Exhibit 2.10
STANDSTILL AGREEMENT
THIS STANDSTILL AGREEMENT (this "Agreement") is dated as of
November 18, 2003, by and among Pennsylvania Real Estate Investment Trust, a
Pennsylvania business trust ("PREIT"), PREIT Associates, L.P., a Delaware
limited partnership ("PREIT Partnership"), Mark E. Pasquerilla, Crown
Investments Trust, a Delaware business trust, Crown American Investment Company,
a Delaware corporation, Crown Delaware Holding Company, a Delaware corporation,
Crown Holding Company, a Pennsylvania corporation, and Crown American
Properties, L.P., a Delaware limited partnership ("Crown Partnership" and,
together with Mark E. Pasquerilla, Crown Investments Trust, Crown American
Investment Company, Crown Delaware Holding Company and Crown Holding Company,
the "Standstill Group").
W I T N E S S E T H:
WHEREAS, PREIT, PREIT Partnership, Crown American Realty Trust
("Crown") and Crown Partnership have entered into an Agreement and Plan of
Merger dated as of May 13, 2003 (the "Merger Agreement"), pursuant to which,
among other things, (a) Crown will be merged with and into PREIT, with PREIT as
the surviving trust (the "Merger"), and (b) Crown Partnership and PREIT
Partnership will consummate certain transactions contemplated in connection with
the Merger, in each case upon the terms and subject to the conditions set forth
in the Merger Agreement;
WHEREAS, in order to induce PREIT and PREIT Partnership to
consummate the Merger Agreement, the members of the Standstill Group have agreed
to and desire to enter into this Agreement prohibiting them from taking certain
actions, directly or indirectly through others, following the Effective Time, as
set forth below.
NOW THEREFORE, in consideration of the foregoing and the
covenants, conditions and agreements contained herein, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
A G R E E M E N T:
1. Definitions. Capitalized terms used herein and not defined
are used as defined in the Merger Agreement. In addition, as used herein:
(a) "Affiliate" means, (i) with respect to a Person,
any member of such person's immediate family; (ii) with respect to an
entity, any officer, director, trustee, general partner or managing
member of such entity; and (iii) with respect to a Person or entity,
any person or entity which directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control
with such person or entity; provided, that as used herein "Affiliate"
shall not include PREIT or any of its subsidiaries or other entities
controlled by PREIT which are not members of the Standstill Group.
2. Restrictions on Certain Actions by Members of the
Standstill Group. Each member of the Standstill Group agrees that, for a period
beginning on the date hereof and ending on the date that is the later to occur
of (i) the 8th anniversary of the Closing Date of the Merger or (ii) the date on
which Mark E. Pasquerilla is no longer a member of the PREIT Board of Trustees
(the "Standstill Period"), neither he nor it will, nor will he or it permit any
of his or its Affiliates to, unless consented to by PREIT in writing:
(a) acquire, offer or propose to acquire, or agree or
seek to acquire, directly or indirectly, by purchase or otherwise, any
securities (or direct or indirect rights or options to acquire any
securities) of PREIT or any subsidiary thereof other than directly from
PREIT or such subsidiary of PREIT, or, except in the ordinary course of
business without the purpose of acquiring control of PREIT, any assets
of PREIT or any subsidiary or division thereof, provided that,
notwithstanding the foregoing, the members of the Standstill Group may
acquire beneficial ownership (as defined in the Securities Exchange Act
of 1934, as amended (the "Exchange Act")) of securities of PREIT in an
amount not to exceed, in the aggregate for all members of the
Standstill Group, the sum of (i) the number of securities acquired by
Mark E. Pasquerilla from time to time pursuant to the exercise of
options granted to him by PREIT or assumed by PREIT pursuant to the
Merger Agreement, (ii) a number of securities equal to one percent (1%)
of either the issued and outstanding voting securities or the issued
and outstanding nonvoting securities of PREIT so long as such
acquisition is made consistent with applicable securities laws and
regulations, and (iii) the number of securities acquired through
purchases made pursuant to PREIT's Dividend Reinvestment Plan, provided
that the value of such purchases shall not exceed the actual amount of
dividends paid with respect to PREIT common shares owned at the time of
reinvestment by a member of the Standstill Group; provided, that
nothing in this Section 2(a) shall restrict any member of the
Standstill Group from acquiring, offering or proposing to acquire, or
agreeing or seeking to acquire, directly or indirectly, by purchase or
otherwise, any securities (or direct or indirect rights or options to
acquire any securities) of PREIT or any subsidiary thereof if, after
giving effect to such actual or proposed acquisition, the Standstill
Group would not, in the aggregate, beneficially own (assuming any such
direct or indirect rights or options to acquire any securities were
immediately exercisable) PREIT securities in excess of the Ownership
Limit as defined from time to time in Section 9A of the Amended and
Restated PREIT Trust Agreement dated as of December 16, 1997, as such
may be amended or restated from time to time; or
(b) except as provided in Section 3 of this
Agreement, enter into or agree, offer, propose or seek to enter into,
or otherwise knowingly be involved in or part of, directly or
indirectly, any acquisition transaction or other business combination
relating to all or part of PREIT or any of its subsidiaries, including
without limitation PREIT Partnership, or any acquisition transaction
for all or part of the assets of PREIT or any of its subsidiaries,
including without limitation PREIT Partnership, or any of their
respective businesses; or
(c) except to the extent any such activity is solely
related to or arises solely from Mark E. Pasquerilla's participation as
a trustee of PREIT and such activity is consistent with the
recommendation of a majority of the members of the PREIT Board of
Trustees, (i) make or in any way participate in, directly or
indirectly, any "solicitation" of "proxies" (as such terms are used in
the rules of the Securities and Exchange Commission) to vote, or seek
to advise or influence any person or entity with respect to the voting
of, any voting securities of PREIT; (ii) become a "participant" in any
"election contest" (as such terms are defined or used in the rules
under the Exchange Act) with respect to PREIT; (iii) seek to advise,
encourage or influence any person or entity with respect to any voting
securities of PREIT; (iv) seek to alter the composition or size of the
Board; (v) demand a copy of PREIT's share ledger, list of shareholders
or the other books and records in connection with any matter covered by
paragraph (a) or the other clauses of this paragraph (c) of this
Section 2; or (vi) call or attempt to call any meeting of the
shareholders of PREIT; provided, that nothing in this Section 2(c)
shall prevent Mark E. Pasquerilla from voting as he desires in
connection with any resolution or action of the PREIT Board of
Trustees, so long as he is not otherwise in violation of this
Agreement; or
(d) except to the extent any such activity is solely
related to or arises solely from Mark E. Pasquerilla's participation as
a trustee of PREIT, take any action with respect to PREIT or any of its
subsidiaries which involves or could require making a public
announcement or could require PREIT or any of its subsidiaries to make
a public announcement regarding (i) any of the activities referred to
in this Section 2; (ii) the possibility of any person (including,
without limitation, such member of the Standstill Group) acquiring
control of PREIT, whether by means of a business combination or
otherwise; or (iii) any extraordinary transaction involving PREIT or
its securities or assets; provided, that nothing in this Section 2(d)
shall prohibit any member of the Standstill Group from making any
public disclosure that is required by applicable law; or
(e) form, join or in any way participate in a "group"
(within the meaning of Section 13(d)(3) of the Exchange Act), except to
the extent that the Standstill Group and any of their Affiliates
constitute a group, with respect to any voting securities of PREIT or
any of its subsidiaries; or
(f) except to the extent any such activity is solely
related to or arises solely from Mark E. Pasquerilla's participation as
a trustee of PREIT, seek or propose, alone or in concert with others,
to influence or control PREIT's management or policies; or
(g) except to the extent any such activity is solely
related to or arises solely from Mark E. Pasquerilla's participation as
a trustee of PREIT, request PREIT or any of its trustees, officers,
employees, Affiliates, representatives (including, without limitation,
financial advisors, attorneys and accountants) or agents, directly or
indirectly, to amend or waive any provision of this Section 2
(including without limitation this Subsection 2(g)); or
(h) directly or indirectly enter into any
discussions, negotiations, arrangements or understandings with any
other person with respect to any of the foregoing activities or propose
any of such activities to any other person; or
(i) advise, assist, encourage, act as a financing
source for or otherwise invest in any other person in connection with
any of the foregoing activities; or
(j) disclose any intention, plan or arrangement
which, if consummated, would violate any of the foregoing, except any
public disclosure that is required by applicable law.
Each member of the Standstill Group also agrees to advise
PREIT promptly of any bona fide inquiry or proposal made to such member with
respect to any of the foregoing until the end of the Standstill Period.
3. Permitted Exceptions. So long as no member of the
Standstill Group is otherwise in violation of any provision of this Agreement,
nothing in this Agreement shall prevent any member of the Standstill Group from
(i) voting any PREIT securities beneficially owned by it on any matter properly
before the PREIT shareholders or holders of PREIT Partnership units of limited
partnership interest for their consideration, and (ii) participating in (by
tendering or exchanging any PREIT securities owned by the Standstill Group) any
tender or exchange offer made to all PREIT shareholders, provided that such
tender or exchange offer was previously approved by a majority of the members of
the PREIT Board of Trustees. In addition, the terms of this Agreement shall not
restrict any member of the Standstill Group from making unsolicited open market
sales of any PREIT common shares beneficially owned by it through a broker or
dealer on the New York Stock Exchange or such other exchange or over-the-counter
market that constitutes the primary trading market of PREIT common shares at the
time of such sale.
4. Remedies. Each party hereto agrees that remedies at law may
be inadequate to protect the other party against any actual or threatened breach
of this Agreement by the party or its Affiliates, and, without prejudice to any
other rights and remedies otherwise available to the other party, each party
agrees to the granting of injunctive relief in favor of the other party without
proof of actual damages as a remedy for any breach.
5. No Implied Waiver. Each party hereto agrees that no failure
or delay by the other party in exercising any right, power or privilege
hereunder will operate as a waiver thereof, nor will any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any right, power or privilege hereunder.
6. Entire Agreement; Modification, Amendment or Waiver. This
Agreement contains the entire agreement among the parties hereto concerning the
standstill provisions addressed herein, and no modification of or amendment to
this Agreement or waiver of the terms and conditions hereof will be binding upon
the parties hereto, unless approved in writing by each of the parties hereto.
7. Binding Effect. This Agreement shall be binding upon the
heirs, personal representatives, successors and assigns of the parties hereto.
8. 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. In any jurisdiction in
which a term or provision of this Agreement is invalid or unenforceable, this
Agreement shall be construed in all respects as if such invalid or unenforceable
term or provision were omitted. 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.
9. Notices. All notices, requests, claims, demands and other
communication under this Agreement shall be in writing and shall be delivered
personally or sent by overnight courier (providing proof of delivery) to the
parties or sent by telecopy (providing confirmation of transmission) at the
following addresses or telecopy numbers (or at such other address or telecopy
number for a party as shall be specified by like notice from such party):
if to PREIT:
Pennsylvania Real Estate Investment Trust
The Bellevue
200 South Broad Street
Philadelphia, PA 19102
Attention: Bruce Goldman, Executive Vice President
and General Counsel
Facsimile: (215) 546-7311
with a copy (which shall not constitute notice) to:
Hogan & Hartson L.L.P.
Columbia Square
555 13th Street, N.W.
Washington, D.C. 20004-1109
Attention: J. Warren Gorrell, Jr., Esq.
Stuart A. Barr, Esq.
Facsimile: (202) 637-5910
and
Drinker Biddle & Reath LLP
One Logan Square
18th & Cherry Streets
Philadelphia, PA 19103-6996
Attention: Howard A. Blum, Esq.
Facsimile: (215) 988-2757
if to any member of the Standstill Group:
Crown American Properties, L.P.
Pasquerilla Plaza
Johnstown, PA 15901
Attention: Ronald J. Hamilton
Facsimile: (814) 536-9525
with a copy (which shall not constitute notice) to:
Reed Smith LLP
435 Sixth Avenue
Pittsburgh, PA 15219
Attention: David L. DeNinno, Esq.
Facsimile: (412) 288-3218
and
Sullivan & Cromwell LLP
125 Broad Street
New York, NY 10004-2498
Attention: Joseph C. Shenker, Esq.
Facsimile: (212) 558-3588
All notices shall be deemed given when delivered personally,
one day after being delivered to a nationally recognized overnight courier or
when telecopied (with a confirmatory copy sent by such overnight courier)
10. Governing Law. This agreement will be governed by and
construed in accordance with the internal laws of the State of New York.
11. Counterparts. This agreement may be signed in any number
of counterparts, each of which shall be deemed an original, and all such
counterparts shall constitute one and the same agreement. Any counterpart to
which original or facsimile signatures of all parties are attached shall
constitute an original of this Agreement.
12. Termination. This Agreement shall automatically terminate
upon the breach by PREIT of its obligations with respect to Mark E.
Pasquerilla's serving as a trustee of PREIT, as set forth in Section 1.6 of the
Merger Agreement.
* * * * *
[Signatures Appear on the Following Page]
IN WITNESS WHEREOF, each of the undersigned has executed and
delivered this Agreement, or caused this Agreement to be duly executed and
delivered on its behalf, as of the date first written above.
/s/ Mark E. Pasquerilla
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Mark E. Pasquerilla
Crown American Properties, L.P.,
a Delaware limited partnership
By: Crown American Realty Trust
its general partner
By: /s/ Terry L. Stevens
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Name: Terry L. Stevens
Title: Executive Vice President and CFO
Crown Investments Trust,
a Delaware business trust
By: /s/ Ronald J. Hamilton
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Name: Ronald J. Hamilton
Title: Chief Financial Officer and Vice President
Crown American Investment Company,
a Delaware corporation
By: /s/ Ronald J. Hamilton
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Name: Ronald J. Hamilton
Title: Chief Financial Officer and Vice President
Crown Delaware Holding Company,
a Delaware corporation
By: /s/ Ronald J. Hamilton
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Name: Ronald J. Hamilton
Title: Chief Financial Officer and Vice President
Crown Holding Company,
a Pennsylvania corporation
By: /s/ Ronald J. Hamilton
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Name: Ronald J. Hamilton
Title: Chief Financial Officer and Vice President
Pennsylvania Real Estate Investment Trust, a Pennsylvania
business trust
By: /s/ Bruce Goldman
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Name: Bruce Goldman
Title: Executive Vice President & General Counsel
PREIT Associates, L.P.,
a Delaware limited partnership
By: Pennsylvania Real Estate Investment Trust, its
general partner
By: /s/ Bruce Goldman
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Name: Bruce Goldman
Title: Executive Vice President
& General Counsel