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EXHIBIT 99.9
SHAREHOLDERS' AGREEMENT
THIS SHAREHOLDERS' AGREEMENT (this "AGREEMENT"), made as of the 31st
day of August, 1998, by and among Wellington Properties Trust, a Maryland real
estate investment trust (the "COMPANY") and the parties identified as "Subject
Shareholders" on the signature page hereto (hereinafter referred to collectively
as the "SUBJECT SHAREHOLDERS" and individually as a "SUBJECT SHAREHOLDER");
WITNESSETH: THAT
WHEREAS, the Company is authorized to issue 100,070,000 common shares
of beneficial interest, $0.01 par value per share, 734,161.409 shares of which
were outstanding as of August 21, 1998 (and of which 106,917.187 are presently
owned by the Subject Shareholders);
WHEREAS, the Company has entered into a certain Amended and Restated
Master Contribution Agreement dated August 31, 1998 (the "MASTER CONTRIBUTION
AGREEMENT") with American Real Estate Equities, LLC ("AREE"), Xxxxxx X. Xxxx
("XXXX"), Xxxxxxx Equities II, LLC ("XXXXXXX LLC"), and WLPT Funding, LLC
("WLPT"), pursuant to which AREE has agreed to contribute certain contracts to
the Company in exchange for the issuance of limited partnership interests (the
"LP UNITS") in Wellington Properties Investments, L.P. (the "UPREIT"), a
Delaware limited partnership, of which the Company is the sole general partner;
WHEREAS, Xxxx, Xxxxxxx LLC and WLPT are all of the members of AREE and
whereas Xxxxx X. Xxxx ("XXXX") is a member of WLPT, and whereas Xxxx X. Xxxxxxx
("XXXXXXX") is a member of Xxxxxxx LLC and, in those capacities, will receive LP
Units pursuant to the Master Contribution Agreement and related agreements;
WHEREAS, pursuant to the terms of the limited partnership agreement
(the "OP AGREEMENT") of the UPREIT, the LP Units are convertible into common
shares of beneficial interest of the Company; and
WHEREAS, the Subject Shareholders desire to exercise the voting rights
of their shares in the Company, and to restrict the transferability of their
shares in the Company, as set forth in this Agreement;
NOW THEREFORE, in consideration of the foregoing premises and the
mutual covenants herein contained, and of other good and valuable
considerations, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:
1. DEFINITIONS. For purposes of this Agreement, the following terms
shall have the respective meanings stated:
1.1. "AFFILIATE" shall mean, (i) with respect to any individual or
entity (the "FIRST PERSON"), any entity (the "SECOND PERSON"), directly or
indirectly, (A) controlled or
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more than 50% owned (directly or indirectly) by the First Person, (B) if the
First Person is an entity, controlling or owning (directly or indirectly) more
than 50% of the First Person, or (C) if the First Person is an entity,
controlled or more than 50% owned (directly or indirectly) by an individual or
entity which controls or owns (directly or indirectly) more than 50% of the
First Person, and (ii) with respect to any First Person who is an individual,
any members of the immediate family of such individual and any trusts
established exclusively for the benefit of such individual and/or any such
immediate family members. If the First Person is an individual, any ownership
and/or control of the Second Person by immediate family members and/or trusts
who are Affiliates of such First Person pursuant to clause (ii) above shall be
attributed to, and deemed exercised and owned by, such First Person. If the
First Person is the successor to a Subject Shareholder by reason of death of
such Subject Shareholder, any person who was an Affiliate of the decedent
Subject Shareholder shall be deemed to be an Affiliate of such First Person. For
purposes of this SECTION 1.1, "IMMEDIATE FAMILY" of an individual shall mean
such individual's siblings, spouse and his lineal ancestors and descendants.
1.2. "SHAREHOLDERS" shall mean, as of any date, all beneficial holders
of any or all of the Shares.
1.3. "SHARES" shall mean, as of any date, any and all shares of
beneficial interest of the Company, of whatever class, issued and outstanding,
including, but not limited to, shares issued or created in connection with any
share dividend, share split or other capital readjustment.
1.4. "SUBJECT SHAREHOLDER" shall mean any person (other than the
Company) who is or becomes a party to, or bound by, this Agreement, whether or
not such person owns any Shares.
1.5. "SUBJECT SHARES" shall mean any and all Shares owned (whether
directly or through a trust for the benefit of the Subject Shareholder) or
controlled by any Subject Shareholder, from time to time, now or hereafter,
including, without limitation any Shares issued in connection with the
conversion of LP Units into Shares pursuant to the OP Agreement.
1.6. "TRANSFER" shall mean and include any sale, assignment, transfer,
gift, pledge, encumbrance, hypothecation, distribution pursuant to a
liquidation, or other disposition or alienation, direct or indirect, of any of
the Shares or any interest of a Shareholder, legal, equitable or beneficial
therein.
1.7. "WMC" shall mean Wellington Management Corporation.
2. ISSUANCE OF ADDITIONAL SHARES. In the event the Company intends to
issue additional Shares (whether pursuant to a secondary offering, share
dividend, share split or otherwise) to any or all of the Subject Shareholders or
their Affiliates, whether or not such Shares are currently authorized by the
Articles of Amendment and Restatement of the Company, such Shares, upon
issuance, shall automatically become Subject Shares. As a condition to the
issuance of any additional Shares to any Affiliate of a Subject Shareholder who
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is not already a Subject Shareholder, the Company shall require that the
proposed holder of such additional Shares execute and deliver to the Company a
joinder (a "JOINDER") to this Agreement in the form attached hereto as EXHIBIT
A.
3. MANAGEMENT OF THE COMPANY.
3.1. ELECTION OF TRUSTEES. The Subject Shareholders acknowledge that
upon the closing of the transactions contemplated by the Master Contribution
Agreement, the board of trustees of the Company will be expanded to seven
members and Xxxxxxx and Xxxx shall be elected as trustees to fill the vacancies
created by such expansion. Each Subject Shareholder (and its successors,
transferees and assigns entitled to exercise such rights) shall take all action
necessary or appropriate (including, without limitation, voting all Subject
Shares, calling special meetings of Shareholders and executing and delivering
proxies and written consents) to ensure that Xxxx and Xxxxxxx are and continue
to be elected to the board of trustees of the Company. In addition, in the event
that any additional vacancies occur in the board of trustees of the Company,
each Subject Shareholder shall use its best efforts to cause the board of
trustees of the Company to fill any such vacancy with a person selected by AREE
and WMC. In the event that any trustee decides not to stand for re-election,
each Subject Shareholder shall use its best efforts to cause the board of
trustees of the Company to present to the Shareholders, at the next Shareholders
meeting, a person selected by AREE and WMC as a nominee for election to such
position.
3.2. ELECTION OF OFFICERS. Each Subject Shareholder shall use its best
efforts to cause the board of trustees of the Company to elect Xxxx as the Chief
Executive Officer of the Company, Xxxxxx Xxxx as the President of the Company
and Xxxxxx Xxxx as Chairman of the Board of the Company.
3.3. CERTAIN PROXIES. In the event that (i) any Subject Shareholder
shall fail to vote its Subject Shares in accordance with the terms of this
SECTION 3 with respect to any matter provided for in this SECTION 3, (ii) such
Subject Shareholder has been given written notice of such failure, and (iii) if
such failure is subject to cure, such failure has not been cured within five
days after such notice has been effectively given to such Subject Shareholder,
then, in addition to all other remedies available at law and in equity with
respect to such failure, such Subject Shareholder (the "DEFAULTING SHAREHOLDER")
shall be deemed to have granted the other Subject Shareholders (the
"NONDEFAULTING SHAREHOLDERS") an irrevocable proxy coupled with an interest to
vote all the Subject Shares of the Defaulting Shareholder in accordance with the
terms of this SECTION 3 as to which the Defaulting Shareholder has failed to so
vote, and the Nondefaulting Shareholders shall not be entitled to vote the
Subject Shares of the Defaulting Shareholder with respect to any other matter.
4. GENERAL RESTRICTIONS ON TRANSFER. In the event a Subject Shareholder
attempts to Transfer any or all of its Shares to any person, such Transfer shall
be valid only as provided in and permitted by SECTION 5. Any purported Transfer
made any time hereafter in violation of the provisions of SECTIONS 4 or 5 shall
be absolutely null and void and shall confer no rights whatsoever on the
purported transferee as against the Company or any other Shareholders.
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The Company shall not transfer, and shall cause its transfer agent not to
transfer, on the books of the Company, or the transfer agent, as the case may
be, any certificates for any Shares owned by any Subject Shareholder, nor issue
any certificate in lieu of any such Shares, nor issue any new Shares, unless
each and all of the conditions hereof affecting such Shares or certificates and
the transfer thereof have been complied with. Until the certificates
representing the Shares to be transferred (either properly endorsed for transfer
or accompanied by the necessary stock powers, with all necessary stock transfer
stamps attached thereto) are delivered to the Company, no such Transfer of
Subject Shares shall be made and title shall remain in the transferring
Shareholder.
5. AFFILIATE TRANSFERS.
5.1. TO SUBJECT SHAREHOLDERS. A Subject Shareholder may Transfer
Subject Shares to any other Subject Shareholder.
5.2. TO AFFILIATES. A Subject Shareholder may Transfer Subject Shares
to any Affiliate of any Subject Shareholder, which Affiliate is not already a
Subject Shareholder, provided the transferring Subject Shareholder delivers a
Joinder executed by the transferee to the Company prior to such Transfer.
6. LEGEND ON CERTIFICATES. In addition to any other legends required by
agreement or by law, each certificate representing one or more of the Subject
Shares now or hereafter held by any of the Subject Shareholders shall be
endorsed with the following legend (the "REQUIRED LEGEND") in substantially the
following form:
"The voting, transfer, pledge or other encumbrance of the securities
represented by this certificate is restricted under the terms of a
certain Shareholders' Agreement dated as of August 31, 1998, a copy of
which is on file at the office of the Company."
In the event that the Company at any time or times shall distribute any Shares
as a dividend upon the Subject Shares or shall issue any Shares in lieu of, or
in exchange for, or in addition to, the Subject Shares, or shall have had a
reclassification of Shares, then all certificates evidencing the same shall bear
the Required Legend. Promptly after execution and delivery of this Agreement,
each Subject Shareholder shall deliver certificates representing all of its
Subject Shares to the Company, whereupon the Company shall endorse such
certificates with the Required Legend or shall reissue such certificates with
the Required Legend.
7. REPRESENTATIONS AND WARRANTIES. Each of the parties hereto represents
and warrants to the others that as of the date of its entry into this Agreement:
7.1. GENERAL. Such party has full power, authority and legal capacity
to execute and deliver this Agreement and to perform its obligations hereunder,
in each capacity in which such party is executing this Agreement, and no
consent, approval or other authorization of, notice to or registration with any
governmental authority, or other person, is required in connection with the
execution, delivery and performance of this Agreement by such
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party, which has not been obtained, given or made. With respect to any party
which is not a natural person, the execution, delivery and performance of the
Agreement have been duly authorized by all requisite action by such entity, and
are not in conflict with the terms of any organizational instruments of such
entity.
7.2. OWNERSHIP OF SHARES. Such party is the true and lawful owner,
beneficially and of record, of that number of Shares indicated below such
parties signature.
8. TERMINATION.
8.1. GENERAL. This Agreement shall terminate upon the first of any of
the following events to occur: (i) the date that is 10 years after the date
hereof; (ii) the written agreement of AREE and WMC to terminate this Agreement;
(iii) there ceasing to be any Shares of the Company outstanding other than those
held by a single Shareholder, (iv) the dissolution of the Company, or (v) the
consummation of a merger or consolidation of the Company as to which an entity
other than the Company is a surviving entity, unless the stock of such surviving
entity is owned by substantially the same parties and in substantially in the
same proportions as the stock of the Company was owned prior to any such merger
or consolidation. The termination of this Agreement shall not impair or affect
any obligations or liabilities accrued prior to any such termination.
8.2. ELECTION OBLIGATIONS. The obligations to elect Xxxxxx X. Xxxx,
Xxxxxx X. Xxxx, Xxxx, Xxxxxxx and/or Xxxx set forth in SECTION 3 shall terminate
with respect to any of the foregoing individuals upon such individual's death,
disability or resignation from the Company.
9. MISCELLANEOUS.
9.1. NOTICES. All notices given pursuant to or in connection with this
Agreement shall be in writing and shall be served by United States registered or
certified mail, return receipt requested, proper postage prepaid, or by a
reputable express delivery service which guarantees next business day delivery,
addressed, as appropriate, to the Company at its registered office, and to any
Shareholder at the last address of such Shareholder shown on the records of the
Company. Any such notice shall be deemed given and effective (a) if by
registered or certified mail, five days after deposit thereof in the U.S. mail,
and (b) if by such express delivery service, on the next business day following
deposit thereof with such express delivery service.
9.2. BENEFIT AND ASSIGNMENT. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective heirs,
executors, administrators, legal representatives, successors, and assigns and to
no other persons or entities. No person may assign any of his rights or
obligations under this Agreement without the unanimous written consent of all
other parties hereto. If any original Subject Shareholder or any other
subsequent Subject Shareholder transfers any of its Shares to any Affiliate of
any Subject Shareholder, for any reason whatsoever, then, without limitation of
SECTION 4, such transferee shall become and be conclusively deemed to be a party
to this Agreement and be
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bound by its terms, without further action on his part. In addition, as a
condition to the issuance of a replacement certificate to said transferee, again
without limitation of SECTION 4, said transferee shall execute and deliver a
Joinder to the Company, if such transferee has not already delivered such
Joinder.
9.3. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto pertaining to the subject matter hereof, and
supersedes all prior and contemporaneous agreements and understandings of the
parties. The parties hereto may amend or modify this Agreement in such manner as
may be agreed upon only by a written instrument executed by all such parties.
9.4. NO WAIVER. No waiver of any provision or condition of this
Agreement by any party shall be valid unless in writing signed by such party. No
such waiver shall be taken as a waiver of any other or similar provision or of
any future event, act, or default.
9.5. SEVERABILITY. In the event any provision of this Agreement shall
be unenforceable in whole or in part, such provision shall be limited to the
extent necessary to render the same valid, or shall be excised from this
Agreement, as circumstances require, and this Agreement shall be construed as if
said provision had been incorporated herein as so limited, or as if said
provision had not been included herein, as the case may be.
9.6. CONSTRUCTION. This Agreement shall be governed by the laws of the
State of Maryland, without reference to its statutory or judicially pronounced
rules regarding conflicts of law or choice of law. Wherever used in this
Agreement, the singular shall be construed to include the plural and vice versa,
where applicable, and the use of the masculine, feminine or neuter gender shall
include the other genders. The term "person" shall refer to both natural persons
and legal entities. The headings used in this Agreement are for convenience only
and do not define, limit or construe the contents thereof.
9.7. COUNTERPARTS. This Agreement may be executed in any number of
identical counterparts, any or all of which may contain the signatures of less
than all of the parties, and all of which shall be construed together as but a
single instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
SUBJECT SHAREHOLDERS:
AMERICAN REAL ESTATE EQUITIES, LLC, a Delaware
limited liability company
By: /s/ Xxxxx Xxxx
-------------------------------------
Its: Member
___0___ Shares
/s/ Xxxxxx X. Xxxx
----------------------------------------------
XXXXXX X. XXXX
___0___ Shares
/s/ Xxxx X. Xxxxxxx
----------------------------------------------
XXXX X. XXXXXXX
___0___ Shares
/s/ Xxxxx X. Xxxx
----------------------------------------------
XXXXX X. XXXX
___0___ Shares
WLPT FUNDING, LLC, a Delaware limited liability
company
By: /s/Xxxxx X. Xxxx
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Its: Member
___0___ Shares
XXXXXXX EQUITIES II, LLC, a Delaware limited
liability company
By: /s/Xxxx X. Xxxxxxx
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Its: Member
___0___ Shares
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WELLINGTON MANAGEMENT CORPORATION, a Wisconsin
corporation
By: /s/Xxxxxx X. Xxxx
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Its: President
84,002 Shares
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/s/ Xxxxxx X. Xxxx
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XXXXXX X. XXXX
20,210.001 Shares
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/s/ Rose Xxxxx Xxxx
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ROSE XXXXX XXXX
605.186 Shares
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/s/ Xxxxxxx Xxxx
----------------------------------------------
XXXXXXX XXXX
1,100 Shares
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/s/ Xxxxxx X. Xxxx
----------------------------------------------
XXXXXX X. XXXX
1,000 Shares
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COMPANY:
WELLINGTON PROPERTIES TRUST, a Maryland real
estate investment trust
By: /s/ Xxxxxx X. Xxxx
-------------------------------------
Its President
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EXHIBIT A
FORM OF JOINDER
The undersigned hereby joins in and agrees to be bound by all of the
terms and provisions applicable to "Subject Shareholders" under that certain
Shareholders' Agreement between Xxxxxx X. Xxxx, Xxxx X. Xxxxxxx, Xxxxx X. Xxxx,
American Real Estate Equities, LLC, WLPT Funding, LLC, Xxxxxxx Equities II, LLC,
Xxxxxx X. Xxxx, Xxxx Xxxxx Xxxx, Xxxxxxx Xxxx, Xxxxxx X. Xxxx, Wellington
Management Corporation and Wellington Properties Trust dated August 31, 1998 (as
amended from time to time, the "AGREEMENT"). The Shares (as defined in the
Agreement) of the undersigned shall be subject to all of the terms and
provisions of the Agreement relating to Subject Shares (as defined in the
Agreement). The undersigned shall be deemed to be a party to the Agreement.
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Shares
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