Exhibit 10.6
EXECUTION COPY
PUT/CALL AGREEMENT
DATED AS OF OCTOBER 11,
2005
By and Among
MINTO BUILDERS (FLORIDA),
INC.,
INLAND AMERICAN REAL ESTATE
TRUST, INC.,
MINTO HOLDINGS
INC.
AND
HOLDERS OF COMMON STOCK AND
SERIES A PREFERRED STOCK
AS LISTED ON SCHEDULE A HERETO
Table of Contents
PUT/CALL AGREEMENT
This PUT/CALL AGREEMENT (this
“ Agreement ”), dated as of October 11,
2005, is made and entered into by and among Minto Builders
(Florida), Inc., a Florida corporation (the “
Company ”), Inland American Real Estate
Trust, Inc., a Maryland corporation (“ Inland
”), Minto Holdings Inc., a Canadian corporation incorporated
under the laws of Ontario (“ Minto Holdings ”),
the holders of common stock, par value $1.00 per share (the “
Common Stock ”), of the Company listed on
Schedule A hereto (the “ Common Stock
Holders ”) and the holders of 3.5% Series A
redeemable preferred stock, par value $0.01 per share, of the
Company (the “ Series A Preferred Stock
”) listed on Schedule A hereto (the “
Series A Holders ”).
WHEREAS, the Company has entered
into a Securities Purchase and Subscription Agreement, dated as of
the date hereof (the “ Purchase Agreement ”),
with Inland and the other parties named therein pursuant to which
the Company has agreed to issue and sell, and Inland has agreed to
purchase, for $1,276 per share, 920,000 shares of convertible
special voting stock, par value $0.01 per share, of the Company
(the “ Voting Stock ”) for an aggregate
purchase price of $1,173,920,000 (the “ Transaction
”);
WHEREAS, prior to the Transaction,
Minto (Delaware), LLC, a Delaware limited liability company, owns
23,000 shares of Common Stock and 207,000 shares of Series A
Preferred Stock; and
WHEREAS, as a result of the
Transaction, when fully subscribed, Inland will hold up to 80% of
the voting securities and value of the Company.
NOW, THEREFORE, the parties hereto
hereby agree as follows:
ARTICLE I
DEFINITIONS
For all purposes of this Agreement,
the following terms shall have the meanings set forth in this
Article I:
“ Adjusted MB FFO
” means the FFO of the Company for the most recently
completed fiscal year calculated as if the Series A Preferred
Stock is debt with an interest rate equal to Inland’s
weighted average interest rate on fixed rate debt for its most
recently completed fiscal year (i.e., treating the dividend on the
Series A Preferred Stock as a deduction from FFO as if the
dividend payment is an interest payment and treating the amount of
the deemed interest payment as if it is paid at a rate equal to
Inland’s weighted average interest rate on fixed rate debt
rather than paid at a rate equal to 3.5%).
“ Amended Charter
” means the First Amended and Restated Articles of
Incorporation of the Company which were filed with the Secretary of
State of the State of Florida on October 7, 2005 and the
Second Amended and Restated Articles of Incorporation of the
Company which were filed with the Secretary of State of the State
of Florida on October 11, 2005.
“ Agreement ” has
the meaning specified in the introductory paragraph to this
Agreement.
“ Affiliate ”
means, with respect to any specified Person, any other Person that,
directly or indirectly, through one or more intermediaries,
controls, or is controlled by, or is under common control with the
Person specified and with respect to Inland, the term
“Affiliate” shall include any member of the Inland
Group. For purposes of this definition, control of a Person
means the power, directly or indirectly,
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to direct or cause the direction of the
management and policies of such Person whether by contract or
otherwise.
“ Applicable
Consideration ” means (1) with respect to
Series A Preferred Stock (treating for purposes of this
definition, Minto Delaware Equity as the Series A Preferred
Stock owned by Minto Delaware multiplied by the percentage of Minto
Delaware Equity owned by the recipient of the Applicable
Consideration), the Series A Liquidation Preference
(apportioned pro rata based on relative number of shares of
Series A Preferred Stock owned) and (2) with respect
to Common Stock (treating for purposes of this definition, Minto
Delaware Equity as the Common Stock owned by Minto Delaware
multiplied by the percentage of Minto Delaware Equity owned by the
recipient of the Applicable Consideration), the applicable
consideration under Article II other than the Series A
Liquidation Preference (apportioned pro rata based on relative
number of shares of Common Stock owned).
“ Arbitrated Claim
” has the meaning specified in Section 3.14.
“ Arbitration Answer
” has the meaning specified in
Section 3.14(c).
“ Arbitration Claimants
” has the meaning specified in
Section 3.14(c).
“ Arbitration Demand
” has the meaning specified in
Section 3.14(c).
“ Arbitration Reply
” has the meaning specified in
Section 3.14(c).
“ Arbitration
Respondents ” has the meaning specified in
Section 3.14(c).
“ Board ” means
the Board of Directors of the Company.
“ Business Day ”
means each day other than a Saturday, a Sunday or any other day on
which banking institutions in the State of Illinois or in the
Province of Ontario are authorized or obligated by law or executive
order to be closed.
“ Capital Stock ”
means the Common Stock, Voting Stock, Series A Preferred Stock
and Series C Preferred Stock.
“ Charter ” means
the articles of incorporation of the Company as from time to time
amended or modified, including, without limitation, the Amended
Charter, the Series A Articles of Amendment, the Series B
Articles of Amendment, the Series C Articles of Amendment and
the Voting Shares Articles of Amendment.
“ Closing ” means
the closing on the initial purchase of Voting Stock by Inland
pursuant to the Purchase Agreement.
“ Common Stock ”
has the meaning specified in the introductory paragraph to this
Agreement.
“ Common Stock Holders
” has the meaning specified in the introductory paragraph to
this Agreement.
“ Company ” has
the meaning specified in the introductory paragraph to this
Agreement.
“ Damages ” means
“any and all costs, losses, Taxes, liabilities, obligations,
lawsuits, deficiencies, claims, demands, penalties, fines, and
expenses, including, without limitation, reasonable
attorneys’ fees, accountants’ fees, environmental
engineer or consultant charges, fees and expenses arising
from
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environmental investigation, remediation or
other response action, costs and expenditures required or incurred
to comply with consent decrees, administrative orders, injunctions
and other judicial equitable relief, and all amounts paid in
investigation, defense or settlement of any of the
foregoing.
“ E/D Purchase Right
” has the meaning specified in Section 2.01(c) of
this Agreement.
“ Event of Default
” means any violation by Inland, Inland Western or the
Company of this Agreement, the Shareholders Agreement,
Section 8 of the Series A Articles of Amendment, the
Purchase Agreement and the Subscription Agreement and the
expiration of any stated cure period, if any, for such
violation.
“ Exercise Notice
” has the meaning specified in Section 2.01(e) of
this Agreement.
“ FFO ” means net
income computed in accordance with GAAP, excluding gains (or
losses) from sales of property, plus depreciation and
amortization and after adjustments for unconsolidated partnerships
and joint ventures in which the Company holds and
interest.
“ GAAP ” means
accounting principles which are (a) consistent with the
principles promulgated or adopted by the Financial Accounting
Standards Board and its predecessors and other recognized
principle-setting bodies as in effect as of the date of the
relevant document, (b) applied on a basis consistent with
prior periods, and (c) such that a certified public accountant
would, insofar as the use of accounting principles is pertinent, be
in a position to base an opinion as to financial statements in
which such principles have been properly applied.
“ Initial Purchase
Right ” has the meaning specified in
Section 2.01(a) of this Agreement.
“ Initial Stock ”
means the Common Stock and Series A Preferred Stock held by
Minto Delaware as of the date hereof.
“ Inland ” has
the meaning specified in the introductory paragraph to this
Agreement.
“ Inland Group ”
means The Inland Group, Inc., a Delaware corporation, and any
direct or indirect wholly-owned subsidiary.
“ Inland Stock ”
means the shares of common stock, par value $0.001 per share, of
Inland.
“ Listed ” means
the listing of capital securities on a national securities exchange
or inclusion of such securities for quotation on the NASDAQ Stock
Market.
“ Majority Holder
” means any Person that owns a majority in interest of the
outstanding shares of Common Stock of the Company.
“ MB Purchase Right
” has the meaning specified in Section 2.01(d) of
this Agreement.
“ MD Common Stock Ratio
” means a fraction, (x) the numerator of which is the
total number of shares of Common Stock held by Minto Delaware or
its assignee, and (y) the denominator which is the total
number of shares of Common Stock outstanding.
“ Minto Delaware
” means Minto (Delaware), LLC, a Delaware limited liability
company.
“ Minto Delaware Equity
” means all membership interests and other equity interests
(including rights to acquire equity, such as warrants and
options) of Minto Delaware.
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“ NAREIT ” means
the National Association of Real Estate Investment
Trusts.
“ NAREIT Multiple
” means a fraction, (x) the numerator of which is the
aggregate market capitalization of the MSCI US REIT Index, and
(y) the denominator of which is the aggregate FFO of the MSCI
US REIT Index.
“ Partial Liquidation
” has the meaning specified in Section 2.04 of this
Agreement.
“ Person ” means
an individual, partnership, corporation, association, trust, joint
venture, unincorporated organization, limited liability company,
joint stock company, and any government, governmental department or
agency or political subdivision thereof or any other
entity.
“ Purchase Agreement
” has the meaning specified in the Recitals to the
Agreement.
“ Purchase Right
” means an Initial Purchase Right, a Subsequent Purchase
Right or an E/D Purchase Right.
“ Series A Articles of
Amendment ” means the Articles of Amendment filed by the
Company and accepted for record by the State of Florida Department
of State designating the Series A Preferred Stock,
substantially in the form of Exhibit A
hereto.
“ Series A Holders
” has the meaning specified in the introductory paragraph to
this Agreement.
“ Series A Liquidation
Preference ” means the liquidation preference equal to
$1,276 per share of Series A Preferred Stock plus accrued and
unpaid dividends.
“ Series A Preferred
Stock ” has the meaning specified in the introductory
paragraph to this Agreement.
“ Series B Articles of
Amendment ” means the Articles of Amendment filed by the
Company and accepted for record by the State of Florida Department
of State designating the Series B Preferred Stock,
substantially in the form of Exhibit B attached to the
Purchase Agreement.
“ Series B Preferred
Stock ” means the Series B Redeemable Preferred
Stock, $0.01 par value per share.
“ Series C Articles of
Amendment ” means the Articles of Amendment filed by the
Company and accepted for record by the State of Florida Department
of State designating the Series C Preferred Stock,
substantially in the form of Exhibit C attached to the
Purchase Agreement.
“ Series C Preferred
Stock ” means the Series C Junior Redeemable
Preferred Stock, $0.01 par value per share.
“ Shareholders
Agreement ” means the Shareholders Agreement, dated as of
the date hereof, by and among the Company, Inland and the
Series A Holders.
“ Subscription
Agreement ” has the meaning specified in the Purchase
Agreement.
“ Subsequent Purchase
Right ” has the meaning specified in
Section 2.01(b) of this Agreement.
“ Supplemental Shareholders
Agreement ” means the Supplemental Shareholders
Agreement, dated as of the date hereof, by and among the Inland and
the Series A Holders.
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“ Transaction ”
has the meaning specified in the Recitals of this
Agreement.
“ Voting Stock ”
has the meaning specified in the Recitals this
Agreement.
“ Voting Stock Articles of
Amendment ” means the Articles of Amendment filed by the
Company and accepted for record by the State of Florida Department
of State designating the Voting Stock, substantially in the form of
Exhibit C attached to the Purchase Agreement.
ARTICLE II
PUT/CALL RIGHTS
SECTION 2.01.
Purchase Rights
.
(a)
On or after the sixth anniversary of
the Closing until the seventh anniversary of the Closing, Minto
Holdings shall have an option to require Inland to purchase (the
“ Initial Purchase Right ”), in whole, but not
in part, one hundred percent (100%) of the Minto Delaware
Equity for a price equal to (A) if the shares of Inland Stock
are not Listed, on the earlier of (x) the date Inland
purchases the Minto Delaware Equity or (y) 150 days after the
date written notice of the Initial Purchase Right is given, the sum
of (1) the Series A Liquidation Preference, payable in
cash and (2) $29,348,000 or (B) if the shares of Inland
Stock are Listed, on the earlier of (x) the date Inland
purchases the Minto Delaware Equity or (y) 150 days after the
date written notice of the Initial Purchase Right is given, the sum
of (1) the Series A Liquidation Preference, payable in
cash and (2) 2,934,800 shares of Inland Stock. If Minto
Holdings exercises the Initial Purchase Right at a time in which
Minto Delaware does not own all of the Initial Stock or Minto
Holdings does not own all of the Minto Delaware Equity, on exercise
of the Initial Purchase Right, each owner of Initial Stock or Minto
Delaware Equity, as applicable, exercising such right shall receive
its Applicable Consideration rather than the consideration
described above in this Section 2.01(a). Each transferee
of any portion of the Initial Stock or the Minto Delaware Equity
shall be entitled to exercise the Initial Purchase Right and be
entitled to receive its Applicable Consideration.
(b)
On or after the seventh anniversary
of the Closing, Minto Holdings shall have an option to require
Inland to purchase (the “ Subsequent Purchase Right
”), in whole, but not in part, one hundred percent
(100%) of the Minto Delaware Equity for a price equal to
(A) if the shares of Inland Stock are not Listed, on the
earlier of (x) the date Inland purchases the Minto Delaware Equity
or (y) 150 days after written notice of a Subsequent Purchase
Right is given, the sum of (1) the Series A Liquidation
Preference, payable in cash and (2) the fair market value of
the Common Stock held by Minto Delaware on the date written notice
of the Subsequent Purchase Right is given, determined pursuant to
Section 2.02 hereof, payable in cash, or (B) if the
shares of Inland Stock are Listed, on the earlier of (x) the date
Inland purchases the Minto
