SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 13D
Under the Securities Exchange Act of 1934
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ROC COMMUNITIES, INC.
(Name of Issuer)
Common Stock, $.01 Par Value Per Share
(Title of Class of Securities)
749650-0-7
(CUSIP Number)
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C.G. Kellogg
Chateau Properties, Inc.
19500 Hall Road
Clinton Townshp, Michigan 48038
(810) 286-3600
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
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Copy to:
Henry J. Brennan
Timmis & Inman L.L.P.
300 Talon Centre
Detroit, Michigan 48207
(313) 396-4200
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July 17, 1996
(Date of event which requires filing of this statement)
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/ / Check box if the filing person has previously filed a statement on
Schedule 13G to report the / / acquisition which is the subject of
this Schedule 13D, and is filing this schedule because of Rule
13d-1(b)(3) or (4).
/ X / Check box is a fee is being paid with the statement.
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Page 1 of 31
Exhibit Index at Page 9
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CUSIP No. 749650-0-7 Page 2 of 31 Pages
13D
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1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON
CHATEAU PROPERTIES, INC.
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP ______
(a) /_____/
______
(b) /_____/
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3. SEC USE ONLY
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4. SOURCE OF FUNDS
WC/OO
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED _______
PURSUANT TO ITEM 2(d) OR 2(e) /______/
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
MARYLAND
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7. SOLE VOTING POWER
NUMBER OF
0
UNITS ---------------------------------------------------------------
8. SHARED VOTING POWER
BENEFICIALLY
594,063
OWNED BY ---------------------------------------------------------------
9. SOLE DISPOSITIVE POWER
EACH
420,000*
REPORTING ---------------------------------------------------------------
10. SHARED DISPOSITIVE POWER
PERSON WITH
0
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,014,063**
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12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES ______
SHARES CERTAIN /_____/
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.9%
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14. TYPE OF REPORTING PERSON
CO
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* Beneficial ownership is disclaimed with respect to all of such shares.
See Item 5.
** Beneficial ownership is disclaimed with respect to 420,000 of such shares.
See Item 5.
<PAGE>
Item 1. Security and Issuer.
This Schedule 13D (this "Schedule") relates to shares of common
stock, par value $0.01 per share ("Shares") of ROC Communities, Inc., a
Maryland corporation ("ROC"). The principal executive offices of ROC are
located at 6430 South Quebec Street, Englewood, Colorado 80111.
Item 2. Identity and Background.
(a)-(c) The person filing this statement is Chateau Properties,
Inc., a Maryland corporation ("Chateau"). The principal executive office of
Chateau is located at 19500 Hall Road, Clinton Township, Michigan 48038.
Chateau is a real estate investment trust primarily engaged in the ownership,
operation and management of manufactured home communities.
Pursuant to General Instruction C of Schedule 13D, the names,
business addresses, principal occupations and citizenship of the executive
officers and directors of Chateau are set forth in Annex A hereto and are
incorporated herein by reference.
(d)-(e) During the last five years, neither Chateau nor, to the
knowledge of Chateau, any of the executive officers and directors of Chateau
listed in Annex A has (i) been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors) or (ii) been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction and
as a result of such proceeding was or is subject to a judgment, decree or
final order enjoining further violations of or prohibiting, activities subject
to federal or state securities laws or final order enjoining further
violations of or prohibiting activities subject to federal or state securities
laws or finding any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
On July 17, 1996, ROC, Chateau, Chateau Communities, Inc., a
Maryland corporation ("Chateau Communities") organized by ROC and Chateau, and
R Acquisition Sub, Inc., a Maryland corporation and a subsidiary of Chateau
Communities ("RSub"), entered into an Agreement and Plan of Merger (the
"Merger Agreement"), pursuant to which Chateau will merge with Chateau
Communities, with Chateau Communities surviving such merger (the "Chateau
Merger"), and ROC will merge with RSub, with ROC surviving such merger (the
"ROC Merger" and, together with the Chateau Merger, the "Mergers").
As a result of the Mergers, each outstanding share of common
stock, par value $.01 per share, of ROC ("ROC Common Stock") and non-voting
redeemable stock, par value $.01 per share, of ROC ("ROC Non-Voting Stock")
will be converted into 1.042 shares of common stock, par value $.0001 per
share, of Chateau Communities ("Chateau Communities Common Stock"), and each
outstanding share of common stock, par value $.01 per share, of Chateau
("Chateau Common Stock") will be converted into one share of Chateau
Communities Common Stock. The Mergers were announced in a press release issued
by ROC and Chateau on July 18, 1996. The Mergers are subject to a number of
conditions, as described in the Merger Agreement.
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<PAGE>
Concurrently with entering into the Merger Agreement, Chateau
was granted the ROC Option (defined in Item 4 below) and received the ROC
Principal Proxy (defined in Item 4 below) entitling Chateau to vote the shares
of ROC Common Stock held by certain officers of ROC in favor of the ROC
Merger. None of the triggering events permitting exercise of the ROC Option
has occurred as of the date of this Schedule 13D. In the event that the ROC
Option becomes exercisable and Chateau wishes to purchase for cash the ROC
Common Stock subject thereto, Chateau anticipates that it would fund the
exercise price from working capital or through other sources, which could
include borrowings.
Item 4. Purpose of the Transaction.
Concurrently with the execution and delivery of the Merger
Agreement, ROC entered into a Stock Option Agreement(the "ROC Option
Agreement") with CP Limited Partnership, a Maryland limited partnership of
which Chateau is the sole general partner (the "Operating Partnership"),
whereby ROC has granted to the Operating Partnership an option to purchase up
to 420,000 shares of ROC Common Stock, exercisable by the Operating
Partnership, in whole or in part, at any time or from time to time after the
Merger Agreement becomes terminable by Chateau under circumstances which could
entitle the Operating Partnership to receive the Chateau Break-Up Expenses or
the Chateau Break-Up Fee under Section 8.2(b) of the Merger Agreement,
regardless of whether the Merger Agreement is actually terminated (any such
event by which the Merger Agreement becomes so terminable by Chateau being
referred to herein as a "Chateau Trigger Event"). The right of the Operating
Partnership to exercise its option shall terminate on the date which is 365
days after the date that ROC shall notify the Operating Partnership in writing
of the occurrence of any Chateau Trigger Event. Chateau has also entered into
a Stock Option Agreement (the "Chateau Option Agreement" and, together with
the ROC Option Agreement, the "Reciprocal Option Agreements") with ROC whereby
Chateau has granted to ROC an option to purchase up to 420,000 shares of
Chateau Common Stock, exercisable by ROC, in whole or in part, at any time or
from time to time after the Merger Agreement becomes terminable by ROC under
circumstances which could entitle ROC to receive the ROC Break-Up Expenses or
the ROC Break-Up Fee under Section 8.2(d) of the Merger Agreement, regardless
of whether the Merger Agreement is actually terminated (any such event by
which the Merger Agreement becomes so terminable by ROC being referred to
herein as a "ROC Trigger Event"). The right of ROC to exercise its option
shall terminate on the date which is 365 days after the date that Chateau
shall notify ROC in writing of the occurrence of any ROC Trigger Event.
Notwithstanding any other provisions of the Reciprocal Option Agreements, the
Total Profit (as defined) which either ROC or the Operating Partnership, as
grantee of a stock option (the "Option") issued by Chateau or ROC,
respectively, may realize from the Option may not exceed $10 million plus the
applicable amount of Break-Up Expenses (as defined in the Merger Agreement).
In connection with the Merger Agreement, certain holders of
Chateau Common Stock delivered to ROC an Agreement and Irrevocable Proxy (the
"Chateau Principal Proxy") to vote their shares of Chateau Common Stock in
favor of the Chateau Merger and the approval and adoption of the Merger
Agreement and the other transactions contemplated thereby, and certain holders
of ROC Common Stock delivered to Chateau an Agreement and Irrevocable Proxy
(the "ROC Principal Proxy") to vote their shares of ROC Common Stock in favor
of the ROC Merger and the approval and adoption of the Merger Agreement and
the other transactions contemplated thereby. Copies of
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<PAGE>
the ROC Principal Proxy and the Chateau Principal Proxy are attached hereto as
Exhibits 7.1 and 7.2, respectively, and are incorporated herein by reference.
If the Mergers are approved by Chateau's stockholders and ROC's
stockholders and consummated, as a result of the Mergers ROC will become a
substantially owned subsidiary of Chateau Communities. In connection with the
Mergers, the composition of ROC's board would change, its charter and bylaws
will be amended and shares of its common stock will be delisted from the New
York Stock Exchange. Except as set forth in this Item 4, Chateau has no plans
or proposals which relate to or would result in any of the matters set forth
in clauses (a) through (j) of Item 4 of Schedule 13D.
The preceding summary of certain provisions of the Chateau
Option Agreement, the ROC Option Agreement, the Chateau Principal Proxy and
the ROC Principal Proxy, copies of which are filed as exhibits hereto, is not
intended to be complete and is qualified in its entirety by reference to the
full text of such agreements.
Item 5. Interest in Securities of the Issuer.
(a)-(b) Pursuant to the ROC Option Agreement, the Operating
Partnership has the right, exercisable only in certain circumstances, none of
which have occurred as of the date hereof, to acquire up to 420,000 shares of
ROC Common Stock, which would represent beneficial ownership of approximately
3.3% of the shares of ROC Common Stock outstanding after giving effect to the
issuance of these 420,000 shares. If the Operating Partnership were to acquire
such shares Chateau, as the general partner of the Operating Partnership,
would have sole voting and, subject to certain restrictions set forth in the
ROC Option Agreement, investment power with respect thereto. Because of the
limited circumstances in which the option granted under the ROC Option
Agreement is exercisable, Chateau disclaims beneficial ownership of such
shares of ROC Common Stock subject to the ROC Option Agreement.
Pursuant to the ROC Principal Proxy, Chateau has sole voting
power with respect to 594,063 shares of Chateau Common Stock, representing
approximately 4.8% of the shares of ROC Common Stock currently outstanding,
for the purpose of voting in favor of the ROC Merger and the approval and
adoption of the Merger Agreement and the other transactions contemplated
thereby. Chateau does not have dispositive power with respect to such shares
nor does it have voting power with respect to such shares except with regard
to the ROC Merger and matters relating thereto.
To the best of its knowledge, no executive officer or director
of Chateau beneficially owns any shares of ROC Common Stock.
(c) Except as described above, there have been no transactions
in shares of ROC Common Stock by Chateau, or, to the best knowledge of
Chateau, any of Chateau's executives officers and directors during the past 60
days.
(d)-(e) Not applicable.
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<PAGE>
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.
On June 4, 1996 Chateau and ROC entered into a Confidentiality
and Standstill Agreement, which was amended on June 20 and 21, 1996, which
provides that until June 4, 1997 Chateau will not, without ROC's prior
consent, acquire any shares of ROC's Common Stock nor will it commence any
tender offer, proxy solicitation or other proposal for an extraordinary
corporate transaction. Except as set forth herein, neither Chateau nor, to the
best knowledge of Chateau, any of its directors or executive officers, has any
contracts, arrangements, understandings or relationships (legal or otherwise)
with any other person with respect to any securities of ROC.
Item 7. Material to be Filed as Exhibits.
Exhibit 7.1 Agreement and Irrevocable Proxy, dated as of July
17, 1996, by and between Gary P. McDaniel, Steven
G. Davis, James B. Grange and Rees F. Davis, Jr.,
and Chateau Properties, Inc.
Exhibit 7.2 Stock Option Agreement dated as of July 17, 1996
between ROC Communities, Inc., as issuer, and CP
Limited Partnership, as Grantee.
Exhibit 7.3 Confidentiality and Standstill Agreement dated as
of June 4, 1996 between Chateau Properties, Inc.
and ROC Communities, Inc., as amended June 20 and
21, 1996.
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<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: July 31, 1996
CHATEAU PROPERTIES, INC.
By: /s/ Tamara D. Fischer
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Executive Vice President and
Chief Financial Officer
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<PAGE>
ANNEX A
IDENTITY AND BACKGROUND
The following table sets forth the names, addresses and principal
occupations of the executive officers and directors of Chateau. Each such
person is a citizen of the United States. The business address of each
executive officer of Chateau is 19500 Hall Road, Clinton Township, Michigan
48038.
Name and Address Occupation
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John A. Boll Chairman of the Board of Directors of Chateau
C.G. Kellogg President and Chief Executive Officer and
Director of Chateau
Tamara D. Fischer Chief Financial Officer of Chateau
Gebran S. Anton, Jr. Director - owner of Gebran Anton Development
Company and Anton Zorn & Associates, Inc., a
commercial and industrial real estate broker
Jay G. Rudolph Director - interim Director of Finance
and administration of Renaissance Center
Management Company; retired partner of Coopers
and Lybrand L.L.P.
Edward R. Allen Director - engaged in various real estate
development projects, formerly Chairman and Chief
Executive Officer of InterCoastal Communities,
Inc.
James M. Lane Director - retired Senior Vice President in
charge of NDB Bank's Trust Investment Division
Kenneth E. Myers Director - President and Chief Executive Officer
of William Beaumont Hospital
A-1
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EXHIBIT INDEX
Sequential
Page
Exhibit Number Exhibit Description Number
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Exhibit 7.1 Agreement and Irrevocable Proxy, dated as of 10
July 17, 1996, by and between Gary P. McDaniel,
Steven G. Davis, James B. Grange and Rees F.
Davis, Jr., and Chateau Properties, Inc.
Exhibit 7.2 Stock Option Agreement dated as of July 17, 1996 14
between ROC Communities, Inc., as issuer, and CP
Limited Partnership, as Grantee.
Exhibit 7.3 Confidentiality and Standstill Agreement dated as 26
of June 4, 1996 between Chateau Properties, Inc.
and ROC Communities, Inc., as amended June 20
and 21, 1996.
EXHIBIT 7.1
AGREEMENT AND IRREVOCABLE PROXY
AGREEMENT and IRREVOCABLE PROXY (the "Agreement"), dated as of July
17, 1996, by and between Gary P. McDaniel, Steven G. Davis, James B. Grange
and Rees F. Davis, Jr., certain principal stockholders of ROC Communities,
Inc. (the "ROC Stockholders"), and Chateau Properties, Inc., a Maryland
corporation ("Chateau").
WHEREAS, the ROC Stockholders are the owners, beneficially or of
record, of certain shares of common stock, par value $0.01 per share (all such
shares, the "ROC Shares"), of ROC Communities, Inc., a Maryland corporation
("ROC"); and
WHEREAS, both ROC and Chateau plan to enter into an Agreement and
Plan of Merger (the "Merger Agreement") with Chateau Communities, Inc., a
Maryland corporation (the "Company") and R Acquisition Sub, Inc., a Maryland
corporation and a wholly-owned subsidiary of the Company ("RSub"), pursuant to
which RSub will merge with and into ROC and Chateau will merge with and into
the Company (the "Merger"); and
WHEREAS, the ROC Stockholders would like to ensure that certain
principal stockholders of Chateau (the "Chateau Stockholders"), who are the
owners, beneficially or of record, of certain shares of common stock, par
value $0.01 per share, of Chateau (all such shares, the "Chateau Shares"),
vote or cause to be voted all of the Chateau Shares in favor of the Merger,
and the Chateau Stockholders would like to ensure that the ROC Stockholders
vote or cause to be voted all of the ROC Shares in favor of the Merger; and
WHEREAS, in order to provide such assurance, the ROC Stockholders
wish to grant to Chateau an irrevocable proxy (the "Proxy"), coupled with an
interest in the form of a reciprocal proxy of even date herewith granted to
ROC by the Chateau Stockholders, to vote or cause to be voted all of the ROC
Shares in favor of the Merger, upon the terms and subject to the conditions
hereof;
NOW, THEREFORE, in consideration of the promises and mutual covenants
provided herein, and other good and sufficient consideration, the receipt of
which is acknowledged by each party hereto, the parties hereto agree as
follows:
1. Proxy.
(a) The ROC Stockholders hereby irrevocably constitute and appoint
Chateau as their true and lawful proxy and attorney-in-fact, for and in the
name, place and stead of the ROC Stockholders, solely to vote or cause to be
voted all of the ROC Shares, together with any additional shares of ROC common
stock that such ROC Stockholders shall acquire between the date of this
Agreement and the date of termination of this Agreement, in favor of the
Merger and the other transactions contemplated in connection therewith, at any
annual, special or other
<PAGE>
meeting of the stockholders of ROC, and at any adjournment or postponements
thereof (a "Meeting"), or pursuant to any written consent in lieu of a meeting
or otherwise.
(b) In the event that Chateau is unable or declines to
exercise the power and authority granted by the Proxy for any reason, the ROC
Stockholders covenant and agree to vote or cause to be voted all of the ROC
Shares in favor of approval and adoption of the Merger and the other
transactions contemplated in connection therewith at any Meeting and, upon
request of Chateau, to provide their written consent thereto.
(c) The ROC Stockholders hereby covenant and agree that they
will not vote, cause to be voted or take any action by written consent of
stockholders in lieu of a meeting on any matter which is subject to the Proxy
without the prior written consent of Chateau, and will promptly provide
Chateau with copies of any stockholder notices given by ROC and received by
the ROC Stockholders.
2. Covenants. The ROC Stockholders, individually, hereby covenant and
agree that they will not, and will not agree to, directly or indirectly, sell,
transfer, assign, pledge, hypothecate, cause to be redeemed or otherwise
dispose of any of the ROC Shares, or grant any proxy, power-of-attorney or
other authorization or interest in or with respect to such ROC Shares, or
deposit such ROC Shares into a voting trust or enter into a voting agreement
or arrangement with respect to such ROC Shares unless and until they shall
have taken all actions (including, without limitation, the endorsement of a
legend on the certificates evidencing such ROC Shares) necessary to ensure
that such ROC Shares shall at all times be subject to the rights, powers and
privileges granted or conferred, and subject to all the restrictions,
covenants and limitations imposed, by this Agreement and shall have caused any
transferee of any of the ROC Shares to execute and deliver to the other party
hereto, an Agreement and Irrevocable Proxy consistent with the terms contained
herein.
3. Representation and Warranty. Each of the ROC Stockholders
represents and warrants to Chateau that he, she, or it has full power and
authority to enter into this Agreement, to grant the Proxy and to perform its
obligations hereunder.
4. Miscellaneous.
(a) The terms and provisions of this Agreement shall be
governed by and construed in accordance with the laws of the State of Maryland
without giving effect to the conflicts of law provisions thereof.
(b) THE ROC STOCKHOLDERS AND CHATEAU AGREE THAT THE PROXY
AND ALL OTHER POWER AND AUTHORITY INTENDED TO BE CONFERRED HEREBY ARE COUPLED
WITH AN INTEREST SUFFICIENT IN LAW TO SUPPORT AN IRREVOCABLE POWER AND SHALL
NOT BE TERMINATED BY ANY ACT OF THE ROC STOCKHOLDERS OR CHATEAU, BY LACK OF
APPROPRIATE POWER OR AUTHORITY OR BY THE OCCURRENCE OF ANY OTHER EVENT OR
EVENTS EXCEPT AS PROVIDED HEREIN.
2
<PAGE>
(c) THIS POWER OF ATTORNEY SHALL NOT BE AFFECTED BY THE
DISABILITY OF ANY ROC STOCKHOLDER.
(d) This Agreement and the Proxy granted hereunder shall
terminate immediately upon the termination of the Merger Agreement or the
consummation of the transactions contemplated thereby.
(e) The ROC Stockholders acknowledge and agree that
performance of their respective obligations hereunder will confer a unique
benefit on Chateau and that a failure of performance will result in
irreparable harm to the other and will not be compensable by money damages.
The parties therefore agree that this Agreement, including the Proxy, shall be
specifically enforceable and that specific enforcement and injunctive relief
shall be remedies properly available to the other party for any breach of any
agreement, covenant or representation of the other hereunder. The terms and
provisions of this Agreement shall be binding upon, inure to the benefit of,
and be enforceable by and against the personal representatives, heirs,
successors and assigns of the parties hereto.
(f) The ROC Stockholders will, upon request, execute and
deliver any additional documents and take such further actions as may
reasonably be deemed by Chateau to be necessary or desirable to complete the
proxies granted herein or to carry out the provisions hereof.
(g) If any term, provision, covenant or restriction of this
Agreement, or the application thereof to any circumstance, shall, to any
extent, be held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement or the application thereof to any other
circumstance, shall remain in full force and effect, shall not in any way be
affected, impaired or invalidated and shall be enforced to the fullest extent
permitted by law.
(h) This Agreement may be executed in counterparts, each of
which shall be deemed to be an original but all of which together shall
constitute one and the same document.
3
<PAGE>
IN WITNESS WHEREOF, the ROC Stockholders and Chateau have
duly executed this Agreement or caused this Agreement to be duly executed as
of the date first above written.
CHATEAU PROPERTIES, INC.
By: /s/ C. G. Kellogg
-----------------
Name: C. G. Kellogg
Title: President and CEO
STOCKHOLDERS
Name: /s/ Gary P. McDaniels Name: /s/ Steven G. Davis
--------------------- -------------------
Gary P. McDaniel Steven G. Davis
Name: /s/ James B. Grange Name: /s/ Rees F. Davis, Jr.
------------------- ----------------------
James B. Grange Rees F. Davis, Jr.
4
EXHIBIT 7.2
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated as of July 17, 1996, between
CP LIMITED PARTNERSHIP, a Maryla limited partnership ("Grantee"), a ROC
COMMUNITIES, INC., a Maryla corporation ("Issuer").
RECITALS
(a) Issuer, Chateau Properties, Inc., a Maryla Corporation
("Chateau"), Chateau Communities, Inc., a Maryla corporation organized by
Chateau a Issuer ("Chateau Communities"), a a merger subsidiary of Chateau
Communities have entered into an Agreement a Plan of Merger dated as of the
date hereof (the "Merger Agreement").
(b) As a coition to, a simultaneously with the execution
of the Merger Agreement a in consideration therefor a in consideration of
the option granted pursuant to the stock option agreement dated the date
hereof between Chateau Properties, Inc., a Maryla corporation, as issuer of
such option, a Issuer, as grantee of such option, Issuer has agreed to grant
Grantee the Option (as herein defined).
(c) Capitalized terms used in this Agreement a not defined
herein shall have the meanings assigned thereto in the Merger Agreement.
NOW, THEREFORE, in consideration of the foregoing a the
mutual covenants a agreements set forth herein a in the Merger Agreement,
the parties hereto agree as follows:
1. Issuer hereby grants to Grantee an uncoitional,
irrevocable option (the "Option") to purchase, subject to the terms hereof, up
to 420,000 fully paid a nonassessable shares of the common stock, $.01 par
value per share, of Issuer (the "Common Stock"), at a price per share equal to
the last reported sale price per share of Common Stock as reported on the
consolidated tape for the NYSE on July 17, 1996 (such price being referred to
herein as the "Option Price"). The number of shares of Common Stock that may
be received upon the exercise of the Option a the Option Price are subject
to adjustment as herein set forth.
2. (a) Subject to Section 2(h), the Option may be exercised
by Grantee, in whole or in part, at any time or from time to time after the
Merger Agreement becomes terminable by Chateau uer circumstances which could
entitle Grantee to receive the Chateau Break-Up Expenses or the Chateau
Break-Up Fee uer Section 8.2(b) of the Merger Agreement, regardless of
whether the Merger Agreement is actually terminated (any such event by which
the
<PAGE>
Merger Agreement becomes so terminable by Chateau being referred to herein as
a "Trigger Event").
(b) Issuer shall notify Grantee promptly in writing of the
occurrence of any Trigger Event, it being uerstood that the giving of such
notice by Issuer shall not be a coition to the right of Grantee to exercise
the Option.
(c) In the event Grantee is entitled to a wishes to
exercise the Option, it shall se to Issuer a written notice (the date of
which being herein referred to as the "Notice Date") specifying (i) the total
number of shares it will purchase pursuant to such exercise a (ii) a place
a date not earlier than three business days nor later than 60 business days
from the Notice Date for the closing of such purchase (the "Closing Date").
Any exercise of the Option shall be deemed to occur on the Notice Date
relating thereto.
(d) At the closing referred to in Section 2(c), Grantee
shall (i) pay to Issuer the aggregate Option Price for the shares of Common
Stock purchased pursuant to the exercise of the Option in immediately
available fus by wire transfer to a bank account designated by Issuer,
provided that failure or refusal of Issuer to designate such a bank account
shall not preclude Grantee from exercising the Option a (ii) present a
surreer this Agreement to Issuer at its principal executive offices.
(e) At such closing, simultaneously with the delivery of
immediately available fus as provided in Section 2(d), Issuer shall deliver
to Grantee a certificate or certificates representing the number of shares of
Common Stock purchased hereuer, in the name of Grantee or its assignee,
transferee or designee, a, if the Option is being exercised in part only, a
new Option evidencing the rights of Grantee to purchase the balance of the
shares purchasable hereuer.
(f) Certificates for Common Stock delivered at a closing
hereuer may be eorsed with a restrictive lege substantially
in the following form:
"The shares represented by this certificate are subject to
certain provisions of an agreement between the registered
holder hereof a Issuer a to resale restrictions arising
uer the Securities Act of 1933, as ameed. A copy of such
agreement is on file at the principal office of Issuer a
will be provided to the holder hereof without charge upon
receipt by Issuer of a written request therefor."
It is understood a agreed that: (i) the reference to the
resale restrictions of the Securities Act of 1933, as ameed (the "1933
Act"), in the above lege shall be removed by delivery
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<PAGE>
of substitute certificate(s) without such reference if the applicable holder
thereof shall have delivered to Issuer an opinion of counsel, in form a
substance reasonably satisfactory to Issuer, to the effect that such lege is
not required for purposes of the 1933 Act; (ii) the reference to the
provisions of this Agreement in the above lege shall be removed by delivery
of substitute certificate(s) without such reference if the shares have been
sold or transferred in compliance with the provisions of this Agreement a
uer circumstances that do not require the retention of such reference; a
(iii) the above lege shall be removed in its entirety if the coitions in
the preceding clauses (i) a (ii) are both satisfied. In addition, such
certificates shall bear any other lege as may be required by law or the
provisions of Issuer's Charter to the extent that such Charter provisions
apply generally to all shares of Common Stock issued by Issuer.
(g) On the Closing Date provided for uer Section 2(c) a
upon the teer of the applicable Option Price in immediately available fus,
Grantee shall be deemed to be the holder of record of the shares of Common
Stock issuable upon such exercise, notwithstaing that the stock transfer
books of Issuer shall then be closed or that certificates representing such
shares of Common Stock shall not then be actually delivered to Grantee. Issuer
shall pay all expenses, a any a all United States federal, state a local
taxes a other charges that may be payable in connection with the
preparation, issue a delivery of stock certificates uer this Section 2 in
the name of Grantee or its assignee, transferee or designee.
(h) The right of Grantee to exercise the Option shall
terminate on the date which is 365 days after the date that Issuer shall
notify Grantee in writing of the occurrence of any Trigger Event as specified
in Section 2(b).
3. Issuer agrees: (i) that it shall at all times maintain,
free from preemptive rights, sufficient authorized but unissued shares of
Common Stock so that the Option may be exercised without additional
authorization of Common Stock after giving effect to all other options,
warrants, convertible securities a other rights to purchase Common Stock;
(ii) that it will not, by Charter amement or through reorganization,
consolidation, merger, dissolution or sale of assets, or by any other
voluntary act, avoid or seek to avoid the observance or performance of any of
the covenants, stipulations or coitions to be observed or performed
hereuer by Issuer; a (iii) promptly to take all action as may from time to
time be required (including waivers of any ownership limitations or similar
provisions in Issuer's Charter) in order to permit Grantee to exercise the
Option a Issuer duly a effectively to issue shares of Common Stock
pursuant hereto.
4. Upon receipt by Issuer of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this
Agreement, a (in the case of loss, theft or destruction) of reasonably
satisfactory iemnification, a upon surreer a
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cancellation of this Agreement, if mutilated, Issuer will execute a deliver a
new Agreement of like tenor a date. Any such new Agreement executed a
delivered shall constitute an additional contractual obligation on the part of
Issuer, whether or not the Agreement so lost, stolen, destroyed or mutilated
shall at any time be enforceable by anyone.
5. Notwithstaing any contrary provisions contained in this
Agreement a without denigration of any restriction on Issuer contained in the
Merger Agreement, in the event of any change in the Common Stock of Issuer by
reason of stock divides, splitups, mergers (other than the Mergers),
recapitalization, combinations, exchange of shares or the like (other than the
exercise or exchange of options outstaing as of the date hereof uer the 1993
Stock Plan), the type a number of shares or securities subject to the Option,
a the Option Price per share provided in Section 1, shall be adjusted
appropriately to restore to Grantee its rights hereuer, including the right to
purchase from Issuer (or its successors) shares of Common Stock representing
3.38% of the outstaing Common Stock for the aggregate Option Price calculated
as of the date of this Agreement as provided in Section 1.
6. Upon the occurrence of a Trigger Event, Issuer shall, at
the request of Grantee delivered within 24 months following the occurrence of
such Trigger Event (whether on its own behalf or on behalf of any subsequent
holder of the Option (or part thereof) or any of the shares of Common Stock
issued pursuant hereto), promptly prepare, file a keep current a registration
statement uer the 1933 Act covering any shares issued a issuable pursuant to
the Option ("Registrable Shares") a shall use its best efforts to cause such
registration statement to become effective a remain current in order to permit
the sale or other disposition of any such Registrable Shares in accordance
with any plan of disposition requested by Grantee. Issuer will use its best
efforts to cause such registration statement first to become effective a then
to remain effective for such period not in excess of 365 days from the day
such registration statement first becomes effective or such shorter time as
may be reasonably necessary to effect such sales or other dispositions from
time to time on a continuous or delayed basis or otherwise as specified by
Grantee. Issuer shall bear the costs of such registrations (including, but not
limited to, Issuer's attorneys' fees, printing costs a filing fees, except for
uerwriting discounts or commissions, brokers' fees a the fees a disbursements
of Grantee's counsel related thereto). The foregoing notwithstaing, if, at the
time of any request by Grantee for registration of Registrable Shares as
provided above, Issuer provides to Grantee a writing, executed by its chief
executive officer, to the effect that, in his reasonable judgment, it would be
seriously detrimental to Issuer a its stockholders for the requested
registration statement to be filed at the time requested a it is therefore
essential to defer the filing of such registration statement, Issuer may delay
the filing of such registration statement for a period not to exceed 60 days,
it being uerstood that such right
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<PAGE>
of delay may be exercised by Issuer not more than once in any 12- month
period. Grantee shall provide all information reasonably requested by Issuer
for inclusion in any registration statement to be filed hereuer. If
requested by Grantee in connection with such registration, Issuer shall become
a party to any uerwriting agreement relating to the sale of such shares, but
only to the extent of obligating itself in respect of representations,
warranties, iemnities a other agreements customarily included in such
uerwriting agreements for Issuer. Notwithstaing anything to the contrary
contained herein, in no event shall Issuer be obligated to effect more than
four registrations pursuant to this Section 6.
7. (a) At the request of Grantee by written notice (x) at
any time during the period that the Option is exercisable pursuant to Section
2, Issuer (or any successor entity thereof) shall, if permitted by applicable
law a Issuer's Charter, repurchase from Grantee all or any portion of the
Option, at the price set forth in subparagraph (i) below, or (y) at any time
prior to the two-year anniversary of the date that the Option first becomes
exercisable pursuant to Section 2 hereof, Issuer (or any successor entity
thereof) shall, if permitted by applicable law a Issuer's Charter,
repurchase from Grantee all or any portion of the shares of Common Stock that
have actually been purchased by Grantee uer the Option, at the price set
forth in subparagraph (ii) below:
(i) the difference between the Market/Offer Price (as
defined below) for shares of Common Stock as of the date (the
"Repurchase Notice Date") Grantee gives notice of its intent to
exercise its rights uer this Section 7 a the Option Price, multiplied
by the number of shares of Common Stock purchasable pursuant to the
Option (or portion thereof with respect to which Grantee is
exercising its rights uer this Section 7), but only if the
Market/Offer Price is greater than the Option Price. For purposes of
this clause (i) "Market/Offer Price" shall mean, as of any date, the
higher of (x) the price (or value of other consideration) per share
offered or agreed upon as of such date pursuant to any teer or
exchange offer or other agreed-upon price with respect to any merger,
consolidation, share exchange, business combination, or similar
transaction involving Issuer (each, a "Business Combination
Transaction"), which was made prior to such date a not terminated or
withdrawn as of such date a (y) the average last reported sale price
per share of Common Stock as reported on the NYSE consolidated tape
over the five- Trading Day period immediately preceding the
Repurchase Notice Date.
(ii) the product of (x) the greater of (A) the Option
Price paid by Grantee per share of Common Stock acquired pursuant to
the Option a (B) the Offer Price (as defined below), a (y) the number
of shares of Common Stock to be repurchased pursuant to this Section
7. For purposes of this clause (ii), the "Offer Price" shall be the
highest price per share offered or agreed upon for Common Stock
pursuant to a Business Combination Transaction involving Issuer after
the
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date of this Agreement a prior to the Repurchase Notice Date.
(b) In the event Grantee exercises its rights uer this Section 7,
Issuer shall, within ten business days thereafter, pay the required amount to
Grantee in immediately available fus a Grantee shall surreer to Issuer
the Option or the certificate or certificates evidencing the shares of Common
Stock purchased by Grantee pursuant hereto, a Grantee shall warrant that it
owns the Option or such shares a that the Option or such shares are then
free a clear of all claims, liens, encumbrances a security interests.
8. (a) In the event that, after the date of this Agreement
a prior to or during the period that the Option is exercisable hereuer,
Issuer shall enter into an agreement (i) to consolidate with or merge into any
person, other than in accordance with the Merger Agreement, a shall not be
the continuing or surviving corporation of such consolidation or merger, (ii)
to permit any person, other than Grantee or a Grantee Subsidiary, to merge
into Issuer or an Issuer Subsidiary a Issuer or such Issuer Subsidiary shall
be the continuing or surviving corporation, but, in connection with such
merger, the then outstaing shares of Common Stock shall be changed into or
exchanged for stock or other securities of any other person or cash or any
other property or the then outstaing shares of Common Stock shall after such
merger represent less than 50% of the outstaing shares a share equivalents
of the merged company or Issuer, as the case may be, or (iii) to sell or
otherwise transfer all or substantially all of its or any of its Subsidiaries'
assets or deposits to any person, other than Grantee or a Grantee Subsidiary,
then, a in each such case, the agreement governing such transaction shall
make proper provision so that the Option shall, upon the consummation of any
such transaction a upon the terms a coitions set forth herein, be
converted into, or exchanged for, an option (the "Substitute Option"), at the
election of Grantee, of either (x) the Acquiring Corporation (as herein
defined) or (y) any person that controls the Acquiring Corporation.
(b) The following terms have the meanings indicated:
(i) "Acquiring Corporation" shall mean (i) the
continuing or surviving corporation of a consolidation or merger with
Issuer (if other than Issuer), (ii) Issuer in a merger in which
Issuer is the continuing or surviving person, a (iii) the transferee
of all or substantially all of Issuer's assets or deposits (or the
assets or deposits of a Subsidiary of Issuer).
(ii) "Substitute Common Stock" shall mean the common
stock issued by the issuer of the Substitute Option upon exercise of
the Substitute Option.
(iii) "Assigned Value" shall mean the Market/Offer
Price, as defined in Section 7.
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<PAGE>
(iv) "Average Price" shall mean the average last
reported sales price of a share of the Substitute Common Stock for
one year immediately preceding the consolidation, merger or sale in
question, but in no event higher than the closing price of the shares
of Substitute Common Stock on the day preceding such consolidation,
merger or sale; provided that if Issuer is the issuer of the
Substitute Option, the Average Price shall be computed with respect
to a share of common stock issued by the person merging into Issuer
or by any company which controls or is controlled by such person, as
Grantee may elect.
(c) The Substitute Option shall have the same terms as the
Option, provided that if the terms of the Substitute Option cannot, for legal
reasons, be the same as those of the Option, such terms shall be as similar as
possible a in no event less advantageous to Grantee. The issuer of the
Substitute Option shall also enter into an agreement with the Grantee of the
Substitute Option in substantially the same form as this Agreement, which
agreement shall be applicable to the Substitute Option.
(d) The Substitute Option shall be exercisable for such
number of shares of Substitute Common Stock as is equal to the Assigned Value
multiplied by the number of shares of Common Stock for which the Option is
then exercisable, divided by the Average Price. The exercise price of the
Substitute Option per share of Substitute Common Stock shall then be equal to
the Option Price multiplied by a fraction, the numerator of which shall be the
number of shares of Common Stock for which the Option is then exercisable a
the denominator of which shall be the number of shares of Substitute Common
Stock for which the Substitute Option is exercisable.
(e) If the Acquiring Corporation shall qualify for taxation
as a REIT uer the Code, then, notwithstaing any of the foregoing provisions,
the Substitute Option shall not be exercisable for more than 9.8% of the
shares of Substitute Common Stock outstaing prior to exercise of the
Substitute Option. In the event that the Substitute Option would be
exercisable for more than 9.8% of the shares of Substitute Common Stock
outstaing prior to exercise but for this clause (e), the issuer of the
Substitute Option (the "Substitute Option Issuer") shall make a cash payment
to Grantee equal to the excess of (i) the value of the Substitute Option
without giving effect to the limitation in this clause (e) over (ii) the value
of the Substitute Option after giving effect to the limitation in this clause
(e). This difference in value shall be determined by a nationally recognized
investment banking firm selected by Grantee.
(f) Issuer shall not enter into any transaction described in
Section 8(a) unless the Acquiring Corporation a any person that controls the
Acquiring Corporation assume in writing all the obligations of Issuer hereuer.
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<PAGE>
9. The period to exercise the Option a to cause the Option
to be repurchased or exchanged as specified herein shall be exteed to the
extent necessary to avoid liability uer Section 16(b) of the Securities
Exchange Act of 1934, as ameed, by reason of such exercise.
10. Issuer hereby represents a warrants to Grantee as
follows:
(a) Issuer has full corporate power a authority to execute
a deliver this Agreement a to consummate the transactions contemplated
hereby. The execution a delivery of this Agreement a the consummation of
the transactions contemplated hereby have been duly a validly authorized by
the Board of Directors of Issuer a no other corporate proceedings on the
part of Issuer are necessary to authorize this Agreement or to consummate the
transactions so contemplated. This Agreement has been duly a validly
executed a delivered by Issuer.
(b) Issuer has taken all necessary corporate action to
authorize a reserve a to permit it to issue, a at all times from the
date hereof through the termination of this Agreement in accordance with its
terms will have reserved for issuance upon the exercise of the Option, that
number of shares of Common Stock equal to the maximum number of shares of
Common Stock at any time a from time to time issuable hereuer, a all
such shares, upon issuance pursuant thereto, will be duly authorized, validly
issued, fully paid, nonassessable, a will be delivered free a clear of all
claims, liens, encumbrances a security interests a not subject to any
preemptive rights.
11. Neither of the parties hereto may assign any of its
rights or obligations uer this Agreement or the Option created hereuer to any
other person, without the express written consent of the other party, except
during the period that the Option is exercisable hereuer. During such period,
Grantee shall have the right from time to time to assign, without expense, all
or a portion of the Option hereuer to a third party that qualifies as an
"accredited investor" within the meaning of the 1933 Act upon the delivery to
Issuer of (i) a written notice specifying the name a address of the inteed
transferee a the total number of shares such transferee will be permitted to
purchase following the transfer, (ii) evidence reasonably satisfactory to
Issuer that the inteed transferee is an "accredited investor" within the
meaning of the 1933 Act, (iii) a writing executed by the inteed transferee
stating that the inteed transferee agrees to become a holder of the Option a
to be bou by the terms a provisions of this Agreement a (iv), if requested by
Issuer within five days of the date of the receipt of the written notice
specified in clause (i), an opinion of counsel, in form a substance reasonably
satisfactory to Issuer, to the effect that such transfer may be effected
without registration uer the 1933 Act. In the case of any such transfer
permitted hereuer, this Agreement (a the Option granted hereby) shall be
presented to Issuer at its principal executive office, a Issuer shall reissue
to Grantee
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<PAGE>
a/or the transferee (as applicable) other Agreements providing for Options
entitling the respective holders to purchase, on the same terms a subject to
the same coitions as are set forth herein, in the aggregate the number of
shares of Common Stock that each will be entitled to purchase following such
transfer. Notwithstaing the foregoing, (i) the decision to exercise
registration rights uer Section 6 shall be made exclusively by Grantee (on
behalf of itself or other holders) following such transfer a (ii) the
provisions of Section 13 hereof shall not apply to the Option issued to any
transferee that is not affiliated with Grantee a purchases the Option in an
arm's-length transaction for value a, in the case of transfers to affiliates
of Grantee, the provisions of Section 13 shall apply to Grantee a such
affiliates as a group as if such group were the sole holder of the Option.
12. Each of Grantee a Issuer will use its best efforts to
make all filings with, a to obtain consents of, all third parties a
Governmental Entities necessary to the consummation of the transactions
contemplated by this Agreement.
13. (a) Notwithstaing any other provision of this
Agreement, in no event shall Grantee's Total Profit (as herein defined) exceed
(i) the amount of the Chateau Break-Up Expenses in circumstances, upon
termination of the Merger Agreement, that would allow Grantee to receive only
Chateau Break-Up Expenses uer the Merger Agreement, or (ii) $10,000,000 in
circumstances, upon termination of the Merger Agreement, that would allow
Grantee to receive only the Chateau Break-Up Fee uer the Merger Agreement,
or (iii) the sum of the amounts specified in clauses (i) a (ii) above in
circumstances, upon termination of the Merger Agreement, that would allow
Grantee to receive both Chateau Break-Up Expenses a the Chateau Break-Up Fee
uer the Merger Agreement; a, if the Total Profit otherwise would exceed
such applicable amounts, Grantee, at its sole election, shall either (a)
reduce the number of shares of Common Stock subject to the Option, (b) deliver
to Issuer for cancellation shares of Common Stock previously purchased
hereuer by Grantee, (c) pay cash to Issuer, or (d) any combination thereof,
so that Grantee's actually realized Total Profit shall not exceed the
applicable amount after taking into account the foregoing actions.
(b) Notwithstaing any other provision of this Agreement, the
Option may not be exercised for a number of shares as would, as of the date of
exercise, result in a Notional Total Profit (as defined below) of more than
(i) the amount of the Chateau Break-Up Expenses in circumstances, upon
termination of the Merger Agreement, that would allow Grantee to receive only
Chateau Break-Up Expenses uer the Merger Agreement, or (ii) $10,000,000 in
circumstances, upon termination of the Merger Agreement, that would allow
Grantee to receive only the Chateau Break-Up Fee uer the Merger Agreement, or
(iii) the sum of the amounts specified in clauses (i) a (ii) above in
circumstances, upon termination of the Merger Agreement, that would allow
Grantee to receive both Chateau Break-Up Expenses a the Chateau Break-Up Fee
under the
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<PAGE>
Merger Agreement; provided that nothing in this sentence shall restrict any
exercise of the Option permitted hereby on any subsequent date.
(c) As used herein, the term "Total Profit" shall mean the
aggregate amount (before taxes) of the following: (i) the amount received by
Grantee pursuant to Issuer's repurchase of the Option (or any portion thereof)
pursuant to Section 7, (ii) (x) the amount received by Grantee pursuant to
Issuer's repurchase of shares of Common Stock pursuant to Section 7, less (y)
Grantee's purchase price for such shares, (iii) (x) the net cash amounts
received by Grantee pursuant to the sale of shares of Common Stock purchased
hereuer (or any other securities into which such shares are converted or
exchanged) to any unaffiliated third party, less (y) Grantee's purchase price
of such shares, (iv) any amounts received by Grantee on the transfer of the
Option (or any portion thereof) to any unaffiliated party that acquires or
receives the Option in an arm's-length transaction for value, a (v) any
equivalent amount with respect to the Substitute Option.
(d) As used herein, the term "Notional Total Profit" with
respect to any number of shares as to which Grantee may propose to exercise
the Option shall be the Total Profit determined as of the date of such
proposed exercise assuming that the Option was exercised on such date for such
number of shares a assuming that such shares, together with all other shares
of Common Stock purchased by Grantee a its affiliates pursuant to this
Agreement as of such date, were sold for cash at the average last reported
sale prices per share of the Common Stock as reported on the NYSE consolidated
tape over the five-Trading Day period immediately preceding the date of
proposed exercise (less customary brokerage commissions).
14. The parties agree that irreparable damage would occur in
the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement a to enforce specifically
the terms a provisions of this Agreement in any court of the United States
located in the State of Maryla or in any Maryla State court, this being in
addition to any other remedy to which they are entitled at law or in equity.
In addition, each of the parties hereto (a) consents to submit itself (without
making such submission exclusive) to the personal jurisdiction of any federal
court located in the State of Maryla or any Maryla State court in the event
any dispute arises out of this Agreement a (b) agrees that it will not attempt
to deny or defeat such personal jurisdiction by motion or other request for
leave from any such court.
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<PAGE>
15. If any term, provision, covenant or restriction
contained in this Agreement is held by a court or a federal or state
regulatory agency of competent jurisdiction to be invalid, void or
unenforceable, the remaier of the terms, provisions a covenants a restrictions
contained in this Agreement shall remain in full force a effect, a shall in no
way be affected, impaired or invalidated. If for any reason such court
determines that Grantee is not permitted to acquire, or Issuer is not
permitted to repurchase pursuant to Section 7, the full number of shares of
Common Stock provided in Section 1 hereof (as adjusted as provided herein), it
is the express intention of Issuer to allow Grantee to acquire or to require
Issuer to repurchase such lesser number of shares as may be permissible,
without any amement or modification hereof.
16. All notices, requests, claims, demas a other
communications uer this Agreement shall be in writing a shall be given in
accordance with the provisions of the Merger Agreement.
17. THIS AGREEMENT SHALL BE GOVERNED BY, A CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF MARYLA, REGARDLESS OF THE LAWS THAT
MIGHT OTHERWISE GOVERN UER APPLICABLE PRINCIPLES OF CONFLICT OF LAWS THEREOF.
18. This Agreement may be executed in one or more
counterparts, all of which shall be considered one a the same agreement a
shall become effective when one or more counterparts have been signed by both
parties a delivered to the other party.
19. Except as otherwise expressly provided herein, each of
the parties hereto shall bear a pay all costs a expenses incurred by it or
on its behalf in connection with the transactions contemplated hereuer,
including fees a expenses of its own financial consultants, investment
bankers, accountants a counsel.
20. Except as otherwise expressly provided herein or in the
Merger Agreement, this Agreement contains the entire agreement between the
parties with respect to the transactions contemplated hereuer a supersedes
all prior arrangements or uerstaings with respect thereof, written or
oral. The terms a coitions of this Agreement shall inure to the benefit of
a be biing upon the parties hereto a their respective successors a
permitted assignees. Nothing in this Agreement, expressed or implied, is
inteed to confer upon any party, other than the parties hereto, a their
respective successors except as assignees, any rights, remedies, obligations
or liabilities uer or by reason of this Agreement, except as expressly
provided herein.
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<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this
Agreement to be executed on its behalf by its officers thereunto duly
authorized, all as of the date first above written.
CP LIMITED PARTNERSHIP (Grantee)
By: Chateau Properties, Inc.,
its General Partner
By:
Name:
Title:
ROC COMMUNITIES, INC. (Issuer)
By:
Name:
itle:
12
<PAGE>
EXHIBIT E
STOCK OPTION AGREEMENT
Dated as of July 17, 1996,
Between
ROC COMMUNITIES, INC.,
as Issuer,
A
CP LIMITED PARTNERSHIP,
as Grantee
EXHIBIT 7.3
ROC Communities, Inc.
6430 South Quebec Street
Englewood, Colorado 80111
June 4, 1996
Chateau Properties, Inc.
19500 Hall Road
Clinton Township, Michigan 48038
Re: Confidentiality and Standstill Agreement
----------------------------------------
Ladies and Gentlemen:
In connection with the preliminary consideration of a possible merger
transaction (the "Transaction") between Roc Communities, Inc. and Chateau
Properties, Inc. (each, a "Party" and, collectively, the "Parties"), we
understand that each Party may be furnished by the other party or by
representatives or agents of the other Party with certain oral or written
information (collectively, the "Information") concerning the Parties and/or
their affiliates. In consideration for receiving the Information, each Party
agrees that, except as provided, the Information shall be kept confidential in
accordance with the following provisions:
1. Each Party shall not, without the prior written consent of the
other Party, (a) use, for itself or on behalf of any other person or entity,
any portion of the Information for any purpose other than evaluating or
negotiating the Transaction; (b) disclose any portion of the Information to
any other person; or (c) otherwise use the Information in any manner
detrimental to the other Party; Notwithstanding the foregoing, the Information
may be furnished by each Party, on a need-to-know basis, and may be furnished
by the other Party as directed by such Party, to such Party's advisors who
assist such Party in evaluating or negotiating the Transaction, accountants
and lenders (said persons being referred to herein as "Other Recipients");
provided, however, that the Parties have specifically advised each Other
Recipient of the confidential nature of the Information, and that the
disclosure of the Information is being made to such Other Recipient and
subject to the obligation to keep the Information confidential in accordance
with this letter agreement.
2. Each Party's obligations hereunder, and the obligations hereunder
of each Other Recipient receiving information from or at the request of such
Party, do not extend to information which (a) was or becomes generally
available to the public other than as a result of a disclosure by such Party,
an Other Recipient or other person subject to an obligation of secrecy or
confidentiality to the other Party; or (b) was or becomes available to such
Party on a non-confidential basis from a source other than the other Party or
the other Party's representatives or agents; provided that such source was not
bound to keep such material or information confidential and did not receive
such material or information, directly or indirectly, from a person so bound.
3. In the event that a Party, or any Other Recipient receiving
information from or at the request of such Party, receives a request under a
valid and effective subpoena to disclose any Information, such Party or Other
Recipient shall promptly so notify the other Party to permit the other Party
to seek a protective order or other appropriate remedy. If such protective
order or other remedy is not sought or obtained, the Party or such Other
Recipient receiving the subpoena shall
<PAGE>
furnish only that portion of the Information which is legally required and
shall use best efforts to obtain reliable assurance that confidential
treatment will be accorded the Information furnished.
4. Except as otherwise permitted by the other Party, each Party shall
keep confidential (a) the fact that any discussions, negotiations or
investigations are taking place concerning the Transaction and (b) the terms,
conditions and all other information with respect thereto, including the
status thereof. Notwithstanding the foregoing, to the extent that a Party, in
consultation with its legal counsel, determine that it is legally required to
make a public disclosure of the matters set forth in (a) or (b) above, such
Party may make a public disclosure, but shall first notify the other Party in
advance of and shall reasonably cooperate with the other Party in the
preparation of such public disclosure.
5. Each Party may elect at any time to terminate further access to
and review of the Information, at which time the Information in each Party's
possession and in the possession of the Other Recipients receiving Information
from or at the request of such Party, including all copies, extracts from and
other reproductions of the Information made by such Party and Other
Recipients, shall be returned to the other Party. All analyses, memoranda,
compilations, studies, notes and other documents (collectively, the
"Analyses") prepared by each Party, as well as by the Other Recipients
receiving information from or at the request of such Party, based on the
Information shall either be likewise delivered to the other Party or shall be
destroyed and such destruction shall be certified in writing to the other
Party by the Party or Other recipient destroying such Analyses. The
obligations of confidentiality with respect to the Information set forth in
this letter agreement shall nevertheless survive such delivery and/or
destruction and shall remain in full force and effect.
[Paragraph Deleted]
2
<PAGE>
7. Except for the Transaction contemplated by this letter agreement
or asset acquisitions and dispositions and financings in the ordinary course
of business, each Party further agrees that, for a period of 60 days from the
date of this letter agreement, it will not in any manner, directly or
indirectly, effect or seek, offer or propose (whether publicly or otherwise)
to effect, or cause or participate in, or in any way assist or encourage any
person (other than the other Party) to effect or seek, offer or propose to
effect or participate in, any tender or exchange offer, merger, asset sale or
acquisition or other business combination involving such Party or any
recapitalization, restructuring, liquidation, dissolution or other
extraordinary transaction with respect to such Party.
8. The Parties acknowledge and agree that in the event of any breach
by a Party of this letter agreement, the other Party would be immediately and
irreparably harmed and would not be made whole by monetary damages.
Accordingly, the Parties agree that each Party, in addition to any other
remedy to which it may be entitled, shall be entitled to an injunction to
prevent breach of this letter agreement and the Parties hereby waive any right
to interpose as a defense that an adequate remedy exists at law for such
breach. Each party agrees to reimburse the other Party for all costs and
expenses (including, without limitations, reasonable attorneys fees) incurred
by it in enforcing any of such Party's obligations hereunder or the
obligations hereunder of the Other Recipients receiving Information from or at
the request of such Party.
The agreements set forth herein may be modified or waived only by a
separate writing signed by the Parties expressly so modifying or waiving such
agreements.
This letter agreement shall be governed and construed in accordance
with the internal laws of Maryland without regard to principles of conflicts
of law. The parties hereto consent to the personal jurisdiction of any federal
or state court located in Maryland.
The Parties hereto have caused this letter agreement to be executed
by their officers duly authorized as of the date first above written.
Very truly yours
ROC Communities, Inc.
By: /s/ Gary P. McDaniel
--------------------
Name: Gary P. McDaniel
Title: President
ACCEPTED AND AGREED TO as of the date first written above:
Chateau Properties, Inc.
By: /s/ C.G. Kellogg
----------------
Name: C.G. Kellogg
Title: President & CEO
3
<PAGE>
ROC Communities, Inc.
6430 South Quebec Street
Englewood, Colorado 80111
June 20, 1996
Chateau Properties, Inc.
19500 Hall Road
Clinton Township, Michigan 48038
Re: Amendment to Confidentiality and Standstill Agreement
-----------------------------------------------------
Ladies and Gentlemen:
Reference is made to the letter agreement dated as of June 4, 1996
(the "Letter Agreement") between ROC Communities, Inc. and Chateau Properties,
Inc. (each, a "Party" and, collectively, the "Parties") in connection with the
preliminary consideration of a possible merger transaction involving the
Parties. Terms not defined in this letter which are defined in the Letter
Agreement are used herein as therein defined.
In addition to the agreements specified in the Letter Agreement, each
Party further agrees that, for a period of 12 months after the date of the
Letter Agreement, unless such shall have been specifically invited in writing
by the Board of Directors of the other Party, neither such Party nor any of
its affiliates (as such term is defined under the Securities Exchange Act of
1934, as amended (the "1934 Act") will in any manner, directly or indirectly,
(a) effect or seek, offer or propose (whether publicly or otherwise) to
effect, or cause or participate in, or in any way assist or encourage any
other person to affect or seek, offer or propose (whether publicly or
otherwise) to effect or participate in, (i) the acquisition of securities (or
beneficial ownership thereof) or assets of the other Party, (ii) any tender or
exchange offer, merger or other business combination involving the other
Party, (iii) any recapitalization, restructuring, liquidation, dissolution or
other extraordinary transaction with respect to the other Party, or (iv) any
"solicitation" of "proxies" (as such terms are used in the proxy rules of the
Securities and Exchange Commission) or consents to vote any voting securities
of the other Party; (b) form, join or in any way participate in a "group" (as
defined under the 1934 Act) or otherwise act, alone or in concert with others,
to seek to control or influence the management, Board of Directors or policies
of the other Party; or (c) enter into any discussion or arrangements with any
third party with respect to any of the foregoing (collectively, the
"Standstill Restrictions"); provided, however, that if a third party which is
not affiliated with a Party shall commence, without any breach of this
provision by such Party and without the consent of the other Party, a tender
offer relating to the purchase of at least 40% of the voting securities (as
such term is defined in Rule 12b-2 promulgated under the 1934 Act) of the
other Party, the Party and its affiliates shall be immediately released from
the Standstill Restrictions unless and until such tender offer shall be
terminated or withdrawn.
The Parties hereto have caused this supplement to the Letter
Agreement to be executed by their officers thereunto duly authorized as of the
date first above written.
<PAGE>
Very truly yours
ROC Communities, Inc.
By: /s/ Gary P. McDaniel
--------------------
Name: Gary P. McDaniel
Title: President
ACCEPTED AND AGREED TO as of the date first written above:
Chateau Properties, Inc.
By: /s/ C.G. Kellogg
----------------
Name: C.G. Kellogg
Title: President & CEO
<PAGE>
ROC Communities, Inc.
6430 South Quebec Street
Englewood, Colorado 80111
June 21, 1996
Chateau Properties, Inc.
19500 Hall Road
Clinton Township, Michigan 48038
Re: Amendment to Confidentiality and Standstill Agreement
-----------------------------------------------------
Ladies and Gentlemen:
Reference is made to the letter agreement dated as of June 4, 1996,
as supplemented by letter agreement dated as of June 20, 1996 (collectively,
the "Letter Agreement") between ROC Communities, Inc. and Chateau Properties,
Inc. ("Chateua") (each, a "Party" and, collectively, the "Parties") in
connection with the preliminary consideration of a possible merger transaction
involving the Parties. Terms not defined in this letter which are defined in
the Letter Agreement are used herein as therein defined.
Notwithstanding anything to the contrary contained in the Letter
Agreement, each Party agrees that, as of the date hereof, Mr. Peter
Ministrelli, an individual, shall not be considered an affiliate of Chateau
for the purposes of the Letter Agreement.
The Parties hereto have caused this supplement to the Letter
Agreement to be executed by their officers thereunto duly authorized as of the
date first above written.
Very truly yours
ROC Communities, Inc.
By: /s/ Gary P. McDaniel
--------------------
Name: Gary P. McDaniel
Title: President
ACCEPTED AND AGREED TO as of the date first written above:
Chateau Properties, Inc.
By: /s/ C.G. Kellogg
----------------
Name: C.G. Kellogg
Title: President & CEO
