________________________________________________________
________________________________________________________
AGREEMENT AND PLAN OF MERGER
among
EXCEL REALTY TRUST, INC.,
ERT MERGER SUB, INC.
and
NEW PLAN REALTY TRUST
Dated May 14, 1998
________________________________________________________
________________________________________________________
TABLE OF CONTENTS
ARTICLE 1. THE MERGER
1.1. The Merger
1.2. The Closing
1.3. Effective Time
1.4. Revision of Form of Transaction
ARTICLE 2. ORGANIZATION OF THE SURVIVING TRUST
2.1. Declaration of Trust
2.2. Trustees
2.3. Officers
ARTICLE 3. ORGANIZATION OF EXCEL
3.1. Articles of Incorporation
3.2. Bylaws
3.3. Directors
3.4. Officers
3.5. Excel Stock Dividend
ARTICLE 4. EFFECT OF THE MERGER ON THE CAPITAL STOCK
OF THE CONSTITUENT PARTIES; EXCHANGE OF
CERTIFICATES
4.1. Effect on Capital Stock
4.2. Exchange of Certificates
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF NEW PLAN
5.1. Existence; Good Standing; Authority;
Compliance With Law
5.2. Authorization, Validity, and Effect of
Agreements
5.3. Capitalization
5.4. Subsidiaries
5.5. Other Interests
5.6. No Violation
5.7. SEC Documents
5.8. Litigation
5.9. Absence of Certain Changes
5.10. Taxes
5.11. Books and Records
5.12. Properties
5.13. Environmental Matters
5.14. Employee Benefit Plans
5.15. Labor Matters
5.16. No Brokers
5.17. Opinion of Financial Advisor
5.18. Excel Stock Ownership
5.19. Related Party Transactions
5.20. Contracts and Commitments
5.21. Leases
5.22. Investment Company Act of 1940
-i-
5.23. Certain Payments Resulting From
Transactions
5.24. State Takeover Statutes
ARTICLE 6. REPRESENTATIONS AND WARRANTIES OF EXCEL
6.1. Existence; Good Standing; Authority;
Compliance With Law
6.2. Authorization, Validity and Effect of
Agreements
6.3. Capitalization
6.4. Subsidiaries
6.5. Other Interests
6.6. No Violation
6.7. SEC Documents
6.8. Litigation
6.9. Absence of Certain Changes
6.10. Taxes
6.11. Books and Records
6.12. Properties
6.13. Environmental Matters
6.14. Employee Benefit Plans
6.15. Labor Matters
6.16. No Brokers
6.17. Opinion of Financial Advisor
6.18. New Plan Share Ownership
6.19. Related Party Transactions
6.20. Contracts and Commitments
6.21. Leases
6.22. Investment Company Act of 1940
6.23. Certain Payments Resulting From
Transactions
6.24. State Takeover Statutes
6.25. Legacy Arrangements
ARTICLE 7. COVENANTS
7.1. No Solicitation by New Plan
7.2. No Solicitation by Excel
7.3. Conduct of Businesses
7.4. Meetings of Stockholders
7.5. Filings; Other Action
7.6. Inspection of Records
7.7. Publicity
7.8. Registration Statement
7.9. Listing Application
7.10. Affiliates of New Plan
7.11. Expenses
7.12. Indemnification
7.13. Employees
7.14. Reorganization
7.15. Advice of Changes
7.16. REIT Status
7.17. Governance
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7.18. Corporate Headquarters
7.19. Amendments to Excel DRIP
7.20. Legacy Arrangements
7.21. Consulting Agreement
7.22. No Sale Agreements
7.23. Dividends
7.24. Executive Employment Agreements
ARTICLE 8. CONDITIONS
8.1. Conditions to Each Party's Obligation to
Effect the Merger
8.2. Conditions to Obligations of New Plan to
Effect the Merger
8.3. Conditions to Obligation of Excel to
Effect the Merger
ARTICLE 9. TERMINATION
9.1. Termination by Mutual Consent
9.2. Termination by Either Excel or New Plan
9.3. Termination by New Plan
9.4. Termination by Excel
9.5. Certain Fees and Expenses Upon Effect of
Termination and Abandonment
9.6. Investigation
ARTICLE 10. GENERAL PROVISIONS
10.1. Nonsurvival of Representations, Warranties
and Agreements
10.2. Notices
10.3. Assignment; Binding Effect; Benefit
10.4. Entire Agreement
10.5. Confidentiality
10.6. Amendment
10.7. Governing Law
10.8. Counterparts
10.9. Headings
10.10. Interpretation
10.11. Extension; Waiver
10.12. Severability
10.13. Enforcement of Agreement
10.14. Interpretation and Certain Definitions
10.15. Limitation of Liability
EXHIBITS
A-1 Arnold Laubich Employment Agreement
A-2 Gary Sabin Employment Agreement
B-1 Gary Sabin Voting Agreement
B-2 Laubich and Newman Voting Agreement
C-1 Gary Sabin Support Agreement
C-2 Laubich and Newman Support Agreement
D-1 Amendment to Administrative Services Agreement
D-2 Terms of Legacy Agreement
-iii-
E Terms of Newman Consulting Agreement
F Executive Employment Agreements
SCHEDULES
1.1 New Plan Trust Amendments
2.2 Trustees of Surviving Trust
2.3 Officers of Surviving Trust
3.1 Excel Charter Amendments
3.2 Amended and Restated Bylaws of Excel
3.3 Directors of Excel as of Effective Time
3.4 Officers of Excel as of Effective Time
4.1(b) Certificate of Designation for Excel Series D
Preferred Stock
-iv-
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement"),
dated May 14, 1998, among EXCEL REALTY TRUST, INC., a
Maryland corporation ("Excel"), ERT MERGER SUB, INC., a
Maryland corporation and wholly-owned subsidiary of Excel
("Sub"), and NEW PLAN REALTY TRUST, a Massachusetts
business trust ("New Plan").
RECITALS
A. The Board of Directors of Excel and the Board
of Trustees of New Plan have both determined that a
business combination between Excel and New Plan is in the
best interests of their respective companies and
stockholders and holders of shares of beneficial interest
(sometimes hereinafter referred to as "shareholders") and
presents an opportunity for their respective companies to
achieve long-term strategic and financial benefits, and
accordingly have agreed to effect the merger of Sub with
and into New Plan upon the terms and subject to the
conditions set forth herein.
B. For federal income tax purposes, it is
intended that the merger provided for herein shall
qualify as a reorganization within the meaning of Section
368(a)(1) of the Internal Revenue Code of 1986, as
amended (the "Code").
C. Each of Excel and New Plan has received a
fairness opinion relating to the transactions
contemplated hereby as more fully described herein.
D. Excel, Sub and New Plan desire to make certain
representations, warranties and agreements as provided in
this Agreement.
E. Simultaneously herewith, (i) Excel and Arnold
Laubich ("Laubich"), currently New Plan's President and
Chief Executive Officer, have entered into an employment
agreement (in the form of Exhibit A-1 hereto) to be
effective as of the Effective Time (as herein defined)
and (ii) Excel and Gary Sabin ("Sabin"), currently
Excel's Chairman and Chief Executive Officer, have
entered into an employment agreement (in the form of
Exhibit A-2 hereto) to be effective as of the Effective
Time.
F. Simultaneous herewith, Laubich, Sabin and
William Newman ("Newman") have entered into (i) a Voting
Agreement in the form of Exhibit B-1 hereto (for Sabin)
and Exhibit B-2 hereto (for Laubich and Newman) with
respect to approval of the Merger, this Agreement and the
transactions contemplated hereby and (ii) a Support
Agreement in the form of Exhibit C-1 hereto (for Sabin)
and Exhibit C-2 hereto (for Laubich and Newman) with
respect to certain matters from and after the Effective
Time.
NOW, THEREFORE, in consideration of the foregoing,
and of the representations, warranties, covenants and
agreements contained herein, the parties hereto hereby
agree as follows:
ARTICLE 1.
THE MERGER
1.1. The Merger. On the terms and subject to the
conditions of this Agreement, at the Effective Time (as
defined in Section 1.3), Sub shall be merged with and
into New Plan in accordance with this Agreement and the
separate corporate existence of Sub shall thereupon cease
(the "Merger"). New Plan shall continue as the surviving
trust in the Merger (sometimes hereinafter referred to as
the "Surviving Trust"). The Merger shall have the
effects specified in Section 3-114 of the Maryland
General Corporation Law (the "MGCL") and in the Amended
and Restated Declaration of Trust of New Plan dated
January 15, 1996 (the "Declaration of Trust") as amended
by the Trust Amendments (the "Trust Amendments") set
forth on Schedule 1.1 hereto under Massachusetts law.
1.2. The Closing. On the terms and subject to the
conditions of this Agreement, and provided that this
Agreement has not been terminated under Article 9 hereof,
the closing of the Merger (the "Closing") shall take
place (a) at the offices of Latham & Watkins in New York,
New York, at 9:00 a.m., local time, on the third business
day immediately following the day on which the condition
set forth in Section 8.1(a) has been satisfied, provided
that if all the other conditions set forth in Article 8
are not then fulfilled or waived on such third business
day, the Closing shall be automatically extended from
time to time until the first subsequent business day on
which all such conditions are so fulfilled or waived,
subject however, to Article 9 hereof, or (b) at such
other time, date or place as Excel and New Plan may
agree. The date on which the Closing occurs is
hereinafter referred to as the "Closing Date." As used
herein, "business day" shall mean a day on which banks
are not required or authorized to close in The City of
New York.
1.3. Effective Time. At the Closing, the parties
hereto shall cause Articles of Merger meeting the
requirements of the MGCL to be properly executed,
verified and delivered for filing in accordance with the
MGCL on the Closing Date, and the Trustees of New Plan
shall cause to be properly executed and filed with the
Secretary of the Commonwealth of Massachusetts a
certificate as to the due adoption of the Trust
Amendments and of the effectiveness of the Merger
provided for in this Agreement to which shall be attached
a duplicate copy of such Articles of Merger (the
"Certificate of Amendment and Merger"). The Merger shall
2
become effective upon the later of the acceptance for
record of the Articles of Merger by the State Department
of Assessments and Taxation of Maryland (the "SDAT") in
accordance with the MGCL and the filing of the
Certificate of Amendment and Merger with the Secretary of
the Commonwealth of Massachusetts (the "Effective Time").
1.4. Revision of Form of Transaction. In the
event that consummation of the Merger as contemplated by
this Agreement would result in a Excel Material Adverse
Effect (as defined herein) at or following the Effective
Time as a result of the failure of the Surviving Trust to
be treated as a qualified REIT subsidiary (as defined in
the Code) under applicable provisions of state law, then
the parties shall effect the business combination of New
Plan and Excel as a direct merger of New Plan into Excel
and such Merger shall be deemed the "Merger" hereunder,
and this Agreement shall be deemed automatically amended
by the parties as appropriate to give effect to the
revised form of such business combination with each party
executing a written amendment to this Agreement as
necessary to reflect the foregoing, provided that in such
case the Excel Series D Preferred Stock (as herein
defined) shall not have voting rights on general
stockholder matters. Such amendment shall not change the
substantive terms of this Agreement, including, without
limitation, provisions with respect to the consideration
to be received by the holders of New Plan Common Shares
(as herein defined).
ARTICLE 2.
ORGANIZATION OF THE SURVIVING TRUST
2.1. Declaration of Trust. The Declaration of
Trust in effect immediately prior to the Effective Time
(after giving effect to the Trust Amendments which shall
be submitted to the New Plan shareholders at the New Plan
Shareholders Meeting (as herein defined) and made
effective immediately prior to the Effective Time) shall
be the Declaration of Trust of the Surviving Trust, until
duly amended in accordance with the provisions of the
Declaration of Trust and applicable law.
2.2. Trustees. The persons listed on Schedule 2.2
hereto shall become the trustees of the Surviving Trust
as of the Effective Time, subject to Section 3.3.
2.3. Officers. The persons listed on Schedule 2.3
hereto with their respective titles shall be the officers
of the Surviving Trust as of the Effective Time, subject
to Section 3.4.
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ARTICLE 3.
ORGANIZATION OF EXCEL
3.1. Articles of Incorporation. The charter, as
amended (the "Charter") of Excel in effect immediately
prior to the Effective Time shall be the Charter of Excel
from and after the Effective Time until duly amended in
accordance with applicable law; provided that, as of the
Effective Time and subject to receipt of the requisite
approval of the stockholders of Excel at the Excel
Stockholders Meeting (as herein defined), (i) Article II
of the Charter shall be amended to read in its entirety
as follows: "The name of the corporation (which is
hereinafter called the "Corporation") is New Plan Excel
Realty Trust, Inc." and (ii) such Charter shall be
further amended as set forth on Schedule 3.1 to this
Agreement (such amendment being referred to herein as the
"Excel Charter Amendment").
3.2. Bylaws. The Bylaws of Excel in effect
immediately prior to the Effective Time shall be the
Bylaws of Excel from and after the Effective Time until
duly amended in accordance with applicable law; provided
that, as of the Effective Time, the Bylaws of Excel shall
be amended and restated as set forth on Schedule 3.2 to
this Agreement.
3.3. Directors. As of the Effective Time, the
Board of Directors of Excel shall be reconstituted to
have fifteen (15) members, nine (9) to be designated by
New Plan and six (6) to be designated by Excel, as
further set forth on Schedule 3.3 so that the persons
listed on Schedule 3.3 hereto shall become the directors
of Excel as of the Effective Time. In the event that any
person designated on Schedule 2.2 or 3.3 (including by
reason of this sentence) is unable or unwilling to serve
as a director of Excel or trustee of the Surviving Trust
as of the Effective Time, then New Plan shall designate
the replacement for any such persons who are trustees of
or designated by New Plan, and Excel shall designate the
replacement for any such persons who are directors of or
designated by Excel and in each case, such replacement
designees shall be treated as if set forth on Schedule
2.2 or 3.3, as the case may be, as of the date hereof in
place of the person for whom he or she has been
designated as a replacement.
3.4. Officers. The persons listed on Schedule 3.4
hereto with their respective titles shall be the officers
of Excel as of the Effective Time. In the event that
prior to the Effective Time any person designated on
Schedule 2.3 or 3.4 (including by reason of this
sentence) is unable or unwilling to serve as an officer
of the Surviving Trust or Excel as set forth on Schedule
2.3 or 3.4, as the case may be, New Plan and Excel shall
4
mutually determine the person or persons to serve as such
officer in replacement for such person.
3.5. Excel Stock Dividend. New Plan and Excel
agree that Excel shall declare and pay on each share of
Excel Common Stock a dividend of .2 of a share of Excel
Common Stock (the "Excel Stock Dividend"). Both the
record date and the payment date for such dividend shall
be before the Effective Time. In the case of any holder
of Excel Common Stock entitled to receive a dividend of a
whole number of shares plus a fraction of one share
(after taking into account all shares owned by such
holder), such holder shall receive such whole number of
shares but, in satisfaction and redemption of such
holder's right to receive such fraction of one share,
such holder shall receive cash in an amount equal to such
fraction of the value of one share of Excel Common Stock,
determined as the average of the high and low trading
prices of a share of Excel Common Stock on the New York
Stock Exchange on the record date for the Excel Stock
Dividend.
ARTICLE 4.
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT PARTIES; EXCHANGE OF CERTIFICATES
4.1. Effect on Capital Stock.
(a) At the Effective Time, each share of
beneficial interest, no par value, of New Plan ("New Plan
Common Shares") together with the New Plan Rights (as
herein defined) outstanding immediately prior to the
Effective Time shall, by virtue of the Merger and without
any action on the part of New Plan, Excel or the holders
of any of the securities of either of these entities, be
cancelled and converted into, subject to the prior
distribution of the Excel Stock Dividend, the right to
receive one (1) (the "Exchange Ratio") share of common
stock, par value $.01 per share, of Excel ("Excel Common
Stock"). The Exchange Ratio and corresponding number of
shares of Excel Common Stock to be issued in the Merger
shall be appropriately adjusted to reflect the effect of
any stock split, reverse stock split, stock dividend
(other than the Excel Stock Dividend), reorganization,
recapitalization or other like change with respect to the
Excel Common Stock or New Plan Common Shares occurring
after the date hereof and prior to the Effective Time
(subject, however, to Sections 7.3(b)(iv) and 7.3(c)(iv)
hereof). Each New Plan Common Share to be converted in
the Merger shall be converted, without further
consideration together with its associated share purchase
right (a "New Plan Right") issued pursuant to the Rights
Agreement between New Plan and Bank Boston, N.A., as
rights agent. References herein to New Plan Common
Shares to be converted in the Merger are deemed to
include the associated New Plan Rights. Each share of
5
Excel Common Stock issued to holders of New Plan Common
Shares in the Merger shall be issued together with one
associated preferred stock purchase right (an "Excel
Right") in accordance with the Rights Agreement between
Excel and BankBoston, N.A., as rights agent. References
herein to shares of Excel Common Stock issuable in
connection with the Merger are deemed to include the
associated Excel Rights.
(b) At the Effective Time, each Depositary
Share representing one-tenth of a share of 7.8% Series A
Cumulative Step-up Rate Premium Preferred Shares, par
value $1.00 per share, of New Plan ("New Plan Preferred
Shares") outstanding immediately prior to the Effective
Time shall, by virtue of the Merger and without any
action on the part of New Plan, Excel or the holders of
any of the securities of either of these entities, be
cancelled and converted into the right to receive one
voting depositary share representing a one-tenth
fractional interest in a share of 7.8% Series D
Cumulative Voting Step-up Rate Premium Preferred Stock,
par value $.01 per share, of Excel ("Excel Series D
Preferred Stock"), and shall have a liquidation
preference of $50.00 per share. The Excel Series D
Preferred Stock shall have the same terms as the New Plan
Preferred Shares and such other terms which are reflected
on Schedule 4.1(b) hereto and which other terms are
hereafter approved by New Plan, shall have ten (10) votes
per share, with each depositary share representing a one-
tenth fractional interest in a share of Excel Series D
Preferred Stock (a "Excel Series D Depositary Share")
having one vote per share (voting together with the Excel
Common Stock) and shall accrue dividends from the end of
the last period with respect to which the New Plan
Preferred Shares received a dividend payment (it being
agreed that Excel shall cooperate with New Plan to
address such other terms promptly hereafter). The shares
of Excel Common Stock to be issued to holders of New Plan
Common Shares and the Excel Series D Depositary Shares to
be issued in the Merger to holders of New Plan Preferred
Shares are sometimes referred to collectively herein as
the "Merger Consideration."
(c) At the Effective Time, each share of
common stock, par value $.01 per share, of Sub ("Sub
Common Stock"), outstanding immediately prior to the
Effective Time shall, by virtue of the Merger and without
any action on the part of New Plan, Sub or the holder of
the securities of either of these entities, be canceled
and converted into the right to receive one New Plan
Common Share.
(d) As a result of the Merger and without
any action on the part of the holder thereof, all New
Plan Common Shares and New Plan Preferred Shares
outstanding immediately prior to the Effective Time shall
6
cease to be outstanding and shall be canceled and retired
and shall cease to exist, and each holder of a
certificate (a "Certificate") representing any New Plan
Common Share or New Plan Preferred Share shall thereafter
cease to have any rights with respect to such New Plan
Common Share or New Plan Preferred Share, except the
right to receive, without interest, the Merger
Consideration (including the rights described in Sections
4.2(c), 4.2(d) and 4.2(e) hereof) and cash in lieu of
fractional shares of Excel Common Stock upon the
surrender of such Certificate.
(e) Each New Plan Common Share or New Plan
Preferred Share issued and held in New Plan's treasury at
the Effective Time or owned of record or beneficially by
Excel, if any, shall by virtue of the Merger cease to be
outstanding and shall be canceled and retired and shall
cease to exist without payment of any consideration
therefor. Each share of Excel Common Stock and Excel
Series D Preferred Stock issued in connection with the
Merger will be duly authorized, validly issued, fully
paid and nonassessable and free of preemptive rights.
(f) To the extent that acceleration by New
Plan of the exercisability of any outstanding option to
purchase New Plan Common Shares (each, an "New Plan
Option") is permitted but not required by the applicable
governing instrument, New Plan shall not elect to cause
such acceleration to occur. In connection therewith, at
the Effective Time, to the extent not prohibited by the
terms of the relevant governing instrument, New Plan's
obligations with respect to each New Plan Option that is
outstanding and unexercised immediately prior thereto
shall be assumed by Excel, as follows. Each New Plan
Option shall cease to represent a right to purchase New
Plan Common Shares and shall instead represent a right to
purchase shares of Excel Common Stock in an amount and at
an exercise price determined as provided below (and
otherwise subject to the terms of whichever of New Plan's
Amended and Restated 1985 Incentive Stock Option Plan,
March 1991 Stock Option Plan, Non-Qualified Stock Option
Plan, 1991 Stock Option Plan or 1997 Stock Option Plan
(collectively, the "New Plan Employee Stock Plans"), that
the New Plan Option was issued under and the agreements
evidencing grants thereunder, including subject to the
provisions of the first sentence of this Section 4.1(f),
the accelerated vesting of New Plan Options that shall
occur in connection with and by virtue of the Merger as
and to the extent required by the New Plan Employee Stock
Plans or such agreements):
(i) the number of shares of Excel
Common Stock to be subject to the assumed New Plan
Option shall be equal to the product of the number
of New Plan Common Shares that were subject to the
option and the Exchange Ratio, provided that any
7
fractional share of Excel Common Stock resulting
from such multiplication shall be rounded up to the
nearest whole share; and
(ii) the exercise price per share of
Excel Common Stock under the assumed New Plan
Option shall be equal to the exercise price per New
Plan Common Share under the option before the
assumption by Excel divided by the Exchange Ratio,
provided that such exercise price shall be rounded
down to the nearest whole cent.
Except as provided above, each such assumed New Plan
Option shall be subject to the same terms and conditions
(including, without limitation, expiration date, vesting
and exercise provisions) as were applicable to New Plan
Options immediately prior to the Effective Time. No
later than the Effective Time, Excel will cause to be
filed one or more registration statements on Form S-8
under the Securities Act (or any successor form) in order
to register the shares of Excel Common Stock issuable in
connection with the assumed New Plan Options, and Excel
shall use its best efforts to maintain the effectiveness
of such registration statements (and maintain the current
status of the prospectuses contained therein or used
pursuant thereto) for so long as such assumed New Plan
Options remain outstanding. At or prior to the Effective
Time, Excel shall take all corporate action necessary to
reserve for issuance a sufficient number of shares of
Excel Common Stock for delivery in connection with the
assumed New Plan Options. The adjustment provided herein
with respect to any New Plan Options that are "incentive
stock options" (as defined in Section 422 of the Code)
shall be and is intended to be effected in a manner that
is consistent with Section 424(a) of the Code and, to the
extent it is not so consistent, Section 424(a) shall
override anything to the contrary contained herein. The
duration and other terms of the assumed New Plan Option
after its assumption by Excel shall be the same as before
such assumption except that all references to New Plan
shall be deemed to be references to Excel.
4.2. Exchange of Certificates.
(a) As of the Effective Time, Excel shall
deposit, or shall cause to be deposited, with an exchange
agent selected by Excel, which shall be reasonably
satisfactory to New Plan (the "Exchange Agent"), for the
benefit of the holders of New Plan Common Shares and New
Plan Preferred Shares, for exchange in accordance with
this Article 4, certificates representing the Merger
Consideration, cash in lieu of fractional shares of the
Merger Consideration to be issued pursuant to Section 4.1
and paid pursuant to this Section 4.2 in exchange for
outstanding New Plan Common Shares, and dividends and
8
other distributions on the Merger Consideration
contemplated by Section 4.2(c).
(b) Promptly after the Effective Time,
Excel shall cause the Exchange Agent to mail to each
holder of record of a Certificate or Certificates (i) a
letter of transmittal which shall specify that delivery
shall be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of the
Certificates to the Exchange Agent and shall be in such
form and have such other provisions as Excel may
reasonably specify and (ii) instructions for use in
effecting the surrender of the Certificates in exchange
for certificates representing the Merger Consideration,
cash in lieu of fractional shares of the Merger
Consideration, and dividends and other distributions on
the Merger Consideration contemplated by Section 4.2(c).
Upon surrender of a Certificate for cancellation to the
Exchange Agent together with such letter of transmittal,
duly executed and completed in accordance with the
instructions thereto, the holder of such Certificate
shall be entitled to receive in exchange therefor (x)
certificates representing the number of whole shares of
the Merger Consideration and (y) a check representing the
amount of cash in lieu of fractional shares of the Merger
Consideration, if any, and unpaid dividends and
distributions, if any, which such holder has the right to
receive in respect of the Certificate surrendered
pursuant to the provisions of this Article 4, after
giving effect to any required withholding tax, and the
Certificate so surrendered shall forthwith be canceled.
No interest will be paid or accrued on the cash in lieu
of fractional shares of the Merger Consideration and
dividends and distributions on the Merger Consideration
contemplated by Section 4.2(c) hereto payable to holders
of Certificates. In the event of a transfer of ownership
of New Plan Common Shares or New Plan Preferred Shares
which is not registered in the transfer records of New
Plan, certificates representing the proper number of
shares of the Merger Consideration, together with a check
for the cash to be paid in lieu of fractional shares of
the Merger Consideration and dividends and distributions
on the Merger Consideration contemplated by Section
4.2(c) hereof, may be issued to such a transferee if the
Certificate representing such New Plan Common Shares or
New Plan Preferred Shares is presented to the Exchange
Agent, accompanied by all documents required to evidence
and effect such transfer and to evidence that any
applicable stock transfer taxes have been paid.
Notwithstanding any other provision of this Agreement,
the letter of transmittal referred to above will, at New
Plan's election, provide for the ability of a holder of
one or more Certificates to elect that shares of Excel
Common Stock to be received in exchange for the New Plan
Common Shares formerly represented by such surrendered
Certificates be issued in uncertificated form or to elect
9
that such shares of Excel Common Stock be credited to an
appropriate book entry account or, as applicable, an
account established for the holder under the dividend
reinvestment and stock purchase plan of Excel.
(c) Notwithstanding any other provisions of
this Agreement, no dividends or other distributions on
the Merger Consideration with a record date after the
Effective Time shall be paid with respect to any New Plan
Common Shares or New Plan Preferred Shares represented by
a Certificate until such Certificate is surrendered for
exchange as provided herein. Subject to the effect of
applicable laws, following surrender of any such
Certificate, there shall be paid to the holder of the
certificates representing whole shares of the Merger
Consideration issued in exchange therefor, without
interest, (i) at the time of such surrender, the amount
of dividends or other distributions with a record date
after the Effective Time theretofore payable with respect
to such whole shares of the Merger Consideration, less
the amount of any withholding taxes which may be required
thereon, and (ii) at the appropriate payment date, the
amount of dividends or other distributions with a record
date after the Effective Time but prior to surrender and
a payment date subsequent to surrender payable with
respect to such whole shares of the Merger Consideration,
less the amount of any withholding taxes which may be
required thereon.
(d) At and after the Effective Time, there
shall be no transfers on the stock transfer books of New
Plan of New Plan Common Shares and New Plan Preferred
Shares which were outstanding immediately prior to the
Effective Time. If, after the Effective Time,
Certificates are presented to the Surviving Trust, they
shall be canceled and exchanged for certificates for the
Merger Consideration and cash in lieu of fractional
shares of the Merger Consideration, if any, and unpaid
dividends and distributions on the Merger Consideration
deliverable in respect thereof pursuant to this Agreement
in accordance with the procedures set forth in this
Article 4. Appropriate procedures shall be established
by Excel and the Exchange Agent so that each holder of a
Certificate at the Effective Time shall be entitled to
vote on all matters subject to the vote of holders of
Excel Common Stock or Excel Series D Preferred Stock with
a record date on or after the date of the Effective Time,
whether or not such Certificate holder shall have
surrendered Certificates in accordance with the
provisions of this Agreement. For purposes of the
immediate foregoing sentence, Excel may rely conclusively
on the shareholder records of New Plan in determining the
identity of and the number of New Plan Common Shares or
New Plan Preferred Shares held by each holder of a
Certificate at the Effective Time.
10
(e) No fractional shares of the Merger
Consideration shall be issued pursuant hereto. In lieu
of the issuance of any fractional shares of the Merger
Consideration pursuant to Section 4.1(b), cash
adjustments will be paid to holders in respect of any
fractional shares of the Merger Consideration that would
otherwise be issuable (after taking into account all
shares held by each record or beneficial owner of the
Merger Consideration), and the amount of such cash
adjustment shall be equal to such fractional proportion
of the closing sale prices of the Excel Common Stock on
the New York Stock Exchange ("NYSE") as reported in The
Wall Street Journal, or, if not reported thereby, by
another authoritative source, on the trading day on which
the Effective Time occurs.
(f) Any portion of the Merger Consideration
held by the Exchange Agent (together with any cash in
lieu of fractional shares of the Merger Consideration and
the proceeds of any investments thereof) that remains
unclaimed by the former stockholders of New Plan one year
after the Effective Time shall be delivered to Excel.
Any former stockholders of New Plan who have not
theretofore complied with this Article 4 shall thereafter
look only to Excel for payment of their shares
constituting the Merger Consideration, cash in lieu of
fractional shares of the Merger Consideration and
dividends and other distributions on the Merger
Consideration contemplated by Section 4.2(c), in each
case, without any interest thereon.
(g) None of Excel, New Plan, the Exchange
Agent or any other person shall be liable to any former
holder of New Plan Common Shares or New Plan Preferred
Shares for any amount properly delivered to a public
official pursuant to applicable abandoned property,
escheat or similar laws.
(h) In the event any Certificate shall have
been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the person claiming such
Certificate to be lost, stolen or destroyed and, if
required by Excel, the posting by such person of a bond
in such reasonable amount as Excel may direct as
indemnity against any claim that may be made against it
with respect to such Certificate, the Exchange Agent or
Excel will issue in exchange for such lost, stolen or
destroyed Certificate the Merger Consideration and cash
in lieu of fractional shares and unpaid dividends and
distributions on shares of the Merger Consideration as
provided in Section 4.2(d), deliverable in respect
thereof pursuant to this Agreement.
(i) The holders of New Plan Common Shares
and New Plan Preferred Shares shall not be entitled to
appraisal rights as a result of the Merger.
11
ARTICLE 5.
REPRESENTATIONS AND WARRANTIES OF NEW PLAN
Except as set forth in the disclosure letter
delivered at or prior to the execution hereof to Excel
(the "New Plan Disclosure Letter") or as set forth in the
New Plan Reports (as defined below) filed prior to the
date of this Agreement (it being understood and agreed
that disclosure set forth in the New Plan Disclosure
Letter and such New Plan Reports shall be deemed
applicable to each particular representation and warranty
of New Plan herein contained to the extent it is
reasonably evident on the face of such disclosure that
such disclosure applies to such representation and
warranty), New Plan represents and warrants to Excel as
follows:
5.1. Existence; Good Standing; Authority;
Compliance With Law. New Plan is an unincorporated
business trust duly established, validly existing and in
good standing under the laws of the Commonwealth of
Massachusetts. New Plan is duly licensed or qualified to
do business and is in good standing under the laws of any
other state of the United States in which the character
of the properties owned or leased by it therein or in
which the transaction of its business therein as a
Massachusetts business trust makes such licensing or
qualification necessary, except where the failure to be
so licensed or qualified or in good standing would not
have a "New Plan Material Adverse Effect." For purposes
of this Agreement, a "New Plan Material Adverse Effect"
shall mean a material adverse effect on the business,
assets, results of operations or condition (financial or
otherwise) of New Plan and its Subsidiaries taken as a
whole (or any matter which is reasonably likely to have
such an effect). The Declaration of Trust confers upon
the trustees named therein, and their successors in
trust, power and authority to own, operate, lease and
encumber its properties and carry on its business as now
conducted. Each of New Plan's Subsidiaries is a
corporation, limited liability company or partnership
duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation or
organization, has the corporate, company or partnership
power and authority to own its properties and to carry on
its business as it is now being conducted, and is duly
qualified to do business and is in good standing in each
jurisdiction where the ownership of its property or the
conduct of its business requires such qualification,
except for jurisdictions where such failure to be so
qualified or to be in good standing would not have a New
Plan Material Adverse Effect. Except as set forth in
Schedule 5.1 of the New Plan Disclosure Letter, or as
disclosed in the New Plan Reports filed prior to the date
hereof, neither New Plan nor any of its Subsidiaries is
in violation of any order of any court, governmental
12
authority or arbitration board or tribunal, or any law,
ordinance, governmental rule or regulation to which New
Plan or any of its Subsidiaries or any of their
respective properties or assets is subject, where such
violation would have a New Plan Material Adverse Effect.
To the knowledge of the executive officers of New Plan,
New Plan and its Subsidiaries have obtained all licenses,
permits and other authorizations and have taken all
actions required by applicable law or governmental
regulations in connection with their business as now
conducted, where the failure to obtain any such item or
to take any such action would have a New Plan Material
Adverse Effect. True and correct copies of New Plan's
Declaration of Trust and its Subsidiaries' charter and
bylaws, and partnership and joint venture agreements have
been previously delivered or made available to Excel.
5.2. Authorization, Validity, and Effect of
Agreements. New Plan has the requisite power and
authority to execute and deliver this Agreement and,
subject to the Trust Amendments and the vote of holders
of New Plan Common Shares described herein, to consummate
the transactions contemplated hereby. The Board of
Trustees of New Plan has unanimously approved the Trust
Amendments, this Agreement, the Merger, and the
transactions contemplated by this Agreement and declared
such transactions advisable and in the best interests of
the holders of New Plan Common Shares and has resolved to
recommend that the holders of New Plan Common Shares
adopt and approve the Trust Amendments, this Agreement,
the Merger and the transactions contemplated by this
Agreement at the New Plan Shareholders Meeting. Subject
only to the approval of this Agreement and the
transactions contemplated hereby (including the Trust
Amendments) by the New Plan Required Vote (as herein
defined), the consummation by New Plan of the
transactions contemplated hereby has been duly authorized
by all requisite action on the part of New Plan. This
Agreement has been duly executed and delivered by New
Plan and constitutes the valid and legally binding
obligation of New Plan, enforceable against New Plan in
accordance with its terms, subject to applicable
bankruptcy, insolvency, moratorium or other similar laws
relating to creditors' rights and general principles of
equity. The affirmative vote of the holders of not less
than 66 2/3% of the issued and outstanding New Plan
Common Shares is necessary to approve the Trust
Amendments and the Merger (the "New Plan Required Vote").
No other vote of the holder of any capital stock of New
Plan is required in connection with the Merger or Trust
Amendments.
5.3. Capitalization. The authorized
capitalization of New Plan consists of an unlimited
number of New Plan Common Shares and 1,000,000 preferred
shares, par value $1.00 per share. As of May 13, 1998,
13
there were 59,658,752 New Plan Common Shares issued and
outstanding and 150,000 New Plan Preferred Shares issued
and outstanding. New Plan has no outstanding bonds,
debentures, notes or other obligations the holders of
which have the right to vote (or which are convertible
into or exercisable for securities having the right to
vote) with the holders of New Plan Common Shares on any
matter. All such issued and outstanding New Plan Common
Shares and New Plan Preferred Shares are duly authorized,
validly issued, fully paid and nonassessable, except as
described in the section entitled "Summary of Declaration
of Trust -- Shareholders' Liability to Third Persons and
Indemnification by Trust" in an exhibit to New Plan's
Form 8-A dated May 30, 1986, and are free of preemptive
or similar rights. Other than the New Plan Options and
New Plan Rights, there are not at the date of this
Agreement any existing options, warrants, calls,
subscriptions, convertible securities, or other rights,
agreements or commitments which obligate New Plan or any
of its Subsidiaries to issue, transfer or sell any shares
of beneficial interest or capital stock of New Plan or
any of its Subsidiaries. After the Effective Time, the
Surviving Trust will have no obligation to issue,
transfer or sell any shares of beneficial interest,
capital stock or other equity interest of New Plan or the
Surviving Trust pursuant to any New Plan Benefit Plan (as
defined in Section 5.14). Except as set forth in
Schedule 5.3 of the New Plan Disclosure Letter, there are
no agreements or understandings to which New Plan is a
party with respect to the voting of any New Plan Common
Shares or which restrict the transfer of any such shares,
nor does New Plan have knowledge of any such agreements
or understandings with respect to the voting of any such
shares or which restrict the transfer of any such shares
other than those set forth in New Plan's Declaration of
Trust with respect to the maintenance of New Plan as a
real estate investment trust ("REIT") and the share
ownership-limit set forth therein. Other than with
respect to New Plan Options and New Plan Rights, there
are no outstanding contractual obligations of New Plan to
repurchase, redeem or otherwise acquire any New Plan
Common Shares or any other securities of New Plan.
Except as set forth in Schedule 5.3 of the New Plan
Disclosure Letter, New Plan is not under any obligation,
contingent or otherwise, by reason of any agreement to
register any of its securities under the Securities Act.
5.4. Subsidiaries. Each Subsidiary of New Plan is
set forth in Schedule 5.4 of the New Plan Disclosure
Letter. Except as set forth in Schedule 5.4 of the New
Plan Disclosure Letter or as set forth in the New Plan
Reports filed prior to the date hereof, as of the date
hereof New Plan owns directly or indirectly each of the
outstanding shares of capital stock or all of the
partnership or other equity interests of each of New
Plan's Subsidiaries. Each of the outstanding shares of
14
capital stock of or other equity interests in each of New
Plan's Subsidiaries is duly authorized, validly issued,
fully paid and nonassessable, and is owned, directly or
indirectly, by New Plan free and clear of all liens,
pledges, security interests, claims or other encumbrances
other than liens imposed by local law which are not
material. The following information for each Subsidiary
of New Plan is set forth in the New Plan Disclosure
Letter, if applicable: (i) its name and jurisdiction of
incorporation or organization; (ii) its authorized
capital stock or share capital (including options,
rights, convertible securities and the like); and (iii)
the primary and fully diluted percentage ownership of New
Plan (directly or indirectly) in each Subsidiary.
5.5. Other Interests. Except for interests in the
Subsidiaries of New Plan and as otherwise set forth in
the New Plan Disclosure Letter or the New Plan Reports
filed prior to the date hereof, neither New Plan nor any
of its Subsidiaries owns directly or indirectly any
interest or investment (whether equity or debt) in any
corporation, partnership, joint venture, business, trust
or entity (other than investment securities held for sale
and cash equivalents).
5.6. No Violation. Except as set forth in
Schedule 5.6 of the New Plan Disclosure Letter, neither
the execution and delivery by New Plan of this Agreement
nor the consummation by New Plan of the transactions
contemplated hereby in accordance with the terms hereof,
will (i) conflict with or result in a breach of any
provisions of the Declaration of Trust of New Plan,
subject to approval of the Trust Amendments and the
Merger at the New Plan Shareholders Meeting, (ii) result
in a breach or violation of, a default under, or the
triggering of any payment or other material obligations
pursuant to, or accelerate vesting under, any of the New
Plan Employee Stock Plans, or any grant or award made
under any of the foregoing, (iii) violate, or conflict
with, or result in a breach of any provision of, or
constitute a default (or an event which, with notice or
lapse of time or both, would constitute a default) under,
or result in the termination or in a right of termination
or cancellation of, or accelerate the performance
required by, or result in the creation of any lien,
security interest, charge or encumbrance upon any of the
properties of New Plan or its Subsidiaries under, or
result in being declared void, voidable or without
further binding effect, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, deed
of trust or any license, franchise, permit, lease,
contract, agreement or other instrument, commitment or
obligation to which New Plan or any of its Subsidiaries
is a party, or by which New Plan or any of its
Subsidiaries or any of their properties is bound or
affected, except for any of the foregoing matters which,
15
individually or in the aggregate, would not have a New
Plan Material Adverse Effect, or (iv) require any
consent, approval or authorization of, or declaration,
filing or registration with, any governmental or
regulatory authority, other than the filings provided for
in Article 1, any filings required by the Securities
Exchange Act of 1934, as amended (the "Exchange Act"),
the Securities Act or applicable state securities and
"Blue Sky" laws (collectively, the "Regulatory Filings")
and filings with the NYSE, except where the failure to
obtain any such consent, approval or authorization of, or
declaration, filing or registration with, any
governmental or regulatory authority would not prevent or
materially delay the consummation of the transactions
contemplated by this Agreement or otherwise prevent New
Plan from performing, or materially impair New Plan's
ability to perform, its obligations under this Agreement
or have a New Plan Material Adverse Effect. Clause (iii)
of this Section 5.6 shall not apply to any note, bond,
mortgage, indenture or deed of trust or similar
instrument where the current principal amount or
principal amount secured does not exceed $20,000,000.
5.7. SEC Documents. New Plan has timely filed all
required forms, reports and documents with the Securities
and Exchange Commission (the "SEC") since August 1, 1995
(collectively, the "New Plan Reports"). As of their
respective dates, the New Plan Reports (i) complied as to
form in all material respects with the applicable
requirements of the Securities Act, the Exchange Act and
the rules and regulations promulgated thereunder (the
"Securities Laws") and (ii) did not contain any untrue
statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make
the statements made therein, in the light of the
circumstances under which they were made, not misleading.
Each of the consolidated balance sheets of New Plan
included in or incorporated by reference into the New
Plan Reports (including the related notes and schedules)
fairly presents in all material respects the consolidated
financial position of New Plan and its Subsidiaries as of
its date and each of the consolidated statements of
income, retained earnings and cash flows of New Plan
included in or incorporated by reference into the New
Plan Reports (including any related notes and schedules)
fairly presents in all material respects the results of
operations, retained earnings or cash flows, as the case
may be, of New Plan and its Subsidiaries for the periods
set forth therein (subject, in the case of unaudited
statements, to normal, year-end audit adjustments which
would not be material in amount or effect), in each case
in accordance with generally accepted accounting
principles consistently applied during the periods
involved, except as may be noted therein or in the notes
thereto and except, in the case of the unaudited
statements, as permitted by Form 10-Q of the SEC.
16
5.8. Litigation. There are (i) no continuing
orders, injunctions or decrees of any court, arbitrator
or governmental authority to which New Plan or any of its
Subsidiaries is a party or by which any of its properties
or assets are bound or, to the knowledge of New Plan, to
which any of its directors, officers, employees or agents
acting in such capacity, is a party and (ii) no actions,
suits or proceedings pending against New Plan or any of
its Subsidiaries or, to the knowledge of New Plan,
against any of its directors, officers, employees or
agents acting in such capacity or, to the knowledge of
New Plan, threatened in writing against New Plan or any
of its Subsidiaries or against any of its directors,
officers, employees or agents acting in such capacity, at
law or in equity, or before or by any federal or state
commission, board, bureau, agency or instrumentality,
that in the case of clause (i) or (ii) above are
reasonably likely, individually or in the aggregate, to
have a New Plan Material Adverse Effect.
5.9. Absence of Certain Changes. Except as
disclosed in the New Plan Reports filed with the SEC
prior to the date hereof or in Schedule 5.9 of the New
Plan Disclosure Letter, since January 31, 1998, New Plan
and its Subsidiaries have conducted their business only
in the ordinary course of such business (which, for
purposes of this section only, shall include all
acquisitions of real estate properties and financing
arrangements made in connection therewith) and there has
not been (i) any event, circumstance or occurrence which
has had or could reasonably be expected to have a New
Plan Material Adverse Effect, other than any such change
that results from a decline or deterioration in general
economic conditions in the real estate markets in which
either New Plan or Excel operates and that affects both
New Plan and Excel in a substantially similar manner,
(ii) as of the date hereof and other than the New Plan
Rights, any declaration, setting aside or payment of any
dividend or other distribution with respect to the New
Plan Common Shares or New Plan Preferred Shares, or (iii)
any material change in New Plan's accounting principles,
practices or methods.
5.10. Taxes.
(a) Except as set forth in Schedule 5.10 of
the New Plan Disclosure Letter and except as has not
resulted and would not result in a New Plan Material
Adverse Effect: New Plan and each of its Subsidiaries
(i) has timely filed all Returns required to be filed by
any of them for tax years ended prior to the date of this
Agreement or requests for extensions have been timely
filed and any such request has been granted and has not
expired and all such Returns are correct and complete in
all material respects and (ii) has paid or caused to be
paid or adequately accrued or reserved for all Taxes
17
shown to be due and payable on such returns or which have
become due and payable pursuant to any assessment,
deficiency notice, 30-day letter or other notice received
by it and (iii) has paid all Taxes required to be paid
and (iv) has complied with all applicable laws relating
to withholding Taxes. New Plan has not received notice
of any audit (not since closed) of any Return filed by
New Plan with respect to any tax year ending after
December 31, 1995, and New Plan has not been notified by
the Internal Revenue Service ("IRS") or any State taxing
authority that any such audit is contemplated or pending.
Neither New Plan nor any of its Subsidiaries has executed
or filed with the IRS or any other taxing authority any
agreement now in effect extending the period for
assessment or collection of any income or other Taxes.
Neither New Plan nor any of its Subsidiaries is a party
to any pending audit, action or proceeding by any
governmental authority for assessment or collection of
Taxes, and no claim for assessment or collection of Taxes
has been asserted against it. True, correct and complete
copies of all Returns filed by New Plan and each of its
Subsidiaries since December 31, 1995, and all material
communications relating thereto have been made available
for inspection to representatives of Excel. Since
December 31, 1997, New Plan has incurred no liability for
Taxes under Sections 857(b) (other than 857(b)(1) or
(3)), 860(c) or 4981 of the Code, including without
limitation, any Tax arising from a prohibited transaction
described in Section 857(b)(6) of the Code, and neither
New Plan nor any New Plan Subsidiary has incurred any
liability for Taxes other than in the ordinary course of
business. There are no Tax liens upon the assets of New
Plan or any of the New Plan Subsidiaries except liens for
Taxes not yet due. Except as between affiliates of New
Plan, neither New Plan nor any New Plan Subsidiary is a
party to any agreement relating to a sharing or
allocation of Taxes, or has any liability for Taxes of
any person other than New Plan and the New Plan
Subsidiaries under Treas. Reg. Section 1.1502-6 (or
similar provision of state, local or foreign law), by
contract or otherwise, is a party to any agreement,
contract, or arrangement that could result in the payment
of any "excess parachute payments" under Section 280G of
the Code or any amount that would be non-deductible under
Section 162(m) of the Code. As used in this Agreement,
"Taxes" shall include all federal, state, local and
foreign income, property, sales, franchise, employment,
excise and other taxes, tariffs or governmental charges
of any nature whatsoever, together with penalties,
interest or additions to Tax with respect thereto. The
term "Returns" means all returns, declarations, reports,
statements, and other documents required to be filed in
respect of Taxes, and the term "Return" means any one of
the foregoing Returns.
18
(b) New Plan (i) has elected to be taxed as
a REIT commencing July 31, 1972, (ii) has been subject to
taxation as a REIT within the meaning of Section 856 of
the Code and has satisfied all requirements to qualify as
a REIT for all taxable years commencing July 31, 1993
through its taxable year ended July 31, 1997, (iii) has
operated since July 31, 1997 to the date of this
representation, and intends to continue to operate, in
such a manner so as to qualify as a REIT for its taxable
year ending on the Closing Date, and (iv) has not taken
or omitted to take any action which would reasonably be
expected to result in a challenge to its status as a
REIT, and to the knowledge of the executive officers of
New Plan, no such challenge is pending or threatened. New
Plan represents that each of its corporate Subsidiaries
is, and at all times since its affiliation with New Plan
has qualified as, a qualified REIT subsidiary as defined
in Section 856(i) of the Code, and that each partnership,
limited liability company, joint venture or other legal
entity (other than a corporation) in which New Plan
(either directly or indirectly) owns any of the capital
stock or other equity interests thereof has been treated
since its formation and continues to be treated for
federal income tax purposes as a partnership or
disregarded as an entity separate from its owner and not
as an association taxable as a corporation. None of New
Plan or the New Plan Subsidiaries has a net unrealized
built-in gain within the meaning of Section 1374(d)(1) of
the Code that would be subject to an election under IRS
Notice 88-19 or has any earnings and profits accumulated
in any non-REIT year within the meaning of Section 857 of
the Code, in each case to the extent the foregoing would
result in a New Plan Material Adverse Effect.
(c) New Plan has not agreed to and is not
required to make any adjustment under Section 481(a) of
the Code.
(d) New Plan has not, with regard to any
assets or property held or acquired by it, filed a
consent to the application of Section 341(f) of the Code
or agreed to have Section 341(f)(2) of the Code apply to
any disposition of a subsection (f) asset (as such term
is defined in Section 341(f)(4) of the Code) owned by New
Plan.
(e) New Plan is not a "foreign person" as
such term is defined in Section 1445(f) of the Code.
5.11. Books and Records.
(a) The books of account and other
financial records of New Plan and its Subsidiaries are in
all material respects true, complete and correct, have
been maintained in accordance with good business
practices, and are accurately reflected in all material
19
respects in the financial statements included in the New
Plan Reports.
(b) The minute books and other records of
New Plan and its Subsidiaries for the period since
December 31, 1987 have been made available to Excel,
contain in all material respects accurate records of all
meetings and accurately reflect in all material respects
all other trust, corporate or partnership action of the
shareholders, trustees, partners, members and directors
and any committees of the Board of Trustees of New Plan
and its Subsidiaries.
5.12. Properties. New Plan and its Subsidiaries
own fee simple title to, or hold ground leases in, each
of the real properties identified in Schedule 5.12 of the
New Plan Disclosure Letter (the "New Plan Properties"),
which are all of the real estate properties owned or
leased by them. The New Plan Properties are not subject
to any rights of way, written agreements (other than
leases), laws, ordinances and regulations affecting
building use or occupancy, or reservations of an interest
in title (collectively, "Property Restrictions"), except
for (i) liens, mortgages or deeds of trust, charges which
are liens and security interests ("Encumbrances") and
other Property Restrictions set forth in Schedule 5.12 of
the New Plan Disclosure Letter, (ii) Property
Restrictions imposed or promulgated by law or any
governmental body or authority with respect to real
property, including zoning regulations, provided such
Property Restrictions do not adversely affect in any
material respect the current use of the applicable
property, (iii) Encumbrances and other Property
Restrictions disclosed on existing title reports or
current surveys (in either case copies of which title
reports and surveys have been delivered or made available
to Excel), and (iv) mechanics', carriers', workmen's and
repairmen's liens, and other Property Restrictions and
limitations, if any, which individually or in the
aggregate do not materially interfere with the present
use of any of the New Plan Properties subject thereto or
affected thereby, and do not otherwise materially impair
business operations conducted there by New Plan and its
Subsidiaries. Valid policies of title insurance have
been issued insuring New Plan's or any of its
Subsidiaries' fee simple title to the New Plan Properties
owned in fee in amounts at least equal to the purchase
price thereof, subject only to the matters set forth
therein or disclosed above, and such policies are, at the
date hereof, in full force and effect and there are no
pending claims against any such policy where the amount
involved exceeds $50,000. Any material certificate,
permit or license from any governmental authority having
jurisdiction over any of the New Plan Properties and any
agreement, easement or other right which is necessary to
permit the material lawful use and operation of the
20
buildings and improvements on any of the New Plan
Properties or which is necessary to permit the lawful use
and operation in all material respects of all driveways,
roads and other means of egress and ingress, which New
Plan has rights to, to and from any of the New Plan
Properties which are currently occupied and are material
to the operation of the property has been obtained and is
in full force and effect. New Plan is not in receipt of
any written notice of any violation of any material
federal, state or municipal law, ordinance, order,
regulation or requirement affecting any portion of any of
the New Plan Properties issued by any governmental
authority other than such violations which would not
reasonably be expected to have a New Plan Material
Adverse Effect. To the knowledge of New Plan, (A) there
are no material structural defects relating to the New
Plan Properties, (B) there are no New Plan Properties
whose building systems are not in working order in any
material respect (except for normal maintenance and
operating systems failures which in any event are the
subject of adequate pending repair procedures), (C) there
is no physical damage to any New Plan Property in excess
of $250,000 for which there is no insurance in effect
covering the cost of the restoration as of the date
hereof, or (D) no current renovation or restoration to
any New Plan Property is underway or for which contracts
have been entered into the cost of which exceeds
$250,000, except in each case, as set forth in Schedule
5.12 of the New Plan Disclosure Letter. Neither New Plan
nor any of its Subsidiaries has received any written
notice to the effect that (x) any condemnation or
material rezoning proceedings are pending or threatened
with respect to any of the New Plan Properties where the
fair market value of the object of such proceeding
exceeds $250,000 or (y) any zoning, building or similar
law, code, ordinance, order or regulation is or will be
violated in any material respect by New Plan or its
Subsidiaries by the continued maintenance, operation or
use of any buildings or other improvements on any of the
New Plan Properties as currently maintained, used or
operated by New Plan or its Subsidiaries or by the
continued maintenance, operation or use of the parking
areas as currently maintained, used or operated by New
Plan or its Subsidiaries which is not insured over and
where the remedying of such violations would materially
and adversely affect the relevant New Plan Property. All
work to be performed, payments to be made and actions to
be taken by New Plan or its Subsidiaries prior to the
date hereof pursuant to any agreement entered into with a
governmental body or authority in connection with a site
approval, zoning reclassification or other similar action
relating to the New Plan Properties (e.g., Local
Improvement District, Road Improvement District,
Environmental Mitigation) has been performed, paid or
taken, as the case may be, in all material respects, and
New Plan is not aware of any planned or proposed work,
21
payments or actions that may be required after the date
hereof pursuant to such agreements. New Plan owns less
than $15,000,000 of nonexempt assets under Section 802.4
of the rules and regulations promulgated under the Hart-
Scott-Rodino Antitrust Improvements Act.
5.13. Environmental Matters. Except as set forth
in the New Plan Reports or in Schedule 5.13 of the New
Plan Disclosure Letter and any environmental assessment
or report listed therein to the actual knowledge of the
executive officers of New Plan: none of New Plan, any of
its Subsidiaries or any other person has caused or
permitted (a) the unlawful presence of any hazardous
substances, hazardous materials, toxic substances or
waste materials (collectively, "Hazardous Materials") on
any of the New Plan Properties, or (b) any unlawful
spills, releases, discharges or disposal of Hazardous
Materials to have occurred or be presently occurring on
or from the New Plan Properties, which presence or
occurrence would, individually or in the aggregate, have
a New Plan Material Adverse Effect; New Plan and its
Subsidiaries have not failed to comply with all
applicable local, state and federal environmental laws,
regulations, ordinances and administrative and judicial
orders relating to the generation, recycling, reuse,
sale, storage, handling, transport and disposal of any
Hazardous Materials or environmental matters or
contamination ("Environmental Laws"), except where the
failure to so comply would not reasonably be expected to
have a New Plan Material Adverse Effect; and New Plan,
its assets and businesses and all operations related
thereto are now in compliance with all Environmental Laws
and not subject to any liability, or, with respect to any
required remediation, corrective action or prophylactic
or other like action, obligation under any Environmental
Law, except where the failure to comply with any such
Environmental Law would not have a New Plan Material
Adverse Effect.
5.14. Employee Benefit Plans. All employee
benefits plans and other benefit programs, policies and
arrangements covering employees of New Plan and the New
Plan Subsidiaries (the "New Plan Benefit Plans") are
listed in Schedule 5.14 of the New Plan Disclosure
Letter. True and complete copies of the New Plan Benefit
Plans have been made available to Excel. To the extent
applicable, the New Plan Benefit Plans comply, in all
material respects, with the requirements of the Employee
Retirement Income Security Act of 1974, as amended
("ERISA"), and the Code, and any New Plan Benefit Plan
intended to be qualified under Section 401(a) of the Code
has been determined by the IRS to be so qualified. No
New Plan Benefit Plan or any other plan with respect to
which New Plan or any entity under "common control" with
New Plan within the meaning of ERISA Section 4001 has or
had any liability is or has been covered by Title IV of
22
ERISA or Section 412 of the Code. Neither any New Plan
Benefit Plan nor any fiduciary thereof nor New Plan has
incurred any material liability or penalty under Section
4975 of the Code or Section 502(i) of ERISA. Each New
Plan Benefit Plan has been maintained and administered in
all material respects in compliance with its terms and
with ERISA and the Code to the extent applicable thereto.
To the knowledge of the executive officers of New Plan,
there are no pending or anticipated claims against or
otherwise involving any of the New Plan Benefit Plans and
no suit, action or other litigation (excluding claims for
benefits incurred in the ordinary course of New Plan
Benefit Plan activities) has been brought against or with
respect to any such New Plan Benefit Plan, except for any
of the foregoing which would not have a New Plan Material
Adverse Effect. All material contributions required to
be made as of the date hereof to the New Plan Benefit
Plans have been timely made or provided for. Neither New
Plan nor any entity under "common control" with New Plan
within the meaning of ERISA Section 4001 has contributed
to, or been required to contribute to, any "multiemployer
plan" (as defined in Sections 3(37) and 4001(a)(3) of
ERISA). New Plan does not maintain or contribute to any
plan, program, policy or arrangement which provides or
has any liability to provide life insurance, medical or
other employee welfare benefits or supplemental pension
benefits to any employee or former employee upon his
retirement or termination of employment, except as
required under Section 4890B of the Code, and New Plan
has never represented, promised or contracted (whether in
oral or written form) to any employee or former employee
that such benefits would be provided. Except as
disclosed in Schedule 5.14 of the New Plan Disclosure
Letter, the execution of, and performance of the
transactions contemplated by this Agreement will not
(either alone or upon the occurrence of any additional
subsequent events) constitute an event under any benefit
plan, program, policy, arrangement or agreement or any
trust or loan that will or may result in any payment
(whether of severance pay or otherwise), acceleration,
forgiveness of indebtedness, vesting, distribution,
increase in benefits or obligations to fund benefits with
respect to any employee, director or consultant of New
Plan or any of its Subsidiaries.
5.15. Labor Matters. Except as set forth in
Schedule 5.15 of the New Plan Disclosure Letter, neither
New Plan nor any of its Subsidiaries is a party to, or
bound by, any collective bargaining agreement, contract
or other agreement with a labor union or labor union
organization. There is no unfair labor practice or labor
arbitration proceeding pending or, to the knowledge of
New Plan, threatened against New Plan or any of its
Subsidiaries relating to their business, except for any
such proceeding which would not have a New Plan Material
Adverse Effect. To the knowledge of the executive
23
officers of New Plan, there are no organizational efforts
with respect to the formation of a collective bargaining
unit presently being made or threatened involving
employees of New Plan or any of its Subsidiaries which
would have a New Plan Material Adverse Effect.
5.16. No Brokers. New Plan has not entered into
any contract, arrangement or understanding with any
person or firm which may result in the obligation of New
Plan or Excel to pay any finder's fees, brokerage or
agent's commissions or other like payments in connection
with the negotiations leading to this Agreement or the
consummation of the transactions contemplated hereby,
except that New Plan has retained Morgan Stanley & Co.
("Morgan Stanley") to serve as its financial advisor
pursuant to an engagement letter, a true and correct copy
of which has been delivered to Excel prior to the date
hereof, and retained Merrill Lynch, Pierce, Fenner &
Smith Incorporated ("Merrill Lynch") to render a fairness
opinion pursuant to an engagement letter dated May 12,
1998. Other than the foregoing arrangements, New Plan is
not aware of any claim for payment of any finder's fees,
brokerage or agent's commissions or other like payments
in connection with the negotiations by New Plan leading
to this Agreement or the consummation of the transactions
contemplated hereby.
5.17. Opinion of Financial Advisor. New Plan has
received the opinion of Merrill Lynch to the effect that,
as of the date hereof, the Exchange Ratio is fair from a
financial point of view to the holders of New Plan Common
Shares.
5.18. Excel Stock Ownership. Neither New Plan nor
any of its Subsidiaries owns any shares of Excel Common
Stock or other securities convertible into any shares of
Excel Common Stock; and New Plan is not an "interested
stockholder" of Excel or an "affiliate of an interested
stockholder" of Excel, within the meaning of Section 3-
602 of the MGCL.
5.19. Related Party Transactions. Schedule 5.19 of
the New Plan Disclosure Letter describes each: (i)
business relationship (excluding employee compensation
and other ordinary incidents of employment) existing on
the date of this Agreement between (x) New Plan, and (y)
any present or former officer, director or Affiliate (as
herein defined) of New Plan, any present or former known
spouse, ancestor or descendant of any of the
aforementioned persons, any trust or other similar entity
for the benefit of any of the foregoing persons or any
entity which is an Affiliate of the foregoing persons
(all such persons, trusts and entities encompassed by
this clause (y) being sometimes collectively referred to
herein as the "Related Parties" and individually as a
"Related Party"); (ii) transaction occurring between
24
January 1, 1997 and the date of this Agreement between
New Plan and any Related Party of New Plan; and (iii)
amount owing by or to any of the Related Parties of New
Plan, respectively, to or from New Plan as of the date of
this Agreement. No property or interest in any property
which relates to and is or will be necessary or useful in
the present or currently contemplated future operation of
New Plan, is presently owned by or leased by or to any
Related Party of New Plan.
5.20. Contracts and Commitments. The New Plan
Disclosure Letter or the New Plan Reports filed prior to
the date hereof sets forth, as of the date hereof, (i)
all notes, debentures, bonds and other evidence of
indebtedness which are secured or collateralized by
mortgages, deeds of trust or other security interests in
the New Plan Properties or personal property of New Plan
and its Subsidiaries, (ii) each joint venture or
partnership agreement involving New Plan or any New Plan
Subsidiary, and (iii) each other material undischarged
commitment entered into by New Plan or any of its
Subsidiaries (excluding tenant allowances, reimbursements
and leases entered into in the ordinary course) where the
obligation of New Plan or any New Plan Subsidiary exceeds
$1,000,000 (excluding acquisitions described in the last
sentence of this Section 5.20). True and correct copies
of the foregoing have been previously delivered or made
available to Excel. To the knowledge of New Plan, (i)
each of the contracts described in the preceding sentence
is in full force and effect and (ii) neither New Plan nor
any New Plan Subsidiary or any other party thereto is in
default thereof except where such default would not have
a New Plan Material Adverse Effect. Schedule 5.20 of the
New Plan Disclosure Letter includes a summary of the
material terms of each acquisition of a business or real
property which is the subject of a binding agreement or
letter of intent, memorandum of understanding or similar
agreement which has not been consummated (the "Pending
New Plan Transactions").
5.21. Leases.
(a) Schedule 5.21 of the New Plan
Disclosure Letter sets forth a list of all New Plan
Properties that are subject to or encumbered by any non-
residential lease accounting for 1% or more of New Plan's
rental revenues for the most recent period reflected in
the financial statements included in the New Plan Reports
(a "Material New Plan Lease") and, with respect to each
such Material New Plan Lease, sets forth the following
information:
(i) the name of the lessee;
(ii) the expiration date of the lease;
25
(iii) the amount (or method of
determining the amount) of monthly rentals due
under the lease; and
(iv) with respect to any Material New
Plan Lease with a remaining term of less than 24
months, whether the lessee has notified New Plan in
writing of any intention not to renew, or seek to
renew, the lease.
(b) Except as set forth in Schedule 5.21 of
the New Plan Disclosure Letter, (i) all rental payments
due under each Material New Plan Lease have been paid
during the period January 1, 1998 through March 31, 1998,
and (ii) to New Plan's knowledge, no lessee is in
material default, and no condition or event exists which
with the giving of notice or the passage of time, or
both, would constitute a material default by any lessee,
under any Material New Plan Lease.
5.22. Investment Company Act of 1940. Neither New
Plan nor any of its Subsidiaries is, or at the Effective
Time will be, required to be registered under the
Investment Company Act of 1940, as amended.
5.23. Certain Payments Resulting From Transactions.
Except as set forth in Schedule 5.23 of the New Plan
Disclosure Letter, the execution of, and performance of
the transactions contemplated by, this Agreement will not
(either alone or upon the occurrence of any additional or
subsequent events) (i) constitute an event under any New
Plan Benefit Plan, policy, practice, agreement or other
arrangement or any trust or loan (the "Employee
Arrangements") that will or may result in any payment
(whether of severance pay or otherwise), acceleration,
forgiveness of indebtedness, vesting, distribution,
increase in benefits or obligation to fund benefits with
respect to any employee, director or consultant of New
Plan or any of its Subsidiaries or (ii) result in the
triggering or imposition of any restrictions or
limitations on the right of New Plan or its Subsidiaries
to amend or terminate any Employee Arrangement and
receive the full amount of any excess assets remaining or
resulting from such amendment or termination, subject to
applicable taxes. Except as set forth in Schedule 5.23 of
the New Plan Disclosure Letter, no payment or benefit
which will be required to be made pursuant to the terms
of any agreement, commitment or New Plan Benefit Plan, as
a result of the transactions contemplated by this
Agreement, to any officer, director or employee of New
Plan or any of its Subsidiaries, will be characterized as
an "excess parachute payment" within the meaning of
Section 280G(b)(1) of the Code.
5.24. State Takeover Statutes. To the knowledge of
New Plan, New Plan has taken all action necessary to
26
exempt the transactions contemplated by this Agreement
from the operation of any applicable "fair price,"
"moratorium," "control share acquisition" or any other
applicable anti-takeover statute or similar statute
enacted under the state or federal laws of the United
States or similar statute or regulation. The Board of
Trustees of New Plan has adopted a resolution as follows:
"The transactions contemplated by the Merger Agreement
are hereby authorized and approved with the intent that
no state takeover law shall be applicable to the Merger,
the Merger Agreement or the transactions contemplated
thereby."
ARTICLE 6.
REPRESENTATIONS AND WARRANTIES OF EXCEL
Except as set forth in the disclosure letter
delivered at or prior to the execution hereof to New Plan
(the "Excel Disclosure Letter") or as set forth in the
Excel Reports (as defined below) filed prior to the date
of this Agreement (it being understood and agreed that
disclosure set forth in the Excel Disclosure Letter and
such Excel Reports shall be deemed applicable to each
particular representation and warranty of Excel herein
contained to the extent it is reasonably evident on the
face of such disclosure that such disclosure applies to
such representation and warranty), Excel represents and
warrants to New Plan as follows:
6.1. Existence; Good Standing; Authority;
Compliance With Law. Excel is a corporation duly
incorporated, validly existing and in good standing under
the laws of the State of Maryland. Excel is duly licensed
or qualified to do business as a foreign corporation and
is in good standing under the laws of any other state of
the United States in which the character of the
properties owned or leased by it therein or in which the
transaction of its business therein makes such licensing
or qualification necessary, except where the failure to
be so licensed or qualified or in good standing would not
have an Excel Material Adverse Effect (as herein
defined). For purposes of this Agreement, an "Excel
Material Adverse Effect" shall mean a material adverse
effect on the business, assets, results of operations or
condition (financial or otherwise) of Excel and its
Subsidiaries taken as a whole (or any matter which is
reasonably likely to have such an effect). Each of Excel
and Excel's Subsidiaries has all requisite corporate
power and authority to own, operate, lease and encumber
its properties and carry on its business as it is now
being conducted. Each of Excel's Subsidiaries is a
corporation, limited liability company or partnership
duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation or
organization, has the corporate, company or partnership
power and authority to own its properties and to carry on
27
its business as it is now being conducted, and is duly
qualified to do business and is in good standing in each
jurisdiction where the ownership of its property or the
conduct of its business requires such qualification,
except for jurisdictions where such failure to be so
qualified or to be in good standing would not have an
Excel Material Adverse Effect. Neither Excel nor any or
its Subsidiaries is in violation of any order of any
court, governmental authority or arbitration board or
tribunal, or any law, ordinance, governmental rule or
regulation to which Excel or any of its Subsidiaries or
any of their respective properties or assets is subject,
where such violation would have an Excel Material Adverse
Effect. To the knowledge of the executive officers of
Excel, Excel and its Subsidiaries have obtained all
licenses, permits and other authorizations and have taken
all actions required by applicable law or governmental
regulations in connection with their business as now
conducted, where the failure to obtain any such item or
to take any such action would have an Excel Material
Adverse Effect. True and correct copies of Excel's and
its Subsidiaries' charter and bylaws and partnership and
joint venture agreements have been previously delivered
or made available to New Plan.
6.2. Authorization, Validity and Effect of
Agreements. Excel has the requisite corporate power and
authority to execute and deliver this Agreement and,
subject to the vote of the holders of Excel Common Stock
described herein, to consummate the transactions
contemplated hereby. The Board of Directors of Excel has
unanimously approved and declared as advisable and in the
best interests of the stockholders of Excel this
Agreement, the Merger, and the transactions contemplated
by this Agreement, including the Excel Charter Amendments
and the issuance ("Share Issuance" and together with the
Excel Charter Amendments, the "Excel Stockholder
Matters") of shares of Excel Common Stock in accordance
with the Merger and has resolved to recommend that the
holders of Excel Common Stock approve the Excel
Stockholder Matters at the Excel Stockholders Meeting.
Subject only to the approval of this Agreement and the
transactions contemplated hereby by the Excel Required
Vote (as herein defined), the consummation by Excel of
the transactions contemplated hereby has been duly
authorized by all requisite corporate action on the part
of Excel. This Agreement has been duly executed and
delivered by Excel and constitutes the valid and legally
binding obligation of Excel, enforceable against Excel in
accordance with its terms, subject to applicable
bankruptcy, insolvency, moratorium or other similar laws
relating to creditors' rights and general principles of
equity. The affirmative vote of the holders of a
majority of the shares of Excel Common Stock issued and
outstanding is required to approve the Excel Charter
Amendment, and the affirmative vote of the holders of a
28
majority of the shares of Excel Common Stock cast at the
Excel Stockholders Meeting is required to approve the
Share Issuance; provided that the total votes cast in
respect of the Share Issuance represents over 50% in
interest of the Excel Common Stock entitled to vote
thereon ("Excel Required Vote"). No other vote of the
holders of capital stock of Excel is required in
connection with the Excel Stockholder Matters or the
transactions contemplated hereby.
6.3. Capitalization. The authorized capital stock
of Excel consists of 100,000,000 shares of Excel Common
Stock and 10,000,000 shares of preferred stock, of which
4,600,000 shares have been designated Excel Series A
Preferred Stock, 630,000 shares have been designated
Excel Series B Preferred Stock, each par value $.01 per
share (collectively, the "Excel Preferred Stock") and
100,000 shares have been designated as Series C Junior
Participating Preferred Stock, par value $.01 per share
("Excel Series C Preferred Stock"). As of the date
hereof, there were 23,428,633 shares of Excel Common
Stock, 2,126,380 shares of Excel Series A Preferred Stock
and 630,000 shares of Excel Series B Preferred Stock
(6,300,000 Depositary Shares, each representing one-tenth
of a share of Excel Series B Preferred Stock) issued and
outstanding, 100,000 shares of Excel Series C Preferred
Stock reserved for issuance upon exercise of the Excel
Rights and no shares of Excel Common Stock are held in
treasury. Excel has no outstanding bonds, debentures,
notes or other obligations the holders of which have the
right to vote (or which are convertible into or
exercisable for securities having the right to vote) with
the stockholders of Excel on any matter. All such issued
and outstanding shares of Excel Common Stock, Excel
Series A Preferred Stock and Excel Series B Preferred
Stock are duly authorized, validly issued, fully paid and
nonassessable, and are free of preemptive rights. Other
than the Excel Rights, there are not at the date of this
Agreement any existing options, warrants, calls,
subscriptions, convertible securities, or other rights,
agreements or commitments which obligate Excel or any of
its Subsidiaries to issue, transfer or sell any shares of
stock or other equity interest of Excel or any of its
Subsidiaries, and other than the issuance after the date
hereof by Excel of Excel Common Stock, consistent with
prior practice, upon the exercise of stock options issued
to employees and directors prior to the date hereof, the
conversion of shares of Excel Series A Preferred Stock
outstanding on the date hereof, the exercise of warrants
outstanding on the date hereof and the exchange of
outstanding units of Excel Realty Partners, L.P. and EH
Properties L.P. (the "Down REITs") outstanding on the
date hereof. As of the date hereof and taking into
account the Excel Stock Dividend and the distribution of
shares of common stock, par value $.01 per share, of
Excel Legacy Corporation ("Legacy") on March 31, 1998,
29
options to purchase an aggregate of 1,763,250 shares of
Excel Common Stock are outstanding, of which options to
purchase 1,681,583 are exercisable, and Down REITs' units
exchangeable for an aggregate of 1,677,910 shares of
Excel Common Stock are outstanding. There are no
agreements or understandings to which Excel is a party
with respect to the voting of any shares of Excel Common
Stock or which restrict the transfer of any such shares,
nor does Excel have knowledge of any such agreements or
understandings with respect to the voting of any such
shares or which restrict the transfer of any such shares
other than those set forth in Excel's Charter with
respect to the maintenance of Excel as a REIT and the
share ownership limit set forth therein. Other than with
respect to the Excel Rights, there are no outstanding
contractual obligations of Excel to repurchase, redeem or
otherwise acquire any shares of Excel Common Stock or any
other securities of Excel. Except as set forth in
Schedule 6.3 of the Excel Disclosure Letter, Excel is not
under any obligation, contingent or otherwise, by reason
of any agreement to register any of its securities under
the Securities Act.
6.4. Subsidiaries. Each Subsidiary of Excel is
identified in Schedule 6.4 of the Excel Disclosure
Letter. Except as set forth in Schedule 6.4 of the Excel
Disclosure Letter or as set forth in the Excel Reports
filed prior to the date hereof, as of the date hereof,
Excel owns directly or indirectly each of the outstanding
shares of capital stock or all of the partnership or
other equity interests of each of Excel's Subsidiaries.
Each of the outstanding shares of capital stock of or
other equity interests in each of Excel's Subsidiaries is
duly authorized, validly issued, fully paid and
nonassessable, and is owned, directly or indirectly, by
Excel free and clear of all liens, pledges, security
interests, claims or other encumbrances other than liens
imposed by local law which are not material. The
following information for each Subsidiary of Excel is set
forth in the Excel Disclosure Letter, if applicable: (i)
its name and jurisdiction of incorporation or
organization; (ii) its authorized capital stock or share
capital (including options, rights, convertible
securities and the like); and (iii) the primary and fully
diluted percentage ownership of Excel (directly or
indirectly) in each Subsidiary. Sub has no assets and
has conducted no business except in connection with its
organization and the transactions contemplated hereby.
6.5. Other Interests. Except for interests in the
Excel Subsidiaries and as otherwise set forth in the
Excel Disclosure Letter or the Excel Reports filed prior
to the date hereof, neither Excel nor any of its
Subsidiaries owns directly or indirectly any interest or
investment (whether equity or debt) in any corporation,
partnership, joint venture, business, trust or entity
30
(other than investments in investment securities held for
sale and cash equivalents).
6.6. No Violation. Except as set forth in
Schedule 6.6 of the Excel Disclosure Letter, neither the
execution and delivery by Excel of this Agreement nor the
consummation by Excel of the transactions contemplated
hereby in accordance with the terms hereof, will (i)
conflict with or result in a breach of any provisions of
the Charter or Bylaws of Excel, subject to approval of
the Excel Stockholder Matters at the Excel Stockholders
Meeting, (ii) result in a breach or violation of, a
default under, or the triggering of any payment or other
material obligations pursuant to, or accelerate vesting
under, any of Excel's stock option plans, or any grant or
award made under any of the foregoing, (iii) violate, or
conflict with, or result in a breach of any provision of,
or constitute a default (or an event which, with notice
or lapse of time or both, would constitute a default)
under, or result in the termination or in a right of
termination or cancellation of, or accelerate the
performance required by, or result in the creation of any
lien, security interest, charge or encumbrance upon any
of the properties of Excel or its Subsidiaries under, or
result in being declared void, voidable, or without
further binding effect, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, deed
of trust or any license, franchise, permit, lease,
contract, agreement or other instrument, commitment or
obligation to which Excel or any of its Subsidiaries is a
party, or by which Excel or any of its Subsidiaries or
any of their properties is bound or affected, except for
any of the foregoing matters which, individually or in
the aggregate, would not have an Excel Material Adverse
Effect, or (iv) require any consent, approval or
authorization of, or declaration, filing or registration
with, any governmental or regulatory authority, other
than the Regulatory Filings and filings with the NYSE,
except where the failure to obtain any such consent,
approval or authorization of, or declaration, filing or
registration with, any governmental or regulatory
authority would not prevent or materially delay the
consummation of the transactions contemplated by this
Agreement or otherwise prevent Excel from performing, or
materially impair Excel's ability to perform, its
obligations under this Agreement or have an Excel
Material Adverse Effect. Clause (iii) of this Section
6.6 shall not apply to any note, bond, mortgage,
indenture or deed of trust or similar instrument where
the current principal amount or principal amount secured
does not exceed $20,000,000.
6.7. SEC Documents. Except as set forth in
Schedule 6.7 of the Excel Disclosure Letter, Excel has
timely filed all required forms, reports and documents
with the SEC since January 1, 1995 (collectively, the
31
"Excel Reports"). As of their respective dates, the
Excel Reports (i) complied as to form in all material
respects with the applicable requirements of the
Securities Laws and (ii) did not contain any untrue
statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make
the statements made therein, in the light of the
circumstances under which they were made, not misleading.
Each of the consolidated balance sheets of Excel included
in or incorporated by reference into the Excel Reports
(including the related notes and schedules) fairly
presents in all material respects the consolidated
financial position of Excel and its Subsidiaries as of
its date and each of the consolidated statements of
income, retained earnings and cash flows of Excel
included in or incorporated by reference into the Excel
Reports (including any related notes and schedules)
fairly presents in all material respects the results of
operations, retained earnings or cash flows, as the case
may be, of Excel and its Subsidiaries for the periods set
forth therein (subject, in the case of unaudited
statements, to normal year-end audit adjustments which
would not be material in amount or effect), in each case
in accordance with generally accepted accounting
principles consistently applied during the periods
involved, except as may be noted therein or in the notes
thereto and except, in the case of the unaudited
statements, as permitted by Form 10-Q of the SEC.
6.8. Litigation. There are (i) no continuing
orders, injunctions or decrees of any court, arbitrator
or governmental authority to which Excel or any of its
Subsidiaries is a party or by which any of its properties
or assets are bound or, to the knowledge of Excel, to
which any of its directors, officers, employees or agents
acting in such capacity, is a party and (ii) no actions,
suits or proceedings pending against Excel or any of its
Subsidiaries or, to the knowledge of Excel, against any
of its directors, officers, employees or agents acting
such capacity, or, to the knowledge of Excel, threatened
in writing against Excel or any of its Subsidiaries or
against any of its directors, officers, employees or
agents acting in such capacity, at law or in equity, or
before or by any federal or state commission, board,
bureau, agency or instrumentality that in the case of
clause (i) or (ii) above are reasonably likely,
individually or in the aggregate, to have an Excel
Material Adverse Effect.
6.9. Absence of Certain Changes. Except as
disclosed in the Excel Reports filed with the SEC prior
to the date hereof or in Schedule 6.9 of the Excel
Disclosure Letter, since December 31, 1997, Excel and its
Subsidiaries have conducted their business only in the
ordinary course of such business (which, for purposes of
this section only, shall include all acquisitions of real
32
estate properties and financing arrangements made in
connection therewith) and there has not been (i) any
event, circumstance or occurrence which has had or could
reasonably be expected to have Excel Material Adverse
Effect, other than any such change that results from a
decline or deterioration in general economic conditions
in the real estate markets in which either New Plan or
Excel operates and that affects both New Plan and Excel
in a substantially similar manner, (ii) as of the date
hereof, any declaration, setting aside or payment of any
dividend or other distribution with respect to the Excel
Common Stock, Excel Series A Preferred Stock or Excel
Series B Preferred Stock or (iii) any material change in
Excel's accounting principles, practices or methods.
6.10. Taxes.
(a) Except as set forth in Schedule 6.10 of
the Excel Disclosure Letter and except as has not
resulted and would not result in an Excel Material
Adverse Effect: Excel and each of its Subsidiaries (i)
has timely filed all Returns required to be filed by any
of them for tax years ended prior to the date of this
Agreement or requests for extensions have been timely
filed and any such request has been granted and has not
expired and all such Returns are correct and complete in
all material respects, and (ii) has paid or caused to be
paid or adequately accrued or reserved for all Taxes
shown to be due and payable on such Returns or which have
become due and payable pursuant to any assessment,
deficiency notice, 30-day letter or other notice received
by it, and (iii) has paid all Taxes required to be paid,
and (iv) has complied with all applicable laws relating
to withholding Taxes. Excel has not received notice of
any audit of any Return filed by Excel with respect to
any tax year ending after December 31, 1995, and Excel
has not been notified by the IRS or any State taxing
authority that any such audit is contemplated or pending.
Neither Excel nor any of its Subsidiaries has executed or
filed with the IRS or any other taxing authority any
agreement now in effect extending the period for
assessment or collection of any income or other Taxes.
Neither Excel nor any of its Subsidiaries is a party to
any pending audit, action or proceeding by any
governmental authority for assessment or collection of
Taxes, and no claim for assessment or collection of Taxes
has been asserted against it. True, correct and complete
copies of all Returns filed by Excel and each of its
Subsidiaries since December 31, 1995 and all material
communications relating thereto have been made available
for inspection to representatives of New Plan. Since
December 31, 1997, Excel has incurred no liability for
Taxes under Sections 857(b), (other than 857(b)(1) or
(3)), 860(c) or 4981 of the Code, including without
limitation, any Tax arising from a prohibited transaction
described in Section 857(b)(6) of the Code, and neither
33
Excel nor any Excel Subsidiary has incurred any liability
for Taxes other than in the ordinary course of business.
There are no tax liens upon the assets of Excel or any of
the Excel Subsidiaries except liens for Taxes not yet
due. Except as between affiliates of Excel (other than
Legacy), neither Excel nor any Excel Subsidiary is a
party to any agreement relating to a sharing or
allocation of Taxes, or has any liability for Taxes of
any person other than Excel and the Excel Subsidiaries
under Treas. Reg. Section 1.1502-6 (or similar provision
of state, local or foreign law), by contract or
otherwise, is a party to any agreement, contract, or
arrangement that could result in the payment of any
"excess parachute payments" under Section 280G of the
Code or any amount that would be non-deductible under
Section 162 (m) of the Code.
(b) Excel (i) has elected to be taxed as a
REIT within the meaning of the Code commencing with its
taxable year ended December 31, 1985, (ii) has been
subject to taxation as a REIT within the meaning of
Section 856 of the Code and has satisfied all
requirements to qualify as a REIT for all taxable years
commencing with its taxable year ended December 31, 1993
through its taxable year ended December 31, 1997, (iii)
has operated since December 31, 1997 to the date of this
representation, and intends to continue to operate in
such a manner so as to qualify as a REIT for its taxable
year ending on December 31, 1998, and (iv) has not taken
or omitted to take any action which would reasonably be
expected to result in a challenge to its status as a
REIT, and to the knowledge of the executive officers of
Excel, no such challenge is pending or threatened. Excel
represents that each of its corporate Subsidiaries is,
and at all times since its affiliation with Excel has
qualified as, a qualified REIT subsidiary as defined in
Section 856(i) of the Code and that each partnership,
limited liability company, joint venture or other legal
entity (other than a corporation) in which Excel (either
directly or indirectly) owns any of the capital stock or
other equity interests thereof has been treated since its
formation and continues to be treated for federal income
tax purposes as a partnership or disregarded as an entity
separate from its owner and not as an association taxable
as a corporation. None of Excel or the Excel
Subsidiaries has a net unrealized built-in gain within
the meaning of Section 1374(d)(1) of the Code that would
be subject to an election under IRS Notice 88-19 or has
any earnings and profits accumulated in any non-REIT year
within the meaning of Section 857 of the Code, in each
case to the extent the foregoing would result in an Excel
Material Adverse Effect.
(c) Excel has not agreed to and is not
required to make any adjustment under Section 481(a) of
the Code.
34
(d) Excel has not, with regard to any
assets or property held or acquired by it, filed a
consent to the application of Section 341(f) of the Code
or agreed to have Section 341(f)(2) of the Code apply to
any disposition of a subsection (f) asset (as such term
is defined in Section 341(f)(4) of the Code) owned by
Excel.
(e) Excel is not a "foreign person" as such
term is defined in Section 1445(f) of the Code.
6.11. Books and Records.
(a) The books of account and other
financial records of Excel and its Subsidiaries are in
all material respects true, complete and correct, have
been maintained in accordance with good business
practices, and are accurately reflected in all material
respects in the financial statements included in the
Excel Reports.
(b) The minute books and other records of
Excel and its Subsidiaries for the period since December
31, 1987 have been made available to New Plan, contain in
all material respects accurate records of all meetings
and accurately reflect in all material respects all other
corporate or partnership action of the stockholders,
partners, members and directors and any committees of the
Board of Directors of Excel and its Subsidiaries.
6.12. Properties. Excel and its Subsidiaries own
fee simple title to, or hold ground leases in, each of
the real properties identified in Schedule 6.12 of the
Excel Disclosure Letter (the "Excel Properties"), which
are all the real estate properties owned or leased by
them. The Excel Properties are not subject to any
Property Restrictions, except for (i) Encumbrances and
other Property Restrictions set forth in Schedule 6.12 of
the Excel Disclosure Letter, (ii) Property Restrictions
imposed or promulgated by law or any governmental body or
authority with respect to real property, including zoning
regulations, provided such Property Restrictions do not
adversely affect in any material respect the current use
of the applicable property, (iii) Encumbrances and other
Property Restrictions disclosed on existing title reports
or current surveys (in either case copies of which title
reports and surveys have been delivered or made available
to New Plan) and (iv) mechanics', carriers', workmen's
and repairmen's liens, and other Property Restrictions
and limitations, if any, which individually or in the
aggregate do not materially interfere with the present
use of any of the Excel Properties subject thereto or
affected thereby, and do not otherwise materially impair
business operations conduced there by Excel and its
Subsidiaries. Valid policies of title insurance have
been issued insuring Excel's or any of its Subsidiaries'
35
fee simple title to the Excel Properties owned in fee in
amounts at least equal to the purchase price thereof,
subject only to the matters set forth therein or
disclosed above, and such policies are, at the date
hereof, in full force and effect and there are no pending
claims against any such policy where the amount involved
exceeds $50,000. Any material certificate, permit or
license from any governmental authority having
jurisdiction over any of the Excel Properties and any
agreement, easement or other right which is necessary to
permit the material lawful use and operation of the
buildings and improvements on any of the Excel Properties
or which is necessary to permit the lawful use and
operation in all material respects of all driveways,
roads and other means of egress and ingress, which Excel
has rights to, to and from any of the Excel Properties
which are currently occupied and are material to the
operation of the property has been obtained and is in
full force and effect. Excel is not in receipt of any
written notice of any violation of any material federal,
state or municipal law, ordinance, order, regulation or
requirement affecting any portion of any of the Excel
Properties issued by any governmental authority, other
than such violations which would not reasonably be
expected to have an Excel Material Adverse Effect. To the
knowledge of Excel (A) there are no material structural
defects relating to the Excel Properties, (B) there are
no Excel Properties whose building systems are not in
working order in any material respect (except for normal
maintenance and operating systems failures which in any
event are the subject of adequate pending repair
procedures), (C) there is no physical damage to any Excel
Property in excess of $250,000 for which there is no
insurance in effect covering the cost of the restoration
as of the date hereof or (D) no current renovation or
restoration to any Excel Property is underway or for
which contracts have been entered into the cost of which
exceeds $250,000, except in each case, as set forth in
Schedule 6.12 of the Excel Disclosure Letter. Neither
Excel nor any of its Subsidiaries has received any
written notice to the effect that (x) any condemnation or
material rezoning proceedings are pending or threatened
with respect to any of the Excel Properties where the
fair market value of the object of such proceeding
exceeds $250,000 or (y) any zoning, building or similar
law, code, ordinance, order or regulation is or will be
violated in any material respect by Excel or its
Subsidiaries by the continued maintenance, operation or
use of any buildings or other improvements on any of the
Excel Properties as currently maintained, used or
operated or by the continued maintenance, operation by
Excel or its Subsidiaries or use of the parking areas as
currently maintained, used or operated by Excel or its
Subsidiaries which is not insured over and where the
remedying of such violation would materially and
adversely affect the relevant Excel Property. All work
36
to be performed, payments to be made and actions to be
taken by Excel or its Subsidiaries prior to the date
hereof pursuant to any agreement entered into with a
governmental body or authority in connection with a site
approval, zoning reclassification or other similar action
relating to the Excel Properties (e.g., Local Improvement
District, Road Improvement District, Environmental
Mitigation) has been performed, paid or taken, as the
case may be, in all material respects, and Excel is not
aware of any planned or proposed work, payments or
actions that may be required after the date hereof
pursuant to such agreements. Excel owns less that
$15,000,000 of nonexempt assets under Section 802.4 of
the rules and regulations promulgated under the Hart-
Scott-Rodino Antitrust Improvements Act.
6.13. Environmental Matters. Except as set forth
in the Excel Reports or in Schedule 6.15 of the Excel
Disclosure Letter and any environmental assessment or
report listed therein to the actual knowledge of the
executive officers of Excel: none of Excel, any of its
Subsidiaries or any other person has caused or permitted
(a) the unlawful presence of any Hazardous Materials on
any of the Excel Properties, or (b) any unlawful spills,
releases, discharges or disposal of Hazardous Materials
to have occurred or be presently occurring on or from the
Excel Properties, which presence or occurrence would,
individually or in the aggregate, have an Excel Material
Adverse Effect; Excel and its Subsidiaries have not
failed to comply with all applicable local, state and
federal environmental laws, regulations, ordinances and
administrative and judicial orders relating to the
Environmental Laws, except where the failure to comply
would not reasonably be expected to have an Excel
Material Adverse Effect and Excel, its assets and
businesses and all operations related thereto are now in
compliance with all Environmental Laws and not subject to
any liability, or, with respect to required remediation,
corrective action or prophylactic or other like action,
obligation under any Environmental Law, except where the
failure to comply with any such Environmental Law would
not have an Excel Material Adverse Effect.
6.14. Employee Benefit Plans. All employee
benefits plans and other benefit programs, policies and
arrangements covering employees of Excel and the Excel
Subsidiaries (the "Excel Benefit Plans") are listed in
Schedule 6.14 of the Excel Disclosure Letter. True and
complete copies of the Excel Benefit Plans have been made
available to New Plan. To the extent applicable, the
Excel Benefit Plans comply, in all material respects,
with the requirements of ERISA and the Code, and any
Excel Benefit Plan intended to be qualified under Section
401(a) of the Code has been determined by the IRS to be
so qualified. No Excel Benefit Plan or any other plan
with respect to which Excel or any entity under "common
37
control" with Excel within the meaning of ERISA Section
4001 has or had any liability is or has been covered by
Title IV of ERISA or Section 412 of the Code. Neither any
Excel Benefit Plan nor any fiduciary thereof nor Excel
has incurred any material liability or penalty under
Section 4975 of the Code or Section 502(i) of ERISA.
Each Excel Benefit Plan has been maintained and
administered in all material respects in compliance with
its terms and with ERISA and the Code to the extent
applicable thereto. To the knowledge of the executive
officers of Excel, there are no pending or anticipated
claims against or otherwise involving any of the Excel
Benefit Plans and no suit, action or other litigation
(excluding claims for benefits incurred in the ordinary
course of Excel Benefit Plan activities) has been brought
against or with respect to any such Excel Benefit Plan,
except for any of the foregoing which would not have an
Excel Material Adverse Effect. All material contributions
required to be made as of the date hereof to the Excel
Benefit Plans have been timely made or provided for.
Neither Excel nor any entity under "common control" with
Excel within the meaning of ERISA Section 4001 has
contributed to, or been required to contribute to, any
"multiemployer plan" (as defined in Sections 3(37) and
4001(a)(3) of ERISA). Excel does not maintain or
contribute to any plan, program, policy or arrangement
which provides or has any liability to provide life
insurance, medical or other employee welfare benefits or
supplemental pension benefits to any employee or former
employee upon his retirement or termination of
employment, except as required under Section 4890B of the
Code, and Excel has never represented, promised or
contracted (whether in oral or written form) to any
employee or former employee that such benefits would be
provided. Except as disclosed in Schedule 6.14 of the
Excel Disclosure Letter, the execution of, and
performance of the transactions contemplated by, this
Agreement will not (either alone or upon the occurrence
of any additional subsequent events) constitute an event
under any benefit plan, program, policy, arrangement or
agreement or any trust or loan that will or may result in
any payment (whether of severance pay or otherwise),
acceleration, forgiveness of indebtedness, vesting,
distribution, increase in benefits or obligations to fund
benefits with respect to any employee, director or
consultant of Excel or any of its Subsidiaries.
6.15. Labor Matters. Neither Excel nor any of its
Subsidiaries is a party to, or bound by, any collective
bargaining agreement, contract or other agreement with a
labor union or labor union organization. There is no
unfair labor practice or labor arbitration proceeding
pending or, to the knowledge of Excel, threatened against
Excel or any of its Subsidiaries relating to their
business, except for any such proceeding which would not
have an Excel Material Adverse Effect. To the knowledge
38
of the executive officers of Excel, there are no
organizational efforts with respect to the formation of a
collective bargaining unit presently being made or
threatened involving employees of Excel or any of its
Subsidiaries which would have an Excel Material Adverse
Effect.
6.16. No Brokers. Excel has not entered into any
contract, arrangement or understanding with any person or
firm which may result in the obligation of New Plan or
Excel to pay any finder's fees, brokerage or agent's
commissions or other like payments in connection with the
negotiations leading to this Agreement or the
consummation of the transactions contemplated hereby,
except that Excel has retained Triton Pacific Capital,
LLC ("Triton") as its financial advisor, pursuant to an
engagement letter dated April 7, 1998, and Prudential
Securities Incorporated ("Prudential") to render a
fairness opinion, pursuant to an engagement letter dated
April 22, 1998, true and correct copies of which have
been delivered to New Plan prior to the date hereof.
Other than the foregoing arrangements, Excel is not aware
of any claim for payment of any finder's fees, brokerage
or agent's commissions or other like payments in
connection with the negotiations by Excel leading to this
Agreement or the consummation of the transactions
contemplated hereby.
6.17. Opinion of Financial Advisor. Excel has
received the opinion of Prudential to the effect that, as
of the date hereof, the Exchange Ratio is fair to the
holders of Excel Common Stock from a financial point of
view.
6.18. New Plan Share Ownership. Neither Excel nor
any of its Subsidiaries owns any shares of beneficial
interest or capital stock of New Plan or other securities
convertible into capital stock of New Plan.
6.19. Related Party Transactions. Schedule 6.19 of
the Excel Disclosure Letter describes each: (i) business
relationship (excluding employee compensation and other
ordinary incidents of employment) existing on the date of
this Agreement between (x) Excel, and (y) any Related
Party of Excel; (ii) transaction occurring between
January 1, 1997 and the date of this Agreement between
Excel and any Related Party of Excel; and (iii) amount
owing by or to any of the Related Parties of Excel,
respectively, to or from Excel as of the date of this
Agreement. No property or interest in any property which
relates to and is or will be necessary or useful in the
present or currently contemplated future operation of
Excel, is presently owned by or leased by or to any
Related Party of Excel.
39
6.20. Contracts and Commitments. The Excel
Disclosure Letter or the Excel Reports filed prior to the
date hereof set forth, as of the date hereof, (i) all
notes, debentures, bonds and other evidence of
indebtedness which are secured or collateralized by
mortgages, deeds of trust or other security interests in
the Excel Properties or personal property of Excel and
its Subsidiaries and (ii) each joint venture or
partnership agreement involving Excel or any Excel
Subsidiary, and (iii) each other material undischarged
commitment entered into by Excel or any of its
Subsidiaries (excluding tenant allowances, reimbursements
and leases entered into in the ordinary course), where
the obligation of Excel or any Excel Subsidiary exceeds
$1,000,000 (excluding acquisitions described in the last
sentence of this Section 6.20). True and correct copies
of the foregoing have been previously delivered or made
available to New Plan. To the knowledge of Excel, (i)
each of the contracts described in the preceding sentence
is in full force and effect; and (ii) neither Excel nor
any Excel Subsidiary or other party thereto is in default
thereof except where such default would not have an Excel
Material Adverse Effect. Schedule 6.20 of the Excel
Disclosure Letter includes a summary of the material
terms of each acquisition of a business or real property
which is the subject of a binding agreement or letter of
intent, memorandum of understanding or similar agreement
which has not been consummated (the "Pending Excel
Transactions").
6.21. Leases.
(a) Schedule 6.21 of the Excel Disclosure
Letter sets forth a list of all Excel Properties that are
subject to or encumbered by any non-residential lease
accounting for 1% or more of Excel's rental revenues for
the most recent period reflected in the financial
statements included in the Excel Reports (a "Material
Excel Lease") and, with respect to each such Material
Excel Lease, sets forth the following information:
(i) the name of the lessee;
(ii) the expiration date of the lease;
(iii) the amount (or method of
determining the amount) of monthly rentals due
under the lease; and
(iv) with respect to any Material
Excel Lease with a remaining term of less than 24
months, whether the lessee has notified Excel in
writing of any intention not to renew, or seek to
renew, the lease.
40
(b) Except as set forth in Schedule 6.21 of
the Excel Disclosure Letter, (i) all rental payments due
under each Material Excel Lease have been paid during the
period January 1, 1998 through March 31, 1998 and (ii) to
Excel's knowledge, no lessee is in material default, and
no condition or event exists which with the giving of
notice or the passage of time, or both, would constitute
a material default by any lessee, under any Material
Excel Lease.
6.22. Investment Company Act of 1940. Neither
Excel nor any of its Subsidiaries is, or at the Effective
Time will be, required to be registered under the
Investment Company Act of 1940, as amended.
6.23. Certain Payments Resulting From Transactions.
Except as set forth in Schedule 6.23 of the Excel
Disclosure Letter, the execution of, and performance of
the transactions contemplated by, this Agreement will not
(either alone or upon the occurrence of any additional or
subsequent events) (i) constitute an event under any
Excel Benefit Plan, policy, practice, agreement or other
arrangement or any trust or loan (the "Employee
Arrangements") that will or may result in any payment
(whether of severance pay or otherwise), acceleration,
forgiveness of indebtedness, vesting, distribution,
increase in benefits or obligation to fund benefits with
respect to any employee, director or consultant of Excel
or any of its Subsidiaries or (ii) result in the
triggering or imposition of any restrictions or
limitations on the right of Excel or its Subsidiaries to
amend or terminate any Employee Arrangement and receive
the full amount of any excess assets remaining or
resulting from such amendment or termination, subject to
applicable taxes. Except as set forth in Schedule 6.23 of
the Excel Disclosure Letter, no payment or benefit which
will be required to be made pursuant to the terms of any
agreement, commitment or Excel Benefit Plan, as a result
of the transactions contemplated by this Agreement to any
officer, director or employee of Excel or any of its
Subsidiaries, will be characterized as an "excess
parachute payment" within the meaning of Section
280G(b)(1) of the Code.
6.24. State Takeover Statutes. To the knowledge of
Excel, assuming the accuracy of the representation and
warranty of New Plan in Section 5.18 hereof, Excel has
taken all action necessary to exempt the transactions
contemplated by this Agreement from the operation of any
applicable "fair price," "moratorium," "control share
acquisition" or any other applicable anti-takeover
statute or similar statute enacted under the state or
federal laws of the United States or similar statute or
regulation. The Board of Directors of Excel has adopted
a resolution as follows: "The transactions contemplated
by the Merger Agreement are hereby authorized and
41
approved with the intent that no state takeover law shall
be applicable to the Merger, the Merger Agreement or the
transactions contemplated thereby."
6.25. Legacy Arrangements. Excel and Legacy have
entered into an Amendment to the Intercompany Agreement,
a true and correct copy of which has been delivered to
New Plan (the "Legacy Intercompany Amendment") and the
Legacy Intercompany Amendment constitutes a legal, valid
and binding agreement of Legacy enforceable against
Legacy in accordance with its terms.
ARTICLE 7.
COVENANTS
7.1. No Solicitation by New Plan.
(a) Unless and until this Agreement shall
have been terminated in accordance with its terms, New
Plan shall not, and shall cause its Subsidiaries and its
and their trustees, officers, employees, investment
bankers, financial advisors, attorneys, accountants and
other representatives retained by it or any of its
Subsidiaries not to, directly or indirectly through
another person, (i) solicit, initiate or encourage
(including by way of furnishing information), or take any
other action designed to facilitate, any inquiries or the
making of any proposal which constitutes or may
reasonably be expected to lead to any New Plan Takeover
Proposal (as defined below) or (ii) participate in any
discussions or negotiations regarding or relating to any
New Plan Takeover Proposal; provided, however, that prior
to the New Plan Shareholders Meeting, if the Board of
Trustees of New Plan determines reasonably and in good
faith, based on the advice of its outside counsel, that
it is necessary to do so in order to comply with its
fiduciary duties to the shareholders of New Plan under
applicable law, or, as applicable, its duties under the
Declaration of Trust, in each case in the context of the
transactions contemplated hereby, New Plan may, in
response to a New Plan Takeover Proposal which was not
solicited by it and which did not result from a breach of
this Section 7.1(a), provided New Plan shall provide
prior written notice of its decision to take such action
to Excel and shall comply with Section 7.1(c), (x)
furnish information with respect to New Plan and its
Subsidiaries to any person making such a New Plan
Takeover Proposal pursuant to a customary confidentiality
agreement (as determined by New Plan after consultation
with its outside counsel) and (y) participate in
discussions or negotiations regarding such New Plan
Takeover Proposal. For purposes of this Agreement, "New
Plan Takeover Proposal" means any proposal made by a
third party (other than Excel) to acquire, directly or
indirectly, including pursuant to a tender offer,
exchange offer, merger, consolidation, business
42
combination, recapitalization, reorganization,
liquidation, dissolution or similar transaction, more
than 25% of the combined voting power of the New Plan
Common Shares or shares or equity interests in any
significant New Plan Subsidiary, in each case then
outstanding, or all or substantially all the assets of
New Plan or any significant New Plan Subsidiary.
(b) Except as expressly permitted by this
Section 7.1 neither the Board of Trustees of New Plan nor
any committee thereof shall (i) withdraw or propose
publicly to withdraw, or modify or propose to modify in a
manner adverse to Excel, the approval or recommendation
by such Board of Trustees or such committee of the Merger
or this Agreement, (ii) approve or recommend, or propose
publicly to approve or recommend, any New Plan Takeover
Proposal or (iii) cause New Plan to enter into any letter
of intent, agreement in principle, acquisition agreement
or other similar agreement (each, a "New Plan Acquisition
Agreement") related to any New Plan Takeover Proposal.
Notwithstanding the foregoing, in the event that a
majority of the Board of Trustees of New Plan determines
reasonably and in good faith (A) (based on the advice of
a financial advisor of nationally recognized reputation)
that a pending New Plan Takeover Proposal is more
favorable to New Plan's shareholders than the Merger and
the transactions contemplated hereby, (B) that such New
Plan Takeover Proposal is reasonably capable of being
consummated, (C) that there is a substantial probability
that the approval of the Merger by holders of New Plan
Common Shares will not be obtained due to the pending New
Plan Takeover Proposal, and (D) (based on the advice of
outside counsel and taking into account the matters in
clause (A), (B) and (C) above) that it is necessary to
terminate this Agreement to accept such New Plan Takeover
Proposal in order to comply with its fiduciary duties to
the shareholders of New Plan under applicable law or, as
the case may be, its duties under the Declaration of
Trust, in each case in the context of the transactions
contemplated hereby, the Board of Trustees of New Plan
may (subject to this and the following sentences and in
compliance with Section 9.3(a)) approve and recommend
such New Plan Takeover Proposal and, in connection
therewith, withdraw its approval or recommendation of
this Agreement and the Merger, provided that in such case
it simultaneously therewith terminates this Agreement and
concurrently with such termination causes New Plan to
enter into a definitive acquisition agreement with
respect to such New Plan Takeover Proposal), but only at
a time that is after the fifth business day following
Excel's receipt of written notice advising Excel that the
Board of Trustees of New Plan is prepared to accept a New
Plan Takeover Proposal, specifying the material terms and
conditions of such New Plan Takeover Proposal and
identifying the person making such New Plan Takeover
Proposal, provided that (x) at all reasonable times
43
during such five-day period New Plan shall have
cooperated with Excel with the objective of providing
Excel a reasonable opportunity to propose and negotiate a
modification of the terms and conditions of this
Agreement so that a business combination may be effected
between Excel and New Plan; (y) at the end of such five-
day period the Board of Trustees shall continue to
believe in good faith that clauses (A), (B), (C) and (D)
above apply to the New Plan Takeover Proposal; and (z)
simultaneously with any such withdrawal or termination,
New Plan pays to Excel the Break-up Fee and Break-up
Expenses pursuant to Section 9.5.
(c) In addition to the obligations of New
Plan set forth in paragraphs (a) and (b) of this Section
7.1, New Plan shall immediately cease any current
discussions and negotiations with respect to any New Plan
Takeover Proposal and hereafter immediately advise Excel
orally and in writing of any request for information or
of any New Plan Takeover Proposal, the material terms and
conditions of such request or New Plan Takeover Proposal
and the identity of the person making such request or New
Plan Takeover Proposal. New Plan will keep Excel
reasonably informed of the status and details (including
amendments or proposed amendments) of any such request or
New Plan Takeover Proposal.
(d) Nothing contained in this Section 7.1
shall prohibit New Plan from taking and disclosing to its
shareholders a position contemplated by Rule 14d-9 and
Rule 14e-2(a) promulgated under the Exchange Act or from
making any disclosure to New Plan's shareholders if, in
the good faith judgment of the Board of Trustees of New
Plan, after consultation with outside counsel, failure so
to disclose would be a violation of its obligations under
applicable law; provided, however, that neither New Plan
nor its Board of Trustees nor any committee thereof shall
withdraw or modify, or propose publicly to withdraw or
modify, its position with respect to this Agreement or
the Merger or approve or recommend, or propose publicly
to approve or recommend, a New Plan Takeover Proposal,
except in accordance with this Section 7.1.
(e) Notwithstanding any other provisions of
this Section 7.1 to the contrary, or any variation in the
duties imposed upon trustees of a Massachusetts business
trust from those imposed on directors of a Maryland
corporation, the Trustees of New Plan shall be permitted
to take any action which they would be permitted to take
under this Section 7.1 if they were directors of a
Maryland corporation and New Plan was a Maryland
corporation.
44
7.2. No Solicitation by Excel.
(a) Unless and until this Agreement shall
have been terminated in accordance with its terms, Excel
shall not, and shall cause its Subsidiaries and its and
their directors, officers, employees, investment bankers,
financial advisors, attorneys, accountants and other
representatives retained by it or any of its Subsidiaries
not to, directly or indirectly through another person,
(i) solicit, initiate or encourage (including by way of
furnishing information), or take any other action
designed to facilitate, any inquiries or the making of
any proposal which constitutes or may reasonably be
expected to lead to any Excel Takeover Proposal (as
defined below) or (ii) participate in any discussions or
negotiations regarding or relating to any Excel Takeover
Proposal; provided, however, that prior to the Excel
Stockholders Meeting, if the Board of Directors of Excel
determines reasonably and in good faith, based on the
advice of its outside counsel, that it is necessary to do
so in order to comply with its fiduciary duties to the
stockholders of Excel under applicable law in the context
of the transactions contemplated hereby, Excel may, in
response to an Excel Takeover Proposal which was not
solicited by it and which did not result from a breach of
this Section 7.2(a), and provided Excel shall provide
prior written notice of its decision to take such action
to New Plan and shall comply with Section 7.2(c), (x)
furnish information with respect to Excel and its
Subsidiaries to any person making such an Excel Takeover
Proposal pursuant to a customary confidentiality
agreement (as determined by Excel after consultation with
its outside counsel) and (y) participate in discussions
or negotiations regarding such Excel Takeover Proposal.
For purposes of this Agreement, "Excel Takeover Proposal"
means any proposal made by a third party (other than New
Plan) to acquire, directly or indirectly, including
pursuant to a tender offer, exchange offer, merger,
consolidation, business combination, recapitalization,
reorganization, liquidation, dissolution or similar
transaction, more than 25% of the combined voting power
of the shares of Excel Common Stock or shares or equity
interests in any significant Excel Subsidiary, in each
case then outstanding or all or substantially all the
assets of Excel or any significant Excel Subsidiary.
(b) Except as expressly permitted by this
Section 7.2, neither the Board of Directors of Excel nor
any committee thereof shall (i) withdraw or propose
publicly to withdraw, or modify or propose publicly to
modify in a manner adverse to New Plan, the approval or
recommendation by such Board of Directors or such
committee of the Merger, this Agreement or the Excel
Stockholder Matters in connection with the Merger, (ii)
approve or recommend, or propose publicly to approve or
recommend, any Excel Takeover Proposal or (iii) cause
45
Excel to enter into any letter of intent, agreement in
principle, acquisition agreement or other similar
agreement (each, an "Excel Acquisition Agreement")
related to any Excel Takeover Proposal. Notwithstanding
the foregoing, in the event that a majority of the Board
of Directors of Excel determines reasonably and in good
faith (A) (based on the advice of a financial advisor of
nationally recognized reputation) that a pending Excel
Takeover Proposal is more favorable to Excel's
stockholders than the Merger and the transactions
contemplated hereby, (B) that such Excel Takeover
Proposal is reasonably capable of being consummated, (C)
that there is a substantial probability that the adoption
of this Agreement by holders of Excel Common Stock will
not be obtained due to the pending Excel Takeover
Proposal, and (D) (based upon the advice of outside
counsel and taking into account the matters in clause
(A), (B) and (C)) that it is necessary to terminate this
Agreement to accept such Excel Takeover Proposal in order
to comply with its fiduciary duties to the stockholders
of Excel under applicable law in the context of the
transactions contemplated hereby, the Board of Directors
of Excel may (subject to this and the following sentences
and in compliance with Section 9.4(a)) approve and
recommend such Excel Takeover Proposal and, in connection
therewith, withdraw its approval or recommendation of
this Agreement, the Merger and the Excel Stockholder
Matters, provided that in such case it simultaneously
therewith terminates this Agreement and concurrently with
such termination causes Excel to enter into a definitive
acquisition agreement with respect to such Excel Takeover
Proposal, but only at a time that is after the fifth
business day following New Plan's receipt of written
notice advising New Plan that the Board of Directors of
Excel is prepared to accept an Excel Takeover Proposal,
specifying the material terms and conditions of such
Excel Takeover Proposal and identifying the person making
such Excel Takeover Proposal, provided that (x) at all
reasonable times during such five-day period Excel shall
have cooperated with New Plan with the objective of
providing New Plan a reasonable opportunity to propose
and negotiate a modification of the terms and conditions
of this Agreement so that a business combination may be
effected between Excel and New Plan; (y) at the end of
such five-day period the Board of Directors of Excel
shall continue to believe in good faith that clauses (A),
(B), (C) and (D) above apply to the Excel Takeover
Proposal; and (z) simultaneously with any such withdrawal
or termination, Excel pays New Plan the Break-up Fee and
Break-up Expenses pursuant to Section 9.5.
(c) In addition to the obligations of Excel
set forth in paragraphs (a) and (b) of this Section 7.2,
Excel shall immediately cease any current discussions or
negotiations with respect to any Excel Takeover Proposal
and hereafter, immediately advise New Plan orally and in
46
writing of any request for information or of any Excel
Takeover Proposal, the material terms and conditions of
such request or Excel Takeover Proposal and the identity
of the person making such request or Excel Takeover
Proposal. Excel will keep New Plan reasonably informed of
the status and details (including amendments or proposed
amendments) of any such request or Excel Takeover
Proposal.
(d) Nothing contained in this Section 7.2
shall prohibit Excel from taking and disclosing to its
stockholders a position contemplated by Rule 14d-9 and
Rule 14e-2(a) promulgated under the Exchange Act or from
making any disclosure to Excel's stockholders if, in the
good faith judgment of the Board of Directors of Excel,
after consultation with outside counsel, failure so to
disclose would be a violation of its obligations under
applicable law; provided, however, that neither Excel nor
its Board of Directors nor any committee thereof shall
withdraw or modify, or propose publicly to withdraw or
modify, its position with respect to this Agreement, the
Merger, or the Excel Stockholder Matters or approve or
recommend, or propose publicly to approve or recommend,
an Excel Takeover Proposal, except in accordance with
this Section 7.2.
7.3. Conduct of Businesses.
(a) During the period from the date of this
Agreement until the earlier of the termination of this
Agreement and the Effective Time, except as set forth in
Schedule 7.3 of the New Plan Disclosure Letter or
Schedule 7.3 of the Excel Disclosure Letter or as
expressly contemplated by this Agreement, unless the
other party has consented in writing thereto (which
consent shall not be unreasonably withheld or delayed),
Excel and New Plan:
(i) shall use their reasonable best
efforts, and shall cause each of their respective
Subsidiaries to use their reasonable best efforts,
to preserve intact their business organizations and
goodwill and keep available the services of their
respective officers and employees subject to the
restrictions set forth in this Agreement;
(ii) subject to the other provisions
of this Section 7.3, shall confer on a regular
basis with one or more representatives of the other
to report material operational matters and, subject
to Sections 7.1 and 7.2, respectively, any
proposals to engage in material transactions;
(iii) shall coordinate the record date
for the quarterly dividends payable with respect to
the Excel Common Stock, Excel Series A Preferred
47
Stock, Excel Series B Preferred Stock and New Plan
Common Shares and New Plan Preferred Shares, and
(iv) shall promptly deliver to the
other true and correct copies of any report,
statement or schedule filed with the SEC subsequent
to the date of this Agreement.
(b) During the period from the date of this
Agreement until the earlier of the Effective Time and the
termination of this Agreement, except as set forth in the
New Plan Disclosure Letter, or as expressly contemplated
by this Agreement, unless Excel has consented in writing
thereto which consent shall not be unreasonably withheld
or delayed, New Plan:
(i) shall, and shall cause each of
its Subsidiaries to, conduct its operations
according to their usual, regular and ordinary
course in substantially the same manner as
heretofore conducted, subject to the restrictions
of this Agreement below;
(ii) shall not, and shall cause each
of its Subsidiaries not to, acquire, enter into an
option to acquire or exercise an option or contract
to acquire additional real property, encumber
assets or commence construction of, or enter into
any agreement or commitment to develop or construct
(other than (A) tenant improvements, reimbursements
and allowances in the ordinary course of business
in accordance with past practice and (B) the
Pending New Plan Transactions), retail shopping
center properties or other real estate projects, in
an amount (together with acquisitions permitted
under clause (xi) of this Section 7.3(b)) which
exceeds $150,000,000 in the aggregate;
(iii) shall not amend its Declaration
of Trust (except for the Trust Amendments) and
shall cause each of its Subsidiaries not to amend
its articles of incorporation, by laws, partnership
agreement, articles of organization or other
governing documents, as the case may be;
(iv) shall not, and shall cause its
Subsidiaries to not (1) except pursuant to the
exercise of options, warrants, conversion rights
and other contractual rights existing on the date
hereof or pursuant to New Plan's dividend
reinvestment plan and disclosed pursuant to this
Agreement, issue any shares of its capital stock
(except to New Plan), effect any stock split,
reverse stock split, stock dividend,
recapitalization or other similar transaction, (2)
grant, confer or award any option, warrant,
48
conversion or other right to acquire any shares of
its capital stock, or amend or permit the
acceleration of vesting of any New Plan Options,
(3) increase any compensation or enter into or
amend any employment agreement with any of its
present or future officers or directors except as
expressly contemplated by this Agreement (and
except for the Employment Agreements contemplated
by Schedule 7.3(b)(iv) of the New Plan Disclosure
Letter providing for certain terms of employment
for, and waiver of loan acceleration for, certain
officers of New Plan) or (4) adopt any new employee
benefit plan (including any stock option, stock
benefit or stock purchase plan) or amend any
existing employee benefit plan in any material
respect, except for changes which are required by
applicable law or are less favorable to
participants in such plans;
(v) shall not declare, set aside or
pay any dividend or make any other distribution or
payment with respect to any shares of its capital
stock, except (1) (x) regular quarterly dividends
on the New Plan Common Shares and regular quarterly
dividends on the Depositary Shares representing
one-tenth of a share of New Plan Preferred Shares,
as well as any other required dividends,
distributions or payments with respect to such New
Plan Preferred Shares, (which, with respect to the
New Plan Common Shares, shall have record dates to
the extent occurring prior to the Effective Time of
June 30, 1998 and September 30, 1998 and
corresponding payment dates of July 10, 1998 and
October 10, 1998), and (y) a dividend in an amount
equal to the greater of (I) the regular quarterly
dividend per share of the New Plan Common Shares
pro-rated for the period from July 1, 1998 (or
October 1, 1998 if the Effective Time has not yet
then occurred) up to and including the Closing Date
and (II) the sum of (A) New Plan's estimated
undistributed real estate investment trust taxable
income (calculated without regard to the dividends
paid deductions as defined in Section 561 of the
Code and by excluding net capital gain) within the
meaning of Section 857(b)(2) of the Code for New
Plan's 1999 taxable year ending on the Closing Date
and (B) New Plan's estimated undistributed net
capital gain within the meaning of Section
857(b)(3) of the Code for New Plan's 1999 taxable
year ending on the Closing Date, and (2) in
connection with the use of shares of capital stock
to pay the exercise price or tax withholding in
connection with stock-based employee benefit plans
of New Plan, directly or indirectly redeem,
purchase or otherwise acquire any shares of its
capital stock or capital stock of any of its
49
Subsidiaries, or make any commitment for any such
action; (it being understood and agreed that for
purposes of the foregoing, New Plan's regular
quarterly dividend shall include increases to prior
quarterly dividend amounts consistent with New
Plan's past practice);
(vi) except in the ordinary course of
business consistent with past practice, shall not,
and shall not permit any of its Subsidiaries to,
sell, mortgage or otherwise encumber or subject to
any Encumbrances or otherwise dispose of, except by
leasing in the ordinary course of business, (i) any
material New Plan Properties or any of its capital
stock of or other interests in its Subsidiaries or
(ii) any of its other assets which are material,
individually or in the aggregate;
(vii) shall not, and shall not permit
any of its Subsidiaries to, (i) incur, assume or
prepay any indebtedness for borrowed money in an
amount in excess of (A) $150,000,000, which amounts
will be applied to pay down outstanding borrowings
under New Plan's existing credit facilities or to
matters specified in Section 7.3(b)(ii) and (B) the
amount necessary to consummate the Pending New Plan
Transactions, in each case in a manner consistent
with New Plan's past practice, (ii) assume,
guarantee, endorse (other than items for
collection) or otherwise become liable or
responsible (whether directly, contingently or
otherwise) for the obligations of any third party
or (iii) make any loans, advances or capital
contributions to, or (except as permitted by
Section 7.3(b)(xi)) investments in, any other
person, other than loans, advances and capital
contributions to Subsidiaries;
(viii) shall not, and shall not permit
any of its Subsidiaries to, pay, discharge or
satisfy any claims, liabilities or obligations
(absolute, accrued, asserted or unasserted,
contingent or otherwise), other than the payment,
discharge or satisfaction, in the ordinary course
of business consistent with past practice or in
accordance with their terms, of liabilities
reflected or reserved against in, or contemplated
by, the most recent consolidated financial
statements (or the notes thereto) of New Plan
included in the New Plan Reports or incurred in the
ordinary course of business consistent with past
practice;
(ix) shall not, and shall not permit
any of its Subsidiaries to, enter into any
contract, arrangement or understanding which may
50
result in total payments or liability by or to it
in excess of $200,000, except (1) tenant
reimbursements and allowances and leases entered
into in the ordinary course consistent with past
practice and (2) capital expenditures incurred in
the ordinary course consistent with past practice;
(x) shall not, and shall not permit
any of its Subsidiaries to, enter into any
contract, arrangement or understanding with any
officer, director, consultant or affiliate of New
Plan or any of its Subsidiaries (i) which is not in
the ordinary course of business and consistent with
past practices or (ii) where the amount involved
exceeds $50,000.
(xi) shall not acquire, enter into any
contract, arrangement or understanding (whether or
not binding) to acquire or announce any proposed
acquisition of, 25% or more of the equity interests
or all or substantially all of the assets, of
another entity which has net assets in excess of
$25,000,000, subject to the limitation in clause
(ii) of this Section 7.3(b);
(xii) shall not make any changes in its
accounting methods or policies except as required
by law, the SEC or generally accepted accounting
principles;
(xiii) shall maintain, and cause its
Subsidiaries to maintain, insurance in such amounts
and against such risks as are customary for
companies like New Plan; and
(xiv) shall not, and shall not permit
any of its Subsidiaries to, authorize, or commit or
agree to take, any of the foregoing actions.
(c) During the period from the date of this
Agreement until the earlier of the Effective Time and the
date on which this Agreement is terminated in accordance
with its terms, except as set forth in the Excel
Disclosure Letter or as contemplated by this Agreement,
unless New Plan has consented in writing thereto (which
consent shall not be unreasonably withheld or delayed),
Excel:
(i) shall, and shall cause each of
its Subsidiaries to, conduct its operations
according to their usual, regular and ordinary
course in substantially the same manner as
heretofore conducted, subject to the restrictions
of this Agreement;
51
(ii) shall not, and shall cause each
of its Subsidiaries not to, acquire, enter into an
option to acquire or exercise an option or contract
to acquire additional real property, encumber
assets or commence construction of, or enter into
any agreement or commitment to develop or construct
(other than (A) tenant improvements reimbursements
and other allowances in the ordinary course of
business consistent with past practice and (B) the
Pending Excel Transactions), retail shopping center
properties or other real estate projects, in an
amount (together with acquisitions permitted under
clause (xi) of this Section 7.3(c)) which exceeds
$150,000,000 in the aggregate;
(iii) shall not and shall cause each of
its Subsidiaries not to amend its Charter (except
for the Excel Charter Amendment) or Bylaws,
partnership agreement, articles of organization or
other governing documents, as the case may be;
(iv) shall not and shall cause its
Subsidiaries not to (1) except pursuant to the
exercise of options, warrants, conversion rights,
Down REIT units and other contractual rights
existing on the date hereof or pursuant to its
dividend reinvestment plan and disclosed pursuant
to this Agreement or pursuant to the Excel Stock
Dividend, issue any shares of its capital stock
(except to Excel), effect any stock split, reverse
stock split, stock dividend, recapitalization or
other similar transaction, (2) other than the
issuance of the Excel Rights, grant, confer or
award any option, warrant, conversion or other
right to acquire any shares of its capital stock or
amend the terms or permit the acceleration of any
such option (except the issuance of Down REIT units
in Pending Excel Transactions), (3) increase any
compensation or enter into or amend any employment
agreement with any of its present or future
officers or directors except as expressly
contemplated by this Agreement or (4) adopt any new
employee benefit plan (including any stock option,
stock benefit or stock purchase plan) or amend any
existing employee benefit plan in any material
respect, except for changes which are required by
applicable law or are less favorable to
participants in such plans and except for changes
proposed in the Excel Proxy Statement for its 1998
Annual Meeting;
(v) shall not declare, set aside or
pay any dividend or make any other distribution or
payment with respect to any shares of its capital
stock, except (1) (x) regular quarterly dividends
of $.50 per share on the Excel Common Stock and
52
regular quarterly dividends on the Excel Series A
Preferred Stock and Excel Series B Preferred Stock
as well as any other required dividends,
distributions or payments with respect to such
Excel Preferred Stock (which, with respect to the
Excel Common Stock, shall have record dates, to the
extent occurring prior to the Effective Time of
June 30, 1998 and September 30, 1998, and
corresponding payment dates of July 10, 1998 and
October 10, 1998) (y) a dividend in an amount equal
to the greater of (I) the regular quarterly
dividend per share of Excel Common Stock pro-rated
for the period from July 1, 1998 (or October 1,
1998 if the Effective Time has not yet then
occurred) up to and including the Closing Date and
(II) the sum of (A) Excel's estimated undistributed
real estate investment trust taxable income
(calculated without regard to the dividends paid
deductions as defined in Section 561 of the Code
and by excluding net capital gain) within the
meaning of Section 857(b)(2) of the Code for
Excel's 1998 taxable year ending on the Closing
Date, (B) Excel's estimated undistributed net
capital gain within the meaning of Section
857(b)(3) of the Code for Excel's 1998 taxable year
ending on the Closing Date and (z) dividends
determined by Excel to be necessary to maintain
Excel's status as a REIT under the Code and (2) in
connection with the use of shares of capital stock
to pay the exercise price or tax withholding in
connection with stock-based employee benefit plans
of Excel, directly or indirectly redeem, purchase
or otherwise acquire any shares of its capital
stock or capital stock of any of its Subsidiaries,
or make any commitment for any such action;
(vi) except in the ordinary course of
business consistent with past practice, shall not,
and shall not permit any of its Subsidiaries to,
sell, mortgage or otherwise encumber or subject to
any Encumbrances or otherwise dispose of, except by
leasing in the ordinary course of business, (i)
material Excel Properties or any of its capital
stock of or other interests in its Subsidiaries or
(ii) any of its other assets which are material,
individually or in the aggregate;
(vii) shall not, and shall not permit
any of its Subsidiaries to, (i) incur, assume or
prepay any indebtedness for borrowed money in an
amount in excess of (A) $150,000,000, which amounts
will be applied to pay down outstanding borrowings
under Excel's existing credit facilities or to
matters specified in Section 7.3(c)(ii) and (B) the
amount necessary to consummate the Pending Excel
Transactions, in each case in a manner consistent
53
with Excel's past practice, (ii) assume, guarantee,
endorse (other than items for collection) or
otherwise become liable or responsible (whether
directly, contingently or otherwise) for the
obligations of any third party or (iii) make any
loans, advances or capital contributions to, or
(except as permitted by Section 7.3(c)(xi))
investments in, any other person, other than loans,
advances and capital contributions to Subsidiaries;
(viii) shall not, and shall not permit
any of its Subsidiaries to, pay, discharge or
satisfy any claims, liabilities or obligations
(absolute, accrued, asserted or unasserted,
contingent or otherwise), other than the payment,
discharge or satisfaction, in the ordinary course
of business consistent with past practice or in
accordance with their terms, of liabilities
reflected or reserved against in, or contemplated
by, the most recent consolidated financial
statements (or the notes thereto) of Excel included
in the Excel Reports or incurred in the ordinary
course of business consistent with past practice;
(ix) shall not, and shall not permit
any of its Subsidiaries to, enter into any
contract, arrangement or understanding which may
result in total payments or liability by or to it
in excess of $200,000, except (1) tenant
reimbursements and allowances and leases entered
into in the ordinary course consistent with past
practice and (2) capital expenditures incurred in
the ordinary course of business consistent with
past practice;
(x) shall not, and shall not permit
any of its Subsidiaries to, enter into any
contract, arrangement or understanding with any
officer, director, consultant or affiliate of Excel
or any of its Subsidiaries (i) which is not in the
ordinary course of business and consistent with
past practices or (ii) where the amount involved
exceeds $50,000.
(xi) shall not acquire, enter into any
contract, arrangement or understanding (whether or
not binding) to acquire or announce any proposed
acquisition of, 25% or more of the equity interests
or all or substantially all of the assets, of
another entity which has net assets in excess of
$25,000,000, subject to the limitations in clause
(ii) of this Section 7.3(c).
(xii) shall not make any changes in its
accounting methods or policies except as required
54
by law, the SEC or generally accepted accounting
principles;
(xiii) shall maintain, and cause its
Subsidiaries to maintain, insurance in such amounts
and against such risks as are customary for
companies like Excel;
(xiv) Notwithstanding anything to the
contrary herein contained, neither Excel nor any of
its Subsidiaries shall make any loan of money to or
investment in, or purchase any equity interest in,
buy any property from or sell any property to, or
enter into any partnership or joint venture with
Legacy. Excel will fully enforce and not waive the
provisions of each material agreement between Excel
and Legacy in effect on the date hereof; and
(xv) shall not, and shall not permit
any of its Subsidiaries to, authorize, or commit or
agree to take, any of the foregoing actions.
(d) Except as required by law, Excel and
Sub, on the one hand, and New Plan, on the other hand,
shall not, and shall not permit any of their respective
Subsidiaries to, voluntarily take any action that would,
or that could reasonably be expected to, result in,
except as contemplated by Sections 7.1 and 7.2, any of
the conditions to the Merger set forth in Article 8 not
being satisfied.
7.4. Meetings of Stockholders. Each of New Plan
and Excel will take all action necessary in accordance
with applicable law and its Declaration of Trust and
Charter and Bylaws, as applicable, to convene a meeting
of its shareholders or stockholders, as the case may be,
as promptly as practicable to consider and vote upon, in
the case of New Plan (including any adjournment thereof,
the "New Plan Shareholders Meeting") the approval of the
Trust Amendments, this Agreement, the Merger and the
other transactions contemplated hereby, and, in the case
of Excel (including any adjournment thereof, the "Excel
Stockholders Meeting") the approval of the Excel
Stockholder Matters. The Board of Directors of Excel and
the Board of Trustees of New Plan shall each recommend
such approval and Excel and New Plan shall each take all
lawful, commercially reasonable action to solicit such
approval, including, without limitation, timely mailing
the Proxy Statement/Prospectus (as defined in Section
7.8). Excel and New Plan shall coordinate and cooperate
with respect to the timing of such meetings and shall use
their reasonable efforts to hold such meetings on the
same day. If on the date of the meetings of Excel and
New Plan established pursuant to this paragraph, either
Excel or New Plan has respectively received less than the
requisite vote and neither a New Plan Takeover Proposal
55
nor an Excel Takeover Proposal has been publicly
disclosed and not withdrawn prior to the date of such
meeting, then both parties shall recommend the
adjournment of their respective meetings until the first
to occur of (i) the date ten (10) days after the
originally scheduled date of such meetings or (ii) the
date on which duly executed proxies for the requisite
number of votes approving the Merger (in the case of New
Plan) or the Excel Stockholder Matters (in the case of
Excel) shall have been obtained. Notwithstanding the
foregoing, New Plan and Excel and their respective Boards
of Trustees and Boards of Directors may take and disclose
to shareholders or stockholders a position contemplated
by Rule 14e-2 promulgated under the Exchange Act if
required to do so by the Exchange Act, comply with Rule
14d-9 thereunder and make all other disclosures required
by applicable law. It shall be a condition to the
mailing of the Proxy Statement/Prospectus that (i) Excel
shall have received a "comfort" letter from Coopers &
Lybrand L.L.P., independent public accountants for New
Plan, dated as of a date within two business days before
the date on which the Form S-4 (as defined in Section
7.8) shall become effective, with respect to the
financial statements of New Plan included in the Proxy
Statement/Prospectus, in form and substance reasonably
satisfactory to Excel, and customary in scope and
substance for "comfort" letters delivered by independent
public accountants in connection with registration
statements and proxy statements similar to the Form S-4
and the Proxy Statement/Prospectus, and (ii) New Plan
shall have received a "comfort" letter from Coopers &
Lybrand L.L.P., independent public accountants for Excel,
dated as of a date within two business days before the
date on which the Form S-4 shall become effective, with
respect to the financial statements of Excel included in
the Proxy Statement/Prospectus, in form and substance
reasonably satisfactory to New Plan, and customary in
scope and substance for "comfort" letters delivered by
independent public accountants in connection with
registration statements and proxy statements similar to
the Form S-4 and the Proxy Statement/Prospectus.
7.5. Filings; Other Action. Subject to the terms
and conditions herein provided, New Plan, Excel and Sub
shall: (a) to the extent required, promptly make their
respective filings with respect to the Merger; (b) use
all reasonable efforts to cooperate with one another in
(i) determining which filings are required to be made
prior to the Effective Time with, and which consents,
approvals, permits or authorizations are required to be
obtained prior to the Effective Time from, governmental
or regulatory authorities of the United States, the
several states and foreign jurisdictions in connection
with the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby and
(ii) timely making all such filings and timely seek all
56
such consents, approvals, permits or authorizations; (c)
use all reasonable efforts to obtain in writing any
consents required from third parties in form reasonably
satisfactory to New Plan and Excel necessary to
effectuate the Merger; and (d) use all reasonable efforts
to take, or cause to be taken, all other action and do,
or cause to be done, all other things necessary, proper
or appropriate to consummate and make effective the
transactions contemplated by this Agreement. 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 and directors of Excel and
Sub, and New Plan shall take all such necessary action.
If any "fair price" or "control share acquisition"
statute or similar statute or regulation shall become
applicable to the transactions contemplated hereby, New
Plan, Excel and Sub and their respective Boards of
Trustees or Directors shall use their reasonable best
efforts to grant such approvals and to take such other
actions as are necessary so that the transactions
contemplated hereby may be consummated as promptly as
practicable on the terms contemplated hereby and shall
otherwise use their reasonable best efforts to minimize
or eliminate the effects of any such statute or
regulation on the transactions contemplated hereby.
Excel and New Plan shall promptly advise each other of
and confer and consult with respect to any communications
from governmental agencies with respect to the
transactions contemplated by this Agreement. Each of New
Plan and Excel shall use its reasonable efforts to cause
to be delivered by its accountants the "comfort letters"
referred to in Sections 7.4, 8.2 and 8.3.
7.6. Inspection of Records. Until the earlier of
the Effective Time or the date in which this Agreement is
terminated in accordance with its terms, each of New
Plan, Excel and Sub shall allow all designated officers,
attorneys, accountants and other representatives of the
other access at all reasonable times to the records and
files, correspondence, audits and properties, as well as
to all information relating to commitments, contracts,
titles and financial position, or otherwise pertaining to
the business and affairs, of New Plan and Excel and their
respective Subsidiaries for purposes related to an
evaluation of the transactions contemplated hereby,
subject to any restrictions arising under applicable law.
All information furnished under this Section 7.6 is
subject to the Confidentiality Agreement (as herein
defined).
7.7. Publicity. The initial press release
relating to this Agreement shall be a joint press release
and thereafter New Plan and Excel shall, subject to their
respective legal obligations (including requirements of
stock exchanges and other similar regulatory bodies),
consult with each other, and use reasonable efforts to
57
agree upon the text of any press release, before issuing
any such press release or otherwise making public
statements with respect to the transactions contemplated
hereby and in making any filings with any federal or
state governmental or regulatory agency or with any
national securities exchange with respect thereto.
7.8. Registration Statement. Excel and New Plan
shall cooperate and promptly prepare and Excel shall file
with the SEC as soon as practicable but no later than
June 10, 1998, a Registration Statement on Form S-4 (the
"Form S-4") under the Securities Act, with respect to the
Merger Consideration issuable in the Merger, a portion of
which Registration Statement shall also serve as the
joint proxy statement with respect to the New Plan
Shareholders Meeting and the Excel Stockholders Meeting
(the "Proxy Statement/Prospectus"). The respective
parties will cause the Proxy Statement/Prospectus and the
Form S-4 to comply as to form in all material respects
with the applicable provisions of the Securities Act, the
Exchange Act and the rules and regulations thereunder.
Each of New Plan and Excel shall furnish all information
about itself and its business and operations and all
necessary financial information to the other as the other
may reasonably request in connection with the preparation
of the Form S-4. Excel shall use its reasonable best
efforts, and New Plan will cooperate with Excel, to have
the Form S-4 declared effective by the SEC as promptly as
practicable. Excel shall use its best efforts to obtain,
prior to the effective date of the Form S-4, all
necessary state securities law or "Blue Sky" permits or
approvals required to carry out the transactions
contemplated by this Agreement and will pay all expenses
incident thereto. Excel agrees that the Proxy
Statement/Prospectus and each amendment or supplement
thereto at the time of mailing thereof and at the time of
the respective meetings of stockholders of Excel and New
Plan, and, in the case of the Form S-4 and each amendment
or supplement thereto, at the time it is filed or becomes
effective, will not include an untrue statement of a
material fact or omit to state a material fact required
to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they
were made, not misleading; provided, however, that the
foregoing shall not apply to the extent that any such
untrue statement of a material fact or omission to state
a material fact was made by Excel in reliance upon and in
conformity with information concerning New Plan furnished
to Excel by New Plan in writing specifically for use in
the Proxy Statement/Prospectus. New Plan agrees that the
information provided by it for inclusion in the Proxy
Statement/Prospectus and each amendment or supplement
thereto, at the time of mailing thereof and at the time
of the New Plan Shareholders Meeting and Excel
Stockholders Meeting, respectively, and, in the case of
information provided by New Plan in writing for inclusion
58
in the Form S-4 or any amendment or supplement thereto,
at the time it is filed or becomes effective, will not
include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
Excel will advise New Plan, promptly after it receives
notice thereof, of the time when the Form S-4 has become
effective or any supplement or amendment has been filed,
the issuance of any stop order, the suspension of the
qualification of the Excel Common Stock or Excel Series D
Preferred Stock (represented by Depositary Shares)
issuable in connection with the Merger for offering or
sale in any jurisdiction, or any request by the SEC for
amendment of the Proxy Statement/Prospectus or the Form
S-4 or comments thereon (which Excel agrees to promptly
respond to) and responses thereto or requests by the SEC
for additional information (which Excel agrees to
promptly provide).
7.9. Listing Application. Excel shall promptly
prepare and submit to the NYSE a listing application
covering the Excel Common Stock and the Excel Series D
Depositary Shares representing shares of Excel Series D
Preferred Stock issuable in the Merger and issuable upon
exercise of the New Plan Options being assumed hereunder
and new symbols, and shall use its reasonable efforts to
obtain, prior to the Effective Time, approval for the
listing of such Excel Common Stock and such Depositary
Shares, subject to official notice of issuance.
7.10. Affiliates of New Plan.
(a) At least 30 days prior to the Closing
Date, New Plan shall deliver to Excel a list of names and
addresses of those persons who were, in New Plan's
reasonable judgment, at the record date for the New Plan
Shareholders' Meeting "affiliates" (each such person, an
"Affiliate") of New Plan within the meaning of Rule 145
of the rules and regulations promulgated under the
Securities Act ("Rule 145"). New Plan shall provide
Excel such information and documents as Excel shall
reasonably request for purposes of reviewing such list.
New Plan shall use all reasonable efforts to deliver or
cause to be delivered to Excel, on or prior to the
Closing Date, from each of the Affiliates of New Plan
identified in the foregoing list, an Affiliate Letter in
customary form reasonably acceptable to Excel. Excel
shall be entitled to place legends as specified in such
Affiliate Letters on the certificates evidencing any
shares of the Merger Consideration to be received by such
Affiliates pursuant to the terms of this Agreement, and
to issue appropriate stop transfer instructions to the
transfer agent for the Merger Consideration, consistent
with the terms of such Affiliate Letters.
59
(b) Excel shall file the reports required
to be filed by it under the Exchange Act and the rules
and regulations adopted by the SEC thereunder, and it
will take such further action as any Affiliate of New
Plan may reasonably request, all to the extent required
from time to time to enable each Affiliate to sell
(subject to Section 7.22 hereof) the Merger Consideration
received by such Affiliate in the Merger without
registration under the Securities Act pursuant to (i)
Rule 145(d) under the Securities Act, as such Rule may be
amended from time to time, or (ii) any successor rule or
regulation hereafter adopted by the SEC.
7.11. Expenses. Subject to Section 9.5 and whether
or not the Merger is consummated, all costs and expenses
incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the
party incurring such expenses, in particular (a) the
filing fees in connection with the filing of the Form S-4
and Proxy Statement/Prospectus with the SEC and (b) the
expenses incurred in connection with printing and mailing
the Form S-4 and the Proxy Statement/Prospectus, shall be
shared equally by New Plan and Excel.
7.12. Indemnification.
(a) In the event of any threatened or
actual claim, action, suit, proceeding or investigation,
whether civil, criminal or administrative, including,
without limitation, any such claim, action, suit,
proceeding or investigation in which any person who is
now, or has been at any time prior to the date hereof, or
who becomes prior to the Effective Time, a trustee,
officer, employee, fiduciary or agent of New Plan (the
"Indemnified Parties") is, or is threatened to be, made a
party based in whole or in part on, or arising in whole
or in part out of, or pertaining to (i) the fact that he,
she or it is or was a trustee, officer, employee or agent
of New Plan, or is or was serving at the request of New
Plan as a trustee, officer, employee or agent of another
corporation, partnership, joint venture, trust or other
enterprise, or (ii) this Agreement or any of the
transactions contemplated hereby, whether in any case
asserted or arising before or after the Effective Time
(and including with respect to any matters occurring at
the Effective Time), the parties hereto agree to
cooperate and use their reasonable best efforts to defend
against and respond thereto. It is understood and agreed
that New Plan shall indemnify and hold harmless, and
after the Effective Time Excel shall indemnify and hold
harmless, as and to the full extent permitted by
applicable law or the Declaration of Trust of New Plan,
each Indemnified Party against any losses, claims,
damages, liabilities, costs, expenses (including
attorneys' fees and expenses), judgments, fines and
amounts paid in settlement in connection with any such
60
threatened or actual claim, action, suit, proceeding or
investigation, and in the event of any such threatened or
actual claim, action, suit, proceeding or investigation
(whether asserted or arising before or after the
Effective Time (and including with respect to any matters
occurring at the Effective Time)); (i) New Plan, and
Excel after the Effective Time, shall promptly pay
expenses in advance of the final disposition of any
claim, suit, proceeding or investigation to each
Indemnified Party to the full extent permitted by law,
(ii) the Indemnified Parties may retain counsel
satisfactory to them, provided such counsel is reasonably
satisfactory to Excel, and New Plan, and Excel after the
Effective Time, shall promptly pay all fees and expenses
of such counsel for the Indemnified Parties after
reasonably detailed statements therefor are received, and
(iii) New Plan and Excel will use their respective
reasonable best efforts to assist in the vigorous defense
of any such matter; provided, that neither New Plan nor
Excel shall be liable for any settlement effected without
its prior written consent (which consent shall not be
unreasonably withheld or delayed); and provided further
that Excel shall have no obligation hereunder to any
Indemnified Party when and if a court of competent
jurisdiction shall ultimately determine, and such
determination shall have become final and non-appealable,
that indemnification of such Indemnified Party in the
manner contemplated hereby is prohibited by applicable
law. The Indemnified Parties as a group may retain only
one law firm to represent them with respect to any single
action unless there is, under applicable standards of
professional conduct, a conflict on any significant issue
between the positions of any two or more Indemnified
Parties. Any Indemnified Party wishing to claim
indemnification under this Section 7.12, upon learning of
any such claim, action, suit, proceeding or
investigation, shall notify New Plan and, after the
Effective Time, Excel, thereof, provided that the failure
to so notify shall not affect the obligations of New Plan
or Excel except to the extent such failure to notify
materially prejudices such party.
(b) Excel agrees that all rights to
indemnification existing in favor, and all limitations on
the personal liability, of the Indemnified Parties
provided for in New Plan's Declaration or Trust or
similar organizational documents as in effect as of the
Effective Time with respect to matters occurring at or
prior to the Effective Time are contract rights and shall
survive the Merger and shall continue in full force and
effect thereafter.
61
(c) From and after the Effective Time,
Excel and the Surviving Trust shall and Excel shall cause
the Surviving Trust to keep in effect provisions in their
respective charters and Declaration of Trust providing
for exculpation of director liability and indemnification
of Trustees, directors, officers, employees and agents at
New Plan to the extent that such persons are entitled
thereto thereunder on the date hereof (or, if more
favorable to such persons, at the Effective Time as
contemplated by Articles 2 and 3 hereof), which
provisions shall not be amended, repealed or otherwise
modified for a period of six years after the Effective
Time in any manner that would adversely affect the rights
thereunder of any such individuals unless such
modification is required by law.
(d) For a period of six years after the
Effective Time, the Surviving Trust shall cause to be
maintained in effect the current policies of directors'
and officers' liability insurance maintained by New Plan
(provided that the Surviving Trust may substitute
therefor policies of at New Plan the same coverage and
amounts containing terms and conditions which are no less
advantageous) with respect to claims arising from facts
or events which occurred before the Effective Time;
provided, however, that in no event shall the Surviving
Trust be required to expend pursuant to this Section
7.12(b) more than an amount equal to 200% of current
annual premiums paid by New Plan for such insurance. In
addition, Excel shall, from and after the Effective Time,
carry directors' and officers' liability insurance which
is no less favorable than the foregoing.
(e) In the event that Excel or the
Surviving Trust or any of its respective successors or
assigns (i) consolidates with or merges into any other
person and shall not be the continuing or surviving
corporation or entity of such consolidation or merger or
(ii) transfers all or substantially all of its properties
and assets to any person, then, and in each such case the
successors and assigns of such entity shall assume the
obligations set forth in this Section 7.12, which
obligations are expressly intended to be for the
irrevocable benefit of, and shall be enforceable by, each
Indemnified Party.
(f) From and after the Effective Time,
Excel guarantees all obligations of the Surviving Trust
under this Section 7.12. This Section 7.12 is intended
to be for the benefit of, and to grant third party rights
to, the Indemnified Parties, their heirs and personal
representatives and shall be binding on Excel, the
Surviving Trust and their respective representatives,
successors and assigns. Each of the Indemnified Parties
shall be entitled to enforce the covenants contained in
this Section 7.12 and Excel and the Surviving Trust each
62
acknowledges and agrees that each Indemnified Party would
suffer irreparable harm in the event of and that no
adequate remedy at law exists for a breach of such
covenants.
(g) To the extent reasonably requested by
New Plan, (i) Excel will amend its Bylaws to make more
favorable to the persons covered thereby the
indemnification, exculpation and similar provisions of
the Bylaws and (ii) if requested reasonably in advance of
the effectiveness of the Form S-4, adopt and include on
Schedule 3.1 and in the Excel Charter Amendment,
amendments to the Charter to make more favorable to the
persons covered thereby the indemnification, exculpation
and similar provisions of the Charter.
7.13. Employees.
(a) Subject to considerations relating to
the particular geographic region in which the employee is
located, it is the intent of the parties hereto that the
employees of New Plan employed by the Surviving Trust
after the Effective Time (the "Former New Plan
Employees") shall in general receive credit with respect
to each employee benefit plan, program, policy or
arrangement of the Surviving Trust or Excel, for service
with New Plan or any of its Subsidiaries (as applicable)
for purposes of determining eligibility to participate
(including waiting periods, and without being subject to
any entry date requirement after the waiting period has
been satisfied), vesting (as applicable) and entitlement
to benefits.
(b) For purposes of this Section 7.13, the
term "employees" shall mean all current employees of New
Plan and its Subsidiaries (including those on disability
or approved leave of absence, paid or unpaid).
7.14. Reorganization. Neither Excel nor New Plan
nor any of their respective Subsidiaries or other
Affiliates shall take any action, or omit to take any
action if such action taken or such omission would
jeopardize qualification of the Merger as a
reorganization within the meaning of Section 368(a) of
the Code.
7.15. Advice of Changes. Excel and New Plan shall
each promptly advise the other party orally and in
writing to the extent it has knowledge of any change or
event having, or which, insofar as can reasonably be
foreseen, could reasonably be expected to have a New Plan
Material Adverse Effect or Excel Material Adverse Effect,
as the case may be, or a material adverse effect on the
ability of the conditions set forth in Article 8 to be
satisfied; provided, however, that no such notification
shall affect the representations, warranties, covenants
63
or agreements of the parties (or remedies with respect
thereto) or the conditions to the obligations of the
parties under this Agreement.
7.16. REIT Status. Notwithstanding anything to the
contrary set forth in this Agreement, nothing in this
Agreement shall prohibit New Plan or Excel from taking,
and New Plan and Excel hereby agree, respectively, to
take any action at any time or from time to time that in
the reasonable judgment of the Board of Trustees of New
Plan or Board of Directors of Excel, as the case may be,
upon advice of counsel, is legally necessary for New Plan
or Excel, as the case may be, to maintain its
qualification as REIT or to eliminate or reduce income or
excise taxes under Sections 856-860 and 4981 of the Code
(and similar provisions of state or local tax law) for
any period or portion thereof ending on or prior to the
Effective Time, including without limitation, making
dividend or distribution payments to shareholders of New
Plan or stockholders of Excel, as the case may be.
Following the Merger, Excel shall use its best efforts to
take any such actions as may be necessary to maintain New
Plan's status as a REIT for any period or portion thereof
ending on or prior to the Effective Time (including,
without limitation, the mailing of stockholder demand
letters as required by Treasury Regulations Section
1.857-8).
7.17. Governance. Excel's Board of Directors shall
take all action necessary to cause the number of
directors comprising the Board of Directors of Excel at
the Effective Time to be increased by eight Directors to
a total of fifteen Directors and shall take all such
action necessary to cause the Trustees of New Plan
immediately prior to the Effective Time to be selected as
Directors of Excel at the Effective Time in accordance
with Section 3.1 and Schedule 3.1. Prior to the Merger,
the Board of Directors of Excel will designate a four-
person Investment Committee which, as of the Effective
Time, will consist of the four Directors with an (I) next
to their names in Schedule 3.1. Under Excel's Bylaws as
in effect at the Effective Time, subject to the
requirements of Board of Directors or stockholder
approval for certain matters under the MGCL, the
Investment Committee will have the power and authority
(i) but only by the consent of at least three members, to
approve on behalf of Excel any acquisition or disposition
with a purchase price (taking into account purchase money
financing and assumption of existing mortgage
indebtedness) of less than five percent (5%) of the total
assets (before accumulated depreciation and amortization)
of Excel and its consolidated Subsidiaries determined in
accordance with generally accepted accounting principles
at the time such transaction is entered into and (ii)
also to approve any such transaction in an amount in
excess of five percent (5%), but less than ten percent
64
(10%), of total assets (before accumulated depreciation
and amortization) of Excel and its consolidated
subsidiaries, determined in accordance with generally
accepted accounting principles, by the consent of all
four members of the Investment Committee and two
additional members of the Board of Directors of Excel.
Any such foregoing consent shall be valid whether or not
it is obtained at a formal meeting. The Investment
Committee shall not have the power or authority to
approve any refinancing, unsecured financing or new
financing, other than purchase money financing or debt
assumed as described above. At the Effective Time, Sabin
shall be appointed to serve as Chairman of the Investment
Committee. In addition, all committee members of Excel
committees, other than as contemplated with respect to
the Investment Committee as contemplated above, shall
resign or be removed as of the Effective Time.
7.18. Corporate Headquarters. The Surviving Trust
and Excel will have their corporate headquarters in New
York, New York, with operational headquarters in both New
York, New York, and San Diego, California, following the
Merger. The office of the Chairman and Chief Executive
Officer will be located in New York, New York.
7.19. Amendments to Excel DRIP. The Board of
Directors of Excel will take all action necessary in
accordance with applicable law to cause the following to
occur with respect to the Excel Dividend Reinvestment
Plan (the "Excel DRIP"): (a) file and have declared
effective at or prior to the Effective Time a
registration statement (the "DRIP Registration
Statement") covering the issuance and sale of 5,000,000
shares of Excel Common Stock under the Excel DRIP as
amended in accordance with this Section 7.19; (b) include
with the letter of transmittal sent pursuant to Section
4.2 hereof, the prospectus included in the DRIP
Registration Statement for the Excel DRIP as so amended
and an enrollment form with instructions as to how to
become a participant in the Excel DRIP; (c) amend the
Excel DRIP to (i) provide that at the time of
effectiveness of the DRIP Registration Statement all
dividends reinvested shall be reinvested as new shares of
Excel at 95% of the market price as defined in the New
Plan DRIP and (ii) permit any participants in the Excel
DRIP to purchase shares of Excel Common Stock at 100% of
"market value" as so defined and as is currently provided
as to New Plan Common Shares in the New Plan DRIP
(collectively (i) and (ii), the "Excel DRIP Amendments").
7.20. Legacy Arrangements. Excel shall use its
reasonable best efforts to enter into, and cause Legacy
to enter into as soon as reasonably practical but not
later than June 1, 1998: (i) an amendment to the
Administrative Services Agreement dated March 31, 1998
substantially in the form of Exhibit D-1 hereto (the
65
"Legacy Services Amendments"), and (ii) an agreement
between Excel and Legacy with respect to the matters set
forth as Exhibit D-2 hereto in form and substance
reasonably satisfactory to New Plan (the "Legacy
Agreement").
7.21. Consulting Agreement. Excel shall enter into
a consulting agreement with William Newman to become
effective as of the Effective Time which shall contain
the terms set forth on Exhibit E hereto and such other
terms not inconsistent therewith which are reasonably
acceptable to Excel and Mr. Newman (the "Newman
Consulting Agreement").
7.22. No Sale Agreements. New Plan and Excel shall
each use their respective reasonable best efforts to
obtain from their respective executive officers and
directors an agreement in favor of Excel, effective as of
the Effective Time, restricting their right to sell their
respective shares of Excel Common Stock, including shares
received in the Merger, for a period of 180 days
following the Effective Time in a form reasonably
acceptable to New Plan and Excel.
7.23. Dividends. Excel and New Plan agree that it
will be the policy of the Board of Directors of Excel
effective as of the Effective Time subject to the
exercise of its fiduciary duties to the Excel
stockholders under applicable law that cash dividends on
the Excel Common Stock for the first year following the
Effective Time will be payable at the annual rate equal
to the greater of (a) $1.60 with anticipated minimum
increases of $.0025 per share per quarter until the
current quarterly dividend (expressed as an annual rate)
is $1.67 per share and (b) the amount necessary to
maintain Excel's status as a REIT and to avoid or reduce
income and excise taxes under the Code (and similar
provisions of state and local tax law).
7.24. Executive Employment Agreements. New Plan
and Excel shall, each acting reasonably, establish the
terms of employment with Excel and the Surviving Trust
following the Effective Time of such of their respective
officers as are jointly agreed by New Plan and Excel;
such terms will be reflected in written employment
agreements substantially in the form of composite Exhibit
F hereto, provided, however, that the level of salary and
bonus for any such individual will not be less than his
salary as of the date hereof and last year's bonus,
respectively. New Plan and Excel each acting reasonably
shall establish the fringe benefits for all such
individuals which are consistent in the aggregate with
the fringe benefits currently enjoyed by such individuals
as a group. The provisions of this Section 7.24 do not
apply to Laubich or Sabin whose employment arrangements
are set forth on Exhibit A-1 and A-2 hereto.
66
7.25. Certain Agreements. Without the prior
written consent of New Plan, Excel shall not amend, waive
or fail to fully enforce any provision of or permit or
suffer to occur any activity prohibited by, the Support
Agreement or Legacy Intercompany Amendment.
ARTICLE 8.
CONDITIONS
8.1. Conditions to Each Party's Obligation to
Effect the Merger. The respective obligation of each
party to effect the Merger and the other transactions
contemplated hereby to occur at the Effective Time shall
be subject to the fulfillment on or prior to the
Effective Time of the following conditions, any or all of
which may be waived, in whole or in part, by the parties
hereto, to the extent permitted by applicable law:
(a) This Agreement and the transactions
contemplated hereby shall have been approved by the New
Plan Required Vote, with respect to the Merger and Trust
Amendments, and by the Excel Required Vote, with respect
to the Excel Stockholder Matters.
(b) None of the parties hereto shall be
subject to any order, ruling or injunction of a court of
competent jurisdiction, and there shall not have been
enacted any statute or regulation, which prohibits or
makes illegal the consummation of the transactions
contemplated by this Agreement. In the event any such
order, ruling or injunction shall have been issued, each
party agrees to use its reasonable efforts to have any
such order, ruling or injunction lifted, stayed or
reversed.
(c) The Form S-4 shall have become
effective and all necessary state securities law or "Blue
Sky" permits or approvals required to carry out the
transactions contemplated by this Agreement shall have
been obtained and no stop order with respect to any of
the foregoing shall be in effect and no proceedings for
that purpose shall have been initiated or, to the
knowledge of Excel or New Plan, threatened by the SEC.
(d) Excel shall have obtained the approval
for the listing of the Excel Common Stock and Excel
Series D Depositary Shares issuable in the Merger or upon
exercise of the New Plan Options assumed by Excel
hereunder, in each case on the NYSE, subject to official
notice of issuance.
(e) All consents, authorizations, order and
approvals of (or filings of registrations with) any
governmental commission, board, other regulatory body or
third parties required in connection with the execution,
delivery and performance of this Agreement shall have
67
been obtained or made, except for filings in connection
with the Merger and any other documents required to be
filed after the Effective Time and except where the
failure to have obtained or made any such consent,
authorization, order, approval, filing or registration
would not have been material adverse effect on the
business, results of operations or financial condition of
Excel or New Plan (together with their respective
Subsidiaries), taken as a whole, following the Effective
Time.
8.2. Conditions to Obligations of New Plan to
Effect the Merger. The obligation of New Plan to effect
the Merger and the other transactions contemplated hereby
to occur at the Effective Time shall be subject to the
fulfillment at or prior to the Effective Time of the
following conditions, unless waived by New Plan:
(a) Excel shall have performed in all
material respects its covenants and agreements contained
in this Agreement required to be performed at or prior to
the Effective Time and the representations and warranties
of Excel contained in this Agreement that are qualified
as to an Excel Material Adverse Effect shall be true and
correct and any of such representations and warranties
that are not so qualified shall be true and correct
except where the failure to be so true and correct
individually or in the aggregate would not have an Excel
Material Adverse Effect, in each case, as of the
Effective Time as if made as of the Effective Time
(except to the extent that the representation or warranty
is expressly limited by its terms to another date), and
New Plan shall have received a certificate of the
President or a Vice President of Excel on behalf of
Excel, dated the Closing Date, certifying to such effect.
(b) New Plan shall have received the
opinion dated the Closing Date of Altheimer & Gray or
another nationally recognized law firm selected by New
Plan, to the effect that the Merger will be treated for
Federal income tax purposes as a reorganization within
the meaning of Section 368(a) of the Code, and that New
Plan and Excel will each be a party to that
reorganization within the meaning of Section 368(b) of
the Code. In rendering its opinion such firm may rely on
representations of New Plan, Excel and others. Excel and
its counsel shall cooperate with such firm in its
investigation as to factual matters.
(c) New Plan shall have received the
opinion of Latham & Watkins dated the Closing Date, to
the effect that, commencing with its taxable year ended
December 31, 1993, Excel was organized in conformity with
the requirements for qualification and taxation as a REIT
under Section 856 of the Code, and its method of
operation has enabled it and will enable it to continue
68
to meet the requirements for qualification and taxation
as a REIT under the Code. In rendering its opinion,
Latham & Watkins may rely on representations of Excel and
others.
(d) New Plan shall have received the (i)
opinion of Ballard Spahr Andrews & Ingersoll, LLP, which
is acting as Maryland counsel to Excel, to the effect
that assuming due authorization and approval of the
Merger and the Articles of Merger by New Plan and its
shareholders, the effectiveness of the Merger under
Massachusetts law and other matters customarily assumed
in opinions with respect to transactions such as the
Merger, upon filing of the Articles of Merger with the
SDAT, the Merger will be effective as a matter of
Maryland law, and as to such other matters of Maryland
law as are customary in a transaction such as the Merger
and (ii) the opinion of Goodwin, Procter & Hoar, LLP,
which is acting as Massachusetts counsel to New Plan to
the effect that, assuming the due authorization and
approval of the Merger and the Articles of Merger by
Excel and by Sub, the effectiveness of the Merger under
Maryland law and other matters customarily assumed in
opinions with respect to transactions such as the Merger,
upon filing of the Certificate of Amendment and Merger
with the Secretary of the Commonwealth of Massachusetts
in accordance with this Agreement, the Merger will be
effective under the Declaration of Trust of New Plan and
Massachusetts law, and as to such other matters of
Massachusetts law as are customary in a transaction such
as the Merger.
(e) New Plan shall have received a
"comfort" letter from Coopers & Lybrand L.L.P., dated the
Closing Date, with respect to the financial statements of
Excel included in the Proxy Statement/Prospectus,
substantially in the form described in Section 7.4.
(f) From the date of this Agreement through
the Effective Time, there shall not have occurred any
change in the financial condition, business or operations
of Excel and its Subsidiaries, taken as a whole, that
would have or would be reasonably likely to have an Excel
Material Adverse Effect other than any such change that
results from a decline or deterioration in general
economic conditions or in conditions in the real estate
markets in which either New Plan or Excel operate and
that affects both New Plan and Excel in a substantially
similar manner.
(g) The Charter of Excel shall have been
amended as provided in Section 3.1 hereof, and the Bylaws
of Excel shall have been amended as provided in Section
3.2 hereof, and such amendments shall be in full force
and effect.
69
(h) The Board of Directors of Excel shall
have been reconstituted as provided in Section 3.3 hereof
and the officers of Excel shall have been appointed in
accordance with Section 3.4 hereof.
(i) Sabin shall be serving as President of
Excel as of the Effective Time in accordance with the
Employment Agreement attached as Exhibit A-2 hereto.
(j) Excel shall have executed and delivered
the Newman Consulting Agreement.
(k) The Excel DRIP Amendments shall be
effective, the Legacy Intercompany Amendment shall have
remained in full force and effect without waiver or
modification of any of its provisions and the Legacy
Services Amendment and Legacy Agreement shall each have
been executed and delivered by Excel and Legacy and be in
full force and effect.
8.3. Conditions to Obligation of Excel to Effect
the Merger. The obligations of Excel to effect the
Merger and the transactions contemplated hereby to occur
at the Effective Time shall be subject to the fulfillment
at or prior to the Effective Time of the following
conditions, unless waived by Excel:
(a) New Plan shall have performed in all
material respects its covenants and agreements contained
in this Agreement required to be performed at or prior to
the Effective Time and the representations and warranties
of New Plan contained in this Agreement that are
qualified as to a New Plan Material Adverse Effect shall
be true and correct and any such representations and
warranties that are not so qualified shall be true and
correct except where the failure to be true and correct
individually or in the aggregate would not have a New
Plan Material Adverse Effect in each case, as of the
Effective Time as if made as of the Effective Time
(except to the extent that the representation or warranty
is expressly limited by its terms to another date), and
Excel shall have received a certificate of the President
or a Vice President of New Plan, on behalf of New Plan,
dated the Closing Date, certifying to such effect.
(b) Excel shall have received the opinion
dated the Closing Date of Latham & Watkins or another
nationally recognized law firm selected by Excel, to the
effect that the Merger will be treated for Federal income
tax purposes as a reorganization within the meaning of
Section 368(a) of the Code, and that Excel and New Plan
will each be a party to that reorganization within the
meaning of Section 368(b) of the Code. In rendering its
opinion such firm may rely on representations of New
Plan, Excel and others. New Plan and its counsel shall
70
cooperate with such firm in its investigation as to
factual matters.
(c) Excel shall have received the opinion
of Altheimer & Gray dated the Closing Date, to the effect
that, commencing July 31, 1993, New Plan was organized in
conformity with the requirements for qualification and
taxation as a REIT under Section 856 of the Code, and its
method of operation has enabled it to meet the
requirements for qualification and taxation as a REIT
under the Code. In rendering its opinion, Altheimer &
Gray may rely on representations of New Plan and others.
(d) Excel shall have received the opinion
of Ballard Spahr Andrews & Ingersoll, LLP, which is
acting as Maryland counsel to Excel, to the effect that
assuming due authorization and approval of the Merger and
the Articles of Merger by New Plan and its shareholders,
the effectiveness of the Merger under Massachusetts law
and other matters customarily assumed in opinions with
respect to transactions such as the Merger, upon filing
of the Articles of Merger with the SDAT, the Merger will
be effective as a matter of Maryland law, and as to such
other matters of Maryland law as are customary in a
transaction such as the Merger.
(e) Excel shall have received a "comfort"
letter from Coopers & Lybrand L.L.P., dated the Closing
Date, with respect to the financial statements of New
Plan included in the Proxy Statement/Prospectus,
substantially in the form described in Section 7.4.
(f) From the date of this Agreement through
the Effective Time, there shall not have occurred any
change in the financial condition, business or operations
of New Plan and its Subsidiaries, taken as a whole, that
would have or would be reasonably likely to have a New
Plan Material Adverse Effect other than any such change
that results from a decline or deterioration in general
economic conditions or in conditions in the real estate
markets in which either New Plan or Excel operate and
that affects both New Plan and Excel in a substantially
similar manner.
ARTICLE 9.
TERMINATION
9.1. Termination by Mutual Consent. This
Agreement may be terminated and the Merger may be
abandoned at any time prior to the Effective Time, before
or after the New Plan Shareholders Meeting or Excel
Stockholders Meeting by the mutual written consent of
Excel and New Plan.
9.2. Termination by Either Excel or New Plan.
This Agreement may be terminated and the Merger may be
71
abandoned by action of the Board of Trustees of New Plan
or the Board of Directors of Excel before or after the
New Plan Shareholders Meeting or Excel Stockholders
Meeting if:
(a) the Merger shall not have been
consummated by December 31, 1998 provided however that
the right to terminate this Agreement under this clause
(a) shall not be available to the party whose failure to
fulfill any covenant or other obligation under this
Agreement has caused the failure of the Merger to occur
on or before such date; or
(b) a meeting of New Plan's shareholders
shall have been duly convened and held and the approval
of New Plan's shareholders required by Section 8.1(a)
shall not have been obtained at such meeting or at any
adjournment thereof; or
(c) a meeting of Excel's stockholders shall
have been duly convened and held and the approval of
Excel's stockholders required by Section 8.1(a) shall not
have been obtained at such meeting or at any adjournment
thereof; or
(d) a United States federal or state court
of competent jurisdiction or United States federal or
state governmental, regulatory or administrative agency
or commission shall have issued an order, decree or
ruling or taken any other action permanently restraining,
enjoining or otherwise prohibiting the Merger and such
order, decree, ruling or other action shall have become
final and non-appealable, provided, that the party
seeking to terminate this Agreement pursuant to this
clause (d) shall have used its best efforts to remove or
appeal such order, decree, ruling or injunction or there
shall have been enacted any statute or regulation which
makes consummation of the Merger illegal.
9.3. Termination by New Plan. This Agreement may
be terminated and the Merger may be abandoned at any time
prior to the Effective Time, before or after the New Plan
Shareholders Meeting, by action of the Board of Trustees
of New Plan:
(a) in accordance with Section 7.1(b);
provided, however, that in order for the termination of
this Agreement pursuant to this Section 9.3(a) to be
deemed effective, New Plan shall have complied with all
provisions contained in Section 7.1, including the
payment of all amounts due under Section 9.5; or
(b) if Excel shall knowingly and materially
breach Section 7.2, including as a result of any action
by the persons or entities referred to in the first
sentence of Section 7.2(a); or
72
(c) if there has been a breach by Excel of
any representation or warranty contained in this
Agreement which is qualified by Excel Material Adverse
Effect or if not so qualified which individually or in
the aggregate with any such other breaches, would have or
would be reasonably likely to have an Excel Material
Adverse Effect, which breach is not curable or, if
curable, is not cured within ten (10) business days after
written notice of such breach is given by New Plan to
Excel; or
(d) if there has been a material breach of
any of the covenants or agreements set forth in this
Agreement on the part of Excel, which breach is not
curable or, if curable, is not cured within ten (10)
business days after written notice of such breach is
given by New Plan to Excel; or
(e) if Sabin shall not be serving as both
the Chairman and Chief Executive Officer of Excel.
Notwithstanding the foregoing, any termination pursuant
to Section 9.3(a) shall only be effective if,
simultaneously with such termination, all sums, if any,
that New Plan is required to pay to Excel or deposit with
the escrow agent pursuant to Section 9.5 have been paid
or deposited in immediately available funds.
9.4. Termination by Excel. This Agreement may be
terminated and the Merger may be abandoned at any time
prior to the Effective Time, before or after the approval
by the Excel Stockholders Meeting, by action of the Board
of Directors of Excel:
(a) in accordance with Section 7.2(b);
provided, however, that in order for the termination of
this Agreement pursuant to this Section 9.4(a) to be
deemed effective, Excel shall have complied with all
provisions contained in Section 7.2, including the
payment of all amounts due under Section 9.5; or
(b) if New Plan shall knowingly and
materially breach Section 7.1, including as a result of
any action by the person or entities referred to in the
first sentence of Section 7.1(a); or
(c) if there has been a breach by New Plan
of any representation or warranty contained in this
Agreement which is qualified as to New Plan Material
Adverse Effect or if not so qualified which individually
or in the aggregate with any such other breaches, would
have or would be reasonably likely to have a New Plan
Material Adverse Effect, which breach is not curable or,
if curable, is not cured within ten (10) business days
after written notice of such breach is given by Excel to
New Plan; or
73
(d) if there has been a material breach of
any of the covenants or agreements set forth in this
Agreement on the part of New Plan, which breach is not
curable or, if curable, is not cured within ten (10)
business days after written notice of such breach is
given by Excel to New Plan.
Notwithstanding the foregoing, any termination pursuant
to Section 9.4(a) shall only be effective if,
simultaneously with such termination, all sums, if any,
that Excel is required to pay to New Plan or deposit with
the escrow agent pursuant to Section 9.5 have been paid
or deposited in immediately available funds.
9.5. Certain Fees and Expenses Upon Effect of
Termination and Abandonment.
(a) If this Agreement shall be terminated
(i) pursuant to Section 9.3(a) or 9.4(b), then New Plan
will pay Excel (provided New Plan was not entitled to
terminate this Agreement at the time of such termination)
a fee equal to the Break-up Fee (as defined below) or
(ii) pursuant to Section 9.4(c) or 9.4(d), then New Plan
will pay Excel (provided New Plan was not entitled to
terminate this Agreement at the time of such termination)
an amount equal to the Break-Up Expenses (as defined
below).
(b) If this Agreement shall be terminated
(i) pursuant to Section 9.4(a) or 9.3(b), then Excel will
pay New Plan (provided Excel was not entitled to
terminate this Agreement at the time of such termination)
a fee equal to the Break-up Fee or (ii) pursuant to
Sections 9.3(c) or 9.3(d), then Excel will pay New Plan
(provided Excel was not entitled to terminate this
Agreement at the time of such termination) an amount
equal to the Break-Up Expenses.
(c) If the Merger is not consummated (other
than due to the termination of this Agreement pursuant to
Section 9.1, 9.2(c) or 9.3(b) or Excel's failure to
perform its obligations under this Agreement in such a
manner so as to entitle New Plan to terminate this
Agreement pursuant to Section 9.3(c) or 9.3(d)) and at
the time of the termination of this Agreement a New Plan
Takeover Proposal has been received by New Plan, and
either prior to the termination of this Agreement or
within twelve (12) months thereafter New Plan enters into
any written New Plan Acquisition Agreement which is
subsequently consummated (whether or not such New Plan
Acquisition Agreement is related to the New Plan Takeover
Proposal which had been received at the time of the
termination of this Agreement), then New Plan shall pay
the Break-Up Fee to Excel. If the Merger is not
consummated (other than due to the termination of this
Agreement pursuant to Section 9.1, 9.2(b) or 9.4(b) or
74
New Plan's failure to perform its obligations under this
Agreement in such a manner so as to entitle Excel to
terminate this Agreement pursuant to Section 9.4(c) or
9.4(d)) and at the time of the termination of this
Agreement an Excel Takeover Proposal has been received by
Excel, and either prior to the termination of this
Agreement or within twelve (12) months thereafter Excel
enters into any written Excel Acquisition Agreement which
is subsequently consummated (whether or not such Excel
Acquisition Agreement is related to the Excel Takeover
Proposal which had been received at the time of the
termination of this Agreement), then Excel shall pay the
Break-Up Fee to New Plan. Any and all amounts to be paid
pursuant to this Section 9.5 shall be paid, except as
provided in 9.5(d), by New Plan to Excel or Excel to New
Plan (as applicable), immediately upon the occurrence of
the event giving rise to such fee in immediately
available funds.
(d) As used in this Agreement, "Break-Up
Fee" shall be an amount equal to the lesser of (i)
$32,500,000 plus Break-Up Expenses (the "Base Amount")
and (ii) the maximum amount that can be paid to Excel or
New Plan, as applicable, without causing it to fail to
meet the requirements of Sections 856(c)(2) and (3) of
the Code ("the REIT Income Requirements") determined as
if the payment of such amount did not constitute income
described in Sections 856(c)(2) and 856(c)(3) of the Code
("Qualifying Income"), as determined by independent
accountants to the party hereto which becomes entitled to
the Break-Up Fee (the "Fee Recipient"). Notwithstanding
the foregoing, in the event the Fee Recipient receives a
letter from outside counsel (the "Break-Up Fee Tax
Opinion") or ruling from the IRS (the "IRS Fee Ruling")
to the effect that the Fee Recipient's receipt of the
Base Amount would either constitute Qualifying Income or
would otherwise not cause the Fee Recipient to fail to
meet the REIT Income Requirements, the Break-Up Fee shall
be an amount equal to the Base Amount and shall be
payable in full within three business days after receipt
of such opinion or IRS Ruling. The obligation of the
party required to pay the Break-Up Fee to pay any unpaid
portion of the Break-Up Fee not payable by reason of
clause (ii) above shall terminate five years from the
date of this Agreement. In the event that the Fee
Recipient is not able to receive the full Base Amount by
reason of clause (ii), the other party shall place the
unpaid portion of the Base Amount in escrow by wire
transfer within three days of termination (except as
otherwise provided in Section 9.3), and the escrow agent
shall not release any portion thereof to the Fee
Recipient, and such portion shall not be payable, except
in accordance with, and unless and until the other party
receives, either one or a combination of the following:
(iii) a letter from the Fee Recipient's independent
accountants indicating the maximum amount that can be
75
paid at that time to the Fee Recipient without causing
the Fee Recipient to fail to meet the REIT Income
Requirements or (iv) a Break-Up Fee Tax Opinion or IRS
Fee Ruling, in either of which events the escrow agent or
the other party shall pay to the Fee Recipient the lesser
of the unpaid portion of the Base Amount or in the case
of clause (iii), the maximum amount stated in the letter
referred to in clause (iii) above. Each of New Plan and
Excel agrees to amend this Section 9.5 at the request of
the Fee Recipient in order to (x) maximize the portion of
the Base Amount that may be paid to the Fee Recipient
hereunder without causing the Fee Recipient to fail to
meet the REIT Income Requirements or (y) improve the Fee
Recipient's chances of securing a Break-Up Fee Tax
Opinion or IRS Fee Ruling, provided that no such
amendment may result in any additional cost or expense to
the other party other than reasonable attorneys' fees.
Amounts remaining in escrow after the obligation of a
party to pay the Break-Up Fee is satisfied or otherwise
terminates shall be released to the party making such
escrow deposit.
(e) The "Break-Up Expenses" payable to
Excel or New Plan, as the case may be (the "Expenses
Recipient"), shall be an amount equal to the lesser of
(i) $2,500,000 and (ii) the maximum amount that can be
paid to the Expenses Recipient without causing it to fail
to meet the REIT Income Requirements determined as if the
payment of such amount did not constitute Qualifying
Income, as determined by independent accountants to the
Expenses Recipient. Notwithstanding the foregoing, in
the event the Expenses Recipient receives a letter from
outside counsel (the "Break-Up Expenses Tax Opinion") or
a ruling from the IRS (the "IRS Expense Ruling") to the
effect that the Expenses Recipient's receipt of the
Break-Up Expenses would either constitute Qualifying
Income or would otherwise not cause the Expenses
Recipient to fail to meet the REIT Income Requirements,
the Break-Up Expenses shall be determined without regard
to clause (ii) above. The obligation of Excel or New
Plan, as applicable ("Payor"), to pay any unpaid portion
of the Break-Up Expenses not payable by reason of clause
(ii) above shall terminate five years from the date of
this Agreement. In the event that the Expenses Recipient
is not able to receive the full Break-Up Expenses by
reason of clause (ii) above, the Payor shall place the
unpaid amount of the Break-Up Expenses in escrow, and the
escrow agent shall not release any portion thereof to the
Expenses Recipient, and such portion shall not be
payable, except in accordance with, and unless and until
the Payor receives any one or a combination of the
following: (iii) a letter from the Expenses Recipient's
independent accountants indicating the maximum amount
that can be paid at that time to the Expenses Recipient
without causing the Expenses Recipient to fail to meet
the REIT Income Requirements or (iv) a Break-Up Expenses
76
Tax Opinion or IRS Expense Ruling, in either of which
events the escrow agent or the Payor shall pay to the
Expenses Recipient the lesser of the unpaid Break-Up
Expenses or, in the case of clause (iii), the maximum
amount stated in the letter referred to in clause (iii)
above. Amounts remaining in escrow after the obligation
of a party to pay the Break-Up Expenses is satisfied or
otherwise terminates shall be released to the party
making such escrow deposit.
(f) In the event of termination of this
Agreement and the abandonment of the Merger pursuant to
this Article 9, this Agreement shall forthwith become
void without any liability hereunder and all obligations
of the parties hereto shall terminate, except the
obligations of the parties pursuant to this Section 9.5
and Section 7.12 and except for the provisions of
Sections 10.3, 10.4, 10.5, 10.6, 10.7, 10.9, 10.10,
10.13, and 10.14, provided that nothing in this paragraph
(f) shall relieve any party from liability for a wilful
and material breach of this Agreement. In the event
either party is required to file suit to seek all or a
portion of the Break-up Fee and/or Break-up Expenses, and
it ultimately succeeds, it shall be entitled to all
expenses, including attorneys' fees and expenses, which
it has incurred in enforcing its rights hereunder.
9.6. Investigation. The right of any party hereto
to terminate this Agreement pursuant to this Article 9
shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of
any party hereto, any person controlling any such party
or any of their respective employees, officers, trustees,
directors, agents, representatives or advisors, whether
prior to or after the execution of this Agreement.
77
ARTICLE 10.
GENERAL PROVISIONS
10.1. Nonsurvival of Representations, Warranties
and Agreements. All representations, warranties and
agreements in this Agreement or in any instrument
delivered pursuant to this Agreement shall terminate as
of the Effective Time and shall not survive the Merger;
provided, however, that the agreements contained in
Article 4, the penultimate sentence of Section 7.5 and
Sections 7.10, 7.12 and 7.13, and this Article 10 shall
survive the Merger and nothing herein contained shall
limit any covenant or agreement which contemplates
performance at or after the Effective Time.
10.2. Notices. Any notice required to be given
hereunder shall be in writing and shall be sent by
facsimile transmission (confirmed by any of the methods
that follow), overnight courier service (with proof of
service), hand delivery or certified or registered mail
(return receipt requested and first-class postage
prepaid) and addressed as follows:
If to Excel: Gary B. Sabin
Chairman and Chief Executive Officer
Excel Realty Trust, Inc.
1955 Via Del Campo, Suite 110
San Diego, California 92127
Facsimile: (619) 485-8530
With a copy to: Scott N. Wolfe, Esq.
Latham & Watkins
701 "B" Street, Suite 2100
San Diego, CA 92101
Facsimile: (619) 696-7419
If to New Plan: Arnold Laubich
President and Chief Executive Officer
New Plan Realty Trust
1120 Avenue of the Americas
New York, New York 10036
Facsimile: (212) 869-9585
With a copy to: Norman M. Gold, Esq.
Altheimer & Gray
10 South Wacker Dr., Suite 4000
Chicago, IL 60606
Facsimile: (312) 715-4800
or to such other address as any party shall specify by
written notice so given, and such notice shall be deemed
to have been delivered as of the date so delivered or
delivery is refused.
10.3. Assignment; Binding Effect; Benefit.
Neither this Agreement nor any of the rights, interests
78
or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of law or otherwise)
without the prior written consent of the other parties.
Subject to the preceding sentence, this Agreement shall
be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and
assigns. Notwithstanding anything contained in this
Agreement to the contrary, except for the provisions of
Article 9 and Sections 7.12, 7.13, and 7.24
(collectively, the "Third Party Provisions"), nothing in
this Agreement, expressed or implied, is intended to
confer on any person other than the parties hereto or
their respective heirs, successors, executors,
administrators and assigns any rights, remedies,
obligations or liabilities under or by reason of this
Agreement. The Third Party Provisions may be enforced by
the beneficiaries thereof.
10.4. Entire Agreement. This Agreement, the
Exhibits, the New Plan Disclosure Letter and the Excel
Disclosure Letter and any documents delivered by the
parties in connection herewith constitute the entire
agreement among the parties with respect to the subject
matter hereof and supersede all prior agreements and
understandings among the parties with respect thereto.
No addition to or modification of any provision of this
Agreement shall be binding upon any party hereto unless
made in writing and signed by all parties hereto except
that the Confidentiality Agreement (as hereinafter
defined) shall remain in effect and, except as
inconsistent with the terms of this Agreement, shall be
binding upon New Plan and Excel in accordance with its
terms.
10.5. Confidentiality. Except to the extent that
any of the provisions of that certain confidentiality
agreement dated March 26, 1998 between Excel and New Plan
(the "Confidentiality Agreement") are inconsistent with
this Agreement, in which case the terms of this Agreement
shall govern and supersede such provisions, the parties
hereto acknowledge and agree that the Confidentiality
Agreement remains in full force and effect and shall
survive any termination of this Agreement.
10.6. Amendment. This Agreement may be amended by
the parties hereto, by action taken by their respective
Boards of Directors or Board of Trustees, at any time
before or after receipt of the approvals to be obtained
at the New Plan Shareholders Meeting or Excel
Stockholders Meeting in accordance with this Agreement
and prior to the filing of the Articles of Merger with
the SDAT; provided, however, that after any such approval
is obtained, no amendment shall be made which by law
requires the further approval of stockholders or
shareholders, as the case may be, without obtaining such
further approval. This Agreement may not be amended
79
except by an instrument in writing signed on behalf of
each of the parties hereto.
10.7. Governing Law. This Agreement shall be
governed, by and construed in accordance with the laws of
the State of New York without regard to its rules of
conflict of laws, except that the validity of the Merger
shall be governed by the MGCL in the case of Excel and
Sub, and by Massachusetts law in the case of New Plan.
Each of New Plan, Sub and Excel hereby irrevocably and
unconditionally consents to submit to the exclusive
jurisdiction of the courts of the State of New York and
of the United States of America located in the State of
New York (the "New York Courts") for any litigation
arising out of or relating to this Agreement and the
transactions contemplated hereby (and agrees not to
commence any litigation relating thereto except in such
courts), waives any objection to the laying of venue of
any such litigation in the New York Courts and agrees not
to plead or claim in any New York Court that such
litigation brought therein has been brought in an
inconvenient forum. The parties hereby waive any right
to trial by jury in connection with this Agreement and
the transactions contemplated hereby.
10.8. Counterparts. This Agreement may be
executed by the parties hereto in separate counterparts,
each of which when so executed and delivered shall be an
original, but all such counterparts shall together
constitute one and the same instrument. Each counterpart
may consist of a number of copies hereof each signed by
less than all, but together signed by all of the parties
hereto.
10.9. Headings. Headings of the Articles and
Sections of this Agreement are for the convenience of the
parties only, and shall be given no substantive or
interpretive effect whatsoever.
10.10. Interpretation. In this Agreement, unless
the context otherwise requires, words describing the
singular number shall include the plural and vice versa,
and words denoting any gender shall include all genders
and words denoting natural persons shall include
corporations and partnerships, and vice versa.
10.11. Extension; Waiver. At any time prior to the
Effective Time, the parties 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 or warranties of the other party
contained in this Agreement or in any document delivered
pursuant to this Agreement or (c) subject to the proviso
of Section 10.6, 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
80
any such extension or waiver shall be valid only if set
forth in an instrument in writing signed on behalf of
such party. Except as provided in this Agreement, no
action taken pursuant to this Agreement, including,
without limitation, any investigation by or on behalf of
any party, shall be deemed to constitute a waiver by the
party taking such action of compliance with any
representations, warranties, covenants or agreements
contained in this Agreement. The waiver by any party
hereto of any provision hereunder shall not operate or be
construed as a waiver of any prior or subsequent breach
of the same or any other provision hereunder.
10.12. Severability. Any term or provision of this
Agreement which is invalid or unenforceable in any
jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or
unenforceability without rendering invalid or
unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of
any of the terms or provisions of this Agreement in any
other jurisdiction. If any provision of this Agreement
is so broad as to be unenforceable, the provision shall
be interpreted to be only so broad as is enforceable.
10.13. Enforcement of Agreement. The parties
hereto agree that irreparable damage would occur in the
event that any of the provisions of this Agreement was
not performed in accordance with its specific terms or
was 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 hereof in
any New York Court, this being in addition to any other
remedy to which they are entitled at law or in equity.
10.14. Interpretation and Certain Definitions. As
used in this Agreement: (a) "Subsidiary" when used with
respect to any party means any corporation, partnership,
limited liability company, joint venture, business trust
or other entity, (i) of which such party directly or
indirectly owns or controls at New Plan a majority of the
securities or other interests having by their terms
ordinary voting power to elect a majority of the board of
directors or others performing similar functions with
respect to such corporation or other organization or (ii)
as to which such party owns, directly or indirectly, a
majority of the equity interests therein it being
understood that Excel Development Corporation is a
"subsidiary" of Excel for all purposes of this Agreement;
(b) "knowledge" or "best knowledge" of any person means
the actual knowledge of such person or of such person's
directors and executive officers after reasonable
inquiry; and (c) "including" means "including without
limitation" and the words "herein" and "hereof" mean "in
this Agreement" and "of this Agreement".
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10.15. Limitation of Liability. This agreement and
all documents, agreements, understandings and
arrangements relating to this transaction have been
negotiated, executed and delivered on behalf of New Plan
by the Trustees or officers thereof in their
representative capacity under the Declaration of Trust,
and not individually, and bind only the trust estate of
New Plan, and no Trustee, officer, employee, agent or
shareholder of New Plan shall be bound or held to any
personal liability in connection with the obligations of
New Plan thereunder, and any person or entity dealing
with New Plan in connection therewith shall look solely
to the trust estate for the payment of any claim or for
the performance of any obligation thereunder. The
foregoing shall also apply to any future documents,
agreements, understandings, and arrangements which may
relate to this transaction.
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IN WITNESS WHEREOF, the parties have executed this
Agreement and caused the same to be duly delivered on
their behalf on the day and year first written above.
ATTEST: NEW PLAN REALTY TRUST
By:/s/ Steven F. Siegel By:/s/ Arnold Laubich
-------------------- --------------------
Title: Secretary Name: Arnold Laubich
Title: President
ATTEST: EXCEL REALTY TRUST, INC.
By:/s/ Richard B. Muir By: /s/ Gary B. Sabin
--------------------- --------------------
Title: Secretary Name: Gary B. Sabin
Title: President
ATTEST: ERT MERGER SUB, INC..
By: /s/ Richard B. Muir By: /s/ Gary B. Sabin
---------------------- --------------------
Title: Secretary Name: Gary B. Sabin
Title: President
83