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AGREEMENT AND PLAN OF MERGER
Among
NEWSWEB CORPORATION,
CDCT ACQUISITION TRUST
and
THE CHICAGO DOCK AND CANAL TRUST
Dated as of September 27, 1996
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TABLE OF CONTENTS
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ARTICLE I
The Merger
SECTION 1.01. The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.03. Effective Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.04. Effects of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.05. Declaration of Trust and By-laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 1.06. Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 1.07. Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE II
Effect of the Merger on the Capital Stock of
Sub and the Company; Exchange of Certificates
SECTION 2.01. Effect on Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2.02. Exchange of Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE III
Representations and Warranties of the Company
SECTION 3.01. Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 3.02. Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 3.03. Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 3.04. Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 3.05. Consent and Approvals; No Violations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 3.06. SEC Reports and Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.07. Absence of Certain Changes or Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 3.08. No Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 3.09. Information Supplied . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 3.10. Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 3.11. Contracts; Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 3.12. Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 3.13. Compliance with Applicable Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 3.14. Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
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SECTION 3.15. State Takeover Statutes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 3.16. Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 3.17. Real Property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 3.18. Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 3.19. Title to Property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 3.20. REIT Qualification. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 3.21. Required Vote . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 3.22. Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 3.23. Opinion of Financial Advisor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 3.24. Violations; Eminent Domain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE IV
Representations and Warranties
of Parent and Sub
SECTION 4.01. Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 4.02. Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 4.03. Consents and Approvals; No Violations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 4.04. Information Supplied . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 4.05. Interim Operations of Sub . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 4.06. Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 4.07. Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 4.08. Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE V
Covenants
SECTION 5.01. Covenants of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 5.02. No Solicitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 5.03. Other Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE VI
Additional Agreements
SECTION 6.01. Shareholder Approvals; Preparation of
Proxy Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 6.02. Access to Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 6.03. Reasonable Efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
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SECTION 6.04. Company Stock Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 6.05. Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 6.06. Indemnification; Directors and Officers
Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 6.07. Obligations of Sub . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 6.08. Certain Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 6.09. Severance Policy and Other Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 6.10. Redemption of Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE VII
Conditions Precedent
SECTION 7.01. Conditions to Each Party's Obligation
To Effect the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 7.02. Conditions to the Company's Obligation
to Effect the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 7.03. Conditions to the Parent's and Sub's
Obligations to Effect the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
ARTICLE VIII
Termination and Amendment
SECTION 8.01. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 8.02. Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 8.03. Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 8.04. Extension; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
ARTICLE IX
Miscellaneous
SECTION 9.01. Nonsurvival of Representations,
Warranties and Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 9.02. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 9.03. Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 9.04. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 9.05. Entire Agreement; No Third Party
Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 9.06. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
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SECTION 9.07. Publicity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 9.08. Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 9.09. Enforcement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 9.10. Exculpation of Shareholders, Trustees,
Officers, Agents and Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of September 27, 1996
among Newsweb Corporation, an Illinois corporation ("Parent"), CDCT Acquisition
Trust, an Illinois business trust and a 99% owned subsidiary of Parent ("Sub"),
and The Chicago Dock and Canal Trust, an Illinois business trust (the
"Company").
WHEREAS the board of directors of Parent and the respective
trustees of Sub and the Company have approved the acquisition of the Company by
Parent on the terms and subject to the conditions set forth in this Agreement;
WHEREAS, in furtherance of such acquisition, the board of
directors of Parent and the respective trustees of Sub and the Company have
each approved the merger of the Company with and into Sub (the "Merger"), upon
the terms and subject to the conditions set forth in this Agreement, whereby
each issued and outstanding Common Share of beneficial interest, without par
value, of the Company (a "Share"), other than Shares owned directly or
indirectly by the Company, will be converted into the right to receive $21.00
per share in cash;
WHEREAS, the trustees of the Company have adopted resolutions
approving the Merger and recommending that the Company's shareholders approve
this Agreement and the Merger;
WHEREAS, Parent, Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger and also to prescribe various conditions to the Merger.
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements herein contained, and intending to be legally
bound hereby, Parent, Sub and the Company hereby agree as follows:
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ARTICLE I
THE MERGER
SECTION 1.01. The Merger. Upon the terms and subject to the
conditions set forth in this Agreement, the Company shall be merged with and
into Sub at the Effective Time (as defined in Section 1.03). Following the
Effective Time, the separate existence of the Company shall cease and Sub shall
continue as the surviving trust (the "Surviving Company") and shall succeed to
and assume all of the rights and obligations of the Company. At the election
of Parent, any direct or indirect wholly owned subsidiary (as defined in
Section 9.03) of Parent may be substituted for Sub as a constituent company in
the Merger. In such event, the parties agree to execute an appropriate
amendment to this Agreement in order to reflect the foregoing.
SECTION 1.02. Closing. The closing of the Merger will take
place at 10:00 a.m. on a date to be mutually agreed by Parent and the Company
(and, failing such agreement, on the second business day) after satisfaction or
waiver of the conditions set forth in Article VII (the "Closing Date"), at the
offices of Sidley & Austin, One First National Plaza, Chicago, Illinois 60603,
unless another date, time or place is agreed to in writing by the parties
hereto.
SECTION 1.03. Effective Time. Subject to the provisions of
this Agreement, as soon as practicable on or after the Closing Date, the
parties shall file articles of merger or other appropriate documents (in any
such case, the "Articles of Merger") executed in accordance with the relevant
provisions of the Amended and Restated Declaration of Trust, as amended
(including the amendment contemplated by the Trust Amendment described in
Section 7.01), of the Company (as so amended, the "Declaration of Trust") and
any applicable laws of the State of Illinois and shall make all other filings
or recordings required under the Declaration of Trust and the laws of the State
of Illinois. The Merger shall become effective at such time as the Articles of
Merger are duly filed with the Recorder of Deeds of Cook County, Illinois, or
at such other time as Sub and the Company shall agree should be specified in
the Articles of Merger consistent with the provisions of the Declaration of
Trust (the
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time the Merger becomes effective being hereinafter referred to as the
"Effective Time").
SECTION 1.04. Effects of the Merger. Upon consummation of
the Merger, the Surviving Company shall have all of the rights, privileges,
immunities and franchises, as of a public or a private nature, of each of the
constituent companies and all property, real, personal and mixed, and all debts
due on whatever account, including subscriptions to shares of capital stock,
and all other choses in action, and all and every other interest, of or
belonging to or due to each of the constituent companies, shall be taken and
deemed to be transferred to and vested in such Surviving Company without
further act or deed, and the title to any real estate, or any other interest
therein, vested in either of the constituent companies shall not revert or be
in any way impaired by reason of such Merger, and such Merger shall have the
other effects set forth in the Declaration of Trust or applicable law.
SECTION 1.05. Declaration of Trust and By-laws. (a) The
Declaration of Trust, as in effect immediately prior to the Effective Time
shall be the declaration of trust of the Surviving Company until thereafter
changed or amended as provided therein or by applicable law.
(b) The Bylaws of Sub as in effect immediately prior to the
Effective Time shall be the bylaws of the Surviving Company, until thereafter
changed or amended as provided therein or by applicable law.
SECTION 1.06. Trustees. The trustees of Sub immediately
prior to the Effective Time shall be the trustees of the Surviving Company,
until the earlier of their resignation or removal or until their respective
successors are duly elected and qualified, as the case may be.
SECTION 1.07. Officers. The officers of Sub immediately
prior to the Effective Time shall be the officers of the Surviving Company,
until the earlier of their resignation or removal or until their respective
successors are duly elected and qualified, as the case may be.
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ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF
SUB AND THE COMPANY; EXCHANGE OF CERTIFICATES
SECTION 2.01. Effect on Capital Stock. As of the Effective
Time, by virtue of the Merger and without any action on the part of the holder
of any Shares or any shares of capital stock of Sub:
(a) Capital Stock of Sub. Each issued and outstanding share
of capital stock of Sub shall be converted into and become one fully
paid and nonassessable Common Share of beneficial interest, without
par value, of the Surviving Company.
(b) Cancellation of Treasury Stock. Each Share that is owned
by the Company or by any subsidiary of the Company shall automatically
be canceled and retired and shall cease to exist, and no consideration
shall be delivered in exchange therefor.
(c) Conversion of Shares. Each Share issued and outstanding
(other than Shares to be canceled in accordance with Section 2.01(b))
shall be converted into the right to receive $21.00 in cash (the
"Merger Consideration"). As of the Effective Time, all such Shares
shall no longer be outstanding and shall automatically be canceled and
retired and shall cease to exist, and each holder of a certificate
representing any such Shares shall cease to have any rights with
respect thereto, except the right to receive the Merger Consideration,
without interest.
SECTION 2.02. Exchange of Certificates. (a) Paying Agent.
Prior to the Effective Time, Parent shall designate LaSalle National Bank (or
such other bank or trust company reasonably acceptable to the Company) to act
as paying agent in the Merger (the "Paying Agent"), and Parent shall, at or
prior to the Effective Time, deposit or cause to be deposited with the Paying
Agent in a separate fund established for the benefit of the holders of Shares
(the "Payment Fund") funds in an amount necessary for the payment of the Merger
Consideration upon
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surrender of certificates representing Shares as part of the Merger pursuant to
Section 2.01 (it being understood that any and all interest earned on funds made
available to the Paying Agent pursuant to this Agreement shall be turned over to
Parent). At the Effective Time, Parent shall also make available to the
Surviving Company funds in an amount necessary for the payment of the Option
Consideration (as defined in Section 6.04). Arrangements shall be made with the
Paying Agent such that holders of Shares and Company Stock Options are deemed to
have received payment of the Merger Consideration and Option Consideration prior
to the expiration of the Company's taxable year ending with the Merger for
Federal income tax purposes.
(b) Exchange Procedure. As soon as reasonably practicable
after the Effective Time, the Paying Agent shall mail to each holder of record
of a certificate or certificates that immediately prior to the Effective Time
represented Shares (the "Certificates"), (i) a letter of transmittal (which
shall specify that delivery shall be effected, and risk of loss and title to
the Certificates shall pass, only upon delivery of the Certificates to the
Paying Agent and shall be in a form and have such other provisions as Parent
and the Company may reasonably specify) and (ii) instructions for use in
effecting the surrender of the Certificates in exchange for the Merger
Consideration. Upon surrender of a Certificate for cancellation to the Paying
Agent, together with such letter of transmittal, duly executed, and such other
documents as may reasonably be required by the Paying Agent, the holder of such
Certificate shall be entitled to receive in exchange therefor the amount of
cash into which the Shares theretofore represented by such Certificate shall
have been converted pursuant to Section 2.01, and the Certificate so
surrendered shall forthwith be canceled. In the event of a transfer of
ownership of Shares that is not registered in the transfer records of the
Company, payment may be made to a person other than the person in whose name
the Certificate so surrendered is registered, if such Certificate shall be
properly endorsed or otherwise be in proper form for transfer and the person
requesting such payment shall pay any transfer or other taxes required by
reason of the payment to a person other than the registered holder of such
Certificate or establish to the satisfaction of the Surviving Company that such
tax has been paid or is not applicable. Until surrendered as contemplated by
this Section 2.02, each Certificate shall be deemed at any time after
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the Effective Time to represent only the right to receive upon such surrender
the amount of cash, without interest, into which the Shares theretofore
represented by such Certificate shall have been converted pursuant to Section
2.01. No interest will be paid or will accrue on the cash payable upon the
surrender of any Certificate.
(c) No Further Ownership Rights in Shares. All cash paid
upon the surrender of Certificates in accordance with the terms of this Article
II shall be deemed to have been paid in full satisfaction of all rights
pertaining to the Shares theretofore represented by such Certificates. At the
Effective Time, the stock transfer books of the Company shall be closed, and
there shall be no further registration of transfers on the stock transfer books
of the Surviving Company of the Shares that were outstanding immediately prior
to the Effective Time. If, after the Effective Time, Certificates are
presented to the Surviving Company or the Paying Agent for any reason, they
shall be canceled and exchanged as provided in this Article II.
(d) Termination of Payment Fund. Any portion of the
Payment Fund which remains undistributed to the holders of Shares for six
months after the Effective Time shall be delivered to Parent, upon demand, and
any holders of Shares who have not theretofore complied with this Article II
and the instructions set forth in the letter of transmittal mailed to such
holders after the Effective Time shall thereafter look only to Parent for
payment of the Merger Consideration to which they are entitled.
(e) No Liability. None of Parent, Sub, the Company or
the Paying Agent shall be liable to any person in respect of any cash delivered
to a public official pursuant to any applicable abandoned property, escheat or
similar law. If any Certificates shall not have been surrendered prior to
seven years after the Effective Time (or immediately prior to such earlier date
on which any payment pursuant to this Article II would otherwise escheat to or
become the property of any Governmental Entity (as defined in Section 3.05)),
the cash payment in respect of such Certificate shall, unless otherwise
provided by applicable law, become the property of the Surviving Company, free
and clear of all claims or interests of any person previously entitled thereto.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Sub as
follows:
SECTION 3.01. Organization. The Company is a business trust
duly organized, validly existing and in good standing under the laws of the
State of Illinois and has all requisite trust power and authority to carry on
its business as now being conducted. The Company is duly qualified or licensed
to do business and in good standing in each jurisdiction in which the property
owned, leased or operated by it or the nature of the business conducted by it
makes such qualification or licensing necessary, except in such jurisdictions
where the failure to be so duly qualified or licensed and in good standing
would not have a material adverse effect (as defined in Section 9.03) on the
Company or prevent or materially delay the consummation of the Merger. The
Company has delivered to Parent a complete and correct copy of its Declaration
of Trust, as in effect on the date of this Agreement.
SECTION 3.02. Subsidiaries. Item 3.02 of the letter from the
Company to Parent dated the date hereof, which letter relates to this Agreement
and is designated therein as the Company Disclosure Letter (the "Company
Disclosure Letter"), lists each subsidiary of the Company. Except as set forth
in Item 3.02 of the Company Disclosure Letter, all of the outstanding shares of
capital stock of each such subsidiary are owned by the Company, by another
wholly owned subsidiary of the Company or by the Company and another wholly
owned subsidiary of the Company, free and clear of all pledges, claims, liens,
charges, encumbrances and security interests of any kind or nature whatsoever
(collectively, "Liens"), and are duly authorized, validly issued, fully paid
and nonassessable. Except for the capital stock of its subsidiaries and except
as set forth in Item 3.02 of the Company Disclosure Letter, the Company does
not own, directly or indirectly, any capital stock or other ownership interest
in any corporation, partnership, joint venture or other entity.
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SECTION 3.03. Capitalization. The authorized capital stock
of the Company consists of 20,000,000 Shares and 1,000,000 Preferred Shares of
beneficial interest, without par value (the "Preferred Shares"). At the close
of business on August 30, 1996, (i) 5,783,800 Shares were issued and
outstanding, (ii) 160,400 Shares were held by the Company in its treasury and
(iii) options to purchase 694,028 Shares ("Company Stock Options") issued
pursuant to the Company's stock option plans and agreements were outstanding.
As of the date hereof there are no Preferred Shares outstanding. Except as set
forth above, as of the date of this Agreement, no shares of capital stock or
other voting securities of the Company are issued, reserved for issuance or
outstanding. All outstanding shares of capital stock of the Company are, and
all shares which may be issued will be, when issued, duly authorized, validly
issued, fully paid and nonassessable and not subject to preemptive rights.
There are no bonds, debentures, notes or other indebtedness of the Company
having the right to vote (or convertible into, or exchangeable for, securities
having the right to vote) on any matters on which shareholders of the Company
may vote. Except for Company Stock Options and the rights to purchase Shares
(the "Rights") issued pursuant to the Rights Agreement dated as of July 20,
1988 between the Company and Harris Trust and Savings Bank, as rights agent
(the "Rights Agreement"), and except as set forth in Item 3.03 of the Company
Disclosure Letter, as of the date of this Agreement, there are no securities,
options, warrants, calls, rights, commitments, agreements, arrangements or
undertakings of any kind to which the Company or any of its subsidiaries is a
party or by which any of them is bound obligating the Company or any of its
subsidiaries to issue, deliver or sell, or cause to be issued, delivered or
sold, additional shares of capital stock or other voting securities of the
Company or of any of its subsidiaries or obligating the Company or any of its
subsidiaries to issue, grant, extend or enter into any such security, option,
warrant, call, right, commitment, agreement, arrangement or undertaking.
Except for redemption of the Rights pursuant to Section 6.10 and except as set
forth on Item 3.03 of the Company Disclosure Letter, as of the date of this
Agreement, there are no outstanding contractual obligations of the Company or
any of its subsidiaries (i) to repurchase, redeem or otherwise acquire any
shares of capital stock of the Company or (ii) to vote or to dispose of any
shares of the capital stock of any of the Company's subsidiaries.
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SECTION 3.04. Authority. The trustees of the Company, at a
meeting duly called and held, at which all trustees were present, have duly and
unanimously adopted resolutions approving this Agreement, the Trust Amendment
and the Merger, determining that the terms of the Merger are fair to, and in
the best interests of the Company's shareholders and recommending that the
Company's shareholders approve and adopt this Agreement, the Trust Amendment
and the Merger. The Company has the requisite trust power and authority to
execute and deliver this Agreement and, subject to the approval and adoption of
this Agreement, the Trust Amendment and the Merger by the holders of at least
two-thirds of the Shares outstanding and entitled to vote thereon (the "Company
Shareholder Approvals"), to consummate the transactions contemplated hereby.
The execution, delivery and performance of this Agreement and the consummation
by the Company of the Merger and of the other transactions contemplated hereby
have been duly authorized by all necessary trust action on the part of the
Company and no other trust proceedings on the part of the Company are necessary
to authorize this Agreement or to consummate the transactions so contemplated
(in each case, other than, with respect to the Merger, the Company Shareholder
Approvals). This Agreement has been duly executed and delivered by the Company
and, assuming this Agreement constitutes a valid and binding obligation of
Parent and Sub, constitutes a valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, subject to
applicable bankruptcy, insolvency, moratorium or other similar laws relating to
creditors' rights generally and to general principles of equity.
SECTION 3.05. Consent and Approvals; No Violations. Except as
set forth in Item 3.05 of the Company Disclosure Letter, except for filings,
permits, authorizations, consents and approvals as may be required under, and
other applicable requirements of, the Securities Exchange Act of 1934, as
amended (the "Exchange Act") (including the filing with the Securities and
Exchange Commission ("SEC") of a proxy statement in definitive form relating to
any required Company Shareholder Approval (the "Proxy Statement")), the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), the laws of the State of Illinois, the laws of other states in which the
Company is qualified to do or is doing business and state takeover laws, and
except for the Company Shareholder Approvals and the filing with the Recorder
of Deeds of Cook
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County, Illinois of the Trust Amendment and the Articles of Merger following
receipt of the Company Shareholder Approvals, neither the execution, delivery
or performance of this Agreement by the Company nor the consummation by the
Company of the transactions contemplated hereby will (i) conflict with or
result in any breach of any provision of the Declaration of Trust or Bylaws of
the Company or of the similar organizational documents of any of its
subsidiaries, (ii) require any filing with, or permit, authorization, consent
or approval of, any Federal, state or local government or any court, tribunal,
administrative agency or commission or other governmental or other regulatory
authority or agency, domestic, foreign or supranational (a "Governmental
Entity") (except where the failure to obtain such permits, authorizations,
consents or approvals or to make such filings would not have a material adverse
effect on the Company or would not reasonably be expected to prevent or
materially delay the consummation of the Merger), (iii) result in a violation
or breach of, or constitute (with or without due notice or lapse of time or
both) a default (or give rise to any right of termination, amendment,
cancellation or acceleration) under, any of the terms, conditions or provisions
of any loan or credit agreement, note, bond, mortgage, indenture, lease,
permit, concession, franchise, license, contract, partnership agreement or
other instrument or obligation to which the Company or any of its subsidiaries
is a party or by which any of them or any of their properties or assets may be
bound or (iv) violate any order, writ, injunction, decree, statute, rule or
regulation applicable to the Company, any of its subsidiaries or any of their
properties or assets, except in the case of clauses (iii) or (iv) for
violations, breaches or defaults that would not, individually or in the
aggregate, have a material adverse effect on the Company or that would not,
individually or in the aggregate, be reasonably expected to prevent or
materially delay the consummation of the Merger.
SECTION 3.06. SEC Reports and Financial Statements. The
Company and each of its subsidiaries has filed with the SEC, and has heretofore
made available to Parent true and complete copies of, all forms, reports,
schedules, statements and other documents required to be filed by it since
April 30, 1995, under the Exchange Act or the Securities Act of 1933, as
amended (the "Securities Act") (such forms, reports, schedules, statements and
other documents, including any financial statements or schedules
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included therein, are referred to as the "Company SEC Documents"). The Company
SEC Documents, at the time filed, (a) did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading and (b) complied in
all material respects with the applicable requirements of the Exchange Act and
the Securities Act, as the case may be, and the applicable rules and
regulations of the SEC thereunder. Except to the extent revised or superseded
by a subsequently filed Company Filed SEC Document (as defined in Section
3.07), none of the Company SEC Documents contains an untrue statement of a
material fact or omits to state a material fact required to be stated or
incorporated by reference therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The financial statements of the Company included in the Company
SEC Documents comply as to form in all material respects with applicable
accounting requirements and with the published rules and regulations of the SEC
with respect thereto, have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis during the periods involved
(except as may be indicated in the notes thereto or, in the case of the
unaudited statements, as permitted by Form 10-Q of the SEC) and fairly present
(subject, in the case of the unaudited statements, to normal, recurring audit
adjustments) the consolidated financial position of the Company and its
consolidated subsidiaries as at the dates thereof and the consolidated results
of their operations and cash flows for the periods then ended.
SECTION 3.07. Absence of Certain Changes or Events. Except
as disclosed in the Company SEC Documents filed and publicly available prior to
the date of this Agreement (the "Company Filed SEC Documents") or as disclosed
in Item 3.07 of the Company Disclosure Letter, since April 30, 1996, the
Company and its subsidiaries have conducted their respective businesses only in
the ordinary course, and there has not been (i) through the date hereof any
material adverse change with respect to the Company, (ii) any declaration,
setting aside or payment of any dividend or other distribution with respect to
its capital stock or any redemption, purchase or other acquisition of any of
its capital stock, other than the Company's regular quarterly
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dividend of $.04 per Share paid on June 1, 1996 and $.06 per Share paid on
September 1, 1996, (iii) any split, combination or reclassification of any of
its capital stock or any issuance or the authorization of any issuance of any
other securities in respect of, in lieu of or in substitution for shares of its
capital stock, (iv) any damage, destruction or loss, whether or not covered by
insurance, that has or reasonably could be expected to have a material adverse
effect on the Company, (v) any revaluation by the Company of any of its
material assets or (vi) any material change in accounting methods, principles
or practices by the Company.
SECTION 3.08. No Undisclosed Liabilities. Except as and to
the extent set forth in the Company's Annual Report on Form 10-K for the fiscal
year ended April 30, 1996 previously filed with the SEC under the Exchange Act,
as of April 30, 1996, neither the Company nor any of its subsidiaries had any
liabilities or obligations of any nature, whether or not accrued, contingent or
otherwise, that would be required by generally accepted accounting principles
to be reflected on a consolidated balance sheet of the Company and its
subsidiaries (or disclosed in the notes thereto). Since April 30, 1996 and to
the date of this Agreement, except as and to the extent set forth in the
Company Filed SEC Documents, neither the Company nor any of its subsidiaries
has incurred any liabilities of any nature, whether or not accrued, contingent
or otherwise, that would be required by generally accepted accounting
principles to be reflected on a consolidated balance sheet of the Company and
its subsidiaries (or disclosed in the notes thereto) and that would be
reasonably expected to have a material adverse effect on the Company.
SECTION 3.09. Information Supplied. None of the information
supplied or to be supplied by the Company specifically for inclusion or
incorporation by reference in the Proxy Statement, will, at the time the Proxy
Statement is first mailed to the Company's shareholders or at the time of the
Shareholders Meeting (as defined in Section 6.01), contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading, except that no
representation or warranty is made by the Company with respect to statements
made or incorporated by reference therein based on information
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supplied by Parent or Sub specifically for inclusion or incorporation by
reference therein. The Proxy Statement will comply as to form in all material
respects with the requirements of the Exchange Act and the rules and
regulations thereunder.
SECTION 3.10. Benefit Plans. (a) Except as disclosed in the
Company Filed SEC Documents or as disclosed in Item 3.10 of the Company
Disclosure Letter, since the date of the most recent audited financial
statements included in the Company Filed SEC Documents, there has not been any
adoption or amendment in any material respect by the Company or any of its
subsidiaries of any collective bargaining agreement or any bonus, pension,
profit sharing, deferred compensation, incentive compensation, stock ownership,
stock purchase, stock option, phantom stock, retirement, vacation, severance,
disability, death benefit, hospitalization, medical or other plan, arrangement
or understanding (whether or not legally binding) providing benefits to any
current or former employee, officer or trustee or director of the Company or
any of its subsidiaries (collectively, "Benefit Plans"). Except as disclosed
in the Company Filed SEC Documents or in Item 3.10 of the Company Disclosure
Letter, there exist no employment, consulting, severance, termination or
indemnification agreement, arrangements or understandings between the Company
or any of its subsidiaries and any current or former employee, officer or
director of the Company or any of its subsidiaries.
(b) Item 3.10 of the Company Disclosure Letter contains a
list and brief description of all "employee pension benefit plans" (as defined
in Section 3(2) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA")) (sometimes referred to herein as "Pension Plans"), "employee
welfare benefit plans" (as defined in Section 3(1) of ERISA) and all other
Benefit Plans maintained, or contributed to, by the Company or any of its
subsidiaries for the benefit of any current or former employees, officers or
trustees or directors of the Company or any of its subsidiaries. The Company
has delivered to Parent true, complete and correct copies of (i) each Benefit
Plan (or, in the case of any unwritten Benefit Plans, descriptions thereof),
(ii) the most recent annual report on Form 5500 filed with the Internal Revenue
Service with respect to each Benefit Plan (if any such report was required),
(iii) the most recent summary plan description for each Benefit Plan for which
such summary plan description is required and (iv) each trust
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agreement and group annuity contract relating to any Benefit Plan.
(c) Except as disclosed in Item 3.10 of the Company
Disclosure Letter, all Pension Plans (i) have been the subject of determination
letters from the Internal Revenue Service to the effect that such Pension Plans
are qualified and exempt from Federal income taxes under Section 401(a) and
501(a), respectively, of the Internal Revenue Code of 1986, as amended (the
"Code"), and no such determination letter has been revoked nor, to the best
knowledge of the Company, has revocation been threatened, nor has any such
Pension Plan been amended since the date of its most recent determination
letter or application therefor in any respect that would adversely affect its
qualification or materially increase its costs, (ii) currently comply in all
material respects in form and in operation with all applicable laws, including
but not limited to ERISA and the Code and have been operated and administered
in accordance with their respective terms, and (iii) have been operated so as
to qualify, where appropriate, for both Federal and state tax purposes, for
income tax exclusions to its participants, tax-exempt income for its funding
vehicle and the allowance of deductions and credits with respect to
contributions thereto.
(d) Except as disclosed in Item 3.10 of the Company
Disclosure Letter, no Pension Plan that the Company or any of its subsidiaries
maintains, or to which the Company or any of its subsidiaries is obligated to
contribute, other than any Pension Plan that is a "multiemployer plan" (as such
term is defined in Section 4001(a)(3) of ERISA; collectively, the
"Multiemployer Pension Plans"), had, as of the respective last annual valuation
date for each such Pension Plan, an "unfunded benefit liability" (as such term
is defined in Section 4001(a)(18) of ERISA), based on actuarial assumptions
which have been furnished to Parent. None of the Pension Plans has an
"accumulated funding deficiency" (as such term is defined in Section 302 of
ERISA or Section 412 of the Code), whether or not waived. None of the Company,
any of its subsidiaries, any officer of the Company or any of its subsidiaries
or any of the Benefit Plans which are subject to ERISA, including the Pension
Plans, any trusts created thereunder or any trustee or administrator thereof,
has engaged in a "prohibited transaction" (as such term is defined in Section
406 of ERISA or Section 4975 of the Code) or any other breach of
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fiduciary responsibility that could subject the Company, any of its
subsidiaries or any officer of the Company or any of its subsidiaries to any
material tax or penalty on prohibited transactions imposed by such Section 4975
or to any material liability under Section 502(i) or (1) of ERISA. None of
such Benefit Plans or trusts has been terminated, nor has there been any
"reportable event" (as that term is defined in Section 4043 of ERISA) with
respect thereto, during the last five years. Neither the Company nor any of
its subsidiaries has suffered or otherwise caused a "complete withdrawal", or a
"partial withdrawal" (as such terms are defined in Section 4203 and Section
4205, respectively, of ERISA) since the effective date of such Sections 4203
and 4205 with respect to any of the Multiemployer Pension Plans.
(e) With respect to any Benefit Plan that is an employee
welfare benefit plan, except as disclosed in Item 3.10 of the Company
Disclosure Letter, (i) no such Benefit Plan is unfunded or funded through a
"welfare benefits fund", as such term is defined in Section 419(e) of the Code,
(ii) each such Benefit Plan that is a "group health plan", as such term is
defined in Section 5000(b)(1) of the Code, complies with the applicable
requirements of Section 4980B(f) of the Code or state continuation coverage
laws and (iii) each such Benefit Plan (including any such Plan covering
retirees or other former employees) may be amended or terminated without
material liability to the Company or any of its subsidiaries on or at any time
after the consummation of the Merger.
SECTION 3.11. Contracts; Indebtedness. (a) Except as
disclosed in the Company Filed SEC Documents or as set forth in Item 3.11 of
the Company Disclosure Letter, there are no contracts or agreements that are
material to the business, properties, assets, financial condition or results of
operations of the Company and its subsidiaries, taken as a whole. Neither the
Company nor any of its subsidiaries is in violation of or in default under (nor
does there exist any condition which upon the passage of time or the giving of
notice would cause such a violation of or default under) any loan or credit
agreement, note, bond, mortgage, indenture, lease, permit, concession,
franchise, license or any other contract, agreement, arrangement or
understanding, to which it is a party or by which it or any of its properties
or assets is bound, except for violations or
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defaults that could not reasonably be expected to result in a material adverse
effect on the Company.
(b) Set forth in Item 3.11 of the Company Disclosure Letter
is (i) a list of all agreements, instruments and other obligations pursuant to
which any indebtedness for borrowed money or capitalized lease obligations of
the Company or any of its subsidiaries in an aggregate principal amount in
excess of $100,000 is outstanding or may be incurred and (ii) the respective
principal amounts outstanding thereunder.
SECTION 3.12. Litigation. As of the date of this Agreement,
there is no suit, claim, action, proceeding or investigation pending or, to the
best knowledge of the Company, threatened against the Company or any of its
subsidiaries or any of their respective properties that could reasonably be
expected to have a material adverse effect on the Company or prevent or
materially delay the consummation of the Merger. As of the date of this
Agreement, neither the Company nor any of its subsidiaries or any of their
respective properties is subject to any outstanding order, writ, injunction or
decree that could reasonably be expected to have a material adverse effect on
the Company or prevent or materially delay the consummation of the Merger.
SECTION 3.13. Compliance with Applicable Law. The Company
and its subsidiaries hold all permits, licenses, variances, exemptions, orders,
concessions, franchises, and approvals of all Governmental Entities necessary
for the lawful conduct of their respective businesses (the "Company Permits"),
except for failures to hold such permits, licenses, variances, exemptions,
orders, concessions, franchises and approvals that would not have a material
adverse effect on the Company or prevent or materially delay the consummation
of the Merger. The Company and its subsidiaries are in compliance with the
terms of the Company Permits, except where the failure so to comply would not
have a material adverse effect on the Company or prevent or materially delay
the consummation of the Merger. Except as disclosed in the Company Filed SEC
Documents, to the best knowledge of the Company, the businesses of the Company
and its subsidiaries are not being conducted in violation of any law, ordinance
or regulation of any Governmental Entity, except for possible violations that
would not have a material adverse effect
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on the Company or prevent or materially delay the consummation of the Merger.
Except as set forth in Item 3.13 of the Company Disclosure Letter, as of the
date of this Agreement, to the best knowledge of the Company no investigation
or review by any Governmental Entity with respect to the Company or any of its
subsidiaries is pending or threatened, nor has any Governmental Entity
indicated an intention to conduct any such investigation or review, other than,
in each case, those the outcome of which would not be reasonably expected to
have a material adverse effect on the Company or prevent or materially delay
the consummation of the Merger.
SECTION 3.14. Tax Matters. Except as set forth in Item 3.14
of the Company Disclosure Letter:
(a) The Company and each of its subsidiaries has filed all
Federal income tax returns and all other material income tax returns
and reports required to be filed by it. The Company and each of its
subsidiaries has paid (or the Company has paid on its subsidiaries'
behalf) all income taxes shown as due on such returns.
(b) No material income tax return of the Company or any of
its subsidiaries is under audit or examination by any taxing
authority, and no written notice of such an audit or examination has
been received by the Company or any of its subsidiaries. Each
material deficiency resulting from any audit or examination relating
to income taxes by any taxing authority has been paid, except for
deficiencies being contested in good faith. No material issues
relating to income taxes were raised in writing by the relevant taxing
authority during any presently pending audit or examination, and no
material issues relating to income taxes were raised in writing by the
relevant taxing authority in any completed audit or examination that
can reasonably be expected to recur in a later taxable period.
(c) There is no agreement or other document extending, or
having the effect of extending, the period of assessment or collection
of any income taxes and no power of attorney with respect to any
income
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taxes has been executed or filed with any taxing authority.
(d) No material liens for taxes exist with respect to any
assets or properties of the Company or any of its subsidiaries, except
for statutory liens for taxes not yet due.
(e) None of the Company or any of its subsidiaries is a party
to or is bound by any tax sharing agreement, tax indemnity obligation
or similar agreement.
SECTION 3.15. State Takeover Statutes. The provisions of
Section 5/11.75 of the IBCA are inapplicable to the Merger and this Agreement
and the transactions contemplated by this Agreement. To the best knowledge of
the Company, no other state takeover statute or similar statute or regulation
applies or purports to apply to the Merger, this Agreement or any of the
transactions contemplated by this Agreement.
SECTION 3.16. Environmental Matters. (a) Except as set
forth in Item 3.16 of the Company Disclosure Letter, neither the Company nor
any of its subsidiaries has (i) to the knowledge of the Company, placed, held,
located, released, transported or disposed of any Hazardous Substances (as
defined below) on, under, from or at any of the Company's or any of its
subsidiaries' properties or any other properties, other than in a manner that
would not reasonably be expected to result in a material adverse effect on the
Company, (ii) any knowledge or reason to know of the presence of any Hazardous
Substances on, under or at any of the Company's or any of its subsidiaries'
properties or any other property but arising from the Company's or any of its
subsidiaries' properties, other than in a manner that would not reasonably be
expected to result in a material adverse effect on the Company, or (iii)
received any written notice (A) of any violation of any statute, law,
ordinance, regulation, rule, judgment, decree or order of any Governmental
Entity relating to any matter of pollution, protection of the environment,
environmental regulation or control or regarding Hazardous Substances on, under
or emanating from any of the Company's or any of its subsidiaries' properties
or any other properties (collectively, "Environmental Laws"), (B) of the
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institution or pendency of any suit, action, claim, proceeding or
investigation by any Governmental Entity or any third party in connection with
any such violation, (C) requiring the response to or remediation of Hazardous
Substances at or arising from any of the Company's or any of its subsidiaries'
properties or any other properties or (D) demanding payment for response to or
remediation of Hazardous Substances at or arising from any of the Company's or
any of its subsidiaries' properties or any other properties, except in each
case for the notices set forth in Item 3.16 of the Company Disclosure Letter
and except for notices relating to matters that are not material. For purposes
of this Agreement, the term "Hazardous Substance" shall mean any toxic or
hazardous materials or substances, including asbestos, buried contaminants,
chemicals, flammable explosives, radioactive materials, petroleum and petroleum
products and any substances defined as, or included in the definition of,
"hazardous substances", "hazardous wastes," "hazardous materials" or "toxic
substances" under any Environmental Law.
(b) Except as set forth in Item 3.16 of the Company
Disclosure Letter, no Environmental Law imposes any obligation upon the Company
or its subsidiaries arising out of or as a condition to any transaction
contemplated by this Agreement including any requirement to modify or to
transfer any permit or license, any requirement to file any notice or other
submission with any Governmental Entity, the placement of any notice,
acknowledgment or covenant in any land records, or the modification of or
provision of notice under any agreement, consent order or consent decree. No
Lien has been placed upon any of the Company's or it subsidiaries' properties
under any Environmental Law.
SECTION 3.17. Real Property. Item 3.17 of the Company
Disclosure Letter contains a brief description of each parcel of real property
owned by the Company or its subsidiaries (the "Company Real Property") (showing
the record title holder, legal description, permanent index number, location,
improvements, the uses being made thereof and any indebtedness secured by a
mortgage or other encumbrance thereon) and of each option held by the Company
or its subsidiaries to acquire any real property.
SECTION 3.18. Leases. (a) Item 3.18 of the Company
Disclosure Letter contains (i) a list of each parcel of Company
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Real Property that is subject to or encumbered by any lease (a "Company
Lease"), and (ii) a list of each lease or similar agreement under which the
Company or any of its subsidiaries is lessee of, or holds or operates, any real
property owned by any third person, in each case, which sets forth the parties
to the lease, annual rental, expiration date, renewal and purchase options, if
any, uses being made thereof and the location and legal description of the real
property covered by such lease.
(b) Except as set forth in Item 3.18 of the Company Disclosure
Letter, (i) all rental payments due under each Company Lease have been paid
during the period from May 1, 1996 through August 31, 1996, and (ii) to the
Company's knowledge, no lessee is in material default, and no condition or
event exists which with the giving of notice or the passage of time, or both,
would constitute a material default by any lessee, under any Company Lease.
(c) The Company has delivered to Sub and Parent, or has given
Sub and Parent an opportunity to inspect, true, correct and complete copies of
each Company Lease and the copies so delivered or made available for inspection
constitute in each case the entire agreement of the parties thereto.
SECTION 3.19. Title to Property. Except as set forth in Item
3.19 of the Company Disclosure Letter, the Company and its subsidiaries have
good, and with respect to the Company Real Property, marketable title to all of
the material assets reflected on the consolidated financial statements of the
Company included in the Company Filed SEC Documents as being owned by the
Company or its subsidiaries and all material assets thereafter acquired by the
Company or its subsidiaries (except to the extent that such assets have
thereafter been disposed of in the ordinary course of business consistent with
past practice), subject to no Liens.
SECTION 3.20. REIT Qualification. The Company (i) has
elected to be taxed as a real estate investment trust (a "REIT") within the
meaning of the Code and has qualified as a REIT at all times from January 22,
1962 through April 30, 1996, (ii) except for the transactions contemplated by
this Agreement, has operated, and intends to continue to operate, in such a
manner as to qualify as a REIT for the period from May 1, 1996 through the
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day prior to the Effective Time, and (iii) except for the transactions
contemplated by this Agreement, has not taken or omitted to take any action
which is likely to result in a challenge to its status as a REIT. Each of the
wholly owned subsidiaries of the Company is a "qualified REIT subsidiary", as
defined in Section 856(i) of the Code.
SECTION 3.21. Required Vote. The affirmative vote of the
holders of at least two-thirds of the Shares outstanding is the only vote of
the holders of any class or series of capital stock of the Company necessary
under applicable law or otherwise to approve the Merger and this Agreement and
the transactions contemplated hereby.
SECTION 3.22. Brokers. No broker, investment banker,
financial advisor or other person, other than Lehman Brothers Inc., the fees
and expenses of which will be paid by the Company, is entitled to any broker's,
finder's, financial advisor's or other similar fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of the Company.
SECTION 3.23. Opinion of Financial Advisor. The Company has
received the opinion of Lehman Brothers Inc., dated the date of this Agreement,
to the effect that, as of the date of this Agreement, the Merger Consideration
to be received in the Merger by the Company's shareholders is fair to the
Company's shareholders from a financial point of view, and such opinion has not
been withdrawn or modified.
SECTION 3.24. Violations; Eminent Domain. Except as set
forth in Item 3.24 of the Company Disclosure Letter, there are no pending, or
to the Company's knowledge, threatened (a) zoning, building, fire or health
code violations or violations of other governing requirements or regulations
with respect to the Company Real Property that have not previously been
corrected, or (b) eminent domain, condemnation or other governmental taking of
the Company Real Property.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF PARENT AND SUB
Parent and Sub represent and warrant to the Company as
follows:
SECTION 4.01. Organization. Parent is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has all requisite corporate power and
authority to carry on its business as now being conducted. Sub is a business
trust duly organized, validly existing and in good standing under the laws of
the State of Illinois and has all requisite trust power and authority to carry
on its business as now conducted.
SECTION 4.02. Authority. Parent and Sub have requisite
corporate or trust power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated hereby. The execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate or trust action on the part of Parent and Sub (including approval of
the Merger and this Agreement by the board of directors of Parent) and no other
corporate or trust proceedings on the part of Parent and Sub are necessary to
authorize this Agreement or to consummate such transactions. No vote of
Parent's stockholders is required to approve this Agreement or the transactions
contemplated hereby. This Agreement has been duly executed and delivered by
Parent and Sub, as the case may be, and, assuming this Agreement constitutes a
valid and binding obligation of the Company, constitutes a valid and binding
obligation of each of Parent and Sub enforceable against them in accordance
with its terms, subject to applicable bankruptcy, insolvency, moratorium or
other similar laws relating to creditors' rights generally and to general
principles of equity.
SECTION 4.03. Consents and Approvals; No Violations. Except
for filings, permits, authorizations, consents and approvals as may be required
under, and other applicable requirements of, the Exchange Act, the HSR Act, the
laws of the State of Illinois, the laws of other states in which Parent is
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qualified to do or is doing business and state takeover laws, neither the
execution, delivery or performance of this Agreement by Parent and Sub nor the
consummation by Parent and Sub of the transactions contemplated hereby will (i)
conflict with or result in any breach of any provision of the respective
certificate of incorporation or declaration of trust or bylaws of Parent and
Sub, (ii) require any filing with, or permit, authorization, consent or
approval of, any Governmental Entity (except where the failure to obtain such
permits, authorizations, consents or approvals or to make such filings would
not be reasonably expected to prevent or materially delay the consummation of
the Merger), (iii) result in a violation or breach of, or constitute (with or
without due notice or lapse of time or both) a default (or give rise to any
right of termination, amendment, cancellation or acceleration) under, any of
the terms, conditions or provisions of any loan or credit agreement, note,
bond, mortgage, indenture, permit, concession, franchise, license, lease,
contract, agreement or other instrument or obligation to which Parent or any of
its subsidiaries is a party or by which any of them or any of their properties
or assets may be bound or (iv) violate any order, writ, injunction, decree,
statute, rule or regulation applicable to Parent, any of its subsidiaries or
any of their properties or assets, except in the case of clauses (iii) and (iv)
for violations, breaches or defaults which would not, individually or in the
aggregate, be reasonably expected to prevent or materially delay the
consummation of the Merger.
SECTION 4.04. Information Supplied. None of the information
supplied or to be supplied by Parent or Sub specifically for inclusion or
incorporation by reference in the Proxy Statement will, at the time the Proxy
Statement is first mailed to the Company's shareholders or at the time of the
Shareholders Meeting, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they
are made, not misleading.
SECTION 4.05. Interim Operations of Sub. Sub was formed
solely for the purpose of engaging in the transactions contemplated hereby, has
engaged in no other business activities and has conducted its operations only
as contemplated hereby.
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SECTION 4.06. Brokers. No broker, investment banker,
financial advisor or other person is entitled to any broker's, finder's,
financial advisor's or other similar fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Parent or Sub.
SECTION 4.07. Financing. Parent has on hand or available
through committed bank facilities all funds necessary to purchase all of the
Shares pursuant to the Merger and to pay all fees and expenses related to the
transactions contemplated by this Agreement. True and correct copies of all
such financing commitments have been furnished to the Company.
SECTION 4.08. Litigation. As of the date of this Agreement,
there is no suit, claim, action, proceeding or investigation pending or, to the
best knowledge of Parent, threatened against Parent or any of its subsidiaries
that could reasonably be expected to prevent or materially delay the
consummation of the Merger. As of the date of this Agreement, neither Parent
nor any of its subsidiaries is subject to any outstanding order, writ,
injunction or decree that could reasonably be expected to prevent or materially
delay the consummation of the Merger.
ARTICLE V
COVENANTS
SECTION 5.01. Covenants of the Company. Except as set forth
on Item 5.01 of the Company Disclosure Letter, during the period from the date
of this Agreement through the Effective Time, the Company agrees as to itself
and its subsidiaries that (except as expressly contemplated or permitted by
this Agreement, or to the extent that Parent shall otherwise consent in
writing):
(a) Ordinary Course. The Company shall, and shall cause its
subsidiaries to, carry on their respective businesses in the usual, regular and
ordinary course in substantially the same manner as heretofore conducted and
shall use all reasonable efforts to preserve intact their present business
organizations, keep available the services of their present officers and key
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employees and preserve their relationships with persons having business
dealings with the Company and its subsidiaries.
(b) Dividends; Changes in Stock. The Company shall not, and
shall not permit any of its subsidiaries to, (i) declare or pay any dividends
on or make other distributions in respect of any of its capital stock except
for dividends by a direct or indirect wholly owned subsidiary of the Company to
its parent or regular quarterly dividends on the Shares in an amount not to
exceed $.08 per Share for the dividend payable on December 1, 1996 and $.10 per
Share for each regular quarterly dividend thereafter, (ii) split, combine or
reclassify any of its capital stock or issue or authorize or propose the
issuance of any other securities in respect of, in lieu of or in substitution
for shares of its capital stock or (iii) repurchase, redeem or otherwise
acquire any shares of capital stock of the Company or its subsidiaries or any
other securities thereof or any rights, warrants or options to acquire any such
shares or other securities, except the redemption of the Rights pursuant to
Section 6.10.
(c) Issuance of Securities. The Company shall not and shall
not permit any of its subsidiaries to, issue, deliver, sell, pledge or
encumber, or authorize or propose the issuance, delivery, sale, pledge or
encumbrance of, any shares of its capital stock of any class or any securities
convertible into, or any rights, warrants, calls, subscriptions or options to
acquire, any such shares or convertible securities, or any other ownership
interest (including stock appreciation rights or phantom stock), other than the
issuance of Shares upon the exercise of Company Stock Options outstanding on
the date of this Agreement, the issuance to trustees of the Company of options
to purchase an aggregate of 3,500 Shares pursuant the 1988 Trustee's Stock
Option Plan and the issuance of Shares upon the exercise of Rights pursuant to
the Rights Agreement.
(d) Governing Documents. Except for the Trust Amendment, the
Company shall not, and shall not permit any of its subsidiaries to, amend or
propose to amend its Declaration of Trust or articles of incorporation or
bylaws (or similar organizational documents).
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(e) No Acquisitions. The Company shall not, and shall not
permit any of its subsidiaries to, acquire or agree to acquire (i) by merging
or consolidating with, or by purchasing a substantial equity interest in or
substantial portion of the assets of, or by any other manner, any business or
any corporation, partnership, limited liability company, joint venture,
association, trust or other business organization or division thereof or (ii)
any asset having a value in excess of $25,000 or any assets having an aggregate
value in excess of $250,000, except U.S. Treasury securities with maturities
of less than one year.
(f) No Dispositions. Other than dispositions in the ordinary
course of business consistent with past practice which are not material to the
Company and its subsidiaries taken as a whole, the Company shall not, and shall
not permit any of its subsidiaries to, sell, lease, license, encumber or
otherwise dispose of, or agree to sell, lease, license, encumber or otherwise
dispose of, any of its assets.
(g) Indebtedness. The Company shall not, and shall not
permit any of its subsidiaries to, (i) incur any indebtedness for borrowed
money or guarantee any such indebtedness or issue or sell any debt securities
or warrants or rights to acquire any debt securities of the Company or any of
its subsidiaries, guarantee any debt securities of others, enter into any
"keep-well" or other agreement to maintain any financial statement condition of
another person or enter into any arrangement having the economic effect of any
of the foregoing, except for working capital borrowings incurred in the
ordinary course of business consistent with past practice, or (ii) make any
loans, advances or capital contributions to, or investments in, any other
person, other than (A) to the Company or any direct or indirect wholly owned
subsidiary of the Company or (B) any advance to employees in accordance with
past practice.
(h) Advice of Changes; Filings. The Company shall promptly
advise Parent of any material adverse change with respect to the Company. The
Company shall provide to Parent (or its counsel) copies of all filings made by
the Company with any Governmental Entity in connection with this Agreement and
the transactions contemplated hereby.
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(i) Tax Matters. The Company shall not make any tax election
that would have a material effect on the tax liability of the Company or any of
its subsidiaries. The Company shall, before filing or causing to be filed any
material income tax return of the Company or any of its subsidiaries, consult
with Parent and its advisors as to the positions and elections that may be
taken or made with respect to such return, and shall take such positions or
make such elections as the Company and Parent shall jointly agree or, failing
such agreement, shall take positions or make elections consistent with its past
practices.
(j) Capital Expenditures. Neither the Company nor any of its
subsidiaries shall make or agree to make any new capital expenditure or
expenditures that, individually, exceeds $25,000 or, in the aggregate, exceed
$500,000.
(k) Discharge of Liabilities. The Company shall not, and
shall not permit any of its subsidiaries to, pay, discharge, settle or satisfy
any claims, liabilities or obligations (absolute, accrued, asserted or
unasserted, contingent or otherwise), other than the payment, discharge,
settlement or satisfaction, in the ordinary course of business consistent with
past practice or in accordance with their terms, of liabilities recognized or
disclosed in the most recent consolidated financial statements (or the notes
thereto) of the Company included in the Company Filed SEC Documents or incurred
since the date of such financial statements in the ordinary course of business
consistent with past practice.
(l) Material Contracts. Except in the ordinary course of
business, neither the Company nor any of its subsidiaries shall (i) enter into,
modify in any material respect, amend in any material respect or terminate any
material contract or agreement to which the Company or such subsidiary is a
party or (ii) waive, release or assign any material rights or claims.
(m) Employee Matters. Neither the Company nor any of its
subsidiaries shall (i) grant any increases in the compensation of any of its
trustees or directors, officers or key employees, except for increases required
under employment agreements existing on the date hereof, and increases for
officers and employees in the ordinary course of business consistent with past
practice that, in any event, do not increase
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such officer's or employee's aggregate compensation by more than 5% over such
employee's aggregate compensation in effect on the date hereof, (ii) pay or
agree to pay any pension retirement allowance or other employee benefit not
required or contemplated by any of the existing Benefit Plans as in effect on
the date hereof to any such trustee or director, officer or key employee,
whether past or present, (iii) enter into any new, or materially amend any
existing, employment, severance or termination agreement with any such trustee
or director, officer or key employee or (iv) except as required to comply with
applicable law, become obligated under any new Benefit Plan which was not in
existence on the date hereof, or amend any such plan or arrangement in
existence on the date hereof if such amendment would have the effect of
enhancing any benefits thereunder. The Company shall provide Parent with
copies of any amendments to any Benefit Plan prior to the Effective Time.
(n) Accounting. The Company shall not adopt any material
change, other than in the ordinary course of business consistent with past
practice or as required by the SEC or by law, in its accounting policies,
procedures or practices.
(o) Agreement with respect to Chicago Music and Dance
Theater, Inc. The Company acknowledges its right to repurchase certain
property subject and pursuant to that certain Agreement of Sale and Purchase
between the Company and Chicago Music and Dance Theater, Inc. dated as of
August 31, 1994, as amended (the "Theater Agreement"). The Company shall
neither exercise any such right to repurchase the subject property nor modify
or amend the Theater Agreement in any respect without the prior consent of
Parent, which consent shall not be unreasonably withheld.
In the event the Company shall request Parent to consent in writing to an
action otherwise prohibited by this Section 5.01, Parent shall use its
reasonable best efforts to respond in a prompt and timely fashion, but may
otherwise respond affirmatively or negatively in its sole discretion.
SECTION 5.02. No Solicitation. (a) The Company and its
subsidiaries and their respective officers, trustees, employees,
representatives, agents or affiliates (including, without limitation, any
investment banker, financial advisor, attorney or accountant retained by the
Company or any of its
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subsidiaries) shall immediately cease any discussions or negotiations with any
parties that may be ongoing with respect to a Takeover Proposal (as hereinafter
defined). The Company shall not, nor shall it permit any of its subsidiaries
to, and it shall use its best efforts to cause its officers, trustees,
employees, agents, affiliates or any investment banker, financial advisor,
attorney, accountant or other representative retained by it or any of its
subsidiaries not to, directly or indirectly, (i) solicit, initiate or knowingly
encourage (including by way of furnishing information, other than the Company
SEC Documents), or knowingly take any other action to facilitate, any inquiries
or the making of any proposal which constitutes, or would reasonably be
expected to lead to, any Takeover Proposal or (ii) participate in any
discussions or negotiations regarding any Takeover Proposal; provided, however,
that if the trustees of the Company determine in good faith, after consultation
with the Company's outside counsel, that such action is necessary in order for
the trustees of the Company to comply with their fiduciary duties to the
Company's shareholders under applicable law, the Company may, in response to an
unsolicited Takeover Proposal, and subject to compliance with Section 5.02(c),
(x) furnish information with respect to the Company to any person pursuant to a
confidentiality agreement containing terms no less favorable to the Company
than the form entered into between the Company and Parent and (y) participate
in negotiations regarding such Takeover Proposal. For purposes of this
Agreement, "Takeover Proposal" means any inquiry, proposal or offer from any
person relating to any direct or indirect acquisition or purchase of 10% or
more of the assets of the Company and its subsidiaries taken as a whole or 10%
or more of any class of equity securities of the Company or any of its
subsidiaries, any tender offer or exchange offer that if consummated would
result in any person beneficially owning 10% or more of any class of equity
securities of the Company or any of its subsidiaries, or any merger,
consolidation, business combination, sale of substantially all the assets,
recapitalization, liquidation, dissolution or similar transaction involving the
Company or any of its subsidiaries, other than the transactions contemplated by
this Agreement.
(b) Except as set forth in this Section 5.02, neither the
trustees of the Company nor any committee thereof shall (i) withdraw or modify,
or propose to withdraw or modify, in a manner adverse to Parent, the approval
or recommendation by such
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trustees or such committee of the Merger or this Agreement, (ii) approve or
recommend, or propose to approve or recommend, any Takeover Proposal or (iii)
cause the Company to enter into any letter of intent, agreement in principle,
acquisition agreement or other similar agreement (each, an "Acquisition
Agreement") with respect to any Takeover Proposal. Notwithstanding the
foregoing, in the event that the trustees of the Company determine in good
faith, after consultation with the Company's outside counsel, that such action
is necessary in order for the trustees of the Company to comply with their
fiduciary duties to the Company's shareholders under applicable law, the
trustees of the Company may (subject to the following sentences) withdraw or
modify their approval or recommendation of the Merger and this Agreement (or
not recommend it before the Proxy Statement is sent to shareholders), approve
or recommend a Superior Proposal (as defined below) or terminate this
Agreement, but in each case only at a time that is after the third business day
following Parent's receipt of written notice (a "Notice of Superior Proposal")
advising Parent that the trustees of the Company have received a Superior
Proposal and specifying the material terms and conditions of such Superior
Proposal. In addition, if the Company proposes to terminate this Agreement, it
shall upon such times set forth in Section 6.05(b) pay to Parent the Expenses
and Termination Fee (each as defined in Section 6.05(b)). For purposes of this
Agreement, a "Superior Proposal" means any bona fide proposal, not subject to
any material financing contingency, made by a third party to acquire, directly
or indirectly, for consideration consisting of cash and/or securities, all of
the Shares then outstanding or all or substantially all the assets of the
Company and otherwise on terms which the trustees of the Company determine in
its good faith judgment (based on the advice of a financial advisor of
nationally recognized reputation) to be more favorable to the Company's
shareholders than the Merger.
(c) In addition to the obligations of the Company set forth
in paragraphs (a) and (b) of this Section 5.02, the Company shall promptly
advise Parent of any request for information (other than the Company SEC
Documents) or of any Takeover Proposal and the material terms and conditions of
such request or Takeover Proposal.
(d) Nothing contained in this Section 5.02 shall prohibit the
Company from taking and disclosing to its
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shareholders a position contemplated by Rule 14e-2(a) promulgated under the
Exchange Act or from making any disclosure to the Company's shareholders if, in
the good faith judgment of the trustees of the Company, after consultation with
the Company's outside counsel, failure so to disclose would be inconsistent
with their fiduciary duties to the Company's shareholders under applicable law;
provided, however, neither the Company nor its trustees nor any committee
thereof shall, except as permitted by Section 5.02(b), withdraw or modify, or
propose to withdraw or modify, its or their position with respect to this
Agreement or the Merger or approve or recommend, or propose to approve or
recommend, a Takeover Proposal.
SECTION 5.03. Other Actions. The Company shall not, and
shall not permit any of its subsidiaries to, take any action that would, or
that could reasonably be expected to, result in (i) any of the representations
and warranties of the Company set forth in this Agreement that are qualified as
to materiality becoming untrue, (ii) any of such representations and warranties
that are not so qualified becoming untrue in any material respect, or (iii) any
of the conditions set forth in Section 7.01 or Section 7.03 not being satisfied
(subject to the Company's right to take actions specifically permitted by
Section 5.02).
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.01. Shareholder Approvals; Preparation of Proxy
Statement. (a) The Company shall as soon as practicable following the date
hereof, duly call, give notice of, convene and hold a meeting of its
shareholders (the "Shareholders Meeting") for the purpose of obtaining the
Company Shareholder Approvals. The Company shall, through its trustees,
recommend to its shareholders that the Company Shareholder Approvals be given;
provided, that in the event that the trustees of the Company determine in good
faith, after consultation with the Company's outside counsel, that such action
is necessary in order for the trustees of the Company to comply with their
fiduciary duties to the Company's shareholders under applicable law, the
trustees of the Company may decline to make such recommendation.
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(b) The Company shall as soon as practicable following the
date hereof, prepare and file a preliminary Proxy Statement with the SEC and
shall use its reasonable efforts to respond to any comments of the SEC or its
staff and cause the Proxy Statement to be mailed to the Company's shareholders
as promptly as practicable after responding to all such comments to the
satisfaction of such staff. Parent shall as soon as practicable following the
date hereof supply such information for inclusion in the Proxy Statement as
shall reasonably be requested by the Company. The Company shall notify Parent
promptly of the receipt of any comments from the SEC or its staff and of any
request by the SEC or its staff for amendments or supplements to the Proxy
Statement or for additional information, will supply Parent with copies of all
correspondence between the Company or any of its representatives, on the one
hand, and the SEC or its staff, on the other hand, with respect to the Proxy
Statement or the Merger and will cooperate with Parent and its representatives
in the preparation of any responses to such correspondence. If at any time
prior to the Shareholders Meeting there shall occur any event that should be
set forth in an amendment or supplement to the Proxy Statement, the Company
shall promptly prepare and mail to its shareholders such an amendment or
supplement. The Company shall give Parent and its counsel the opportunity to
review any Proxy Statement, or any amendment or supplement thereto, prior to
its being filed with the SEC.
(c) At the Shareholders Meeting, Parent agrees to cause all
Shares owned by Parent or any affiliate of Parent to be voted in favor of the
Company Shareholder Approvals.
SECTION 6.02. Access to Information. Upon reasonable notice
and subject to restrictions contained in confidentiality agreements to which
the Company is subject, the Company shall, and shall cause each of its
subsidiaries to, afford to Parent and to the officers, employees, accountants,
counsel and other representatives of Parent (including, without limitation,
surveyors, structural engineers, appraisers and other consultants) access,
during normal business hours during the period prior to the Effective Time, to
all their respective properties, books, contracts, commitments and records and,
during such period, the Company shall (and shall cause each of its subsidiaries
to) furnish promptly to Parent (a) a copy of each report, schedule,
registration statement and other document filed
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or received by it during such period pursuant to the requirement of the Federal
or state securities laws or the Federal tax laws and (b) all other information
concerning its business, properties and personnel as Parent may reasonably
request. Notwithstanding anything contained herein to the contrary, the
Company shall not be required to provide access to its properties for the
purpose of enabling Parent or its authorized representatives to conduct further
environmental- related tests, observations, reviews, surveys or soil borings or
otherwise cooperate with Parent or any of its representatives with respect to
any of the same. Except as otherwise agreed to by the Company, unless and
until the consummation of the Merger, and notwithstanding termination of this
Agreement, the terms of the Confidentiality Agreement dated as of June 20, 1996
between Parent and the Company (the "Confidentiality Agreement") shall apply to
all information furnished thereunder or hereunder.
SECTION 6.03. Reasonable Efforts. Each of the Company,
Parent and Sub agree to use its reasonable efforts to take, or cause to be
taken, all actions necessary to comply promptly with all legal requirements
that may be imposed on itself with respect to the Merger (which actions shall
include furnishing all information required under the HSR Act and in connection
with approvals of or filings with any other Governmental Entity) and shall
promptly cooperate with and furnish information to each other in connection
with any such requirements imposed upon any of them or any of their
subsidiaries in connection with the Merger. Each of the Company, Parent and
Sub shall, and shall cause its subsidiaries to, use its reasonable efforts to
take all reasonable actions necessary to obtain (and shall cooperate with each
other in obtaining) any consent, authorization, order or approval of, or any
exemption by, any Governmental Entity or other public or private third party
required to be obtained or made by Parent, Sub, the Company or any of their
subsidiaries in connection with the Merger or the taking of any action
contemplated thereby or by this Agreement, except that no party need waive any
substantial rights or agree to any substantial limitation on its operations or
to dispose of any assets.
SECTION 6.04. Company Stock Options. At the Effective Time,
each holder of a then outstanding Company Stock Option, whether or not then
exercisable, shall, in settlement thereof and
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without any action by such holder, be deemed to have made a disposition of such
Company Stock Option to the Company and shall receive from the Company for each
Share subject to such Company Stock Option an amount (subject to any applicable
withholding tax) in cash equal to the excess, if any, of the Merger
Consideration over the per Share exercise price of such Company Stock Option
(such amount being hereinafter referred to as the "Option Consideration");
provided, however, that with respect to any person subject to Section 16(a) of
the Exchange Act who may incur liability as a result of such disposition, any
such disposition shall be made, and any such amount shall be paid, as soon as
practicable after the first date payment can be made without liability to such
person under Section 16(b) of the Exchange Act. Any option to purchase Shares
which prior to the date hereof has ceased to be exercisable by reason of the
termination of employment or service with the Company of any employee or
trustee of the Company shall not be deemed to be an outstanding Company Stock
Option for purposes of this Section 6.04. Upon receipt of the Option
Consideration, each Company Stock Option shall be canceled. The disposition of
any Company Stock Option to the Company in exchange for the Option
Consideration shall be deemed a release of any and all rights the holder had or
may have had in respect of such Company Stock Option. Prior to the Effective
Time, the Company shall use its best efforts to obtain all necessary consents
or releases from holders of Company Stock Options and to take all such other
lawful action as may be necessary to give effect to the transactions
contemplated by this Section 6.04 (except for such action that may require the
approval of the Company's shareholders). Except as otherwise agreed to by the
parties, (a) the Company's 1982, 1986, 1988, 1991 and 1993 Employees' Stock
Option Plans and 1988 and 1993 Trustee's Stock Options Plans shall terminate as
of the Effective Time and the provisions in any other plan, program or
arrangement providing for the issuance or grant of any other interest in
respect of the capital stock of the Company shall be canceled as of the
Effective Time and (b) the Company shall take all action necessary to ensure
that following the Effective Time no participant in the Company's 1982, 1986,
1988, 1991 and 1993 Employees' Stock Option Plans and 1988 and 1993 Trustees'
Stock Option Plans or other plans, programs or arrangements shall have any
right thereunder to acquire equity securities of the Company, the Surviving
Company
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or any subsidiary of the Company or the Surviving Company and to terminate all
such plans, programs or arrangements.
SECTION 6.05. Fees and Expenses. (a) Except as provided
below in this Section 6.05, all fees and expenses incurred in connection with
the Merger, this Agreement and the transactions contemplated by this Agreement
shall be paid by the party incurring such fees or expenses, whether or not the
Merger is consummated.
(b) The Company shall pay, or cause to be paid, in same day
funds to Parent the sum of (x) the Expenses (as hereinafter defined) and (y)
$3,500,000 (the "Termination Fee") under the circumstances and at the times set
forth as follows:
(i) if Parent or Sub terminates this Agreement under
Section 8.01(e), and at the time of such termination there is no
pending Takeover Proposal, the Company shall pay the Expenses and the
Termination Fee upon demand;
(ii) if Parent or Sub terminates this Agreement under Section
8.01(e) and at the time of such termination a Takeover Proposal shall
then be pending, the Company shall pay the Expenses, upon demand; in
addition, if within twelve months after such termination, the Company
shall enter into an Acquisition Agreement providing for a Takeover
Proposal or a Takeover Proposal shall be consummated, the Company
shall pay the Termination Fee concurrently with the earlier of the
entering into of such Acquisition Agreement or the consummation of
such Takeover Proposal;
(iii) if the Company terminates this Agreement under Section
8.01(f), the Company shall pay the Expenses concurrently therewith; in
addition, if within twelve months after such termination, the Company
shall enter into an Acquisition Agreement providing for a Takeover
Proposal or a Takeover Proposal shall be consummated, the Company
shall pay the Termination Fee concurrently with the earlier of the
entering into of such Acquisition Agreement or the consummation of
such Takeover Proposal; and
(iv) if, at the time of any other termination of this
Agreement (other than (A) a termination by the Company
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pursuant to Section 8.01(g) or (B) provided that the Company is not at
the time of such termination in breach of its obligations under
Section 5.02 or Section 6.03, a termination pursuant to Section
8.01(a), Section 8.01(b)(i) or Section 8.01(b)(iii)), a Takeover
Proposal shall have been made (other than a Takeover Proposal made
prior to the date hereof), the Company shall pay the Expenses, if
terminated by the Company, concurrently therewith or, if terminated by
Parent, upon demand; in addition, if within twelve months of such
termination, the Company shall enter into an Acquisition Agreement
providing for a Takeover Proposal or a Takeover Proposal shall be
consummated, the Company shall pay the Termination Fee concurrently
with the earlier of the entering into of such Acquisition Agreement or
the consummation of such Takeover Proposal.
"Expenses" shall mean documented out-of-pocket fees and expenses up to an
aggregate $750,000 incurred prior to any termination of this Agreement or
otherwise paid by or on behalf of Parent or Sub in connection with the Merger
or the consummation of any of the transactions contemplated by this Agreement,
including all fees and expenses of law firms, commercial banks, investment
banking firms, accountants, experts and consultants to Parent or Sub. In no
event shall more than one Termination Fee be payable.
SECTION 6.06. Indemnification; Directors and Officers
Insurance. (a) The declaration of trust and bylaws of the Surviving Company
shall contain the provisions with respect to indemnification set forth in the
Declaration of Trust and Bylaws of the Company on the date of this Agreement,
which provisions shall not be amended, repealed or otherwise modified for a
period of six years after the Effective Time in any manner that would adversely
affect the rights thereunder of persons who at any time prior to the Effective
Time were identified as prospective indemnitees under the Declaration of Trust
or Bylaws of the Company in respect of actions or omissions occurring at or
prior to the Effective Time (including, without limitation, the transactions
contemplated by this Agreement), unless such modification is required by law.
(b) From and after the Effective Time, the Surviving Company
shall indemnify, defend and hold harmless the present and former officers,
trustees or directors, agents and employees of
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the Company and its subsidiaries (collectively, the "Indemnified Parties")
against all losses, expenses, claims, damages, liabilities or amounts that are
paid in settlement of, with the approval of Parent and the Surviving Company
(which approval shall not be unreasonably withheld), or otherwise in connection
with, any claim, action, suit, proceeding or investigation (a "Claim"), based
in whole or in part on the fact that such person is or was such a trustee or
director, officer, agent or employee of the Company or any subsidiary and
arising out of actions or omissions occurring at or prior to the Effective Time
(including the transactions contemplated by this Agreement), in each case to
the fullest extent permitted under the laws of the State of Illinois and the
Declaration of Trust (and, from and after the Effective Time, shall pay
expenses in advance of the final disposition of any such action or proceeding
to each Indemnified Party to the fullest extent permitted by the Declaration of
Trust and the laws of the State of Illinois, upon receipt from the Indemnified
Party to whom expenses are advanced of the undertaking to repay such advances
contemplated by the Declaration of Trust). Parent hereby guarantees the
Surviving Company's obligations to the Indemnified Parties pursuant to this
Section 6.06.
(c) Parent will provide, or cause the Surviving Company
to provide, for a period of not less than six years after the Effective Time,
the Company's current directors and officers an insurance and indemnification
policy that provides coverage for events occurring at or prior to the Effective
Time (the "D&O Insurance") that is no less favorable than the Company's
existing policy or, if substantially equivalent insurance coverage is
unavailable, the best available coverage; provided, however, that Parent and
the Surviving Company shall not be required to pay an annual premium for the
D&O Insurance in excess of one and one-half times the last annual premium paid
by the Company prior to the date hereof, but in such case shall purchase as
much such coverage as possible for such amount.
(d) This Section 6.06 shall survive the consummation of the
Merger and is intended to be for the benefit of, and shall be enforceable by,
the Indemnified Parties referred to herein, their heirs and personal
representatives and shall be binding on Parent and Sub and the Surviving
Company and their respective successors and assigns.
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SECTION 6.07. Obligations of Sub. Subject to the terms and
conditions set forth in this Agreement, Parent shall take all actions necessary
to cause Sub to perform its obligations under this Agreement and to consummate
the Merger on the terms and conditions set forth in this Agreement.
SECTION 6.08. Certain Litigation. The Company agrees that it
shall not settle any litigation commenced after the date hereof against the
Company or any of its trustees by any shareholder of the Company relating to
the Merger or this Agreement, without the prior written consent of Parent. In
addition, the Company shall not voluntarily cooperate with any third party that
may hereafter seek to restrain or prohibit or otherwise oppose the Merger and
shall cooperate with Parent and Sub to resist any such effort to restrain or
prohibit or otherwise oppose the Merger, unless the trustees of the Company
determine in good faith, after consultation with the Company's outside counsel,
that failing so to cooperate with such third party or cooperating with Parent
or Sub, as the case may be, would be inconsistent with their fiduciary duties
under applicable law.
SECTION 6.09. Severance Policy and Other Agreements. (a)
With respect to any officer who is covered by a severance policy separate from
the standard severance policy for the Company's employees (which separate
severance policy is described in Item 6.09 of the Company Disclosure Letter),
Parent shall maintain (or shall cause the Surviving Company to maintain) such
separate policy as in effect as of the Effective Time until the first
anniversary of the Effective Time, and, as to all other officers and employees,
Parent shall maintain (or shall cause to be maintained) the Company's standard
severance policy as in effect as of the Effective Time for a period of at least
six months from the Effective Time.
(b) Parent shall honor or cause to be honored all severance
agreements, employment agreements, death benefit agreements and non-competition
agreements with the Company's officers and employees disclosed in Item 6.09 of
the Company Disclosure Letter.
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(c) Parent and its subsidiaries shall, until the first
anniversary of the Effective Time, provide reasonable and customary
outplacement services ("Outplacement Services") to employees of the Company
whose employment is terminated without cause, which Outplacement Services
provided to such employees shall include one-on-one counseling and assistance.
SECTION 6.10. Redemption of Rights. The Company shall take
all actions necessary to redeem the Rights pursuant to the terms of the Rights
Agreement effective immediately prior to the Effective Time, provided, that
this Agreement has not been terminated prior thereto in accordance with its
terms.
ARTICLE VII
CONDITIONS PRECEDENT
SECTION 7.01. Conditions to Each Party's Obligation To Effect
the Merger. The respective obligation of each party to effect the Merger shall
be subject to the satisfaction prior to the Closing Date of the following
conditions:
(a) Company Shareholder Approvals. The Company Shareholder
Approvals shall have been obtained.
(b) HSR Period. The waiting period (and any extension
thereof) applicable to the consummation of the Merger under the HSR
Act shall have expired or been terminated.
(c) No Injunctions Or Restraints. No statute, rule,
regulation, executive order, decree, 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 preventing the consummation of the Merger
shall be in effect; provided, however, that each of the parties shall
have used reasonable efforts to prevent the entry of any such
injunction or other order and to appeal as promptly as possible any
injunction or other order that may be entered.
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(d) Trust Amendment. The Amendment set forth in
Exhibit I hereto (the "Trust Amendment") of the Amended and
Restated Declaration Trust (as amended and in effect on the
date of this Agreement) shall have been approved by the
holders of at least two-thirds of the Shares outstanding and
entitled to vote thereon at the Shareholders Meeting and the
Trust Amendment shall have been duly filed with the Recorder
of Deeds of Cook County, Illinois.
SECTION 7.02. Conditions to the Company's Obligation to
Effect the Merger. The obligation of the Company to effect the Merger shall be
subject to the satisfaction at or prior to the Closing Date of the following
additional conditions:
(a) Performance of Obligations; Representations and
Warranties. Parent and Sub shall have performed in all material
respects each of their obligations and complied in all material
respects with each of their agreements and covenants contained in this
Agreement required to be performed or complied with on or prior to the
Closing Date, each of the representations and warranties of Parent and
Sub contained in this Agreement that is qualified by materiality shall
be true and correct on and as of the Closing Date as if made on and as
of such date (other than to the extent that any such representation
and warranty, by its terms, is expressly limited to a specific date,
in which case such representation and warranty shall be true and
correct as of such date) and each of the representations and
warranties that is not so qualified shall be true and correct in all
material respects on and as of the Closing Date as if made on and as
of such date (other than to the extent that any such representation
and warranty, by its terms, is expressly limited to a specific date,
in which case such representation and warranty shall be true and
correct as of such date), in each case except as contemplated or
permitted by this Agreement.
(b) Officer's Certificate. Parent shall have furnished to
the Company a certificate, dated the Closing Date, signed on behalf of
Parent by an appropriate officer of Parent, certifying to the effect
that the conditions set forth in this Section 7.02, insofar as they
relate to Parent, have been satisfied in full.
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(c) Other Documents. Parent and Sub shall have furnished to
the Company at the closing of the Merger such other customary
documents, certificates or instruments as the Company may reasonably
request evidencing compliance by Parent and Sub with the terms of this
Agreement.
(d) Fairness Opinion. The opinion received by the Company
from Lehman Brothers Inc., dated the date of this Agreement, to the
effect that the Merger Consideration to be received in the Merger by
the Company's shareholders is fair to the Company's shareholders from
a financial point of view shall not have been withdrawn or modified.
(e) Tax Opinion. Parent shall have furnished to the Company
the opinion of Parent's counsel, in form and substance satisfactory to
the Company, and containing customary qualifications, limitations and
assumptions for opinions of this nature, to the effect that for
Federal income tax purposes:
(i) the Merger will be treated as a sale by the
Company of all its assets to Sub for the Merger Consideration
and the assumption of the Company's liabilities, followed by
the distribution of the Merger Consideration by the Company to
the Company's shareholders in complete liquidation of the
Company;
(ii) as to whether gain or loss will be recognized
by each of the Company's shareholders measured by the
difference between (x) the amount of Merger Consideration
received by such shareholder and (y) such shareholder's
adjusted basis in its Shares of the Company; and
(iii) no portion of the Merger Consideration received
by the Company's shareholders will be treated as a
distribution described in Section 301 of the Code.
SECTION 7.03. Conditions to the Parent's and Sub's
Obligations to Effect the Merger. The obligations of Parent and Sub to effect
the Merger shall be subject to the satisfaction at or prior to the Closing Date
of the following additional conditions:
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(a) Performance of Obligations; Representations and
Warranties. The Company shall have performed in all material respects
each of its obligations and complied in all material respects with
each of its agreements and covenants contained in this Agreement
required to be performed or complied with on or prior to the Closing
Date, each of the representations and warranties of the Company
contained in this Agreement that is qualified by materiality shall be
true and correct on and as of the Closing Date as if made on and as of
such date (other than to the extent that any such representation and
warranty, by its terms, is expressly limited to a specific date, in
which case such representation and warranty shall be true and correct
as of such date) and each of the representations and warranties that
is not so qualified shall be true in all material respects on and as
of the Closing Date as if made on and as of such date (other than to
the extent that any such representation and warranty is, by its terms,
expressly limited to a specific date, in which case such
representation and warranty shall be true and correct as of such
date), in each case except as contemplated or permitted by this
Agreement.
(b) Absence of Certain Changes. Since the date of this
Agreement, there shall have occurred no material adverse change with
respect to the Company, other than changes relating to the Company's
industry or the economy in general and not specifically related to the
Company and its subsidiaries. Each of Parent and Sub acknowledges
that there may be disruptions to the Company's business as a result of
the announcement of the Merger and any changes attributable thereto
shall not constitute a material adverse change.
(c) Officer's Certificate. The Company shall have furnished
to Parent a certificate, dated the Closing Date, signed by an
appropriate officer of the Company, certifying to the effect that the
conditions set forth in this Section 7.03, insofar as they relate to
the Company, have been satisfied.
(d) Estoppel Certificates. To the extent the Company is
entitled to receive same under the terms of the agreements specified
in Item 7.03(d) of the Company
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Disclosure Letter, the Company shall have furnished to Parent estoppel
certificates addressed to Parent and Sub, dated not more than 30 days
prior to the Closing Date from the persons listed in Item 7.03(d) of
the Company Disclosure Letter, in the form required under the terms of
such agreements to be delivered by each such person.
(e) Consent. The Company shall have obtained consents to the
Merger from each of the persons described in Item 7.03(e) of the
Company Disclosure Letter.
(f) Other Documents. The Company shall have furnished to
Parent at the closing of such Merger such other customary documents,
certificates or instruments as Parent may reasonably request
evidencing compliance by the Company with the terms of this Agreement.
ARTICLE VIII
TERMINATION AND AMENDMENT
SECTION 8.01. Termination. This Agreement may be terminated
at any time prior to the Effective Time, whether before or after approval of
the terms of this Agreement by the Shareholders of the Company:
(a) by mutual written consent of Parent and the Company;
(b) by either Parent or the Company:
(i) if any Governmental Entity shall have issued an
order, decree or ruling or taken any other action permanently
enjoining, restraining or otherwise prohibiting the
consummation of the Merger and such order, decree or ruling or
other action shall have become final and nonappealable;
(ii) if, at the Shareholders Meeting (including any
adjournment thereof) (x) this Agreement and the Merger or (y)
the Trust Amendment shall fail to be adopted and
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approved by the requisite vote of the shareholders of
the Company;
(iii) if the Merger shall not have been consummated
on or before the later of (x) February 28, 1997 or (y) five
months after the date hereof, unless the failure to consummate
the Merger is the result of a material breach of this
Agreement by the party seeking to terminate this Agreement;
(c) by Parent or Sub, if the Company shall have failed to
perform in any material respect any material obligation or to comply
in any material respect with any material agreement or covenant of the
Company to be performed or complied with by it under this Agreement,
which failure cannot be or has not been cured within 20 business days
after the giving of written notice thereof to the Company;
(d) by Parent or Sub, if there has been a breach of any of
the representations and warranties of the Company set forth in this
Agreement that are qualified as to materiality or there has been a
material breach of any such representations and warranties that are
not so qualified, in each case which breach cannot be or has not been
cured within 20 business days after the giving of written notice
thereof to the Company;
(e) by Parent or Sub, if (i) the trustees of the Company or
any committee thereof shall have withdrawn or modified in a manner
adverse to Parent or Sub their approval or recommendation of the
Merger or this Agreement, or approved or recommended any Takeover
Proposal or (ii) the trustees of the Company or any committee thereof
shall have resolved to do any of the foregoing;
(f) by the Company in accordance with Section 5.02(b),
provided it has complied with all provisions thereof, including the
notice provisions therein, and that it complies with applicable
requirements relating to the payment (to the extent
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required to be paid upon such termination) of the Expenses and
the Termination Fee; or
(g) by the Company, if Sub or Parent shall have (i) failed to
perform in any material respect any material obligation or to comply
in any material respect with any material agreement or covenant of Sub
or Parent to be performed or complied with by it under this Agreement
or (ii) breached in any material respect any of their respective
representations or warranties contained in this Agreement, which
failure or breach described in clause (i) or (ii) above is incapable
of being cured or has not been cured within 20 business days after the
giving of written notice thereof to Parent or Sub, as applicable.
SECTION 8.02. Effect of Termination. In the event of a
termination of this Agreement by either the Company or Parent as provided in
Section 8.01, this Agreement shall forthwith become void and there shall be no
liability or obligation on the part of Parent, Sub or the Company or their
respective officers or directors, except with respect to Section 3.22, Section
4.06, the last sentence of Section 6.02, Section 6.05, this Section 8.02 and
Article IX; provided, however, that nothing herein shall relieve any party for
liability for any breach hereof.
SECTION 8.03. Amendment. This Agreement may be amended by
the parties hereto, by action taken or authorized by their respective trustees
or board of directors at any time before or after obtaining the Company
Shareholder Approvals (if required by law or the Declaration of Trust), but,
after any such approval, no amendment shall be made which by law or the
Declaration of Trust requires further approval by such Shareholders without
obtaining such further approval. This Agreement may not be amended except by
an instrument in writing signed on behalf of each of the parties hereto.
SECTION 8.04. Extension; Waiver. At any time prior to the
Effective Time, the parties hereto, by action taken or authorized by their
respective trustees or board of directors, may, to the extent legally allowed,
(i) extend the time for the performance of any of the obligations or other acts
of the other parties hereto, (ii) waive any inaccuracies in the representations
and warranties contained herein or in any
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document delivered pursuant hereto or (iii) waive compliance with any
of the agreements or conditions contained herein. Any agreement on the part of
a party hereto to any such extension or waiver shall be valid only if set forth
in a written instrument signed on behalf of such party. The failure of any
party to this Agreement to assert any of its rights under this Agreement or
otherwise shall not constitute a waiver of those rights.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Nonsurvival of Representations, Warranties and
Agreements. None of the representations and warranties in this Agreement or in
any instrument delivered pursuant to this Agreement shall survive the Effective
Time. This Section 9.01 shall not limit any covenant or agreement of the
parties which by its terms contemplates performance after the Effective Time of
the Merger.
SECTION 9.02. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given if delivered
personally, telecopied (which is confirmed), sent by overnight courier
(providing proof of delivery) or mailed by registered or certified mail (return
receipt requested) to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
(a) if to Parent or Sub, to
Newsweb Corporation
1645 West Fullerton
Chicago, Illinois 60614
Attention: Charles Frank Gross
Telecopy No.: 312/975-1301
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with a copy to :
Katten, Muchin & Zavis
525 West Monroe Street
Chicago, Illinois 60611
Attention: Howard S. Lanznar
Telecopy No: 312/902-1061
(b) if to the Company, to
The Chicago Dock and Canal Trust
455 E. Illinois Street, Suite 565
Chicago, Illinois 60611
Attention: Charles R. Gardner
Telecopy No.: 312/467-9647
with a copy to:
Sidley & Austin
One First National Plaza
Chicago, Illinois 60603
Attention: Larry A. Barden
Telecopy No: 312/853-7036
and:
Wilson & McIlvaine
500 Madison Street, #3700
Chicago, Illinois 60661
Attention: Michael F. Csar
Telecopy No: 312/715-5155
SECTION 9.03. Interpretation. When a reference is made in
this Agreement to an Article or a Section, such reference shall be to an
Article or a Section of this Agreement unless otherwise indicated. The table
of contents and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words "include," "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation." The phrase "made available" in this Agreement shall mean that the
information referred to has been made available if requested by the party to
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whom such information is to be made available. As used in this Agreement, the
term "subsidiary" of any person means another person, an amount of the voting
securities, other voting ownership or voting partnership interests of which is
sufficient to elect at least a majority of its Board of Directors or other
governing body (or, if there are no such voting interests, 50% or more of the
equity interests of which) is owned directly or indirectly by such first
person. As used herein, "knowledge," as it relates to the Company, means, with
respect to any matter, that any executive officer or trustee of the Company has
actual knowledge of such matter. As used in this Agreement, "material adverse
change" or "material adverse effect" means, when used in connection with the
Company, any change or effect (or any development that, insofar as can
reasonably be foreseen is likely to result in any change or effect) that,
individually or in the aggregate with any such other changes or effects, is
materially adverse to the business, properties, assets, financial condition or
results of operations of the Company and its subsidiaries taken as a whole.
SECTION 9.04. Counterparts. This Agreement may be executed
in two or more counterparts, all of which shall be considered one and the same
agreement and shall become effective when two or more counterparts have been
signed by each of the parties and delivered to the other parties, it being
understood that all parties need not sign the same counterpart.
SECTION 9.05. Entire Agreement; No Third Party Beneficiaries.
This Agreement (including the Confidentiality Agreement and the other documents
and the instruments referred to herein) (a) constitute the entire agreement and
supersede all prior agreements and understandings, both written and oral, among
the parties with respect to the subject matter hereof, and (b) except as
provided in Sections 6.04, 6.06, and 6.09, are not intended to confer upon any
person other than the parties hereto any rights or remedies hereunder.
SECTION 9.06. Governing Law. This Agreement shall be
governed and construed in accordance with the laws of the State of Illinois
without regard to any applicable conflicts of law.
SECTION 9.07. Publicity. Except as otherwise required by law
or the rules of the Nasdaq Stock Market, for so long as this Agreement is in
effect, neither the Company nor Parent
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shall, or shall permit any of its subsidiaries to, issue or cause the
publication of any press release or other public announcement with respect to
the transactions contemplated by this Agreement without the consent of the
other party, which consent shall not be unreasonably withheld.
SECTION 9.08. Assignment. Neither this Agreement nor any of
the rights, interests or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties, except that Parent may assign, in its
sole discretion, any or all of its rights, interests and obligations hereunder
to any Affiliate of Parent, provided Parent guarantees the obligation of such
assignees through the Closing Date. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of and be enforceable by
the parties and their respective successors and assigns.
SECTION 9.09. Enforcement. The parties agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions of this Agreement in the
United States District Court for the Northern District of Illinois or in a
Illinois state court located in Cook County, Illinois, this being in addition
to any other remedy to which they are entitled at law or in equity. In
addition, each of the parties hereto (i) consents to submit such party to the
personal jurisdiction of the United States District Court for the Northern
District of Illinois or any Illinois state court located in Cook County,
Illinois in the event any dispute arises out of this Agreement or any of the
transactions contemplated hereby, (ii) agrees that such party will not attempt
to deny or defeat such personal jurisdiction by motion or other request for
leave from any such court, (iii) agrees that such party will not bring any
action relating to this Agreement or any of the transactions contemplated
hereby in any court other than the United States District Court for the
Northern District of Illinois or a Illinois state court located in Cook County,
Illinois and (iv) waives any right to trial by jury with respect to any claim
or proceeding related to or arising out of this Agreement or any of the
transactions contemplated hereby.
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SECTION 9.10. Exculpation of Shareholders, Trustees,
Officers, Agents and Beneficiaries. In furtherance of and not in limitation of
Section 5.2 and Article VIII of the Declaration of Trust, Parent, Sub and the
Company expressly acknowledge and agree that no shareholder, trustee, officer,
agent or beneficiary of the Company shall be or be held personally liable for
or on account of any demand, contract, debt, liability, tort, claim, damage,
judgment or decree arising out of, or preservation of, the property of the
Company, the conduct of the business of the Company or the transactions
contemplated by this Agreement. Every act or thing that shall be done or
omitted, and every power exercised or obligation incurred by the trustees of
the Company, or any of them, in the administration of the Company or in
connection with any business, property or concerns of the Company, whether
ostensibly in their own names or in their trust capacity, shall be deemed to
have been done, omitted, exercised or incurred by them as trustees and not as
individuals; and every person contracting or dealing with the trustees or
having any debt, claim or judgment against them or any of them shall look only
to the funds and property of the Company for payment or satisfaction.
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IN WITNESS WHEREOF, Parent, Sub and the Company have caused
this Agreement to be signed by their respective officers thereunto duly
authorized as of the date first written above.
NEWSWEB CORPORATION
By /s/ Charles Frank Gross
-------------------------------
Name: Charles Frank Gross
Title: Chief Financial Officer
CDCT ACQUISITION TRUST
By: 200 West Adams Street
Company L.L.C.
Its: Trustee
By: Newsweb Corporation
Its: Member
By /s/ Charles Frank Gross
-------------------------------
Name: Charles Frank Gross
Title: Chief Financial Officer
THE CHICAGO DOCK & CANAL TRUST
By /s/ Charles R. Gardner
-------------------------------
Name: Charles R. Gardner
Title: President
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EXHIBIT I
CERTIFICATE OF AMENDMENT
OF
DECLARATION OF TRUST
OF
THE CHICAGO DOCK AND CANAL TRUST
The Chicago Dock and Canal Trust does hereby certify that the
Amended and Restated Declaration of Trust dated September 16, 1986 and recorded
in the office of the Recorder of Deeds of Cook County, Illinois on September
16, 1986 as Doc. No. 86-418338, as amended by Certificate of Amendment of
Declaration of Trust dated September 19, 1989 and recorded in the office of the
Recorder of Deeds of Cook County, Illinois on October 6, 1989 as Doc. No.
89-476310 and as subsequently amended by Certificate of Amendment of
Declaration of Trust dated September 22, 1993 and recorded in the office of the
Recorder of Deeds of Cook County, Illinois on October 4, 1993 as Doc. No.
93-789669 is hereby further amended as follows:
1. Numbered clause 3 of the second paragraph of Article III is
hereby amended and restated in its entirety as follows:
"3. to sell and convey, mortgage, pledge, lease as lessor, with
leases commencing immediately or in futuro and for terms extending
beyond the term of this trust, and otherwise dispose of all or any
part of the property and assets of this trust; provided, however, that
no real property owned by the trustees may be sold without the
favorable vote or written approval of two-thirds (2/3) of the duly
qualified and acting trustees; and provided further that (i) any sale,
conveyance, lease or other disposition of all or substantially all of
the property and assets of this trust (otherwise than by mortgage or
pledge), (ii) any sale of all or any part of the property and assets
of this trust for any shares, bonds or other securities or obligations
of the purchaser, or any other consideration, as a step in
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proceedings looking toward the merger, consolidation, dissolution or
termination of this trust or the carrying out of any plan of
reorganization or rearrangement of the business or properties
conducted or held hereunder or (iii) any merger of this trust into or
with any Person (as defined in Article XI) or any merger of any Person
into or with this trust, may be made only upon the favorable vote or
written approval of two-thirds (2/3) of the duly qualified and acting
trustees, and upon the favorable vote of the holders of at least
two-thirds (2/3) the outstanding common shares of this trust (and upon
any favorable vote required by the provisions of any series of
preferred shares which may at the time be outstanding), or their
proxies, voting at a meeting called for that purpose, pursuant to
notice as hereinafter provided."
2. The third sentence of Section 4.7 is hereby amended and
restated in its entirety to read as follows:
"The limitation on beneficial ownership of common shares set
forth in this Section 4.7 shall not apply to any (i) acquisition of
common shares pursuant to a cash tender offer made for all outstanding
shares of the trust (including securities convertible into shares) in
conformity with applicable federal and state securities laws where
two-thirds (2/3) of the outstanding shares (not including shares or
securities convertible into shares held by the tender offeror and/or
any Affiliate or Associate (each as defined in Article XI hereof)
thereof) are duly tendered and accepted pursuant to the cash tender
offer, (ii) acquisition of common shares pursuant to a merger
involving this trust consummated in compliance with the provisions of
Article XIII or (iii) acquisition of common shares by an underwriter
in a public offering of common shares."
3. A new Article XIII is hereby added which shall read in its
entirety as follows:
"ARTICLE XIII
MERGERS INVOLVING THE TRUST
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Sec. 13.1. Procedure for Merger. This trust may be merged
into or with any Person (as defined in Article XI) or any Person may be merged
into or with this trust, in each case in the following manner (such Person into
or with which this trust is to be merged or such Person to be merged into or
with this trust, as the case may be, being hereinafter designated as the
"Merging Person"):
The trustees of this trust shall, by resolution adopted by the
favorable vote or written approval of at least two-thirds (2/3) of the
duly qualified and acting trustees of this trust, and the board of
directors, trustees or other appropriate governing body of the Merging
Person shall duly, approve a plan of merger setting forth:
1. The name of this trust and the name of the Merging Person
proposing to merge, and a statement identifying whether this trust or
the Merging Person is to be the surviving entity in such merger (such
surviving entity being hereinafter designated as the "Surviving
Entity").
2. The terms and conditions of the proposed merger and the
mode of carrying the same into effect.
3. The manner and basis of converting the shares of this
trust and the shares or other equity interests of the Merging Person
into shares, obligations or other securities of the Surviving Entity,
or into shares, obligations or other securities of any Person which
immediately before or immediately after the merger is effected is the
owner of all of the outstanding voting securities of the Surviving
Entity, or into cash or other property, or into any combination of the
foregoing.
4. A statement of any changes in the declaration of trust or
articles of incorporation of the Surviving Entity to be effected by
such merger.
5. Such other provisions with respect to the proposed merger
as are deemed necessary or desirable by the trustees of this trust and
the board of directors,
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trustees or other appropriate governing body of the Merging Person,
including provisions, if any, under which the proposed merger may be
abandoned prior to the filing of articles of merger in accordance with
Section 13.4.
In connection with any merger effected pursuant to the provisions of this
trust, this trust shall comply with the provisions in this trust and the
merging Person shall comply with the applicable provisions of the laws of the
state under which it is organized or its declaration of trust, as the case may
be.
Sec. 13.2. Call of Shareholders' Meeting. The trustees of this
trust, upon approving such plan of merger, shall by resolution, direct that the
plan be submitted to a vote at a meeting of shareholders of this trust, which
may be either an annual or a special meeting. Written notice shall be given to
each shareholder of record entitled to vote at such meeting in accordance with
the provisions of this trust for the giving of notice of meetings of
shareholders. Such notice, whether the meeting be an annual or special
meeting, shall include a copy or a summary of the plan of merger.
Sec. 13.3. Approval by Shareholders. The plan of merger shall be
approved by the shareholders of this trust upon receiving the favorable vote of
the holders of at least two-thirds (2/3) of the outstanding common shares of
this trust (and upon receiving any favorable vote required by the provisions of
any series of preferred shares which may at the time be outstanding), or their
proxies, voting at a meeting called for that purpose, pursuant to notice as
herein provided.
Sec. 13.4. Filing of Articles of Merger. Upon any required approval
of the plan of merger upon behalf of this trust or the Merging Person, articles
of merger shall be executed by this trust and the Merging Person and filed in
the office of the Recorder of Deeds of Cook County, Illinois. Such articles of
merger shall set forth:
(1) The plan of merger; and
(2) A statement that, with respect to each party to such
plan of merger whose shareholders shall be entitled to vote
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thereon, that such plan of merger was duly adopted by the affirmative
vote of the holders of outstanding shares or other equity interests of
such party having not less than the minimum number of votes necessary
to adopt such plan.
Sec. 13.5. Effective Date of Merger. The merger contemplated by the
plan of merger shall become effective upon the filing of an executed copy of
the articles of merger described in Section 13.4 relating to the merger in the
office of the Recorder of Deeds of Cook County, Illinois, or on a later
specified date, not later than 30 days subsequent to such date of filing of
such articles of merger, as provided in such plan of merger.
Sec. 13.6. Effect of Merger. Whenever a merger involving this trust
has been effected in accordance with the provisions of this trust and a plan of
merger, (i) the several parties to such plan of merger shall be a single
entity, which shall be that entity designated in such plan of merger as the
Surviving Entity, (ii) the separate existence of all parties to such plan of
merger, except the Surviving Entity, shall cease, (iii) the Surviving Entity
shall thereupon and thereafter possess all the rights, privileges, immunities,
and franchises, as of a public or a private nature, of each of the merging
parties and all property, real, personal and mixed, and all debts due on
whatever account, including subscriptions to shares, and all other choses in
action and all and every other interest of or belonging to or due to each of
the parties so merged shall be taken and deemed to be transferred to and vested
in such single Surviving Entity without further act or deed and title to any
real estate, or any interest therein, vested in any of such parties shall not
revert or be in any way impaired by reason of such merger, (iv) such Surviving
Entity shall thenceforth be responsible and liable for all the liabilities and
obligations of each of the parties so merged and any claim existing or action
or proceeding pending by or against any of such parties may be prosecuted to
judgment as if such merger had not taken place or such Surviving Entity may be
substituted in its place and neither the rights of creditors nor any liens upon
the property of any of such parties so merged shall be impaired by such merger,
(v) the provisions of this trust shall be deemed to be amended to the extent,
if any, that changes in this trust are stated in such plan of merger and (vi)
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when such merger has been effected, the shares or other equity interests of the
entity to be converted under the terms of such plan of merger shall cease to
exist and the holders of such shares or other equity interests so converted
shall be entitled only to the money, securities or other property into which
those shares or other equity interests shall have been converted in accordance
with such plan of merger."
IN WITNESS WHEREOF, said The Chicago Dock and Canal Trust has
caused this certificate to be executed by its President and its Secretary as of
this __ day of __________, 1996.
______________________________
Charles R. Gardner
President
Attest: __________________________
Secretary
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