SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): February 6, 1998
Aegis Realty, Inc.
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(Exact Name of Registrant as Specified in Charter)
Maryland
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(State or other Jurisdiction of Incorporation)
1-13239 13-3967879
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(Commission File Number) (IRS Employer Identification Number)
625 Madison Avenue, New York, NY 10022
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(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (212) 421-5333
Not Applicable
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(Former Name or Former Address, if Changed Since Last Report
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Item 5. Other Events
On February 6, 1998, Arthur G. Hatzopoulos resigned from his position of Vice
President of Aegis Realty, Inc. ("Aegis") and Vice President of Related Aegis,
Inc., general partner of Related Aegis LP, Advisor to Aegis (the "Advisor").
Also on February 6, 1998, Richard A. Palermo was elected to the positions of
Vice President and Controller of Aegis and Vice President and Controller of the
general partner of the Advisor by unanimous written consent of the Board of
Directors on February 6, 1998.
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a). Financial Statements
Not Applicable
(b). Pro Forma Financial Information
Not Applicable
(c). Exhibits
3.1.A. Articles of Incorporation dated as of August 13, 1996(1)
3.1.B. Amended Articles of Incorporation dated as of
September 26, 1996(1)
3.1.C. Articles of Amendment and Restatement of Articles of
Incorporation dated as of October 1, 1997(1)
3.1.D Certificate of Correction dated as of October 22, 1997
3.2 By-Laws
4.1 Specimen Stock Certificate(2)
10.1 Advisory Agreement dated as of October 1, 1997
10.2 Agreement and Plan of Consolidation dated as of October 1, 1997
10.3 Incentive and Stock Option Plan
10.4 Omnibus Assignment Agreement dated as of October 1, 1997
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(1) Incorporated by reference to Registrant's Form 10 as filed with the SEC on
August 1, 1997.
(2) Incorporated by reference to Registrant's Form 10/A-1 as filed with the SEC
on September 23, 1997.
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Aegis Realty, Inc.
(Registrant)
BY: /s/ Stuart J. Boesky
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Stuart J. Boesky
President
March , 1998
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EXHIBIT 3.1.D
AEGIS REALTY, INC.
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CERTIFICATE OF CORRECTION
Aegis Realty, Inc., a Maryland corporation (the "Corporation"), hereby
certifies that:
FIRST: The title of the document being corrected is Articles of Amendment
and Restatement.
SECOND: The Articles of Amendment and Restatement were filed on October 1,
1997.
THIRD: The provisions of the Articles of Amendment and Restatment which
are to be corrected are set forth below:
1. The provision entitled "Number of Options" in Article V,
Section 5.13, currently reads as follows:
"Number of Options: Maximum over life of plan - [809,574] options
for shares of Common Stock. [10% of shares of
Common Stock outstanding on the date of
reorganization.]
Maximum each calendar year - 3% of shares
outstanding as of the end of the prior year
([242,926] options for the Corporation's first
calendar year). Any shares available for grant
of options, but for which options are not
granted, in previous years, may be carried over
for grant in a subsequent year."
2. The provision entitled "Conditions to Issuance" in Article V,
Section 5.13, currently reads as follows:
"Conditions to Compensation Committee may only grant options
Issuance: in a given year if the dividend per share of
Common Stock for the year prior to the grant
year exceeds $.____ per share [the pro forma
dividend per share set forth in the Information
Statement]"
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FOURTH: The corrected provisions of the Articles of Amendment and
Restatement are set forth below:
1. The provision entitled "Number of Options" in Article V,
Section 5.13, shall read as follows:
"Number of Options: Maximum over life of plan - 809,574 options for
shares of Common Stock (as such amount may be
adjusted to reflect the elimination of
fractional shares of Common Stock pursuant to
the Solicitation Statement of the Company dated
June 18, 1997 ("Solicitation Statement") such
that the maximum number of options does not
exceed 10% of the shares of Common Stock
outstanding on the date of Consolidation (as
defined in the Solicitation Statement)).
Maximum each calendar year - 3% of shares
outstanding as of the end of the prior year
(242,926 options for the Corporation's first
calendar year) (as such amount may be adjusted
to reflect the elimination of fractional shares
of Common Stock pursuant to the Solicitation
Statement of the Company dated June 18, 1997
("Solicitation Statement") such that the
maximum number of options does not exceed 3% of
the shares of Common Stock outstanding on the
date of Consolidation (as defined in the
Solicitation Statement)). Any shares available
for grant of options, but for which options are
not granted, in previous years, may be carried
over for grant in a subsequent year."
2. The provision entitled "Conditions to Issuance" in Article V,
Section 5.13, shall read as follows:
"Conditions to Compensation Committee may only grant options
in a given year if the dividend per share of
Common Stock for the year prior to the grant
year exceeds $0.9869 per share."
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The undersigned President acknowledges this Certificate of Correction to
be the corporate act of the Corporation and as to all matters or facts required
to be verified under oath, the undersigned President acknowledges that to the
best of his knowledge, information and belief, these matters and facts are true
in all material respects and that this statement is made under the penalties for
perjury.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Correction to be signed in its name and on its behalf by its President and
attested to by its Secretary on this _____ day of October, 1997.
ATTEST: AEGIS REALTY, INC.
By: (SEAL)
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Lynn A. McMahon J. Michael Fried
Secretary President
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EXHIBIT 3.2
AEGIS REALTY, INC.
BYLAWS
ARTICLE I
OFFICES
Section 1. PRINCIPAL OFFICE. The principal office of the Corporation
shall be located at such place or places as the Board of Directors may designate
in its sole discretion.
Section 2. ADDITIONAL OFFICES. The Corporation may have additional
offices at such places as the Board of Directors may from time to time determine
in its sole discretion or the business of the Corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. PLACE. All meetings of stockholders shall be held at the
principal office of the Corporation or at such other place within the United
States as shall be stated in the notice of the meeting.
Section 2. ANNUAL MEETING. An annual meeting of the stockholders for the
election of directors whose terms have expired and the transaction of any
business within the powers of the Corporation shall be held on a date and at the
time set by the Board of Directors during the month of June in each year.
Section 3. SPECIAL MEETINGS. The president, chief executive officer or
Board of Directors may call special meetings of the stockholders. Special
meetings of stockholders shall also be called by the secretary of the
Corporation upon the written request of the holders of shares entitled to cast
not less than 10% of all the votes entitled to be cast at such meeting. Such
request shall briefly state the purpose of such meeting and the
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matters proposed to be acted on at such meeting.
Section 4. NOTICE. Not less than 10 nor more than 90 days before each
meeting of stockholders, the secretary shall give to each stockholder entitled
to vote at such meeting and to each stockholder not entitled to vote who is
entitled to notice of the meeting written or printed notice stating the time and
place of the meeting and, in the case of a special meeting or as otherwise may
be required by any statute, stating briefly the purpose for which the meeting is
called, either by mail or by presenting it to such stockholder personally or by
leaving it at his residence or usual place of business. If mailed, such notice
shall be deemed to be given when deposited in the United States mail addressed
to the stockholder at his post office address as it appears on the records of
the Corporation, with postage thereon prepaid.
Section 5. SCOPE OF NOTICE. Any business of the Corporation may be
transacted at an annual meeting of stockholders without being specifically
designated in the notice, except such business as is required by any statute to
be stated in such notice. No business shall be transacted at a special meeting
of stockholders except as specifically designated in the notice.
Section 6. ORGANIZATION. At every meeting of stockholders, the chairman
of the Board of Directors, if there be one, shall conduct the meeting or, in the
case of vacancy in office or absence of the chairman of the board, one of the
following officers present shall conduct the meeting in the order stated: the
vice chairman of the board, if there be one, the president, the vice presidents
in their order of rank and seniority, or a chairman chosen by the stockholders
entitled to cast a majority of the votes which all stockholders present in
person or by proxy are entitled to cast, shall act as chairman, and the
secretary, or, in his absence, an assistant secretary, or in the absence of both
the secretary and assistant secretaries, a person appointed by the chairman
shall act as secretary.
Section 7. QUORUM. At any meeting of stockholders, the presence in person
or by proxy of stockholders entitled to cast a majority of all the votes
entitled to be cast at such meeting shall constitute a quorum; but this section
shall not affect any requirement under any statute or the Charter for the vote
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necessary for the adoption of any measure. If, however, such quorum shall not be
present at any meeting of the stockholders, the stockholders entitled to vote at
such meeting, present in person or by proxy, shall have the power to adjourn the
meeting from time to time to a date not more than 120 days after the original
record date without notice other than announcement at the meeting. At such
adjourned meeting at which a quorum shall be present, any business may be
transacted which might have been transacted at the meeting as originally
notified. If the adjournment is for more than 120 days after the original record
date, or if after the adjournment a new record date is fixed for the adjourned
meeting, notice of the adjourned meeting shall be given to each stockholder of
record entitled to vote at the meeting and to each stockholder not entitled to
vote who is entitled to notice of the meeting.
The stockholders present at a meeting which has been duly called and
convened may continue to transact business until adjournment, notwithstanding
the withdrawal of enough stockholders to leave less than a quorum.
Section 8. VOTING. A plurality of all the votes cast at a meeting of
stockholders duly called and at which a quorum is present shall be sufficient to
elect a director. Each share may be voted for as many individuals as there are
directors to be elected and for whose election the share is entitled to be
voted. A majority of the votes cast at a meeting of stockholders duly called and
at which a quorum is present shall be sufficient to approve any other matter
which may properly come before the meeting, unless a different vote is required
by statute or by the Charter. Unless otherwise provided in the Charter, each
outstanding share, regardless of class, shall be entitled to one vote on each
matter submitted to a vote at a meeting of stockholders.
Section 9. PROXIES. A stockholder may cast the votes entitled to be cast
by the shares of the stock owned of record by him either in person or by proxy
executed in writing by the stockholder or by his duly authorized attorney in
fact. Such proxy shall be filed with the secretary of the Corporation before or
at the time of the meeting. No proxy shall be valid after eleven months from the
date of its execution, unless otherwise provided in the proxy. A proxy shall be
irrevocable if it states
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that it is irrevocable and if, and only as long as, it is coupled with an
interest sufficient in law to support an irrevocable power. A stockholder may
revoke any proxy that is not irrevocable by attending the meeting and voting in
person or by filing an instrument in writing revoking the proxy or by delivering
a proxy in accordance with applicable law bearing a later date to the Board of
Directors.
Section 10. VOTING OF STOCK BY CERTAIN HOLDERS. Stock of the Corporation
registered in the name of a corporation, partnership, trust or other entity, if
entitled to be voted, may be voted by the president or a vice president, a
general partner or trustee thereof, as the case may be, or a proxy appointed by
any of the foregoing individuals, unless some other person who has been
appointed to vote such stock pursuant to a bylaw or a resolution of the
governing body of such corporation or other entity or agreement of the partners
of a partnership presents a certified copy of such bylaw, resolution or
agreement, in which case such person may vote such stock. Any director or other
fiduciary may vote stock registered in his name as such fiduciary, either in
person or by proxy.
Shares of stock of the Corporation directly or indirectly
owned by it shall not be voted at any meeting and shall not be counted in
determining the total number of outstanding shares entitled to be voted at any
given time, unless they are held by it in a fiduciary capacity, in which case
they may be voted and shall be counted in determining the total number of
outstanding shares at any given time.
The Board of Directors may adopt by resolution a procedure by
which a stockholder may certify in writing to the Corporation that any shares of
stock registered in the name of the stockholder are held for the account of a
specified person other than the stockholder. The resolution shall set forth the
class of stockholders who may make the certification, the purpose for which the
certification may be made, the form of certification and the information to be
contained in it; if the certification is with respect to a record date or
closing of the stock transfer books, the time after the record date or closing
of the stock transfer books within which the certification must be received by
the Corporation; and any other provisions with respect to the procedure which
the Board of Directors considers necessary or desirable. On receipt of such
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certification, the person specified in the certification shall be regarded as,
for the purposes set forth in the certification, the stockholder of record of
the specified stock in place of the stockholder who makes the certification.
Section 11. INSPECTORS. At any meeting of stockholders, the chairman of
the meeting may appoint one or more persons as inspectors for such meeting. Such
inspectors shall ascertain and report the number of shares represented at the
meeting based upon their determination of the validity and effect of proxies,
count all votes, report the results and perform such other acts as are proper to
conduct the election and voting with impartiality and fairness to all the
stockholders.
Each report of an inspector shall be in writing and signed by
him or by a majority of them if there is more than one inspector acting at such
meeting. If there is more than one inspector, the report of a majority shall be
the report of the inspectors. The report of the inspector or inspectors on the
number of shares represented at the meeting and the results of the voting shall
be prima facie evidence thereof.
Section 12. NOMINATIONS AND STOCKHOLDER BUSINESS
(a) Annual Meetings of Stockholders. (1) Nominations of persons for
election as a director to the Board of Directors and the proposal of business to
be considered by the stockholders may be made at an annual meeting of
stockholders (i) pursuant to the Corporation's notice of meeting, (ii) by or at
the direction of the Board of Directors or (iii) by any stockholder of the
Corporation who was a stockholder of record both at the time of giving of notice
provided for in this Section 12(a) and at the time of the annual meeting, who is
entitled to vote at the meeting and who complied with the notice procedures set
forth in this Section 12(a).
(2) For nominations or other business to be properly brought
before an annual meeting by a stockholder pursuant to clause (iii) of paragraph
(a)(1) of this Section 12, the stockholder must have given timely notice thereof
in writing to the secretary of the Corporation. To be timely, a stockholder's
notice shall be delivered to the secretary at the principal executive offices of
the Corporation not less than 60 days nor
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more than 90 days prior to the first anniversary of the preceding year's annual
meeting; provided, however, that in the event that the date of the annual
meeting is advanced by more than 30 days or delayed by more than 60 days from
such anniversary date or if the Corporation has not previously held an annual
meeting, notice by the stockholder to be timely must be so delivered not earlier
than the 90th day prior to such annual meeting and not later than the close of
business on the later of the 60th day prior to such annual meeting or the tenth
day following the day on which public announcement of the date of such meeting
is first made. Such stockholder's notice shall set forth (i) as to each person
whom the stockholder proposes to nominate for election or reelection as a
director all information relating to such person that is required to be
disclosed in solicitations of proxies for election of directors, or is otherwise
required, in each case pursuant to Regulation 14A under the Securities Exchange
Act of 1934, as amended (the "Exchange Act") (including such person's written
consent to being named in the proxy statement as a nominee and to serving as a
director if elected); (ii) as to any other business that the stockholder
proposes to bring before the meeting, a brief description of the business
desired to be brought before the meeting, the reasons for conducting such
business at the meeting and any material interest in such business of such
stockholder and of the beneficial owner, if any, on whose behalf the proposal is
made; and (iii) as to the stockholder giving the notice and the beneficial
owner, if any, on whose behalf the nomination or proposal is made, (x) the name
and address of such stockholder, as they appear on the Corporation's books, and
of such beneficial owner and (y) the number of shares of each class of stock of
the Corporation which are owned beneficially and of record by such stockholder
and such beneficial owner.
(3) Notwithstanding anything in the second sentence of paragraph
(a)(2) of this Section 12 to the contrary, in the event that the number of
directors to be elected to the Board of Directors is increased and there is no
public announcement naming all of the nominees for director or specifying the
size of the increased Board of Directors made by the Corporation at least 70
days prior to the first anniversary of the preceding year's annual meeting, a
stockholder's notice required by this Section 12(a) shall also be considered
timely, but only with respect to nominees for any new positions created by such
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increase, if it shall be delivered to the secretary at the principal executive
offices of the Corporation not later than the close of business on the tenth day
following the day on which such public announcement is first made by the
Corporation.
(b) Special Meetings of Stockholders. Only such business shall be
conducted at a special meeting of stockholders as shall have been brought before
the meeting pursuant to the Corporation's notice of meeting. Nominations of
persons for election to the Board of Directors may be made at a special meeting
of stockholders at which directors are to be elected (i) pursuant to the
Corporation's notice of meeting, (ii) by or at the direction of the Board of
Directors or (iii) provided that the Board of Directors has determined that
directors shall be elected at such special meeting, by any stockholder of the
Corporation who is a stockholder of record both at the time of giving of notice
provided for in this Section 12(b) and at the time of the special meeting, who
is entitled to vote at the meeting and who complied with the notice procedures
set forth in this Section 12(b). In the event the Corporation calls a special
meeting of stockholders for the purpose of electing one or more directors to the
Board of Directors, any such stockholder may nominate a person or persons (as
the case may be) for election to such position as specified in the Corporation's
notice of meeting, if the stockholder's notice containing the information
required by paragraph (a)(2) of this Section 12 shall be delivered to the
secretary at the principal executive offices of the Corporation not earlier than
the 90th day prior to such special meeting and not later than the close of
business on the later of the 60th day prior to such special meeting or the tenth
day following the day on which public announcement is first made of the date of
the special meeting and of the nominees proposed by the Board of Directors to be
elected at such meeting.
(c) General. (1) Only such persons who are nominated in accordance with
the procedures set forth in this Section 12 shall be eligible to serve as
directors and only such business shall be conducted at a meeting of stockholders
as shall have been brought before the meeting in accordance with the procedures
set forth in this Section 12. The presiding officer of the meeting shall have
the power and duty to determine whether a nomination or any business proposed to
be brought before the meeting was made in accordance with the procedures set
forth in this Section 12 and,
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if any proposed nomination or business is not in compliance with this Section
12, to declare that such defective nomination or proposal be disregarded.
(2) For purposes of this Section 12, "public announcement" shall
mean disclosure in a press release reported by the Dow Jones News Service,
Associated Press or comparable news service or in a document publicly filed by
the Corporation with the Securities and Exchange Commission pursuant to Section
13, 14 or 15(d) of the Exchange Act.
(3) Notwithstanding the foregoing provisions of this Section 12, a
stockholder shall also comply with all applicable requirements of state law and
of the Exchange Act and the rules and regulations thereunder with respect to the
matters set forth in this Section 12. Nothing in this Section 12 shall be deemed
to affect any rights of stockholders to request inclusion of proposals in the
Corporation's proxy statement pursuant to Rule 14a-8 under the Exchange Act.
Section 13. VOTING BY BALLOT. Voting on any question or in any election
may be viva voce unless the chairman of the meeting shall order or any
stockholder shall demand that voting be by ballot.
Section 14. CONDUCT OF MEETINGS. Except as otherwise required by law, the
Board of Directors may adopt by resolution such rules and regulations for the
conduct of meetings of stockholders as it shall deem appropriate. Except to the
extent inconsistent with such rules and regulations as adopted by the Board of
Directors, the presiding officer of any meeting of stockholders shall have the
right and authority to prescribe such rules, regulations and procedures and to
do all such acts as, in the judgment of such presiding officer, are appropriate
for the proper conduct of the meeting. Such rules, regulations or procedures,
whether adopted by the Board of Directors or prescribed by the presiding officer
of the meeting, may include, without limitation, the following:
(a) The establishment of an agenda or order of business for the meeting;
(b) Rules and procedures for maintaining order at the
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meeting and the safety of those present;
(c) Limitations on attendance at or participation in the meeting of
stockholders of record, their duly authorized and constituted proxies or such
other persons as the presiding officer of the meeting shall determine;
(d) Restrictions on entry to the meeting after the time fixed for the
commencement thereof; and
(e) Limitations on the time allotted to questions or comments by
participants. Unless and to the extent determined by the Board of Directors or
the presiding officer of the meeting, meetings of stockholders shall not be
required to be held in accordance with the rules of parliamentary procedure.
Section 15. ACTION BY CONSENT OF STOCKHOLDERS. Any action required or
permitted to be taken at any annual or special meeting of the stockholders may
be taken without a meeting, without prior notice and without a vote, if (a) a
consent or consents in writing, setting forth the action so taken, shall be
signed by each stockholder entitled to vote on the matter and a written waiver
of any right to dissent shall be signed by each stockholder entitled to notice
of the meeting but not entitled to vote at it and (b) such consent or consents
and written waiver shall be delivered (by hand or by certified or registered
mail, return receipt requested) to the Corporation by delivery to its registered
office in the State of Maryland, its principal place of business, or an agent of
the Corporation having custody of the book in which proceedings of minutes of
stockholders are recorded.
ARTICLE III
DIRECTORS
Section 1. GENERAL POWERS. The business and affairs of the Corporation
shall be managed under the direction of its Board of Directors.
Section 2. NUMBER, TENURE AND QUALIFICATIONS. At any regular meeting or
at any special meeting called for that purpose, a majority of the entire Board
of Directors may establish, increase or decrease the number of directors,
provided
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that the number thereof shall never be less than the minimum number required by
the Maryland General Corporation Law, nor more than 9, and that at least
one-third are Independent Directors (as defined in the Charter) and further
provided that the tenure of office of a director shall not be affected by any
decrease in the number of directors.
Section 3. ANNUAL AND REGULAR MEETINGS. An annual meeting of the Board of
Directors shall be held immediately after and at the same place as the annual
meeting of stockholders, no notice other than this Bylaw being necessary. The
Board of Directors may provide, by resolution, the time and place, either within
or without the State of Maryland, for the holding of regular meetings of the
Board of Directors without other notice than such resolution.
Section 4. SPECIAL MEETINGS. Special meetings of the Board of Directors
may be called by or at the request of the chairman of the board, president or by
a majority of the directors then in office. The person or persons authorized to
call special meetings of the Board of Directors may fix any place, either within
or without the State of Maryland, as the place for holding any special meeting
of the Board of Directors called by them.
Section 5. NOTICE. Notice of any special meeting of the Board of
Directors shall be delivered personally or by telephone, facsimile transmission,
United States mail or courier to each director at his business or residence
address. Notice by personal delivery, by telephone or a facsimile transmission
shall be given at least two days prior to the meeting. Notice by mail shall be
given at least five days prior to the meeting and shall be deemed to be given
when deposited in the United States mail properly addressed, with postage
thereon prepaid. Telephone notice shall be deemed to be given when the director
is personally given such notice in a telephone call to which he is a party.
Facsimile transmission notice shall be deemed to be given upon completion of the
transmission of the message to the number given to the Corporation by the
director and receipt of a completed answer-back indicating receipt. Neither the
business to be transacted at, nor the purpose of, any annual, regular or special
meeting of the Board of Directors need be stated in the notice, unless
specifically required by statute or these Bylaws.
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Section 6. QUORUM. A majority of the directors shall constitute a quorum
for transaction of business at any meeting of the Board of Directors, provided
that, if less than a majority of such directors are present at said meeting, a
majority of the directors present may adjourn the meeting from time to time
without further notice, and provided further that if, pursuant to the Charter or
these Bylaws, the vote of a majority of a particular group of directors is
required for action, a quorum must also include a majority of such group, but
only with respect to a vote on such action.
The directors present at a meeting which has been duly called
and convened may continue to transact business until adjournment,
notwithstanding the withdrawal of enough directors to leave less than a quorum.
Section 7. VOTING. The action of the majority of the directors present at
a meeting at which a quorum is present shall be the action of the Board of
Directors, unless the concurrence of a greater proportion is required for such
action by applicable statute.
Section 8. TELEPHONE MEETINGS. Directors may participate in a meeting by
means of a conference telephone or similar communications equipment if all
persons participating in the meeting can hear each other at the same time.
Participation in a meeting by these means shall constitute presence in person at
the meeting.
Section 9. INFORMAL ACTION BY DIRECTORS. Any action required or permitted
to be taken at any meeting of the Board of Directors may be taken without a
meeting, if a consent in writing to such action is signed by each director and
such written consent is filed with the minutes of proceedings of the Board of
Directors.
Section 10. VACANCIES. If for any reason any or all the directors cease to
be directors, such event shall not terminate the Corporation or affect these
Bylaws or the powers of the remaining directors hereunder (even if fewer than
three directors remain). Any vacancy on the Board of Directors for any cause
other than an increase in the number of directors shall be
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filled by a majority of the remaining directors, although such majority is less
than a quorum. If such vacancy must be filled with an Independent Director (as
defined in the Charter) to comply with the terms of Section 5.1 of the Charter,
and there are any remaining Independent Directors, a majority of such remaining
Independent Directors or the sole Independent Director, as the case may be,
shall nominate a replacement. If there is no remaining Independent Director,
such vacancies shall be filled by a majority of the remaining directors. Any
vacancy in the number of directors created by an increase in the number of
directors may be filled by a majority vote of the entire Board of Directors. Any
individual so elected as director shall hold office until the next annual
meeting of stockholders and until his successor is elected and qualifies.
Section 11. COMPENSATION. Directors other than Independent Directors shall
not receive any salary or other compensation for their services as directors. By
resolution of the Board of Directors, Independent Directors may receive fixed
sums, stock or other compensation per year and/or per meeting and/or per visit
to real property or other facilities owned or leased by the Corporation and for
any service or activity they performed or engaged in as directors. Directors may
be reimbursed for expenses of attendance, if any, at each annual, regular or
special meeting of the Board of Directors or of any committee thereof and for
their expenses, if any, in connection with each property visit and any other
service or activity they performed or engaged in as directors; but nothing
herein contained shall be construed to preclude any directors from serving the
Corporation in any other capacity and receiving compensation therefor.
Section 12. LOSS OF DEPOSITS. No director shall be liable for any loss
which may occur by reason of the failure of the bank, trust company, savings and
loan association, or other institution with whom moneys or stock have been
deposited.
Section 13. SURETY BONDS. Unless required by law, no director shall be
obligated to give any bond or surety or other security for the performance of
any of his duties.
Section 14. RELIANCE. Each director, officer, employee and agent of the
Corporation shall, in the performance of his duties with respect to the
Corporation, be fully justified and
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protected with regard to any act or failure to act in reliance in good faith
upon the books of account or other records of the Corporation, upon an opinion
of counsel or upon reports made to the Corporation by any of its officers or
employees or by the adviser, accountants, appraisers or other experts or
consultants selected by the Board of Directors or officers of the Corporation,
regardless of whether such counsel or expert may also be a director.
Section 15. CERTAIN RIGHTS OF DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS.
The directors shall have no responsibility to devote their full time to the
affairs of the Corporation. Any director or officer, employee or agent of the
Corporation, in his personal capacity or in a capacity as an affiliate,
employee, or agent of any other person, or otherwise, may have business
interests and engage in business activities similar to or in addition to or in
competition with those of or relating to the Corporation.
ARTICLE IV
COMMITTEES
Section 1. NUMBER, TENURE AND QUALIFICATIONS. The Board of Directors may
appoint from among its members an Executive Committee, an Audit Committee, a
Compensation Committee and other committees, composed of one or more directors,
to serve at the pleasure of the Board of Directors.
Section 2. POWERS. The Board of Directors may delegate to committees
appointed under Section 1 of this Article any of the powers of the Board of
Directors, except as prohibited by law.
Section 3. MEETINGS. Notice of committee meetings shall be given in the
same manner as notice for special meetings of the Board of Directors. A majority
of the members of the committee shall constitute a quorum for the transaction of
business at any meeting of the committee. The act of a majority of the committee
members present at a meeting shall be the act of such committee. The Board of
Directors may designate a chairman of any committee, and such chairman or any
two members of any committee may fix the time and place of its meeting unless
the
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Board of Directors shall otherwise provide. In the absence of any member of any
such committee, the members thereof present at any meeting, whether or not they
constitute a quorum, may appoint another director to act in the place of such
absent member. Each committee shall keep minutes of its proceedings.
Section 4. TELEPHONE MEETINGS. Members of a committee of the Board of
Directors may participate in a meeting by means of a conference telephone or
similar communications equipment if all persons participating in the meeting can
hear each other at the same time. Participation in a meeting by these means
shall constitute presence in person at the meeting.
Section 5. INFORMAL ACTION BY COMMITTEES. Any action required or
permitted to be taken at any meeting of a committee of the Board of Directors
may be taken without a meeting, if a consent in writing to such action is signed
by each member of the committee and such written consent is filed with the
minutes of proceedings of such committee.
Section 6. VACANCIES. Subject to the provisions hereof, the Board of
Directors shall have the power at any time to change the membership of any
committee, to fill all vacancies, to designate alternate members to replace any
absent or disqualified member or to dissolve any such committee.
ARTICLE V
OFFICERS
Section 1. GENERAL PROVISIONS. The officers of the Corporation shall
include a president, a secretary and a treasurer and may include a chairman of
the board, a vice chairman of the board, one or more vice presidents, a chief
executive officer, a chief operating officer, a chief financial officer, one or
more assistant secretaries and one or more assistant treasurers. In addition,
the Board of Directors may from time to time appoint such other officers with
such powers and duties as they shall deem necessary or desirable. The officers
of the Corporation shall be elected annually by the Board of Directors at the
first meeting of the Board of Directors held after each annual meeting of
stockholders, except that the chief executive officer may appoint one or more
vice presidents,
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assistant secretaries and assistant treasurers. If the election of officers
shall not be held at such meeting, such election shall be held as soon
thereafter as may be convenient. Each officer shall hold office until his
successor is elected and qualifies or until his death, resignation or removal in
the manner hereinafter provided. Any two or more offices except president and
vice president may be held by the same person. In its discretion, the Board of
Directors may leave unfilled any office except that of president, treasurer and
secretary. Election of an officer or agent shall not of itself create contract
rights between the Corporation and such officer or agent.
Section 2. REMOVAL AND RESIGNATION. Any officer or agent of the
Corporation may be removed by the Board of Directors if in its judgment the best
interests of the Corporation would be served thereby, but such removal shall be
without prejudice to the contract rights, if any, of the person so removed. Any
officer of the Corporation may resign at any time by giving written notice of
his resignation to the Board of Directors, the chairman of the board, the
president or the secretary. Any resignation shall take effect at any time
subsequent to the time specified therein or, if the time when it shall become
effective is not specified therein, immediately upon its receipt. The acceptance
of a resignation shall not be necessary to make it effective unless otherwise
stated in the resignation. Such resignation shall be without prejudice to the
contract rights, if any, of the Corporation.
Section 3. VACANCIES. A vacancy in any office may be filled by the Board
of Directors for the balance of the term.
Section 4. CHIEF EXECUTIVE OFFICER. The Board of Directors may designate
a chief executive officer. In the absence of such designation, the chairman of
the board shall be the chief executive officer of the Corporation. The chief
executive officer shall have general responsibility for implementation of the
policies of the Corporation, as determined by the Board of Directors, and for
the management of the business and affairs of the Corporation.
Section 5. CHIEF OPERATING OFFICER. The Board of Directors may designate
a chief operating officer. The chief
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operating officer shall have the responsibilities and duties as set forth by the
Board of Directors or the chief executive officer.
Section 6. CHIEF FINANCIAL OFFICER. The Board of Directors may designate
a chief financial officer. The chief financial officer shall have the
responsibilities and duties as set forth by the Board of Directors or the chief
executive officer.
Section 7. CHAIRMAN OF THE BOARD. The Board of Directors may designate a
chairman of the board. The chairman of the board shall preside over the meetings
of the Board of Directors and of the stockholders at which he shall be present.
The chairman of the board shall perform such other duties as may be assigned to
him or them by the Board of Directors.
Section 8. PRESIDENT. The president or chief executive officer, as the
case may be, shall in general supervise and control all of the business and
affairs of the Corporation. In the absence of a designation of a chief executive
officer by the Board of Directors, the president shall be the chief executive
officer. He may execute any deed, mortgage, bond, contract or other instrument,
except in cases where the execution thereof shall be expressly delegated by the
Board of Directors or by these Bylaws to some other officer or agent of the
Corporation or shall be required by law to be otherwise executed; and in general
shall perform all duties incident to the office of president and such other
duties as may be prescribed by the Board of Directors from time to time.
Section 9. VICE PRESIDENTS. In the absence of the president or in the
event of a vacancy in such office, the vice president (or in the event there be
more than one vice president, the vice presidents in the order designated at the
time of their election or, in the absence of any designation, then in the order
of their election) shall perform the duties of the president and when so acting
shall have all the powers of and be subject to all the restrictions upon the
president; and shall perform such other duties as from time to time may be
assigned to him by the president or by the Board of Directors. The Board of
Directors may designate one or more vice presidents as executive vice president
or as vice president for particular areas of
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responsibility.
Section 10. SECRETARY. The secretary shall (a) keep the minutes of the
proceedings of the stockholders, the Board of Directors and committees of the
Board of Directors in one or more books provided for that purpose; (b) see that
all notices are duly given in accordance with the provisions of these Bylaws or
as required by law; (c) be custodian of the corporate records and of the seal of
the Corporation; (d) keep a register of the post office address of each
stockholder which shall be furnished to the secretary by such stockholder; (e)
have general charge of the share transfer books of the Corporation; and (f) in
general perform such other duties as from time to time may be assigned to him by
the chief executive officer, the president or by the Board of Directors.
Section 11. TREASURER. The treasurer shall have the custody of the funds
and securities of the Corporation and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Corporation and shall
deposit all moneys and other valuable effects in the name and to the credit of
the Corporation in such depositories as may be designated by the Board of
Directors. In the absence of a designation of a chief financial officer by the
Board of Directors, the treasurer shall be the chief financial officer of the
Corporation.
The treasurer shall disburse the funds of the Corporation as
may be ordered by the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the president and Board of Directors, at the
regular meetings of the Board of Directors or whenever it may so require, an
account of all his transactions as treasurer and of the financial condition of
the Corporation.
If required by the Board of Directors, the treasurer shall
give the Corporation a bond in such sum and with such surety or sureties as
shall be satisfactory to the Board of Directors for the faithful performance of
the duties of his office and for the restoration to the Corporation, in case of
his death, resignation, retirement or removal from office, of all books, papers,
vouchers, moneys and other property of whatever kind in his possession or under
his control belonging to the Corporation.
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Section 12. ASSISTANT SECRETARIES AND ASSISTANT TREASURERS. The assistant
secretaries and assistant treasurers, in general, shall perform such duties as
shall be assigned to them by the secretary or treasurer, respectively, or by the
president or the Board of Directors. The assistant treasurers shall, if required
by the Board of Directors, give bonds for the faithful performance of their
duties in such sums and with such surety or sureties as shall be satisfactory to
the Board of Directors.
Section 13. SALARIES. The salaries and other compensation of the officers
shall be fixed from time to time by the Board of Directors and no officer shall
be prevented from receiving such salary or other compensation by reason of the
fact that he is also a director. Notwithstanding the foregoing, so long as the
Corporation has engaged an Advisor to manage the affairs of the Corporation as
set forth in Section 5.9 of the Charter, no salaries shall be paid by the
Corporation to any officer.
ARTICLE VI
CONTRACTS, LOANS, CHECKS AND DEPOSITS
Section 1. CONTRACTS. The Board of Directors may authorize any officer or
agent to enter into any contract or to execute and deliver any instrument in the
name of and on behalf of the Corporation and such authority may be general or
confined to specific instances. Any agreement, deed, mortgage, lease or other
document executed by one or more of the directors or by an authorized person
shall be valid and binding upon the Board of Directors and upon the Corporation
when authorized or ratified by action of the Board of Directors.
Section 2. CHECKS AND DRAFTS. All checks, drafts or other orders for the
payment of money, notes or other evidences of indebtedness issued in the name of
the Corporation shall be signed by such officer or agent of the Corporation in
such manner as shall from time to time be determined by the Board of Directors.
Section 3. DEPOSITS. All funds of the Corporation not
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otherwise employed shall be deposited from time to time to the credit of the
Corporation in such banks, trust companies or other depositories as the Board of
Directors may designate.
ARTICLE VII
STOCK
Section 1. CERTIFICATES. Each stockholder shall be entitled to a
certificate or certificates which shall represent and certify the number of
shares of each class of stock held by him in the Corporation. Each certificate
shall be signed by the chief executive officer, the president or a vice
president and countersigned by the secretary or an assistant secretary or the
treasurer or an assistant treasurer and may be sealed with the seal, if any, of
the Corporation. The signatures of such officers may be either manual or
facsimile. Certificates shall not be valid until manually countersigned and
registered by the Corporation's transfer agent and/or registrar. Certificates
shall be consecutively numbered; and if the Corporation shall, from time to
time, issue several classes of stock, each class may have its own number series.
A certificate is valid and may be issued whether or not an officer who signed it
is still an officer when it is issued. Each certificate representing shares
which are restricted as to their transferability or voting powers, which are
preferred or limited as to their dividends or as to their allocable portion of
the assets upon liquidation or which are redeemable at the option of the
Corporation, shall have a statement of such restriction, limitation, preference
or redemption provision, or a summary thereof, plainly stated on the
certificate. If the Corporation has authority to issue stock of more than one
class, the certificate shall contain on the face or back a full statement or
summary of the designations and any preferences, conversion and other rights,
voting powers, restrictions, limitations as to dividends and other
distributions, qualifications and terms and conditions of redemption of each
class of stock and, if the Corporation is authorized to issue any preferred or
special class in series, the differences in the relative rights and preferences
between the shares of each series to the extent they have been set and the
authority of the Board of Directors to set the relative rights and preferences
of subsequent series. In lieu of such statement or summary, the certificate may
state that the Corporation will
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furnish a full statement of such information to any stockholder upon written
request and without charge. If any class of stock is restricted by the
Corporation as to transferability, the certificate shall contain a full
statement of the restriction or state that the Corporation will furnish
information about the restrictions to the stockholder on request and without
charge.
Section 2. TRANSFERS. Upon surrender to the Corporation or the transfer
agent of the Corporation of a stock certificate duly endorsed or accompanied by
proper evidence of succession, assignment or authority to transfer, the
Corporation shall issue a new certificate to the person entitled thereto, cancel
the old certificate and record the transaction upon its books.
The Corporation shall be entitled to treat the holder of
record of any share of stock as the holder in fact thereof and, accordingly,
shall not be bound to recognize any equitable or other claim to or interest in
such share or on the part of any other person, whether or not it shall have
express or other notice thereof, except as otherwise provided by the laws of the
State of Maryland.
Notwithstanding the foregoing, transfers of shares of any
class of stock will be subject in all respects to the Charter and all of the
terms and conditions contained therein.
Section 3. REPLACEMENT CERTIFICATE. Any officer designated by the Board
of Directors may direct a new certificate to be issued in place of any
certificate previously issued by the Corporation alleged to have been lost,
stolen or destroyed upon the making of an affidavit of that fact by the person
claiming the certificate to be lost, stolen or destroyed. When authorizing the
issuance of a new certificate, an officer designated by the Board of Directors
may, in his discretion and as a condition precedent to the issuance thereof,
require the owner of such lost, stolen or destroyed certificate or the owner's
legal representative to advertise the same in such manner as he shall require
and/or to give bond, with sufficient surety, to the Corporation to indemnify it
against any loss or claim which may arise as a result of the issuance of a new
certificate.
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Section 4. CLOSING OF TRANSFER BOOKS OR FIXING OF RECORD DATE. The Board
of Directors may set, in advance, a record date for the purpose of determining
stockholders entitled to notice of or to vote at any meeting of stockholders or
determining stockholders entitled to receive payment of any dividend or the
allotment of any other rights, or in order to make a determination of
stockholders for any other proper purpose. Such date, in any case, shall not be
prior to the close of business on the day the record date is fixed and shall be
not more than 90 days and, in the case of a meeting of stockholders, not less
than ten days, before the date on which the meeting or particular action
requiring such determination of stockholders of record is to be held or taken.
In lieu of fixing a record date, the Board of Directors may
provide that the stock transfer books shall be closed for a stated period but
not longer than 20 days. If the stock transfer books are closed for the purpose
of determining stockholders entitled to notice of or to vote at a meeting of
stockholders, such books shall be closed for at least ten days before the date
of such meeting.
If no record date is fixed and the stock transfer books are
not closed for the determination of stockholders, (a) the record date for the
determination of stockholders entitled to notice of or to vote at a meeting of
stockholders shall be at the close of business on the day on which the notice of
meeting is mailed or the 30th day before the meeting, whichever is the closer
date to the meeting; and (b) the record date for the determination of
stockholders entitled to receive payment of a dividend or an allotment of any
other rights shall be the close of business on the day on which the resolution
of the directors, declaring the dividend or allotment of rights, is adopted.
When a determination of stockholders entitled to vote at any
meeting of stockholders has been made as provided in this section, such
determination shall apply to any adjournment thereof, except when (i) the
determination has been made through the closing of the transfer books and the
stated period of closing has expired or (ii) the meeting is adjourned to a date
more than 120 days after the record date fixed for the
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original meeting, in either of which case a new record date shall be determined
as set forth herein.
Section 5. STOCK LEDGER. The Corporation shall maintain at its principal
office or at the office of its counsel, accountants or transfer agent, an
original or duplicate share ledger containing the name and address of each
stockholder and the number of shares of each class held by such stockholder.
Section 6. FRACTIONAL STOCK; ISSUANCE OF UNITS. The Board of Directors
may issue fractional stock or provide for the issuance of scrip, all on such
terms and under such conditions as they may determine. Notwithstanding any other
provision of the Charter or these Bylaws, the Board of Directors may issue units
consisting of different securities of the Corporation. Any security issued in a
unit shall have the same characteristics as any identical securities issued by
the Corporation, except that the Board of Directors may provide that for a
specified period securities of the Corporation issued in such unit may be
transferred on the books of the Corporation only in such unit.
ARTICLE VIII
ACCOUNTING YEAR
The Board of Directors shall have the power, from time to time, to fix the
fiscal year of the Corporation by a duly adopted resolution.
ARTICLE IX
DISTRIBUTIONS
Section 1. AUTHORIZATION. Dividends and other distributions upon the
stock of the Corporation may be authorized and declared by the Board of
Directors, subject to the provisions of law and the Charter. Dividends and other
distributions may be paid in cash, property or stock of the Corporation, subject
to the provisions of law and the Charter.
Section 2. CONTINGENCIES. Before payment of any dividends or other
distributions, there may be set aside out of any assets of the Corporation
available for dividends or other
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distributions such sum or sums as the Board of Directors may from time to time,
in its absolute discretion, think proper as a reserve fund for contingencies,
for equalizing dividends or other distributions, for repairing or maintaining
any property of the Corporation or for such other purpose as the Board of
Directors shall determine to be in the best interest of the Corporation, and the
Board of Directors may, in its sole discretion, modify or abolish any such
reserve in the manner in which it was created.
ARTICLE X
INVESTMENT POLICY
Subject to the provisions of the Charter, the Board of Directors may from
time to time adopt, amend, revise or terminate any policy or policies with
respect to investments by the Corporation as it shall deem appropriate in its
sole discretion. The Corporation shall not invest in, or purchase, properties
owned by a Related Advisor or its Affiliates; provided, however, that the
foregoing limitation may be amended or eliminated with the approval of a
majority of the Independent Directors. Notwithstanding the foregoing, a Related
Advisor or its Affiliates may purchase or otherwise acquire properties or other
investments in its own name or in the name of a nominee, a trust or a corporate
"nominee" or otherwise and hold title thereto for the purpose of facilitating
the acquisition of such properties or other investments or any other purpose
related to the business of the Corporation; provided that in the event of the
acquisition of such properties or other investments by the Corporation from the
Related Advisor or its Affiliates, (i) the purchase price paid by the
Corporation may not exceed the cost of the properties or other investment to the
seller thereof plus Acquisition Fees paid by the Corporation and (ii) no
compensation or other benefit may accrue to the Related Advisor or its
Affiliates except as otherwise permitted herein and except that they may be
reimbursed for the costs incurred to carry the properties or other investment.
ARTICLE XI
SEAL
Section 1. SEAL. The Board of Directors may authorize
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the adoption of a seal by the Corporation. The seal shall contain the name of
the Corporation and the year of its incorporation and the words "Incorporated
Maryland." The Board of Directors may authorize one or more duplicate seals and
provide for the custody thereof.
Section 2. AFFIXING SEAL. Whenever the Corporation is permitted or
required to affix its seal to a document, it shall be sufficient to meet the
requirements of any law, rule or regulation relating to a seal to place the word
"(SEAL)" adjacent to the signature of the person authorized to execute the
document on behalf of the Corporation.
ARTICLE XII
INDEMNIFICATION AND ADVANCE OF EXPENSES
To the maximum extent permitted by Maryland law in effect from time to
time, the Corporation shall indemnify and, without requiring a preliminary
determination of the ultimate entitlement to indemnification, shall pay or
reimburse reasonable expenses in advance of final disposition of a proceeding to
(a) any individual who is a present or former director or officer of the
Corporation and who is made a party to the proceeding by reason of his service
in that capacity or (b) any individual who, while a director of the Corporation
and at the request of the Corporation, serves or has served another corporation,
partnership, joint venture, trust, employee benefit plan or any other enterprise
as a director, officer, partner or trustee of such corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise and who is made
a party to the proceeding by reason of his service in that capacity. The
Corporation may, with the approval of its Board of Directors, provide such
indemnification and advance for expenses to a person who served a predecessor of
the Corporation in any of the capacities described in (a) or (b) above and to
any employee or agent of the Corporation or a predecessor of the Corporation.
Neither the amendment nor repeal of this Article, nor the adoption or
amendment of any other provision of the Bylaws or Charter inconsistent with this
Article, shall apply to or affect in any respect the applicability of the
preceding paragraph with respect to any act or failure to act which occurred
prior to such amendment, repeal or adoption.
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ARTICLE XIII
WAIVER OF NOTICE
Whenever any notice is required to be given pursuant to the Charter or
these Bylaws or pursuant to applicable law, a waiver thereof in writing, signed
by the person or persons entitled to such notice, whether before or after the
time stated therein, shall be deemed equivalent to the giving of such notice.
Neither the business to be transacted at nor the purpose of any meeting need be
set forth in the waiver of notice, unless specifically required by statute. The
attendance of any person at any meeting shall constitute a waiver of notice of
such meeting, except where such person attends a meeting for the express purpose
of objecting to the transaction of any business on the ground that the meeting
is not lawfully called or convened.
ARTICLE XIV
AMENDMENT OF BYLAWS
Except as otherwise provided in Article X, the Board of Directors shall
have the exclusive power to adopt, alter or repeal any provision of these Bylaws
and to make new Bylaws.
ARTICLE XV
DEFINITIONS
All terms not otherwise defined in these Bylaws shall have the meanings
ascribed to them in the charter of the Corporation (the "Charter")
Exhibit 10.1
ADVISORY AGREEMENT AMONG
AEGIS REALTY, INC.,
AEGIS REALTY OPERATING PARTNERSHIP, LP
and
RELATED AEGIS LP
This ADVISORY AGREEMENT (this "Agreement") dated as of October 1,
1997 is between AEGIS REALTY, INC., a Maryland corporation (the "Company"),
AEGIS REALTY OPERATING PARTNERSHIP, LP, a Delaware limited partnership (the
"OP"), and RELATED AEGIS LP, a Delaware limited partnership (the "Advisor"). The
Company and the OP are sometimes referred to herein collectively as the
"Advisees" and each individually as an "Advisee."
W I T N E S S E T H:
WHEREAS, the Company is a Maryland corporation created in accordance
with applicable provisions of the Maryland General Corporation Law, as amended
from time to time (the "Maryland GCL"); and
WHEREAS, the purposes of the Company are, as determined from time to
time by the board of directors (the "Board of Directors") of the Company, to
engage in any lawful business or activity for which a corporation may be created
under the Maryland GCL; and
WHEREAS, the Company is the general partner of the OP; and
WHEREAS, the Company desires, on its own behalf and as general
partner of the OP, to avail itself of the experience, sources of information,
advice and assistance of the Advisor and to have the Advisor undertake the
duties and responsibilities hereinafter set forth, on behalf of and subject to
the supervision of the Board of Directors, all as provided herein; and
WHEREAS, all capitalized terms used herein, and not otherwise
defined in Article 10, shall have the meanings ascribed to them in the Company's
Articles of Amendment and Restatement (the "Charter"); and
<PAGE>
WHEREAS, the Advisor is willing to render such services, subject to
the supervision of the Board of Directors, on the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, IT IS AGREED as follows:
1 Duties of Advisor. The Company, on its own behalf, and as
general partner of the OP, hereby retains the
<PAGE>
Advisor as the advisor of the Company and the OP to perform the services
hereinafter set forth, and the Advisor hereby accepts such appointment, subject
to the terms and conditions hereinafter set forth. In the performance of this
undertaking, subject to the supervision of the Board of Directors and consistent
with the provisions of the Company's Charter and the Amended and Restated
Agreement of Limited Partnership of the OP (the "Partnership Agreement"), the
Advisor shall:
a0 obtain for the Advisees, furnish and/or supervise the services
necessary to perform any ministerial functions in connection with the management
of the day-to-day operations of the Advisees;
b0 seek out, present and recommend to the Advisees, whether
through its own efforts or those of third parties retained by it, suitable
investment opportunities in real properties, mortgages and mortgage securities,
which are consistent with the Advisees' respective investment objectives and
policies as adopted by the Board of Directors from time to time, and negotiate
on behalf of the Advisees with respect to potential investments or the
disposition thereof;
c0 exercise absolute discretion, subject to the Board of
Directors' review, in decisions to originate, acquire, retain or sell real
properties, mortgages and mortgage securities, including negotiations for the
prepayment or restructuring of the Advisees' respective mortgage and mortgage
securities investments;
d0 recommend investment opportunities consistent with the
Advisees' respective investment objectives and policies and negotiate on behalf
of the Advisees with respect to potential investments or the disposition
thereof;
e0 when appropriate, cause an Affiliate to serve as the holder or
mortgagee of record for properties and mortgage investments, respectively, of
the Advisees if such Affiliate is qualified to do so and in that capacity to
hold escrows on behalf of mortgagors in connection with the servicing of
mortgages, which it may deposit with various banks;
f0 obtain for the Advisees such other services as may be required
in acquiring or disposing of investments, disbursing and collecting the funds of
the Advisees, paying the debts and fulfilling the obligations of the Advisees,
and handling,
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prosecuting and settling any claims of the Advisees, including foreclosing and
otherwise enforcing mortgages and other liens securing investments;
g0 obtain for the Advisees such services as may be required for
property management, leasing, mortgage brokerage and servicing, and other
activities relating to the investment portfolio of the Advisees;
h0 supervise the servicing of the Advisees' loan portfolios;
i0 prepare, or cause to be prepared, statements and other
relevant information for distribution to stockholders or partners, as the case
may be, including annual and quarterly reports and any filings required by
regulatory authorities;
j0 monitor operations and expenses of the Advisees;
k0 from time to time, or as requested by the Board of Directors,
make reports to the Advisees as to its performance of the foregoing services;
l0 perform any other powers of the Board of Directors or the
Company (as general partner of the OP) which (with respect to the Company) are
set forth in the Charter and the Partnership Agreement, as applicable, which may
be delegated to it by the Board of Directors from time to time; and
m0 do all things necessary to assure its ability to render the
services contemplated herein.
2 Fiduciary Relationship. The Advisor, as a result of its
relationship with the Advisees pursuant to this Agreement, stands in a fiduciary
relationship with the Stockholders of the Company and the partners of the OP.
3 No Partnership or Joint Venture. The Advisees and the Advisor
are not partners or joint venturers with each other and nothing herein shall be
construed to make them partners or joint venturers or impose any liability as
such on either of them.
4 Records. At all times, the Advisor shall keep books of account
and records relating to services performed hereunder, which books of account and
records shall be accessible
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for inspection by the Advisees at any time during the ordinary business hours of
the Advisor.
5 REIT Qualification; Other Limitations on Advisor Actions.
Anything else in this Agreement to the contrary notwithstanding, the Advisor
shall refrain from any action which, in its sole judgment made in good faith,
or, in the judgment of the Board of Directors provided that the Board of
Directors give the Advisor written notice to such effect, would (a) adversely
affect the status of the Company as a real estate investment trust pursuant to
Section 856 of the Code; (b) cause the Advisees to be classified as an
"investment company" for purposes of the Investment Company Act of 1940, as
amended; (c) cause the OP to be classified other than as a partnership for
purposes of the Code; (d) violate any law, rule, regulation or statement of
policy of any governmental body or agency having jurisdiction over the Advisees
or over their securities, or (e) be prohibited by the Company's Charter or the
Partnership Agreement of the OP.
6 Bank Accounts. The Advisor may establish and maintain one or
more bank accounts in the name of the Advisees or in its own name as agent for
the Advisees and may collect and deposit in and disburse from any such account,
any money on behalf of the Advisees, under such terms and conditions as the
Board of Directors may approve, provided that no funds in such account shall be
commingled with funds of the Advisor. From time to time and upon appropriate
request, the Advisor shall render appropriate accounting of such collections and
payments to the Board of Directors and the auditors of the Advisees.
7 Bond. If required by the Board of Directors, the Advisor will
maintain a fidelity bond with a responsible surety company in such amounts as
may be required by the Board of Directors, covering all members or partners
thereof together with employees and agents of the Advisor handling funds of the
Advisees and investment documents or records pertaining to investments of the
Advisees. Such bonds shall inure to the benefit of the Advisees in respect of
losses from acts of such partners, employees and agents through theft,
embezzlement, fraud, negligence, error or omission or otherwise. The premiums on
such bonds shall be paid by the Advisees.
8 Information Furnished Advisor. The Board of Directors shall,
at all times, keep the Advisor fully informed with regard to the investment
policies of the Advisees, including any specific types of real properties,
mortgage investments and
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mortgage securities desired, and any criteria or conditions established by the
Board of Directors as to whether the Advisees will make a particular investment,
the capitalization policy of the Advisees (including the policy with regard to
the incurrence of indebtedness by the Advisees) and their intentions as to the
future operations of the Advisees. In particular, the Board of Directors shall
notify the Advisor promptly of their intention to either sell or otherwise
dispose of any of the Advisees' investments, to make any new investment, to
incur any indebtedness or to issue any additional shares of Common Stock or
Preferred Stock of the Company or any partnership interests in the OP.
9 Consultation and Advice. In addition to the services described
above, the Advisor shall consult with the Board of Directors and shall, at the
request of the Board of Directors of the Company, furnish advice and
recommendations with respect to other aspects of the business and affairs of the
Advisees.
10 Definitions. As used herein, the following terms shall have
the meanings set forth below:
(a) "Acquisition Expenses" shall mean expenses related to the
Advisee's selection of, and investment in, real properties and mortgage
investments and other investments, whether or not acquired or made, including
but not limited to advertising costs, brokerage fees, environmental, engineering
and other due diligence expenses, legal fees and expenses, travel and
communications expenses, cost of appraisals, accounting fees and expenses, title
insurance and miscellaneous other expenses.
(b) "Affiliated Programs" shall mean any publicly offered entity
which is sponsored by an Affiliate of Related.
(c) "Charter" shall mean the Articles of Amendment and Restatement
of the Company dated as of October 1, 1997, as amended and/or restated from time
to time.
(d) "Initial Term" shall have the meaning set forth in Article 18.
(e) "Partnership Agreement" shall mean the Amended and Restated
Agreement of Limited Partnership of the OP dated as of October 1, 1997, as
amended and restated from time to time.
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(f) "Related" shall mean Related Capital Company, a New York
general partnership.
11 Fees and Other Compensation of the Advisor.
a0 The Advisor or its designees shall be entitled to receive from
the respective Advisees (except those payable by others as noted below) the
following fees and other compensation, which shall be paid to the Advisor by the
OP on its own behalf or on behalf of the Company:
(i) Acquisition Fee. The Advisor or its Affiliates shall
receive an Acquisition Fee of 3.75% of the acquisition price of each property
acquired by an Advisee, payable by the OP on behalf of the applicable Advisee
upon consummation of the investment.
(ii) Mortgage Placement Fees. The Advisor or its Affiliates
may receive from borrowers, but not from the Advisees, mortgage placement fees
equal to 0.75% of the principal amount of each mortgage loan acquired or
originated by such Advisee.
(iii) Mortgage Selection Fees. The Advisor or its Affiliates
shall receive mortgage selection fees equal to 3.00% of the principal amount of
each mortgage funded by an Advisee payable by the OP on behalf of the applicable
Advisee upon consummation of the investment.
(iv) Asset Management Fee/Special Distribution. The Advisor
or its Affiliates shall receive an asset management fee or Special Distribution,
as applicable, equal to 0.375% of the Total Invested Assets of the Company, or
the OP or its subsidiaries as applicable, payable quarterly, in arrears, at the
end of each calendar quarter. The Special Distribution shall be payable pursuant
to the applicable provisions of the Partnership Agreement.
(v) Liquidation Fees. If the Company or the OP is dissolved,
the Advisor shall receive a liquidation fee equal to 1.50% of the gross sales
price of the assets sold in connection with the liquidation of such Advisee's
assets supervised by the Advisor.
(vi) Property Management Fees. In the event any of the
Advisees determines to retain the Advisor and its Affiliates to provide property
management services for its
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properties, the Advisor or its Affiliates shall provide property management
services at rates and on terms no less favorable to the Advisees than those
customary for similar services, if they have such knowledge of and experience in
managing properties in the area. With respect to residential properties, such
fee (including all rent-up, leasing, and re-leasing fees and bonuses paid to any
Person) shall not exceed 5% of the gross revenues from such properties and with
respect to all other properties, such fee shall not exceed 6% of the gross
revenues where the Advisor or its Affiliates provide leasing, re-leasing and
leasing related services, and 3% of gross revenues where the Advisor or its
Affiliates do not provide such services. Notwithstanding the foregoing, the
Advisor may be entitled to receive higher fees in the event the Advisor can
demonstrate to the satisfaction of the Board of Directors through empirical data
that a higher competitive fee is justified for the services rendered and the
type of property. Where the Advisor or its Affiliates provide property
management services, property management fees payable to unaffiliated parties
will be paid out of the fees paid to the Advisor or its Affiliate. Property
management fees shall be payable monthly.
(vii) Insurance Brokerage Fees. The Advisor or its Affiliates
may receive an insurance brokerage fee for providing insurance brokerage
services with respect to Advisee properties provided such insurance brokerage
fee will be no greater than the lowest quote obtained from two unaffiliated
insurance agencies and the coverage and terms likewise will be comparable.
(viii) Money Market Fees. If funds of the Advisees are
temporarily invested in money market funds sponsored by the Advisor or its
Affiliates, they shall be entitled to receive the fees customarily charged by
such money market funds to unaffiliated third parties making similar investments
therein.
(ix) Services to Third Parties. Nothing in this Agreement
shall limit the Advisor or its Affiliates' right to provide services to
borrowers or owners of properties underlying mortgages or loans made by the
Advisees provided the fees charged for such services is not in excess of the
competitive rate in the market. Without limiting the foregoing, Affiliates of
the Advisor may charge mortgage insurance premiums and mortgage servicing fees
to the borrowers under mortgage loans (and not the Advisees); with respect to
the Advisees' existing mortgage portfolios, unless otherwise permitted by FHA or
HUD, such
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premiums and fees shall be no more than 0.5% and 0.07% of the principal amount
of the mortgage loans.
b0 Stockholder/Partner Interests Distribution. The Advisor shall
be entitled to receive distributions from the Advisees in respect of any shares
of Common Stock of the Company or partner interests of the OP which it holds.
12 Statements. Prior to the payment of any fees hereunder, the
Advisor shall furnish to the Advisees a statement showing the computation of the
fees, if any, payable under Section 11 hereof.
13 Incentive Stock Options. Subject to the provisions of the
Charter, the Advisor and its partners, officers and employees may receive
options to acquire shares of Common Stock pursuant to the Company's Incentive
Stock Option Plan only if the Company's distributions in any year exceed $0.9869
per share of Common Stock, and the Compensation Committee of the Board of
Directors determines to grant such options.
14 Expenses of the Company. (a) The OP, on its own behalf and on
behalf of the Company, shall pay all of the Advisees' expenses. Without limiting
the foregoing, it is specifically agreed that the following expenses of an
Advisee shall be paid by the OP on its own behalf or on behalf of the Company
and shall not be borne by the Advisor unless such expense is a fee or other
service for which the Advisor is otherwise receiving a fee from the Advisees:
(i) the cost of money borrowed by the Advisee;
(ii) all taxes applicable to the Advisee including, without
limitation, taxes on income and on assessments of real property;
(iii) fees and expenses paid to independent contractors,
unaffiliated mortgage servicers, consultants, managers and other agents employed
by or on behalf of the Advisee;
(iv) Acquisition Expenses and expenses directly connected
with the ownership and disposition of real property or other investments, and
with the purchase or origination of real property and mortgage investments
(including the costs of foreclosure, insurance premiums, legal services,
brokerage and
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sales commissions, maintenance, repair and improvement of property);
(v) expenses of maintaining and managing real estate equity
interests, processing and servicing mortgage and other loans and managing the
Advisee's other investments;
(vi) insurance coverage in connection with the business of
the Advisee (including officers', directors' and partners' liability insurance);
(vii) the expenses of dissolving and liquidating the Advisee
or revising, amending or modifying its organizational documents;
(viii) expenses connected with payments of dividends or
interest or distribution in cash or any other form made or caused to be made by
the Board of Directors to the stockholders or partners, as the case may be, of
such Advisee.
(ix) all expenses connected with communications to
stockholders or partners, as the case may be, and other bookkeeping and clerical
work necessary in maintaining relations with the stockholders or partners, as
the case may be, including the cost of printing and mailing certificates for
securities, proxy solicitation materials and reports to holders of the Advisee's
securities;
(x) the cost of any accounting, statistical or bookkeeping
equipment necessary for the maintenance of the books and records of the Advisee;
(xi) transfer agent's and registrar's fees and charges; and
(xii) other legal, accounting and auditing fees and expenses
as well as any costs incurred in connection with any litigation in which the
Advisee is involved and in the examination, investigation or other proceedings
conducted by any regulatory agency with respect to the Advisee.
(b) Subject to Article 15, the OP shall reimburse the Advisor and
its Affiliates on its own behalf or on behalf of the Company for (i) the actual
costs to the Advisor or its Affiliates of goods, materials and services used for
and by such Advisee obtained from unaffiliated parties; (ii) administrative
services
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necessary to the operation of such Advisee; (iii) the costs of personnel
employed by the Advisor and directly involved in the organization and business
of such Advisee (including persons who may be employees or officers of the
Advisor and its Affiliates) and for legal, accounting, transfer agent,
reinvestment and redemption plan administration, data processing, duplicating
and investor communications services performed by employees or officers of the
Advisor and its Affiliates which could be performed directly for the Advisee by
independent parties and (iv) any travel expenses incurred in connection with the
services provided hereunder and for advertising expenses incurred by the Advisor
in seeking any investments or seeking the disposition of any investments held by
such Advisee. The amounts charged to an Advisee for services performed shall not
exceed the lesser of (a) the actual cost of such services, or (b) the amount
which such Advisee would be required to pay to independent parties for
comparable services.
15 Limitations on Reimbursements. The sum of the amounts
reimbursed to the Advisor by the OP pursuant to Section 14(b) above shall not
exceed $200,000 per annum, subject to (i) annual increases following the first
anniversary of the date hereof and each year thereafter based upon increases in
the Consumer Price Index for All Urban Consumers, N.Y., N.Y. -Northeastern N.J.
(Base Year 1982-1984 = 100) specified for "All Items" as issued by the Bureau of
Labor Statistics, U.S. Department of Labor (or comparable substitute index) and
(ii) proportionately as the Total Invested Assets of the Company and the assets
of the OP increase from time to time.
16 Other Activities of Advisor. (a) Nothing in this Agreement
shall prevent the Advisor or any of its Affiliates from engaging in other
business activities related to real estate, mortgage investments or other
investments whether similar or dissimilar to those made by any of the Advisees
or from acting as advisor to any other person or entity having investment
policies whether similar or dissimilar to those of the Company or the OP
(including other REITs or partnerships). However, before the Advisor, the
officers and directors of the Advisor and all persons controlled by the Advisor
and its officers and directors may take advantage of an opportunity for their
own account or present or recommend it to others (except as set forth in Section
16(b)), they are obligated to present an investment opportunity to an Advisee if
(i) such opportunity is compatible with such Advisee's investment objectives and
policies, (ii) such opportunity is of a character which could be taken by such
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Advisee, and (iii) the Advisee has the financial resources to take advantage of
such opportunity.
(b) To the extent that an Affiliated Program with similar
investment objectives to those of an Advisee have funds available for investment
at the same time as the Advisee, and/or an investment is potentially suitable
for more than one such entity, the Advisor and its Affiliates shall review the
investment portfolio of each such entity and shall make the decision as to which
such entity, will acquire the investment on the basis of such factors as it
deems reasonable in light of each entity's then current situation, including,
without limitation, the effect of the acquisition on each such entity's
portfolio and objectives, the amount of funds available and the then length of
time such funds have been available for investment, and the cash requirements of
each such entity. If funds should be available to two or more Affiliated
Programs to purchase a given investment and the other factors enumerated above
have been evaluated and deemed equally applicable to each entity, then the
Advisor or its Affiliates will acquire such investment for the Affiliated
Programs on a basis of rotation with the initial order of priority determined by
the dates of formation of the entities.
17 Term; Termination of Agreement. This Agreement shall continue
in force and shall not be terminable by the Advisees for a period of four years
from the date hereof (the "Initial Term") and thereafter it may be renewed by
the Advisees from year to year, subject to the approval of a majority of the
Board of Directors. Notice of renewal shall be given in writing by the Advisees
to the Advisor not less than 60 days before the expiration of this Agreement or
of any extension thereof.
Notwithstanding any other provision to the contrary, this Agreement
shall be terminable (i) with or without Cause by the Advisor at any time (ii)
with or without Cause by a majority of the Independent Directors after the
expiration of the Initial Term; or (iii) for Cause by a majority of the
Independent Directors at any time, each without penalty, and each upon 60 days'
prior written notice prior to the non-terminating party.
In the event of the termination of this Agreement, the Advisor will
cooperate with the Advisees and take all reasonable steps requested to assist
the Advisees in making an orderly transition of the advisory function.
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18 Restrictions on Company's Right to Dissolve. (a) The Company
shall not dissolve and liquidate prior to the expiration of the Initial Term
except upon a recommendation of the Advisor and the Majority Vote of the
stockholders of the Company. After the expiration of the Initial Term, the vote
of the holders of 66_% of the Company's then outstanding shares of Common Stock
shall be required to approve a dissolution and liquidation of the Company that
is not recommended by the Advisor and the Majority Vote of the stockholders of
the Company shall be required to approve a liquidation of the Company
recommended by the Advisor.
(b) With respect to the OP, the Company, as the general partner of
the OP, shall not cause the OP to liquidate or dissolve unless (i) the Company
is also permitted to do so pursuant to Section 18(a) or (ii) it is part of a
reorganization, recapitalization or other similar transaction in which the
Company (or its successor) shall continue to exist but the OP or its respective
assets are merged into, or consolidated with, those of the Company (or its
successor).
(c) If for any reason, whether prior to or after the expiration of
the Initial Term, this Agreement is terminated in accordance with its terms, the
restrictions on the Advisees' right to dissolve and liquidate set forth in this
Article 18 shall terminate.
19 Amendments. This Agreement shall not be changed, modified,
terminated or discharged in whole or in part except by an instrument in writing
signed by all parties hereto, or their respective successors or permitted
assigns, or otherwise as provided herein.
20 Assignment. This Agreement may not be assigned by the Advisor
without the written consent of the Advisees, except to an Affiliate of the
Advisor. Any assignee of the Advisor shall be bound hereunder to the same extent
as the Advisor. This Agreement shall not be assigned by any Advisee without the
written consent of the Advisor, except to a corporation, association, trust or
other organization which is a successor to such Advisee. Such successor shall be
bound hereunder to the same extent as such Advisee. Notwithstanding anything to
the contrary contained herein, the economic rights of the Advisor hereunder,
including the right to receive all compensation hereunder, may be sold,
transferred or assigned by the Advisor without the consent of the Advisees.
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21 Action Upon Termination. From and after the effective date of
termination of this Agreement, pursuant to Section 17 hereof, the Advisor shall
not be entitled to compensation for further service rendered hereunder but shall
be paid all compensation and reimbursed for all expenses accrued through the
date of termination. The Advisor shall forthwith upon such termination:
(a) pay over to the Advisees all moneys collected and held for the
account of such Advisees pursuant to this Agreement, after deducting any accrued
compensation and reimbursement for its expenses to which it is then entitled;
(b) deliver to the Advisees a full accounting, including a
statement showing all payments collected by it and a statement of all moneys
held by it, covering the period following the date of the last accounting
furnished to the Advisees; and
(c) deliver to the Advisees all property and documents of the
Advisees then in the custody of the Advisor.
22 Incorporation of the Charter and the Partnership Agreement. To
the extent the Charter or the Partnership Agreement impose obligations or
restrictions on the Advisor or grant the Advisor certain rights which are not
set forth in this Agreement, the Advisor shall abide by such obligations or
restrictions and such rights shall inure to the benefit of the Advisor with the
same force and effect as if they were set forth herein.
23 Standard of Care. The Advisor assumes no responsibility under
this Agreement other than to render the services called for hereunder in good
faith, and shall not be responsible for any action of the Advisees in following
or declining to follow any advice or recommendations of the Advisor. Neither the
Advisor nor its directors, officers, partners, members, and employees shall be
liable to the Advisees, or to the stockholders, partners or directors of the
Advisees, as the case may be, or to any successor or assignee of the Advisees,
except by reason of acts constituting bad faith, gross negligence or reckless
disregard of their duties. This shall in no way affect the standard for
indemnification but shall only constitute a standard of liability. The duties to
be performed by the Advisor pursuant to this Agreement may be performed by it or
by officers, members or directors or by Affiliates of the foregoing under the
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direction of the Advisor or delegated to unaffiliated third parties under its
direction.
(b) The Advisor shall look solely to the assets of the Advisees
for satisfaction of all claims against the Advisees, and in no event shall any
stockholder, partner or director of the Advisees, as the case may be, have any
personal liability for the obligations of the Advisees under this Agreement.
24 Indemnification of Advisor. (a) The Advisees shall indemnify
the Advisor and its Affiliates for any loss arising out of any of their acts or
omissions in connection with this Agreement; provided that (i) the Board of
Directors must have determined, in good faith, that such course of conduct was
in the best interests of an Advisee and did not constitute negligence or
misconduct by the Advisor or its Affiliates; (ii) such conduct was within the
scope of authority of the Advisor; and (iii) any such indemnification shall be
recoverable only from the assets of the Advisees and not from the assets of the
stockholders, partners or directors of the Advisees, as the case may be.
Notwithstanding the foregoing, the Advisor or its Affiliates shall not be
indemnified for any liability, loss or damage incurred by the Advisor or its
Affiliates in connection with any claim or settlement involving allegations that
federal or state securities laws were violated by the Advisor or its Affiliates
unless: (a) the Advisor or its Affiliates seeking indemnification are successful
in defending such action on the merits of each count involving securities law
violations; or (b) such claims have been dismissed with prejudice on the merits
by a court of competent jurisdiction; or (c) a court of competent jurisdiction
approves a settlement of the claims against the Advisor or its Affiliates
seeking indemnification involving securities law violations and finds that
indemnification of the settlement and related costs should be made; or (d)
indemnification is specifically approved by a court of competent jurisdiction in
each such case.
25 Notices. Any notice, report or other communication required or
permitted to be given hereunder shall be in writing, and shall be given by
delivering such notice by hand or by certified mail, return receipt requested,
postage pre-paid, at the following addresses of the parties hereto:
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Advisees:
The Company:
625 Madison Avenue
New York, New York 10022
Att: Stuart J. Boesky
Executive Vice President and Chief
Operating Officer
with a copy to:
Michael Orbison, Esq.
625 Madison Avenue
New York, New York 10022
The OP
625 Madison Avenue
New York, New York 10022
with a copy to:
Michael Orbison, Esq.
625 Madison Avenue
New York, New York 10022
Advisor:
Related Aegis, Inc.
625 Madison Avenue
New York, New York 10022
Att: Stuart J. Boesky,
Executive Vice President
with a copy to:
Michael Orbison, Esq.
625 Madison Avenue
New York, New York 10022
Any party may at any time change its address for the purpose of this
Section 25 by like notice.
26 Headings. The section headings herein have been inserted for
convenience of reference only and shall not be
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construed to affect the meaning, construction or effect of this Agreement.
27 Governing Law. The provisions of this Agreement shall be
construed and interpreted in accordance with the laws of the State of New York
as at the time in effect.
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IN WITNESS WHEREOF, the undersigned have caused this agreement to be
signed as of the day and year first above written.
AEGIS REALTY, INC.
By:
-----------------------------------
Stuart J. Boesky
Executive Vice President and
Chief Operating Officer
AEGIS REALTY OPERATING PARTNERSHIP, LP
By: AEGIS REALTY, INC., its
General Partner
By:
-----------------------------------
Stuart J. Boesky
Executive Vice President and
Chief Operating Officer
RELATED AEGIS LP
By: RELATED AEGIS, INC., its
General Partner
By:
-----------------------------------
J. Michael Fried
President
Exhibit 10.2
AGREEMENT AND PLAN OF CONSOLIDATION
This AGREEMENT AND PLAN OF CONSOLIDATION (this "Agreement") is made and
entered into as of October 1, 1997, by and among Aegis Realty, Inc., a Maryland
Corporation ("Aegis"), Aegis Realty Operating Partnership, L.P., a Delaware
limited partnership (the "Operating Partnership"), Aegis Realty Holding
Partnership, LP, a Delaware limited partnership and a subsidiary of the
Operating Partnership ("Aegis Holding, LP"), AOP Merger Sub I, Inc., a Delaware
corporation and subsidiary of the Operating Partnership ("AOP Sub I"), AOP
Merger Sub II, Inc., a Delaware corporation and subsidiary of the Operating
Partnership ("AOP Sub II"), Summit Insured Equity L.P., a Delaware limited
partnership ("Insured I"), Summit Insured Equity II L.P., a Delaware limited
partnership ("Insured II"), Summit Preferred Equity L.P., a Delaware limited
partnership ("Summit Preferred"), Eagle Insured L.P., a Delaware limited
partnership ("Eagle"), Related Aegis, LP, a Delaware limited partnership (the
"Advisor"), Related Insured Equity Associates, Inc., a Delaware corporation
("Related GP I"), RIDC II, L.P., a Delaware limited partnership ("Related GP
II"), Related Equity Funding, Inc., a Delaware corporation ("Related GP III"),
Partnership Monitoring Corp., a Delaware corporation, Related Federal Insured,
L.P., a Delaware limited partnership ("Related GP IV," and, together with
Related GP I, Related GP II and Related GP III, the "Related GPs"), Related
Insured BUC$ Associates, Inc., the assignor limited partner of Insured I
("Assignor LP I"), Related Insured BUC$ Associates, Inc., the assignor limited
partner of Insured II ("Assignor LP II"), Related BUC$ Associates, Inc., the
assignor limited partner of Summit Preferred ("Assignor LP III"), and Related FI
BUC$, Inc., the assignor limited partner of Eagle ("Assignor LP IV"). Insured I,
Insured II, Summit Preferred and Eagle Insured are sometimes hereinafter
referred to individually as a "Partnership" and collectively as the
"Partnerships." Aegis, the Operating Partnership, Aegis Holding LP, AOP Sub I
and AOP Sub II are sometimes hereinafter referred to collectively as "Aegis and
its Affiliates." Assignor LP I, Assignor LP II, Assignor LP III and Assignor LP
IV are sometimes hereinafter referred to as the "Assignor LPs."
W I T N E S S E T H
WHEREAS, the parties hereto desire to engage in a consolidation
transaction (the "Consolidation") whereby, among other things (i)(A) 100 percent
of the BUC$ (as defined below) of (1) Insured I, (2) Insured II, (3) Summit
Preferred, and (4) Eagle (the "Assigned BUC$") will be assigned by the
respective Assignor LPs of such Partnerships to Aegis in exchange for shares of
common stock of Aegis, par value $.01 per share (the "Shares") to be delivered
to the BUC$holders (as hereinafter defined); (B) 100 percent of the Economic
Interests (as hereinafter defined) of the general partner interests of (1)
Insured I and (2) Insured II held by the Related GP's and the Advisor will be
contributed to the Operating Partnership in exchange for OP Units (as
hereinafter defined) in the Operating Partnership (the "Contributed GP Economic
Interests"); (C) 100 percent of the Economic Interests of the general partner
interests held by the Related GPs and the Advisor in Summit Preferred and Eagle
will be assigned to
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Aegis in exchange for Shares (the "Assigned GP Economic Interests"); (D) Aegis
will contribute to Aegis Holding, LP (1) a .0075 percent limited partner
interest in Insured I BUC$ and (2) a .015 percent limited partner interest in
Insured II BUC$; (E) Aegis will contribute to the Operating Partnership in
exchange for OP Units in the Operating Partnership (1) the Assigned BUC$, and
(2) the Assigned GP Economic Interests, and (F) the Operating Partnership will
contribute to Aegis Holding, LP (1) a .7425 percent interest in the Insured I
BUC$ and (2) a 1.485 percent partner interest in the Insured II BUC$, as more
specifically provided herein; and (ii) all holders of BUC$ previously issued by
the Partnerships shall receive Shares in exchange for their BUC$;
WHEREAS, upon the effectiveness of the assignments and contributions set
forth in the preceding paragraph, as part of the Consolidation, (A) Insured I
will be merged with AOP Sub I, with the Partnership being the surviving entity
(the "Insured I Merger"), (B) Insured II will be merged with AOP Sub II, with
Insured II being the surviving entity (the "Insured II Merger"), (C) Summit
Preferred will be merged with and into the Operating Partnership, with the
Operating Partnership being the surviving entity (the "Summit Preferred
Merger"), and (D) Eagle will be merged with and into the Operating Partnership,
with the Operating Partnership being the surviving entity (the "Eagle Merger")
(the Insured I Merger, the Insured II Merger, the Summit Preferred Merger and
the Eagle Merger being hereinafter collectively referred to as the "Mergers",
and Insured I , Insured II and the Operating Partnership are sometimes
hereinafter collectively referred to as the "Surviving Entities");
WHEREAS, Prudential Bache Properties, Inc. ("P-B Properties"), P.B. Tax
Credit S.L.P., a Delaware limited partnership, Prudential Bache Investor
Services II, Inc., a Delaware corporation, and Related Capital Company, a New
York general partnership ("RCC"), have entered into a Purchase Agreement dated
December 19, 1996 (the "Purchase Agreement") whereby, among other things, and
subject to the terms and conditions contained therein, P-B Properties has agreed
to assign and transfer all of its general partner interests in the Partnerships
to RCC or its affiliate, the Advisor, and to withdraw from the Partnerships (the
"Withdrawal Transactions");
WHEREAS, prior to the assignment of interests as set forth in Article I
the Withdrawal Transactions have been consummated and upon P-B Properties'
withdrawal as a general partner of the Partnerships, the Partnerships were
continued without dissolution;
WHEREAS, the United States District Court for the Southern District of New
York issued on August 28, 1997 a final order (the "Final Order"), which among
other things, (i) approved a Stipulation of Settlement (the "Settlement")
entered into in connection with the litigation entitled In Re: Prudential
Securities Incorporated Limited Partnerships Litigation ("Litigation"), (ii)
approved the Withdrawal Transactions and the proposed Consolidation and (iii)
granted each of the Partnerships the right to amend their respective agreements
of limited partnership to authorize, inter alia, such Partnerships to engage in
the Withdrawal Transactions and the Consolidation (the "Partnership Agreement
Amendments");
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WHEREAS, the Partnership Agreement Amendments have been duly adopted in
accordance with the Final Order;
WHEREAS, under the agreements of limited partnership, as amended, of the
Partnerships, as amended by the Partnership Agreement Amendments, the
Partnerships are authorized to and may consummate the Consolidation without any
additional consent or other act of any person;
WHEREAS, immediately prior to the Mergers and subsequent to the assignment
of various interests in the Partnerships as set forth in Article I, certain
assets held by Eagle will be assigned to the Operating Partnership;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
ASSIGNMENT OF INTERESTS
Section I.1 Closing. Unless this Agreement shall have been
terminated and the transactions herein contemplated shall have been abandoned
pursuant to Section 7.1 hereof and subject to the satisfaction or waiver of the
conditions set forth in Article VI, the closing with respect to the
Consolidation (the "Closing") will take place on the later of the second
business day following the date on which the last to be fulfilled or waived
condition set forth in Article VI shall be fulfilled in accordance with this
Agreement, or October 1, 1997 (the "Closing Date"), at the offices of Battle
Fowler, LLP, New York, New York, unless another date, time or place is agreed to
in writing by the parties hereto. Pursuant to the Consolidation, at the Closing
the parties hereto shall take such actions and engage in the transaction
identified in this Article I and Article II and take such other actions as may
be necessary or appropriate to consummate the Consolidation and the transactions
contemplated thereby. "Economic Interests" as used in this Article I shall mean,
with respect to any general partner interest in any given Partnership, a general
partner's share of the profits and losses of such Partnership and the right to
receive distributions of Partnership assets, and also includes all rights of the
holder of such general partner interest to compensation, fees, reimbursement of
expenses, allocations, distributions, adjustment to accounts and proceeds, under
the Agreement of Limited Partnership of such Partnership, as in effect at the
Closing Date.
Section I.2 Summit Preferred Assignments.
I.2.1 Assignment of Economic Interests of the General
Partner Interests in Summit Preferred held by Related
Equity Funding, Inc. to Aegis.
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Related GP III shall assign to Aegis all of the Economic Interests of the
general partner interests in Summit Preferred held by it in exchange for and
against delivery of 6,093 Shares (subject to adjustment pursuant to Section 1.17
hereof) to be issued to it by Aegis in consideration of such assignment.
I.2.2 Assignment of Economic Interests of the General
Partner Interests in Summit Preferred held by the
Advisor to Aegis.
Advisor shall assign to Aegis all of the Economic Interests of the general
partner interests of Summit Preferred held by it in exchange for and against
delivery of 3,075 Shares (subject to adjustment pursuant to Section 1.18 hereof)
to be issued to it by Aegis in consideration of such assignment.
I.2.3 Assignment of Economic Interests of the General
Partner Interests in Summit Preferred held by
Partnership Monitoring Corp. to Aegis.
Partnership Monitoring Corp. shall assign to Aegis all of the Economic
Interests of the general partner interests of Summit Preferred held by it in
exchange for and against delivery of 62 Shares (subject to adjustment pursuant
to Section 1.17 hereof) to it by Aegis be issued to in consideration of such
assignment.
I.2.4 Continuation of Related GP III as the General Partner
of Summit Preferred.
Upon the assignment by Related GP III, Advisor and Partnership Monitoring
Corp. of all of the Economic Interests of the general partner interests in
Summit Preferred, Related GP III shall continue to be the general partner of
Summit Preferred and the business of Summit Preferred shall be continued without
dissolution.
I.2.5 Assignment by Assignor Limited Partner of in Summit
Preferred BUC$ to Aegis.
Assignor LP III shall assign and transfer to Aegis, on behalf of the
Summit Preferred BUC$holders, the Summit Preferred BUC$, in exchange for and in
consideration of the issuance by Aegis to Assignor LP III of 605,916 Shares, on
behalf of the Summit Preferred BUC$holders (subject to adjustment pursuant to
Section 1.14 hereof). Promptly after the Effective Time, Assignor LP III shall
deliver such Shares to the Exchange Agent for distribution to the Summit
Preferred BUC$holders pursuant to Section 1.15 hereof. Upon the assignment in
accordance with this Section 1.2.5, Assignor LP III shall continue to be a
limited partner of Summit Preferred and the business of Summit Preferred shall
continue without dissolution.
Section I.3 Eagle Assignments.
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I.3.1 Assignment of Economic Interests of the General
Partner Interests in Eagle held by Related Federal
Insured, L.P. to Aegis.
Related GP IV shall assign to Aegis all of the Economic Interests of the
general partner interests in Eagle held by it in exchange for and against
delivery of 23,241 Shares (subject to adjustment pursuant to Section 1.17
hereof) to be issued to it by Aegis in consideration of such assignment.
I.3.2 Assignment of Economic Interests of the General
Partner Interests in Eagle held by the Advisor to
Aegis.
Advisor shall assign to Aegis all the Economic Interests of the general
partner interests of Eagle held by it in exchange for and against delivery of
11,620 Shares (subject to adjustment pursuant to Section 1.17 hereof) to be
issued to it by Aegis in consideration of such assignment.
I.3.3 Continuation of Related GP IV as the General Partner
of Eagle.
Upon the assignment by Related GP IV and Advisor of all of the Economic
Interests of the general partner interests in Eagle, Related GP IV shall
continue to be the general partner of Eagle and the business of Eagle shall be
continued without dissolution.
I.3.4 Assignment by Assignor LP IV of Eagle BUC$ to Aegis.
Assignor LP IV shall assign and transfer to Aegis, on behalf of the Eagle
BUC$holders, the Eagle BUC$, in exchange for and against delivery of 2,289,204
Shares to Assignor LP IV on behalf of such BUC$holders (subject to adjustment
pursuant to Section 1.14 hereof). Promptly after the Effective Time, Assignor LP
IV shall deliver such Shares to the Exchange Agent for distribution to the Eagle
BUC$holders pursuant to Section 1.15 hereof. Upon the assignment in accordance
with this Section 1.3.4, Assignor LP IV shall continue to be a limited partner
of Eagle and the business of Eagle shall continue without dissolution.
Section I.4 Insured I Assignments and Contributions.
I.4.1 Assignment and Contribution by Related Insured Equity
Associates, Inc. of Economic Interests of General
Partner Interests of Insured I held by it to the
Operating Partnership.
Related GP I shall assign and contribute to the Operating Partnership all
of the Economic Interests of the general partner interests in Insured I held by
it, in exchange for 20,359 OP Units (subject to adjustment pursuant to section
1.17 hereof). The term "OP Unit" as used in
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this Agreement shall have the meaning ascribed to it in the Amended and Restated
Agreement of Limited Partnership of the Operating Partnership dated as of
October 1, 1997.
I.4.2 Assignment and Contribution by Advisor of Economic
Interests of the General Partner Interests of Insured
I held by it to the Operating Partnership.
Advisor shall assign and contribute to the Operating Partnership all of
the Economic Interests of the general partner interests in Insured I held by it
in exchange for 10,179 OP Units (subject to adjustment pursuant to Section 1.18
hereof).
I.4.3 Continuation of Insured I by Related GP I.
Upon the assignment by Related GP I and Advisor, of all of the Economic
Interests of the general partner interests in Insured I, Related GP I shall
continue to be the general partner of Insured I and the business of Insured I
shall be continued without dissolution.
I.4.4 Assignment by Assignor LP I of Insured I BUC$ to
Aegis.
Assignor LP I shall assign and transfer to Aegis, on behalf of the Insured
I BUC$holders, the Insured I BUC$, in exchange for and against delivery of
4,041,207 Shares to Assignor LP I, on behalf of such BUC$holders (subject to
adjustment pursuant to Section 1.14 hereof ) by Aegis in consideration of such
assignment. Promptly after the Effective Time, Assignor LP I shall deliver such
Shares to the Exchange Agent for distribution to the Insured I BUC$holders
pursuant to Section 1.15 hereof. Upon the assignment in accordance with this
Section 1.4.4, Assignor LP I shall continue to be a limited partner of Insured I
and the business of Insured I shall continue without dissolution.
Section I.5 Insured II Assignments and Contributions.
I.5.1 Assignment and Contribution by RIDC II, L.P. of
Economic Interests of the General Partner Interests of
Insured II to the Operating Partnership.
Related GP II shall assign and contribute to the Operating Partnership all
of the Economic Interests of the general partner interests in Insured II held by
it in exchange for 10,866 OP Units (subject to adjustment pursuant to Section
1.17 hereof).
I.5.2 Assignment and Contribution by Advisor of Economic
Interests of the General Partner Interests of Insured
II to the Operating Partnership.
Advisor shall assign and contribute to the Operating Partnership all of
the Economic Interests of the general partner interests in Insured II held by it
in exchange for 5,433
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OP Units (subject to adjustment pursuant to Section 1.18 hereof).
I.5.3 Continuation of Related GP II as the General Partner
of Insured II.
Upon the assignment by Related GP II and Advisor all of the Economic
Interests of the general partner interests in Insured II, Related GP II shall
continue to be the general partner of Insured II and the business of Insured II
shall be continued without dissolution.
I.5.4 Assignment by Assignor LP II of Insured II BUC$ to
Aegis.
Assignor LP II shall assign and transfer, by recording such assignment and
transfer to Aegis, its records of account, on behalf of the Insured II
BUC$holders, the Insured II BUC$ to Aegis in exchange for and in consideration
of the issuance by Aegis to Assignor LP II of 1,070,287 Shares on behalf of the
Insured II BUC$holders (subject to adjustment pursuant to Section 1.14 hereof).
Promptly after the Effective Time, Assignor LP II shall deliver such Shares to
the Exchange Agent for distribution to the Insured II BUC$holders pursuant to
Section 1.15 hereof. Upon the assignment in accordance with this Section 1.5.4,
Assignor LP II shall continue to be a limited partner of Insured II and the
business of Insured II shall continue without dissolution.
Section I.6 Aegis Assignments and Contributions of Economic
Interests of the General Partner Interests of Summit
Preferred and Eagle to the Operating Partnership.
Promptly upon its receipt of the Assigned GP Economic Interests assigned
to it pursuant to Sections 1.2.1, 1.2.2, 1.2.3, 1.3.1 and 1.3.2 hereof, Aegis
shall assign and contribute the Assigned GP Economic Interests to the Operating
Partnership, in exchange for and against delivery of 44,091 OP Units.
Section I.7 Aegis Assignment of BUC$ to the Operating Partnership.
Promptly upon its receipt of the BUC$ assigned to it pursuant to Sections
1.2.5, 1.3.4, 1.4.4 and 1.5.4 hereof, Aegis shall assign and contribute to the
Operating Partnership in exchange for and against delivery of 8,006,614 OP Units
in the Operating Partnership the following interests: (i) the Summit Preferred
BUC$ received by it pursuant to Section 1.2.5 hereof, (ii) the Eagle BUC$
received by it pursuant to 1.3.4 hereof, (iii) a 99.9925% interest in the
Insured I BUC$ received by it pursuant to Section 1.4.4 hereof, and (iv) a
99.985% interest in the Insured II BUC$ received by it pursuant to Section
1.5.4. hereof.
Section I.8 Aegis Assignments and Contributions to Aegis Holding,
L.P.
Promptly upon its receipt of the BUC$ assigned to it pursuant to Sections
1.4.4
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and 1.5.4, Aegis shall assign and contribute the following interests to Aegis
Holding, L.P.: (i) a .0075% interest in the Insured I BUC$ received by it
pursuant to Section 1.4.4 hereof, and (ii) a .015% interest in the Insured II
BUC$ received by it pursuant to Section 1.5.4 hereof.
Section I.9 Operating Partnership Assignments and Contributions to
Aegis Holding, LP.
Promptly upon its receipt of BUC$ assigned to it pursuant to Section 1.7,
the Operating Partnership shall assign and contribute to Aegis Holding, LP: (i)
a 0.7425% interest in the Insured I BUC$, and (ii) a 1.485% interest in the
Insured II BUC$.
Section I.10 Transferors Representations and Warranties.
Each of the parties hereto making the assignments, contributions and other
transfers provided for in Sections 1.2 through 1.9 above (the "Transfers"),
other than the Assignor LP's, hereby represents and warrants that (i) each
Transfer that it is agreeing to make pursuant to the above-described Sections
has been duly and validly authorized by all necessary corporate or partnership,
as applicable, action on its part, and (ii) that immediately prior to the
effective time of any Transfer of any interest or right required to be
transferred by it pursuant to such sections, it will own such right or interest
free and clear of all liens and encumbrances.
Section I.11 Eagle Assignment of Mortgages.
Promptly after the effectiveness of the transactions contemplated in
Sections 1.2 through 1.9 hereof, Eagle shall assign to the Operating
Partnership, all of its right, title and interest in and to the mortgages and
all other assets owned by it.
Section I.12 Sequence of Assignments and Other Transactions
Except as otherwise specifically provided above, the transfers and
transactions identified in Sections 1.2 through 1.11 above shall occur, and
shall be deemed to occur, in the sequence set forth above, with the transactions
set forth in 1.2.1 above occurring first, and the transactions specified in
Section 1.11 occurring last.
Section I.13 Further Assurances.
If at any time after the Effective Time any Surviving Entity (as defined
below) shall determine or be advised that any further assignment, conveyance or
assurance is necessary or advisable to vest, perfect or confirm of record in the
Surviving Entities, the title to any property or right or other asset
transferred pursuant to this Agreement, or otherwise to carry out the provisions
of this Agreement or the transactions contemplated hereby, the general partners,
officers, or other proper representatives of the parties hereto just prior to,
and after, the Effective Time shall execute and deliver any and all proper
deeds, assignments, rights and assurances, or other assets, instruments and
documents as may be necessary to, and do all things necessary or
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proper to, vest, perfect or convey title to such properties or rights, or other
assets, in accordance with the provisions and intent of this Agreement, and
otherwise to carry out the provisions and intents hereof.
Section I.14 No Fractional Shares.
Fractional Shares will not be issued to any holder of partnership
interests (or Economic Interests in partnership interests) in the Partnerships
or holders of BUC$ in connection with the Consolidation. Each holder of
partnership interests (or Economic Interests in partnership interests) who would
otherwise be entitled to a fractional Share under this Article I (which
entitlement will be determined by combining all such holder's allocation of
Shares from each Partnership as to which such holder is receiving Shares) will
receive one Share for each fractional share of .5 or greater otherwise due to
such holder. No Shares will be issued for fractional shares of less than .5
otherwise due to any holder.
Section I.15 Delivery of Share Certificates; Exchange of BUC$
Certificates for Share Certificates.
(1) Exchange Agent. As of the Effective Time, the respective Assignor
LPs shall deposit with the transfer agent and registrar (the "Exchange Agent"),
for the benefit of the respective BUC$holders, certificates representing the
Shares to be received by and delivered to such BUC$holders pursuant to this
Article I.
(2) Delivery of Share Certificates to Holders of Partnership Interests
(or Economic Interests in partnership interests) not Represented by BUC$.
Promptly after the Effective Time, Aegis shall require the Exchange Agent to
deliver to each holder of partnership interests in the Partnerships (or Economic
Interests in partnership interests) not represented by BUC$, a certificate
representing that number of whole Shares due such holder, determined in
accordance with Sections 1.2.1, 1.2.2, 1.2.3, 1.3.1, 1.3.2, 1.17, 1.18 and 1.14
of this Agreement.
(3) Exchange Procedures for BUC$holders. Subject to the provisions of
Section 1.16 hereof, promptly after the Effective Time, Aegis shall require the
Exchange Agent to mail to each holder of certificates representing BUC$ ("BUC$
Certificates") (each, a "BUC$holder" and collectively, the "BUC$holders"), a
form of letter of transmittal, advising such BUC$holder of the effectiveness of
the Consolidation and including the instructions for surrendering the BUC$
Certificates to the Exchange Agent in order to receive the Shares to which it is
entitled pursuant to this Agreement. Such instructions shall also specify that
delivery shall be effected, and risk of loss and title to the BUC$ shall pass
only upon, delivery of the BUC$ to the Exchange Agent, and such instructions
shall otherwise be in such form and have such other provisions as Aegis shall
reasonably specify.
Upon surrender to the Exchange Agent of such BUC$ Certificates for
cancellation in accordance with the instructions in the letter of transmittal
thereon, the Exchange Agent shall mail to such
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BUC$holder a certificate representing that number of whole Shares due such
BUC$holder determined in accordance with Article I of this Agreement. The
Exchange Agent shall accept such BUC$ upon compliance with such reasonable terms
and conditions as Aegis and the Exchange Agent may impose to effect an orderly
exchange thereof in accordance with normal exchange practices. If the Shares to
be issued to BUC$holders in connection with the Consolidation (the "BUC$holder
Consideration") (or any portion thereof) is to be delivered to any person other
than the person in whose name the BUC$ Certificates surrendered in exchange
therefor is registered, it shall be a condition to such exchange that the
certificate so surrendered shall be properly endorsed or otherwise be in proper
form for transfer and that the person requesting such exchange shall pay to the
Exchange Agent any transfer or other taxes required by reason of the payment of
such consideration to a person other than the registered holder of the
certificate surrendered, or shall establish to the satisfaction of the Exchange
Agent that such tax has been paid or is not applicable. After the Effective
Time, there shall be no further transfer on the records of the Partnerships or
its transfer agent of BUC$ and if such BUC$ Certificates are presented to any of
the Partnerships for transfer, they shall be canceled against delivery of the
BUC$holder Consideration as herein above provided. Until surrendered as
contemplated by this Section 1.15, each BUC$ Certificate shall be deemed at any
time after the Effective Time to represent only the right to receive upon such
surrender the BUC$holder Consideration payable with respect to such BUC$ as
contemplated by and provided for by this Agreement.
(4) Distributions with Respect to Unexchanged BUC$. Subject to the
provisions of Section 1.15 hereof, no distributions with respect to Shares with
a record date after the Effective Time shall be paid to any BUC$holder until the
surrender for exchange of the BUC$ Certificates in accordance with this Section
1.15. Following surrender for exchange of any such certificate in accordance
with this Section 1.15, Aegis shall pay to the holder of such certificate,
without interest, (i) at the time of such surrender, the amount of distributions
from Aegis with a record date after the Effective Time theretofore paid with
respect to the number of whole Shares payable in respect of such BUC$ hereunder
pursuant to Article I of this Agreement, and (ii) at the appropriate payment
date, the amount of distributions from Aegis with a record date after the
Effective Time, but prior to such surrender, and with a payment date subsequent
to such surrender, payable with respect to such whole Shares.
(5) No Further Ownership Rights in BUC$. The BUC$holder Consideration
paid upon the surrender for exchange of the BUC$ Certificates in accordance with
the terms of this Article I shall be deemed to have been issued and paid in full
satisfaction of all rights pertaining to the BUC$ owing to BUC$holders under
this Agreement.
(6) Termination of Fund. Any Shares that remain undistributed to
BUC$holders for 120 days after the Effective Time shall be delivered to Aegis,
upon demand, and any BUC$holders who have not theretofore complied with this
Article I shall thereafter look only to Aegis and only as general creditors
thereof for payment of their claim for the BUC$holder Consideration and any
distributions with respect to the Shares.
(7) No Liability. Neither Aegis, nor the Assignor LPs, nor the Exchange
Agent shall be liable to any person in respect of any Shares owing under this
Agreement, or
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distributions payable in respect of such Shares, to the extent the same are
delivered to a public official pursuant to any applicable abandoned property,
escheat or similar law. If any BUC$ Certificates shall not have been surrendered
prior to five years after the Effective Time (or immediately prior to such
earlier date on which any BUC$holder Consideration in respect of such
certificate would otherwise escheat to or become the property of any applicable
governmental entity), any Shares owed under this Agreement with respect to such
BUC$, or distributions payable in respect of such Shares shall, to the extent
permitted by applicable law, become the property of Aegis, free and clear of all
claims or interest of any person previously entitled thereto.
(8) Lost BUC$ Certificates. If BUC$ Certificates shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming such certificate to be lost, stolen or destroyed and, if required by
Aegis, the posting by such person of a bond, in such reasonable amount as Aegis
may direct, as indemnity against any claim that may be made against it with
respect to such certificate, the Exchange Agent will issue in exchange for such
lost, stolen or destroyed certificate the applicable BUC$holder Consideration,
to which the holder thereof is entitled pursuant to this Article I and any
dividends or other distributions with respect to Shares to which the holder
thereof is entitled pursuant to this Article I.
(9) Transfer Books. At the Effective Time, the transfer books of the
Partnerships shall be closed with respect to BUC$ and there shall be no further
registration of transfers of BUC$ thereafter on the records of the Partnerships.
Section I.16 Aegis' Option to Not Require Delivery of BUC$
Certificates by BUC$holders in Order to Receive
Shares.
Anything in this Agreement to the contrary notwithstanding, Aegis shall
have the right, in its sole and absolute discretion, to waive the requirements
in Sections 1.15(c) and (d) above (with respect to all, or any, of the
Partnerships, in its discretion) relating to the delivery of BUC$ Certificates
and other items by the BUC$holders to the Exchange Agent, by written notice to
the Exchange Agent of the same (the "Notice"). In the event of such Notice the
Exchange Agent shall promptly fulfill its obligations and duties under Section
1.15 hereof, as if all BUC$holders had fulfilled their obligations under Section
1.15(c), and fulfilled all obligations necessary for such BUC$holders to receive
the BUC$holder Consideration, at the time of receipt of the Notice by the
Exchange Agent.
Section I.17 Shares issued to Related General Partners to equal
0.75% of all Shares outstanding after the
Consolidation.
Anything in this Agreement to the contrary notwithstanding, the aggregate
number of Shares to be issued to (i) Related GP I or its successor pursuant to
the Exchange Rights Agreement (as hereinafter defined), assuming Related GP I or
its successor fully exercises its right to exchange the OP Units received by it
pursuant to Section 1.4.1 hereof for Shares,
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(ii) Related GP II or its successor, pursuant to the Exchange Rights Agreement,
assuming Related GP II or its successor fully exercises its right to exchange
the OP Units received by it pursuant to Section 1.5.1 hereof, (iii) Related GP
III, pursuant to Section 1.2.1, (iv) Related GP IV pursuant to Section 1.3.1
hereof, and (v) Partnership Monitoring Corp., pursuant to Section 1.2.3 hereof,
shall be adjusted to equal 0.75% of the aggregate number of Shares to be issued
pursuant to this Article I (the "Article I Shares"), or if not mechanically
possible, such number of whole Shares as is closest to equaling such 0.75%. In
the event the number of Shares to be issued to the Related GPs and Partnership
Monitoring Corp. as a group exceeds or is less than 0.75% of the Article I
Shares, Aegis shall adjust downward or upward the number of Shares, or OP Units,
as the case may be, to be issued pursuant to Sections 1.2.1, 1.2.3, 1.3.1, 1.4.1
and 1.5.1 by the least number of Shares, or OP Units, as the case may be, as is
necessary to satisfy the .0.75% requirement, such that the Related GPs and
Partnership Monitoring Corp. share as equally as possible (based upon their
respective eventual percentages of ownership of Shares in Aegis, assuming the
exchange for Shares of all OP Units issued to Related GP I and Related GP II,
respectively, pursuant to 1.4.1 and 1.5.1, respectively) in any such adjustment.
For purposes of this Article I, Exchange Rights Agreement means the Exchange
Rights Agreement dated as of October 1, 1997, by and among Aegis, the Operating
Partnership, and the limited partners of the Operating Partnership (the
"Exchange Rights Agreement").
Section I.18 Shares to be issued to Advisor to equal 0.37% of all
Shares outstanding after the Consolidation.
Anything in this Agreement to the contrary notwithstanding, the aggregate
number of Shares to be issued to the Advisor pursuant to Sections 1.2.2, 1.3.2,
1.4.2 and 1.5.2 (assuming the Advisor or its successor fully exercises its right
under the Exchange Rights Agreement to exchange the OP Units received by it
pursuant to Sections 1.4.2 and 1.5.2 hereof for Shares) shall be adjusted upward
or downward to equal 0.37% of the Article I Shares, or if not mechanically
possible, such number of whole Shares as comes closest to equaling such 0.37%.
ARTICLE II
THE CONSOLIDATION
Section II.1 The Consolidation.
Subject to the terms and conditions of this Agreement, promptly
after the effectiveness of the transfers and assignments of partnership
interests (and Economic Interests of partnership interests) and other
transactions contemplated by Article I, (i) Insured I shall be merged with AOP
Sub I, with Insured I being the surviving entity (the "Insured I Merger"), (ii)
Insured II shall be merged with AOP Sub II, with Insured II being the surviving
entity (the "Insured II Merger"), (iii) Summit Preferred shall be merged with
and into the Operating Partnership, with the Operating Partnership being the
surviving entity (the "Summit Preferred Merger"), and (iv) Eagle shall be merged
with and into the Operating Partnership, with the Operating Partnership being
the surviving entity (the "Eagle Merger"), in accordance with the
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Delaware Revised Uniform Limited Partnership Act ("DRULPA") and the General
Corporation Law of the State of Delaware (the "DGCL"), as applicable, and the
separate existence of Summit Preferred, Eagle, AOP Sub I and AOP Sub II shall
cease and the Surviving Entities (as defined below) shall continue as the
surviving entities under the laws of the State of Delaware with all the rights,
privileges, immunities and powers, and subject to all the duties and
liabilities, of limited partnerships formed under the DRULPA.
Section II.2 Effective Time. The Surviving Entities will file with
the Secretary of State of the State of Delaware (the "Delaware Secretary of
State") on the Closing Date (or on such other date as the parties hereto may
agree) certificates of merger executed in accordance with the relevant
provisions of the DRULPA and DGCL, as applicable, and make all other filings or
recordings required under the DRULPA and DGCL in connection with the Mergers.
The Mergers shall become effective upon the filings of the certificates of
merger with the Delaware Secretary of State, or at such later time as is
specified in the certificates of merger as determined by the Surviving Entities
in their discretion (the "Effective Time"), which time may be changed by the
parties executing such certificate in their discretion, without amendment to
this Agreement, or any other consent, by filing certificates of amendment to
such certificates of merger with the Delaware Secretary of State. This Agreement
shall constitute the agreement of merger of the relevant parties for purposes of
DRULPA and DGCL.
Section II.3 Certificates of Limited Partnership of the Surviving
Entities.
(1) Insured I Merger. The Certificate of Limited Partnership of Insured
I, as in effect immediately prior to the Effective Time, shall be the
Certificate of Limited Partnership of the Surviving Entity in the Insured I
Merger.
(2) Insured II Merger. The Certificate of Limited Partnership of Insured
II, as in effect immediately prior to the Effective Time, shall be the
Certificate of Limited Partnership of the Surviving Entity in the Insured II
Merger.
(3) Summit Preferred Merger. The Certificate of Limited Partnership of
the Operating Partnership, as in effect immediately prior to the Effective Time,
shall be the Certificate of Limited Partnership of the Surviving Entity in the
Summit Preferred Merger.
(4) Eagle Merger. The Certificate of Limited Partnership of the
Operating Partnership, as in effect immediately prior to the Effective Time,
shall be the Certificate of Limited Partnership of the Surviving Entity in the
Eagle Merger. Section II.4 Agreements of Limited Partnership of Surviving
Entities.
(1) Insured I Merger. The Partnership Agreement of Insured I, as in
effect immediately prior to the Effective Time, shall be the Partnership
Agreement of the Surviving Entity in the Insured I Merger.
(2) Insured II Merger. The Partnership Agreement of Insured II, as in
effect
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immediately prior to the Effective Time, shall be the Partnership Agreement of
the Surviving Entity in the Insured II Merger.
(3) Summit Preferred Merger. The Partnership Agreement of the Operating
Partnership dated October 1, 1997, as in effect immediately prior to the
Effective Time, shall be the Partnership Agreement of the Surviving Entity in
the Summit Preferred Merger.
(4) Eagle Merger. The Partnership Agreement of the Operating Partnership
dated October 1, 1997, as in effect immediately prior to the Effective Time
shall be the Partnership Agreement of the Surviving Entity in the Eagle Merger.
Section II.5 General Partners of the Surviving Entities.
(1) Insured I Merger. The Operating Partnership shall be the general
partner of the Surviving Entity in the Insured I Merger.
(2) Insured II Merger. The Operating Partnership shall be the general
partner of the Surviving Entity in the Insured II Merger.
(3) Summit Preferred Merger. The general partner of the Operating
Partnership at the Effective Time shall be the general partner of the Surviving
Entity in the Summit Preferred Merger.
(4) Eagle Merger. The general partner of the Operating Partnership at
the Effective Time shall be the general partner of the Surviving Entity in the
Eagle Merger.
Section II.6 Cancellation of General and Limited Partner Interests
in Insured I.
(1) Cancellation of General Partner Interests held by Related GP I. The
general partner interests of Insured I held by Related GP I shall, by virtue of
the Insured I Merger and without any action on the part of any person, be
canceled.
(2) Cancellation of General Partner Interests Held by the Advisor. The
general partner interests of Insured I held by the Advisor shall, by virtue of
the Insured I Merger and without any action on the part of any person, be
canceled.
(3) Cancellation of Insured I BUC$ and Underlying Limited Partner
Interests relating to Insured I BUC$. The Insured I BUC$ (as defined in the
agreement of limited partnership of Insured I, as amended) held by the Operating
Partnership and Aegis Holding, L.P. and the underlying limited partner interests
in Insured I held by Assignor LP I relating to the Insured I BUC$, outstanding
immediately before the Effective Time, shall, by virtue of the Insured I Merger
and without any action on the part of any person, be canceled.
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Section II.7 Conversion of Shares of AOP Sub I.
(1) Each share of Common Stock, par value $.01 per share, of AOP Sub I
held by the Operating Partnership shall, by virtue of the Insured I Merger and
without any action on the part of any person, be converted into a .01% general
partner interest in Insured I, the Surviving Entity of the Insured I Merger. At
the Effective Time the Operating Partnership will be entitled to receive a
99.25% general partner interest in Insured I, the Surviving Entity in the
Insured I Merger and the Operating Partnership shall be the sole general partner
of Insured I, the Surviving Entity in the Insured I Merger and the business of
Insured I shall continue without dissolution.
(2) Each share of Common Stock, par value $.01 per share, of AOP Sub I
held by Aegis Holding, LP shall, by virtue of the Insured I Merger and without
any action on the part of any person, be converted into a .01% limited partner
interest in Insured I. At the Effective Time Aegis Holding LP will be entitled
to receive a .75% limited partner interest in Insured I, the Surviving Entity in
the Insured I Merger. Aegis Holding, LP shall be the sole limited partner of
Insured I, the Surviving Entity in the Insured I Merger and the business of
Insured I shall continue without dissolution.
Section II.8 Cancellation of General and Limited Partner Interests
in Insured II.
(1) Cancellation of General Partner Interests held Related GP II. The
general partner interests of Insured II held by Related GP II, shall, by virtue
of the Insured II Merger and without any action on the part of any person, be
canceled.
(2) Cancellation of General Partner Interests Held by the Advisor. The
general partner interests of Insured II held by the Advisor shall, by virtue of
the Insured II Merger and without any action on the part of any person, be
canceled.
(3) Cancellation of Insured II BUC$ and Underlying Limited Partner
Interests Relating to Insured II BUC$. The Insured II BUC$ (as defined in the
agreement of limited partnership of Insured II, as amended) held by the
Operating Partnership and Aegis Holding, LP, and the underlying limited partner
interests in Insured II held by Assignor LP II relating to Insured II BUC$,
outstanding immediately before the Effective Time, shall, by virtue of the
Insured II Merger and without any action on the part of any person, be canceled.
Section II.9 Conversion of Shares of AOP Sub II.
(1) Each share of Common Stock, par value $.01 per share, of AOP Sub II
held by the Operating Partnership shall, by virtue of the Insured II Merger and
without any action on the part of any person, be converted into a .01% general
partner interest in Insured II. At the Effective Time the Operating Partnership
will be entitled to receive a 98.50% general partner interest in Insured II, the
Surviving Entity in the Insured II Merger. The Operating Partnership shall be
the sole general partner of Insured II and the business of Insured II shall
continue without
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dissolution.
(2) Each share of Common Stock, par value $.01 per share, of AOP Sub II
held by Aegis Holding, LP shall, by virtue of the Insured II Merger and without
any action on the part of any person, be converted into a .01% limited partner
interest in Insured II. At the Effective Time Aegis Holding LP will be entitled
to receive a 1.5% limited partner interest in Insured II the Surviving Entity in
the Insured II Merger. Aegis Holding, L.P. shall be the sole limited partner of
Insured II and the business of Insured II shall continue without dissolution.
Section II.10 Cancellation of General and Limited Partner Interests
in Summit Preferred.
(1) Cancellation of General Partner Interests held by Related GP III.
The general partner's interests of Summit Preferred held by Related GP III,
shall, by virtue of the Summit Preferred Merger and without any action on the
part of any person, be canceled.
(2) Cancellation of General Partner Interests Held by the Advisor The
general partner interests of Summit Preferred held by the Advisor shall, by
virtue of the Summit Preferred Merger and without any action on the part of any
person, be canceled.
(3) Cancellation of General Partner Interests held by Partnership
Monitoring Corp. The general partner interests of Summit Preferred held by
Partnership Monitoring Corp. shall, by virtue of the Summit Preferred Merger and
without any action on the part of any person, be canceled.
(4) Cancellation of Summit Preferred BUC$ and Underlying Limited Partner
Interests Relating to Summit Preferred BUC$. The Summit Preferred BUC$ (as
defined in the agreement of limited partnership of Summit Preferred, as amended)
held by the Operating Partnership and Aegis Holding, LP and the underlying
limited partner interests of Summit Preferred held by Assignor LP III relating
to the Summit Preferred BUC$, outstanding immediately before the Effective Time,
shall, by virtue of the Summit Preferred Merger and without any action on the
part of any person, be canceled.
Section II.11 Cancellation of General and Limited Partner Interests
in Eagle.
(1) Cancellation of General Partner Interests held by Related GP IV. The
general partner's interests of Eagle held by Related GP IV shall, by virtue of
the Eagle Merger and without any action on the part of any person, be canceled.
(2) Cancellation of General Partner Interests Held by the Advisor. The
general partner interests of Eagle held by the Advisor shall, by virtue of the
Eagle Merger and without any action on the part of any person, be canceled.
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(3) Cancellation of Eagle BUC$ and Underlying Limited Partner Interests
Relating to Eagle BUC$. The Eagle BUC$ (as defined in the agreement of limited
partnership of Eagle, as amended) held by the Operating Partnership and Aegis
Holding, LP and the underlying limited partner interests of Eagle held by
Assignor LP IV relating to the Eagle BUC$, outstanding immediately before the
Effective Time, shall, by virtue of the Eagle Merger and without any action on
the part of any person, be canceled.
Section II.12 Repurchase of Shares of Aegis Outstanding Prior to the
Effective Time.
Promptly after the Effective Time, Aegis shall repurchase from RCC, and
RCC shall sell to Aegis, the 1,000 shares of Aegis held by RCC, constituting all
the issued and outstanding shares of Aegis outstanding prior to the Effective
Time, for a purchase price of $1.00 per share, the original consideration paid
for such shares. Promptly upon such repurchase, Aegis shall cause such shares to
be canceled.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PARTNERSHIPS
Section III.1 Insured I hereby represents and warrants to Aegis as
follows:
(1) Organization and Good Standing. Insured I is a limited partnership,
duly formed and validly existing as a limited partnership in good standing under
the laws of the State of Delaware. Insured I has the requisite partnership power
and authority to conduct its business in the manner and in the jurisdictions
where it is now conducted. Insured I is qualified to do business and is in good
standing in each jurisdiction in which the failure to be so qualified would have
a Material Adverse Effect.
(2) Authority; Power. The execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby have been duly and
validly authorized by all necessary partnership action on the part of Insured I.
Insured I has the requisite partnership power and authority to enter into,
deliver and, perform this Agreement and any other agreements and instruments
contemplated hereby. This Agreement constitutes a legal, valid and binding
obligation of Insured I enforceable against it in accordance with its terms,
except as such enforceability may be limited by (i) bankruptcy, reorganization,
insolvency, moratorium or other similar laws affecting creditor's rights
generally, (ii) the power of a court to grant specific performance or any other
remedy and (iii) the application of general principles of equity.
(3) Consents and Approvals; No Violation.
(1) To the knowledge of Insured I, other than the Final Order, no
consent, waiver, approval or authorization of, or filing, registration or
qualification
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with, any governmental or regulatory authority, which if not made or
obtained would have a Material Adverse Effect or would materially
adversely affect Insured I's ability to perform its obligations under this
Agreement, is required to be made or obtained by Insured I in connection
with the execution, delivery and performance of this Agreement; and
(2) None of the execution, delivery or, except as contemplated by
this Agreement, performance of this Agreement by Insured I does or will,
with or without the giving of notice, lapse of time or both, result in any
violation of or conflict with or constitute a default under any term or
provision of the certificate of limited partnership or agreement of
limited partnership, as amended, of Insured I or, to the knowledge of
Insured I, any judgment, decree, order, law, statute, injunction, rule,
regulation or governmental license or permit applicable to Insured I;
result in the creation of any lien upon the partnership interests of
Insured I or Insured I BUC$; or constitute a default under, or result in
the termination, acceleration, amendment or modification of, any material
contract, agreement, arrangement, commitment or plan to which Insured I is
a party, or by which Insured I may be subject or bound, which, in any such
case, would have a Material Adverse Effect.
(4) No Options. Except as contemplated by this Agreement, Insured I is
not a party to any rights, options, subscriptions or other agreements of any
kind, to purchase or to acquire, receive or be issued any interest in any
partnership interest in Insured I or Insured I BUC$.
(5) Litigation. Except as set forth in the Solicitation Statement dated
June 18, 1997 or the 1996 Form 10-K or Form 10-Q of Insured I for the quarter
ended June 30, 1997:
(1) there are no claims, actions, suits, proceedings or
investigations pending or, to the knowledge of Insured I, threatened, in any
court or before any governmental agency or instrumentality, or before any
arbitrator, by or against or affecting or relating to Insured I, which, if
adversely determined, would have a Material Adverse Effect or which would (i)
restrain or enjoin the consummation of the transactions contemplated by this
Agreement, (ii) declare unlawful the transactions or events contemplated by this
Agreement, or (iii) cause any of such transactions to be rescinded; and
(2) there are no judgments, injunctions, orders or other judicial
or administrative mandates outstanding against or affecting Insured I which
would materially hinder or delay the consummation of the transactions
contemplated by this Agreement or which would have a Material Adverse Effect.
(6) Compliance with Laws. To the knowledge of Insured I, it is in
compliance in all material respects with all laws, governmental rules and
ordinances of the federal, state and local authorities having jurisdiction over
and except where the failure to so comply would not
18
<PAGE>
have a Material Adverse Effect.
(7) Conversion of BUC$. No Insured I BUC$holder has exercised its right,
under the Partnership Agreement of Insured I, as amended, to convert its Insured
I BUC$ into limited partnership interests in Insured I.
(8) Insured I has not, since June 18, 1997, suffered a Material Adverse
Effect.
(9) Material Adverse Effect. As used in this Section 3.1 "Material
Adverse Effect" shall mean any material adverse change in the business, assets
or financial condition of Insured I which has a material adverse effect on the
income reasonably expected to be generated by Insured I from and after the
Closing Date or the economic value thereof.
Section III.2 Insured II hereby represents and warrants to Aegis as
follows:
(1) Organization and Good Standing. Insured II is a limited partnership,
duly formed and validly existing as a limited partnership in good standing under
the laws of the State of Delaware. Insured II has the requisite partnership
power and authority to conduct its business in the manner and in the
jurisdictions where it is now conducted. Insured II is qualified to do business
and is in good standing in each jurisdiction in which the failure to be so
qualified would have a Material Adverse Effect.
(2) Authority; Power. The execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby have been duly and
validly authorized by all necessary partnership action on the part of Insured
II. Insured II has the requisite partnership power and authority to enter into,
deliver and, perform this Agreement and any other agreements and instruments
contemplated hereby. This Agreement constitutes a legal, valid and binding
obligation of Insured II enforceable against it in accordance with its terms,
except as such enforceability may be limited by (i) bankruptcy, reorganization,
insolvency, moratorium or other similar laws affecting creditor's rights
generally, (ii) the power of a court to grant specific performance or any other
remedy and (iii) the application of general principles of equity.
(3) Consents and Approvals; No Violation.
(1) To the knowledge of Insured II, other than the Final Order, no
consent, waiver, approval or authorization of, or filing, registration or
qualification with, any governmental or regulatory authority, which if not
made or obtained would have a Material Adverse Effect or would materially
adversely affect Insured II's ability to perform its obligations under
this Agreement, is required to be made or obtained by Insured II in
connection with the execution, delivery and performance of this Agreement;
and
(2) None of the execution, delivery or, except as contemplated by
this
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<PAGE>
Agreement, performance of this Agreement by Insured II does or will, with
or without the giving of notice, lapse of time or both, result in any
violation of or conflict with or constitute a default under any term or
provision of the certificate of limited partnership or agreement of
limited partnership, as amended, of Insured II or, to the knowledge of
Insured III, any judgment, decree, order, law, statute, injunction, rule,
regulation or governmental license or permit applicable to Insured II;
result in the creation of any lien upon the partnership interests of
Insured II or Insured II BUC$; or constitute a default under, or result in
the termination, acceleration, amendment or modification of, any material
contract, agreement, arrangement, commitment or plan to which Insured II
is a party, or by which Insured II may be subject or bound, which, in any
such case, would have a Material Adverse Effect.
(4) No Options. Except as contemplated by this Agreement, Insured II is
not a party to any rights, options, subscriptions or other agreements of any
kind, to purchase or to acquire, receive or be issued any interest in any
partnership interest in Insured II or Insured II BUC$.
(5) Litigation. Except as set forth in the Solicitation Statement dated
June 18, 1997 or the 1996 Form 10-K or Form 10-Q of Insured II for the quarter
ended June 30, 1997:
(1) there are no claims, actions, suits, proceedings or
investigations pending or, to the knowledge of Insured II, threatened, in
any court or before any governmental agency or instrumentality, or before
any arbitrator, by or against or affecting or relating to Insured II,
which, if adversely determined, would have a Material Adverse Effect or
which would (i) restrain or enjoin the consummation of the transactions
contemplated by this Agreement, (ii) declare unlawful the transactions or
events contemplated by this Agreement, or (iii) cause any of such
transactions to be rescinded; and
(2) there are no judgments, injunctions, orders or other judicial
or administrative mandates outstanding against or affecting Insured II
which would materially hinder or delay the consummation of the
transactions contemplated by this Agreement or which would have a Material
Adverse Effect.
(6) Compliance with Laws. To the knowledge of Insured II, it is in
compliance in all material respects with all laws, governmental rules and
ordinances of the federal, state and local authorities having jurisdiction over
and except where the failure to so comply would not have a Material Adverse
Effect.
(7) Conversion of BUC$. No Insured II BUC$holder has exercised its
right, under the Agreement of Limited Partnership of Insured II, as amended, to
convert its Insured II BUC$ into limited partnership interests in Insured II.
(8) Insured II has not, since June 18, 1997, suffered a Material Adverse
Effect.
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<PAGE>
(9) Material Adverse Effect. As used in this Section 3.2 "Material
Adverse Effect" shall mean any material adverse change in the business, assets
or financial condition of Insured II which has a material adverse effect on the
income reasonably expected to be generated by Insured II from and after the
Closing Date or the economic value thereof.
Section III.3 Summit Preferred hereby represents and warrants to
Aegis as follows:
(1) Organization and Good Standing. Summit Preferred is a limited
partnership, duly formed and validly existing as a limited partnership in good
standing under the laws of the State of Delaware. Summit Preferred has the
requisite partnership power and authority to conduct its business in the manner
and in the jurisdictions where it is now conducted. Summit Preferred is
qualified to do business and is in good standing in each jurisdiction in which
the failure to be so qualified would have a Material Adverse Effect.
(2) Authority; Power. The execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby have been duly and
validly authorized by all necessary partnership action on the part of Summit
Preferred. Summit Preferred has the requisite partnership power and authority to
enter into, deliver and, perform this Agreement and any other agreements and
instruments contemplated hereby. This Agreement constitutes a legal, valid and
binding obligation of Summit Preferred enforceable against it in accordance with
its terms, except as such enforceability may be limited by (i) bankruptcy,
reorganization, insolvency, moratorium or other similar laws affecting
creditor's rights generally, (ii) the power of a court to grant specific
performance or any other remedy and (iii) the application of general principles
of equity.
(3) Consents and Approvals; No Violation.
(1) To the knowledge of Summit Preferred, other than the Final
Order, no consent, waiver, approval or authorization of, or filing,
registration or qualification with, any governmental or regulatory
authority, which if not made or obtained would have a Material Adverse
Effect or would materially adversely affect Summit Preferred's ability to
perform its obligations under this Agreement, is required to be made or
obtained by Summit Preferred in connection with the execution, delivery
and performance of this Agreement; and
(2) None of the execution, delivery or, except as contemplated by
this Agreement, performance of this Agreement by Summit Preferred does or
will, with or without the giving of notice, lapse of time or both, result
in any violation of or conflict with or constitute a default under any
term or provision of the certificate of limited partnership or agreement
of limited partnership, as amended, of Summit Preferred or, to the
knowledge of Summit Preferred, any judgment, decree, order, law, statute,
injunction, rule, regulation or governmental license or permit applicable
to Summit Preferred; result in the creation of any lien upon the
21
<PAGE>
partnership interests of Summit Preferred or Summit Preferred BUC$; or
constitute a default under, or result in the termination, acceleration,
amendment or modification of, any material contract, agreement,
arrangement, commitment or plan to which Summit Preferred is a party, or
by which Summit Preferred may be subject or bound, which, in any such
case, would have a Material Adverse Effect.
(4) No Options. Except as contemplated by this Agreement, Summit
Preferred is not a party to any rights, options, subscriptions or other
agreements of any kind, to purchase or to acquire, receive or be issued any
interest in any partnership interest in Summit Preferred or Summit Preferred
BUC$.
(5) Litigation. Except as set forth in the Solicitation Statement dated
June 18, 1997 or the 1996 Form 10-K or Form 10-Q of Summit Preferred for the
quarter ended June 30, 1997:
(1) there are no claims, actions, suits, proceedings or
investigations pending or, to the knowledge of Summit Preferred,
threatened, in any court or before any governmental agency or
instrumentality, or before any arbitrator, by or against or affecting or
relating to Summit Preferred, which, if adversely determined, would have a
Material Adverse Effect or which would (i) restrain or enjoin the
consummation of the transactions contemplated by this Agreement, (ii)
declare unlawful the transactions or events contemplated by this
Agreement, or (iii) cause any of such transactions to be rescinded; and
(2) there are no judgments, injunctions, orders or other judicial
or administrative mandates outstanding against or affecting Summit
Preferred which would materially hinder or delay the consummation of the
transactions contemplated by this Agreement or which would have a Material
Adverse Effect.
(6) Compliance with Laws. To the knowledge of Summit Preferred, it is in
compliance in all material respects with all laws, governmental rules and
ordinances of the federal, state and local authorities having jurisdiction over
and except where the failure to so comply would not have a Material Adverse
Effect.
(7) Conversion of BUC$. No Summit Preferred BUC$holder has exercised its
right, under the Partnership Agreement of Summit Preferred, as amended, to
convert its Summit Preferred BUC$ into limited partnership interests in Summit
Preferred.
(8) Summit Preferred has not, since June 18, 1997, suffered a Material
Adverse Effect.
(9) Material Adverse Effect. As used in this Section 3.3 "Material
Adverse Effect" shall mean any material adverse change in the business, assets
or financial condition of Summit Preferred which has a material adverse effect
on the income reasonably expected to be
22
<PAGE>
generated by Summit Preferred from and after the Closing Date or the economic
value thereof.
Section III.4 Eagle hereby represents and warrants to Aegis as
follows:
(1) Organization and Good Standing. Eagle is a limited partnership, duly
formed and validly existing as a limited partnership in good standing under the
laws of the State of Delaware. Eagle has the requisite partnership power and
authority to conduct its business in the manner and in the jurisdictions where
it is now conducted. Eagle is qualified to do business and is in good standing
in each jurisdiction in which the failure to be so qualified would have a
Material Adverse Effect.
(2) Authority; Power. The execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby have been duly and
validly authorized by all necessary partnership action on the part of Eagle.
Eagle has the requisite partnership power and authority to enter into, deliver
and, perform this Agreement and any other agreements and instruments
contemplated hereby. This Agreement constitutes a legal, valid and binding
obligation of Eagle enforceable against it in accordance with its terms, except
as such enforceability may be limited by (i) bankruptcy, reorganization,
insolvency, moratorium or other similar laws affecting creditor's rights
generally, (ii) the power of a court to grant specific performance or any other
remedy and (iii) the application of general principles of equity.
(3) Consents and Approvals; No Violation.
(1) To the knowledge of Eagle, other than the Final Order, no
consent, waiver, approval or authorization of, or filing, registration or
qualification with, any governmental or regulatory authority, which if not
made or obtained would have a Material Adverse Effect or would materially
adversely affect Eagle's ability to perform its obligations under this
Agreement, is required to be made or obtained by Eagle in connection with
the execution, delivery and performance of this Agreement; and
(2) None of the execution, delivery or, except as contemplated by
this Agreement, performance of this Agreement by Eagle does or will, with
or without the giving of notice, lapse of time or both, result in any
violation of or conflict with or constitute a default under any term or
provision of the certificate of limited partnership or agreement of
limited partnership, as amended, of Eagle or, to the knowledge of Eagle,
any judgment, decree, order, law, statute, injunction, rule, regulation or
governmental license or permit applicable to Eagle; result in the creation
of any lien upon the partnership interests of Eagle or Eagle BUC$; or
constitute a default under, or result in the termination, acceleration,
amendment or modification of, any material contract, agreement,
arrangement, commitment or plan to which Eagle is a party, or by which
Eagle may be subject or bound, which, in any such case, would have a
Material Adverse Effect.
23
<PAGE>
(4) No Options. Except as contemplated by this Agreement, Eagle is not a
party to any rights, options, subscriptions or other agreements of any kind, to
purchase or to acquire, receive or be issued any interest in any partnership
interest in Eagle or Eagle BUC$.
(5) Litigation. Except as set forth in the Solicitation Statement dated
June 18, 1997 or the 1996 Form 10-K or Form 10-Q of Eagle for the quarter ended
June 30, 1997:
(1) there are no claims, actions, suits, proceedings or
investigations pending or, to the knowledge of Eagle, threatened, in any
court or before any governmental agency or instrumentality, or before any
arbitrator, by or against or affecting or relating to Eagle, which, if
adversely determined, would have a Material Adverse Effect or which would
(i) restrain or enjoin the consummation of the transactions contemplated
by this Agreement, (ii) declare unlawful the transactions or events
contemplated by this Agreement, or (iii) cause any of such transactions to
be rescinded; and
(2) there are no judgments, injunctions, orders or other judicial
or administrative mandates outstanding against or affecting Eagle which
would materially hinder or delay the consummation of the transactions
contemplated by this Agreement or which would have a Material Adverse
Effect.
(6) Compliance with Laws. To the knowledge of Eagle, it is in compliance
in all material respects with all laws, governmental rules and ordinances of the
federal, state and local authorities having jurisdiction over and except where
the failure to so comply would not have a Material Adverse Effect.
(7) Conversion of BUC$. No Eagle BUC$holder has exercised its right,
under the Agreement of Limited Partnership of Eagle, as amended, to convert its
Eagle BUC$ into limited partnership interests in Eagle.
(8) Eagle has not, since June 18, 1997, suffered a Material Adverse
Effect.
(9) Material Adverse Effect. As used in this Section 3.4 "Material
Adverse Effect" shall mean any material adverse change in the business, assets
or financial condition of Eagle which has a material adverse effect on the
income reasonably expected to be generated by Eagle from and after the Closing
Date or the economic value thereof.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF AEGIS
Aegis hereby represents and warrants to the Partnerships, as follows:
Section IV.1 Organization, Standing and Corporate Power.
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<PAGE>
Aegis is a corporation duly organized, validly existing and in good
standing under the laws of Maryland and has the requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as being conducted. Aegis is duly qualified or licensed to do business and is in
good standing in each jurisdiction in which the nature of its business or the
character, or location of the properties owned by it makes such qualification or
licensing necessary, except where the failure to be so qualified or licensed
would not have a material adverse effect on the condition of Aegis. Aegis has
delivered to the Partnerships complete and correct copies of its Amended and
Restated Articles of Incorporation and by-laws, as amended to the date of this
Agreement. Aegis is not in default under or in violation of any provisions of
its Amended and Restated Articles of Incorporation or by-laws.
Section IV.2 Aegis Capital Structure.
The authorized capital stock of Aegis consists of 50,000,000 shares
of Common Stock, par value $.01 per share and 5,000,000 shares of Preferred
Stock. At the close of business on September 30, 1997, (i) 1,000 Shares were
issued and outstanding (which will be repurchased by Aegis pursuant to Section
1.19 hereof for a purchase price of $1.00 per share), (ii) 8,097,539 Shares have
been reserved for issuance pursuant to the Mergers (and pursuant to the exercise
of exchange rights by the Related GPs and Advisor under the Exchange Rights
Agreement), (iii) 800,000 Shares have been reserved for issuance pursuant to the
exercise of options granted or to be granted pursuant to Aegis's Incentive Stock
Option Plan, and (iv) 316,261 Shares have been reserved for issuance in
connection with the Settlement of the Litigation. Except as set forth above, at
the close of business on September 30, 1997, no shares of capital stock or other
voting securities of Aegis were issued, reserved for issuance or outstanding.
All outstanding Shares of Aegis are, and all Shares which may be issued pursuant
to this Agreement will be, when issued, duly authorized, validly issued, fully
paid and nonassessable and not subject to preemptive rights. As of the date of
this Agreement, no bonds, debentures, notes or other indebtedness of Aegis
having the right to vote (or convertible into, or exchangeable for, securities
having the right to vote) on any matters on which the holders of Shares may vote
are issued and outstanding.
Section IV.3 Authority; Noncontravention.
Aegis has all requisite corporate power and authority to enter into
this Agreement and to consummate the transactions contemplated by this
Agreement. The execution and delivery of this Agreement by Aegis and the
consummation by Aegis of the transactions contemplated by this Agreement have
been duly authorized by all necessary corporate action on the part of Aegis and
no other action on the part of Aegis is necessary to authorize the execution,
delivery and performance of this Agreement by Aegis. This Agreement has been
duly executed and delivered by and, assuming this Agreement constitutes the
valid and binding agreement of the Partnerships, constitutes a valid and binding
obligation of Aegis, enforceable against such party in accordance with its terms
except that the enforcement thereof may be limited by (a) bankruptcy,
insolvency, reorganization, moratorium or similar laws now or hereafter in
effect relating to creditor's rights generally and (b) general principles of
equity (regardless of whether enforceability is considered in
25
<PAGE>
a proceeding at law or in equity). The execution and delivery of this Agreement
does not, and the consummation of the transactions contemplated by this
Agreement and compliance with the provisions of this Agreement will not (i)
conflict with any of the provisions of the Amended and Restated Articles of
Incorporation or by-laws of Aegis, (ii) conflict with, result in a breach of or
default (with or without notice or lapse of time, or both) under, or give rise
to a right of termination, cancellation or acceleration of any obligation or
loss of a material benefit under, or require the consent of any person under,
any indenture, or other agreement, permit, concession, franchise, license or
similar instrument or undertaking to which Aegis is a party or by which Aegis
any of its assets is bound or affected, or (iii) contravene any law, rule or
regulation of any state or of the United States or any political subdivision
thereof or therein, or any order, writ, judgment, injunction, decree,
determination or award currently in effect. No consent, approval or
authorization of, or declaration or filing with, or notice to, any governmental
entity which has not been received or made, is required to be made by Aegis in
connection with the execution and delivery of this Agreement by Aegis or the
consummation by Aegis of any of the transactions contemplated by this Agreement.
ARTICLE V
SURVIVAL OF PROVISIONS
Section V.1 Survival.
The representations and warranties respectively made, or required to
be made, by the parties to this Agreement, or in any certificate, respectively,
delivered by the parties hereto pursuant to this Agreement will not survive the
Closing.
ARTICLE VI
NOTICES
Section VI.1 Notices.
All notices and other communications under this Agreement must be in
writing and will be deemed to have been duly given if delivered, telecopied or
mailed, by certified mail, return receipt requested, first class postage
prepaid, to the parties at the following addresses:
If to Aegis, to:
Aegis Realty, Inc.
625 Madison Avenue
New York, New York 10022
Attention: Stuart J. Boesky
26
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With a Copy to:
Battle Fowler LLP
75 East 55th Street
New York, New York 10022
Attention: Peter Fass, Esq.
If to Operating Partnership, to:
Aegis Realty Operating Partnership, L.P.
625 Madison Avenue
New York, New York 10022
Attention: Stuart J. Boesky
With a Copy to:
Battle Fowler LLP
75 East 55th Street
New York, New York 10022
Attention: Peter Fass, Esq.
If to Aegis Holding LP to:
Aegis Realty Holding, LP
625 Madison Avenue
New York, New York 10022
Attention: Stuart J. Boesky
With a Copy to:
Battle Fowler LLP
75 East 55th Street
New York, New York 10022
Attention: Peter Fass, Esq.
If to Insured I, to:
Summit Insured Equity L.P.
625 Madison Avenue
New York, New York 10022
Attention: Alan P. Hirmes
With a Copy to:
27
<PAGE>
Battle Fowler LLP
75 East 55th Street
New York, New York 10022
Attention: Peter Fass, Esq.
If to Insured II, to:
Summit Insured Equity II L.P.
625 Madison Avenue
New York, New York 10022
Attention: Alan P. Hirmes
With a Copy to:
Battle Fowler LLP
75 East 55th Street
New York, New York 10022
Attention: Peter Fass, Esq.
If to Summit Preferred, to:
Summit Preferred Equity L.P.
625 Madison Avenue
New York, New York 10022
Attention: Alan P. Hirmes
With a Copy to:
Battle Fowler LLP
75 East 55th Street
New York, New York 10022
Attention: Peter Fass, Esq.
If to Eagle, to:
Eagle Insured Equity L.P.
625 Madison Avenue
New York, New York 10022
Attention: Alan P. Hirmes
With a Copy to:
Battle Fowler LLP
75 East 55th Street
28
<PAGE>
New York, New York 10022
Attention: Peter Fass, Esq.
If to Related GP I, to:
Related Insured Equity Associates, Inc.
625 Madison Avenue
New York, New York 10022
With a copy to:
Battle Fowler, LLP
75 East 55th Street
New York, New York 10022
If to Related GP II, to:
RIDC II, L.P.
625 Madison Avenue
New York, New York 10022
With a copy to:
Battle Fowler, LLP
75 East 55th Street
New York, New York 10022
If to Related GP III, to:
Related Equity Funding, Inc.
625 Madison Avenue
New York, New York 10022
With a copy to:
Battle Fowler, LLP
75 East 55th Street
New York, New York 10022
If to Related GP IV, to:
Related Federal Insured, L.P.
625 Madison Avenue
New York, New York 10022
29
<PAGE>
With a copy to:
Battle Fowler, LLP
75 East 55th Street
New York, New York 10022
If to Partnership Monitoring Corp., to:
Partnership Monitoring Corp.
625 Madison Avenue
New York, New York 10022
With a copy to:
Battle Fowler, LLP
75 East 55th Street
New York, New York 10022
All notices and other communications required or permitted under this
Agreement that are addressed as provided in this Article VI will, if delivered
personally, be deemed given upon delivery, will, if delivered by telecopy, be
deemed delivered when confirmed and will, if delivered by mail in the manner
described above, be deemed given on the third business day after the day it is
deposited in a regular depository of the United States mail. Any party from time
to time may change its address for the purpose of notices to that party by
giving a similar notice specifying a new address, but no such notice will be
deemed to have been given until it is actually received by the party sought to
be charged with the contents thereof.
ARTICLE VII
CONDITIONS PRECEDENT
Section VII.1 Conditions to Each Party's Obligation To Effect
the Consolidation. The respective obligation of each party hereto to effect the
Consolidation is n subject to the satisfaction or waiver on or prior to the
Closing Date of the following conditions:
(1) the Final Order continues to be viable;
(2) no provision of any applicable law or regulation and no
judgment, injunction, order or decree shall prohibit the consummation of the
Consolidation;
(3) all actions by or in respect of or filings with any
governmental body, agency, official or authority required to permit the
consummation of the Consolidation shall have
30
<PAGE>
been obtained or completed; and
(4) the Withdrawal Transactions shall have been consummated
pursuant to the Purchase Agreement;
(5) the Shares shall have been approved for listing on the American
Stock Exchange, subject to notice of issuance;
(6) pursuant to the Partnership Agreement Amendments, the Advisor
has contributed back to each respective Partnership one-half of the general
partner interests of each such Partnership received by it in the Withdrawal
Transactions.
Section VII.2. Conditions to Obligations of Aegis and its
Affiliates. The obligations of Aegis and its Affiliates to effect the
Consolidation is further subject to the following conditions:
(1) Accuracy of Representations and Warranties. The representations
and warranties of the other parties to this Agreement contained in this
Agreement shall have been true and correct on the date of this Agreement and as
of the Closing Date (except to the extent that they expressly relate only to an
earlier time, in which case they shall have been true and correct as of such
earlier time) other than such breaches of representations and warranties which
in the aggregate would not reasonably be expected to have a Material Adverse
Effect on the condition of any Partnership, provided, however, that the
representations and warranties of any Partnership contained in this Agreement to
the extent qualified by "material", "material adverse effect" or "material
adverse change" shall be true and correct in all respects at and as of the
Closing Date.
(2) Perfomance of Obligations by the Other Parties. The other
parties to this Agreement shall have performed in all material respects all
obligations required to be performed by them under this Agreement at or prior
to the Closing Date and shall not have willfully or intentionally (i) breached
any of their respective representations or warranties herein or (ii) failed to
perform or satisfy any of their respective obligations or covenants hereunder,
and Aegis shall have received certificates dated as of the Closing Date signed
on behalf of each Partnership by their respective general partners to such
effect.
Section VII.3 Conditions to Obligation of the Partnerships.
The obligation of each Partnership to effect the Consolidation is further
subject to the following conditions:
(1) Accuracy of Representations and Warranties. The representations
and warranties of Aegis and its Affiliates and the other parties to this
Agreement contained in this Agreement shall have been true and correct on this
date of this Agreement and as of the Closing Date (except to the extent that
they expressly relate only to an earlier time, in which case they shall have
been true and correct as of such earlier time), other than such breaches of
representations and warranties which in the aggregate would not reasonably be
expected to have a material adverse effect on the condition of such other
parties; provided, however, that the representations and warranties of the other
parties contained in this Agreement to the extent
31
<PAGE>
qualified by "material", "material adverse effect" or "material adverse change"
shall be true and correct in all respects at and as of the Closing Date.
(2) Performance of Obligations of Aegis and its Affiliates and the
Other Parties to this Agreement Partnerships. Aegis and its Affiliates and the
other parties to this Agreement Partnerships shall have performed in all
material respects all obligations required to be performed by such party under
this Agreement at or prior to the Closing Date and shall not have willfully or
intentionally (i) breached any of their representations or warranties herein or
(ii) failed to perform or satisfy any of its obligations or covenants hereunder.
(3) Opinion of Counsel. The Partnerships shall have received the
opinion dated the Closing Date of counsel to Aegis as set forth in the
Solicitation Statement.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
Section VIII.1 Termination. This Agreement may be terminated
and abandoned at any time prior to the Effective Time:
(1) by mutual written consent of the parties hereto or
(2) by either Aegis and its Affiliates on the one hand or the
Partnerships on the other:
(1) at any time after March 31, 1998 if the Consolidation
shall not have been consummated by such date, unless the
failure to consummate the Consolidation is the result of a
failure to fulfill any obligation under this Agreement by any
party seeking to terminate this Agreement or the failure of
the representations and warranties of any party seeking to
terminate this Agreement to be true and correct in all
material respects; and
(2) at any time prior to the Effective Time by Aegis and its
Affiliates on the one hand, or the Partnerships on the other,
in the event of either (A) a material breach by any of the
Partnerships on the one hand, and Aegis and its Affiliates on
the other, of any representation or warranty contained in this
Agreement, which breach cannot be or has not been cured within
30 days after the giving of written notice to the breaching
party of such breach; or (B) a material breach by any of the
Partnerships on the one hand, and Aegis and its Affiliates on
the other, of any of the covenants or agreements contained in
this Agreement, which breach cannot be or has not been cured
within 30 days after the giving of written notice to the
breaching party of such breach.
32
<PAGE>
Section VIII.2 Effect of Termination. In the event of
termination of this Agreement as provided in Section 8.1, this Agreement shall
forthwith become void and have no effect, without any liability or obligation on
the part of the parties hereto. Nothing contained in this Section 8.2 shall
relieve any party from any liability resulting from any material breach of the
representations, warranties, covenants or agreements set forth in this
Agreement.
Section VIII.3 Amendment. At any time prior to the Effective
Time, the parties hereto may modify or amend this Agreement, by written
agreement executed and delivered by duly authorized officers, general partners,
or members, as the case may be, of the respective parties. This Agreement may
not be amended except by an instrument in writing signed on behalf of each of
the parties.
Section VIII.4 Extension; Waiver. At any time prior to the
Effective Time, each party may (a) extend the time for the performance of any of
the obligations or other acts of any other party, (b) waive any inaccuracies in
the representations and warranties of any other party contained in this
Agreement or in any document delivered pursuant to this Agreement or (c) subject
to Section 8.3, waive compliance with any of the agreements or conditions of any
other party contained in this Agreement. Any agreement on the part of a party to
any such extension or waiver shall be valid only if set forth in an instrument
in writing signed on behalf of such party, and only with respect to 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 such rights.
Section VIII.5 Procedure for Termination, Amendment, Extension
or Waiver. A termination of this Agreement pursuant to Section 8.1, an
amendment of this Agreement pursuant to Section 8.3 or an extension or waiver
pursuant to section 8.4 shall, in order to be effective, require in the case of
any Partnership, action by a general partner of such Partnership, and in the
case of any corporation, action by any officer of such corporation.
ARTICLE IX
MISCELLANEOUS
Section IX.1 Entire Agreement. Except for the Purchase
Agreement and any documents executed by the parties hereto pursuant hereto, this
Agreement supersedes all prior discussions and agreements between the parties
with respect to the subject matter of this Agreement, and this Agreement
(including the exhibits and schedules hereto, and other documents delivered in
connection herewith) and the Purchase Agreement contain the sole and entire
agreement between the parties hereto with respect to the subject matter hereof.
Section IX.2 Expenses. All costs and expenses incurred by the
parties hereto incident to preparing for, entering into, carrying out and
performing this Agreement and the transactions contemplated hereby (the
"Consolidation Expenses") shall be borne and paid for as
33
<PAGE>
follows:
(1) All Consolidation Expenses incurred by Aegis and its
Affiliates shall be borne and paid for by Aegis;
(2) If the Consolidation is consummated, Aegis shall be
responsible for all Consolidation Expenses incurred by the Partnerships and
shall reimburse the Partnerships for the same;
(3) If none of the Consolidation is not consummated, each of
the respective Related GPs shall be responsible for Consolidation Expenses of
their respective Partnerships and shall reimburse each of their respective
Partnerships for the same.
Section IX.3 Counterparts. This Agreement may be executed in
one or more counterparts, each of which will be deemed an original, but all of
which will constitute one and the same instrument and shall become effective
when one or more counterparts have been signed by each of the parties and
delivered to the other parties.
Section IX.4 No Third Party Beneficiary. Except as otherwise
expressly provided herein, the terms and provisions of this Agreement are
intended solely for the benefit of the parties hereto, and their respective
successors or assigns, and it is not the intention of the parties to confer
third party beneficiary rights upon any other person.
Section IX.5 Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of Delaware,
regardless of the laws that might otherwise govern under applicable principles
of conflicts of laws thereof.
Section IX.6 Assignment; Binding Effect. Neither this
Agreement nor any of the rights, interests or obligations under this Agreement
shall be assigned, in whole or in part, by operation of law or otherwise by any
of the parties without the prior written consent of the other parties, and any
such assignment that is not consented to shall be null and void. 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 IX.7 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, this being in addition
to any other remedy to which they are entitled at law or in equity.
Section IX.8 Headings, Gender, etc. The headings used in this
Agreement have been inserted for convenience and do not constitute matters to be
construed or interpreted in connection with this Agreement. Unless the context
of this Agreement otherwise
34
<PAGE>
requires, (a) words of any gender are deemed to include each other gender, (b)
words using the singular or plural number also include the plural or singular
number, respectively, (c) the terms "hereof," "herein, " "hereby, " "hereto,"
and derivative or similar words refer to this entire Agreement, (d) the terms
"Article" or "Section" refer to the specified Article or Section of this
Agreement, (e) all references to "dollars" or will refer to currency of the
United States of America, and (f) the term "person" shall include any natural
person, corporation, limited liability company, general partnership, limited
partnership, or other entity, enterprise, authority or business organization.
[SIGNATURE PAGES FOLLOW]
35
<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the parties hereto, effective as of the date first written above.
AEGIS REALTY, INC. AOP MERGER SUB I, INC.
By: _______________________________ By: ________________________
Name: J. Michael Fried Name: Stuart J. Boesky
Title: President Title: President
AEGIS REALTY OPERATING AOP MERGER SUB II, INC.
PARTNERSHIP, L.P.
By: _______________________________
By: AEGIS REALTY, INC., Name: Stuart J. Boesky
as its General Partner Title: President
By: _________________________ SUMMIT INSURED EQUITY L.P.
Name: J. Michael Fried
Title: President By: RELATED INSURED QUITY
ASSOCIATES, INC., its General
AEGIS REALTY HOLDING Partner
PARTNERSHIP, LP
By: _______________________________
By: AEGIS REALTY OPERATING Name: Stuart J. Boesky
PARTNERSHIP, L.P., as its General Title: Vice President
Partner
SUMMIT INSURED EQUITY II L.P.
By: AEGIS REALTY, INC.
as its General Partner By: RIDC II, L.P., its General
Partner
By: _______________________ By: Related Insured Equity
Name: J. Michael Fried Associates, II, Inc.
Title: President
By: _______________________
RELATED AEGIS, LP Name: Stuart J. Boesky
Title: Vice President
By: RELATED AEGIS, INC., its General
Partner SUMMIT PREFERRED EQUITY L.P.
By: _________________________ By: RELATED EQUITY FUNIDNG, INC.,
Name: J. Michael Fried its General Partner
Title: President
By: _______________________
Name: Stuart J. Boesky
Title: President
RELATED INSURED EQUITY EAGLE INSURED L.P.
36
<PAGE>
ASSOCIATES, INC.
By: RELATED FEDERAL INSURED L.P.,
By:_____________________________ as its General Partner
Name: Stuart J. Boesky
Title: Vice President By: RFI ASSOCIATES, INC., as its
General Partner
RIDC II, L.P. By: _______________________
Name: Stuart J. Boesky
By: Related Insured Equity Title: Vice President
Associates, II, Inc.
By:_____________________________ By: PARTNERSHIP MONITORING
Name: Stuart J. Boesky CORPORATION, its General
Title: Vice President Partner
By:_______________________
Name: J. Michael Fried
Title: President
RELATED EQUITY FUNDING, INC.
RELATED FI BUC$, INC.
By:_______________________
Name: Stuart J. Boesky
Title: Vice President By: __________________________
Name: J. Michael Fried
Title: President
RELATED INSURED BUC$ ASSOCIATES,
INC.
PARTNERSHIP MONITORING
By:________________________ CORPORATION
Name: J. Michael Fried
Title: President By: _________________________
Name: J. Michael Fried
Title: President
RELATED BUC$ ASSOCIATES, INC.
By:_________________________
Name: J. Michael Fried
Title: President
37
<PAGE>
RELATED FEDERAL INSURED L.P.
By: RFI ASSOCIATES, INC., as its
General Partner
By: ______________________
Name: Stuart J. Boesky
Title: Vice President
38
<PAGE>
AGREEMENT AND PLAN OF CONSOLIDATION
DATED AS OF OCTOBER 1, 1997
By and Among
AEGIS REALTY, INC.
AEGIS REALTY OPERATING PARTNERSHIP, L.P.
AEGIS REALTY HOLDING PARTNERSHIP, LP
AOP MERGER SUB I, INC.
AOP MERGER SUB II, INC.
RELATED AEGIS, LP
SUMMIT INSURED EQUITY L.P.
SUMMIT INSURED EQUITY II L.P.
SUMMIT PREFERRED EQUITY L.P.
EAGLE INSURED L.P.
RELATED EQUITY FUNDING, INC.
PARTNERSHIP MONITORING CORPORATION.
RELATED FEDERAL INSURED, L.P.
RELATED INSURED BUC$ ASSOCIATES, INC.
RELATED BUC$ ASSOCIATES, INC.
RIDC II, L.P.
RELATED FI BUC$ ASSOCIATES, INC.
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
<S> <C> <C>
ARTICLE I ASSIGNMENT OF INTERESTS.................................................................................3
Section 1.1 Closing...............................................................................3
Section 1.2 Summit Preferred Assignments..........................................................3
Section 1.3 Eagle Assignments.....................................................................5
Section 1.4 Insured I Assignments and Contributions...............................................5
Section 1.5 Insured II Assignments and Contributions..............................................6
Section 1.6 Aegis Assignments and Contributions of Economic Interests of the General Partner
Interests of Summit Preferred and Eagle to the Operating Partnership..................7
Section 1.7 Aegis Assignment of BUC$ to the Operating Partnership.................................7
Section 1.8 Aegis Assignments and Contributions to Aegis Holding, L.P.............................8
Section 1.9 Operating Partnership Assignments and Contributions to Aegis Holding, LP..............8
Section 1.11 Eagle Assignment of Mortgages.........................................................8
Section 1.12 Sequence of Assignments and Other Transactions .......................................8
Section 1.13 Further Assurances....................................................................8
Section 1.14 No Fractional Shares..................................................................9
Section 1.15 Delivery of Share Certificates; Exchange of BUC$ Certificates for Share Certificates..9
Section 1.16 Aegis' Option to Not Require Delivery of BUC$
Certificates by BUC$holders in Order to Receive Shares...............................11
Section 1.17 Shares issued to Related General Partners to equal 0.75% of all Shares outstanding
after the Consolidation..............................................................12
Section 1.18 Shares to be issued to Advisor to equal 0.37% of all Shares outstanding after the
Consolidation........................................................................12
ARTICLE II THE CONSOLIDATION......................................................................................13
Section 2.1 The Consolidation....................................................................13
Section 2.2 Effective Time.......................................................................13
Section 2.3 Certificates of Limited Partnership of the Surviving Entities........................13
Section 2.4 Agreements of Limited Partnership of Surviving Entities..............................14
Section 2.5 General Partners of the Surviving Entities...........................................14
Section 2.6 Cancellation of General and Limited Partner Interests in Insured I...................15
Section 2.7 Conversion of Shares of AOP Sub I....................................................15
Section 2.8 Cancellation of General and Limited Partner Interests in Insured II .................15
Section 2.9 Conversion of Shares of AOP Sub II...................................................16
Section 2.10 Cancellation of General and Limited Partner Interests in Summit Preferred............16
Section 2.11 Cancellation of General and Limited Partner Interests in Eagle.......................17
</TABLE>
i
<PAGE>
<TABLE>
<S> <C> <C>
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE PARTNERSHIPS.....................................................17
Section 3.1 .....................................................................................17
(a) Organization and Good Standing.......................................................18
(b) Authority; Power.....................................................................18
Section 3.2 .....................................................................................19
(a) Organization and Good Standing.......................................................19
(b) Authority; Power.....................................................................20
Section 3.3 .....................................................................................21
(a) Organization and Good Standing.......................................................21
(b) Authority; Power.....................................................................21
Section 3.4 .....................................................................................23
(a) Organization and Good Standing.......................................................23
(b) Authority; Power.....................................................................23
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF AEGIS................................................................25
Section 4.1 Organization, Standing and Corporate Power...........................................25
Section 4.2 Aegis Capital Structure..............................................................25
Section 4.3 Authority; Noncontravention..........................................................26
ARTICLE V SURVIVAL OF PROVISIONS.................................................................................27
Section 5.1 Survival.............................................................................27
ARTICLE VI NOTICES................................................................................................27
Section 6.1 Notices..............................................................................27
ARTICLE VII CONDITIONS PRECEDENT...................................................................................31
Section 7.1 Conditions to Each Party's Obligation To Effect the Consolidation....................31
Section 7.2 Conditions to Obligations of Aegis and its Affiliates................................32
Section 7.3 Conditions to Obligation of the Partnerships.........................................32
ARTICLE VIII TERMINATION, AMENDMENT AND WAIVER......................................................................33
Section 8.1 Termination..........................................................................33
Section 8.2 Effect of Termination................................................................34
Section 8.3 Amendment............................................................................34
Section 8.4 Extension; Waiver....................................................................34
Section 8.5 Procedure for Termination, Amendment, Extension or Waiver............................34
ARTICLE IX MISCELLANEOUS..........................................................................................34
Section 9.1 Entire Agreement.....................................................................34
Section 9.2 Expenses.............................................................................35
Section 9.3 Counterparts.........................................................................35
Section 9.4 No Third Party Beneficiary...........................................................35
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C> <C>
Section 9.5 Governing Law .......................................................................35
Section 9.6 Assignment; Binding Effect...........................................................35
Section 9.7 Enforcement..........................................................................35
Section 9.8 Headings, Gender, etc................................................................36
</TABLE>
iii
Exhibit 10.3
AEGIS REALTY, INC.
INCENTIVE SHARE OPTION PLAN
2. Purpose
The purpose of this plan (the "Plan") is to permit Aegis Realty, Inc.,
a Maryland corporation (the "Company") and its subsidiaries and its advisor,
Related Aegis, LP, and any successor advisor (the "Advisor") to attract and
retain qualified persons as directors, officers and employees and to incentivize
and more closely align the financial interests of the Advisor with the interests
of the Company's shareholders by providing the Advisor with a substantial
financial interest in the Company's success.
Reference is made to the solicitation statement (the "Solicitation
Statement") dated June 18, 1997, with respect to the consolidation (the
"Consolidation") of the limited partnerships named in the Solicitation Statement
with and into the Company. All capitalized terms not otherwise defined herein
shall have the meanings ascribed to them in the Solicitation Statement.
3. Types of Plan Benefits and Administration
(a) Types of Awards. Under the Plan, the Company may in its sole
discretion (subject to the terms of the Company's Amendment and Restatement of
Articles of Incorporation as amended from time to time), grant options
("Options") for the purchase of the Company's shares of common stock, $.01 par
value ("Shares") to the directors, officers, and employees of the Company or any
of its subsidiaries (a "Subsidiary") and directors officers and employees of the
Advisor (the "Participants"), as authorized by action of the Board of Directors
of the Company (or a committee designated by the Board of Directors). As used in
the Plan, an "Award" shall mean an Option and an "Award Owner" shall mean the
owner of an Option. Options granted pursuant to the Plan to Participants who are
employees of the Company (or a Subsidiary) may be either incentive stock options
("Incentive Stock Options") meeting the requirements of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), or non-statutory options
("Non-Statutory Stock Options"), which are not intended to or do not meet the
requirements of Code Section 422. Options granted to Participants who are not
employees of the Company or a Subsidiary shall be only Non-Statutory Stock
Options.
(b) Administration. The Plan will be administered by a committee of the
Board of Directors of the Company which shall be comprised solely of two or more
independent directors and, if required for compliance with Section 16 of the
Securities Exchange Act of 1934 (the "Exchange Act"), each of whom is a
"non-employee director" and, if required for compliance with Section 162(m) of
the Code, each of whom is an "outside director" within the meaning of such
section (the "Committee"). For purposes of the Plan, a person shall be deemed to
be a "non-employee director" only if such person would qualify as a
"non-employee director" within the
<PAGE>
meaning of Rule 16b-3 of the Securities and Exchange Commission (the "SEC"). The
Committee's construction and interpretation of the terms and provisions of the
Plan shall be final and conclusive. Subject to Section 6(a) hereof, the
Committee may in its sole discretion grant Options to Participants and authorize
the issuance of Shares upon exercise of the Options, as provided in the Plan.
The Committee shall have authority, subject to the express provisions of the
Plan, to construe the respective Awards and Award Agreements (as hereinafter
defined) and the Plan; to prescribe, amend and rescind rules and regulations
relating to the Plan; to determine the terms and provisions of the respective
Award Agreements, which need not be identical; to advance the lapse of any
waiting or installment periods and exercise dates and to make all other
determinations in the sole judgment of the Committee necessary or desirable for
the administration of the Plan. The Committee may correct any defect or supply
any omission or reconcile any inconsistency in the Plan or in any Award or Award
Agreement in the manner and to the extent it shall deem expedient to carry the
Plan into effect, and such determination shall be in the sole and final
judgement of the Committee. No director, including any director who is a
Committee member, shall be liable for any action or determination taken or made
under or with respect to the Plan or any Award in good faith.
4. Eligibility
(a) Generally. Except as provided in paragraph (b) of this Section 3
and Section 6(a) hereof, Awards shall be granted only to the Participants
selected by the Committee who are, at the time of grant, directors, officers or
employees of the Company or a Subsidiary or directors, officers or employees of
the Advisor. A Participant who has been granted an Award may, if he or she is
otherwise eligible, be granted one or more additional Awards if the Committee
shall so determine.
(b) Incentive Stock Options. No person shall be granted any Incentive
Stock Option under the Plan unless, at the time such Option is granted, such
person is an employee of the Company or any Subsidiary, and such person does not
own, directly or indirectly, Shares of the Company possessing more than 10% of
the total combined voting power of all classes of equity securities of the
Company or of any Subsidiary (unless the requirements of Section 6(g)(i) are
satisfied).
5. Stock Subject to Plan
Subject to adjustment as provided in Sections 13 and 14 below, the
maximum number of Shares that may be issued and sold pursuant to Options granted
under the Plan is ten (10%) percent of the number of Shares to be issued on or
about the Effective Date pursuant to the Consolidation.
The Company shall reserve for issuance, for the purposes of the Plan,
out of its authorized but unissued Shares or out of Shares held in the Company's
treasury, or partly out of each, such number of Shares as shall be determined,
from time to time, by the Committee. If Options granted under the Plan shall
expire or terminate for any reason without having been exercised in full, the
Shares subject to the unexercised portions of such Options shall again be
available for subsequent Award grants under the Plan. Shares issuable upon
exercise of Options shall be subject to such
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restrictions on transfer,
repurchase rights or other restrictions as may be determined by the Committee.
6. Form of Award Agreements
As a condition to the grant of an Option under the Plan, each recipient
of an Option shall execute an agreement ("Award Agreement"), substantially in
the form authorized by the Board of Directors of the Company or in such other
form not inconsistent with the Plan as shall be specified by the Committee at
the time such Option is granted.
7. Discretionary Grants of Awards to Participants
(a) Initial Restriction on Grant. The Compensation Committee may not
grant any options until six months after the Shares have been listed on the
American Stock Exchange.
(b) Share Limitation. Subject to the limitation set forth in Section
4, if the Company's distributions per Share in the immediately preceding
calendar year exceed $0.9869 per Share, the Committee will have the authority to
issue Options to purchase, in the aggregate, that number of Shares which is
equal to three (3%) percent of the Shares outstanding as of December 31 of the
immediately preceding calendar year. If the Committee does not grant the maximum
number of Options in any year, the excess of the number of authorized Options
which the Committee could have granted over the number of Options actually
granted in such year will be added to the number of Options which the Committee
is authorized to grant in the next succeeding year and will be available for
grant to Participants by the Committee in such succeeding year.
(c) Purchase Price. The purchase price per Share issuable upon the
exercise of an Option granted pursuant to this Section 6 shall be the Fair Value
(as defined in Section 16 hereof) on the date that such Option is granted.
Notwithstanding anything to the contrary contained herein, in the case of an
Incentive Stock Option, the exercise price shall not be less than 100% of the
Fair Value of such stock at the date of grant of such Option, nor less than 110%
of the Fair Value in the case of Options described in Section 6(g)(i).
(d) Exercise Period. Each discretionary Award to a Participant shall
expire on such date as the Committee shall determine, but in no event after the
expiration of ten (10) years from the date on which such Award is granted, and
in all cases each Award shall be subject to earlier termination as provided in
the Plan or in any Award Agreement.
(e) Vesting of Awards. An Award granted to a Participant may be
exercised, and payment shall be made upon exercise of such Award, only to the
extent that such Award has vested. Awards shall vest in accordance with the
schedule or terms set forth in the Award Agreement executed by the Award Owner
and a duly authorized Director or officer of the Company. The Committee may
accelerate the vesting of any Option granted pursuant to this Section 6.
(f) Effect of Termination of Service. Upon termination of service of
a Participant, all
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Awards to such Participant, to the extent not vested, shall be forfeited. No
Award may be exercised unless, at the time of such exercise, the Participant is,
and continuously since the date of grant of his or her Award has been, engaged
by the Company, a Subsidiary or the Advisor, as the case may be, except that if
and to the extent the Award Agreement so provides:
(i) if the Participant ceases to be engaged by the Company, a
Subsidiary or the Advisor, as the case may be, for any reason other than death
or disability or a discharge for "cause" (as defined in (iv) below), the right
to exercise the Award, to the extent vested, shall terminate three (3) months
after such cessation (or within such other period as may be specified in the
Award Agreement);
(ii) if the Participant dies while engaged by the Company or
Subsidiary or the Advisor or within three (3) months after the Participant
ceases to be so engaged, the Awards, to the extent vested, may be exercised by
the administrator of the Participant's estate, or by the person to whom the
Options are transferred by will or the laws of descent and distribution, within
the period of one (1) year after the date of death, or within such other period
as may be specified in the Award Agreement;
(iii) if the Participant becomes disabled (within the meaning of
Section 22(e)(3) of the Code) while engaged by the Company or Subsidiary or the
Advisor, the Awards may be exercised, to the extent vested, within the period of
one (1) year after the date the Participant ceases to be engaged by the Company
or Subsidiary or the Advisor because of such disability, or within such other
period as may be specified in the Award Agreement; and
(iv) if the Participant, prior to the expiration date of an Award,
ceases his or her services with the Company or Subsidiary or the Advisor, as the
case may be, because he or she is discharged for "cause" (as defined below), the
right to exercise an Option shall terminate immediately upon such cessation of
such services. "Cause" shall mean: willful misconduct in connection with the
Participant's performance of services for the Company or Subsidiary or the
Advisor, or willful failure to perform his or her services in the best interest
of the Company or Subsidiary or the Advisor, as determined by the Committee,
which determination shall be conclusive;
provided, however, that in no event may any Award be exercised after the
expiration date of the Award. Any Award or portion thereof that is not exercised
during the applicable time period specified above (or any shorter period
specified in the Award Agreement) shall be deemed terminated at the end of the
applicable time period for purposes of Section 4 hereof.
(g) Incentive Stock Options. Options granted under the Plan that are
intended to be Incentive Stock Options shall be specifically designated as
intending to be Incentive Stock Options and shall be subject to the following
additional terms and conditions:
(i) 10% Shareholder. If any Participant to whom an Incentive
Stock Option is to be granted under the Plan is, at the time of the grant of
such Option, the owner of equity securities
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possessing more than 10% of the total combined voting power of all classes of
equity securities of the Company or any Subsidiary, then the following special
provisions shall be applicable to the Incentive Stock Option granted to such
individual: (x) the exercise price per Share subject to such Incentive Stock
Option shall not be less than 110% of the Fair Value (as defined in Section 16)
of one Share at the time of grant; and (y) the option exercise period shall not
exceed five years from the date of grant.
(ii) Dollar Limitation. Shares of the Company that are
acquired pursuant to the exercise of an Incentive Stock Option granted to a
Participant under the Plan shall be deemed to be acquired pursuant to the
exercise of an Incentive Stock Option under Code Section 422, only to the extent
that the aggregate Fair Value (determined as of the respective date or dates of
grant) of the Shares with respect to which such Incentive Stock Option, and all
other Incentive Stock Options that are granted to such Participant under the
Plan (and under any other incentive stock option plans of the Company or any
Subsidiary), are exercisable for the first time by such Participant in any one
calendar year, does not exceed $100,000. To effectuate the provisions of this
Section 6(g), the Committee may designate the Shares that are treated as
acquired pursuant to the exercise of an Incentive Stock Option by issuing a
separate certificate for such Shares and identifying such certificates as
Incentive Stock Option stock in its stock transfer records.
(iii) If a Participant makes a disposition, within the
meaning of Section 424(c) of the Code and regulations promulgated thereunder, of
any Share or Shares issued to such Participant pursuant to the exercise of an
Incentive Stock Option within the two-year period commencing on the day after
the date of the grant or within the one-year period commencing on the day after
the date of transfer of such share or shares to the Participant pursuant to such
exercise, the Participant shall, within ten (10) days of such disposition,
notify the Company thereof, by delivery of written notice to the Company at its
principal executive office.
Except as modified by the preceding provisions of this Section
6(g), all the provisions of the Plan applicable to Options shall be applicable
to Incentive Stock Options granted hereunder.
8. Method of Exercise
An Award Owner may exercise an Option granted pursuant to the Plan by
delivering to the Company at its main office written notice of exercise, which
notice shall specify the number of Shares with respect to which the Option is
being exercised, together with payment of the purchase price in exchange for the
Company's issuance and delivery of certificates therefor. The purchase price for
any Shares pursuant to the exercise of an Option shall be paid in full upon such
exercise by any one or a combination of the following: (i) cash (by check), (ii)
transferring fully paid Shares to the Company with a Fair Value equal to the
aggregate purchase price, or (iii) by cash payments in installments or pursuant
to a full recourse promissory note, in either case, upon such terms as the
Committee deems appropriate. Notwithstanding the foregoing, the Committee shall
have discretion to determine at the time of grant of each Option or at any later
date (up to and including the date of exercise) the form of payment acceptable
in respect of the exercise of such Option. The written
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notice pursuant to this Section 7 may also provide instructions to the Company
that upon receipt of the purchase price in cash from the Award Owner's broker or
dealer, designated as such on the written notice, in payment for any Shares
purchased pursuant to the exercise of an Option, the Company shall issue such
Shares directly to the designated broker or dealer. Any Shares transferred to
the Company as payment of the purchase price under an Option shall be valued at
their Fair Value on the day preceding the date of exercise of such Option. If
requested by the Committee, the Award Owner shall deliver the related Award
Agreement to a designated representative of the Company who shall endorse
thereon a notation of such exercise and return such agreement to the Award
Owner. No fractional Shares or cash in lieu thereof shall be issued upon
exercise of an Option, and the number of Shares that may be purchased upon
exercise shall be rounded to the nearest number of whole Shares.
9. Transferability of Awards
No Award granted under the Plan shall be assignable or transferable by
the Participant to whom it is granted, either voluntarily or by operation of
law, except by will or the laws of descent and distribution. During the life of
the Participant, the Award shall be exercisable only by or on behalf of such
person. Notwithstanding the foregoing and provided the Award Owner receives no
consideration, the Committee may permit Awards (other than Incentive Stock
Options) to be transferable to a member of the Award Owner's "immediate family,"
a trust established by an Award Owner for the benefit of one or more members of
such Award Owner's "immediate family" or a partnership in which such "immediate
family" members are the only partners. The term "immediate family" shall have
the meaning of such term in Rule 16a-1 of the SEC.
10. General Restrictions
(a) Award Owner Representations. The Company may require a person to
whom an Award is granted, as a condition of exercising such Award, to:
(i) give such written assurances, in substance and form
satisfactory to the Company, as the Company deems necessary or appropriate in
order to comply with federal and applicable state securities laws, including,
without limitation, that such person is acquiring the Share subject to the Award
for his or her own account for investment and not with any present intention of
selling or otherwise distributing the same; and
(ii) grant to the Company the right, which shall be for a
price equal to the Fair Value for such Shares and upon such other terms as the
Committee, in its sole discretion, prescribes, to repurchase from the Award
Owner any or all Shares acquired by such Award Owner through the exercise of an
Award which such Award Owner may at any time desire to sell, transfer or
otherwise dispose of.
Certificates representing Shares issued upon exercise of the Award shall bear
such legends as are deemed appropriate by legal counsel to the Company, unless
the Award Owner provides a written opinion of legal counsel, satisfactory to the
Company, that any such legend is not required.
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(b) Compliance With Securities Laws.
(i) Each Award shall be subject to the requirement that, if
at any time counsel to the Company shall determine that the listing,
registration or qualification of such Award or the Shares subject to such Award
upon any securities exchange or under any state or federal law, or the consent
or approval of any governmental or regulatory body, is necessary as a condition
of, or in connection with the grant or exercise of such Award or the issuance or
purchase of Shares thereunder, such Award shall not be effective or may not be
accepted or exercised in whole or in part (as applicable) unless such listing,
registration, qualification, consent or approval shall have been effected or
obtained on conditions acceptable to the Committee. Nothing herein shall be
deemed to require the Company to apply for or to obtain such listing,
registration, qualification, consent or approval.
(ii) The Company shall provide each Award Owner with such
information, statements, discussions and analyses with respect to the Company in
such manner and at such times as may be required under state or federal
securities laws.
11. Rights as a Shareholder
The Award Owner shall have no rights as a shareholder with respect to
any Shares covered by the Award until the date upon which the share certificates
are issued to him or her for such Shares. Except as otherwise expressly provided
in the Plan, no adjustment shall be made for cash dividends or other
distributions or rights for which the record date is prior to the date on which
such share certificate is issued.
12. Recapitalization
In the event that the outstanding Shares of the Company are changed
into or exchanged for a different number or kind of shares or other securities
of the Company by reason of any recapitalization, reclassification, stock split,
stock dividend, combination or subdivision, an appropriate and proportionate
adjustment shall be made in the number and kind of shares subject to the Plan
and in the number, kind, and per share exercise price, of shares subject to
unexercised Options or portions thereof granted prior to such adjustment. Any
such adjustment to an outstanding Option shall be made without change in the
total price applicable to the unexercised portion of such Option as of the date
of the adjustment. No such adjustment shall be made with respect to an Incentive
Stock Option that would, within the meaning of any applicable provisions of the
Code, constitute a modification, extension or renewal of any Option or a grant
of additional benefits to the holder of an Option.
13. Reorganization
In the event that:
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(i) the Company is merged or consolidated with another entity
or person other than an Affiliate (as defined below), and the
Company is not a surviving entity, or
(ii) all or substantially all of the assets or more than 20%
of the outstanding equity securities of the Company entitled
to vote for directors is acquired by any other entity or
person other than an Affiliate or an entity or person or any
Affiliate thereof owning 5% or more of the outstanding voting
stock of the Company or
(iii) there is a reorganization or liquidation of the Company,
the Committee, or the board of directors of any corporation assuming the
obligations of the Company, shall, as to outstanding Awards, either (x) in the
case of a merger, consolidation or reorganization of the Company, make
appropriate provision for the protection of any such outstanding Awards by the
substitution on an equivalent basis of appropriate shares or other securities of
the Company or of the merged, consolidated or otherwise reorganized corporation
that will be issuable in respect of the Shares (provided that no additional
benefits shall be conferred upon Award Owners as a result of such substitution),
or (y) upon written notice to the Award Owners, provide that all unexercised
Awards must be exercised within a specified number of days of the date of such
notice or the unexercised Awards will be terminated, or (z) upon written notice
to the Award Owners, provide that all unexercised Awards shall be purchased by
the Company or its successor within a specified number of days of the date of
such notice at a price equal to the value the Award Owners would have received
if they then exercised all their Awards and immediately received full payment in
respect of such exercise, as determined in good faith by the Committee.
Notwithstanding anything contained in the Plan or any Award Agreement
to the contrary, in the event of a reorganization or other event described above
which is also intended to constitute a Pooling Transaction (as defined herein),
the Committee shall take such actions, if any, which are specifically
recommended by an independent accounting firm retained by the Company to the
extent reasonably necessary in order to assure that the Pooling Transaction will
qualify as such, including but not limited to (i) deferring the vesting,
exercise, payment or settlement with respect to any Option, (ii) providing that
the payment or settlement in respect of any Option be made in the form of cash,
Shares or securities of a successor or acquirer of the Company, or a combination
of the foregoing and (iii) providing for the extension of the term of any Option
to the extent necessary to accommodate the foregoing, but not beyond the maximum
term permitted for any Option. For purposes of this Plan, "Pooling Transaction"
means an acquisition of the Company in a transaction which is intended to be
treated as a "pooling of interests" under generally accepted accounting
principles.
14. No Special Rights
Nothing contained in the Plan or in any Award granted under the Plan
shall confer upon any Award Owner any right with respect to the continuation of
his or her service with the Company or Subsidiary or Advisor or interfere in any
way with the right of the Company (or any Subsidiary), or the Advisor, as the
case may be, subject to the terms of any separate agreement to the contrary, at
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any time to terminate such service or to increase or decrease the compensation
of the Award Owner from the rate in existence at the time of the grant of an
Award. Whether an authorized leave of absence, or absence in military or
government service, shall constitute termination or cessation of services for
purposes of this Plan shall be determined by the Committee.
15. No Special Director Rights
Nothing contained in the Plan or in any Award granted under the Plan
shall constitute evidence of any agreement or understanding, express or implied,
that a director has a right to continue as a director for any period of time.
16. Other Employee Benefits
The amount of any income deemed to be received by an Award Owner as a
result of the exercise of an Award or the sale of Shares received upon such
exercise will not constitute "compensation" or "earnings" with respect to which
any other benefits of such person are determined by the Company, including
without limitation benefits under any pension, profit sharing, life insurance or
salary continuation plan.
17. Definitions
(a) Affiliate. The term "Affiliate" shall mean a corporation or other
entity or person which, at the time of reference, directly or indirectly through
one or more intermediaries, controls, is controlled by, or is under common
control with, the Company.
(b) Consolidation Effective Date. The term "Consolidation Effective
Date" shall mean October 1, 1997.
(c) Fair Value. The term "Fair Value" of a Share shall mean (i) if the
Shares are traded on a national securities exchange, the closing price for such
Shares on the day immediately preceding the date of determination or if there is
no closing price on such date, the last preceding closing price, (ii) if the
Shares are not traded on a national securities exchange, the mean of the high
bid and ask quotes of such Shares as reported in the NASDAQ/NMS reports or the
National Quotation Bureau Inc.'s pink sheets or in the NASD Bulletin Board on
the day immediately preceding the date of determination or if there were no high
bid and ask quotes on such date, the last preceding day that there were, and
(iii) if neither (i) or (ii) are applicable, as determined in good faith by the
Committee.
(d) Rule 16b-3. The term "Rule 16b-3" shall mean Rule 16b-3 of the SEC
(or any successor rule).
(e) Subsidiary. The term "Subsidiary" shall mean any corporation in an
unbroken chain of corporations beginning with the Company if, at the time of the
grant of the Award, each of the corporations other than the last corporation in
the unbroken chain owns stock possessing 50% or
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more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.
18. Amendment of the Plan
(a) The Board of Directors may at any time and from time to time modify
or amend the Plan in any respect, provided that, the Board of Directors shall
not modify or amend the Plan without the approval of the shareholders of the
Company if such approval were required or desired for compliance with (i) an
exemption afforded by Rule 16b-3 or (ii) Section 422 of the Code. The
termination or any modification or amendment of the Plan shall not, without the
consent of an Award Owner, affect his or her rights under an Award previously
granted to him or her. With the consent of the Award Owners affected, the
Committee may amend outstanding Award agreements in a manner not inconsistent
with the Plan.
(b) Notwithstanding the provisions of Section 17(a), the Board of
Directors shall have the right, but not the obligation, without the consent of
the Company's shareholders, to (i) amend or modify the terms and provisions of
the Plan and of any outstanding Incentive Stock Options granted under the Plan
to the extent necessary to qualify any or all such options for such favorable
federal income tax treatment (including deferral of taxation upon exercise), as
may be afforded incentive stock options under Section 422 of the Code; and (ii)
amend or modify the terms and provisions of the Plan and of any outstanding
Award granted under the Plan to the extent necessary to comply with any
securities law to which, in the opinion of counsel to the Company, the Plan or
Award is subject.
19. Withholding
At such times as an Award Owner recognizes taxable income in
connection with the receipt of Shares hereunder (a "Taxable Event"), the Award
Owner shall pay to the Company an amount equal to the federal, state and local
income taxes and other amounts as may be required by law to be withheld by the
Company in connection with the Taxable Event (the "Withholding Taxes") prior to
the issuance, or release from escrow, of such Shares. In satisfaction of the
obligation to pay Withholding Taxes to the Company, the Committee may, in its
discretion and subject to compliance with applicable securities laws and
regulations, withhold Shares having an aggregate Fair Value on the date
preceding the date of such issuance equal to the Withholding Taxes.
20. Effective Date and Duration of the Plan
(a) Effective Date. The Plan shall become effective when adopted by the
Board of Directors, but no award granted under the Plan shall become exercisable
unless and until the Plan shall have been approved by the Company's shareholders
within twelve months before or after the date of such adoption. If such
shareholder approval is not obtained within such period, any Award previously
granted under the Plan shall terminate and no further Awards shall be granted.
Subject to this limitation, Awards may be granted under the Plan at any time
after the effective date and before
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the date fixed for termination of the Plan.
(b) Termination. The Plan shall terminate upon the earlier of (i)
September 30, 2007 or (ii) the date on which all Shares available for issuance
under the Plan shall have been issued pursuant to the exercise of Awards granted
under the Plan. If the date of termination is determined under (i) above, then
Awards outstanding on such date shall continue to have force and effect in
accordance with the provisions of the instruments evidencing such Awards.
21. Governing Law
The Plan and all Award agreements issued hereunder shall be governed by
the laws of the State of Maryland.
22. Expenses of Administration
All costs and expenses incurred in the operation and administration of
this Plan shall be borne by the Company.
**********
ThePlan was adopted by the Board of Directors on September 30, 1997 and
approved by the sole shareholder of Shares on September 30, 1997.
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Exhibit 10.4
OMNIBUS ASSIGNMENT AGREEMENT
PURSUANT TO AGREEMENT AND PLAN OF CONSOLIDATION
This OMNIBUS ASSIGNMENT AGREEMENT (this "Agreement") is made and
entered into as of October 1, 1997, by and among Aegis Realty, Inc., a Maryland
Corporation ("Aegis"), Aegis Realty Operating Partnership, L.P., a Delaware
limited partnership (the "Operating Partnership"), Aegis Realty Holding
Partnership, LP, a Delaware limited partnership and a subsidiary of the
Operating Partnership ("Aegis Holding, LP"), AOP Merger Sub I, Inc., a Delaware
corporation and subsidiary of the Operating Partnership ("AOP Sub I"), AOP
Merger Sub II, Inc., a Delaware corporation and subsidiary of the Operating
Partnership ("AOP Sub II"), Summit Insured Equity L.P., a Delaware limited
partnership ("Insured I"), Summit Insured Equity II L.P., a Delaware limited
partnership ("Insured II"), Summit Preferred Equity L.P., a Delaware limited
partnership ("Summit Preferred"), Eagle Insured L.P., a Delaware limited
partnership ("Eagle"), Related Aegis, LP, a Delaware limited partnership (the
"Advisor"), Related Insured Equity Associates, Inc., a Delaware corporation
("Related GP I"), RIDC II, L.P., a Delaware limited partnership ("Related GP
II"), Related Equity Funding, Inc., a Delaware corporation ("Related GP III"),
Partnership Monitoring Corp., a Delaware corporation, Related Federal Insured,
L.P., a Delaware limited partnership ("Related GP IV," and, together with
Related GP I, Related GP II and Related GP III, the "Related GPs"), Related
Insured BUC$ Associates, Inc., the assignor limited partner of Insured I
("Assignor LP I"), Related Insured BUC$ Associates, Inc., the assignor limited
partner of Insured II ("Assignor LP II"), Related BUC$ Associates, Inc., the
assignor limited partner of Summit Preferred ("Assignor LP III"), and Related FI
BUC$, Inc., the assignor limited partner of Eagle ("Assignor LP IV"). Insured I,
Insured II, Summit Preferred and Eagle Insured are sometimes hereinafter
referred to individually as a "Partnership" and collectively as the
"Partnerships." Assignor LP I, Assignor LP II, Assignor LP III and Assignor LP
IV are sometimes hereinafter referred to as the "Assignor LPs." Capitalized
terms not defined herein shall have the meanings ascribed to them in the
Consolidation Agreement (as defined below).
W I T N E S S E T H
WHEREAS, the parties hereto have agreed to engage in a consolidation
transaction (the "Consolidation") pursuant to an Agreement and Plan of
Consolidation dated as of October 1, 1997, by and among the parties hereto,
whereby, among other things (i)(A) 100 percent of the BUC$ (as defined below) of
(1) Insured I, (2) Insured II, (3) Summit Preferred, and (4) Eagle (the
"Assigned BUC$") will be assigned by the respective Assignor LPs of such
Partnerships to Aegis in exchange for shares of common stock of Aegis, par value
$.01 per share (the "Shares") to be delivered to the BUC$holders (as hereinafter
defined); (B) 100 percent of the Economic Interests (as hereinafter defined) of
the general partner interests of (1) Insured I and (2) Insured II held by the
Related GPs and the Advisor will be contributed to the Operating Partnership in
exchange for
<PAGE>
OP Units (as hereinafter defined) in the Operating Partnership (the "Contributed
GP Economic Interests"); (C) 100 percent of the Economic Interests of the
general partner interests held by the Related GPs and the Advisor in Summit
Preferred and Eagle will be assigned to Aegis in exchange for Shares (the
"Assigned GP Economic Interests"); (D) Aegis will contribute to Aegis Holding,
LP (1) a .0075 percent limited partner interest in Insured I BUC$ and (2) a .015
percent limited partner interest in Insured II BUC$; (E) Aegis will contribute
to the Operating Partnership in exchange for OP Units in the Operating
Partnership (1) the Assigned BUC$, and (2) the Assigned GP Economic Interests,
and (F) the Operating Partnership will contribute to Aegis Holding, LP (1) a
.7425 percent interest in the Insured I BUC$ and (2) a 1.485 percent interest in
the Insured II BUC$, as more specifically provided herein; and (ii) all holders
of BUC$ previously issued by the Partnerships shall receive Shares in exchange
for their BUC$; and
WHEREAS, pursuant to a Purchase Agreement dated December 9, 1996 (the
"Purchase Agreement") by and among Prudential Bache Properties, Inc. ("P-B
Properties"), P.B. Tax Credit S.L.P., a Delaware limited partnership, Prudential
Bache Investor Services II, Inc., a Delaware corporation, and Related Capital
Company, a New York general partnership ("RCC"), P-B Properties has assigned and
transferred all of its general partner interests in the Partnerships to RCC or
its affiliate, the Advisor, and withdrawn from the Partnerships (the "Withdrawal
Transactions"); and upon P-B Properties' withdrawal as a general partner of the
Partnerships, the Partnerships were continued without dissolution;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Assignments and Transfers Pursuant to Consolidation Agreement.
Pursuant to and in accordance with the Consolidation Agreement, acting in
sequence, beginning with the assignment and transfer of Economic Interests of
the General Partner Interest in Summit Preferred held by Related GP III in
Section 1.2 of the Consolidation Agreement, and ending with the assignment and
contributions of the interests in BUC$ by the Operating Partnership pursuant to
Section 1.9 of the Consolidation Agreement, the parties hereto hereby assign and
transfer, or contribute, as the case may be, for themselves or for others, as
the case may be, the BUC$ (or interests in BUC$) or Economic Interests of the
general partner interests in the Partnerships, as the case may be, agreed to, or
required to be made, by them pursuant to Sections 1.2 through 1.9 of the
Consolidation Agreement.
2. Assignment of BUC$ by the Assignor LPs. In furtherance of the
foregoing, the Partnerships and the Assignor LPs, in accordance with and
pursuant to the terms and provisions of the Consolidation Agreement, hereby
agree (i) immediately prior to the effective time of the Mergers (the "Effective
Time"), to take all actions as may be necessary or appropriate to assign and
transfer, on the books and records of the Assignor LP, or the Partnerships, or
by any other legally effective method, to effect such assignments and transfers
of the BUC$, or partnership interests of the Partnerships, or Economic Interests
in partnership
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<PAGE>
interests, as any of them, or any general partner of any of them may deem
necessary or appropriate to consummate the transactions contemplated by the
Consolidation Agreement. The Assignor LPs further agree to take all other
actions, upon the direction of the Related General Partners, as the Related
General Partners may deem to be necessary, desirable, appropriate, convenient or
incidental to the implementation, effectuation and consummation of the
transactions contemplated by the Consolidation Agreement.
3. Acceptance. The parties hereto hereby accept the respective
assignments, transfers and contributions made to them pursuant to Section 1
hereof.
4. Effectiveness of Agreement. This Agreement shall be effective
on the later of (i) 10:00 A.M. EST, October 1, 1997, or (ii) upon the
consummation and completion of the Withdrawal Transactions, whichever is later.
5 Further Assurances. If at any time after the Effective Time any
Surviving Party hereto shall determine or be advised that any further
assignment, conveyance or assurance is necessary or advisable to vest, perfect
or confirm of record in the Surviving Entities (as defined in the Consolidation
Agreement), the title to any property or right or other asset transferred
pursuant to this Agreement, or otherwise to carry out the provisions of the
Consolidation Agreement or the transactions contemplated thereby, the general
partners, officers, or other proper representatives of the parties hereto just
prior to, and after, the Effective Time shall execute and deliver any and all
proper deeds, assignments, rights and assurances, or other assets, instruments
and documents as may be necessary to, and do all things necessary or proper to,
vest, perfect or convey title to such properties or rights, or other assets, in
accordance with the provisions and intent of this Agreement, and otherwise to
carry out the provisions and intents hereof.
6. Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original, but all of which will
constitute one and the same instrument and shall become effective when one or
more counterparts have been signed by each of the parties and delivered to the
other parties.
[SIGNATURE PAGES FOLLOW]
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<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the parties hereto, as of the date first written above.
AEGIS REALTY, INC. AOP MERGER SUB I, INC.
By: _______________________________ By:_______________________________
Name: J. Michael Fried Name: Stuart J. Boesky
Title: President Title: President
AEGIS REALTY OPERATING AOP MERGER SUB II, INC.
PARTNERSHIP, L.P.
By:_______________________________
By: AEGIS REALTY, INC., Name: Stuart J. Boesky
as its General Partner Title: President
By: _________________________ SUMMIT INSURED EQUITY L.P.
Name: J. Michael Fried
Title: President By: RELATED INSURED QUITY
ASSOCIATES, INC., its General
AEGIS REALTY HOLDING Partner
PARTNERSHIP, LP
By:_______________________________
By: AEGIS REALTY OPERATING Name: Stuart J. Boesky
PARTNERSHIP, L.P., as its General Title: Vice President
Partner
SUMMIT INSURED EQUITY II L.P.
By: AEGIS REALTY, INC.
as its General Partner By: RIDC II, L.P., its General
Partner
By: _________________________ By: Related Insured Equity
Name: J. Michael Fried Associates, II, Inc.
Title: President
By: _______________________
RELATED AEGIS, LP Name: Stuart J. Boesky
Title: Vice President
By: RELATED AEGIS, INC., its General
Partner SUMMIT PREFERRED EQUITY L.P.
By: __________________________ By: RELATED EQUITY FUNIDNG, INC.,
Name: J. Michael Fried its General Partner
Title: President
By: _______________________
Name: Stuart J. Boesky
Title: President
RELATED INSURED EQUITY EAGLE INSURED L.P.
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<PAGE>
ASSOCIATES, INC.
By: RELATED FEDERAL INSURED L.P.,
By: _____________________________ as its General Partner
Name: Stuart J. Boesky
Title: Vice President By: RFI ASSOCIATES, INC., as its
General Partner
RIDC II, L.P. By:______________________
Name: Stuart J. Boesky
By: Related Insured Equity Title: Vice President
Associates, II, Inc.
By:_____________________________ By: PARTNERSHIP MONITORING
Name: Stuart J. Boesky CORPORATION, its General Partner
Title: Vice President
By: ___________________________
Name: J. Michael Fried
Title: President
RELATED EQUITY FUNDING, INC.
RELATED FI BUC$, INC.
By:_______________________
Name: Stuart J. Boesky
Title: Vice President By: ________________________________
Name: J. Michael Fried
Title: President
RELATED INSURED BUC$ ASSOCIATES,
INC.
PARTNERSHIP MONITORING
By:________________________ CORPORATION
Name: J. Michael Fried
Title: President By: ________________________________
Name: J. Michael Fried
Title: President
RELATED BUC$ ASSOCIATES, INC.
By:_________________________
Name: J. Michael Fried
Title: President
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<PAGE>
RELATED FEDERAL INSURED L.P.
By: RFI ASSOCIATES, INC., as its
General Partner
By: ______________________
Name: Stuart J. Boesky
Title: Vice President
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