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PUT/CALL AGREEMENT

Put Option Agreement

PUT/CALL AGREEMENT | Document Parties: Cabot Industrial Value Fund Manager, LLC | Dividend Capital Trust Inc You are currently viewing:
This Put Option Agreement involves

Cabot Industrial Value Fund Manager, LLC | Dividend Capital Trust Inc

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Title: PUT/CALL AGREEMENT
Governing Law: Delaware     Date: 8/15/2005
Law Firm: Mayer, Brown, Rowe & Maw LLP; Goodwin Procter LLP    

PUT/CALL AGREEMENT, Parties: cabot industrial value fund manager  llc , dividend capital trust inc
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Exhibit 2.2

 

PUT/CALL AGREEMENT

 

This PUT/CALL AGREEMENT (this “Agreement”) is entered into as of July 21, 2005 by and among Cabot Industrial Value Fund Manager, LLC, a Massachusetts limited liability company (“Cabot GP”), each of the limited partners of the Partnership listed on Exhibit A to this Agreement (the “Non-REIT LPs”) and Dividend Capital Trust Inc., a Maryland corporation (“DCT”).  A list of the defined terms used in this Agreement and the sections of this Agreement where such terms are defined is attached to this Agreement as Exhibit B .  Capitalized terms used in this Agreement and not otherwise defined in this Agreement shall have the meanings ascribed to them in the Merger Agreement.

 

RECITALS

 

WHEREAS, DCT, DCT Acquisition Corporation, a Maryland corporation and a controlled affiliate of DCT (“Acquisition Sub”), Capital Industrial Value Fund, Inc., a Maryland corporation (“REIT LP”) and Cabot GP have entered into an Agreement and Plan of Merger dated as of June 17, 2005 (the “Merger Agreement”) whereby Acquisition Sub will merge with and into REIT LP, with REIT LP remaining as the surviving corporation controlled by DCT (such merger transaction is referred to herein as the “Merger Transaction”).

 

WHEREAS, contemporaneously with the closing of the Merger Transaction (the “Closing”), the Amended and Restated Limited Partnership Agreement of Cabot Industrial Value Fund, L.P. (the “Partnership”) shall be amended and restated in the form of the Second Amended and Restated Limited Partnership Agreement attached as Exhibit M to the Merger Agreement (as so amended and restated, the “Partnership Agreement”), Cabot Industrial Value Fund, Inc., a Maryland corporation which will be beneficially owned by DCT following the closing of the Merger Transaction, shall replace Cabot GP as the sole general partner of the Partnership, with the general partner interest of Cabot GP converted to a limited partner interest in the Partnership, and the Non-REIT LPs shall continue to hold limited partnership interests in the Partnership.

 

WHEREAS, as contemplated by the Merger Agreement, the parties are entering into this Agreement to set forth certain rights and obligations of the parties with respect to the limited partnership interests in the Partnership held by Cabot GP and the Non-REIT LPs following the Merger Transaction.

 

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual agreements, covenants and conditions contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties, the parties hereby agree as set forth below.

 

1.                                        Put Option .

 

1.1                          At any time during the period beginning April 1, 2006 through July 1, 2006 (the “Initial Put Period”), each of Cabot GP and each Non-REIT LP (each an “Interest Holder”) shall have the irrevocable right and option, by giving DCT a Put Notice (as described below), to require DCT to purchase all (but not less than all) of the Interest Holder’s limited partnership interests in the Partnership for an amount equal to the Interest Holder’s Initial Put Price (as

 



 

defined below).  Beginning on January 1, 2009, at any time during the month of January in 2009 and in each calendar year thereafter (the “Subsequent Put Periods”), each Interest Holder shall have the irrevocable right and option, by giving DCT a Put Notice, to require DCT to purchase all (but not less than all) of the Interest Holder’s limited partnership interests in the Partnership for an amount equal to the Interest Holder’s Subsequent Put Price (as defined below).   As used herein, “Put Price” shall refer to either the Initial Put Price or a Subsequent Put Price, as applicable.

 

1.2                          On the date of sale designated in a Put Notice, the applicable Interest Holder shall (a) sell, assign, convey, transfer and deliver to DCT all of its limited partnership interests in the Partnership free and clear of all pledges, security interests, adverse claims, liens, restrictions and encumbrances (other than those set forth in the Partnership Agreement, as then in effect) against payment therefor of such Interest Holder’s Initial Put Price or Subsequent Put Price, as applicable, (b) withdraw as a partner of the Partnership and (c) execute and deliver all instruments, agreements and other documents reasonably necessary to effect the foregoing, including, without limitation, (x) a certificate by such Interest Holder as of such date that the representations and warranties in Section 7 with respect to such Interest Holder and such limited partnership interest are true and correct as of such date, (y) if such Interest Holder is not an individual, a certificate by the secretary or other appropriate Person of such Interest Holder as of such date as to (i) the incumbency of its officers or other signatories, (ii) authorizations relating to this Agreement, and (iii) the organizational documents of such Interest Holder and (z) if such Interest Holder is registered entity, a certificate of good standing as of a recent date from the secretary of state of its state of organization.  DCT shall make payment in cash by wire transfer of same day funds of the Initial Put Price or Subsequent Put Price, as applicable, with respect to such Interest Holder to the Interest Holders’ Representative (as defined below) for distribution to such Interest Holder subject, however, to adjustment as provided in Section 3 and 4.  Upon payment of an Interest Holder’s Initial Put Price or Subsequent Put Price, as applicable, to the Interest Holders’ Representative, such Interest Holder shall cease to be, and shall have no further rights or obligations as, a limited partner of the Partnership, except the right to receive the Initial Put Price or Subsequent Put Price, as applicable, obligations of Cabot GP to pay the remaining balance owed under the “CSFB Agreement” pursuant to Section 6.5 of the Partnership Agreement, and confidentiality obligations pursuant to Section 12.12 of the Partnership Agreement.  If DCT GP requests, DCT shall set off against the Initial Put Price or Subsequent Put Price, as applicable, any amounts owed by such Interest Holder pursuant to Section 6.5 of the Partnership Agreement subject, however, to the right of the Interest Holders’ Representative to reasonably approve the amount of such set off.

 

1.3                          The Put Notice shall designate the date of sale, which date shall be not less than ten (10) Business Days and not more than fifteen (15)

 

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Business Days after DCT’s receipt of such Put Notice.  The Put Notice shall be delivered to DCT at the address provided in Section 10.

 

1.4                          The Initial Put Price for each Interest Holder is the difference between (a) the product of (i) Two Hundred Seventy Nine Million Thirty Thousand Two Hundred and Fifty Dollars ($279,030,250.00), multiplied by (ii) the Put/Call Payment Percentage for such Interest Holder set forth in Exhibit A , minus (b) the product of (i) $20,736,918.94, multiplied by (ii) such Interest Holder’s Adjustment Pro Rata Percentage.  The Subsequent Put Price for each Interest Holder shall equal the fair market value of the limited partnership interest in the Partnership held by such Interest Holder as determined pursuant to Section 6.  Notwithstanding anything to the contrary contained in this Agreement, there shall be no adjustment to the Subsequent Put Price pursuant to Sections 3 or 4 of this Agreement.

 

1.5                          Notwithstanding the foregoing, DCT shall not be under any obligation to purchase an Interest Holder’s limited partnership interest pursuant to a Put Notice if any of the representations or warranties in Section 7 of this Agreement with respect to such Interest Holder or such limited partnership interest is in default in any material respect.

 

2.                                        Call Option

 

2.1                          At any time during the period beginning April 1, 2007 through July 1, 2007 (the “Initial Call Period”), DCT shall have the irrevocable right and option, by giving the Interest Holders’ Representative a Call Notice (as described below), to purchase all (but not less than all) of the limited partnership interests in the Partnership of all (but not less than all) of the Interest Holders for an amount equal to the Interest Holders’ aggregate Initial Call Prices (as defined below).  Beginning on January 1, 2009, at any time during the month of January in 2009 and in each calendar year thereafter (the “Subsequent Call Periods”), DCT shall have the irrevocable right and option, by giving the Interest Holders’ Representative a Call Notice, to purchase all (but not less than all) of the limited partnership interests in the Partnership of all (but not less than all) of the Interest Holders for an amount equal to the Interest Holders’ aggregate Subsequent Call Prices (as defined below).   As used herein, “Call Price” shall refer to either the Initial Call Price or a Subsequent Call Price, as applicable.

 

2.2                          On the date of sale designated in the Call Notice, each Interest Holder shall (a) sell, assign, convey, transfer and deliver to DCT all of its limited partnership interest in the Partnership, free and clear of all pledges, security interests, adverse claims, liens, restrictions and encumbrances (other than those set forth in the Partnership Agreement, as then in effect), against payment therefor of such Interest Holder’s Initial Call Price or Subsequent Call Price, as applicable, (b) withdraw as a partner of the Partnership and (c) execute and deliver all instruments, agreements and other documents reasonably necessary to effect the foregoing, including, without limitation, (x) a certificate

 

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by such Interest Holder as of such date that the representations and warranties in Section 7 with respect to such Interest Holder and such limited partnership interest are true and correct as of such date, (y) if such Interest Holder is not an individual, a certificate by the secretary or other appropriate person of such Interest Holder as of such date as to (i) the incumbency of its officers or other signatories, (ii) authorizations relating to this Agreement, and (iii) the organizational documents of such Interest Holder and (z) if such Interest Holder is registered entity, a certificate of good standing as of a recent date from the secretary of state of its state of organization.  DCT shall make payment in cash by wire transfer of same day funds of the Initial Call Price or Subsequent Call Price, as applicable, to the Interest Holders’ Representative (as defined below) for distribution to the applicable Interest Holder.  Upon payment of the Interest Holder’s Initial Call Price or Subsequent Call Price, as applicable, to the Interest Holders’ Representative, such Interest Holder shall cease to be, and shall have no further rights or obligations as, a limited partner of the Partnership, except the right to receive the Initial Call Price or Subsequent Call Price, as applicable, obligations of Cabot GP to pay the remaining balance owed under the “CSFB Agreement” pursuant to Section 6.5 of the Partnership Agreement, and confidentiality obligations pursuant to Section 12.12 of the Partnership Agreement.  If DCT GP requests, DCT shall set off against the Initial Call Price or Subsequent Call Price, as applicable, any amounts owed by such Interest Holder pursuant to Section 6.5 of the Partnership Agreement subject, however, to the right of the Interest Holders’ Representative to reasonably approve the amount of such set off.

 

2.3                          The Call Notice shall designate the date of sale, which date shall be not less than ten (10) Business Days and not more than fifteen (15) Business Days after the Interest Holders’ Representative’s receipt of such Call Notice.  The Call Notice shall be delivered to the Interest Holders’ Representative at the notice address provided in Section 10.

 

2.4                          The Initial Call Price for the limited partnership interest of each Interest Holder shall be equal to the product of (A) the Initial Put Price (prior to any adjustment pursuant to Sections 3 or 4) multiplied by (B) one (1) plus the percentage increase, if any, in the Consumer Price Index – All Urban Consumers, All Items, published by US Department of Labor, Bureau of Labor Statistics, for the most recent twelve month period that is available on April 1, 2007 (the “Call Adjuster”); provided, that the Call Adjuster shall in no event be less than 1.025 or greater than 1.035.  The Initial Call Price as so determined shall be subject to adjustment as provided in Sections 3 and 4.  The Subsequent Call Price for each Interest Holder shall equal the fair market value of the limited partnership interest in the Partnership held by such Interest Holder as determined pursuant to Section 6.  Notwithstanding anything to the contrary contained in this Agreement, there shall be no adjustment to any Subsequent Call Price pursuant to Sections 3 or 4 of this Agreement.

 

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2.5                          Notwithstanding the foregoing, DCT shall not be under any obligation to purchase an Interest Holder’s limited partnership interest pursuant to a Call Notice if any of the representations or warranties in Section 7 of this Agreement with respect to such Interest Holder or such limited partnership interest is in default in any material respect.

 

3.                                        Adjustments to Put Price/Call Price; Other Payments to Interest Holders

 

3.1                          Upon the determination of the Closing Pro-Rated Adjustment in accordance with Section 1.8(d) of the Merger Agreement, in the event the Closing Pro-Rated Adjustment is different from the Estimated Pro-Rated Adjustment (excluding in such case leasing commissions, tenant improvement costs and capital improvements required under leases that are allocated according to Sections 1.8(g)(v) and 1.8(g)(vi) of the Merger Agreement), each Interest Holder’s Initial Put Price or Initial Call Price, as applicable, shall be appropriately adjusted by an amount equal to the difference between such amounts, multiplied by such Interest Holder’s Adjustment Pro Rata Percentage as set forth on Exhibit A (with respect to each Interest Holder, the “Adjustment Pro Rata Percentage”).  If pursuant to Section 1.8(d) of the Merger Agreement there is an adjustment in favor of the Stockholders under the Merger Agreement, then the adjustment pursuant to this Section 3.1 shall result in an increase in each Interest Holder’s Initial Put Price or Initial Call Price, as applicable, calculated in accordance with the preceding sentence, and if the adjustment pursuant to Section 1.8(d) of the Merger Agreement is in favor of the Buyer under the Merger Agreement, then the adjustment pursuant to this Section 3.1 shall be in the form of a decrease in each Interest Holder’s Initial Put Price or Initial Call Price, as applicable, calculated in accordance with the preceding sentence.  If there is a sale pursuant to a Put Notice or Call Notice prior to the determination of the Closing Pro-Rated Adjustment in accordance with Section 1.8(d) of the Merger Agreement and the Closing Pro-Rated Adjustment is different from the Estimated Pro-Rated Adjustment when the same is finally determined, then within three (3) Business Days following such determination, DCT and the applicable Interest Holder shall appropriately adjust for such difference either (i) if there is an adjustment in favor of DCT, by jointly authorizing and directing the Escrow Agent to pay to DCT within three (3) Business Days following delivery of such authorization an amount equal to the product of (A) the difference between such amounts multiplied by (B) such Interest Holder’s Adjustment Pro Rata Percentage, and (ii) if there is an adjustment in favor of the Interest Holder, by DCT paying to the Interest Holders’ Representative, for payment to such Interest Holder, the product of (A) the difference between such amounts, multiplied by (B) such Interest Holder’s Adjustment Pro Rata Percentage, by wire transfer of immediately available funds.

 

3.2                          Upon the determination of the Closing Adjusted Working Capital in accordance with Section 1.8(c) of the Merger Agreement, (i) in the event the Closing Adjusted Working Capital minus the Closing Total Debt, is

 

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less than the Estimated Closing Adjusted Working Capital minus the Estimated Total Debt, each Interest Holder’s Initial Put Price or Initial Call Price, as applicable, shall be reduced by an amount equal to the product of (A) the difference between such amounts, multiplied by (B) the applicable Interest Holder’s Adjustment Pro Rata Percentage, and (ii) in the event that the Closing Adjusted Working Capital minus the Closing Total Debt is greater than the Estimated Closing Adjusted Working Capital minus the Estimated Total Debt, the applicable Interest Holder’s Initial Put Price or Initial Call Price, as applicable, shall be increased by the product of (A) the difference between such amounts, multiplied by (B) the Interest Holder’s Adjustment Pro Rata Percentage.

 

3.3                          If as of the date of sale of limited partnership interests in the Partnership pursuant to a Put Notice or Call Notice, the Partnership has undistributed Operating Cash Flow or undistributed Net Capital Proceeds (each as defined in the Partnership Agreement), undistributed proceeds from the sale of the Helen Street Property or the Baltimore Property or from a final judgment in or settlement of the litigation involving the Helen Street Rent Escrow and/or the Helen Street Improvements Escrow (as each such terms are defined in the Partnership Agreement), or undistributed collected rent from the tenant of the Baltimore Property for the period prior to June 1, 2006, then the applicable Interest Holder’s Initial Put Price or Initial Call Price, as applicable, shall be increased by an amount equal to the product of (A) the aggregate amount of such undistributed Operating Cash Flow, Net Capital Proceeds, proceeds from the sale of such Helen Street Property or Baltimore Property or from such final judgment or settlement or such undistributed collected rent, multiplied by (B) in the case of undistributed Operating Cash Flow or undistributed Net Capital Proceeds, the Percentage (as defined in the Partnership Agreement) of the applicable Interest Holder, and in the case of undistributed proceeds from the sale of such Helen Street Property or Baltimore Property, from a final judgment in or settlement of the litigation involving the Helen Street Rent Escrow and/or the Helen Street Improvements Escrow or such undistributed collected rent, the amount of such proceeds or rent that would be distributed to such Interest Holder if 100% of such proceeds were distributed pursuant to Sections 6.3 and 6.4 of the Partnership Agreement.  If, as of the date of any sale pursuant to a Put Notice or Call Notice, the Partnership has entered into a binding contract for the sale of the Helen Street Property or Baltimore Property that, if and when consummated, would give rise to a distribution requirement to the applicable Interest Holder pursuant to Section 6.3 or 6.4 of the Partnership Agreement, but has not closed on such sale then, upon the consummation of such sale, DCT shall pay to the Interest Holders’ Representative for distribution to the applicable Interest Holder the amount that would have been distributed to such Interest Holder pursuant to Section 6.3 or 6.4 of the Partnership Agreement if such Interest Holder had still been a partner in the Partnership and 100% of such proceeds from such sale were distributed at such time.  In addition to the foregoing:

 

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a)                                       If following any sale pursuant to a Put Notice or Call Notice but prior to that date which is three (3) years after the date of this Agreement, the Partnership receives a final judgment in or settlement of the litigation involving the Helen Street Rent Escrow and/or the Helen Street Improvements Escrow or collects rent from the tenant at the Baltimore Property for the period prior to June 1, 2006, then DCT shall promptly pay to the Interest Holders’ Representative for distribution to the applicable Interest Holder the amount of the proceeds from such judgment or settlement or such collected rent that would have been paid to such Interest Holder pursuant to Section 6.3 or Section 6.4 of the Partnership Agreement if such Interest Holder had still been a partner in the Partnership and 100% of such proceeds were distributed at such time; and

 

(b)                                  if following any sale pursuant to any Put Notice or Call Notice but prior to that date which is twelve (12) months after the date of this Agreement there is a sale of the Baltimore Property that would have resulted in a distribution to the applicable Interest Holder pursuant to Section 6.4 of the Partnership Agreement if such Interest Holder had continued to be a limited partner in the Partnership, then DCT shall promptly pay to the Interest Holders’ Representative for distribution to such Interest Holder an amount equal to the distribution that such Interest Holder would have received pursuant to Section 6.4 of the Partnership Agreement if such Interest Holder had still been a partner in the Partnership and 100% of such proceeds were distributed at such time.

 

3.4                          If there is a sale of any Seller Property (including, without limitation, the Baltimore Property and the Helen Street Property), then each Interest Holder’s Initial Put Price or Initial Call Price, as applicable, shall be decreased to the extent that the proceeds distributed to such Interest Holder from such sale pursuant to the Partnership Agreement exceed such Interest Holder’s share of the excess of such proceeds over the value allocated to such Seller Property by Buyer in good faith in connection with the Merger Agreement (which allocations Buyer has provided to Seller prior to the date of this Agreement.)

 

3.5                          If DCT is obligated under the Merger Agreement to make a payment to the Seller Representative after the date hereof pursuant to Section 1.14(c) of the Merger Agreement as a result of its acquisition of the Seattle Property, then the Initial Put Price or Initial Call Price, as applicable, of each Interest Holder shall be increased by an amount equal the product of (i) the amount set forth in clause (A) of the last sentence of such Section 1.14(c) of the Merger Agreement, multiplied by (ii) such Interest Holder’s Adjustment Pro Rata Percentage.

 

3.6                          To the extent that any lease described in Exhibit K to the Merger Agreement that was not executed as of the date hereof is subsequently executed by the applicable tenant and the Partnership or a subsidiary or other transferee affiliate of DCT on substantially the same terms as set forth in such Exhibit K for such lease and the payment of rent under such lease commenced

 

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within the number of months set forth in such Exhibit K for such lease, then the Initial Put Price or Initial Call Price, as applicable, of each Interest Holder shall be increased by an amount equal to the product of (i) the monthly rent shown on such Exhibit K for such lease multiplied by (ii) the difference between (x) the number of months set forth for such lease in such Exhibit K and (y) the number of months (or portions of months) that have expired since the date hereof prior to the commencement of payment of rent multiplied by (iii) such Interest Holder’s Adjustment Pro Rata Percentage.

 

3.7                          If DCT becomes obligated under the Merger Agreement to make a payment to the Seller Representative pursuant to Section 1.8(f) of the Merger Agreement as a result of the collection of Uncollected Tenant Payments, then (i) to the extent that an Interest Holder continues to be a limited partner in the Partnership, such Interest Holder’s Initial Put Price or Initial Call Price, as applicable, shall be increased by an amount equal to the product of (A) such Uncollected Tenant Payments that are collected and (B) such Interest Holder’s Adjustment Pro Rata Percentage, and (ii) to the extent that an Interest Holder has sold its limited partnership interest pursuant to a Put Notice or a Call Notice, DCT will be obligated to promptly pay to the Interest Holders’ Representative, for payment to such Interest Holder, an amount equal to the product of (A) such Uncollected Tenant Payments that are collected and (B) such Interest Holder’s Adjustment Pro Rata Percentage.

 

4.                                        Put/Call Escrow Agreement

 

4.1                          Section 9 of this Agreement provides that DCT is entitled to indemnification from and against certain Losses (as defined in Section 9.2).  Prior to the sale of a limited partnership interest of an Interest Holder pursuant to a Put Notice by such Interest Holder or a Call Notice by DCT, any indemnification amounts to which DCT is entitled with respect to such Interest Holder pursuant to Section 9.2 shall be subtracted from the Initial Put Price or the Initial Call Price.

 

4.2                          If at the time of a sale of a limited partnership interest of an Interest Holder pursuant to a Put Notice or a Call Notice there is the possibility of continuing adjustments to the Initial Put Price or Initial Call Price, as applicable, pursuant to Section 3.1 and/or continuing indemnification obligations pursuant to Section 9.2, the Interest Holders’ Representative and DCT shall enter into an escrow agreement with the Escrow Agent in the form attached hereto as Exhibit D (the “Put/Call Escrow Agreement”) providing for the formation of an escrow fund.

 

4.3                          The amount of the payment to an Interest Holder in connection with a sale of a limited partnership interest pursuant to a Put Notice or a Call Notice shall be reduced by an amount equal to the difference between (A) such Interest Holder’s Adjustment Pro Rata Percentage of the Put/Call Escrow Amount and (B) the sum of (x) any indemnification amounts subtracted

 

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from such Interest Holder’s Initial Put Price or Initial Call Price, as applicable, pursuant to Section 4.1 and (y) if there is any Put/Call Post-Closing Adjustment Escrow Amount, any amounts subtracted from such Interest Holder’s Initial Put Price or Initial Call Price, as applicable, pursuant to Sections 3.1 and 3.2 prior to the date of sale of such Interest Holder’s limited partnership interest pursuant to such Call Notice or Put Notice.  The reduction amount equal to the difference between (A) and (B) of the foregoing sentence shall be deposited into escrow pursuant to the Put/Call Escrow Agreement.

 

4.4                          The following terms as used in Agreement shall have the meanings set forth below.

 

4.4.1                         The “Put/Call Post-Closing Adjustment Escrow Amount” for each Interest Holder shall mean the product of (A) the amount mutually agreed upon by Buyer and Seller in accordance with Section 5.12 of the Merger Agreement, multiplied by (B) such Interest Holder’s Adjustment Pro Rata Percentage (together with any interest earned on such product while held in escrow), which, in addition to the Put/Call Indemnification Escrow Amount, shall secure and serve as the sole and exclusive remedy for satisfying DCT ‘s rights to payments under Section 3.  Notwithstanding the foregoing, there shall be no Put/Call Post-Closing Adjustment Escrow Amount if there is no possibility of continuing adjustments to the Initial Put Price or Initial Call Price, as applicable, pursuant to Section 3.1.

 

4.4.2                         The “Put/Call Indemnification Escrow Amount” for each Interest Holder shall mean the product of (A) Five Million Dollars ($5,000,000) multiplied by (B) such Interest Holder’s Adjustment Pro Rata Percentage (together with any interest earned on such product while held in escrow), which shall secure and serve as the sole and exclusive remedy for satisfying DCT ‘s rights to payments under Section 9.2 of this Agreement and, in addition to the Put/Call Post-Closing Adjustment Escrow Amount, for satisfying DCT ‘s rights to payments under Section 3.

 

4.4.3                         The “Put/Call Escrow Amount” means, collectively the Put/Call Post-Closing Adjustment Escrow Amount and the Put/Call Indemnification Escrow Amount.

 

5.                                        Interest Holders’ Representative

 

5.1                          Cabot GP shall serve as the representative of the Interest Holders with respect to matters arising after the date hereof in connection with all matters arising under or related to this Agreement including, without limitation, the post-closing adjustments set forth in Section 3, the indemnification rights and obligations set forth in Section 9, and matters arising under or relating to the Put/Call Escrow Agreement (in such capacity, the “Interest Holders’ Representative”).  The Interest Holders’ Representative shall have all of the rights and shall perform all of the obligations of the Interest Holders’ Representative as set forth in the Put/Call Escrow Agreement and this Agreement.  Without limiting the foregoing, the Interest Holders’ Representative shall have the exclusive right, power and authority, on behalf of the Interest Holders, (w) to take any actions the Interest Holders’ Representative may deem

 

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necessary or proper on behalf of the Interest Holders in connection with the post-closing adjustments pursuant to Section 3, (x) to pursue, defend, and settle any indemnification claims made pursuant to Section 9, and to do all things and to take all other actions the Interest Holders’ Representative may consider necessary or proper to resolve any indemnification claims, (y) to consent to the sale of the Helen Street Property without retaining an interest in the Helen Street Rent Escrow or Helen Street Improvements Escrow, and (z) give and receive all notices, make all decisions and take all other actions on behalf of the Interest Holders in connection with this Agreement.

 

5.2                          All decisions and actions by the Interest Holders’ Representative pursuant to its authority granted herein shall be binding upon each Interest Holder and no Interest Holder shall have any right to object, dissent, protest or otherwise contest the same.  DCT shall be entitled to deal with and rely conclusively on the Interest Holders’ Representative as provided herein as if, and with the same effect as if, the Interest Holders’ Representative constituted all Interest Holders and DCT shall not be under any obligation to involve itself with the Interest Holders’ Representative’s performance for the benefit of the Interest Holders or the Interest Holders’ relationship among themselves.

 

5.3                          The Interest Holders’ Representative shall have full power and authority on behalf of each Interest Holder to take any and all actions, execute any and all instruments (other than the instruments, agreements, certificates and documents delivered pursuant to Sections 1.2, 2.2 and 10.13 of this Agreement, which shall be executed by the applicable Interest Holder), and execute or waive any and all rights and obligations of each Interest Holder in connection with the matters covered by Section 3, Section 4 and Section 9.2 and all other matters arising under or relating to this Agreement.  The Interest Holders’ Representative at all times shall be the same Person as the Seller Representative.  No bond shall be required of the Interest Holders’ Representative, and the Interest Holders’ Representative shall receive no compensation for its services in such capacity.  Notices or communications to or from the Interest Holders’ Representative shall constitute notice to or from each of the Interest Holders.  The Interest Holders’ Representative shall have reasonable access to information about the Partnership, provided that the Interest Holders’ Representative shall treat confidentially and not disclose the Seller Rent Roll and other lease information related to the Seller Properties to anyone (except on a need to know basis to individuals who agree to treat such information confidentially or in connection with any arbitration or other dispute resolution proceeding).

 

5.4                          DCT shall make payment of all amounts to be paid to the Interest Holders under this Agreement to the Interest Holders’ Representative for distribution to the Interest Holders.  DCT’s sole obligation with respect to the payment of amounts under this Agreement shall be to pay such amounts to the Interest Holders’ Representative, and the Interest Holders shall look solely to the

 

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Interest Holders’ Representative for payment thereof following such payment by DCT.

 

6.                                        Determination of Fair Market Value for Subsequent Put Price .  If a Subsequent Put Price or a Subsequent Call Price is to be determined pursuant to this Agreement, then DCT and the Interest Holders’ Representative shall attempt to agree on the fair market value of the applicable limited partnership interests in the Partnership in connection therewith.  If the Interest Holders’ Representative and DCT fail to agree on such fair market value within ten (10) Business Days after a request from the other that they attempt to agree on such fair market value, such fair market value shall be determined by a single appraiser satisfactory to both the Interest Holders’ Representative and DCT, if they are able to agree to such an appraiser within ten (10) Business Days after the request of the Interest Holders’ Representative and DCT.  If no single appraiser is so selected, the Interest Holders’ Representative and DCT shall each appoint an independent appraiser who has at least ten (10) years’ experience appraising comparable interests in partnerships that own industrial real estate and who is not then employed or anticipated to be employed, and who during the last three years has not been employed, by the party selecting the appraiser or any affiliate thereof, and in the case of the third appraiser contemplated below, either such party or any affiliate thereof.  The two appraisers so appointed shall thereafter appoint a third appraiser within ten (10) Business Days after their appointment who meets the same qualifications.  If they fail to do so, the Interest Holders’ Representative and DCT may request that the head of a recognized professional association of real estate appraisers designate a third appraiser with such qualifications.  The three appraisers so appointed shall within thirty (30) days thereafter render their judgment as to the fair market value of the applicable limited partnership interests.  If the Interest Holders’ Representative fails to select an appraiser within ten (10) Business Days after the request by DCT that it do so, the fair market value of the applicable limited partnership interests shall be the fair market value as determined by an appraiser who meets the qualifications stated above and who is selected solely by DCT.  If DCT fails to select an appraiser within ten (10) Business Days after the request by the Interest Holders’ Representative that it do so, the fair market value of the applica


 
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