Exhibit 99.(a)(1)
OFFER TO PURCHASE FOR CASH
ALL COMMON SHARES OF BENEFICIAL INTEREST
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
of
CABOT INDUSTRIAL TRUST
at
$24 NET PER SHARE
by
ROOSTER ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY
OF
CALWEST INDUSTRIAL PROPERTIES, LLC
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON TUESDAY, DECEMBER 4, 2001, UNLESS THE OFFER IS EXTENDED.
A summary of the principal terms of the offer appears on pages (ii) through
(vi). You should read this entire document carefully before deciding whether to
tender your shares.
-----------------
THE DEALER MANAGERS
FOR THE OFFER ARE:
Goldman, Sachs & Co.
-----------------
NOVEMBER 5, 2001
TABLE OF CONTENTS
Page
----
SUMMARY TERM SHEET......................................................... ii
IMPORTANT.................................................................. vii
INTRODUCTION............................................................... 1
THE OFFER.................................................................. 3
1.TERMS OF THE OFFER; EXPIRATION DATE...................................... 3
2.ACCEPTANCE FOR PAYMENT AND PAYMENT....................................... 5
3.PROCEDURES FOR ACCEPTING THE OFFER AND TENDERING COMMON SHARES........... 6
4.WITHDRAWAL RIGHTS........................................................ 9
5.MATERIAL FEDERAL INCOME TAX CONSEQUENCES................................. 10
6.PRICE RANGE OF THE SHARES; DIVIDENDS..................................... 10
7.POSSIBLE EFFECTS OF THE OFFER ON THE MARKET FOR THE COMMON SHARES;
STOCK EXCHANGE LISTING; EXCHANGE ACT REGISTRATION; MARGIN
REGULATIONS.............................................................. 11
8.CERTAIN INFORMATION CONCERNING CABOT..................................... 12
9.CERTAIN INFORMATION CONCERNING CALWEST AND ROOSTER
ACQUISITION CORP......................................................... 14
10.BACKGROUND OF THE OFFER; CONTACTS WITH CABOT............................ 16
11.PURPOSE OF THE OFFER AND THE MERGER; THE MERGER AGREEMENT; OTHER
AGREEMENTS; EFFECTS OF INABILITY TO CONSUMMATE THE MERGER;
STATUTORY REQUIREMENTS; APPRAISAL RIGHTS; PLANS FOR CABOT............... 23
12.SOURCE AND AMOUNT OF FUNDS.............................................. 42
13.DIVIDENDS AND DISTRIBUTIONS............................................. 44
14.CONDITIONS OF THE OFFER................................................. 45
15.LEGAL MATTERS; REQUIRED REGULATORY APPROVALS............................ 47
16.CERTAIN FEES AND EXPENSES............................................... 47
17.MISCELLANEOUS........................................................... 48
SCHEDULE I
DIRECTORS, EXECUTIVE OFFICERS AND BOARD MEMBERS OF ROOSTER ACQUISITION
CORP., RREEF AMERICA L.C.C., ROPROPERTY HOLDING B.V., RODAMCO NORTH AMERICA
N.V., HASLEMERE N.V. AND RODAMCO EUROPE, N.V............................... I-1
SCHEDULE II
MEMBERS OF THE BOARD OF ADMINISTRATION AND EXECUTIVE OFFICERS OF THE
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM............................. II-1
(i)
SUMMARY TERM SHEET
Our name is Rooster Acquisition Corp. and we are offering to purchase all of
the outstanding common shares of beneficial interest of Cabot Industrial Trust,
a Maryland real estate investment trust ("Cabot"), for $24 net per share in
cash, without any interest, pursuant to a merger agreement with Cabot. The
following are some of the questions that you, as a shareholder of Cabot, may
have and answers to those questions.
We urge you to read carefully the remainder of this Offer to Purchase and
the accompanying Letter of Transmittal and Cabot's Solicitation/Recommendation
Statement on Schedule 14D-9, which is being mailed to you with these materials,
because the information in this summary term sheet is not complete. Important
additional information is contained in the remainder of this Offer to Purchase,
the Letter of Transmittal and the Schedule 14D-9.
Q: WHO IS OFFERING TO BUY YOUR COMMON SHARES?
A: . Rooster Acquisition Corp. is a Maryland corporation that was formed solely
to make the offer described in this Offer to Purchase. We are a wholly
owned subsidiary of CalWest Industrial Properties, LLC, a California
limited liability company ("CalWest").
. CalWest was created in 1998 as a joint venture between the California
Public Employees' Retirement System ("CalPERS"), a government employee
pension fund and a unit of the State and Consumer Services Agency of the
State of California, and RREEF America L.L.C., a Delaware limited
liability company ("RREEF"), and its affiliates, to invest exclusively in
industrial properties in the western United States.
. CalPERS provides retirement and health benefits to more than 1.2 million
members, including active workers and retirees, their families and
beneficiaries, and their employers. CalPERS is the nation's largest public
pension fund and the third largest in the world with assets totaling
approximately $155.3 billion at July 31, 2001.
. RREEF, a wholly owned indirect subsidiary of RoProperty Holding B.V., is a
full service commercial real estate investment advisor. See Section 9.
Q: WHAT ARE THE CLASSES AND AMOUNTS OF SECURITIES SOUGHT IN THE OFFER?
A: We are seeking to purchase all of the issued and outstanding common shares
of beneficial interest of Cabot (including the associated preferred share
purchase rights) for $24 net per share in cash. See the "Introduction" to
this Offer to Purchase for more information about the offer.
Q: HOW MUCH ARE WE OFFERING TO PAY, WHAT IS THE FORM OF PAYMENT AND WILL YOU
HAVE TO PAY ANY FEES OR COMMISSIONS?
A: We are offering to pay you $24 net per share in cash, without any interest.
If you are the registered owner of your common shares and you tender your
common shares to us in our offer, you will not have to pay brokerage fees
or similar fees. However, if you own your common shares through a broker
or other nominee, your broker or nominee may charge you a fee to tender
your common shares. You should consult your broker or nominee to
determine whether any charges will apply. See the "Introduction" to this
Offer to Purchase.
Q: DO WE HAVE THE FINANCIAL RESOURCES TO MAKE PAYMENT?
A: We have received from Goldman Sachs Mortgage Company a commitment to lend,
subject to the conditions set forth in a commitment letter, up to $1.225
billion to us for the purpose of purchasing the Cabot common shares
pursuant to the offer and providing working capital following the
acquisition. Goldman Sachs
(ii)
Mortgage Company is obligated to provide funds under this commitment, unless
certain customary conditions are not satisfied and unless the offer is not
completed on or before January 15, 2002, subject to a 30 business day
extension. These customary conditions are not conditions to our obligation
to complete the offer. In addition to these customary conditions:
. Goldman Sachs Mortgage Company also is not obligated to fund the loan
provided by the commitment if certain specified serious events occur
relating to New York Stock Exchange trading, commercial banking
activities, war or a national emergency, or certain national or
international financial, political or economic conditions and consequences.
. Within 30 business days of the occurrence of one of these serious events
which allows our lender not to fund the loan, our lender will once again
be obligated to fund the loan if our lender determines that a stock
exchange or banking activity related event has been resolved or the war,
emergency or national or international condition has not materially
impaired our collateral or the value of the loan.
. During this 30 business day time period following such a serious event, we
will be allowed to, and we have agreed with Cabot to use our efforts to,
find alternative financing.
. If, at the conclusion of such 30 business day time period, our lender
relies on one of these serious events not to fund the loan and we have not
obtained alternative financing, we will not be obligated to complete the
offer or the merger.
See Sections 12 and 14.
Q: IS OUR FINANCIAL CONDITION RELEVANT TO YOUR DECISION TO TENDER YOUR COMMON
SHARES IN THE OFFER?
. We do not believe that our financial condition is relevant to your
decision whether to tender common shares and accept the offer because:
. the offer is being made for all outstanding common shares solely for cash,
. as outlined above and as described in detail herein, we have received from
Goldman Sachs Mortgage Company a commitment to loan to us sufficient funds
to purchase for cash all outstanding common shares,
. our obligation to purchase your shares in the offer is not subject to any
financing related condition, other than a specified serious financial
market, commercial banking, war, national emergency, or national or
international financial, political or economic event, as outlined above,
. if we complete the offer, we will acquire all remaining shares for the
same cash price in the merger,
. as outlined below, the offer is made pursuant to a merger agreement
approved by Cabot's Board of Trustees, which Board has determined that the
merger agreement, the offer and the merger are fair to and in the best
interests of Cabot shareholders, and
. Cabot's Board of Trustees has received a written opinion from its
financial advisor, dated October 28, 2001, to the effect that, subject to
certain customary limitations, the consideration to be received by
shareholders in the offer, in the aggregate, is fair from a financial
point of view.
See "Introduction" and Sections 1, 11, 12 and 14 of the Offer to Purchase.
(iii)
Q: WHAT DOES CABOT'S BOARD OF TRUSTEES THINK OF THE OFFER?
A: We are making the offer pursuant to a merger agreement among us, CalWest,
Cabot and Cabot LP. Cabot's Board of Trustees unanimously approved the
merger agreement, our offer and the proposed merger of Rooster Acquisition
Corp. with and into Cabot. Cabot's Board of Trustees has determined that the
merger agreement, the offer, the merger and the other transactions
contemplated by the merger agreement, taken together, are fair to, advisable
and in the best interests of Cabot and its shareholders. See the
"Introduction" to this Offer to Purchase.
Q: WHAT ARE THE MOST IMPORTANT CONDITIONS TO THE OFFER?
A: The most important conditions to the offer are that:
- shareholders validly tender, and do not withdraw, common shares before
the expiration of our offer that, if accepted for payment and purchased
by us, will represent at least two-thirds of the outstanding common
shares on a fully diluted basis, after giving effect to the exercise or
conversion of all options, rights, partnership units and other
securities exercisable or convertible into common shares. Pursuant to
shareholder and unitholder agreements entered into in connection with
the merger agreement, holders of common shares and units of common
limited partnership interests in Cabot LP representing approximately
7.5% of the outstanding common shares on a fully diluted basis (assuming
conversion of such units of partnership interest in Cabot LP into common
shares of Cabot) have agreed to tender their common shares in the offer,
- our lender has not determined that there has occurred a specified,
serious event relating to New York Stock Exchange trading, commercial
banking activities, war or a national emergency, or national or
international financial, political or economic conditions, as discussed
above under "Do We Have The Financial Resources To Make Payment?" or, if
our lender does determine that a specified serious event has occurred,
our lender nevertheless determines within 30 business days following
that occurrence to finance our purchase of the common shares,
- the merger agreement has not been terminated, and
- there has not occurred any change of a specified type that is or is
reasonably likely to
. be materially adverse to Cabot and Cabot's subsidiaries taken as a
whole, or
. prevent or materially delay the performance by Cabot or Cabot LP of
any of its obligations under the merger agreement.
See Sections 1, 12 and 14.
Q: HOW DO YOU ACCEPT THE OFFER AND TENDER YOUR COMMON SHARES?
A: To tender your common shares, you must completely fill out the enclosed
Letter of Transmittal and deliver it, along with the certificates
representing your common shares, to the Depositary identified in the Letter
of Transmittal prior to the expiration of the offer. If your common shares
are held in street name (i.e., through a broker, dealer or other nominee),
they can be tendered by your nominee through The Depository Trust Company.
If you cannot deliver all necessary documents to the Depositary in time, you
might be able to complete and deliver to the Depositary, in lieu of the
missing documents, the enclosed Notice of Guaranteed Delivery, provided you
are able to fully comply with its terms. See Section 3.
Q: HOW LONG DO YOU HAVE TO DECIDE WHETHER TO TENDER YOUR COMMON SHARES INTO THE
OFFER?
A: You have until 12:00 midnight, New York City time, on Tuesday, December 4,
2001 to decide whether to tender your common shares into the offer. Under
certain circumstances, the offer may be extended. If the
(iv)
offer is extended, we will issue a press release announcing the extension on
or before the morning of the first business day following the date the offer
was then scheduled to expire. See Section 1.
Q: IF YOU ACCEPT THE OFFER, WHEN WILL YOU GET PAID?
A: Provided the conditions to the offer are satisfied and we complete the
offer, we will mail to you a check in an amount equal to the number of
common shares you tendered multiplied by $24, which amount may be reduced by
any required withholding for federal income tax and stock transfer taxes
payable by you, as promptly as practicable following the expiration of the
offer. See Section 2
Q: CAN YOU WITHDRAW YOUR PREVIOUSLY TENDERED COMMON SHARES?
A: You may withdraw a portion or all of your tendered common shares by
delivering written, telegraphic or facsimile notice to the Depositary prior
to the expiration of the offer. Further, if we have not agreed to accept
your common shares for payment within 60 days of the commencement of the
offer, you can withdraw them at any time after that 60-day period until we
accept your common shares for payment. Once common shares are accepted for
payment by us, they cannot be withdrawn. See Section 4.
Q: IF YOU DO NOT TENDER BUT THE OFFER IS SUCCESSFUL, WHAT WILL HAPPEN TO YOUR
COMMON SHARES?
A: If the offer is successful, we expect to complete a merger transaction in
which all remaining shareholders of Cabot at the time of the proposed
merger, other than those that assert appraisal rights, if any are available,
under Maryland law (discussed immediately below and in Section 11), will
receive $24 per share in cash for each common share, without interest.
Following the merger, the separate corporate existence of Rooster
Acquisition Corp. shall cease and Cabot will continue as the surviving
company.
You should also be aware that, after the offer is consummated and prior to
the merger, the number of holders of Cabot's common shares may be so small
that Cabot's common shares may not be eligible for trading on any national
securities exchange or through any interdealer quotations system. This may
adversely affect the market value of any remaining Cabot common shares held
by the public. See Section 7.
Q: ARE APPRAISAL RIGHTS AVAILABLE IN EITHER THE OFFER OR THE PROPOSED MERGER?
A: Appraisal rights are not available in the offer. If we obtain at least 90%
of the common shares entitled to vote on the proposed merger, no appraisal
rights will be available to you in connection with the Merger. If we obtain
less than 90% of the common shares entitled to vote on the proposed merger,
you will only have appraisal rights in the event that the common shares are
delisted from the New York Stock Exchange on or prior to the record date for
determining shareholders entitled to vote on the proposed merger. We expect
Cabot to set such record date, if necessary, shortly after consummation of
the Offer. See Section 11.
Q: WHAT ARE THE FEDERAL INCOME TAX CONSEQUENCES OF THE TRANSACTION?
A: The receipt of cash by you in exchange for your common shares pursuant to
the offer or the subsequent proposed merger (or upon exercise of appraisal
rights, if any are available) is a taxable transaction for federal income
tax purposes and may also be a taxable transaction under applicable state,
local or foreign tax laws. In general, assuming you hold your common shares
as a capital asset, you will recognize capital gain or loss equal to the
difference between the amount of cash you receive for the common shares you
tender and your adjusted tax basis in those common shares. You should
consult your tax advisor about the particular tax consequences of tendering
your common shares. See Section 5.
(v)
Q: WHAT IS THE MARKET VALUE OF YOUR COMMON SHARES AS OF A RECENT DATE?
A: On October 26, 2001, the last full day of trading of Cabot's common shares
prior to the announcement of the execution of the merger agreement, the
reported closing price of Cabot's common shares on the New York Stock
Exchange was $19.95 per share. The offer price of $24 per share represents a
premium of 20.3% of the closing price on such day. On November 2, 2001, the
last full day of trading before the commencement of the offer, the reported
closing price of Cabot's common shares on the New York Stock Exchange was
$23.83 per share. Please obtain a recent quotation for your common shares
prior to deciding whether or not to tender.
Q: WHO CAN YOU CALL WITH QUESTIONS ABOUT THE OFFER?
A: You can call MacKenzie Partners, Inc., the Information Agent for the offer,
toll-free at (800) 322-2885 with any questions you may have.
(vi)
IMPORTANT
Any shareholder desiring to tender common shares of Cabot should either (a)
complete and sign the Letter of Transmittal (or a facsimile thereof) in
accordance with the instructions in the Letter of Transmittal, have such
shareholder's signature thereon guaranteed if required by Instruction 1 to the
Letter of Transmittal, mail or deliver the letter of transmittal (or such
facsimile) and any other required documents to the Depositary and deliver the
certificates for such common shares to the Depositary along with the Letter of
Transmittal (or facsimile thereof) or tender such common shares pursuant to the
procedure for book-entry transfer set forth in Section 3, or (b) request such
shareholder's broker, dealer, commercial bank, trust company or other nominee
to effect the transaction for such shareholder. A shareholder whose common
shares are registered in the name of a broker, dealer, commercial bank, trust
company or other nominee must contact such broker, dealer, commercial bank,
trust company or other nominee if such shareholder desires to tender such
common shares.
If a shareholder desires to tender common shares in the offer and the
certificates representing such common shares are not immediately available or
time will not permit all required documents to reach the Depositary on or
before the expiration date or the procedures for book-entry transfer cannot be
completed on time, such shareholder may nevertheless tender such common shares
by complying with the procedures for guaranteed delivery set forth in Section 3.
Questions and requests for assistance may be directed to the Information
Agent at its address and telephone number set forth on the back cover of this
Offer to Purchase. Additional copies of this Offer to Purchase, the Letter of
Transmittal, the Notice of Guaranteed Delivery and other related materials may
be obtained from the Information Agent.
(vii)
TO: ALL HOLDERS OF COMMON SHARES OF CABOT INDUSTRIAL TRUST:
INTRODUCTION
We are Rooster Acquisition Corp., a Maryland corporation and wholly owned
subsidiary of CalWest Industrial Properties, LLC, a California limited
liability company ("CalWest"). CalWest was created in 1998 as a joint venture
between the California Public Employees' Retirement System ("CalPERS"), a
government employee pension fund and a unit of the State and Consumer Services
Agency of the State of California, and RREEF America L.L.C., a Delaware limited
liability company ("RREEF"), and its affiliates, to invest exclusively in
industrial properties in the Western United States. RREEF, a wholly owned
indirect subsidiary of RoProperty Holding B.V., a Dutch Company, is a full
service commercial real estate investment advisor. We hereby offer to purchase
all of the issued and outstanding common shares of beneficial interest, par
value $.01 per share (the "Common Shares"), of Cabot Industrial Trust, a
Maryland real estate investment trust ("Cabot"), at a purchase price of $24 per
Common Share, net to the seller in cash (less any required withholding taxes),
without interest thereon (such amount, or any greater amount per share paid
pursuant to the offer, the "Offer Price"), upon the terms and subject to the
conditions set forth in this Offer to Purchase (the "Offer to Purchase") and
the related Letter of Transmittal (which, as amended or supplemented from time
to time, together, constitute the "Offer").
Our offer to purchase Common Shares includes the associated preferred share
purchase rights (the "Rights") issued pursuant to a Rights Agreement, dated as
of June 11, 1998, as amended and restated as of September 10, 1998, and as
further amended on October 28, 2001 (the "Rights Agreement"), between Cabot and
EquiServe Limited Partnership (as successor to BankBoston, N.A.), as Rights
Agent. Unless the context otherwise requires, all references herein to the
Common Shares shall include the associated Rights.
If you are a recordholder of Common Shares, you will not be required to pay
brokerage fees or commissions or, except as described in Instruction 6 of the
Letter of Transmittal, stock transfer taxes on the purchase of Common Shares in
the Offer. However, if you do not complete and sign the Substitute Form W-9
that is included in the Letter of Transmittal (or the appropriate Internal
Revenue Service Form W-8 if you are a non-resident alien or foreign entity),
you may be subject to a required backup federal income tax withholding of up to
30.5% of the gross proceeds payable to you. See Section 3. We will pay all
charges and expenses of Goldman, Sachs & Co., as Dealer Managers (the "Dealer
Managers"), Computershare Trust Company of New York, as Depositary (the
"Depositary"), and MacKenzie Partners, Inc., as Information Agent (the
"Information Agent"), incurred in connection with the Offer. See Section 16.
THE CABOT BOARD OF TRUSTEES (THE "CABOT BOARD OF TRUSTEES") HAS UNANIMOUSLY
DETERMINED THAT THE MERGER AGREEMENT, THE OFFER, THE MERGER AND THE OTHER
TRANSACTIONS CONTEMPLATED THEREBY, TAKEN TOGETHER, ARE FAIR TO, ADVISABLE AND
IN THE BEST INTERESTS OF CABOT AND ITS SHAREHOLDERS AND HAS VOTED TO APPROVE
THE MERGER AGREEMENT AND RECOMMEND ACCEPTANCE AND APPROVAL BY THE HOLDERS OF
COMMON SHARES OF THE MERGER AGREEMENT, THE OFFER, THE MERGER AND THE OTHER
TRANSACTIONS CONTEMPLATED THEREBY AND THAT YOU TENDER YOUR COMMON SHARES IN THE
OFFER. YOU MUST, HOWEVER, MAKE YOUR OWN DECISION WHETHER TO TENDER COMMON
SHARES AND, IF SO, HOW MANY COMMON SHARES TO TENDER. YOU SHOULD EVALUATE
CAREFULLY ALL OF THE INFORMATION CONTAINED OR REFERRED TO IN THIS DOCUMENT AND
MAKE YOUR OWN DECISION WHETHER TO TENDER COMMON SHARES PURSUANT TO THE OFFER.
YOU ARE URGED TO CONSULT A TAX ADVISOR CONCERNING ANY FEDERAL, STATE, LOCAL OR
FOREIGN TAX CONSEQUENCES OF A SALE OF COMMON SHARES PURSUANT TO THE OFFER.
We are not required to purchase any Common Shares unless there are validly
tendered, and not withdrawn prior to the expiration of the Offer, Common Shares
representing at least two-thirds of the outstanding Common Shares on a fully
diluted basis, after giving effect to the exercise or conversion of all
options, rights, units of common limited partnership interests and other
securities exercisable or convertible into such Common Shares (the
1
"Minimum Condition"). Pursuant to shareholder and unitholder agreements entered
into in connection with the Merger Agreement, holders of Common Shares and
Common Shares issuable upon the conversion of units of common limited
partnership interests (the "Units") in Cabot Industrial Properties, L.P., a
Delaware limited partnership ("Cabot LP"), are obligated to tender Common
Shares representing approximately 7.5% of the outstanding Common Shares on a
fully diluted basis, including, without limitation, all Common Shares issuable
upon the conversion of any convertible securities or upon the exercise or
conversion of any Units, options, warrants or rights (such percentage may be
reduced to the extent that such securities (other than Units) have not been
converted or exercised prior to the expiration of the Offer), pursuant to the
Offer. We reserve the right (subject to the applicable rules and regulations of
the Securities and Exchange Commission (the "SEC") and subject to the approval
of Cabot), to waive or reduce the Minimum Condition. The Offer is also subject
to certain other terms and conditions. See Sections 1 and 14.
We are making the Offer under the Agreement and Plan of Merger (the "Merger
Agreement"), dated as of October 28, 2001, among Rooster Acquisition Corp.,
CalWest, Cabot and Cabot LP. Pursuant to the Merger Agreement, if we acquire
the Common Shares tendered pursuant to the Offer, we will be merged (the
"Merger") with and into Cabot with Cabot surviving in accordance with the
Maryland General Corporation Law (the "MGCL") and Title 8 of the Corporations
and Associations Article of the Annotated Code of Maryland ("Title 8"),
pursuant to which each outstanding Common Share (other than Common Shares held
by us, CalWest and any direct or indirect subsidiaries of CalWest) will be
converted into the right to receive the applicable Offer Price upon the terms
and subject to the conditions provided in the Merger Agreement. If we acquire
pursuant to the Offer Common Shares entitled to cast at least two-thirds, but
less than 90%, of the votes entitled to be cast on the Merger, Cabot is
required to call a special meeting of its shareholders to consider and to vote
upon the Merger. The approval and adoption by Cabot of the Merger, the Merger
Agreement and the other transactions contemplated thereby require the
affirmative vote of the holders of Common Shares casting at least two-thirds of
the votes entitled to be cast (the "Cabot Shareholder Approval"). At any such
meeting, we shall vote our Common Shares in favor of the Merger. If we acquire
pursuant to the Offer or otherwise (including pursuant to the Common Share
Option (as defined herein)) Common Shares entitled to cast 90% or more of the
votes entitled to be cast on the Merger, no meeting of Cabot's shareholders is
required to approve the Merger. See Section 11.
THE OFFER DOES NOT CONSTITUTE A SOLICITATION OF PROXIES FOR ANY MEETING OF
THE SHAREHOLDERS OF CABOT. ANY SUCH SOLICITATION WILL BE MADE ONLY PURSUANT TO
SEPARATE PROXY MATERIALS FURNISHED PURSUANT TO THE REQUIREMENTS OF SECTION
14(A) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (THE "EXCHANGE ACT").
J.P. Morgan Securities Inc. ("JPMorgan"), Cabot's financial advisor, has
delivered to the Cabot Board of Trustees a written opinion, dated October 28,
2001, to the effect that, based upon and subject to the assumptions and
qualifications set forth in its opinion, as of the date of such opinion, the
consideration to be received by holders of Common Shares, in the aggregate,
pursuant to the Merger Agreement was fair from a financial point of view to
such holders (other than CalWest and its affiliates).
A copy of the JPMorgan opinion is included with Cabot's
Solicitation/Recommendation Statement on Schedule 14D-9, which is being mailed
with this document, and shareholders are urged to read the opinion in its
entirety, which sets forth the procedures followed, matters reviewed and
assumptions made by JPMorgan.
Cabot has informed us that, as of November 2, 2001, there were 41,251,871
Common Shares issued and outstanding (of which all are considered outstanding
for financial reporting purposes). Each holder of a Common Share is entitled to
one vote per share.
THE OFFER IS CONDITIONED UPON THE FULFILLMENT OF THE CONDITIONS DESCRIBED IN
SECTION 14 BELOW. THE OFFER WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME,
ON TUESDAY, DECEMBER 4, 2001, UNLESS WE EXTEND IT.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH YOU SHOULD READ CAREFULLY BEFORE YOU MAKE ANY
DECISION WITH RESPECT TO THE OFFER.
2
THE OFFER
1. TERMS OF THE OFFER; EXPIRATION DATE.
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any extension or
amendment), we will purchase at the Offer Price all Common Shares validly
tendered and not withdrawn in accordance with the procedures set forth in
Section 4 of this Offer to Purchase on or prior to the Expiration Date (as
defined below), subject to the acceptance procedures set forth in Section 2.
The term "Expiration Date" means 12:00 midnight, New York City time, on
Tuesday, December 4, 2001. We have agreed with Cabot that we will not terminate
or withdraw the Offer or extend the Expiration Date of the Offer without the
consent of Cabot; provided, that we may, without the consent of Cabot, (i) from
time to time, extend the Offer, if at the scheduled expiration date of the
Offer any of the conditions to the Offer described in Section 14 of this Offer
to Purchase (the "Tender Offer Conditions") have not been satisfied or earlier
waived, until such time as such conditions are satisfied or waived, (ii) from
time to time, extend the Offer for any period required by any rule, regulation,
interpretation or position of the SEC or the staff thereof applicable to the
Offer or (iii) extend the Offer for a total of not more than five business days
beyond the initial expiration date or the latest expiration date that would
otherwise be permitted under clauses (i) or (ii) of this sentence if, on such
expiration date, the Common Shares validly tendered pursuant to the Offer and
not withdrawn are sufficient to satisfy the Minimum Condition but, together
with all other Common Shares owned by us, are entitled to cast less than 90% of
the votes entitled to be cast on the Merger.
Without the prior written consent of Cabot, we shall not, and CalWest shall
cause us not to, (i) decrease the Offer Price or change the form of
consideration payable in the Offer (subject to adjustment in the event of an
increase in shares outstanding as a result of a stock split, stock dividend,
recapitalization or other similar event after the date of the Merger
Agreement), (ii) decrease the number of Common Shares sought in the Offer,
(iii) modify or amend the Tender Offer Conditions or impose conditions to the
Offer in addition to the Tender Offer Conditions, (iv) waive the Minimum
Condition, or (v) except as provided in the second, fourth and fifth paragraphs
of this Section 1, extend the Offer if all of the Tender Offer Conditions are
satisfied.
So long as the Merger Agreement is in effect, the Offer has been commenced
and the Tender Offer Conditions have not been satisfied or waived, we have
agreed to cause the Offer not to expire, subject, however, to CalWest's right
of termination under the Merger Agreement; provided, however, that we will not
be required to extend the Offer any time beyond (i) December 28, 2001, if the
Minimum Condition is not satisfied on December 28, 2001 or any date thereafter,
at CalWest's option, if the Minimum Condition continues to be unsatisfied on
any such date or (ii) the date that is 120 days from the date of Merger
Agreement. Notwithstanding the foregoing, in the event that the Tender Offer
Conditions have not been satisfied as the result of the failure of our lender
to fund its loan commitment to finance our purchase of the Common Shares as a
result of a specified, serious event relating to New York Stock Exchange
trading, commercial banking activities, war or a national emergency, or
national or international financial, political or economic conditions (see
Section 12 "Source and Amount of Funds"), we are required to extend the Offer
until such time (but in no event longer than 30 business days after the date on
which we first invoke such Tender Offer Condition as a reason for not
consummating the Offer) as our loan lender funds such loan commitment;
provided, that during such 30 business day period, we must use commercially
reasonable efforts, subject to any contractual restrictions binding upon us or
CalWest pursuant to such commitment letter, to obtain financing for the Offer
and the Merger on terms substantially similar and at least as favorable as the
terms of such commitment letter.
We may, in addition, provide a "subsequent offer period" (as contemplated by
Rule 14d-11 under the Exchange Act) of not less than three business days
following our acceptance for payment of Common Shares in the Offer.
If at the Expiration Date, the Tender Offer Conditions have not been
satisfied or earlier waived, then, subject to the provisions of the Merger
Agreement, we may extend the Expiration Date for an additional period
3
or periods of time until such conditions are satisfied or waived without the
consent of Cabot, by giving oral or written notice of the extension to the
Depositary. During any such extension, all Common Shares previously tendered
and not withdrawn will remain subject to the Offer and subject to your right to
withdraw Common Shares. See Section 4.
Notwithstanding any other provision of the Offer, neither we nor CalWest
shall be required to accept for payment or, subject to any applicable rules and
regulations of the SEC, including Rule 14e-1(c) promulgated under the Exchange
Act (relating to our obligation to pay for or return tendered Common Shares
promptly after termination or withdrawal of the Offer), pay for, and (subject
to any such rules or regulations) may delay the acceptance for payment of any
tendered Common Shares and (except as described above) amend or terminate the
Offer as to any tendered Common Shares if (i) the Minimum Condition shall not
have been satisfied or (ii) any applicable waiting period (and any extension
thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), shall not have expired or been terminated prior to the
expiration of the Offer or (iii) at any time after the date of the Merger
Agreement and prior to the expiration of the Offer, any of the events specified
in paragraphs (a) through (k) of Section 14 hereof shall occur and be
continuing or any event specified in any of the conditions specified therein
exists that in the reasonable discretion of CalWest, in any such case, and
regardless of the circumstances (including any action or inaction by CalWest)
giving rise to such condition, makes it inadvisable to proceed with the Offer
or the acceptance for payment of the Common Shares tendered and not withdrawn
pursuant to the Offer.
We acknowledge (i) that Rule 14e-1(c) under the Exchange Act requires us to
pay the consideration offered or return the Common Shares tendered promptly
after the termination or withdrawal of the Offer and (ii) that we may not delay
purchase of, or payment for (except while awaiting receipt of any governmental
approvals specified in Section 15), any Common Shares upon the occurrence of
any event specified in Section 14 without extending the period of time during
which the Offer is open.
The rights we reserve in the preceding paragraph are in addition to our
rights described in Section 14. Any extension, delay, termination or amendment
of the Offer will be followed as promptly as practicable by a public
announcement. An announcement in the case of an extension will be made no later
than 9:00 a.m., New York City time, on the next business day after the
previously scheduled Expiration Date. Without limiting the manner in which we
may choose to make any public announcement, subject to applicable law
(including Rules 14d-4(d) and 14d-6(c) under the Exchange Act, which require
that material changes be promptly disseminated to holders of Common Shares), we
will have no obligation to publish, advertise or otherwise communicate any such
public announcement other than by issuing a release to the Dow Jones News
Service.
If we make a material change in the terms of the Offer or if we waive a
material condition to the Offer, we will extend the Offer and disseminate
additional tender offer materials to the extent required by Rules 14d-4(d),
14d-6(c) and 14e-1 under the Exchange Act. The minimum period during which a
tender offer must remain open following material changes in the terms of the
Offer, other than a change in price or a change in the percentage of securities
sought, depends upon the facts and circumstances, including the materiality of
the changes. In the SEC's view, an offer should remain open for a minimum of
five business days from the date the material change is first published, sent
or given to shareholders, and, if material changes are made with respect to
information that approaches the significance of price and the percentage of
securities sought, a minimum of ten business days may be required to allow for
adequate dissemination and investor response. With respect to a change in price
or such percentage, a minimum ten business day period from the date of the
change is generally required to allow for adequate dissemination to
shareholders. Accordingly, if prior to the Expiration Date, we decrease the
number of Common Shares being sought, or increase or decrease the consideration
offered pursuant to the Offer, and if the Offer is scheduled to expire at any
time earlier than the period ending on the tenth business day from the date
that notice of the increase or decrease is first published, sent or given to
holders of Common Shares, we will extend the Offer at least until the
expiration of such period of ten business days. For purposes of the Offer, a
"business day" means any day other than a Saturday, Sunday or a federal holiday
and consists of the time period from 12:01 a.m. through 12:00 midnight, New
York City time.
4
The Offer is conditioned upon the satisfaction of the Tender Offer
Conditions, including the Minimum Condition. We reserve the right (but are not
obligated), in accordance with applicable rules and regulations of the SEC, to
waive any or all of those conditions, other than the Minimum Condition. In the
event that we waive any Tender Offer Condition, the SEC may, if the waiver is
deemed to constitute a material change to the information previously provided
to the shareholders, require that the Offer remain open for an additional
period of time and/or that we disseminate information concerning such waiver.
Cabot has provided us with its shareholder lists and security position
listings for the purpose of disseminating the Offer to holders of Common
Shares. We will mail this Offer to Purchase, the related Letter of Transmittal
and other relevant materials to record holders of Common Shares and we will
furnish the materials to brokers, dealers, commercial banks, trust companies
and similar persons whose names, or the names of whose nominees, appear on the
security holder lists or, if applicable, who are listed as participants in a
clearing agency's security position listing, for subsequent transmittal to
beneficial owners of Common Shares.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT.
Upon the terms and subject to the conditions of the Offer (including, if we
extend or amend the Offer, the terms and conditions of the Offer as so extended
or amended), we will purchase, by accepting for payment, and will pay for, all
of the Common Shares validly tendered and not withdrawn (as permitted by
Section 4) prior to the Expiration Date promptly after the later of (a) the
Expiration Date and (b) the satisfaction or waiver of the conditions to the
Offer set forth in Section 14. In addition, subject to applicable rules of the
SEC, we reserve the right to delay acceptance for payment of Common Shares
pending receipt of any regulatory or governmental approvals specified in
Section 15.
In all cases, we will pay for Common Shares purchased in the Offer only
after timely receipt by the Depositary of (a) certificates representing such
Common Shares ("Share Certificates") or timely confirmation (a "Book-Entry
Confirmation") of the book-entry transfer of the Common Shares into the
Depositary's account at The Depository Trust Company (the "Book-Entry Transfer
Facility") pursuant to the procedures set forth in Section 3; (b) the Letter of
Transmittal (or a facsimile thereof), properly completed and duly executed,
with any required signature guarantees or an Agent's Message (as defined below)
in connection with a book-entry transfer of such Common Shares; and (c) any
other documents required by the Letter of Transmittal.
The term "Agent's Message" means a message transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has
received an express acknowledgment from the participant in the Book-Entry
Transfer Facility tendering the Common Shares which are the subject of the
Book-Entry Confirmation that the participant has received and agrees to be
bound by the terms of the Letter of Transmittal and that we may enforce that
agreement against the participant.
For purposes of the Offer, we will be deemed to have accepted for payment,
and purchased, Common Shares validly tendered and not withdrawn if, as and when
we give oral or written notice to the Depositary of our acceptance of the
Common Shares for payment pursuant to the Offer. In all cases, upon the terms
and subject to the conditions of the Offer, payment for Common Shares purchased
pursuant to the Offer will be made by deposit of the purchase price for the
Common Shares with the Depositary, which will act as agent for tendering
shareholders for the purpose of receiving payment from us and transmitting
payment to validly tendering shareholders.
UNDER NO CIRCUMSTANCES WILL WE PAY INTEREST ON THE PURCHASE PRICE FOR COMMON
SHARES, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH
PAYMENT.
If we do not purchase any tendered Common Shares pursuant to the Offer for
any reason or if you submit Share Certificates representing more Common Shares
than you wish to tender, we will return Share Certificates
5
representing unpurchased or untendered Common Shares, without expense to you
(or, in the case of Common Shares delivered by book-entry transfer into the
Depositary's account at the Book-Entry Transfer Facility pursuant to the
procedures set forth in Section 3, the Common Shares will be credited to an
account maintained within the Book-Entry Transfer Facility), as promptly as
practicable following the expiration, termination or withdrawal of the Offer.
IF, PRIOR TO THE EXPIRATION DATE, WE INCREASE THE PRICE OFFERED TO HOLDERS
OF COMMON SHARES IN THE OFFER, WE WILL PAY THE INCREASED PRICE TO ALL HOLDERS
OF COMMON SHARES THAT WE PURCHASE IN THE OFFER, WHETHER OR NOT THE COMMON
SHARES WERE TENDERED BEFORE THE INCREASE IN PRICE.
We reserve the right, subject to the provisions of the Merger Agreement, to
transfer or assign, in whole or from time to time in part, to one or more of
our subsidiaries (wholly owned or otherwise) the right to purchase all or any
portion of the Common Shares tendered in the Offer, but any such transfer or
assignment will not relieve us of our obligations under the Offer or prejudice
your rights to receive payment for Common Shares validly tendered and accepted
for payment in the Offer.
3. PROCEDURES FOR ACCEPTING THE OFFER AND TENDERING COMMON SHARES.
Valid Tender of Shares
Except as set forth below, in order for you to tender Common Shares in the
Offer, the Depositary must receive the Letter of Transmittal (or a facsimile),
properly completed and signed, together with any required signature guarantees
or an Agent's Message in connection with a book-entry delivery of Common Shares
and any other documents that the Letter of Transmittal requires at one of its
addresses set forth on the back cover of this Offer to Purchase on or prior to
the Expiration Date and either (a) you must deliver Share Certificates
representing tendered Common Shares to the Depositary or you must cause your
Common Shares to be tendered pursuant to the procedure for book-entry transfer
set forth below and the Depositary must receive Book-Entry Confirmation, in
each case on or prior to the Expiration Date or (b) you must comply with the
guaranteed delivery procedures set forth below.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES, THE LETTER OF TRANSMITTAL AND
ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY
TRANSFER FACILITY, IS AT YOUR OPTION AND SOLE RISK, AND DELIVERY WILL BE
CONSIDERED MADE ONLY WHEN THE DEPOSITARY ACTUALLY RECEIVES THE SHARE
CERTIFICATES. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, YOU SHOULD ALLOW
SUFFICIENT TIME TO ENSURE TIMELY DELIVERY.
Book-Entry Transfer
The Depositary will make a request to establish an account with respect to
the Common Shares at the Book-Entry Transfer Facility for purposes of the Offer
within two business days after the date of this Offer to Purchase. Any
financial institution that is a participant in the system of the Book-Entry
Transfer Facility may make book-entry delivery of Common Shares by causing the
Book-Entry Transfer Facility to transfer the Common Shares into the
Depositary's account at the Book-Entry Transfer Facility in accordance with the
Book-Entry Transfer Facility's procedures. However, although Common Shares may
be delivered through book-entry transfer into the Depositary's account at the
Book-Entry Transfer Facility, the Depositary must receive the Letter of
Transmittal (or facsimile), properly completed and signed, with any required
signature guarantees, or an Agent's Message in connection with a book-entry
transfer, and any other required documents, at one of its addresses set forth
on the back cover of this Offer to Purchase on or before the Expiration Date,
or you must comply with the guaranteed delivery procedure set forth below.
6
DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH
THE BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO
THE DEPOSITARY.
Signature Guarantees
A bank, broker, dealer, credit union, savings association or other entity
which is a member in good standing of the Securities Transfer Agents Medallion
Program, or by any other "eligible guarantor institution" as such term is
defined in Rule 17Ad-15 promulgated under the Exchange Act, (each of the
foregoing being an "Eligible Institution"), must guarantee signatures on all
Letters of Transmittal, unless the Common Shares tendered are tendered (a) by a
registered holder of Common Shares who has not completed either the box labeled
"Special Payment Instructions" or the box labeled "Special Delivery
Instructions" on the Letter of Transmittal or (b) for the account of an
Eligible Institution. See Instruction 1 of the Letter of Transmittal.
If the Share Certificates are registered in the name of a person other than
the signer of the Letter of Transmittal, or if payment is to be made to, or
Share Certificates for unpurchased Common Shares are to be issued or returned
to, a person other than the registered holder, then the tendered Share
Certificates must be endorsed or accompanied by appropriate stock powers,
signed exactly as the name or names of the registered holder or holders appear
on the Share Certificates, with the signatures on the Share Certificates or
stock powers guaranteed by an Eligible Institution as provided in the Letter of
Transmittal. See Instructions 1 and 5 of the Letter of Transmittal.
If the Share Certificates are forwarded separately to the Depositary, a
properly completed and duly executed Letter of Transmittal (or facsimile) must
accompany each delivery of Share Certificates.
Guaranteed Delivery
If you want to tender Common Shares in the Offer and your Share Certificates
are not immediately available or time will not permit all required documents to
reach the Depositary on or before the Expiration Date or the procedures for
book-entry transfer cannot be completed on time, your Common Shares may
nevertheless be tendered if you comply with all of the following guaranteed
delivery procedures:
(a) your tender is made by or through an Eligible Institution;
(b) the Depositary receives, as described below, a properly completed and
signed Notice of Guaranteed Delivery, substantially in the form made
available by us, on or before the Expiration Date; and
(c) the Depositary receives the Share Certificates (or a Book-Entry
Confirmation) representing all tendered Common Shares, in proper form for
transfer together with a properly completed and duly executed Letter of
Transmittal (or facsimile), with any required signature guarantees (or, in
the case of a book-entry transfer, an Agent's Message) and any other
documents required by the Letter of Transmittal within three trading days
after the date of execution of the Notice of Guaranteed Delivery. A "trading
day" is any day on which the New York Stock Exchange ("NYSE") is open for
business.
You may deliver the Notice of Guaranteed Delivery by hand, mail or facsimile
transmission to the Depositary. The Notice of Guaranteed Delivery must include
a guarantee by an Eligible Institution in the form set forth in the Notice of
Guaranteed Delivery.
Notwithstanding any other provision of the Offer, we will pay for Common
Shares only after timely receipt by the Depositary of Share Certificates for,
or of Book-Entry Confirmation with respect to, the Common Shares, a properly
completed and duly executed Letter of Transmittal (or facsimile thereof),
together with any required signature guarantees (or, in the case of a
book-entry transfer, an Agent's Message) and any other documents required by
the Letter of Transmittal. Accordingly, payment might not be made to all
tendering shareholders at the same time, and will depend upon when the
Depositary receives Share Certificates or Book-Entry Confirmation that the
Common Shares have been transferred into the Depositary's account at the
Book-Entry Transfer Facility.
7
Conversion of Units Into Common Shares
The purchase by us of the Common Shares may include the Common Shares,
including the associated Rights, issuable upon conversion of the Units. Each
holder of the Units may participate in the Offer by electing to convert his,
her or its Units into Common Shares pursuant to the terms of the Amended and
Restated Agreement of Limited Partnership of Cabot LP and then validly
tendering the Common Shares prior to the Expiration Date, subject to the
conditions of the Offer and in accordance with the procedure set forth in the
Offer. Cabot will provide the holders of Units with instructions regarding the
conversion of their Units and the immediate tender of the Common Shares issued
upon the conversion into the Offer. Each holder of Units shall be required to
execute and deliver to Cabot, as the general partner of Cabot LP, a notice of
conversion agreeing to convert their Units to Common Shares, subject to Tender
Offer Conditions being satisfied or earlier waived. Cabot has agreed to hold
the notices of conversion in escrow until immediately prior to the closing of
the Offer.
Backup Federal Income Tax Withholding
Under the backup federal income tax withholding laws applicable to certain
shareholders (other than certain exempt shareholders, including, among others,
all corporations and certain foreign individuals), the Depositary may be
required to withhold up to 30.5% of the amount of any payments made to those
shareholders pursuant to the Offer. To prevent backup federal income tax
withholding, you must provide the Depositary with your correct taxpayer
identification number and certify that you are not subject to backup federal
income tax withholding by completing the Substitute Form W-9 included in the
Letter of Transmittal. See Instruction 11 of the Letter of Transmittal.
If you are a non-resident alien or foreign entity not subject to backup
withholding, you must give to the Depositary the appropriate completed Form W-8
prior to the receipt of any payment.
Tendering Shareholder's Representation and Warranty; Our Acceptance Constitutes
an Agreement
A tender of Common Shares pursuant to any of the procedures described above
will constitute the tendering shareholder's acceptance of the terms and
conditions of the Offer. Our acceptance for payment of Common Shares tendered
pursuant to the Offer will constitute a binding agreement between the tendering
shareholder and Rooster Acquisition Corp. upon the terms and subject to the
conditions of the Offer.
Appointment as Proxy
By executing the Letter of Transmittal, you irrevocably appoint our
designees, and each of them, as your agents, attorneys-in-fact and proxies,
with full power of substitution, in the manner set forth in the Letter of
Transmittal, to the full extent of your rights with respect to the Common
Shares that you tender and that we accept for payment and with respect to any
and all other Common Shares and other securities or rights issued or issuable
in respect of those Common Shares on or after the date of this Offer to
Purchase. All such powers of attorney and proxies will be considered
irrevocable and coupled with an interest in the tendered Common Shares. This
appointment will be effective when we accept your Common Shares for payment in
accordance with the terms of the Offer. Upon such acceptance for payment, all
other powers of attorney and proxies given by you with respect to your Common
Shares and such other securities or rights prior to such payment will be
revoked, without further action, and no subsequent powers of attorney and
proxies may be given by you (and, if given, will not be deemed effective). Our
designees will, with respect to the Common Shares and such other securities and
rights for which the appointment is effective, be empowered to exercise all
your voting and other rights as they in their sole discretion may deem proper
at any annual or special meeting of Cabot's shareholders, or any adjournment or
postponement thereof, or by consent in lieu of any such meeting or otherwise.
In order for Common Shares to be deemed validly tendered, immediately upon the
acceptance for payment of such Common Shares, we or our designees must be able
to exercise full voting, consent and other rights with respect to such Common
Shares and other securities, including voting at any meeting of shareholders.
8
Determination of Validity
All questions as to the form of documents and the validity, eligibility
(including time of receipt) and acceptance for payment of any tender of Common
Shares will be determined by us, in our sole discretion, which determination
will be final and binding on all parties. We reserve the absolute right to
reject any or all tenders determined by us not to be in proper form or the
acceptance of or payment for which may, in the opinion of our counsel, be
unlawful. We also reserve the absolute right to waive any of the conditions of
the Offer or any defect or irregularity in any tender of Common Shares of any
particular shareholder whether or not similar defects or irregularities are
waived in the case of other shareholders.
Our interpretation of the terms and conditions of the Offer will be final
and binding. No tender of Common Shares will be deemed to have been validly
made until all defects and irregularities with respect to the tender have been
cured or waived by us. None of CalWest, Rooster Acquisition Corp. nor any of
their respective affiliates or assigns, the Dealer Managers, the Depositary,
the Information Agent or any other person or entity will be under any duty to
give any notification of any defects or irregularities in tenders or incur any
liability for failure to give any such notification.
4. WITHDRAWAL RIGHTS.
Except as described in this Section 4, tenders of Common Shares made in the
Offer are irrevocable. However, you may withdraw Common Shares that you have
previously tendered in the Offer at any time on or before the Expiration Date.
If, for any reason, acceptance for payment of any Common Shares tendered in
the Offer is delayed, or we are unable to accept for payment or pay for Common
Shares tendered in the Offer, then, without prejudice to our rights set forth
in this document, the Depositary may, nevertheless, on our behalf, retain
Common Shares that you have tendered, and you may not withdraw your Common
Shares except to the extent that you are entitled to and duly exercise
withdrawal rights as described in this Section 4. Any such delay will be by an
extension of the Offer to the extent required by law.
In order for your withdrawal to be effective, you must deliver a written,
telegraphic or facsimile transmission notice of withdrawal to the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase
within the time set forth in the first paragraph of this section. Any such
notice of withdrawal must specify your name, the number of Common Shares that
you want to withdraw, and (if Share Certificates have been tendered) the name
of the registered holder of the Common Shares as shown on the Share
Certificate, if different from your name. If Share Certificates have been
delivered or otherwise identified to the Depositary, then prior to the physical
release of such Share Certificates, you must submit the serial numbers shown on
the particular Share Certificates evidencing the Common Shares to be withdrawn
and an Eligible Institution must guarantee the signature on the notice of
withdrawal, except in the case of Common Shares tendered for the account of an
Eligible Institution. If Common Shares have been tendered pursuant to the
procedures for book-entry transfer set forth in Section 3, the notice of
withdrawal must also specify the name and number of the account of an Eligible
Institution. If Common Shares have been tendered pursuant to the procedures for
book-entry transfer set forth in Section 3, the notice of withdrawal must also
specify the name and number of the account at the Book-Entry Transfer Facility
to be credited with the withdrawn Common Shares, and otherwise comply with the
Book Entry Transfer Facility's procedures, in which case a notice of withdrawal
will be effective if delivered to the Depositary by any method of delivery
described in the first sentence of this paragraph. You may not rescind a
withdrawal of Common Shares. Any Common Shares that you withdraw will be
considered not validly tendered for purposes of the Offer, but you may tender
your Common Shares again at any time before the Expiration Date by following
any of the procedures described in Section 3.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by us, in our sole discretion, which
determination will be final and binding. None of CalWest, Rooster Acquisition
Corp. nor any of their respective affiliates or assigns, the Dealer Managers,
the Depositary,
9
the Information Agent or any other person or entity will be under any duty to
give any notification of any defects or irregularities in any notice of
withdrawal or incur any liability for failure to give any such notification.
5. MATERIAL FEDERAL INCOME TAX CONSEQUENCES.
Your receipt of cash for Common Shares in the Offer or the Merger will be a
taxable transaction for federal income tax purposes and may also be a taxable
transaction under applicable state, local, foreign and other tax laws. For
federal income tax purposes, if you sell or exchange your Common Shares for
cash in the Offer or the Merger (or upon exercise of appraisal rights, if any
are available), you will generally recognize gain or loss equal to the
difference between the amount of cash received and your tax basis for the
Common Shares that you sold or exchanged. Any recognized gain or loss will be
capital gain or loss (assuming you hold your Common Shares as a capital asset)
and any such capital gain or loss will be long term if, as of the date of sale
or exchange, you have held the Common Shares for more than one year, or will be
short term if, as of such date, you have held the Common Shares for one year or
less.
The discussion above may not be applicable to certain types of shareholders,
including (i) shareholders who acquired Common Shares through the exercise of
employee stock options or otherwise as compensation, (ii) shareholders who hold
their Common Shares as part of a hedge, straddle or conversion transaction,
(iii) individuals who are not citizens or residents of the United States, (iv)
foreign corporations, (v) dealers or brokers, or (vi) entities that are
otherwise subject to special tax treatment under the Internal Revenue Code of
1986, as amended (the "Code") (such as insurance companies, tax-exempt
entities, real estate investment trusts and regulated investment companies).
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION ONLY. YOU ARE URGED TO CONSULT YOUR TAX ADVISOR WITH RESPECT TO THE
SPECIFIC TAX CONSEQUENCES TO YOU OF THE OFFER AND MERGER, INCLUDING FEDERAL,
STATE, LOCAL AND FOREIGN TAX CONSEQUENCES. IN ADDITION, EACH HOLDER OF UNITS
WHO CONVERTS UNITS INTO COMMON SHARES IS URGED TO CONSULT HIS, HER OR ITS TAX
ADVISOR WITH RESPECT TO THE TAX CONSEQUENCES TO SUCH HOLDER OF SUCH CONVERSION,
AS WELL AS OF THE OFFER AND MERGER.
6. PRICE RANGE OF THE SHARES; DIVIDENDS.
According to Cabot's Annual Report on Form 10-K for the year ended December
31, 2000, the Common Shares are principally traded on the NYSE under the symbol
"CTR." The following table sets forth, for the periods indicated, the reported
high and low sale prices for the Common Shares on the NYSE as reported in such
Form 10-K with respect to periods occurring in years 1999 and 2000 and as
reported in published financial sources with respect to periods occurring in
the current year. The table also sets forth the quarterly cash dividends per
Common Share payable as of the date of declaration during 1999, 2000 and 2001,
as reported by Cabot.
HIGH LOW DIVIDENDS
------ ------ ---------
1999
First Quarter...................... $20.44 $18.13 $0.340
Second Quarter..................... 22.00 18.25 0.340
Third Quarter...................... 23.00 18.00 0.340
Fourth Quarter..................... 20.50 17.38 0.340
2000
First Quarter...................... 20.63 17.00 0.355
Second Quarter..................... 20.38 17.56 0.355
Third Quarter...................... 20.50 18.81 0.355
Fourth Quarter..................... 20.75 18.00 0.355
2001
First Quarter...................... 20.40 18.51 0.370
Second Quarter..................... 21.00 19.00 0.370
Third Quarter...................... 21.75 20.05 0.370
October 1, 2001 to November 2, 2001 23.84 19.50 N/A
10
On October 26, 2001, the last full day of trading of Common Shares prior to
the announcement of the execution of the Merger Agreement by CalWest and Cabot,
the reported closing price per Common Share on the NYSE was $19.95 and on
November 2, 2001, the last full day of trading of Common Shares prior to the
commencement of the Offer, the reported closing price per Common Share on the
NYSE was $23.83. Holders of Common Shares are urged to obtain current market
quotations for their Common Shares.
Under the terms of the Merger Agreement, during the period from the date of
the Merger Agreement to the earlier of the termination of the Merger Agreement
or the Effective Time (as defined in Section 11 under the heading "The Merger
Agreement--Trustees and Directors") of the Merger, neither Cabot nor any Cabot
subsidiary is permitted, unless consented to by CalWest, to declare, set aside
or pay any dividends on, or make any other distributions in respect of, any
Common Shares or the partnership interests, stock or other equity interests in
any Cabot subsidiary that is not directly or indirectly wholly owned by Cabot,
except for dividends or distributions on the Common Shares declared with
respect to the quarter ended September 30, 2001 and distributions on preferred
units in the Cabot LP as required by their terms, and provided, that Cabot may
make dividend payments it is required to make by the Code in order to maintain
real estate investment trust (as defined in the Code) ("REIT") status and those
that are sufficient to eliminate any federal tax liability. However, pursuant
to the Merger Agreement, Cabot, each Cabot subsidiary and any affiliate of any
of them may take or omit to take any action, or permit any status to exist, in
order to maintain Cabot's status as a REIT under the Code or the status of the
Cabot LP or any other subsidiary organized as a partnership or limited
liability company as a partnership for tax purposes for any period.
7. POSSIBLE EFFECTS OF THE OFFER ON THE MARKET FOR THE COMMON SHARES; STOCK
EXCHANGE LISTING; EXCHANGE ACT REGISTRATION; MARGIN REGULATIONS.
Possible Effects of the Offer on the Market for the Common Shares
The purchase of Common Shares pursuant to the Offer will reduce the number
of Common Shares that might otherwise trade publicly and could adversely affect
the liquidity and market value of the remaining Common Shares held by the
public. The purchase of Common Shares pursuant to the Offer can also be
expected to reduce the number of holders of Common Shares. We cannot predict
whether the reduction in the number of Common Shares that might otherwise trade
publicly would have an adverse or beneficial effect on the market price for, or
marketability of, the Common Shares or whether it would cause future market
prices to be greater or less than the Offer Price.
Stock Exchange Listing
The Common Shares may be subject to delisting by the NYSE as a result of
completion of the Offer. According to the NYSE's published guidelines, the NYSE
would consider delisting the Common Shares if, among other things, (a) the
total number of holders of Common Shares is less than 400; (b) the total number
of holders of Common Shares is less than 1,200 and the average monthly trading
volume over the most recent 12 month period is less than 100,000 Common Shares;
(c) the number of publicly held Common Shares (excluding the holdings of
officers, directors and their families and other concentrated holdings of 10%
or more) is less than 600,000; (d) Cabot's total global market capitalization
is less than $50.0 million and the total shareholders' equity is less than
$50.0 million; (e) Cabot's average global market capitalization over a
consecutive 30 trading-day period is less than $15.0 million; or (f) the
average closing price per Common Share is less than $1.00 over a consecutive 30
trading-day period. If, as a result of the purchase of Common Shares pursuant
to the Offer or otherwise, the Common Shares no longer meet the requirements of
the NYSE for continued listing and the listing of the Common Shares is
discontinued, the market for the Common Shares could be adversely affected.
If the NYSE were to delist the Common Shares, it is possible that the Common
Shares would continue to trade on another securities exchange or in the
over-the-counter market and that prices or other quotations would be reported
by such exchange or through the National Association of Securities Dealers
Automated Quotations
11
System or other sources. The extent of the public market for the Common Shares
and the availability of such quotations would depend upon such factors as the
number of shareholders and/or the aggregate market value of the publicly traded
Common Shares remaining at such time, the interest in maintaining a market in
the Common Shares on the part of securities firms, the possible termination of
registration under the Exchange Act as described below and other factors. We
cannot predict whether the reduction in the number of Common Shares that might
otherwise trade publicly, if any, effected by the Offer would have an adverse
or beneficial effect on the market price for or marketability of the Common
Shares or whether it would cause future market prices to be greater or less
than the Offer Price.
Exchange Act Registration
The Common Shares are currently registered under the Exchange Act. Such
registration may be subject to termination as a result of completion of the
Offer. Registration of the Common Shares may be terminated upon application by
Cabot to the SEC if the Common Shares are not listed on a "national securities
exchange" and there are fewer than 300 record holders of Common Shares.
Termination of registration of the Common Shares under the Exchange Act may
reduce the information that Cabot would be required to furnish to its
shareholders and the SEC and would make certain provisions of the Exchange Act,
such as the short-swing profit recovery provisions of Section 16(b) and the
requirements of furnishing a proxy statement in connection with shareholders'
meetings pursuant to Section 14(a) or 14(c) and the related requirement of
delivery to shareholders of an annual report, no longer applicable to Cabot. If
the Common Shares are no longer registered under the Exchange Act, the
requirements of Rule 13e-3 under the Exchange Act with respect to "going
private" transactions would no longer be applicable to Cabot. In addition, the
ability of "affiliates" of Cabot and persons holding "restricted securities" of
Cabot to dispose of such securities pursuant to Rule 144 promulgated under the
Securities Act of 1933, as amended, may be impaired or, with respect to certain
persons, eliminated. We believe that the purchase of the Common Shares pursuant
to the Offer may result in the Common Shares becoming eligible for
deregistration under the Exchange Act, and it is our intention to cause Cabot
to make an application for termination of registration of the Common Shares as
soon as possible after successful completion of the Offer if the Common Shares
are then eligible for such termination.
If registration of the Common Shares is not terminated prior to the Merger,
then the registration of the Common Shares under the Exchange Act and the
listing of the Common Shares on the NYSE will be terminated following the
completion of the Merger.
Other than the Common Shares, no other shares of Cabot are currently
registered under the Exchange Act.
Margin Regulations
The Common Shares are currently "margin securities" under the regulations of
the Board of Governors of the Federal Reserve System, which have the effect,
among other things, of allowing brokers to extend credit on the collateral of
the Common Shares for the purpose of buying, carrying or trading in securities
("Purpose Loans"). If the Common Shares are delisted by the NYSE and are not
subsequently listed on another national securities exchange or on the NASDAQ
Stock Market, the Common Shares would no longer constitute "margin securities"
and therefore could no longer be used for Purpose Loans made by brokers.
8. CERTAIN INFORMATION CONCERNING CABOT.
The information concerning Cabot in this Offer to Purchase has been taken
from or is based upon publicly available documents and records on file with the
SEC and other public sources. Although we have no knowledge that any such
information is untrue, we are unable to verify the accuracy or completeness of
information contained in this Offer to Purchase with respect to Cabot or any of
its subsidiaries or affiliates.
Cabot, a Maryland real estate investment trust, was formed on October 10,
1997. Cabot's principal executive offices are located at Two Center Plaza,
Suite 200, Boston, Massachusetts 02108, and its telephone
12
number is (617) 723-0900. Cabot is organized in what is commonly referred to as
an umbrella partnership, or "UPREIT" structure, meaning that its properties are
held and its business is conducted primarily through a limited partnership,
Cabot LP, of which Cabot is the sole general partner. Cabot is an internally
managed, fully integrated real estate company which, through Cabot LP, acquires
or develops, leases, manages and holds for investment industrial real estate
properties in principal markets throughout the United States. At June 30, 2001,
Cabot owned a geographically diversified portfolio of 363 industrial properties
having an aggregate of approximately 41 million rentable square feet,
approximately 95.9% of which space was leased to 724 tenants. The properties
are located in 21 markets in each of the five principal regions (West, Midwest,
Northeast, Southeast and Southwest) of the United States. In addition to
acquiring existing industrial properties, Cabot is engaged in the development
and construction of new properties. The construction and leasing functions of
its development activities are conducted through relationships with local
builders selected by Cabot.
Cabot has elected to be taxed as a REIT under Sections 856 through 860 of
the Code. As a REIT, Cabot generally will not be subject to federal income tax
to the extent it distributes its taxable income for each tax year to its
shareholders. REITs are also subject to a number of organizational and
operational requirements. If Cabot fails to qualify as a REIT in any taxable
year, Cabot will be subject to federal income tax (including any applicable
alternative minimum tax) on its taxable income at regular corporate tax rates.
Certain Financial Projections. Cabot does not, as a matter of course, make
public forecasts or projections as to its future financial performance.
However, in connection with the negotiations between RREEF and Cabot, in June
2001 Cabot prepared annual net operating income projections on a
property-by-property basis for a ten year period solely for use by RREEF and
its representatives in assessing the valuation of Cabot. The projections
provided by Cabot did not constitute property budgets, but were based upon (i)
the actual leases in place for each such property as of the date that the
property-by-property projections were provided to RREEF and (ii) assumptions
about future leasing activity for unleased spaces and spaces anticipated to be
vacant following expiration of any such lease. Set forth below is an aggregate
sum on an annual basis of such net operating income projections for the
properties then held by Cabot (the "Projections"). These Projections should be
read together with the financial statements of Cabot that can be obtained from
the SEC as described below.
2001 2002 2003 2004 2005 2006 2007 2008
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Net Operating
Income From Total
Consolidation.... $176,604,021 $183,802,915 $190,340,076 $197,941,969 $204,517,421 $207,896,905 $212,682,304 $220,101,084
2009 2010
------------ ------------
Net Operating
Income From Total
Consolidation.... $227,166,968 $221,006,001
The Projections were prepared solely for internal use and not with a view to
public disclosure or compliance with the published guidelines of the SEC or the
American Institute of Certified Public Accountants regarding projections and
were not prepared with the assistance of, or reviewed by, independent
accountants. The Projections are included in this Offer to Purchase solely
because such information was furnished to RREEF by Cabot. The Projections were
not prepared in accordance with generally accepted accounting principles and
were not audited or reviewed by any independent accounting firm, nor did any
such firm perform any other services with respect thereto. The Projections are
based on a variety of assumptions relating to the business of Cabot, industry
performance, general business and economic conditions and other matters, which
are inherently subject to significant uncertainties and contingencies, many of
which are beyond Cabot's control. These assumptions involve judgments with
respect to, among other things, future economic and competitive conditions,
inflation rates and future business conditions. Accordingly, there can be no
assurance that the assumptions made in preparing the Projections will prove
accurate, and actual results may be materially greater or less than those
contained in the Projections. The inclusion of the Projections herein should
not be regarded as an indication that Cabot, RREEF, CalWest or their respective
affiliates or representatives considered or consider the Projections to be a
reliable prediction of future events, and the Projections should not be relied
upon as such. None of RREEF, CalWest or any of their respective affiliates
assumes any responsibility for the validity, reasonableness, accuracy or
completeness of the Projections. None of Cabot, RREEF or CalWest or their
affiliates is under any obligation to or has any intention to update the
Projections at any future time.
13
Cabot is subject to the information and reporting requirements of the
Exchange Act and in accordance therewith is obligated to file reports and other
information with the SEC relating to its business, financial condition and
other matters. Information, as of particular dates, concerning Cabot's trustees
and officers, their compensation, stock options granted to them, the principal
holders of Cabot's securities, any material interests of such persons in
transactions with Cabot and other matters is required to be disclosed in proxy
statements distributed to shareholders and filed with the SEC. Such reports,
proxy statements and other information should be available for inspection at
the public reference room at the SEC's office at 450 Fifth Street, N.W.,
Washington, D.C. 20549. Information regarding the public reference facilities
may be obtained from the SEC by telephoning 1-800-SEC-0330. Copies may be
obtained, by mail, upon payment of the SEC's customary charges, by writing to
its Public Reference Section at 450 Fifth Street, N.W., Washington, D.C. 20549
and can be accessed electronically on the SEC's website at http://www.sec.gov.
Such material should also be available for inspection at the NYSE, 20 Broad
Street, New York, New York 10005.
9. CERTAIN INFORMATION CONCERNING CALWEST AND ROOSTER ACQUISITION CORP.
CalWest is a California limited liability company created in 1998 as a joint
venture between CalPERS and RREEF and its affiliates to invest in industrial
properties in the Western United States. CalPERS has a 98.0% membership
interest and RoCAL, L.L.C., a Delaware limited liability company (and an
affiliate of RREEF), has a 2.0% membership interest in CalWest. Pursuant to the
operating agreement of CalWest among CalPERS, RoCAL, L.L.C. and RREEF, dated as
of March 31, 1998, as amended, RREEF was appointed manager of CalWest. In the
capacity of manager, RREEF has overall management and control of the business
and affairs of CalWest, subject to the investment objectives and policies,
program guidelines, budgets and annual investment plans of CalPERS. CalWest
acquires, owns, develops, manages, leases, finances and sells industrial real
estate properties (generally classified as warehouse, manufacturing, office
showroom, R&D and flex space properties) in the Western United States.
Currently, the assets of CalWest exceed $2.1 billion in market value and
CalWest's total outstanding debt is less than $250 million.
Rooster Acquisition Corp. is a newly formed Maryland corporation organized
in connection with the Offer and the Merger, and is a wholly owned subsidiary
of CalWest.
The principal executive offices of CalWest and Rooster Acquisition Corp. are
located at 101 California Street, 26th Floor, San Francisco, California
94111-5853. The telephone number at such offices is (415) 781-3300.
RREEF is a wholly owned indirect subsidiary of RoProperty Holding B.V. (a
Dutch company ("RoProperty")), which in turn is owned by four publicly held
Dutch companies (Rodamco North America N.V., Haslemere N.V., and Rodamco Europe
N.V. (collectively, with RoProperty, the "Rodamco Parties") and Robeco Groep
N.V. (which holds a minority interest)). The principal executive office of
RREEF is located at 101 California Street, 26th Floor, San Francisco,
California 94111-5853. The telephone number at such office is (415) 781-3300.
The address of Rodamco North America N.V. is Coolsingel 120, Postbus 973,
NL-3000 AZ Rotterdam, the Netherlands. The address of Haslemere N.V. is Weena
327-329, NL 3013, Rotterdam, the Netherlands. The address of Rodamco Europe
N.V. is Hofplein 20, NL 3032 AC, Rotterdam, the Netherlands. The address of
RoProperty Holdings B.V. is Weena 327-329, NL 3013, Rotterdam, the Netherlands.
RREEF is an active investment advisor of investment-grade real estate across
the United States with approximately $15.1 billion in assets (including real
estate securities) currently under management. RREEF and its affiliates manage
properties consisting of industrial parks, retail centers, office buildings and
apartment communities. RREEF currently offers a number of investment vehicles
to meet the different goals and objectives of its clients. These include
separately-managed accounts for direct property investment, core and
value-added commingled funds, and investments in publicly-traded real estate
securities through separate accounts and a mutual fund. In addition, the
management or liquidation of equity real estate portfolios assembled by other
14
advisors has been an important part of RREEF's business. Since 1989, on behalf
of 28 different clients, RREEF has taken over management of more than 250
properties for a total value of $6.7 billion.
Rodamco North America N.V. is a property investment company operating in the
U.S., Haslemere N.V. is a property investment company operating in the United
Kingdom and Rodamco Europe N.V. is a property investment company operating in
continental Europe. We believe that Rodamco North America N.V., Rodamco Europe
N.V. and Haslemere N.V. are among the largest property companies quoted on the
Amsterdam Stock Exchange.
CalPERS is a government employee pension fund and a unit of the State and
Consumer Services Agency of the State of California, with its principal office
and place of business located at Lincoln Plaza, 400 "P" Street, Sacramento,
California, 95814. CalPERS provides retirement and health benefit services to
more than 1.2 million members and more than 2,400 employers. CalPERS'
membership includes active workers and retirees, their families and
beneficiaries and their employers. As the nation's largest public pension fund
and third largest in the world with assets totaling approximately $155.3
billion at July 31, 2001, CalPERS' investments span domestic and international
markets. The CalPERS Board of Administration has investment authority and sole
fiduciary responsibility for the management of the CalPERS' assets. The Board
is guided by the CalPERS Investment Committee, management, and more than 120
members of the CalPERS Investment Office who carry out the daily activities of
the investment program.
None of the Rodamco Parties, CalPERS, RREEF, CalWest and Rooster Acquisition
Corp. is subject to the information and reporting requirements of the Exchange
Act and as a result is not required to file periodic reports, proxy statements
and other information with the SEC relating to its business, financial
condition and other matters. CalPERS provides its financial information at its
web site at www.calpers.ca.gov.
The name, business address, citizenship, principal occupation and employment
history for each of the members of the board of administration, management
board, directors and executive officers of CalPERS, RREEF, the Rodamco Parties,
CalWest and Rooster Acquisition Corp., as applicable, are set forth in
Schedules I and II.
As of the date hereof, CalPERS beneficially owns 585,780 Common Shares,
representing approximately 1.3% of the total Common Shares outstanding on
November 2, 2001. On September 5, 2001, RREEF acquired discretionary management
of a portfolio including 13,500 Common Shares, representing less than 1% of the
total Common Shares outstanding on November 2, 2001. RREEF assumed management
over the portfolio containing these Common Shares (in addition to other
diversified REIT shares) as a result of a request from a client to transfer its
existing portfolio from another advisor. RREEF has discretionary investment
power to dispose or direct the disposition of such Common Shares. Except as set
forth in this paragraph and elsewhere in this Offer to Purchase:
(a) none of Rooster Acquisition Corp., CalWest, RREEF, the Rodamco
Parties, CalPERS (collectively, the "CalWest Entities") or any associate or
majority owned subsidiary thereof nor, to any of the CalWest Entities'
knowledge, any of the persons listed in Schedules I and II hereto nor any
associate of any of the persons so listed, beneficially owns or has a right
to acquire any Common Shares or any other equity securities of Cabot,
(b) none of the CalWest Entities nor any associate or majority owned
subsidiary of Rooster Acquisition Corp. or CalWest nor, to any of the
CalWest Entities' knowledge, any of the persons listed on Schedules I and II
hereto nor any associate of any of the persons so listed has effected any
transaction in the Common Shares or any other equity securities of Cabot
during the past 60 days,
(c) none of the CalWest Entities nor any subsidiary of Rooster
Acquisition Corp. or CalWest nor, to any of the CalWest Entities' knowledge,
any of the persons listed in Schedules I and II hereto, has any contract,
arrangement, understanding or relationship with any other person with
respect to any securities of Cabot (including, but not limited to, any
contract, arrangement, understanding or relationship concerning the transfer
or the voting of any such securities, joint ventures, loan or option
arrangements, puts or calls, guaranties of loans, guaranties against loss or
the giving or withholding of proxies, consents or
15
authorizations) (except as contemplated by the Shareholder and Unitholder
Agreements and the Option Agreement, forms of which are attached as Exhibits
(d)(4), (d)(5), (d)(6) and (d)(7), respectively, to the Tender Offer
Statement on Schedule TO filed by Rooster Acquisition Corp. and CalWest with
the SEC of which this Offer to Purchase forms a part),
(d) since October 1999, there have been no transactions which would
require reporting under the rules and regulations of the SEC among the
CalWest Entities or, to any of the CalWest Entities' knowledge, any of the
persons listed in Schedules I and II hereto, on the one hand, and Cabot or
any of its executive officers, trustees or affiliates, on the other hand, and
(e) since October 1999, there have been no negotiations, transactions or
material contacts among the CalWest Entities, any subsidiary of Rooster
Acquisition Corp. or CalWest or, to any of the CalWest Entities' knowledge,
any of the persons listed in Schedules I and II hereto, on the one hand, and
Cabot or any of its subsidiaries or affiliates, on the other hand,
concerning a merger, consolidation, acquisition, a tender offer for or other
acquisition of Cabot securities, an election of Cabot's trustees or a sale
or other transfer of a material amount of assets of Cabot.
In addition, none of the CalWest Entities, nor to the best of their
knowledge, any of the persons listed on Schedules I and II to this Offer to
Purchase has during the last five years (i) been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) or (ii) been
a party to any judicial or administrative proceeding (except for matters that
were dismissed without sanction or settlement) that resulted in a judgment,
decree or final order enjoining the person from future violations of, or
prohibiting activities subject to, federal or state securities laws or a
finding of any violation of such laws.
10. BACKGROUND OF THE OFFER; CONTACTS WITH CABOT.
In October 1999, RREEF sold a property on behalf of one of its clients to
Cabot, which property was valued at $6.5 million. Such sale was unrelated to
the Merger.
In late August 2000 or early September 2000, Mr. Charles B. Leitner, III, a
Principal of RREEF, contacted Mr. Robert E. Patterson, the President of Cabot,
to explore opportunities for RREEF and clients of RREEF to transact business
with Cabot, including the purchase and sale of industrial properties.
In early October 2000, Mr. Leitner, Mr. Peter J. Broccolo, a Principal of
RREEF, and Mr. James N. Carbone, a Principal of RREEF, met in Cabot's offices
in Boston, Massachusetts with Mr. Ferdinand Colloredo-Mansfeld, Chairman and
CEO of Cabot, Mr. Patterson and Mr. Franz Colloredo-Mansfeld, Chief Financial
Officer of Cabot, to discuss Cabot's portfolio of assets and possible joint
venture opportunities for Cabot, RREEF and clients of RREEF to develop and/or
acquire new properties. During October 2000 through mid-November 2000, Mr.
Leitner and Mr. Patterson communicated on a number of occasions to further
explore joint venture opportunities and possible asset sales by Cabot
consistent with their discussions in early October 2000.
On January 4, 2001, Messrs. Leitner and Broccolo met with Messrs. Ferdinand
Colloredo-Mansfeld and Patterson in Boston, Massachusetts in Cabot's principal
executive offices in order to gauge whether Cabot would be interested in
discussing a transaction in which a client or clients of RREEF would purchase
all or substantially all of the properties of Cabot. At this meeting, Mr.
Ferdinand Colloredo-Mansfeld and Mr. Patterson stated that Cabot was not for
sale, but that they were interested in considering a number of other
transactions, including a sale of certain Cabot assets and/or capital raising
or joint venture opportunities.
During the first quarter of 2001, a large pension fund client of RREEF
requested through its advisor, JPMorgan Investment Management, Inc., that the
management responsibility for certain of such pension fund's
16
real property assets be transferred from Cabot to RREEF. Representatives of
RREEF and Cabot (other than the representatives of such parties identified
above) had numerous discussions in connection with this transfer. This transfer
was unrelated to the Merger.
In mid-March 2001, Mr. Leitner made an unsolicited telephone call to Mr.
Ferdinand Colloredo-Mansfeld to schedule a meeting in Boston, Massachusetts.
On March 29, 2001, Messrs. Leitner, Broccolo and Donald A. King, Jr.,
Managing Principal of RREEF, held a meeting with Mr. Ferdinand
Colloredo-Mansfeld at a restaurant in Boston, Massachusetts to discuss a
potential offer to purchase all of the industrial properties in Cabot's
portfolio, but did not discuss a price for such properties. Mr. Ferdinand
Colloredo-Mansfeld responded that he was obliged to listen to the proposal, but
would want to discuss the proposal with the other senior officers of Cabot
prior to proceeding further. At this meeting the parties considered CalPERS, a
client of RREEF, as a potential buyer.
On April 18, 2001, Mr. Leitner sent an unsolicited letter to Mr. Ferdinand
Colloredo-Mansfeld formalizing RREEF's offer to purchase all of the
wholly-owned, non-development industrial properties of Cabot for $1.862 billion
and recommending that the parties enter into a confidentiality agreement so
that RREEF could exclusively review the financial and property information of
Cabot in order to verify the assumptions used to arrive at the purchase price
proposed in this letter.
Also, in mid-April 2001, another major institutional real estate investment
and management firm ("Interested Party A") contacted Cabot by telephone and
expressed an interest in acquiring all or a significant portion of the assets
of Cabot. On May 4, 2001, Messrs. Ferdinand Colloredo-Mansfeld and Franz
Colloredo-Mansfeld met with one of the principals of Interested Party A in
Boston, Massachusetts to discuss the nature of Interested Party A's proposal.
Interested Party A did not specify any value for Cabot or its assets, but the
parties did agree to continue discussions and that a confidentiality agreement
would be negotiated between the parties in order for Cabot to provide certain
information to Interested Party A so that it could continue its analysis of
Cabot.
In early May 2001, Cabot commenced the negotiation of a confidentiality
agreement with each of RREEF and Interested Party A. On May 23, 2001, RREEF and
Cabot entered into a confidentiality agreement and on May 25, 2001, Cabot and
Interested Party A entered into a confidentiality agreement. The
confidentiality agreement with RREEF did not contain any exclusivity provisions
prohibiting Cabot from engaging any third party in an acquisition discussion.
Absent the approval of the Cabot Board of Trustees, such confidentiality
agreement prohibited RREEF from acquiring Cabot's securities or soliciting
proxies for a period of 18 months from the date on which Cabot and RREEF agree
to terminate discussions regarding a proposed transaction.
On May 10, 2001, the Cabot Board of Trustees held a regularly scheduled
meeting in Boston, Massachusetts which immediately followed the annual meeting
of the shareholders of Cabot. At this meeting, the management of Cabot
presented to the Cabot Board of Trustees a review of possible strategic
alternatives for Cabot. The alternatives presented by management included the
continuation of the business in its current mode, strategies for growth through
joint venture arrangements with third parties, dispositions of assets and the
reinvestment of the proceeds of such dispositions into new ventures or the
repurchase of a portion of Cabot's outstanding Common Shares, and the pursuit
of a business combination or sale of Cabot. As part of this discussion,
management discussed with the Cabot Board of Trustees the recent indications of
interest from each of RREEF and Interested Party A. Management indicated to the
Cabot Board of Trustees that, based on its review of RREEF's proposal, it
believed that it might achieve an offer of $24 per share after further
negotiations. Based upon this discussion, the Cabot Board of Trustees indicated
that management should explore discussions with each of RREEF and Interested
Party A to determine what value each would place on Cabot, but not to the
exclusion of the pursuit of other strategies by Cabot.
On May 21, 2001, Cabot met with representatives of JPMorgan in Cabot's
offices in Boston to review the recent indications of interest from RREEF and
Interested Party A. Shortly thereafter, Cabot notified JPMorgan
17
that it wished to engage JPMorgan to advise Cabot in connection with the
exploration of these proposals. Cabot formally engaged JPMorgan to act as its
financial advisor in connection with a potential acquisition of Cabot by
agreement dated July 10, 2001.
On June 4, 2001, a meeting was held in New York, New York at RREEF's offices
and was attended by Mr. Leitner, Mr. Broccolo, Mr. Timothy B. Keith, Vice
President, Acquisitions and Development of RREEF, Ms. Michelle Damerjian,
Acquisition Associate of RREEF, Mr. Ferdinand Colloredo-Mansfeld, Mr.
Patterson, Mr. Franz Colloredo-Mansfeld, Mr. Peter Baccile, Managing Director
of JPMorgan, and Mr. Murray McCabe, Managing Director of JPMorgan. At this
meeting, Cabot provided RREEF with additional financial and other information
regarding its portfolio of properties and RREEF presented Cabot with a list of
RREEF clients that RREEF had identified as potential buyers of Cabot's assets,
which list included CalPERS. At this point in the discussions, Cabot had not
permitted RREEF to approach any of RREEF's clients, including CalPERS, about
any potential transaction.
On June 5, 2001, a meeting was held in New York, New York with
representatives of Cabot and its financial advisor, JPMorgan, and
representatives of Interested Party A to discuss the structure of a potential
transaction. Interested Party A did not specify any price or valuation for
Cabot at this meeting, but did indicate its possible source of funds and that
it might submit a written indication of interest shortly with the intent of
performing due diligence thereafter to confirm its pricing.
On June 14, 2001, Messrs. Leitner, Keith, Ferdinand Colloredo-Mansfeld,
Patterson, Franz Colloredo-Mansfeld, Baccile, McCabe and Michael Errichetti,
Managing Director of JPMorgan, Thomas Brown, Vice President of JPMorgan, and
Ms. Damerjian met at the offices of JPMorgan in New York, New York to share
financial information and further discuss the valuation of Cabot. At this
meeting RREEF also described two RREEF clients, including CalPERS, who RREEF
believed might be interested in a potential acquisition of Cabot's assets,
relayed that the information provided by Cabot on June 4, 2001 had been
analyzed by RREEF and confirmed RREEF's original valuation assumptions, and
requested additional information in order to validate a purchase price. Cabot
and its advisors implied at this meeting that RREEF's purchase price was too
low.
In a phone conversation between Mr. Leitner and Mr. McCabe shortly after the
June 14, 2001 meeting, Mr. McCabe stated that Cabot had agreed to prepare
ten-year net operating income projections on a property-by-property basis for
use by RREEF in assessing the valuation of Cabot. These net operating income
projections were provided by Cabot to RREEF in late June 2001.
Between June 14, 2001 and July 12, 2001, representatives of RREEF and
JPMorgan communicated on numerous occasions to discuss Cabot's property related
projections, Cabot's valuation and additional requests by RREEF for information
about Cabot.
During the week commencing June 11, 2001, Interested Party A contacted Cabot
and JPMorgan and indicated that, due to other pending initiatives, it would be
unable to obtain the necessary capital to proceed with the pursuit of a
transaction with Cabot for a period of approximately two months. During July
and August of 2001, JPMorgan and Interested Party A maintained contact, and
Interested Party A continued to express an interest in a transaction with
Cabot, but also continued to defer proceeding with any proposal due to its
capital constraints. In mid-August 2001, Interested Party A contacted Cabot and
JPMorgan and advised that it would be interested in pursuing an acquisition of
Cabot, but would need to identify third party sources of capital, which would
include one or more of Cabot's existing large shareholders. Based on Interested
Party A's lack of available capital, Cabot discontinued discussions with
Interested Party A.
On July 12, 2001, a meeting was held at JPMorgan's offices in New York, New
York and was attended by Messrs. Leitner, Keith, McCabe, Errichetti and Brown
to continue to analyze and discuss the value of the real estate held by Cabot
and the pricing of a potential transaction and to determine whether the parties
would be able to agree on pricing terms. At this meeting, JP Morgan provided
RREEF with additional financial information regarding Cabot and its properties.
18
On July 16, 2001, Messrs. Leitner, Keith, Ferdinand Colloredo-Mansfeld,
Patterson, Franz Colloredo-Mansfeld, McCabe, Brown and Andrew Harper,
Acquisition Associate of RREEF, met in Boston, Massachusetts at the apartment
of Mr. Ferdinand Colloredo-Mansfeld. At this meeting, the parties discussed
purchase price and real estate values. Cabot indicated to RREEF that it would
prefer that the transaction be structured as a corporate acquisition (a merger)
rather than a sale of assets. At this meeting, RREEF also summarized its
approach in determining its calculations of its valuation of Cabot and
confirmed to Cabot that its client, CalPERS, would likely be interested in a
transaction similar to this acquisition and would likely be capable of
consummating the transaction without any other party. RREEF requested
permission to approach CalPERS about the transaction, but Cabot did not give
RREEF permission to do so at this time. At the end of this meeting, Cabot
indicated to RREEF that the purchase price should not be less than $24 per
Common Share. At this juncture, RREEF did not agree to the $24 price.
Between July 16, 2001 and July 26, 2001, representatives of RREEF and
JPMorgan participated in a series of meetings and communications during which
they discussed various pricing proposals in an effort to agree upon pricing
terms. In order to bridge the parties' respective positions on pricing, on or
about July 25, 2001, JPMorgan again proposed that RREEF consider structuring
the proposed transaction as a merger instead of an acquisition of assets. RREEF
agreed to consider this proposed structure, but relayed to JPMorgan that it
would need permission to approach CalPERS in order to determine whether such a
structure would be feasible. RREEF also requested at this time that Cabot
provide RREEF with its material corporate documents.
On July 25, 2001 and July 26, 2001, Messrs. Leitner, Keith and McCabe met at
RREEF's offices in New York, New York to discuss issues related to purchase
price and the net asset value of Cabot and to determine how to structure a
merger transaction as opposed to an acquisition of real property assets. At the
July 26, 2001 meeting, Messrs. Leitner and Keith informed Mr. McCabe that RREEF
would be able to agree on a $24 per Common Share purchase price if RREEF could
better understand the amount of savings that could be obtained in connection
with a merger transaction. Mr. Leitner also advised Mr. McCabe that he would
need to obtain Cabot's permission to approach CalPERS about the potential
transaction.
On July 27, 2001, Mr. Ferdinand Colloredo-Mansfeld notified Mr. Leitner in a
telephone conversation that he had updated the Cabot Board of Trustees about
the transaction proposed by RREEF and requested that the Cabot Board of
Trustees begin to seriously consider such proposed transaction. On this phone
call, Mr. Ferdinand Colloredo-Mansfeld gave his permission to RREEF to approach
CalPERS about the potential transaction.
On July 30, 2001, Messrs. Leitner, Keith, Broccolo, Ferdinand
Colloredo-Mansfeld, Patterson, Franz Colloredo-Mansfeld, McCabe and Brown
attended a meeting in Boston, Massachusetts at the apartment of Mr. Ferdinand
Colloredo-Mansfeld. At this meeting, the parties confirmed their agreement on a
$24 cash purchase price per Common Share of Cabot, subject to negotiation and
agreement on all other terms of a transaction, and began discussions regarding
the process for completing the proposed transaction.
On August 1, 2001, Messrs Leitner, Keith, Stephen M. Steppe, Principal of
RREEF, and Warren Otto, Vice President, Portfolio Management of RREEF, met with
representatives of CalPERS to present the proposed acquisition of Cabot by
CalWest. At this meeting, CalPERS indicated to RREEF that it would consider
such a transaction and requested additional information. After several days of
communications between RREEF and CalPERS, CalPERS authorized RREEF to engage
legal counsel and begin a due diligence process on CalWest's behalf.
Between June and early August 2001, representatives of Cabot and JPMorgan
had informal discussions with representatives of three publicly traded real
estate companies regarding their interest in a transaction involving Cabot.
None of the public companies indicated an interest in a transaction at a price
or value which approximated or exceeded the price discussed with RREEF.
On August 15, 2001, the Cabot Board of Trustees met in Boston, Massachusetts
to review the proposal from RREEF. Attending the meeting were Mr. Franz
Colloredo-Mansfeld, Messrs. Baccile, McCabe, Errichetti and
19
Brown from JPMorgan and representatives of the law firm of Mayer Brown & Platt
("Mayer Brown"), outside legal counsel to Cabot. Management reviewed the
background and course of discussions and negotiations with RREEF and the terms
of the proposal with the Cabot Board of Trustees and responded to their
questions. Management also described to the Cabot Board of Trustees the status
of its discussions with Interested Party A. JPMorgan reviewed the proposed
transaction with RREEF and presented various analyses of the financial terms of
such proposed transaction, the strategic environment for companies similar to
Cabot and possible alternatives. JPMorgan also presented to the Cabot Board of
Trustees an analysis of the financial capacity of other parties to engage in
similar transactions with Cabot. Legal counsel reviewed with the Cabot Board of
Trustees their duties under applicable law. Counsel also discussed with the
Cabot Board of Trustees the proposed form of transaction, a cash tender offer
followed by a merger providing the same cash price in the tender offer to all
common shareholders, and the time frame for achieving such a transaction. The
consensus of the Cabot Board of Trustees was to continue to pursue a
transaction with RREEF.
Also at the August 15, 2001 meeting of the Cabot Board of Trustees,
management of Cabot explained to the Cabot Board of Trustees that RREEF had
indicated that it did not have an interest in acquiring any of the joint
venture interests held by Cabot or the business of the advisory subsidiary of
Cabot. Management indicated that it might wish to discuss the acquisition of
such businesses. Following a discussion with outside legal counsel, the Cabot
Board of Trustees resolved that any such transaction involving management would
be reviewed by the independent trustees with such advice and counsel as they
deem appropriate. Subsequent to this meeting, the independent trustees engaged
independent counsel to advise the independent trustees in connection with any
such transaction involving management.
Between August 7, 2001 and September 4, 2001, RREEF continued its own due
diligence, retained the law firm of Orrick, Herrington & Sutcliffe LLP
("Orrick") to act as legal counsel to CalWest in connection with the Merger and
authorized Orrick to began conducting legal due diligence. During this same
period, RREEF, Cabot, Orrick and Mayer Brown began to negotiate the terms and
conditions of an exclusivity agreement. On September 4, 2001, Messrs. Leitner,
Keith, Ferdinand Colloredo-Mansfeld, Patterson, Franz Colloredo-Mansfeld and
McCabe met in Boston, Massachusetts at the apartment of Mr. Ferdinand
Colloredo-Mansfeld to negotiate the final terms of the exclusivity agreement.
On September 5, 2001, RREEF and Cabot entered into an exclusivity agreement.
The exclusivity agreement provided that from the date of such agreement until
the earlier of (i) the execution of a definitive agreement between Cabot and
RREEF and (ii) October 21, 2001, which date could be extended by RREEF for up
to an additional 10 business days to the extent reasonably necessary to address
environmental due diligence issues, Cabot would not solicit, initiate or engage
in discussions or negotiations with, or provide information to, any third party
relating to a possible acquisition of all or any substantial interest in Cabot
or its business (a "prohibited transaction"). However, under the exclusivity
agreement, Cabot was permitted to engage in discussion or negotiations with,
and provide information to, a third party which submitted to Cabot an
unsolicited proposal for a transaction that the Cabot Board of Trustees
determined in good faith was likely to be superior to RREEF's proposal from a
financial point of view. In the event that, prior to the expiration of the
exclusivity agreement, (a) Cabot received a superior proposal from a third
party and entered into an agreement with that third party within six months
with respect to a prohibited transaction, (b) Cabot terminated discussions with
RREEF or (c) Cabot rejected a bona fide offer from RREEF that would result in
Cabot's shareholders receiving at least $24 per Common Share, Cabot would be
obligated to promptly pay to RREEF its reasonable out-of-pocket expenses up to
a maximum amount of $8.0 million.
During September 2001, management of Cabot and RREEF, their respective legal
counsel and JPMorgan communicated on numerous occasions to discuss the
structure, pricing, tax consequences, business integration, corporate
governance, consequences of the transaction to the limited partners of Cabot
LP, the holders of preferred units of Cabot LP, and the joint ventures in which
Cabot's subsidiaries were a party, as well as, control, liquidity and other
issues involved in a potential transaction.
20
On September 13, 2001, the Cabot Board of Trustees held its regularly
scheduled board meeting in Boston, Massachusetts and reviewed the terms of the
proposed transaction with management, JPMorgan and outside counsel. Attending
the meeting were Messrs. Baccile and McCabe from JPMorgan and representatives
of the law firm of Mayer Brown. An update was provided to the Cabot Board of
Trustees on the status of the due diligence by RREEF, the matters to be
addressed in the proposed documentation for the transaction, and transaction
issues involving the outstanding preferred units of Cabot LP, the joint
ventures involving Cabot and Cabot's advisory subsidiary business, in which
RREEF continued to have no interest in acquiring. The Cabot Board of Trustees
directed management, together with JPMorgan and Mayer Brown, to continue the
due diligence process with RREEF and commence negotiation of definitive
documents for the proposed transaction.
On September 17, 2001, Cabot's legal counsel distributed to RREEF and
CalWest's legal counsel a draft merger agreement setting forth the proposed
terms of an acquisition of Cabot by CalWest through a cash tender offer and
subsequent merger.
Between September 17, 2001 and October 28, 2001, RREEF, Cabot and their
respective legal and financial advisors engaged in lengthy negotiations with
respect to the terms and conditions of the proposed merger agreement. The
principals of both Cabot and RREEF, together with their legal and financial
advisors, met at the offices of JPMorgan in New York on October 10, 2001 and
again on October 15, October 19 and October 20, 2001 to address issues in the
documentation and the process to effect the transaction. Material issues
discussed and negotiated by the parties were the status of Cabot's joint
venture interests, the terms under which the tender offer would be commenced
and the conditions upon which it would close, the ability of Cabot to entertain
other proposals from third parties and terminate the merger agreement, the size
and terms upon which RREEF would be entitled to payment of a break-up fee and
reimbursement of its expenses in the event the merger agreement was terminated,
the terms and conditions upon which either party could terminate the merger
agreement (including the refusal of Goldman Sachs Mortgage Company ("GSMC" or
the "lender") to fund its loan commitment to CalWest due to the consequences of
terrorist acts and armed conflict involving the United States) and certain
covenants applicable to the parties between the execution of the merger
agreement and the consummation of a merger.
On October 4, 2001, Messrs. Keith, Patterson, Neil Waisnor, Senior Vice
President-Finance and Treasurer of Cabot, and Eugene Reilly, Senior Vice
President--Director of Development of Cabot, met in Cabot's offices in Boston,
Massachusetts to discuss real property due diligence matters.
On October 4, 2001, with the consent of RREEF, Cabot management met with a
third party financial investor ("Interested Party B") for purposes of
determining the terms upon which a consent or agreement necessary to accomplish
the transaction as proposed by RREEF might be obtained. Interested Party B
executed a confidentiality agreement in advance of the meeting. During the
meeting, Interested Party B was informed of a proposed transaction.
On October 5, 2001, Mr. Keith and Christopher L. Hughes, Vice President,
Capital Markets of RREEF, traveled to New York, New York to meet with
representatives of Goldman, Sachs & Co. ("Goldman Sachs") to discuss
arrangements for the financing of the proposed acquisition and the engagement
of Goldman Sachs as the exclusive financial advisor to CalWest. Following the
meeting, representatives of REEEF and Goldman Sachs discussed on numerous
occasions throughout October 2001 the terms and conditions pursuant to which
Goldman Sachs would lead the financing of the acquisition.
On October 18, 2001, RREEF notified Cabot in writing that it was exercising
its right under the exclusivity agreement to extend the exclusivity period for
up to an additional 10 business days, thereby extending the period until
November 2, 2001.
On October 23, 2001, representatives of RREEF met in Sacramento, California
with the staff of CalPERS to present the terms, conditions and financial
analysis of the proposed merger with Cabot and to seek CalPERS consent to such
transaction. At the end of this meeting, CalPERS agreed to consider the
proposed merger and requested additional information, which information was
provided by RREEF.
21
On October 24, 2001, a special meeting of the Cabot Board of Trustees was
held in Boston, Massachusetts. Attending the meeting were Messrs. Franz
Colloredo-Mansfeld and Waisnor, Messrs. Baccile and McCabe and other
representatives of JPMorgan, and representatives of Mayer Brown. The Cabot
Board of Trustees received a detailed review of the terms of the transaction
and the status of the negotiations. At this meeting, the Cabot Board of
Trustees discussed with management and its legal and financial advisors the
terms of the financing arrangements proposed by RREEF in connection with the
proposed transaction, including that a condition to closing of the tender offer
would be that Rooster Acquisition Corp.'s and CalWest's lender (GSMC) does not
exercise its right not to fund such financing as a result of specified adverse
market conditions. Management described to the Cabot Board of Trustees that
arrangements for addressing each of Cabot's joint ventures had been negotiated
with RREEF whereby RREEF would unwind those transactions after execution of the
Merger Agreement, and accordingly, management would not be involved in any
acquisition of such joint venture interests. The Cabot Board of Trustees
discussed with management the terms upon which certain members of management
would acquire the business of Cabot's advisory subsidiary, and, thereafter, the
independent trustees reviewed such terms separately with JPMorgan and their
independent legal counsel. The representatives of JPMorgan described to the
Cabot Board of Trustees their analysis of the financial terms of the proposed
transaction. Management and its advisors discussed Cabot's current financial
condition and business prospects with the Cabot Board of Trustees. JPMorgan
described to the Cabot Board of Trustees the form of fairness opinion it
expected to be prepared to deliver in connection with the merger agreement.
Following the conclusion of the Cabot Board meeting, Cabot received a
proposal from Interested Party B for the possible acquisition of all the
outstanding Common Shares. The letter from Interested Party B stated that it
was a preliminary non-binding indication of current interest with respect to a
possible transaction and proposed that the shareholders of Cabot would receive
consideration in the range of $22.00 to $23.50 per share in an all cash
transaction. The letter from Interested Party B further noted that any
definitive agreement would contain certain closing conditions, including the
funding of third party debt and equity to be committed, on terms satisfactory
to Interested Party B.
On October 26, 2001, CalPERS and RREEF signed an amendment to CalWest's
operating agreement authorizing CalWest to enter into the Merger Agreement and
loan commitment letter with GSMC and to take all actions contemplated by such
agreements.
On October 26, 2001, GSMC delivered to CalWest an executed commitment letter
that set forth the terms and conditions pursuant to which GSMC would lead the
financing of the Offer and the Merger.
On October 27, 2001, the Cabot Board of Trustees convened a special meeting
to discuss the terms of the proposed transaction with RREEF. Attending the
meeting were representatives of JPMorgan and outside counsel. Management
reviewed with the Cabot Board of Trustees the proposal received from Interested
Party B. It was noted that Interested Party B's proposal indicated a value of
Cabot in a range in which the highest value was less than the merger price set
forth in the documents negotiated with RREEF. Management, together with its
legal and financial advisors, reviewed with the Cabot Board of Trustees the
changes in the definitive documentation since the prior Cabot Board of Trustees
meeting, the remaining issues to be resolved by the parties and the proposed
timetable for completion of the documentation. The independent trustees
reviewed with JPMorgan the terms upon which the advisory business would be
acquired by certain members of management.
On October 28, 2001, the Cabot Board of Trustees convened a special meeting
to consider the proposed transaction with CalWest. Attending the meeting were
representatives of JPMorgan and Mayer Brown. Management discussed with the
Cabot Board of Trustees the terms of the final documentation and the conclusion
of its negotiations with CalWest and its representatives. JPMorgan reviewed
with the Cabot Board of Trustees its financial analyses of the transaction and
delivered its written opinion to the Cabot Board of Trustees that, as of
October 28, 2001, based upon the assumptions and qualifications set forth in
its analyses, the consideration to be received pursuant to the Merger Agreement
by holders of Common Shares was fair from a financial point of
22
view to such holders (other than CalWest and its affiliates). Following further
discussion, the Cabot Board of Trustees, by unanimous vote:
. determined that the Merger Agreement, the Offer, the Merger and the other
transactions contemplated thereby, taken together, are fair to, advisable
and in the best interests of Cabot and its shareholders,
. approved the Merger Agreement and recommended acceptance and approval by
the holders of Common Shares of the Merger Agreement, the Offer, the
Merger and the other transactions contemplated thereby and that such
holders tender their Common Shares in the Offer,
. approved an amendment to each of the employment agreements between Cabot
and its executive officers and to the Cabot Industrial Trust Severance Pay
Plan for employees,
. resolved to exempt the proposed transaction from the provisions of the
Maryland Business Combination Act and adopted an amendment to Cabot's
bylaws providing that the Maryland Control Share Act would not apply to
this transaction,
. approved all other action necessary to render the dilution provisions of
the Cabot rights agreement inapplicable to the Offer and the Merger,
without any payment to the holders of the preferred share purchase rights,
and
. took all action necessary to waive the application of the ownership limit
set forth in the Cabot declaration of trust for the purchase of Common
Shares pursuant to the Offer, the Merger or otherwise pursuant to the
Merger Agreement.
In addition, the independent trustees unanimously approved the transaction
by which Mr. Ferdinand Colloredo-Mansfeld would acquire the business of Cabot
Advisors, Inc. in exchange for the redemption of his shares of common stock,
constituting all of the shares of common stock, of such entity.
On October 27, 2001 and October 28, 2001, management representatives from
both companies and their advisors communicated by telephone to finalize certain
technical aspects of the transaction documents. In the early evening of October
28, 2001, the parties executed the Merger Agreement. Early the next morning,
the parties issued a joint press release announcing the proposed acquisition.
11. PURPOSE OF THE OFFER AND THE MERGER; THE MERGER AGREEMENT; OTHER
AGREEMENTS; EFFECTS OF INABILITY TO CONSUMMATE THE MERGER; STATUTORY
REQUIREMENTS; APPRAISAL RIGHTS; PLANS FOR CABOT.
Purpose
The purpose of the Offer and the Merger is to acquire control of, and all of
the Common Shares of, Cabot. The Offer, as the first step in the acquisition of
Cabot, is intended to facilitate the acquisition of all the Common Shares. The
purpose of the Merger is to acquire all Common Shares not purchased pursuant to
the Offer or otherwise.
The Merger Agreement
The Merger Agreement, which has been entered into by Cabot, Cabot LP,
CalWest, and Rooster Acquisition Corp., governs both the Offer and the Merger.
The following summary description of the Merger Agreement is qualified in its
entirety by reference to the agreement itself, filed as an exhibit to the
Tender Offer Statement on Schedule TO that we filed with the SEC, which you may
examine and copy as set forth in Section 8 above.
23
THE OFFER. The Merger Agreement provides for the commencement of the Offer
by Rooster Acquisition Corp. as promptly as reasonably practicable, but no
later than five business days following public announcement by Rooster
Acquisition Corp. and Cabot of the execution of the Merger Agreement. Rooster
Acquisition Corp. will pay to each holder of Common Shares $24 in cash per
share. The purchase by Rooster Acquisition Corp. of the Common Shares includes
the associated Rights.
The obligation of Rooster Acquisition Corp. to accept for payment and pay
for Common Shares validly tendered pursuant to the Offer is subject only to the
prior satisfaction of the Tender Offer Conditions. Rooster Acquisition Corp.
reserves the right from time to time, without the consent of Cabot, to waive
any conditions, other than the Minimum Condition, and to irrevocably increase
the Per Share Amounts, as defined herein.
The Merger Agreement provides that, without the prior written consent of
Cabot, we will not (a) decrease the Offer Price or change the form of
consideration payable in the Offer (subject to adjustment in the event of an
increase in shares outstanding as a result of stock splits, stock dividends, a
recapitalization or other similar event after the date of the Merger
Agreement), (b) decrease the number of Common Shares sought in the Offer, (c)
modify or amend the Tender Offer Conditions or impose conditions to the Offer
in addition to the Tender Offer Conditions, (d) waive the Minimum Condition or
(e) except as described in the following paragraph, extend the Offer if all of
the Tender Offer Conditions are satisfied.
The Offer will expire 20 business days after it is commenced. We have agreed
with Cabot that we will not terminate or withdraw the Offer or extend the
Expiration Date without the consent of Cabot; provided, that without the
consent of Cabot, we may (i) extend the Offer, if at the scheduled expiration
date of the Offer any of the conditions to the Offer have not been satisfied or
waived, until such time as such conditions are satisfied or waived, (ii) extend
the Offer for any period required by any rule, regulation, interpretation or
position of the SEC or the staff of the SEC applicable to the Offer or (iii)
extend the Offer for a total of not more than five business days beyond the
initial expiration date or the latest expiration date that would otherwise be
permitted under clauses (i) or (ii) above if, on such expiration date, the
Common Shares validly tendered pursuant to the Offer and not withdrawn are
sufficient to satisfy the Minimum Condition but, together with all other Common
Shares owned by us, are entitled to cast less than 90% of the votes entitled to
be cast on the Merger.
So long as the Merger Agreement is in effect, the Offer has been commenced
and the conditions to the Offer have not been satisfied or waived, we have
agreed to cause the Offer not to expire, subject, however, to CalWest's right
of termination under the Merger Agreement; provided, however, that we will not
be required to extend the Offer any time beyond (i) December 28, 2001, if the
Minimum Condition is not satisfied on December 28, 2001, (ii) any date
thereafter that the Minimum Condition is not satisfied, or (iii) the date that
is 120 days from the date of Merger Agreement. Notwithstanding the foregoing,
in the event that the conditions to the Offer have not been satisfied as the
result of the occurrence of a specified, serious event relating to New York
Stock Exchange trading, commercial banking activities, war or a national
emergency, or national or international financial, political or economic
conditions (see clause (k) of Section 14 "Conditions of the Offer"), we are
required to extend the Offer until such time (but in no event longer than 30
business days after the date on which we first invoke such condition to the
Offer as a reason for not consummating the Offer) as CalWest's bridge loan
lender (GSMC) funds the bridge loan commitment; provided, further, that during
such 30 business day period, we shall use commercially reasonable efforts,
subject to any contractual restrictions binding upon us or CalWest pursuant to
the commitment letter entered into with CalWest's bridge loan lender, to obtain
financing for the Offer and the Merger on terms substantially similar and at
least as favorable as the terms of such loan agreement. We may, in addition,
provide a "subsequent offer period" (as contemplated by Rule 14d-11 under the
Exchange Act) of not less than three business days following our acceptance for
payment of Common Shares in the Offer.
TRUSTEES AND DIRECTORS. The Merger Agreement provides that, promptly upon
the acceptance for payment and payment for Common Shares pursuant to the Offer,
Rooster Acquisition Corp. will be entitled to designate such number of trustees
on the Board of Trustees of Cabot as will give Rooster Acquisition Corp.
24
representation on the Board of Trustees of Cabot in the same proportion as the
number of Common Shares beneficially owned by CalWest, Rooster Acquisition
Corp. and their affiliates bears to the total number of Common Shares
outstanding. At such time, Cabot will also cause, if requested by Rooster
Acquisition Corp., (i) each committee of the Board of Trustees of Cabot, (ii)
the Board of Directors of each subsidiary of Cabot and (iii) each committee of
each such subsidiary board to include designees of Rooster Acquisition Corp.
constituting up to the same percentage of each such committee or board as
Rooster Acquisition Corp.'s designees constitute on the Cabot Board of
Trustees. Pursuant to the Merger Agreement, Cabot shall take all actions
reasonably necessary to cause Rooster Acquisition Corp's designees to be
elected to the Cabot Board of Trustees, including by increasing the size of the
Board or securing the resignations of existing trustees. Following the time
directors designated by Rooster Acquisition Corp. are appointed or elected to
the Cabot Board of Trustees and prior to the date the articles of merger with
respect to the Merger have been accepted for filing by the Maryland State
Department of Assessments and Taxation (the "Effective Time"), the affirmative
vote of a majority of the Independent Trustees (as defined below) shall be
required (and sufficient) to (i) amend or terminate the Merger Agreement on
behalf of Cabot, (ii) exercise or waive any of Cabot's rights or remedies under
the Merger Agreement, (iii) extend the time for performance of any of the
obligations of Rooster Acquisition Corp. contained in the Merger Agreement,
(iv) take any other action by Cabot in connection with the Merger Agreement
required to be taken by the Cabot Board of Trustees, or (v) take any action by
Cabot in connection with the transactions contemplated by the Merger Agreement.
In the event that Rooster Acquisition Corp.'s designees are elected to the
Cabot Board of Trustees, until the Effective Time, those continuing members of
the Cabot Board of Trustees who are not designees, affiliates or associates
(within the meaning of the federal securities laws) of Rooster Acquisition
Corp. are to be deemed "Independent Trustees."
THE MERGER. The Merger Agreement provides that if the Offer is consummated,
any shareholder approval required for the Merger is obtained and no law or
regulation prohibits the Merger, Rooster Acquisition Corp will merge with and
into Cabot with Cabot surviving (the "Surviving Entity") as a wholly owned
subsidiary of CalWest. The closing of the Merger shall occur no later than the
third business day following the satisfaction or waiver of the conditions to
the Merger contained in the Merger Agreement, provided that if any Units remain
outstanding after consummation of the offer, the Merger Agreement requires
CalWest, Rooster Acquisition Corp., Cabot and Cabot LP to take all actions
reasonably necessary to effect a merger of a wholly owned subsidiary of CalWest
or Rooster Acquisition Corp. with and into Cabot LP and in such event, the
Merger and the merger of Cabot LP shall be consummated concurrently. The Merger
Agreement provides that if the condition that Common Shares entitled to cast at
least two-thirds of the votes entitled to be cast on the Merger is not
satisfied, neither CalWest nor Rooster Acquisition Corp. will be obligated to
accept for payment or pay for Common Shares pursuant to the Offer or effectuate
the Merger.
The Merger Agreement provides that, at the Effective Time, the
organizational documents of Cabot immediately prior to the Effective Time will
be the organizational documents of the Surviving Entity. The officers of
Rooster Acquisition Corp. shall serve as the officers of the Surviving Entity.
CONVERSION OF THE COMMON SHARES. At the Effective Time (a) each Common Share
owned by CalWest, Rooster Acquisition Corp. or by any CalWest subsidiary will
be cancelled and will cease to exist, and (b) each other issued and outstanding
Common Share shall be converted into the right to receive the Offer Price, in
cash, without interest (the "Merger Consideration") and, when so converted,
shall no longer be outstanding and shall automatically be canceled and retired
and shall cease to exist, and each holder of Common Shares shall only have the
right to receive the Merger Consideration, without interest, upon surrender of
Shares Certificates representing such holder's Common Shares.
Each share of common stock, par value $1.00 per share, of Rooster
Acquisition Corp. issued and outstanding immediately prior to the Effective
Time will be converted into and become one validly issued, fully paid and
nonassessable common share of beneficial interest, par value $0.01 per share,
of the Surviving Entity and will constitute the only outstanding common shares
of beneficial interest of the Surviving Entity.
25
The Surviving Entity or the designated paying agent will be entitled to
deduct and withhold from the consideration otherwise payable pursuant to the
Merger Agreement to any holder of Common Shares amounts that the Surviving
Entity or the paying agent is required to deduct and withhold under the Code,
the rules and regulations promulgated thereunder or any provision of state,
local or foreign tax law.
In the event that any Units remain outstanding after the consummation of the
Offer, the Merger Agreement requires CalWest, Rooster Acquisition Corp., Cabot
and Cabot LP to take all actions reasonably necessary to effect a merger of
Cabot LP with a subsidiary of CalWest or Rooster Acquisition Corp, pursuant to
which Cabot LP will be the surviving entity and each common unit of limited
partnership of Cabot LP will be exchanged and cancelled for the right to
receive the Offer Price. The Merger Agreement requires CalWest, Rooster
Acquisition Corp., Cabot and Cabot LP to cause the Second Amended and Restated
Agreement of Limited Partnership of Cabot LP to be amended prior to any merger
of a subsidiary of CalWest or Rooster Acquisition Corp. with and into Cabot LP
to provide that any such merger will not cause a liquidation, dissolution or
winding-up of Cabot LP. To insure that such amendment may be made, Ferdinand
Colloredo-Mansfeld, Robert Patterson and certain of their affiliates have
granted CalWest an option to purchase the Units held by such persons or
entities, which units account for at least a majority of the outstanding Units.
CalWest intends to exercise such option and purchase such Units if, immediately
prior to the consummation of the Offer, less than all Units have been converted
to Common Shares and tendered pursuant to the Offer.
CABOT COMMON SHARE OPTIONS. At the Effective Time, each outstanding option
(including dividend equivalent units) to purchase Common Shares or Units (each,
a "Cabot Option") granted under the Cabot Long Term Incentive Plan (the "LTIP")
and the Cabot 1999 Long Term Incentive Plan (the "1999 LTIP," and together with
the LTIP, the "Cabot Option Plans") whether or not then exercisable and vested,
shall be cancelled and of no further force and effect and the holder of any
such option shall be entitled to receive, from and after the Effective Time, an
amount in cash without interest (the "Option Cash Out Amount"), equal to the
product of (i) the number of Common Shares or Units provided for in such Cabot
Option and (ii) the excess, if any, of the Merger Consideration over the
exercise price per share or unit provided for in such Cabot Option, which cash
payment will be treated as compensation and will be net of any applicable tax.
If the exercise price per share or unit provided for in any Cabot Option
exceeds the Merger Consideration, no cash will be paid with regard to such
Cabot Option to the holder of such Cabot Option. At or prior to the closing of
the Merger, Cabot shall take all actions necessary to terminate the Cabot
Option Plans.
Cabot has agreed to terminate all Cabot Option Plans and all awards issued
under such Cabot Option Plans as of the Effective Time and the provisions in
any other plan, program or arrangement or agreement providing for the issuance
or grant of any other interest in respect of the equity interests of Cabot or
any of its subsidiaries (including, without limitation, Cabot LP) shall be of
no further force or effect and shall be deemed to be terminated as of the
Effective Time and no holder of a Cabot Option or any participant in any Cabot
Option Plan shall have any right thereunder to (i) acquire any securities of
Cabot, the Cabot LP, the Surviving Entity or any subsidiary thereof or (ii)
receive any additional payment or benefit with respect to any award previously
granted under the Cabot Option Plans.
TERMINATION OF DIVIDEND REINVESTMENT PLAN. Pursuant to the Merger Agreement,
Cabot shall terminate Cabot's 1999 Dividend Reinvestment and Share Purchase
Plan, effective prior to the closing of the Merger, and ensure that no purchase
or other rights under such plan enable the purchaser or holder of such rights
to acquire any interest in the Surviving Entity, CalWest or any CalWest
subsidiary, including Rooster Acquisition Corp., as a result of such purchase
or the exercise of such rights at or after the closing of the Merger.
SHAREHOLDERS' MEETING. If required by applicable law to consummate the
Merger, Cabot, acting through the Cabot Board of Trustees, shall, in accordance
with Cabot's declaration of trust and by-laws and applicable law, and provided
that the Merger Agreement shall not have been terminated: (A) duly call, give
notice of, convene and hold a special meeting of its shareholders as promptly
as reasonably practicable following the acceptance for payment and payment for
Common Shares by Rooster Acquisition Corp. pursuant to the Offer
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for the purpose of considering and taking action upon the approval of the
Merger and the adoption of the Merger Agreement; (B) as promptly as reasonably
practicable, prepare and file with the SEC a preliminary proxy or information
statement relating to the Merger and the Merger Agreement and use its
commercially reasonable efforts, subject to the terms of the Merger Agreement,
(1) to obtain and furnish the information required to be included by the SEC in
the proxy or information statement and, after consultation with CalWest, to
respond promptly to any comments made by the SEC with respect to the
preliminary proxy or information statement and cause a definitive proxy
statement or information statement, including any amendment or supplement
thereto, to be mailed to its shareholders; provided, that no amendment or
supplement to the definitive proxy statement or information statement will be
made by Cabot without consultation with CalWest and its counsel and (2) to
obtain the necessary approvals of the Merger and the Merger Agreement by its
shareholders; and (C) subject to the terms of the Merger Agreement, include in
the definitive proxy statement or information statement (i) the recommendation
of the Cabot Board of Trustees that shareholders of Cabot vote in favor of the
approval of the Merger and the Merger Agreement and (ii) the opinion of Cabot's
financial advisor.
At any such meeting Rooster Acquisition Corp., CalWest and any other
subsidiary of CalWest (the "CalWest Parties") shall vote their respective
Common Shares in favor of the Merger.
However, the Merger Agreement provides that if the CalWest Parties shall
acquire or otherwise own, in the aggregate, Common Shares entitled to cast at
least 90% of the votes entitled to be cast on the Merger, pursuant to the Offer
or otherwise (including pursuant to the Common Share Option (as defined
below)), the parties will take all necessary and appropriate action to cause
the Merger to become effective as soon as practicable after acceptance for
payment of and payment for the Common Shares by Rooster Acquisition Corp.
pursuant to the Offer without a meeting of shareholders of Cabot. For a
discussion of certain terms of the Merger Agreement that increase the
likelihood that Rooster Acquisition Corp. could acquire the minimum number of
the outstanding Common Shares as set forth above, see the discussion of the
Common Share Option in the immediately following paragraph.
COMMON SHARE OPTION OF CALWEST. In order to increase the likelihood that
Rooster Acquisition Corp. can acquire the minimum number of Common Shares
required to approve the Merger without a shareholders' meeting, Cabot has
granted CalWest an irrevocable option (the "Common Share Option") pursuant to
an option agreement, dated October 28, 2001, to purchase for a price of $24 per
Common Share (the "Per Common Share Option Price") in cash a number of Common
Shares (the "Optioned Common Shares") equal to the Applicable Common Share
Amount. The "Applicable Common Share Amount" is the number of Common Shares
which, when added to the number of Common Shares owned by the CalWest Parties
immediately prior to the exercise of the Common Share Option, would result in
the CalWest Parties owning immediately after the exercise of the Common Share
Option 90% of the then outstanding Common Shares; provided, however, that in no
event shall the Applicable Common Share Amount exceed 19.8% of the Common
Shares then issued and outstanding (without giving effect to any Common Shares
issued pursuant to the Common Share Option). CalWest may exercise the Common
Share Option only if at the time of exercise (a) Rooster Acquisition Corp.
shall have accepted for payment and paid for all Common Shares tendered and not
withdrawn pursuant to the Offer and (b) after giving effect to such exercise,
the CalWest Parties would own 90% of the then outstanding Common Shares. The
Common Share Option expires 30 business days after expiration of the Offer if
not exercised on or prior thereto.
If, for any reason following completion of the Offer, the Merger is not
consummated, CalWest, Rooster Acquisition Corp. and their affiliates reserve
the right to acquire additional Common Shares through private purchases, market
transactions, tender or exchange offers or otherwise on terms and at prices
that may be more or less favorable than those of the Offer or, subject to any
applicable legal restrictions, to dispose of any or all Common Shares acquired
by Rooster Acquisition Corp.
REPRESENTATIONS AND WARRANTIES. Cabot and Cabot LP have made customary
representations and warranties to CalWest and Rooster Acquisition Corp. in the
Merger Agreement with respect to, among other
27
matters, their organization, subsidiaries, capitalization and authority,
consents and approvals, conflicts, SEC reports and financial statements,
absence of certain changes or events, absence of undisclosed liabilities,
employee benefit plans, labor matters, contracts, properties, insurance,
related party transactions, litigation, compliance with law, taxes,
environmental matters, defaults, intellectual property, the required
shareholder vote to approve the Merger Agreement, brokers, lack of beneficial
ownership of Common Shares by Cabot and any Cabot subsidiaries and the opinion
of Cabot's financial advisor. Cabot has also made a representation that it has
taken all appropriate and necessary actions to exempt the Offer and the Merger
from anti-takeover statutes.
CalWest and Rooster Acquisition Corp. have made customary representations
and warranties to Cabot with respect to, among other matters, organization,
authority, consents and approvals, compliance with law, conflicts, litigation
and financing.
INTERIM BUSINESS OPERATIONS. The Merger Agreement obligates Cabot and its
subsidiaries (including Cabot LP), from the date of the Merger Agreement until
the earlier of the termination of the Merger Agreement or the Effective Time,
to carry on their businesses in the usual, regular and ordinary course in
substantially the manner theretofore conducted and in compliance with
applicable law and to use commercially reasonable efforts to preserve intact
their business organizations, goodwill, ongoing businesses and their
relationships with customers, suppliers, distributors, lessors, creditors,
employees, contractors and others having business with them and Cabot's status
as a real estate investment trust. The Merger Agreement also contains specific
restrictive covenants as to certain activities of Cabot and its subsidiaries
prior to the Effective Time without the prior written consent of CalWest
relating to, among other things, dividends or other distributions, changes in
stock, repurchases or redemptions of securities, issuances or sales of its
securities, amendments to Cabot's declaration of trust or by-laws, liquidation,
merger, change of control transactions, material acquisitions or dispositions,
indebtedness, tax matters, capital expenditures, discharge of liabilities,
material contracts, affiliate contracts, compensation and employee benefits,
receivables, settlement of litigation and claims, employee matters, changes in
accounting methods, and certain other material events or transactions.
NO SOLICITATION. The Merger Agreement provides that Cabot shall and shall
cause its subsidiaries to, and Cabot and Cabot LP shall take all actions
reasonably necessary to cause their respective affiliates, officers, directors,
employees, financial advisors, counsel and any other agents to, immediately
cease any discussions, negotiations or communications with any party or parties
with respect to any Competing Transaction (as defined below). The Merger
Agreement also provides that Cabot will not, and will not permit any of its
subsidiaries to, and will not authorize or permit any officer, trustee,
director or employee of, or any investment banker, attorney, agent or other
advisor or representative of, Cabot or any Cabot subsidiary to:
(i) solicit or initiate, encourage, participate, or facilitate, directly
or indirectly, any inquiries relating to, or the submission of, any proposal
or offer, whether in writing or otherwise, from any person or group (as
defined in Section 13(d)(3) of the Exchange Act) other than CalWest, Rooster
Acquisition Corp. or any affiliates thereof (a "Third Party") to acquire
beneficial ownership (as defined under Rule 13(d) of the Exchange Act) of
all or more than 15% of the assets of Cabot and Cabot's subsidiaries, taken
as a whole, or 15% or more of any class of equity securities (or voting
debt) of Cabot or Cabot LP pursuant to a merger, consolidation or other
business combination, sale of shares of beneficial interest, sale of assets,
tender offer, exchange offer or similar transaction or series of related
transactions, which is structured to permit such Third Party to acquire
beneficial ownership of more than 15% of the assets of Cabot and the Cabot
subsidiaries, taken as a whole, or 15% or more of any class of equity
securities (or voting debt) in Cabot or the Cabot LP (a "Competing
Transaction");
(ii) directly or indirectly, solicit, initiate, encourage, facilitate or
participate in any discussions or negotiations regarding, or furnish to any
person or group (as defined in Section 13(d)(3) of the Exchange Act) any
information or data with respect to or access to the properties, offices,
books, records, officers, directors or employees of, or take any other
action to knowingly, directly or indirectly, facilitate, solicit or
encourage the making of any proposal that constitutes, or may reasonably be
expected to lead to, any Competing Transaction; or
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(iii) enter into any Acquisition Agreement, approve or recommend or
resolve to approve or recommend any Competing Transaction or enter into any
agreement (written or oral) requiring it to abandon, terminate or fail to
consummate the Offer, the Merger and the other transactions contemplated by
the Merger Agreement. "Acquisition Agreement" means any letter of intent,
agreement in principle, merger agreement, stock purchase agreement, asset
purchase agreement, acquisition agreement, option agreement or similar
agreement relating to a Competing Transaction.
Notwithstanding the foregoing, prior to the expiration of the Offer, if
Cabot receives a bona fide, written proposal or offer for a Competing
Transaction by a Third Party, which the Cabot Board of Trustees determines in
good faith (after consultation with Cabot's independent financial advisor and
outside counsel) (A) is on terms which are more favorable from a financial
point of view to the holders of Common Shares than the Offer, the Merger, and
the other transactions contemplated by the Merger Agreement, (B) would result
in such Third Party owning, directly or indirectly, all or substantially all of
the Common Shares then outstanding (or of the surviving entity in a merger) or
all or substantially all of the assets of Cabot and Cabot's subsidiaries, (C)
is not subject to any material contingency, including any contingency relating
to financing (provided that if such contingency related to financing is
substantially similar in substance, and not less favorable to Cabot than the
material adverse effect provision in the commitment letter from CalWest's
bridge loan lender, it shall not be considered a material contingency, which
neither the Cabot Board of Trustees determines may likely be overcome or
addressed nor the other party thereto has reasonably demonstrated in its
written offer its ability to overcome or address, including the receipt of
government consents or approvals (including any such approval required under
the HSR Act), (D) does not contain a "right of first offer" or "right of first
refusal" with respect to any revised Offer that CalWest or Rooster Acquisition
Corp. may make, (E) is reasonably capable of being consummated (provided, that
the Cabot Board of Trustees and any of its advisors shall be permitted to
contact such Third Party and its advisors solely for the purpose of clarifying
the proposal and any material contingencies and the capability of
consummation), and (F) was not solicited, encouraged or facilitated by Cabot in
breach of this provision (a "Superior Competing Transaction"), then, prior to
acceptance by Rooster Acquisition Corp. for payment and payment by Rooster
Acquisition Corp. for the Common Shares pursuant to the Offer, Cabot may, in
response to an unsolicited request therefor and subject to a good faith
determination by the Cabot Board of Trustees (after consultation with its
outside counsel) that the failure to take such action likely would be
inconsistent with its duties under Maryland law and compliance by Cabot with
its obligation to notify CalWest of the material details of such Superior
Competing Transaction and the status thereof (including amendments or changes
or proposed amendments or changes thereto), furnish information with respect to
Cabot and the Cabot subsidiaries to, and participate in discussions and
negotiations directly or through its representatives with, such Third Party,
subject to a confidentiality agreement not materially less favorable to Cabot
than the confidentiality agreement among RREEF, Cabot and Cabot LP and which
contains a one year prohibition against such Third Party soliciting the
employment of any employee of Cabot or any Cabot subsidiary.
In addition, except concurrently with Cabot's termination of the Merger
Agreement in accordance with the termination provisions described below in the
section entitled "Termination", neither the Cabot Board of Trustees nor any
committee thereof may (i) take any action to (A) redeem the Rights, (B) waive
or amend any provision of the Rights Agreement or (C) make any determination
under the Rights Agreement, in any such case to permit or facilitate the
consummation of a Competing Transaction (provided that notwithstanding the
foregoing, the Cabot Board of Trustees may delay the distribution of the Rights
under the Cabot Rights Agreement so long as no person or group of persons has
become an "acquiring person" for purposes of the Cabot Rights Agreement), (ii)
take any action to waive the limit on the ownership of Common Shares contained
in Cabot's Declaration of Trust with respect to any Competing Transaction,
(iii) take any action necessary to render the provisions of any "fair price,"
"moratorium," "control share acquisition" or other takeover defense or similar
statute or regulation (including the provisions of Subtitles 6 and 7 of Title 3
of the MGCL and Title 8 (collectively, the "Takeover Statute") inapplicable to
any Competing Transaction, or (iv) propose, agree or resolve to do any of the
foregoing. Nothing contained in the Merger Agreement prevents the Cabot Board
of Trustees from complying with Rule 14d-9 and Rule 14e-2 promulgated under the
Exchange Act. Cabot has agreed to promptly notify CalWest if the Cabot Board of
Trustees determines that a Competing Transaction is not a Superior Competing
Transaction.
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The Merger Agreement also provides that Cabot shall advise CalWest orally
and in writing of (i) any Competing Transaction or any inquiry with respect to
or which could reasonably be expected to lead to any Competing Transaction
received by any officer or trustee of Cabot or, to Cabot's knowledge, any
financial advisor, attorney or other advisor or representative of Cabot, (ii)
the material terms and conditions of such Competing Transaction (including a
copy of any written proposal) and (iii) the identity of the person making the
proposal or offer for any such Competing Transaction or inquiry immediately
(but in any event within 24 hours) following receipt by Cabot or any officer or
trustee of Cabot or, to Cabot's knowledge, any financial advisor, attorney or
other advisor or representative of Cabot of such Competing Transaction proposal
or inquiry. Cabot will promptly inform CalWest and Rooster Acquisition Corp.
(orally and in writing) of the status and details of any such Competing
Transaction proposal or inquiry (including amendments or changes or proposed
amendments or changes thereto) and, in any event shall promptly inform CalWest
and Rooster Acquisition Corp. (orally and in writing) of any material
developments regarding such proposal or inquiry. Cabot agrees to promptly
notify CalWest if the Cabot Board of Trustees determines that a Competing
Transaction is not a Superior Competing Transaction.
Pursuant to the Merger Agreement, Cabot shall not determine to accept a
Superior Competing Transaction unless (i) it has complied in all material
respects with its obligations described in this section "No Solicitation", (ii)
the Cabot Board of Trustees determines in good faith (after consultation with
its outside counsel) that the failure to take such action likely would be
inconsistent with its duties under Maryland law, (iii) not fewer than 48 hours
prior to taking such action, CalWest is notified orally and in writing of such
Board's intention to take such action and (iv) the Cabot Board of Trustees
determines in good faith (after consultation with Cabot's independent financial
advisor and outside counsel) that such Competing Transaction continues to be a
Superior Competing Transaction after (A) taking into account any amendment of
the terms of the Offer or Merger by CalWest or Rooster Acquisition Corp. and/or
any proposal by CalWest to amend the terms of the Merger Agreement or other
documents contemplated thereby, the Offer or the Merger and (B) negotiating in
good faith with CalWest concerning any such new proposal by CalWest prior to
the expiration of such 48 hour period.
PUBLIC ANNOUNCEMENTS. Cabot and CalWest have agreed to consult with each
other before issuing any press release or other public statements with respect
to the Merger Agreement and the transactions contemplated by it, and each has
agreed not to issue any such press release or make any such public statement
without the prior consent of the other party, not to be unreasonably withheld
or delayed, except as may be required by law or in accordance with any listing
agreement with any national securities exchange.
EFFORTS. Each of CalWest, Rooster Acquisition Corp., Cabot and Cabot LP has
agreed to use its commercially reasonable efforts to take, or cause to be
taken, all actions and to do, or cause to be done, and to assist and cooperate
with the other parties in doing, all things necessary, proper or advisable to
fulfill all conditions applicable to such party pursuant to the Merger
Agreement and to consummate and make effective, in the most expeditious manner
practicable, the Offer, the Merger and the other transactions contemplated
thereby, including (i) the obtaining of all necessary, proper and advisable
actions or nonactions, waivers, consents and approvals from governmental
entities and the making of all necessary, proper and advisable registrations,
filings and notices and the taking of all reasonable steps as may be necessary
to obtain an approval, waiver or exemption from any governmental entity, (ii)
the obtaining of all necessary, proper and advisable consents, approvals,
waivers or exemptions from non-governmental third parties; and (iii) the
execution and delivery of any additional documents or instruments necessary,
proper and advisable to consummate the transactions contemplated by, and to
fully carry out the purposes of, the Merger Agreement. In addition, each of
CalWest, Rooster Acquisition Corp., Cabot and the Cabot LP agrees to use its
commercially reasonable efforts to defend any lawsuits or other legal
proceedings, whether judicial or administrative, challenging the Merger, the
Merger Agreement or the transactions contemplated thereby, including seeking to
have any stay, temporary restraining order, injunction, or restraining order or
other order adversely affecting the ability of the parties to consummate the
transactions contemplated by the Merger Agreement and other documents related
thereto entered by any court or other governmental entity vacated or reversed.
In addition, from the date of the Merger Agreement through the Effective Time,
Cabot shall timely file, or cause to be filed, with the SEC all documents
required to be so filed.
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EMPLOYEE ARRANGEMENTS. Pursuant to the Merger Agreement, on October 29,
2001, Cabot mailed or personally delivered to all of its full-time employees
who have worked for an average of at least 20 hours per week and have been
employed by Cabot for at least six of the twelve months prior to October 29,
2001, at Cabot's operation in Boston, Massachusetts, notices which were
sufficient to comply with the terms of the Worker Adjustment and Retraining
Notification Act and any applicable analogous state plant closing statutes.
Unless otherwise agreed by Cabot, Cabot LP and CalWest, prior to the
effective date of any transaction (or series of transactions) in which Cabot
and Cabot LP become members of the CalWest controlled group, within the meaning
of Section 414(b), (c), (m) or (o) of the Code, and if directed to do so by
CalWest, Cabot and Cabot LP will take such action (and cause their subsidiaries
to take such action) as is necessary to terminate Cabot's 401(k) Plan and also
will take all necessary action to ensure that each Cabot employee is fully
vested in his or her account balance under Cabot's 401(k) Plan.
In the event that the employment of any employee of Cabot is terminated
within six months of the Effective Time and in the event that such employee
obtains insurance pursuant to the Consolidated Omnibus Budget Reconciliation
Act of 1985 ("COBRA"), the Surviving Entity shall pay a portion of the premium
owed by such employee under the COBRA plan equal to the premium paid by Cabot
under the Cabot employee benefit plans in which such employee participated
prior to the closing date for the Merger. Such premiums shall be paid for a
period of time equal to the lesser of (x) the period of months upon which such
employee severance payment has been calculated and (y) 18 months from the date
of termination of employment.
CalWest has agreed to pay or cause to be paid at the effective time the
amounts due to Cabot's senior executives under severance agreements entered
into between Cabot and such senior executives.
TRIGGERED LOANS. Certain mortgage indebtedness will likely be, and certain
additional mortgage indebtedness may potentially be, accelerated as a result of
the transactions contemplated by the Merger Agreement and, if so accelerated,
such indebtedness must be paid or refinanced. At November 1, 2001, the
aggregate outstanding principal balance under such indebtedness was
approximately $34,896,713.
INDEMNIFICATION; DIRECTORS', TRUSTEES' AND OFFICERS' INSURANCE. CalWest and
Rooster Acquisition Corp. agree that all rights to indemnification existing in
favor of, and all exculpations and limitations of the personal liability of,
the trustees and officers of Cabot (the "Indemnified Parties") provided for in
Cabot's declaration of trust or by-laws, as well as indemnification agreements,
as in effect as of the date of the Merger Agreement with respect to matters
occurring at or prior to the Effective Time, including the Merger, shall
continue in full force and effect in accordance with their terms; provided,
however, that all rights to indemnification in respect of any claims (each, a
"Claim") asserted or made within such period shall continue until the
disposition of such Claim.
For six years after the Effective Time, the Surviving Entity shall, and
CalWest will cause the Surviving Entity to, cause to be maintained in effect
Cabot's existing trustees', directors' and officers' liability insurance and
fiduciary insurance policies with an amount of coverage not less than 100% of
the amount of existing coverage, or policies that are no less favorable to the
Indemnified Parties, and with an amount of coverage not less than 100% of the
amount of existing coverage, than the policies which are currently maintained
by Cabot, with respect to claims arising from facts or events which occurred at
or before the Effective Time, so long as such policies are available for an
annual premium which is no more than 200% of the current annual premium for the
existing policies; provided, that if such policies are not available for an
annual premium of 200% or less of the current annual premium, then policies in
an amount and scope as great as can be obtained for an annual premium of 200%
of the current annual premium shall be obtained.
The obligations of CalWest set forth in the foregoing two paragraphs are
intended for the irrevocable benefit of, and to grant third party rights to,
the Indemnified Parties and will be binding on all successors and assigns of
CalWest, Cabot and the Surviving Entity. Each of the Indemnified Parties shall
be entitled to enforce the
31
covenants contained in this section. In the event that the Surviving Entity or
any of its successors or assigns (i) consolidates with or merges into any other
person or entity and shall not be the continuing or surviving entity of such
consolidation or merger or (ii) transfers or conveys all or substantially all
of its properties and assets to any person or entity, then, and in each such
case, proper provision will be made so that the successors, assigns and
transferees of the Surviving Entity, as the case may be, assume the obligations
set forth in this section.
NOTIFICATION OF CERTAIN MATTERS. Each of Cabot and CalWest and Rooster
Acquisition Corp. have agreed to promptly notify the other if (a) any
representation or warranty made by it contained in the Merger Agreement that is
qualified as to materiality becomes untrue or inaccurate in any respect or any
such representation or warranty that is not so qualified becomes untrue or
inaccurate in any material respect or (b) it fails to comply with or satisfy in
any material respect any covenant, condition or agreement to be complied with
or satisfied by it under the Merger Agreement; provided, however, that no such
notification shall affect the representations, warranties, covenants or
agreements of the parties or the conditions to the obligations of the parties
under the Merger Agreement.
TAKEOVER RESTRICTIONS. In the Merger Agreement, Cabot has represented that
it has taken all appropriate and necessary actions to exempt the Offer, the
Merger and the other transactions contemplated by the Merger Agreement from the
restrictions of the "Takeover Statute." Cabot has further represented that
Cabot and the Cabot Board of Trustees have taken all appropriate and necessary
actions to (A) amend the Cabot Rights Agreement to (1) exempt CalWest and
Rooster Acquisition Corp. from the definition of an Acquiring Person (as
defined in the Rights Agreement) thereunder due solely to the Merger Agreement
and the transactions contemplated thereby (including the Merger and the Offer)
and (2) provide that no Distribution Date (as defined in the Rights Agreement)
shall be deemed to have occurred as a result of the Merger Agreement or the
transactions contemplated thereby (including the Merger and the Offer), (B)
render any takeover defense or other provision contained in Cabot's declaration
of trust or by-laws inapplicable to the Offer, the Merger and the other
transactions contemplated by the Merger Agreement and (C) render any and all
limitations on ownership of (1) Common Shares as set forth in Cabot's
declaration of trust and (2) the limited partner interests in the Cabot LP as
set forth in Cabot LP's current limited partnership agreement, inapplicable to
the Offer, the Merger and the other transactions contemplated by the Merger
Agreement.
TAX TREATMENT. For federal income tax purposes, CalWest, Rooster Acquisition
Corp. and Cabot shall report the portions of the transactions contemplated by
the Merger Agreement, constituting the Offer and the Merger, as a taxable
purchase of Common Shares directly by CalWest with the existence of Rooster
Acquisition Corp. disregarded and each shall use its respective best efforts to
cause such portions of such transactions to be so treated for federal income
tax purposes. Unless required by law, neither CalWest and Rooster Acquisition
Corp., on the one hand, nor Cabot and Cabot LP, on the other hand, will take or
omit to take any action, or permit any status to exist, prior to the Effective
Time, that would or may jeopardize, or that is inconsistent with, Cabot's
status as a REIT or the status of Cabot LP or any of its subsidiaries organized
and existing as partnerships or limited liability companies under the laws of
its jurisdiction or organization, as a partnership for tax purposes, for any
period.
Unless prohibited by law (as evidenced by the legal opinion of a nationally
recognized U.S. law firm reasonably acceptable to CalWest and Cabot) or the
Merger Agreement, up to the Effective Time, Cabot, each Cabot subsidiary and
any affiliate of any of them, will be permitted to take or omit to take any
action in order to maintain Cabot's status as a REIT under the Code or the
status of Cabot LP or any Cabot subsidiary partnership as a partnership for tax
purposes for any period.
CONDITIONS TO CONSUMMATION OF THE MERGER. Pursuant to the Merger Agreement,
the respective obligations of Rooster Acquisition Corp. and Cabot to consummate
the Merger are subject to the satisfaction or waiver, on or prior to the
closing date of the Merger, of the following conditions:
(a) if required by Title 8, the Merger Agreement and the Merger shall
have been approved by the Cabot shareholders in accordance with Title 8 and
any other applicable federal, state, local or foreign
32
statute, law, regulation, permit, license, approval, authorization, rule,
rule of common law, ordinance or code of any governmental entity, including
any judicial or administrative interpretation thereof (collectively, any
"Law");
(b) there shall be no Law or award, judgment, injunction, consent,
ruling, decree or order (whether temporary, preliminary or permanent)
issued, adopted, granted, awarded or entered by any governmental entity or
private arbitrator (collectively, any "Order") (which Order or other action
the parties to the Merger Agreement shall use their commercially reasonable
efforts to vacate or lift) which prohibits, enjoins, restrains or precludes
the consummation of the Merger under applicable Law; and
(c) Rooster Acquisition Corp. shall have accepted for payment and paid
for, pursuant to the terms and conditions of the Offer, all Common Shares
duly tendered pursuant to the Offer and not withdrawn.
TERMINATION. The Merger Agreement may be terminated and the Offer, the
Merger and the adoption, execution and delivery of the other transactions
contemplated by the Merger Agreement may be abandoned at any time prior to the
Effective Time (notwithstanding any approval of the Merger, the Merger
Agreement or any of the other transactions contemplated by the Merger Agreement
by the Cabot shareholders):
(a) by mutual written consent of Cabot and CalWest;
(b) by Cabot or CalWest if any governmental entity or private arbitrator
shall have issued an Order permanently enjoining, restraining or otherwise
prohibiting the acceptance for payment of, or payment for, Common Shares
pursuant to the Offer, or issued a similar Order with respect to the merger
or any of the material transactions contemplated by the Merger Agreement and
such Order shall have become final and nonappealable; provided, that the
party seeking to terminate the Merger Agreement pursuant to this clause (b)
shall have used all commercially reasonable efforts to remove such Order;
(c) by Cabot, if (i) Rooster Acquisition Corp. shall have failed to
commence the Offer within the five business day period specified in the
Merger Agreement, so long as none of the events or conditions set forth in
clauses (a) through (k) of Section 14 shall have occurred and be existing,
(ii) if Rooster Acquisition Corp. terminates or withdraws the Offer without
accepting for payment and promptly paying for all Common Shares validly
tendered for payment and not withdrawn thereunder in breach of the Merger
Agreement, (iii) the Offer shall have expired (or shall have been required
to expire pursuant to the terms of the Merger Agreement) without the
acceptance for payment and prompt payment for all Common Shares validly
tendered for payment and not withdrawn thereunder or (iv) if the Offer has
not been consummated on or before the date that is 120 days from the date of
the Merger Agreement; provided, that the right to terminate the Merger
Agreement pursuant to the foregoing clauses (c)(i), (ii), (iii) and (iv)
will not be available to Cabot if Cabot's (or any Cabot subsidiary's)
failure to fulfill any obligation under the Merger Agreement has been the
proximate cause of, or resulted in, such event or condition;
(d) by Cabot, prior to the consummation of the Offer, if it determines to
accept a proposal or offer for a Superior Competing Transaction; provided,
that the Merger Agreement may not be terminated under this provision unless,
(i) the Cabot Board of Trustees determines in good faith (after consultation
with its outside counsel) that the failure to take such action likely would
be inconsistent with its duties under Maryland law, (ii) not fewer than 48
hours prior to taking such action, CalWest is notified orally and in writing
of such Board's intention to take such action and (iii) the Cabot Board of
Trustees determines in good faith (after consultation with Cabot's
independent financial advisor and outside counsel) that such Competing
Transaction continues to be a Superior Competing Transaction after (A)
taking into account any amendment of the terms of the Offer or Merger by
CalWest or Rooster Acquisition Corp. and/or any proposal by CalWest to amend
the terms of the documents contemplated by the Merger Agreement, the Offer
or the Merger and (B) negotiating in good faith with CalWest concerning any
such new proposal by CalWest prior to the expiration of such 48 hour period;
(e) by CalWest, prior to the consummation of the Offer, if (i) the Cabot
Board of Trustees shall have withdrawn or adversely modified its approvals
or recommendations of the Offer, the Merger or the
33
transactions contemplated by the Merger Agreement (with the understanding,
however, that for all purposes of the Merger Agreement, the fact that Cabot
has supplied any person with information regarding Cabot or has entered into
discussions or negotiations with such person as permitted by, or without
violating, the Merger Agreement, or the disclosure of such facts, shall not
be deemed in and of itself a withdrawal or modification of such approvals or
recommendations) or (ii) the Cabot Board of Trustees shall have (A)
recommended to the holders of Common Shares that they approve or accept a
Competing Transaction rather than the transactions contemplated by the
Merger Agreement or (B) determined to accept a proposal or offer for a
Superior Competing Transaction;
(f) by CalWest, (i) if the Offer terminates or expires without CalWest
and Rooster Acquisition Corp. having purchased any Common Shares thereunder
or (ii) if the Offer has not been consummated on or before the later of (A)
December 28, 2001 if the Minimum Condition is not satisfied on December 28,
2001, or any date thereafter, at CalWest's option, if the Minimum Condition
continues to be unsatisfied on such date (in accordance with the terms of
the Merger Agreement), or (B) the date that is 120 days from the date of the
Merger Agreement (provided, that the right to terminate this Agreement
pursuant to the foregoing clauses (f)(i) and (ii) will not be available to
CalWest if CalWest's (or any CalWest subsidiary's) failure to fulfill any
obligation under the Merger Agreement has been the proximate cause of, or
resulted in, such event or condition);
(g) by CalWest, if any of the following events shall occur and be
continuing or conditions exists (any such event or condition, a "Terminating
Cabot Breach"):
(i) prior to the acceptance for payment by Rooster Acquisition Corp.
of Common Shares pursuant to the Offer, any of the representations and
warranties of Cabot contained in the Merger Agreement and qualified by
the term Cabot Material Adverse Effect (as such term is defined in
Section 14(d) below) shall not be true and correct as of the date of
determination or the date of the Merger Agreement (except to the extent
that any such representation or warranty, by its terms, is expressly
limited to a specific date, in which case CalWest's right to terminate
pursuant to this clause (i) shall be triggered only if such
representation or warranty shall not be true and correct as of such
date); or
(ii) prior to the acceptance for payment by Rooster Acquisition Corp.
of Common Shares pursuant to the Offer, any of the representations and
warranties of Cabot contained in the Merger Agreement and qualified by
materiality (not including those that are qualified by the term Cabot
Material Adverse Effect) shall not be true and correct as of the date of
determination or the date of the Merger Agreement (except to the extent
that any such representation or warranty, by its terms, is expressly
limited to a specific date, in which case CalWest's right to terminate
pursuant to this clause (ii) shall be triggered only if such
representation or warranty shall not be true and correct as of such
date), except where the failure of any such representation or warranty
to be so true and correct, together with all other representations and
warranties qualified by materiality (not including those that are
qualified by the term Cabot Material Adverse Effect) which are not true
and correct, would not constitute a Cabot Material Adverse Effect; or
(iii) prior to the acceptance for payment by Rooster Acquisition
Corp. of Common Shares pursuant to the Offer, the representations and
warranties of Cabot contained in the Merger Agreement and not qualified
by materiality or the term Cabot Material Adverse Effect shall not be
true and correct in all material respects as of the date of
determination, the date of the Merger Agreement or, with respect to the
representations and warranties expressly limited to a specific date, as
of such specific dates; or
(iv) Cabot shall have failed to perform or comply with, in all
material respects, each of its agreements contained in the Merger
Agreement required to be performed at or prior to the date of
determination;
provided, however, that if such Terminating Cabot Breach is capable of being
cured by Cabot within ten business days after the notification of the
occurrence of the Terminating Cabot Breach and prior to the
34
Effective Time through the exercise of its commercially reasonable efforts
and is so cured within such period, so long as Cabot continues to exercise
such commercially reasonable efforts, CalWest may not terminate this
Agreement under this paragraph (g); or
(h) by Cabot, if any of the following events shall occur and be
continuing or conditions exists: (i) any of the representations and
warranties of any CalWest Party contained in the Merger Agreement that are
qualified as to materiality shall not be true and correct and any such
representations and warranties that are not so qualified shall not be true
and correct in any material respect, in each case as of the date of
determination (except to the extent that any such representation or
warranty, by its terms, is expressly limited to a specific date, in which
case such representation or warranty shall not be true and correct as of
such date), except where the failure to be so true and correct would not
reasonably be expected to prevent or materially delay the consummation of
the Offer, the Merger or any other transaction contemplated by the Merger
Agreement, and except where the failure of such representation or warranty
to be so true and correct was principally caused by general economic
changes, changes in the U.S. financial markets generally, changes that
affect REITs generally and changes that generally affect real estate
properties of the type generally owned by Cabot; or (ii) the CalWest Parties
shall have failed to perform in all material respects each of their
agreements contained in the Merger Agreement required to be performed at or
prior to the date of determination (any such event or condition, a
"Terminating CalWest Breach"); provided, however, that such Terminating
CalWest Breach must be reasonably likely to materially adversely affect the
consummation of the Offer or the Merger and if such Terminating CalWest
Breach is capable of being cured by CalWest prior to the Effective Time
through the exercise of its commercially reasonable efforts, so long as
CalWest continues to exercise such commercially reasonable efforts, Cabot
may not terminate the Merger Agreement under this paragraph (h).
EXPENSES. Except as described below or agreed in writing by the parties, all
out-of-pocket costs and expenses incurred in connection with the Offer, the
Merger, the Merger Agreement and the transactions contemplated by the Merger
Agreement will be paid by the party incurring such cost or expense; provided,
that if the Merger is consummated, all expenses of Cabot and Cabot LP shall be
paid by the Surviving Entity and its subsidiaries, and provided further that
any filing fees under the HSR Act shall be split equally between Cabot and
CalWest.
In the event the Merger Agreement is terminated by CalWest pursuant to the
provisions described in paragraph (g) of the foregoing section entitled
"Termination," then Cabot and Cabot LP will pay to CalWest, or to such party or
parties as directed by CalWest, an amount equal to (i) in the event of a
termination pursuant to paragraph (g)(i), (ii) or (iii) of the foregoing
section, an amount equal to the out-of-pocket expenses of CalWest or any of its
affiliates incurred in connection with the Offer, the Merger, the Merger
Agreement and the other transactions contemplated by the Merger Agreement
(including all attorneys', accountants', investment bankers', consultants',
appraisers', insurers' and financing sources' fees and expenses), but in no
event in an amount greater than $17.5 million (the "Break-Up Expenses") or (ii)
in the event of a termination pursuant to paragraph (g)(iv) of the foregoing
"Termination" section, $15 million. If the Merger Agreement:
(a) is terminated pursuant to paragraph (c)(iii), paragraph (c)(iv) or
paragraph (f) of the foregoing "Termination" section and (A) following the
first public announcement of the Merger Agreement and on or before the date
of any such termination, a plan or proposal with respect to a Competing
Transaction is publicly disclosed or announced or is otherwise reported in
the media, (B) thereafter, but prior to such termination, Cabot failed to
publicly reaffirm its recommendations and approvals of the Offer, Merger and
other transactions contemplated by the Merger Agreement in response to any
such plan or proposal or any material modification thereof and (C) within
180 days of the date of such termination, Cabot shall consummate a Competing
Transaction or enter into an Acquisition Agreement (or resolves or announces
an intention to do so) providing for a Competing Transaction that is
ultimately consummated (in each case, regardless of whether such Competing
Transaction is the same Competing Transaction which was proposed or
announced as of the date of termination); or
(b) is terminated pursuant to paragraph (g) of the foregoing termination
section (other than as a result of a breach by Cabot of the foregoing
section entitled "No Solicitation") and (A) on or before the date of
35
any such termination, there has been or there is proposed by a Third Party
to Cabot to consummate, or a Third Party shall have publicly announced,
following the first public announcement of this Agreement, a plan or
proposal with respect to, a Competing Transaction and (B) within 360 days of
the date of such termination, Cabot shall consummate a Competing Transaction
or enter into an Acquisition Agreement (or resolves or announces an
intention to do so) providing for a Competing Transaction that is ultimately
consummated (in each case, regardless of whether such Competing Transaction
is the same Competing Transaction which was proposed or announced as of the
date of termination); or
(c) is terminated pursuant to paragraph (g) of the foregoing
"Termination" section as a result of a breach by Cabot of the foregoing
section entitled "No Solicitation" and within 360 days of the date of such
termination, Cabot shall consummate a Competing Transaction or enter into an
Acquisition Agreement (or resolves or announces an intention to do so)
providing for a Competing Transaction that is ultimately consummated; or
(d) is terminated pursuant to paragraph (d) or (e) of the foregoing
"Termination" section,
then, Cabot and Cabot LP shall pay to CalWest, or as directed by CalWest, an
amount equal to $35 million (the "Break-Up Fee") plus any Break-Up Expenses
(unless such Break-Up Expenses or an amount equal to $15 million was paid
theretofore pursuant to the second paragraph of this section). Payment of any
of such amounts shall be made, as directed by CalWest, by prompt wire transfer
of immediately available funds, but in no event later than one business day
after the amount is due as provided herein.
Notwithstanding anything to the contrary in the Merger Agreement (other than
in the case of a willful or intentional breach of the Merger Agreement,
including such a breach of the foregoing section entitled "No Solicitation"),
CalWest has expressly acknowledged and agreed that, with respect to any
termination of this Agreement pursuant to paragraph (d), (e) or (g) of the
foregoing "Termination" section in circumstances where the Break-Up Fee and/or
the Break-Up Expenses are payable in accordance with this section, the payment
of the Break-Up Fee and/or the Break-Up Expenses shall constitute liquidated
damages with respect to any claim for damages or any other claim which CalWest
would otherwise be entitled to assert against Cabot, Cabot LP or any Cabot
subsidiary or any of their respective assets, or against any of their
respective trustees, directors, officers, employees, partners or shareholders,
with respect to the Merger Agreement and the transactions contemplated by the
Merger Agreement and shall constitute the sole and exclusive remedy available
to CalWest. The parties have expressly acknowledged and agreed that, in light
of the difficulty of accurately determining actual damages with respect to the
foregoing upon any termination of the Merger Agreement pursuant to paragraph
(d), (e) or (g) of the foregoing section in circumstances where the Break-Up
Fee and/or the Break-Up Expenses are payable in accordance with this section,
the right to payment under any of such subsections of the foregoing section:
(i) constitutes a reasonable estimate of the damages that will be suffered by
reason of any such proposed or actual termination of the Merger Agreement
pursuant to said section, and (ii) shall be in full and complete satisfaction
of any and all damages arising as a result of the foregoing. Except for
nonpayment of the amounts set forth in this section, CalWest has agreed that,
upon any termination of the Merger Agreement pursuant to paragraph (d), (e) or
(g) of the foregoing "Termination" section in circumstances where the Break-Up
Fee and/or the Break-Up Expenses are payable in accordance with this section,
in no event (other than in the case of an intentional or willful breach of the
Merger Agreement, including such a breach of the foregoing section entitled "No
Solicitation") shall CalWest (A) seek to obtain any recovery or judgment
against Cabot, Cabot LP or any Cabot subsidiary or any of their respective
assets, or against any of their respective trustees, directors, officers,
employees, partners or shareholders, or (B) be entitled to seek or obtain any
other damages of any kind, including, without limitation, consequential,
indirect or punitive damages.
AMENDMENT. The Merger Agreement may be amended by CalWest, Rooster
Acquisition Corp., Cabot and Cabot LP, at any time before or after obtaining
the affirmative vote of at least two-thirds of the votes entitled to be cast on
the Merger and prior to the filing of the articles of merger, provided that
after such shareholder approval is obtained, no such amendment, modification or
supplement may be made which alters the amount or
36
changes the form of consideration paid to Cabot's shareholders in the Merger or
alters or changes any of the terms or conditions of the Merger Agreement if
such alteration or change would adversely affect Cabot's shareholders.
EXTENSION; WAIVER. At any time prior to the Effective Time, each of Cabot
and CalWest may (a) extend the time for the performance of any of the
obligations or other acts of the other party, (b) waive any inaccuracies in the
representations and warranties contained in the Merger Agreement or in any
document delivered pursuant to the Merger Agreement or (c) subject to the
foregoing section entitled "Amendments," waive compliance with any of the
agreements or conditions of the other party contained in the Merger Agreement.
The Shareholder and Unitholder Agreements
The following summary description of the Shareholder Agreements and
Unitholder Agreements is qualified in its entirety by reference to the form of
the agreements, filed as Exhibits (d)(4), (d)(5) and (d)(6) to the Tender Offer
Statement on Schedule TO that we filed with the SEC, which you may examine and
copy as set forth in Section 8 above.
Concurrently with the execution of the Merger Agreement, CalWest, Rooster
Acquisition Corp., Cabot and Cabot LP have entered into (i) Unitholder
Agreements with certain holders (who are not trustees or executive officers of
Cabot) of Units (the "Unitholders"), and (ii) Shareholder Agreements with
certain trustees and executive officers of Cabot and their affiliates who are
also (A) shareholders of Cabot and/or (B) holders of Units (collectively with
the Unitholders, the "Subject Shareholders").
Each Unitholder Agreement and Shareholder Agreement terminates immediately
upon the earlier of (a) any termination of the Merger Agreement in accordance
with its terms or (b) the Effective Time. The Unitholder Agreements contemplate
that the holders of 127,936 Units will convert such Units into Common Shares
and tender such Common Shares in the Offer. The Shareholder Agreements
contemplate that the holders of 1,642,475 Units will convert such Units into
Common Shares and tender such Common Shares in the Offer, and that the holders
of 41,551 Common Shares will tender such Common Shares in the Offer; provided,
however, that the Shareholder Agreements executed by Ferdinand
Colloredo-Mansfeld, Robert E. Patterson and certain of their affiliates provide
CalWest and Rooster Acquisition Corp. with an option to purchase the 1,431,271
Units held by such persons and entities, which option is discussed in paragraph
(h) below.
Each Subject Shareholder has agreed not to: (i) transfer, assign, sell,
gift-over, pledge or otherwise dispose of, or consent to any of the foregoing
(each, a "Transfer") with respect to, any or all of the Common Shares or Units
owned by such Subject Shareholder or any right or interest therein; (ii) enter
into any contract, option or other agreement, arrangement or understanding with
respect to any Transfer; (iii) grant any proxy, power-of-attorney or other
authorization or consent with respect to any of the Common Shares or Units
owned by such Subject Shareholder; (iv) deposit any of the Common Shares or
Units owned by such Subject Shareholder into a voting trust, or enter into a
voting agreement or arrangement with respect to any of such securities or (v)
take any other action that would in any way restrict, limit or interfere with
the performance of the Subject Shareholder's obligations under the Unitholder
or Shareholder Agreement, as applicable, or the consummation of the
transactions contemplated thereby or by the Merger Agreement.
Each Subject Shareholder who is a party to the Unitholder Agreement has
agreed to convert the Units into Common Shares conditional upon Rooster
Acquisition Corp.'s acceptance for payment and payment for, pursuant to the
terms of the Offer, all Common Shares duly tendered and not withdrawn, pursuant
to the conversion rights set forth in the Second Amended and Restated Agreement
of Limited Partnership of Cabot LP and, upon such conversion, immediately
tender such Common Shares in the Offer.
37
Each Subject Shareholder who is a party to the Shareholder Agreement has
agreed:
(a) to tender such Subject Shareholder's Common Shares in the Offer as
promptly as practicable, and in any event no later than the fifth business
day, following the commencement of the Offer. The Subject Shareholder has
agreed not to withdraw any Common Shares tendered unless the Offer is
terminated or has expired without Rooster Acquisition Corp. purchasing all
Common Shares validly tendered in the Offer;
(b) immediately prior to and conditional upon Rooster Acquisition Corp.'s
acceptance for payment and payment for, pursuant to the terms of the Offer,
all Common Shares duly tendered and not withdrawn, to convert the Units into
Common Shares, pursuant to the conversion rights set forth in the Second
Amended and Restated Agreement of Limited Partnership of Cabot LP and, upon
such conversion, immediately tender such Common Shares in the Offer,
provided that in the case of Ferdinand Colloredo-Mansfeld, Robert E.
Patterson and certain of their respective affiliates thereto, such
obligation is subject to such option;
(c) at any meeting of the shareholders of Cabot (a "Cabot Shareholders'
Meeting"), to:
(i) appear at the meeting or otherwise cause such Subject
Shareholder's Common Shares to be counted as present thereat for
purposes of establishing a quorum,
(ii) vote, or execute consents in respect of, such Common Shares or
cause such Common Shares to be voted, or consents to be executed in
respect thereof, in favor of the approval and adoption of the Merger
Agreement, and
(iii) vote, or execute consents in respect of, such Common Shares or
cause such Common Shares to be voted, or consents to be executed in
respect thereof, against:
(A) any agreement or transaction relating to any
(1) Competing Transaction;
(2) any liquidation or dissolution of Cabot or Cabot LP;
(3) any proposal to approve the grant of voting rights upon
"control shares" (as defined in Title 3, Subtitle 7 of the
Corporations and Associations Article of the Annotated Code of
Maryland ("Title 3")) of Cabot acquired in any "control share
acquisition" (as defined in Title 3);
(4) any transaction or occurrence that if proposed and offered
to Cabot or its shareholders (or any of them) would constitute a
transaction described in clauses (1) - (3) above; or
(B) any amendment of Cabot's declaration of trust or by-laws or
other proposal, action or transaction involving Cabot or any of its
subsidiaries or any of its shareholders, which amendment or other
proposal, action or transaction could reasonably be expected to
prevent or materially impede or delay the consummation of the Merger
or the other transactions contemplated by the Merger Agreement or the
consummation of the transactions contemplated by the Shareholder
Agreement or to deprive CalWest of any material portion of the
benefits anticipated by CalWest to be received from the consummation
of the Merger or the other transactions contemplated by the Merger
Agreement or the Shareholder Agreement, or change in any manner the
voting rights of Common Shares presented to the shareholders of Cabot
(regardless of any recommendation of the Board of Trustees of Cabot)
or in respect of which vote or consent of the Subject Shareholder is
requested or sought;
(d) not to: (i) solicit proxies or become a "participant" in a
"solicitation" (as such terms are defined in Regulation 14A under the
Exchange Act) with respect to a Competing Transaction or otherwise encourage
or assist any party in taking or planning any action that would compete
with, restrain or otherwise serve to interfere with or inhibit the timely
consummation of the Merger in accordance with the terms of the Merger
Agreement, (ii) initiate a vote or action by written consent in lieu of a
Cabot shareholders' meeting, or (iii)
38
become a member of a "group" (as defined under Section 13(d) of the Exchange
Act and the rules and regulations thereunder) with respect to any voting
securities of Cabot or Cabot LP, as applicable, with respect to any matter
or transaction described in foregoing paragraph (c);
(e) to irrevocably constitute and appoint CalWest as such Subject
Shareholder's attorney and proxy, with full power of substitution and
resubstitution, to cause the Common Shares to be counted as present at any
Cabot Shareholders' Meeting, to vote the Common Shares thereat, however
called, and execute consents in respect of the Common Shares as and to the
extent provided in foregoing paragraph (d);
(f) to notify CalWest and Rooster Acquisition Corp. promptly if any
proposals are received by, any information is requested from, or any
negotiations or discussions are sought to be initiated or continued with
such Subject Shareholder, Cabot, Cabot LP, and Cabot's and Cabot LP's
officers, trustees, employees, investment bankers, attorneys, accountants or
other agents, if any (each, a "Representative"), in each case in connection
with any Competing Transaction indicating, in connection with such notice,
the name of the person making such proposal, requesting such information, or
seeking to initiate negotiations or discussions with the Subject Shareholder
or any officers, trustees or agents of Cabot and of Cabot LP that relate to
a Competing Transaction and the material terms and conditions of any
proposals or offers;
(g) that such Subject Shareholder will immediately cease any discussions,
negotiations or communications with any persons with respect to any
Competing Transaction and that such Subject Shareholder will not and will
not authorize or permit its Representatives to directly or indirectly (i)
solicit, initiate, encourage, facilitate or participate in any discussions
or negotiations regarding, or furnish to any person or group any information
or data with respect to or access to the properties, offices, books,
records, officers, directors or employees of, or take any other action to
knowingly, directly or indirectly, facilitate, solicit or encourage the
making of any proposal that constitutes, or may reasonably be expected to
lead to, any Competing Transaction; or (ii) enter into any agreement with
respect to any Competing Transaction; and.
(h) with respect to Ferdinand Colloredo-Mansfeld, Robert Patterson and
certain affiliates thereof only, at Rooster Acquisition Corp.'s option and
upon notice to such Subject Shareholder, (i) to sell to CalWest or Rooster
Acquisition Corp. the respective Units held thereby for the aggregate cash
consideration equal to the product of (A) the number of Common Shares for
which such Units may have been converted immediately prior to such sale,
multiplied by (B) $24, or such greater amount as is offered to the holders
of Common Shares pursuant to the Offer; and (ii) not convert such Units into
Common Shares as contemplated by paragraph (b) above or otherwise; provided
that such Subject Shareholder 's obligations pursuant to this paragraph
shall be conditioned upon Rooster Acquisition Corp.'s acceptance for payment
and payment for, pursuant to the terms and conditions of the Offer, all
Common Shares duly tendered pursuant to the Offer and not withdrawn.
Effects of Inability to Consummate the Merger
If the Merger is consummated, shareholders of Cabot who elected not to
tender their Common Shares in the Offer will have the ability to exchange each
of their Common Shares in the Merger for the Offer Price.
If, following the consummation of the Offer, the Merger is not consummated,
Rooster Acquisition Corp. will control at least two-thirds of the votes
entitled to be cast on matters on which shareholders are generally entitled to
vote. Under the Merger Agreement, Rooster Acquisition Corp. will be entitled to
representation on the Cabot Board of Trustees (and certain committees thereof)
in the same proportion as the number of Common Shares beneficially owned by
CalWest, Rooster Acquisition Corp. and their affiliates bears to the total
number Common Shares outstanding at such time. As a result of its ownership of
such Common Shares and its representation on the Cabot Board of Trustees and
certain committees thereof, Rooster Acquisition Corp. will control Cabot and
the Cabot Board of Trustees, except that only the Independent Trustees may: (i)
amend or terminate the Merger Agreement on behalf of Cabot, (ii) exercise or
waive any of Cabot's rights or remedies under the Merger Agreement, (iii)
extend the time for performance of any of the obligations of Rooster
39
Acquisition Corp. contained in the Merger Agreement, (iv) take any other action
by Cabot in connection with the Merger Agreement required to be taken by the
Cabot Board of Trustees, or (v) take any action by Cabot in connection with the
transactions contemplated by the Merger Agreement.
If, for any reason following completion of the Offer the Merger is not
consummated, CalWest, Rooster Acquisition Corp. and their affiliates reserve
the right to acquire additional Common Shares through private purchases, market
transactions, tender or exchange offers or otherwise on terms and at prices
that may be more or less favorable than those of the Offer or, subject to any
applicable legal restrictions, to dispose of any or all Common Shares acquired
by Rooster Acquisition Corp.
Statutory Requirements
In general, under the MGCL and Title 8, a merger of a corporation with a
real estate investment trust requires, on the part of the Maryland entities,
(a) the board of directors or trustees of the entity desiring to merge to adopt
a resolution declaring that the merger is advisable on substantially the terms
and conditions referred to in the resolution and directing that the merger be
submitted for consideration by the shareholders and (b) the shareholders of the
entity to approve the merger. The shareholders of such an entity can approve a
merger with the affirmative vote of two-thirds of all votes entitled to vote on
the merger. According to Cabot's declaration of trust, the Common Shares are
the only securities of Cabot that entitle the holders thereof to vote in
connection with the Merger. The holders of the Common Shares are entitled to
one vote per share. The MGCL and Title 8 also provide that if a corporation or
a real estate investment trust owns shares of another corporation or real
estate investment trust representing at least 90% of all of the votes entitled
to be cast on a merger, the parent entity can effect a short-form merger with
the subsidiary entity without a vote of the shareholders of the subsidiary.
Accordingly, if, as a result of the Offer or otherwise, Rooster Acquisition
Corp. owns Common Shares entitled to cast at least 90% of the votes entitled to
be cast on the Merger, Rooster Acquisition Corp. could, and intends to, effect
the Merger without any action by Cabot's shareholders.
Notice of Merger of Rooster Acquisition Corp. Into Cabot Pursuant to Maryland
Law
Notice is hereby given by Rooster Acquisition Corp. of the proposed merger
of Rooster Acquisition Corp. into Cabot. Articles of Merger pursuant to which
the Merger will become effective will be filed with the State Department of
Assessments and Taxation of Maryland (the "SDAT") no earlier than December 5,
2001. This Notice is given pursuant to Section 3-106(d) and 8-501.1(c) of the
Maryland General Corporation Law and is conditioned upon the ownership by
Rooster Acquisition Corp. of 90% or more of the Common Shares of Cabot as of
the time of acceptance for record of the Articles of Merger by the SDAT.
Appraisal Rights
No appraisal rights are available under the MGCL and Title 8 in connection
with the Offer. A recently enacted provision of the MGCL provides that no
appraisal or dissenters' rights would be available to the holders of the Common
Shares under the MGCL in connection with the Merger because they are not
entitled to vote on the transaction. No appraisal rights would be available to
the holders of the Common Shares under the MGCL or Title 8 in connection with
the Merger provided that the Common Shares are listed on the NYSE or are listed
on any other national securities exchange or are designated as a national
market system security on an interdealer quotation system by the National
Association of Securities Dealers, Inc. or designated for trading on the NASDAQ
small cap market (i) as of the date of notice of the Merger, which is being
given in connection with this Offer to Purchase and Cabot's Schedule 14D-9 in
the event that Rooster Acquisition Corp. holds 90% or more of the outstanding
voting stock of Cabot or (ii) as of the record date for determining
shareholders entitled to vote on the Merger in the event that a meeting of the
shareholders of Cabot is required to approve the Merger. In the event that the
Common Shares are delisted from the NYSE and are not relisted on any other
national securities exchange or designated as a national market system security
on an interdealer quotation system by the National Association of Securities
Dealers, Inc. or designated for trading on the NASDAQ small cap market as of
40
(i) the date of this Offer to Purchase (in the event Rooster Acquisition Corp.
owns at least 90% of the votes entitled to be cast on the Merger) or (ii) the
record date for determining shareholders entitled to vote on the Merger (in the
event that a meeting of the shareholders of Cabot is required to approve the
Merger because Rooster Acquisition Corp. owns Common Shares entitled to cast
fewer than 90% of the votes entitled to be cast on the Merger), the holders of
the Common Shares will be entitled to appraisal rights under the MGCL in
connection with the Merger.
Plans for Cabot and Cabot LP
At the Effective Time, the separate corporate existence of Rooster
Acquisition Corp. will terminate. The business and operations of Cabot will be
continued by Cabot. The separate limited partnership existence of the Cabot LP
will be continued and its business and operations will be managed by Cabot as
its sole general partner. Notwithstanding the foregoing, in the event that any
Units remain outstanding after the consummation of the Offer, the Merger
Agreement requires CalWest, Rooster Acquisition Corp., Cabot and Cabot LP to
take all actions reasonably necessary to effect a merger of Cabot LP with a
subsidiary of CalWest or Rooster Acquisition Corp, pursuant to which Cabot LP
will be the surviving entity and each Unit will be exchanged and cancelled for
the right to receive the Offer Price. The Merger Agreement requires CalWest,
Rooster Acquisition Corp., Cabot and Cabot LP to cause the Second Amended and
Restated Agreement of Limited Partnership of Cabot LP to be amended prior to
the merger between Cabot LP and a subsidiary of CalWest or Rooster Acquisition
Corp. to provide that such merger will not cause a liquidation or winding-up of
Cabot LP. To insure that such amendment may be made, Ferdinand
Colloredo-Mansfeld, Robert Patterson and certain of their respective affiliates
have granted CalWest an option to purchase the Units held thereby, which Units
account for at least a majority of the outstanding Units. CalWest intends to
exercise such option and purchase such Units if immediately prior to the
consummation of the Offer, less than all Units have been converted into Common
Shares and tendered pursuant to the Offer.
Joint Ventures
Cabot, through Cabot LP and its subsidiaries, owns an interest in the
following joint ventures which will be affected by the Merger: Industrial
Properties Portfolio, L.L.C., TC Rancho Cucamonga LLC, CCP-Cabot Industrial
Investors I, LLC., CCP-Cabot Industrial Investors II, LLC and Meadows Business
Center, LLC.
Cabot Ventures, LLC, a wholly owned subsidiary of Cabot LP ("Cabot
Ventures"), owns a 20% interest in Industrial Properties Portfolio, L.L.C.
Industrial Ventures, L.P., an affiliate of GE Capital Real Estate (the "GE
Member"), owns the remaining 80% interest in this joint venture. In connection
with the Offer and Merger, Cabot Ventures has given the GE Member notice of its
election to terminate its capital commitment obligations under the limited
liability company agreement of this joint venture. Following such notice, both
Cabot Ventures and the GE Member may exercise their right pursuant to the
limited liability company agreement to cause the joint venture to be wound-up.
Cabot Ventures II, LLC, a wholly owned subsidiary of Cabot LP ("Cabot
Ventures II"), owns a 20% membership interest in TC Rancho Cucamonga LLC.
Teachers REA, LLC, an affiliate of Teachers Insurance and Annuity
Association--College Retirement Fund (the "TIAA Member"), owns the remaining
80% interest in this joint venture. Pursuant to the Merger Agreement, Cabot and
Cabot LP are required to use their commercially reasonable efforts to effect
the purchase by the TIAA Member of Cabot Ventures II's interest in this joint
venture. Cabot and the TIAA Member and its affiliates are currently negotiating
such a transaction.
Cabot LP owns a 20% membership interest in CCP-Cabot Industrial Ventures I,
LLC and Cabot Advisors, Inc., a majority owned subsidiary of Cabot LP ("Cabot
Advisors"), owns a 20% interest in CCP-Cabot Ventures II, LLC. CCP-Industrial
Member, LLC, an affiliate of JPMorgan Partners (formerly Chase Capital
Partners) (the "Chase Member"), owns the remaining 80% interest in these two
joint ventures. Pursuant to the Merger Agreement, Cabot and Cabot LP are
required to use their commercially reasonable efforts to effect the purchase
41
by Cabot LP of the Chase Member's interest in these two joint ventures. Cabot
and the Chase Member and its affiliates are currently negotiating such a
transaction.
Cabot LP owns a 50% interest in Meadows Business Center, LLC. Taylor &
Mathis Industrial Properties, LLC owns the remaining 50% interest in this joint
venture. Pursuant to the Merger Agreement, Cabot and Cabot LP are required to
use their commercially reasonable efforts to effect the purchase by Cabot LP of
Taylor & Mathis Industrial Properties, LLC's interest in this joint venture.
Cabot and Taylor & Mathis Industrial Properties, LLC are currently negotiating
such a transaction.
Redemption of Common Stock of Cabot Advisors, Inc.
In connection with the Merger Agreement, Cabot, Cabot LP and Ferdinand
Colloredo-Mansfeld have entered into an agreement pursuant to which Cabot LP
will redeem all of the shares of common stock of Cabot Advisors, Inc. owned by
Ferdinand Colloredo-Mansfeld, and Cabot Advisors, Inc. will issue and sell to
Cabot LP one share of common stock for a purchase price of $115,000. As
consideration for the redemption of his shares, Ferdinand Colloredo-Mansfeld
shall receive (a) a transfer by Cabot Advisors, Inc. of certain real estate
investment advisory contracts; (b) the rights to the name "Cabot Advisors"; (c)
furniture, fixtures and equipment with a net book value of up to $100,000 and
(d) delivery of a $15,000 promissory note of Ferdinand Colloredo-Mansfeld by
Cabot Advisors in full satisfaction of such obligation. The foregoing
transactions are conditioned upon the closing of the Merger.
"Going Private" Transactions
The SEC has adopted Rule 13e-3 under the Exchange Act, which is applicable
to certain "going private" transactions. We do not believe that Rule 13e-3 will
be applicable to the Merger unless the Merger is consummated more than one year
after the expiration of the Offer. If applicable, Rule 13e-3 requires, among
other things, that certain financial information concerning the fairness of the
proposed transaction and the consideration offered to minority shareholders in
such transaction be filed with the SEC and disclosed to shareholders prior to
the consummation of the transaction.
12. SOURCE AND AMOUNT OF FUNDS.
CalWest and Rooster Acquisition Corp. estimate that the total amount of
funds required to purchase all of the Common Shares pursuant to the Offer will
be up to approximately $1.185 billion (which amount excludes related fees and
expenses). See Section 16. CalWest and Rooster Acquisition Corp. intend to fund
the purchase of the Common Shares pursuant to the Offer from a loan (the
"Loan") to be made by GSMC, and/or its assigns or participants. A copy of the
commitment letter, dated October 26, 2001 ("Commitment Letter"), issued by GSMC
for the Loan has been filed as Exhibit (b)(1) to the Schedule TO of CalWest and
Rooster Acquisition Corp. filed with the SEC. The Commitment Letter has
attached a form of loan agreement which has been negotiated among GSMC, CalWest
and Rooster Acquisition Corp. (the "Loan Agreement"). Pursuant to the
Commitment Letter, CalWest and Rooster Acquisition Corp. may borrow from the
lender up to $1.225 billion for the purpose of purchasing the Common Shares and
for other corporate purposes.
The obligation of GSMC to enter into the Loan Agreement and fund the Loan is
subject to a number of conditions, including: (a) that there has not been (i) a
suspension or material limitation in trading in securities generally on the New
York Stock Exchange; (ii) any general moratorium on commercial banking
activities declared by either Federal or New York State authorities or a
material disruption in commercial banking or securities settlement or clearance
services in the United States; (iii) any outbreak or escalation of hostilities
involving the United States or the declaration by the United States of a
national emergency or war or the occurrence of any other calamity or crisis, or
(iv) any change in national or international financial, political or economic
conditions, if the lender, in its sole discretion, determines that the effect
of any such event specified in clause (iii) or (iv) would materially impair the
value of CalWest's and its subsidiaries' collateral or the value of the loan;
and, (b) the satisfaction of the customary conditions precedent to disbursement
as set forth in the Loan Agreement. Notwithstanding the foregoing, if (i) GSMC
elects not to cause the Loan to be funded because of the
42
failure to meet the condition precedent described in clause (a) of the
preceding sentence and (ii) within 30 business days of the initial occurrence
of the first event or condition described in the preceding sentence giving rise
to such failure to meet such condition precedent GSMC determines, in its sole
discretion, that (A) in the case of any event or condition specified in clause
(a) (i) or (a) (ii) of the preceding sentence, such event or condition is not
continuing, not unresolved and not occurring, and (B) in the case of any event
or condition specified in clause (a) (iii) or (a) (iv) of the preceding
sentence, neither the value of CalWest's and its subsidiary's collateral nor
the value of the Loan remain materially impaired, then GSMC shall from such
date once again be obligated to cause the Loan to be funded, subject to all of
the terms and conditions contained in the Commitment Letter (including, without
limitation, the condition precedent set forth in the preceding sentence) and in
the Loan Agreement. Notwithstanding the foregoing, CalWest shall have the right
during such 30 business day period to solicit alternate financing. If CalWest
receives a bona fide offer for alternate financing (a "Financing Offer"),
CalWest may only accept such Financing Offer if CalWest first gives GSMC the
option, at GSMC's sole discretion, to either (a) cause the Loan to be funded,
subject to all of the terms and conditions contained in the Commitment Letter
(other than the condition precedent set forth in the first sentence of this
paragraph), (b) provide financing on the terms and conditions of the Financing
Offer, or (c) terminate the Commitment Letter and Loan Agreement and permit
CalWest to accept such Financing Offer. If GSMC does not elect option (a) or
(b) within 15 days after written notice from CalWest, GSMC shall be deemed to
have elected option (c) and the Commitment Letter and Loan Agreement shall
terminate.
The obligation of GSMC to fund the Loan pursuant to the Loan Agreement with
respect to the purchase by Rooster Acquisition Corp. of Common Shares in the
Offer also is subject to the satisfaction of certain customary conditions,
including, without limitation: (A) that Rooster Acquisition Corp. shall have
acquired enough stock to cause the Merger to occur; (B) CalWest and Rooster
Acquisition Corp. shall have executed and delivered to the lender the Loan
Agreement; (C) CalWest and Rooster Acquisition Corp. shall have caused UCC
financing statements to be executed and delivered to a collateral agent; (D)
required opinions of counsel shall have been delivered; (E) required good
standing certificates for applicable entities shall have been delivered; (F)
required authorizations and resolutions shall have been received; (G) required
certificates of insurance for all insurance shall have been received; (H) a
detailed closing statement shall have been delivered; (I) immediately following
the consummation of the closing of the Loan no default or event of default
under the Loan Agreement will exist; (J) no law or regulation shall have been
adopted, and no order, judgment or decree of any governmental authority shall
have been issued, which purports to enjoin, prohibit or restrain, or which
imposes or results in the imposition of any material adverse condition upon,
the making or repayment of the Loan or the consummation of any portion of the
acquisition transaction, and no suit shall have been brought which is intended
to accomplish the foregoing; (K) the representations and warranties of CalWest
and Rooster Acquisition Corp. contained in the Loan Agreement including without
limitation the representation and warranty that there has been no material
adverse change in the business, financial position or results of operation of
CalWest, Rooster Acquisition Corp., and their subsidiaries, taken as a whole,
or of Cabot and Cabot LP taken as a whole, shall be true and correct after
giving effect to the funding of the Loan; (L) required solvency certificates
shall have been received; (M) CalWest and Rooster Acquisition Corp. shall have
paid all transaction costs required to be paid by them; (N) required reports of
lien and title searches shall have been received and such searches shall not
disclose any breaches in any of the representations and warranties contained in
the Loan Agreement in a manner that would be reasonably likely to have a
material adverse effect upon CalWest and Rooster Acquisition Corp; (O) a copy
of the new revolving credit agreement shall have been delivered; (P) a debt to
equity ratio calculated in accordance with the Loan Agreement shall not exceed
47%; (Q) the required limitation on indebtedness shall not have been exceeded;
and (R) as of closing Cabot and Cabot LP shall have total undepreciated real
estate assets with a book value of not less than $1.75 billion. The obligation
of Rooster Acquisition Corp. to purchase Common Shares pursuant to the Offer is
not conditioned upon the satisfaction or waiver of any of these conditions. The
Commitment Letter will terminate if the initial funding under the Loan (the
funding that will occur upon the close of the Offer) does not occur by January
15, 2002, subject to the aforementioned 30 business day extension option.
CalWest and Rooster Acquisition Corp. are the borrowers under the Loan. The
Loan will be collateralized by a pledge of (i) all membership interests in
CalWest, (ii) the shares held by CalWest in Rooster Acquisition
43
Corp, (iii) the Common Shares held by Rooster Acquisition Corp. in Cabot and
(iv) all shares, partnership interests or membership interests in all other
CalWest subsidiaries (v) other assets. Each subsidiary of CalWest (other than
Rooster Acquisition Corp.) is also required to execute an Omnibus Guaranty of
the Loan; however, the liabilities of such subsidiaries under such guarantees
is limited by certain provisions therein.
After the consummation of the Merger, a loan (the "Operating Partnership
Advance") of up to $500 million will be made pursuant to the Loan Agreement
directly to Cabot LP. Cabot will also be a borrower on the Operating
Partnership Advance. At the time that the Operating Partnership Advance is
made, Cabot and Cabot LP will become borrowers under the Loan Agreement with
respect to the Operating Partnership Advance and the assets of Cabot and Cabot
LP will be subject to certain negative covenants under the Loan Agreement.
Proceeds from the Operating Partnership Advance will be distributed to the
partners of Cabot LP and any such proceeds received by Cabot will be
distributed to CalWest. Such proceeds received by CalWest will be used to
either pay certain mandatory prepayments under the Loan Agreement or pay costs
of the Merger. CalWest will execute a guarantee of the Operating Partnership
Advance.
The Loan, including the Operating Partnership Advance, will have a maturity
date of six months from the initial funding, with four three-month extensions
at the option of the borrower, subject to satisfaction of certain conditions,
including the borrower paying an extension fee at the time of each extension in
the amount of 0.25% of the principal balance of the Loan at the time of such
extension.
The Loan Agreement provides for an interest rate on the Loan, including the
Operating Partnership Advance, equal to the one month LIBOR plus 125 basis
points, provided that the spread over LIBOR shall increase to 225 basis points
from and after the third extension term. Interest payments will be due monthly
in arrears on the tenth day of each month, calculated on an actual/360 day
basis.
The financing may be prepaid in whole or in part at any time during the term
of the Loan, subject to mandatory prepayment by the relevant borrower with net
cash proceeds received from the sale of assets (subject to certain exceptions).
We anticipate that the Loan, including the Operating Partnership Advance,
will be repaid by a combination of the following: (i) a securitized financing
of a material portion of the unencumbered assets of CalWest, (ii) a new line of
credit in favor of Cabot LP, and/or (iii) the sale of certain assets of CalWest
and/or Cabot LP. No decision has been made concerning the exact amounts that
would be sought or realized from each of these alternatives. Such decision will
be made based on review by the applicable borrower from time to time of the
advisability of particular actions, as well as on prevailing interest rates and
financial and other economic conditions and such other factors as the relevant
borrower may deem appropriate.
The Loan Agreement provides for certain customary affirmative covenants,
negative covenants and events of default applicable to the relevant borrower
and the guarantors, including without limitation, limitations on indebtedness,
liens, transfers and asset sales, changes in control of the relevant borrower
and the guarantors, and certain financial covenants.
The Loan Agreement requires that the proceeds be used to finance the
consummation of the transaction described in the Merger Agreement and other
general corporate purposes.
The preceding summary of the Commitment Letter and the Loan Agreement is
qualified in its entirety by reference to the Commitment Letter filed as
exhibit to our Schedule TO which is incorporated herein by reference. CalWest
and Rooster Acquisition Corp. have not made alternative financing arrangements
in the event funds under the Loan are not available.
13. DIVIDENDS AND DISTRIBUTIONS.
In the event the number of outstanding Common Shares, other outstanding
shares of beneficial interest of Cabot, or share equivalents of Cabot issuable
upon the exercise of, or subject to, options or other agreements exceeds the
amounts specifically set forth in the Merger Agreement (including, without
limitation, as a result of
44
any stock split, reverse stock split, stock dividend, including any dividend or
distribution of securities convertible into beneficial shares or share
equivalents of Cabot, recapitalization, or other like changes occurring after
the date of the Merger Agreement, but excluding any Common Shares or units of
the Cabot LP issued pursuant to the Cabot Option Plans, in accordance with, and
subject to, the Merger Agreement), the Per Share Amounts shall be appropriately
adjusted downward.
14. CONDITIONS OF THE OFFER.
Notwithstanding any other provision of the Offer, neither CalWest nor
Rooster Acquisition Corp. shall be required to accept for payment or, subject
to any applicable rules and regulations of the SEC, including Rule 14e-1(c)
promulgated under the Exchange Act (relating to the obligation of Rooster
Acquisition Corp. to pay for or return tendered Common Shares promptly after
termination or withdrawal of the Offer), pay for, and (subject to any such
rules or regulations) may delay the acceptance for payment of any tendered
Common Shares and (except as provided in the Merger Agreement) amend or
terminate the Offer as to any tendered Common Shares if (i) there shall not
have been validly tendered and not withdrawn prior to the expiration of the
Offer Common Shares entitled to cast at least two-thirds of the outstanding
Common Shares on a fully diluted basis, after giving effect to the exercise or
conversion of all options, rights, Units and other securities exercisable or
convertible into such voting securities, or (ii) any applicable waiting period
(and any extension thereof) under the HSR Act shall not have expired or been
terminated prior to the expiration of the Offer or (iii) at any time after the
date of the Merger Agreement and prior to the acceptance for payment of any
such Common Shares, any of the following events shall occur and be continuing
or conditions exist:
(a) there shall have been any action taken, or any Law, temporary
restraining order, preliminary or permanent injunction or other order issued
by any court of competent jurisdiction or other governmental entity or other
legal restraint or prohibition which (i) prohibits, restrains, limits or
makes illegal the acceptance for payment, payment for or purchase of Common
Shares or the consummation of the Offer, the Merger or the other material
transactions contemplated by the Merger Agreement, the Unitholder
Agreements, Shareholder Agreements and Option Agreement, (ii) renders
Rooster Acquisition Corp. unable to accept for payment, pay for or purchase
some or all of the Common Shares tendered and not withdrawn pursuant to the
Offer, or (iii) imposes material limitations on the ability of Rooster
Acquisition Corp. to effectively exercise full rights of ownership of the
Common Shares to be acquired in the Offer, including the right to vote such
Common Shares, or the assets or business of Cabot and Cabot's subsidiaries;
or
(b) there shall be officially threatened in writing or pending any suit,
action or proceeding by any governmental entity challenging the acquisition
by CalWest or Rooster Acquisition Corp. of any Common Shares, seeking to
restrain or prohibit consummation of the Offer or the Merger, or seeking to
place limitations on the ownership of Common Shares or the assets and
business of Cabot or Cabot's subsidiaries by CalWest or Rooster Acquisition
Corp.; or
(c) the Merger Agreement shall have been terminated in accordance with
its terms; or
(d) since the date of the Merger Agreement there shall have occurred any
change, event or effect that shall have occurred that, when taken together
with all other adverse changes, events or effects that have occurred, is or
is reasonably likely to (i) be materially adverse to the business,
operations, properties, condition (financial or otherwise), assets or
liabilities of Cabot and Cabot's subsidiaries taken as a whole or (ii)
prevent or materially delay the performance by Cabot or Cabot LP of any of
its obligations under the Merger Agreement or the consummation of the Offer,
the Merger or the other transactions contemplated by the Merger Agreement,
not including the effect of general economic changes, changes in the U.S.
financial markets generally, changes that affect REITs generally and changes
that generally affect real estate properties of the type generally owned by
Cabot, in each case that are a principal cause of such change, event or
effect (a "Cabot Material Adverse Effect"); or
(e) (i) any of the representations and warranties of Cabot contained in
the Merger Agreement which are qualified by the term Cabot Material Adverse
Effect, shall not be true and correct; (ii) any of the
45
representations and warranties of Cabot contained in the Merger Agreement
which are qualified by materiality (not including those that are qualified
by the term Cabot Material Adverse Effect), shall not be true and correct,
except where the failure of any such representation or warranty to be so
true and correct, together with all other representations and warranties
qualified by materiality (not including those that are qualified by the term
Cabot Material Adverse Effect) which are not true and correct, would not
constitute a Cabot Material Adverse Effect; and (iii) the representations
and warranties of Cabot contained in the Merger Agreement which are not
qualified by materiality or the term Cabot Material Adverse Effect shall not
be true and correct in all material respects, in each of the foregoing
cases, as of the date of determination or the date hereof (except to the
extent that any such representation or warranty, by its terms, is expressly
limited to a specific date, in which case, as of such specific date); or
(f) Cabot shall have breached or failed to perform or comply with, in all
material respects, each of its covenants and agreements contained in the
Merger Agreement required to be performed at or prior to the date of
determination; or
(g) the Cabot Board of Trustees (i) shall have withdrawn or modified in a
manner adverse to Rooster Acquisition Corp. (including by amendment of the
Schedule 14D-9) any of its approvals or recommendations set forth in the
Merger Agreement, including as to the Offer, the Merger or the Merger
Agreement, (ii) recommended or approved any Competing Transaction or
Superior Competing Transaction or (iii) shall have publicly proposed or
resolved to do any of the foregoing; or
(h) the Rights shall have become exercisable; or
(i) Cabot shall have failed to deliver a bring-down letter, dated the
date of the consummation of the Offer, to the REIT tax opinion of Mayer
Brown regarding, among other things, Cabot's REIT status; or
(j) CalWest shall have failed to receive an officer's certificate
executed by Cabot's chief executive officer and chief financial officer on
behalf of Cabot, dated the date of consummation of the Offer, to the effect
that none of the events or conditions set forth in the foregoing paragraphs
(d), (e), (f), (g) and (h) have occurred; or
(k) the failure by CalWest's lender(s) to fund the bridge loan commitment
provided by such lenders to finance the purchase by CalWest or Rooster
Acquisition Corp. of the Common Shares pursuant to the Commitment Letter as
a result of a serious event specified in the Commitment Letter relating to
New York Stock Exchange trading, commercial banking activities, war or a
national emergency, or national or international financial, political or
economic conditions; provided that if after seeking alternative financing
for a period of no more than 30 business days in accordance with the Merger
Agreement, CalWest shall have obtained other financing for the Offer and the
Merger on terms substantially similar and at least as favorable as the terms
of the Commitment Letter and such other financing is available and funded at
the time of the consummation of the Offer, then the event specified in this
clause (k) shall be deemed to have been cured (see Section 12 "Source and
Amount of Funds)";
which, in the reasonable discretion of CalWest, in any such case, and
regardless of the circumstances (including any action or inaction by CalWest)
giving rise to such condition, makes it inadvisable to proceed with the Offer
or the acceptance for payment of or payment for the Common Shares (tendered and
not withdrawn pursuant to the Offer).
The foregoing conditions are for the sole benefit of Rooster Acquisition
Corp. and may (subject to the terms of the Merger Agreement) be asserted or
waived by Rooster Acquisition Corp., in whole or in part, at any time and from
time to time prior to the expiration of the Offer, in the sole discretion of
Rooster Acquisition Corp. The failure by Rooster Acquisition Corp. at any time
to exercise any of the foregoing rights shall not be deemed a waiver of any
such right and each such right shall be deemed an ongoing right which may be
asserted at any time and from time to time prior to the expiration of the
Offer. All conditions to the Offer, other than those dependent upon the receipt
of necessary governmental approvals, must be satisfied or waived prior to the
expiration of the Offer.
46
15. LEGAL MATTERS; REQUIRED REGULATORY APPROVALS.
Except as set forth in this Offer to Purchase, based on our review of
publicly available filings by Cabot with the SEC and other information
regarding Cabot, we are not aware of any licenses or regulatory permits that
appear to be material to the business of Cabot and its subsidiaries, taken as a
whole, and that might be adversely affected by our acquisition of Common Shares
in the Offer. In addition, we are not aware of any filings, approvals or other
actions by or with any governmental authority or administrative or regulatory
agency that would be required for our acquisition or ownership of the Common
Shares. Should any such approval or other action be required, we expect to seek
such approval or take such action, except as described below under "State
Takeover Laws." Should any such approval or other action be required, we cannot
be certain that we would be able to obtain any such approval or take such
action without substantial conditions or that adverse consequences might not
result to the businesses of Cabot or its subsidiaries, or that certain parts of
the businesses of Cabot or Rooster Acquisition Corp. might not have to be
disposed of or held separate in order to obtain such approval or action. In
that event, we may not be required to purchase any Common Shares in the Offer.
See Introduction and Section 14 for a description of the conditions to the
Offer.
State Takeover Laws
A number of states (including Maryland, where Cabot is organized as a REIT)
have adopted takeover laws and regulations that purport to be applicable to
attempts to acquire securities of corporations that are incorporated in those
states or that have substantial assets, shareholders, principal executive
offices or principal places of business in those states. In the Merger
Agreement, Cabot has represented that it has taken all appropriate and
necessary actions to, among other things, make the Takeover Statute (as defined
in Section 11) inapplicable. See "The Merger Agreement--Takeover Restrictions"
in Section 11.
We have not attempted to comply with any state takeover statutes in
connection with the Offer or the Merger. We reserve the right to challenge the
validity or applicability of any state law allegedly applicable to the Offer or
the Merger, and nothing in this Offer to Purchase nor any action that we take
in connection with the Offer is intended as a waiver of that right. In the
event that it is asserted that one or more takeover statutes apply to the Offer
or the Merger, and it is not determined by an appropriate court that the
statutes in question do not apply or are invalid as applied to the Offer or the
Merger, as applicable, we might be unable to accept for payment Common Shares
tendered in the Offer or be delayed in continuing or consummating the Offer. In
that case, we may not be obligated to accept for purchase any Common Shares
tendered. See Section 14.
Antitrust
Under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended,
(the "HSR Act"), and the related rules and regulations that have been issued by
the Federal Trade Commission (the "FTC"), certain acquisition transactions may
not be consummated until certain information and documentary material has been
furnished for review by the FTC and the Antitrust Division of the Department of
Justice and certain waiting period requirements have been satisfied. We believe
that no antitrust filings or notifications with United States or foreign
governmental or regulatory authorities, including the premerger notification
provided by the HSR Act, will be required in connection with the Offer or the
Merger.
16. CERTAIN FEES AND EXPENSES.
RREEF manages CalWest's investments in industrial properties and is
CalWest's exclusive investment advisor. CalWest pays RREEF an annual management
fee based on annual net operating income and average total assets under
management and also reimburses RREEF for certain expenses, provided that they
have been included in a budget approved by CalWest's members.
We have retained MacKenzie Partners, Inc. as the Information Agent in
connection with the Offer. The Information Agent may contact holders of Common
Shares by mail, telephone, telex, telegraph and personal
47
interview and may request brokers, dealers and other nominee shareholders to
forward material relating to the Offer to beneficial owners of Common Shares.
We will pay the Information Agent reasonable and customary compensation for
these services in addition to reimbursing the Information Agent for its
reasonable out-of-pocket expenses. We have agreed to indemnify the Information
Agent against certain liabilities and expenses in connection with the Offer,
including certain liabilities under the federal securities laws.
We have retained Computershare Trust Company of New York as the Depositary.
The Depositary has not been retained to make solicitations or recommendations
in its role as Depositary. We will pay the Depositary reasonable and customary
compensation for its services in connection with the Offer, will reimburse the
Depositary for its reasonable out-of-pocket expenses and will indemnify the
Depositary against certain liabilities and expenses, including certain
liabilities under the federal securities laws.
In addition, we have retained Goldman Sachs to act as our financial
advisors, as well as the Dealer Managers, in connection with the Offer and the
Merger. We will pay the Dealer Managers reasonable and customary compensation
for their services in connection with the Offer and the Merger, will reimburse
the Dealer Managers for their reasonable out-of-pocket expenses and will
indemnify the Dealer Managers against certain liabilities and expenses,
including certain liabilities under the federal securities laws.
Except as set forth above, we will not pay any fees or commissions to any
broker, dealer or other person for soliciting tenders of Common Shares pursuant
to the Offer. We will reimburse brokers, dealers, commercial banks and trust
companies and other nominees, upon request, for customary clerical and mailing
expenses incurred by them in forwarding materials relating to the Offer to
their customers.
17. MISCELLANEOUS.
We are making the Offer to all holders of Common Shares solely pursuant to
this Offer to Purchase and the related Letter of Transmittal (and any
amendments or supplements thereto). We are not aware of any state where the
making of the Offer is prohibited by any administrative or judicial action or
pursuant to any valid state statute. If we become aware of any valid state
statute prohibiting the making of the Offer or the acceptance for payment of
Common Shares tendered pursuant to the Offer, we will make a good faith effort
to comply with that state statute or seek to have such statute declared
inapplicable to the Offer. If, after a good faith effort, we cannot comply with
the state statute, we will not make the Offer to, nor will we accept tenders
from or on behalf of, the holders of Common Shares in that state. In any
jurisdiction where the securities, "blue sky" or other laws require the Offer
to be made by a licensed broker or dealer, the Offer shall be deemed to be made
on our behalf by the Dealer Managers or one or more registered brokers or
dealers licensed under the laws of such jurisdiction.
We and our parent, CalWest, have filed with the SEC a Tender Offer Statement
on Schedule TO pursuant to Rule 14d-3 under the Exchange Act, together with
exhibits, furnishing certain additional information with respect to the Offer,
and may file amendments to our Schedule TO. Our Schedule TO, and any
amendments, including exhibits, may be examined and copies may be obtained from
the SEC in the same manner as described in Section 8 with respect to
information concerning Cabot.
WE HAVE NOT AUTHORIZED ANY PERSON TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON OUR BEHALF NOT CONTAINED IN THIS OFFER TO PURCHASE OR IN THE
LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, YOU SHOULD NOT RELY ON ANY SUCH
INFORMATION OR REPRESENTATION AS HAVING BEEN AUTHORIZED.
Neither the delivery of this Offer to Purchase nor any purchase pursuant to
the Offer will under any circumstances create any implication that there has
been no change in the affairs of CalWest, Rooster Acquisition Corp., Cabot or
any of their respective subsidiaries or affiliates since the date as of which
information is furnished or the date of this Offer to Purchase.
ROOSTER ACQUISITION CORP.
November 5, 2001
48
SCHEDULE I
DIRECTORS, EXECUTIVE OFFICERS AND BOARD MEMBERS OF ROOSTER ACQUISITION CORP.,
REEF AMERICA L.L.C., ROPROPERTY HOLDING B.V., RODAMCO NORTH AMERICA N.V.,
HASLEMERE N.V., AND RODAMCO EUROPE N.V.*
DIRECTORS AND EXECUTIVE OFFICERS OF ROOSTER ACQUISITION CORP. The following
table sets forth the name, principal occupation or employment and business
address for each director and executive officer of Rooster Acquisition Corp.
Each such person, unless otherwise indicated, is a citizen of the United States
of America.
Name Principal Occupation and Employment History
---- -------------------------------------------
Charles B. Leitner, III Mr. Leitner has been the President and Director of Rooster Acquisition
Corp. since its incorporation in October 2001. Mr. Leitner graduated
from the University of Pennsylvania with a B.A degree in Urban
Studies/Regional Science. He has 19 years of experience in real estate
investment. Mr. Leitner directs RREEF's National Acquisitions Group
and sits on the RREEF Investment and Policy Committees and serves
as the industrial specialist. Prior to joining RREEF in 1988, Mr. Leitner
was associated with Teachers Insurance & Annuity Association and
General Electric Capital Corporation in real estate finance. During
those associations, he was responsible for the organization of over
$500 million of conventional, hybrid debt and joint venture financing
for shopping centers, industrial and office buildings, apartments and
hotels. Mr. Leitner is a member of the Urban Land Institute and the
Industrial and Office Parks Council (IOPC/Green). Mr. Leitner's
business address if c/o RREEF America L.L.C., 320 Park Avenue,
Suite 1700, New York, NY 10022.
Warren H. Otto......... Mr. Otto has been a Vice President and Director of Rooster Acquisition
Corp. since its incorporation in October 2001. Mr. Otto graduated cum
laude from Harvard College in 1976 majoring in economics. Mr. Otto
has 25 years of experience in market research and real estate asset
management. At RREEF, Mr. Otto is the Portfolio Manager of
CalWest. Before joining RREEF in 1994, he was Manager of Real
Estate Investments for the $15 billion Ameritech Pension Trust. Mr.
Otto was responsible for working out joint ventures and restructuring
investments for Ameritech's real estate portfolio, which included land,
hotels, public storage facilities, shopping centers, malls, office
buildings, industrial buildings, and apartments. Before joining
Ameritech in 1991, Mr. Otto spent 15 years with The Landsing
Corporation, a real estate investment management and syndication firm
headquartered in the San Francisco Bay Area, where he performed a
wide variety of services including acquisition, disposition, asset
management, and market research for several metropolitan areas. Mr.
Otto's business address is c/o RREEF America L.L.C., 101 California
Street, 26th Floor, San Francisco, CA 94111.
* CalWest is a limited liability company formed by RREEF and CalPERS. RREEF is
the sole manager of RREEF and, thus, CalWest has no employees, officers,
directors or individuals performing such functions.
I-1
Name Principal Occupation and Employment History
---- -------------------------------------------
Robert J. Cook Mr. Cook has been a Vice President of Rooster Acquisition Corp. since
its incorporation in October 2001. Mr. Cook has M.S. degrees in Real
Estate Appraisal and Investment Analysis and Landscape Architecture
and a Ph.D. in Urban and Regional Planning from the University of
Wisconsin. Mr. Cook joined RREEF in February of 1990 and was
promoted to vice president in 1992 and principal in 1998. In 1999,
Mr. Cook was named principal in charge of RREEF Portfolio
Management and now serves on RREEF's Policy Committee and
Investment Committee as retail specialist. Before coming to RREEF,
Mr. Cook was vice president and director of administration for
JMB Properties, with responsibility for marketing properties for sale or
lease, budgeting and forecasting, financial analysis, and contract
negotiation. Prior to this, he was the assistant to the president of
JMB/Centers Management Company and was involved in the areas of
budgeting and reporting. Mr. Cook is a past chairman of the Valuation
Committee for the National Council of Real Estate Investment
Fiduciaries (NCREIF). Mr. Cook's business address is c/o RREEF
America L.L.C. 875 North Michigan Avenue, Suite 4100, Chicago, IL
60611.
MANAGEMENT BOARD MEMBERS AND POLICY COMMITTEE MEMBERS OF RREEF AMERICA
L.L.C. The following table sets forth the name, principal occupation or
employment and business address for each member of the management board and
policy committee of RREEF. Each such person, unless otherwise indicated, is a
citizen of the United States of America.
Names Principal Occupation and Employment History
----- -------------------------------------------
Christopher J. Bartram Mr. Bartram is a member of the Management Board of RREEF and
RoProperty Holding B.V. Since 1999, Mr. Bartram has also been the
Managing Director of Haslemere N.V. Since 1995, Mr. Bartram has been
the Chief Executive of Haslemere Estates Management Ltd. From 1997
until 1999 Mr. Bartram served as a Managing Director of Rodamco N.V.
Since May 2001, Mr. Bartram has served as a Director of George Wimpey
Plc. Mr. Bartram's business address is c/o of Haslemere Estates
Management Ltd., 43-45 Portman Square, London, W1H 6HE, United
Kingdom. Mr. Bartram is a citizen of the United Kingdom.
Robert J. Cook........ Mr. Cook serves on RREEF's Policy Committee and Investment Committee
as retail specialist. Mr. Cook has M.S. degrees in Real Estate Appraisal and
Investment Analysis and Landscape Architecture and a Ph.D. in Urban and
Regional Planning from the University of Wisconsin. Mr. Cook joined
RREEF in February of 1990 and was promoted to vice president in 1992 and
principal in 1998. In 1999, Mr. Cook was named principal in charge of
RREEF Portfolio Management. Mr. Cook has been a Vice President of
Rooster Acquisition Corp. since its incorporation in October 2001. Before
coming to RREEF, Mr. Cook was vice president and director of
administration for JMB Properties, with responsibility for marketing
properties for sale or lease, budgeting and forecasting, financial analysis, and
contract negotiation. Prior to this, he was the assistant to the president of
JMB/Centers Management Company and was involved in the areas of
budgeting and reporting. Mr. Cook is a past chairman of the Valuation
Committee for the National Council of Real Estate Investment Fiduciaries
(NCREIF). Mr. Cook's business address is c/o RREEF America L.L.C.,
875 North Michigan Avenue, Suite 4100, Chicago, IL 60611.
I-2
Name Principal Occupation and Employment History
---- -------------------------------------------
D. Wylie Greig..... Mr. Greig is a member of RREEF's Policy Committee, on its Management
Board and is a voting member of the Investment Committee. Mr. Greig
received his B.A. degree from Juniata College in Pennsylvania, and holds
Masters degrees in Business Administration from Wharton School at the
University of Pennsylvania and in City Planning from the University's
Graduate School of Fine Arts. Mr. Greig has been a land use economist and
market analyst for over 30 years, addressing growth patterns and real estate
markets nationwide. Prior to joining RREEF, Mr. Greig directed the Real
Estate Industries Department at SRI International (Standford Research
Institute) and had been a partner in several land use economics and real estate
consulting firms. At RREEF, Mr. Greig directs a 15-person research
program that supports strategic decision-making on all major areas of
operations including acquisitions, dispositions, property management,
portfolio management, and client reporting. Mr. Greig is a past president of
the National Council of Real Estate Investment Fiduciaries (NCREIF) and
was NCREIF's original representative to the joint PREA/NCREIF/NAREIM
Task Force on Real Estate Information Standards. He is a member of the
American Real Estate Society (ARES), the National Association of Business
Economists (NABE), the National Association of Real Estate Investment
Trusts (NAREIT), and the Pension Real Estate Association (PREA). He is a
recipient of PREA's Grasskamp Award for excellence in research. Mr.
Greig's business address is c/o RREEF America L.L.C, 875 North Michigan
Avenue, Suite 4100, Chicago, IL 60611.
Timothy K. Gonzalez Mr. Gonzalez is a voting member of RREEF's Policy and Investment
Committee. Mr. Gonzalez received his B.S. degree from the University of
California, and holds a Masters degree from Harvard University.
Mr. Gonzalez has 20 years of experience in real estate investment,
portfolio management, and financing. Since 1995, he has directed the
portfolio management activities of the San Francisco office and supervised
a 15-person staff that has managed over $3 billion in assets. Mr. Gonzalez
also serves as portfolio manager for RREEF America II, RREEF's flagship
core fund. He became a principal of RREEF in 1997. Mr Gonzalez came to
RREEF in 1990 as vice president, responsible for real estate acquisitions in
Southern California and Arizona. Prior to joining RREEF, he was a
director in the Los Angeles office of the Prudential Realty Group, where he
was responsible for Prudential's acquisition and financing activities in
Southern California, Arizona, and Nevada. He is a member of the
International Council of Shopping Centers and the Society of Industrial &
Office Realtors. Mr. Gonzalez's business address is c/o RREEF America
L.L.C., 101 California Street, 26th Floor, San Francisco, CA 94111.
I-3
Name Principal Occupation and Employment History
---- -------------------------------------------
Gary T. Kachadurian.... Mr. Kachadurian is a member of RREEF's Policy Committee and on its
Management Board. Mr. Kachadurian received his B.S. in Accounting
from the University of Illinois. Mr. Kachadurian has 23 years of real
estate experience specializing in land acquisitions, development,
financing and property management. He joined RREEF in 1990 and most
recently was the Principal-in-Charge of RREEF's National Acquisition
Group. At RREEF, Mr. Kachadurian has responsibility for the value-
added line of business. Mr. Kachadurian also serves as the Apartment
Specialist on the firm's Investment Committee. Prior to joining RREEF,
Mr. Kachadurian was the Midwest Regional Partner for Lincoln Property
Company, directing a staff of over 100 employees in the development of
apartment communities in Illinois, Indiana, Wisconsin, Kansas and
Pennsylvania. Mr. Kachadurian is a founding Board Member of the
Chicago Apartment Association and the immediate past chairman of the
National Multi-Housing Council. He also serves on the Multi-Family
Council of the Urban Land Institute (ULI), is a member of the
International Council of Shopping Centers (ICSC), and is a Board
Member of the Real Estate Committee of the YMCA. Mr. Kachadurian's
business address is c/o RREEF America L.L.C., 875 North Michigan
Avenue, Suite 4100, Chicago, IL 60611.
Donald A. King, Jr..... Mr. King is a member of RREEF's Investment and Policy Committees
and on its Management Board. Mr. King received a B.S. degree from the
University of Virginia and an M.B.A. degree from Harvard Business
School. Mr. King has 31 years of experience in real estate acquisition,
development, and management. Before joining RREEF he was active as
a real estate developer and property manager. From 1974 to 1976, as vice
president of Trust Investment, he founded the Bank of America Real
Estate Fund. Mr. King joined RREEF as a principal in 1979 and was co-
founder of RREEF MidAmerica Partners in Chicago. He was named
RREEF's Managing Partner in 1988. Mr. King is a member of the
National Association of Real Estate Investment Trusts, the National
Association of Real Estate Investment Managers, the Pension Real Estate
Association, the Urban Land Institute, and Lambda Alpha International,
an honorary society of land use economists. Mr. King's business address
is c/o RREEF America L.L.C., 875 North Michigan Avenue, Suite 4100,
Chicago, IL 60611.
Charles B. Leitner, III Mr. Leitner is a member of RREEF's Policy Committee. Mr. Leitner
graduated from the University of Pennsylvania with a B.A degree in Urban
Studies/Regional Science. He has 19 years of experience in real estate
investment. Mr. Leitner directs RREEF's National Acquisitions Group and
sits on the RREEF Investment Committee and serves as the industrial
specialist. Mr. Leitner was associated with Teachers Insurance & Annuity
Association and General Electric Capital Corporation in real estate finance.
During those associations, he was responsible for the organization of over
$500 million of conventional, hybrid debt and joint venture financing for
shopping centers, industrial and office buildings, apartments and hotels. Mr.
Leitner is a member of the Urban Land Institute and the Industrial and Office
Parks Council (IOPC/Green). Mr. Leitner's business address is c/o RREEF
America L.L.C., 320 Park Avenue, Suite 1700, New York, NY 10022.
I-4
Name Principal Occupation and Employment History
---- -------------------------------------------
Stephen M. Steppe Mr. Steppe is a member of RREEF's Policy and Investment Committees
and on its Management Board. At RREEF Mr. Steppe also oversees the
client relations department Mr. Steppe is a graduate of the University of
Arizona. Before joining RREEF as a principal in 1986, Mr. Steppe spent
14 years with Coldwell Banker. His responsibilities as vice president and
marketing director of investment properties included supervision of 22
offices in Southern California, Arizona, Colorado, and Nevada. Prior to
moving to Los Angeles, Mr. Steppe spent ten years as a commissioned
salesman in Coldwell Banker's South Bay office in Southern California.
He was named senior sales consultant in 1978. Mr. Steppe has handled
the marketing of over one billion dollars of investment properties,
including shopping centers, apartments, industrial, and office buildings
for both domestic and foreign investors. Mr. Steppe is a former chairman
of the Pension Real Estate Association (PREA). He also serves on the
Editorial Board of the Institutional Real Estate Letter. Mr. Steppe's
business address is c/o RREEF America L.L.C., 101 California Street,
26th Floor, San Francisco, CA 94111.
MANAGEMENT BOARD MEMBERS OF ROPROPERTY HOLDING B.V. The following table sets
forth the name, principal occupation or employment and business address for
each member of the managing board of RoProperty Holding B.V. Each such person,
unless otherwise indicated, is a citizen of the United States of America.
Name Principal Occupation and Employment History
---- -------------------------------------------
Christopher J. Bartram Since March 2001, Mr. Bartram has been the Chairman of the
Management Board of RoProperty. Mr. Bartram is also a member of the
Management Board of RREEF. Since 1999, Mr. Bartram has also been
the Managing Director of Haslemere N.V. Since 1995, Mr. Bartram has
been the Chief Executive of Haslemere Estates Management Ltd. From
1997 until 1999 Mr. Bartram served as a Managing Director of
Rodamco N.V. Since May 2001, Mr. Bartram has served as a Director
of George Wimpey Plc. Mr. Bartram's business address is
c/o Haselmere Estates Management Ltd., 43-45 Portman Square,
London, W1H 6HE, United Kingdom. Mr. Bartram is a citizen of the
United Kingdom.
Maarten J. Hulshoff... Mr. Hulshoff is a member of the Management Board of RoProperty.
Mr. Hulshoff is also the chief executive officer of Rodamco Europe
N.V. From 1995 until 1999, Mr. Hulshoff was the Chief Executive
Officer of NCM Holding N.V., a credit insurance company based in the
Netherlands. From 1999 until 2000, Mr. Hulshoff was the Chief
Executive Officer of Rabobank International, a bank based in the
Netherlands. Mr. Hulshoff also serves as a member of the Supervisory
Boards of two banks based in the Netherlands, NIB Capital Bank N.V.
and The Economy Bank N.V. Mr. Hulshoff's business address is
c/o Rodamco Europe N.V., Hofplein 20 NL 3032 AC, Rotterdam, the
Netherlands. Mr. Hulshoff is a Dutch citizen.
I-5
Name Principal Occupation and Employment History
---- -------------------------------------------
Donald A. King, Jr. Mr. King is a member on the Management Board of RoProperty.
Mr. King is also a member of RREEF's Investment and Policy
Committees. Mr. King received a B.S. degree from the University of
Virginia and an M.B.A. degree from Harvard Business School. Mr.
King has 31 years of experience in real estate acquisition, development,
and management. Before joining RREEF he was active as a real estate
developer and property manager. From 1974 to 1976, as vice president
of Trust Investment, he founded the Bank of America Real Estate Fund.
Mr. King joined RREEF as a principal in 1979 and was co-founder of
RREEF MidAmerica Partners in Chicago. He was named RREEF's
Managing Partner in 1988. Mr. King is a member of the National
Association of Real Estate Investment Trusts, National Association of
Real Estate Investment Managers, the Pension Real Estate Association,
the Urban Land Institute, and Lambda Alpha International, an honorary
society of land use economists. Mr. King's business address is c/o
RREEF America L.L.C., 875 North Michigan Avenue, Suite 4100,
Chicago, IL 60611.
CHIEF EXECUTIVE OFFICERS OF RODAMCO NORTH AMERICA N.V., HASLEMERE N.V. AND
RODAMCO EUROPE N.V. The following table sets forth the name, principal
occupation or employment and business address for each of the chief executive
officers of Rodamco N.A., Haslemere N.V. and Rodamco Europe N.V. Each such
person, unless otherwise indicated, is a citizen of the United States of
America.
Name Principal Occupation and Employment History
---- -------------------------------------------
Christopher J. Bartram Since 1999, Mr. Bartram has been the Managing Director of Haslemere
N.V. Mr. Bartram is also a member on the Management Boards of
RoProperty and RREEF. Since 1995, Mr. Bartram has been the Chief
Executive of Haslemere Estates Management Ltd. From 1997 until
1999 Mr. Bartram served as a Managing Director of Rodamco N.V.
Since May 2001, Mr. Bartram has served as a Director of George
Wimpey Plc. Mr. Bartram's business address is c/o Haslemere Estates
Management Ltd., 43-45 Portman Square, London, W1H 6HE, United
Kingdom. Mr. Bartram is a citizen of the United Kingdom.
Gerald E. Egan........ Mr. Egan has been the Chairman and Chief Executive Officer of
Rodamco North America N.V. since March 2000. Mr. Egan holds a
B.A. degree from Northwestern University and a law degree from
DePaul University of Law. He has 31 years of experience in real estate.
From July 1981 to March 2000, Mr. Egan was principal-in-charge of
the portfolio management group of RREEF. Mr. Egan's business
address is c/o Urban Properties Co., 900 N. Michigan Avenue, 15th
Floor, Chicago, IL 60611.
I-6
Name Principal Occupation and Employment History
---- -------------------------------------------
Maarten J. Hulshoff Mr. Hulshoff is the chief executive officer of Rodamco Europe N.V.
Mr. Hulshoff is also a member of the Management Board of
RoProperty. From 1995 until 1999, Mr. Hulshoff was the Chief
Executive Officer of NCM Holding N.V., a credit insurance company
based in the Netherlands. From 1999 until 2000, Mr. Hulshoff was the
Chief Executive Officer of Rabobank International, a bank based in the
Netherlands. Mr. Hulshoff also serves as a member of the Supervisory
Boards of two banks based in the Netherlands, NIB Capital Bank N.V.
and The Economy Bank N.V. Mr. Hulshoff's business address is c/o
Rodamco Europe N.V., Hofplein 20 NL 3032 AC, Rotterdam, the
Netherlands. Mr. Hulshoff is a Dutch citizen.
I-7
SCHEDULE II
MEMBERS OF THE BOARD OF ADMINISTRATION AND EXECUTIVE OFFICERS OF THE CALIFORNIA
PUBLIC EMPLOYEES' RETIREMENT SYSTEM
The following table sets forth the name, principal occupation or employment
and business address, for each member of the Board of Administration and
executive officer of the California Public Employees' Retirement System
("CalPERS"). The business address of each such person, unless otherwise
indicated, is c/o CalPERS, Lincoln Plaza, 400 "P" Street, Sacramento,
California, 94229-2701, and each such person is a citizen of the United States
of America.
Board of Administration of CalPERS
Name Principal Occupation and Employment History
---- -------------------------------------------
Dr. William Dale Crist Dr. Crist has been an elected member of the Board since 1987.
Dr. Crist has served as President of the Board since 1992. He is a
member of the Investment, Benefits and Program Administration,
Finance and Performance and Compensation Committees. A Professor
of Economics at California State University, Stanislaus, Dr. Crist
served as chair of his University's Department of Economics from
1986 to 1990. He has held a variety of Academic Senate and faculty
association positions during his academic career. He was the State
president of the California Faculty Association from 1976 to 1985. He
has also made numerous professional and scholarly contributions in the
areas of collective bargaining in higher education, public retirement
systems, and corporate governance. Dr. Crist has served as co-chair of
the Council of Institutional Investors (CII) and is a former member of
the CII Executive Committee and the International Corporate
Governance Network Board of Governors. Mr. Crist's business address
is c/o California State University--Stanislaus, 801 West Monte Vista
Ave., Turlock, California 95380.
Sidney L. Abrams...... Mr. Abrams was appointed to the CalPERS Board of Administration in
September 2001 by Governor Gray Davis to serve as the insurance
industry representative. His term expires in January 2005. He serves on
the Investment Committee, the Benefits and Program Administration
Committee and the Health Benefits Committee. He is an actuary who
has more than 30 years experience providing actuarial and consulting
services to large multi-employer Taft-Hartley pension, health and
welfare and other employee benefit plans in California and other
Western states. For many years, Mr. Abrams had his own consulting
firm based in San Francisco, and was involved in the establishment and
continuing operation of the plans, including benefit design,
administration, investment and actuarial matters. He currently sits on
the boards of several plans in the retail food industry. Mr. Abrams'
current address is P.O. Box 220, Pacific Palisades, CA 90272.
II-1
Name Principal Occupation and Employment History
---- -------------------------------------------
Robert F. Carlson... Mr. Carlson has been an elected member of the Board since 1971 and
has served as Vice President since April 2000. He is the Chair of the
Finance Committee and Vice Chair of the Performance and
Compensation Committee. In addition he also serves on the Benefits
and Program Administration and the Investment Committees, and the
Policy Committee (a subcommittee of the Investment Committee). His
current term expires January 15, 2004. Mr. Carlson, who retired as
Chief Counsel from the California Department of Transportation in
1985, serves as a director or trustee of 12 Investment Trusts of the
Franklin Templeton Fund. He has also served as Adjunct Professor of
Law at the University of the Pacific McGeorge School of Law from
1975 to 1989. He has been a member of the California State Bar
Association since 1952. Mr. Carlson's current address is 2120 Lambeth
Way, Carmichael, California 95608.
Philip Angelides.... Mr. Angelides has been an ex officio member of the Board since
January 1999 as a result of his election as California State Treasurer.
He serves on the Finance, Investment, and Health Benefits
Committees. Mr. Angelides is a graduate of Harvard University and a
Coro Foundation Fellow. He served for eight years in California
government before entering the private sector in 1984. In 1986,
Angelides formed his own investment and management business. Mr.
Angelides's business address is c/o Treasurer of the State of California,
915 Capitol Mall, Room 110, Sacramento, California 95814.
Willie Brown, Jr.... Mr. Brown was appointed to the Board by Governor Gray Davis, in
2000. Mr. Brown is on the Investment Committee. He is a 36 year
veteran of California State government and is currently the Mayor of
the City and County of San Francisco. He was elected to represent the
13th Assembly District in 1964 then became the Speaker of the
California State Assembly from 1980-1995. Mr. Brown's business
address is c/o Mayor of City and County of San Francisco, State of
California, 1 Dr. Carlton B. Goodlett Place, Room 336, San Francisco,
California 95814.
Dr. Kathleen Connell Dr. Connell has been an ex officio member of the Board since January
1995, following her election in 1994 as State Controller. She is the
Vice Chair of the Finance Committee and a member of the Benefits
and Program Administration, Health Benefits and Investment
Committees. Prior to being elected State Controller, Dr. Connell ran
her own investment banking firm and served as vice president and
director for Chemical Bank of New York. She also served as a Director
of Housing for the City of Los Angeles. Dr. Connell's business address
is c/o Controller of the State of California, 300 Capital Mall, Suite
1850, Sacramento, California 95814.
II-2
Name Principal Occupation and Employment History
---- -------------------------------------------
Rob Feckner...... Mr. Feckner has been an elected member of the Board since January
1999. He is the Chair of the Benefits and Program Administration and
Health Benefits Committees. He also serves as a member of the
Performance and Compensation and Investment Committees.
Mr. Feckner has worked for the last 21 years in the Napa Valley
Unified School District, where he is currently employed as a glazing
specialist. He also serves as a member of the Statewide Board of
Directors of the California School Employees Association. Mr. Feckner
has also served as local Chapter President (10 years), local Vice
President, and Negotiating Chairperson. His business address is c/o
Glazing Specialist, Napa Valley Unified School District, 1616 Lincoln
Avenue, Napa, California 94558.
Michael Flaherman Mr. Flaherman has been a member of the Board since January 1995.
He is Chair of the Investment Committee. In addition he serves on the
Finance, Benefits and Program Administration, and Performance and
Compensation Committees and the R Street Project Subcommittee (a
subcommittee of the Investment Committee). His current term expires
January 15, 2003. Mr. Flaherman has worked as a pricing economist
for the Bay Area Rapid Transit, a mass transit company, since 1992.
Prior to 1992, he worked as a staff consultant for Multisystems, Inc., a
Massachusetts firm specializing in public transit management and
planning. Mr. Flaherman's business address is c/o BART, 800 Madison
Street, MSQ-3, Oakland, California 94607.
Sean Harrigan.... Mr. Harrigan, a member of the State Personnel Board (SPB), serves as
its representative to the CalPERS Board. He was appointed as a
member of the Board in December 1999. He is also the Vice Chair of
the Investment Committee and serves on the Benefits and Program
Administration and the Health Benefits Committees. Mr. Harrigan has
served as International Vice President and Regional Director of the
Food and Commercial Workers International Union (UFCW), Region 8
--Western, since 1994 and has been on the California State Personnel
Board since 1999. For seven years, he worked for Safeway
Supermarkets in various capacities before joining Richland Retail
Clerks Local 1612 as Union Representative. In 1991, he was appointed
Executive Assistant of UFCW, Region 8--Western, in California, and
in 1993 he became Assistant to the Director of Organizing in
Washington, D.C. Mr. Harrigan's business address is c/o United Food
and Commercial Workers International Union, 1775 K Street, NW,
Washington, DC 20006.
II-3
Name Principal Occupation and Employment History
---- -------------------------------------------
Marty Morgenstern... Mr. Morgenstern became an ex officio member of the CalPERS Board
in January 1999 when he was appointed to the Board by Governor
Gray Davis. Mr. Morgenstein is on the Health Benefits and Investment
Committees. He has been the Director of the California Department of
Personnel Administration since 1981. Mr. Morgenstern also served as
Chair of the Center for Labor Research and Education at the University
of California at Berkeley's Institute of Industrial Relations from 1987
to 1994 and as a member of the Public Employment Relations Board
from 1982 to 1987. His business address is c/o Department of Director,
Department of Personnel Administration, North Building, Suite 400,
1515 S Street, Sacramento, California 95814.
Mike Quevedo, Jr.... Mr. Quevedo was appointed to the Board by the California State Senate
Rules Committee and the Assembly Speaker in February 1998. He
serves on the Investment Committee. His term expires January 15,
2004. He has been the Business Manager for the Southern California
District Council of Laborers, a labor union, since 1994 and Vice
President of the Laborers' International Union of North America. He
has also served as Vice President and President of the Southern
California District Council of Laborers. Mr. Quevedo is the Co-
Chairman of the Laborers' Pension Trust, the Laborers' Health and
Welfare Trust, the Laborers' Vacation Trust, and the Laborers'
Training and Retraining Trust. Mr. Quevedo's business address is
c/o Southern California District Council of Laborers, 4399 Santa Anita
Avenue, Suite 204, El Monte, California 91731.
William B. Rosenberg Mr. Rosenberg has been an elected member of the Board since July
1993. He is the Vice Chair of the Benefits and Program Administration
and the Health Benefit Committees. He also serves on the Finance and
Investment Committees. Mr. Rosenberg, who is retired, spent more
than seven years with CalPERS as a retirement specialist and 14 years
as a consultant and contract compliance officer with the State
Department of Fair Employment and Housing. Mr. Rosenberg's current
address is c/o 5362 North Algarrobo Street, Laguna Woods,
California 92653.
Charles P. Valdes... Mr. Valdes has been an elected member of the Board since 1984. His
current term expires January 15, 2002. He is currently Chair of the
Performance and Compensation Committee and a member of the
Health Benefits, Finance and Ad Hoc Internal Board Governance
Committees. Mr. Valdes is a Deputy Attorney IV for the
California Department of Transportation. Mr. Valdes' current address
is c/o California Department of Transportation, 1120 N Street,
Sacramento, California 95814.
II-4
Executive Officers of CalPERS
Name Principal Occupation and Employment History
---- -------------------------------------------
James E. Burton. Mr. Burton has been the Chief Executive Officer of CalPERS since
October 1994. Previously, Mr. Burton served as Assistant Executive
Officer for CalPERS investment operations, supervising investment
operations in all asset classes, including both domestic and
international public and private markets, coordinating internal
investment policy, and representing CalPERS on investment-related
legislation. Prior to joining CalPERS in 1992, Mr. Burton was Deputy
State Controller, advising the State Controller on public pension,
government borrowing, and state finance issues. Burton's career in
California government also includes leadership positions as Executive
Director of the Commission on State Finance, Deputy Chief of Staff to
former Governor Jerry Brown, Executive Secretary of the Pooled
Money Investment Board, and Assistant Executive Officer of the State
Board of Control. Mr. Burton is currently Second Vice President and a
member of the Executive Committee of the National Association of
State Retirement Administrators. He also serves on the National
Nominating Committee of NASD, Inc.
James H. Gomez.. Mr. Gomez was appointed to the position of Deputy Executive Officer
of CalPERS in December of 1996. Prior to joining CalPERS,
Mr. Gomez was the Director of the California Department of
Corrections. Mr. Gomez also served the California Department of
Corrections as Chief Deputy Director from 1983 to 1989 and from
1989 to 1991 he was Deputy County Executive for Santa Clara County.
Prior to 1983, he held several senior management positions with the
California Department of Social Services, serving as Deputy Director
of the department from 1978 to 1983. Mr. Gomez is a member of the
National Institute of Corrections Advisory Board.
Daniel M. Szente Mr. Szente has served as the Chief Investment Officer for CalPERS
since July 2000 and is responsible for managing the public pension
fund. Prior to joining CalPERS, he held the position of Executive Vice
President and Director of Research for Pennsylvania-based McGlinn
Capital Management from 1998 to 2000. Prior to that from 1995 to
1998, Mr. Szente was employed by the Howard Hughes Medical
Institute. Mr. Szente has more than 16 years' investment policy and
management experience in the public sector, serving as Assistant
Director of Investments of the State Teachers Retirement System of
Ohio.
Vincent P. Brown Mr. Brown has served as Assistant Executive Officer for Financial and
Administrative Services of CalPERS since May 1995. He is
responsible for the overall management of a variety of CalPERS
functions, including financial accounting systems, budgets, information
technology, human resources, and administrative and general support
programs. Prior to joining CalPERS, Mr. Brown served as Chief of
Administrative Services and Assistant Program Budget Manager for
the California Department of Finance. With over 20 years of public
service, Mr. Brown has held numerous financial, administrative, and
managerial positions in both the executive and legislative branches of
government in New York and California.
II-5
Name Principal Occupation and Employment History
---- -------------------------------------------
Barbara Hegdal.. Ms. Hegdal was named Assistant Executive Officer of the Member and
Benefit Services Branch for CalPERS in December of 1997.
Ms. Hegdal has worked for CalPERS in various capacities since 1976,
including Chief of the Member Services Division, interim Assistant
Executive Officer of the Member and Benefit Services Branch, Chief
of the Benefit Application Services Division, Assistant Chief of the
Benefits Division, Manager of the Retirement Eligibility and Payment
Section for the Benefits Division, and Manager of the Management
Analysis Section for the Administration Division.
Robert D. Walton Mr. Walton is the Assistant Executive Officer in charge of
Governmental Affairs and Planning and Research for CalPERS and
represents CalPERS at the California Legislature and works with the
CalPERS federal lobbyist in Washington, D.C. He also oversees the
CalPERS Strategic Planning activities, Information Security, and the
Customer Service project, as well as the CalPERS Annual Plan.
Mr. Walton began working for CalPERS in March 1971 and has more
than 26 years experience with CalPERS, including responsibility for
Financial Services, Human Resources, Public Affairs, Information
Technology, the Health Benefits Program, Actuarial Services, Field
Services, Administrative Support Services and the Long-Term Care
Program. He also served with the California Department of General
Services from 1974 to 1978.
Allen D. Feezor. Mr. Feezor became the Assistant Executive Officer of Health Benefits
Services for CalPERS in January 2000. Prior to joining CalPERS,
Mr. Feezor served as Vice President for Planning, Marketing, and
Managed Care for University Health Systems of Eastern Carolina. He
served as Chief Deputy Commissioner for the North Carolina
Department of Insurance from 1985 to 1995. From 1985 to 1988 he
also served as chief executive of the 430,000-member North Carolina
Teachers', State Employees' and Retirees' Health Plan. Mr. Feezor has
also served as the Senior Washington (D.C.) Representative for the
Blue Cross/Blue Shield Association from 1978 to 1985. He serves on
the Board of Directors of Pacific Business Group on Health and The
Integrated Health Association.
Robert Aguallo.. Mr. Aguallo has served as the Assistant Executive Officer of
Investment Operations for CalPERS since February 1995. Mr. Aguallo
administers internal and external investment operations in all of
CalPERS major asset classes, including both domestic and international
private and public markets, coordinating internal investment policy,
and representing CalPERS on investment-related legislation at both the
state and federal level. He advises the Chief Investment Officer on
strategic investment policies and ensures applicability of policy and
procedures to state law and regulations for the trust fund. Prior to his
current position, Mr. Aguallo served six years as Assistant Executive
Officer for CalPERS Financial and Administrative Services.
II-6
Name Principal Occupation and Employment History
---- -------------------------------------------
Kayla J. Gillan...... Ms. Gillan was appointed General Counsel of CalPERS in August 1996
and manages the CalPERS Legal Office. Ms. Gillan serves as chief
legal advisor to the CalPERS Board of Administration and executive
staff on pension and trust law, tax law, health care, investments, and
corporate governance. Ms. Gillan has been with CalPERS since 1986,
serving as Staff Counsel from 1986 to 1990 and as Deputy General
Counsel from 1990 to 1996. Prior to joining CalPERS, Gillan was in
the private practice of law, specializing in labor and personal injury
litigation.
Dr. Ronald L. Seeling Dr. Seeling has served as the Chief Actuary for CalPERS since October
1994 and oversees and directs the CalPERS actuarial staff and external
consultants in establishing the liability and contribution requirements
of the State of California, schools, and contracting agencies. He
recommends the adjustment of reserves and changes in actuarial laws,
rates, and tables. Dr. Seeling provides independent advice and counsel
on actuarial issues to the CalPERS Board of administration and the
Benefits and Program Administration Committee. He is responsible for
evaluating, developing, and implementing the actuarial policies and
procedures of the Board. Prior to joining CalPERS, Dr. Seeling served
as a managing consultant and actuary in the Atlanta office of William
M. Mercer, a benefit-consulting firm. He also served as legislative
actuary for the State of Louisiana for six years prior to joining Mercer.
Patricia K. Macht.... Ms. Macht has served as Chief of the Office of Public Affairs for
CalPERS since August 1995 and is responsible for developing and
administering communications and public relations programs for the
system. She advises the Board of Administration and Executive Staff
on communications issues and policies. Prior to her current position,
Ms. Macht worked for the California Integrated Waste Management
Board where over a four-year period she served as Assistant Director of
Public Affairs and Deputy Director of Waste Prevention and
Education. Prior to her career in public service, Ms. Macht was
communications manager for AmeriGas Propane, a national energy
company.
II-7
THE DEPOSITARY FOR THE OFFER IS:
COMPUTERSHARE TRUST COMPANY OF NEW YORK
BY MAIL: BY OVERNIGHT DELIVERY: BY HAND DELIVERY:
Computershare Trust Computershare Trust Computershare Trust
Companyof New York Companyof New York Companyof New York
Wall Street Station Wall Street Plaza Wall Street Plaza
P.O. Box 1010 88 Pine Street, 19/th/ 88 Pine Street, 19/th/
New York, NY 10268-1010 Floor Floor
New York, NY 10005 New York, NY 10005
FACSIMILE TRANSMISSION (FOR ELIGIBLE INSTITUTIONS ONLY):
(212) 701-7636
CONFIRM RECEIPT OF FACSIMILE BY TELEPHONE ONLY:
(212) 701-7624
-----------------
Questions and requests for assistance may be directed to the Information
Agent or the Dealer Managers at their respective addresses and telephone
numbers listed below. Additional copies of this Offer to Purchase, the Letter
of Transmittal and other tender offer materials may be obtained from the
Information Agent as set forth below, and will be furnished promptly at our
expense. Facsimile copies of the Letter of Transmittal, properly completed and
duly executed, will be accepted. The Letter of Transmittal, certificates for
Common Shares and any other required documents should be sent or delivered by
each shareholder of Cabot or his broker, dealer, commercial bank, trust company
or other nominee to the Depository at one of its addresses set forth above. You
may also contact your broker, dealer, commercial bank, trust company or other
nominee for assistance concerning the Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
[LOGO] MacKenzie Partners, Inc. Logo
156 Fifth Avenue
New York, NY 10010
(212) 929-5500 Call Collect
or
Call Toll-Free (800) 322-2885
E-mail: proxy@mackenziepartners.com
THE DEALER MANAGERS FOR THE OFFER ARE:
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Call Collect: (212) 902-1000
or
Call Toll-Free: (800) 323-5678