<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 1)
WALDEN RESIDENTIAL PROPERTIES, INC.
(Name of Issuer)
COMMON STOCK, PAR VALUE $0.01 PER SHARE
(Title of Class of Securities)
931210108
(CUSIP Number)
HAL R. HALL
C/O OLY HIGHTOP, LLC
200 CRESCENT COURT
SUITE 1600
DALLAS, TEXAS 75201
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
Copies to:
MICHAEL D. WORTLEY TIMOTHY B. SMITH
VINSON & ELKINS L.L.P. C/O OLY HIGHTOP, LLC
3700 TRAMMELL CROW CENTER 200 CRESCENT COURT
2001 ROSS AVENUE SUITE 1600
DALLAS, TEXAS 75201 DALLAS, TEXAS 75201
(214) 220-7732 (214) 720-7800
SEPTEMBER 24, 1999
(Date of Event which Requires Filing of this Statement)
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<PAGE> 2
<TABLE>
<CAPTION>
CUSIP NO. 931210108
- -------- -----------------------------------------------------------------------
<S> <C>
1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
Oly Hightop, LLC
- -------- -----------------------------------------------------------------------
2 Check the appropriate box if a member of a group (a) [ ]
(b) [X]
- -------- -----------------------------------------------------------------------
3 SEC use only
- -------- -----------------------------------------------------------------------
4 Source of Funds(1) Not applicable
- -------- -----------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
- -------- -----------------------------------------------------------------------
6 Citizenship or Place of Organization State of Delaware
- -------- -------------------------- --------------------------------------------
7 Sole Voting Power 0
Number of Shares Beneficially --------------------------------------------
8 Shared Voting Power(1) 1,408,500
Owned by Each Reporting --------------------------------------------
9 Sole Dispositive Power 0
Person With --------------------------------------------
10 Shared Dispositive Power(1) 1,408,500
- -------- -----------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by each Reporting
Person(1) 1,408,500
- -------- -----------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain
Shares [ ]
- -------- -----------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)(1) 5.53%
- -------- -----------------------------------------------------------------------
14 Type of Reporting Person OO
- -------- -----------------------------------------------------------------------
</TABLE>
(1) The reporting person expressly disclaims beneficial ownership with respect
to such shares. The reporting person does not own of record any shares of
stock of Walden Residential Properties, Inc. (the "Company"), and no
agreement exists between the reporting person and any other party regarding
the voting or disposition of any such shares; provided, however, that
certain affiliates of the reporting person expect to enter into voting
agreements with certain stockholders of the Company (the "Voting
Agreements") as described in Item 4. The shares listed above represent
shares beneficially owned, in the aggregate, by Westdale Properties America
I, Ltd., a Texas limited partnership; JGB Ventures I, Ltd., a Texas limited
partnership; JGB Holdings, Inc., a Texas corporation; Joseph G. Beard and
Ronald Kimel, as sole Trustee for the benefit of the issue of Manuel Kimel
under the Manuel Kimel Family Trust; Westdale 2000 Inc., an Ontario, Canada
corporation; Trivestment Holdings Limited, an Ontario, Canada corporation;
and 657330 Ontario Inc., an Ontario, Canada corporation (collectively, the
"WPA Group"), according to the Schedule 13D filed by such persons dated
January 4, 1999, as amended by amendments dated March 1, 1999, May 17, 1999
and August 10, 1999; provided, however, that such persons have not affirmed
that such persons constitute a "group" within the meaning of Section
13(d)(3) of the Securities Exchange Act of 1934, as amended (the "Act").
See Item 5.
Page 2 of 16
<PAGE> 3
<TABLE>
<CAPTION>
CUSIP NO. 931210108
- -------- -----------------------------------------------------------------------
<S> <C>
1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
Oly Hightop, L.P.
- -------- -----------------------------------------------------------------------
2 Check the appropriate box if a member of a group (a) [ ]
(b) [X]
- -------- -----------------------------------------------------------------------
3 SEC use only
- -------- -----------------------------------------------------------------------
4 Source of Funds(1) Not applicable
- -------- -----------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant
to Items 2(d) or 2(e) [ ]
- -------- -----------------------------------------------------------------------
6 Citizenship or Place of Organization State of Texas
- -------- -------------------------- --------------------------------------------
7 Sole Voting Power 0
Number of Shares Beneficially --------------------------------------------
8 Shared Voting Power(1) 1,408,500
Owned by Each Reporting --------------------------------------------
9 Sole Dispositive Power 0
Person With --------------------------------------------
10 Shared Dispositive Power(1) 1,408,500
- -------- -----------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by each Reporting
Person(1) 1,408,500
- -------- -----------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain
Shares [ ]
- -------- -----------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)(1) 5.53%
- -------- -----------------------------------------------------------------------
14 Type of Reporting Person PN
- -------- -----------------------------------------------------------------------
</TABLE>
(1) The reporting person expressly disclaims beneficial ownership with respect
to such shares. The reporting person does not own of record any shares of
stock of the Company, and no agreement exists between the reporting person
and any other party regarding the voting or disposition of any such shares,
subject to the expected execution of the Voting Agreements described in
Item 4. The shares listed above represent shares beneficially owned by the
WPA Group, according to the Schedule 13D filed by such persons dated
January 4, 1999, as amended by amendments dated March 1, 1999, May 17, 1999
and August 10, 1999; provided, however, that such persons have not affirmed
that such persons constitute a "group" within the meaning of Section
13(d)(3) of the Act. See Item 5.
Page 3 of 16
<PAGE> 4
<TABLE>
<CAPTION>
CUSIP NO. 931210108
- -------- -----------------------------------------------------------------------
<S> <C>
1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
Oly Hightop Two GP, LLC
- -------- -----------------------------------------------------------------------
2 Check the appropriate box if a member of a group (a) [ ]
(b) [X]
- -------- -----------------------------------------------------------------------
3 SEC use only
- -------- -----------------------------------------------------------------------
4 Source of Funds(1) Not applicable
- -------- -----------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
- -------- -----------------------------------------------------------------------
6 Citizenship or Place of Organization State of Delaware
- -------- -------------------------- --------------------------------------------
7 Sole Voting Power 0
Number of Shares Beneficially --------------------------------------------
8 Shared Voting Power(1) 1,408,500
Owned by Each Reporting --------------------------------------------
9 Sole Dispositive Power 0
Person With -------------------------------------------
10 Shared Dispositive Power(1) 1,408,500
- -------- -----------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by each Reporting
Person(1) 1,408,500
- -------- -----------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain
Shares [ ]
- -------- -----------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)(1) 5.53%
- -------- -----------------------------------------------------------------------
14 Type of Reporting Person OO
- -------- -----------------------------------------------------------------------
</TABLE>
(1) The reporting person expressly disclaims beneficial ownership with
respect to such shares. The reporting person does not own of record any
shares of stock of the Company, and no agreement exists between the
reporting person and any other party regarding the voting or
disposition of any such shares, subject to the expected execution of
the Voting Agreements described in Item 4. The shares listed above
represent shares beneficially owned by the WPA Group, according to the
Schedule 13D filed by such persons dated January 4, 1999, as amended by
amendments dated March 1, 1999, May 17, 1999 and August 10, 1999;
provided, however, that such persons have not affirmed that such
persons constitute a "group" within the meaning of Section 13(d)(3) of
the Act. See Item 5.
Page 4 of 16
<PAGE> 5
<TABLE>
<CAPTION>
CUSIP NO. 931210108
- --------------------------------------------------------------------------------
<S> <C>
1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
Oly Real Estate Partners II, L.P.
- --------------------------------------------------------------------------------
2 Check the appropriate box if a member of a group (a) [ ]
(b) [X]
- --------------------------------------------------------------------------------
3 SEC use only
- --------------------------------------------------------------------------------
4 Source of Funds(1) Not applicable
- --------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization State of Texas
- --------------------------------------------------------------------------------
7 Sole Voting Power 0
Number of Shares Beneficially --------------------------------------------
8 Shared Voting Power(1) 1,408,500
Owned by Each Reporting --------------------------------------------
9 Sole Dispositive Power 0
Person With --------------------------------------------
10 Shared Dispositive Power(1) 1,408,500
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by each Reporting
Person(1) 1,408,500
- --------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain
Shares [ ]
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)(1) 5.53%
- --------------------------------------------------------------------------------
14 Type of Reporting Person PN
- --------------------------------------------------------------------------------
</TABLE>
(1) The reporting person expressly disclaims beneficial ownership with respect
to such shares. The reporting person does not own of record any shares of
stock of the Company, and no agreement exists between the reporting person
and any other party regarding the voting or disposition of any such shares,
subject to the expected execution of the Voting Agreements described in
Item 4. The shares listed above represent shares beneficially owned by the
WPA Group, according to the Schedule 13D filed by such persons dated
January 4, 1999, as amended by amendments dated March 1, 1999, May 17, 1999
and August 10, 1999; provided, however, that such persons have not affirmed
that such persons constitute a "group" within the meaning of Section
13(d)(3) of the Act. See Item 5.
Page 5 of 16
<PAGE> 6
<TABLE>
<CAPTION>
CUSIP NO. 931210108
- --------------------------------------------------------------------------------
<S> <C>
1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
Oly REP II, L.P.
- --------------------------------------------------------------------------------
2 Check the appropriate box if a member of a group (a) [ ]
(b) [X]
- --------------------------------------------------------------------------------
3 SEC use only
- --------------------------------------------------------------------------------
4 Source of Funds(1) Not applicable
- --------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization State of Texas
- --------------------------------------------------------------------------------
7 Sole Voting Power 0
Number of Shares Beneficially --------------------------------------------
8 Shared Voting Power(1) 1,408,500
Owned by Each Reporting --------------------------------------------
9 Sole Dispositive Power 0
Person With --------------------------------------------
10 Shared Dispositive Power(1) 1,408,500
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by each Reporting
Person(1) 1,408,500
- --------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain
Shares [ ]
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)(1) 5.53%
- --------------------------------------------------------------------------------
14 Type of Reporting Person PN
- --------------------------------------------------------------------------------
</TABLE>
(1) The reporting person expressly disclaims beneficial ownership with respect
to such shares. The reporting person does not own of record any shares of
stock of the Company, and no agreement exists between the reporting person
and any other party regarding the voting or disposition of any such shares,
subject to the expected execution of the Voting Agreements described in
Item 4. The shares listed above represent shares beneficially owned by the
WPA Group, according to the Schedule 13D filed by such persons dated
January 4, 1999, as amended by amendments dated March 1, 1999, May 17, 1999
and August 10, 1999; provided, however, that such persons have not affirmed
that such persons constitute a "group" within the meaning of Section
13(d)(3) of the Act. See Item 5.
Page 6 of 16
<PAGE> 7
<TABLE>
<CAPTION>
CUSIP NO. 931210108
- -------- -----------------------------------------------------------------------
<S> <C>
1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
Oly Fund II, LLC
- -------- -----------------------------------------------------------------------
2 Check the appropriate box if a member of a group (a) [ ]
(b) [X]
- -------- -----------------------------------------------------------------------
3 SEC use only
- -------- -----------------------------------------------------------------------
4 Source of Funds(1) Not applicable
- -------- -----------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
- -------- -----------------------------------------------------------------------
6 Citizenship or Place of Organization State of Texas
- -------- -------------------------- --------------------------------------------
7 Sole Voting Power 0
Number of Shares Beneficially --------------------------------------------
8 Shared Voting Power(1) 1,408,500
Owned by Each Reporting --------------------------------------------
9 Sole Dispositive Power 0
Person With --------------------------------------------
10 Shared Dispositive Power(1) 1,408,500
- -------- -----------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by each Reporting
Person(1) 1,408,500
- -------- -----------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain
Shares [ ]
- -------- -----------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)(1) 5.53%
- -------- -----------------------------------------------------------------------
14 Type of Reporting Person OO
- -------- -----------------------------------------------------------------------
</TABLE>
(1) The reporting person expressly disclaims beneficial ownership with respect
to such shares. The reporting person does not own of record any shares of
stock of the Company, and no agreement exists between the reporting person
and any other party regarding the voting or disposition of any such shares,
subject to the expected execution of the Voting Agreements described in
Item 4. The shares listed above represent shares beneficially owned by the
WPA Group, according to the Schedule 13D filed by such persons dated
January 4, 1999, as amended by amendments dated March 1, 1999, May 17, 1999
and August 10, 1999; provided, however, that such persons have not affirmed
that such persons constitute a "group" within the meaning of Section
13(d)(3) of the Act. See Item 5.
Page 7 of 16
<PAGE> 8
This Amendment No. 1 to Schedule 13D is hereby filed by Oly Fund II,
LLC, a Texas limited liability company ("Oly Fund II"); Oly REP II, L.P., a
Texas limited partnership ("Oly REP"); Oly Real Estate Partners II, L.P., a
Texas limited partnership ("Oly Real Estate"); Oly Hightop Two GP, LLC, a
Delaware limited liability company ("Oly Two"); Oly Hightop, L.P., a Texas
limited partnership ("Oly LP"); and Oly Hightop, LLC, a Delaware limited
liability company ("Oly LLC"). Oly Fund II, Oly REP, Oly Real Estate, Oly Two,
Oly LP and Oly LLC are collectively referred to herein as the "Reporting
Persons." Each Reporting Person disclaims responsibility for the completeness
and accuracy of the information contained in this Schedule 13D concerning the
other Reporting Persons.
This Amendment No. 1 amends and supplements Items 2, 4, 5, 6 and 7
contained in the Schedule 13D dated August 9, 1999 filed by each of the
Reporting Persons (the "Prior Filing"). Items 1 and 3 of the Prior Filing remain
unchanged.
ITEM 2. IDENTITY AND BACKGROUND.
Oly Two has succeeded to the interest of Oly Texas GP II, LLC ("Oly
Texas"), a Reporting Person listed in the Prior Filing. Oly Two has the same
principal business address, principal office address, principal business,
directors and executive officers as Oly Texas, information with respect to which
is set forth in the Prior Filing.
During the last five years, Oly Two has not (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 future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
ITEM 4. PURPOSE OF THE TRANSACTION.
Pursuant to that certain Agreement and Plan of Merger dated as of
September 24, 1999 (the "Merger Agreement"), among the Company, Oly Hightop
Corporation, a Maryland corporation and affiliate of the Reporting Persons
("Newco"), and Oly Hightop Parent, L.P., a Delaware limited partnership and
affiliate of the Reporting Persons and the direct parent of Newco ("Parent"),
the Company will merge (the "Merger") with and into Newco, with Newco being the
surviving corporation, upon the terms and conditions set forth in the Merger
Agreement. The following summary of certain terms of the Merger Agreement is
qualified in its entirety by reference to the Merger Agreement, which is
incorporated herein by reference.
Company Common Stock and Company Convertible Preferred Stock. The
Merger Agreement provides that upon the consummation of the Merger, other than
shares of common stock, par value $0.01 per share, of the Company ("Company
Common Stock") held by the Company or any of its subsidiaries or by Parent or
any of its subsidiaries, which shares will be canceled and no consideration will
be received therefor, and subject to reduction as described below, (i) each
share of Company Common Stock issued and outstanding immediately prior to the
effective time of the Merger (the "Effective Time") will be converted into the
right to receive $23.25 in cash, and (ii) each share of 9.16% Series B
Convertible Preferred Stock, par value $0.01 per share, of the Company ("Company
Convertible Preferred Stock") issued and outstanding immediately prior to the
Effective Time will be converted into the right to receive an amount in cash
equal to the sum of (A) the product of (1) $23.25 and (2) the number of shares
of Company Common Stock into which such share of Company Convertible Preferred
Stock would have been convertible immediately prior to the Effective Time and
(B) accrued and unpaid dividends on the Company Convertible Preferred Stock to
but excluding the Closing Date. The per share consideration described in clauses
(i) and (ii) above, subject to reduction as described below, is referred to
herein as the "Cash Merger Consideration".
Reduction in Cash Merger Consideration. As more fully set forth in the
Merger Agreement, the Cash Merger Consideration is subject to reduction in
connection with certain expenditures by the Company relating to
Page 8 of 16
<PAGE> 9
capital improvements, payments to obtain consents required to consummate the
Merger, and other expenditures. Accordingly, the amount, $23.25, set forth in
the preceding paragraph will be reduced by a per share amount equal to the
amount that is, (i) in the case of the Company Common Stock, 79.89% of such
total expenditures divided by the number of outstanding shares of Company Common
Stock immediately prior to the Effective Time, and (ii) in the case of the
Company Convertible Preferred Stock, 6.12% of such total expenditures divided by
the number of outstanding shares of Company Convertible Preferred Stock
immediately prior to the Effective Time. The remaining percentage of
expenditures will reduce the consideration to be received by certain limited
partners of WDOP (as defined below) and WROP (as defined below) upon the
consummation of the respective mergers of newly formed subsidiaries of the
Company into WDOP and WROP immediately prior to the Effective Time.
Company Senior Preferred Stock and Company Redeemable Preferred Stock.
If the Merger is approved both by holders of at least two-thirds of the
outstanding shares of 9.20% Senior Preferred Stock, par value $0.01 per share,
of the Company ("Company Senior Preferred Stock") and by holders of shares of
9.0% Redeemable Preferred Stock, par value $0.01 per share, of the Company
("Company Redeemable Preferred Stock") entitled to vote thereon (such approvals,
the "Preferred Stock Vote"), then (i) each share of Company Senior Preferred
Stock issued and outstanding immediately prior to the Effective Time will be
converted into one validly issued, fully paid and nonassessable unit of senior
preferred limited partnership interest in Parent having the rights and
preferences set forth in the Agreement of Limited Partnership of Parent (the
"Parent Partnership Agreement"), (ii) each share of Company Redeemable Preferred
Stock issued and outstanding immediately prior to the Effective Time shall be
converted into one validly issued, fully paid and nonassessable unit of
redeemable preferred limited partnership interest having the rights and
preferences set forth in the Parent Partnership Agreement, and (iii) each holder
of Company Senior Preferred Stock and Company Redeemable Preferred Stock shall
become a limited partner of Parent and shall be bound by the terms of the Parent
Partnership Agreement. If the Preferred Stock vote is obtained, Newco will merge
into Parent, with Parent being the surviving entity.
Alternatively, if the Preferred Stock Vote is not obtained, then (i)
each share of Company Senior Preferred Stock issued and outstanding immediately
prior to the Effective Time shall be converted into one validly issued, fully
paid and nonassessable share of 9.20% Senior Preferred Stock of Newco having the
rights and preferences set forth in the Articles Supplementary designating the
9.20% Senior Preferred Stock of Newco (which rights and preferences are
substantially identical to the existing rights and preferences of the Company
Senior Preferred Stock), and (ii) each share of Company Redeemable Preferred
Stock issued and outstanding immediately prior to the Effective Time shall be
converted into one validly issued, fully paid and nonassessable share of 9.0%
Redeemable Preferred Stock of Newco (which rights and preferences are
substantially identical to the existing rights and preferences of the Company
Redeemable Preferred Stock).
Company Warrants. The Board of Directors of the Company has reduced the
exercise price of each warrant to purchase Company Common Stock then outstanding
under (i) that certain Series A Warrant Agreement dated as of December 27, 1996
between the Company and The First National Bank of Boston and (ii) that certain
Series B Warrant Agreement dated as of October 1, 1997 between the Company and
the First National Bank of Boston, to an exercise price of $23.24 per share,
effective immediately prior to the Effective Time. Subject to their earlier
expiration in accordance with their respective terms, each such warrant then
outstanding shall automatically be canceled and cease to exist and shall
thereafter represent the right to receive for each share of Company Common Stock
subject to such Company Warrant an amount in cash equal to $0.01.
Company Stock Options. At the Effective Time of the Merger, each
outstanding option to purchase Company Common Stock that has been granted under
the Company's Amended and Restated 1994 Stock Option Plan, the Company's
Long-Term Incentive Plan or the Company's 1998 Non-Qualified Employee Stock
Purchase Plan, whether or not then vested or exercisable, will become fully
vested and exercisable as of the Effective Time and will automatically be
canceled and cease to exist as of the Effective Time and will be converted into
the right to receive an amount in cash, if positive, equal to the number of
shares of Company Common Stock subject to such option multiplied by the excess
of (i) the per share Cash Merger Consideration minus (ii) the exercise price of
such option.
Page 9 of 16
<PAGE> 10
Company Restricted Stock. As of the Effective Time, all restrictions
upon each outstanding share of restricted stock that has been granted under the
Company's Long-Term Incentive Plan will terminate, each such share of restricted
stock will be converted into the right to receive the per share Cash Merger
Consideration, and each share of restricted stock will be canceled.
Directors and Officers. The Merger Agreement provides that the
directors and officers of the Company will resign at the Effective Time, and the
directors and officers of Newco will be the initial directors and officers of
the surviving entity at the Effective Time.
Amendment to Rights Agreement. In addition, the Company has amended the
Rights Agreement dated as of March 26, 1998 between the Company and BankBoston,
N.A. (the "Company Rights Agreement") to provide that none of the execution and
delivery of the Merger Agreement or related documents or the consummation of the
transactions contemplated by the Merger Agreement or related documents will
cause (A) the rights to purchase Series A Junior Participating Preferred Stock
of the Company to be exercisable under the Company Rights Agreement, (B) Parent,
Newco or any of their respective Subsidiaries or any of their respective
stockholders or holders of partnership interests to be deemed an "Acquiring
Person" (as defined in the Company Rights Agreement), or (C) any such event to
be deemed a "Distribution Date" (as defined in the Company Rights Agreement).
State Takeover Laws. The Board of Directors of the Company has exempted
the transactions contemplated by the Merger Agreement from Section 3-602
(business combinations statute) of the Maryland General Corporation Law and has
amended the Company's bylaws to exempt the transactions contemplated by the
Merger Agreement from Title 3, Subtitle 7 (control shares act) of the
Corporations and Associations Article of the Annotated Code of Maryland.
Representations, Warranties and Covenants. The Company, Parent and
Newco each have made certain customary representations, warranties and covenants
in connection with the Merger as set forth in the Merger Agreement.
Conditions. Consummation of the Merger is subject to various conditions
fully set forth in the Merger Agreement, including (without limitation) the
conditions that (i) the Merger be approved by a majority of the shares of
Company Common Stock entitled to vote on the Merger, (ii) certain consents
required to consummate the transactions contemplated by the Merger Agreement
shall have been obtained, (iii) the debt and equity financing for the
transactions contemplated by the Merger Agreement shall have been received in
accordance with the terms of the financing commitments, and (iv) no material
adverse change shall have occurred with respect to the Company.
Termination. The Merger Agreement may be terminated under the
circumstances set forth in the Merger Agreement, including (without limitation)
upon the following events: (i) by Parent or Newco, if the Board of Directors of
the Company (or its special committee) has withdrawn or modified its
recommendation or approval of the Merger or has recommended an inquiry, proposal
or offer with respect to a merger, acquisition, tender offer, exchange offer,
consolidation, sale of assets or similar transaction involving, or any purchase
of, 10% or more of the assets or any equity securities of the Company or any of
its subsidiaries, other than the transactions contemplated by the Merger
Agreement (any such inquiry, proposal or offer, a "Company Acquisition
Proposal"), (ii) by the Company, under certain circumstances if the Company
receives a financially superior Company Acquisition Proposal, (iii) by Parent or
Newco, if a material adverse change occurs with respect to the Company, (iv) by
Parent or Newco, under certain circumstances if the debt and equity financing
commitments terminate or expire, or if the aggregate gross proceeds from such
debt financing (excluding the commitment of The Chase Manhattan Bank) are less
than $825,000,000, (v) by the Company, if the conditions of Parent and Newco to
consummate the Merger have been satisfied, neither Parent nor Newco has the
right to terminate the Agreement, and Newco fails or refuses to effect the
Merger, (vi) by the Company, if the sum of certain expenditures described under
"Reduction in Cash Merger Consideration" above exceeds $5,000,000, and (vii) by
Parent or Newco, if certain retention bonuses, severance payments and
noncompetition payments exceed $11,203,500.
Page 10 of 16
<PAGE> 11
Break Up Fee. As more fully described in the Merger Agreement, if (i)
Parent or Newco terminates the Merger Agreement because the Company's Board of
Directors (or its special committee) has withdrawn or adversely modified its
recommendation or approval of the Merger or has recommended to the stockholders
a Company Acquisition Proposal or (ii) the Company terminates the Merger
Agreement under certain circumstances because its Board of Directors (or special
committee) has determined to withdraw its recommendation or approval of the
Merger based on the receipt of a financially superior Company Acquisition
Proposal, then the Company shall pay Parent a break up fee of $26,750,000 (the
"Break Up Fee"). In addition, the Company shall pay Parent the Break Up Fee if
the Merger Agreement is terminated by Parent, Newco or the Company because (i)
the stockholders do not approve the Merger, (ii) at the time of the stockholders
meeting a Company Acquisition Proposal was pending, and (iii) within 12 months
after the meeting, a Company Acquisition Proposal is agreed to or consummated.
Termination Expenses. The Company shall pay to Parent the expenses
incurred by Parent in connection with the transaction up to $12,000,000 if the
Merger Agreement is terminated for any reason other than (i) by mutual consent,
(ii) due to a material breach of the Merger Agreement by Parent or Newco, (iii)
due to insufficient available proceeds under the debt financing or (iv) because
the condition to Newco's obligation to effect the Merger relating to receipt of
financing has not been satisfied solely due to the failure of The Chase
Manhattan Bank to provide debt financing under its commitment.
Parent shall pay to the Company the expenses incurred by the Company in
connection with the transaction up to $2,000,000 if the Merger Agreement is
terminated due to a material breach of the Merger Agreement by Parent or Newco.
Liquidation Damages. Parent shall pay to the Company liquidated damages
of $5,000,000 if Newco refuses to effect the Merger after all conditions are
satisfied and neither Parent nor Newco has the right to terminate the Merger
Agreement.
Mergers of WDOP and WROP. Concurrently with the execution of the Merger
Agreement, the Company, WDOP Merger, L.P., a Delaware limited partnership ("WDOP
Merger Sub"), and Walden/Drever Operating Partnership, L.P., a Delaware limited
partnership and subsidiary of the Company ("WDOP"), entered into an Agreement
and Plan of Merger in connection with which (i) the limited partners of WDOP
will (A) receive cash or (B) elect to receive new securities or a combination of
new securities and cash and, and (ii) immediately prior to the Merger, WDOP
Merger Sub will merge with and into WDOP, with WDOP as the surviving entity. In
addition, Walden Operating, Inc., a Delaware corporation, WROP Merger, L.P., a
Delaware limited partnership ("WROP Merger Sub"), and Walden Residential
Operating Partnership, L.P., a Delaware limited partnership and subsidiary of
the Company ("WROP"), entered into an Agreement and Plan of Merger, in
connection with which (i) the limited partners of WROP will (A) receive cash or
(B) elect to receive new securities or a combination of new securities and cash
and (ii) immediately prior to the Merger, WROP Merger Sub will merge with and
into WROP, with WROP as the surviving entity.
Voting Agreements. Parent and Newco expect to enter into voting
agreements with the Company and certain of its stockholders (the "Stockholders")
under which each of the Stockholders would agree, and would grant to Parent an
irrevocable proxy to vote the shares of that Stockholder, as follows:
(a) at any meeting of stockholders of the Company called to vote upon
the Merger or the Merger Agreement, or at any adjournment thereof or in any
other circumstances upon which a vote, consent or other approval (including by
written consent) with respect to the Merger and the Merger Agreement is sought,
to vote (or cause to be voted) the number of shares of Company Common Stock,
Company Senior Preferred Stock or Company Redeemable Preferred Stock that the
Stockholder owns of record or of which the Stockholder has the power to direct
the vote (the "Subject Shares") in favor of the Merger and any other transaction
contemplated by the Merger Agreement;
(b) at any meeting of the stockholders of the Company or at any
adjournments thereof or in any other circumstances upon which the Stockholder's
vote, consent or other approval is sought, to vote (or cause to be voted)
Page 11 of 16
<PAGE> 12
the Subject Shares against (i) any merger agreement or merger (other than the
Merger Agreement and the Merger), consolidation, combination, sale of
substantial assets, reorganization, recapitalization, dissolution, liquidation
or winding up of or by the Company or any other takeover proposal or Company
Acquisition Proposal or (ii) any amendment of the Company's charter or bylaws or
other proposal or transaction involving the Company or any of its subsidiaries
which would in any manner impede, frustrate, prevent or nullify the Merger, the
Merger Agreement or any of the other transactions contemplated by the Merger
Agreement or change the voting rights of the Company Common Stock, Company
Senior Preferred Stock or Company Redeemable Preferred Stock;
(c) subject to certain exceptions, not to sell, transfer, pledge,
assign or otherwise dispose of (including by gift) (collectively, the
"Transfer"), or enter into any contract, option or other arrangement with
respect to the Transfer of the Subject Shares to any person other than pursuant
to the terms of the Merger Agreement or enter into any voting arrangement in
connection with any Company Acquisition Proposal; and
(d) not to directly or indirectly solicit, initiate or encourage the
submission of any Company Acquisition Proposal or, except as permitted by the
Merger Agreement, directly or indirectly participate in any discussions or
negotiations regarding, or furnish to any person any information with respect
to, or take any other action to facilitate any inquiries or the making of any
proposal that constitutes, or may reasonably be expected to lead to, any Company
Acquisition Proposal.
The foregoing summary of the terms of the Voting Agreement is qualified
in its entirety by reference to the Voting Agreement, which is incorporated
herein by reference.
Financing Commitments. In connection with the debt financing
contemplated by the financing commitments attached as exhibits hereto and
incorporated herein by reference, certain properties of the Company will be
transferred to various existing or newly created subsidiaries of the Company.
Page 12 of 16
<PAGE> 13
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) and (b) As described in Item 4 of this Schedule 13D, the Reporting
Persons, together with the WPA Group, may be deemed to be members of a group
under Section 13(d)(3) of the Act. At the close of business on September 24,
1999, the WPA Group may be deemed to be the beneficial owner of 1,408,500 shares
of the Company Common Stock, which constitutes approximately 5.53% of the
25,460,322 shares of the Company Common Stock outstanding on September 24, 1999,
according to the Company's representations in the Merger Agreement. The
Reporting Persons do not, directly or indirectly, have or share the power to
vote or to direct the vote of, or to dispose or to direct the disposition of,
such shares of Company Common Stock owned by the WPA Group. The Reporting
Persons expressly declare that the filing of this statement shall not be
construed as an admission that such person is, for purposes of Section 13(d) of
the Act, the beneficial owner of the Stock held by the WPA Group.
(c) No transactions in the Company Common Stock were effected by the
Reporting Persons during the past 60 days. On September 22, 1999, two members of
the WPA Group transferred certain shares internally among affiliated entities.
Westdale 2000 Inc., an Ontario, Canada corporation, transferred 170,000 shares
of Company Common Stock to Westdale Properties America, Inc., a Nevada
corporation ("Westdale Properties"), in exchange for 170,000 shares of Series A
Preferred Stock of Westdale Properties. In addition, Ronald Kimel made a capital
contribution of 6,100 shares of Company Common Stock to 657330 Ontario Inc., an
Ontario, Canada corporation, which in turn transferred these shares to Westdale
Properties in exchange for 6,100 shares of Series A Preferred Stock of Westdale
Properties. Westdale Properties subsequently made a capital contribution of all
such 176,100 shares to Westdale Properties America I, Ltd., a Texas limited
partnership.
(d) Not applicable.
(e) Not applicable.
Page 13 of 16
<PAGE> 14
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER.
Parent, Newco and the Company entered into the Merger Agreement on
September 24, 1999, and expect to enter into Voting Agreements with certain
stockholders of the Company as described in Item 4.
Oly LLC has entered into an expense sharing agreement with Westdale
Asset Management, Ltd. ("Westdale"), an affiliate of the WPA Group, a copy of
which is attached hereto as an exhibit and is incorporated herein by reference.
Under this agreement, the parties have agreed to share certain fees and expenses
incurred in connection with the proposed Merger. Westdale has agreed to commit
$12,000,000 in equity financing for the Merger and will receive a $1,000,000
sourcing fee upon the closing of the Merger. In addition, the agreement provides
that two members of the WPA Group will be appointed as members of the Management
Committee of Parent and that Parent and Westdale will enter into a property
management agreement if the Merger is consummated.
To the best knowledge of the Reporting Persons, there are no other
contracts, arrangements, understandings or relationships (legal or otherwise)
among the Reporting Persons or between any of the Reporting Persons and any
other person with respect to any securities of the Issuer, including but not
limited to, transfer or voting of any of the securities of the Issuer, finder's
fees, joint ventures, loan or option arrangements, puts or calls, guarantees of
profits, division of profits or loss, or the giving or withholding of proxies,
or a pledge or contingency the occurrence of which would give another person
voting power over the securities of the Issuer.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
EXHIBIT
NO.
- -------
10.1 Merger Agreement dated September 24, 1999 among Parent, Newco and the
Company.(1)
10.2 Form of Voting Agreement among Parent, Newco, the Company and the
stockholder named therein.(1)
10.3 Letter agreement dated September 24, 1999 between Oly LLC and Westdale*
99.1 Joint Filing Statement dated September 28, 1999, among Oly Fund II, Oly
REP, Oly Real Estate, Oly Two, Oly LP and Oly LLC.*
* Filed herewith.
(1) Incorporated by reference to the Company's Current Report on Form 8-K dated
September 24, 1999.
Page 14 of 16
<PAGE> 15
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief,
the undersigned certifies that the information set forth in this statement is
true, complete and correct.
Dated: September 28, 1999 OLY FUND II, LLC
By: /s/ HAL R. HALL
-------------------------------
Name: Hal R. Hall
-----------------------------
Title: Vice President
----------------------------
OLY REP II, L.P.
By: Oly Fund II, LLC,
its general partner
By: /s/ HAL R. HALL
-------------------------------
Name: Hal R. Hall
-----------------------------
Title: Vice President
----------------------------
OLY REAL ESTATE PARTNERS II, L.P.
By: Oly REP II, L.P.,
its general partner
By: Oly Fund II, LLC,
its general partner
By: /s/ HAL R. HALL
-------------------------------
Name: Hal R. Hall
-----------------------------
Title: Vice President
----------------------------
OLY HIGHTOP TWO GP, LLC
By: /s/ HAL R. HALL
-------------------------------
Name: Hal R. Hall
-----------------------------
Title: Vice President
----------------------------
Page 15 of 16
<PAGE> 16
OLY HIGHTOP, L.P.
By: Oly Hightop Two GP, LLC,
its general partner
By: /s/ HAL R. HALL
------------------------------
Name: Hal R. Hall
----------------------------
Title: Vice President
---------------------------
OLY HIGHTOP, LLC
By: Oly Hightop, L.P.,
its sole member
By: Oly Hightop Two GP, LLC,
its general partner
By: /s/ HAL R. HALL
------------------------------
Name: Hal R. Hall
----------------------------
Title: Vice President
---------------------------
Page 16 of 16
<PAGE> 17
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<S> <C>
10.1 Merger Agreement dated September 24, 1999 among Parent, Newco and the
Company.(1)
10.2 Form of Voting Agreement among Parent, Newco, the Company and the
stockholder named therein.(1)
10.3 Letter agreement dated September 24, 1999 between Oly LLC and Westdale*
99.1 Joint Filing Statement dated September 28, 1999, among Oly Fund II, Oly
REP, Oly Real Estate, Oly Two, Oly LP and Oly LLC.*
</TABLE>
* Filed herewith.
(1) Incorporated by reference to the Company's Current Report on Form 8-K dated
September 24, 1999.
<PAGE> 1
EXHIBIT 10.3
OLY HIGHTOP, LLC
September 24, 1999
Mr. Joseph G. Beard
President
Westdale Asset Management, Ltd.
300 Commerce
Dallas, Texas 75226
Re: Walden Residential Properties, Inc.
Dear Joe:
As you are aware, Oly Hightop, LLC, a Texas limited liability company
("OLY"), an affiliate of Olympus Real Estate Corporation, a Delaware corporation
doing business in Texas as OREC Real Estate Corporation ("OREC"), Westdale Asset
Management, Ltd. ("Westdale") and certain affiliates of Westdale have been
engaged in discussions regarding the possible acquisition (the "Proposed
Transaction") of Walden Residential Properties, Inc. ("Walden"). This letter is
intended to confirm our understandings with regard to those discussions,
particularly with respect to certain expense sharing arrangements and, as set
forth on Annex A attached hereto, our intentions regarding certain ownership,
management and fee arrangements that are conditioned upon the negotiation,
execution and delivery of definitive documentation with regard to, and the
consummation of, the Proposed Transaction.
On May 14, 1999, OREC and Westdale each executed a letter setting forth
certain matters regarding their discussions with Walden (the "May 14 letter").
On August 4, 1999, OREC and Westdale Properties America I, Ltd. ("Westdale
Properties") each executed a letter (the "Indemnity Letter") setting forth
certain agreements between OREC and Westdale Properties with respect to their
obligations under a letter agreement among OREC, Westdale Properties, Bank
Boston, N.A., and BancBoston Robertson Stephens Inc. (the "BKB Fee Letter"). On
August 9, 1999, OREC, Westdale and Walden entered into a letter agreement (the
"Exclusivity Agreement") granting OREC and Westdale a 45-day exclusive due
diligence and negotiation period. The Exclusivity Agreement also provides that
Walden will pay certain fees to OREC and Westdale and reimburse certain expenses
of OREC and Westdale under certain circumstances as set forth in the Exclusivity
Letter. OREC has subsequently assigned its rights under the Exclusivity Letter
to OLY and Westdale has consented to that assignment.
1. This letter agreement supersedes the May 14 Letter and represents
our entire understanding with respect to the Proposed Transaction and the
matters described in the May 14 Letter. Except to the extent that paragraph 2
below obligates Westdale to reimburse OLY for a portion of certain Transaction
Expenses, the provisions of the Indemnity Letter shall remain unmodified hereby.
<PAGE> 2
Joseph G. Beard
September 24, 1999
Page 2
2. Although neither of us shall have the authority to bind the other
with regard thereto, we have agreed to share the economic burden of our
respective expenses incurred heretofore or hereafter in connection with the
Proposed Transaction (collectively, "Transaction Expenses"), including (a) fees
and expenses of financial advisors and lenders (including those incurred
pursuant to the BKB Fee Letter, unless excluded by paragraph 9 below), (b) the
costs of appraisals, surveys, environmental and engineering reports and title
searches and commitments, and (c) the reasonable fees and expenses of counsel
engaged by OLY or Westdale. Without limiting the generality of the foregoing,
the Transaction Expenses shall include the fees and expenses of Vinson & Elkins,
L.L.P., counsel to OLY, and the fees and expenses of Jackson Walker, L.L.P.,
counsel to Westdale; provided, however, that from and after August 9, 1999, the
fees and expenses of Jackson Walker L.L.P. which shall constitute Transaction
Expenses shall be limited to time and expenses incurred by Susan Halsey and
persons under her direction and the time and expenses of such other partners or
employees of Jackson Walker L.L.P. as shall be requested by Vinson & Elkins,
L.L.P. to provide assistance to them with regard to the Potential Transaction or
as shall be incurred in connection with any litigation arising from or relating
to the Proposed Transaction; and provided however that fees and expenses of
counsel incurred in connection with litigation that may arise from or with
respect to the Proposed Transaction shall not be Transaction Expenses unless the
Proposed Transaction shall be successfully consummated. Each of the parties
hereto agrees that they are not being represented by the other's counsel,
notwithstanding any sharing of fees or expenses thereof. Transaction Expenses
incurred prior to August 9, 1999 and after May 14, 1999 shall be allocated to
and paid one half by OLY and one half by Westdale. Transaction Expenses incurred
from and after August 9, 1999 shall be allocated and paid in accordance with the
parties respective Transaction Percentages (as defined in paragraph 6 below.)
OLY and Westdale shall, promptly upon request therefor, pay directly or
reimburse, as the case may be, their respective shares of the Transaction
Expenses.
3. All amounts received from Walden pursuant to paragraph 6 of the
Exclusivity Agreement and all amounts received from Walden or any other third
party, as fees or as reimbursement of expenses, upon consummation or abandonment
of any Proposed Transaction, or upon termination of any agreement relating
thereto, shall be allocated and paid (i) first, to give effect to the sharing of
expenses contemplated in paragraph 2 above, and (ii) second, to OLY and Westdale
in accordance with their respective Transaction Percentages. In addition, any
other consideration received from Walden or its affiliates pursuant to any
definitive agreement contemplating the Proposed Transaction, shall be allocated
and paid or delivered to OLY and Westdale in accordance with the preceding
sentence.
4. (a) If Walden is obligated to pay any amounts pursuant to paragraph
6 of the Exclusivity Agreement, or pursuant to any provision of the definitive
documentation contemplating a Proposed Transaction, and does not pay such
amounts, OLY and Westdale may jointly agree to seek to enforce the Exclusivity
Agreement or definitive documentation in such manner as they shall
<PAGE> 3
Joseph G. Beard
September 24, 1999
Page 3
agree. In such event, the costs and expenses associated with such action shall
be deemed Transaction Expenses and allocated and paid by OLY and Westdale in
accordance with paragraph 2 above. If the parties are successful in enforcing
the Exclusivity Agreement, any amounts received shall be allocated and paid in
accordance with paragraph 3 above.
(b) If either party elects not to seek to enforce the provisions of the
Exclusivity Agreement or any definitive documentation contemplating a Proposed
Transaction or, at any point after enforcement proceedings have commenced (upon
payment of any expenses incurred in connection with such proceedings to such
date) elects not to continue to fund such proceedings, the other party may
pursue or continue to seek enforcement of the Exclusivity Agreement or such
definitive documentation and shall bear all of the costs of such proceedings and
shall be entitled to retain any and all benefits received as a result of such
proceedings. The provisions of this paragraph 4(b) shall not modify the
provisions of paragraphs 2 and 3 hereof, except that costs paid and benefits
received by a single party pursuing an enforcement proceeding as contemplated in
this paragraph 4(b) shall be excluded from the application thereof.
5. The parties have agreed to consider the Proposed Transaction and to
investigate one or more structures therefor. Currently, the parties expect to
structure Westdale's participation in the Proposed Transaction as summarized on
Exhibit A hereto. In addition, except as provided herein and in Exhibit A
hereto, the parties have agreed that as between them, any equity investments of
OLY and its affiliates, on one hand, and Westdale and its affiliates, on the
other hand, in the Proposed Transaction will participate in and benefit from the
Proposed Transaction on a pari passu basis, based upon their respective
Transaction Percentages. Each of the parties recognizes and agrees, however,
that OLY may obtain capital with which to meet its capital commitments
contemplated in paragraph 6 hereof from one or more third parties, some of whom
may not be affiliates of OLY, and may receive consideration with regard thereto.
Westdale shall have no interest in or responsibility for any such arrangement or
consideration, unless the parties shall specifically agree to the contrary. This
letter does not constitute a legally enforceable agreement with respect to our
current expectations regarding the Proposed Transaction, and each party's
obligations are subject to the completion of their due diligence review of the
business, products, assets and financial and other records of Walden and to the
negotiation and execution of definitive agreements and the closing of the
Proposed Transaction. Nonetheless, this letter does evidence OLY and Westdale's
intention to proceed with the Proposed Transaction as contemplated above.
6. For the purposes of this letter, the "Transaction Percentage" of OLY
or Westdale, as the case may be, at any point in time, shall be the ratio
between the equity capital committed by that party and its affiliates to the
Proposed Transaction and the aggregate of all equity capital committed thereto
by the parties. Initially, the parties have committed to provide an aggregate of
$300,000,000 of equity capital, with Westdale and its affiliates providing
$12,000,000 and OLY and its affiliates providing $288,000,000. To the extent
that the actual equity investments differ from the
<PAGE> 4
Joseph G. Beard
September 24, 1999
Page 4
commitments in the preceding sentence, the parties' respective shares of
Transaction Expenses already incurred shall be likewise adjusted.
7. Each party acknowledges that it has no authority to enter into any
agreement with Walden, or Walden's Board of Directors, representatives or
advisors or any prospective lenders or joint venture partners or any other party
in the name of, on behalf of, or otherwise binding on the other party, nor may
it subject the other party to any other obligations or liabilities except as
expressly authorized hereby, and it shall not represent that it has any such
authority. The parties further acknowledge and agree that the current on-going
discussions between Westdale and OLY regarding the Proposed Transaction are
preliminary in nature and may be terminated by either party at any time for any
or no reason without any liability or obligation to the other, other than with
respect to Transaction Expenses incurred prior to the date of such termination.
The parties further acknowledge and agree that none of this letter, the May 14
Letter, any proposals made to Walden, the Exclusivity Agreement nor the current
on-going discussions are intended to (and shall not) create a legally binding
obligation or commitment on the part of either party with respect to the
negotiation or completion of the Proposed Transaction. It shall be and remain in
the sole discretion of each party whether or not to enter into the Proposed
Transaction or any transaction with the other party and neither party shall have
any liability or obligation for failing to do so except as expressly provided
herein.
8. Consummation of the Proposed Transaction is subject to (a) a
satisfactory due diligence review by each of the parties in their respective
sole and absolute discretion, (b) negotiation, execution and delivery of
definitive transaction documents in form and substance acceptable to each of the
parties in their respective sole and absolute discretion, as evidenced by their
written execution thereof, and (c) approval in writing of the terms and
conditions of the Proposed Transaction and the definitive transaction documents
by the investment committee of OLY which approval may be withheld in its sole
and absolute discretion.
9. In the event that either party ultimately elects not to pursue the
Proposed Transaction with the other party, either party shall have the right to
pursue the Proposed Transaction alone or with any other party without any
liability or obligation to the other except for the obligation to reimburse
Transaction Expenses and any other obligations expressly undertaken pursuant to
this letter or in any other writing between the parties. In the event that
either party shall pursue the Proposed Transaction without the other, the fees
and expenses of Bank Boston, N.A. and BancBoston Robertson Stephens, Inc. that
are the subject of the Indemnity Letter shall not be deemed Transaction Expenses
and shall be governed by the Indemnity Letter.
10. No modification, amendment or supplement may be made to this letter
unless such modification, amendment or supplement is made in writing and
executed by both parties. Any notices permitted or required hereunder shall be
in writing and shall be personally delivered or sent
<PAGE> 5
Joseph G. Beard
September 24, 1999
Page 5
by telefacsimile (with electronic confirmation) to the other party at its
address set forth on the signature page hereto, or at such other address as it
may specify in writing in accordance with this sentence. This letter shall be
governed by and construed in accordance with the laws of the State of Texas,
without giving effect to the principles of conflicts of laws thereof. This
letter may be executed in any number of counterparts (including by facsimile),
each of which shall be deemed an original, and all such counterparts together
shall constitute but one and the same agreement.
OLY HIGHTOP, LLC
By: Oly Hightop, L.P., its Member
By: Oly Hightop Two GP, LLC,
Its: General Partner
By: /s/ HAL R. HALL
----------------------------
Name: Hal R. Hall
--------------------------
Title: Vice President
-------------------------
AGREED AND ACCEPTED:
WESTDALE ASSET MANAGEMENT, LTD.
By: JGB Ventures I, Ltd.
Its: General Partner
By: JGB Holdings, Inc.
Its: General Partner
By: /s/ Joseph G. Beard
------------------------
Joseph G. Beard
President
<PAGE> 6
ANNEX A
Equity Commitment: Westdale commits at least $12 million to the equity
of the pass through entity that will own Walden upon
the completion of the Proposed Transaction ("NewCo").
Board Representation: Joe Beard and Ron Kimel will each be
appointed to serve as members of Management Committee
of NewCo upon the completion of Proposed Transaction.
The voting power of these directorships will be
proportional to Westdale's ownership percentage in
NewCo.
Sourcing Fee: Westdale will receive a $1 million sourcing fee upon
the closing of the Proposed Transaction.
Management Contract: At the closing, Walden and Westdale will enter into a
one year management contract that will provide for a
$500,000 annual management fee and on-site
involvement by Joe Beard and members of Westdale
management mutually agreeable to NewCo and Westdale.
The management contract will be terminable on 30 days
written notice, without any further obligation to
Walden, beginning six months after the closing of the
Proposed Transaction.
Management Incentive
Program: Westdale/Beard will be entitled to participate in the
Walden equity incentive compensation plan at a level
approved by the Management Committee of NewCo upon
the same terms and conditions as Walden management.
<PAGE> 1
EXHIBIT 99.1
JOINT FILING STATEMENT
Each of the undersigned agrees that (i) the amendment to the statement
on Schedule 13D relating to the common stock, par value $.01 per share, of
Walden Residential Properties, Inc. has been adopted and filed on behalf of each
of them, (ii) all future amendments to such statement on Schedule 13D will,
unless written notice to the contrary is delivered as described below, be
jointly filed on behalf of each of them, and (iii) the provisions of Rule
13d-1(f)(1) under the Securities Exchange Act of 1934 apply to each of them.
This agreement may be terminated with respect to the obligations to jointly file
future amendments to such statement on Schedule 13D as to any of the undersigned
upon such person giving written notice thereof to each of the other persons
signatory hereto, at the principal office thereof.
Dated: September 28, 1999 OLY FUND II, LLC
By: /s/ HAL R. HALL
-------------------------------
Name: Hal R. Hall
-----------------------------
Title: Vice President
----------------------------
Dated: September 28, 1999 OLY REP II, L.P.
By: Oly Fund II, LLC,
its general partner
By: /s/ HAL R. HALL
-------------------------------
Name: Hal R. Hall
-----------------------------
Title: Vice President
----------------------------
Dated: September 28, 1999 OLY REAL ESTATE PARTNERS II, L.P.
By: Oly REP II, L.P
its general partner
By: Oly Fund II, LLC,
its general partner
Dated: September 28, 1999
By: /s/ HAL R. HALL
-------------------------------
Name: Hal R. Hall
-----------------------------
Title: Vice President
----------------------------
2
<PAGE> 2
Dated: September 28, 1999 OLY HIGHTOP TWO GP, LLC
By: /s/ HAL R. HALL
-------------------------------
Name: Hal R. Hall
-----------------------------
Title: Vice President
----------------------------
Dated: September 28, 1999 OLY HIGHTOP, L.P.
By: Oly Hightop Two GP, LLC,
its general partner
By: /s/ HAL R. HALL
-------------------------------
Name: Hal R. Hall
-----------------------------
Title: Vice President
----------------------------
Dated: September 28, 1999 OLY HIGHTOP, LLC
By: Oly Hightop, L.P.,
its sole member
By: Oly Hightop Two GP, LLC,
its general partner
By: /s/ HAL R. HALL
-------------------------------
Name: Hal R. Hall
-----------------------------
Title: Vice President
----------------------------
3
