<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) May 20, 1996
BANYAN MORTGAGE INVESTMENT FUND
(Exact name of Registrant as specified in its charter)
Delaware 1-9885 36-3465359
(State of or other (Commission File (I.R.S. Employer
jurisdiction of Number) Identification
incorporation) Number)
150 South Wacker Drive, Suite 2900, Chicago, IL 60606
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (312) 553-9800
<PAGE> 2
ITEM 5. OTHER EVENTS
On May 20, 1996, Banyan Mortgage Investment Fund (the "Registrant")
entered into an Amended and Restated Agreement and Plan of Merger (the
"Amended Merger Agreement") with RGI Holdings, Inc. ("RGI Holdings") and
its wholly owned subsidiary, RGI U.S. Holdings Inc., ("RGI U.S." or
collectively "RGI"). Pursuant to the Amended Merger Agreement, on May 21,
1996, RGI Holdings (i) paid $3,500,000 to acquire 7,466,666 shares
($0.46875 per share) or approximately 16% of the Registrant's outstanding
common stock (ii) purchased the loan made to the Registrant in October,
1994 by a group of lenders for which Morgens, Waterfall, Vintiadis & Co.,
Inc. served as agent (the "Morgens Loan") and (iii) purchased the loan made
to a subsidiary of the Registrant by Societe Generale ("SoGen Loan") and
secured by a first mortgage on the Registrant's Wayside Property and a
portion of the Southbridge Property. In addition, Mr. Kenneth Uptain,
President of RGI Holdings and RGI U.S. was named to fill a vacant seat on
the Registrant's Board of Directors.
Both the Morgens Loan and the SoGen Loan were in default, and, as
part of the transaction, the Registrant and RGI Holdings entered into
agreements modifying each of the Morgens Loan and the SoGen Loan. Under
these modification agreements, RGI Holdings has agreed that, among other
things, prior to December 31, 1996 it will not accelerate either the
Morgens Loan or the SoGen Loan nor foreclose on any collateral securing
such loans based upon (i) any events of default occurring before May 15,
1996; or (ii) any non-monetary defaults occurring after May 15, 1996 but
before the merger is completed or the Amended Merger Agreement is
terminated; or (iii) as a result of the execution of the Merger Agreement
as described above.
RGI Holdings also agreed to capitalize and add to the outstanding
principal balance of the loan the interest payment due on January 1, 1996
in the approximate amount of $1,005,000. Additionally, if the Merger is
approved, the terms of the Morgens Loan will be further modified to reduce
the interest rate on the Morgens Loan from 17.5% per annum to Prime + 2%
per annum and the real estate assets owned by RGI U.S. and merged into the
Registrant will be added to the collateral pledged to secure the Morgens
Loan. Finally, the original Morgens Loan provisions that required the
outstanding principal balance to be reduced to $11,000,000 by September 30,
1997 and prohibited prepayment of the entire loan prior to September 30,
1996 will be eliminated and the entire loan will become due and payable on
September 30, 1998. A portion of the proceeds from the sale of stock were
used to pay interest for the period January 1, 1996 through March 31, 1996,
which was due April 1, 1996, in the amount of approximately $1,179,000 and
a $500,000 loan restructuring fee to RGI Holdings. In the event that the
Merger closing does not occur on or before 12/31/96 (as the same may be
extended by mutual agreement) or if RGI is unable to obtain the consent of
its lender to a subordination of the lien created in favor of RGI for the
purpose of placing construction financing on any of the Registrant's
development projects, then the loan restructuring fee will be applied
against future interest payments due. As part of RGI Holding's acquisition
of the Morgens Loan, the 4,380,000 outstanding warrants of the Registrant
which were issued to the lenders were cancelled. Also, RGI allowed the
Registrant to utilize, without requiring applications against debt, the net
proceeds from the sale of the Oakridge and 120 S. Spalding properties, in
the aggregate amount of approximately $8,675,000, which funds were
previously held by the Registrant as restricted cash. RGI Holdings will,
however, require the Registrant to pay 100% of the future
<PAGE> 3
ITEM 5. OTHER EVENTS (CONTINUED)
proceeds from either the sale or joint venture development of the Laguna
Seca Ranch and 50% of the net sales proceeds generated by developed lot or
raw land sales at the Southbridge, Wayside and Chapman's Landing
properties.
Upon acquisition of the SoGen Loan by RGI Holdings, the $287,702 of
interest due as of December 31, 1995 was capitalized and added to the
outstanding loan balance of $6,360,000. The principal balance of the loan
after adding interest was reduced by approximately $250,000 which
represents the net proceeds released from escrow by SoGen in respect to the
sale of four lots at the Wayside property which occurred on April 9, 1996.
The outstanding principal balance subsequent to the modification is
$6,397,700. Using a portion of the proceeds from the stock sale, the
Registrant paid interest for the period January 1, 1996 through April 30,
1996 in the amount of $319,782 and late fees and legal fees in the amount
of $302,708. No additional payments of principal or interest will be
required until the earlier of the repayment of the SoGen Loan or December
31, 1997. The $2,000,000 revolving loan agreement, executed by SoGen and
the Registrant in 1994, under which no funds were ever loaned, was
cancelled and released. The Registrant and SoGen exchanged mutual
releases.
Subject to the approval of the Registrant's stockholders, RGI U.S.
will be merged with and into the Registrant with all of the outstanding
shares of RGI U.S. being converted into 109,674,667 shares of the
Registrant's common stock. As a result, the percentage of the Registrant's
common stock that RGI Holdings will own if the Merger is approved has been
reduced from 80% to 75%. This reduction in shares reflects an adjustment
to the value of RGI U.S Holdings for potential tax liabilities associated
with the sale of its assets subsequent to the Merger. The Registrant
anticipates seeking approval of the merger pursuant to a vote at the annual
meeting which will likely be held in early fall 1996 after the Registrant
completes all necessary regulatory filings associated with the proposed
merger.
ITEM 7. FINANCIAL STATEMENTS, PROFORMA FINANCIAL INFORMATION AND
EXHIBITS
EXHIBITS:
(2)(i) Amended and Restated Agreement and Plan of Merger dated
as of May 20, 1996 by and among RGI U.S. Holdings, Inc.,
RGI Holdings, Inc. and the Registrant.
(4)(i) Registration Rights Agreement dated as of May 21, 1996
between RGI Holdings, Inc. and the Registrant.
(10)(i) "Morgens" Loan Modification dated as of May 21, 1996
between RGI Holdings, Inc. and the Registrant.
(10)(ii) "Societe Generale" Loan Modifications dated May 21, 1996
between RGI Holdings, Inc. and VMIF Anden Wayside Venture
and VMIF Southbridge Venture.
<PAGE> 4
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: May 29, 1996 BANYAN MORTGAGE INVESTMENT FUND
(Registrant)
By: /s/ Joel L. Teglia
---------------------
Joel L. Teglia
Its: Vice President, Chief Financial
and Accounting Officer.
<PAGE> 1
EXHIBIT 2(i)
================================================================================
AGREEMENT AND PLAN
OF
MERGER
dated as of April 12, 1996,
as amended and restated as of May 20, 1996
by and among
RGI U.S. HOLDINGS, INC.,
RGI HOLDINGS, INC.
AND
BANYAN MORTGAGE INVESTMENT FUND
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
ARTICLE I PRIVATE PLACEMENT; PURCHASE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.01 The Private Placement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.02 Purchase of the Morgens Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 1.03 Purchase of the SoGen Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE II THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.01 Merger Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.02 The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.03 Conversion of Shares; Exchange of Certificates . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.04 Certificate of Incorporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.05 Bylaws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.06 Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE III REPRESENTATIONS AND WARRANTIES OF BANYAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 3.01 Corporate Existence and Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 3.02 Corporate Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 3.03 Governmental Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 3.04 Non-Contravention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 3.05 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 3.06 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 3.07 SEC Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 3.08 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 3.09 Compliance with Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 3.10 No Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 3.11 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 3.12 Absence of Certain Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 3.13 No Undisclosed Material Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 3.14 Certain Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 3.15 Employee Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 3.16 Major Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 3.17 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 3.18 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 3.19 Restrictions on Business Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 3.20 Title to Properties: Absence of Liens and Encumbrances. . . . . . . . . . . . . . . . . . . 19
Section 3.21 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 3.22 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 3.23 Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 3.24 Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 3.25 Finders' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
</TABLE>
i
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ARTICLE IV REPRESENTATIONS AND WARRANTIES OF RGI/US AND
RGI HOLDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 4.01 Corporate Existence and Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 4.02 Corporate Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 4.03 Governmental Consents and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 4.04 Non-Contravention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 4.05 Capitalization of RGI/US . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 4.06 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 4.07 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 4.08 Compliance with Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 4.09 No Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 4.10 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 4.11 Absence of Certain Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 4.12 No Undisclosed Material Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 4.13 Certain Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 4.14 Employee Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 4.15 Major Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 4.16 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 4.17 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 4.18 Restrictions on Business Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 4.19 Title to Properties: Absence of Liens and Encumbrances. . . . . . . . . . . . . . . . . . . 35
Section 4.20 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 4.21 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 4.22 Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 4.23 Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 4.24 Finders' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 4.25 Certain Securities Representations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 4.26 Certain Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
ARTICLE V COVENANTS OF BANYAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 5.01 Conduct of Banyan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 5.02 Banyan Stockholders' Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 5.03 Access to Properties and Financial, Operational and Technical Information;
Monthly Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 5.04 Other Offers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 5.05 Compliance with Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 5.06 Notice of Certain Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 5.07 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 5.08 Registration Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 5.09 Listing Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
ARTICLE VI COVENANTS OF RGI/US. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 6.01 Conduct of RGI/US . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 6.02 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
</TABLE>
ii
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<TABLE>
<S> <C>
Section 6.03 Access to Properties and Financial, Operational and Technical Information;
Monthly Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 6.04 Compliance with Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 6.05 Notice of Certain Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 6.06 Registration Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 6.07 Audited Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
ARTICLE VII COVENANTS OF ALL PARTIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 7.01 Advice of Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 7.02 Regulatory Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 7.03 Actions Contrary to Stated Intent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 7.04 Certain Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 7.05 Public Announcements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
ARTICLE VIII CONDITIONS TO THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 8.01 Conditions to Obligations of RGI/US and RGI Holdings . . . . . . . . . . . . . . . . . . . 47
Section 8.02 Conditions to Obligations of Banyan . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 8.03 Conditions to Obligations of Each Party . . . . . . . . . . . . . . . . . . . . . . . . . . 49
ARTICLE IX TERMINATION OF AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 9.01 Termination Prior to the Initial Closing . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 9.02 Termination After the Initial Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 9.03 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
ARTICLE X MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 10.01 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 10.02 Further Assurances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 10.03 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 10.04 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 10.05 Governing Laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 10.06 Binding upon Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 10.07 Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 10.08 Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 10.09 Other Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 10.10 Amendment and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 10.11 No Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 10.12 Construction of Agreement; Knowledge. . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 10.13 Absence of Third Party Beneficiary Rights . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 10.14 Mutual Drafting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 10.15 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SCHEDULES
Banyan Disclosure Schedule
RGI/US Disclosure Schedule
</TABLE>
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<PAGE> 5
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") was entered into
as of the 12th day of April, 1996, and is amended and restated in its entirety
as of the 20th day of May, 1996, by and among RGI U.S. HOLDINGS, INC., a
Washington corporation ("RGI/US"), RGI HOLDINGS, INC., a Washington corporation
("RGI Holdings") and BANYAN MORTGAGE INVESTMENT FUND, a Delaware corporation
("Banyan" and, together with RGI/US and RGI Holdings, the "Parties").
RECITALS
A. The Board of Directors of each of RGI/US and Banyan have
determined that a business combination between RGI/US and Banyan is in the best
interests of their respective companies and stockholders and presents an
opportunity for their respective companies to achieve long-term strategies and
financial benefits, and accordingly, have agreed to effect the transactions
contemplated herein including a merger of RGI/US with and into Banyan (the
"Merger") upon the terms and subject to the conditions set forth herein.
B. In connection with the contemplated Merger, RGI/US, RGI
Holdings and Banyan have each determined to engage in the transactions
contemplated hereby, pursuant to which: (i) RGI Holdings shall purchase in a
private placement (the "Private Placement") 7,466,666 shares of Banyan's
authorized but unissued common stock, $0.01 par value per share ("Banyan Common
Stock") at a purchase price of $.46875 per share, as a result of which RGI
Holdings will own approximately 16.5% of the total outstanding capital stock of
Banyan; (ii) RGI Holdings or an affiliate will purchase from Morgens,
Waterfall, Vintiadis & Co., Inc. ("Morgens") as agent for several institutional
lenders, a loan previously made to Banyan in the principal amount of
$20,500,000 (the "Morgens Loan"), the terms and conditions of which will be
modified by agreement of the Parties to cure or waive certain defaults that
have occurred under the Morgens Loan; and (iii) RGI Holdings or an affiliate
will purchase from Societe Generale, Southwest Agency ("SoGen"), a loan
previously made to Banyan in the principal amount of $7,000,000 (the "SoGen
Loan"), the terms and conditions of which will be modified by agreement of the
Parties to cure or waive certain defaults that have occurred under the SoGen
Loan.
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C. Subject to the terms and conditions of this Agreement, RGI/US
shall be merged with and into Banyan in accordance with the General Corporation
Law of the State of Delaware ("Delaware Law") and the Washington Business
Corporation Act ("Washington Law"), the separate existence of RGI/US shall
cease, and Banyan shall be the surviving corporation (the "Surviving
Corporation"). In connection therewith, each of the 1,000 issued and
outstanding shares of RGI/US common stock, no par value per share ("RGI/US
Common Stock"), shall be converted into 109,674.667 newly-issued shares of
Banyan Common Stock, in the manner and upon the terms and subject to the
conditions set forth herein.
D. RGI/US and Banyan intend for the Merger to qualify as a
reorganization in accordance with the provisions of Section 368(a)(1)(A) of the
Internal Revenue Code of 1986, as amended (the "Code").
E. RGI/US, RGI Holdings and Banyan desire to make certain
representations, warranties and agreements in connection with the Private
Placement and the Merger.
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements set forth herein, the
parties agree as follows:
ARTICLE I
PRIVATE PLACEMENT; PURCHASE OF MORGENS LOAN
SECTION 1.01 THE PRIVATE PLACEMENT.
(a) Subject to the terms and conditions of this
Agreement, RGI Holdings shall purchase at the Initial Closing (as defined in
Section 1.01(c) below) and Banyan shall sell and issue to RGI Holdings at the
Initial Closing, seven million four hundred sixty-six thousand six hundred
sixty-six (7,466,666) shares of Banyan Common Stock (the "Initial Shares") for
the purchase price of Three Million Five Hundred Thousand Dollars ($3,500,000)
(the "Purchase Price").
(b) [deleted]
(c) Initial Closing. The closing of the purchase and
sale of the Initial Shares (the "Initial Closing") shall take place on the
later of May 15, 1996 or one business day after satisfaction or waiver of the
latest to occur of the conditions set forth in Subsection 1.01(e) and 1.01(f)
below, at the offices of Davis Wright Tremaine, 2600 Century Square, 1501
Fourth Avenue, Seattle, Washington 98101, unless a different date or place is
agreed to in writing by the Parties hereto. At the Initial Closing, Banyan
shall deliver to RGI Holdings a certificate representing the Initial Shares
against delivery
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to Banyan by RGI Holdings of a federal funds wire transfer in the amount of the
Purchase Price.
(d) Third Party Consents. The Parties shall use their
commercially reasonable best efforts to obtain such written consents,
authorizations, approvals, waivers and consents as may be required from third
parties in connection with the Private Placement and the purchase of the
Morgens Loan.
(e) Conditions to RGI Holdings' Obligations at Initial
Closing. The obligations of RGI Holdings to Banyan under Section 1.01(a) of
this Agreement are subject to the fulfillment on or before the Initial Closing
of each of the following conditions:
(i) [deleted]
(ii) The representations and warranties of Banyan
contained in Article III shall be true and accurate on and as of the Initial
Closing with the same force and effect as if such representations and
warranties had been made on and as of the date of such Initial Closing, and the
president of Banyan shall have delivered to RGI/US and RGI Holdings at the
Initial Closing a certificate dated as of the Initial Closing certifying the
same;
(iii) All corporate and other proceedings in
connection with the transactions contemplated at the Initial Closing and all
documents incident thereto shall be reasonably satisfactory in form and
substance to Davis Wright Tremaine, and they shall have received all such
counterpart original and certified or other copies of such documents as they
may reasonably request;
(iv) All written consents, authorizations,
approvals, waivers and consents of third parties to the Private Placement and
the purchase of the Morgens Loan and the SoGen Loan shall have been obtained
and RGI Holdings or an affiliate of RGI Holdings shall have purchased the
Morgens Loan and the SoGen Loan and the Parties shall have agreed to the
Morgens Loan Modification (as defined in Section 1.02 below) and the SoGen Loan
Modification (as defined in Section 1.03 below);
(v) The directors of Banyan shall be Messrs.
Walter E. Auch, Robert Ungerleider and Kenneth Uptain, there shall be no
vacancies on the Banyan Board of Directors and there shall have been no other
changes to the Banyan Board of Directors except as agreed to by the Parties;
(vi) RGI/US and RGI Holdings shall have received
from Shefsky Froelich & Devine, special counsel for Banyan, an opinion, dated
as of the Initial Closing, in form and substance agreed to by the Parties; and
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<PAGE> 8
(vii) RGI Holdings shall have received and agreed
to a Registration Rights Agreement in form and substance agreed to by the
Parties.
(f) Conditions of Banyan's Obligations at Initial
Closing. The obligations of Banyan to RGI Holdings under Section 1.01(a) of
this Agreement are subject to the fulfillment on or before the Initial Closing
of each of the following conditions:
(i) [deleted]
(ii) The representations and warranties of each of
RGI Holdings and RGI/US contained in Article IV shall be true and accurate on
and as of the Initial Closing with the same force and effect as if such
representations and warranties had been made on and as of the date of such
Initial Closing, and the Presidents of RGI/US and RGI Holdings shall have
delivered to Banyan a certificate dated as of the Initial Closing certifying
the same;
(iii) RGI Holdings shall have delivered to Banyan
the Purchase Price specified in Section 1.01(a);
(iv) All corporate and other proceedings in
connection with the transactions contemplated at the Initial Closing and all
documents incident thereto shall be reasonably satisfactory in form and
substance to Shefsky Froelich & Devine, and they shall have received all such
counterpart original or certified or other copies of such documents as they may
reasonably request;
(v) All written consents, authorizations,
approvals, waivers and consents of third parties to the Private Placement and
the purchase of the Morgens Loan shall have been obtained and RGI Holdings or
an affiliate of RGI Holdings shall have purchased the Morgens Loan and the
Parties shall have agreed to the Morgens Loan Modification;
(vi) Banyan shall have received from Davis Wright
Tremaine, special counsel to each of RGI Holdings and RGI/US, an opinion, dated
as of the Initial Closing, in form and substance agreed to by the Parties;
(viii) Banyan shall have received an opinion from
Josephthal Lyon & Ross Incorporated that the Merger as contemplated herein is
fair from a financial point of view to the holders of Banyan Common Stock (the
"Fairness Opinion");
(ix) Banyan shall have received and agreed to a
Registration Rights Agreement in form and substance agreed to by the Parties;
and
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(x) Those certain promissory notes of RGI/US
listed on Schedule 1.01(f)(x) attached hereto shall have been converted into
equity of RGI/US by the lenders thereof.
SECTION 1.02 PURCHASE OF THE MORGENS LOAN.
At the Initial Closing, RGI Holdings or an affiliate of RGI Holdings,
shall purchase the Morgens Loan on such terms and conditions as are acceptable
to RGI Holdings. RGI Holdings agrees with Banyan that concurrently with the
purchase of the Morgens Loan, RGI Holdings or its affiliate will amend the
terms of the Morgens Loan in a manner that is acceptable to RGI Holdings and
Banyan (the "Morgens Loan Modification"); provided that RGI Holdings, or such
affiliate that purchases the Morgens Loan, hereby agrees that prior to December
31, 1996 it will not accelerate the Morgens Loan or foreclose on any security
for the Morgens Loan based upon any events of default occurring on or before
May 15, 1996 or occurring as a result of the execution, delivery and
performance of this Agreement, the Ancillary Documents and the transactions
contemplated hereby and thereby. Moreover, RGI Holdings agrees that prior to
the earlier of (i) the Merger Closing or (ii) the termination of this Agreement
for any reason, it will not accelerate the Morgens Loan or foreclose on any
security for the Morgens Loan as a result of the occurrence of any non-payment
(technical) events of default occurring after May 15, 1996.
SECTION 1.03 PURCHASE OF THE SOGEN LOAN.
At the Initial Closing, RGI Holdings or an affiliate of RGI Holdings,
shall purchase the SoGen Loan on such terms and conditions as are acceptable to
RGI Holdings. RGI Holdings agrees with Banyan that concurrently with the
purchase of the SoGen Loan, RGI Holdings or its affiliate will amend the terms
of the SoGen Loan in a manner that is acceptable to RGI Holdings and Banyan
(the "SoGen Loan Modification"); provided that RGI Holdings, or such affiliate
that purchases the SoGen Loan, hereby agrees that prior to December 31, 1996 it
will not accelerate the SoGen Loan or foreclose on any security for the SoGen
Loan based upon any events of default occurring on or before May 15, 1996 or
occurring as a result of the execution, delivery and performance of this
Agreement, the Ancillary Documents and the transactions contemplated hereby and
thereby. Moreover, RGI Holdings agrees that prior to the earlier of (i) the
Merger Closing or (ii) the termination of this Agreement for any reason, it
will not accelerate the SoGen Loan or foreclose on any security for the SoGen
Loan as a result of the occurrence of any non-payment (technical) events of
default occurring after May 15, 1996.
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ARTICLE II
THE MERGER
SECTION 2.01 MERGER CLOSING. The closing of the Merger (the
"Merger Closing") shall take place on the first business day after satisfaction
or waiver of the latest to occur of the conditions set forth in Article VIII,
at the offices of Davis Wright Tremaine, 2600 Century Square, 1501 Fourth
Avenue, Seattle, Washington 98101, unless a different date or place is agreed
to in writing by the Parties hereto (the "Merger Date").
SECTION 2.02 THE MERGER. If all of the conditions to the Merger
set forth in this Agreement shall have been fulfilled or waived in accordance
herewith, and this Agreement shall not have been terminated as provided herein,
then concurrent with the Merger Closing, RGI/US and Banyan shall file an
agreement of merger in the Office of the Secretary of State of the State of
Delaware in accordance with Delaware Law and a plan of merger in the Office of
the Secretary of State of the State of Washington. The Merger shall become
effective at such time as the agreement or plan of merger is duly filed in both
the Office of the Secretary of State of the State of Delaware and the Office of
the Secretary of State of the State of Washington (the date of such filings
being hereinafter referred to as the "Effective Date" and the time of the
latest to occur of such filing being hereinafter referred to as the "Effective
Time"), and of the separate existence of RGI/US shall cease and Banyan shall be
the Surviving Corporation. It is the intention of the parties that this
Agreement shall constitute the "agreement of merger" under Section 252 of
Delaware Law and the "plan of merger" under RCW 23B.11.050 of Washington Law.
SECTION 2.03 CONVERSION OF SHARES; EXCHANGE OF CERTIFICATES. At
the Effective Time each share of RGI/US Common Stock outstanding immediately
prior to the Effective Time shall, automatically and without any action on the
part of the holder thereof, be converted into one hundred nine thousand six
hundred seventy-four and six hundred sixty-seven thousandths (109,674.667)
shares of the Banyan Common Stock (the "Exchange Ratio"); each share of Banyan
Common Stock, outstanding immediately prior to the Effective Time shall remain
outstanding and shall represent one share of common stock of the Surviving
Corporation. Banyan shall make available for exchange certificates
representing the shares of Banyan Common Stock issuable pursuant to this
Section 2.03 in exchange for certificates representing the outstanding shares
of RGI/US Common Stock.
SECTION 2.04 CERTIFICATE OF INCORPORATION. The Amended and
Restated Certificate of Incorporation of Banyan (the "Existing Certificate")
shall be further amended and restated at the Effective Time to adopt the
amendments to the Existing Certificate and to restate the Existing Certificate
in a manner agreed to by the Parties (the "Restated Certificate").
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SECTION 2.05 BYLAWS. The Bylaws of Banyan (the "Existing Bylaws")
shall be amended and restated to adopt the amendments to the Existing Bylaws
and to restate the Existing Bylaws in a manner agreed to by the Parties (the
"New Bylaws").
SECTION 2.06 DIRECTORS. From and after the Effective Time, until
successors are duly elected or appointed and qualified in accordance with
applicable law, the directors of the Surviving Corporation shall be the New
Board (as defined in Section 5.02).
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BANYAN
Except as set forth in a document referring specifically to the
relevant Section or subsection of this Agreement which is delivered by Banyan
to RGI/US and RGI Holdings prior to the execution of this Agreement (the
"Banyan Disclosure Schedule"), Banyan represents and warrants to RGI/US and RGI
Holdings as follows:
SECTION 3.01 CORPORATE EXISTENCE AND POWER. Banyan is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware, and has all corporate powers required to carry
on its business as now conducted. Banyan is duly qualified to do business as a
foreign corporation, and is in good standing, in each jurisdiction where the
character of the property owned or leased by it or the nature of its activities
makes such qualification necessary, except for those jurisdictions where the
failure to be so qualified would not, individually or in the aggregate, have a
Material Adverse Effect on Banyan. Banyan has delivered to RGI/US true and
complete copies of Banyan's Existing Certificate and Existing Bylaws as
currently in effect. For purposes of this Agreement, the term "Material
Adverse Effect" means, with respect to any person or entity, a material adverse
effect on the condition (financial or otherwise), business, properties, assets,
liabilities (including contingent liabilities), results of operations of such
person or entity and its subsidiaries; and the term "Material Adverse Change"
means a change which would have a Material Adverse Effect; provided, however,
that the happening or the occurrence of the events set forth on Schedule 3.01
of the Banyan Disclosure Schedule shall not constitute a Material Adverse
Effect or Material Adverse Change for purposes of this Agreement and shall not
cause a breach of any representation or warranty of Banyan made herein or cause
a failure of a condition to RGI/US' obligations hereunder.
SECTION 3.02 CORPORATE AUTHORIZATION. The execution, delivery and
performance by Banyan of this Agreement, the Registration Rights Agreement and
the Morgens Loan Modification and the consummation by Banyan of the
transactions contemplated hereby and thereby are within Banyan's corporate
powers and have been and, to the extent not executed as of the date hereof,
will be prior to execution, duly authorized by all necessary corporate action,
subject to approval by Banyan's stockholders of the Merger. The Registration
Rights Agreement and the Morgens Loan Modification and such
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documents as are executed in connection with the Morgens Loan or RGI/US'
purchase of the Morgens Loan are collectively referred to herein as the
"Ancillary Agreements." This Agreement and the Ancillary Agreements
constitute, or upon execution will constitute, valid and binding agreements of
Banyan, enforceable against Banyan in accordance with their respective terms
except as enforcement may be limited by applicable bankruptcy, insolvency,
moratorium or other similar laws relating to creditors' rights and general
principles of equity.
SECTION 3.03 GOVERNMENTAL AUTHORIZATION. The execution, delivery
and performance by Banyan of this Agreement, the Ancillary Agreements, the
consummation of the transactions contemplated hereby and thereby by Banyan and
the Banyan Subsidiaries (as defined in Section 3.06 below) requires no action
by or in respect of, or filing with, any governmental body, agency, official or
authority other than:
(a) compliance with any applicable requirements of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act");
(b) compliance with any applicable requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the rules
and regulations promulgated thereunder;
(c) compliance with any applicable requirements of the
Securities Act of 1933, as amended (the "Securities Act") and the rules and
regulations promulgated thereunder;
(d) compliance with any applicable requirements of the
New York Stock Exchange ("NYSE");
(e) compliance with any applicable state securities or
"blue sky" laws; and
(f) such other filings or registrations with, or
authorizations, consents, or approvals of, governmental bodies, agencies,
officials or authorities, the failure of which to make or obtain would not have
a Material Adverse Effect on the ability of the Parties to consummate the
transactions contemplated hereby.
SECTION 3.04 NON-CONTRAVENTION. The execution, delivery and
performance by Banyan of this Agreement, the Ancillary Agreements and the
consummation by Banyan of the transactions contemplated hereby and thereby do
not and will not:
(a) contravene or conflict with the Existing Certificate
or Existing Bylaws of Banyan;
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(b) assuming compliance with the matters set forth in
Section 3.03 and assuming the requisite approval of Banyan's stockholders of
the Merger, to the best of Banyan's knowledge, (i) contravene, conflict with or
constitute a violation of any provision of any judgment, injunction, order or
decree binding upon Banyan or any Banyan Subsidiary (as defined in Section 3.06
below), or (ii) contravene, conflict with or constitute a violation of any
provision of any law or regulation applicable to Banyan or any Banyan
subsidiary to the extent such contravention, conflict or violation would have a
Material Adverse Effect on Banyan;
(c) except as set forth on Schedule 3.04(c) of the Banyan
Disclosure Schedule, constitute a default under, require the approval of, or
give rise to a right of termination, cancellation or acceleration or loss of
any material benefit under any agreement, contract or other instrument
(including loan documents) binding upon Banyan or any Banyan Subsidiary or
under any license, franchise, permit or other similar authorization held by
Banyan or any such Banyan Subsidiary; or
(d) result in the creation or imposition of any Lien (as
defined below) on any material asset of Banyan or any Banyan Subsidiary.
For purposes of this Agreement, the term "Lien" means, with respect to any
asset, any mortgage, lien, pledge, charge, security interest or encumbrance of
any kind in respect of such asset.
SECTION 3.05 CAPITALIZATION OF BANYAN. The authorized capital
stock of Banyan consists of 100,000,000 shares of Banyan Common Stock. As of
March 31, 1996, there were outstanding:
(a) 39,822,304 shares of Banyan Common Stock;
(b) options to purchase an aggregate of 611,836 shares of
Banyan Common Stock;
(c) warrants to purchase an aggregate of 4,380,000 shares
of Banyan Common Stock; and
(d) 18,831 shares issuable by Banyan pursuant to its
existing employment agreement with Leonard G. Levine dated December 31, 1992,
as amended (the "Levine Contract").
All outstanding shares of Banyan Common Stock have been duly authorized and
validly issued and are fully paid and nonassessable. All outstanding shares of
Banyan Common Stock are listed, or approved for listing upon official notice of
issuance, on the NYSE and to the best of Banyan's knowledge, there are no
proceedings or other actions being taken to delist any such shares. Except as
set forth above in this Section 3.05 and except
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for changes since March 31, 1996 resulting from the exercise of options or
warrants to purchase Banyan Common Stock or shares issuable pursuant to the
Levine Contract and except as otherwise unanimously agreed to by the Board of
Directors of Banyan after the date of the Initial Closing, there are
outstanding (i) no shares of capital stock or other voting securities of
Banyan, (ii) no securities of Banyan convertible into or exchangeable for
shares of capital stock or voting securities of Banyan and (iii) no options or
other rights to acquire from Banyan, and no obligation of Banyan to issue, any
capital stock, voting securities or securities convertible into or exchangeable
for capital stock or other voting securities of Banyan (the items in clauses
(i), (ii) and (iii) being referred to collectively as the "Banyan Securities").
There are no outstanding obligations of Banyan or any Banyan Subsidiary to
repurchase, redeem or otherwise acquire any Banyan Securities. The shares of
Banyan Common Stock which are being purchased at the Initial Closing and which
are issuable in connection with the Merger when issued and paid for in
accordance with the terms of this Agreement for the consideration expressed
herein, will be duly authorized, validly issued, fully paid and nonassessable.
SECTION 3.06 SUBSIDIARIES.
(a) Schedule 3.06(a) to the Banyan Disclosure Schedule
sets forth a true and accurate list of each "Subsidiary" of Banyan (each a
"Banyan Subsidiary" and together, the "Banyan Subsidiaries"). Each Banyan
Subsidiary is either a corporation or other entity duly incorporated or
otherwise organized, validly existing and in good standing (or local law
equivalent) under the laws of its jurisdiction of organization, and has all
corporate or other organizational powers required to carry on its business as
now conducted. Each Banyan Subsidiary is duly qualified to do business as a
foreign corporation or partnership (as the case may be), is in good standing or
local law equivalent and has all licenses and permits necessary in each
jurisdiction where the character of the property owned or leased by, or the
nature of its activities, make such qualification, licenses or permits
necessary except for those jurisdictions where the failure to be so qualified
or have such licenses or permits would not, individually or in the aggregate,
have a Material Adverse Effect on Banyan or on the relevant Banyan Subsidiary.
For purposes of this Agreement, the term "Subsidiary" means, with respect to
any entity, any corporation or other organization of which securities or other
ownership interests having ordinary voting power to elect a majority of the
board of directors or other persons performing similar functions are directly
or indirectly owned by such entity or of which such entity is a partner or is,
directly or indirectly, the beneficial owner of 50% or more of any class of
equity securities or equivalent profit participation interest. Banyan has
delivered to RGI/US true and complete copies of the articles or certificate of
incorporation, bylaws, partnership agreement and other similar organizational
documents as currently in effect for each Banyan Subsidiary.
(b) Except as set forth on Schedule 3.06(b) of the Banyan
Disclosure Schedule, all of the outstanding capital stock of, or other
ownership interests in, each Banyan Subsidiary is owned by Banyan, directly or
indirectly, free and clear of any Lien
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and free of any other limitation or restriction (including any restriction on
the right to vote, sell or otherwise dispose of such capital stock or other
ownership interests). Except as set forth on Schedule 3.06(b) of the Banyan
Disclosure Schedule, there are no outstanding:
(i) securities of any Banyan Subsidiary which are
convertible into or exchangeable for shares of capital stock or other voting
securities of any Banyan Subsidiary; or
(ii) options or other rights to acquire from Banyan or any
Banyan Subsidiary, and no other obligation of Banyan or any Banyan Subsidiary
to issue, any capital stock, voting securities of or other ownership interests
in, or any securities convertible into or exchangeable for any capital stock,
voting securities or other ownership interests of, any Banyan Subsidiary (the
items in clauses (i) and (ii) being referred to collectively as the "Banyan
Subsidiary Securities"). There are no outstanding obligations of Banyan or any
Banyan Subsidiary to repurchase, redeem or otherwise acquire any outstanding
Banyan Subsidiary Securities.
(c) Schedule 3.06(c) of the Banyan Disclosure Schedule
sets forth a complete list of all material agreements, contracts and other
documentation which set forth the terms and conditions of Banyan's ownership
interest in each Banyan Subsidiary (the "Banyan Subsidiary Agreements"). Each
Banyan Subsidiary Agreement is valid and binding on each party thereto, and is
in full force and effect, and, except as set forth on Schedule 3.06(c), neither
Banyan nor any of the Banyan Subsidiaries, nor to the knowledge of Banyan any
other party thereto, has breached any provision of, or is in default under the
terms of, any Banyan Subsidiary Agreement.
SECTION 3.07 SEC FILINGS.
(a) Schedule 3.07(a) of the Banyan Disclosure Schedule
sets forth a true and complete list of all Banyan Reports (as defined below)
that Banyan has delivered to RGI/US, or, to the extent not yet filed, will
deliver to RGI/US prior to the Merger Closing.
(b) As of their respective filing date, no such report or
statement filed with the Securities and Exchange Commission (the "SEC")
pursuant to the Exchange Act (collectively the "Banyan Reports") contained any
untrue statement of a material fact or omitted to state any material fact
necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading. Except as set forth
on Schedule 3.07(b) of the Banyan Disclosure Schedule, Banyan has timely filed
all reports, statements or forms required by it to be filed pursuant to the
Exchange Act and the rules and regulations thereunder.
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SECTION 3.08 FINANCIAL STATEMENTS. Each of the consolidated
balance sheets of Banyan included in or incorporated by reference into the
Banyan Reports (including the related notes and schedules) fairly presents the
consolidated financial position of Banyan and its subsidiaries as of its date
and each of the consolidated statements of income, retained earnings and
cashflows of Banyan included in or incorporated by reference into the Banyan
Reports (including any related notes and schedules) fairly presents results of
operations, retained earnings or cashflows, as the case may be, of Banyan and
its subsidiaries for the period set forth therein (subject, in the case of
unaudited statements to normal year-end audit adjustments which would not be
material in amount or effect), in each case in accordance with generally
accepted accounting principles consistently applied during the periods
involved, except as may be noted therein and except, in the case of the
unaudited statements, as permitted by Form 10-Q of the SEC. For purposes of
this Agreement, "Banyan Balance Sheet" means the consolidated balance sheet of
Banyan as of December 31, 1995, and the notes thereto and "Banyan Balance Sheet
Date" means December 31, 1995.
SECTION 3.09 COMPLIANCE WITH LAW. Banyan and each Banyan
Subsidiary is in compliance and has conducted its business so as to comply with
all laws, rules and regulations, judgments, licenses, permits, decrees or
orders of any court, administrative agency, commission, regulatory authority or
other governmental authority or instrumentality, domestic or foreign (a
"Governmental Authority") applicable to their respective businesses or
properties except to the extent that noncompliance would not have a Material
Adverse Effect on Banyan or the Banyan Subsidiaries taken as a whole. Except
as set forth on Schedule 3.09 of the Banyan Disclosure Schedule, there are no
judgments or orders, injunctions, decrees, stipulations or awards (whether
rendered by a court or administrative agency or by arbitration), including any
such actions relating to affirmative action claims or claims of discrimination,
against Banyan or any Banyan Subsidiary or against any of their respective
properties or businesses.
SECTION 3.10 NO DEFAULTS. Except as set forth on Schedule 3.10 of
the Banyan Disclosure Schedule, neither Banyan nor any Banyan Subsidiary is, or
has received notice that it would be with the passage of time, (i) in violation
of any provision of its articles or certificate of incorporation or bylaws or
other similar organizational document or (ii) in default or violation of any
term, condition or provision of (A) any judgment, decree, order, injunction or
stipulation applicable to Banyan or any Banyan Subsidiary or (B) any material
agreement, note, mortgage, indenture, contract, lease or instrument, permit,
concession, franchise or license to which Banyan or any Banyan Subsidiary is a
party or by which Banyan or any Banyan Subsidiary or their respective
properties or assets may be bound.
SECTION 3.11 LITIGATION. Except as set forth on Schedule 3.11 of
the Banyan Disclosure Schedule, there is no action, suit, proceeding, claim or
investigation pending or, to the best of Banyan's knowledge, threatened,
against Banyan or any Banyan Subsidiary which could, individually or in the
aggregate, have a Material Adverse Effect
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on Banyan and the Banyan Subsidiaries, taken as a whole, or which in any manner
challenges or seeks to prevent, enjoin, alter or materially delay any of the
transactions contemplated by this Agreement or by any of the Ancillary
Agreements. Except as set forth on Schedule 3.11, Banyan has delivered to
RGI/US complete copies of all audit response letters prepared by its counsel
for Banyan's independent public accountants and all management letters prepared
in connection with the last three completed audits of Banyan's financial
statements, including the audit conducted in connection with the Banyan Balance
Sheet, and any such correspondence since the Banyan Balance Sheet Date.
SECTION 3.12 ABSENCE OF CERTAIN CHANGES. Except as expressly
allowed or contemplated by this Agreement or, as set forth on Schedule 3.12 to
the Banyan Disclosure Schedule, since the Banyan Balance Sheet Date, there has
not occurred:
(a) A Material Adverse Change with respect to Banyan or
the Banyan Subsidiaries, taken as a whole;
(b) Any amendments or changes in the articles or
certificate of incorporation or bylaws or other similar organizational document
of Banyan or any Banyan Subsidiary, except for the Restated Certificate and New
Bylaws as contemplated by this Agreement;
(c) Any damage, destruction or loss, not covered by
insurance in excess of $250,000 with respect to any of the properties or
businesses of Banyan or any Banyan Subsidiary;
(d) Any redemption, repurchase or other acquisition of
shares of capital stock, partnership interests or ownership units of Banyan or
any Banyan Subsidiary by Banyan or any Banyan Subsidiary (other than pursuant
to arrangements with terminated employees or consultants), or any declaration,
setting aside or payment of any dividend or other distribution (whether in
cash, stock or property) with respect to the capital stock of Banyan or any
Banyan Subsidiary;
(e) Any increase in the hourly rate of compensation
payable or to become payable (by reimbursement or otherwise) by Banyan or any
Banyan Subsidiary to any of their respective directors, officers, partners,
employees or consultants, whether as employees of Banyan or Banyan Management
Corp.;
(f) Except as set forth on Schedule 3.12(f) of the Banyan
Disclosure Schedule, any increase in or modification of any bonus, pension,
insurance or other employee benefit plan, payment or arrangement (including,
but not limited to, the granting of stock options, restricted stock awards or
stock appreciation rights) made to, for or with any of Banyan's directors,
officers or employees, whether as employees of Banyan or Banyan Management
Corp.;
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(g) Except as contemplated by this Agreement, any
acquisition or sale of a material amount of property or assets by or of Banyan
or any Banyan Subsidiary;
(h) Any alteration in any term of any outstanding Banyan
securities or any Banyan Subsidiary Securities;
(i) Except as contemplated by this Agreement, any (i)
incurrence, assumption or guarantee by Banyan or any Banyan Subsidiary of any
debt for borrowed money; (ii) issuance or sale of any securities convertible
into or exchangeable for debt securities of Banyan or any Banyan Subsidiary; or
(iii) issuance or sale of options or other rights to acquire from Banyan or any
Banyan Subsidiary, directly or indirectly, debt securities of Banyan or any
Banyan Subsidiary or any securities convertible into or exchangeable for any
such debt securities;
(j) Any creation or assumption by Banyan or any Banyan
Subsidiary of any Lien on any material asset, except as permitted or
contemplated by this Agreement;
(k) Any loan, advance or capital contribution to or
investment in any person other than (i) loans, advances or capital
contributions to or investments in any Banyan Subsidiary, (ii) travel loans or
advances made in the ordinary course of business of Banyan, and (iii) other
loans and advances in an aggregate amount which do not exceed $10,000
outstanding at any time;
(l) Any entry into, amendment of, relinquishment,
termination or nonrenewal by Banyan or any Banyan Subsidiary of any material
contract, lease, commitment or other right or obligation other than as
permitted or contemplated by this Agreement; or
(m) To the best of Banyan's knowledge, any agreement or
arrangement made by Banyan or any Banyan Subsidiary to take any action which,
if taken prior to the date hereof, would have made any representation or
warranty set forth in this Section 3.12 untrue or incorrect as of the date when
made.
SECTION 3.13 NO UNDISCLOSED MATERIAL LIABILITIES. Except as set
forth on Schedule 3.13 to the Banyan Disclosure Schedule, there are no
liabilities of Banyan or any Banyan Subsidiary of any kind whatsoever that are
material to the business of Banyan and the Banyan Subsidiaries, taken as a
whole, other than:
(a) liabilities disclosed or provided for in the Banyan
Balance Sheet;
(b) liabilities incurred in the ordinary course of
business consistent with past practice since the Banyan Balance Sheet Date; and
(c) liabilities under this Agreement.
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SECTION 3.14 CERTAIN AGREEMENTS. Except as set forth on Schedule
3.14 of the Banyan Disclosure Schedule, neither the execution and delivery of
this Agreement nor the Ancillary Agreements nor the consummation of the
transactions contemplated hereby or thereby will (i) result in any payment
(including, without limitation, severance, unemployment compensation, golden
parachute, bonus or otherwise) becoming due to any director or employee of
Banyan or any Banyan Subsidiary from Banyan or any such Banyan Subsidiary,
under any Banyan Employee Plan (as defined in Section 3.15(a) below) or
otherwise, (ii) materially increase any benefits otherwise payable under any
Banyan Employee Plan, or (iii) result in the acceleration of the time of
payment or vesting of any such benefits.
SECTION 3.15 EMPLOYEE BENEFITS.
(a) Schedule 3.15 of the Banyan Disclosure Schedule sets
forth each "employee benefit plan," as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974 ("ERISA"), and each employment
agreement, compensation agreement, bonus, commission or similar arrangement,
and fringe benefit arrangement which is maintained, administered or contributed
to by Banyan or any affiliate thereof (as defined below) and covers any
employee or former employee of Banyan or any affiliate or under which Banyan or
any affiliate has any liability. Such plans are referred to collectively
herein as the "Banyan Employee Plans." For purposes of this Section 3.15 only,
an "affiliate" of any person or entity means any other person or entity, which,
together with such person or entity, would be treated as a single employer
under Section 414 of the Code or Title IV of ERISA. The only Banyan Employee
Plans which individually or collectively would constitute an "employee pension
benefit plan" as defined in Section 3(2) of ERISA are identified as such in the
list referred to above.
(b) No Banyan Employee Plan constitutes a "multiemployer
plan" as defined in Section 3(37) of ERISA (a "Multiemployer Plan"), no Banyan
Employee Plan is maintained in connection with any trust described in Section
501(c)(9) of the Code and no Banyan Employee Plan is subject to Title IV of
ERISA or Section 412 of the Code. If Banyan or an affiliate thereof ever
maintained or was obligated to contribute to a Multiemployer Plan or a plan
subject to Title IV of ERISA, any withdrawal or other liability under Title IV
of ERISA with respect to such plan has been fully satisfied. To Banyan'
knowledge, nothing done or omitted to be done and no transaction or holding of
any asset under or in connection with any Banyan Employee Plan has or will make
Banyan or any of its Subsidiaries, or any officer or director thereof, subject
to any liability under Title I of ERISA or liable for any tax pursuant to
Section 4975 of the Code.
(c) To the best knowledge of Banyan, each Banyan Employee
Plan which is intended to be qualified under Section 401(a) of the Code is so
qualified and has been so qualified during the period from its adoption to
date, and each trust forming a part thereof is exempt from tax pursuant to
Section 501(a) of the Code. Banyan has
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furnished to RGI/US copies of the most recent Internal Revenue Service
determination letters, if any, with respect to each such Banyan Employee Plan.
To the best knowledge of Banyan, each Banyan Employee Plan has been maintained
in substantial compliance with its terms and with the requirements prescribed
by any and all statutes, orders, rules and regulations, including but not
limited to ERISA and the Code, which are applicable to such Banyan Employee
Plan. Except as set forth on Schedule 3.15(c) of the Banyan Disclosure
Schedule, there are no pending or threatened disputed claims against any Banyan
Employee Plan or against Banyan or any affiliate arising under any such plan.
No Banyan Employee Plan is currently under examination by the Internal Revenue
Service or Department of Labor and Banyan has received no notice from either
agency of its intent to examine any Banyan Employee Plan.
(d) There is no contract, agreement, plan or arrangement
covering any employee or former employee of Banyan or any affiliate that would
obligate the Surviving Corporation or any affiliate to pay any additional
compensation, including severance pay or additional withholding taxes, as a
result of the consummation of the transactions contemplated by this Agreement
or that, individually or collectively, could give rise to the payment by the
Surviving Corporation of any amount that would not be deductible pursuant to
the terms of Sections 162(a)(1) or 280G of the Code.
(e) Neither Banyan nor its affiliates have any projected
liability in respect of post-retirement health, life and medical benefits for
retired employees of Banyan and its affiliates. Other than provisions of
applicable law, no condition exists that would prevent Banyan or any of its
Subsidiaries from amending or terminating any Banyan Employee Plan.
(f) There has been no amendment to, written
interpretation or announcement (whether or not written) by Banyan or any of its
affiliates relating to, or change in employee participation or coverage under,
any Banyan Employee Plan which would materially increase the expense of
maintaining such Banyan Employee Plan above the level of the expense incurred
in respect thereof for the most recent fiscal year.
SECTION 3.16 MAJOR CONTRACTS. Schedule 3.16 of the Banyan
Disclosure Schedule sets forth a list of all "material contracts" as defined in
Item 601 of Regulation S-K under the Securities Act and to which Banyan or any
Banyan Subsidiary is a party or has a beneficial interest in (each a "Banyan
Material Contract"). Each Banyan Material Contract is valid and binding on
Banyan or a Banyan Subsidiary, as applicable, and except as set forth on
Schedule 3.16 of the Banyan Disclosure Schedule, neither Banyan nor any of the
Banyan Subsidiaries, nor to the best of their knowledge any other party
thereto, has breached any provision of, or is in default under the terms of,
any Banyan Material Contract.
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SECTION 3.17 TAXES.
(a) Except as set forth on Schedule 3.17(a) of the Banyan
Disclosure Schedule, all Tax returns, statements, reports and forms (including
estimated Tax returns and reports and information returns and reports) required
to be filed with any Taxing Authority with respect to any Taxable period ending
on or before the Effective Time by or on behalf of Banyan or any of the Banyan
Subsidiaries (collectively, the "Banyan Tax Returns"), the non-filing of which
would have a Material Adverse Effect on Banyan or would result in criminal
penalties against Banyan or any officer or employee thereof, have been or will
be filed when due (including any extensions of such due date).
(b) Banyan and the Banyan Subsidiaries have timely paid,
withheld or made provision on their books for all Taxes shown as due and
payable on Banyan Tax Returns that have been filed.
(c) All Banyan Tax Returns relating to income or
franchise Taxes filed with respect to Taxable years of Banyan and Banyan
Subsidiaries ending on or after December 31, 1990, have been filed or
extensions have been duly made.
(d) Neither Banyan nor any Banyan Subsidiary has been
granted any extension or waiver of the limitation period applicable to any
Banyan Tax Returns.
(e) To the best of Banyan's knowledge, there is no claim,
audit, action, suit, proceeding, or investigation now pending or threatened in
writing against or with respect to Banyan or any Banyan Subsidiary in respect
of any Tax or assessment.
(f) There are no requests for rulings in respect of any
Tax pending between Banyan or any Banyan Subsidiary and any Taxing Authority.
(g) None of the property owned or used by Banyan or any
of the Banyan Subsidiaries is subject to a tax benefit transfer lease executed
in accordance with Section 168(f)(8) of the Code.
(h) None of the property owned by Banyan or any Banyan
Subsidiary is "tax-exempt use property" within the meaning of Section 168(h) of
the Code.
(i) Neither Banyan nor any Banyan Subsidiary, nor any
other person on behalf of Banyan or any such Banyan Subsidiary, has entered
into nor will it enter into any agreement or consent pursuant to Section 341(f)
of the Code.
(j) Except as set forth on Schedule 3.17(j) of the Banyan
Disclosure Schedule, there are no Liens for Taxes upon the assets of Banyan or
any of the Banyan Subsidiaries, except Liens for Taxes not yet due.
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(k) Neither Banyan nor any Banyan Subsidiary will be
required to include any adjustment in Taxable income for any Tax period (or
portion thereof) ending after the Effective Time pursuant to Section 481(c) of
the Code (or any similar provision of the Tax laws of any jurisdiction) as a
result of a change in method of accounting for any Tax period (or portion
thereof) ending on or before the Effective Time or pursuant to the provisions
of any agreement entered into with any Taxing Authority with regard to the Tax
liability of Banyan or any such Banyan Subsidiary for any Tax period (or
portion thereof) ending on or before the Effective Time.
(l) Neither Banyan nor any Banyan Subsidiary has been a
member of an affiliated group other than one of which Banyan was the common
parent, or filed or been included in a combined, consolidated or unitary Tax
return other than one filed by Banyan (or a return for a group consisting
solely of Banyan Subsidiaries or predecessors), or participated in any other
similar arrangement whereby any income, revenues, receipts, gains, losses,
deductions, credits or other Tax items of Banyan or any such Banyan Subsidiary
was determined or taken into account for Tax purposes with reference to or in
conjunction with any such items of another person other than Banyan or any such
Banyan Subsidiary or predecessor.
(m) Neither Banyan nor any Banyan Subsidiary is currently
under any contractual obligation to pay the income or franchise tax obligations
of, or with respect to transactions relating to, any other person or to
indemnify any other person with respect to any income or franchise tax.
(n) Neither Banyan nor any Banyan Subsidiary has signed
any letter or entered into any agreement or arrangement consenting to the
surrender or sharing of any deductions, credits, or other Tax attributes with
any other person or transferred or assigned to any other person for Tax
purposes any such item.
(o) Notwithstanding any of the foregoing, no
representation or warranty is made by Banyan with respect to the Tax
consequences that may result from the transactions contemplated by this
Agreement and the Ancillary Agreements.
(p) For the purposes of this Agreement, "Tax" (and, with
correlative meaning, "Taxes" and "Taxable") means, for any entity, (i) any net
income, alternative or add-on minimum tax, gross income, gross receipts, sales,
use, ad valorem, value added, transfer, franchise, profits, license,
withholding on amounts paid to or by such entity or any subsidiary thereof,
payroll, employment, excise, severance, stamp, occupation, property,
environmental or windfall profit tax, or other tax, together with any interest
or any penalty, addition to tax or additional amount imposed by any
governmental authority (a "Taxing Authority") responsible for the imposition of
any such tax (domestic or foreign), (ii) liability of such entity or any
subsidiary thereof for the payment of any amounts of the type described in (i)
as a result of being a member of an affiliated, consolidated, combined or
unitary group for any Taxable period and (iii) liability of such
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entity or any subsidiary thereof for the payment of any amounts of the type
described in (i) or (ii) as a result of any express or implied obligation to
indemnify any other person.
SECTION 3.18 INTELLECTUAL PROPERTY.
(a) Schedule 3.18(a) of the Banyan Disclosure Schedule
sets forth all licensing arrangements which Banyan or any Banyan Subsidiary has
with third parties and which are material to the business of Banyan and the
Banyan Subsidiaries taken as a whole (collectively, the "Banyan Intellectual
Property Rights").
(b) Neither Banyan nor any Banyan Subsidiary, during the
three years preceding the date of this Agreement, has been sued or charged in
writing with or been a defendant or plaintiff in any claim, suit, action or
proceeding relating to its business which has not been finally terminated prior
to the date hereof and which involves a claim of infringement of any patents or
licenses, and to Banyan's best knowledge (i) there are no other claims by any
other person of patent or license infringement by Banyan or a Banyan
Subsidiary, and (ii) there are no continuing infringements by any other person
or persons of any Banyan Intellectual Property Rights.
SECTION 3.19 RESTRICTIONS ON BUSINESS ACTIVITIES. Except as set
forth on Schedule 3.19 of the Banyan Disclosure Schedule, there is no material
agreement, judgment, injunction, order or decree binding upon Banyan or any
Banyan Subsidiary which has or could reasonably be expected to have the effect
of prohibiting or materially impairing any acquisition of property by Banyan or
any Banyan Subsidiary or the conduct of business by Banyan or any Banyan
Subsidiary as currently conducted or as currently proposed to be conducted by
Banyan.
SECTION 3.20 TITLE TO PROPERTIES: ABSENCE OF LIENS AND
ENCUMBRANCES.
(a) Schedule 3.20(a) of the Banyan Disclosure Schedule
sets forth a true and complete description of all real property owned or leased
(as lessee) by Banyan or any Banyan Subsidiary (the "Banyan Properties"), the
aggregate annual rental or other fee payable under any such lease, and, with
respect to any such Banyan Properties currently under contract for sale, the
parties to such contract or contracts.
(b) Except as set forth on Schedule 3.20(b) of the Banyan
Disclosure Schedule, Banyan or a Banyan Subsidiary has marketable title to, or,
in the case of leased properties and assets, valid leasehold interests in, all
of the Banyan Properties, and, except as set forth on Schedule 3.20(b) of the
Banyan Disclosure Schedule and to the best of Banyan's knowledge without
conducting a title search of the Banyan Properties, such title or leasehold
interests are free and clear of any Liens. Banyan or a Banyan Subsidiary is
the sole owner of the Banyan Properties free and clear of any right to or claim
of possession by any other party (except tenants under the leases copies of
which have been delivered to RGI/US and the rights of various public or private
entities
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for easement purposes). Schedule 3.20(b) of the Banyan Disclosure Schedule
sets forth a list of all material management agreements, development agreements
or other agreements of any kind with respect to any of the Banyan Properties to
which Banyan or any Banyan Subsidiary is a party and such agreements are valid
and binding on Banyan or the Banyan Subsidiary (as the case may be) and, to the
best of Banyan's knowledge, without default by any party thereto. All approved
or proposed site plans, master development plans or similar development plans
with respect to any of the Banyan Properties have been provided to RGI/US.
(c) With respect only to the Banyan Property commonly
known as 120 S. Spalding ("120 S. Spalding"), to the best of Banyan's
knowledge, there are no material, physical or mechanical defects, including,
without limitation, the mechanical, ventilation, plumbing, heating, air
conditioning, life safety, and electrical systems and all such items are in
operating condition and repair and neither Banyan nor any Banyan Subsidiary has
received of any notification of noncompliance with any applicable governmental
requirements.
(d) To the best of Banyan's knowledge, the use and
operation of 120 S. Spalding is in material compliance with applicable building
codes, and neither Banyan nor any Banyan Subsidiary has received of any
notification of noncompliance with the Americans with Disabilities Act ("ADA"),
seismic design, zoning and land use laws, other local, state and federal laws
and regulations, and restrictive easements or covenants affecting the Banyan
Properties.
(e) Schedule 3.20(e) of the Banyan Disclosure Schedule
sets forth a rent roll for the Banyan Properties and such rent roll accurately
summarizes the status of the existing leases and any defaults thereunder.
There are no leasing or other commissions due and unpaid under any of the
leases, and all tenant improvements required under existing leases have been
completed and are fully paid and no credit is due to any tenant.
(f) Except as set forth in Schedule 3.20(f) of the Banyan
Disclosure Schedule, to the best of Banyan's knowledge, there are no
condemnation proceedings or any land-use or development regulations or
proceedings pending or threatened, including but not limited to historical
designation or preservation proceedings, that would have a Material Adverse
Effect on the development, use and operation of any of the Banyan Properties,
nor has Banyan received notice of any special assessment proceedings affecting
any of the Banyan Properties.
(g) All water, sewer, gas, electric, telephone, drainage
facilities and any other utilities required for the normal use of those
specific Banyan Properties set forth on Schedule 3.20(g) of the Banyan
Disclosure Schedule are installed and connected pursuant to valid permits, and
are adequate to service such Banyan Properties, and to the best of Banyan's
knowledge comply with all applicable legal requirements.
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(h) Schedule 3.20(h) of the Banyan Disclosure Schedule to
be delivered to RGI/US prior to the Initial Closing summarizes the licenses,
permits, certificates, approvals, variances, easements and rights of way
received, and to the best of Banyan's knowledge required, from all governmental
authorities having jurisdiction over each of the Banyan Properties or from
private parties for the normal use (both existing and proposed) and operation
of the Banyan Properties and to insure vehicular and pedestrian ingress to and
egress from each of the Banyan Properties.
(i) None of the Banyan Properties are located in an area
identified by the Secretary of Housing and Urban Development or other
governmental agency as an area having special flood hazards, and except as
identified on the master development plans or site plans delivered to RGI/US
pursuant to Section 3.20(b), no separate areas within any of the Banyan
Properties are required to be set aside for water retention, "green belt," open
space or drainage.
(j) Except with respect to Banyan Properties for which
Banyan is attempting to change existing zoning requirements, Banyan has no
knowledge of any plan by any person or entity to change the existing zoning
applicable to any of the Banyan Properties.
(k) Except as set forth on Schedule 3.20(k) of the Banyan
Disclosure Schedule, all fees and charges due and payable for thirty (30) days
or more for materials and labor (including property management, design,
engineering, surveying, and other professional services) delivered or performed
in connection with the development of the Banyan Properties as of the date of
the Merger Closing will have been paid in full or lien releases for such fees
and charges will have been obtained.
(l) To the best of Banyan's knowledge there is no claim,
litigation, or governmental investigation or proceeding, pending or threatened
that may affect the Banyan Properties and no unrecorded easements or claims of
encroachment or prescriptive easement affecting the Banyan Properties exist.
SECTION 3.21 ENVIRONMENTAL MATTERS.
(a) Neither Banyan nor any Banyan Subsidiary, nor to the
knowledge of Banyan (without inquiry) any tenant on the Banyan Properties, has
received any written notice, demand, citation, summons, complaint or order or
any notice of any penalty, Lien or assessment, and to the best of Banyan's
knowledge (without inquiry with respect to any tenant on the Banyan
Properties), there is no investigation or review pending by any governmental
entity, with respect to any (i) alleged violation by Banyan, any Banyan
Subsidiary or any tenant on the Banyan Properties of any Environmental Law (as
defined in subsection (f) below), (ii) alleged failure by Banyan, any Banyan
Subsidiary or any tenant on the Banyan Properties to have any environmental
permit, certificate, license,
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approval, registration or authorization required in connection with the conduct
of its business or (iii) Regulated Activity (as defined in subsection (f)
below).
(b) Neither Banyan nor any Banyan Subsidiary, with
respect to any of the Banyan Properties, has any knowledge of any Environmental
Liabilities (as defined in subsection (f) below), or of any release of
Hazardous Substances (as defined in subsection (f) below) into the environment
in violation of any Environmental Law or environmental permit. Banyan has
disclosed to RGI/US in writing the presence, to the best of Banyan's knowledge,
of any asbestos in any of its premises other than fully encapsulated
asbestos-containing construction materials.
(c) Banyan has delivered to RGI/US copies of all
environmental audits and other similar reports which have been prepared by or
for Banyan or any Banyan Subsidiary, or by or for any tenant on the Banyan
Properties to the extent delivered to Banyan by such tenant, with respect to
the Banyan Properties.
(d) Except as set forth on Schedule 3.21(d) of the Banyan
Disclosure Schedule, to the best of Banyan's knowledge, (i) no
asbestos-containing materials were installed or exposed in the Banyan
Properties through demolition, renovation or otherwise, (ii) no electrical
transformers or other equipment containing PCB's are or were located on the
Banyan Properties, (iii) no storage tanks for gasoline, heating oil or diesel
fuel or any other substances are or were located on or under the Banyan
Properties, and (iv) no materials regulated under any federal, state or local
law or regulation, as amended from time to time, as a toxic, hazardous,
contaminated or similarly harmful or dangerous material or substance
(including, without limitation, asbestos and radon) are or were located on, in
or under the Banyan Properties or have affected the Banyan Properties or waters
on or under the Banyan Properties.
(e) Neither Banyan nor any Banyan Subsidiary, nor to the
knowledge of Banyan (without inquiry) any tenant on the Banyan Properties, has
received any written notice under the California Health and Safety Code or any
other applicable local, state or federal law regarding Hazardous Substances on,
under or affecting the Banyan Properties or requiring the removal of any
Hazardous Substances from the Banyan Properties.
(f) For the purposes of this Agreement, the following
terms have the following meanings:
"Environmental Laws" shall mean any and all federal,
state and local laws (including case law), regulations,
ordinances, rules, judgments, orders, decrees, codes, plans,
injunctions, permits, concessions, grants, franchises,
licenses, agreements and governmental restrictions relating to
human health, the environment or to emissions, discharges or
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releases of pollutants, contaminants, Hazardous Substances or
wastes into the environment or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of pollutants, contaminants,
Hazardous Substances or wastes or the cleanup or other
remediation thereof.
"Environmental Liabilities" shall mean all
liabilities, whether vested or unvested, contingent or fixed,
which (i) arise under or relate to a violation of
Environmental Laws and (ii) relate to actions occurring or
conditions existing on or prior to the Effective Time.
"Hazardous Substances" shall mean any toxic,
radioactive, caustic or otherwise hazardous substance
regulated by any Environmental Law, including petroleum, its
derivatives, by-products and other hydrocarbons, or any
substance having any material constituent elements displaying
any of the foregoing characteristics.
"Regulated Activity" shall mean any generation,
treatment, storage, recycling, transportation, disposal or
release of any Hazardous Substances.
SECTION 3.22 INSURANCE. Schedule 3.22 of the Banyan Disclosure
Schedule sets forth a list of all insurance policies and fidelity bonds
insuring the assets, business, equipment, properties, operations, employees,
officers and directors of Banyan and the Banyan Subsidiaries. Copies of all
such policies have been delivered to RGI/US prior to the date hereof. There is
no claim by Banyan or any Banyan Subsidiary pending under any of such policies
or bonds as to which coverage has been questioned, denied or disputed by the
underwriters of such policies or bonds. All premiums payable under all such
policies and bonds have been paid and Banyan and the Banyan Subsidiaries are
otherwise in full compliance with the terms of such policies and bonds (or
other policies and bonds providing substantially similar insurance coverage).
To the best of Banyan's knowledge no termination or material premium increase
is pending or threatened with respect to any of such policies.
SECTION 3.23 LABOR MATTERS. Banyan, each Banyan Subsidiary and,
to the best of Banyan's knowledge after inquiry, Banyan Management Corp., is in
compliance with all currently applicable laws and regulations respecting
employment, discrimination in employment, verification of immigration status,
terms and conditions of employment and wages and hours and occupational safety
and health and employment practices, and is not engaged in any unfair labor
practice, except to the extent that non-compliance would not have a Material
Adverse Effect on Banyan. Neither Banyan nor any Banyan
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Subsidiary nor, to the best of Banyan's knowledge after inquiry, Banyan
Management Corp., has received any notice from any Governmental Entity, and
there has not been asserted before any Governmental Entity, any claim, action
or proceeding to which Banyan or any Banyan Subsidiary is a party, and to the
best of Banyan's knowledge, there is neither pending nor threatened any
investigation or hearing concerning or involving Banyan, any Banyan Subsidiary
or any officer or employee of Banyan or any Banyan Subsidiary arising out of or
based upon any such laws, regulations or practices.
SECTION 3.24 EMPLOYEES. Schedule 3.24 of the Banyan Disclosure
Schedule lists each employee of Banyan and each Banyan Subsidiary, his or her
current position, salary, bonus and general compensation arrangement. Except
for the employment agreements listed on Schedule 3.24 of the Banyan Disclosure
Schedule, complete and accurate copies of which have been delivered to RGI/US,
neither Banyan nor any Banyan Subsidiary is a party to any employment
agreements. All employees of Banyan and the Banyan Subsidiaries who are
employed in a technical, managerial or executive capacity and who are material
to the operations of Banyan and the Banyan Subsidiaries, taken as a whole, have
the right under applicable immigration laws to work in their present locations
for at least two years from the Effective Date.
SECTION 3.25 FINDERS' FEES. Except for Josephthal Lyon & Ross
Incorporated, there is no investment banker, broker, finder or other
intermediary which has been retained by or is authorized to act on behalf of
Banyan or any Banyan Subsidiary who might be entitled to any fee or commission
upon consummation of the transactions contemplated by this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF RGI/US AND RGI HOLDINGS
Except as set forth in a document referring specifically to the
relevant Section or subsection of this Agreement which is delivered by RGI/US
to Banyan prior to execution of this Agreement (the "RGI/US Disclosure
Schedule"), RGI/US and RGI Holdings, jointly and severally, represent and
warrant to Banyan as follows:
SECTION 4.01 CORPORATE EXISTENCE AND POWER. Each of RGI/US and
RGI Holdings is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Washington. Each of RGI/US and RGI
Holdings has all corporate powers and all material Governmental Authorizations
required to carry on its respective business as now conducted. Each of RGI/US
and RGI Holdings is duly qualified to do business as a foreign corporation and
is in good standing in each jurisdiction where the character of the property
owned or leased by it or the nature of its activities makes such qualification
necessary, except for those jurisdictions where the failure to be so qualified
would not, individually or in the aggregate, have a Material Adverse Effect on
RGI/US or RGI Holdings (as the case may be). With respect to
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RGI/US and the RGI/US Subsidiaries taken as a whole, a Material Adverse Change
shall be deemed to have occurred for purposes of this Agreement if the fair
market value of the RGI/US common stock as reported by Coopers & Lybrand in its
report dated as of April 1, 1996, as amended on May 20, 1996, shall have
declined by ten percent (10%) or more prior to the Merger Date in the report to
be delivered by Coopers & Lybrand on the Merger Date (such a decline to be a
"RGI/US Decline in Value" for purposes of this Agreement). RGI/US has
delivered to Banyan true and complete copies of RGI/US' and RGI Holdings'
Articles of Incorporation and Bylaws, each as currently in effect.
SECTION 4.02 CORPORATE AUTHORIZATION. The execution, delivery and
performance by RGI/US and RGI Holdings of this Agreement and the Ancillary
Agreements (to the extent either RGI/US or RGI Holdings is a party thereto) and
the consummation by RGI/US and RGI Holdings of the transactions contemplated
hereby and thereby are within such corporations' corporate powers and have been
and, to the extent not executed as of the date hereof, will be prior to
execution, duly authorized by all necessary corporate action. This Agreement
and the Ancillary Agreements (to the extent either RGI/US or RGI Holdings is a
party thereto) constitute valid and binding agreements of RGI/US and RGI
Holdings (as the case may be) enforceable against each of them in accordance
with its terms except as enforcement may be limited by applicable bankruptcy,
insolvency, moratorium or other similar laws relating to creditors' rights and
general principles of equity.
SECTION 4.03 GOVERNMENTAL CONSENTS AND APPROVALS. The execution,
delivery and performance by RGI/US and RGI Holdings of this Agreement and the
Ancillary Agreements (to the extent either RGI/US or RGI Holdings is a party
thereto) and the consummation of the transactions contemplated hereby and
thereby by RGI/US and RGI Holdings requires no action by or in respect of, or
filing with, any governmental body, agency, official or authority other than:
(a) compliance with any applicable requirements of the
HSR Act;
(b) compliance with any applicable requirements of the
Exchange Act and the rules and regulations promulgated thereunder;
(c) compliance with any applicable requirements of the
Securities Act and the rules and regulations promulgated thereunder;
(d) compliance with any applicable requirements of the
NYSE;
(e) compliance with any applicable state securities or
"blue sky" laws; and
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(f) such other filings or registrations with, or
authorizations, consents, or approvals of, governmental bodies, agencies,
officials or authorities, the failure of which to make or obtain would not have
a Material Adverse Effect on the ability of the Parties to consummate the
transactions contemplated hereby.
SECTION 4.04 NON-CONTRAVENTION. The execution, delivery and
performance by RGI/US and RGI Holdings of this Agreement and the Ancillary
Agreements (to the extent either RGI/US or RGI Holdings is a party thereto) and
the consummation of the transactions by RGI/US and RGI Holdings contemplated
hereby and thereby and do not and will not:
(a) contravene or conflict with the articles of
incorporation or bylaws of RGI/US or RGI Holdings;
(b) assuming compliance with the matters set forth in
Section 4.03, to the best of RGI/US and RGI Holdings' knowledge, (i)
contravene, conflict with or constitute a violation of any provision of any
judgment, injunction, order or decree binding upon RGI/US, RGI Holdings or any
RGI/US Subsidiary (as defined in Section 4.06), or (ii) contravene, conflict
with or constitute a violation of any provision of any law or regulation
applicable to RGI/US or any RGI/US Subsidiary to the extent that such
contravention, conflict or violation would have a Material Adverse Effect on
RGI/US;
(c) except as set forth on Schedule 4.04(c) of the RGI/US
Disclosure Schedule, constitute a default under, require the approval of, or
give rise to a right of termination, cancellation, acceleration or loss of any
material benefit under any agreement, contract or other instrument (including
loan documents) binding upon RGI/US, RGI Holdings or any RGI/US Subsidiary or
under any license, franchise, permit or other similar authorization held by
RGI/US, RGI Holdings or any such RGI/US Subsidiary; or
(d) result in the creation or imposition of any Lien on
any material asset of RGI/US, RGI Holdings or any RGI/US Subsidiary.
SECTION 4.05 CAPITALIZATION OF RGI/US.
(a) The authorized capital stock of RGI/US consists of
100,000 shares of RGI/US Common Stock, 1,000 of which shares are outstanding
and owned by RGI Holdings. All outstanding shares of RGI/US Common Stock have
been duly authorized and validly issued and are fully paid and nonassessable.
Except for the 1,000 shares of RGI/US Common Stock owned by RGI Holdings, there
are outstanding (i) no shares of capital stock or other voting securities of
RGI/US, (ii) no securities of RGI/US convertible into or exchangeable for
shares of capital stock or voting securities of RGI/US and (iii) no options or
other rights to acquire from RGI/US, and no obligation
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of RGI/US to issue, any capital stock, voting securities or securities
convertible into or exchangeable for capital stock or other voting securities
of RGI/US (the items in clauses (i), (ii) and (iii) being referred to
collectively as the "RGI/US Securities"). There are no outstanding obligations
of RGI/US or any RGI Subsidiary to repurchase, redeem or otherwise acquire any
RGI/US Securities.
SECTION 4.06 SUBSIDIARIES.
(a) Schedule 4.06(a) of the RGI/US Disclosure Schedule
sets forth a true and accurate list of each "Subsidiary" of RGI/US (each an
"RGI/US Subsidiary" and together, the "RGI/US Subsidiaries"). Each RGI/US
Subsidiary is either a corporation or other entity duly incorporated or
otherwise organized, validly existing and in good standing (or local law
equivalent) under the laws of its jurisdiction of organization, and has all
corporate or other organizational powers required to carry on its business as
now conducted. Each RGI/US Subsidiary is duly qualified to do business as a
foreign corporation or partnership (as the case may be), is in good standing or
local law equivalent and has all licenses and permits necessary in each
jurisdiction where the character of the property owned or leased by, or the
nature of its activities, make such qualification, licenses or permits
necessary except for those jurisdictions where the failure to be so qualified
or have such licenses or permits would not, individually or in the aggregate,
have a Material Adverse Effect on RGI/US or on the relevant RGI/US Subsidiary.
RGI/US has delivered to Banyan true and complete copies of the articles or
certificate of incorporation, bylaws, partnership agreement and other similar
organizational documents as currently in effect for each such RGI/US
Subsidiary.
(b) Except as set forth on Schedule 4.06(b) of the RGI/US
Disclosure Schedule, all of the outstanding capital stock of, or other
ownership interests in, each RGI/US Subsidiary is owned by RGI/US, directly or
indirectly, free and clear of any Lien and free of any other limitation or
restriction (including any restriction on the right to vote, sell or otherwise
dispose of such capital stock or other ownership interests). Except as set
forth on Schedule 4.06(b) of the RGI/US Disclosure Schedule, there are no
outstanding:
(i) securities of RGI/US or any RGI/US Subsidiary
convertible into or exchangeable for shares of capital stock or other voting
securities of any RGI/US Subsidiary; or
(ii) options or other rights to acquire from RGI/US or any
RGI/US Subsidiary, and no other obligation of RGI/US or any RGI/US Subsidiary
to issue, any capital stock, voting securities of or other ownership interests
in, or any securities convertible into or exchangeable for any capital stock,
voting securities or other ownership interests of, any RGI/US Subsidiary (the
items in clauses (i) and (ii) being referred to collectively as the "RGI/US
Subsidiary Securities"). There are no
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outstanding obligations of RGI/US or any RGI/US Subsidiary to repurchase,
redeem or otherwise acquire any outstanding RGI/US Subsidiary Securities.
(c) Except as set forth on Schedule 4.06(c) of the RGI/US
Disclosure Schedule, there are no material agreements, contracts and other
documentation setting forth any terms or conditions with respect to RGI/US'
ownership interest in the RGI/US Subsidiaries.
SECTION 4.07 FINANCIAL STATEMENTS. RGI/US has delivered to Banyan
the unaudited consolidated balance sheet of RGI/US as of December 31, 1995 and
the related unaudited statements of operations, stockholders equity and cash
flows for the year ended December 31, 1995, together with audited balance
sheets as of December 31, 1992, 1993, 1994 and 1995 and related audited
statements of operations, stockholders equity and cash flows for the years
ended December 31, 1992, 1993, 1994 and 1995 for Grand Harbor Associates, Inc.
The consolidated financial statements of RGI/US present fairly, in conformity
with GAAP applied on a consistent basis (except that the unaudited consolidated
financial statements do not contain notes), the consolidated financial position
of RGI/US and the RGI/US Subsidiaries as of the dates thereof and their
consolidated results of operations and cash flows for the periods then ended.
For purposes of this Agreement, "RGI/US Balance Sheet" means the unaudited
consolidated balance sheet of RGI/US as of December 31, 1995, and "RGI/US
Balance Sheet Date" means December 31, 1995.
SECTION 4.08 COMPLIANCE WITH LAW. RGI/US and each RGI/US
Subsidiary is in compliance and has conducted its business so as to comply with
all laws, rules and regulations, judgments, licenses, permits decrees or orders
of any Governmental Authority applicable to their respective businesses or
properties except to the extent that noncompliance would not have a Material
Adverse Effect on RGI/US or the RGI/US Subsidiaries taken as a whole. Quality
Life Services, Ltd., an RGI/US Subsidiary, has all necessary licenses and
permits to operate the Royal Palm Convalescent Center. Except as set forth on
Schedule 4.08 to the RGI/US Disclosure Schedule, there are no judgments or
orders, injunctions, decrees, stipulations or awards (whether rendered by a
court or administrative agency or by arbitration), including any such actions
relating to affirmative action claims or claims of discrimination, against
RGI/US or any RGI/US Subsidiary or against any of their respective properties
or businesses.
SECTION 4.09 NO DEFAULTS. Neither RGI/US nor any RGI/US
Subsidiary is, or has received notice that it would be with the passage of
time, (i) in violation of any provision of its articles or certificate of
incorporation or bylaws or other similar organizational document or (ii) in
default or violation of any term, condition or provision of (A) any judgment,
decree, order, injunction or stipulation applicable to RGI/US or any RGI/US
Subsidiary or (B) any material agreement, note, mortgage, indenture, contract,
lease or instrument, permit, concession, franchise or license to which RGI/US
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or any RGI/US Subsidiary is a party or by which RGI/US or any RGI/US Subsidiary
or their respective properties or assets may be bound.
SECTION 4.10 LITIGATION. Except as set forth on Schedule 4.10 of
the RGI/US Disclosure Schedule, there is no action, suit, proceeding, claim or
investigation pending or, to the best of RGI/US' and RGI Holdings' knowledge,
threatened, against RGI/US or any RGI/US Subsidiary which could, individually
or in the aggregate, have a Material Adverse Effect on RGI/US and the RGI/US
Subsidiaries, taken on as a whole, or which in any manner challenges or seeks
to prevent, enjoin, alter or materially delay any of the transactions
contemplated hereby or by any of the Ancillary Agreements. Except as set forth
on Schedule 4.10, RGI/US has delivered to Banyan complete copies of all audit
response letters prepared by RGI/US' counsel for RGI/US' independent public
accountants and all management letters prepared in connection with the last
three completed audits (if such audits took place) of the financial statements
of RGI/US' and any of the RGI/US Subsidiaries, including the audit conducted in
connection with the RGI/US Balance Sheet, and any such correspondence since the
RGI/US Balance Sheet Date.
SECTION 4.11 ABSENCE OF CERTAIN CHANGES. Except as expressly
allowed or contemplated by this Agreement or as set forth on Schedule 4.11 of
the RGI/US Disclosure Schedule, since the RGI/US Balance Sheet Date, there has
not occurred:
(a) Material Adverse Change with respect to RGI/US or the
RGI/US Subsidiaries, taken as a whole;
(b) Any amendments or changes in the articles or
certificate of incorporation or bylaws or other similar organizational document
of RGI/US or any RGI/US Subsidiary;
(c) Any damage, destruction or loss, not covered by
insurance in excess of $250,000 with respect to any of the properties or
businesses of RGI/US or any RGI/US Subsidiary;
(d) Any redemption, repurchase or other acquisition of
shares of capital stock, partnership units or ownership units of RGI/US or any
RGI/US Subsidiary by RGI/US or any RGI/US Subsidiary (other than pursuant to
arrangements with terminated employees or consultants), or any declaration,
setting aside or payment of any dividend or other distribution (whether in
cash, stock or property) with respect to the capital stock of RGI/US or any
RGI/US Subsidiary;
(e) Any increase in or modification of the compensation
or benefits payable or to become payable by RGI/US or any RGI/US Subsidiary to
any of their respective directors, officers, partners, employees or
consultants;
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(f) Any increase in or modification of any bonus,
pension, insurance or other employee benefit plan, payment or arrangement
(including, but not limited to, the granting of stock options, restricted stock
awards or stock appreciation rights) made to, for or with any of its directors
or employees;
(g) Except as contemplated by this Agreement, any
acquisition or sale of a material amount of property or assets by or of RGI/US
or any RGI/US Subsidiary;
(h) Any alteration in any term of any outstanding
securities of RGI/US or any RGI/US Subsidiaries;
(i) Except as contemplated by this Agreement, any (i)
incurrence, assumption or guarantee by RGI/US or any RGI/US Subsidiary of any
debt for borrowed money; (ii) issuance or sale of any securities convertible
into or exchangeable for debt securities of RGI/US or any RGI/US Subsidiary; or
(iii) issuance or sale of options or other rights to acquire from RGI/US or any
RGI/US Subsidiary, directly or indirectly, debt securities of RGI/US or any of
RGI/US Subsidiary or any securities convertible into or exchangeable for any
such debt securities;
(j) Any creation or assumption by RGI/US or any RGI/US
Subsidiary of any Lien on any material asset;
(k) Any loan, advance or capital contribution to or
investment in any person other than (i) loans, advances or capital
contributions to or investments in RGI/US Subsidiaries, (ii) travel loans or
advances made in the ordinary course of business of RGI/US, and (iii) other
loans and advances in an aggregate amount which do not exceed $10,000
outstanding at any time;
(l) Any entry into, amendment of, relinquishment,
termination or nonrenewal by RGI/US or any RGI/US Subsidiary of any material
contract, lease, commitment or other right or obligation other than in the
ordinary course of business; or
(m) To the best of RGI/US and RGI Holdings' knowledge,
any agreement or arrangement made by RGI/US or any RGI/US Subsidiary to take
any action which, if taken prior to the date hereof, would have made any
representation or warranty set forth in this Section 4.11 untrue or incorrect
as of the date when made; or
(n) Any labor dispute, other than routine individual
grievances, or any actions or proceedings by a labor union or representative
thereof to organize any employee of RGI/US or any RGI/US Subsidiary.
SECTION 4.12 NO UNDISCLOSED MATERIAL LIABILITIES. Except as set
forth on Schedule 4.12 of the RGI/US Disclosure Schedule, there are no
liabilities of RGI/US or
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any RGI/US Subsidiary of any kind whatsoever that are material to the business
of RGI/US and the RGI/US Subsidiaries, taken as a whole, other than:
(a) liabilities disclosed or provided for in the RGI/US
Balance Sheet;
(b) liabilities incurred in the ordinary course of
business consistent with past practice since the RGI/US Balance Sheet Date; and
(c) liabilities under this Agreement.
SECTION 4.13 CERTAIN AGREEMENTS. Neither the execution and
delivery of this Agreement nor the consummation of the transactions
contemplated hereby will (i) result in any payment (including, without
limitation, severance, unemployment compensation, golden parachute, bonus or
otherwise) becoming due to any director or employee of RGI/US or any RGI/US
Subsidiary from RGI/US or any such RGI/US Subsidiary, under any RGI/US Employee
Plan (as defined in Section 4.14(a) below) or otherwise, (ii) materially
increase any benefits otherwise payable under any RGI/US Employee Plan, or
(iii) result in the acceleration of the time of payment or vesting of any such
benefits.
SECTION 4.14 EMPLOYEE BENEFITS.
(a) Schedule 4.14(a) of the RGI/US Disclosure Schedule
sets forth each "employee benefit plan," as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974 ("ERISA"), and each employment
agreement, compensation agreement, bonus, commission or similar arrangement,
and fringe benefit arrangement which is maintained, administered or contributed
to by RGI/US or any affiliate thereof (as defined below) and covers any
employee or former employee of RGI/US or any affiliate or under which RGI/US or
any affiliate has any liability. Such plans are referred to collectively
herein as the "RGI/US Employee Plans." For purposes of this Section 4.14 only,
an "affiliate" of RGI/US means (i) RGI Holdings and RGI Real Estate, Inc. and
any domestic corporation owned 80% or more by either of them, and (ii) Resource
Group International, Inc. The only RGI/US Employee Plans which individually or
collectively would constitute an "employee pension benefit plan" as defined in
Section 3(2) of ERISA are identified as such in the list referred to above.
(b) No RGI/US Employee Plan constitutes a "multiemployer
plan" as defined in Section 3(37) of ERISA (a "Multiemployer Plan"), no RGI/US
Employee Plan is maintained in connection with any trust described in Section
501(c)(9) of the Code and no RGI/US Employee Plan is subject to Title IV of
ERISA or Section 412 of the Code. If RGI/US or an affiliate thereof ever
maintained or was obligated to contribute to a Multiemployer Plan or a plan
subject to Title IV of ERISA, any withdrawal or other liability under Title IV
of ERISA with respect to such plan has been fully satisfied. To RGI/US's
knowledge, nothing done or omitted to be done and no transaction or holding
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of any asset under or in connection with any RGI/US Employee Plan has or will
make RGI/US or any of its Subsidiaries, or any officer or director thereof,
subject to any liability under Title I of ERISA or liable for any tax pursuant
to Section 4975 of the Code.
(c) To the best knowledge of RGI/US, each RGI/US Employee
Plan which is intended to be qualified under Section 401(a) of the Code is so
qualified and has been so qualified during the period from its adoption to
date, and each trust forming a part thereof is exempt from tax pursuant to
Section 501(a) of the Code. RGI/US has furnished to Banyan copies of the most
recent Internal Revenue Service determination letters, if any, with respect to
each such RGI/US Employee Plan. To the best of knowledge of RGI/US, each
RGI/US Employee Plan has been maintained in substantial compliance with its
terms and with the requirements prescribed by any and all statutes, orders,
rules and regulations, including but not limited to ERISA and the Code, which
are applicable to such RGI/US Employee Plan. Except as set forth on Schedule
4.14(c) of the RGI/US Disclosure Schedule, there are no pending or threatened
disputed claims against any RGI/US Employee Plan or against RGI/US or any
affiliate of RGI/US arising under any such Plan. No RGI/US Employee Plan is
currently under examination by the Internal Revenue Service or Department of
Labor and RGI/US has received no notice from either agency of its intent to
examine by RGI/US Employee Plan.
(d) There is no contract, agreement, plan or arrangement
covering any employee or former employee of RGI/US or any affiliate that would
obligate the Surviving Corporation to pay any additional compensation,
including severance pay or additional withholding taxes, as a result of the
consummation of the transactions contemplated by this Agreement or that,
individually or collectively, could give rise to the payment by the Surviving
Corporation of any amount that would not be deductible pursuant to the terms of
Sections 162(a)(1) or 280G of the Code.
(e) Neither RGI/US nor its affiliates have any projected
liability in respect of post-retirement health, life and medical benefits for
retired employees of RGI/US and its affiliates. Other than provisions of
applicable law, no condition exists that would prevent RGI/US or any of the
RGI/US Subsidiaries from amending or terminating any RGI/US Employee Plan.
(f) There has been no amendment to, written
interpretation or announcement (whether or not written) by RGI/US or any of its
affiliates relating to, or change in employee participation or coverage under,
any RGI/US Employee Plan which would materially increase the expense of
maintaining such RGI/US Employee Plan above the level of the expense incurred
in respect thereof for the most recent fiscal year.
SECTION 4.15 MAJOR CONTRACTS. Schedule 4.15 of the RGI/US
Disclosure Schedule sets forth a list of all "material contracts" as defined in
Item 601 of Regulation S-K under the Securities Act and to which RGI/US or any
RGI/US Subsidiary is a party
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or has a beneficial interest in (each a "RGI/US Material Contract"). Each
RGI/US Material Contract is valid and binding on RGI/US or the RGI/US
Subsidiary, as applicable, and neither RGI/US nor any RGI/US Subsidiary, nor to
the best of their knowledge any other party thereto, has breached any provision
of, or is in default under the terms of, any RGI/US Material Contract.
SECTION 4.16 TAXES.
(a) Except as set forth on Schedule 4.16(a) of the RGI/US
Disclosure Schedule, all Tax returns, statements, reports and forms (including
estimated Tax returns and reports and information returns and reports) required
to be filed with any Taxing Authority with respect to any Taxable period ending
on or before the Effective Time by or on behalf of RGI/US or any of the RGI/US
Subsidiaries (collectively, the "RGI/US Tax Returns"), the non-filing of which
would have a Material Adverse Effect on RGI/US or would result in criminal
penalties against RGI/US or any officer or employee thereof, have been or will
be filed when due (including any extensions of such due date).
(b) RGI/US and the RGI/US Subsidiaries have timely paid,
withheld or made provision on their books for all Taxes shown as due and
payable on RGI/US Tax Returns that have been filed.
(c) All RGI/US Tax Returns relating to income or
Franchise Taxes filed with respect to Taxable Years of RGI/US and RGI/US
Subsidiaries ending on or after December 31, 1990 have been filed or extensions
have been duly made.
(d) Neither RGI/US nor any RGI/US Subsidiary has been
granted any extension or waiver of the limitation period applicable to any
RGI/US Tax Returns.
(e) To the best of RGI/US and each of the RGI/US
Subsidiaries' knowledge, there is no claim, audit, action, suit, proceeding, or
investigation now pending or threatened in writing against or with respect to
RGI/US or any RGI/US Subsidiary in respect of any Tax or assessment.
(f) There are no requests for rulings in respect of any
Tax pending between RGI/US or any RGI/US Subsidiary and any Taxing Authority.
(g) None of the property owned or used by RGI/US or any
of the RGI/US Subsidiaries is subject to a tax benefit transfer lease executed
in accordance with Section 168(f)(8) of the Code.
(h) Except as set forth on Schedule 4.16(h) of the RGI/US
Disclosure Schedule, none of the property owned by RGI/US or any RGI/US
Subsidiary is "tax-exempt use property" within the meaning of Section 168(h) of
the Code.
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(i) Neither RGI/US nor any RGI/US Subsidiary, nor any
other person on behalf of RGI/US or any such RGI/US Subsidiary, has entered
into nor will it enter into any agreement or consent pursuant to Section 341(f)
of the Code.
(j) Except as set forth on Schedule 4.16(j) of the RGI/US
Disclosure Schedule, there are no liens for Taxes upon the assets of RGI/US or
any RGI/US Subsidiary except liens for current Taxes not yet due.
(k) Except as set forth on Schedule 4.16(k) of the RGI/US
Disclosure Schedule, neither RGI/US nor any RGI/US Subsidiary will be required
to include any adjustment in Taxable income for any Tax period (or portion
thereof) ending after the Effective Time pursuant to Section 481(c) of the Code
(or any similar provision of the Tax laws of any jurisdiction) as a result of a
change in method of accounting for any Tax period (or portion thereof) ending
on or before the Effective Time or pursuant to the provisions of any agreement
entered into with any Taxing Authority with regard to the Tax liability of
RGI/US or any such RGI/US Subsidiary for any Tax period (or portion thereof)
ending on or before the Effective Time.
(l) Neither RGI/US nor any RGI/US Subsidiaries is
currently under any contractual obligation to pay the income or franchise tax
obligations of, or with respect to transactions relating to, any other person
or to indemnify any other person with respect to any income or franchise tax.
(m) Except as set forth on Schedule 4.16(m) of the RGI/US
Disclosure Schedule, neither RGI/US nor any RGI/US Subsidiary has signed any
letter or entered into any agreement or arrangement consenting to the surrender
or sharing of any deductions, credits, or other Tax attributes with any other
person or transferred or assigned to any other person for Tax purposes any such
item.
(n) Notwithstanding any of the foregoing, no
representation or warranty is made by RGI/US with respect to the Tax
consequences that may result from the transactions contemplated by this
Agreement and the Ancillary Agreements.
SECTION 4.17 INTELLECTUAL PROPERTY.
(a) Schedule 4.17 of the RGI/US Disclosure Schedule sets
forth a schedule of all licensing arrangements which RGI/US or any RGI/US
Subsidiary has with third parties and which are material to the business of
RGI/US and the RGI/US Subsidiaries taken as a whole (collectively, the "RGI/US
Intellectual Property Rights").
(b) Neither RGI/US nor any RGI/US Subsidiary, during the
three years preceding the date of this Agreement, has been sued or charged in
writing with or been a defendant or plaintiff in any claim, suit, action or
proceeding relating to its business which has not been finally terminated prior
to the date hereof and which
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involves a claim of infringement of any patents or licenses, and to the best of
the knowledge of RGI/US (i) there are no other claims by any other person of
patent or license infringement by RGI/US or a RGI/US Subsidiary, and (ii) there
are no continuing infringements by any other person or persons of any RGI/US
Intellectual Property Rights with respect to patents.
SECTION 4.18 RESTRICTIONS ON BUSINESS ACTIVITIES. Except as set
forth on Schedule 4.18 of the RGI/US Disclosure Schedule, there is no material
agreement, judgment, injunction, order or decree binding upon RGI/US or any
RGI/US Subsidiary which has or could reasonably be expected to have the effect
of prohibiting or materially impairing any acquisition of property by RGI/US or
any RGI/US Subsidiary or the conduct of business by RGI/US or any RGI/US
Subsidiary as currently conducted or as currently proposed to be conducted by
the Surviving Corporation.
SECTION 4.19 TITLE TO PROPERTIES: ABSENCE OF LIENS AND ENCUMBRANCES.
(a) Schedule 4.19(a) of the RGI/US Disclosure Schedule
sets forth a true and complete list of all real property owned or leased (as
lessee) by RGI/US or any RGI/US Subsidiary (the "RGI/US Properties"), the
aggregate annual rental or other fee payable under any such lease, and, with
respect to any such RGI/US Properties currently under contract for sale, the
parties to such contract or contracts and the principal terms thereof.
(b) Except as set forth on Schedule 4.19(b) of the RGI/US
Disclosure Schedule, RGI/US or an RGI/US Subsidiary has marketable title to,
or, in the case of leased properties and assets, valid leasehold interests in,
all of the RGI/US Properties, and, except as set forth on Schedule 4.19(b) of
the RGI/US Disclosure Schedule and to the best of RGI/US' knowledge without
conducting a title search of the RGI/US Properties, such title or leasehold
interests are free and clear of any Liens. Except as set forth on Schedule
4.19(b) of the RGI/US Disclosure Schedule, RGI/US and its Subsidiaries are the
sole owners of the RGI/US Properties free and clear of any right to or claim of
possession by any other party (except tenants under the leases copies of which
have been delivered to Banyan and the rights of various public or private
entities for easement purposes). Schedule 4.19(b) of the RGI/US Disclosure
Schedule sets forth a list of all material management agreements, development
agreements or other agreements of any kind with respect to any of the RGI/US
Properties to which RGI/US or any RGI/US Subsidiary is a party and such
agreements are valid and binding on RGI/US or the RGI/US Subsidiary (as the
case may be) and, to the best of RGI/US's knowledge, without default by any
party thereto. All approved or proposed site plans, master development plans
or similar development plans with respect to any of the RGI/US Properties have
been provided to Banyan.
(c) With respect to any buildings or other structures on
the RGI/US Properties, to the best of RGI/US's knowledge, except as set forth
on Schedule 4.19(c)
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of the RGI/US Disclosure Schedule, there are no material, physical or
mechanical defects, including, without limitation, the mechanical, ventilation,
plumbing, heating, air conditioning, life safety, and electrical systems and
all such items are in operating condition and repair and neither RGI/US nor any
RGI/US Subsidiary has received any notification of noncompliance with any
applicable governmental requirements.
(d) To the best of RGI/US' knowledge, the use and
operation of each of the RGI/US Properties is in material compliance with
applicable building codes, and neither RGI/US nor any RGI/US Subsidiary has
received any notification of noncompliance with the Americans with Disabilities
Act ("ADA"), seismic design, zoning and land use laws, other local, state and
federal laws and regulations, and restrictive easements or covenants affecting
the RGI/US Properties.
(e) Schedule 4.19(e) of the RGI/US Disclosure Schedule
sets forth a rent roll for the RGI/US Properties and such rent roll accurately
summarizes the status of the existing leases and any defaults thereunder.
There are no leasing or other commissions due and unpaid under any of the
leases, and all tenant improvements required under existing leases have been
completed and are fully paid and no credit is due to any tenant.
(f) Except as set forth in Schedule 4.19(f) of the RGI/US
Disclosure Schedule, to the best of RGI/US' knowledge, there are no
condemnation proceedings or any land-use or development regulations or
proceedings pending or threatened, including but not limited to historical
designation or preservation proceedings, that would have a Material Adverse
Effect on the development, use and operation of any of the RGI/US Properties,
nor has RGI/US received notice of any special assessment proceedings affecting
any of the RGI/US Properties.
(g) All water, sewer, gas, electric, telephone, drainage
facilities and any other utilities required for the normal use of those
specific RGI/US Properties set forth on Schedule 4.19(g) of the RGI/US
Disclosure Schedule are installed and connected pursuant to valid permits, and
are adequate to service such RGI/US Properties, and to the best of RGI/US'
knowledge comply with all applicable legal requirements.
(h) Except as set forth in Schedule 4.19(h) of the RGI/US
Disclosure Schedule, RGI/US has obtained all licenses, permits, certificates,
approvals, variances, easements and rights of way required from all
governmental authorities having jurisdiction over each of the RGI/US Properties
or from private parties for the normal use (both existing and proposed) and
operation of the RGI/US Properties and to insure vehicular and pedestrian
ingress to and egress from each of the RGI/US Properties.
(i) Except as set forth on Schedule 4.19(i) of the
RGI/US Disclosure Schedule, none of the RGI/US Properties are located in an
area identified by the Secretary of Housing and Urban Development or other
governmental agency as an area
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having special flood hazards, and except as indicated on the master development
plans or site plans delivered to Banyan pursuant to Section 4.19(b), no
separate areas within any of the RGI/US Properties are required to be set aside
for water retention, "green belt," open space or drainage.
(j) Except with respect to RGI/US Properties for which
RGI/US is attempting to change existing zoning requests, RGI/US has no
knowledge of any plan by any person or entity to change the existing zoning
applicable to any of the RGI/US Properties.
(k) Except as set forth on Schedule 4.19(k) of the RGI/US
Disclosure Schedule, all fees and charges due and payable for thirty (30) days
or more for materials and labor (including property management, design,
engineering, surveying, and other professional services) delivered or performed
in connection with the development of the RGI/US Properties as of the date of
the Merger Closing will have been paid in full or lien releases for such fees
and charges will have been obtained.
(l) Except as set forth on Schedule 4.19(b) of the RGI/US
Disclosure Schedule, to the best of RGI/US's knowledge there is no claim,
litigation, or governmental investigation or proceeding, pending or threatened,
that may affect the RGI/US Properties and no unrecorded easements or claims of
encroachment or prescriptive easement affecting the RGI/US Properties exist.
SECTION 4.20 ENVIRONMENTAL MATTERS.
(a) Neither RGI Holdings, RGI/US nor any RGI/US
Subsidiary, nor to the knowledge of RGI Holdings or RGI/US (without inquiry)
any tenant on the RGI/US Properties, has received any written notice, demand,
citation, summons, complaint or order or any notice of any penalty, Lien or
assessment, and to the best of RGI Holdings' and RGI/US' knowledge (without
inquiry with respect to any tenant on the RGI/US Properties), there is no
investigation or review pending by any governmental entity, with respect to any
(i) alleged violation by RGI/US, any RGI/US Subsidiary or any tenant on the
RGI/US Properties of any Environmental Law, (ii) alleged failure by RGI/US, any
RGI/US Subsidiary or any tenant on the RGI/US Properties to have any
environmental permit, certificate, license, approval, registration or
authorization required in connection with the conduct of its business or (iii)
Regulated Activity.
(b) Neither RGI Holdings, RGI/US nor any RGI/US
Subsidiary, with respect to any of the RGI/US Properties, has any knowledge of
any Environmental Liabilities, or of any release of Hazardous Substances into
the environment in violation of any Environmental Law or environmental permit.
RGI/US has disclosed to Banyan in writing the presence, to the best of RGI/US'
knowledge, of any asbestos in any of its premises other than fully encapsulated
asbestos-containing construction materials.
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(c) RGI/US has delivered to Banyan copies of all
environmental audits and other similar reports which have been prepared by or
for RGI/US or any RGI/US Subsidiary, or by or for any tenant on the RGI/US
Properties to the extent delivered to RGI/US by such tenant, with respect to
the RGI/US Properties.
(d) Except as set forth on Schedule 4.20(d) of RGI/US
Disclosure Schedule, to the best of RGI Holdings' and RGI/US' knowledge, (i) no
asbestos-containing materials were installed or exposed in the RGI/US
Properties through demolition, renovation or otherwise, at any time, (ii) no
electrical transformers or other equipment containing PCB's are or were located
on the RGI/US Properties, (iii) no storage tanks for gasoline, heating oil or
diesel fuel or any other substances are or were located on or under the RGI/US
Properties, and (iv) no materials regulated under any federal, state or local
law or regulation, as amended from time to time, as a toxic, hazardous,
contaminated or similarly harmful or dangerous material or substance
(including, without limitation, asbestos and radon) are or were located on, in
or under the RGI/US Properties or have affected the RGI/US Properties or waters
on or under the RGI/US Properties.
(e) Neither RGI Holdings, RGI/US nor any RGI/US
Subsidiary, nor to the knowledge of RGI Holdings or RGI/US (without inquiry)
any tenant on the RGI/US Properties, has received any written notice under any
applicable local, state or federal law regarding Hazardous Substances on, under
or affecting the RGI/US Properties or requiring the removal of any Hazardous
Substances from the RGI/US Properties.
SECTION 4.21 INSURANCE. Schedule 4.21 of the RGI/US Disclosure
Schedule sets forth a list of all insurance policies and fidelity bonds
insuring the assets, business, equipment, properties, operations, employees,
officers and directors of RGI/US and the RGI/US Subsidiaries. Copies of all
such policies have been delivered to Banyan prior to the date hereof. There is
no claim by RGI/US or any RGI/US Subsidiary pending under any of such policies
or bonds as to which coverage has been questioned, denied or disputed by the
underwriters of such policies or bonds. All premiums payable under all such
policies and bonds have been paid and RGI/US and the RGI/US Subsidiaries are
otherwise in full compliance with the terms of such policies and bonds (or
other policies and bonds providing substantially similar insurance coverage).
To the best of RGI/US' knowledge, no termination or material premium increase
is pending or threatened with respect to any of such policies.
SECTION 4.22 LABOR MATTERS. RGI/US and each RGI/US Subsidiary is
in compliance with all currently applicable laws and regulations respecting
employment, discrimination in employment, verification of immigration status,
terms and conditions of employment and wages and hours and occupational safety
and health and employment practices, and are not engaged in any unfair labor
practice, except to the extent that non-compliance would not have a Material
Adverse Effect on RGI/US. Neither RGI/US
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nor any RGI/US Subsidiary has received any notice from any Governmental Entity,
and there has not been asserted before any Governmental Entity, any claim,
action or proceeding to which RGI/US or any RGI/US Subsidiary is a party and,
to the best of RGI/US' knowledge, there is neither pending nor threatened any
investigation or hearing concerning RGI/US or any RGI/US Subsidiary arising out
of or based upon any such laws, regulations or practices.
SECTION 4.23 EMPLOYEES. Schedule 4.23 of the RGI/US Disclosure
Schedule lists each employee or consultant (if under a current contract) of
RGI/US and each RGI/US Subsidiary, his or her current position, salary, bonus
and general compensation arrangement. Except for the employment agreements
listed on Schedule 4.23 to the RGI/US Disclosure Schedule, complete and
accurate copies of which have been delivered to Banyan, neither RGI/US nor any
RGI/US Subsidiary is a party to any employment agreements. All employees of
RGI/US and the RGI/US Subsidiaries who are employed in a technical, managerial
or executive capacity and who are material to the operations of RGI/US and the
RGI/US Subsidiaries, taken as a whole, have the right under applicable
immigration laws to work in their present locations for at least two years from
the Effective Date.
SECTION 4.24 FINDERS' FEES. Except for Goodman Financial
Services, Inc., there is no investment banker, broker, finder or other
intermediary which has been retained by or is authorized to act on behalf of
RGI/US or RGI Holdings or any affiliate thereof who might be entitled to any
fee or commission upon consummation of the transactions contemplated by this
Agreement.
SECTION 4.25 CERTAIN SECURITIES REPRESENTATIONS. RGI Holdings
understands and hereby acknowledges that the Initial Shares have not been
registered under the Securities Act of 1933, as amended, and may not be resold
except pursuant to a registration statement which has been declared effective
under the Securities Act or pursuant to an exemption from the registration
requirements of the Securities Act as confirmed in an opinion of counsel,
acceptable in form and substance to Banyan, and in accordance with the
applicable securities laws of any state of the United States or any other
applicable jurisdiction. RGI Holdings acknowledges that the Initial Shares
will be acquired for its own account and are not being acquired with a view to,
or for offer or sale in connection with any distribution in violation of the
Securities Act. RGI Holdings has such knowledge and experience in financial
and business matters as to be capable of evaluating the merits and risks of
purchasing the Initial Shares and is able to bear the economic risk of the
investment. RGI Holdings and RGI/US acknowledge that they have had access to
such financial and other information, and have been afforded the opportunity to
ask such questions of representatives of Banyan and the Banyan Subsidiaries and
receive answers thereto, as they each deem necessary in connection with RGI
Holdings' decision to purchase the Initial Shares. RGI Holdings was not
induced to invest by any form of general solicitation or general advertising
including, but not limited to, the following: (i) any advertisement, article,
notice or other communication published
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in any newspaper, magazine or similar media or broadcast over the television or
radio; or (ii) any seminar or meeting whose attendees had been invited by any
general solicitation or general advertising.
SECTION 4.26 CERTAIN DOCUMENTS. The information provided to
Coopers & Lybrand by RGI/US for purposes of its preparation of the C&L Report
was to the best knowledge of RGI/US and RGI Holdings true, accurate and
complete as of the dates given to Coopers & Lybrand.
ARTICLE V
COVENANTS OF BANYAN
SECTION 5.01 CONDUCT OF BANYAN. From the date of this Agreement
until the Merger Closing, and except as set forth on Schedule 5.01 of the
Banyan Disclosure Schedule, or with the express written consent of RGI/US,
Banyan and each Banyan Subsidiary shall conduct their businesses in all
material respects in the ordinary course and neither Banyan nor any Banyan
Subsidiary will:
(a) adopt or propose any change in the Existing
Certificate or Existing Bylaws, except as contemplated by the Restated
Certificate or New Bylaws;
(b) enter into or amend any contract, agreement, plan or
arrangement covering any director, officer or employee of Banyan or any Banyan
Subsidiary that provides for the making of any payments, the acceleration of
vesting of any benefit or right or any other entitlement contingent upon (i)
the Merger or (ii) the termination of employment after the occurrence of any
such contingency if such payment, acceleration or entitlement would not have
been provided but for such contingency;
(c) except for issuances pursuant to outstanding Banyan
Options and Warrants, and the issuance of the Initial Shares, issue any
securities;
(d) terminate or amend any of its existing insurance
policies or modify or reduce the coverage thereunder;
(e) sell, transfer, license, sublicense or otherwise
dispose of any of its material assets, or pay any dividend or make any other
distribution to holders of its capital stock;
(f) incur any indebtedness for borrowed money or
guarantee any such indebtedness or issue or sell any debt securities or
guarantee any debt securities of others; or
(g) agree or commit to do any of the foregoing.
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SECTION 5.02 BANYAN STOCKHOLDERS' MEETING. Banyan shall call a
meeting of its stockholders (the "Stockholders' Meeting") to be held as promptly
as practicable following the date of this Agreement (the date on which such
meeting is scheduled in the proxy statement (the "Proxy Statement") to be
prepared by Banyan in connection with such meeting when first mailed to Banyan'
stockholders being hereinafter referred to as the "Stockholders' Meeting Date")
for the purpose of obtaining the stockholder approval required in connection
with the transactions contemplated hereby including (i) the approval of the
Merger, (ii) the approval and adoption of the Restated Certificate, (iii) the
approval and adoption of the New Bylaws, and (iv) the election of those
individuals listed on Schedule 5.02 hereto (or otherwise agreed to by the
Parties) to the Board of Directors of the Surviving Corporation (the "New
Board"). The Board of Directors of Banyan shall recommend in the Proxy
Statement the approval of the Merger, the New Certificate, and New Bylaws and
the election of the New Board by the stockholders of Banyan; provided, however,
that nothing contained in this Section 5.02 shall prohibit the Board of
Directors of Banyan from failing to recommend approval of this Agreement and the
transactions contemplated hereby or using its commercially reasonable best
efforts to obtain approval if the board of directors of Banyan determines in
good faith, after consultation with and based upon the advice of Shefsky
Froelich & Devine Ltd. or such other counsel selected by the Board of Directors
of Banyan, that such action is necessary for the board of directors to comply
with its fiduciary duties to its stockholders under Delaware Law. Without the
prior unanimous consent of the Banyan Board of Directors, Banyan shall not
change the Stockholders' Meeting Date or adjourn the Stockholders' Meeting
unless such adjournment is due to the lack of a quorum, in which case the
chairman of the Stockholders' Meeting shall announce at such meeting the time
and place of the adjourned meeting.
SECTION 5.03 ACCESS TO PROPERTIES AND FINANCIAL, OPERATIONAL AND
TECHNICAL INFORMATION; MONTHLY FINANCIAL STATEMENTS.
(a) From the date hereof until the Merger Closing, Banyan
will give RGI/US and RGI Holdings, their counsel, financial advisors, auditors
and other authorized representatives reasonable access during normal business
hours to the Banyan Properties, and the offices, books and records of Banyan
and any of the Banyan Subsidiaries, will furnish to RGI/US and RGI Holdings,
their counsel, financial advisors, auditors and other authorized
representatives such financial and operating data and all other technical
information as such persons may reasonably request and will instruct Banyan's
employees, counsel and financial advisors to cooperate with RGI/US and RGI
Holdings in their investigation of the business of Banyan and the Banyan
Subsidiaries and in the planning for the combination of the businesses of
Banyan and RGI/US following the consummation of the Merger.
(b) From May 1, 1996 until the Merger Closing, within 15
days following the end of each month (the first such report being due June 15,
1996), Banyan
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will deliver to RGI/US a consolidated balance sheet, consolidated
statement of operations and consolidated statement of cash flows for such
month.
SECTION 5.04 OTHER OFFERS. From the date hereof unless and until
this Agreement shall have been terminated in accordance with its terms, Banyan
and the Banyan Subsidiaries and the officers, directors, employees or other
agents of Banyan and such Banyan Subsidiaries will not, directly or indirectly,
(i) take any action to solicit, initiate or encourage the making of any
Acquisition Proposal (as defined below) or (ii) engage in negotiations with any
person or entity that has made an Acquisition Proposal, or (iii) except as
required by applicable law, disclose any nonpublic information relating to
Banyan or any of the Banyan Subsidiaries or, afford access to the properties,
books or records of Banyan or any of the Banyan Subsidiaries. Banyan will
promptly notify RGI/US after receipt by it of any Acquisition Proposal or any
request for nonpublic information relating to Banyan or any Banyan Subsidiary or
for access to the properties, books or records of Banyan or any Banyan
Subsidiary by any person or entity. The term "Acquisition Proposal" as used in
this Agreement means any offer or proposal for, or any indication of interest
in, a merger or other business combination involving Banyan or any Banyan
Subsidiary or the acquisition of a ten percent (10%) or greater equity interest
in, or a ten percent (10%) or greater portion of the assets of, Banyan or any
Banyan Subsidiary, other than the transactions contemplated by this Agreement;
provided, however, that nothing contained in this Section 5.04 shall prohibit
the Board of Directors of Banyan from: (i) furnishing information to or
entering into discussions or negotiations with, any person or entity that makes
an unsolicited bona fide Acquisition Proposal, if, and only to the extent that
(a) the board of directors of Banyan, after consultation with and based upon the
advice of Shefsky Froelich & Devine Ltd. or such other counsel selected by the
Banyan Board of Directors, determines in good faith that such action is required
for the board of directors to comply with its fiduciary duties to stockholders
under applicable law and (b) prior to furnishing the information to, or entering
into discussions or negotiations with, the person or entity, Banyan provides
written notice to RGI/US to the effect that it is furnishing to, or entering
into discussions or negotiation with, the person or entity; and (ii) to the
extent applicable, complying with Rule 14e-2 and Rule 14a-9 promulgated under
the Exchange Act with regard to an Acquisition Proposal.
SECTION 5.05 COMPLIANCE WITH OBLIGATIONS. Except to the extent
that non-compliance would not have a Material Adverse Effect on Banyan and the
Banyan Subsidiaries taken as a whole, prior to the Effective Date, Banyan and
each of the Banyan Subsidiaries shall comply with (i) all applicable federal,
state, local and foreign laws, rules and regulations, (ii) all material
agreements and obligations, including its respective certificate of
incorporation and bylaws and other similar organizational documents, by which
it, its properties or its assets may be bound, and (iii) all final and
unappealable decrees, orders, writs, injunctions, judgments, statutes, rules
and regulations applicable to it and its respective properties or assets.
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SECTION 5.06 NOTICE OF CERTAIN EVENTS. Banyan shall promptly
notify RGI/US of:
(a) any notice or other communication from any person or
entity alleging that the consent of such person or entity is or may be required
in connection with the transactions contemplated by this Agreement or any of
the Ancillary Agreements;
(b) any employment by Banyan Management Corp. of any new
non-hourly employee to work for, and whose compensation shall be reimbursed by,
Banyan or any Banyan Subsidiary for an annual salary (including benefits) in
excess of $50,000;
(c) any termination of employment by, or threat to
terminate employment received from, any salaried or non-hourly, skilled
employee who works for, or is compensated by, Banyan or any Banyan Subsidiary;
(d) any notice or other communication from any
governmental or regulatory agency or authority in connection with the
transactions contemplated by this Agreement and the Ancillary Agreements;
(e) any notice or other communication from the SEC or
NYSE;
(f) any notice or other communication from any lender;
and
(g) any actions, suits, claims, investigations or
proceedings commenced or, to the best of Banyan's knowledge threatened against,
Banyan or any Banyan Subsidiary which, if pending on the date of this
Agreement, would have been required to have been disclosed pursuant to Section
3.11 or which relate to the consummation of the transactions contemplated by
this Agreement.
SECTION 5.07 CONFIDENTIALITY. Banyan agrees that the
confidentiality agreement dated February 5, 1996, between RGI/US and Banyan
(the "Confidentiality Agreement") shall remain valid and binding in accordance
with its terms at all times prior to the Merger Closing or after any
termination of this Agreement, and provided further, that Banyan agrees to
maintain in confidence in accordance with the Confidentiality Agreement any
information which it receives regarding other entities to which either RGI/US
or RGI Holdings is affiliated.
SECTION 5.08 REGISTRATION STATEMENT. Banyan shall promptly
prepare, and Banyan shall file with the SEC as soon as practicable, a combined
Registration Statement and Proxy Statement on Form S-4 under the Securities
Act, with respect to the shares of Banyan Common Stock issuable in the Merger
(the "Form S-4"). Banyan will cause the Form S-4 to comply as to form in all
material respects with the applicable provisions of the Securities Act, the
Exchange Act and the rules and regulations thereunder. Banyan shall use its
reasonable best efforts to have the Form S-4 declared
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effective by the SEC as promptly as practicable. Banyan shall use its
reasonable best efforts to obtain, prior to the effective date of the Form S-4,
all necessary state securities law or "Blue Sky" permits or approvals required
to carry out the transactions contemplated by this Agreement. Banyan
agrees that the Form S-4 and each amendment or supplement thereto at the time it
is mailed to the Banyan stockholders and at the time of the Stockholders'
Meeting, will not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; provided, however, that the foregoing shall not apply to the
extent that any such untrue statement of a material fact or omission to state a
material fact was made by Banyan in reliance upon and in conformity with
information concerning RGI/US, RGI Holdings or any RGI/US Subsidiary furnished
to Banyan by RGI/US, RGI Holdings, any RGI/US Subsidiary or any of their agents
specifically for use in the Form S-4.
SECTION 5.09 LISTING APPLICATION. Banyan shall promptly prepare
and submit to the NYSE a listing application covering the shares of Banyan
Common Stock issuable in the Merger and the Private Placement, and shall use
its commercially reasonable best efforts to obtain, prior to the Effective
Time, approval for the listing of such Banyan Common Stock, subject to official
notice of issuance.
ARTICLE VI
COVENANTS OF RGI/US
SECTION 6.01 CONDUCT OF RGI/US. From the date of this Agreement
until the Merger Closing, and except as set forth on Schedule 6.01 of the
RGI/US Disclosure Schedule, or with the express written consent of Banyan,
RGI/US and each RGI/US Subsidiary shall conduct their business in all material
respects in the ordinary course, and neither RGI/US nor any RGI/US Subsidiary
will (i) make any changes to or modify any indebtedness, or any guaranty of any
indebtedness, of RGI/US or any RGI/US Subsidiary the effect of which benefits
any affiliate (other than RGI/US or an RGI/US Subsidiary) of RGI Holdings and
detrimentally affects RGI/US or any RGI/US Subsidiary, or (ii) pay any dividend
or make any other distribution to the holders of its capital stock.
SECTION 6.02 CONFIDENTIALITY. RGI/US agrees that the
Confidentiality Agreement shall remain valid and binding in accordance with its
terms at all times prior to the Merger Closing or after any termination of this
Agreement, and provided further, that RGI/US and RGI Holdings agree to maintain
in confidence in accordance with the Confidentiality Agreement any information
which it or they receive regarding other entities to which Banyan Management
Corp. provides administrative services.
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SECTION 6.03 ACCESS TO PROPERTIES AND FINANCIAL, OPERATIONAL AND
TECHNICAL INFORMATION; MONTHLY FINANCIAL INFORMATION.
(a) From the date hereof until the Merger Closing, RGI/US
will give Banyan, its counsel, financial advisors, auditors and other authorized
representatives reasonable access during normal business hours to the RGI/US
Properties, and the offices, books and records of RGI/US and any of the RGI/US
Subsidiaries, will furnish to Banyan, its counsel, financial advisors, auditors
and other authorized representatives such financial and operating data and all
other technical information as such persons may reasonably request and will
instruct RGI/US' employees, counsel and financial advisors to cooperate with
Banyan in its investigation of the business of RGI/US and the RGI/US
Subsidiaries and in the planning for the combination of the businesses of Banyan
and RGI/US following the consummation of the Merger provided that no
investigation pursuant to this Section shall affect any representation or
warranty given by RGI/US and RGI Holdings to Banyan hereunder.
(b) From May 1, 1996 until the Merger Closing, within 15
days following the end of each month (the first such report being due June 15,
1996), RGI/US will deliver to Banyan a consolidated balance sheet, consolidated
statement of operations and consolidated statement of cash flows for such
month.
SECTION 6.04 COMPLIANCE WITH OBLIGATIONS. Except to the extent
that non-compliance would not have a Material Adverse Effect on RGI/US and the
RGI/US Subsidiaries taken as a whole, prior to the Effective Date, RGI/US and
each of the RGI/US Subsidiaries shall comply with (i) all applicable federal,
state, local and foreign laws, rules and regulations, (ii) all material
agreements and obligations, including its respective certificate of
incorporation and bylaws and other similar organizational documents, by which
it, its properties or its assets may be bound, and (iii) all final and
unappealable decrees, orders, writs, injunctions, judgments, statutes, rules
and regulations applicable to it and its respective properties or assets.
SECTION 6.05 NOTICE OF CERTAIN EVENTS. RGI/US shall promptly
notify Banyan of:
(a) any notice or other communication from any person or
entity alleging that the consent of such person or entity is or may be required
in connection with the transactions contemplated by this Agreement or any of
the Ancillary Agreements;
(b) any employment of any new non-hourly employee by
RGI/US or any RGI/US Subsidiary for an annual salary (including benefits) in
excess of $50,000;
(c) any termination of employment by, or threat to
terminate employment received from, any salaried or non-hourly, skilled
employee of RGI/US or any RGI/US Subsidiary;
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(d) any notice or other communication from any
governmental or regulatory agency or authority in connection with the
transactions contemplated by this Agreement and the Ancillary Agreements;
(e) any notice or other communication from the SEC or
NYSE;
(f) any notice or other communication from any lender;
and
(g) any actions, suits, claims, investigations or
proceedings commenced or, to the best of RGI/US' knowledge threatened against,
relating to or involving or otherwise affecting RGI/US or any RGI/US Subsidiary
which, if pending on the date of this Agreement, would have been required to
have been disclosed pursuant to Section 4.10 or which relate to the
consummation of the transactions contemplated by this Agreement.
SECTION 6.06 REGISTRATION STATEMENT. RGI/US and RGI Holdings shall
cooperate with Banyan in the preparation of the Form S-4 and the information
supplied by RGI/US, RGI Holdings and any RGI/US Subsidiary for inclusion in the
Form S-4 and each amendment or supplement thereto, at the time the Form S-4 is
mailed to Banyan stockholders and at the time of the Stockholders' Meeting, will
not include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
RGI/US shall deliver to Banyan no later than May 15, 1996 the information
required to be disclosed by RGI/US in the Form S-4 pursuant to Item 404 of
Regulation S-K.
SECTION 6.07 AUDITED FINANCIAL STATEMENTS. RGI/US shall deliver
to Banyan no later than May 15, 1996 an audited consolidated balance sheet at
December 31, 1995 and related consolidated audited statements of operations,
stockholders equity and cash flows as of December 31, 1995 for RGI/US.
ARTICLE VII
COVENANTS OF ALL PARTIES
RGI/US, RGI Holdings and Banyan agree that:
SECTION 7.01 ADVICE OF CHANGES. Each Party will promptly advise
the other in writing (i) of any event occurring subsequent to the date of this
Agreement that would render any representation or warranty of such Party
contained in this Agreement, if made on or as of the date of such event or the
Effective Date, untrue, inaccurate or misleading in any material respect and
(ii) of any Material Adverse Change in the business condition of the party and
its subsidiaries, taken as a whole.
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SECTION 7.02 REGULATORY APPROVALS. Prior to the Merger Closing,
each party shall execute and file, or join in the execution and filing of, any
application or other document that may be necessary in order to obtain the
authorization, approval or consent of any governmental body, federal, state,
local or foreign, which may be reasonably required, or that the
other company may reasonably request, in connection with the consummation
of the transactions contemplated by this Agreement. Each party
shall use its commercially reasonable best efforts to obtain all such
authorizations, approvals and consents.
SECTION 7.03 ACTIONS CONTRARY TO STATED INTENT. No party hereto
will, either before or after the Merger Closing, take any action that would
prevent the Merger from qualifying as a reorganization under Sections
368(a)(1)(A) and 368(a)(2)(D) of the Code.
SECTION 7.04 CERTAIN FILINGS. The parties hereto shall cooperate
with one another:
(a) in connection with the preparation of the Form S-4;
(b) in connection with the preparation of any filing
required by the HSR Act; and
(c) in determining whether any action by or in respect
of, or filing with, any governmental body, agency or official, or authority is
required, or any actions, consents, approvals or waivers are required to be
obtained from parties to any material contracts, in connection with the
consummation of the transactions contemplated by this Agreement.
SECTION 7.05 PUBLIC ANNOUNCEMENTS. The parties hereto will use
all reasonable efforts to consult with each other before issuing any press
release or making any public statement with respect to this Agreement and the
transactions contemplated hereby and, except as may be required by applicable
law or the NYSE, will use all reasonable efforts not to issue any such press
release or make any such public statement prior to such consultation.
ARTICLE VIII
CONDITIONS TO THE MERGER
SECTION 8.01 CONDITIONS TO OBLIGATIONS OF RGI/US AND RGI HOLDINGS.
The obligations of RGI/US and RGI Holdings hereunder are subject to the
fulfillment or satisfaction, on and as of the Effective Date, of each of the
following conditions (any one or more of which may be waived by RGI/US and RGI
Holdings, but only in a writing signed by RGI/US and RGI Holdings):
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(a) The representations and warranties of Banyan
contained in Article III shall be true and accurate in all material respects
(and without regard to any knowledge limitation contained therein) on and as of
the Effective Date with the same force and effect as if they had been made on
the Effective Date, except for changes therein specifically permitted or
contemplated by this Agreement or resulting from any transaction
expressly consented to in writing by RGI/US. Banyan shall have provided
RGI/US with a certificate executed by the President and the Chief
Financial Officer of Banyan, dated as of the Effective Date, certifying
compliance with this subsection (a).
(b) Banyan shall have performed and complied with all of
its covenants contained in Articles V and VII in all material respects on or
before the Effective Date, and RGI/US shall have received a certificate to such
effect signed by Banyan's President and Chief Financial Officer.
(c) RGI/US shall have received an opinion dated the
Effective Date of Shefsky Froelich & Devine, counsel to Banyan, in form and
substance to be agreed to by the Parties.
(d) All written consents, assignments, waivers or
authorizations ("Consents"), other than Governmental Authorizations and other
than those permits and authorizations referred to in Sections 8.03(f) and (g),
that are required as a result of the Merger shall have been obtained.
(e) The boards of directors of RGI/US and RGI Holdings
shall have received from Banyan's independent public accountants letters dated
the date the proxy statement contained in the Form S-4 is mailed to the Banyan
stockholders and the date of the Merger Closing which shall be in a form
customary for accountants "comfort letters" in transactions such as the Merger
and acceptable to RGI/US and RGI Holdings.
SECTION 8.02 CONDITIONS TO OBLIGATIONS OF BANYAN. The obligations
hereunder are subject to the fulfillment or satisfaction, on and as of the
Effective Date, of each of the following conditions (any one or more of which
may be waived by Banyan, but only in a writing signed by Banyan):
(a) The representations and warranties of RGI/US and RGI
Holdings set forth in Article IV shall be true and accurate in all material
respects (and without regard to any knowledge limitation contained therein) on
and as of the Effective Date with the same force and effect as if they had been
made on and as of the Effective Date, except for changes therein specifically
permitted or contemplated by this Agreement or resulting from any transaction
expressly consented to in writing by Banyan; provided that an RGI Decline in
Value shall not cause a failure of a condition to Banyan's obligations
hereunder if, at RGI/US' option, the Merger shall occur at the Exchange Ratio
set forth in Exhibit 9.02 hereto. RGI/US shall have provided Banyan with a
certificate executed
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by the President and the Chief Financial Officer of RGI/US and RGI Holdings,
dated as of the Effective Date, certifying compliance with this subsection (a).
(b) RGI/US and RGI Holdings shall have performed and
complied with all of its covenants contained in Articles VI and VII in all
material respects on or before the Effective Date, and Banyan shall have
received a certificate to such effect signed by RGI/US and RGI Holdings'
President and Chief Financial Officer.
(c) Banyan shall have received an opinion dated the
Effective Date of Davis Wright Tremaine, counsel to RGI/US and RGI Holdings, in
form and substance to be agreed to by the Parties.
(d) All Consents other than Governmental Authorizations
and other than those permits and authorizations referred to in Sections 8.03(f)
and (g), that are required as a result of the Merger shall have been obtained.
(e) The board of directors of Banyan shall have received
from RGI/US' independent public accountants letters dated the date the proxy
statement contained in the Form S-4 is mailed to the Banyan stockholders and
the date of the Merger Closing which shall be in a form customary for
accountants "comfort letters" in transactions such as the Merger and acceptable
to Banyan.
(f) Banyan shall have received an opinion from Josephthal
Lyon & Ross that the Merger and the transactions contemplated by this Agreement
are fair from a financial point of view to the holders of Banyan Common Stock
(the "Fairness Opinion").
SECTION 8.03 CONDITIONS TO OBLIGATIONS OF EACH PARTY. The
respective obligations of RGI/US, RGI Holdings, and Banyan hereunder are
subject to the fulfillment, on and as of the Effective Date, of each of the
following conditions (any one or more of which may be waived by such parties,
but only in a writing signed by such parties):
(a) Banyan's stockholders shall have duly approved this
Merger and the New Board all in accordance with applicable laws.
(b) The Form S-4 shall have become effective under the
Securities Act and shall not be the subject of any stop order.
(c) Each of Banyan and RGI/US shall have received a
written opinion from their respective counsel to the effect that the Merger
will constitute a reorganization within the meaning of Section 368(a)(1)(A) of
the Code, which opinions shall be substantially identical in form and substance
and which shall not have been withdrawn or modified in any material respect. In
preparing the Banyan and the RGI/US tax opinions, counsel may rely on
reasonable representations related thereto.
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(d) The shares to be issued in the Merger shall have been
approved for listing on the NYSE subject to official notice of issuance
thereof.
(e) No statute, rule, regulation, executive order,
decree, injunction or restraining order shall have been enacted, promulgated or
enforced (and not repealed, superseded or otherwise made inapplicable) by any
court or governmental authority which prohibits the consummation of the Merger
and the transactions contemplated by this Agreement and each Party shall use
its commercially reasonable best efforts to have any such order, decree or
injunction lifted.
(f) There shall have been obtained any and all
Governmental Authorizations, permits, approvals and consents of securities or
"blue sky" commissions of any jurisdiction and of any other governmental body
or agency, that may reasonably be deemed necessary so that the consummation of
the Merger will be in compliance with applicable laws.
(g) The waiting period (and any extension thereof)
applicable to the consummation of the Merger under the HSR Act shall have
expired or a been terminated.
ARTICLE IX
TERMINATION OF AGREEMENT
SECTION 9.01 TERMINATION PRIOR TO THE INITIAL CLOSING. This
Agreement may be terminated at any time prior to the Initial Closing:
(a) by mutual consent of the Boards of Directors of
RGI/US, RGI Holdings and Banyan; or
(b) by RGI/US or RGI Holdings if the conditions set forth
in Section 1.01(e) are not satisfied, or by Banyan if the conditions set forth
in Section 1.01(f) are not satisfied.
SECTION 9.02 TERMINATION AFTER THE INITIAL CLOSING. This
Agreement may be terminated at any time after the Initial Closing and prior to
the Effective Time whether before or after the approval and adoption of the
Merger by the stockholders of Banyan:
(a) by mutual consent of the Boards of Directors of
RGI/US, RGI Holdings and Banyan;
(b) by Banyan, if the Fairness Opinion has not been
received by Banyan or has been withdrawn prior to the Stockholders' Meeting;
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(c) by either RGI/US, RGI Holdings or Banyan if the
stockholders of Banyan do not approve the Merger and the transaction
contemplated hereby upon the holding of a duly convened stockholders meeting;
(d) by Banyan, if Banyan shall have received an
Acquisition Proposal that Banyan's Board of Directors determines to recommend
to the stockholders of Banyan for approval and acceptance;
(e) by RGI/US or RGI Holdings, if it is not in breach of
this Agreement and if the Board of Directors of Banyan shall have (i) withdrawn
its recommendation of the Merger (except if such withdrawal is caused by any
disclosures made or required to be made by RGI/US in the Form S-4 pursuant to
Item 404 of Regulation S-K that in the opinion of the disinterested members of
the Board of Directors of Banyan materially and adversely affects the Merger
such that Banyan could have terminated this Agreement pursuant to Section
9.02(h) hereto), or (ii) recommended or approved acceptance by Banyan's
stockholders of any Acquisition Proposal;
(f) by RGI/US or RGI Holdings, if (i) there has been a
breach by Banyan of any of its representations and warranties hereunder such
that Section 8.01(a) will not be satisfied, or (ii) there has been the breach
on the part of Banyan of any of its covenants or agreements contained in this
Agreement such that Section 8.01(b) will not be satisfied, and, in both case
(i) and case (ii), such breach has not been promptly cured after notice (in
reasonable detail) to Banyan;
(g) by Banyan, if (i) there has been a breach by RGI/US
or RGI Holdings of any of their respective representations and warranties
hereunder such that Section 8.02(a) will not be satisfied, or (ii) there has
been a breach on the part of RGI/US or RGI Holdings of any of their respective
covenants or agreements contained in this Agreement such that Section 8.02(b)
will not be satisfied, and, in both case (i) and case (ii), such breach has not
been promptly cured after notice (in reasonable detail) to RGI/US or RGI
Holdings; provided, that at Banyan's option a breach of Section 6.06 of this
Agreement may not be cured by RGI/US; and provided further that if Banyan seeks
to terminate this Agreement because of an RGI/US Decline in Value (as defined
in Section 4.01), then at RGI/US' option, in lieu of such termination the
Exchange Ratio set forth in Section 2.03 shall be recomputed in accordance with
the formula set forth in Exhibit 9.02 hereto;
(h) By Banyan if there shall be any disclosures made or
required to be made by RGI/US in the Form S-4 pursuant to Item 404 of
Regulation S-K that in the opinion of the disinterested members of the Board of
Directors of Banyan materially and adversely affects the Merger; or
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(i) by any Party if the Effective Date has not occurred
by December 31, 1996.
SECTION 9.03 EFFECT OF TERMINATION; SURVIVAL OF REPRESENTATION AND
WARRANTIES. In the event of termination of this Agreement as provided above,
all further obligation of the Parties under this Agreement shall terminate
without further liability of any Party to the other except that the agreements
contained or referred to in Article I (provided that termination occurs after
the Initial Closing) and Sections 4.25, 5.07, 6.02, 6.06 and 10.03 (provided
that termination occurs after the Initial Closing) shall survive the termination
hereof. Except for Sections 4.25, 5.07, 6.02 and 6.06, all representations,
warranties and covenants made herein, and in any instrument delivered pursuant
to Articles III and IV of this Agreement, shall be deemed to be conditions to
the Merger Closing and shall not survive the Effective Time.
ARTICLE X
MISCELLANEOUS
SECTION 10.01 DEFINITIONS. The following terms are defined in the
section of this Agreement referenced below:
<TABLE>
<CAPTION>
Defined Term Reference
- ------------ ---------
<S> <C>
Acquisition Proposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 5.04
Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Ancillary Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.02
Banyan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Banyan Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.08
Banyan Balance Sheet Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.087
Banyan Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recital B
Banyan Disclosure Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . Article III
Banyan Employee Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.16(a)
Banyan Intellectual Property Rights . . . . . . . . . . . . . . . . . . . . . . . Section 3.18(b)
Banyan Material Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.16
Banyan Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.07(a)
Banyan Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.20
Banyan Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.07(b)
Banyan Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.05
Banyan Stockholders' Meeting Date . . . . . . . . . . . . . . . . . . . . . . . . Section 5.02
Banyan Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.06(a)
Banyan Subsidiary Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.06(c)
Banyan Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.06(a)
Banyan Subsidiary Securities . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.06(b)
Banyan Tax Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.18(a)
</TABLE>
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<TABLE>
<S> <C>
Business Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.01(d)
Certificate of Incorporation . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.01
C&L Report. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 4.01
Code. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recital D
Completion Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.01(b)
Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.02(a)
Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 8.01(f)
Delaware Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recital C
Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.02
Effective Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.02
Environmental Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.21(f)
Environmental Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.21(f)
ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.15(a)
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.03(a)
Exchange Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.03
Fairness Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.01(g)
Form S-4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 5.08
GAAP. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.03(a)
Governmental Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.09
Governmental Authorizations . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.23
Hazardous Substances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.21(f)
HSR Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.03(a)
Initial Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.01(c)
Initial Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.01(a)
Knowledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 10.13
Levine Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.05
Lien. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.04
Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.01
Material Adverse Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.01
Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recital A
Merger Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.01
Merger Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.01
Morgens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recital B
Morgens Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recital B
Morgens Loan Modifications . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.02
Multiemployer Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.15(b)
New Bylaws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.05
New Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 5.02
NYSE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.03(d)
Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Private Placement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recital B
Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.01(a)
Proxy Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 5.02
Registration Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.31
</TABLE>
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<TABLE>
<S> <C>
Regulated Activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.21(f)
Restored Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.04
RGI Holdings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
RGI/US . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
RGI/US Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 4.07
RGI/US Balance Sheet Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 4.07
RGI/US Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recital C
RGI/US Decline in Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 4.01
RGI/US Disclosure Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . Article IV
RGI/US Employee Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 4.14(a)
RGI/US Intellectual Property Rights . . . . . . . . . . . . . . . . . . . . . . . Section 4.18
RGI/US Material Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 4.15
RGI/US Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 4.06(a)
RGI/US Subsidiary Securities . . . . . . . . . . . . . . . . . . . . . . . . . . Section 4.06(b)
RGI/US Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 4.06(a)
SEC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.03(c)
Securities Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.08
SoGen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recital B
SoGen Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recital B
SoGen Loan Modification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.03
Stockholders' Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 5.02
Stockholders' Meeting Date . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 5.02
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.06(a)
Surviving Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recital C
Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.17(p)
Taxing Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.17(p)
Termination Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.02(a)
Washington Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recital C
</TABLE>
SECTION 10.02 FURTHER ASSURANCES. Each Party agrees to cooperate
fully with the other parties and to execute such further instruments,
documents and agreements and to give such further written assurances as may be
reasonably requested by any other party to better evidence and reflect the
transactions described herein and contemplated hereby and to carry into effect
the intents and purposes of this Agreement.
SECTION 10.03 FEES AND EXPENSES.
(a) Except as set forth below, each party shall bear its
own fees and expenses, including counsel fees and fees of brokers and
investment bankers contracted by such party, in connection with the
transactions contemplated hereby.
(b) If the Merger is not consummated because (i) RGI/US
or RGI Holdings terminates this Agreement pursuant to Section 9.02(e) or (f),
or (ii) Banyan has terminated this Agreement in accordance with Section
9.02(d), or (iii) Banyan terminates
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this Agreement pursuant to Section 9.02(b) and there shall not have occurred an
RGI/US Decline in Value in RGI/US, then, in each case, Banyan shall pay
to RGI/US a termination fee of $1,000,000 and shall repurchase the Initial
Shares from RGI Holdings at a repurchase price of $1.00 per share. The
termination fee and repurchase of the Initial Shares shall be liquidated damages
to RGI/US for loss of its bargain hereunder and the above termination fee and
repurchase agreement shall be RGI/US's sole and exclusive remedy in such event.
(c) If this Agreement is terminated pursuant to Section
9.02(c), then Banyan shall reimburse RGI/US and RGI Holdings for its expenses
(including, without limitation, attorney fees, accountant fees and appraisal
fees).
(d) If the Merger is not consummated because Banyan
terminates this Agreement pursuant to Section 9.02(g) (and it is not continued
by RGI/US) or Section 9.02(h), then RGI/US shall reimburse Banyan for its
expenses (including, without limitation, attorney fees, accountant fees, and
appraisal fees).
SECTION 10.04 NOTICES. Whenever any Party hereto desires or is
required to give any notice, demand, or request with respect to this Agreement,
each such communication shall be in writing and shall be effective only if it
is delivered by personal service or mailed, United States registered or
certified mail, postage prepaid, or sent by prepaid overnight courier or
confirmed telecopier, addressed as follows:
If to RGI/US:
RGI Holdings, Inc.
U.S. Bank Centre
1420 Fifth Avenue, 42nd Floor
Seattle, WA 98101-2333
Attention: Kenneth Uptain
With a copy in each case to:
Davis Wright Tremaine
2600 Century Square
1501 Fourth Avenue
Seattle, WA 98101-1688
Attention: Richard M. Rawson, Esq.
If to Banyan:
Banyan Mortgage Investment Fund
150 S. Wacker Drive, Suite 2900
Chicago, IL 60606
Attention: Leonard G. Levine, President
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With a copy in each case to:
Shefsky Froelich & Devine, Ltd.
444 N. Michigan Avenue, Suite 2500
Chicago, IL 60611
Attention: Michael J. Choate, Esq.
Such communications shall be effective when they are received by the
addressee thereof. Any Party may change its address for such communications by
giving notice thereof to the other parties in conformity with this Section.
SECTION 10.05 GOVERNING LAWS. The laws of the State of Delaware
(irrespective of its choice of law principles) shall govern the validity of
this Agreement, the construction of its terms, and the interpretation and
enforcement of the rights and duties of the parties.
SECTION 10.06 BINDING UPON SUCCESSORS AND ASSIGNS. This Agreement is
personal to each of the parties and may not be assigned without the written
consent of the other parties.
SECTION 10.07 SEVERABILITY. If any provision of this Agreement, or
the application thereof, shall for any reason or to any extent be invalid or
unenforceable, the remainder of this Agreement and application of such provision
to other persons or circumstances shall continue in full force and effect and in
no way be affected, impaired or invalidated, except to the extent that the
intent of the Parties in entering into the Agreement shall be substantially and
materially impaired.
SECTION 10.08 ENTIRE AGREEMENT. This Agreement, the Confidentiality
Agreement and the Ancillary Agreements constitute the entire understanding and
agreement of the parties with respect to the subject matter hereof and thereof
and supersede all prior and contemporaneous agreements or understandings,
inducements or conditions, express or implied, written or oral, between the
parties with respect hereto.
SECTION 10.09 OTHER REMEDIES. Except as otherwise provided herein,
any and all remedies herein expressly conferred upon a party shall be deemed
cumulative with and not exclusive of any other remedy conferred hereby or by law
on such party, and the exercise of any one remedy shall not preclude the
exercise of any other.
SECTION 10.10 AMENDMENT AND WAIVERS. Any term or provision of this
Agreement may be amended, and the observance of any term of this
Agreement may be waived (either generally or in a particular instance and either
retroactively or prospectively) only by a writing signed by the party to be
bound thereby. The waiver by a party of any breach hereof or default in the
performance hereof shall not be deemed to constitute a waiver of any other
default or any succeeding breach or default. This Agreement may
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not be amended or supplemented by any party hereto except pursuant to a written
amendment executed by all parties, and provided further that following approval
by the stockholders of Banyan of the Merger there shall be no amendment or
change to the provisions hereof with respect to the Exchange Ratio (except as
expressly provided in this Agreement) without further approval by the
stockholders of Banyan, and no other amendment shall be made which by law
requires further approval by such stockholders without such further approval.
SECTION 10.11 NO WAIVER. The failure of any party to enforce any of
the provisions hereof shall not be construed to be a waiver of the right of
such party thereafter to enforce such provisions.
SECTION 10.12 CONSTRUCTION OF AGREEMENT; KNOWLEDGE. A reference to an
Article, Section, Schedule or Exhibit shall mean an Article of, a Section in, or
Schedule or Exhibit to, this Agreement unless otherwise explicitly set forth.
The titles and headings herein are for reference purposes only and shall not in
any manner limit the construction of this Agreement which shall be considered as
a whole. The words "include," "includes," and "including" when used herein shall
be deemed in each case to be followed by the words "without limitation." For
purposes of this Agreement, and except as provided in the following sentence,
the term "knowledge," when used in reference to a corporation means the actual
knowledge of the executive officers of such corporation after such officers
shall have made any such inquiry that is customary and appropriate under the
circumstances to which reference is made, and when used in reference to an
individual means the actual knowledge of such individual after the individual
shall have made any such inquiry that is customary and appropriate under the
circumstances to which reference is made.
SECTION 10.13 ABSENCE OF THIRD PARTY BENEFICIARY RIGHTS. No provision
of this Agreement is intended, nor will be interpreted, to provide to create any
third party beneficiary rights or any other rights of any kind in any client,
customer, affiliate, stockholder, employee, partner or any party hereto or any
other person or entity and all provisions hereof will be personal solely between
the parties to this Agreement.
SECTION 10.14 MUTUAL DRAFTING. This Agreement is the joint product of
the parties hereto, and each provision hereof has been subject to the mutual
consultation, negotiation and agreement of such parties, and shall not be
construed for or against any party hereto.
SECTION 10.15 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be an original as against any
party whose signature appears thereon and all of which together shall constitute
one and the same instrument. This Agreement shall become binding when one or
more counterparts hereof, individually or taken together, shall bear the
signatures of all of the paries reflected
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hereon as signatories.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
RGI U.S. HOLDINGS, INC.
By /S/ Kenneth L. Uptain
-------------------------------------------
Kenneth L. Uptain
Its President
RGI HOLDINGS, INC.
By /S/ Kenneth L. Uptain
-------------------------------------------
Kenneth L. Uptain
Its President
BANYAN MORTGAGE INVESTMENT FUND
By /S/ Robert G. Higgins
-------------------------------------------
Robert G. Higgins
Its Vice President
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<PAGE> 1
EXHIBIT (4)(i)
BANYAN MORTGAGE INVESTMENT FUND
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made and
entered into as of this 21st day of May, 1996, by and between Banyan Mortgage
Investment Fund, a Delaware corporation (the "Company"), and RGI Holdings,
Inc., a Washington corporation (the "Stockholder").
RECITALS
WHEREAS, the Stockholder holds 7,466,666 shares of the Company's
Common Stock (the "Shares") issued pursuant to an Agreement and Plan of Merger
dated as of April 12, 1996, as amended and restated as of May 17,1996, by and
among the Company, the Stockholder and RGI U.S. Holdings, Inc., a Washington
corporation (the "Merger Agreement").
NOW, THEREFORE, in consideration of the mutual promises and covenants
set forth herein and in the Merger Agreement, the parties hereto further agree
as follows:
1. RESTRICTIONS ON TRANSFERABILITY OF SECURITIES; REGISTRATION RIGHTS
1.1. Certain Definitions. As used in this Agreement, the following
terms shall have the meanings set forth below:
(a) "Other Holders" shall mean persons other than the
Stockholder who, by virtue of agreements with the Company, are entitled to
include their securities in certain registrations of the Company.
(b) "Registrable Securities" shall mean (i) the Shares
and (ii) any Common Stock issued as a dividend or other distribution with
respect to or in exchange for or in replacement of the Shares, provided,
however, that Registerable Securities shall not include any shares of Common
Stock which have previously been registered or which have been sold to the
public, or which have been sold in a private transaction in which Stockholder's
rights under this Agreement are not assigned.
(c) The terms "register," "registered" and "registration"
shall refer to a registration effected by preparing and filing a registration
statement in compliance with the Securities Act and applicable rules and
regulations thereunder, and the declaration or ordering of the effectiveness of
such registration statement.
(d) "Registration Expenses" shall mean all expenses
incurred in effecting any registration pursuant to this Agreement, including,
without limitation, all registration, qualification and filing fees, printing
expenses, escrow fees, fees and disbursements of
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<PAGE> 2
counsel for the Company, blue sky fees and expenses, and expenses of any
regular or special audits incident to or required by any such registration, but
shall not include Selling Expenses, fees and disbursements of counsel for the
Stockholder, or the compensation of regular employees of the Company, which
shall be paid in any event by the Company.
(e) "Rule 144" shall mean Rule 144 as promulgated by the
Securities and Exchange Commission (the "Commission") under the Securities Act,
as such Rule may be amended from time to time, or any similar successor rule
that may be promulgated by the Commission.
(f) "Rule 145" shall mean Rule 145 as promulgated by the
Commission under the Securities Act, as such Rule may be amended from time to
time, or any similar successor rule that may be promulgated by the Commission.
(g) "Securities Act" shall mean the Securities Act of
1933, as amended, or any similar successor federal statute and the rules and
regulations thereunder, all as the same shall be in effect from time to time.
(h) "Selling Expenses" shall mean all underwriting
discounts, selling commissions and stock transfer taxes applicable to the sale
of Registrable Securities and fees and disbursements of counsel for the
Stockholder (other than the fees and disbursements of counsel included in
Registration Expenses).
1.2. Requested Registration.
(a) Request for Registration. If the Company shall
receive from the Stockholder a written request that the Company effect any
registration with respect to all or a part of the Registrable Securities, the
aggregate proceeds of which will (after deduction for underwriter's discounts
and expenses related to the issuance) exceed $1,000,000, the Company will, as
soon as practicable, use its best efforts to effect such registration
(including, without limitation, filing post-effective amendments, appropriate
qualifications under applicable blue sky or other state securities laws, and
appropriate compliance with the Securities Act) as would permit or facilitate
the sale and distribution of all or such portion of the Registrable Securities
as are specified in such request.
The Company shall not be obligated to effect, or to take any action to
effect, any such registration pursuant to this Section 1.2:
(i) In any particular jurisdiction in which the
Company would be required to execute a general consent to service of process in
effecting such registration, qualification, or compliance, unless the Company
is already subject to service in such jurisdiction and except as may be
required by the Securities Act;
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<PAGE> 3
(ii) After the Company has initiated two such
registrations pursuant to this Section 1.2(a) (counting for these purposes only
registrations which have been declared or ordered effective, and pursuant to
which securities have been sold, and registrations which have been withdrawn by
the Stockholder as to which the Stockholder has not elected to bear the
Registration Expenses pursuant to Section 1.4 hereof and would, absent such
election, have been required to bear such expenses);
(iii) During the period starting with the date sixty
(60) days prior to the Company's good faith estimate of the date of filing of,
and ending on a date one hundred eighty (180) days after the effective date of,
a Company-initiated registration; provided that the Company is actively
employing in good faith all reasonable efforts to cause such registration
statement to become effective; or
(iv) If the Stockholder proposes to dispose of
shares of Registrable Securities which may be immediately registered on Form
S-3 pursuant to a request made under Section 1.5 hereof.
(b) Subject to the foregoing clauses, the Company shall
file a registration statement covering the Registrable Securities so requested
to be registered as soon as practicable after receipt of the request of the
Stockholder; provided, however, that if (i) in the good faith judgment of the
Board of Directors of the Company, such registration would be detrimental to
the Company, and the Board of Directors of the Company concludes, as a result,
that it is essential to defer the filing of such registration statement at such
time, and (ii) the Company shall furnish to the Stockholder a certificate
signed by the President of the Company stating that in the good faith judgment
of the Board of Directors of the Company, it would be detrimental to the
Company for such registration statement to be filed in the near future, and
that it is, therefore, essential to defer the filing of such registration
statement, then the Company shall have the right to defer such filing for a
period of not more than ninety (90) days after receipt of the request of the
Stockholder, and, provided further, that the Company shall not defer its
obligation in this manner more than once in any six month period.
(c) If the Company shall request inclusion in any
registration pursuant to Section 1.2 of securities being sold for its own
account, or if Other Holders shall request inclusion in any registration
pursuant to this Section 1.2, the Stockholder shall offer to include such
securities in the underwriting and may condition such offer on the acceptance
by the Company or the Other Holders of the further applicable provisions of
this Section 1; provided that in no event shall the Stockholder be limited as
to the amount of Registrable Securities it may register and sell. The Company
shall (together with any Other Holders proposing to distribute their securities
through such underwriting) enter into an underwriting agreement in customary
form with the representative of the underwriter or underwriters selected for
such underwriting by the Stockholder, which underwriters are reasonably
acceptable to the Company. If a person who has requested inclusion in such
registration as provided above does not agree to the
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<PAGE> 4
terms of any such underwriting, such person shall be excluded therefrom by
written notice from the Company, the underwriter or the Stockholder. The
securities so excluded shall also be withdrawn from registration.
1.3. Company Registration.
(a) If the Company shall determine to register any of its
securities either for its own account or the account of any Other Holders
exercising their respective demand registration rights other than a
registration relating solely to employee benefit plans, or a registration
relating solely to a Rule 145 transaction, or a registration on any
registration form that does not permit secondary sales, the Company will:
(i) promptly give to the Stockholder written
notice thereof; and
(ii) use its best efforts to include in such
registration (and any related qualification under blue sky laws or other
compliance), except as set forth in Section 1.3(b) below, and in any
underwriting involved therein, all the Registrable Securities specified in a
written request or requests made by the Stockholder and received by the Company
within ten (10) days after the written notice from the Company described in
clause (i) above is mailed or delivered by the Company. Such written request
may specify all or a part of the Stockholder's Registrable Securities.
(b) If the registration of which the Company gives
written notice under Section 1.3(a) above is for a registered public offering
involving an underwriting, the Company shall so advise the Stockholder as a
part of such notice. In such event, the right of the Stockholder to
registration pursuant to this Section 1.3 shall be conditioned upon the
Stockholder's participation in such underwriting and the inclusion of such
Stockholder's Registrable Securities in the underwriting to the extent provided
herein. If the Stockholder proposes to distribute any Registrable Securities
through such underwriting, Stockholder shall (together with the Company and
Other Holders distributing their securities through such underwriting) enter
into an underwriting agreement in customary form with the representative of the
underwriter or underwriters selected by the Company.
Notwithstanding any other provision of this Section 1.3, if (i) the
registration involves an underwriting and the representative of the
underwriters advises the Company in writing that marketing factors require a
limitation on the number of shares to be underwritten, or (ii) if the
registration does not involve an underwriting and the Company shall furnish to
the Stockholder a certificate signed by the President of the Company stating
that in the good faith judgment of the Board of Directors of the Company it
would be detrimental to the Company not to limit the number of shares to be
registered, then the representative or the Company, as the case may be, may
(subject to the limitation set forth below) exclude all Registrable Securities
from, or limit the number of Registrable Securities to be included in, the
registration and/or underwriting.
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<PAGE> 5
The Company shall so advise the Stockholder and all Other Holders requesting
registration, and the number of shares of securities that are entitled to be
included in the registration and/or underwriting shall be allocated first to
the Company for securities being sold for its own account and thereafter as set
forth in Section 1.11 hereof. If any person does not agree to the terms of any
such underwriting, he shall be excluded therefrom by written notice from the
Company or the underwriter. Any Registrable Securities or other securities
excluded or withdrawn from such underwriting shall be withdrawn from such
registration.
If shares are so withdrawn from the registration or if the number of
shares of Registrable Securities to be included in such registration was
previously reduced as a result of marketing factors, the Company shall then
offer to all persons who have retained the right to include securities in the
registration the right to include additional securities in the registration in
an aggregate amount equal to the number of shares so withdrawn, with such
shares to be allocated among the persons requesting additional inclusion in
accordance with Section 1.11 hereof.
1.4. Expenses of Registration. All Registration Expenses incurred
in connection with any registration, qualification or compliance pursuant to
Sections 1.2 and 1.3 hereof, and the reasonable fees of counsel for the
Stockholder in the case of registrations pursuant to Section 1.2 shall be borne
by the Company; provided, however, that if the Stockholder bears the
Registration Expenses for any registration proceeding initiated pursuant to
Section 1.2 and subsequently withdrawn by the Stockholder, such registration
proceeding shall not be counted as a requested registration pursuant to Section
1.2 hereof. Furthermore, in the event that a withdrawal by the Stockholder is
based upon material adverse information relating to the Company that is
different from the information relating to the Company known or available (upon
request from the Company or otherwise) to the Stockholder at the time of its
request for registration under Section 1.2, such registration shall not be
treated as a counted registration for purposes of Section 1.2 hereof, even
though the Stockholder does not bear the Registration Expenses for such
registration. All Selling Expenses relating to Registrable Securities so
registered shall be borne by the Stockholder.
1.5. Registration on Form S-3. The Company shall use its best
efforts to qualify for registration on Form S-3 or any comparable or successor
form or forms. After the Company has qualified for the use of Form S-3, in
addition to the rights contained in the foregoing provisions of this Section 1,
the Stockholder shall have the right to request registrations on Form S-3 (such
requests shall be in writing and shall state the number of shares of
Registrable Securities to be disposed of and the intended methods of
disposition of such shares by the Stockholder), provided, however, that the
Company shall not be obligated to effect any such registration if (i) the
Stockholder, together with the holders of any other securities of the Company
entitled to inclusion in such registration, propose to sell Registrable
Securities and such other securities (if any) on Form S-3 at an aggregate price
to the public of less than $1,000,000, or (ii) the Company
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shall furnish the certification described in Section 1.2(b)(ii) (but subject to
the limitations set forth therein), or (iii) in a given nine-month period, the
Company has already effected one (1) such registration in such period. If the
registration is for an underwritten offering, the provisions of Section 1.2(c)
hereof shall apply to such registration.
1.6. Registration Procedures. In the case of each registration
effected by the Company pursuant to this Section 1, the Company will keep the
Stockholder advised in writing as to the initiation of each registration and as
to the completion thereof. At its expense, the Company will use its best
efforts to:
(a) Keep such registration effective for a period of one
hundred twenty (120) days or until the Stockholder has completed the
distribution described in the registration statement relating thereto,
whichever first occurs; provided, however, that (i) such 120-day period shall
be extended for a period of time equal to the period the Stockholder refrains
from selling any securities included in such registration at the request of an
underwriter of Common Stock (or other securities) of the Company; and (ii) in
the case of any registration of Registrable Securities on Form S-3 which are
intended to be offered on a continuous or delayed basis, such 120-day period
shall be extended, if necessary, to keep the registration statement effective
until all such Registrable Securities are sold, provided that Rule 415, or any
successor rule under the Securities Act, permits an offering on a continuous or
delayed basis, and provided further that applicable rules under the Securities
Act governing the obligation to file a post-effective amendment permit, in lieu
of filing a post-effective amendment that (i) includes any prospectus required
by Section 10(a)(3) of the Securities Act or (ii) reflects facts or events
representing a material or fundamental change in the information set forth in
the registration statement, the incorporation by reference of information
required to be included in (i) and (ii) above to be contained in periodic
reports filed pursuant to Sections 13 or 15(d) of the Securities Exchange Act
of 1934 (the "Exchange Act") in the registration statement;
(b) Prepare and file with the Commission such amendments
and supplements to such registration statement and the prospectus used in
connection with such registration statement as may be necessary to comply with
the provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement;
(c) Furnish such number of prospectuses and other
documents incident thereto, including any amendment of or supplement to the
prospectus, as the Stockholder from time to time may reasonably request; and
(d) Cause all such Registrable Securities registered
pursuant hereunder to be listed on each securities exchange on which similar
securities issued by the Company are then listed.
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1.7. Indemnification.
(a) The Company will indemnify the Stockholder, each of
its officers, directors, partners, legal counsel, and accountants and each
person controlling such Stockholder within the meaning of Section 15 of the
Securities Act, with respect to which registration, qualification, or
compliance has been effected pursuant to this Section 1, and each underwriter,
if any, and each person who controls within the meaning of Section 15 of the
Securities Act any underwriter, against all expenses, claims, losses, damages,
and liabilities (or actions, proceedings, or settlements in respect thereof)
arising out of or based on any untrue statement (or alleged untrue statement)
of a material fact contained in any prospectus, offering circular, or other
document (including any related registration statement, notification, or the
like) incident to any such registration, qualification, or compliance, or based
on any omission (or alleged omission) to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, or any violation by the Company of the Securities Act or any rule
or regulation thereunder applicable to the Company and relating to action or
inaction required of the Company in connection with any such registration,
qualification, or compliance, and will reimburse the Stockholder, each of its
officers, directors, partners, legal counsel, and accountants and each person
controlling the Stockholder, each such underwriter, and each person who
controls any such underwriter, for any legal and any other expenses reasonably
incurred in connection with investigating and defending or settling any such
claim, loss, damage, liability, or action, provided that the Company will not
be liable in any such case to the extent that any such claim, loss, damage,
liability, or expense arises out of or is based on any untrue statement or
omission based upon written information furnished to the Company by the
Stockholder or underwriter and stated to be specifically for use therein. It is
agreed that the indemnity agreement contained in this Section 1.7(a) shall not
apply to amounts paid in settlement of any such loss, claim, damage, liability,
or action if such settlement is effected without the consent of the Company
(which consent has not been reasonably withheld).
(b) The Stockholder will, if Registrable Securities held
by the Stockholder are included in the securities as to which such
registration, qualification, or compliance is being effected, indemnify the
Company, each of its directors, officers, partners, legal counsel, and
accountants and each underwriter, if any, of the Company's securities covered
by such a registration statement, and each person who controls the Company or
such underwriter within the meaning of Section 15 of the Securities Act,
against all claims, losses, damages and liabilities (or actions in respect
thereof) arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact contained in any such registration statement,
prospectus, offering circular, or other document, or any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statement therein not misleading, and will reimburse the
Company and such directors, officers, partners, legal counsel, and accountants,
and such underwriters and control persons, for any legal or any other
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expenses reasonably incurred in connection with investigating or defending any
such claim, loss, damage, liability, or action, in each case to the extent, but
only to the extent, that such untrue statement (or alleged untrue statement) or
omission (or alleged omission) is made is such registration statement,
prospectus, offering circular, or other document in reliance upon and in
conformity with written information furnished to the Company by the Stockholder
and stated to be specifically for use therein, provided, however, that in no
event shall any indemnity under this Section 1.7 exceed the gross proceeds from
the offering received by the Stockholder.
(c) Each party entitled to indemnification under this
Section 1.7 (the "Indemnified Party") shall give notice to the party required
to provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may
be sought, and shall permit the Indemnifying Party to assume the defense of
such claim or any litigation resulting therefrom, provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claims or any
litigation resulting therefrom, shall be approved by the Indemnified Party
(whose approval shall not unreasonably be withheld), and the Indemnified Party
may participate in such defense at such party's expense, and provided further
that the failure of any Indemnified Party to give notice as provided herein
shall not relieve the Indemnifying Party of its obligations under this Section
1.7, to the extent such failure is not prejudicial. No Indemnifying Party, in
the defense of any such claim or litigation resulting therefrom, shall, except
with the consent of each Indemnified Party, consent to entry of any judgment or
enter into any settlement that does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such Indemnified Party of a
release from all liability in respect to such claim or litigation. Each
Indemnified Party shall furnish such information regarding itself or the claim
in question as an Indemnifying Party may reasonably request in writing and as
shall be reasonably required in connection with the defense of such claim and
litigation resulting therefrom.
(d) If the indemnification provided for in this Section
1.7 is held by a court of competent jurisdiction to be unavailable to an
Indemnified Party with respect to any loss, liability, claim, damage, or
expense referred to therein, then the Indemnifying Party, in lieu of
indemnifying such Indemnified Party hereunder, shall contribute to the amount
paid or payable by such Indemnified Party as a result of such loss, liability,
claim, damage, or expense in such proportion as is appropriate to reflect the
relative fault of the Indemnifying Party on the one hand and of the Indemnified
Party on the other in connection with the statements or omissions that resulted
in such loss, liability, claim, damage, or expense as well as any other
relevant equitable considerations. The relative fault of the Indemnifying
Party and of the Indemnified Party shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission to state a material fact relates to information supplied by the
Indemnifying Party or by the Indemnified Party and the parties' relative
intent, knowledge, access to information, and the opportunity to correct or
prevent such statement or omission.
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(e) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in any underwriting
agreement entered into in connection with an underwritten public offering
contemplated hereby are in conflict with the foregoing provisions, the
provisions in the underwriting agreement shall control.
1.8. Limitations on Subsequent Registration Rights. From and after
the date of this Agreement, the Company shall not, without the prior written
consent of the Stockholder, enter into any agreement with any holder or
prospective holder of any securities of the Company giving such holder or
prospective holder any registration rights the terms of which are more
favorable that the registration rights granted to the Stockholder hereunder.
1.9. Transfer or Assignment of Registration Rights. The rights to
cause the Company to register securities granted to the Stockholder by the
Company under this Section 1 may be transferred or assigned by the Stockholder
only to a transferee or assignee of not less than 50,000 shares of Registrable
Securities (as presently constituted and subject to subsequent adjustments for
stock splits, stock dividends, reverse stock splits, and the like), provided
that the Company is given written notice at the time of or within a reasonable
time after said transfer or assignment, stating the name and address of the
transferee or assignee and identifying the securities with respect to which
such registration rights are being transferred or assigned, and, provided
further, that the transferee or assignee of such rights assumes in writing the
obligations of the Stockholder under this Agreement.
1.10. "Market Stand-Off" Agreement. If requested by the Company and
an underwriter of Common Stock (or other securities) of the Company, the
Stockholder shall not sell or otherwise transfer or dispose of any Common Stock
(or other securities) of the Company held by such Stockholder (other than those
included in the registration) during the one hundred twenty (120) day period
following the effective date of a registration statement of the Company filed
under the Securities Act, provided that all Other Holders and officers and
directors of the Company are bound by and have entered into similar agreements.
The obligations described in this Section 1.10 shall not apply to a
registration relating solely to employee benefit plans on Form S-8 or similar
forms that may be promulgated in the future, or a registration relating solely
to a Rule 145 transaction on Form S-4 or similar forms that may be promulgated
in the future. The Company may impose stop-transfer instructions with respect
to the shares (or securities) subject to the foregoing restriction until the
end of said one hundred twenty (120) day period.
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<PAGE> 10
1.11. Allocation of Registration Opportunities. In any Company
registration pursuant to Section 1.3 hereof in which all of the Registrable
Securities and other shares of Common Stock of the Company with registration
rights (the "Other Shares") requested to be included in a registration on
behalf of the Stockholder or Other Holders cannot be so included as a result of
limitations of the aggregate number of shares of Registrable Securities and
Other Shares that may be so included, the number of shares of Registrable
Securities and Other Shares that may be so included shall be allocated among
the Stockholder and Other Holders pro rata on the basis of the total number of
shares of Registrable Securities and Other Shares that are held by the
Stockholder and Other Holders (assuming conversion of all convertible
securities).
1.12. Delay of Registration. The Stockholder shall not have any
right to take any action to restrain, enjoin, or otherwise delay any
registration as the result of any controversy that might arise with respect to
the interpretation or implementation of this Section 1.
1.13. Termination of Registration Rights. The rights of the
Stockholder to request registration or inclusion in any registration pursuant
to Section 1.2, 1.3 or 1.5 shall terminate on such date as all shares of
Registrable Securities held by the Stockholder may immediately be sold under
Rule 144 during any 90-day period.
2. MISCELLANEOUS
2.1. Governing Law. This Agreement shall be governed in all
respects by the laws of the State of Delaware, as applied to agreements among
Delaware residents entered into and to be performed entirely within Delaware.
2.2. Successors and Assigns. Except as otherwise expressly
provided herein, the provisions hereof shall inure to the benefit of, and be
binding upon, the successors, assigns, heirs, executors and administrators of
the parties hereto.
2.3. Entire Agreement; Amendment; Waiver. This Agreement
constitutes the full and entire understanding and agreement between the parties
with regard to the subjects hereof and thereof. Neither this Agreement nor any
term hereof may be amended, waived, discharged or terminated, except by a
written instrument signed by the Company and the Stockholder.
2.4. Notices, etc. All notices and other communications required
or permitted hereunder shall be in writing and shall be mailed by United States
first-class mail, postage prepaid, sent by facsimile or delivered personally by
hand or nationally recognized courier addressed (a) if to the Stockholder, at
RGI Holdings, Inc., U.S. Bank Centre, 1420 Fifth Avenue, 42nd Floor, Seattle,
Washington 98101, or at such other
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<PAGE> 11
address as the Stockholder or permitted assignee shall have furnished to the
Company in writing, or (b) if to the Company, at such address or facsimile
number as the Company shall have furnished to the Stockholder in writing. All
such notices and other written communications shall be effective on the date of
mailing, facsimile transfer or delivery.
2.5. Delays or Omissions. No delay or omission to exercise any
right, power or remedy accruing to the Stockholder, upon any breach or default
of the Company under this Agreement, shall impair any such right, power or
remedy of the Stockholder, nor shall it be construed to be a waiver of any such
breach or default, or an acquiescence therein, or of or in any similar breach
or default thereafter occurring; nor shall any waiver of any single breach or
default be deemed a waiver of any other breach or default therefore or
thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of the Stockholder of any breach or default under this
Agreement or any waiver on the part of the Stockholder of any provisions or
conditions of this Agreement must be made in writing and shall be effective
only to the extent specifically set forth in such writing. All remedies,
either under this Agreement or by law or otherwise afforded to the Stockholder,
shall be cumulative and not alternative.
2.6. Information Confidential. The Stockholder acknowledges that
the information received by it may be confidential and for its use only, and it
will not use such confidential information in violation of the Exchange Act or
reproduce, disclose or disseminate such information to any other person (other
than its employees or agents having a need to know the contents of such
information, and its attorneys), except in connection with the exercise of
rights under this Agreement, unless the Company has made such information
available to the public generally or the Stockholder is required to disclose
such information by a governmental body.
2.7. Titles and Subtitles. The titles of the sections and
subsections of this Agreement are for convenience of reference only and are not
be considered in construing or interpreting this Agreement.
2.8. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Registration Rights
Agreement effective as of the date first above written.
BANYAN MORTGAGE INVESTMENT FUND
By: /s/ Leonard G. Levine
-------------------------------------------------
Name: Leonard G. Levine
Title: President
RGI HOLDINGS, INC.
By: /s/ Kenneth L. Uptain
-------------------------------------------------
Name: Kenneth L. Uptain
Title: President
12
<PAGE> 1
EXHIBIT (10)(i)
(MORGENS)
LOAN MODIFICATION AGREEMENT
This Loan Modification Agreement ("Agreement") is entered into as of
May 21, 1996 between RGI HOLDINGS, INC., a Washington corporation ("Lender"),
BANYAN MORTGAGE INVESTMENT FUND, a Delaware corporation ("Borrower"), and the
affiliates and subsidiaries of Borrower identified on the signature pages of
this Agreement (the "Obligors").
Recitals
A. Borrower entered into a credit agreement ("Credit Agreement")
dated October 4, 1994 with Morgens, Waterfall, Vintiadis & Company, Inc.
("Morgens"), as agent, and Restart Partners L.P., Restart Partners II, L.P.,
Restart Partners III, L.P., Restart Partners IV, L.P., The Common Fund, and
Morgens Waterfall Income Partners, as lenders (collectively, the "Morgens
Lenders"), pursuant to which Morgens, as agent for the Morgens Lenders, agreed
to make a loan to Borrower in the original principal amount of Twenty Million
Five Hundred Thousand United States Dollars (US$20,500,000.00) (the "Loan").
Capitalized terms used herein but not defined herein shall have the meanings
set forth in the Credit Agreement.
B. Pursuant to the Credit Agreement, Borrower executed and
delivered six promissory notes, one in favor of each Morgens Lender (the
"Notes").
C. Obligors guaranteed certain of the obligations of Borrower
pursuant two guaranties dated October 4, 1994 and April 19, 1995 (the
"Guaranties").
D. In order to secure their respective obligations under the
Notes and the Guaranties, Borrower and Obligors granted various security
interests in certain Collateral (as defined in the Credit Agreement) and
executed certain security documents in favor of Morgens (the "Security
Documents"). The Credit Agreement, Notes, Guaranties, Security Documents, and
any and all amendments, restatements, extensions or renewals thereof are
collectively referred to herein as the "Loan Documents."
E. Pursuant to a Loan Purchase Agreement dated as of April 12,
1996 between Morgens, the Morgens' Lenders and RGI Realty, Inc., as amended by
the First and Second Amendments to Loan Purchase Agreement dated May 13 and May
15, 1996, which Loan Purchase Agreement (as amended) has been assigned by RGI
Realty, Inc. to Lender, Lender has acquired all of Morgens' and the Morgens
Lenders' rights, title and interest in and to the Loan and the Loan Documents.
<PAGE> 2
F. Borrower and Obligors have requested that Lender modify the
Loan Documents to, among other things, forbear from taking action against
Borrower and Obligors for certain periods of time.
G. Lender is willing to modify the Loan Documents on the terms
and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants set forth
below, Lender, Borrower, and Obligors agree to the following:
1. Reaffirmation of Obligations Under Loan Documents. Borrower
and Obligors reaffirm all of their respective obligations under the Loan
Documents. Borrower and Obligors represent and warrant that, to the best of
their knowledge and except as previously disclosed to Lender in writing
(including, without limitation, all disclosures contained in the Banyan
disclosure schedule, as amended, given in connection with the Merger Agreement
referred to in Section 4 below), all of the representations and warranties set
forth in the Loan Documents continue to be true and accurate as of the date
hereof to the same extent as if they were fully set forth herein. Borrower and
Obligors acknowledge and confirm that Borrower is justly indebted to Lender
under the Loan Documents; that the amounts owed by Borrower to Lender under the
Loan Agreement and Note are as set forth on Exhibit B attached hereto; and that
the Loan Documents have been duly executed and delivered by Borrower and/or
Obligors and constitute the legal, valid and binding obligations of Borrower
and/or Obligors, as the case may be, enforceable against them in accordance
with their terms, except as the enforceability thereof may be affected by
bankruptcy, insolvency, moratorium, fraudulent transfer and other similar laws
affecting the rights and remedies of creditors generally.
2. Default Under Loan Documents. Borrower and Obligors
acknowledge that (i) Borrower is in default under the terms of the Loan
Documents, (ii) Borrower and Obligors have received written notice of events
constituting such default, which events have not been not cured and remain
unremedied, (iii) except as otherwise expressly provided in this Agreement,
Lender is entitled to make demand on Borrower for payment of all principal,
interest and other amounts due under the Loan Documents and to foreclose,
replevin or otherwise proceed against the collateral, including, but not
limited to, the deeds of trust on the properties known as "Chapman's Landing,"
"Bishop Ranch" and "Southbridge", and (iv) neither Borrower nor any Obligor has
any defenses to payment of the obligations under the Loan Documents and neither
Borrower nor any Obligor has any claims against Lender as of the date hereof.
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<PAGE> 3
3. Forbearance with Respect to Past Defaults. Subject to the
prior fulfillment of the conditions precedent set forth in Section 8 hereof,
Lender covenants and agrees that from the date hereof until December 31, 1996,
for any and all Events of Default under the Loan Documents prior to the date
hereof, and for any and all Potential Events of Default under the Loan
Documents prior to the date hereof:
a. Lender shall not accelerate the Loan; and
b. Lender shall not attach, sequester, foreclose,
replevin or otherwise initiate any action against Borrower or Obligors
or any of their respective assets or properties.
4. Forbearance with Respect to Certain Future Defaults. Subject
to the prior fulfillment of the conditions precedent set forth in Section 8
hereof, Lender covenants and agrees that for non-monetary Events of Defaults
under the Loan Documents which occur subsequent to the date hereof and prior to
the earlier of (i) the Merger Closing, as defined in the Agreement and Plan of
Merger between Lender, RGI U.S. Holdings, Inc., and Banyan Mortgage Investment
Fund dated as of April 12, 1996 (the "Merger Agreement"), or (ii) the
termination of the Merger Agreement for any reason:
a. Lender shall not accelerate the Loan; and
b. Lender shall not attach, sequester, foreclose,
replevin or otherwise initiate any action against Borrower or Obligors
or any of their respective assets or properties.
5. Capitalization of a Portion of Accrued Interest. Subject to
the prior fulfillment of the conditions precedent set forth in Section 8
hereof, Lender agrees that accrued and unpaid interest under the Note for the
period from October 1, 1995 through December 31, 1995 shall be added to the
principal balance of the Note as of December 31, 1995 ($23,233,737.19 +
$1,105,051.05 = $24,258,788.24). Lender acknowledges and agrees that upon
capitalization of such interest and receipt by Lender of the payments set forth
in Section 6 hereof, Borrower shall have cured all existing monetary Events of
Default under the Note and Loan Agreement.
6. Payments by Borrower to Lender at Closing. Upon signing of
this Agreement by all parties hereto and upon consummation of the Initial
Closing under the Merger Agreement ("Closing"), Borrower shall make the
following payments to Lender, the calculations of which are set forth in
Exhibit B:
a. Interest. Borrower shall pay to Lender $1,179,375.40
for accrued and unpaid interest due under the
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<PAGE> 4
Note and Credit Agreement for the period from January 1, 1996 through
March 31, 1996.
b. Loan Restructure Fee. Borrower shall pay to Lender a
loan restructure fee in the amount of $500,000, provided however, that
if the Merger Closing does not occur on or before December 31, 1996 or
such later date as is mutually agreed upon in writing by the parties
to the Merger Agreement ("Merger Closing Deadline"), or if Lender is
unable to obtain the approval of Fokus Bank ASA for the Construction
Subordination as provided in Section 14 hereof, then in either of such
events the amount of the Restructure Fee shall be credited against
interest owing under the Note for the quarter ending September 30,
1996 (or if such interest has already been paid, then against interest
owing for the quarter ending December 31, 1996).
7. Modification of Loan Terms. Subject to the prior fulfillment
of the conditions precedent set forth in Section 8 hereof, Lender, Borrower and
Obligors agree that the Loan Documents shall be amended as follows:
a. Scheduled Principal Repayments. So long as the Merger
Closing occurs on or before the Merger Closing Deadline, (as defined
in Section 6(b) hereof), Borrower shall not be obligated to reduce the
outstanding principal balance of the Loan to $11,000,000 on or before
October 1, 1997 as set forth in Section 2.4(A) of the Credit
Agreement.
b. Interest Rate. So long as the Merger Closing occurs
on or before the Merger Closing Deadline, Lender agrees to reduce the
interest rate set forth in Section 2.2(A) of the Credit Agreement from
17.5% to the Prime Rate (as defined below) plus two percent (2%),
effective as of the Merger Closing date. Unless and until the
occurrence, after the date hereof, of an Event of Default or Potential
Event of Default under the Loan Documents, Lender agrees to charge the
non-default interest rate of 17.5%, despite the occurrence of Events
of Default and Potential Events of Default prior to the date hereof
which remain unremedied. If the Merger Closing does not occur on or
before the Merger Closing Deadline, or if the Merger Agreement is
terminated for any reason prior to said date, Lender shall thereafter
charge the default interest rate of 19.5% if an Event of Default or
Potential Event of Default has occurred and has not been cured.
Nothing in this Section shall affect Lender's right to charge the
default interest rate of 19.5% for any Events of Default or Potential
Events of Default (monetary, non-monetary, or otherwise) which occur
subsequent to the date hereof.
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<PAGE> 5
c. Amendment to Guaranties. Each Guaranty is amended by
adding Schedule 1 thereto in the form of Schedule 1 to this Agreement,
and by revising Section 2.2(a) thereof to read as follows:
2.2. Limitation on Amount Guarantied; Contribution
by Guarantors. (a) Notwithstanding any provision of this
Guaranty or any other Loan Document to which a Guarantor is a
party or by which a Guarantor is bound, the maximum aggregate
liability of a Guarantor under this Guaranty or secured by any
property of such Guarantor in respect of the Guarantied
Obligations shall be the amount of Loan proceeds actually
disbursed to or for the benefit of such Guarantor (or the
partnership of which such Guarantor is the general partner),
which each Guarantor represents and warrants is as set forth
in Schedule 1 attached hereto as of the date hereof, plus
accrued and unpaid interest thereon and the expenses described
in Section 2.9 of this Guaranty. With respect to each
Guarantor which is a general partner of a Guarantor, the
amount set forth in Schedule 1 (plus accrued interest and
expenses) shall be the maximum aggregate collective liability
(as of the date hereof) of such Guarantor and the partnership
of which such Guarantor is the general partner.
d. Schedule 3.3. Schedule 3.3 to the Credit Agreement
shall be replaced by Schedule 3.3 attached hereto.
e. Amended and Restated Note. The Notes shall be
combined, amended and restated in the form of Exhibit A attached
hereto (the "Restated Note").
f. Definition of Projects. From and after the Merger
Closing, Schedule 1.1F shall be amended to include the properties
known as "Lynnwood," "Grand Harbor," and "Oak Harbor," which as of the
date hereof are owned by subsidiaries by RGI U.S. Holdings, Inc. and
which are more fully described on Schedule 1.1F hereto.
g. Prepayments. Section 2.4(B) shall be amended to read
as follows:
B. Prepayments.
(i) Voluntary Prepayments. Company may,
upon not less than three (3) Business Day's prior
written or telephonic notice given to Lender at any
time and from time to time, prepay the Loan in whole
or in part on any Business Day. Notice of prepayment
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<PAGE> 6
having been given as aforesaid, the principal amount
of the Loan specified in such notice shall become
due and payable on the prepayment date
specified therein. Any such voluntary prepayment
shall be applied to reduce the principal balance of
the Loan in the scheduled order of maturity.
(ii) Mandatory Prepayments.
(a) Prepayments from Cash Flow Payments.
All Cash Flow Payments made pursuant to subsection
2.3 shall be applied to reduce the principal balance
of the Loan in the scheduled order of maturity.
(b) Prepayments from Net Sales Proceeds.
Until the Loan is repaid in full, Company shall pay
to Lender 50% of the Net Sales Proceeds of a sale of
Development Property and 100% of the Net Sales
Proceeds of a sale of Non-Development Property,
provided, however, that if any such payment of Net
Sales Proceeds would otherwise reduce Company's
Consolidated Cash Reserve to less than the Minimum
Reserve, then Company shall be obligated to pay to
Lenders only the portion of such Net Sales Proceeds
which will not reduce Company's Consolidated Cash
Reserve to less than the Minimum Reserve. The payment
of such deferred Net Sales Proceeds will be accrued,
without interest, until the next calendar quarter (or
quarters) in which the Consolidated Cash Reserve
exceeds the Minimum Reserve, at which time Company
shall pay to Lender the deferred Net Sales Proceeds
(or so much thereof as can be made without reducing
the Consolidated Cash Reserve to less than Minimum
Reserve).
(c) Notwithstanding the provisions of (a) and
(b) above, none of the proceeds from the sale of the
Projects commonly known as 120 Spalding and Oakridge
will be paid to Lender.
h. Net Cash Flow. The definition of "NET CASH FLOW"
shall be amended by deleting Subsection (A)(c).
i. Certain Other Definitions. The following definitions
shall be added to Section 1.1:
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<PAGE> 7
"DEVELOPMENT PROPERTY" means the Projects
known as "Wayside Village," "Southbridge," and
"Chapman's Landing." As of the effective date of the
Merger, "Development Property" shall also include the
Projects known as "Grand Harbor" and "Oak Harbor."
"MERGER" means the merger of RGI U.S.
Holdings, Inc. into the Company pursuant to the
Agreement and Plan of Merger dated as of April 12,
1996 among RGI U.S. Holdings, Inc., RGI Holdings,
Inc. and the Company.
"MINIMUM RESERVE" means $3,000,000.
"NON-DEVELOPMENT PROPERTY" means the Project
known "Bishop Ranch." As of the effective date of the
Merger, "Non-Development Property" shall also include
the Project known as "Lynnwood."
"NET SALES PROCEEDS" means all cash proceeds
received from the sale or any other disposition
(other than any proceeds from financing or
refinancing of a Project, which are governed by A.(d)
of the definition of Net Cash Flow above) of all or
any portion of such Project, or any interest therein
(including any deferred payments, but only as and
when so received), net of (i) the actual and
reasonable closing costs and expenses incurred in
such sale or other disposition (excluding, in any
event, closing costs paid to Company, its Affiliates
or BMC in excess of amounts customarily paid to third
parties providing comparable services), and (ii)
amounts applied to repayment of Indebtedness (other
than the Obligations) secured by Permitted
Encumbrances on the Project, or the portion thereof
so disposed.
"PRIME RATE" means the prime rate of interest
as published in The Wall Street Journal by Dow Jones
& Company, Inc. from time to time, changing daily as
such prime rate changes.
j. Payment Instructions. The wire transfer instructions
set forth in Section 2.4(C) shall be replaced with the following:
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<PAGE> 8
c/o Resource Group International, Inc.
West One Bank
Pike Place Office
Seattle, Washington
ABA Routing #125107833
Account #6002314034
k. Notices. The addresses referenced in Section 8.7
shall be deemed to refer to the addresses listed below the signature
lines of this Agreement.
l. Agent. Section 9 is deleted and all references to
"Agent" in the Loan Documents shall be deemed to refer to Lender.
8. Conditions Precedent. Lender's obligations under this
Agreement are subject to the prior fulfillment of the following conditions
precedent:
a. This Agreement shall have been duly executed and
delivered by Lender, Borrower and Obligors.
b. Borrower shall have paid to Lender the sum of
$1,679,375.40, which shall be applied by Lender in the manner
described in Section 6 hereof.
c. Lender shall have received the Restated Note in the
form of Exhibit A, duly executed by Borrower.
d. The Initial Closing under the Merger Agreement shall
have occurred.
e. Lender shall have received certified copies of (i)
the corporate and/or partnership resolutions authorizing Borrower and
Obligors to enter into and perform this Agreement, (ii) an incumbency
certificate for the person signing this Agreement and related
documents on behalf of Borrower and Obligors, and (iii) such other
statements, certificates, documents, amendments and information with
respect to the matters contemplated by this Agreement and the Loan
Documents as Lender may reasonably request.
9. Covenants of Borrower and Obligors. In consideration for
Lender's agreement to enter into this Agreement, Borrower and Obligors covenant
and agree that:
a. Borrower and Obligors shall comply with the terms and
conditions of this Agreement and shall make commercially reasonable
efforts to continue to comply with all of their obligations under the
Loan Documents, as modified by this Agreement.
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<PAGE> 9
b. Borrower shall pay all of the costs and expenses
reasonably incurred by Lender in connection with the preparation of
this Agreement and all documents delivered in connection herewith,
including title insurance and the costs and expenses of counsel to
Lender.
c. Borrower and Obligors shall from time to time at
their expense execute such additional documents as are reasonably
requested by Lender (and Fokus Bank ASA, to whom Lender is assigning
the Note and related security documents as collateral for a loan made
by Fokus Bank ASA to Lender) to protect Lender's and Fokus Bank ASA's
interest in all collateral, whether now held or hereafter acquired.
10. Waiver of Defenses. Borrower and Obligors hereby waive and
release any and all defenses they may have with respect to any of the Loan
Documents or any obligations owing thereunder based on or otherwise relating to
any events or circumstances which occurred or existed on or prior to the date
hereof, and hereby release and forever discharge Lender, and its officers,
directors, fiduciaries, agents and employees, from every claim, demand or cause
of action whatsoever, of every kind and nature, whether presently known or
unknown, suspected or unsuspected, arising or alleged to have arisen or which
shall arise hereafter from any act, omission or condition which occurred or
existed on or prior to the date hereof. Borrower and Obligors expressly waive
any right to setoff any claim, if any, against Lender against any sum owed or
to be owed by Borrower or Obligors under any Loan Document.
11. Representations and Warranties of Borrower and Obligors.
a. Borrower and Obligors acknowledge that the concepts
embodied in this Agreement have been independently negotiated with
Lender by Borrower and Obligors, at all times represented by counsel
of Borrower's and Obligors' own choosing, and that this Agreement is
satisfactory to and in the best interests of Borrower and Obligors,
and that Borrower and Obligors have actively requested that Lender
enter into this Agreement.
b. Borrower and Obligors hereby represent and warrant
that the execution, delivery and performance of this Agreement have
been duly authorized, and that when executed and delivered by Borrower
and Obligors this Agreement shall constitute a valid and binding
obligation of Borrower and Obligors, enforceable against them in
accordance with its terms, except as the enforceability thereof may be
affected by bankruptcy, insolvency, moratorium, fraudulent transfer
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<PAGE> 10
and other similar laws affecting the rights and remedies of creditors
generally.
c. Borrower and Obligors hereby further represent and
warrant that the amounts set forth in Schedules 1 and 3.3 hereto are
true and correct as of the date hereof, and they hereby agree to
indemnify, defend and hold Lender harmless from and against any and
all claims, losses, damages, costs or expenses which Lender may incur
arising out of or relating to any errors or inaccuracies in such
Schedules.
d. Borrower and Obligors hereby further represent and
warrant that their articles of incorporation, bylaws, and/or
partnership agreements, as the case may be, as well as the articles of
incorporation and bylaws of their respective general partners (as
applicable), have not been amended or modified since the date the
Credit Agreement was signed.
12. Loan Documents Remain in Effect; References to Loan Documents.
Except as expressly amended by this Agreement, the Credit Agreement and all
other Loan Documents shall remain in full force and effect. In addition,
Lender, Borrower, and Obligors agree that: (i) all references to the Credit
Agreement in any of the Loan Documents or any other agreements between Lender
and Borrower shall mean the Credit Agreement, as amended by this Agreement;
(ii) all references to the Guaranty or the Guaranties in any of the Loan
Documents or any other agreements between Lender and Borrower shall mean the
Guaranties, as amended by this Agreement; and (iii) all references to
"Promissory Note" or "Note" in the Credit Agreement or any of the Security
Documents shall mean the Restated Note.
13. Termination of Warrants. Lender agrees that the seven
Warrants dated October 4, 1994, which were originally issued in favor of each
of the Morgens Lenders and Leveraged Equity Management, Inc. and which have
been assigned to Lender pursuant to the Loan Purchase Agreement, are hereby
terminated. All references to the Warrants in the Credit Agreement are
deleted. Lender represents and warrants that after the assignment of the
Warrants from the Morgens Lenders and Leveraged Equity Management, Inc. to
Lender, Lender has not sold, assigned or pledged the Warrants to any other
party.
14. Subordination to Construction Financing. Lender agrees to
subordinate its interest in the Collateral to construction financing upon
commercially reasonable terms provided that such construction financing is used
solely to pay costs directly related to improvement of such Collateral
("Construction Subordination"). Lender further agrees to use commercially
reasonable efforts to obtain Fokus Bank ASA approval for the Construction
Subordination.
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15. Miscellaneous.
a. Modification. This Agreement may not be modified in
any manner except by written agreement signed by all of the parties
hereto.
b. No Waiver. No course of dealings heretofore or
hereafter among Borrower, Obligors and Lender or any failure on the
part of Lender in exercising any rights or remedies under this
Agreement or any existing by law shall operate as a waiver of any
right or remedy of Lender with respect to any obligations owed to
them, and no single or partial exercise of any right or remedy
hereunder shall operate as a waiver or a preclusion to the exercise of
any other rights or remedies that Lender may have under any other
document.
c. Severability. Whenever possible, each provision of
this Agreement shall be interpreted in such a manner as to be
effective and valid under applicable law, but if any provision of this
Agreement shall be prohibited by or under applicable law, such
provision shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision and
the remaining provisions of this Agreement.
d. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York,
excluding its conflict of law rules.
e. Agents, Successors, and Assigns. This Agreement shall
be binding upon and inure to the benefit of the parties and their
agents, successors and assigns.
f. Counterparts. This Agreement may be executed in any
number of counterparts and shall be a valid and binding agreement when
all parties execute the original or a counterpart.
EXECUTED as of the date set forth above.
BORROWER: BANYAN MORTGAGE INVESTMENT FUND,
a Delaware Corporation
By: /s/ Robert G. Higgins
--------------------------------
Printed Name: Robert G. Higgins
Title: Vice President and Secretary
11
<PAGE> 12
Address:
-------
150 South Wacker Drive, Suite 2900
Chicago, Illinois 60606
Telephone: 312-553-9800
Facsimile: 312-553-0450
With a copy to:
Shefsky & Froelich Ltd.
444 North Michigan Avenue
Chicago, Illinois 60611
Attention: Michael J. Choate, Esq.
Telephone: 312-836-4066
Facsimile: 312-527-5921
OBLIGORS: VMIF/ANDEN SOUTHBRIDGE VENTURE, an Illinois joint
venture
By VMIF SOUTHBRIDGE CORP., its managing
general partner
By: Robert G. Higgins (whose signature
appears below)
Title: Vice President and Secretary
BMIF MONTEREY COUNTY CORP.
By: Robert G. Higgins (whose signature appears
below)
Title: Vice President and Secretary
BMIF MONTEREY COUNTY LIMITED PARTNERSHIP
By: BMIF MONTEREY COUNTY CORP., GENERAL PARTNER
By: Robert G. Higgins (whose signature appears
below)
Title: Vice President and Secretary
12
<PAGE> 13
BMIF RANCHO MALIBU II CORP.
By: Robert G. Higgins (whose signature appears
below)
Title: Vice President and Assistant Secretary
BMIF VIRGINIA MANAGEMENT CORP.
By: Robert G. Higgins (whose signature appears
below)
Title: Vice President and Assistant Secretary
VMIF 248 BUCKEYE WILSHIRE CORP.
By: Robert G. Higgins (whose signature appears
below)
Title: Vice President and Assistant Secretary
VMIF 9025 WILSHIRE CORP.
By: Robert G. Higgins (whose signature appears
below)
Title: Vice President and Assistant Secretary
VMIF/ANDEN WAYSIDE VENTURE, a general partnership
By: VMIF WAYSIDE CORP., managing general
partner
By: Robert G. Higgins (whose signature appears
below)
Title: Vice President and Assistant Secretary
13
<PAGE> 14
VMIF CHARLES COUNTY CORP.
By: Robert G. Higgins (whose signature appears
below)
Title: Vice President and Assistant Secretary
VMIF CHARLES COUNTY L.P.
By: VMIF CHARLES COUNTY CORP., general partner
By: Robert G. Higgins (whose signature appears
below)
Title: Vice President and Assistant Secretary
VMIF CHARLES COUNTY VENTURE, a general partnership
By: VMIF CHARLES COUNTY CORP., managing
general partner
By: Robert G. Higgins (whose signature appears
below)
Title: Vice President and Assistant Secretary
VMIF OAKRIDGE CORP.
By: Robert G. Higgins (whose signature appears
below)
Title: Vice President and Assistant Secretary
VMIF RANCHO MALIBU CORP.
By: Robert G. Higgins (whose signature appears
below)
Title: Vice President and Assistant Secretary
14
<PAGE> 15
VMIF RANCHO MALIBU LIMITED PARTNERSHIP
By: VMIF RANCHO MALIBU CORP., general partner
By: Robert G. Higgins (whose signature appears
below)
Title: Vice President and Assistant Secretary
VMIF SOUTHBRIDGE CORP.
By: Robert G. Higgins (whose signature appears
below)
Title: Vice President and Assistant Secretary
VMIF SOUTHBRIDGE L.P.
By: VMIF SOUTHBRIDGE CORP., general partner
By: Robert G. Higgins (whose signature appears
below)
Title: Vice President and Assistant Secretary
VMIF WAYSIDE L.P.
By: VMIF WAYSIDE CORP., general partner
By: Robert G. Higgins (whose signature appears
below)
Title: Vice President and Assistant Secretary
VMIF WAYSIDE CORP.
By: Robert G. Higgins (whose signature appears
below)
Title: Vice President and Assistant Secretary
By /s/ Robert G. Higgins
------------------------------------------------
ROBERT G. HIGGINS, for the entitles and
in the capacities described above
15
<PAGE> 16
LENDER: RGI HOLDINGS, INC., a Washington corporation
By: /s/ Kenneth L. Uptain
----------------------------------------
Printed Name: Kenneth L. Uptain
-------------------------------
Title: President
-------------------------------------
Address:
--------
U.S. Bank Centre
1420 Fifth Avenue, 42nd Floor
Seattle, Washington 98101-2333
Telephone: 206-464-0200
Telecopy: 206-448-0404
With a copy to:
Davis Wright Tremaine
1501 Fourth Avenue
2600 Century Square
Seattle, Washington 98101-1688
Attention: Richard M. Rawson
Telephone: 206-628-7746
Telecopy: 206-628-7699
16
<PAGE> 17
EXHIBIT A
AMENDED AND RESTATED PROMISSORY NOTE
$24,258,788.24 April 1, 1996
FOR VALUE RECEIVED, BANYAN MORTGAGE INVESTMENT FUND, a Delaware
corporation ("Company"), promises to pay to the order of RGI HOLDINGS, INC., a
Washington corporation ("Lender"), the principal amount of Twenty-Four Million
Two Hundred Fifty-Eight Thousand Seven Hundred Eighty-Eight and 24/100 United
States Dollars (US$24,258,788.24).
Company also promises to pay interest on the unpaid principal amount
hereof, from the date hereof until paid in full, at the rates and at the times
which shall be determined in accordance with the provisions of that certain
Credit Agreement dated as of October 4, 1994 (as assigned, amended,
supplemented, or otherwise modified from time to time, the "Credit Agreement").
All capitalized terms used herein and not otherwise defined herein shall have
the meanings given them in the Credit Agreement.
This Note is issued pursuant to and is entitled to the benefits of the
Credit Agreement, to which reference is hereby made for a more complete
statement of the terms and conditions under which the Loan evidenced hereby was
made and is to be repaid. Interest is payable at the rate (including, without
limitation, the default rate set forth in subsection 2.2B of the Credit
Agreement) and at the times set forth in the Credit Agreement, and the entire
outstanding principal balance of this Note, and all accrued and unpaid interest
thereon, is due and payable in full on September 30, 1998.
All payments of principal and interest in respect of this Note shall
be made in lawful money of the United States of America by wire transfer of
same day funds to the account of Lender in accordance with the wiring
instructions for Lender set forth in the Credit Agreement, or at such other
place as shall be designated by Lender in writing for such purpose, and in
accordance with the terms of the Credit Agreement. Lender hereby agrees, by
its acceptance hereof, that before disposing of this Note or any part hereof it
will make a notation hereon of all principal payments previously made hereunder
and of the date to which interest hereon has been paid; provided, however, that
the failure to make a notation of any payment made on this Note shall not limit
or otherwise affect the obligations or defenses of Company hereunder with
respect to payments of principal of or interest on this Note.
17
<PAGE> 18
Whenever any payment on this Note shall be stated to be due on a day
which is not a Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in the computation of
the payment of interest on this Note.
This Note is subject to (i) a mandatory repayment of a portion of the
outstanding principal balance of the Loan as provided in subsection 2.4A of the
Credit Agreement, and (ii) mandatory prepayment as provided in subsection
2.4B(ii) of the Credit Agreement.
THE CREDIT AGREEMENT AND THIS NOTE SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES.
Upon the occurrence of an Event of Default, the unpaid balance of the
principal amount of this Note, together with all accrued and unpaid interest
thereon, may become, or may be declared to be, due and payable in the manner,
upon the conditions and with the effect provided in the Credit Agreement. In
addition, upon certain Events of Default under the Credit Agreement, the
interest payable under this Note shall increase to the default rate specified
in subsection 2.2B of the Credit Agreement.
The terms of this Note are subject to amendment only in the manner
provided in the Credit Agreement.
No reference herein to the Credit Agreement and no provision of this
Note or the Credit Agreement shall alter or impair the obligations of Company,
which are absolute and unconditional, to pay the principal of and interest on
this Note at the place, at the respective times, and in the currency herein
prescribed.
Company promises to pay costs and expenses (including reasonable
attorneys' fees) as provided in subsection 8.2 of the Credit Agreement,
incurred in the collection and enforcement of this Note. Company and any
endorsers of this Note hereby consent to renewals and extensions of time at or
after the maturity hereof, without notice, and hereby waive diligence,
presentment, protest, demand and notice of every kind and, to the full extent
permitted by law, the right to plead any statute of limitations as a defense to
any demand hereunder.
This Note amends and restates the Promissory Notes executed by Company
dated as of October 4, 1994 in favor of (1) Restart Partners, L.P. in the
amount of $4,469,000, (2) Restart Partners II, L.P. in the amount of
$6,560,000, (3) Restart Partners III, L.P. in the amount of $4,592,000, (4)
Restart Partners IV, L.P.
18
<PAGE> 19
in the amount of $2,829,000, (5) The Common Fund in the amount of $1,332,500,
and (6) Morgens Waterfall Income Partners in the amount of $717,500. Each of
the six individual Promissory Notes listed above have been endorsed to Lender
pursuant to a Loan Purchase Agreement dated April 12, 1996.
THIS NOTE IS SUBJECT TO RESTRICTIONS ON TRANSFEROR ASSIGNMENT AS
PROVIDED IN SUBSECTIONS 8.1 AND 8.14 OF THE CREDIT AGREEMENT.
IN WITNESS WHEREOF, Company has caused this Note to be duly executed
and delivered by its officers thereunto duly authorizing as of the date first
written above.
BANYAN MORTGAGE INVESTMENT FUND, a Delaware
Corporation
By: /s/ Robert G. Higgins
---------------------------
Printed Name: Robert G. Higgins
Title: Vice President and Secretary
19
<PAGE> 20
EXHIBIT B
Amounts owed by Borrower prior to March 31, 1996:
Principal balance as of October 1, 1995 $23,233,737.19
Accrued interest 10/1/95 - 12/31/95 $1,105,051.05
--------------
Principal plus capitalized interest: $24,258,788.24
Accrued Interest from 1/1/96 - 3/31/96:
$24,258,788.24 x 19.5% x 91 days / 365 days: $1,179,375.40
Total owing as of March 31, 1996: $25,438,163.64
Amounts to be paid by Borrower at Closing:
Accrued interest from 1/1/96 - 3/31/96: $1,179,375.40
Restructure Fee: $500,000.00
--------------
Total to be paid at Closing: $1,679.375.40
Principal balance owed by Borrower as of April 1, 1996:
Principal balance: $24,258,778.24
20
<PAGE> 21
SCHEDULE 1
<TABLE>
<CAPTION>
====================================================================================================================================
Chapman's Southbridge Wayside Bishop Ranch
<S> <C> <C> <C> <C>
Land Acquisition Costs 41,252
- ------------------------------------------------------------------------------------------------------------------------------------
Hard Constr. Costs 10,698 0 722,925 4,179
- ------------------------------------------------------------------------------------------------------------------------------------
Soft Costs:
- ------------------------------------------------------------------------------------------------------------------------------------
Legal Fees 198,229 68,665 29,093 109,681
- ------------------------------------------------------------------------------------------------------------------------------------
Land Planning/Zoning 354,183 71,398 116,395 148,828
- ------------------------------------------------------------------------------------------------------------------------------------
Real Estate Advisors 183,114 17,399 3,819 22,973
- ------------------------------------------------------------------------------------------------------------------------------------
Other Costs 6,686 1,298 80,816 45,629
- ------------------------------------------------------------------------------------------------------------------------------------
Fees & Permits 82,668 0 40,662 14,927
- ------------------------------------------------------------------------------------------------------------------------------------
Marketing 71,990 49,145 266,954 20,629
- ------------------------------------------------------------------------------------------------------------------------------------
Project Overhead 0
- ------------------------------------------------------------------------------------------------------------------------------------
Other Chicago Ohd 11,964 20,896 11,437 8,694
- ------------------------------------------------------------------------------------------------------------------------------------
Other Divisional Ohd 238,214 119,687 160,601 47,519
- ------------------------------------------------------------------------------------------------------------------------------------
Utilities 8,420
- ------------------------------------------------------------------------------------------------------------------------------------
Real Estate Taxes (54,849) 288,894 127,317 39,138
- ------------------------------------------------------------------------------------------------------------------------------------
Insurance 4,330 2,490 550 3,641
- -----------------------------------------------------------------------------------------------------------------------------------
Financing Costs:
- -----------------------------------------------------------------------------------------------------------------------------------
Interest 41,650 776,210 800,014 59,409
- ------------------------------------------------------------------------------------------------------------------------------------
Principal 1,039,204 422,115 4,737,750 1,900,000
- ------------------------------------------------------------------------------------------------------------------------------------
Extension Fees 0 0 70,000 0
- ------------------------------------------------------------------------------------------------------------------------------------
Misc. (Sources)/Uses
- ------------------------------------------------------------------------------------------------------------------------------------
Deposits 0 0 (17,406) 0
- ------------------------------------------------------------------------------------------------------------------------------------
Escrows 0 0 37,792 0
- ------------------------------------------------------------------------------------------------------------------------------------
Other Costs 82 0 5,092
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL USES 2,238,163 1,877,250 7,205,717 2,438,760
====================================================================================================================================
</TABLE>
21
<PAGE> 22
SCHEDULE 1.1F
Lynnwood
Lynnwood is a neighborhood retail shopping center located on an
approximately 14.35 acre site in Lynnwood, Washington, approximately 20 miles
north of Seattle, Washington.
Grand Harbor
Grand Harbor is an 888 acre (approximate) residential community
located along the Indian River in Vero Beach, Florida. The community includes
a full service marina, golf courses, private residences, a club house and a
beach house.
Oak Harbor
Oak Harbor is a 115 acre planned luxury, country club retirement
community located within Grand Harbor in Vero Beach, Florida.
22
<PAGE> 23
SCHEDULE 3.3
<TABLE>
<CAPTION>
Project Amount as of May 20, 1996
- ------- -------------------------
<S> <C>
Chapman's Landing $2,238,163.00
Southbridge $1,877,250.00
Bishop Ranch $2,438,760.00
</TABLE>
Note: The above amounts do not include accrued and unpaid interest and costs of
collection, which are also secured by the Mortgages on these Projects.
23
<PAGE> 1
EXHIBIT (10)(ii)
(SOCIETE GENERALE)
LOAN MODIFICATION AGREEMENT
This Loan Modification Agreement ("Agreement") is entered into as of
May 21, 1996, between RGI HOLDINGS, INC., a Washington corporation ("Lender"),
VMIF/Anden Wayside Venture, an Illinois general partnership ("Borrower"), and
VMIF/Anden Southbridge Venture, an Illinois general partnership ("Obligor").
Recitals
A. Borrower entered into a certain Restated Loan Agreement ("Loan
Agreement") dated October 14, 1994 with Societe Generale, Southwest Agency
("SoGen"), to document Borrower's obligations to SoGen with respect to a loan
in the principal amount of Seven Million United States Dollars
(US$7,000,000.00) (the "Loan"). Capitalized terms used herein but not defined
herein shall have the meanings set forth in the Loan Agreement.
B. Pursuant to the Loan Agreement, Borrower executed and
delivered an Amended and Restated Promissory Note in favor of SoGen dated
October 14, 1994 (the "Note").
C. As security for repayment of the Loan, Borrower and VMIF/Anden
Southbridge Venture, an Illinois general partnership that is affiliated with
Borrower ("Southbridge Partnership"), each granted a security interest in
certain collateral and executed certain security documents in favor of SoGen
(the "Security Documents"). The Loan Agreement, Note, Security Documents, and
any and all amendments, restatements, extensions and renewals thereof are
collectively referred to herein as the "Loan Documents."
D. Pursuant to a Loan Purchase Agreement dated as of April 12,
1996 between RGI Realty, Inc. and SoGen, as amended by the Amendment to Loan
Purchase Agreement dated May 15, 1996, which Loan Purchase Agreement (as
amended) has been assigned by RGI Realty, Inc. to Lender, Lender has acquired
all of SoGen's right, title and interest in and to the Loan and the Loan
Documents.
E. Borrower and Obligor have requested that Lender modify the
Loan Documents to, among other things, forbear from taking action against
Borrower and Obligor for certain periods of time.
F. Lender is willing to modify the Loan Documents on the terms
and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants set forth
below, Lender, Borrower, and Obligor agree to the following:
<PAGE> 2
1. Reaffirmation of Obligations Under Loan Documents. Borrower
and Obligor reaffirm all of their respective obligations under the Loan
Documents. Borrower and Obligor represent and warrant that, to the best of
their knowledge and except as previously disclosed to Lender in writing
(including, without limitation, all disclosures contained in the Banyan
disclosure schedule, as amended, given in connection with the Merger Agreement
referred to in Section 4 below), all of the representations and warranties set
forth in the Loan Documents continue to be true and accurate as of the date
hereof to the same extent as if they were fully set forth herein. Borrower and
Obligor acknowledge and confirm that Borrower is justly indebted to Lender
under the Loan Documents; that the amounts owed by Borrower to Lender under the
Loan Agreement and Note are as set forth on Exhibit A attached hereto; and that
the Loan Documents have been duly executed and delivered by Borrower and/or
Obligor and constitute the legal, valid and binding obligations of Borrower
and/or Obligor, as the case may be, enforceable against them in accordance with
their terms, except as the enforceability thereof may be affected by
bankruptcy, insolvency, moratorium, fraudulent transfer and other similar laws
affecting the rights and remedies of creditors generally.
2. Default Under Loan Documents. Borrower and Obligor
acknowledge that (i) Borrower is in default under the terms of the Loan
Documents, (ii) Borrower and Obligor have received written notice of events
constituting such default, which events have not been not cured and remain
unremedied, (iii) except as otherwise expressly provided in this Agreement,
Lender is entitled to make demand on Borrower for payment of all principal,
interest and other amounts due under the Loan Documents and to foreclose,
replevin or otherwise proceed against the collateral, including, but not
limited to, the deeds of trust on the properties known as "Wayside" and
"Southbridge", and (iv) neither Borrower nor Obligor has any defenses to
payment of the obligations under the Loan Documents and neither Borrower nor
Obligor has any claims against Lender as of the date hereof.
3. Forbearance with Respect to Past Defaults. Subject to the
prior fulfillment of the conditions precedent set forth in Section 9 hereof,
Lender covenants and agrees that from the date hereof until December 31, 1996,
for any and all Events of Default under the Loan Documents prior to the date
hereof, and for any event or circumstance which, with the passage of time or
the giving of notice or both, would have constituted an Event of Default under
the Loan Documents prior to the date hereof:
a. Lender shall not accelerate the Loan; and
2
<PAGE> 3
b. Lender shall not attach, sequester, foreclose,
replevin or otherwise initiate any action against Borrower or Obligor
or any of their respective assets or properties.
4. Forbearance with Respect to Certain Future Defaults. Subject
to the prior fulfillment of the conditions precedent set forth in Section 9
hereof, Lender covenants and agrees that for non-monetary Events of Defaults
under the Loan Documents which occur subsequent to the date hereof and prior to
the earlier of (i) the Merger Closing, as defined in the Agreement and Plan of
Merger between Lender, RGI U.S. Holdings, Inc., and Banyan Mortgage Investment
Fund dated as of April 12, 1996 (the "Merger Agreement"), or (ii) the
termination of the Merger Agreement for any reason:
a. Lender shall not accelerate the Loan; and
b. Lender shall not attach, sequester, foreclose,
replevin or otherwise initiate any action against Borrower or Obligor
or any of their respective assets or properties.
5. Capitalization of a Portion of Accrued Interest. Subject to
the prior fulfillment of the conditions precedent set forth in Section 9
hereof, Lender agrees that accrued and unpaid interest under the Note for the
period from September 1, 1995 through December 31, 1995 shall be added to the
principal balance of the Note as of December 31, 1995 ($6,360,000 + 287,701.66
= $6,647,701.66).
6. Payments by Borrower to Lender at Closing. Upon signing of
this Agreement by all parties hereto and upon consummation of the Initial
Closing under the Merger Agreement ("Closing"), Borrower shall make the
following payments to Lender, the calculations of which are set forth in
Exhibit A:
a. Interest. Borrower shall pay to Lender $319,782.15
for accrued and unpaid interest due under the Note and Loan Agreement
for the period from January 1, 1996 through April 30, 1996.
b. Late Fees. Borrower shall pay to Lender $278,701.20
for late fees due under the Note and Loan Agreement.
c. Attorneys Fees. Borrower shall pay to Lender
$24,009.25 for attorneys fees due under the Note and Loan Agreement as
of December 31, 1995.
7. Application of Funds Held in Escrow by SoGen. Upon purchase
of the SoGen Loan, Lender is receiving a credit in the amount of approximately
$250,000 for funds previously held in
3
<PAGE> 4
escrow by SoGen relating to four Lots of the Wayside Property. At Closing,
Lender shall apply the amount of this credit to reduce the outstanding
principal balance of the Loan and Note (e.g., if the amount of the credit is
$250,000, the new principal balance after Closing would be $6,647,701.66 -
$250,000 = $6,397,701).
8. Modification of Loan Terms. Subject to the prior fulfillment
of the conditions precedent set forth in Section 9 hereof, Lender, Borrower and
Obligor agree that the Loan Documents shall be amended as follows:
a. Mandatory Principal Repayments. So long as the Merger
Closing occurs on or before December 31, 1996 or such later date as is
mutually agreed upon in writing by the parties to the Merger Agreement
("Merger Closing Deadline"), Borrower shall not be obligated to make
the mandatory repayments set forth in Article XIV of the Loan
Agreement. If the Merger Closing does not occur on or before the
Merger Closing Deadline, or if the Merger Agreement is terminated for
any reason prior to that date, then within fifteen (15) days
thereafter Borrower shall make a principal repayment under the Note in
the amount necessary to comply with the provisions of Article XIV
(i.e., Borrower shall reduce the outstanding principal balance of the
Loan to the maximum amount set forth in Article XIV).
b. Interest Payments. From and after May 1, 1996,
interest shall accrue on the outstanding principal balance of the Loan
at the default rate set forth in the Note, which is six percent (6%)
above the prime rate. However, the definition of the "prime rate"
shall be changed from "the rate of interest announced publicly by
Societe Generale, from time to time, as its prime rate," to "the
prime rate of interest as published in The Wall Street Journal by Dow
Jones & Company, Inc. from time to time, changing daily as such prime
rate changes." Accrued interest shall be due and payable in full no
later than fifteen (15) days after the earlier of (i) the Merger
Closing, (ii) the termination of the Merger Agreement for any reason,
or (iii) the Merger Closing Deadline. From and after the earlier of
the dates set forth in the preceding sentence, accrued interest shall
be due and payable monthly on the first day of each month as provided
in the Note.
c. Extension of Maturity Date. Article X of the Loan
Agreement is deleted, it being understood that Borrower shall not have
any right to extend the Maturity Date of the Note beyond December 31,
1997.
4
<PAGE> 5
d. Late Fee. The late payment premium set forth in the
Note shall apply only to overdue interest and not to overdue
principal.
e. Place for Payment. The place for payment in the first
sentence of the Note shall be changed to the address of Lender listed
below its signature on this Agreement.
f. Notices. The addresses for notices set forth in
Section 16.02 of the Loan Agreement shall be changed to the addresses
listed below the signature lines of this Agreement.
g. Definitions. The definition of "Lender's Counsel" set
forth in Section 4.02 of the Loan Agreement shall be changed to "Davis
Wright Tremaine."
h. Deed of Trust Modification. Obligor and Lender shall
enter into an AMENDMENT NO. 1 TO DEED OF TRUST MODIFICATION AND
SUBSTITUTION OF TRUSTEE AGREEMENT in the form of Exhibit B.
9. Conditions Precedent. Lender's obligations under this
Agreement are subject to the prior fulfillment of the following conditions
precedent:
a. This Agreement shall have been duly executed and
delivered by Lender, Borrower and Obligor.
b. Borrower shall have paid to Lender the sum of
$622,492.60, which shall be applied by Lender in the manner described
in Section 6 hereof.
c. Lender shall have received the AMENDMENT NO. 1 TO
DEED OF TRUST MODIFICATION AND SUBSTITUTION OF TRUSTEE AGREEMENT in
the form of Exhibit A, duly executed, notarized and delivered by
Borrower and Obligor.
d. The Initial Closing under the Merger Agreement shall
have occurred.
e. Lender shall have received certified copies of (i)
the corporate and/or partnership resolutions authorizing Borrower and
Obligor to enter into and perform this Agreement, (ii) an incumbency
certificate for the person signing this Agreement and related
documents on behalf of Borrower and Obligor, and (iii) such other
statements, certificates, documents, amendments and information with
respect to the matters contemplated by this Agreement and the Loan
Documents as Lender may reasonably request.
5
<PAGE> 6
10. Covenants of Borrower and Obligor. In consideration for
Lender's agreement to enter into this Agreement, Borrower and Obligor covenant
and agree that:
a. Borrower and Obligor shall make commercially
reasonable efforts to refinance the Loan as soon as practicable.
b. Borrower and Obligor shall comply with the terms and
conditions of this Agreement and shall make commercially reasonable
efforts to continue to comply with all of their obligations under the
Loan Documents, as modified by this Agreement.
c. Borrower shall pay all of the costs and expenses
reasonably incurred by Lender in connection with the preparation of
this Agreement and all documents delivered in connection herewith,
including title insurance and the costs and expenses of counsel to
Lender.
d. Borrower and Obligor shall from time to time at their
expense execute such additional documents as are reasonably requested
by Lender (and Fokus Bank ASA, to whom Lender is assigning the Note
and related security documents as collateral for a loan made by Fokus
Bank ASA to Lender) to protect Lender's and Fokus Bank ASA's interest
in all collateral, whether now held or hereafter acquired.
11. Waiver of Defenses. Borrower and Obligor hereby waive and
release any and all defenses they may have with respect to any of the Loan
Documents or any obligations owing thereunder based on or otherwise relating to
any events or circumstances which occurred or existed on or prior to the date
hereof, and hereby release and forever discharge Lender, and its officers,
directors, fiduciaries, agents and employees, from every claim, demand or cause
of action whatsoever, of every kind and nature, whether presently known or
unknown, suspected or unsuspected, arising or alleged to have arisen or which
shall arise hereafter from any act, omission or condition which occurred or
existed on or prior to the Effective Date. Borrower and Obligor expressly waive
any right to setoff any claim, if any, against Lender against any sum owed or
to be owed by Borrower or Obligor under any Loan Document.
12. Representations and Warranties of Borrower and Obligor.
a. Borrower and Obligor acknowledge that the concepts
embodied in this Agreement have been independently negotiated with
Lender by each of Borrower and Obligor, at all times represented by
counsel of Borrower's and Obligor's own choosing, and that this
Agreement is satisfactory to and
6
<PAGE> 7
in the best interests of Borrower and Obligor, and that Borrower and
Obligor have actively requested that Lender enter into this Agreement.
b. Borrower and Obligor hereby represent and warrant
that the execution, delivery and performance of this Agreement have
been duly authorized, and that when executed and delivered by Borrower
and Obligor this Agreement shall constitute a valid and binding
obligation of Borrower and Obligor, enforceable against them in
accordance with its terms, except as the enforceability thereof may be
affected by bankruptcy, insolvency, moratorium, fraudulent transfer
and other similar laws affecting the rights and remedies of creditors
generally.
c. Borrower and Obligor hereby further represent and
warrant that their respective partnership agreements, as well as the
articles of incorporation and bylaws of their respective general
partners, have not been amended or modified since the date the Loan
Agreement was signed.
13. Loan Documents Remain in Effect; References to Loan Documents.
Except as expressly amended by this Agreement, the Loan Agreement, Note, and
Security Documents shall remain in full force and effect. Lender, Borrower,
and Obligor agree that all references to the Loan Agreement in any of the Loan
Documents or any other agreements between Lender and Borrower shall mean the
Loan Agreement as amended by this Agreement.
14. Termination of SoGen Revolving Loan Agreement. Borrower,
Obligor and Lender acknowledge and agree that the Revolving Loan Agreement
between Borrower and SoGen dated October 14, 1994 ("Revolving Loan Agreement"),
the Credit Note executed by Borrower in favor of SoGen dated October 14, 1994
("Credit Note"), and all security therefor ("Revolving Loan Security"), has
been terminated by SoGen, and that SoGen has not assigned any rights or
obligations thereunder to Lender. Neither Borrower, Obligor nor Lender shall
have any obligation to any other party hereto with respect to such Revolving
Loan Agreement, Credit Note, or Revolving Loan Security.
15. Miscellaneous.
a. Modification. This Agreement may not be modified in
any manner except by written agreement signed by all of the parties
hereto.
b. No Waiver. No course of dealings heretofore or
hereafter among Borrower, Obligor and Lender or any failure on the
part of Lender in exercising any rights or remedies under this
Agreement or any existing by law shall operate as
7
<PAGE> 8
a waiver of any right or remedy of Lender with respect to any
obligations owed to it, and no single or partial exercise of any right
or remedy hereunder shall operate as a waiver or a preclusion to the
exercise of any other rights or remedies that Lender may have under
any other document.
c. Severability. Whenever possible, each provision of
this Agreement shall be interpreted in such a manner as to be
effective and valid under applicable law, but if any provision of this
Agreement shall be prohibited by or under applicable law, such
provision shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision and
the remaining provisions of this Agreement.
d. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York,
excluding its conflict of law rules.
e. Agents, Successors, and Assigns. This Agreement shall
be binding upon and inure to the benefit of the parties and their
agents, successors and assigns.
f. Counterparts. This Agreement may be executed in any
number of counterparts and shall be a valid and binding agreement when
all parties execute the original or a counterpart.
EXECUTED as of the date set forth above.
BORROWER: VMIF/ANDEN WAYSIDE VENTURE, an Illinois general
partnership
By: VMIF WAYSIDE L.P., an Illinois limited
partnership, general partner
By: VMIF WAYSIDE CORP., an Illinois
corporation, general partner
By: /s/ Robert G. Higgins
----------------------------
Printed Name: Robert G. Higgins
-------------------
Title: Vice President
-------------------------
By: VMIF WAYSIDE CORP., an Illinois
corporation, general partner
By: /s/ Robert G. Higgins
-------------------------------------
Printed Name: Robert G. Higgins
---------------------------
Title: Vice President
----------------------------------
8
<PAGE> 9
Address:
--------
c/o Banyan Mortgage Investment Fund
150 South Wacker Drive, Suite 2900
Chicago, Illinois 60606
Telephone: 312-553-9800
Facsimile: 312-553-0450
With a copy to:
Shefsky & Froelich Ltd.
444 North Michigan Avenue
Chicago, Illinois 60611
Attention: Michael J. Choate, Esq.
Telephone: 312-836-4066
Facsimile: 312-527-5921
9
<PAGE> 10
OBLIGOR: VMIF/ANDEN SOUTHBRIDGE VENTURE, an Illinois
general partnership
By: VMIF SOUTHBRIDGE L.P., an Illinois
limited partnership, general partner
By: VMIF SOUTHBRIDGE CORP., a
Delaware corporation, general
partner
By: /s/ Robert G. Higgins
----------------------------
Printed Name: Robert G. Higgins
------------------
Title: Vice President
-------------------------
By: VMIF SOUTHBRIDGE CORP., a Delaware
corporation, general partner
By: /s/ Robert G. Higgins
-------------------------------------
Printed Name: Robert G. Higgins
---------------------------
Title: Vice President
----------------------------------
Address:
--------
c/o Banyan Mortgage Investment Fund
150 South Wacker Drive, Suite 2900
Chicago, Illinois 60606
Telephone: 312-553-9800
Facsimile: 312-553-0450
With a copy to:
Shefsky & Froelich Ltd.
444 North Michigan Avenue
Chicago, Illinois 60611
Attention: Michael J. Choate, Esq.
Telephone: 312-836-4066
Facsimile: 312-527-5921
LENDER: RGI HOLDINGS, INC., a Washington corporation
By: /s/ Kenneth L. Uptain
---------------------------------------------
Printed Name: Kenneth L. Uptain
------------------------------------
Title: President
------------------------------------------
Address:
--------
U.S. Bank Centre
1420 Fifth Avenue, 42nd Floor
Seattle, Washington 98101-2333
Telephone: 206-464-0200
Telecopy: 206-448-0404
10
<PAGE> 11
With a copy to:
Davis Wright Tremaine
1501 Fourth Avenue
2600 Century Square
Seattle, Washington 98101-1688
Attention: Richard M. Rawson
Telephone: 206-628-7746
Telecopy: 206-628-7699
11
<PAGE> 12
EXHIBIT A
Amounts owed by Borrower as of April 30, 1996:
<TABLE>
<S> <C>
Principal balance as of 9/30/95: $6,360,000.00
Accrued interest 9/30/95 - 12/31/95: $287,701.66
-------------
Principal plus capitalized interest: $6,647,701.66
Accrued Interest from 1/1/96 - 1/30/96:
6,647,701.66 x 14.5% x 30 days / 360 days = $80,326.40
Accrued Interest from 1/31/96 - 4/30/96:
6,647,701.66 x 14.25% x 91 days / 360 days = $239,455.75
-------------
Total accrued interest: $319,782.15
Legal Fees as of December 31, 1995 $24,009.25
Late Fees ($6,360,000 + $607,483.81) x 4% = $278,699.35
Amounts to be paid by Borrower at Closing:
Accrued interest from 1/1/96 - 4/30/96: $319,782.15
Legal Fees: $24,009.25
Late Fees: $278,699.35
-------------
Total to be paid at Closing: $622,490.75
Amounts owed by Borrower as of May 1, 1996:
Principal balance: $6,647,701.66
Amount credited from SoGen at Closing: $250,000.00
-------------
Principal balance after Closing: $6,397,701.66
</TABLE>
12
<PAGE> 13
EXHIBIT B
AFTER RECORDING, RETURN TO:
Richard M. Rawson, Esq.
Davis Wright Tremaine
2600 Century Square
1501 Fourth Avenue
Seattle, Washington 98101-1688
================================================================================
AMENDMENT NO. 1 TO
DEED OF TRUST MODIFICATION
AND SUBSTITUTION OF TRUSTEE AGREEMENT
THIS AMENDMENT NO. 1 TO DEED OF TRUST MODIFICATION AND SUBSTITUTION OF
TRUSTEE AGREEMENT (this "Amendment") is made as of May 21, 1996, by and between
VMIF/ANDEN SOUTHBRIDGE VENTURE, an Illinois general partnership, having an
office in care of Banyan Management Corporation, 150 South Wacker Drive,
Chicago, Illinois 60606 ("Grantor"); RGI HOLDINGS, INC., a Washington
corporation, having an office at U.S. Bank Centre, 1420 Fifth Avenue, 42nd
Floor, Seattle, Washington 98101-2333 ("Beneficiary/Assignee"); and STEWART
TITLE AND ESCROW, INC., a Virginia corporation, having an address at 10505
Judicial Drive, Suite 300, Fairfax, Virginia 22030 ("Trustee").
R E C I T A L S
WHEREAS, on January 11, 1995, Societe Generale, Southwest Agency, a
U.S. agency of a French banking corporation, as beneficiary ("Assignor"),
Grantor as grantor, and Trustee as trustee, made that certain Deed of Trust
Modification and Substitution of Trustee Agreement subsequently recorded in
Book 2214, Page 1978, of the real property records of Prince William County,
Virginia (the "Modification"), which amended four deeds of trust, each of which
was entitled Deed of Trust, Assignment of Rents and Security Agreement and
dated as of September 21, 1992, and which were recorded in Book 1893, Page 577
[Goldblatt Parcel]; Book 1893, Page 542 [Clark Parcel]; Book 1893, Page 469
[Williams Parcel]; and Book 1893, Page 505 [Possum Point Parcel]; of the real
property records of Prince William County, Virginia (collectively, the "Deeds
of Trust"); and
WHEREAS, Grantor executed and delivered the Deeds of Trust, the
Modification, and other documents relating thereto in exchange for valuable
consideration given to Grantor by
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<PAGE> 14
VMIF/Anden Wayside Venture, an Illinois general partnership ("Wayside"), the
maker of certain obligations secured by the Deeds of Trust, as amended by the
Modification; and
WHEREAS, on May 21, 1996, immediately prior to the making of this
Amendment, Assignor transferred, conveyed, and assigned to
Beneficiary/Assignee, and Beneficiary/Assignee accepted from Assignor, all of
Assignor's rights, title and interest in and to the Modification and the loan
and loan documents to which the Modification relates; and
WHEREAS, Grantor and Beneficiary/Assignee desire to amend and correct
the Modification.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties do hereby covenant
and agree for themselves and their respective heirs, personal representatives,
successors, and assigns as follows:
A G R E E M E N T
16. The following definition shall replace the definition of
"Contracts" within the section entitled, "Certain Definitions," at page 4 of
the Modification:
"Contracts" means any and all contracts now in effect
and/or hereafter entered into with respect to the Premises
and/or any part or parts thereof.
17. The following definition shall be added to the Modification
within the section entitled, "Certain Definitions," at page 4 of the
Modification:
"Property" means the real property legally described
on Exhibit A attached hereto.
18. The following definition shall be added to the Modification
within the section entitled, "Certain Definitions," at page 4 of the
Modification:
"Restated Note" means the note given by Wayside to
Beneficiary that modifies, amends, extends, and restates in
its entirety the Amended Note.
19. At page 5 of the Modification, the words "Mortgaged Mortgaged
Property" shall be replaced by the words "Mortgaged Property."
14
<PAGE> 15
20. The word "Grantor" shall be replaced by the word "Wayside" in
the following places in the Modification:
a. Line 3, page 3; and
b. The definition of "New Loan Agreement" at page 4.
21. The Modification amends the Deeds of Trust. The Modification
does not merge the four Deeds of Trust into a single deed of trust. The Deeds
of Trust comprise four separate and distinct Deeds of Trust, as amended by the
Modification.
22. The Modification, this Amendment, and all other prior
amendments and modifications to the Deeds of Trust do not affect the priorities
of the liens perfected by the recordation of the Deeds of Trust.
23. This Amendment may be executed and delivered in counterparts.
24. Grantor hereby acknowledges and reaffirms its representations,
warranties, covenants, and obligations under the Deeds of Trust, as amended by
the Modification, as amended hereby.
IN WITNESS WHEREOF, this Amendment has been duly executed by Grantor,
Beneficiary/Assignee, and Trustee.
GRANTOR: VMIF/ANDEN SOUTHBRIDGE VENTURE, an Illinois
general partnership
By: VMIF SOUTHBRIDGE L.P., an Illinois
limited partnership, a general partner
By: VMIF SOUTHBRIDGE CORP., a
Delaware corporation, its
general partner
By /s/Robert G. Higgins
----------------------------
Name: Robert G. Higgins
-------------------------
Title: Vice President
------------------------
By: VMIF SOUTHBRIDGE CORP., a Delaware
corporation, a general partner
By: /s/ Robert G. Higgins
-------------------------------
Name: Robert G. Higgins
---------------------------------
Title: Vice President
--------------------------------
15
<PAGE> 16
BENEFICIARY/ASSIGNEE: RGI HOLDINGS, INC.
By: /s/ Kenneth L. Uptain
------------------------------------
Kenneth L. Uptain
President
TRUSTEE: STEWART TITLE AND ESCROW, INC., a Virginia
corporation
By: /s/ Lisa Overton
------------------------------------
Lisa Overton
Senior Vice President
16
<PAGE> 17
STATE OF ILLINOIS )
) ss.
COUNTY OF COOK )
On this _____ day of May, 1996, before me, a Notary Public in and for
the State of Illinois, personally appeared ________________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person who signed this instrument; on oath stated that he was
authorized to execute the instrument as the ____________________________ of
VMIF SOUTHBRIDGE CORP., general partner of VMIF SOUTHBRIDGE L.P., general
partner of VMIF/ANDEN SOUTHBRIDGE VENTURE, and acknowledged said instrument to
be his free and voluntary act and deed, as partner, for the uses and purposes
therein mentioned.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal the
day and year first above written.
_______________________________________
NOTARY PUBLIC in and for the State of
Illinois, residing at _________________
My appointment expires ________________
Print Name ____________________________
STATE OF ILLINOIS )
) ss.
COUNTY OF COOK )
On this _____ day of May, 1996, before me, a Notary Public in and for
the State of Illinois, personally appeared ________________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person who signed this instrument; on oath stated that he was
authorized to execute the instrument as the ____________________________ of
VMIF SOUTHBRIDGE CORP., general partner of VMIF/ANDEN SOUTHBRIDGE VENTURE, and
acknowledged said instrument to be his free and voluntary act and deed, as
partner, for the uses and purposes therein mentioned.
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<PAGE> 18
IN WITNESS WHEREOF, I have hereunto set my hand and official seal the
day and year first above written.
________________________________________
NOTARY PUBLIC in and for the State of
Illinois, residing at _________________
My appointment expires ________________
Print Name ____________________________
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
On this _____ day of May, 1996, before me, a Notary Public in and for
the State of Washington, personally appeared Kenneth Uptain, personally known
to me (or proved to me on the basis of satisfactory evidence) to be the person
who executed this instrument, on oath stated that he was authorized to execute
the instrument, and acknowledged it as the President of RGI HOLDINGS, INC., to
be the free and voluntary act and deed of said corporation for the uses and
purposes mentioned in the instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal the
day and year first above written.
_______________________________________
NOTARY PUBLIC in and for the State of
Washington, residing at _______________
My appointment expires ________________
Print Name ____________________________
STATE OF VIRGINIA )
) ss.
COUNTY OF ______________ )
On this _____ day of May, 1996, before me, a Notary Public in and for
the State of Virginia, personally appeared Lisa Overton, personally known to me
(or proved to me on the basis of satisfactory evidence) to be the person who
executed this instrument, on oath stated that she was authorized to execute the
instrument, and acknowledged it as the Senior Vice President of STEWART TITLE
AND ESCROW, INC., to be the free and voluntary act
18
<PAGE> 19
and deed of said corporation for the uses and purposes mentioned in the
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal the
day and year first above written.
_______________________________________
NOTARY PUBLIC in and for the State of
Virginia, residing at _________________
My appointment expires ________________
Print Name ____________________________
19
