VOTING AGREEMENT
THIS VOTING AGREEMENT (this "Agreement"), dated as of November 10,
2009, is made and entered into by and among FCP Fund I, L.P., a Delaware
limited partnership ("Parent"), FCP/ACPT Acquisition Company, Inc., a
Maryland corporation and an indirect subsidiary of Parent ("MergerSub" and
together with Parent, the "Buyer Parties"), and certain holders of common
shares of beneficial interest ("Shares") in American Community Properties
Trust, a Maryland real estate investment trust ("ACPT"), identified in Exhibit
A attached hereto (each a "Arbiter Group Shareholder" and collectively, the
"Arbiter Group Shareholders").
WHEREAS, ACPT and the Buyer Parties have agreed to effect a merger
transaction through a merger of Merger Sub with and into ACPT (the "Merger"),
with ACPT being the surviving entity ("New ACPT"), on the terms and subject
to the conditions set forth in that certain Agreement and Plan of Merger,
dated as of September 25, 2009, by and among ACPT and the Buyer Parties (the
"Merger Agreement"), and in accordance with the Maryland REIT Law and the
Maryland General Corporation Law;
WHEREAS, Parent and the Arbiter Group Shareholders desire for the Arbiter Group
Shareholders to become at or shortly after the Merger a direct or indirect
equity investor in New ACPT, on the terms and subject to the conditions set
forth in that certain Contribution and Partnership Interest Purchase Agreement,
dated as of November 10, 2009, by and among Parent, the Arbiter Group
Shareholders
and T Street Investors, LLC, an affiliate of the Arbiter Group Shareholders
(the "Purchase Agreement");
WHEREAS, the Arbiter Group Shareholders collectively own, in the
aggregate, 829,529 common shares, par value $0.01 per share, of ACPT
(including any equity interests into which such common shares may be
converted or exchanged after the date hereof, the "Arbiter Group Shares")
(such Arbiter Group Shares, together with any other equity interests in
ACPT acquired by the Arbiter Group Shareholders after the date hereof
and during the term of this Agreement, being collectively referred to
herein as the "Subject Shares"); and
WHEREAS, as an inducement to Parent to enter into the Purchase Agreement
and incur the obligations set forth therein, Parent requires that each Arbiter
Group Shareholder enter into this Agreement, and the Arbiter Group Shareholders
desire to enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and
agreements herein contained, and intending to be legally bound hereby, the
parties hereto agree as follows:
Section 1. Definitions. Capitalized terms used herein and not defined shall
have the meanings specified in the Merger Agreement.
Section 2. Representations and Warranties of the Arbiter Group Shareholders.
Each Arbiter Group Shareholder hereby, jointly and severally, represents
and warrants to the Buyer Parties as follows:
(a) Organization; Authority. Each of Xxxxx Grandchildren's Trust and
Xxxxxxxx X. Xxxxx u/w/o Xxxxxx X. Xxxxx Marital Trust is a trust duly formed,
validly existing and in good standing under the laws of the jurisdiction of
its formation. Arbiter Partners, L.P. is a limited partnership duly formed,
validly existing and in good standing under the laws of the jurisdiction of
its formation. Xxxxx Xxxxxxxx, L.L.C. (together with Xxxxx Grandchildren's
Trust, Xxxxxxxx X. Xxxxx u/w/o Xxxxxx X. Xxxxx Marital Trust and Arbiter
Partners,L.P., the "Entity Shareholders" and each, an "Entity Shareholder")
is a limited liability company duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization.
Each Entity Shareholder has the requisite trust, limited partnership or
limited liability company power and authority, as applicable, to execute
and deliver this Agreement and to consummatethe transactions contemplated
hereby. The execution and delivery by each Entity Shareholder of this
Agreement and the consummation by each Entity Shareholder of the
transactions contemplated hereby have been duly authorized by all
necessary corporateor similar action by such Entity Shareholder or by
its trustee, general partner or managing member, as applicable. Each
Arbiter Group Shareholder that is not also anEntity Shareholder
has full legal right, capacity, power and authority to execute
this Agreement and to consummate the transactions contemplated hereby.
(b) Binding Obligation. This Agreement has been duly executed and
deliveredby each Arbiter Group Shareholder and constitutes a legal,
valid and binding obligation of each Arbiter Group Shareholder,
enforceable in accordance with its terms.
(c) No Conflicts. Neither the execution and delivery of this Agreement,
nor the consummation of the transactions contemplated hereby or compliance
with the terms hereof will violate, conflict with or result in a breach,
require any consent or approval, or constitute a default (with or without
notice or lapse of time or both) under any provision of, the organizational
documents of any Entity Shareholder or any trust agreement, loan or credit
agreement,note, bond, mortgage, indenture, lease or other agreement,
instrument, permit,concession, franchise, license, judgment, order,
notice, decree, statute, law, ordinance, rule or regulation applicable
to any Arbiter Group Shareholder or to any Arbiter Group Shareholder's
property or assets. No authorization, consent or approval of, or any
filing with, any public body or authority is necessary for consummation
by any Arbiter Group Shareholder of the transactions
contemplated by this Agreement.
(d) The Subject Shares. Each Arbiter Group Shareholder is the sole record
and beneficial owner of, and has good and marketable title to, the number of
Shares set forth opposite the name of such Arbiter Group Shareholder in
Exhibit A,free and clear of any mortgage, lien, pledge, charge, encumbrance,
security interest or other adverse claim, other than normal and customary
pledges madeto certain banking institutions in connection with loan agreements
that havebeen entered into by the Arbiter Group Shareholders. Other than
the Shares owned by certain exempted persons set forth in Exhibit A, whose
Shares may be deemed to be beneficially owned by Xxxx X. Xxxxxx (and for which
he disavows beneficial ownership), no Arbiter Group Shareholder owns, of
record or beneficially,any Shares other than as set forth opposite the name
of such Arbiter Group Shareholderin Exhibit A. Xxxx X. Xxxxx is the manager
and the general partner of Xxxxx Xxxxxxxx,L.L.C. and Arbiter Partners, L.P.,
respectively, and as such, he has sole dispositive and voting powers
over the Shares owned by such entities. In addition, Xxxx X. Xxxxx
has shared voting and dispositive powers over the Shares owned by each of
Xxxxxxx X. Xxxxx, Xxxxxxx X. Xxxxx, Xxxxxx X. Xxxxx and Xxxxx X. Xxxxx.
Xxxx X. Xxxxx also serves as the trustee for each of Xxxxx Grandchildren's
Trust and Xxxxxxxx X. Xxxxx u/w/o Xxxxxx X. Xxxxx Marital Trust and
as such, he has voting and dispositive powers of the Shares owned by
such trusts. Except as set forth in this Section 2(d), each Arbiter
Group Shareholder has the sole right to vote, or to dispose of, the
number of Shares set forth opposite the name of such Arbiter Group
Shareholder inExhibit A, and none of such Shares is subject to any
agreement, arrangement or restriction with respect to the voting of
such Shares, except as contemplated by this Agreement. There are no
agreements or arrangements of any kind, contingent or otherwise,
obligating any Arbiter Group Shareholder to sell,
transfer, assign, grant a participation interest in, option, pledge,
hypothecate or otherwise dispose or encumber (each, a "Transfer"), or
cause to be Transferred, any of the Subject Shares. No Person has any
contractual or other right or obligation to purchase or otherwise acquire
any of the Subject Shares.
(e) Litigation. No Arbiter Group Shareholder has received notice of,
and thereis no pending, or, to the knowledge of any Arbiter Group Shareholder,
threatened, action, suit, claim, arbitration, proceeding or investigation
against, affecting orinvolving any Arbiter Group Shareholder relating to,
or affecting in any manner, the Subject Shares, or that questions the
validity of this Agreement or any actiontaken or to be taken by any Arbiter
Group Shareholder in connection with this Agreement.
Section 3. Covenants of the Arbiter Group Shareholders. Until the termination
of this Agreement in accordance with Section 4, each Arbiter Group
Shareholder agrees as follows:
(a) Agreement to Vote in Favor. At any meeting of the shareholders of ACPT
calledto vote upon the Merger and the Merger Agreement or at any adjournment
thereof or inany other circumstances upon which a vote, consent or other
approval (including by written consent in lieu of a meeting) with respect to
the Merger and the Merger Agreement is sought, each Arbiter Group
Shareholdershall vote (or cause to be voted) its Subject Shares, or any other
Shares owned by any Non-Affiliated Shareholder identified on Exhibit A attached
hereto("Non-Affiliated Shareholders") for which such Arbiter Group Shareholder
has received a proxy to vote with respect to the Merger, the Merger Agreement
and theother transaction contemplated by the Merger Agreement
(the "Proxy Shares"),in favor of the approval of the Merger and the
Merger Agreement and each of the transactions contemplated by the
Merger Agreement (including, without limitation,the Company Charter
Amendment (as defined in the Merger Agreement)), regardless of
whether or not the Merger is based on the terms and conditions set forth
inthe Merger Agreement or as may be modified and agreed to between Parent
and ACPT pursuantto an amendment or modification to the Merger Agreement.
(b) Agreement to Vote Against. At any meeting of the shareholders of ACPT or
at any adjournment thereof or in any other circumstances upon which a vote,
consentor other approval of all or some of the shareholders of ACPT is sought,
each Arbiter GroupShareholder shall vote (or cause to be voted) its Subject
Shares and any Proxy Shares against (i) any merger agreement or merger
(other than the Merger Agreement and the Merger), consolidation, combination,
sale or transfer of a material amount of assets, reorganization,
recapitalization, dissolution, liquidation or winding up of or by ACPT
or any Acquisition Proposal, (ii) any amendment of ACPT's Amended and
Restated Declaration of Trust or Amendedand Restated Bylaws or
other proposal or transaction involving ACPT or any of its subsidiaries,
which amendment or other proposal or transaction would in any manner
delay, impede, frustrate, prevent or nullify the Merger, the Merger
Agreement or any of the other transactions contemplated by the Merger
Agreement or change in any manner the voting rights of Shares,
and (iii) any action, agreement, transaction or proposal
that would result in a breach of any representation, warranty, covenant,
agreement or other obligation of ACPT in the Merger Agreement.
(c) Restrictions on Transfer. (i) Each Arbiter Group Shareholder agrees
not to,directly or indirectly, (A) Transfer or enter into any agreement,
option or other
arrangement (including any profit sharing arrangement) with respect to the
Transferof, any Subject Shares to any Person, other than pursuant to the
Merger Agreement or (B) grant any proxies, deposit any Subject Shares into
any voting trust or enter into any voting arrangement, whether by proxy,
voting agreement or otherwise, with respect to the Subject Shares,
other than pursuant to this Agreement or as set forth in Section 2(d)
hereof; and (ii) Xxxx X. Xxxxx agrees to use commercially reasonable
efforts to prevent the Non-Affiliated Shareholders from taking any of the
actions describedin clauses (A) and (B) above other than, with respect to
the actions d
escribed in clause
(B), as set forth in Section 2(e)(v) hereof.
(d) Legend. Each Arbiter Group Shareholder agrees to cooperate
with the Buyer Parties and ACPT to cause the transfer agent of ACPT to place
a restricted or similar legend on one or more certificates evidencing the
Subject Shares (if certificated) and/or in the electronic ledger maintained
by the transfer agent to note the transactions contemplated by, and the
various restrictions contained in, this Agreement with respect to the
Subject Shares.
(e) Additional Covenants.
(i) Each Arbiter Group Shareholder hereby agrees not to take any action
that would make any representation or warranty of the Arbiter Group Shareholders
contained herein untrue or incorrect or have the effect of preventing,
impeding,or in any material respect, interfering with or adversely affecting
the performanceby the Arbiter Group Shareholders of their obligations under
this Agreement;
(ii) Each Arbiter Group Shareholder hereby waives any rights of appraisal or
rights of dissent from the Merger that such Arbiter Group Shareholder may have;
(iii) Each Arbiter Group Shareholder hereby agrees to promptly notify Parent
of the number of any new Shares acquired by the Arbiter Group Shareholders, if
any, after the date hereof, which Shares shall be subject to the terms of this
Agreement as though owned by the Arbiter Group Shareholders on the date hereof;
(iv) Each Arbiter Group Shareholder hereby authorizes Parent and ACPT to
publishand disclose in any announcement or disclosure required by the U.S.
Securities and Exchange Commission and in ACPT's proxy statement any Arbiter
Group Shareholder's identity and ownership of the Subject Shares and the
nature of such Arbiter Group Shareholder's obligation under this Agreement,
provided that such Arbiter Group Shareholder is provided with a reasonable
opportunity to review and comment
on such disclosure; and
(v) Xxxx X. Xxxxx shall obtain, prior to any meeting of the shareholders
of ACPT called to vote upon the Merger and the Merger Agreement or at any
adjournment thereof or in any other circumstances upon which a vote, consent
or other approval (including by written consent in lieu of a meeting) with
respect to the Merger and the Merger Agreement is sought, irrevocable proxies
from each of the Non-Affiliated Shareholders authorizing him to attend and
represent such Non-Affiliated Shareholder at such meeting and cast on behalf
of such Non-Affiliated Shareholder all votes entitled to be cast by such
Non-Affiliated Shareholder.
Section 4. Termination. This Agreement shall terminate (i) upon the
earlier of (A) the Effective Time, (B) sixty (60) calendar days following
the termination of the Merger Agreement by ACPT to enter into a definitive
agreement with respect to a Superior Proposal (as defined in the Merger
Agreement)in accordance with the terms of the Merger Agreement and (C) sixty
(60) calendar days following the termination of the Purchase Agreement, or
(ii) at any time uponnotice by the Buyer Parties. No party hereto shall be
relieved from any liabilityfor breach of this Agreement by reason of any
such termination.
Section 5. Governing Law. This Agreement shall be governed by and
construedin accordance with the laws of the State of Maryland, without regard
to the conflicts of law rules of such state.
Section 6. Jurisdiction. The parties hereto agree that any suit, action
or proceeding seeking to enforce any provision of, or based on any matter
arising out of or in connection with, this Agreement or the transactions
contemplated hereby shall be brought in any federal court located in the
State of Maryland or any Maryland state court, and each of the parties hereby
irrevocably consents to the jurisdiction of such courts (and of the appropriate
appellate courts therefrom) in any such suit, action or proceeding and
irrevocablywaives, to the fullest extent permitted by law, any objection that
it may now or hereafter have to the laying of the venue of any such suit,
action or proceedingin any such court or that any such suit, action or
proceeding brought in any suchcourt has been brought in an inconvenient
forum. Process in any such suit, actionor proceeding may be served on
any party anywhere in the world, whether within or
without the jurisdiction of any such court. Without limiting the
foregoing, each arty agrees that service of process on such party as
provided in Section 11 shall
be deemed effective service of process on such party.
Section 7. Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLYWAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
Section 8. Specific Performance. Each Arbiter Group Shareholder acknowledges
and agrees that (i) the covenants, obligations and agreements of the
Arbiter Group Shareholders contained in this Agreement relate to special,
unique and extraordinarymatters, and (ii) a violation of any of the terms
of such covenants, obligations oragreements will cause the Buyer Parties
irreparable injury for which adequate remediesare not available at law.
Therefore, each Arbiter Group Shareholder agrees that the Buyer
Parties shall be entitled to an injunction, restraining order or such other
equitable relief (without the requirement to post bond) as a court of competent
jurisdiction may deem necessary or appropriate to restrain the Arbiter Group
Shareholders from committing any violation of such covenants, obligations or
agreements. These injunctive remedies are cumulative and in addition to any
other rights and remedies the Buyer Parties may have.
Section 9. Amendment, Waivers, Etc. Neither this Agreement nor any term
hereof may be amended or otherwise modified other than by an instrument in
writing signed by each of the Buyer Parties and the Arbiter
Group Shareholders. No provision of this Agreement may be waived,
discharged or terminated other thanby an instrument in writing signed
by the party against whom the enforcement of
such waiver, discharge or termination is sought.
Section 10. Assignment; No Third Party Beneficiaries. This
Agreement shall not be assignable or otherwise transferable by a party
without the prior consent of the other parties, and any attempt to so assign
or otherwise transfer this Agreement without such consent shall be void and of
no effect; provided that Parent may, inits sole discretion, assign or transfer
all or any of its rights, interests and obligations under this Agreement
to any of its affiliates and Parent may substitute any direct or indirect
subsidiary for MergerSub. This Agreement shall be binding upon the
respective heirs, successors, legal representatives and permitted assigns
of the parties hereto. Nothing in this Agreement shall be construed as giving
anyPerson, other than the parties hereto and their heirs, successors, legal
representativesand permitted assigns, any right, remedy or claim under or
in respect of this Agreement or any provision hereof.
Section 11. Notices. All notices, requests, claims, demands and other
communicationsto any party hereunder shall be in writing
(including facsimile transmission) and shall be given
(and shall be deemed to have been duly given upon receipt) by delivery in
person,by prepaid overnight courier (providing proof of delivery), by facsimile
or by registeredor certified mail (postage prepaid, return receipt requested)
to the respective parties atthe following addresses or facsimile numbers:
if to the Buyer Parties, to:
FCP Fund I, L.P.
c/o Federal Capital Partners
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxx
with a copy (which shall not constitute notice) to:
Xxxxx & Xxxxxxx LLP
000 Xxxxxxxxxx Xxxxxx, XX
Xxxxxxxxxx, X.X. 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxx
Xxxxxxxxx X. Xxxx
if to any of the Arbiter Group Shareholders, to the address listed next to such
Arbiter Group Shareholder's name in Exhibit A;
or to such other address or facsimile number as such party may hereafter
specify for the purpose by notice to the other parties hereto. All such
notices, requests and other communications shall be deemed received on the
date of receipt by the recipient thereof if received prior to 5:00 p.m. on
a Business Day in the place of receipt. Otherwise, any such notice, request
or communication shall be deemed to have been received on the next succeeding
Business Day in the place of receipt.
Section 12. Remedies. 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. The rights
and remedies herein provided shall becumulative and not exclusive of
any rights or remedies provided by law.
Section 13. Severability. If any term, provision, covenant or
restriction of thisAgreement is held by a court of competent
jurisdiction or other authority to be invalid,void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions
of this Agreement shall remain in full force and effect and shall in no
way be affected, impaired or invalidated so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such a determination, the parties
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as
possible in an acceptable manner in order that the transactions contemplated
hereby be consummated as originally contemplated to the fullest extent possible.
Section 14. Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter of this Agreement and
supersedes all prior agreements and understandings, both oral and written,
between the parties with respect to the subject matter of this Agreement.
Section 15. Further Assurances. The Arbiter Group Shareholders shall,
upon the request of Parent, execute and deliver such documents and take
such action deemed by Parent to be reasonably necessary to effectuate the
purposes of this Agreement.
Section 16. Section Headings. The article and section headings of this
Agreement are for convenience of reference only and are not to be considered
in construing this Agreement.
Section 17. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
[SIGNATURE PAGES FOLLOW]
IN WITNESS WHEREOF, each party hereto has executed and delivered
this Agreement, or has caused this Agreement to be duly executed and
delivered on its behalf, as of the date first set forth above.
BUYER PARTIES:
FCP FUND I, L.P.
By: FCP Fund I GP, LLC, its General Partner
By:
Name: Xxxx X. Xxxx
Title: Class A Member
FCP/ACPT ACQUISITION COMPANY, INC.
By:
Name: Xxxx X. Xxxx
Title: President
ARBITER GROUP SHAREHOLDERS:
ARBITER PARTNERS, L.P.
By:
Name:
Title:
XXXXX XXXXXXXX, L.L.C.
By:
Name:
Title:
XXXXX GRANDCHILDREN'S TRUST
By:
Name:
Title:
XXXXXXXX X. XXXXX U/W/O XXXXXX X. XXXXX MARITAL TRUST
By:
Name:
Title:
_____________________________________
Xxxx X. Xxxxx
_____________________________________
Xxxxxxx X. Xxxxx
_____________________________________
Xxxxxx X. Xxxxx
_____________________________________
Xxxxx X. Xxxxx
EXHIBIT A
Arbiter Group Shareholders
I. Arbiter Group Shareholders
Holder
Address
Number of
Shares Owned
Arbiter Partners, L.P.
484,329
Xxxx X.
Xxxxx
73,450
Xxxxxxx X. Xxxxx
15,500
Xxxxxx X.
Xxxxx
16,800
Xxxxx X. Xxxxx
2,000
Xxxxx Xxxxxxxx, L.L.C.
220,200
Xxxxx Grandchildren's Trust
12,250
Xxxxxxxx X.
Xxxxx u/w/o Xxxxxx X. Xxxxx Marital Trust
5,000
Total
829,529
II. Non-Affiliated Shareholders
Holder
Address
Number of
Shares Owned
Xxxxxxx X. Xxxxx
35,800
Xxxxxxxx Xxxxx
14,300
Total
50,100
1
10
Execution Version
