UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
___________________
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): September 1, 2005
United Mortgage Trust
(Exact Name of Registrant as Specified in its Charter)
Maryland
(State or Other Jurisdiction of Incorporation)
000-32409 75-6493585
(Commission File Number) (I.R.S. Employer Identification Number)
5740 Prospect Avenue, Suite 1000
Dallas, TX 75206
(Address of Principal Executive Office) (Zip Code)
(214) 237-9305
( Registrant's Telephone Number, Including Area Code)
N/A
(Former Name and Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any
of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17CFR 240.13e-4(c))
Item 1.01 Entry into Material Definitive Agreement.
United Mortgage Trust ("UMT") hereby amends its Current Report on Form 8-K
filed on September 2, 2005 under Items 1.01 and 8.01 (File Number 000-32409).
The description of the Merger and the Merger Agreement in that report is
qualified in its entirety by reference to the full text of the Merger Agreement
which is attached hereto as Exhibit 2.1.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
The following exhibit is included with this Report:
2.1 Agreement and Plan of Merger, dated as of September 1, 2005, among
UMT, UMT Holdings, L.P. and UMT Services, Inc.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
UNITED MORTGAGE TRUST
Date: February 16, 2006 /s/ Christine A. Griffin
By: Christine A. Griffin
Its: President
Exhibit 2.1
EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
DATED AS OF SEPTEMBER 1, 2005
BY AND AMONG
UMT HOLDINGS, L.P.,
UMT SERVICES, INC.,
AND
UNITED MORTGAGE TRUST
TABLE OF CONTENTS
ARTICLE I THE MERGER A-1
SECTION 1.1 The Merger A-1
SECTION 1.2 [Reserved] A-1
SECTION 1.3 Closing A-1
SECTION 1.4 Effective Time A-1
SECTION 1.5 Limited Partnership Agreement; Certificate of
Limited Partnership A-2
SECTION 1.6 General Partner; Officers A-2
SECTION 1.7 Conversion of Shares of Beneficial Interest in
the Merger A-2
SECTION 1.8 Surrender of Certificates A-2
ARTICLE II REPRESENTATIONS AND WARRANTIES A-4
SECTION 2.1 Representations and Warranties of UMT A-4
SECTION 2.2 Representations and Warranties of Purchaser A-8
ARTICLE III COVENANTS RELATING TO CONDUCT OF BUSINESS
PENDING THE MERGER A-12
SECTION 3.1 Conduct of Business by UMT A-12
SECTION 3.2 Conduct of Business by General Partner and Purchaser A-14
SECTION 3.3 Preparation of the Proxy Statement/Prospectus;
Shareholders' Meeting A-14
SECTION 3.4 Access to Information A-15
SECTION 3.5 Reasonable Efforts A-16
SECTION 3.6 No Solicitation of Transactions A-16
SECTION 3.7 Public Announcements A-17
SECTION 3.8 Assistance A-17
SECTION 3.9 Proxy Solicitor A-18
SECTION 3.10 Termination of Advisor Contracts A-18
SECTION 3.11 Terms of Class A Debentures Approved A-18
ARTICLE IV ADDITIONAL COVENANTS A-18
SECTION 4.1 Tax Treatment A-18
SECTION 4.2 Transfer and Gains Taxes A-18
SECTION 4.3 Confidentiality A-18
SECTION 4.4 Repurchase Program A-18
SECTION 4.5 Directors' and Officers' Insurance A-19
ARTICLE V CONDITIONS PRECEDENT A-19
SECTION 5.1 Conditions to Each Party's Obligation to Effect the Merger A-19
SECTION 5.2 Conditions to Obligations of General Partner and Purchaser A-20
SECTION 5.3 Conditions to Obligations of UMT A-21
ARTICLE VI TRUSTEE ACTIONS A-21
SECTION 6.1 Trustee Actions A-21
ARTICLE VII TERMINATION, AMENDMENT AND WAIVER A-22
SECTION 7.1 Termination A-22
SECTION 7.2 Expenses; Break-Up Fees A-24
SECTION 7.3 Effect of Termination A-25
SECTION 7.4 Amendment A-25
SECTION 7.5 Extension; Waiver A-25
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Table of Contents
ARTICLE VIII GENERAL PROVISIONS A-25
SECTION 8.1 Nonsurvival of Representations and Warranties A-25
SECTION 8.2 Notices A-25
SECTION 8.3 Interpretation A-26
SECTION 8.4 Counterparts A-26
SECTION 8.5 Entire Agreement; No Third-Party Beneficiaries A-26
SECTION 8.6 Governing Law; Waiver of Jury Trial A-26
SECTION 8.7 Assignment A-27
SECTION 8.8 Enforcement A-27
SECTION 8.9 Exhibits; Disclosure Letter A-27
ARTICLE IX CERTAIN DEFINITIONS A-27
SECTION 9.1 Certain Definitions A-27
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Table of Contents
INDEX OF DEFINED TERMS Page
Act A-13
Advisor A-27
Advisor Contracts A-27
Affiliate A-27
Agreement A-1
Allocable Consideration A-18
Articles of Merger A-1
Blue Sky Laws A-5
Certificate(s) A-3
Certificate of Limited Partnership A-2
Certificate of Merger A-1
Class A Debenture A-1
Closing A-1
Closing Date A-1
Code A-27
Commitment A-13
Competing Transaction
Confidentiality Agreement A-18
Declaration of Trust A-5
Deferred Arrangements A-13
Delaware SOS A-1
Department A-1
Determination A-27
Dissenting UMT Holder A-4
Dissenting UMT Shares A-4
DOT Amendments A-5
DRULPA A-1
Effective Time A-2
Exchange Act A-2
Exchange Fund A-3
Exchange Ratio A-2
Financial Advisors A-7
GAAP A-6
General Partner A-1
Governmental Entity A-3
HSR Act A-6
Indebtedness A-27
Indenture A-27
Knowledge A-27
Law A-28
Laws A-6
Lien A-28
Limited Partner A-1
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Page
Maryland Law A-1
Material Contracts A-7
Merger A-1
Merger Consideration A-2
MGCL A-1
MRL A-1
Outside Date A-23
Paying Agent A-2
Person A-28
Proxy Statement/ Prospectus A-28
Purchaser A-1
Purchaser Break-Up Expenses A-24
Purchaser Break-Up Fee A-24
Purchaser Material Adverse Effect A-8
Purchaser Materiality Qualifier A-20
Purchaser Subsidiary A-28
Registration Statement A-28
Representative A-16
SEC A-6
Securities Act A-5
shareholders A-28
Shares of Beneficial Interest A-1
Subsidiary A-28
Superior Competing Transaction A-22
Surviving Company A-1
Surviving Partnership Agreement A-2
Takeover Statute
Tax or Taxes A-28
Tax Return A-28
Transaction Documents A-28
Transfer and Gains Taxes A-18
UMT A-1
UMT Break-Up Expenses A-24
UMT Bylaws A-5
UMT Material Adverse Effect A-4
UMT Materiality Qualifier A-20
UMT Option A-2
UMT Options A-2
UMT SEC Documents A-8
UMT Shareholder Approval A-5
UMT Shareholder Meeting A-28
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THIS AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of
September 1, 2005, by and among UMT Holdings, L.P., a Delaware limited
partnership ("Purchaser"), UMT Services, Inc., a Delaware corporation
and sole general partner of Purchaser ("General Partner"), and United
Mortgage Trust, a Maryland real estate investment trust ("UMT").
RECITALS
A. The General Partner has determined that it is advisable and in
the best interest of Purchaser and its limited partners (each a
"Limited Partner") that, upon the terms and subject to the conditions
set forth in this Agreement, for UMT to be merged with and into
Purchaser, with the Purchaser continuing as the surviving entity in the
merger (the "Merger"), in which each issued and outstanding share of
Beneficial Interest of UMT (the "Shares of Beneficial Interest") would
be converted into the right to receive one Class A Senior Subordinated
Debenture of Purchaser (a "Class A Debenture").
B. Upon the terms and subject to the conditions set forth herein,
Purchaser and UMT desire to execute a Certificate of Merger in
substantially the form attached hereto as Exhibit A (the "Certificate
of Merger"), and desire to execute Articles of Merger in substantially
the form attached hereto as Exhibit B (the "Articles of Merger") and
desire to file such Certificate of Merger and Articles of Merger in
accordance with Delaware and Maryland law, as applicable, to effectuate
the Merger.
AGREEMENT
In consideration of the premises and the mutual representations,
warranties, covenants and agreements contained in this Agreement, and
for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, intending to be legally bound, the
parties hereto hereby agree as follows:
ARTICLE I
THE MERGER
SECTION 1.1 The Merger. Upon the terms and subject to the
conditions set forth in this Agreement, and in accordance with
Section 8-501.1 of the Maryland REIT Law (the "MRL") (the MRL and the
Maryland General Corporation Law (the "MGCL") shall together be
referred to as the "Maryland Law") and Section 17-211 of the Delaware
Revised Uniform Limited Partnership Act (the "DRULPA"), UMT shall be
merged with and into Purchaser, with Purchaser being the surviving
entity in the Merger (the "Surviving Company").
SECTION 1.2 [Reserved].
SECTION 1.3 Closing. The closing of the Merger (the "Closing")
will take place commencing at 10:00 a.m., local time, on the date to be
specified by the parties, which shall be no later than the third
business day after satisfaction or waiver of the conditions set forth
in Article V (other than those conditions that by their nature are to
be satisfied or waived at the Closing, but subject to the satisfaction
or waiver of those conditions) (the "Closing Date"), at the offices of
Gibson, Dunn & Crutcher LLP, 2100 McKinney, Suite 1100, Dallas, Texas,
unless another date or place is agreed to in writing by the parties
hereto.
SECTION 1.4 Effective Time. As soon as practicable following
the satisfaction or waiver of the conditions set forth in Article V,
Purchaser and UMT shall execute and file the Articles of Merger with
the State Department of Assessments and Taxation of the State of
Maryland (the "Department") and the Certificate of Merger with the
Secretary of State of the State of Delaware (the "Delaware SOS") and
shall make all other filings and recordings required under such
statutes with respect to the Merger. The Merger shall become effective
upon the later of (i) the filing of the Certificate of Merger with the
Delaware SOS or (ii) the filing of the Articles of Merger with the
Department or at such other time which the parties hereto shall have
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agreed upon and designated in such filing in accordance with Delaware
law and Maryland law, as applicable (the "Effective Time").
SECTION 1.5 Limited Partnership Agreement; Certificate of
Limited Partnership. The Partnership Agreement shall, from and after
the Effective Time of the Merger, be and become the Limited Partnership
Agreement of the Surviving Company (the "Surviving Partnership
Agreement"), until further amended in accordance with the terms of such
Limited Partnership Agreement and applicable provisions of the DRULPA.
The Certificate of Limited Partnership of Purchaser as in effect as of
the Effective Time of the Merger (the "Certificate of Limited
Partnership") shall continue in full force and effect until further
amended in accordance with applicable provisions of the DRULPA.
SECTION 1.6 General Partner; Officers. The General Partner
shall, from and after the Effective Time of the Merger, be and become
the general partner of the Surviving Company until such time as it
shall be removed or replaced in accordance with the Surviving
Partnership Agreement and the DRULPA. The officers of Purchaser at the
Effective Time of the Merger shall, from and after the Effective Time
of the Merger, be and become the officers of the Surviving Company
until their successors shall have been duly appointed and qualified or
until their earlier death, resignation or removal in accordance with
the Surviving Partnership Agreement.
SECTION 1.7 Conversion of Shares of Beneficial Interest in the
Merger. At the Effective Time, by virtue of the Merger and without any
action on the part of the holder of any Shares of Beneficial Interest
or Limited Partner:
(a) Shares of Beneficial Interest Merger Consideration.
Each Share of Beneficial Interest issued and outstanding immediately
prior to the Effective Time of the Merger shall be converted into the
right to receive one (1) Class A Debenture issued by Purchaser (the
"Exchange Ratio"). Fractional Shares of Beneficial Interest outstanding
immediately prior to the Effective Time shall be converted into the
right to receive a fractional Class A Debenture bearing the same
fractional value as that of such fractional Share of Beneficial
Interest. The foregoing Class A Debentures, which each Share of
Beneficial Interest issued and outstanding immediately prior to the
Effective Time shall represent a right to receive, shall, along with
the right to receive any accumulated dividends, be hereinafter be
referred to as the "Merger Consideration". Following the Effective Time
of the Merger, upon surrender of Certificates evidencing Shares of
Beneficial Interest in accordance with Section 1.8, the Surviving
Company shall pay to the holders of such Certificates as of the
Effective Time of the Merger any such dividends which have accrued but
which remain unpaid at the Effective Time.
(b) Stock Options and Restricted Stock. Each option to
purchase Shares of Beneficial Interest (each, a "UMT Option" and
collectively, the "UMT Options") granted by UMT to UMT Trustees,
employees and service providers which is outstanding immediately prior
to the Effective Time of the Merger, whether or not then vested or
exercisable, shall, at the Effective Time, be automatically converted
into an option to purchase the same number of Class A Debentures on the
same terms and subject to the same conditions as those applicable to
such UMT Option immediately prior to the Effective Time.
(c) Adjustments to Merger Consideration. The Merger
Consideration payable upon the cancellation of Shares of Beneficial
Interest shall be adjusted to reflect fully the effect of any
reclassification, combination, subdivision, split, reverse split, share
dividend (including any share dividend or distribution of securities
convertible into Shares of Beneficial Interest), reorganization,
recapitalization or other like change with respect to Shares of
Beneficial Interest (or for which a record date is established) after
the date hereof and prior to the Effective Time of the Merger.
SECTION 1.8 Surrender of Certificates.
(a) Paying Agent. Prior to the Effective Time of the Merger,
Purchaser shall designate a bank or trust company reasonably acceptable
to UMT to act as agent (the "Paying Agent") for the payment of the
Merger Consideration upon surrender of Certificates evidencing Shares
of Beneficial Interest (each a "Certificate" and collectively, the
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"Certificates"). Purchaser shall take all steps necessary to enable,
and shall cause, the Surviving Company to provide to the Paying Agent
immediately following the Effective Time of the Merger the Merger
Consideration payable in exchange for the Shares of Beneficial Interest
pursuant to Section 1.7 (such consideration being hereinafter referred
to as the "Exchange
Fund").
(b) Exchange Procedure. As soon as practicable after the
Effective Time of the Merger, the Paying Agent shall mail to each
holder of record of a Certificate (i) a form of letter of transmittal
(which shall specify that delivery shall be effected, and risk of loss
and title to the Certificates held by such Person (as defined herein)
shall pass, only upon proper delivery of the Certificates to the Paying
Agent and shall be in customary form and have such other provisions as
Purchaser may reasonably specify) and (ii) instructions for use in
effecting the surrender of the Certificates in exchange for the Merger
Consideration. Upon surrender of a Certificate for cancellation to the
Paying Agent or to such other agent or agents as may be appointed by
Purchaser, together with such letter of transmittal, duly completed and
validly executed, and such other documents as may reasonably be
required by the Paying Agent, the holder of such Certificate shall be
entitled to receive in exchange therefor the Merger Consideration in
respect of the Shares of Beneficial Interest formerly evidenced by such
Certificate, and the Certificate so surrendered shall forthwith be
canceled. In the event of a transfer of ownership of Shares of
Beneficial Interest that is not registered in the transfer books of
UMT, payment may be paid in exchange therefor to a Person other than
the Person in whose name the Certificate so surrendered is registered,
if such Certificate shall be properly endorsed or otherwise be in
proper form for transfer, and the Person requesting such payment shall
pay any transfer or other Taxes required by reason of the payment to a
Person other than the registered holder of such Certificate or
establish to the satisfaction of Purchaser that such Tax has been paid
or is not applicable. No interest shall be paid or shall accrue on the
Merger Consideration (other than pursuant to the terms of any
instrument constituting part of the Merger Consideration) or on any
unpaid dividends payable upon surrender of any Certificate.
(c) No Further Ownership Rights. Merger Consideration paid upon
the surrender of a Certificate in accordance with the terms of this
Article I shall be deemed to have been paid in full satisfaction of all
rights pertaining to the Shares of Beneficial Interest formerly
evidenced by such Certificate. At the close of business on the day on
which the Effective Time of the Merger occurs the transfer books of UMT
shall be closed, and there shall be no further registration of
transfers on the transfer books of the Surviving Company of the Shares
of Beneficial Interest that were outstanding immediately prior to the
Effective Time of the Merger. If, after the Effective Time of the
Merger, Certificates are presented to the Surviving Company or the
Paying Agent for transfer or any other reason, they shall be canceled
and exchanged as provided in this Article I.
(d) Termination of Exchange Fund. Any portion of the Exchange
Fund that remains undistributed to the holders of Shares of Beneficial
Interest for one year after the Effective Time of the Merger shall be
delivered to the Surviving Company, upon demand, and any holder of
Shares of Beneficial Interest who has not theretofore complied with
this Article I shall thereafter look only to the Surviving Company for
payment of its claim for Merger Consideration.
(e) No Liability. Neither Purchaser nor the Surviving Company
shall be liable to any Person for any part of the Merger Consideration
or for unpaid dividends or for any distributions with respect thereto
delivered to a public official pursuant to any applicable abandoned
property, escheat or similar Law (as defined herein). Any amounts
remaining unclaimed by holders of any such shares five years after the
Effective Time of the Merger or at such earlier date as is immediately
prior to the time at which such amounts would otherwise escheat to, or
become property of, any federal, state, local government, or agency or
any court, regulatory or administrative agency or commission or other
governmental authority or instrumentality, domestic or foreign (a
"Governmental Entity"), shall, to the extent permitted by applicable
Law, become the property of the Surviving Company free and clear of any
claims or interest of any such holders or their successors, assigns or
personal representatives previously entitled thereto.
(f) Lost Certificates. If any Certificate shall have been lost,
stolen, defaced or destroyed, upon the making of an affidavit of that
fact by the Person claiming such Certificate to be lost, stolen,
defaced or destroyed and, if required by the Surviving Company, the
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posting by such Person of a bond in such reasonable amount as the
Surviving Company may direct as indemnity against any claim that may be made
against it with respect to such Certificate, the Paying Agent shall pay
in respect of such lost, stolen, defaced or destroyed Certificate, the
Merger Consideration.
(g) Withholding Rights. Purchaser, the Surviving Company or the
Paying Agent, as applicable, shall be entitled to deduct and withhold
from the consideration otherwise payable pursuant to this Agreement to
any holder of Shares of Beneficial Interest, such amounts as it is
required to withhold with respect to such payments under the Code (as
defined herein) or any other provision of state, local or foreign tax
law.
(h) Objectors' Rights to an Appraisal. Anything in this Agreement
to the contrary notwithstanding, each Share of Beneficial Interest
outstanding immediately prior to the Effective Time of the Merger and
held by a holder who has filed with UMT a written objection to the
Merger, who has not voted in favor of the Merger or consented thereto
in writing and who has demanded appraisal (each a "Dissenting UMT
Holder") of such Share of Beneficial Interest in accordance with
Section 8-501.1(j) of the MRL and Sections 3-201 et seq. of the MGCL,
to the extent such sections of the MRL and MGCL provide holders of
Shares of Beneficial Interest with appraisal rights in the Merger
("Dissenting UMT Shares"), shall not be converted into or be
exchangeable for the right to receive the Merger Consideration, unless
and until such Dissenting UMT Holder fails to perfect or withdraws or
otherwise loses his right to appraisal and payment under the MRL and
the MGCL. If, after the Effective Time of the Merger, any such
Dissenting UMT Holder fails to perfect or withdraws or loses his right
to appraisal, such Dissenting UMT Shares shall thereupon be treated as
if such Shares of Beneficial Interest had been converted as of the
Effective Time of the Merger into the right to receive the Merger
Consideration, if any, to which such Dissenting UMT Holder is entitled,
without interest or dividends thereon (other than pursuant to the terms
of any instrument constituting part of the Merger Consideration). UMT
shall give Purchaser (i) prompt notice of any demands received by UMT
for appraisal of Shares of Beneficial Interest, attempted written
withdrawals of such demands, and any other instruments served pursuant
to Maryland Law and received by UMT relating to the rights of holders
of Shares of Beneficial Interest to appraisal of their Shares of
Beneficial Interest, and (ii) the opportunity to direct all
negotiations and proceedings with respect to any exercise of such
appraisal rights under Maryland Law. UMT shall not, except with the
prior written consent of Purchaser, voluntarily make any payment with
respect to any demands for payment of fair value for Shares of
Beneficial Interest, offer to settle or settle any such demands or
approve any withdrawal of any such demands.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
SECTION 2.1 Representations and Warranties of UMT. UMT
represents and warrants to Purchaser as follows:
(a) Organization, Standing and Trust Power of UMT. UMT is a
real estate investment trust formed, validly existing and in good
standing under the Laws of the State of Maryland and has the requisite
trust power and authority to own, lease and operate its properties and
to carry on its business as now being conducted. UMT is duly qualified
or licensed to do business and is in good standing in each jurisdiction
in which the nature of the business it is conducting makes such
qualification or licensing necessary, other than in such jurisdictions
where the failure to be so qualified or licensed, individually or in
the aggregate, would not have or would not reasonably be expected to
have a UMT Material Adverse Effect. For the purposes of this Agreement,
a "UMT Material Adverse Effect" is any event, change, circumstance or
effect which would have or would reasonably be expected to have a
material adverse effect on (i) the business, assets, liabilities,
properties, condition (financial or otherwise) or results of operations
of UMT taken as a whole, or (ii) the ability of UMT to perform any of
its obligations hereunder or consummate the transactions contemplated
hereby, provided that a UMT Material Adverse Effect shall not include
any change with respect to UMT resulting from orattributable to (X)
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general national, international or regional economic or financial
conditions, (Y) the announcement, pendency or consummation of the
transactions contemplated by this Agreement or the other Transaction
Documents, or (Z) conditions generally affecting the
industries in which UMT operates. UMT has heretofore made available to
Purchaser true, complete and correct copies of UMT's Declaration of
Trust, as amended (the "Declaration of Trust"), and Bylaws, as amended
(the "UMT Bylaws").
(b) Capital Structure.
(i) As of the date of this Agreement, the authorized shares
of beneficial interest of UMT consists of 100,000,000 Shares of
Beneficial Interest, 7,034,770 of which were issued and outstanding as
of June 30, 2005, 2005.
(ii) Set forth in Schedule 2.1(b)(ii) of the UMT Disclosure
Letter is a true and complete list of the following:
(A) each UMT Option granted under any formal or informal
arrangement (written or otherwise); and
(B) all other warrants or other rights to acquire Shares of
Beneficial Interest, all share appreciation rights, phantom shares,
dividend equivalents, performance units and performance shares which
are outstanding on the date of this Agreement.
(iii) All outstanding Shares of Beneficial Interest of UMT
are duly authorized, validly issued, fully paid and non-assessable and
not subject to preemptive rights. There are no bonds, debentures, notes
or other indebtedness of UMT having rights to vote (or convertible
into, or exchangeable for, securities having the right to vote) on any
matters on which shareholders of UMT may vote.
(iv) Except as set forth in this Section 2.1(b) or in
Schedule 2.1(b)(ii) of the UMT Disclosure Letter, there are no
outstanding securities, options, warrants, calls, rights, commitments,
agreements, arrangements or undertakings of any kind to which UMT is a
party or by which it is bound, obligating UMT to issue, deliver or
sell, or cause to be issued, delivered or sold, additional Shares of
Beneficial Interest, voting securities or other ownership interests of
UMT to issue, grant, extend or enter into any such security, option,
warrant, call, right, commitment, agreement, arrangement or
undertaking.
(v) All dividends on Shares of Beneficial Interest which
have been declared prior to the date of this Agreement have been paid
in full.
(vi) Set forth on Schedule 2.1(b)(vi) of the UMT Disclosure
Letter is a list of each registration rights agreement or other
agreement between UMT and any other Person which sets forth the rights
of any such Person to cause the registration of any securities of UMT
pursuant to the Securities Act of 1933, as amended (the "Securities
Act"), or pursuant to the securities laws of any State in the United
States of America (the "Blue Sky Laws").
(c) Authority; Non-Contravention; Consents.
(i) UMT has the requisite trust power and authority to
enter into this Agreement and, subject to the requisite UMT shareholder
approval of the Merger Agreement, the Merger, the amendments to UMT's
Declaration of Trust as described in Exhibit C (the "DOT Amendments")
and any other matters reasonably and timely requested by any other
party to effectuate the transactions contemplated by this Agreement and
the other Transaction Documents (collectively, the "UMT Shareholder
Approval"), to consummate the transactions contemplated by this
Agreement to which UMT is a party. The execution and delivery of this
Agreement by UMT and the consummation by UMT of the transactions
contemplated by this Agreement to which UMT is a party have been duly
authorized by all necessary action on the part of UMT, except for and
subject to the UMT Shareholder Approval. This Agreement has been duly
executed and delivered by UMT and constitutes a valid and binding
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obligation of UMT, enforceable against UMT in accordance with and subject
to its terms, subject to applicable bankruptcy, insolvency, moratorium
or other similar laws relating to creditors' rights and general principles
of equity.
(ii) The execution and delivery of this Agreement by UMT does
not, and the consummation of the transactions contemplated by this
Agreement to which UMT is a party and compliance by UMT with the
provisions of this Agreement will not, conflict with, or result in any
violation of, or default (with or without notice or lapse of time, or
both) under, or give rise to a right of termination, cancellation or
acceleration of any material obligation or cause the material loss of a
benefit under, or result in the creation of any Lien upon any of the
properties or assets of UMT under, (A) the Declaration of Trust or UMT
Bylaws, each as amended or supplemented, (B) any loan or credit
agreement, note, bond, mortgage, indenture, merger or other acquisition
agreement, reciprocal easement agreement, lease or other agreement,
instrument, permit, concession, franchise, license or other Material
Contract (as defined in Section 2.1(f) below) applicable to UMT or its
properties or assets or (C) subject to the governmental filings and
other matters referred to in the following sentence, any judgment,
order, decree, statute, law, ordinance, rule or regulation
(collectively, "Laws") applicable to UMT, or its properties or assets,
other than, in the case of clause (B) or (C), any such conflicts,
violations, defaults, rights, loss or Liens that individually or in the
aggregate would not be reasonably expected to (x) have a UMT Material
Adverse Effect or (y) prevent the consummation of the transactions
contemplated by this Agreement.
No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Entity is
required by or with respect to UMT in connection with the execution and
delivery of this Agreement by UMT or the consummation by UMT of the
transactions contemplated by this Agreement, except for (1) the filing
by UMT with the Securities and Exchange Commission (the "SEC") of the
Registration Statement (as defined herein), (2) the filing of the
Articles of Merger with, and the acceptance for record of the Articles
of Merger by, the Department, (3) the filing of the Certificate of
Merger with, and the acceptance for the record of the Certificate of
Merger by, the Delaware SOS, and (4) such other consents, approvals,
orders, authorizations, registrations, declarations and filings:
(X) as are set forth in Schedule 2.1(c)(ii) of the UMT
Disclosure Letter;
(Y) as may be required under (i) the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act"),
(ii) laws requiring transfer, recordation or gains tax filings,
(iii) federal, state or local environmental laws, or (iv) the Blue Sky
laws, to the extent applicable; or
(Z) which, if not obtained or made, would not prevent or
delay in any material respect the consummation of any of the
transactions contemplated by this Agreement or otherwise prevent UMT
from performing its obligations under this Agreement in any material
respect or reasonably be expected to have, individually or in the
aggregate, a UMT Material Adverse Effect.
(d) Financial Statements. The consolidated financial statements
of UMT included in the documents filed by UMT with the SEC since
December 31, 2000 through the date hereof (the "UMT SEC Documents")
complied as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with
respect thereto, have been prepared in accordance with generally
accepted accounting principles ("GAAP") (except, in the case of
unaudited statements, as permitted by the applicable rules and
regulations of the SEC) applied on a consistent basis during the
periods involved (except as may be indicated in the notes thereto) and
fairly presented in all material respects, in accordance with the
applicable requirements of GAAP and the applicable rules and
regulations of the SEC, the consolidated financial position of UMT and
any UMT Subsidiaries taken as a whole, as of the dates thereof and the
consolidated results of operations and cash flows for the periods then
ended (subject, in the case of unaudited statements, to normal year end
audit adjustments). Since December 31, 2004, there has not been a
material adverse effect
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on the business, assets, liabilities, properties, condition
(financial or otherwise) or results of operations of UMT and any UMT
Subsidiaries taken as a whole.
(e) No Undisclosed Material Liabilities. Except as disclosed in
the UMT SEC Documents, or as set forth in Schedule 2.1(e) of the UMT
Disclosure Letter, there are no liabilities or obligations of UMT,
whether (x) accrued, contingent, absolute or determined or
(y) otherwise required by GAAP to be set forth on a balance sheet of
UMT, other than: (i) liabilities adequately provided for on the balance
sheet of UMT dated as of June 30, 2005 (including the notes thereto),
or (ii) liabilities incurred in the ordinary course of business
subsequent to June 30, 2005 that would not have or would not reasonably
be expected to have a UMT Material Adverse Effect.
(f) No Default. Except as set forth in Schedule 2.1(f) of the
UMT Disclosure Letter, UMT is not in default or violation (and no event
has occurred which, with notice or the lapse of time or both, would
constitute a default or violation) of, and no notice of any default or
acceleration of Indebtedness has been received from any lender in
connection with, any term, condition or provision of (i) the
Declaration of Trust or the UMT Bylaws, (ii) any Material Contract (as
defined herein), or (iii) any order, writ, injunction, decree, statute,
rule or regulation applicable to UMT, except for, in the case of
(ii) and (iii), defaults or violations which, individually or in the
aggregate, would not reasonably be expected to have a UMT Material
Adverse Effect. Schedule 2.1(f) of the UMT Disclosure Letter includes
an explanation of the nature of any such default disclosed therein,
penalties associated therewith and actions taken by UMT, if any, to
cure or renegotiate said contracts.
For purposes of this Agreement, with respect to UMT, "Material
Contracts" shall mean (A) any loan or credit agreement, indenture,
note, bond, debenture or any other document or agreement evidencing a
capitalized lease obligation or other Indebtedness to any Person,
including any such Indebtedness that may be incurred pursuant to an
agreement already executed, other than Indebtedness in a principal
amount less than $100,000 in the aggregate, (B) each material
commitment, contractual obligation, borrowing, capital expenditure,
agreement to acquire real property, or transaction entered into by UMT
which may result in total payments by UMT in excess of $100,000, and
(C) all other contracts and agreements that are material to UMT, or the
conduct of the business of UMT, or the absence of which would, in the
aggregate, have a UMT Material Adverse Effect.
(g) Litigation. There is no suit, action or proceeding pending,
or, to the Knowledge of UMT, threatened against or affecting UMT or any
UMT Subsidiary that would be likely to prevent the consummation of the
transactions contemplated by this Agreement.
(h) Taxes. This Agreement shall constitute UMT's plan of
liquidation within the meaning of Section 562(b)(1) of the Code and
UMT's Board of Trustees will adopt this Agreement as such a plan of
liquidation prior to the date on which the Effective Time occurs.
(i) Opinion of Financial Advisor. The Board of Trustees of UMT
has received the opinion of Southwest Securities, Inc. (the "Financial
Advisors"), dated as of the date of this Agreement, to the effect that,
as of such date, the Merger Consideration is fair from a financial
point of view to the holders of Shares of Beneficial Interest (and such
opinion of the Financial Advisors has not been withdrawn), a copy of
which opinion will promptly be made available to Purchaser after
receipt by the Board of Trustee of UMT.
(j) Vote Required. The affirmative vote of the holders of
eighty percent (80%) of the outstanding Shares of Beneficial Interest
other than those shares held by affiliates of Purchaser, the
affirmative vote of a majority of the trustees of UMT and the and the
unanimous vote of the independent trustees of UMT, are the only vote
and approval required to approve the Merger, the DOT Amendments and the
other transactions contemplated by the Transaction Documents.
(k) Beneficial Ownership of Shares of Beneficial Interest. UMT
does not "beneficially own" (as defined in Rule 13d-3 promulgated under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"))
any of the outstanding Shares of Beneficial Interest.
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(l) No Competing Transactions. None of UMT, any UMT Subsidiary
or Affiliate or any of their respective Representatives is engaged in
any activities, discussions or negotiations with any parties with
respect to any possible Competing Transaction.
(m) Proxy Statement/ Prospectus; Registration Statement. None
of the information regarding UMT or its Subsidiaries provided by UMT
for inclusion in, or incorporation by reference into, the Proxy
Statement/ Prospectus or the Registration Statement will, in the case
of the definitive Proxy Statement/ Prospectus or any amendment or
supplement thereto, at the time of the mailing of the definitive Proxy
Statement/ Prospectus and any amendment or supplement thereto and at
the time of the UMT Shareholders Meeting, or, in the case of the
Registration Statement, at the time it becomes effective, contain an
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 the light of the circumstances under which they
are made, not misleading.
(n) Dissenter's Rights. After giving effect to the DOT
Amendments, except as provided under Section 8-501.1(j) of the MRL with
respect to the Merger, no dissenters' or appraisal rights shall be
available to holders of any securities of UMT or any Affiliates of UMT
with respect to the Merger or the other transactions contemplated by
the Transaction Documents.
(o) State Takeover Statutes; Partners Solicitation Materials.
UMT has approved, or caused to be approved, this Agreement and the
Transaction Documents and the transactions contemplated hereby and
thereby and has taken all actions and done all things necessary to
exempt this Agreement, the Transaction Documents, the Merger and the
transactions contemplated by this Agreement and the Transaction
Documents from operation of any "fair price," "business combination,"
"moratorium," "control share acquisition," or any other takeover or
anti-takeover statute or similar statute enacted under federal or state
Laws of the United States or similar statute or regulation or any
"rights plan" or "excess share" provisions (a "Takeover Statute"),
including all such action such that each such Takeover Statute does not
apply to this Agreement, the Transaction Documents, the Merger, or any
of the transactions contemplated hereby or thereby.
SECTION 2.2 Representations and Warranties of Purchaser. Each
of General Partner and Purchaser represents and warrants to UMT as
follows:
(a) Organization and Standing. Purchaser is a limited
partnership, and General Partner is a corporation, and each is duly
formed, validly existing and in good standing under the laws of the
State of Delaware and has the requisite power and authority to own,
lease and operate its properties and to carry on its business as now
being conducted. Purchaser has made available to UMT complete and
correct copies of its certificate of limited partnership and
partnership agreement, and General Partner has made available to UMT
complete and correct copies of its Certificate of Incorporation and
Bylaws (including all amendments thereto through the date hereof). Each
of General Partner and Purchaser is duly qualified or licensed to do
business and in good standing in each jurisdiction in which the nature
of their businesses or the ownership, operation or leasing of their
properties makes such qualification or licensing necessary, other than
in such jurisdictions where the failure to be so qualified or licensed
individually or in the aggregate, would not have a Purchaser Material
Adverse Effect. For purposes of this Agreement, a "Purchaser Material
Adverse Effect" is any event, change, circumstance or effect which
would have or would reasonably be expected to have a material adverse
effect on (i) the business, assets, liabilities, properties, condition
(financial or otherwise) or results of operations of the Purchaser
taken as a whole, or (ii) the ability of the Purchaser to perform any
of its obligations hereunder or consummate the transactions
contemplated hereby; provided that a Purchaser Material Adverse Effect
shall not include any change with respect to the Purchaser resulting
from or attributable to (X) general national, international or regional
economic or financial conditions, (Y) the announcement, pendency or
consummation of the transactions contemplated by this Agreement or the
other Transaction Documents, or (Z) conditions generally affecting the
industries in which the Purchaser operates. The Purchaser has
heretofore made available to UMT true, complete and correct copies of
the Purchaser's Agreement of Limited Partnership.
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(b) Capital Structure.
(i) As of the date of this Agreement:
(A) the authorized capital stock of the General Partner
consists of 1,000 shares of Common Stock, par value $.01 per share, 300
of which are issued and outstanding. Hollis M. Greenlaw, Todd F. Etter
and Craig Pettit each hold 100 shares of Common Stock of the General
Partner;
(B) the issued and outstanding limited partnership
interests of Purchaser consist of 31,532 Class C Units and 9,819.2
Class D Units. In addition, the Purchaser has granted Class EIA Units
to the persons described in Schedule 2.2(b)(i) of the Purchaser
Disclosure Letter; and
(C) General Partner is the sole general partner of
Purchaser.
(ii) Set forth in Schedule 2.2(b)(ii) of the Purchaser
Disclosure Letter is a true and complete list of the following:
(A) each holder of Class C Units and Class D Units of
Purchaser;
(B) all other warrants or other rights to acquire
Purchaser's Class C Units and Class D Units or other ownership interest
in Purchaser, and all share appreciation rights, phantom shares,
dividend equivalents, performance units and performance shares which
are outstanding on the date of this Agreement.
(iii) All Class C Units, Class D Units and Class EIA Units of
Purchaser are duly authorized, validly issued, fully paid and non-
assessable and not subject to preemptive rights. There are no bonds,
debentures, notes or other indebtedness of Purchaser having rights to
vote (or convertible into, or exchangeable for, securities having the
right to vote) on any matters on which shareholders of Purchaser may
vote.
(iv) Except as set forth in this Section 2.2(b) or in
Schedule 2.2(b) of the Purchaser Disclosure Letter, there are no
outstanding securities, options, warrants, calls, rights, commitments,
agreements, arrangements or undertakings of any kind to which Purchaser
or any Purchaser Subsidiary is a party or by which such entity is
bound, obligating Purchaser or any Purchaser Subsidiary to issue,
deliver or sell, or cause to be issued, delivered or sold, additional
Class C Units or Class D Units, voting securities or other ownership
interests of Purchaser or any Purchaser Subsidiary to issue, grant,
extend or enter into any such security, option, warrant, call, right,
commitment, agreement, arrangement or undertaking.
(v) Set forth on Schedule 2.2(b)(vi) of the Purchaser
Disclosure Letter is a list of each registration rights agreement or
other agreement between Purchaser and any other Person which sets forth
the rights of any such Person to cause the registration of any
securities of Purchaser pursuant to the Securities Act or any Blue Sky
Laws.
(c) Authority; No Violations; Consents and Approvals.
(i) Each of General Partner and Purchaser has all requisite
power and authority to enter into the Transaction Documents to which
they are parties and to consummate the transactions contemplated hereby
or thereby. The execution and delivery of the Transaction Documents and
the consummation of the transactions contemplated hereby or thereby
have been duly authorized by all necessary corporate action on the part
of General Partner and all necessary partnership action on the part of
the Purchaser. General Partner has received unanimous approval from its
Board of Directors to approve the Agreement, the Merger, the
Transaction Documents and the transactions contemplated hereby and
thereby and no consent or approval of its shareholders is required for
any of such transactions.
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(ii) The Transaction Documents to which General Partner and
Purchaser are or will be parties have been or will be duly executed and
delivered by each of General Partner and Purchaser, as the case may be,
and assuming the Transaction Documents to which General Partner,
Purchaser or any of the Purchaser Subsidiaries is a party constitute
the valid and binding obligation of General Partner, Purchaser or
Purchaser Subsidiary, as the case may be, constitute or will constitute
a valid and binding obligation of each of General Partner, Purchaser
and Purchaser Subsidiary, as the case may be, enforceable in accordance
with its terms, subject as to enforceability, to bankruptcy,
insolvency, reorganization, moratorium and other Laws of general
applicability relating to or affecting creditors' rights and to general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at Law).
(iii) The execution and delivery of the Transaction Documents
to which it is a party do not, and the consummation of the transactions
contemplated hereby or thereby, and compliance with the provisions
hereof or thereof, will not, conflict with, or result in any violation
of, or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancellation or
acceleration of any material obligation, or give rise to a right of
purchase under, result in the creation of any Lien upon any of the
properties or assets of General Partner or Purchaser or any of the
Purchaser Subsidiaries under, require the consent or approval of any
third-party lender or otherwise result in a material detriment to
General Partner or Purchaser or any of the Purchaser Subsidiaries
under, any provision of (A) the Certificate of Incorporation and Bylaws
of General Partner, or the Certificate of Formation and Limited
Partnership Agreement of Purchaser or any provision of the comparable
charter or organizational documents of any of the Purchaser
Subsidiaries, (B) any Material Contract applicable to General Partner
or Purchaser or any of the Purchaser Subsidiaries, the respective
properties or assets of General Partner or Purchaser, or any guarantee
by General Partner or Purchaser or any of the Purchaser Subsidiaries,
(C) any joint venture or other ownership arrangement to which General
Partner, Purchaser or any of the Purchaser Subsidiaries is a party or
are parties, or (D) assuming the consents, approvals, authorizations or
permits and filings or notifications referred to in Section 2.2(c)(iv)
are duly and timely obtained or made, any judgment, order, decree or
Law applicable to General Partner or Purchaser or any of the Purchaser
Subsidiaries or any of their respective properties or assets, other
than, in the case of clauses (B), (C) and (D), any such conflicts,
violations, defaults, rights, Liens or detriments that, individually or
in the aggregate, would not reasonably be expected to materially impair
the ability of General Partner or Purchaser to perform its obligations
hereunder or thereunder or prevent the consummation of any of the
transactions contemplated hereby or thereby or result in a Purchaser
Material Adverse Effect.
For purposes of this Agreement, with respect to General
Partner, Purchaser and each Purchaser Subsidiary, "Material Contracts"
shall mean (i) any loan or credit agreement, indenture, note, bond,
debenture or any other document or agreement evidencing a capitalized
lease obligation or other Indebtedness to any Person, including any
such Indebtedness that may be incurred pursuant to an agreement already
executed, other than Indebtedness in a principal amount less than
$100,000 in the aggregate, (ii) each material commitment, contractual
obligation, borrowing, capital expenditure, agreement to acquire real
property, or transaction entered into by General Partner, Purchaser or
a Purchaser Subsidiary which may result in total payments by Purchaser
or any Purchaser Subsidiary in excess of $100,000, or (iii) all other
contracts and agreements that are material to General Partner,
Purchaser and the Purchaser Subsidiaries, taken as a whole, or the
conduct of the business of General Partner, Purchaser and the Purchaser
Subsidiaries, taken as a whole, or the absence of which would, in the
aggregate, have a Purchaser Material Adverse Effect.
(iv) No consent, approval, order or authorization of, or
registration, declaration or filing with, or permit from any
Governmental Entity is required by or with respect to General Partner
or Purchaser or any of the Purchaser Subsidiaries in connection with
the execution and delivery by General Partner or Purchaser of the
Transaction Documents to which Purchaser is a party or
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the consummation by Purchaser of the transactions contemplated
hereby or thereby, except for: (1) the filing with the SEC of such
reports under Section 13(a) of the Exchange Act and such other
compliance with the Securities Act and the Exchange Act and the rules
and regulations thereunder as may be required in connection with this
Agreement and the transactions contemplated hereby; (2) the filing of
the Certificate of Merger with, and acceptance for record of, the
Certificate of Merger by, the Delaware SOS; (3) the filing of the
Articles of Merger with, and the acceptance for record of, the Articles
of Merger by the Department, and (4) any such consent, approval, order,
authorization, registration, declaration, filing or permit that the
failure to obtain or make would not reasonably be expected to
materially impair the ability of General Partner or Purchaser to
perform its obligations hereunder or prevent the consummation of any of
the transactions contemplated hereby or thereby or result in a
Purchaser Material Adverse Effect.
(d) Litigation. There is no suit, action or proceeding pending,
or, to the Knowledge of General Partner or Purchaser, threatened
against or affecting Purchaser or any other Purchaser Subsidiary that
would be likely to prevent the consummation of the transactions
contemplated by this Agreement.
(e) Financial Condition of Purchaser; Operating Agreements.
General Partner has provided to UMT true, complete and correct copies
of the audited consolidated financial statements of Purchaser and the
Purchaser Subsidiaries for the fiscal years ended December 31, 2003 and
December 31, 2004. Such financial statements have been prepared in
accordance with GAAP applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto) and fairly
presented, in accordance with applicable requirements of GAAP (subject,
in the case of the unaudited financial statements, to normal recurring
adjustments, none of which are material, individually or in the
aggregate), the consolidated financial position of Purchaser and the
Purchaser Subsidiaries as of their respective dates and the
consolidated statements of income and the consolidated statements of
cash flows of Purchaser and the Purchaser Subsidiaries for the periods
presented therein. Since December 31, 2004, there has not been a
material adverse effect on the business, assets, liabilities,
properties, condition (financial or otherwise) or results of operations
of General Partner, Purchaser and the Purchaser Subsidiaries taken as a
whole.
(f) No Undisclosed Material Liabilities. Except as disclosed in
the financial statements referred to in Section 2.2(e), as set forth in
Schedule 2.2(f) of the Purchaser Disclosure Letter or as otherwise
would not reasonably be expected to have a Purchaser Material Adverse
Effect, there are no liabilities of Purchaser or any of the Purchaser
Subsidiaries, whether (x) accrued, contingent, absolute or determined,
or (y) otherwise required by GAAP to be set forth in the balance sheet
of the Purchaser, other than:
(i) liabilities adequately provided for on the balance sheet
of Purchaser dated as of December 31, 2004 (including the notes
thereto); or
(ii) liabilities incurred in the ordinary course of business
subsequent to December 31, 2004.
(g) No Default. Except as set forth in Schedule 2.2(g) of the
Purchaser Disclosure Letter, neither Purchaser nor any of the Purchaser
Subsidiaries is in default or violation (and no event has occurred
which, with notice or the lapse of time or both, would constitute a
default or violation) of any term, condition or provision of (i) the
Certificate of Limited Partnership or Limited Partnership Agreement or
any of the organizational documents of any of the Purchaser
Subsidiaries, (ii) any loan or credit agreement, note, or any bond,
mortgage or indenture, to which Purchaser or any of the Purchaser
Subsidiaries is now a party or by which Purchaser or any of the
Purchaser Subsidiaries or any of their respective properties or assets
is bound, or (iii) any order, writ, injunction, decree, statute, rule
or regulation applicable to Purchaser or any of the Purchaser
Subsidiaries, except in the case of (ii) and (iii) for defaults or
violations which, individually or in the aggregate, would not
reasonably be expected to have a Purchaser Material Adverse Effect.
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(h) Class B Indenture. Purchaser has provided UMT with a
complete and correct copy of the indenture under which its Class B
Junior Subordinated Secured Debentures have been issued. As of the date
of this Agreement, there are Class B Junior Subordinated Secured
Debentures outstanding with an aggregate principal value of no more
than $3,000,000.
(i) Proxy Statement/ Prospectus; Registration Statement. None
of the information regarding Purchaser or any of the Purchaser
Subsidiaries provided by Purchaser for inclusion in, or incorporation
by reference into, the Proxy Statement/ Prospectus or the Registration
Statement will, in the case of the definitive Proxy Statement/
Prospectus or any amendment or supplement thereto, at the time of the
mailing of the definitive Proxy Statement/ Prospectus and any amendment
or supplement thereto and at the time of the UMT Shareholders Meeting,
or, in the case of the Registration Statement, at the time it becomes
effective, contain an 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 the light of the circumstances
under which they are made, not misleading.
ARTICLE III
COVENANTS RELATING TO
CONDUCT OF BUSINESS PENDING THE MERGER
The parties agree that, at all times before the earlier of
(i) the Closing or (ii) the termination of this Agreement, they will
comply with all covenants and provisions of this Article III, except to
the extent (a) the other party may otherwise consent in writing,
(b) otherwise required by applicable Law or (c) otherwise required or
permitted hereby.
SECTION 3.1 Conduct of Business by UMT.
(a) UMT shall use all commercially reasonable efforts to carry on
its businesses in the usual, regular and ordinary course in
substantially the same manner as heretofore conducted and consistent
with past practice and use commercially reasonable efforts to preserve
intact (i) its current business organization, goodwill, assets, ongoing
businesses, and (ii) UMT's status as a REIT within the meaning of the
Code. UMT will promptly deliver to Purchaser true and correct copies of
any report, statement, schedule or other document filed with the SEC by
UMT subsequent to the date of this Agreement.
(b) Without limiting the generality of the foregoing, except as
set forth in Schedule 3.1(b) of the UMT Disclosure Letter, as otherwise
contemplated by this Agreement or to the extent consented to in writing
in advance by Purchaser, UMT shall not engage in, authorize or agree
to:
(i) take any action that would prevent or materially delay the
consummation of the transactions contemplated by this Agreement or the
other Transaction Documents;
(ii) (A) declare, set aside or pay any dividends on, or make
any other distributions in respect of, any of UMT's Shares of
Beneficial Interest or any other equity interests in UMT, except
(1) the authorization and payment of monthly dividends with respect to
the UMT Shares of Beneficial Interest on any monthly anniversaries of
prior dividend record and payment dates in accordance with past
practice, and at the same rate per share as the most recent monthly
dividend, and (2) any distribution (or an increase in a distribution)
by UMT that is the minimum amount necessary for UMT to maintain REIT
status, or avoid the incurrence of any Taxes under Section 857 of the
Code, avoid the imposition of any excise Taxes under Section 4981 of
the Code;
(B) split, combine or reclassify any Shares of Beneficial
Interest or other equity interests or issue or authorize the issuance
of any other securities in respect of, in lieu of or in substitution
for shares of such Shares of Beneficial Interest or other equity
interests, or take any similar action, or
(C) purchase, redeem or otherwise acquire any Shares of
Beneficial Interest or the partnership interests, stock or other equity
interests in any UMT Subsidiary or any options,
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warrants or rights to acquire, or security convertible into, Shares
of Beneficial Interest or the partnership interests, stock or other
equity interests in any UMT Subsidiary;
(iii) issue, deliver, sell or grant any option or other
material right in respect of any Shares of Beneficial Interest, any
other voting or redeemable securities of UMT or any UMT Subsidiary or
any securities convertible into, or any rights, warrants or options to
acquire, any such shares, voting securities or convertible or
redeemable securities, except in accordance with past practice;
(iv) amend the Declaration of Trust or the UMT Bylaws or any
other comparable charter or organizational documents of any UMT
Subsidiary, except as otherwise contemplated by this Agreement;
(v) merge, consolidate or consummate any other business
combination transaction, with any Person;
(vi) acquire, enter into any option to acquire, or exercise an
option or other right or election or enter into any other commitment or
contractual obligation (each, a "Commitment") for the acquisition of
any real property (other than in the ordinary course of business,
consistent with past practices) or other transaction involving
nonrefundable deposits; or incur additional Indebtedness or guarantee
the Indebtedness of another Person;
(vii) sell, mortgage, lease, subject to Lien or otherwise
encumber or dispose of any material assets, or assign or encumber the
right to receive income, dividends, distributions and the like or agree
to do any of the foregoing;
(viii) issue or sell any debt securities or warrants or other
rights to acquire debt securities of UMT or any UMT Subsidiary, enter
into any "keep well" or other agreement to maintain any financial
statement condition of another Person or enter into any arrangement
having the economic effect of any of the foregoing;
(ix) make or rescind any material election relating to Taxes
(unless UMT reasonably determines that such action is required by Law
or necessary to preserve UMT's status as a REIT or the partnership
status of any UMT Subsidiary which files Tax Returns as a partnership
for federal tax purposes); provided, however, that nothing in this
Agreement shall preclude UMT from designating dividends paid by it as
"capital gain dividends" within the meaning of Section 857 of the Code;
(x) (A) change in any material respect (except as may be
required by Law) any of its methods, principles or practices of
accounting in effect or (B) settle or compromise any claim, action,
suit, litigation, proceeding, arbitration, investigation, audit or
controversy relating to Taxes, except in the case of settlements or
compromises relating to Taxes on real property or sales Taxes in an
amount not to exceed, individually or in the aggregate, $25,000, or
change any of its methods of reporting income or deductions for federal
income tax purposes from those employed in the preparation of its
federal income Tax Return for the taxable year ended December 31, 2002,
except as may be required by the SEC, changes in applicable Law or
GAAP;
(xi) adopt any new employee benefit plan, incentive plan,
severance plan, bonus plan, stock option or similar plan, grant new
stock appreciation rights, or enter into or amend any employment
agreement or similar agreement or arrangement or grant or become
obligated to grant any increase in the compensation of officers or
employees, except such changes as are required by Law or as deemed
necessary by UMT to bring any plan, policy, arrangement or award (the
"Deferred Arrangements") in compliance with the requirements of
Section 409A of the Code as amended by the American Jobs Creation Act
of 2004 (the "Act") or to preserve grandfathered status of amounts
accrued under the Deferred Arrangements under Section 885(d) of the
Act;
(xii) except as otherwise permitted or contemplated by this
Agreement, authorize, recommend, propose or announce an intention to
adopt a plan of complete or partial liquidation or dissolution of UMT
or any UMT Subsidiary;
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(xiii) fail to use commercially reasonable efforts to comply or
remain in compliance with all terms and provisions of any agreement
relating to any outstanding Indebtedness of UMT or any UMT Subsidiary;
(xiv) enter into any agreement that contains a change of
control or similar provision that would be violated by the consummation
of the transactions contemplated hereunder;
(xv) enter into any agreements or contracts, or agree to amend
such agreements or contracts, with a value of $100,000 in the
aggregate, other than in the ordinary course of business consistent
with past practices; or
(xvi) take, permit or cause any action or omission inconsistent
with any of the foregoing covenants in this Section 3.1.
SECTION 3.2 Conduct of Business by General Partner and
Purchaser.
(a) General Partner and Purchaser shall, and shall cause each of
the Purchaser Subsidiaries to, use all commercially reasonable efforts
to, carry on its business in the usual, regular and ordinary course in
substantially the same manner as heretofore conducted and, to the
extent consistent therewith, use commercially reasonable efforts to
preserve intact in all material respects its current business
organization, goodwill and ongoing businesses. General Partner will
promptly notify UMT of any litigation having, to the knowledge of
General Partner, potential liability to General Partner, Purchaser or
any of the Purchaser Subsidiaries in excess of $50,000 or any
complaint, investigation or hearing, of which General Partner has
Knowledge, by a Governmental Entity involving General Partner,
Purchaser or any of the Purchaser Subsidiaries.
(b) Without limiting the generality of the foregoing, except as
set forth in Schedule 3.2(b) of the Purchaser Disclosure Letter, as
otherwise contemplated by this Agreement or to the extent consented to
by UMT, which consent shall not be unreasonably withheld or delayed,
neither General Partner nor Purchaser shall engage in or authorize or
agree to:
(i) take any action that would prevent or materially delay the
consummation of the transactions contemplated by this Agreement or the
other Transaction Documents;
(ii) merge, consolidate or enter into any other business
combination transaction with any Person, other than any such
transactions that have an aggregate transactional value of $100,000 or
less;
(iii) except as otherwise permitted or contemplated by this
Agreement, authorize, recommend, propose or announce an intention to
adopt a plan of complete or partial liquidation or dissolution of
General Partner, Purchaser or any of the Purchaser Subsidiaries; or
(iv) agree in writing or otherwise to take any action
inconsistent with any of the foregoing.
SECTION 3.3 Preparation of the Proxy Statement/ Prospectus;
Shareholders' Meeting.
(a) Proxy Statement/ Prospectus and Registration Statement.
(i) Promptly following the execution of this Agreement, UMT and
Purchaser shall prepare the Proxy Statement/ Prospectus, and Purchaser
shall prepare and file with the SEC the Registration Statement, in
which the Proxy Statement/ Prospectus will be included. UMT shall
furnish to Purchaser all information concerning it as is required by
the SEC in connection with the preparation of the Registration
Statement. Purchaser shall use its commercially reasonable efforts to
have the Registration Statement declared effective under the Securities
Act as promptly as practicable after such filing and to keep the
Registration Statement effective as long as is necessary to consummate
the Merger, and UMT shall use its commercially reasonable efforts to
assist Purchaser in this regard. The parties shall promptly provide
copies, consult with each other and prepare written responses with
respect to any written comments received from the SEC with respect to
the Proxy Statement/ Prospectus and the Registration Statement and
advise one another of any oral comments with respect to the Proxy
Statement/ Prospectus and the Registration Statement received from the
SEC. The
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parties will cooperate in preparing and filing with the SEC any
necessary amendment or supplement to the Proxy Statement/ Prospectus or
the Registration Statement. No amendment or supplement to the Proxy
Statement/ Prospectus or Registration Statement shall be filed without
the approval of both parties, which approvals shall not be unreasonably
withheld or delayed. The Proxy Statement/ Prospectus and the
Registration Statement shall comply as to form in all material respects
with the rules and regulations promulgated by the SEC under the
Securities Act and the Exchange Act, respectively.
(ii) If at any time prior to the Effective Time, any event or
circumstance relating to UMT, or its officers or trustees, should be
discovered by UMT which should be set forth in an amendment to the
Registration Statement or a supplement to the Proxy Statement, UMT
shall promptly inform Purchaser. If at any time prior to the Effective
Time any event or circumstance relating to Purchaser, General Partner
or any of their respective partners, officers or directors should be
discovered by Purchaser which should be set forth in an amendment to
the Registration Statement or a supplement to the Proxy Statement,
Purchaser shall promptly inform UMT.
(iii) Prior to the Closing Date, Purchaser shall use its
commercially reasonable efforts to cause the Class A Debentures to be
issued pursuant to the Merger to be registered or qualified under all
applicable Blue Sky Laws of each of the states and territories of the
United States, and to take any other actions which may be necessary to
enable the Class A Debentures to be issued pursuant to the Merger to be
distributed in each such jurisdiction.
(iv) UMT shall furnish all information to Purchaser with
respect to UMT and any UMT Subsidiaries as Purchaser requests based on
Purchaser's reasonable belief that such information is legally required
to be included in the Proxy Statement/ Prospectus or Registration
Statement and shall otherwise cooperate with Purchaser in the
preparation and filing of the Proxy Statement/ Prospectus and
Registration Statement. Purchaser and General Partner shall furnish all
information to UMT with respect to Purchaser, General Partner and any
Purchaser Subsidiaries as UMT requests based on UMT's reasonable belief
that such information is legally required to be included in the Proxy
Statement/ Prospectus or Registration Statement and shall otherwise
cooperate with UMT in the preparation and filing of the Proxy
Statement/ Prospectus and Registration Statement.
(b) Meeting of UMT Shareholders. UMT will take all steps
necessary in accordance with the Declaration of Trust and the UMT
Bylaws to duly call, give notice of, convene and hold the UMT
Shareholder Meeting as soon as practicable (and, if it is practicable
to obtain a quorum using commercially reasonable efforts within such
time, no later than within 45 days) after the effectiveness of the
Registration Statement, for the purpose of obtaining the UMT
Shareholder Approval and for such other purposes as may be necessary.
Subject to Section 6.1, UMT will, through the unanimous action of its
independent Trustees and action of the UMT Board of Trustees,
(i) approve both the Merger and the DOT Amendments and declare that
both are advisable and direct that the Merger and DOT Amendments be
submitted to the consideration of the shareholders of UMT for approval
at the UMT Shareholder Meeting and (ii) recommend that the shareholders
of UMT approve the Merger and the Proxy Statement will include such
recommendation; provided, however, that should a quorum not be obtained
at the UMT Shareholder Meeting, or if fewer Shares of Beneficial
Interest than the number required therefor are voted in favor of
approval and adoption of the transactions contemplated hereby, the UMT
Shareholder Meeting shall be postponed or adjourned from time to time
in order to permit additional time for soliciting and obtaining
additional proxies or votes.
SECTION 3.4 Access to Information.
(a) General Partner and Purchaser Access. UMT shall afford to
General Partner and its officers, employees, accountants, counsel,
financial advisors and other representatives, reasonable access upon
reasonable prior notice and during normal business hours during the
period prior to the Effective Time to all its properties (including for
the purpose of conducting Phase I environmental assessments and such
other environmental testing as shall be deemed desirable by Purchaser),
books, contracts, commitments, personnel and records and, during such
period, UMT shall furnish promptly to General Partner (a) a copy
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of each report, schedule, registration statement and other document
filed by it during such period pursuant to the requirements of federal
or state securities Laws and (b) all other information concerning its
business, properties and personnel as General Partner may reasonably
request. No investigation under this Section 3.4(a) or otherwise shall
affect any of UMT's representations or warranties contained in this
Agreement or any condition to the obligations of the parties under this
Agreement.
(b) UMT Access. General Partner and Purchaser shall afford to UMT
and its officers, employees, accountants, counsel, financial advisors
and other representatives, reasonable access upon reasonable prior
notice and during normal business hours during the period prior to the
Effective Time to all its properties (including for the purpose of
conducting Phase I environmental assessments and such other
environmental testing as shall be deemed desirable by Purchaser),
books, contracts, commitments, personnel and records and, during such
period, General Partner and Purchaser shall furnish promptly to UMT all
information concerning its business, properties and personnel as UMT
may reasonably request. No investigation under this Section 3.4(b) or
otherwise shall affect any of General Partner or Purchaser's
representations or warranties contained in this Agreement or any
condition to the obligations of the parties under this Agreement.
SECTION 3.5 Reasonable Efforts. Upon the terms and subject to
the conditions set forth in this Agreement, each of General Partner,
Purchaser and UMT agrees to use its commercially reasonable efforts to
take, or cause to be taken, all actions and to do, or cause to be done,
and to assist and cooperate with the other in doing, all things
necessary, proper or advisable to fulfill all conditions applicable to
such party pursuant to this Agreement and to consummate and make
effective, in the most expeditious manner practicable, the Merger and
the other transactions contemplated by the Transaction Documents,
including (i) the obtaining of all necessary actions or nonactions,
waivers, consents and approvals from Governmental Entities and the
making of all necessary registrations and filings and the taking of all
reasonable steps as may be necessary or desirable to obtain an
approval, waiver or exemption from any Governmental Entity, (ii) the
obtaining of all necessary consents, approvals, waivers or exemption
from non-governmental third parties; and (iii) the execution and
delivery of any additional instruments necessary or desirable to
consummate the transactions contemplated by, and to fully carry out the
purposes of, this Agreement. In addition, each of Purchaser, General
Partner and UMT agrees to use its commercially reasonable efforts to
defend any lawsuits or other legal proceedings, whether judicial or
administrative, challenging the Merger, this Agreement or the
transactions contemplated by the Transaction Documents, including
seeking to have any stay, temporary restraining order, injunction, or
restraining order or other order adversely affecting the ability of the
parties to consummate the transactions contemplated by the Transaction
Documents entered by any court or other Governmental Entity vacated or
reversed. If, at any time after the Effective Time, any further action
is necessary or desirable to carry out the purpose of this Agreement,
the proper officers, trustees and directors of UMT, General Partner and
Purchaser shall take all such necessary or desirable action. From the
date of this Agreement through the Effective Time, UMT shall timely
file, or cause to be filed, with the SEC all documents required to be
filed with the SEC by UMT.
SECTION 3.6 No Solicitation of Transactions.
(a) No Solicitation. Subject to Section 6.1, during the term of
this Agreement, UMT shall not, and shall not authorize or permit,
directly or indirectly, any officer, trustee, employee, agent,
investment banker, financial advisor, consultant, attorney, accountant,
broker, finder or other representative (each, a "Representative") of
UMT or any of its Affiliates (other than Purchaser and Purchaser's
controlled Affiliates) to, directly or indirectly through any person,
(i) initiate, solicit, encourage or facilitate (including by way of
furnishing or disclosing nonpublic information or furnishing
assistance) any inquiries or the making of any proposal or other action
that constitutes, or may reasonably be expected to lead to, any
Competing Transaction (as defined herein), (ii) explore, enter into,
maintain, or continue discussions or otherwise negotiate with any
Person (other than Purchaser or Purchaser's Affiliates or their
respective Affiliates' Representatives) in furtherance of such
inquiries, proposal or action, with respect to a Competing Transaction,
or (iii) enter into any agreement, arrangement or understanding
requiring UMT
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or any of its Affiliates to abandon, terminate or fail to consummate
the Merger or the other transactions contemplated by this Agreement and
the other Transaction Documents.
(b) UMT Trustees Actions. Subject to Section 6.1, the UMT Board
of Trustees shall not (i) withdraw or modify, or propose to withdraw or
modify, its recommendations in favor of the Merger or any of the other
transactions contemplated by the Transaction Documents so as to oppose
the Merger or any of the other transactions contemplated by the
Transaction Documents, or (ii) approve or recommend, or propose
publicly to approve or recommend, any Competing Transaction.
(c) Definition of Competing Transaction. For purposes of this
Agreement, a "Competing Transaction" shall mean any inquiry, proposal
or offer from any Person relating to any of the following (other than
the transactions expressly provided for in this Agreement) involving
UMT:
(i) any tender or exchange offer involving 50% of more of the
Shares of Beneficial Interest of UMT;
(ii) any merger, consolidation or other business combination
involving UMT or any of its Subsidiaries;
(iii) any direct or indirect acquisition or purchase of a
business that constitutes 50% or more of the assets of UMT and its
Subsidiaries, taken as a whole, or 50% or more of the equity securities
of UMT;
(iv) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition of 50% or more of the assets of UMT and its
Subsidiaries, taken as a whole, in a single transaction or series of
related transactions;
(v) any recapitalization or restructuring of UMT or any of its
Subsidiaries;
(vi) any other transaction similar to any of the foregoing with
respect to UMT or any of its Subsidiaries, other than the Merger; or
(vii) any public announcement of a proposal, plan or intention
to do any of the foregoing or any agreement to engage in any of the
foregoing.
SECTION 3.7 Public Announcements. UMT and General Partner shall
consult with each other before issuing, or permitting their respective
Affiliates to issue, any press release or otherwise making any public
statements with respect to this Agreement or any of the transactions
contemplated by the Transaction Documents and shall not issue any such
press release or make any such public statement without the prior
consent of the other party, which consent shall not be unreasonably
withheld, except any press release or other announcement which such
party, on the advice of counsel, is required by law to issue or make
within such time period as to make the foregoing procedure impractical,
and in such case the party making such press release or announcement
shall promptly provide a copy thereof to the other party or parties
hereto. In this regard, the parties shall make a joint public
announcement (the form and substance of which UMT and General Partner
shall mutually agree to in advance) of the transactions contemplated by
the Transaction Documents no later than (i) the close of trading on the
New York Stock Exchange on the day this Agreement is signed, if such
signing occurs during a business day or (ii) the opening of trading on
the New York Stock Exchange on the business day following the date on
which this Agreement is signed, if such signing does not occur during a
business day.
SECTION 3.8 Assistance. From and after the date of this
Agreement, if Purchaser requests, UMT shall cooperate, and shall use
its commercially reasonable efforts to cause UMT's attorneys,
accountants and other representatives to cooperate in all reasonable
respects in connection with any financing efforts (including the
refinancing or assumption of existing Indebtedness at Closing) of
Purchaser or its Affiliates (including providing reasonable assistance
in the preparation of one or more offering circulars, private placement
memoranda, registration statements or other offering documents relating
to debt or equity financing) and any other filings that may be made by
Purchaser or its Affiliates, including, if applicable, with the SEC,
all at the sole expense of Purchaser (or its Affiliates).
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SECTION 3.9 Proxy Solicitor. UMT shall engage a proxy solicitor
reasonably acceptable to General Partner to assist in the solicitation
of proxies from shareholders relating to the UMT Shareholder Approval.
SECTION 3.10 Termination of Advisor Contracts. UMT shall use
commercially reasonable efforts to terminate any and all Advisor
Contracts (whether or not written) binding on UMT prior to the Closing.
SECTION 3.11 Terms of Class A Debentures Approved. The General
Partner shall establish the terms of the Class A Debentures by entering
into an indenture substantially in the form of the Indenture and each
of the Limited Partners shall have consented thereto. The General
Partner and Purchaser shall use commercially reasonable efforts to
ensure that every provision of the Class A Debentures, including, but
not limited to, the repurchase program with respect to the Class A
Debentures, complies with applicable Law.
ARTICLE IV
ADDITIONAL COVENANTS
SECTION 4.1 Tax Treatment.
(a) Purchase Price Allocation. On or prior to the Closing Date,
Purchaser shall, with the consent of UMT (such consent not to be
unreasonably withheld), reach agreement as to the manner in which the
consideration to be paid pursuant to this Agreement, together with any
assumed liabilities (the "Allocable Consideration"), shall be allocated
among the assets of UMT. Such allocation shall be made in the manner
required by Section 1060 of the Code and the regulations promulgated
thereunder. In making such allocation the fair market values as
reasonably determined by the parties shall apply. UMT and Purchaser
hereby agree that IRS Form 8594 will be timely filed based on such fair
market values, except as may be required by a Determination.
(b) Tax Treatment of the Merger. Except as may be required by a
Determination, the parties shall treat the Merger for all income tax
purposes as a taxable purchase of assets by Purchaser in exchange for
the allocable Merger Consideration for all income tax purposes, and a
liquidating distribution of the Merger Consideration to the
shareholders of UMT within the meaning of Section 562(b)(1) of the
Code, including filing UMT final Tax Returns consistent with such
treatment, and no party shall take any position inconsistent with such
treatment.
(c) Consistency Required. Neither Purchaser nor UMT will take (or
permit its Affiliates to take) any action following the Closing that is
inconsistent with UMT's status as a REIT for any period, except as may
be required by a Determination.
SECTION 4.2 Transfer and Gains Taxes. Purchaser shall, with
UMT's cooperation and assistance, prepare, execute and file, or cause
to be prepared, executed and filed, all returns, questionnaires,
applications or other documents regarding any real property transfer or
gains, sales, use, transfer, value added stock transfer and stamp
Taxes, any transfer, recording, registration and other fees and any
similar Taxes which become payable in connection with the transactions
contemplated by this Agreement (together, with any related interests,
penalties or additions to Tax, "Transfer and Gains Taxes"). From and
after the Effective Time, Purchaser shall pay or cause to be paid all
Transfer and Gains Taxes without deductions withheld from any amounts
payable to the holders of Shares of Beneficial Interest.
SECTION 4.3 Confidentiality. Each of UMT, Purchaser and General
Partner will hold, and will cause its respective officers, employees,
accountants, counsel, financial advisors and other representatives and
Affiliates to hold, any nonpublic information in confidence to the
extent required by, and in accordance with, and will comply with the
confidentiality provisions of the non-binding Term Sheet between UMT
and Purchaser (the "Confidentiality Agreement").
SECTION 4.4 Repurchase Program. Subject to applicable Law, the
General Partner and the Purchaser shall repurchase Class A Debentures
in accordance with a repurchase program upon, but not
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limited to, the following terms (the "Repurchase Program"): (i) subject
to clause (iv) of this Section 4.4, in any calendar year, the Purchaser
will purchase for cash (in U.S. dollars) all Class A Debentures
tendered for repurchase by holders of Class A Debentures up to ten
percent (10%) of the total number of Class A Debentures outstanding at
the beginning of such year at a repurchase price of $20.00 per Class A
Debenture; (ii) purchases will be made on a quarterly basis on the
Business Day that falls on the last day of each calendar quarter (or if
such day is not a Business Day, on the next preceding day that is a
Business Day); (iii) holders of Class A Debentures may withdraw
tendered Class A Debentures at any time prior to repurchase; and
(iv) the Purchaser will purchase Class A Debentures tendered for
repurchase on a pro rata basis on the Business Day that falls on the
last day of each calendar quarter (or if such day is not a Business
Day, on the next preceding day that is a Business Day) in the event
(a) the Repurchase Amount (as defined in the Indenture as of the date
hereof) available for repurchase of Class A Debentures for such quarter
is insufficient to satisfy all current repurchase requests or
(b) satisfying all current repurchase requests would cause the
Purchaser to exceed the limitation set forth in clause (i) of this
Section 4.4. Subject to applicable Law, the General Partner and
Purchaser shall maintain the Repurchase Program at all times Class A
Debentures remain outstanding. The General Partner and Purchaser shall
use all commercially reasonable efforts to ensure that every provision
of the Indenture and the Class A Debentures, and the performance
thereof, including, but not limited to, the operation of the Repurchase
Program, complies with applicable Law.
SECTION 4.5 Directors' and Officers' Insurance. Purchaser
shall, or UMT may with the prior written consent of Purchaser, purchase
a six (6) year extended reporting period endorsement ("runoff
coverage") under UMT's existing directors' and officers' liability
insurance policy with respect to claims arising from facts or events
that occurred on or prior to the Effective Time. Notwithstanding the
foregoing, in no event shall Purchaser or the Surviving Company be
obligated to expend in the aggregate in excess of 250% of the annual
premiums paid by UMT as of the date hereof for its directors' and
officers' liability insurance (the "D&O Premium Cap") for such
directors' runoff coverage in order to maintain or procure insurance
coverage pursuant to this Section 4.5. If Purchaser or the Surviving
Company is unable to obtain the insurance coverage required by this
Section 4.5 for an aggregate amount less than or equal to the D&O
Premium Cap, Purchaser or the Surviving Company, after consultation
with UMT, shall obtain as much insurance coverage as can be obtained
for the D&O Premium Cap.
ARTICLE V
CONDITIONS PRECEDENT
SECTION 5.1 Conditions to Each Party's Obligation to Effect the
Merger. The respective obligations of UMT and Purchaser to effect the
Merger and to consummate the other transactions contemplated by the
Transaction Documents on the Closing Date are subject to the
satisfaction or waiver on or prior to the Closing Date of the following
conditions:
(a) Shareholders Approval. The UMT Shareholder Approval shall
have been obtained.
(b) No Injunctions or Restraints. No temporary restraining
order, statute, rule, regulation, decree, ruling, preliminary or
permanent injunction or other order issued by any court of competent
jurisdiction or other legal restraint or prohibition enacted, entered,
promulgated, issued or enforced by any Governmental Entity preventing
the consummation of the Merger or any of the other transactions or
agreements contemplated by the Transaction Documents shall be in
effect.
(c) Registration Statement Declared Effective. The Registration
Statement shall have been declared effective in accordance with the
provisions of the Securities Act and Blue Sky Laws, if applicable, and
no stop order with respect to the Registration Statement shall be in
effect and no proceeding for that purpose shall have been instituted by
the SEC or any state regulatory authorities.
(d) Other Approvals. All consents, approvals, permits and
authorizations required to be obtained from any Governmental Entity as
indicated in Schedule 2.1(d)(iii) of the UMT Disclosure Letter in
connection with the execution and delivery of this Agreement and the
other Transaction
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Documents and the consummation of the transactions contemplated
hereby or thereby shall have been made or obtained (as the case may
be).
(e) Terms of Class A Debentures Approved. The General Partner
shall have established the terms of the Class A Debentures by entering
into an indenture substantially in the form of the Indenture.
(f) Updated Opinion of Financial Advisors. The Board of
Trustees of UMT shall have received an updated opinion of the Financial
Advisors, dated as of a date within ten calendar days before or after
the date the Registration Statement is declared effective by the SEC,
to the effect that, as of such date, the Merger Consideration is fair
from a financial point of view to the holders of Shares of Beneficial
Interest, a copy of which opinion will promptly be made available to
Purchaser after receipt by the Board of Trustees of UMT.
SECTION 5.2 Conditions to Obligations of General Partner and
Purchaser. The obligations of General Partner and Purchaser to effect
the Merger and to consummate the other transactions contemplated by the
Transaction Documents on the Closing Date are further subject to the
following conditions, any one or more of which may be waived by General
Partner and Purchaser:
(a) Representations and Warranties. Each of the representations
and warranties of UMT set forth in this Agreement shall be true and
correct (without giving effect to any materiality, UMT Material Adverse
Effect or any similar qualification or limitation in any representation
and warranty (any such qualification or limitation, a "UMT Materiality
Qualifier")) as of the date of this Agreement and on and as of the
Closing Date, as though made on and as of the Closing Date (except to
the extent any representation or warranty is expressly limited by its
terms to a specified date, the accuracy of which will be determined as
of such specified date), except where the failure of such
representations and warranties in the aggregate to be true and correct
(without giving effect to any UMT Materiality Qualifier) would not or
would not reasonably be likely to have a UMT Material Adverse Effect.
(b) Performance of Obligations of UMT. UMT shall have performed
or complied with all obligations required to be performed or complied
with by them under this Agreement at or prior to the Effective Time
that are subject to a UMT Materiality Qualifier, and shall have
performed or complied with in all material respects all obligations
required to be performed or complied with by them under this Agreement
at or prior to the Effective Time that are not so subject to a UMT
Materiality Qualifier, and Purchaser shall have received a certificate
signed on behalf of UMT by the Secretary of UMT to such effect.
(c) Material Adverse Change. Since the date of this Agreement,
no UMT Material Adverse Effect shall have occurred. Purchaser shall
have received a certificate signed on behalf of UMT by the Secretary of
UMT to such effect.
(d) Consents. All consents and waivers from third parties
necessary, set forth in Schedule 5.2(d) of the UMT Disclosure Letter in
connection with the consummation of the Merger and the other
transactions contemplated by the Transaction Documents shall have been
obtained, other than such consents and waivers from third parties,
which, if not obtained, would not reasonably be expected to have,
individually or in the aggregate, a UMT Material Adverse Effect.
(e) Termination of Advisor Contracts. Any and all Advisor
Contracts shall have been terminated in a manner that will not result
in the Surviving Company having any rights or liabilities thereunder at
any time following the Closing.
(f) Limit on Persons Seeking Appraisal. Neither UMT nor any of
the Trustees shall have received, prior to the UMT Shareholder Meeting,
a demand for appraisal of Shares of Beneficial Interest or a written
objection to the Merger or any of the transactions contemplated by the
Transaction Documents from shareholders of UMT holding more than
200,000 Shares of Beneficial Interest as of the record date for the UMT
Shareholder Meeting.
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SECTION 5.3 Conditions to Obligations of UMT. The obligations
of UMT to effect the Merger and to consummate the other transactions
contemplated by the Transaction Documents on the Closing Date are
further subject to the following conditions, any one or more of which
may be waived by UMT:
(a) Representations and Warranties. Each of the representations
and warranties of General Partner and Purchaser set forth in this
Agreement shall be true and correct (without giving effect to any
materiality, Purchaser Material Adverse Effect or any similar
qualification or limitation in any representation and warranty (any
such qualification or limitation, a "Purchaser Materiality Qualifier"))
as of the date hereof and on and as of the Closing Date, as though made
on and as of the Closing Date (except to the extent any representation
or warranty is expressly limited by its terms to a specified date, the
accuracy of which will be determined as of such specified date), except
where the failure of such representations and warranties to be in the
aggregate true and correct (without giving effect to any Purchaser
Materiality Qualifier) would not or would not reasonably be likely to
have a Purchaser Material Adverse Effect, and UMT shall have received a
certificate signed on behalf of Purchaser by the President of General
Partner, in such capacity, to such effect.
(b) Performance of Obligations of General Partner and
Purchaser. General Partner and Purchaser shall have performed or
complied with all obligations required to be performed or complied with
by them under this Agreement at or prior to the Effective Time that are
subject to a Purchaser Materiality Qualifier, and shall have performed
or complied with in all material respects all obligations required to
be performed or complied with by them under this Agreement at or prior
to the Effective Time that are not so subject to a Purchaser
Materiality Qualifier, and UMT shall have received a certificate signed
on behalf of Purchaser by the President of General Partner, in such
capacity, to such effect.
(c) Material Adverse Change. Since the date of this Agreement,
there shall have occurred no Purchaser Material Adverse Effect. UMT
shall have received a certificate signed on behalf of Purchaser by the
President of General Partner, in such capacity, to such effect.
(d) Consents. All consents and waivers from third parties
necessary in connection with the consummation of the Merger and the
other transactions contemplated by the Transaction Documents shall have
been obtained, other than such consents and waivers from third parties,
which, if not obtained, would not reasonably be expected to have,
individually or in the aggregate, a Purchaser Material Adverse Effect.
ARTICLE VI
TRUSTEE ACTIONS
SECTION 6.1 Trustee Actions. Notwithstanding Section 3.6 or any
other provision of this Agreement to the contrary, prior to the
Effective Time:
(a) In the event that after the date hereof, UMT or any
Representative of UMT or any of its Affiliates receives an unsolicited
bona fide written inquiry or proposal from a third party with respect
to a Competing Transaction, UMT shall notify Purchaser orally and in
writing (as promptly as practicable but in any event within 24 hours)
of all of the relevant details relating thereto (including the identity
of the parties, price and other terms thereof), including any
modification, amendment or change in respect thereto, including
relating to a Competing Transaction, and shall promptly furnish to
Purchaser in writing a copy of any inquiry or proposal in addition to
any information provided to or by any third party relating thereto. UMT
may furnish information to, or enter into discussions or negotiations
with, such third party if, and only to the extent that, (A) the Board
of Trustees of UMT after consultation with and having considered the
advice of independent legal counsel, determines in good faith that
(x) such Competing Transaction would, if consummated, constitute a
Superior Competing Transaction (as defined herein) and (y) such action
is necessary for the Board of Trustees to comply with their legal
duties to UMT's shareholders under applicable Law and (B) prior to
taking such action, UMT (x) provides reasonable notice to Purchaser
(but in any event no later
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than 72 hours before taking such action) to the effect that it is
taking such action and (y) UMT receives from such third party an
executed confidentiality agreement in reasonably customary form, the
terms of which, as applicable to such third party, in any event are at
least as stringent as those applicable to Purchaser in the
Confidentiality Agreement. In the event the Board of Trustees is unable
to determine whether the legal duties of the Board of Trustees to UMT's
shareholders under applicable Law require it to consider an unsolicited
written inquiry, the Board of Trustees may make inquiry of such third
party until the Board of Trustees is able to make such determination.
Before providing any information to or entering into discussions or
negotiations with any third party in connection with a Competing
Transaction by such third party to the extent permitted pursuant to the
immediately preceding sentence, UMT shall notify Purchaser of any
Competing Transaction (including the material terms and conditions
thereof and the identity of the person making it) as promptly as
practicable after its receipt thereof (and in any event, no later than
24 hours from receipt), and shall provide Purchaser with a copy of any
written Competing Transaction or amendments or supplements thereto, and
shall thereafter promptly inform Purchaser of the status of any
discussions or negotiations with such a third party, and any material
changes to the terms and conditions of such Competing Transaction, and
shall promptly give Purchaser a copy of any information delivered to
such third party that has not previously been reviewed by Purchaser.
UMT agrees that it will take the necessary steps to promptly inform the
individuals or entities referred to in the first sentence hereof of the
obligations undertaken in this Section 6.1(a). UMT shall keep Purchaser
fully apprised of the status (including amendments and proposed
amendments) of any proposal relating to a Competing Transaction on a
current basis, including promptly providing to Purchaser copies of any
written communications between UMT and any Person relating to a
Competing Transaction.
(b) Notwithstanding Section 3.5 or any other provision of this
Agreement to the contrary, but subject to this Section 6.1(b), the
Board of Trustees of UMT may, provided that it gives Purchaser five
full business days' prior written notice of its intention to do so,
withdraw or modify, or propose to withdraw or modify, its approval or
recommendation of this Agreement or the Merger, may approve or
recommend a Competing Transaction (or amendment or supplement thereto),
or cause UMT to enter into an agreement with respect thereto, if and
only to the extent that, the Board of Trustees of UMT, after
consultation with and having considered the advice of independent legal
counsel and the Financial Advisor (or any other investment bank of
nationally recognized reputation), determines in good faith (after
taking into account any proposal that may have been made by Purchaser
at such time) that (x) a bona fide written proposal from a third party
for a Competing Transaction received after the date hereof that was
not, directly or indirectly, initiated, solicited or encouraged or
knowingly facilitated by UMT or its Representatives that is more
favorable to the holders of the Shares of Beneficial Interest than the
transactions contemplated by this Agreement, and is reasonably capable
of being consummated (a "Superior Competing Transaction"), and (y) such
action is necessary for the trustees of UMT to comply with their legal
duties to UMT's shareholders under applicable Law. Any such withdrawal
or modification of the recommendation shall not change the approval of
UMT's Trustees for purposes of causing any Takeover Statute or other
state Law to be inapplicable to the transactions contemplated hereby.
(c) Nothing contained in this Section 6.1 shall prohibit UMT
from taking and disclosing to its shareholders a position contemplated
by Rule 14e-2(a) promulgated under the Exchange Act or from making any
disclosure to the UMT shareholders which, in the good faith reasonable
judgment of the Trustees of UMT, based on the advice of independent
legal counsel, is required under applicable Law.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
SECTION 7.1 Termination. Subject to Section 7.2, this Agreement
may be terminated at any time prior to the first to occur of the
acceptance for record of the Articles of Merger by the Department or
the
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filing of the Certificate of Merger with the Delaware SOS, whether
before or after the UMT Shareholder Approval is obtained:
(a) by mutual written consent duly authorized by the General
Partner and UMT;
(b) by Purchaser or General Partner,
(i) upon a material breach of any representation or warranty
on the part of UMT set forth in this Agreement, or if any
representation or warranty of UMT shall have become materially untrue,
such that the conditions set forth in Section 5.2(a) or (b), as the
case may be, would be incapable of being satisfied by June 30, 2006 (as
otherwise extended by mutual written agreement by UMT and General
Partner, the "Outside Date"), or
(ii) upon a material breach by UMT of one or more of its
covenants or agreements contained in the Agreement and UMT has not
cured such breach within 10 business days after notice by Purchaser
thereof;
provided, however, that neither Purchaser nor General Partner may
terminate this Agreement pursuant to either (i) or (ii) above if either
Purchaser or General Partner has breached any of its obligations under
this Agreement in any material respect and such breach remains uncured
at the time of such desired termination.
(c) by UMT,
(i) upon a material breach of any representation or warranty
on the part of General Partner or Purchaser set forth in this
Agreement, or if any representation or warranty of General Partner or
Purchaser shall have become materially untrue, such that the conditions
set forth in Section 5.3(a) or (b), as the case may be, would be
incapable of being satisfied by the Outside Date, or
(ii) upon a material breach by Purchaser or General Partner
of one or more of its covenants or agreements contained in the
Agreement and Purchaser or General Partner, as the case may be, has not
cured such breach within 10 business days after notice by UMT thereof;
provided, however, that UMT may not terminate this Agreement
pursuant to either (i) or (ii) above if UMT has breached any of its
obligations under this Agreement in any material respect and such
breach remains uncured at the time of such desired termination.
(d) by either Purchaser or UMT if any judgment, injunction,
order, decree or action by any Governmental Entity of competent
authority preventing the consummation of the Merger shall have become
final and nonappealable;
(e) by either Purchaser or UMT if the Merger shall not have
been consummated by the Outside Date; provided, however, that a party
that has materially breached a representation, warranty or covenant of
such party set forth in this Agreement and not cured such breach by the
Outside Date shall not be entitled to exercise its right to terminate
under this Section 7.1(e);
(f) by either Purchaser or UMT if, upon a vote at a duly held
UMT Shareholder Meeting, the UMT Shareholder Approval shall not have
been obtained, as contemplated by Section 5.1(a);
(g) by either Purchaser or General Partner, if (i) prior to the
approval of this Agreement at the UMT Shareholder Meeting, the Board of
Trustees of UMT shall have withdrawn or modified in any manner adverse
to Purchaser its approval or recommendation of the Merger of this
Agreement in connection with, or approved or recommended, any Competing
Transaction, (ii) UMT shall have entered into any agreement with
respect to any Competing Transaction, or (iii) the Board of Trustees of
UMT shall have resolved to do any of the foregoing;
(h) by either Purchaser or General Partner if, prior to the UMT
Shareholder Meeting, the Board of Trustees shall have received a demand
for appraisal of Shares of Beneficial Interest or a written objection
to the Merger or any of the transactions contemplated by the
Transaction
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Documents from shareholders of UMT holding more than 200,000 Shares
of Beneficial Interest as of the record date for the UMT Shareholder
Meeting.
A terminating party shall provide written notice of termination
to the other parties specifying with particularity the reason for such
termination. If more than one provision in this Section 7.1 is
available to a terminating party in connection with a termination, a
terminating party may rely on any and all available provisions in this
Section 7.1 for any such termination.
SECTION 7.2 Expenses; Break-Up Fees.
(a) Except as otherwise specified in this Section 7.2 or agreed
in writing by the parties, all out-of-pocket costs and expenses
incurred in connection with this Agreement, the Merger and the other
transactions contemplated hereby shall be paid by the party incurring
such cost or expense.
(b) UMT agrees that if this Agreement shall be terminated
pursuant to Section 7.1(b) (and in the case of any such termination,
Purchaser has not materially breached its representations and
warranties or covenants (or, with regard to breaches of covenants, has
cured any such breach prior to the date of the UMT Shareholder
Meeting)), then UMT will pay to Purchaser, or as directed by Purchaser,
an amount equal to the Purchaser Break-Up Expenses (as defined herein).
Payment of any of such amounts shall be made in the form of a
promissory note payable to the order of Purchaser (or its designee)
which promissory note shall have a simple interest rate equal to the
per annum rate of interest publicly announced by Citibank, N.A. as its
prime or base rate in effect at its principal office in New York City
from time to time plus 1.0% per annum and shall provide for the payment
of the principal amount of the Purchaser Break-Up Expenses in twelve
(12) equal monthly installments with a final maturity date no later
than one year following the date of termination. For the purposes of
this Agreement "Purchaser Break-Up Expenses" shall be an amount equal
to $500,000 which the parties hereto agree represents a reasonable
estimate of the out-of-pocket expenses Purchaser and General Partner
have incurred or are likely to incur in connection with this Agreement
and the transactions contemplated hereby (including all fees and
expenses of attorneys, accountants, investment bankers, experts,
financing sources and other advisors and consultants).
(c) Purchaser agrees that if this Agreement shall be terminated
pursuant to Section 7.1(c) (and in the case of any such termination,
UMT has not materially breached its representations and warranties or
covenants (or has cured any such breach prior to the date of the UMT
Shareholder Meeting)), then Purchaser will pay to UMT, or as directed
by Purchaser, an amount equal to the UMT Break-Up Expenses (as defined
herein). Payment of any of such amounts shall be made in the form of a
promissory note payable to the order of UMT (or its designee) which
promissory note shall have a simple interest rate equal to the per
annum rate of interest publicly announced by Citibank, N.A. as its
prime or base rate in effect at its principal office in New York City
from time to time plus 1.0% per annum and shall provide for the payment
of the principal amount of the UMT Break-Up Expenses in twelve
(12) equal monthly installments with a final maturity date no later
than one year following the date of termination. For the purposes of
this Agreement "UMT Break-Up Expenses" shall be an amount equal to
$430,000 which the parties hereto agree represents a reasonable
estimate of the out-of-pocket expenses UMT has incurred or is likely to
incur in connection with this Agreement and the transactions
contemplated hereby (including all fees and expenses of attorneys,
accountants, investment bankers, experts, financing sources and other
advisors and consultants).
(d) UMT also agrees that if this Agreement is terminated pursuant
to Section 7.1(g), then UMT shall pay to Purchaser, or as directed by
Purchaser, an amount equal to the Purchaser Break-Up Fee (as defined
herein). Payment of any of such amounts shall be made, as directed by
Purchaser, by wire transfer of immediately available funds promptly
following the earlier of the consummation of the Competing Transaction
or the execution of a definitive agreement providing for a Competing
Transaction. For purposes of this Agreement, the "Purchaser Break-Up
Fee" shall be an amount equal to $3,000,000.
(e) The foregoing provisions of this Section 7.2 have been agreed
to by each of the parties hereto in order to induce the other parties
to enter into this Agreement and to consummate the Merger and the
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other transactions contemplated by this Agreement, it being agreed and
acknowledged by each of them that the execution of this Agreement by
them constitutes full and reasonable consideration for such provisions.
(f) In the event that either Purchaser or UMT is required to file
suit to seek all or a portion of the amounts payable under this
Section 7.2, and such party prevails in such litigation, such party
shall be entitled to all expenses, including attorneys' fees and
expenses, which it has incurred in enforcing its rights under this
Section 7.2.
SECTION 7.3 Effect of Termination. In the event of termination
of this Agreement by either UMT or Purchaser as provided in
Section 7.1, this Agreement shall forthwith become void and have no
effect, without any liability or obligation on the part of General
Partner, Purchaser or UMT, other than Section 7.2, this Section 7.3 and
Article VIII.
SECTION 7.4 Amendment. This Agreement may be amended by the
parties in writing by action of the General Partner and the UMT
trustees at any time before or after the UMT Shareholder Approval is
obtained and prior to the earlier of the acceptance for record of the
Articles of Merger by the Department or the filing of the Certificate
of Merger with the Delaware SOS; provided, however, that, after the UMT
Shareholder Approval is obtained, no such amendment, modification or
supplement shall alter the amount or change the form of the Merger
Consideration to be delivered to UMT's shareholders or alter or change
any of the terms or conditions of this Agreement if such alteration or
change would adversely affect UMT's shareholders.
SECTION 7.5 Extension; Waiver. At any time prior to the
Effective Time, each of UMT and General Partner may (a) extend the time
for the performance of any of the obligations or other acts of the
other party, (b) waive any inaccuracies in the representations and
warranties of the other party contained in this Agreement or in any
document delivered pursuant to this Agreement or (c) subject to the
provisions of Section 7.4, waive compliance with any of the agreements
or conditions of the other party contained in this Agreement. Any
agreement on the part of a party to any such extension or waiver shall
be valid only if set forth in an instrument in writing signed on behalf
of such party. The failure of any party to this Agreement to assert any
of its rights under this Agreement or otherwise shall not constitute a
waiver of those rights.
ARTICLE VIII
GENERAL PROVISIONS
SECTION 8.1 Nonsurvival of Representations and Warranties. None
of the representations and warranties in this Agreement or in any
instrument delivered pursuant to this Agreement shall survive the
Effective Time. This Section 8.1 shall not limit any covenant or
agreement of the parties which by its terms contemplates performance
after the Effective Time.
SECTION 8.2 Notices. All notices, requests, claims, demands and
other communications under this Agreement shall be in writing and shall
be deemed given if delivered personally, sent by overnight courier
(providing proof of delivery) to the parties or sent by telecopy
(providing confirmation of transmission) at the following addresses or
telecopy numbers (or at such other address or telecopy number for a
party as shall be specified by like notice):
(a) if to Purchaser or General Partner, to
UMT Services, Inc.
1702 N. Collins Blvd., Suite 100
Richardson, TX 75080
Attn: Hollis Greenlaw
Fax: (214) 237-9304
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with a copy to:
Gibson, Dunn & Crutcher LLP
1050 Connecticut Avenue, N.W.
Washington, D.C. 20036
Attn: Stephen I. Glover, Esq.
Fax: (202) 251-5374
(b) if to UMT
United Mortgage Trust
5740 Prospect Avenue, Suite 1000
Dallas, Texas 75206
Attn: Christine Griffin
Fax: (214) 237-9304
Fax: (817) 354-6335
with a copy to:
Haynes and Boone LLP
901 Main Street, Suite 3100
Dallas, Texas 75202
Attn: Gregory Samuel
Fax: (214) 651-5645
Butzel Long, P.C.
150 West Jefferson, Suite 900
Detroit, Michigan 48226
Attn: Robert A. Hudson
Fax: (313) 225-7080
SECTION 8.3 Interpretation. When a reference is made in this
Agreement to a Section, such reference shall be to a Section of this
Agreement unless otherwise indicated. 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. Whenever the words "include," "includes" or "including" are
used in this Agreement, they shall be deemed to be followed by the
words "without limitation."
SECTION 8.4 Counterparts. This Agreement may be executed in one
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.
SECTION 8.5 Entire Agreement; No Third-Party Beneficiaries.
This Agreement, the Confidentiality Agreement and the other agreements
entered into in connection with the transactions (i) constitute the
entire agreement and supersede all prior agreements and understandings,
both written and oral, between the parties with respect to the subject
matter of this Agreement and, (ii) except for the provisions of
(x) Article I, (y) Section 4.4 and (z) Section 4.5 with respect to the
individuals currently serving as members of the Board of Trustees of
UMT, are not intended to confer upon any Person other than the parties
hereto any rights or remedies.
SECTION 8.6 Governing Law; Waiver of Jury Trial.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO ANY
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW. EACH PARTY HERETO
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF SUCH PARTY IN
THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT THEREOF.
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SECTION 8.7 Assignment. Neither this Agreement nor any of the
rights, interests or obligations under this Agreement shall be assigned
or delegated, in whole or in part, by operation of Law or otherwise by
any of the parties without the prior written consent of the other
parties. 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 assigns.
SECTION 8.8 Enforcement. The parties agree that irreparable
damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or
were otherwise breached. It is accordingly agreed that the parties
shall be entitled to an injunction or injunctions to prevent breaches
of this Agreement and to enforce specifically the terms and provisions
of this Agreement in any court of the United States located in the
State of Delaware or in any Delaware State court, this being in
addition to any other remedy to which they are entitled at Law or in
equity. In addition, each of the parties hereto (i) consents to submit
itself exclusively to the personal jurisdiction of the District Court
in Delaware or any Delaware State court as well as the jurisdiction of
any court from which an appeal may be taken from such courts in the
event any dispute arises out of this Agreement or any of the
transactions contemplated by this Agreement, including for the purpose
of any litigation, proceeding or other action arising out of such
party's obligations under or with respect to this Agreement and the
transactions contemplated hereby and (ii) agrees that it will not
attempt to deny or defeat such personal jurisdiction by motion or other
request for leave from any such court and expressly waives any and all
objections such party may have to venue in such courts.
SECTION 8.9 Exhibits; Disclosure Letter. All Exhibits and
Schedules attached hereto, the Purchaser Disclosure Letter and the UMT
Disclosure Letter are intended to be and hereby are specifically made a
part of this Agreement.
ARTICLE IX
CERTAIN DEFINITIONS
SECTION 9.1 Certain Definitions.
"Advisor" means UMT Advisors, Inc., a Texas corporation that is
presently providing certain management services for UMT.
"Advisor Contracts" means that certain Advisory Contract by and
among UMT and the Advisor, and any other contracts pursuant to which
the Advisor or any affiliates of the Advisor are or will provide
management services to UMT.
"Affiliate" of any Person means another Person that directly or
indirectly, through one or more intermediaries, controls, is controlled
by, or is under common control with, such first Person.
"Code" means the Internal Revenue Code of 1986, as amended.
"Determination" shall have the meaning given to it in
Section 1313(a) of the Code.
"Indebtedness" shall mean with respect to any Person, without
duplication (a) all indebtedness of such Person for borrowed money,
whether secured or unsecured, (b) all obligations of such Person under
such conditional sale or other title retention agreements relating to
property purchased by such Person, (c) all lease obligations (capital
or other) of such Person, (d) all obligations of such Person under
interest rate or currency hedging transactions (valued at the
termination value thereof), (e) all guarantees of such Person of any
such indebtedness of any other Person, and (f) any agreements to
provide any of the foregoing.
"Indenture" means an indenture pursuant to which the Class A
Debentures of UMT Holdings, L.P. will be issued which shall be
substantially in the form of the indenture attached hereto as
Exhibit D.
"Knowledge" where used herein with respect to UMT shall mean the
actual (and not constructive or imputed) knowledge, after reasonable
investigation, of the persons named in Schedule 9.1 of the UMT
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Disclosure Letter and where used with respect to General Partner and
Purchaser shall mean the actual (and not constructive or imputed)
knowledge, after reasonable investigation, of Hollis M. Greenlaw, Todd
F. Etter or Craig Pettit.
"Law" means any statute, law, regulation, rule, order, decree,
code, judgment, ordinance (including zoning law or building code) or
any other applicable requirement of any Governmental Entity applicable
to Purchaser or UMT or any of their respective Subsidiaries or any of
the UMT Properties.
"Lien" means any pledge, claim, lien, charge, encumbrance or
security interests of any kind or nature whatsoever.
"Person" means an individual, corporation, partnership, limited
liability company, joint venture, association, trust, unincorporated
organization or other entity.
"Proxy Statement/ Prospectus" shall mean the proxy statement/
prospectus to be distributed to the UMT shareholders in connection with
the Merger and the transactions contemplated by this Agreement,
including any preliminary proxy statement/ prospectus or definitive
proxy statement/ prospectus filed with the SEC in accordance with the
terms and provisions hereof. The Proxy Statement/ Prospectus shall
constitute a part of the Registration Statement.
"Purchaser Subsidiary" means a Subsidiary of the Purchaser.
"Registration Statement" shall mean the Registration Statement on
Form S-4 to be filed by UMT with the SEC to effect the registration
under the Securities Act of the Class A Debentures to be issued to UMT
shareholders pursuant to the Merger.
"shareholders" when used (1) in connection with UMT shall refer
to persons holding Shares of Beneficial Interest or any other equity
security, or instrument convertible into any equity security, of UMT,
and (2) in connection with Purchaser shall refer to the limited
partners of Purchaser holding Class C Units and Class D Units or any
other equity security, or instrument convertible into any equity
security, of Purchaser.
"Subsidiary" of any Person means any corporation, partnership,
limited liability company, joint venture or other legal entity of which
such Person (either directly or through or together with another
Subsidiary of such Person) owns 50% or more of the voting stock, value
of or other equity interests (voting or non-voting) of such
corporation, partnership, limited liability company, joint venture or
other legal entity.
"Tax" or "Taxes" shall mean any federal, state, local and foreign
income, gross receipts, license, withholding, property, recording,
stamp, sales, use, franchise, employment, payroll, excise,
environmental and other taxes, tariffs or governmental charges of any
nature whatsoever, together with penalties, interest or additions
thereto, whether disputed or not.
"Tax Return" shall mean 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.
"Transaction Documents" shall mean this Agreement, the
Certificate of Merger, the Articles of Merger, the DOT Amendments, the
Indenture and any other document or instrument to be executed and
entered into by the parties hereto in connection with the Merger or any
of the other transactions contemplated under this Agreement.
"UMT Shareholder Meeting" means a meeting of the holders of
Shares of Beneficial Interest of UMT and of each and every other class
of equity security of UMT having a right to vote upon or approve the
Merger, called pursuant to Section 3.3(b) by the appropriate officers
of UMT for the purpose of approving (1) the Merger, this Agreement, any
other transactions contemplated by the Transaction Documents, and such
other matters as are required by law, the Declaration of Trust or the
UMT Bylaws to be approved by the shareholders of UMT in order to
consummate the Merger and the transactions contemplated herein and in
the other Transaction Documents.
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IN WITNESS WHEREOF, the parties hereto have executed and
delivered this as of the date first written above.
UMT:
United Mortgage Trust, a Maryland real
estate investment trust
By: /s/ Christine "Cricket" Griffin
Title: President
PURCHASER:
UMT Holdings, L.P., a Delaware limited
partnership
By: UMT Services, Inc., its sole general
partner
By: /s/ Hollis Greenlaw
Hollis Greenlaw, President
GENERAL PARTNER:
UMT Services, Inc., a Delaware corporation
By: /s/ Hollis Greenlaw
Hollis Greenlaw, President
SIGNATURE PAGE TO UNITED MORTGAGE TRUST MERGER AGREEMENT
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EXHIBIT A
DELAWARE CERTIFICATE OF MERGER
CERTIFICATE OF MERGER
of
UNITED MORTGAGE TRUST
(a Maryland real estate investment trust)
into
UMT HOLDINGS, L.P.
(a Delaware limited partnership)
Pursuant to Section 17-211 of the Delaware Revised Uniform Limited
Partnership Act.
It is hereby certified that:
1. The constituent entities (the "Constituent Entities")
participating in the merger herein certified are:
(i) United Mortgage Trust, which is organized under the laws of
the State of Maryland (the "United Mortgage Trust"); and
(ii) UMT Holdings, L.P., which is organized under the laws of
the State of Delaware (the "Surviving Limited Partnership").
2. An Agreement and Plan of Merger, dated as of September 1,
2005, by and among United Mortgage Trust and the Surviving Limited
Partnership has been approved, adopted, certified, executed, and
acknowledged by each of the Constituent Entities in accordance with the
provisions of applicable laws of Maryland and Delaware, including
subsection (b) of Section 17-211 of the Delaware Revised Uniform
Limited Partnership Act.
3. The name of the surviving limited partnership in the merger
herein certified is "UMT Holdings, L.P." which will continue its
existence as said surviving limited partnership under the name "UMT
Holdings, L.P." upon the effective date of said merger pursuant to the
provisions of the Delaware Revised Uniform Limited Partnership Act.
4. The executed Agreement and Plan of Merger between the
Constituent Entities is on file at an office of the Surviving Limited
Partnership, the address of which is as follows:
UMT Holdings, L.P.
1702 N. Collins Boulevard, Suite 100
Richardson, TX 75080
Phone: (972) 889-7323
5. A copy of the aforesaid Agreement and Plan of Merger will be
furnished by the Surviving Limited Partnership, on request and without
cost, to any partner of the Surviving Limited Partnership or any person
holding an interest in United Mortgage Trust.
[Signature Page Follows]
EXHIBIT A TO UNITED MORTGAGE TRUST MERGER AGREEMENT
Table of Contents
IN WITNESS WHEREOF, this Certificate of Merger, pursuant to
Section 17-211 of the Delaware Revised Uniform Limited Partnership Act,
is hereby signed on behalf of the Surviving Limited Partnership by its
sole general partner.
The Surviving Limited Partnership:
UMT HOLDINGS, L.P.,
a Delaware limited partnership
By UMT Services, Inc.,
its sole general partner
Name:
Title:
Dated: , 200
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EXHIBIT B
MARYLAND ARTICLES OF MERGER
EXHIBIT B
MARYLAND ARTICLES OF MERGER
UNITED MORTGAGE TRUST
UMT HOLDINGS, L.P.
ARTICLES OF MERGER
THIS IS TO CERTIFY THAT:
FIRST: United Mortgage Trust, a Maryland real estate investment
trust (the "Merging Entity") and UMT Holdings, L.P., a Delaware limited
partnership, agree to merge in the manner hereinafter set forth (the
"Merger").
SECOND: UMT Holdings, L.P. is the entity to survive the Merger
(the "Surviving Entity").
THIRD: The Merging Entity is a real estate investment trust
formed under the laws of the State of Maryland. The Surviving Entity is
a limited partnership formed under the Delaware Revised Uniform Limited
Partnership Act on March 14, 2003. The Surviving Entity is not
qualified or registered to do business in the State of Maryland.
FOURTH: The principal office of the Merging Entity in the State
of Maryland is located in Baltimore City. The Surviving Entity has no
principal office in the State of Maryland.
FIFTH: The Merging Entity owns no interest in land in the State
of Maryland.
SIXTH: The principal office of the Surviving Entity in the State
of Delaware is c/o Corporation Service Company, Suite 400, 2711
Centerville Road, Wilmington, Delaware 19808. The name and address of
the Surviving Entity's resident agent in the State of Maryland are CSC
Lawyers Incorporating Service Company, 11 East Chase Street, Baltimore,
Maryland 21202.
SEVENTH: (a) The total number of shares of beneficial interest of
all classes which the Merging Entity has the authority to issue and the
number of shares of each class are as follows:
100,000,000 shares of beneficial interest, consisting of
100,000,000 common shares of beneficial interest, par value $.01 per
share ("Merging Entity Common Shares"). The aggregate par value of all
shares of all classes having a par value is $1,000,000.
(b) The percentages of partnership interest of each class of
partnership interest of the Surviving Entity and the class of partners
and the respective percentage of partnership interests in each class of
partnership interest are as follows:
General Partner - 0.01%].
Limited Partners -99.99%.
EIGHTH: (a) Upon the Effective Time (as defined below), the
Merging Entity shall be merged into the Surviving Entity. Thereupon,
the Surviving Entity shall possess any and all purposes and powers of
the Merging Entity; and all leases, licenses, property, rights,
privileges, and powers of whatever nature and description of the
Merging Entity shall be transferred to, vested in, and devolved upon
the Surviving Entity, without further act or deed, subject to all of
the debts, liabilities and obligations of the Merging Entity.
(b) Each Merging Entity Common Share issued and outstanding
immediately prior to the Effective Time shall, by virtue of the Merger
and without any action on the part of the holder thereof, be converted
into the right to receive one Class A Senior Subordinated Debenture of
the Surviving Entity (the "Merger Consideration"). All Merging Entity
Common Shares, when converted as provided above, shall no longer
EXHIBIT B TO UNITED MORTGAGE TRUST MERGER AGREEMENT
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be outstanding and shall automatically cease to exist, and certificates
that immediately prior to the Effective Time evidenced Merging Entity
Common Shares shall thereafter represent only the right to receive the
Merger Consideration.
(c) The outstanding partnership interests of the Surviving Entity
shall be unaffected by the Merger.
NINTH: The terms and conditions of the transaction described in
these Articles were duly advised, authorized and approved by the
Merging Entity in the manner and by the vote required by the laws of
the State of Maryland and the Second Amended and Restated Agreement and
Declaration of Trust of the Merging Entity, as follows:
(a) The Board of Trustees of the Merging Entity, at a duly called
meeting, adopted a resolution declaring that the terms and conditions
of the Merger described herein were advisable and directing that the
Merger be submitted for consideration by the shareholders of the
Merging Entity.
(b) The shareholders of the Merging Entity entitled to vote on
the Merger, at a duly called meeting, approved the Merger on
substantially the terms and conditions set forth herein.
TENTH: The terms and conditions of the transaction described in
these Articles were duly advised, authorized and approved by the
Surviving Entity in the manner and by the vote required by the laws of
the State of Delaware and the Agreement of Limited Partnership of the
Surviving Entity, as follows:
The board of directors of the general partner of the Surviving
Entity, by unanimous written consent, adopted a resolution approving
the Merger on substantially the terms and conditions set forth herein.
ELEVENTH: The Merger shall become upon the later of (a) the
filing of the Certificate of Merger relating to the Merger with the
Secretary of State of the State of Delaware or (b) the acceptance for
record of these Articles by the State Department of Assessments and
Taxation of Maryland (the "Effective Time").
TWELFTH: Each of the undersigned acknowledges these Articles to
be the act and deed of the entity on whose behalf he has signed, and
further, as to all matters or facts required to be verified under oath,
each of the undersigned acknowledges that to the best of his knowledge,
information and belief, these matters and facts relating to the entity
on whose behalf he has signed are true in all material respects and
that this statement is made under the penalties of perjury.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, these Articles of Merger have been duly
executed by the parties hereto this day of
, 2005.
ATTEST: UNITED MORTGAGE TRUST
By:
By: -------------------------------
- ------------
(SEAL)
Name: Name:
Title: Secretary Title: President
WITNESS: UMT HOLDINGS, L.P.
By: UMT Services, Inc, its sole
general partner
By:
By: -------------------------------
- ------------
(SEAL)
Name: Name: Hollis Greenlaw
Title: Title: President
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EXHIBIT C
ARTICLES OF AMENDMENT
United Mortgage Trust, a Maryland real estate investment trust
(the "Trust") hereby certifies to the State Department of Assessments
and Taxation of Maryland that:
FIRST: The Declaration of Trust of the Trust (the "Declaration
of Trust") is hereby amended by deleting therefrom in its entirety
Article XIV.
SECOND: The amendment to the Declaration of Trust as set forth
above has been duly advised by the Board of Trustees and approved by
the shareholders of the Trust as required by law.
THIRD: The undersigned President acknowledges these Articles of
Amendment to be the trust act of the Trust and as to all matters of
facts required to be verified under oath, the undersigned President
acknowledges that to the best of her knowledge, information and belief,
these matters and facts are true in all material respects and that this
statement is made under the penalties of perjury.
IN WITNESS WHEREOF, the Trust has caused these Articles of
Amendment to be executed under seal in its name and on its behalf by
its President, and attested to by its Secretary, on this day of
2005.
ATTEST: UNITED MORTGAGE TRUST
By:
(Seal)
Name: Douglas R. Evans Name: Christine Griffin
Title: Secretary Title: President