliance by the
Company with any of the terms or provisions of this Agreement or the Related Agreements, will (i)
assuming compliance with the provisions of Section 7.2.1(a) of the Company Charter and subject to
receipt of the Company Stockholder Approval, violate any provision of the Company Charter, the
Company Bylaws, or the certificates of incorporation or bylaws or other charter or organizational
documents of any of the Subsidiaries of the Company or (ii) assuming that the Company Consents are
duly obtained, (x) violate any Law or Governmental Order applicable to the Company or any of its
Subsidiaries or any of the Assets or (y) violate, conflict with, result in a breach of any
provision of or the loss of any benefit under, constitute a default (or an event which, with notice
or lapse of time, or both, would constitute a default) under, result in the termination of or a
right of termination or cancellation under, accelerate the performance required by or rights or
obligations under, or result in the creation of any Lien upon any of the Assets under, any of the
terms, conditions or provisions of any Contract to which the Company or any of its Subsidiaries is
a party, or by which they or any of their respective Assets or business activities may be bound or
affected, except (in the case of clause (ii) above) for such violations, conflicts, breaches,
defaults or loss of benefits which would not individually or in the aggregate reasonably be
expected to have a Company Material Adverse Effect.
(c) The Company Board, at a meeting duly called and held, has, subject to the terms and
conditions set forth herein, (i) approved this Agreement, the Related Agreements and the
transactions contemplated hereby, including the Sale Transaction and the Offer (the “Company
Board Approval”), (ii) resolved to recommend that the Company Stockholders approve and adopt
the proposals specified in Section 6.3, and (iii) taken all other actions necessary to
exempt the Sale Transaction, the Offer and this Agreement and the transactions contemplated hereby
from any “fair price,” “moratorium,” “control share acquisition,” “interested shareholder,”
“business combination” or other similar statute or regulation promulgated by a Governmental Entity
(“Takeover Statute”).
3.4 Consents and Approvals. Except for (i) the Company Stockholder Approval, (ii) the
filing with the SEC of (A) the filings contemplated by this Agreement and (B) such other reports or
filings under the Exchange Act or the Securities Act as may be required in connection with this
Agreement and the Contemplated Transactions, (iii) such filings as may be required under the rules
and regulations of the NYSE, (iv) the consents, notices and approvals set forth in Section 3.4 of
the Company Disclosure Schedule (the consents referred to in clauses (i) through (iv), the
“Company Consents”) and (v) such additional consents, notices and approvals, the failure of
which to make or obtain would not individually or in the aggregate reasonably be expected to have a
Company Material Adverse Effect, no consents or approvals of any Governmental Entity or any Third
Party are necessary in connection with (A) the execution and
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delivery by the Company of this Agreement and the Related Agreements and (B) the consummation
by the Company of the Contemplated Transactions.
3.5 SEC Documents; Financial Statements.
(a) The Company has furnished or made available (including via XXXXX) to the Purchaser
complete and correct copies of all forms, documents, statements and reports filed with or furnished
by the Company to the SEC since June 27, 2007 (such forms, documents, statements and reports,
including any amendments thereto, the “Company SEC Documents”). As of their respective
filing dates, the Company SEC Documents complied as to form in all material respects with the
requirements of the Exchange Act and the Securities Act, and none of the Company SEC Documents
contained any untrue statement of a material fact or omitted to state a material fact required to
be stated therein or necessary to make the statements made therein, in light of the circumstances
under which they were made, not misleading, except to the extent amended or superseded by a
subsequently filed Company SEC Document. The Company has made available to the Purchaser correct
and complete copies of all material correspondence between the SEC, on the one hand, and the
Company and any of its Subsidiaries, on the other hand, occurring since June 30, 2007 and prior to
the date hereof. As of the date hereof, there are no material outstanding or unresolved comments in
comment letters from the SEC staff with respect to any of the Company SEC Documents. To the
Knowledge of the Company, as of the date hereof, none of the Company SEC Documents is the subject
of ongoing SEC review, outstanding SEC comment or outstanding SEC investigation.
(b) The financial statements of the Company, including the notes thereto, included in the
Company SEC Documents (collectively, the “Company Financial Statements”) complied in all
material respects with applicable accounting requirements and with the published rules and
regulations of the SEC with respect thereto as of their respective dates, and have been prepared in
accordance with GAAP applied on a basis consistent throughout the periods indicated. The Company
Financial Statements fairly present in all material respects the consolidated financial condition
and operating results of the Company and its Subsidiaries at the dates and during the periods
indicated therein (subject, in the case of unaudited statements, to normal year-end adjustments).
(c) The Company and the Company’s Subsidiaries have established and maintained a system of
internal control over financial reporting (as defined in Rule 13a-15 under the Exchange Act). Such
internal controls are, in all material respects, (i) sufficient to provide reasonable assurance
regarding the reliability of the Company’s financial reporting and the preparation of Company
financial statements for external purposes in accordance with GAAP and (ii) designed to ensure that
material information relating to the Company and its Subsidiaries required to be included in
reports filed under the Exchange Act is made known to the Company’s principal executive officer and
its principal financial officer by others within those entities, particularly during the periods in
which the periodic reports required under the Exchange Act are being prepared, and such disclosure
controls and procedures are effective in timely alerting the Company’s principal executive officer
and its principal financial officer to material information
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required to be included in the Company’s periodic reports required under the Exchange Act.
Since June 30, 2007, the Company’s principal executive officer and its principal financial officer
have disclosed to the Company’s auditors and the audit committee of the Company Board (A) all Known
significant deficiencies and material weaknesses in the design or operation of internal controls
over financial reporting that are reasonably likely to adversely affect the Company’s ability to
record, process, summarize and report financial information and (B) any fraud, whether or not
material, that involves management or others who have a significant role in the Company’s internal
controls and the Company has provided to the Purchaser copies of any material written materials
relating to each of the foregoing. The Company has made available to the Purchaser all such
disclosures made by management to the Company’s auditors and audit committee since June 30, 2007.
(d) Since the enactment of SOX, the Company has been and is in compliance in all material
respects with the provisions of SOX applicable to it, including Section 404 thereof, and the
certifications provided pursuant to Sections 302 and 906 thereof were accurate when made.
(e) Without giving effect to the transactions contemplated hereby, the Company is in
compliance in all material respects with all current listing and corporate governance requirements
of the NYSE.
3.6 Absence of Certain Changes or Events. Except as set forth in Section 3.6 of the
Company Disclosure Schedule, as disclosed in the Company SEC Documents or as contemplated by this
Agreement, since January 1, 2009, there has not occurred:
(i) any change, event or condition that individually or in the aggregate has had or
would reasonably be expected to have a Company Material Adverse Effect;
(ii) any acquisition or disposition of or any entering into of an agreement to acquire
or dispose of by merging or consolidating with, or by purchasing or disposing of a
substantial portion of the assets of, or by any other manner, any business or any Person,
any other acquisition or disposition or agreement to acquire or dispose of any assets which
are or would be, individually or in the aggregate, material to the Company and its
Subsidiaries (taken as a whole) except, to the extent prior to September 30, 2009, in the
ordinary course of business;
(iii) any change in the Company’s financial accounting methods or practices (including
any change in depreciation or amortization policies or rates), except as may be required by
GAAP, Regulation S-X or other rules or regulations promulgated by the SEC;
(iv) any declaration, setting aside, or payment of a dividend or other distribution
(whether in cash, stock or property) in respect of any of the Company or its Subsidiaries’
capital stock (other than dividends or distributions by any wholly owned Subsidiary of the
Company to the Company or another wholly owned Subsidiary thereof
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and except for regular quarterly dividends), any split, combination or reclassification
of any capital stock, or repurchase, redemption or other acquisition, whether directly or
indirectly, of any shares of capital stock except for repurchase from former employees,
directors and consultants in accordance with agreements providing for the repurchase of
shares in connection with any termination of service to the Company or any of its
Subsidiaries and the acceptance of shares of Company Common Stock in payment of the exercise
price or withholding Taxes incurred by any holder in connection with the exercise of Company
Warrants or the vesting and settlement of Company Restricted Shares, Company Performance
Share Awards or Company RSUs;
(v) (A) any termination, amendment or waiver of any material rights in any Material
Contract in a manner that would reasonably be expected to have a Company Material Adverse
Effect, or any failure to perform any material obligations under any Material Contract, or
(B) any entry into any Contract that is a Material Contract;
(vi) any amendment, modification, alteration or rescission of the Company Charter, the
Company Bylaws or any other charter or organizational documents of the Company or any of its
Subsidiaries; or
(vii) any entry by the Company or any of its Subsidiaries into any agreement to do any
of the things described in the preceding clauses (i) through (vi) (other than with respect
to the Contemplated Transactions).
3.7 Undisclosed Liabilities. Except as set forth in Section 3.7 of the Company
Disclosure Schedule, neither the Company nor any of its Subsidiaries has any obligations or
liabilities of any nature (matured or unmatured, fixed or contingent) other than (i) those set
forth or adequately provided for in the consolidated balance sheet (and the related notes thereto,
if any) of the Company and its Subsidiaries as of September 30, 2009, included in the Company SEC
Documents filed prior to the date hereof, (ii) those incurred in the ordinary course of business
consistent with past practice since September 30, 2009, (iii) those incurred pursuant to this
Agreement, and (iv) obligations or liabilities that do not, individually or in the aggregate,
exceed $1 million.
3.8 Legal Proceedings. Except as disclosed in the Company SEC Documents or as set
forth in Section 3.8 of the Company Disclosure Schedule, neither the Company nor any of its
Subsidiaries is a party to any, and there are no pending or, to the Knowledge of the Company,
threatened, legal, administrative, arbitral or other proceedings, claims, actions or governmental
or regulatory investigations of any nature against the Company or any of its Subsidiaries except
for those which would not reasonably be expected to have a Company Material Adverse Effect. There
are no (i) investigations or proceedings pending or, to the Knowledge of the Company, threatened by
any Governmental Entity with respect to the Company or any of its Subsidiaries or any of their
respective properties, or (ii) Governmental Orders imposed upon the Company, any of its
Subsidiaries or the Assets.
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3.9 Taxes and Tax Returns. Except as set forth in Section 3.9 of the Company
Disclosure Schedule:
(a) Each of the Company and its Subsidiaries has timely filed or caused to be timely filed all
Tax Returns required by applicable Law to be filed, all such Tax Returns are correct and complete
and all Taxes due and owing by the Company or any of its Subsidiaries, other than Taxes which are
being contested in good faith and are adequately reserved against or provided for (in accordance
with GAAP) in the Company Financial Statements, have been paid.
(b) Neither the Company nor any of its Subsidiaries has received notice of any proposed or
threatened Tax proceeding, examination, investigation, audit or administrative or judicial
proceeding (collectively, “Tax Proceedings”) against, or with respect to any Taxes of, the
Company or any of its Subsidiaries, and no Tax Proceeding is currently pending.
(c) There are no Liens for Taxes (other than statutory Liens for Taxes not yet due and
payable) upon any of the Assets.
(d) Neither the Company nor any of its Subsidiaries has granted any extension or waiver of the
limitation period applicable to any Tax that remains in effect.
(e) The Company and each of its Subsidiaries have withheld and paid to the relevant Tax
authority all Taxes required by applicable Law to have been withheld and paid by each of them.
(f) Neither the Company nor any of its Subsidiaries (i) has been a member of a group filing a
consolidated, combined or unitary Tax Return (other than a group the common parent of which was the
Company) or (ii) has any liability for the Taxes of any Person (other than the Company or any of
its Subsidiaries) under Treasury Regulation Section 1.1502-6 (or any similar provision of state,
local or foreign Law) or as a transferee or successor, or by contract or otherwise.
(g) Neither the Company nor any of its Subsidiaries is a party to or is bound by any Tax
sharing, allocation or indemnification agreement or arrangement (other than such an agreement or
arrangement exclusively between or among the Company and its Subsidiaries).
(h) Neither the Company nor any of its Subsidiaries has been a “distributing corporation” or a
“controlled corporation” (within the meaning of Section 355(a)(1)(A) of the Code) in a distribution
of stock intended to qualify for tax-free treatment under Section 355 of the Code.
(i) Commencing with the Company’s taxable year ended December 31, 2007 through the date
hereof, the Company has at all times satisfied all requirements to qualify, and has qualified, as a
real estate investment trust within the meaning of Section 856 of the Code (a “REIT”) and
its operations will enable it to continue to meet the requirements for qualification
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and taxation as a REIT under the Code prior to the Closing (without giving effect to the
Contemplated Transactions).
(j) The Company has no earnings and profits attributable to it or any other corporation in any
non-REIT year, within the meaning of Section 857 of the Code.
(k) Each Company Subsidiary qualifies as a “qualified REIT subsidiary,” within the meaning of
Section 856(i) of the Code, as a “taxable REIT subsidiary,” within the meaning of Section 856(l) of
the Code, or as a partnership or disregarded entity (rather than an association or partnership
taxable as a corporation) within the meaning of Section 7701 and Section 7704 of the Code, in each
case without giving effect to the Contemplated Transactions.
(l) No power of attorney currently in force has been granted by the Company or any of its
Subsidiaries relating to Taxes.
(m) Neither the Company nor any of its Subsidiaries has received or is party to any written
ruling of a taxing authority relating to Taxes, or any other written and legally binding agreement
with a tax authority relating to Taxes.
(n) The Company and its Subsidiaries have disclosed on their Federal income Tax Returns all
positions taken in such Tax Returns that could give rise to a substantial understatement of Federal
income Tax within the meaning of Code Section 6662.
(o) Neither the Company nor any of its Subsidiaries has made or is required to have made any
disclosure with respect to any “reportable transaction” within the meaning of Treasury Regulation
Section 1.6011-4.
(p) No property of the Company or its Subsidiaries is “tax exempt use property” within the
meaning of Code Section 168(h).
(q) Neither the Company nor any of its Subsidiaries is a party to any Contract that would
result in the payment of any “excess parachute payments” within the meaning of Code Section 280G in
connection with the transactions contemplated herein, separately or in the aggregate, and whether
alone or in connection with any other event.
(r) The Company and its Subsidiaries will not be required to include any item of income or
gain in, or be required to exclude any item of deduction or loss from, any taxable period (or
portion thereof) beginning after the Closing Date as a result of any: (i) change in method of
accounting for a taxable period ending on or before the Closing Date under Code Section 481(a) (or
any corresponding or similar provision of state, local or foreign Tax Law), (ii) “closing
agreement” as described in Code Section 7121 (or any corresponding or similar provision of state,
local or foreign Tax Law) executed on or prior to the Closing Date, (iii) installment sale or open
transaction made on or prior to the Closing Date, or (iv) prepaid amount received on or prior to
the Closing Date.
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3.10 Employee Matters.
(a) The Company has no employees, and no individual has received or is entitled to receive
wages or any benefit in their capacity as a director or employee of the Company, including pursuant
to any Company Benefit Plan (other than the grant of equity or equity-based awards pursuant to the
Company Benefit Plans) from the Company. Section 3.10(a) of the Company Disclosure Schedule sets
forth all grants of equity or equity-based awards made, or to be made in accordance with Contracts
existing as of the date hereof, all of which were or will be made pursuant to the Company Benefit
Plans.
(b) Copies of all Company Benefit Plans have been filed with the SEC as exhibits to one or
more Company SEC Documents.
(c) Except as would not reasonably be expected to have a Company Material Adverse Effect: (i)
each of the Company Benefit Plans has been operated and administered in compliance with applicable
Laws, the Code and in each case the regulations thereunder, and (ii) no Company Benefit Plan is
subject to Title IV or Section 302 of ERISA or Section 412 or 4971 of the Code.
(d) Except as disclosed in the Company SEC Documents, the consummation of the Contemplated
Transactions will not, either alone or in combination with another event, (i) entitle any current
or former employee, consultant or officer of the Company or any of its Subsidiaries to severance
pay, unemployment compensation or any other payment, or (ii) accelerate the time of payment or
vesting, or increase the amount of compensation due any such employee, consultant or officer.
3.11 Reserved.
3.12 Compliance with Applicable Law and Regulatory Matters.
(a) Except as disclosed in the Company SEC Documents or as set forth in Section 3.12 of the
Company Disclosure Schedule, the Company and each of its Subsidiaries have complied and are in
compliance with all applicable Laws, and have not received any notices from any Governmental Entity
or any other Person that alleges that the Company or any of its Subsidiaries is not in compliance
in any respect with any applicable Law, nor have any of them been subject to any investigation or
inspection in connection with the conduct of their respective businesses or the ownership or
operation of their respective businesses and Assets, except in each case for such noncompliance and
violations as would not reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect.
(b) Except as would not individually or in the aggregate reasonably be expected to have a
Company Material Adverse Effect, the Company and each of its Subsidiaries hold all licenses,
permits, certificates, franchises and other authorizations (collectively, “Authorizations”)
necessary for the ownership or use of its Assets and the conduct of its business. The Company and
each of its Subsidiaries have complied with, and are not in violation
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of, any Authorization, except where such noncompliance or violation would not reasonably be
expected to have, individually or in the aggregate, a Company Material Adverse Effect. Except as
would not reasonably be expected to have individually or in the aggregate a Company Material
Adverse Effect, all such Authorizations are in full force and effect and there are no proceedings
pending or, to the Knowledge of the Company or any of its Subsidiaries, threatened that seek the
revocation, cancellation, suspension or adverse modification thereof.
3.13 Material Contracts.
(a) Except for those agreements and other documents (i) set forth in the exhibit index of the
Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008 or in the exhibit
indexes to subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K filed by the
Company with the SEC prior to the date hereof, (ii) permitted pursuant to Section 5.2, or
(iii) set forth in Section 3.13 of the Company Disclosure Schedule, neither the Company nor any of
its Subsidiaries is a party to, bound by or subject to any Contract (A) that is a “material
contract” within the meaning of Item 601(b)(10) of the SEC’s Regulation S-K, (B) that restricts in
any material respect the conduct of business by the Company or any of its Subsidiaries or its or
their ability to compete in any line of business, (C) the loss of which would reasonably be
expected to have a Company Material Adverse Effect, or (D) that involves expenditures or revenue in
excess of $250,000 in the aggregate that is not revocable by the Company at any time without
penalty. Each contract, arrangement, commitment or understanding of the type described in this
Section 3.13(a) is referred to herein as a “Material Contract.”
(b) Except as would not reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect or as set forth in Section 3.13(b) of the Company Disclosure
Schedule, (i) each Material Contract is valid and binding on the Company and/or its Subsidiaries,
as applicable, and is enforceable against the Company or its Subsidiaries in accordance with its
terms, except as such enforcement may be limited by (A) the effect of bankruptcy, insolvency,
reorganization, receivership, conservatorship, arrangement, moratorium or other Laws affecting or
relating to the rights of creditors generally or (B) the rules governing the availability of
specific performance, injunctive relief or other equitable remedies and general principles of
equity, regardless of whether considered in a proceeding in equity or at law, (ii) to the Knowledge
of the Company, each Material Contract is valid and binding on the other parties thereto and is
enforceable against such other party in accordance with its terms, except as such enforcement may
be limited by (C) the effect of bankruptcy, insolvency, reorganization, receivership,
conservatorship, arrangement, moratorium or other Laws affecting or relating to the rights of
creditors generally or (D) the rules governing the availability of specific performance, injunctive
relief or other equitable remedies and general principles of equity, regardless of whether
considered in a proceeding in equity or at law, (iii) the Company and each of its Subsidiaries has
performed all obligations required to be performed by it to date under each Material Contract, (iv)
no event or condition exists which constitutes or, after notice or lapse of time or both, will
constitute, a default on the part of the Company or any of its Subsidiaries, as applicable, under
any such Material Contract, and (v) neither the Company nor any of its
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Subsidiaries has received written notice from any other party to a Material Contract with
respect to the termination or non renewal of, and otherwise has no Knowledge that such other party
intends to terminate or not renew, any Material Contract.
(c) None of the Material Contracts set forth in Section 3.13(c) of the Company Disclosure
Schedule to which the Company or any of its Subsidiaries is a party contains a “change of control”
or similar provision applicable to the Company, except as otherwise set forth on such schedule.
3.14 Assets. Each of the Company and its Subsidiaries has good title to, or in the
case of leased or subleased Assets, valid and subsisting leasehold interests in, or has the
contractual right to use, all of the material properties and assets necessary for or used or held
for use in the conduct of their respective businesses (all such properties and assets being
referred to as the “Assets”), free and clear of all Liens, except for Permitted Liens.
Section 3.14 of the Company Disclosure Schedule contains a complete and correct list of all real
property and improvements leased or subleased by the Company and its Subsidiaries as lessee or
sublessee or otherwise made available for their use (the “Leases”). Copies of all Leases
have been delivered or otherwise made available to the Purchaser by the Company.
3.15 Insurance. The Company has in full force and effect the insurance coverage with
respect to its business and the businesses of its Subsidiaries set forth in Section 3.15 of the
Company Disclosure Schedule. From January 1, 2009 through the date of this Agreement, neither the
Company nor any of its Subsidiaries has received any written notice regarding any threatened
termination of, or material premium increase with respect to, any of such policies.
3.16 Broker’s Fees. Except for Credit Suisse Securities (USA) LLC, whose fees and
expenses will be paid by the Company, neither the Company nor any of its Subsidiaries has employed
any broker or finder or incurred any liability for any broker’s fees, commissions or finder’s fees
in connection with the Contemplated Transactions. The Company has provided to the Purchaser a copy
of the engagement letter of Credit Suisse Securities (USA) LLC. Section 3.16 of the Company
Disclosure Schedule sets forth the fees (not including expenses) payable to Credit Suisse
Securities (USA) LLC in connection with the Contemplated Transactions.
3.17 Company Information. None of the information regarding the Company included or
incorporated by reference in (i) the Offer Documents will, at the date such Offer Documents are
first mailed to the Company Stockholders and at any time between the time the Offer Documents are
mailed to the Company Stockholders and the Acceptance Date, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which they were made, not
misleading, (ii) the Proxy Statement will, at the date the Proxy Statement is first mailed to the
Company Stockholders and at any time between the time the Proxy Statement is mailed to the Company
Stockholders and the Meeting Date, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order
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to make the statements therein, in light of the circumstances under which they were made, not
misleading, or (iii) any other document filed with any other regulatory agency in connection
herewith will, at the time such document is filed, contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made, not misleading,
except that no representation or warranty is made by the Company with respect to statements made or
incorporated by reference in any of the documents described in subsections (i) — (iii) above based
on information supplied by or on behalf of the Purchaser or any of its Subsidiaries for inclusion
or incorporation by reference in such documents. The Offer Documents and the Proxy Statement will
comply as to form in all material respects with the requirements of the Exchange Act.
3.18 Investment Company Status. Neither the Company nor any entity controlled by the
Company is an “investment company,” as defined by the Investment Company Act of 1940, as amended.
3.19 Affiliate Transactions. Except as set forth on Section 3.19 of the Company
Disclosure Schedule, there are no Contracts that are in existence under which the Company has any
existing or future material liabilities or obligations between the Company or any of its
Subsidiaries, on the one hand, and, on the other hand, any (i) present officer or director of
either the Company or any of its Subsidiaries or any person that has served as such an officer or
director within the past two years or any of such officer’s or director’s immediate family members,
(ii) record or beneficial owner of more than 5% of the Company Common Stock, or (iii) to the
Knowledge of the Company, any Affiliate of any such officer, director or owner (other than the
Company or any of its Subsidiaries), in each case that has not been disclosed in the Company SEC
Documents (each, an “Affiliate Transaction”). The Company has made available to the
Purchaser copies of each Contract or other relevant documentation (including any amendments or
modifications thereto) relating to each Affiliate Transaction.
3.20 State Takeover Statutes; Charter Provisions. The Company Board has taken all
actions necessary so that no anti-takeover statute or regulation, including any affiliate
transaction or control share acquisition, in each case under the MGCL or other applicable Laws of
the State of Maryland, shall be applicable to the execution, delivery or performance of this
Agreement or the consummation of the Sale Transaction (after giving effect to the Offer).
3.21 No Other Representations or Warranties. Except for the representations and
warranties contained in this Article III, neither the Company nor any other Person makes
any express or implied representation or warranty on behalf of the Company or any of its Affiliates
in connection with this Agreement or the Contemplated Transactions.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF PURCHASER
REPRESENTATIONS AND WARRANTIES
OF PURCHASER
Except as disclosed in the disclosure letter, dated as of the date of this Agreement and
delivered by the Purchaser to the Company immediately prior to the execution and delivery of this
Agreement (the “Purchaser Disclosure Schedule”), which disclosure shall be subject to
Section 10.4, the Purchaser represents and warrants to the Company, as of the date hereof,
as of the Pre-Closing Date and as of the Acceptance Date, as follows:
4.1 Corporate Organization, Standing and Power. The Purchaser is a Delaware limited
partnership duly organized, validly existing and in good standing under the Laws of its
jurisdiction of organization. The Purchaser has all requisite partnership or similar power and
authority to own, lease and operate its properties and assets and to carry on its business as now
being conducted and is duly qualified to do business in each jurisdiction in which the failure to
be so qualified would not, individually or in the aggregate, have or be reasonably be expected to
have a Purchaser Material Adverse Effect. The Purchaser has furnished or made available to the
Company a complete and correct copy of the certificate of limited partnership, as amended, and the
limited partnership agreement, as amended, and any other charter or organizational documents, each
as amended, of the Purchaser. The Purchaser is not in violation of any of the provisions of its
certificate of limited partnership or limited partnership agreement or other charter or
organizational documents, each as amended.
4.2 Authority; No Violation.
(a) The Purchaser and has full partnership power and authority to execute and deliver this
Agreement and the Related Agreements to which it is a party and to consummate the transactions
contemplated to be consummated by it herein and therein. The execution and delivery of this
Agreement and the consummation of the Sale Transaction has been duly and validly authorized by the
board of directors or other governing body of the Purchaser. The execution and delivery of the
Related Agreements and the performance of the Purchaser’s obligations thereunder have been duly and
validly authorized by the board of directors or other governing body of the Purchaser. No other
corporate proceedings on the part of the Purchaser are necessary to approve this Agreement or the
Related Agreements and to consummate the Contemplated Transactions. This Agreement has been duly
and validly executed and delivered by the Purchaser and (assuming due authorization, execution and
delivery by the Company) constitutes a valid and binding obligation of the Purchaser, enforceable
against the Purchaser in accordance with its terms, except as such enforcement may be limited by
(i) the effect of bankruptcy, insolvency, reorganization, receivership, conservatorship,
arrangement, moratorium or other Laws affecting or relating to the rights of creditors generally or
(ii) the rules governing the availability of specific performance, injunctive relief or other
equitable remedies and general principles of equity, regardless of whether considered in a
proceeding in equity or at law. The Related Agreements have been duly and validly executed and
delivered by the Purchaser and (assuming due authorization, execution and delivery by the Company
and, in the case of the
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Escrow Agreement, the Escrow Agent) constitute valid and binding obligations of the Purchaser,
enforceable against the Purchaser in accordance with their respective terms, except as such
enforcement may be limited by (x) the effect of bankruptcy, insolvency, reorganization,
receivership, conservatorship, arrangement, moratorium or other laws affecting or relating to the
rights of creditors generally or (y) the rules governing the availability of specific performance,
injunctive relief or other equitable remedies and general principles of equity, regardless of
whether considered in a proceeding in equity or at law.
(b) Neither the execution and delivery of this Agreement or the Related Agreements by the
Purchaser, nor the consummation by the Purchaser of the Contemplated Transactions, nor compliance
by the Purchaser with any of the terms or provisions of this Agreement or the Related Agreements,
will (i) violate any provision of the certificate of limited partnership or limited partnership
agreement or any other charter or organizational documents of the Purchaser or (ii) assuming that
the Purchaser Consents are duly obtained, (x) violate any Law or Governmental Order applicable to
the Purchaser or any of its Subsidiaries or any of their respective properties or assets or (y)
violate, conflict with, result in a breach of any provision of or the loss of any benefit under,
constitute a default (or an event which, with notice or lapse of time, or both, would constitute a
default) under, result in the termination of or a right of termination or cancellation under,
accelerate the performance required by or rights or obligations under, or result in the creation of
any Lien upon any of the properties or assets of the Purchaser under, any of the terms, conditions
or provisions of any Contract to which the Purchaser is a party, or by which it or any of its
properties, assets or business activities may be bound or affected, except (in the case of clause
(ii)(y) above) for such violations, conflicts, breaches, defaults or loss of benefits which would
not individually or in the aggregate reasonably be expected to have a Purchaser Material Adverse
Effect.
4.3 Consents and Approvals. Except for (i) the consents, notices and approvals set
forth in Section 4.3 of the Purchaser Disclosure Schedule (the “Purchaser Consents”) and,
(ii) such additional consents, notices and approvals, the failure of which to make or obtain would
not individually or in the aggregate reasonably be expected to have a Purchaser Material Adverse
Effect, no consents or approvals of any Governmental Entity or any Third Party are necessary in
connection with (A) the execution and delivery by the Purchaser of this Agreement and the Related
Agreements, and (B) the consummation by the Purchaser of the Sale Transaction; provided,
however, that no representation or warranty is made with respect to any consent or approval
required to be made or obtained by the Company or any of its Affiliates.
4.4 Legal Proceedings. The Purchaser is not a party to any, and there are no pending
or, to the Knowledge of the Purchaser, threatened, legal, administrative, arbitral or other
proceedings, claims, actions or governmental or regulatory investigations of any nature against the
Purchaser.
4.5 Broker’s Fees. The Purchaser has not employed any broker or finder or incurred
any liability for any broker’s fees, commissions or finder’s fees in connection with the
Contemplated Transactions.
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4.6 Purchaser Information. None of the information to be explicitly supplied by or on
behalf of the Purchaser or any of its Subsidiaries in writing for inclusion or incorporation by
reference in (i) the Offer Documents will, at the date the Offer Documents are first mailed to the
Company Stockholders and at any time between the time the Offer Documents are mailed to the Company
Stockholders and the Acceptance Date, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not misleading, (ii) the Proxy
Statement will, at the date the Proxy Statement is first mailed to the Company Stockholders and at
any time between the time the Proxy Statement is mailed to the Company Stockholders and the Meeting
Date, contain any untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, or (iii) any other document filed with
any other regulatory agency in connection herewith will, at the time such document is filed,
contain any untrue statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
4.7 Continued Listing. The Purchaser intends to cause the shares of Company Common
Stock to continue to be listed for trading on the NYSE from and after the Closing.
4.8 Financing. The Purchaser has, and will have immediately prior to the Pre-Closing
Date, sufficient cash, available lines of credit or other sources of immediately available funds to
enable it to deposit the Maximum Amount with the Escrow Agent in accordance with Section
2.1.
4.9 No Reliance. The Purchaser (i) is not relying upon any representations or
warranties of the Company other than those expressly set forth in this Agreement; (ii) is entering
into this Agreement as principal and understands that the Company is not acting as the Purchaser’s
advisor, agent, broker or in any other capacity, fiduciary or otherwise; (iii) has entered into
this Agreement with a full understanding of the material terms and risks of the same; (iv) has
conducted its own due diligence efforts with respect to the Contemplated Transactions; (v) has made
its decision to enter into this Agreement and to consummate the Contemplated Transactions
(including regarding the suitability thereof) based upon its own judgment and any advice from such
advisors as it deemed necessary and not in reliance upon any view expressed by the Company or its
Affiliates or their respective representatives, including as to any projections, forecasts or other
estimates, plans or budgets of future revenues, expenses or expenditures, future results of
operations (or any component thereof), future cash flows (or any component thereof) or future
financial condition (or any component thereof) of the Company or any of its Subsidiaries or the
future business, operations or affairs of the Company or any of its Subsidiaries or the merits or
outcome of any litigation pending with respect to the Company or any of its Subsidiaries, in each
case heretofore or hereafter delivered to or made available to the Purchaser or its representatives
or Affiliates; and (vi) has consulted with and is relying on its own advisors with regard to the
Tax consequences of the Contemplated Transactions, and is not
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relying upon any representation of or information obtained from the Company or any of its
Affiliates or their respective representatives with respect to Taxes.
4.10 Investor Representation. The Purchaser is sophisticated in financial matters and
is able to evaluate the risks and benefits of an investment in the Purchased Shares. An investment
in the Purchased Shares involves risks and uncertainties and the Purchaser is able to bear the
economic risk of its investment in the Purchased Shares for an indefinite period of time. The
Purchaser is purchasing the Purchased Shares solely for investment purposes, for the Purchaser’s
own account and not for the account or benefit of any other Person, and not with a view towards
distribution thereof, and the Purchaser has no present arrangement to sell the Purchased Shares to
or through another Person. The Purchaser acknowledges and understands that the Purchased Shares
are being offered in a transaction not involving a public offering of securities in the United
States within the meaning of the Securities Act. The Purchased Shares have not been registered
under the Securities Act, and, if in the future the Purchaser decides to offer, resell, pledge or
otherwise transfer the Purchased Shares, such Purchased Shares may be offered, resold, pledged or
otherwise transferred only (i) pursuant to an effective registration statement filed under the
Securities Act, (ii) pursuant to an exemption from registration under Rule 144 promulgated under
the Securities Act, if available, or (iii) pursuant to any other exemption from the registration
requirements of the Securities Act, and, in each case, in accordance with any applicable securities
Laws of any state or any other jurisdiction. Absent registration or the applicability of an
exemption, the Purchaser will not sell the Purchased Shares. In connection with the foregoing, the
Purchaser acknowledges and understands that the certificates or other evidence of the Purchased
Shares will bear a restrictive legend stating that such Purchased Shares may not be offered, sold
or otherwise transferred except in a manner contemplated by this Section 4.10.
4.11 No Other Representations or Warranties. Except for the representations and
warranties contained in this Article IV, neither the Purchaser nor any other Person makes
any other express or implied representation or warranty on behalf of the Purchaser or any of its
Affiliates in connection with this Agreement or the Contemplated Transactions.
ARTICLE V
INTERIM CONDUCT
INTERIM CONDUCT
5.1 Obligation of Company Regarding Conduct of Business. During the period from the
date of this Agreement and continuing until the earlier of the termination of this Agreement and
the Closing Date, except (i) as required, expressly contemplated or permitted by this Agreement,
(ii) as required by applicable Law, or (iii) with the prior written consent of the Purchaser (which
consent shall not be unreasonably withheld, conditioned or delayed), the Company shall, and shall
cause each of its Subsidiaries, to conduct its business in the ordinary course consistent with past
practice.
5.2 Restrictions on Company Regarding Conduct of Business. Without limiting the
effect of Section 5.1, during the period from the date of this Agreement and
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continuing until the earlier of the termination of this Agreement and the Closing Date, except
(i) as set forth in Section 5.2 of the Company Disclosure Schedule, (ii) as required, expressly
contemplated or permitted by this Agreement, (iii) as required by applicable Laws, or (iv) with the
prior written consent of the Purchaser (which consent shall not be unreasonably withheld,
conditioned or delayed), the Company shall not, and shall not permit any of its Subsidiaries to:
(a) cause or permit any amendment, modification, alteration or rescission of its certificate
of incorporation, bylaws or other charter or organizational documents;
(b) declare or pay any dividends on or make any other distributions (whether in cash, stock or
property) in respect of any of its capital stock (other than dividends or distributions by any
wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary thereof
and quarterly cash dividends of up to $0.17 per share of Company Common Stock, with record and
payment dates consistent with past practice) or split, combine or reclassify any of its capital
stock, or repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock
except from former employees, directors and consultants in accordance with agreements in effect on
the date hereof providing for the repurchase of shares in connection with any termination of
service to it or any of its Subsidiaries and the acceptance of shares of Company Common Stock in
payment of the exercise price or withholding Taxes incurred by any holder in connection with the
exercise of Company Warrants or the vesting and settlement of Company Restricted Shares, Company
Performance Share Awards and Company RSUs;
(c) issue, deliver or sell or authorize or propose the issuance, delivery or sale of any
shares of its capital stock or securities convertible into, or subscriptions, rights, warrants or
options to acquire, or other agreements or commitments of any character obligating it to issue any
such shares or other convertible securities, other than (i) the issuance of shares of Company
Common Stock pursuant to the exercise of Company Warrants or the vesting and settlement of Company
RSUs or Company Performance Share Awards, in each case outstanding as of the date of this Agreement
or as may be granted after the date of this Agreement as permitted under this Section 5.2,
(ii) issuances of shares of Company Common Stock as required on the date hereof pursuant to the
Company Benefit Plans, (iii) the sale of shares of Company Common Stock pursuant to the exercise of
Company Warrants outstanding on the date hereof if necessary to effectuate a grantee direction upon
exercise or for withholding of Taxes, or (iv) pursuant to other agreements existing as of the date
of this Agreement to the extent set forth in Section 5.2 of the Company Disclosure Schedule;
(d) sell, lease, license or otherwise dispose of or encumber any Assets having a value in
excess of $250,000 in the aggregate;
(e) (A) incur any indebtedness for borrowed money or (B) assume, guarantee, endorse or
otherwise as an accommodation become responsible for the obligations of any Third Party, in each
case in excess of $250,000 in the aggregate;
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(f) make any capital expenditures, capital additions or capital improvements except in the
ordinary course of business consistent with past practice that do not exceed individually or in the
aggregate $250,000;
(g) (i) terminate, amend or waive any material right in, or fail to perform any material
obligations under, any Material Contract in a manner that could reasonably be expected to have a
Company Material Adverse Effect, or (ii) enter into any Material Contract;
(h) (A) except as required by existing written agreements or Company Benefit Plans, increase
the compensation or other benefits payable or provided to the Company’s directors or officers or
any other person that provides services to the Company or its Subsidiaries, (B) enter into any
employment, change of control, severance or retention agreement with any employee or director of
the Company or its Subsidiaries or any other person that provides services to the Company or its
Subsidiaries, (C) establish, adopt, enter into or amend any collective bargaining agreement, plan,
trust, fund, policy or arrangement for the benefit of any current or former directors, officers or
employees of the Company or its Subsidiaries or any of their beneficiaries, or (D) grant any equity
or equity based awards;
(i) acquire or agree to acquire by merging or consolidating with, or by purchasing a
substantial portion of the assets of, or by any other manner, any business or any Person or
otherwise acquire or agree to acquire any assets;
(j) make any change to its financial accounting methods or practices (including any change in
depreciation or amortization policies or rates), except as may be required by GAAP, Regulation S-X
or other rule or regulation promulgated by the SEC;
(k) make or change any material election in respect of Taxes, apply for or pursue any Tax
ruling, change any tax identification number, execute any powers of attorney in respect of any Tax
matter, extend or waive the application of any statute of limitations regarding the assessment or
collection of any material Tax of the Company or its Subsidiaries, or take any action which could
cause the Company to fail to qualify as a REIT (other than in connection with or as a result of the
Contemplated Transactions), or adopt or change in any material respect any accounting method in
respect of Taxes;
(l) settle or offer to settle the Cambridge Litigation (other than any settlement that (i)
does not require the payment by the Company of any material amounts, (ii) would not reasonably be
expected to have a Company Material Adverse Effect from and after the settlement date, or (iii)
would not require the Company to waive any material right or to undertake any material obligation);
(m) enter into any new line of business or enter into any agreement that restrains, limits or
impedes the Company’s or any of its Subsidiaries’ ability to compete with or conduct any business
or line of business;
(n) expand the size of the Company Board; or
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(o) take or agree in writing to take, any of the actions described in clauses (a) through (n)
above.
5.3 No Solicitation.
(a) The Company shall not, nor shall it authorize any of its Subsidiaries or any officer,
director, employee, accountant, counsel, financial advisor, agent or other representative of the
Company or any of its Subsidiaries (collectively, the “Company Representatives”) to, (i)
solicit or initiate, or encourage, directly or indirectly, any inquiries regarding or the
submission of, any Takeover Proposal, (ii) participate in any discussions or negotiations
regarding, or furnish to any Person any confidential information or data with respect to, or take
any other action to knowingly facilitate the making of, a Takeover Proposal or any inquiry that may
reasonably be expected to lead to a Takeover Proposal, or (iii) enter into any agreement with
respect to any Takeover Proposal or approve or resolve to approve any Takeover Proposal;
provided, however, that nothing contained in this Section 5.3 or any other
provision of this Agreement shall prohibit the Company or the Company Board from (A) taking and
disclosing to the Company Stockholders a position with respect to a tender or exchange offer by a
Third Party pursuant to Rules 14d-9 and 14e-2 or Item 1012(a) of Regulation M-A promulgated under
the Exchange Act or (B) making such disclosure to the Company Stockholders as, in the good faith
judgment of the Company Board, after consultation with outside counsel, is required under
applicable Laws, provided, that the Company may not, except as permitted by Section
5.3(e), withdraw or modify its approval of this Agreement or the Sale Transaction, or approve
or recommend any Takeover Proposal, or enter into any agreement with respect to any Takeover
Proposal. Upon execution of this Agreement, the Company shall, and it shall instruct the Company
Representatives to, immediately cease any existing activities, discussions or negotiations with any
parties conducted heretofore with respect to any Takeover Proposal.
(b) Notwithstanding anything to the contrary in Section 5.3(a), prior to the
Acceptance Date, if the Company has received from any Third Party a written inquiry or Takeover
Proposal that was not solicited in violation of this Section 5.3 (i) the Company may
contact such Third Party or its advisors for the purpose of clarifying such inquiry or Takeover
Proposal and the material terms and conditions thereof, so as to determine whether such inquiry or
Takeover Proposal is reasonably likely to lead to a Superior Proposal, and (ii) the Company may
furnish information concerning its business or Assets to such Third Party pursuant to a customary
confidentiality agreement with provisions not materially less favorable in the aggregate to the
Company than the Confidentiality Agreement, and may negotiate and participate in discussions and
negotiations with such Third Party concerning a Takeover Proposal, if such Third Party has
submitted a Superior Proposal, or a Takeover Proposal that the Company Board determines in good
faith (after consultation with its advisors) is reasonably likely to constitute or lead to a
Superior Proposal.
(c) The Company agrees that it will promptly (and, in any event, within 72 hours) notify the
Purchaser if any proposals or offers with respect to a Takeover Proposal are received by, any
non-public information is requested from, or any discussions or negotiations are
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sought to be initiated or continued with, the Company or any of the Company Representatives
including, in connection with such notice, a written summary of the material terms and conditions
of any proposals or offers that are not made in writing and copies of any requests, proposals or
offers, including proposed agreements, of proposals or offers that are made in writing. The
Company shall keep the Purchaser reasonably informed, on a prompt basis, of the status and terms of
any proposals or offers (including any amendments thereto) and the status of any discussions,
negotiations or developments. The Company will promptly provide to the Purchaser any non-public
information concerning the Company provided to any other Third Party which was not previously
provided to the Purchaser.
(d) As used in this Agreement, the following terms have the meanings set forth below:
“Superior Proposal” means a bona fide written proposal by a Third Party to acquire,
directly or indirectly, more than 50% of the shares of Company Common Stock then outstanding or of
the Assets, which (i) the Company Board determines in good faith (after consultation with its
advisors) to be more favorable to the Company Stockholders than the Contemplated Transactions and
(ii) which, in the good faith judgment of the Company Board, is reasonably likely to be
consummated, taking into consideration (with respect to both subsections (i) and (ii) hereof) all
financial, regulatory, legal, timing and other aspects of such proposal.
“Takeover Proposal” means any proposal or offer, whether in writing or otherwise, from
a Third Party to acquire beneficial ownership (as defined under Rule 13d-3 of the Exchange Act) of
assets that constitute 15% or more of the Assets or 15% or more of the Company Common Stock or
outstanding voting power of the Company, whether pursuant to a merger, consolidation or other
business combination, sale of shares of capital stock, sale of assets, tender offer, exchange offer
or similar transaction.
“Third Party” means any Person or group other than the Purchaser or any Affiliate
thereof.
(e) Except as set forth in this Section 5.3(e), neither the Company Board nor any
committee thereof shall (i) adopt, approve or recommend, or propose to adopt, approve or recommend,
(publicly or otherwise) a Takeover Proposal, (ii) make any recommendation or public statement in
connection with a tender offer or exchange offer by a Third Party other than a recommendation
against such offer or a “stop, look and listen” communication by the Company Board pursuant to Rule
14d-9(f) of the Exchange Act, or (iii) cause or permit the Company to enter into any acquisition
agreement, merger agreement or similar definitive agreement (other than a confidentiality agreement
referred to in Section 5.3(b)) relating to any Takeover Proposal.
Notwithstanding anything in this Agreement to the contrary, prior to the Acceptance Date, the
Company Board may take any of the foregoing actions if (A) the Company Board shall have determined
in good faith, after consultation with outside counsel, that failure to take such action would be
inconsistent with the Company’s directors’ fiduciary duties to the Company Stockholders and (B) in
the case of the actions referred to in clauses (ii) or (iii) of the
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preceding sentence, (x) the Company shall have received a Superior Proposal which is pending at the
time the Company determines to take such action, (y) the Company shall have provided the Purchaser
with written notice advising the Purchaser that the Company Board has received such a Superior
Proposal which it intends to approve, recommend or accept, specifying the identity of the party
making the Superior Proposal and the material terms and conditions thereof, and (z) at least two
(2) Business Days shall have passed following the Purchaser’s receipt of such notice (it being
agreed that each subsequent material amendment or material revision to such Superior Proposal shall
require the Company to deliver to the Purchaser a new notice of Superior Proposal and result in an
additional two (2) Business Day period from the date of receipt of any such material amendment or
material revision) and the Purchaser shall not have made a binding written offer that the Company
Board shall have concluded in its good faith judgment, after consultation with its financial
advisors, is at least as favorable to the Company Stockholders as such Superior Proposal.
5.4 Conduct of the Purchaser. The Purchaser, from the date of this Agreement until
the earlier of the termination of this Agreement and the Closing Date, will not and will not permit
its Subsidiaries, other Affiliates or Purchaser Representatives to (a) take any action that would
reasonably be expected to materially impede or delay the ability of the parties to consummate the
Contemplated Transactions (including deposit by the Purchaser of the Maximum Amount with the Escrow
Agent) or to obtain any necessary approvals of any Governmental Entity required for the
Contemplated Transactions; or (b) agree to, or make any commitment to, take or authorize, any of
the foregoing.
ARTICLE VI
ADDITIONAL AGREEMENTS
ADDITIONAL AGREEMENTS
6.1 Company Tender Offer.
(a) The Company shall commence (within the meaning of Rule 14d-2 under the Exchange Act) the
Offer within ten (10) Business Days after the date on which the Proxy Statement is mailed to the
Company Stockholders. The Company shall use its commercially reasonable efforts to consummate the
Offer, subject to the terms and conditions thereof. The obligation of the Company to accept for
payment or pay for any shares of Company Common Stock tendered pursuant to the Offer will be
subject only to the satisfaction or waiver of each of the conditions set forth in Annex I
hereto (the “Offer Conditions”). By 9:00 a.m., New York City time, on the Business Day
immediately after (or, if not practicable, as soon as practicable after such time) (i) the Offer
has expired without being extended in accordance with subsection (c) below, and (ii) each of the
Offer Conditions has been satisfied or waived at or after such expiration (in accordance with
Annex I), the Company shall accept for payment all shares of Company Common Stock validly
tendered pursuant to the Offer (and not withdrawn) (such date for the acceptance for payment, the
“Acceptance Date”), and the Company shall pay the Offer Price for such shares promptly
thereafter, and in any event in compliance with Rule 14e-1(c) under the Exchange Act.
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(b) Without the prior written consent of the Purchaser (which consent shall not be
unreasonably withheld, conditioned or delayed), the Company may not (i) waive or amend the Minimum
Condition or any other condition of the Offer (other than the conditions set forth in subsections
(a), (e), (f) and (h) of Annex I), (ii) change the form of consideration to be paid
pursuant to the Offer, (iii) change the Offer Price, (iv) impose conditions to the Offer in
addition to the Offer Conditions, (v) except as provided in Section 6.1(c), extend the
expiration date of the Offer beyond the initial expiration date, (vi) reduce the time period during
which the Offer shall remain open, or (vii) amend any other term of the Offer in a manner adverse
to the Purchaser or holders of Company Common Stock.
(c) The Offer shall remain open until 12:00 p.m. New York City time on the date that is twenty
(20) Business Days after the commencement (determined pursuant to Rule 14d-1(g)(3) under the
Exchange Act) of the Offer (the “Expiration Date”), unless extended pursuant to the
following sentence, in which case the term “Expiration Date” shall mean the latest time and
date as the Offer, as so extended, may expire. If at any scheduled expiration time, any of the
Offer Conditions (other than delivery of the Joint Written Direction) are not satisfied or waived
by the Company (subject to subsection (b) above), the Company shall, by 2:00 p.m. New York City
time on such scheduled expiration date, extend the Offer for the shortest time period or periods
necessary to satisfy the Offer Conditions (other than delivery of the Joint Written Direction);
provided, however, that in no event shall the Company be required to extend the
Offer beyond August 31, 2010 (the “Outside Date”). Notwithstanding anything in this
Agreement to the contrary, if any of the Offer Conditions are not satisfied or waived by the
Company as of the Outside Date, the Company shall not be required to accept for payment, or pay
for, any shares of Company Common Stock pursuant to the Offer.
(d) On the date of commencement of the Offer, the Company shall (i) file with the SEC a Tender
Offer Statement on Schedule TO with respect to the Offer, which will contain or incorporate by
reference the offer to purchase shares of Company Common Stock pursuant to the Offer (the
“Offer to Purchase”) and the forms of the related letter of transmittal and summary
advertisement (the Tender Offer Statement on Schedule TO, the Offer to Purchase, and all exhibits,
amendments and supplements thereto, the “Offer Documents”) and (ii) cause the Offer to
Purchase and related documents to be disseminated to holders of shares of Company Common Stock in
accordance with all applicable Laws. The Company shall cause the Offer Documents to comply in all
material respects with the Exchange Act. The Company shall use its commercially reasonable efforts
to respond promptly to any comments of the SEC or its staff with respect to the Offer Documents or
the Offer, to correct promptly any information provided by it for use in the Offer Documents if and
to the extent that such information shall have become false or misleading in any material respect,
and to take all steps necessary to cause the Offer Documents, as supplemented or amended to correct
such information, to be filed with the SEC and to be disseminated to holders of shares of Company
Common Stock to the extent required by applicable Laws. The Purchaser shall use its commercially
reasonable efforts promptly to furnish to the Company all information concerning the Purchaser and
its Subsidiaries that may be required or reasonably requested by the Company in connection with any
action contemplated by this Section 6.1(d). The Purchaser and its counsel shall be given
reasonable opportunity to
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review and comment on the Offer Documents (including any amendment thereto) each time before
any such document is filed with the SEC, and the Company shall include in such Offer Documents all
comments reasonably proposed by the Purchaser and its counsel. The Company shall provide the
Purchaser and its counsel with any comments the Company or their counsel may receive from the SEC
or its staff with respect to the Offer Documents promptly after receipt of such comments and the
Purchaser and its counsel shall be afforded a reasonable opportunity to participate in the response
to such comments. Each of the Company and the Purchaser shall, acting in good faith and
reasonably, agree to amend or modify any Offer Condition to the extent necessary to comply with any
comments received from the SEC in connection with the Offer and the Proxy Statement;
provided, that the Purchaser shall not be required to amend or modify the Minimum
Condition.
(e) If, between the date of this Agreement and the date on which any particular share of
Company Common Stock is accepted for payment and paid for pursuant to the Offer, the outstanding
shares of Company Common Stock are changed into a different number or class of shares by reason of
any stock split, division or subdivision of shares, stock dividend, reverse stock split,
consolidation of shares, reclassification, recapitalization or other similar transaction, then the
Offer Price, the Minimum Condition, and with respect to the Sale Transaction, the Share Quantity
and the Purchase Price, as the case may be, applicable to such share shall be appropriately and
proportionately adjusted.
6.2 Company Proxy Solicitation.
(a) Subject to Section 5.3(e), the Company Board Approval shall not be withdrawn or
modified in a manner adverse to the Purchaser.
(b) As soon as practicable but in no event more than twenty (20) Business Days after the date
of this Agreement, the Company shall prepare and file with the SEC a preliminary proxy statement
seeking shareholder approval of the issuance of the Purchased Shares to the Purchaser and
abandonment of the Plan of Liquidation at the Company Stockholders’ Meeting and shall use its
commercially reasonable efforts to respond to any comments of the SEC or its staff and to cause a
definitive proxy statement seeking shareholder approval of the Stockholder Proposals (the
“Proxy Statement”) to be mailed to the Company Stockholders as promptly as practicable
after responding to all such comments to the satisfaction of the SEC and its staff. The Company
shall notify the Purchaser promptly of the receipt of any comments from the SEC or its staff and of
any request by the SEC or its staff for amendments or supplements to the Proxy Statement or for
additional information and will supply the Purchaser with copies of all correspondence between the
Company or any of its representatives, on the one hand, and the SEC or its staff, on the other
hand, with respect to the Proxy Statement and the Purchaser and its counsel shall be afforded a
reasonable opportunity to participate in the response to any SEC comments. If at any time prior to
the Company Stockholders’ Meeting there shall occur any event that is required to be set forth in
an amendment or supplement to the Proxy Statement, the Company shall as promptly as practicable
prepare and mail to the Company Stockholders such an amendment or supplement. Each of the Company
and the Purchaser agrees
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promptly to correct any information provided by it or on its behalf for use in the Proxy
Statement if and to the extent that such information shall have become false or misleading in any
material respect, and the Company shall as promptly as practicable prepare and mail to the Company
Stockholders an amendment or supplement to correct such information to the extent required by
applicable Laws. The Company shall consult with the Purchaser prior to mailing any Proxy
Statement, or any amendment or supplement thereto, to which the Purchaser timely and reasonably
objects. The Purchaser shall cooperate with the Company in the preparation of the Proxy Statement
or any amendment or supplement thereto.
6.3 Stockholder Approval. Subject to Section 5.3, the Company, acting through
the Company Board, shall take all action necessary under all applicable Laws to call, give notice
of and hold a meeting of the holders of Company Common Stock (the “Company Stockholders’
Meeting”) to vote on proposals (i) to approve the abandonment of the Plan of Liquidation in
favor of the Contemplated Transactions, (ii) to approve the issuance of the Purchased Shares to the
Purchaser, and (iii) to approve an amendment to Section 7.2.1(a)(iii) of the Company Charter to
permit a Transfer (as defined in the Company Charter) that would cause the Company to be
beneficially owned by less than 100 Company Stockholders (collectively, the “Stockholder
Proposals”). The Company Stockholders’ Meeting shall be held (on a date selected by the
Company in consultation with the Purchaser) as promptly as practicable after the mailing of the
Proxy Statement, but in no event earlier than twenty (20) Business Days after such mailing. The
Company shall use its commercially reasonable efforts to ensure that all proxies solicited in
connection with the Company Stockholders’ Meeting are solicited in compliance with all applicable
Laws. Subject to Section 5.3, the Company Board shall recommend a vote in favor of the
proposals contemplated in this Section 6.3.
6.4 Other Regulatory Matters.
(a) Each of the Purchaser and the Company shall, and shall cause its Subsidiaries to, use its
commercially reasonable efforts to, (i) take, or cause to be taken, all actions necessary, proper
or advisable to comply promptly with all legal requirements which may be imposed on such party or
its Subsidiaries with respect to the Contemplated Transactions, including obtaining any Third Party
consent which may be required to be obtained in connection with the Contemplated Transactions, to
challenge the imposition of any preliminary or permanent injunction or other order of a court of
competent jurisdiction preventing the consummation of the Contemplated Transactions (which
challenge shall be at the Company’s cost and expense), and, subject to the conditions to such
party’s obligations set forth in this Agreement, to consummate the Contemplated Transactions and
(ii) obtain (and cooperate with the other party to obtain) any consent, authorization, order or
approval of, or any exemption by, any Governmental Entity which is required to be obtained by the
Purchaser or the Company, respectively, or any of their respective Subsidiaries in connection with
the Contemplated Transactions; provided, however that, for the avoidance of doubt,
in no event shall the Company or any of its Subsidiaries or the Purchaser be required to (iii) seek
to remove any temporary restraining order, preliminary or permanent injunction or other order
issued by a court of competent jurisdiction preventing the consummation of the Contemplated
Transactions or (iv)
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pay any amounts to any Third Parties in settlement of pending litigation relating to or
arising out of the Contemplated Transactions or otherwise pursuant to this Section 6.4(a)
except as set forth in Section 6.4(a) of the Company Disclosure Schedule. The parties hereto shall
cooperate with each other and promptly prepare and file all necessary documentation, and effect all
applications, notices, petitions and filings (including any notification required by the HSR Act),
to obtain as promptly as practicable all permits, consents, approvals, authorizations of all Third
Parties and Governmental Entities, and the expiry or termination of all applicable waiting periods,
which are required to consummate the Contemplated Transactions. The parties hereto agree that they
will consult with each other with respect to the obtaining of all permits, consents, approvals and
authorizations of all Third Parties and Governmental Entities necessary or advisable to consummate
the Contemplated Transactions and each party will keep the other apprised of the status of matters
relating to completion of the Contemplated Transactions.
(b) The Purchaser and the Company shall, upon request, furnish each other with all information
concerning themselves, their respective Subsidiaries, directors, officers, employees and
stockholders and such other matters as may be reasonably necessary or advisable in connection with
the Proxy Statement, the Offer Documents or any other statement, filing, notice, application or
other document made by or on behalf of the Purchaser, the Company or any of their respective
Subsidiaries to any Governmental Entity in connection with the Contemplated Transactions.
(c) The Purchaser and the Company shall promptly advise each other upon receiving any
communication from any Governmental Entity in respect of any filing, investigation or inquiry
concerning this Agreement or the Contemplated Transactions.
6.5 Access to Information. Subject to applicable Laws, the Company agrees to provide
the Purchaser and the Purchaser’s officers, directors, employees, accountants, counsel, financial
advisors, agents and other representatives (collectively, the “Purchaser Representatives”),
from time to time prior to the Closing Date, reasonable access during normal business hours to the
officers, employees, agents, properties, offices, plants and other facilities of the Company, books
and records of the Company and its Subsidiaries and such other information as the Purchaser shall
reasonably request with respect to the Company and its Subsidiaries and their respective
businesses, financial condition and operations. Except as required by applicable Laws, the
Purchaser shall keep confidential, and shall cause the Purchaser’s Affiliates and the Purchaser
Representatives to keep confidential, any non-public information received from the Company,
directly or indirectly, in accordance with the Confidentiality Agreement.
6.6 Public Disclosure. Unless otherwise permitted by this Agreement, the Purchaser
and the Company shall consult with each other before issuing any press release or otherwise making
any public statement regarding the terms of this Agreement or any of the Contemplated Transactions,
and neither shall issue any such press release or make any such statement without the prior
approval of the other (which approval shall not be unreasonably withheld, conditioned or delayed),
except as may be required by applicable Laws or by obligations pursuant to any listing agreement
with any national securities exchange, in which
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case the party proposing to issue such press release or make such public statement or
disclosure shall use its reasonable best efforts to consult with the other party before issuing
such press release or making such public statement; provided, however, that any
public statement or disclosure that is consistent with a public statement or disclosure previously
approved by the other party shall not require the prior approval of such other party.
6.7 Further Assurances. Subject to Section 5.3 and Section 6.4(a),
each party hereto, at the reasonable request of another party hereto, shall execute and deliver
such other instruments and do and perform such other acts and things as may be necessary or
desirable for effecting the consummation of this Agreement and the Contemplated Transactions.
6.8 Continued Listing. The Purchaser shall use commercially reasonable efforts to
cause the shares of Company Common Stock to continue to be listed for trading on the NYSE for a
period of one (1) year after the Closing Date.
6.9 Director and Officer Indemnification.
(a) From and after the Closing Date, the Purchaser shall (i) if the Purchaser owns or
controls, directly or through one or more Affiliates, more than 50% of the Company Common Stock,
not permit, or (ii) if the Purchaser owns or controls, directly or through one or more Affiliates,
50% or less of the Company Common Stock, vote against, and cause any directors of the Company
designated or nominated by the Purchaser that serve on the Company Board to vote against (in their
capacity as Board members), in each case, any amendment, repeal or modification of the Company
Charter or the Company Bylaws with respect to indemnification of directors, officers, employees and
agents in any manner that would adversely affect the rights thereunder of the Persons who at any
time prior to the Closing Date were identified as prospective indemnitees under the Company Charter
or the Company Bylaws in respect of actions or omissions occurring at or prior to the Closing Date
(including the Contemplated Transactions).
(b) From and after the Closing Date, the Company shall, to the fullest extent permitted by
applicable Laws, indemnify, defend and hold harmless the present and former directors, officers,
employees and agents of the Company or any of its Subsidiaries in their capacities as such (each,
an “Indemnified Party”) against all losses, claims, damages, costs, expenses, liabilities
or judgments or amounts that are paid in settlement of or in connection with any claim based in
whole or in part on or arising in whole or in part out of the fact that such Indemnified Party is
or was a director, officer, employee or agent of the Company or any Subsidiary of the Company, and
pertaining to any matter existing or occurring, or any acts or omissions occurring, at or prior to
the Closing Date, whether asserted or claimed prior to, or at or after, the Closing Date (including
matters, acts or omissions occurring in connection with the approval of this Agreement and the
consummation of the Contemplated Transactions) or taken at the request of the Purchaser pursuant to
this Agreement.
(c) Prior to the Closing Date, the Company shall obtain a six-year prepaid “tail policy” with
respect to directors’ and officers’ liability insurance covering those individuals
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serving as officers and directors of the Company or any of its Subsidiaries immediately prior
to the Closing Date and any other Person who is covered by the Company’s current directors’ and
officers’ liability insurance policy, which tail policy shall cover acts and omissions occurring at
or prior to the Closing Date and shall have a coverage amount of $20 million and other policy terms
and conditions at least as favorable as the terms and conditions in the existing directors’ and
officers’ liability insurance policy of the Company, subject to a maximum premium with respect to
such tail policy of $2 million.
(d) In the event the Company or any of its successors or assigns (i) consolidates with or
merges into any other Person and shall not be the continuing or surviving corporation or entity of
such consolidation or merger or (ii) transfers or conveys all or substantially all of its
properties and assets to any Person, then, and in each such case, to the extent necessary, proper
provision shall be made so that the successors and assigns of the Company assume the obligations
set forth in this Section 6.9.
(e) The provisions of this Section 6.9 shall survive the Closing Date and are intended
to be for the benefit of, and shall be enforceable by, each Indemnified Party and his or her heirs
and representatives.
6.10 Advice of Changes. The Company and the Purchaser shall give prompt notice to the
other of (a) the occurrence, or failure to occur, of any event, which occurrence or failure to
occur is reasonably likely to cause any representation or warranty of such party contained in this
Agreement to be untrue or inaccurate in a manner that would cause the conditions set forth in
Section 7.3 not to be satisfied as of the Pre-Closing Date or the Offer Conditions not to
be satisfied as of the Acceptance Date, or (b) any failure of the Purchaser or the Company, as the
case may be, to comply with or satisfy any covenant, condition or agreement to be complied with or
satisfied by it under this Agreement in a manner that would cause the conditions set forth in
Section 7.3 not to be satisfied as of the Pre-Closing Date or the Offer Conditions not to
be satisfied as of the Acceptance Date. Notwithstanding the above, the delivery of any notice
pursuant to this Section 6.10 will not limit or otherwise affect the remedies available
hereunder to the party receiving such notice or the conditions to such party’s obligation to
consummate the Contemplated Transactions.
6.11 Litigation. The Company shall consult with, and keep the Purchaser promptly
informed with respect to, any litigation or claim against or involving the Company, any of its
Subsidiaries, or any of their respective directors or officers or Assets, including the settlement
thereof; provided, that the Purchaser shall have no obligation to participate in the
defense or settlement of the Cambridge Litigation or any other litigation or claims involving the
Company, any of its Subsidiaries, or any of their respective directors or officers or Assets. In
the event any litigation or claim involving or relating to the Contemplated Transactions is
commenced, the Company agrees, at the Company’s expense, to use commercially reasonable efforts to
promptly defend against any such action.
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6.12 Takeover Statutes. Subject to Section 5.3(e), if any Takeover Statute is
or may become applicable to the Sale Transaction (after giving effect to the Offer), the Company
and the Company Board shall grant such approvals and take such actions as are necessary so that
such transactions may be consummated as promptly as practicable on the terms contemplated by this
Agreement and otherwise act to eliminate (to the extent reasonably possible as advised by counsel
to the Company) the effects of such statute or regulation on such transactions.
6.13 Rule 14d-10 Matters. Prior to the scheduled expiration of the Offer (as it may
be extended hereunder) the Company (acting through its Compensation Committee) will take all such
steps as may be required to cause each Compensation Arrangement entered into by the Company or any
of its Subsidiaries on or after the date of this Agreement to be approved as an “employment
compensation, severance or other employee benefit arrangement” within the meaning of Rule
14d-10(d)(2) under the Exchange Act and to satisfy the requirements of the non- exclusive safe
harbor set forth in Rule 14d-10(d) of the Exchange Act. Prior to the scheduled expiration of the
Offer (as it may be extended hereunder), neither the Company Board nor the Compensation Committee
shall withdraw, nor permit the withdrawal of, the Company Compensation Arrangement Approvals.
6.14 Use of Proceeds. The Company shall use the proceeds from the Sale Transaction
solely to fund the Company’s obligations in connection with the Offer.
ARTICLE VII
CONDITIONS PRECEDENT TO PRE-CLOSING
CONDITIONS PRECEDENT TO PRE-CLOSING
7.1 Reserved.
7.2 Reserved.
7.3 Conditions to the Purchaser’s Obligations to Effect the Pre-Closing. The
obligation of the Purchaser to deposit the Maximum Amount with the Escrow Agent pursuant to
Section 2.1 shall be subject to the satisfaction at or prior to such deposit of the
following conditions (any of which may be waived in writing by the Purchaser, in whole or in part):
(a) Accuracy of Representations and Warranties. The representations and warranties of
the Company contained in this Agreement are true and correct, except where the failure of such
representations and warranties to be true and correct, taken as a whole, would not reasonably be
expected to have a Company Material Adverse Effect;
(b) Performance of Obligations. Each of the covenants and obligations that the
Company is required to perform or to comply with pursuant to this Agreement at or prior to the
Pre-Closing Date shall have been duly performed or complied with in all respects at or prior to the
Pre-Closing Date, except to the extent the non-performance thereof would not be material to the
Contemplated Transactions or result in a Company Material Adverse Effect;
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(c) Related Agreements. Each of the Related Agreements shall be in full force and
effect;
(d) Consents. The Company shall have delivered to the Purchaser evidence of the
filing with respect to and/or receipt of all the Company Consents set forth on Schedule 7.3(d) of
the Company Disclosure Letter;
(e) No MAE. Between the date of this Agreement and the Pre-Closing Date, there shall
not have occurred any change, event or development that has had, or would reasonably be expected to
have, individually or in the aggregate, a Company Material Adverse Effect;
(f) Resignations of Directors. At least three (3) of the directors on the Company
Board shall have provided the Purchaser with written resignations from such positions effective as
of the Closing Date and the remaining director(s) on the Company Board shall have filled the
vacancies with candidates acceptable to the Purchaser in its sole discretion;
(g) Opinion of Counsel. The Purchaser shall have received an opinion from counsel to
the Company, addressed to the Purchaser, stating that, assuming receipt of the Company Stockholder
Approval, the Purchased Shares, when issued and delivered to the Purchaser in accordance with the
terms and conditions of this Agreement, will be duly authorized, fully paid, validly issued and
non-assessable, and that such Purchased Shares, when issued, will not have been issued in violation
of any preemptive rights set forth in the Company Charter;
(h) No Order. No Governmental Entity of competent jurisdiction shall have enacted,
issued or entered any restraining order, preliminary or permanent injunction or similar order or
legal restraint or prohibition which remains in effect that enjoins or otherwise prohibits
consummation of the Offer, the Sale Transaction or the Contemplated Transaction; and
(i) Closing Certificate. The Company shall have delivered to the Purchaser a
certificate of a duly authorized officer of the Company, dated as of the Pre-Closing Date,
certifying (as applicable as of such date) that the conditions set forth in Sections
7.3(a), (b), (d), (e) and (h) have been satisfied as of the
Pre-Closing Date.
ARTICLE VIII
TERMINATION AND AMENDMENT
TERMINATION AND AMENDMENT
8.1 Termination. This Agreement may be terminated as follows:
(a) by mutual consent of the Purchaser and the Company, by action of their respective boards
of directors, at any time prior to the Acceptance Date;
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(b) by either the Purchaser or the Company at any time after 5:00 p.m., New York City time, on
the Outside Date by delivering written notice to the other party if shares of Company Common Stock
shall not have been accepted for payment by the Company pursuant to the Offer by such date;
provided, however, that a party shall not be permitted to terminate this Agreement
pursuant to this Section 8.1(b) if the failure to accept shares of Company Common Stock for
payment pursuant to the Offer is attributable to a failure on the part of such party to perform any
covenant in this Agreement required to be performed by such party on or prior to the Acceptance
Date;
(c) by the Purchaser at any time prior to the Pre-Closing Date by written notice to the
Company (which notice shall specify the provisions of this Agreement that the Purchaser believes
have been breached), if (i) the Company shall have breached any of its representations, warranties
or obligations hereunder to an extent that would cause the conditions set forth in either
Section 7.3(a) or Section 7.3(b) not to be satisfied and such breach shall not have
been cured within ten (10) Business Days of receipt by the Company of written notice of such breach
if such breach is capable of cure; provided, that the right to terminate this Agreement by
the Purchaser shall not be available to the Purchaser if the Purchaser is at that time in material
breach of this Agreement, (ii) the Company Board shall have withdrawn or modified, or proposed
publicly to withdraw or modify, the Company Board Approval in a manner adverse to the Purchaser or
(iii) the Company Board shall have approved or recommended, or proposed publicly to approve or
recommend, a Takeover Proposal, or within five (5) days of a written request by the Purchaser for
the Company Board to reaffirm the Company Board Approval following the date on which any Takeover
Proposal, or any material modification thereto, is first publicly announced, published or sent to
the Company Stockholders, the Company fails to issue a press release that reaffirms the Company
Board Approval (which request may only be made once with respect to such Takeover Proposal absent
further material changes or amendments in such Company Takeover Proposal);
(d) by the Company at any time prior to the Closing Date, if the Purchaser shall have breached
any of its representations, warranties or obligations hereunder to an extent that would cause the
conditions set forth in subsections (e) or (f) of Annex I not to be satisfied and such
breach shall not have been cured within ten (10) Business Days following receipt by the Purchaser
of written notice of such breach if such breach is capable of cure; provided, that the
right to terminate this Agreement by the Company shall not be available to the Company if the
Company is at that time in material breach of this Agreement;
(e) by the Company at any time prior to the Acceptance Date to enter into a definitive
agreement with respect to a Superior Proposal in accordance with Section 5.3;
provided, that the Company has complied in all material respects with the provisions of
Section 5.3, including without limitation the provisions of Sections 5.3(e)(y) and
5.3(e)(z); and
(f) by either the Purchaser or the Company prior to the Acceptance Date if any Governmental
Entity issues an order, decree or ruling or takes any other action permanently enjoining,
restraining or otherwise prohibiting the Contemplated Transactions (i) as violative of
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any Antitrust Law or (ii) for any reason other than under any Antitrust Law, and, in either
case, such order, decree, ruling or other action shall have become final and non-appealable.
8.2 Effect of Termination; Termination Fee. In the event of termination of this
Agreement in accordance with Section 8.1, this Agreement shall forthwith become void and
there shall be no liability or obligation on the part of the Purchaser or the Company or their
respective officers, directors, stockholders or Affiliates; provided, however, that
(a) the provisions of Section 6.6 (Public Disclosure), this Section 8.2,
Section 8.3 (Termination Fees), Article IX (Definitions) and Article X
(General Provisions) (other than Section 10.12 (Specific Performance)) shall remain in full
force and effect and survive any termination of this Agreement and (b) nothing herein shall relieve
any party from liability for fraud in connection with this Agreement or the Contemplated
Transactions.
8.3 Termination Fees. Subject to subsections (a), (b), (c),
(d) and (e) of this Section 8.3, whether or not the Contemplated
Transactions are consummated, all costs and expenses incurred in connection with this Agreement and
the transactions contemplated by this Agreement (including the fees and expenses of its advisers,
brokers, finders, agents, accountants and legal counsel) shall be paid by the party incurring such
expense.
(a) In the event that the Company shall terminate this Agreement pursuant to Section
8.1(e), then upon such termination the Company shall pay or cause to be paid by wire transfer
of same-day funds to the Purchaser a termination fee of $1.6 million (the “Termination
Fee”).
(b) In the event that the Purchaser shall terminate this Agreement pursuant to Section
8.1(c)(i) as a result of a breach by the Company of Section 5.3, Section
6.1(a), the first sentence of Section 6.2(b) or the first two sentences of Section
6.3 (as specified in the termination notice from the Purchaser to the Company in accordance
with Section 8.1(c)(i)), then upon such termination the Company shall pay or cause to be
paid by wire transfer of same-day funds to the Purchaser the Termination Fee.
(c) In the event (A) a Person makes a Takeover Proposal or publicly discloses its intention
(whether or not conditional and whether or not withdrawn) to make a Takeover Proposal and,
thereafter, this Agreement is terminated pursuant to (y) Section 8.1(c)(ii) or
(iii) or (z) Section 8.1(b) because the Minimum Condition (as defined in Annex
I) fails to be satisfied and (B) within twelve (12) months of such termination, the Company
consummates the transactions contemplated by such Takeover Proposal, then the Company shall, on the
date such Takeover Proposal is consummated, pay or cause to be paid by wire transfer of same-day
funds the Termination Fee to the Purchaser.
(d) In the event that the Company shall terminate this Agreement pursuant to Section
8.1(d), then upon such termination the Purchaser shall pay or cause to be paid by wire transfer
of same-day funds to the Company the Termination Fee.
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(e) In the event the Company shall terminate this Agreement pursuant to Section 8.1(b)
then upon such termination the Purchaser shall pay or cause to be paid by wire transfer of same-day
funds to the Company the Termination Fee; provided, however, that the Termination
Fee shall only be payable pursuant to this Section 8.3(e) if any of the conditions set
forth in subsection (h) or subsection (i) of Annex I shall not have been satisfied as of
the Outside Date; and
(f) In no event shall any party be obligated to pay to the other party under this Section
8.3 an aggregate amount in excess of the Termination Fee. A party’s payment of the Termination
Fee pursuant to this Section 8.3 shall be the sole and exclusive remedy of the other party
with respect to the occurrences giving rise to such payment.
ARTICLE IX
DEFINITIONS
DEFINITIONS
9.1 Certain Defined Terms. Unless the context otherwise requires, the following
terms, when used in this Agreement, shall have the respective meanings specified below (such
meanings to be equally applicable to the singular and plural forms of the terms defined):
“Acceptance Date” is defined in Section 6.1(a).
“Additional Share Notice” is defined in Section 2.3(a).
“Affiliate” of a Person means any Person that directly, or indirectly through one or
more intermediaries, controls, or is controlled by, or is under common control with, such Person.
“Affiliate Transactions” is defined in Section 3.19.
“Agreement” is defined in the Preamble.
“Antitrust Law” means all Laws that are designed or intended to prohibit, restrict or
regulate actions having the purpose or effect of monopolization or restraint of trade or lessening
of competition through merger, acquisition or other similar transaction.
“Assets” is defined in Section 3.14.
“Authorizations” is defined in Section 3.12(b).
“Business Day” means any day other than a Saturday, Sunday or a day on which banking
institutions in New York, New York are authorized or obligated by Law or executive order to be
closed.
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“Cambridge Defendants” means Xxxx-Xxxxxx Xxxxx, Cambridge Onalp, Inc.; Cambridge
Nassau Bay GP LLC; 6000 Greenville, Inc.; Xxxxx MOB, Inc.; 0000 Xxxxxxx Xxxxx, Inc.; Cambridge
Tarrant, Inc.; CHMP Manager, LLC; Cambridge B/R, Inc.; Cambridge-Greenville Dallas, LLC; PMC
Cambridge of Plano, Ltd.; Cambridge-Crown Atrium, LLC; and Cambridge North Texas Holdings, LLC.
“Cambridge Entities” means Cambridge Nassau Bay LP; Cambridge Xxxxxx Medical Plaza,
LLC; Cambridge Walnut Hill, L.P.; Cambridge Xxxxx Partners, L.P.; Cambridge Plano Partners MOB IV,
L.P.; Cambridge Westgate Medical Center, L.P.; Cambridge Xxxxxxx MOB, L.P.; and Cambridge Southlake
Partners, L.P.
“Cambridge Holdings” means Cambridge Holdings, Inc.
“Cambridge Litigation” means the judicial proceedings captioned Care Investment
Trust, Inc. v. Xxxx-Xxxxxx Xxxxx, et al. (No. 3:09-cv-02256-K) pending in the United States
District Court for the Northern District of Texas between the Company, CIT Healthcare LLC, Flint X.
Xxxxxxxx and ERC Sub, L.P., on the one hand, and the Cambridge Defendants, on the other hand, or
any disputes that arise out of or are the subject of such judicial proceedings or any results of
such judicial proceedings, or any other disputes or proceedings between the Company or any of its
Subsidiaries, on the one hand, and any of Cambridge Holdings, any of the Cambridge Defendants or
any of the Cambridge Entities or any Affiliates of any of the foregoing (collectively, the
“Cambridge Parties”), on the other hand, relating to or arising out of the ownership
interest of ERC Sub, L.P. in any Cambridge Entity or the ownership of any partnership interests in
ERC Sub, L.P. by any of the Cambridge Parties.
“Cambridge Parties” is defined in the definition of Cambridge Litigation.
“Chosen Courts” is defined in Section 10.11.
“Closing” is defined in Section 2.2.
“Closing Date” is defined in Section 2.2.
“Code” means the Internal Revenue Code of 1986, as amended.
“Company” is defined in the Preamble.
“Company Benefit Plans” means any employee or director benefit plan, arrangement or
agreement, whether or not written, including any employee welfare benefit plan within the meaning
of Section 3(1) of the Employee Retirement Income Security Act of 1974 (“ERISA”), any
employee pension benefit plan within the meaning of Section 3(2) of ERISA (whether or not such plan
is subject to ERISA) and any bonus, incentive, deferred
compensation, vacation, stock purchase, stock option, severance, employment, change of control
or fringe benefit plan, program or agreement that is or has been sponsored, maintained or
contributed to by the Company or any of its Subsidiaries.
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“Company Board” is defined in the Recitals.
“Company Board Approval” is defined in Section 3.3(c).
“Company Bylaws” means the Amended and Restated Bylaws of the Company, as amended from
time to time.
“Company Charter” means the Articles of Amendment and Restatement of the Company, as
amended from time to time.
“Company Common Stock” is defined in Section 3.2(a).
“Company Consents” is defined in Section 3.4.
“Company Disclosure Schedule” is defined in Article III.
“Company Financial Statements” is defined in Section 3.5(b).
“Company Material Adverse Effect” means any effect that is material and adverse to the
assets, business, results of operations or financial condition of the Company and its Subsidiaries
taken as a whole or that prevents or materially delays or materially impairs the ability of the
Company to consummate the Contemplated Transactions; provided, however, that no
effect resulting from or relating to the following shall constitute, or be taken into account in
determining whether there is or has been, a Company Material Adverse Effect:
(i) changes in conditions generally affecting the industry in which the Company operates or
the United States or global economy;
(ii) general political, economic or business conditions or changes therein (including the
commencement, continuation or escalation of a war, material armed hostilities or other material
international or national calamity or acts of terrorism or earthquakes, hurricanes, other natural
disasters or acts of God);
(iii) general financial or capital market conditions, including interest rates, or changes
therein;
(iv) any changes in applicable Law, rules, regulations, or GAAP or other accounting standards,
or authoritative interpretations thereof, after the date of this Agreement;
(v) the negotiation, execution, announcement or performance of this Agreement or the
performance or consummation of the Contemplated Transactions, any
litigation resulting therefrom, or the impact thereof on relationships, contractual or
otherwise, with customers, suppliers, lenders, investors or employees;
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(vi) any failure by the Company or any of its Affiliates to meet any analysts’ expectations or
estimates of revenues or earnings, including any failure arising out of changes in the business of
the Company or any of its Affiliates or any changes in their respective credit ratings;
(vii) any action or omission required pursuant to the terms of this Agreement, or pursuant to
the express written request of the Purchaser, or any action otherwise taken by the Purchaser;
(viii) a decrease in the market price of the shares of Company Common Stock; provided,
that the exception in this clause (viii) shall not prevent or otherwise affect a determination that
any change or effect underlying such a decrease in market price has resulted in, or contributed to,
a Company Material Adverse Effect; or
(ix) the existence of the Cambridge Litigation or any settlement thereof or any other actions
taken or omitted to be taken by the Company or any of its Subsidiaries or any of the Cambridge
Parties relating to the ownership interest of ERC Sub, L.P. in any Cambridge Entity or the
ownership of any partnership interests in ERC Sub, L.P. by any of the Cambridge Parties;
provided, further, however, that changes, events, occurrences or effects
set forth in clause (i), (ii), (iii) or (iv) above may be taken into account in determining whether
there has been or is a Company Material Adverse Effect to the extent such changes, events,
occurrences or effects have a materially disproportionate adverse effect on the Company and its
Subsidiaries, taken as a whole, as compared to other participants in the industries in which the
Company and its Subsidiaries operate, but only to the extent of such materially disproportionate
adverse effect as compared to such other participants; provided, further,
however, that the exceptions in clauses (vi) and (viii) shall not prevent or otherwise
affect a determination that the underlying cause of any decline, change or failure referred to
therein (if not otherwise falling within any of the exceptions provided by clause (i) through (ix)
above) is a Company Material Adverse Effect.
“Company Performance Share Awards” means the performance share awards granted pursuant
to the Care Investment Trust Equity Plan.
“Company Preferred Stock” is defined in Section 3.2(a).
“Company Representatives” is defined in Section 5.3(a).
“Company Restricted Shares” means the restricted shares of Company Common Stock
granted pursuant to the Care Investment Trust Inc. Equity Plan.
“Company RSU” means the restricted stock units of the Company granted pursuant to the
Care Investment Trust Inc. Equity Plan.
“Company SEC Documents” is defined in Section 3.5(a).
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“Company Stockholder Approval” means the affirmative vote of the holders of a majority
of the outstanding shares of Company Common Stock entitled to vote thereon to approve each of the
Stockholder Proposals.
“Company Stockholders” means the holders of issued and outstanding shares of Company
Common Stock.
“Company Stockholders’ Meeting” is defined in Section 6.3.
“Company Warrants” means all warrants to purchase shares of Company Common Stock.
“Compensation Arrangement” means each Company Benefit Plan pursuant to which
consideration is payable to any officer, director or employee.
“Compensation Arrangement Approvals” means action by the Compensation Committee to
approve each Compensation Arrangement as an “employment compensation, severance or other employee
benefit arrangement” within the meaning of Rule 14d-10(d)(2) under the Exchange Act and all other
actions necessary or advisable to satisfy the requirements of the non-exclusive safe harbor with
respect to such Compensation Arrangement in accordance with Rule 14d-10(d)(2) under the Exchange
Act.
“Compensation Committee” means the Compensation Committee of the Company Board or any
successor committee thereto.
“Confidentiality Agreement” means the Confidentiality Agreement, dated as of February
3, 2010, between the Purchaser and the Company, as it may be amended from time to time.
“Contemplated Transactions” means all of the transactions contemplated to be
consummated under this Agreement and the Related Agreements, including the Sale Transaction and the
Offer.
“Contract” means a note, bond, mortgage, indenture, deed of trust, license, lease,
agreement, contract, or other instrument or obligation, whether written or oral.
“ERISA” is defined in the definition of Company Benefit Plans.
“Escrow Agent” means The Bank of New York Mellon.
“Escrow Agreement” means the Escrow Agreement between the Purchaser, Seller and the
Escrow Agent dated as of the date hereof and attached hereto as Exhibit A.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereunder.
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“Expiration Date” is defined in Section 6.1(c).
“Fully-Diluted Basis” means, as of the time of determination, that number of shares of
Company Common Stock that are then issued and outstanding, plus that number of shares of Company
Common Stock then issuable upon the exercise of any outstanding options, warrants or other rights
to acquire shares of Company Common Stock (regardless of whether or not such options, warrants or
other rights are subject to further restrictions on exercise or “vesting”), but only to the extent
that the per share exercise price or other consideration payable to acquire such shares of Company
Common Stock is equal to or less than the last reported closing price of a share of the Company
Common Stock on the NYSE on the Business Day immediately prior to the Closing Date, as reported on
the composite index for the NYSE.
“GAAP” means United States generally accepted accounting principles.
“Governmental Entity” means any domestic, foreign or supranational government or
subdivision thereof, administrative, governmental, prosecutorial or regulatory authority, agency,
commission, court, tribunal or body or self-regulatory organization.
“Governmental Order” means any order, writ, judgment, injunction or decree entered by
or with any Governmental Entity.
“HSR Act” means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended.
“Indemnified Party” is defined in Section 6.9(b).
“Joint Written Direction” is defined in Section 2.3(a).
“Knowledge” or “Known” means, with respect to the Company or the Purchaser,
the actual knowledge after reasonable inquiry, as of the date of this Agreement, of any of those
Persons set forth in Section 9.1(a) or 9.1(b) of the Company Disclosure Schedule or the Purchaser
Disclosure Schedule, respectively.
“Laws” means all federal, state, local and foreign statutes, laws, codes, rules,
regulations and ordinances.
“Leases” is defined in Section 3.14.
“Lien” means any charge, claim, community property interest or similar equitable
interest, lien, option, pledge, security interest, right of first refusal, encumbrance or
restriction of any kind, including any restriction on use, voting, transfer, receipt of income, or
exercise of any other attribute of ownership.
“Material Contract” is defined in Section 3.13(a).
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“Maximum Amount” means $60,430,932.
“Meeting Date” is the date on which the Company Stockholders’ Meeting is held.
“MGCL” means the Maryland General Corporation Law, as amended.
“Minimum Condition” is defined in Annex I.
“NYSE” means the New York Stock Exchange.
“Offer” is defined in the Recitals.
“Offer Conditions” is defined in Section 6.1(a).
“Offer Documents” is defined in Section 6.1(d).
“Offer Price” means $9.00 per share of Company Common Stock (as such amount may be
adjusted pursuant to Section 6.1(e)).
“Offer to Purchase” is defined in Section 6.1(d).
“Outside Date” is defined in Section 6.1(c).
“Paying Agent” means the paying agent engaged by the Company for the purpose of
consummating the Offer.
“Permitted Liens” means any Liens that are (i) carriers’, warehousemen’s, mechanics’,
landlords’, materialmen’s, repairmen’s or similar common law or statutory Liens or encumbrances
arising in the ordinary course of business which are not delinquent or remain payable without
penalty, and (ii) encumbrances for Taxes and other assessments or governmental charges or levies
not yet due and delinquent or for Taxes that are contested in good faith.
“Person” means any individual, corporation, partnership, limited liability company,
joint venture, association, trust, unincorporated organization or other legal entity or
Governmental Entity.
“Plan of Liquidation” means the Plan of Liquidation approved by the Company
Stockholders on January 28, 2010 as more fully described in Exhibit A to the Company’s proxy
statement filed with the SEC on December 28, 2009.
“Pre-Closing Date” is defined in Section 2.1.
“Proxy Statement” is defined in Section 6.2(b).
“Purchase Price” means the product of (i) $9.00, multiplied by (ii) the Share
Quantity.
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“Purchased Shares” is defined in Section 1.1.
“Purchaser” is defined in the Preamble.
“Purchaser Consents” is defined in Section 4.3.
“Purchaser Disclosure Schedule” is defined in Article IV.
“Purchaser Material Adverse Effect” means any material adverse effect on the ability
of the Purchaser to timely consummate the Contemplated Transactions or otherwise comply, in all
material respects, with the terms and conditions of this Agreement.
“Purchaser Representatives” is defined in Section 6.5.
“Registration Rights Agreement” means that certain Registration Rights Agreement
between the Company and the Purchaser dated as of the date hereof attached hereto as Exhibit
B.
“Regulation M-A” means 17 CFR § 229.1000, et seq.
“Regulation S-K” means 17 CFR § 229.10, et seq.
“Regulation S-X” means 17 CFR § 210.1-01, et seq.
“REIT” is defined in Section 3.9(i).
“Related Agreements” means the Registration Rights Agreement and the Escrow Agreement.
“Sale Transaction” is defined in the Recitals.
“SEC” means the Securities and Exchange Commission.
“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
“Share Quantity” means 4,445,000; provided, that (i) if more than 18,000,000
shares of Company Common Stock are validly tendered (and not withdrawn) as of the expiration of the
Offer, then Share Quantity shall mean the sum of (x) 4,445,000, plus (y) the difference between
18,000,000 and the actual number of shares of Company Common Stock that are validly tendered (and
not withdrawn) as of the expiration of the Offer, and (ii) if less than 16,500,000 shares of
Company Common Stock are validly tendered (and not withdrawn) as of the expiration of the Offer,
then Share Quantity shall mean, at the option of the Purchaser, either (A) 4,445,000, or (B) that
number of shares of the Company Common Stock that would have to be newly issued by the Company to
the Purchaser pursuant to the Sale Transaction in order to represent, on a
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Fully-Diluted Basis and
determined after giving pro forma effect to the consummation of the Contemplated Transactions, up
to 53.4% of the shares of Company Common Stock.
“Stockholder Proposals” is defined in Section 6.3.
“SOX” means the Xxxxxxxx-Xxxxx Act of 2002 and the rules and regulations promulgated
thereunder.
“Subsidiary” of any Person means any corporation, partnership, limited liability
company, joint venture or other entity in which such Person (a) owns, directly or indirectly, 50%
or more of the outstanding voting securities or equity interests and (b) is a general partner,
managing member or otherwise manages the business and operations of such entity.
“Superior Proposal” is defined in Section 5.3(d).
“Takeover Proposal” is defined in Section 5.3(d).
“Takeover Statute” is defined in Section 3.3(c).
“Tax” or “Taxes” means all federal, state, local, and foreign income, excise,
gross receipts, gross income, ad valorem, profits, gains, property, capital, sales, transfer, use,
value-added, stamp, documentation, payroll, employment, severance, withholding, duties,
intangibles, franchise, backup withholding, and other taxes (including estimated taxes), charges,
levies or like assessments, together with all penalties and additions to tax and interest thereon.
“Tax Proceedings” is defined in Section 3.9(b).
“Tax Returns” means any return, declaration, report, claim for refund or information
return or statement relating to Taxes, including any schedule or attachment thereto, and including
any amendment thereof, supplied to, or required to be supplied to, a Governmental Entity.
“Termination Fee” is defined in Section 8.3(a).
“Third Party” is defined in Section 5.3(d).
ARTICLE X
GENERAL PROVISIONS
GENERAL PROVISIONS
10.1 Survival of Representations, Warranties and Agreements. The representations,
warranties and agreements set forth in this Agreement shall terminate at Closing, except that the
agreements set forth in Article I (Purchase and Sale), Section 6.9 (Director and
Officer Indemnification) and this Article X shall survive the Closing Date.
10.2 Notices. All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given when delivered personally, telecopied (with
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confirmation), or delivered by an overnight courier (with confirmation) to the parties at the
following addresses (or at such other address for a party as shall be specified by like notice):
| (a) | if to the Purchaser, to: | ||
| Tiptree Financial Partners, L.P. 000 Xxxxx Xxxxxx Xxx Xxxx, XX 00000 Attention: Chief Executive Officer Fax: 000-000-0000 |
|||
| with a copy to: | |||
| Xxxxxxx Xxxx & Xxxxx LLP 000 Xxxxx Xxxxxx Xxx Xxxx, XX 00000 Attention: Xxxxxxx X. Xxxxxxxxxx Fax: 000-000-0000 |
|||
| and | |||
| (b) | if to the Company, to: | ||
| Care Investment Trust Inc. 000 Xxxxx Xxxxxx Xxx Xxxx, XX 00000 Attention: Chief Executive Officer Fax: 000-000-0000 |
|||
| with a copy to: | |||
| XxXxxxxxx Will & Xxxxx LLP 000 00xx Xxxxxx, X.X. Xxxxxxxxxx, XX 00000 Attention: Xxxxx Xxxxx Fax: (000) 000-0000 |
10.3 Interpretation. When a reference is made in this Agreement to an Article, a
Section, an Exhibit or a Schedule, such reference shall be to an Article or Section of, or an
Exhibit or Schedule to, this Agreement unless otherwise indicated. The phrase “the date of this
Agreement” and terms of similar import, unless the context otherwise requires, shall be deemed to
refer to the date set forth in the first paragraph of this Agreement. The table of contents and
headings contained in this Agreement are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement. As used in this Agreement, (i) the words
“include,” “includes” and “including” when used herein shall be deemed in each case to be
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followed by the words “without limitation,” (ii) the word “or” shall not be exclusive, (iii)
the words “hereof,” “herein” and “hereby” and words of similar import refer to this Agreement as a
whole (including any Exhibits and Schedules hereto) and not to any particular provisions of this
Agreement, (iv) all references to any period of days shall be to the relevant number of calendar
days unless otherwise specified, (v) all references to dollars or to “$” shall be references to
United States dollars and (vi) all accounting terms shall have their respective meanings under
GAAP.
10.4 Disclosure Schedules. Disclosure of any matter in any section of the Company
Disclosure Schedule or the Purchaser Disclosure Schedule shall be deemed to be disclosed with
respect to any other Section of this Agreement to the extent that it is reasonably apparent that
such disclosure is applicable to such other Section. The mere inclusion of an item in such Company
Disclosure Schedule or Purchaser Disclosure Schedule as an exception to a representation or
warranty shall not be deemed an admission that such item represents a material exception or
material fact, event or circumstance or that such item has had or would reasonably be expected to
have a Company Material Adverse Effect or a Purchaser Material Adverse Effect, as applicable.
10.5 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 one 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. facsimile or PDF transmission of
any signature will be deemed the same as delivery of an original.
10.6 Entire Agreement. This Agreement and the documents and instruments and other
agreements specifically referred to herein or delivered pursuant hereto, including the Related
Agreements, the Exhibits, the Schedules, the Company Disclosure Schedule and the Purchaser
Disclosure Schedule, constitute the entire agreement among the parties with respect to the subject
matter hereof and supersede all prior agreements and understandings, both written and oral, among
the parties with respect to the subject matter hereof, except for the Confidentiality Agreement,
which shall continue in full force and effect, and shall survive any termination of this Agreement
or the Closing, in accordance with its terms.
10.7 Assignment. Neither this Agreement nor any of the rights, interests or
obligations contained herein shall be assigned by any party hereto (whether by operation of law or
otherwise) without the prior written consent of the other party. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by the
parties and their respective successors and permitted assigns.
10.8 Amendments and Waivers. Except as otherwise expressly provided herein, any
provision of this Agreement may be amended or waived prior to the Closing Date if, and only if,
such amendment or waiver is in writing and is signed, in the case of an amendment, by each party to
this Agreement or, in the case of a waiver, by each party against whom the
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waiver is to be effective; provided, that an amendment made subsequent to the approval
of this Agreement and the Contemplated Transactions by the Company Stockholders shall not (i) alter
or change the Purchase Price or the Offer Price or (ii) alter or change any of the terms and
conditions of this Agreement if such alteration or change would adversely affect the holders of
Company Common Stock in any material respect. No failure or delay by any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the exercise of any
other right, power or privilege.
10.9 Remedies Cumulative. Except as otherwise stated herein, the rights and remedies
hereunder provided shall be cumulative and not exclusive of any rights or remedies provided by
applicable Laws.
10.10 Third Party Beneficiaries. Except for (a) the right of the Company on behalf of
the Company Stockholders to pursue damages in the event of the Purchaser’s breach of any covenant
or agreement contained in this Agreement and (b) the provisions of Section 6.9 (Director
and Officer Indemnification), this Agreement is not intended to and shall not confer upon any
Person other than the parties hereto any rights or remedies hereunder.
10.11 Governing Law. This Agreement shall be governed by and construed in accordance
with the Laws of the State of New York without regard to the principles of conflict of laws to the
extent that such principles would permit or require the application of Laws of another
jurisdiction. Each party hereto agrees that it shall bring any action or proceeding in respect of
any claim arising out of or related to this Agreement or the Contemplated Transactions, exclusively
in the United States District Court for the Southern District of New York (or if subject matter
jurisdiction before the federal court does not exist, then before the New York State Supreme Court
for the Borough of Manhattan, in New York, New York) (the “Chosen Courts”), and solely in
connection with claims arising under this Agreement or the transactions that are the subject of
this Agreement (i) irrevocably submits to the exclusive jurisdiction of the Chosen Courts,
(ii) waives any objection to laying venue in any such action or proceeding in the Chosen Courts,
(iii) waives any objection that the Chosen Courts are an inconvenient forum or do not have
jurisdiction over any party hereto and (iv) agrees that service of process upon such party in any
such action or proceeding shall be effective if notice is given in accordance with Section
10.2 of this Agreement. Each party hereto irrevocably designates CT Corporation as its agent
and attorney-in-fact for the acceptance of service of process and making an appearance on its
behalf in any such claim or proceeding and for the taking of all such acts as may be necessary or
appropriate in order to confer jurisdiction over it before the Chosen Courts and each party hereto
stipulates that such consent and appointment is irrevocable and coupled with an interest. Each
party hereto irrevocably waives any and all right to trial by jury in any legal proceeding arising
out of or relating to this Agreement or the Contemplated Transactions.
10.12 Specific Performance. The parties hereto agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not performed by the parties
hereto in accordance with their specific terms or were otherwise breached. It is
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accordingly agreed that the Purchaser, on the one hand, and the Company, on the other hand,
shall be entitled to an injunction or injunctions to prevent breaches of this Agreement by the
other and to enforce specifically the terms and provisions of this Agreement. Each of the parties
hereto hereby waives (i) any defenses in any action for specific performance, including the defense
that a remedy at law would be adequate, and (ii) any requirement under any Law to post a bond or
other security as a prerequisite to obtaining equitable relief.
10.13 Rules of Construction. The parties hereto have participated jointly and been
represented by counsel in the negotiation and drafting of this Agreement and, therefore, this
Agreement shall be construed without regard to any presumption or rule requiring construction or
interpretation in favor of or against any party by virtue of the authorship of any provision of
this Agreement.
10.14 Waiver of Jury Trial. THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHT WHICH ANY PARTY MAY HAVE TO TRIAL BY JURY IN RESPECT OF ANY
PROCEEDING, LITIGATION OR COUNTERCLAIM BASED ON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN)
OR ACTIONS OF ANY PARTY. IF THE SUBJECT MATTER OF ANY LAWSUIT IS ONE IN WHICH THE WAIVER OF JURY
TRIAL IS PROHIBITED, NO PARTY TO THIS AGREEMENT SHALL PRESENT AS A NON-COMPULSORY COUNTERCLAIM IN
ANY SUCH LAWSUIT ANY CLAIM BASED ON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT.
FURTHERMORE, NO PARTY TO THIS AGREEMENT SHALL SEEK TO CONSOLIDATE ANY SUCH ACTION IN WHICH A JURY
TRIAL CANNOT BE WAIVED.
10.15 Severability. The provisions of this Agreement shall be deemed severable and
the invalidity or unenforceability of any provision shall not affect the validity or enforceability
of the other provisions hereof. If any provision of this Agreement, or the application thereof,
becomes or is declared by a court of competent jurisdiction to be illegal, void, invalid or
unenforceable, the remainder of this Agreement and the application of such provision to other
Persons or circumstances shall not be affected by such invalidity or unenforceability, nor shall
such invalidity or unenforceability affect the validity or enforceability of such provision, or the
application thereof, in any other jurisdiction.
[remainder of page intentionally blank]
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IN WITNESS WHEREOF, the Purchaser and the Company have caused this Agreement to be executed by
their respective officers thereunto duly authorized as of the date first above written.
| CARE INVESTMENT TRUST INC. |
||||
| By: | /s/ Xxxxx Xxxx | |||
| Name: | Xxxxx Xxxx | |||
| Title: | Chief Executive Officer and President | |||
| TIPTREE FINANCIAL PARTNERS, L.P. |
||||
| By: | /s/ Xxxxxxxx Xxxxxxxx | |||
| Name: | Xxxxxxxx Xxxxxxxx | |||
| Title: | President and Chief Operating Officer | |||
[Signature Page to Purchase and Sale Agreement]
ANNEX I
CONDITIONS OF THE OFFER
CONDITIONS OF THE OFFER
Notwithstanding any other provisions of the Offer, the Company shall not be required to accept
for payment or, subject to any applicable rules and regulations of the SEC, including Rule 14e-1(c)
promulgated under the Exchange Act, pay for any tendered shares of Company Common Stock and may
(subject to Section 6.1 of the Agreement) terminate the Offer if (i) there shall not be
validly tendered (and not withdrawn) prior to the Expiration Date for the Offer 10,300,000 shares
of Company Common Stock (the “Minimum Condition”) or (ii) any of the following additional
conditions shall not have been satisfied as of the Acceptance Date:
(a) Maximum Amount and Joint Written Direction. (i) The Purchaser shall have
delivered the Maximum Amount to the Escrow Agent in accordance with Section 2.1 of the
Agreement, to be held and released by the Escrow Agent in accordance with the terms of the Escrow
Agreement, and (ii) the Joint Written Direction shall have been delivered to the Escrow Agent in
accordance with Section 2.3(a) of the Agreement.
(b) Stockholder Approval. The Company Stockholder Approval shall have been obtained.
(c) No Injunctions or Restraints; Illegality. No temporary restraining order,
preliminary or permanent injunction, or other order issued by any court of competent jurisdiction
preventing the consummation of the Contemplated Transactions shall be in effect; nor shall there be
any statute, rule, regulation or order enacted, entered, or enforced which prevents or prohibits
the consummation of the Contemplated Transactions.
(d) Governmental Approval. Any waiting period applicable to the Contemplated
Transactions under the HSR Act shall have expired or been terminated and any approvals and consents
required to be obtained before the Contemplated Transactions can be consummated under any other
Antitrust Law shall have been obtained.
(e) Accuracy of Representations and Warranties. The representations and warranties of
the Purchaser contained in the Agreement are true and correct, except where the failure of such
representations and warranties to be true and correct, taken as a whole, would not reasonably be
expected to have a Purchaser Material Adverse Effect.
(f) Performance of Obligations. Each of the covenants and obligations that the
Purchaser is required to perform or to comply with pursuant to the Agreement at or prior to the
Acceptance Date shall have been duly performed or complied with in all respects, except to the
extent the non-performance thereof would not be material to the Contemplated Transactions.
(g) Related Agreements. The Escrow Agreement shall be in full force and effect.
(h) Consents. Each of the Purchaser Consents set forth in Section 4.3 of the
Purchaser Disclosure Schedule and each of the Company Consents set forth in Section 7.3(d) of the
Company Disclosure shall have been obtained.
-I-1-
(i) No MAE. Since the date of the Agreement, there shall not have occurred any
change, event or development that has had or would reasonably be expected to have a Purchaser
Material Adverse Effect.
The foregoing conditions are for the benefit of the Company and, subject to Section
6.1, may be waived by the Company, in whole or in part at any time and from time to time;
provided, however, the express written consent of the Purchaser is required in
connection with any waiver of the Minimum Condition, or of conditions set forth in paragraphs (b),
(c) or (d) hereof. The failure by the Company at any time to exercise any of the foregoing rights
shall not be deemed a waiver of any such right and each such right shall be deemed an ongoing right
which may be asserted at any time and from time to time.
Capitalized terms used but not defined in this Annex I shall have the meanings set
forth in the Purchase and Sale Agreement to which this Annex I is attached.
-I-2-
EXHIBIT A
ESCROW AGREEMENT
ESCROW AGREEMENT
THE
BANK OF
NEW
YORK
BANK OF
NEW
YORK
ESCROW AGREEMENT
among
CARE INVESTMENT TRUST, INC.
and
TIPTREE FINANCIAL PARTNERS, L.P.
and
THE BANK OF NEW YORK MELLON, as Escrow Agent
Dated as
of March 16,
2010
ACCOUNT NUMBER(S):
SHORT TITLE OF ACCOUNT: ESCROW ACCOUNT
ESCROW
AGREEMENT made this 16th day of March, 2010, entered into by and among THE BANK OF NEW
YORK MELLON, as escrow agent (the “Escrow Agent”), CARE INVESTMENT TRUST INC. (the “Beneficiary” or
the “Company”) and TIPTREE FINANCIAL PARTNERS, L.P. (the “Depositor”).
Each of Beneficiary, Depositor and the Escrow Agent hereby agree that, in consideration of the
mutual promises and covenants contained herein, Escrow Agent shall hold in escrow and shall
distribute Escrow Property (as defined herein) in accordance with and subject to the following
Instructions and Terms and Conditions:
I. INSTRUCTIONS:
1. Escrow Property
The property and/or funds deposited or to be deposited with the Escrow Agent by Depositors
shall be as follows:
The amount of cash identified next to the name of the Depositor on Schedule
1 attached hereto, which cash shall be delivered by the Depositor to the Escrow
Agent in accordance with Section 2.1 of the Purchase and Sale Agreement to which
this Escrow Agreement is attached (the “Purchase and Sale Agreement”), by wire
transfer of immediately available funds (the date on which such cash is deposited,
each, a “Deposit Date”). The account details for such wire transfer are as follows:
The Bank of New York Mellon
000 Xxxx Xxxxxx
Xxxxxxxxxx, XX 00000-00000
ABA Number:
Acct. Number:
Acct. Name:
000 Xxxx Xxxxxx
Xxxxxxxxxx, XX 00000-00000
ABA Number:
Acct. Number:
Acct. Name:
Ref:
Attn: Xxxx Xxxx Chow 000-000-0000
Attn: Xxxx Xxxx Chow 000-000-0000
For the avoidance of doubt, cash may be deposited by the Depositor on one or more
occasions pursuant to Section 2.1 of the Purchase and Sale Agreement.
The foregoing property and/or funds, plus all interest, dividends and other distributions and
payments thereon (collectively the “Distributions”) received by Escrow Agent, less any property
2
and/or funds distributed or paid in accordance with this Escrow Agreement, are collectively
referred to herein as “Escrow Property”.
2. Investment of Escrow Property
Depositors are to select one of the following options:
| (a) | |||
| (b) | If any Escrow Property is comprised of cash, the Escrow Agent shall invest or reinvest Escrow Property without distinction | ||
| between principal and income, in the following: | |||
| One or more short-term market instruments including but not limited to marketable obligations issued or guaranteed by the U.S. Government, its agencies or instrumentalities, bank instruments, corporate debt securities issued by U.S. or foreign companies, commercial paper, demand instruments, adjustable rate obligations, asset-backed securities, restricted securities, fully collateralized repurchase agreements or money market funds subject to the requirements of the Investment Company Act of 1940, as amended, invested in any one or more of the aforementioned types of instruments. |
Escrow Agent shall have no liability for any loss arising from or related to any such investment
other than in accordance with paragraph 4 of the Terms and Conditions.
3. Distribution of Escrow Property
With respect to any cash deposited by Depositor on any Deposit Date, the Escrow Agent is
directed to hold and distribute such Escrow Property in the following manner:
Upon receipt of a Joint Written Direction, substantially in the form attached hereto
as Exhibit A (the “Joint Written Direction”) executed by each of Depositor
and Beneficiary following such Deposit Date, the Escrow Agent shall distribute (i)
to the account designated by the Beneficiary that portion of the Escrow Property
designated in such Joint Written Direction as being payable to or for the benefit of
the Beneficiary, and (ii) to the Depositor, the balance of the Escrow Property.
Once delivered to the Escrow Agent, a Joint Written Direction may not be amended,
modified or rescinded unless executed by each of the Depositor and the Beneficiary.
Any distribution to or for the benefit of the Beneficiary and the Depositor shall be
made by wire transfer of immediately available funds to the accounts designated with
respect to each of Beneficiary and Depositor in writing to the Escrow Agent.
Notwithstanding the foregoing, if a Joint Written Direction is not delivered to the
Escrow Agent within three (3) days after such Deposit Date, then the Escrow Agent
shall distribute all of the Escrow Property to the Depositor by wire transfer
3
of immediately available funds to the account of the Depositor designated in writing
by the Depositor to the Escrow Agent.
4. Addresses
Notices, instructions and other communications shall be sent to:
To the Escrow Agent:
The Bank of New York Mellon
Attn: Jaddiel Xxxxx
000 Xxxxxxxxxx Xxxx., 00xx Xxxxx
Xxxxxx Xxxx, XX 00000 XXX
Facsimile: 000-000-0000
Attn: Jaddiel Xxxxx
000 Xxxxxxxxxx Xxxx., 00xx Xxxxx
Xxxxxx Xxxx, XX 00000 XXX
Facsimile: 000-000-0000
with a copy to its counsel:
The Bank of New York Mellon
Attn: Legal Department
000 Xxxxxxxxxx Xxxx., 00xx Xxxxx
Xxxxxx Xxxx, XX 00000 XXX
Facsimile: 000-000-0000
Attn: Legal Department
000 Xxxxxxxxxx Xxxx., 00xx Xxxxx
Xxxxxx Xxxx, XX 00000 XXX
Facsimile: 000-000-0000
To Depositors:
Chief Executive Officer,
Tiptree Financial Partners, LP,
000 Xxxxx Xxxxxx,
Xxx Xxxx, XX 00000,
Fax Number 000-000-0000
Tiptree Financial Partners, LP,
000 Xxxxx Xxxxxx,
Xxx Xxxx, XX 00000,
Fax Number 000-000-0000
with a copy to its counsel:
Xxxxxxx X. Xxxxxxxxxx,
Xxxxxxx Xxxx & Xxxxx LLP,
000 Xxxxx Xxxxxx,
Xxx Xxxx, XX 00000,
Fax Number 000-000-0000
Xxxxxxx Xxxx & Xxxxx LLP,
000 Xxxxx Xxxxxx,
Xxx Xxxx, XX 00000,
Fax Number 000-000-0000
To Beneficiary:
Care Investment Trust Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Chief Executive Officer
Fax: 000-000-0000
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Chief Executive Officer
Fax: 000-000-0000
with a copy to its counsel:
4
Xxxxx Xxxxx,
XxXxxxxxx Will & Xxxxx LLP,
000 00xx Xxxxxx, X.X.,
Xxxxxxxxxx, X.X. 00000,
Fax Number 000-000-0000
XxXxxxxxx Will & Xxxxx LLP,
000 00xx Xxxxxx, X.X.,
Xxxxxxxxxx, X.X. 00000,
Fax Number 000-000-0000
5. Distribution of Escrow Property Upon Termination
This Escrow Agreement shall terminate on the earlier of (i) if a Joint Written
Direction is delivered to the Escrow Agent in accordance with Section 3 above, the
date on which distributions are made in accordance with Section 3 above, and (ii) if
a Joint Written Direction is not delivered to the Escrow Agent in accordance with
Section 3 above, August 31, 2010 or such later date as agreed upon by the
Beneficiary and the Depositor. Upon termination hereof, the Escrow Agent shall
distribute all of the Escrow Property, if any, to the Depositor by wire transfer of
immediately available funds to the account of the Depositor designated in writing by
the Depositor to the Escrow Agent.
6. Compensation
| (a) | At the time of execution of this Escrow Agreement, the Company shall pay Escrow Agent an escrow fee of $0.00. | ||
| (b) | The Company shall pay all activity charges as per Escrow Agent’s current fee schedule. | ||
| (c) | The Company shall be responsible for and shall reimburse Escrow Agent upon demand for all expenses, disbursements and advances incurred or made by Escrow Agent in connection with this Agreement. |
5
II. TERMS AND CONDITIONS:
| 1. | The duties, responsibilities and obligations of Escrow Agent shall be limited to those expressly set forth herein and no duties, responsibilities or obligations shall be inferred or implied. Escrow Agent shall not be subject to, nor required to comply nor deemed to have any knowledge of any of the terms of any other agreement between the Depositor and the Beneficiary or to which the Depositor or the Beneficiary are a party, even though reference thereto may be made herein, or to comply with any direction or instruction (other than those contained herein or delivered in accordance with this Escrow Agreement) from the Depositor or the Beneficiary or any person acting on their behalf. Escrow Agent shall not be required to, and shall not, expend or risk any of its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder. | |
| 2. | This Agreement is for the exclusive benefit of the parties hereto and their respective successors hereunder, and shall not be deemed to give, either express or implied, any legal or equitable right, remedy, or claim to any other entity or person whatsoever. | |
| 3. | If at any time Escrow Agent is served with any judicial or administrative order, judgment, decree, writ or other form of judicial or administrative process which in any way affects Escrow Property (including but not limited to orders of attachment or garnishment or other forms of levies or injunctions or stays relating to the transfer of Escrow Property), Escrow Agent is authorized to comply therewith in any manner as it or its legal counsel of its own choosing deems appropriate; and if Escrow Agent complies with any such judicial or administrative order, judgment, decree, writ or other form of judicial or administrative process, Escrow Agent shall not be liable to any of the parties hereto or to any other person or entity even though such order, judgment, decree, writ or process may be subsequently modified or vacated or otherwise determined to have been without legal force or effect. | |
| 4. | (a) Escrow Agent shall not be liable for any action taken or omitted or for any loss or injury resulting from its actions or its performance or lack of performance of its duties hereunder in the absence of gross negligence or willful misconduct on its part. In no event shall Escrow Agent be liable (i) for acting in accordance with or relying upon any instruction, notice, demand, certificate or document from the Depositor and the Beneficiary or any person acting on behalf of the Depositor or the Beneficiary, (ii) for any consequential, punitive, indirect, incidental or special loss or damages of any kind whatsoever to any person or entity (including without limitation lost profits), even if the Escrow Agent has been advised of the likelihood of such loss or damage, (iii) for the acts or omissions of its nominees, correspondents, designees, subagents or subcustodians, or (iv) for an amount in excess of the value of the Escrow Property, valued as of the date of deposit. | |
| (b) If any fees, expenses or costs incurred by, or any obligations owed to, Escrow Agent hereunder are not promptly paid when due, Escrow Agent may reimburse itself therefor from the Escrow Property and may sell, convey or otherwise dispose of any Escrow Property for such purpose. | ||
| (c) As security for the due and punctual performance of the Depositors’ and the Beneficiary’s obligations to Escrow Agent hereunder, now or hereafter arising, the Depositor and the Beneficiary, individually and collectively, hereby pledge, assign and grant to Escrow Agent a continuing security interest in, and a lien on, the Escrow Property and all Distributions thereon or additions thereto (whether such additions are the result of deposits by Depositors or the investment of Escrow Property). The security interest of Escrow Agent shall at all times be valid, perfected and enforceable by Escrow |
6
| Agent against the Depositor and the Beneficiary and all third parties in accordance with the terms of this Escrow Agreement. | ||
| (d) Escrow Agent may consult with legal counsel at the expense of the Company as to any matter relating to this Escrow Agreement, and Escrow Agent shall not incur any liability in acting in good faith in accordance with any advice from such counsel. | ||
| (e) Escrow Agent shall not incur any liability for not performing any act or fulfilling any duty, obligation or responsibility hereunder by reason of any occurrence beyond the control of Escrow Agent (including but not limited to any act or provision of any present or future law or regulation or governmental authority, any act of God or war, or the unavailability of the Federal Reserve Bank wire or telex or other wire or communication facility). | ||
| 5. | Unless otherwise specifically set forth herein, Escrow Agent shall proceed as soon as practicable to collect any checks or other collection items at any time deposited hereunder. All such collections shall be subject to Escrow Agent’s usual collection practices or terms regarding items received by Escrow Agent for deposit or collection. Escrow Agent shall not be required, or have any duty, to notify anyone of any payment or maturity under the terms of any instrument deposited hereunder, nor to take any legal action to enforce payment of any check, note or security deposited hereunder or to exercise any right or privilege which may be afforded to the holder of any such security. | |
| 6. | Escrow Agent shall provide to the Depositor and Beneficiary monthly statements identifying transactions, transfers or holdings of Escrow Property and each such statement shall be deemed to be correct and final upon receipt thereof by the Depositor and the Beneficiary unless Escrow Agent is notified in writing to the contrary within thirty (30) business days of the date of such statement. | |
| 7. | Escrow Agent shall not be responsible in any respect for the form, execution, validity, value or genuineness of documents or securities deposited hereunder, or for any description therein, or for the identity, authority or rights of persons executing or delivering or purporting to execute or deliver any such document, security or endorsement. | |
| 8. | Notices, instructions or other communications shall be in writing and shall be given to the address set forth in the “Addresses” provision herein (or to such other address as may be substituted therefor by written notification to the Escrow Agent, the Depositor or the Beneficiary). Escrow Agent is authorized to comply with and rely upon any notices, instructions or other communications believed by it to have been sent or given by the Depositor and the Beneficiary or by a person or persons authorized by the Depositor and the Beneficiary on their respective behalf. Whenever under the terms hereof the time for giving a notice or performing an act falls upon a Saturday, Sunday, or banking holiday, such time shall be extended to the next day on which Escrow Agent is open for business. | |
| 9. | The Beneficiary shall be liable for and shall reimburse and indemnify Escrow Agent and hold Escrow Agent harmless from and against any and all claims, losses, liabilities, costs, damages or expenses (including reasonable attorneys’ fees and expenses) (collectively, “Losses”) arising from or in connection with or related to this Escrow Agreement or being Escrow Agent hereunder (including but not limited to Losses |
7
| incurred by Escrow Agent in connection with its successful defense, in whole or in part, of any claim of gross negligence or willful misconduct on its part); provided, however, that nothing contained herein shall require Escrow Agent to be indemnified for Losses caused by its gross negligence or willful misconduct. | ||
| 10. | (a) The Depositor and the Beneficiary may, by mutual agreement, remove the Escrow Agent at any time by giving to the Escrow Agent thirty (30) calendar days’ prior notice in writing signed by each of the Depositor and the Beneficiary. The Escrow Agent may resign at any time by giving two calendar days’ prior written notice thereof. | |
| (b) Within ten (10) calendar days after giving the foregoing notice of removal to Escrow Agent or receiving the foregoing notice of resignation from Escrow Agent, each of the Depositor and the Beneficiary jointly agree on and appoint a successor Escrow Agent. If a successor Escrow Agent has not accepted such appointment by the end of such 10-day period, Escrow Agent may, in its sole discretion, deliver the Escrow Property to the Beneficiary at the address provided herein or may apply to a court of competent jurisdiction for the appointment of a successor Escrow Agent or for other appropriate relief. The costs and expenses (including reasonable attorneys’ fees and expenses) incurred by Escrow Agent in connection with such proceeding shall be paid by, and be deemed a joint and several obligation of, each of the Depositor and the Beneficiary. | ||
| (c) Upon receipt of the identity of the successor Escrow Agent, Escrow Agent shall either deliver the Escrow Property then held hereunder to the successor Escrow Agent, less Escrow Agent’s fees, costs and expenses or other obligations owed to Escrow Agent, or hold such Escrow Property (or any portion thereof), pending distribution, until all such fees, costs and expenses or other obligations are paid. | ||
| (d) Upon delivery of the Escrow Property to successor Escrow Agent, Escrow Agent shall have no further duties, responsibilities or obligations hereunder. | ||
| 11. | (a) In the event of any ambiguity or uncertainty hereunder or in any notice, instruction or other communication received by Escrow Agent hereunder, Escrow Agent may, in its sole discretion, refrain from taking any action other than retain possession of the Escrow Property, unless Escrow Agent receives written instructions, signed by each of the Depositor and the Beneficiary, which eliminates such ambiguity or uncertainty. | |
| (b) In the event of any dispute between or conflicting claims by or among the Depositor and/or the Beneficiary and/or any other person or entity with respect to any Escrow Property, Escrow Agent shall be entitled, in its sole discretion, to refuse to comply with any and all claims, demands or instructions with respect to such Escrow Property so long as such dispute or conflict shall continue, and Escrow Agent shall not be or become liable in any way to the Depositor or the Beneficiary for failure or refusal to comply with such conflicting claims, demands or instructions. Escrow Agent shall be entitled to refuse to act until, in its sole discretion, either (i) such conflicting or adverse claims or demands shall have been determined by a final order, judgment or decree of a court of competent jurisdiction, which order, judgment or decree is not subject to appeal, or settled by agreement between the conflicting parties as evidenced in a writing satisfactory to Escrow Agent or (ii) Escrow Agent shall have received security or an indemnity satisfactory to it sufficient to hold it harmless from and against any and all Losses which it may incur by reason of so acting. Escrow Agent may, in addition, elect, in its sole discretion, to commence an interpleader action or seek other judicial relief or orders as it |
8
| may deem, in its sole discretion, necessary. The costs and expenses (including reasonable attorneys’ fees and expenses) incurred in connection with such proceeding shall be paid by, and shall be deemed a joint and several obligation of, the Depositor and the Beneficiary. | ||
| 12. | This Escrow Agreement shall be interpreted, construed, enforced and administered in accordance with the internal substantive laws (and not the choice of law rules) of the State of New York, without regard to the principles of conflict of laws to the extent that such principles would permit or require the application of laws of another jurisdiction. Each of the Depositor and the Beneficiary hereby submits to the personal jurisdiction of and each agrees that all proceedings relating hereto shall be brought in courts located within the City and State of New York or elsewhere as Escrow Agent may select. Each of the Depositor and the Beneficiary hereby waives the right to trial by jury and to assert counterclaims in any such proceedings. To the extent that in any jurisdiction the Depositor or the Beneficiary may be entitled to claim, for itself or its assets, immunity from suit, execution, attachment (whether before or after judgment) or other legal process, each hereby irrevocably agrees not to claim, and hereby waives, such immunity. Each of the Depositor and the Beneficiary waives personal service of process and consents to service of process by certified or registered mail, return receipt requested, directed to it at the address last specified for notices hereunder, and such service shall be deemed completed ten (10) calendar days after the same is so mailed. | |
| 13. | Except as otherwise permitted herein, this Escrow Agreement may be modified only by a written amendment signed by all the parties hereto, and no waiver of any provision hereof shall be effective unless expressed in a writing signed by the party to be charged. | |
| 14. | The rights and remedies conferred upon the parties hereto shall be cumulative, and the exercise or waiver of any such right or remedy shall not preclude or inhibit the exercise of any additional rights or remedies. The waiver of any right or remedy hereunder shall not preclude the subsequent exercise of such right or remedy. | |
| 15. | Each of the Depositor and the Beneficiary hereby represents and warrants (a) that this Escrow Agreement has been duly authorized, executed and delivered on its behalf and constitutes its legal, valid and binding obligation and (b) that the execution, delivery and performance of this Escrow Agreement by each of the Depositor and the Beneficiary do not and will not violate any applicable law or regulation. | |
| 16. | The invalidity, illegality or unenforceability of any provision of this Agreement shall in no way affect the validity, legality or enforceability of any other provision; and if any provision is held to be enforceable as a matter of law, the other provisions shall not be affected thereby and shall remain in full force and effect. | |
| 17. | This Escrow Agreement shall constitute the entire agreement of the parties with respect to the subject matter and supersedes all prior oral or written agreements in regard thereto. | |
| 18. | This Escrow Agreement shall terminate upon the distribution of all Escrow Property from the Account. The provisions of these Terms and Conditions shall survive termination of this Escrow Agreement and/or the resignation or removal of the Escrow Agent. | |
| 19. | No printed or other material in any language, including prospectuses, notices, reports, and promotional material which mentions “The Bank of New York Mellon” by name or the rights, powers, or duties of the Escrow Agent under this Escrow Agreement shall be |
9
| issued by any other parties hereto, or on such party’s behalf, without the prior written consent of Escrow Agent. | ||
| 20. | The headings contained in this Escrow Agreement are for convenience of reference only and shall have no effect on the interpretation or operation hereof. | |
| 21. | This Escrow Agreement may be executed by each of the parties hereto in any number of counterparts, each of which counterpart, when so executed and delivered, shall be deemed to be an original and all such counterparts shall together constitute one and the same agreement. | |
| 22. | The Escrow Agent does not have any interest in the Escrowed Property deposited hereunder but is serving as escrow holder only and having only possession thereof. The Company shall pay or reimburse the Escrow Agent upon request for any transfer taxes or other taxes relating to the Escrowed Property incurred in connection herewith and shall indemnify and hold harmless the Escrow Agent any amounts that it is obligated to pay in the way of such taxes. Any payments of income from this Escrow Account shall be subject to withholding regulations then in force with respect to United States taxes. Each of the Depositor and the Beneficiary will provide the Escrow Agent with appropriate W-9 forms for tax I.D., number certifications, or W-8 forms for non-resident alien certifications. It is understood that the Escrow Agent shall be responsible for income reporting only with respect to income earned on investment of funds which are a part of the Escrowed Property and is not responsible for any other reporting. This paragraph and paragraph (9) shall survive notwithstanding any termination of this Escrow Agreement or the resignation of the Escrow Agent. |
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10
IN WITNESS WHEREOF, each of the parties has caused this Escrow Agreement to be executed by a
duly authorized officer as of the day and year first written above.
| TIPTREE FINANCIAL PARTNERS, L.P., | CARE INVESTMENT TRUST INC., | |||||||||
| as Depositor | as Beneficiary | |||||||||
By:
|
/s/ Xxxxxxxx Xxxxxxxx | By: | /s/ Xxxxx Xxxx | |||||||
Name:
|
Xxxxxxxx Xxxxxxxx
|
Name: | Xxxxx Xxxx
|
|||||||
Title:
|
President and Chief Operating Officer | Title: | Chief Executive Officer and President | |||||||
11
| THE BANK OF NEW YORK MELLON, as Escrow Agent |
||||
| By: | /s/ Jaddiel Xxxxx | |||
| Name: | Jaddiel Xxxxx | |||
| Title: | Vice President | |||
12
SCHEDULE 1
ESCROW PROPERTY
| Description of Escrow | Amount of Escrow | |||||||
| Depositor | Property | Property | ||||||
Tiptree Financial Partners, L.P. |
Cash | $ | 60,430,932 | |||||
13
EXHIBIT A
FORM OF
JOINT WRITTEN DIRECTION
JOINT WRITTEN DIRECTION
[INSERT DATE]
The Bank of New York Mellon
Attn: Jaddiel Xxxxx
000 Xxxxxxxxxx Xxxx., 00xx Xxxxx
Xxxxxx Xxxx, XX 00000 XXX
Facsimile: 000-000-0000.
Attn: Jaddiel Xxxxx
000 Xxxxxxxxxx Xxxx., 00xx Xxxxx
Xxxxxx Xxxx, XX 00000 XXX
Facsimile: 000-000-0000.
To Whom It May Concern:
In connection with that certain Purchase and Sale Agreement, dated as of ___, 2010,
entered into by the undersigned (the “PSA”), and the Escrow Agreement, dated as of ___,
2010, entered into by the undersigned and the Escrow Agent (as defined in the Escrow Agreement)
(the “Escrow Agreement”), the undersigned hereby notify and direct the Escrow Agent to distribute
the Escrow Property (as defined in the Escrow Agreement) as follows:
| 1. | $ shall be distributed to an account for the benefit of the Beneficiary in accordance with Section 3 of the Escrow Agreement; and | |
| 2. | the balance of the Escrow Property, if any, shall be distributed to the Depositor in accordance with Section 3 of the Escrow Agreement. |
This Joint Written Direction may not be amended, modified or rescinded unless executed by each
of the Depositor and the Beneficiary.
| TIPTREE FINANCIAL PARTNERS, L.P., | CARE INVESTMENT TRUST INC., | |||||||||
| as Depositor | as Beneficiary | |||||||||
By:
|
By: | |||||||||
Name:
|
Name: | |||||||||
Title:
|
Title: | |||||||||
14
EXHIBIT B
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT
