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EXHIBIT-10.9
Form of Transmittal Letter
to the Shareholders of Lexford
FORM OF INVESTMENT LETTER
Cardinal Realty Services, Inc.
6954 Americana Parkway
Reynoldsburg, Ohio 43068
Ladies and Gentlemen:
The undersigned is a holder of shares of Common Stock, par value $1.00
per share ("Company Common Stock"), of Lexford Properties, Inc. a Texas
corporation (the "Company"). The undersigned will receive shares of common
stock, without par value ("Parent Common Stock"), of Cardinal Realty Services,
Inc., an Ohio corporation ("Parent"), in connection with the merger of Rexflor
Acquisition Corporation, an Ohio corporation and a wholly owned subsidiary of
Parent ("Sub"), with and into the Company, with the Company continuing as the
surviving corporation (the "Merger").
The undersigned acknowledges and understands that the shares of Parent
Common Stock to be received by the undersigned in exchange for shares of Company
Common Stock pursuant to the Merger (the "Merger Shares") have not been
registered under the Securities Act of 1933, as amended (the "Act"), or the
securities laws of any state and that the Merger Shares are "restricted
securities" as defined in Rule 144 promulgated under the Act. The undersigned
further acknowledges that the undersigned is fully aware of the applicable
limitations on the resale of the Merger Shares.
The undersigned acknowledges that he/she has had an opportunity to ask
questions of and receive answers from duly designated representatives of Parent
concerning the terms and conditions pursuant to which the Merger Shares will be
acquired. The undersigned acknowledges that he/she has been afforded an
opportunity to examine such documents (including, without limitation, all forms,
reports, schedules, statements and other documents required to be filed by
Parent with the Securities and Exchange Commission (the "Commission") pursuant
to Section 13 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), since January 1, 1993, and other information which the undersigned has
requested for the purpose of verifying the information set forth in the
documents referred to above.
By reason of the undersigned's knowledge and experience in financial
and business matters in general, and investments in particular, the undersigned
is capable of evaluating the merits and risks of the acquisition of the Merger
Shares.
The undersigned's present financial condition is such that the
undersigned is under no present or contemplated future need to dispose of any
portion of the Merger Shares to satisfy any existing or contemplated
undertaking, need or indebtedness.
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The undersigned acknowledges that he/she may be deemed an "affiliate"
of the Company as the term "affiliate" is defined for purposes of paragraphs (c)
and (d) of Rule 145 promulgated under the Act. Execution of this Letter
Agreement by the undersigned should not be construed as an admission of
"affiliate" status or as a waiver of any rights the undersigned may have to
object to any claim that the undersigned is such an affiliate on or after the
date of this Letter Agreement.
If in fact the undersigned were deemed to be an affiliate of the
Company under the Act, the undersigned's ability to sell, transfer or otherwise
dispose of any Merger Shares may be further restricted unless such transaction
is registered under the Act or an exemption from such registration is available.
The undersigned understands that such exemptions are limited and has obtained
advice of counsel as to the nature and conditions of such exemptions, including
information with respect to the applicability of Rules 144 and 145(d) to the
resale of such securities.
The undersigned hereby represents to and covenants with Parent that
he/she will not sell, transfer or otherwise dispose of any Merger Shares except
(i) pursuant to an effective registration statement under the Act, (ii) by a
sale made in conformity with the provisions of Rules 144 or 145 or (iii) in a
transaction which, in the opinion of independent counsel reasonably satisfactory
to Parent or as described in a "no-action" or interpretive letter from the Staff
of the Commission, is not required to be registered under the Act.
The undersigned understands that Parent is under no obligation to
register the sale, transfer or other disposition of the Merger Shares by the
undersigned or on behalf of the undersigned under the Act except to the limited
extent provided in that certain Registration Rights Agreement of even date
herewith among the undersigned Parent and the other holders of the Company
Common Stock or, except as provided in paragraph A below, to take any other
action necessary in order to make compliance with an exemption from such
registration available.
The undersigned also understands that stop transfer instructions will
be given to Parent's transfer agents with respect to the Merger Shares issued to
the undersigned and that there will be placed on the certificates for the Merger
Shares issued to the undersigned, or any substitutions therefor, a legend
stating in substance:
"THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A
TRANSACTION TO WHICH RULE 144 OR 145 PROMULGATED UNDER THE SECURITIES
ACT OF 1933 APPLIES. THE SHARES REPRESENTED BY THIS CERTIFICATE MAY
ONLY BE TRANSFERRED IN ACCORDANCE WITH THE TERMS OF AN INVESTMENT
LETTER AGREEMENT DATED [ ], 1996 BETWEEN THE REGISTERED HOLDER HEREOF
AND CARDINAL REALTY SERVICES, INC., A COPY OF WHICH AGREEMENT IS ON
FILE AT THE PRINCIPAL OFFICES OF CARDINAL REALTY SERVICES, INC."
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The undersigned also understands that unless a sale or transfer is made
in conformity with the provisions of Rules 144 or 145, or pursuant to a
registration statement, Parent reserves the right to put the following legend on
the certificates issued to the undersigned's transferee:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 AND WERE ACQUIRED FROM A PERSON WHO
RECEIVED SUCH SHARES IN A TRANSACTION TO WHICH RULE 144 OR 145
PROMULGATED UNDER THE SECURITIES ACT OF 1933 APPLIES. THE SHARES HAVE
BEEN ACQUIRED BY THE HOLDER NOT WITH A VIEW TO, OR FOR RESALE IN
CONNECTION WITH, ANY DISTRIBUTION THEREOF WITHIN THE MEANING OF THE
SECURITIES ACT OF 1933 AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT IN ACCORDANCE WITH AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933."
In the event of a sale of any Merger Shares pursuant to Rules 144 or
145, the undersigned will supply Parent with evidence of compliance with such
Rules, in the form of customary seller's and broker's Rule 144 or 145
representation letters or as Parent may otherwise reasonably request. The
undersigned understands that Parent may instruct its transfer agent to withhold
the transfer of any Merger Shares disposed of by the undersigned in a manner
inconsistent with this Letter Agreement.
The undersigned hereby agrees not to exercise any appraisal rights with
respect to the Merger that he/she may have under the Texas Business Corporation
Act or any similar law or regulation.
By Parent's acceptance of this Letter Agreement, Parent hereby agrees
with the undersigned as follows:
A. For so long as and to the extent necessary to permit the undersigned
to sell the Merger Shares pursuant to Rules 144 or 145, Parent shall (a) use its
reasonable best efforts to (i) file, on a timely basis, all reports and data
required to be filed with the Commission by it pursuant to Section 13 of the
Exchange Act and (ii) furnish to the undersigned upon request a written
statement as to whether Parent has complied with such reporting requirements
during the 12 months preceding any proposed sale of the Merger Shares by the
undersigned under Rules 144 and 145. Parent has filed all reports required to be
filed with the Commission under Section 13 of the Exchange Act during the
preceding 12 months.
B. It is understood and agreed that the legends set forth above shall
be removed by delivery of substitute certificates without such legend if such
legend is not required for purposes of the Act or this Letter Agreement. It is
understood and agreed that such legends and the stop orders referred to above
will be removed if (i) the Parent has received either a written opinion of
counsel, which opinion and counsel shall be reasonably satisfactory to Parent,
or a "no action" letter obtained from the Staff of the Commission, to the effect
that the Merger Shares subject thereto may be transferred free of the
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restrictions imposed by Rules 144 or 145 under the Act, or (ii) in the event of
a sale of the Merger Shares received by the undersigned in the Merger which has
been registered under the Act or made in conformity with the provisions of Rules
144 or 145.
The undersigned acknowledges that he/she has carefully reviewed this
Letter Agreement and understands the requirements hereof and the limitations
imposed upon the distribution, sale, transfer or other disposition of the Merger
Shares.
Very truly yours,
/s/ Eric Madsen
Eric Madsen
Accepted this 1st day of August, 1996, by
CARDINAL REALTY SERVICES, INC.
By: /s/ Mark D. Thompson
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Mark D. Thompson
Executive Vice President
of Corporate Acquisitions
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