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Exhibit 10.41
STOCK PURCHASE AGREEMENT dated as of December 13,
1996, between CORPORATE PROPERTY INVESTORS, a voluntary
association of the type commonly known as a
Massachusetts business trust ("CPI") and FIFTH AND 59TH
STREET INVESTORS CORPORATION, a Delaware corporation
(the "Purchaser").
Preliminary Statement
Pursuant to and on the terms of this Purchase Agreement, CPI agrees
to sell and Purchaser agrees to buy, certain voting Series A Common Shares of
Beneficial Interest, par value $1 per share, in CPI, together with related
beneficial interests in the shares of common stock, par value $.10 per share, of
Corporate Realty Consultants, Inc., a Delaware corporation ("CRC"), held in the
CRC Trust (as hereinafter defined), in exchange for Purchaser's sale,
assignment, transfer and conveyance to CPI or one of its affiliates of the
Partnership Interest (as hereinafter defined).
SECTION 1. Definitions. As used herein the following terms have the
following meanings:
"Assignment Agreement" means an assignment agreement dated as of the
Closing Date, substantially in the form of Exhibit B, effecting
Purchaser's sale, assignment, transfer and conveyance of the Partnership
Interest to CPI or one of its affiliates.
"business day" means a day other than a Saturday, Sunday or other
day on which banks in the State of New York are authorized to be closed.
"Closing" shall have the meaning set forth in Section 2.2.
"Closing Date" means December 13, 1996, or such later date as may be
mutually agreed upon by the parties hereto, but in no event later than
February 14, 1997.
"Closing Date Share Number" means a number equal to (a) $227,200,000
divided by (b) the Purchase Price.
"Code" means the Internal Revenue Code of 1986, as amended to date.
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"Commission" means the Securities and Exchange Commission or any
successor federal agency charged with responsibility for enforcing the
United States federal securities laws.
"Common Share" means any shares of beneficial interest of any class
of CPI that are designated Common Shares pursuant to the Declaration of
Trust as of the date of this Purchase Agreement, and shares of any class
or classes authorized after the date of this Purchase Agreement or
resulting from the reclassification of any of the foregoing which have no
preference in respect of dividends or amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding-up of CPI and
which are not subject to redemption by CPI (except as the Trustees of CPI
may deem necessary so that CPI may qualify as a Real Estate Investment
Trust in accordance with the terms of Section 5.12 of the Declaration of
Trust).
"CPI" shall have the meaning set forth in the preamble, and shall
include any successor thereto.
"CRC" shall have the meaning set forth in the preamble, and shall
include any successor thereto.
"CRC Shares" means shares of Common Stock, par value $.10 per share,
of CRC.
"CRC Trust" means the Trust created by the CRC Trust Agreement,
under which the depositing holders of Common Shares have ratable
beneficial interests in the CRC Shares deposited in the CRC Trust.
"CRC Trust Agreement" means the Trust Agreement dated as of October
30, 1979, among the shareholders of CPI at that date, CRC and the Bank of
Montreal Trust Company, as successor Trustee.
"Declaration of Trust" means the Second Amended and Restated
Declaration of Trust executed as of March 16, 1995, as amended, of CPI.
"Encumbrance" means any security interest, lien, charge, claim or
other encumbrance or restriction of any other nature or kind other than
those granted by this Purchase Agreement, the Declaration of Trust or the
CRC Trust Agreement.
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"Evaluation Material" shall have the meaning set forth in Section
2.4.
"1934 Act" means the Securities Exchange Act of 1934 and the rules
and regulations of the Commission thereunder, all as in effect from time
to time.
"Partnership" means Longstreet Associates, L.P., a New York limited
partnership.
"Partnership Interest" shall mean the rights and obligations of
Purchaser that are set forth in those agreements and other documents
listed in Schedule 6.2.1, together with any other rights or claims that
the Purchaser may have (as a partner, creditor, beneficiary or other
claimant) in, to or against the Partnership.
"Per Share Proration Factor" means an amount equal to $1.875
multiplied by a fraction, the numerator of which is the number of days
following November 15, 1996, that the Closing Date occurs and the
denominator of which is 92.
"Preference Shares" means any shares of beneficial interest of any
class or series of CPI that are designated Preference Shares pursuant to
the Declaration of Trust.
"Purchaser" shall have the meaning set forth in the preamble.
"Purchase Price" means $131.32 per Share, which amount includes the
portion thereof ($.44 as of December 31, 1995, as determined by Landauer
Associates, Inc.) per Common Share which represents the fair value of the
beneficial interest which the certificate for such Common Share represents
(at the ratio of 1/10th of a CRC Share per Common Share) in the CRC Shares
held in the CRC Trust, plus the Per Share Proration Factor.
"Real Estate Investment Trust" or "REIT" means "real estate
investment trust" as defined in Section 856 of the Code, or such other
entity as may, under the corresponding section or sections of any United
States income tax law at the time in effect, be entitled to substantially
the same treatment in respect of liability for Federal income taxes as a
"real estate investment trust", as so defined, is entitled pursuant
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to Sections 856 through 860 of the Code, as in effect on the date of this
Purchase Agreement.
"Release" means a release dated as of the Closing Date,
substantially in the form of Exhibit C hereto.
"Securities Act" means the Securities Act of 1933 and the rules and
regulations of the Commission thereunder, all as in effect from time to
time.
"Series A Shares" means voting Series A Common Shares of Beneficial
Interest, par value $1, in CPI.
"Shares" means the Common Shares (with their related beneficial
interests in CRC Shares held in the CRC Trust) purchased by the Purchaser
from CPI pursuant to Section 2.
"Statement" shall have the meaning set forth in Section 2.3.1.
"TREET" means State Street Bank and Trust Company, a Massachusetts
banking corporation, in its capacity as Trustee of the Telephone Real
Estate Equity Trust and not individually.
"Undistributed Cash Flow" of the Partnership means the amount of the
Partnership's adjusted undistributed cash flow, computed in accordance
with Schedule 1 hereto.
"Working Capital Share Number" shall mean a number (which number of
Shares may be positive or negative) equal to the Working Capital Value
divided by the Purchase Price.
"Working Capital Value" for the Partnership means the sum of (i) the
Purchaser's proportionate share as of the Closing Date of (a) the cash and
cash equivalents, short-term investments, receivables (net of allowances
for doubtful collections and exclusive of any "straight-line" rent
receivable) and prepaid taxes, prepaid utilities and other prepaid
expenses of the Partnership minus (b) the liabilities of the Partnership
(including any unpaid tenant inducements payable by the Partnership, but
excluding the principal amount of mortgage liabilities and other long-term
indebtedness), and the Partnership's Undistributed Cash Flow, all of the
items referred to in clauses (a) and (b) computed (to the extent
applicable) in accordance
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with generally accepted accounting principals applied consistently with
the most recently prepared audited financial statements of the
Partnership, plus (ii) the Purchaser's proportionate share of the
Partnership's Undistributed Cash Flow. The method of computation of
Working Capital Value for the Partnership is more particularly described
on Schedule 1 hereto, in a manner consistent with the definition thereof.
SECTION 2. Sale and Purchase of Shares; Adjustments.
SECTION 2.1. Sale and Purchase of Shares; Sale and Assignment of
Partnership Interest; Delivery of Shares. Subject to the terms and
conditions of and in reliance upon the representations and warranties set
forth in this Purchase Agreement, (a) CPI agrees to sell to the Purchaser,
and the Purchaser agrees to purchase from CPI, on the Closing Date, at a
price per Share equal to the Purchase Price, a number of Shares equal to
the Closing Date Share Number (and, in connection therewith, CRC agrees to
sell to the Purchaser, and the Purchaser agrees to purchase from CRC, a
number of CRC Shares equal to 10% of the Closing Date Share Number, which
CRC Shares the Purchaser and CRC agree shall be issued directly to the
trustee of the CRC Trust and deposited in the CRC Trust to be held
thereafter for the ratable benefit of the holders of Common Shares
pursuant to the terms of the CRC Trust Agreement), (b) the Purchaser
agrees to sell, assign, transfer and convey to CPI or one or more of its
affiliates all of the Purchaser's right, title and interest in and to the
Partnership Interest, (c) CPI agrees to deliver to Purchaser such Common
Shares as CPI may be required to deliver pursuant to Section 2.3.3 hereof
and (d) Purchaser agrees to deliver to CPI such Common Shares as Purchaser
may be required to deliver pursuant to Section 2.3.3 hereof.
SECTION 2.2. Closings. The purchase by and the sale of Shares to the
Purchaser and the sale, assignment, transfer and conveyance of the
Partnership Interest by the Purchaser to CPI (the "Closing") shall take
place on the Closing Date at the offices of Cravath, Swaine & Moore, 825
Eighth Avenue, New York, New York 10019, or at such other place as may be
mutually agreed by the parties.
The Purchaser may, by written notice to CPI and pursuant to
documentation satisfactory to CPI, assign
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this Purchase Agreement to Fosterlane Holdings Corporation concurrently
with an assignment of the Partnership Interest to such entity. Except as
the context otherwise requires, each such entity shall be deemed the
"Purchaser" for all purposes of this Purchase Agreement to the same extent
as if it had executed and delivered a copy of this Purchase Agreement,
provided that the Purchaser referenced in the first paragraph of this
Purchase Agreement shall remain liable for all of its obligations
hereunder.
At least five business days prior to the Closing Date, CPI may, by
written notice to the Purchaser, specify one or more affiliates of CPI as
the entities to acquire all or any part of the Partnership Interest
pursuant hereto, provided that CPI shall remain liable for all of its
obligations hereunder.
At the Closing, (a) CPI will deliver to the Purchaser one
certificate, registered in the name of the Purchaser, representing the
number of Shares set forth in Section 2.1 (unless the Purchaser has at
least two business days prior to the Closing Date specified in writing to
CPI a different name or names and/or different number of certificates
representing the same aggregate number of such Shares) and (b) CRC shall
deliver to the trustee of the CRC Trust one certificate, registered in the
name of such trustee, representing the number of CRC Shares to be
deposited in the CRC Trust in accordance with Section 2.1, each against
the sale, assignment, transfer and conveyance by the Purchaser to CPI or
its specified affiliates of the Partnership Interest in the Partnership
pursuant to the Assignment Agreement, all as may be reasonably requested
by CPI. The Certificate representing the Shares that is delivered to the
Purchaser shall include the following descriptive legend:
"The holder of the shares represented by this certificate also
holds a beneficial interest in shares of stock of Corporate Realty
Consultants, Inc. ("CRC") held in a trust under a Trust Agreement
dated as of October 30, 1979, among shareholders of the Trust, CRC
and the Trustee thereunder."
SECTION 2.3. Adjustments.
SECTION 2.3.1. Working Capital Value Statement. Within 45 days
after the Closing Date,
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CPI shall prepare and deliver to Purchaser a statement (the
"Statement") setting forth CPI's determination of the Working
Capital Value and the elements and calculation thereof, all as set
forth in Schedule 1 hereto and consistent with the definitions
related thereto, along with a Certificate of the Chief Financial
Officer, Chief Accounting Officer or Controller of CPI to the effect
that the Statement was prepared substantially in accordance with the
requirements therefor as provided herein. From the Closing Date
through the date which is 30 days after receipt by the Purchaser of
the Statement, CPI shall provide the Purchaser with reasonable
access to any books, records, working papers or other information
reasonably necessary or useful in the preparation or calculation of
the Statement or any Notice of Disagreement (as defined hereafter).
The Statement shall become final and binding upon both parties
hereto on the 31st day following delivery thereof unless the
Purchaser delivers written Notice of Disagreement (a "Notice of
Disagreement") with the Statement to CPI prior to such date. Any
Notice of Disagreement shall specify in reasonable detail the nature
of any disagreement so asserted and shall relate solely to the
preparation of the Statement and the calculation of the Working
Capital Value.
SECTION 2.3.2. Disputes. If a Notice of Disagreement is
received by CPI in a timely manner, then the Working Capital Value
set forth in the Statement, as adjusted pursuant hereto, shall
become final and binding upon the parties hereto on the earlier of
(i) the date Purchaser and CPI resolve, in writing, any differences
they may have with respect to any matters specified in the Notice of
Disagreement or (ii) the date any disputed matters are finally
resolved in writing by the Arbitrator. During the 30-day period
following the delivery of the Notice of Disagreement, CPI and the
Purchaser shall seek in good faith to resolve, in writing, any
differences which they may have with respect to any matter specified
in the Notice of Disagreement and each shall provide the other with
reasonable access to any books, records, working papers or other
information reasonably necessary or useful in the preparation or
calculation of the Statement, any Notice of Disagreement, the
Working Capital Value
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or otherwise with respect to any thereof. At the end of such 30-day
period, if there has been no resolution of the matters specified in
the Notice of Disagreement, then CPI and the Purchaser shall submit
to an arbitrator (the "Arbitrator") for review and resolution any
and all matters (and only such matters) arising under this Section
which remain in dispute. The Arbitrator shall be Arthur Andersen
L.L.P., or if such firm is unable or unwilling to act, such other
nationally recognized independent public accounting firm as shall be
agreed upon, in writing, by CPI and the Purchaser. The Arbitrator
shall render a decision resolving the matters submitted to the
Arbitrator within 30 days following submission thereto. The costs of
any arbitration (including the fees of the Arbitrator) shall be
borne 50% by CPI and 50% by the Purchaser. Except as specified
above, each of CPI and the Purchaser shall bear their own costs and
expenses incurred in connection with any arbitration.
SECTION 2.3.3. Adjustment Mechanics. Within 7 days after the
date that the Working Capital Value set forth in the Statement (as
adjusted according to the procedures set forth in Section 2.3)
becomes final and binding on the parties: (a) if the Working Capital
Value is a positive number, then the number of Shares to be sold to,
and purchased by, the Purchaser hereunder shall be increased by a
number of Shares equal to the Working Capital Share Number and CPI
shall deliver to the Purchaser a certificate, registered in the name
of the Purchaser (or such other name as may be designated by the
Purchaser) representing such number of Shares (and, in connection
therewith, CRC agrees to deliver to the Purchaser a number of CRC
Shares equal to 10% of the Working Capital Share Number, which CRC
Shares the Purchaser and CRC agree shall be issued directly to the
trustee of the CRC Trust and deposited in the CRC Trust to be held
thereafter for the benefit of the holders of Common Shares pursuant
to the terms of the CRC Trust Agreement), or
(b) if the Working Capital Value is a negative number, then
the number of Shares sold to, and purchased by, the Purchaser
hereunder shall be reduced by a number of Shares equal to
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the absolute value of the Working Capital Share Number and the
Purchaser shall deliver to CPI such number of Shares (and, in
connection therewith, CPI and CRC shall cause a number of CRC Shares
equal to 10% of the Working Capital Share Number to be withdrawn
from the CRC Trust and delivered to CRC). In connection with any
delivery of Shares by the Purchaser pursuant to this Section
2.3.3(b), the Purchaser shall deliver to CPI the certificate or
certificates delivered pursuant to Section 2.2 hereof (together with
an undated stock power executed in blank) and, upon receipt thereof,
CPI shall deliver to the Purchaser one certificate, registered in
the name of the Purchaser (or such other name as may be designated
by the Purchaser pursuant to Section 2.2) representing the number of
Shares equal to the Closing Date Share Number less the number of
Shares returned to CPI pursuant to this Section 2.3.3(b).
SECTION 2.4. Evaluation Material. CPI has delivered to the Purchaser
its Annual Report for the year 1995, its Proxy Statement for the 1996
Annual Meeting of its shareholders and its Nine Month Report for the six
months ended September 30, 1996 (collectively called the "Evaluation
Material").
SECTION 3. Conditions.
SECTION 3.1. Conditions to Purchaser's Obligations. The obligations
of the Purchaser to purchase the Shares and sell, assign, transfer and
convey the Partnership Interest on the Closing Date shall be subject to
the following conditions at the Closing Date:
(a) The Purchaser shall have received a certificate of the President
or a Vice-President of CPI dated the Closing Date to the effect that (A)
the representations and warranties of CPI contained in Section 6 of this
Purchase Agreement are true and correct in all material respects as of
such date as if made on and as of such date and (B) the covenants,
agreements and conditions that CPI was required to perform or comply with
have been fulfilled in all material respects.
(b) The Purchaser shall have received (i) a Certificate of the
Secretary of CPI certifying as to
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the accuracy of the copies of the Declaration of Trust of CPI, the CRC
Trust Agreement and the Trustees Regulations of CPI provided to the
Purchaser and (ii) a Certificate of the Secretary of CRC certifying as to
the accuracy of the copies of the Certificate of Incorporation and by-laws
of CRC provided to the Purchaser.
(c) The Purchaser shall have received from Cravath, Swaine & Moore,
counsel for CPI (who may rely with respect to any matters of Massachusetts
law involved therein on an opinion of Peabody & Arnold, Massachusetts
counsel for CPI, a signed copy of which, addressed to Purchaser, shall
accompany such opinion of Cravath, Swaine & Moore), a favorable opinion
dated the Closing Date, and reasonably satisfactory in scope and form to
the Purchaser, to the effect set forth in Sections 6.1.1, 6.1.2, 6.1.3,
6.1.4(i), 6.1.7, 6.1.13, 6.1.14 (the first and second sentences thereof),
6.1.15(i), 6.1.18, 6.1.23 and 6.1.24 and, to the knowledge of such
counsel, after having made due inquiry, Sections 6.1.4(ii), 6.1.5, 6.1.6,
6.1.15(ii), 6.1.16, 6.1.17 and 6.1.21, and as to:
(i) the exemption from the registration and prospectus
delivery requirements of the Securities Act of the offer, sale and
delivery to the Purchaser of the Shares then to be purchased by the
Purchaser;
(ii) that CPI qualified as a REIT for its taxable years ended
December 31, 1993, December 31, 1994 and December 31, 1995, and that
its organization and method of operation for its current taxable
year should enable it to continue so to qualify;
(iii) the due execution and delivery by authorized
representatives of CPI and CRC, respectively, of all instruments and
documents signed by or on behalf of CPI and CRC and delivered to the
Purchaser on the Closing Date.
(d) The purchase of and payment for the Shares to be purchased by
the Purchaser on the Closing Date on the terms and conditions herein
provided shall not violate any applicable law or governmental regulation
and the Purchaser shall have received such certificates or other evidence
as it may reasonably request to establish compliance with this condition.
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(e) All proceedings in connection with the transactions contemplated
hereby, and all documents and instruments incident to such transactions,
shall be reasonably satisfactory in substance and form to the Purchaser,
and the Purchaser shall have received all such counterpart originals or
certified or other copies of such documents as the Purchaser may
reasonably request.
(f) From the date of this Purchase Agreement to and including the
Closing Date there shall not have been any material adverse change in the
business, assets, operations, properties, prospects or condition,
financial or otherwise, of CPI and its subsidiaries taken as a whole.
(g) The Purchaser shall have received from CPI an executed Release.
(h) The Purchaser shall have received from CPI an executed statement
in the form of Exhibit D attached hereto.
SECTION 3.2. Conditions to CPI's Obligations. The obligation of CPI
to sell the Shares and acquire the Partnership Interest on the Closing
Date shall be subject to the following conditions at the Closing Date:
(a) CPI shall have received a certificate of the President or a
Vice-President of the Purchaser dated the Closing Date to the effect that
(i) the representations and warranties of the Purchaser contained in
Section 6 of this Purchase Agreement are true and correct in all material
respects as of such date as if made on and as of such date and (ii) the
covenants, agreements and conditions that the Purchaser was required to
perform or comply with have been fulfilled in all material respects.
(b) CPI shall have received a Certificate of the Secretary or an
Assistant Secretary of the Purchaser certifying as to the accuracy of the
copies of the Certificate of Incorporation, by-laws and other
organizational documents of the Purchaser provided to CPI.
(c) CPI shall have received from Shearman & Sterling, counsel for
the Purchaser, a favorable opinion dated the Closing Date and reasonably
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satisfactory in scope and form to CPI, to the effect set forth in Sections
6.2.2, 6.2.3(i) and 6.2.5, and to the knowledge of such counsel, after
having made due inquiry, Sections 6.2.3(ii) and 6.2.4, and as to:
(i) the exemption from the registration and prospectus
delivery requirements of the Securities Act of the sale, assignment,
transfer and conveyance to CPI of the Partnership Interest; and
(ii) the due execution and delivery by authorized
representatives of the Purchaser, respectively, of all instruments
and documents signed by or on behalf of the Purchaser and delivered
to CPI on the Closing Date.
(d) The acquisition by CPI of the Partnership Interest on the
Closing Date on the terms and conditions herein provided shall not violate
any applicable law or governmental regulation and CPI shall have received
such certificates or other evidence as it may reasonably request to
establish compliance with this condition.
(e) All proceedings in connection with the transactions contemplated
hereby, and all documents and instruments incident to such transactions,
shall be reasonably satisfactory in substance and form to CPI, and CPI
shall have received all such counterpart originals or certified or other
copies of such documents as CPI may reasonably request.
(f) From the date of this Purchase Agreement to and including the
Closing Date there shall not have been any material adverse change in the
business, assets, operations, properties, prospects or condition,
financial or otherwise, of the Partnership.
(g) CPI shall have received from the Purchaser an executed Release.
(h) CPI shall have received from Purchaser a duly executed
certificate of non-foreign status in the form presented by Treasury
Regulation ss. 1.1445-1(b)(2).
SECTION 4. Covenants.
SECTION 4.1. CPI agrees with the Purchaser as follows:
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SECTION 4.1.1 From the date of this Purchase Agreement through
the Closing Date, CPI shall not issue any Common Shares or
Preference Shares by virtue of any reclassification,
recapitalization, split-up, subdivision, declaration of a stock
dividend or otherwise except pursuant to plans, arrangements and
agreements existing on the date hereof.
SECTION 4.1.2. CPI has not, either by itself or through any
agent on its behalf, offered to sell any Common Shares, or solicited
any offers to buy Common Shares and will not so offer or solicit
offers, so as thereby to bring the issuance and sale of Shares
pursuant to this Purchase Agreement or any other securities in
violation of the Securities Act, the Massachusetts Uniform
Securities Act, the New Jersey Uniform Securities Law or the New
York State Martin Act or any other state securities or real estate
syndication or similar laws.
SECTION 4.1.3. Until a class of CPI's equity securities has
been registered under Section 12 of the 1934 Act or CPI has become
obligated to file reports under Section 15(d) of the 1934 Act, CPI
shall, within 120 days after the close of each fiscal year of CPI,
furnish to the Purchaser or any permitted transferee of the Shares,
as long as it owns any Shares, the following statements prepared in
accordance with generally accepted accounting principles
consistently applied and reported upon by Ernst & Young LLP or such
other independent public accountants of recognized standing as may
be retained by CPI from time to time: (i) a balance sheet of CPI as
of the end of such fiscal year and (ii) statements of income, cash
flow and shareholders' equity for such fiscal year, in each case
setting forth in comparative form the corresponding figures for the
preceding fiscal year. Until a class of CPI's equity securities has
been registered under Section 12 of the 1934 Act or CPI has become
obligated to file reports under Section 15(d) of the 1934 Act, CPI
shall, within 60 days after the close of each of the first three
quarters of each fiscal year of CPI, furnish to the Purchaser or any
permitted transferee of the Shares as long as it owns any Shares (1)
a balance sheet of CPI as of the end of such quarter and (2)
statements of income, cash
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flow and shareholders' equity for the portion of such fiscal year
preceding the end of such quarter, in each case setting forth in
comparative form the corresponding figures for the corresponding
period of the preceding fiscal year.
SECTION 4.1.4. Until a class of CPI's equity securities has
been registered under Section 12 of the 1934 Act or CPI has become
obligated to file reports under Section 15(d) of the 1934 Act, CPI
shall promptly furnish to the Purchaser or any transferee of the
Shares such other information with respect to the finances,
business, operations, affairs, prospects, condition, properties and
assets of CPI and CRC as from time to time may be reasonably
requested by the Purchaser or such transferee, it being understood
that CPI shall determine whether or not any such request is
reasonable, giving effect to all relevant circumstances.
SECTION 5. Transfer and Registration.
SECTION 5.1. Investment Statements. The Purchaser hereby represents
and warrants to CPI that (1) the Purchaser will purchase the Shares to be
purchased by it hereunder for investment and not with a view to their
public sale or distribution, nor with any present intention of selling or
distributing any such Shares or beneficial interests in CRC Shares, (2)
the Purchaser will purchase such Shares for its own account (including any
separate accounts maintained by the Purchaser) and that such Shares (and
any CRC Shares delivered to the Purchaser upon a termination of the CRC
Trust) will be acquired by it or such funds for the purpose of investment
and not with a view to, or for sale in connection with, the public
distribution thereof, nor with any present intention of publicly
distributing the same other than in accordance with the registration
provisions hereof) and (3) Purchaser is familiar with the business and
operations of CPI and CRC and has conducted its own due diligence
investigation with respect thereto.
The Purchaser further represents and warrants to CPI (i) that the
Purchaser understands that such Shares (and any CRC Shares delivered to
the Purchaser upon a termination of the CRC Trust) have not been
registered under the Securities Act by reason of their issuance in a
transaction exempt from the registration requirements
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of the Securities Act pursuant to Section 4(2) thereof, (ii) that such
Shares (and any CRC Shares delivered to the Purchaser upon a termination
of the CRC Trust) will not be disposed of unless such disposition is
either registered under the Securities Act or is exempt from registration
under that Act and (iii) that CPI has no obligation to register such
Shares (or CRC Shares so delivered to the Purchaser) other than as set
forth herein.
The Purchaser also understands and agrees that, if any CRC Shares
shall be delivered to the Purchaser upon a termination of the CRC Trust,
the Purchaser shall be bound by and entitled to the benefits of the
provisions of Article FOURTH of CRC's Certificate of Incorporation (a copy
of which has been delivered to the Purchaser) restricting transfers of,
and providing rights to registrations under the Securities Act of, any
such CRC Shares. Each certificate for CRC Shares so delivered will bear
the legend prescribed by said Article FOURTH.
SECTION 5.2. Permissible Transfers. Except in accordance with this
Section 5, the Purchaser shall not effect any Transfer of Restricted
Shares (both as hereinafter defined) or of any interest or right to
purchase the same other than:
(a) a Transfer from the Purchaser to another person or persons
acting as nominee or nominees or trustee or trustees for the
Purchaser or, if the Purchaser is acting as nominee or trustee in
making the purchases hereunder, to a different nominee or trustee
for the same person as the Purchaser is so acting;
(b) a Transfer to the Purchaser from one or more other person
or persons acting as nominee or nominees or trustee or trustees for
the Purchaser;
(c) a Transfer by the Purchaser, if it is a trustee for a
pension or trust fund, in connection with the dissolution of such
fund or in connection with the Transfer or distribution of all or
part of the assets of such fund to another pension or trust fund for
which the Purchaser or another corporate trustee is acting as
trustee; or
(d) a Transfer by a pension or trust fund to another pension
or trust fund the investment
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discretion for which is exercised by the same trustee or other
fiduciary or director.
In the event that the Purchaser shall Transfer any Restricted Shares in a
manner contemplated by this Section 5.2, the Purchaser shall cause its
transferee or transferees to agree in writing to take and hold such
securities subject to the provisions of this Section 5.
SECTION 5.3. Certain Definitions. As used in this Section 5 (and
elsewhere herein with reference to this Section 5), the following terms
shall have the following respective meanings:
"Transfer" means, as to any Restricted Shares, any sale, assignment
or transfer of any of such Restricted Shares or of any interest therein or
right to subscribe therefor, whether or not such transfer would constitute
a "sale" as that term is defined in Section 2(3) of the Securities Act.
"Restricted Shares" means the Shares and any other securities issued
as a dividend or other distribution on or as a result of a subdivision,
combination or reclassification of any Shares, in each case, prior to the
effective registration of the Transfer thereof under the Securities Act.
"Registration Expenses" means the expenses so described in Section
5.8.
"Selling Expenses" means the expenses so described in Section 5.8.
"Underwriter" means each person who is or may be deemed to be an
"underwriter", as that term is defined in Section 2(11) of the Securities
Act, in respect of Restricted Shares which shall have been registered by
CPI under the Securities Act pursuant to any of the provisions of this
Section 5.
"CPI Counsel" means Cravath, Swaine & Moore, or such other counsel
as shall at the time be serving as counsel to CPI.
"Holder's Counsel" shall mean counsel for the holder of the
Restricted Shares in question, which counsel shall be reasonably
satisfactory to CPI.
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SECTION 5.4. Transfer Legends. Each certificate for Restricted
Shares, including each certificate issued to any transferee, shall be
stamped or otherwise imprinted with a legend (in addition to any legends
otherwise required by the Declaration of Trust of CPI) in substantially
the following form (unless otherwise permitted by the provisions of
Section 5.5 or unless such Restricted Shares shall have been effectively
registered under the Securities Act and sold or otherwise disposed of
pursuant to the registration statement covering such Restricted Shares):
"The shares represented by this certificate were issued pursuant to a
Stock Purchase Agreement dated as of December 13, 1996, between Corporate
Property Investors and the original purchaser of such shares (copies of
which Agreement are on file at the principal office of the issuer of such
shares), have not been registered under the Securities Act of 1933 and may
not be sold, assigned or transferred until the applicable provisions of
Section 5 of such Agreement have been complied with."
SECTION 5.5. Notice of Proposed Transfers; Requests for
Registration. The holder of any Restricted Shares by acceptance thereof
agrees, prior to any Transfer of any such Restricted Shares (other than a
Transfer referred to in paragraphs (a) to (d), inclusive, of Section 5.2),
to give written notice to CPI of such holder's intention to effect such
Transfer and to comply in all other respects with the provisions of this
Section 5.5. Each notice shall describe in detail the manner, method of
disposition and circumstances of the proposed Transfer and shall be
accompanied by (i) a written opinion of Holder's Counsel addressed to CPI
stating whether in the opinion of such counsel such proposed Transfer
involves a transaction requiring registration of the Restricted Shares
under the Securities Act, and (ii) if in the opinion of such counsel
registration is required, a written request that CPI effect the
registration of such Restricted Shares under the Securities Act, subject
to the limitations contained in Section 5.10. Upon receipt by CPI of any
such notice, opinion and, if necessary, request, the following provisions
shall apply:
(a) Not more than 20 calendar days after such receipt, CPI
Counsel shall render an opinion to CPI as to whether such counsel
concurs in the
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opinion of Holder's Counsel. CPI Counsel shall furnish copies of
such opinion to CPI, Holder's Counsel and the shareholder giving
such notice. If CPI Counsel shall not render such opinion within
such 20 calendar days, its opinion shall be deemed to concur with
the opinion of Holder's Counsel.
(b) If in the opinion of Holder's Counsel and CPI Counsel the
proposed Transfer of Restricted Shares may be effected without
registration under the Securities Act, the shareholder shall
thereupon be entitled to transfer such Restricted Shares in
accordance with the terms of the notice delivered to CPI; provided,
however, that the transferee of such Restricted Shares shall agree
in writing to take and hold such securities subject to the
applicable provisions of this Section 5. Each certificate evidencing
the Restricted Shares issued upon the Transfer (and each certificate
evidencing any untransferred balance of the original Restricted
Shares) shall bear the legend set forth in Section 5.4 unless in the
opinion of CPI Counsel such legend is not necessary.
(c) If in the opinion of both Holder's Counsel and CPI Counsel
the proposed Transfer of the Restricted Shares may not be effected
without registration under the Securities Act, CPI shall use its
best efforts to effect such registration, all in accordance with the
request of the prospective seller and the provisions and conditions
of this Section 5. Upon the effectiveness of such registration the
Restricted Shares may be transferred to the extent permitted by law
and the legend thereon shall be removed promptly upon delivery of
certificates therefor to CPI.
(d) If in the opinion of Holder's Counsel the proposed
Transfer of Restricted Shares may be effected without registration
under the Securities Act, but CPI Counsel shall not concur in such
opinion, Holder's Counsel at their option may submit the question to
the staff of the Commission for an advisory opinion and, in the
event that the staff of the Commission shall issue a "no action"
letter or other favorable advisory opinion which, in the view of CPI
Counsel, shall be conclusive
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with respect to the proposed Transfer, the shareholder shall be
entitled to transfer the Restricted Shares covered by such "no
action" letter or other favorable advisory opinion on the basis and
in accordance with the terms thereof; provided, however, that the
transferee of such Restricted Shares shall agree in writing to take
and hold such securities subject to the provisions of this Section
5.
The holder of Restricted Shares giving the notice under this Section
5.5 shall not Transfer such Restricted Shares unless and until (i) the
favorable opinions of Holder's Counsel and CPI Counsel referred to in
paragraph (b) shall have been given, (ii) registration of such Restricted
Shares under the Securities Act shall have become effective or (iii) the
"no action" letter or other favorable advisory opinion referred to in
paragraph (d) shall have been received and reviewed by CPI Counsel and, in
addition, in the case of (i) and (iii), the written agreement referred to
in paragraphs (b) and (d), respectively, shall have been made. Nothing
contained in this Section 5 shall preclude a holder of Restricted Shares
from entering into an agreement to Transfer the same if such agreement
requires compliance with the conditions set forth in this Section 5.5.
Section 5.6. Required Registration. Whenever CPI shall be required
pursuant to Section 5.5 to effect the registration of any Restricted
Shares under the Securities Act, CPI shall promptly give written notice of
such proposed registration to all holders of outstanding Restricted Shares
and, subject to the provisions of Section 5.10, shall use its best efforts
to effect the registration under the Securities Act of the Restricted
Shares which CPI has been requested to register pursuant to Section 5.5
and all other Restricted Shares the holders of which shall have made
written requests (stating the proposed method of disposition of such
securities by the prospective seller) to CPI for the registration thereof
within 20 calendar days after the mailing of such written notice by CPI.
Section 5.7. Incidental Registration. If CPI shall propose to
register any Common Shares or other securities which are convertible into
or exchangeable for Common Shares (otherwise than pursuant to Section 5.6)
on Form S-1, Form S-2, Form S-3, Form S-11
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or any similar form then in effect, it shall give written notice to all
holders of outstanding Restricted Shares of its intention and, upon the
written request of the holder of any such Restricted Shares given within
20 calendar days after the mailing of such notice (which request shall
state the proposed method of disposition of such Restricted Shares), CPI
shall use its best efforts to cause all Restricted Shares the holders of
which have requested registration to be included under the proposed
registration for disposition in accordance with the proposed method
thereof stated in the respective shareholder's request; provided, however,
that CPI may, in lieu of including any of or all such Restricted Shares
under the proposed registration, elect to effect a separate registration
thereof if its proposed registration relates to an underwritten public
offering and the Underwriters thereof object to the inclusion of any of or
all such Restricted Shares under such registration. In the event CPI shall
elect to effect a separate registration in accordance with the provisions
of the preceding sentence, CPI shall use its best efforts to cause such
separate registration to become effective not later than 90 days after the
effectiveness of its originally proposed registration. If CPI determines,
prior to the effectiveness of its originally proposed registration, not to
proceed with such registration, CPI shall have no further obligation under
this Section 5.7 to register any Restricted Shares.
SECTION 5.8. Registration Procedures and Expenses. If and whenever
CPI is required by the provisions of this Section 5 to use its best
efforts to effect the registration of any Restricted Shares under the
Securities Act, CPI shall, as expeditiously as possible,
(a) select underwriters, counsel and independent accountants
for CPI of recognized standing and competence in connection with
such registration;
(b) prepare and file (or cause to be prepared and filed) with
the Commission a registration statement with respect to such
Restricted Shares and use its best efforts to cause such
registration statement to become effective;
(c) prepare and file (or cause to be prepared and filed) with
the Commission such amendments and
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supplements to such registration statement as may be necessary to
keep such registration statement effective for nine months from the
date of its effectiveness;
(d) furnish each seller such number of copies of the
registration statement and the prospectus forming a part of such
registration statement (including each preliminary prospectus) as
such seller may reasonably request;
(e) use its best efforts to register or qualify (or cause to
be registered or qualified) the securities covered by such
registration statement under the securities or blue sky laws of such
jurisdictions as each seller shall reasonably request (including,
without limitation, the New York State Real Estate Syndicate Act,
the Massachusetts Uniform Securities Act and the New Jersey Real
Estate Syndicate Offerings Law), and do any and all other acts and
things which may be necessary or advisable to enable such seller to
consummate the disposition of the Restricted Shares during the
period provided in paragraph (c) of this Section 5.8; provided,
however, that in no event shall CPI be obligated to qualify to do
business in any jurisdiction where it is not now so qualified, to
take any action which would subject it to the service of process in
suits other than those arising out of the offer or sale of the
securities covered by such registration statement in any
jurisdiction where it is not now so subject or to conform the
composition of its assets at the time to the securities or blue sky
laws of such jurisdiction;
(f) notify each seller of any Restricted Shares covered by
such registration statement, during the period when a prospectus
relating thereto is required to be delivered under the Securities
Act, of the happening of any event which causes the prospectus
forming a part of such registration statement to include an untrue
statement of a material fact or to omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances under which
they were made, and at the request of any such seller prepare and
furnish such seller a reasonable number of copies of any supplement
to
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or any amendment of such prospectus necessary so as to render such
prospectus, as amended or supplemented, in compliance with the
provisions of the Securities Act;
(g) engage a transfer agent and registrar for the Restricted
Shares at least by the effective date of the first registration of
any of such Restricted Shares;
(h) give serious consideration to the listing of the
Restricted Shares on an appropriate national securities exchange as
promptly after the effectiveness of such first registration as the
Trustees of CPI deem advisable.
(i) use its best efforts to procure a comfort letter or
letters for the benefit of the underwriters of such registration
which substantially conform with the requirements of the American
Institute of Certified Public Accountants' Statement of Auditing
Standards No. 72 from independent accountants for CPI of recognized
standing and competence in connection with such registration;
(j) use its best efforts to deliver customary closing opinions
of counsel for CPI in connection with such registration; and
(k) make customary representations and warranties to the
underwriters in connection with such registration.
All expenses (except for the compensation of regular employees of
CPI, which shall be paid in any event by CPI) incurred by CPI in complying
with this Section 5.8, including, without limitation, all registration and
filing fees, printing expenses, expenses of complying with securities or
blue sky laws (including fees and disbursements of counsel for CPI,
counsel for the Underwriters and counsel representing selling shareholders
owning a majority of the Restricted Shares being registered), all fees and
disbursements of counsel for CPI and any accountants' fees and expenses
incident to or required by any such registration are herein called
"Registration Expenses", which shall be borne as provided in Section 5.9.
All underwriting fees and commissions to be incurred by any seller and all
fees and disbursements of counsel for
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any seller (other than counsel described in the second parenthetical
phrase in the preceding sentence) are herein called "Selling Expenses",
which shall be borne by the seller or sellers in such proportions as they
may agree upon; provided, however, that if such sellers cannot otherwise
agree, they shall bear such expenses (other than their individual counsel
fees which shall be borne by them directly) in direct proportion to the
number of Restricted Shares which they are having registered.
It shall be a condition precedent to the obligation of CPI to take
any action pursuant to this Section 5.8 for the benefit of a prospective
seller of Restricted Shares that (x) CPI shall have received an
undertaking satisfactory to it from such seller (A) to pay all
Registration Expenses required to be paid by such seller pursuant to
Section 5.9 and all Selling Expenses to be incurred by or for account of
such seller and (B) to notify CPI of the happening of any event within the
knowledge of such seller which causes the prospectus referred to in
Section 5.8(d), as it may be amended or supplemented, to include an untrue
statement of a material fact or to omit to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances under which they were
made, in each case with respect to such seller, and (y) such seller shall
furnish to CPI such information regarding such seller, the Restricted
Shares held by such seller and the intended method of disposition of such
Restricted Shares as CPI shall reasonably request and as shall be required
by applicable law in connection with the action to be taken by CPI.
SECTION 5.9. Allocation of Expenses. If and whenever CPI is required
by the provisions of this Section 5 to use its best efforts to effect the
registration of any of its securities under the Securities Act, CPI shall
pay all Registration Expenses in connection with
(a) (i) the first two registrations of any Restricted Shares
consummated pursuant to Sections 5.5 and 5.6 and (ii) each of the
third, fourth, fifth and sixth registrations of any Restricted
Shares consummated pursuant to Sections 5.5 and 5.6, so long as each
such registration is effected pursuant to a request or requests from
a prospective seller or sellers
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(including Purchaser) to register at least 5% of the outstanding
Common Shares (including as "outstanding" for such purpose any
Common Shares issuable upon conversion of any outstanding securities
of CPI which may then be converted); provided, however, that if the
full number of Restricted Shares covered by a request pursuant to
Section 5.5 is not in fact sold pursuant to any such registration as
a result of the inclusion of any additional outstanding or newly
issued securities of CPI in such registration, such registration
shall not be counted for purposes of this clause (a) of Section 5.9;
and
(b) each registration pursuant to Section 5.7.
The Registration Expenses in connection with any other registration of its
Restricted Shares which CPI shall be required to use its best efforts to
effect pursuant to any of the provisions of this Section 5, and all
Selling Expenses in connection with any registration of its Restricted
Shares pursuant to this Section 5, shall be borne by the seller or sellers
of such Restricted Shares in such proportions as they may agree upon;
provided, however, that if such sellers cannot otherwise agree, they shall
bear such expenses (other than their individual counsel fees which shall
be borne by them directly) in direct proportion to the number of
Restricted Shares which they are having registered.
SECTION 5.10. Limitations on Obligations to Register and Right To
Sell Restricted Shares. Anything in this Section 5 to the contrary
notwithstanding:
(a) if CPI has not theretofore registered an offering of
Common Shares or other securities which are convertible into or
exchangeable for Common Shares under the Securities Act, CPI shall
not be obligated to effect any registration under Section 5.5 or
Section 5.6 unless it shall have received a request or requests
pursuant to Section 5.5 or Section 5.6 or any similar provision of
any other agreement from a prospective seller or sellers (including
the Purchaser) to register at least 10% of the outstanding Common
Shares (including as "outstanding" for such purpose any Common
Shares issuable upon conversion of any outstanding securities of CPI
which may then be converted);
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(b) if CPI has theretofore registered an offering of Common
Shares or other securities which are convertible into or
exchangeable for Common Shares under the Securities Act, CPI shall
not be obligated to effect any registration under Section 5.5 or
Section 5.6 unless it shall have received a request or requests from
a prospective seller or sellers (including Purchaser) to register
Common Shares with a minimum value of $15 million, based on the
current value of shareholder's equity per Common Share as of the
December 31 immediately preceding the date of the first such
request. For purposes of the preceding sentence, the "current value
of shareholder's equity per Common Share" shall be deemed to be the
average of the daily closing prices for the thirty consecutive
business days commencing no more than forty-five business days
before the day in question. The closing price for each day shall be
the last reported sale price regular way or, in case no such
reported sale takes place on such day, the average of the last
reported bid and asked prices regular way, in either case on the
principal national securities exchange on which the Common Shares
are admitted to trading or listed, or if not listed or admitted to
trading on any national securities exchange, the average of highest
reported bid and lowest reported asked prices on the
over-the-counter market on the day in question as reported by the
National Association of Securities Dealers, Inc. Automated Quotation
System (or any successor to such system), or a similarly generally
accepted reporting service, or if not so available, the "current
value of shareholder's equity per Common Share" shall be determined
in an appraisal conducted by Landauer Associates, Inc. or such other
independent person of recognized standing as shall have been
selected by the Trustees of CPI to determine the net asset value of
CPI;
(c) CPI shall not be required to register Restricted Shares
under the Securities Act pursuant to Section 5.5 or Section 5.6 more
than once in any consecutive 12-month period; provided, that if the
full number of Restricted Shares covered by a request pursuant to
Section 5.5 is not in fact sold pursuant to any such registration as
a result of the inclusion of any additional outstanding or newly
issued securities of CPI in
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such registration, such registration shall not be counted for
purposes of this clause (c) of Section 5.10;
(d) CPI shall not be obligated to effect any registration
pursuant to Section 5.5 or Section 5.6 if such registration would
require an audit of CPI as of a date other than its fiscal year end
unless the seller requesting such registration agrees to bear
responsibility for the expenses of such an audit; and
(e) any registration statement prepared pursuant to this
Section 5 shall be subject to such restrictions or limitations as
may be required by law to the sales price or sales method of the
Restricted Shares included in such registration statement; provided,
however, that, if upon the effectiveness of any such registration
statement CPI will be engaged in a primary distribution of its
securities, CPI may require the prospective seller or sellers whose
Restricted Shares are included in such registration statement to
agree not to sell any such Restricted Shares for a period of 90 days
after the effective date of such registration statement.
SECTION 5.11. Indemnification. In the event of any registration of
Restricted Shares pursuant to this Section 5, CPI shall indemnify and hold
harmless the Purchaser, its officers, directors or trustees and each
seller of Restricted Shares covered by a registration pursuant to this
Section 5 and each Underwriter of such Restricted Shares and each person,
if any, who controls the Purchaser or such seller or Underwriter within
the meaning of the Securities Act, against any losses, claims, damages or
liabilities and any action in respect thereof, joint or several, to which
the Purchaser or such seller, Underwriter or controlling person may become
subject under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of
any material fact contained in any registration statement under which such
securities were registered under the Securities Act, any preliminary
prospectus or final prospectus contained therein, or any amendment or
supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
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therein or necessary to make the statements therein not misleading; and
CPI will reimburse the Purchaser and each such seller, Underwriter and
controlling person for any legal or any other expenses reasonably incurred
by any of them in connection with investigating or defending any such
loss, claim, damage, liability or action; provided, however, that CPI will
not be liable in any such case to the extent that any such loss, claim,
damage, liability or action arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made
in such registration statement, preliminary prospectus, prospectus or
amendment or supplement thereto in reliance upon and in conformity with
information furnished to CPI in writing by the Purchaser or such seller
specifically for use therein, or by any Underwriter distributing or
selling the Restricted Shares of such seller, specifically for use in the
preparation thereof. This indemnity will be in addition to any liability
which CPI may otherwise have.
A party from whom indemnity may be sought pursuant to the provisions
of this Section 5.11 shall not be liable for such indemnity with respect
to any claim as to which indemnity is sought unless the party seeking such
indemnity shall have notified such indemnifying party in writing of the
nature of such claim promptly after such indemnified party becomes aware
of the assertion thereof; provided, however, that the failure so to notify
such indemnifying party shall not relieve such party from any liability
which it may have to such indemnified party otherwise than on account of
the provisions of this Section 5.11 or if the failure to give such notice
promptly shall not have been prejudicial to such indemnifying party. Any
indemnifying party may participate (with counsel reasonably satisfactory
to the indemnified party) in, and to the extent that it shall wish, may
direct (at its own expense and either individually or jointly with any
other indemnifying party), the defense of any suit brought to enforce such
claim; provided, that if a party seeking such indemnity shall give notice
to such indemnifying party that in its good faith judgment an important
general interest of such party is involved in such proceeding, such party
seeking indemnity shall have the right to control (at its own expense),
with the participation of the indemnifying party, the defense against or
settlement of any such proceeding. If any indemnifying party elects to
assume the defense of any such suit and retains counsel satisfactory to
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such indemnified party, such indemnifying party will not be liable to such
indemnified party for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense of such suit, other
than reasonable costs of investigation. No indemnifying party shall be
liable for any compromise or settlement of any such action effected
without its consent.
Insofar as the foregoing indemnity agreement may permit
indemnification for liabilities under the Securities Act of any person who
is a partner or controlling person of an Underwriter within the meaning of
Section 15 of the Securities Act and who, at the effective date of the
registration statement, is, or is named to be, a Trustee of CPI, if a
claim for indemnification for any such liabilities (except payment for
expenses incurred in the successful defense of any action, suit or
proceeding) is asserted by such a person, CPI will submit to a court of
competent jurisdiction (unless in the opinion of counsel for CPI the
matter has already been settled by controlling precedent) the question of
whether or not such indemnification is against public policy and
unenforceable, and such person and CPI will be governed by the final
adjudication of such issue.
It shall be a condition precedent to the obligation of CPI to take
any action pursuant to Section 5.8 that CPI shall have received an
undertaking satisfactory to it from each prospective seller of the
Restricted Shares to be registered under each registration pursuant to
this Section 5, and from any Underwriter of such Restricted Shares, to
indemnify and hold harmless (in the same manner and to the same extent as
set forth in the preceding paragraphs of this Section 5.11) CPI and each
of its Trustees, officers and "control" persons within the meaning of that
term under the Securities Act, against any losses, claims, damages or
liabilities to which CPI or any such Trustee, officer or control person
may become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in such registration statement,
any preliminary prospectus or final prospectus contained therein, or any
amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact
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required to be stated therein or necessary to make the statements therein
not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was in reliance upon and in conformity with information furnished
to CPI in writing by such seller or Underwriter, as the case may be,
specifically for use therein; and such persons will reimburse CPI and each
of its Trustees, officers and control persons for any legal or other
expenses reasonably incurred by any of them in connection with
investigating or defending any such loss, claim, damage, liability or
action. This indemnity will be in addition to any liability which such
seller or Underwriter may otherwise have.
SECTION 5.12. 1934 Act Registration. CPI shall cause at least one
class of its securities to be registered pursuant to Section 12 of the
1934 Act within 90 calendar days after the effective date of the first
registration statement pertaining to Common Shares or other securities
which are convertible into or exchangeable for Common Shares filed by CPI
under the Securities Act or as otherwise required by the 1934 Act and
shall thereafter (i) cause such securities to remain registered under such
Section 12, (ii) file within the requisite period of time all reports
required to be filed by issuers having securities registered pursuant to
such Section 12, (iii) file such other documents as may be required to be
filed pursuant to Rule 144 under the Securities Act as a condition to the
sale of restricted or control securities and (iv) provide such other
information as may be required to be provided pursuant to Rule 144A under
the Securities Act as in effect on the date of this Purchase Agreement.
CPI covenants that, so long as the Purchaser shall hold any Common
Shares or CRC Shares, it will give to the Purchaser prompt written notice
of (i) the filing and effectiveness of any registration statement filed by
CPI under the 1934 Act pursuant to the preceding paragraph, relating to
any class of securities of CPI or CRC, and (ii) the number of shares of
such class of securities outstanding at the time such registration
statement becomes effective. CPI also covenants that it will furnish to
the Purchaser any information which it may reasonably require for the
purpose of completing Form 144, or any other comparable form, in
connection with any proposed sale by the Purchaser pursuant to
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Rule 144 under the Securities Act, as then in effect, or any other
comparable rule, of any Common Share or any CRC Shares.
SECTION 5.13. More Favorable Rights. CPI agrees that if it shall
hereafter afford to any person or entity registration rights with respect
to Restricted Shares more favorable than those provided in this Section 5,
it will forthwith make such more favorable rights available to the
Purchaser with respect to the Restricted Shares held by the Purchaser.
SECTION 6. Representations and Warranties.
SECTION 6.1. Representations and Warranties of CPI. CPI (and, with
respect to the representations and warranties applicable to it, CRC)
represents and warrants to the Purchaser as follows:
SECTION 6.1.1. CPI is a voluntary association of the type
commonly known as a business trust duly organized and existing under
the laws of the Commonwealth of Massachusetts, has all the requisite
power to own and deal with real and other property, conduct its
business as it is now conducted and perform this Purchase Agreement
and is duly qualified to do business and in good standing in
Massachusetts and in each jurisdiction, if any, in which the nature
of the business transacted or the character of the property owned by
it therein makes such qualification necessary. This Purchase and
Exchange Agreement, the Assignment Agreement and the Release have
been duly authorized, executed and delivered by CPI and constitute
CPI's legal, valid and binding agreements enforceable against CPI in
accordance with their terms (subject to any applicable bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium or other
similar laws affecting creditors' rights generally from time to time
in effect and to general principles of equity, regardless of whether
such enforceability is considered in a proceeding in equity or at
law, and except as the enforceability of the indemnification
provisions hereof may be limited by federal securities law and
public policy considerations).
SECTION 6.1.2. The Shares to be delivered to the Purchaser on
the Closing Date in accordance
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with this Purchase Agreement will have all the rights and privileges
applicable to Series A Shares as provided in the Declaration of
Trust and, when so delivered against payment therefor, will be duly
authorized, validly issued, fully paid and non-assessable, and the
delivery to the Purchaser of certificates for the Shares will pass
to the Purchaser good and valid title thereto, free of any
Encumbrance.
SECTION 6.1.3. The Declaration of Trust and the Trustees'
Regulations of CPI, in the forms certified by the Secretary of CPI
and delivered to the Purchaser on the date hereof, are and at the
Closing will be in full force and effect.
SECTION 6.1.4. The execution and delivery by CPI of this
Purchase Agreement, the Assignment Agreement, the Release and the
certificates representing the Shares and performance of this
Purchase Agreement, the Assignment Agreement and the Release and
compliance with the provisions hereof and thereof do not and, in the
case of the Release and Assignment Agreements, upon their execution
and delivery will not (i) violate any provision of any applicable
law or of the Declaration of Trust or Trustees' Regulations, (ii)
conflict with or result in any breach of any of the terms,
conditions or provisions of, or constitute a default under, or
result in the creation or imposition of any Encumbrance upon any of
the properties or assets of CPI pursuant to, any material indenture,
mortgage, deed of trust, bank loan or credit agreement or other
agreement or instrument to which CPI is a party or by which it or
any of its properties may be bound or (iii) require any consent
under any such material indenture, mortgage, deed of trust, bank
loan or credit agreement or other agreement or instrument other than
consents (A) that have been obtained or the procurement of which is
a condition to the closing of the transactions contemplated hereby
or (B) the failure to obtain of which is not reasonably likely to
have a material adverse effect upon the assets, business or
operations of CPI, CRC and their subsidiaries taken as a whole or
the ability of CPI and CRC to consummate the transactions
contemplated hereby.
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SECTION 6.1.5. CPI has not, either directly or through any
agent, offered any Common Shares or other securities for sale, or
solicited any orders to buy the same, or otherwise approached or
negotiated in respect thereof, in such manner as to require
registration under the Securities Act, the Massachusetts Uniform
Securities Act, the New Jersey Uniform Securities Law or the New
York State Martin Act of such Common Shares, such other securities
or any Shares to be sold hereunder.
SECTION 6.1.6. Except as described in the Evaluation Material,
there is no action, proceeding or investigation pending or, to the
knowledge of CPI, threatened, against CPI in which there is a
reasonable possibility of an adverse decision that would materially
adversely affect the condition, business or prospects of CPI or any
of its properties or assets, or which questions the validity of this
Purchase Agreement, the Shares, the Assignment Agreement, the
Release or any action to be taken pursuant to this Purchase
Agreement, the Assignment Agreement or the Release.
SECTION 6.1.7. No consent, approval, order or authorization
of, or registration, declaration or filing with, any governmental or
public body or authority on the part of CPI is required in
connection with the valid execution, delivery and performance of
this Purchase and Exchange Agreement, the Assignment Agreement, the
Release or the offer, sale and delivery of the Shares, as
contemplated hereby.
SECTION 6.1.8. CPI has no present intention of making any
public distribution of any equity securities.
SECTION 6.1.9. Each of CPI, CPI's subsidiaries and CRC have
filed all material Federal, state and local income, franchise and
other tax returns, reports and statements required to have been
filed to date. All material taxes shown to be due on such returns
have been paid. There is no material audit, examination,
investigation, dispute or claim concerning any taxes of any of CPI,
CPI's subsidiaries or CRC raised by any taxing authority in writing
or as to which any of the Trustees and officers of CPI,
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33
other directors and officers of CPI's subsidiaries and the directors
and officers of CRC have actual knowledge. There are no settlements
or closing agreements with respect to any taxes of CPI or CRC with
respect to which any material amounts remain to be paid. Neither CPI
nor CRC is a party to any income tax sharing agreement.
SECTION 6.1.10. CPI has endeavored and will endeavor to
operate in such manner as to qualify as a real estate investment
trust under Sections 856-860 of the Code.
SECTION 6.1.11. The Evaluation Material does not contain any
untrue statement of a material fact. The balance sheets of CPI as at
December 31, 1995, and September 30, 1996, and the related
statements of income, cash flow and shareholders' equity for the
twelve months then ended and nine months then ended, respectively,
included in the Evaluation Material, fairly present the financial
condition of CPI as at such dates and the results of operations of
CPI for the periods ended on such dates, all in accordance with
generally accepted accounting principles consistently applied. Since
September 30, 1996, there has been no material adverse change in the
business, operations, financial condition, results of operations or
prospects of CPI and its subsidiaries.
SECTION 6.1.12. CPI in its Federal income tax return for the
taxable year ended December 31, 1995, elected to be treated as a
Real Estate Investment Trust.
SECTION 6.1.13. CRC is a duly organized and validly existing
corporation under the laws of the State of Delaware, has all the
requisite power to own and deal with real and other property, and is
duly qualified to do business and in good standing in the
jurisdictions, if any, in which the nature of the business
transacted or the character of the property owned by it therein
makes such qualification necessary.
SECTION 6.1.14. Upon its acquisition of the Shares, the
Purchaser will also acquire related beneficial interests in the CRC
Shares held in the CRC Trust. The CRC Shares held in the CRC Trust
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34
are duly authorized, validly issued, fully paid and non-assessable,
and the delivery to the Purchaser pursuant to this Purchase
Agreement of certificates for the Shares will pass to the Purchaser
good and valid title to their related beneficial interests in the
CRC Shares held in the CRC Trust, free of any Encumbrance except as
set forth in Article FOURTH of CRC's Certificate of Incorporation.
All but 74.3 of the outstanding CRC Shares are held by the CRC Trust
or by the Bank of Montreal Trust Company, as trustee, ratably on
behalf of the holders of CPI's outstanding Preference Shares.
SECTION 6.1.15. The execution and delivery by each of CPI and
CRC of this Purchase Agreement and by CPI of the certificates
representing the Shares and performance by CPI and CRC of this
Purchase Agreement and compliance with the provisions hereof do not
(i) violate any provision of CRC's Certificate of Incorporation, its
By-laws or the CRC Trust Agreement or (ii) conflict with or result
in any breach of any of the terms, conditions or provisions of, or
constitute a default under, or result in the creation or imposition
of any lien, charge or encumbrance upon any of the properties or
assets of CRC pursuant to, any material indenture, mortgage, deed of
trust, bank loan or credit agreement or other agreement or
instrument to which CRC is a party or by which it or any of its
properties may be bound or (iii) require any consent under any such
material indenture, mortgage, deed of trust, bank loan or credit
agreement or other agreement or instrument other than consents (A)
that have been obtained or the procurement of which is a condition
to the closing of the transactions contemplated hereby or (B) the
failure to obtain of which is not reasonably likely to have a
material adverse effect upon the assets, business or operations of
CPI, CRC and their subsidiaries taken as a whole or the ability of
CPI and CRC to consummate the transactions contemplated hereby.
SECTION 6.1.16. CRC has not, either directly or through any
agent, offered any CRC Shares or other securities for sale, or
solicited any orders to buy the same, or otherwise approached or
negotiated in respect thereof, in such manner as to require
registration under the Securities Act,
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35
the Massachusetts Uniform Securities Act, the New Jersey Uniform
Securities Law or the New York State Martin Act of such CRC Shares,
such other securities or any Shares to be sold hereunder.
SECTION 6.1.17. Except as described in the Evaluation
Material, there is no action, proceeding or investigation pending
or, to the knowledge of CPI, threatened, against CRC in which there
is a reasonable possibility of an adverse decision that would
materially adversely affect the condition, business or prospects of
CPI and CRC taken as a whole, or which questions the validity of
this Purchase Agreement, the CRC Shares or any action taken by CPI
or CRC pursuant to this Purchase Agreement.
SECTION 6.1.18. No consent, approval, order or authorization
of, or registration, declaration or filing with, any governmental or
public body or authority on the part of CRC is required in
connection with the valid execution, delivery and performance of
this Purchase Agreement or the issuance for deposit in the CRC Trust
of CRC Shares as contemplated hereby.
SECTION 6.1.19. CRC has no present intention of making any
public distribution of any CRC Shares.
SECTION 6.1.20. The financial information concerning CRC set
forth in the Annual Report and Nine Month Report of CPI included in
the Evaluation Material fairly summarizes the financial condition of
CRC at such dates and the results of operations of CRC for the
periods indicated in such information, all in accordance with
generally accepted accounting principles consistently applied. Since
September 30, 1996, there has been no adverse change in the
business, operations, financial condition, results of operations or
prospects of CRC and its subsidiaries that are material in the
context of CPI (and its subsidiaries) and CRC, taken as a whole.
SECTION 6.1.21. CPI is not in violation of any provision of
its Declaration of Trust or Trustees' Regulations. CRC is not in
violation of any provision of the CRC Trust.
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36
SECTION 6.1.22. CRC is not in violation of any provision of
its Certificate of Incorporation or By-laws.
SECTION 6.1.23. The Certificate of Incorporation of CRC, as
amended, in the form certified by the Secretary of CRC and
heretofore delivered to the Purchaser, is and at the Closing will be
in full force and effect.
SECTION 6.1.24. The CRC Trust Agreement in the form certified
by the Secretary of CRC and heretofore delivered to the Purchaser,
is and at the Closing will be in full force and effect.
SECTION 6.1.25. The total number of Preference Shares which
CPI shall have authority to issue shall be 209,249, and the total
number of Common Shares which CPI shall have authority to issue
shall be 36,089,872 Common Shares plus such number (if any) of
additional Common Shares as shall be required for issuance pursuant
to Share Purchase Contracts entered into under CPI's 1994 Plan for
Shareholder Contractual Purchases of Shares (the "1994 Plan") and
1997 Plan for Shareholder Contractual Purchases of Shares (the "1997
Plan"); provided, however, that (a) upon the issuance of all Common
Shares issuable pursuant to the terms of Share Purchase Contracts
entered into under the 1994 Plan (the "1994 Contracts"), the number
of Common Shares authorized to be issued shall be reduced by the
excess (if any) of 1,105,894 over the number of authorized but
unissued Common Shares as shall then have been issued subsequent to
November 1, 1996, pursuant to such 1994 Contracts; (b) upon the
issuance of all Common Shares issuable pursuant to the terms of
Share Purchase Contracts entered into under the 1997 Plan (the "1997
Contracts"), the number of Common Shares authorized to be issued
shall be reduced by the excess (if any) of 1,100,000 over the number
of authorized but unissued Common Shares as shall then have been
issued subsequent to January 1, 1997, pursuant to such 1997
Contracts; (c) upon the issuance of all Common Shares issuable
pursuant to all Employee Share Purchase Plan Contracts entered into
under CPI's Employee Share Purchase Plan as amended ("Employee
Contracts"), the number of Common Shares authorized to be issued as
aforesaid shall be
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37
reduced by the excess (if any) of 12,513 (as adjusted to reflect
non-vested shares acquired by CPI) over the total number of
authorized but unissued Common Shares as shall then have been issued
subsequent to June 15, 1994, pursuant to Employee Contracts; (d)
upon the issuance of all Common Shares issuable pursuant to Share
Purchase Agreements providing for the issuance of up to 1,788,948
Common Shares directly, or upon the conversion or exchange of
securities convertible into or exchangeable for Common Shares, the
number of Common Shares authorized to be issued shall be reduced by
the excess (if any) of 1,788,948 over the number of authorized but
unissued Common Shares as shall have been issued subsequent to
November 1, 1996 pursuant to such Share Purchase Agreements; (e)
upon the termination or expiration of the Trust's 1993 Share Option
Plan for Employees and all options granted thereunder (the "1993
Share Options"), the number of Common Shares authorized to be issued
as aforesaid shall be reduced by the excess (if any) of 1,000,000
over the total number of Common Shares as shall then have been
issued upon the exercise of 1993 Share Options granted on or after
November 2, 1993; (f) upon the issuance of all Common Shares
issuable upon conversion of the First Series Preference Shares, the
number of Common Shares authorized to be issued as aforesaid shall
be reduced by the excess (if any) of 1,600,000 over the number of
authorized but unissued Common Shares as shall then have been issued
subsequent to June 15, 1994 upon conversion of such First Series
Preference Shares; (g) upon the issuance of all Common Shares
issuable in exchange for interests in properties (whether direct or
indirect through ownership interests in legal entities) pursuant to
contracts entered into on or before January 31, 1997 ("Bellwether
Contracts"), the number of Common Shares authorized to be issued
shall be reduced by the excess (if any), of 6,000,000 over the
number of authorized but unissued Common Shares as shall have been
issued subsequent to November 1, 1996 pursuant to such Bellwether
Contracts; and (h) upon the issuance of all Common Shares (excluding
those utilized in (g) above) issuable in exchange for interests in
the Partnership (or in a successor to the assets thereof or in the
underlying assets thereof), on or before December 31, 2000
("Longstreet
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Exchanges"), the number of Common Shares authorized to be issued
shall be reduced by the excess (if any) of 1,800,000 over the number
of authorized but unissued Common Shares as shall then have been
issued subsequent to November 1, 1996 pursuant to such Longstreet
Exchanges. As of November 20, 1996 there were outstanding 26,918,773
Common Shares (excluding 404,967 Common Shares held by CPI in its
treasury), 209,249 Preference Shares and 2,843,075.3 shares of
common stock of CRC. Since November 4, 1996, neither CPI nor CRC has
effected any change in its authorized classes of beneficial interest
(whether by way of reclassification, recapitalization, subdivision,
stock splits or otherwise). Neither CPI nor CRC is required to file,
pursuant to the requirements of Section 12 of the 1934 Act, a
registration statement relating to any of its securities.
SECTION 6.1.26. Since January 1, 1975, CPI has been, and CPI
continues to be, primarily engaged directly in the management or
development of real estate.
SECTION 6.1.27. Schedule 6.2.1 contains a correct and complete
list of all of the organizational documents of the Partnership.
SECTION 6.1.28. Each of CPI and CRC are in compliance in all
material respects with all applicable laws, ordinances, rules,
regulations, and requirements of governmental authorities except
where (a) the necessity of compliance therewith is contested in good
faith by appropriate proceedings or (b) the failure to comply
therewith would not, together with all other such failures,
reasonably be expected to have a material adverse effect on the
assets, business or operations of CPI, CRC and their subsidiaries
taken as a whole.
SECTION 6.1.29. CPI (a) will acquire the Partnership Interest
for the purpose of investment and not with a view to, or for sale in
connection with, the public distribution thereof, nor with any
present intention of publicly distributing the same and (b) is
familiar with the business and operations of the Partnership and has
conducted its own due diligence investigation with respect thereto.
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39
SECTION 6.2. Representations and Warranties of Purchaser. The
Purchaser hereby represents and warrants to CPI as follows:
SECTION 6.2.1. Schedule 6.2.1 contains a correct and complete
list of all of the organizational documents of the Partnership and
the Purchaser owns the Partnership Interest free and clear of all
Encumbrances.
SECTION 6.2.2. The Purchaser is duly organized, validly
existing and in good standing under the laws of the state of
Delaware, the Purchaser has all the requisite power to own and deal
with its real and other property, conduct its business as it is now
conducted and perform this Purchase Agreement, the Assignment
Agreement and the Release and is duly qualified to do business and
in good standing in each jurisdiction, if any, in which the nature
of the business transacted or the character of the property owned by
it therein makes such qualification necessary. This Purchase
Agreement has been duly authorized, executed and delivered by
Purchaser and each of the Assignment Agreement and the Release has
been duly authorized by Purchaser and shall be duly executed and
delivered by Purchaser at the Closing and this Purchase Agreement
and the Assignment Agreement (upon its execution and delivery) and
the Release (upon its execution and delivery) constitute (or will
constitute upon execution and delivery) Purchaser's legal, valid and
binding agreement enforceable in accordance with its terms (subject
to any applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or other similar laws affecting
creditors' rights generally from time to time in effect and to
general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law,
and except as the enforceability of the indemnification provisions
hereof may be limited by federal securities law and public policy
considerations).
SECTION 6.2.3. The execution and delivery by Purchaser of this
Purchase Agreement, the Assignment Agreement and the Release and the
performance of this Purchase Agreement, the Assignment Agreement and
the Release, and
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40
compliance with the provisions hereof and thereof do not and, in the
case of the Release and the Assignment Agreements, upon their
execution and delivery will not (i) violate any provision of any
applicable law or of the Certificate of Incorporation or By-laws of
the Purchaser or (ii) conflict with or result in any breach of any
of the terms, conditions or provisions of or constitute a default
under, or result in the creation or imposition of any lien, charge
or encumbrance upon any of the properties or assets of Purchaser
pursuant to, any material indenture, mortgage, deed of trust, bank
loan or credit agreement or other agreement or instrument to which
Purchaser is a party or by which it or any of its properties may be
bound.
SECTION 6.2.4. There is no action, proceeding or investigation
pending or, to the knowledge of Purchaser, threatened, against
Purchaser in which there is a reasonable possibility of an adverse
decision that questions the validity of this Purchase Agreement, the
Assignment Agreement, the Release, the Partnership Interest or any
action to be taken pursuant to this Purchase Agreement.
SECTION 6.2.5. No consent, approval, order or authorization
of, or registration, declaration or filing with, any governmental or
public body or authority on the part of Purchaser is required in
connection with the valid execution, delivery and performance of
this Purchase Agreement, the Assignment Agreement, the Release,
Purchaser's sale, assignment, transfer and conveyance of the
Partnership Interest or Purchaser's acquisition of the Shares, all
as contemplated hereby.
SECTION 7. Applicability of Declaration of Trust. Notwithstanding
any other provisions of this Purchase Agreement, the rights of the Purchaser to
hold and transfer the Shares shall at all times be subject to the provisions of
Sections 5.12, Purchasers Disclosures; Redemption of Shares, and 5.13, Right to
Refuse to Transfer Shares; Certain Transfers Void, of the Declaration of Trust
of CPI and to all rights granted to the Trustees of CPI thereunder.
SECTION 8. Assignment. This Purchase Agreement may not be assigned
by CPI or the Purchaser prior to the Closing Date without, in the case of a
transfer by the
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Purchaser, the consent of CPI and, in the case of a transfer by CPI, the consent
of the Purchaser. After the Closing Date, all representations, warranties,
covenants and agreements contained in this Purchase Agreement shall bind and
inure to the benefit of CPI and the Purchaser and their respective successors
and assigns (including without limitation transferees of any or all Shares to be
purchased hereunder by the Purchaser if such transferees acquired such Shares
prior to the public offering thereof), except as any provision may by its terms
be otherwise limited. After the Closing Date, the Purchaser shall not assign
this Purchase Agreement or any of its rights, privileges or obligations
hereunder to any party other than such a transferee without the prior written
consent of CPI.
SECTION 9. Governing Law. This Purchase Agreement shall be governed
by and construed and enforced in accordance with the internal laws of the State
of New York, without regard to the principles of the conflicts of laws thereof.
SECTION 10. Jurisdiction; Consent to Service of Process. (a) Each of
the Purchaser and CPI hereby irrevocably and unconditionally submits, for itself
and its property, to the nonexclusive jurisdiction of any New York State court
or Federal court of the United States of America sitting in New York City, and
any appellate court from any thereof, in any action or proceeding arising out of
or relating to this Purchase Agreement, or for recognition or enforcement of any
judgment arising therefrom, and CPI and the Purchaser hereby irrevocably and
unconditionally agree that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. CPI and the Purchaser agree that a
final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Purchase Agreement shall affect any right that
the Purchaser or CPI may otherwise have to bring any action or proceeding
relating to this Purchase Agreement against the other or its properties in the
courts of any jurisdiction.
(b) CPI and the Purchaser hereby irrevocably and unconditionally
waive, to the fullest extent they may legally and effectively do so, any
objection which they may now or hereafter have to the laying of venue of any
suit, action or proceeding arising out of or relating to this Purchase Agreement
in any New York State or Federal court sitting in New York City. CPI and the
Purchaser hereby
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irrevocably waive, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
(c) CPI and the Purchaser irrevocably consent to service of process
in the manner provided for notices in Section 13. Nothing in this Purchase
Agreement will affect the right of any party to this Purchase Agreement to serve
process in any other manner permitted by law.
SECTION 11. Waiver of Jury Trial. Each party hereto hereby waives,
to the fullest extent permitted by applicable law, any right it may have to a
trial by jury in respect of any litigation directly or indirectly arising out
of, under or in connection with this Purchase Agreement. Each party hereto (a)
certifies that no representative, agent or attorney of any other party has
represented, expressly or otherwise, that such other party would not, in the
event of litigation, seek to enforce the foregoing waiver and (b) acknowledges
that it and the other party hereto have been induced to enter into this Purchase
Agreement by, among other things, the mutual waivers and certifications in this
Section 11.
SECTION 12. Brokers Fees. The Purchaser shall indemnify CPI and CPI
shall indemnify the Purchaser against any claim for brokerage or other
commissions relative to this Purchase Agreement or to the transactions
contemplated hereby based in any way on agreements, arrangements or
understandings made or alleged to have been made by the indemnifying party.
SECTION 13. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given when delivered
or mailed by first-class registered or certified mail (air mail when being sent
outside the United States) postage prepaid, addressed (a) if to the Purchaser,
at its address set forth in Exhibit A hereto, or at such other address as may be
furnished in writing by the Purchaser to CPI, or (b) if to CPI, Three Dag
Hammarskjold Plaza, 305 East 47th Street, New York, N.Y. 10017, or at such other
address as CPI shall have furnished to the Purchaser in writing.
SECTION 14. Survival of Provisions. The representations, warranties
and covenants set forth in Sections 2, 4, 5, 6, 7, 12 and 15 shall survive the
purchase of Shares under this Purchase Agreement.
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SECTION 15. Expenses. Each of CPI and the Purchaser shall bear its
own respective direct and indirect costs and expenses incurred by it in
connection with the negotiation, preparation, execution and performance of this
Purchase Agreement and the transactions contemplated hereby, whether or not the
transactions contemplated hereby are consummated, including, without limitation,
all fees and disbursements of agents, representatives, counsel and accountants.
SECTION 16. Entire Agreement; Section Headings. This Purchase
Agreement sets forth the entire agreement of the parties hereto, and supersedes
the provisions of any prior agreement or understanding of the parties hereto,
with respect to the subject matter hereof. The descriptive headings of the
several sections of this Purchase Agreement are inserted for convenience only
and do not constitute a part of this Purchase Agreement.
SECTION 17. Counterparts. This Purchase Agreement may be executed in
counterparts, each of which shall be an original.
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The Purchaser understands that the name "Corporate Property
Investors" is the designation of the Trustees under its Declaration of Trust.
Neither the shareholders nor the Trustees or officers, employees or agents of
the trust created thereby shall be liable hereunder and all persons shall look
solely to the trust estate for the payment of any claims hereunder or for the
performance hereof.
Very truly yours,
CORPORATE PROPERTY INVESTORS,
by /s/ Corporate Property Investors
---------------------------------------
Name:
Title:
CORPORATE REALTY CONSULTANTS,
INC.,
by /s/ Corporate Realty Consultants, Inc.
---------------------------------------
Name:
Title:
Accepted and agreed to:
FIFTH AND 59TH STREET INVESTORS
CORPORATION,
by
-------------------------
Name:
Title:
by
-------------------------
Name:
Title:
45
Exhibit A
Name and Address
of Purchaser
Fifth and 59th Street Investors Corporation
c/o Fosterlane Management Corporation
400 Northcreek, Suite 700
3715 Northside Parkway
Atlanta, Georgia 30327
Attention: Mr. Saleh F. Alzouman
President
with a copy to:
Fifth and 59th Street Investors Corporation
c/o Fosterlane Management Corporation
400 Northcreek, Suite 700
3715 Northside Parkway
Atlanta, Georgia 30327
Attention: Vice President
46
Exhibit B
Assignment Agreement
47
[Form of]
PARTNERSHIP INTEREST ASSIGNMENT
This Partnership Interest Assignment ("Assignment") is made on [the
Closing Date] by and between [FOSTERLANE HOLDINGS CORPORATION], a Delaware
corporation ("Assignor"), and [ ](1) ("Assignee"), with
reference to the following:
A. Assignor owns the rights of Fifth and 59th Street Investors
Corporation, that are set forth in those agreements and other documents listed
on Schedule A annexed hereto (collectively, the "Partnership Agreement"), which
constitute the organizational documents of Longstreet Associates, L.P., a New
York limited partnership (the "Partnership"), as amended to the date hereof.
B. Assignor now wishes to assign to Assignee all of Assignor's
interest in and to the Partnership and the Partnership Agreement and to cause
Assignee to become a substituted limited partner of the Partnership in the place
and stead of Assignor.
NOW, THEREFORE, the parties agree as follows:
1. Assignment. For good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Assignor hereby assigns and
transfers to Assignee, its successors and assigns, effective as of the date
hereof, all of Assignor's right, title and interest (whether as partner,
creditor, beneficiary or other claimant) in and to the Partnership, the
Partnership Agreement and all of the Partnership's rights, interests and assets
of any nature whatsoever, whether now existing or hereafter arising, including,
without limitation, all of Assignor's right, title and interest in and to all
distributions of cash or property made by the Partnership after the date hereof,
all of Assignor's rights to the repayment of any moneys advanced or otherwise
lent to the Partnership that have not been repaid as of the date hereof, all of
Assignor's right, title and interest in and to all allocations of profits,
losses and tax credits for tax purposes arising with respect to Assignor's
interest in the
- ----------
(1) Designee of CPI.
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2
Partnership after the date hereof and all of Assignor's capital account
attributable to Assignor's interest in the Partnership (all of the foregoing
being collectively referred to herein as the "Partnership Interest").
2. Substitution of Assignee as Limited Partner. Assignor and
Assignee intend that, effective as of the date hereof, Assignee shall be
substituted as a limited partner in the Partnership in the place and stead of
Assignor. Upon Assignee's request, Assignor shall execute and deliver to each of
the remaining partners in the Partnership and to Assignee an amendment to the
Partnership Agreement, in form and substance reasonably satisfactory to each of
the remaining partners and Assignee, effecting the substitution of Assignee from
and after the date hereof in the place and stead of Assignor as a partner of the
Partnership.
3. Acceptance and Assumption; Indemnity. Effective as of the date
hereof, Assignee hereby accepts the assignment to it of all of Assignor's right,
title and interest in and to the Partnership Interest, hereby agrees to become a
substituted limited partner in the Partnership from and after the date hereof in
the place and stead of Assignor and, to the extent of the Partnership Interest
and as otherwise provided by law, hereby assumes and agrees to be bound by all
of the obligations of Assignor under the Partnership Agreement arising after the
date hereof, whether known or unknown, fixed or contingent and howsoever
arising; provided, however, that the liabilities and obligations assumed by
Assignee hereunder do not include (i) any claims related to Federal, state or
local income, franchise, sales, property, transfer, document recording or other
taxes of Assignor or the Partnership accruing prior to the date hereof or by
reason of the assignment and transfer contemplated hereby or (ii) any other
liabilities or obligations of Assignor or the Partnership accruing prior to the
date hereof. Assignee hereby indemnifies and agrees to hold harmless Assignor
from and against all of Assignor's losses, costs, damages and claims arising out
of the liabilities assumed pursuant to this paragraph 3 to the extent that such
losses, costs, damages or claims are incurred by Assignor on or after the date
hereof.
4. Further Assurances. Assignor shall, at any time and from time to
time after the date hereof, upon the request of Assignee, execute, acknowledge
and deliver all such further acts, deeds, assignments, transfers, conveyances,
powers of attorney and assurances, and take all such further actions, as shall
be necessary or desirable to give effect to the transactions hereby consummated
and to
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collect and reduce to the possession of Assignee any and all of the interests
and assets hereby transferred to Assignee. Without limiting the generality of
the foregoing, Assignor hereby appoints Assignee, and its nominees, successors
and assigns, the true and lawful attorney of Assignor, with full power of
substitution, in the name of Assignee or in the name of Assignor but for the
benefit and at the expense of Assignee, to demand and receive from time to time
the benefits of the right and title to the Partnership Interest hereby conveyed,
transferred and assigned, to give receipts and releases for and in respect of
the same, or any part thereof, and from time to time to institute and prosecute
in the name of Assignor or otherwise, for the benefit of Assignee, any and all
proceedings at law, in equity or otherwise, which Assignee, its nominees,
successors or assigns, may deem proper in order to collect, assert or enforce
the right or title to the Partnership Interest hereby conveyed, transferred and
assigned, or intended so to be, to defend and compromise any and all actions,
suits or proceedings in respect of the Partnership Interest, and to do any and
all such acts and things in relation thereto as Assignee, its nominees,
successors or assigns, shall deem advisable; Assignor hereby declaring that the
appointment hereby made and the powers hereby granted are coupled with an
interest and are and shall be irrevocable by Assignor; provided that prior to
its exercise of any rights granted pursuant to the foregoing appointment,
Assignee shall deliver to Assignor at least 5 business days' prior notice of
Assignee's intention to take any such action.
5. Counterparts. This Assignment may be executed in counterparts
with the same effect as if all parties hereto had executed the same document.
All counterparts shall be construed together and shall constitute a single
Assignment.
6. Governing Law. This Assignment shall be construed and interpreted
in accordance with, and governed and enforced in all respects by, the laws of
the State of
50
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New York without giving effect to the conflict of laws principles of such State.
Assignor understands that the name "Corporate Property Investors" is
the designation of the Trustees under its Declaration of Trust. Neither the
shareholders nor the Trustees or officers, employees or agents of the trust
created thereby shall be liable hereunder and all persons shall look solely to
the trust estate for the payment of any claims hereunder or for the performance
hereof.
IN WITNESS WHEREOF, Assignor and Assignee have executed this
Partnership Interest Assignment as of the date and year first above written.
[FOSTERLANE HOLDINGS CORPORATION],
a Delaware corporation,
by
-------------------------------
Name:
Title:
by
-------------------------------
Name:
Title:
[ASSIGNEE],
by
-------------------------------
Name:
Title:
51
5
Consent to Assignment:
The undersigned, as general partner
of Longstreet Associates, L.P.,
hereby consents to the foregoing
assignment:
CPI-767 CORPORATION,
by
-------------------------------
Name:
Title:
52
NOTARIAL ACKNOWLEDGMENTS
[To be Attached]
53
Schedule A
to
Assignment
ORGANIZATIONAL DOCUMENTS
Longstreet Associates L.P., a New York limited partnership.
a. Agreement of Limited Partnership of Longstreet Associates L.P. dated as
of December 30, 1981.
b. Certificate of Limited Partnership of Longstreet Associates L.P. dated
as of December 30, 1981.
c. First Amendment to Agreement of Limited Partnership of Longstreet
Associates L.P. dated as of December 29, 1982.
d. Second Amendment to Agreement of Limited Partnership of Longstreet
Associates L.P. dated as of January 3, 1983.
e. Third Amendment to Agreement of Limited Partnership of Longstreet
Associates L.P. dated as of February 4, 1987.
f. Partnership Interest Assignment dated as of December 27, 1990.
g. Partnership Interest Assignment dated as of December 27, 1990.
h. Fourth Amendment to Agreement of Limited Partnership of Longstreet
Associates L.P. dated as of December 27, 1990.
i. Letter Agreements dated November 14, 1990, December 11, 1990, December
19, 1990, December 27, 1990, February 11, 1991, March 8, 1991, June 6,
1991, September 11, 1991, January 10, 1992, June 14, 1992, December 14,
1992 and May 18, 1994.
54
Exhibit C
[Form of]
GENERAL RELEASE
In consideration of, among other things, the premises and mutual
covenants contained in that certain Purchase Agreement (the "Agreement") dated
as of December 13, 1996, between Corporate Property Investors, a voluntary
association of the type commonly known as a Massachusetts business trust
("CPI"), Corporate Realty Consultants, Inc., a Delaware corporation ("CRC"), and
Fosterlane Holdings Corporation, a Delaware corporation (the "Purchaser"), and
the mutual covenants contained herein, the parties hereto agree as follows:
1. All capitalized terms used but not otherwise defined herein shall
have the meanings ascribed to such terms in the Agreement.
2. Each of CPI, CPI-767 Corporation, a Delaware corporation
("CPI-767"), CPI-767 II Corporation, a Delaware corporation ("CPI-767 II"), and
CRC hereby forever releases and discharges the Purchaser, its subsidiaries and
partners, and each of their respective directors, officers and employees
(collectively, the "Purchaser Releasees") from, and waives and relinquishes any
and all claims, demands, debts, liabilities, obligations, actions, causes of
action, suits, sums of money, accounts, reckonings, covenants, contracts,
controversies, agreements, promises and rights whatsoever, whenever arising,
known or unknown, suspected or unsuspected, contingent or fixed, liquidated or
unliquidated, matured or unmatured, in law, equity or otherwise (collectively,
"Claims") that CPI, CPI-767, CPI- 767 II or CRC ever had, now has, or hereafter
can, shall or may have against the Purchaser Releasees for, upon, or by reason
of any matter, cause, transaction or thing whatsoever occurring at any time
prior to the date hereof; provided, however, that nothing contained herein shall
be deemed to release any person from its obligations under the Agreement, the
Assignment Agreements or any other documents delivered pursuant to the express
provisions thereof or to release the Purchaser from any obligations to CPI under
any written agreement pursuant to which the Purchaser or any predecessor in
interest acquired Common Shares.
3. The Purchaser hereby forever releases and discharges each of CPI,
CPI-767, CPI-767 II, CRC, all of their respective subsidiaries and partners, and
all the
55
2
respective trustees, directors, officers and employees of each of them
(collectively, the "CPI Releasees") from, and waives and relinquishes any and
all Claims that Purchaser ever had, now has, or hereafter can, shall or may have
against the CPI Releasees for, upon or by reason of, any matter, cause,
transaction or thing whatsoever occurring at any time prior to the date hereof;
provided, however, that nothing contained herein shall be deemed to release any
person from its obligations under the Agreement, the Assignment Agreements or
any other documents delivered pursuant to the express provisions thereof or to
release CPI or CRC from any obligations to the Purchaser (i) under any written
agreement pursuant to which the Purchaser or any predecessor in interest
acquired Common Shares or (ii) that may arise solely by virtue of the
Purchaser's ownership of any such Common Shares.
4. This Release shall be binding upon the parties hereto and their
respective successors and permitted assigns. No party hereto may assign either
this Release or any of its rights, interests or obligations hereunder without
the prior written approval of the other party.
5. This Release constitutes the entire agreement among the parties
hereto with respect to the subject matter hereof. It is expressly understood and
agreed that this Release may not be altered, amended, modified or otherwise
changed in any respect whatsoever, except by a writing duly executed and
delivered by all of the parties hereto.
6. THIS RELEASE SHALL BE CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, AND GOVERNED AND ENFORCED IN ALL RESPECTS BY, THE LAWS OF THE STATE OF NEW
YORK WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES OF SUCH STATE. THE
PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREE TO SUBMIT TO PERSONAL
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND TO WAIVE ANY OBJECTION
AS TO VENUE IN THE COUNTY OF NEW YORK, STATE OF NEW YORK IN CONNECTION WITH ALL
MATTERS RELATING TO THIS RELEASE AND/OR THE CLAIMS. EACH PARTY HERETO WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS RELEASE. EACH PARTY ACKNOWLEDGES THAT IT AND
THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS RELEASE BY, AMONG
OTHER THINGS THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 6.
7. If any provisions of this Release are determined by a court of
competent jurisdiction to be invalid or unenforceable, in whole or in part, the
remaining
56
3
provisions, and any partially invalid or unenforceable provisions, to the extent
valid and enforceable, shall nevertheless be binding and valid and enforceable.
8. This Release may be executed in one or more counterparts, each of
which shall be deemed an original but all of which together will constitute one
and the same instrument.
9. This Release shall not be effective unless and until executed by
all of the parties hereto.
9. The Purchaser understands that the name "Corporate Property
Investors" is the designation of the Trustees under its Declaration of Trust.
Neither the shareholders nor the Trustees or officers, employees or agents of
the trust created thereby shall be liable hereunder and all persons shall look
solely to the trust estate for the payment of any claims hereunder or for the
performance hereof.
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Release as of the ____ day of December, 1996.(2)
CORPORATE PROPERTY INVESTORS,
By:
---------------------------
Name:
Title:
CPI-767 CORPORATION,
By:
---------------------------
Name:
Title:
CPI-767 II CORPORATION,
By:
---------------------------
Name:
Title:
- --------
(2) This Release should be dated as of the Closing Date.
57
4
CORPORATE REALTY CONSULTANTS, INC.,
By:
---------------------------
Name:
Title:
FOSTERLANE HOLDINGS CORPORATION,
By:
---------------------------
Name:
Title:
By:
---------------------------
Name:
Title:
58
Exhibit D
Statement pursuant to Treasury
Regulation Section 1.897-2(h)
In accordance with Treasury Regulation Section 1.897-2(h), Corporate
Property Investors, a Massachusetts business trust ("CPI"), hereby states that
its Series A Common Shares do not represent a "United States real property
interest" within the meaning of Section 897(c) of the Internal Revenue Code of
1986, as amended (the "Code"), because CPI has determined based upon its
corporate records that it currently is a "domestically-controlled REIT" within
the meaning of Section 897(h)(4)(B) of the Code.
Under penalties of perjury, I declare that (i) I have examined this
statement, (ii) to the best of my knowledge and belief, this statement is true,
correct and complete and (iii) I have authority to sign this statement on behalf
of CPI.
Dated: ________________
By:
----------------------
Name:
Title:
Subscribed to and sworn
before me this __ of
__________, 1996.
State of New York
County of New York
[Seal]
- -------------------------
Notary Public
59
SCHEDULE 1
Computation of Working Capital Value
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2
As used on the preceding page, "Undistributed C/F - Per Partnership
Equity" means (x) income before extraordinary items plus depreciation less
principal payments on mortgages, for the period commencing on January 1, 1996,
and ending on the Closing Date, all computed in accordance with generally
accepted accounting principles applied consistently with the most recently
prepared audited financial statements, minus (y) all distributions of "Net Cash
Flow" or "Excess Cash Available" actually made in respect of such period on or
before the Closing Date.
61
SCHEDULE 6.2.1
Partnership Interest
Longstreet Associates L.P., a New York limited partnership.
a. Agreement of Limited Partnership of Longstreet Associates L.P. dated as
of December 30, 1981.
b. Certificate of Limited Partnership of Longstreet Associates L.P. dated
as of December 30, 1981.
c. First Amendment to Agreement of Limited Partnership of Longstreet
Associates L.P. dated as of December 29, 1982.
d. Second Amendment to Agreement of Limited Partnership of Longstreet
Associates L.P. dated as of January 3, 1983.
e. Third Amendment to Agreement of Limited Partnership of Longstreet
Associates L.P. dated as of February 4, 1987.
f. Partnership Interest Assignment dated as of December 27, 1990.
g. Partnership Interest Assignment dated as of December 27, 1990.
h. Fourth Amendment to Agreement of Limited Partnership of Longstreet
Associates L.P. dated as of December 27, 1990.
i. Letter Agreements dated November 14, 1990, December 11, 1990, December
19, 1990, December 27, 1990, February 11, 1991, March 8, 1991, June 6,
1991, September 11, 1991, January 10, 1992, June 14, 1992, December 14,
1992 and May 18, 1994.