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AGREEMENT AND PLAN OF MERGER
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dated as of January 17, 2007
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by and among
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BROOKFIELD ASSET MANAGEMENT
INC.
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THE MILLS
CORPORATION,
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THE MILLS LIMITED
PARTNERSHIP,
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and
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SUCH OTHER PERSONS THAT BECOME
SIGNATORIES HERETO
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PURSUANT TO THE TERMS
HEREOF
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TABLE OF
CONTENTS
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Page
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ARTICLE I
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THE MERGERS
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Section
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1.1
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The
Mergers
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2
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Section
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1.2
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Closing
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2
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Section
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1.3
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Effective
Times
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3
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Section
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1.4
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Tax
Characterizations
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3
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Section
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1.5
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Organization
of Holdings, Purchaser Sub and Purchaser LP;
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Organizational
Documents
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3
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Section
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1.6
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Managing
Member and Officers of the Surviving Company;
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General
Partner of the Surviving Partnership
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5
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Section
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1.7
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Further
Assurances
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5
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Section
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1.8
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Restructuring
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6
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ARTICLE II
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EFFECTS OF THE MERGERS; EXCHANGE
OF
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CERTIFICATES
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Section
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2.1
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Merger
Consideration
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7
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Section
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2.2
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Partnership
Merger Consideration
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8
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Section
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2.3
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Stock
Election
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9
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Section
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2.4
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Proration
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12
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Section
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2.5
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Roll-Over
Election
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12
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Section
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2.6
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Preferred
Stock and Preferred Units
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14
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Section
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2.7
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Company
Options; Company SARs; Restricted Shares
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15
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Section
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2.8
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Dissenting
Shares
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15
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Section
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2.9
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Fractional
Shares
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16
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Section
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2.10
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Exchange of
and Payment for Securities
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16
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Section
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2.11
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Adjustments to
Prevent Dilution
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20
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ARTICLE III
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REPRESENTATIONS AND WARRANTIES OF
THE
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COMPANY AND THE OPERATING
PARTNERSHIP
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Section
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3.1
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Organization
and Good Standing
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21
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Section
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3.2
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Subsidiaries
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22
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Section
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3.3
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Capitalization
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22
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Section
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3.4
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Authority; No
Violations
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24
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Section
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3.5
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Governmental
Approvals and Notices
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25
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Section
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3.6
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Company SEC
Documents; Financial Statements
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26
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Section
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3.7
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Absence of
Certain Changes
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28
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Section
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3.8
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No Undisclosed
Material Liabilities
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28
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Section
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3.9
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Compliance
with Applicable Laws
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28
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i
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Section
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3.10
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Litigation
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29
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Section
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3.11
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Taxes
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29
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Section
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3.12
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Pension and
Benefit Plans; ERISA
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32
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Section
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3.13
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Labor and
Employment Matters
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34
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Section
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3.14
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Intangible
Property
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35
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Section
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3.15
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Environmental
Matters
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35
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Section
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3.16
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Real
Property
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37
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Section
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3.17
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Insurance
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39
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Section
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3.18
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Material
Contracts
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39
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Section
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3.19
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Opinion of
Financial Advisor
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39
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Section
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3.20
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Brokers
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40
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Section
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3.21
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Inapplicability of Takeover Statutes and
Certain Charter and
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Bylaw
Provisions
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40
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Section
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3.22
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Registration
Statement and Proxy Statement/Prospectus
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40
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Section
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3.23
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Investment
Company Act of 1940
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41
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ARTICLE IV
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REPRESENTATIONS AND WARRANTIES OF
THE
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PURCHASER PARTIES
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Section
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4,1
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Organization
and Good Standing
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Section
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4.2
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Authority; No
Violations
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Section
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4.3
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Governmental
Approvals and Notices
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Section
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4.4
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Availability
of Funds
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44
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Section
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4.5
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Brokers
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Section
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4.6
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Litigation
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Section
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4.7
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Ownership of
Company Common Shares or LP Units
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44
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Section
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4.8
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Investigation
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44
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ARTICLE V
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COVENANTS
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Section
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5.1
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Conduct of
Business by the Company
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45
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Section
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5.2
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Preparation of
Proxy Statement and Registration Statement;
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Stockholders’ Meeting
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51
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Section
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5.3
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No
Solicitation of Transactions
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53
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Section
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5.4
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Board
Actions
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55
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Section
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5.5
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Access to
Information; Confidentiality and Confidentiality
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Agreement
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56
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Section
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5.6
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Efforts
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56
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Section
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5.7
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Tax
Matters
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57
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Section
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5.8
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Public
Announcements
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58
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Section
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5.9
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Employee
Arrangements
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59
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Section
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5.10
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Indemnification; Directors’ and
Officers’ Insurance
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60
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Section
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5.11
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Tax
Returns
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62
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Section
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5.12
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Goldman Sachs
Loan Assignment
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63
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Section
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5.13
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Pre-Acquisition Restructuring
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63
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Section
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5.14
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Comfort
Letter
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65
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Section
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5.15
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Compliance
with the Securities Act
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Section
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5.16
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Notices of
Certain Events
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65
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ARTICLE VI
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CONDITIONS PRECEDENT
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Section
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6.1
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Conditions to
Each Party’s Obligation to Effect the Mergers
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66
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Section
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6.2
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Conditions to
Obligations of Purchaser Parties
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67
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Section
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6.3
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Conditions to
Obligations of the Company and the Operating
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Partnership
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68
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ARTICLE VII
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TERMINATION, AMENDMENT AND
WAIVER
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Section
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7.1
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Termination
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69
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Section
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7.2
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Break-Up Fees
and Expenses
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70
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Section
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7.3
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Effect of
Termination
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73
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Section
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7.4
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Amendment
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73
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Section
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7.5
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Extension;
Waiver
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73
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ARTICLE VIII
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GENERAL PROVISIONS
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Section
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8.1
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Nonsurvival of
Representations and Warranties
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73
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Section
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8.2
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Notices
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74
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Section
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8.3
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Interpretation
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75
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Section
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8.4
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Specific
Performance
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75
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Section
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8.5
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Counterparts
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75
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Section
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8.6
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Entire
Agreement; Third-Party Beneficiaries
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75
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Section
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8.7
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Governing
Law
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76
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Section
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8.8
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Assignment
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76
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Section
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8.9
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Severability
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76
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Section
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8.10
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Exhibits;
Disclosure Letters
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76
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Section
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8.11
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Mutual
Drafting
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77
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Section
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8.12
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Jurisdiction;
Venue
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77
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Section
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8.13
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Waiver of
Trial by Jury
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77
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ARTICLE IX
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CERTAIN DEFINITIONS
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Section
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9.1
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Certain
Definitions
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Exhibit
A
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Form of
Loan Assignment
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Exhibit
B
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Form of
Tax Opinion
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Exhibit
C
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Company
Knowledge Persons
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Exhibit
D
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Parent
Knowledge Persons
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iii
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AGREEMENT
AND PLAN OF MERGER
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This AGREEMENT AND PLAN OF MERGER, dated as of
January 17, 2007 (this “ Agreement ”), is by and
among BROOKFIELD ASSET MANAGEMENT INC., an Ontario corporation
(“ Parent ”), THE MILLS CORPORATION, a Delaware
corporation (the “ Company ”), THE MILLS LIMITED
PARTNERSHIP, a Delaware limited partnership and the Company’s
operating partnership (the “ Operating Partnership
”), and such other Persons that become signatories hereto
pursuant to the terms hereof.
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WHEREAS it is proposed that, on the terms and subject to the
conditions set forth
in this Agreement, the Company and
Purchaser Sub shall engage in the Merger, pursuant to
which each of the issued and
outstanding shares of voting common stock, par value $0.01
per
share, of the Company (the “
Company Common Shares ”) shall be converted into the
right to
receive the Merger
Consideration;
WHEREAS it is proposed that, on the terms and subject to the
conditions set forth
in this Agreement, the Operating
Partnership and Purchaser LP shall engage in the
Partnership
Merger, pursuant to which each of
the common units of limited partnership interest in the
Oper-
ating Partnership (“ LP
Units ”) shall be converted into the right to receive the
Merger Considera-
tion or, to the extent provided
herein, to retain an interest in the Operating Partnership or
its
business and assets;
WHEREAS the respective boards of directors of the Company, Parent,
Holdings
and Purchaser Sub have each
determined that the Merger and the other transactions
contemplated
by this Agreement are fair to,
advisable and in the best interests of their respective
stockholders
and have approved this Agreement
and the transactions contemplated by this Agreement,
includ-
ing the Merger;
WHEREAS the Company, as the general partner of the Operating
Partnership,
and Purchaser Sub, as the general
partner of Purchaser LP, have each approved, on behalf of
the
Operating Partnership and Purchaser
LP, respectively, this Agreement and the transactions
con-
templated by this Agreement,
including the Partnership Merger;
WHEREAS Goldman Sachs Mortgage Company, as Administrative Agent,
Col-
lateral Agent and Lead Arranger of
the Goldman Sachs Loan, has consented to the
Company’s
and the Operating
Partnership’s execution and delivery of this Agreement, and
to the transactions
contemplated by this Agreement;
and
WHEREAS the parties intend that, for U.S. federal and state income
tax purposes,
(a) the Merger shall be treated as
a taxable sale by the Company of all of the Company’s
assets
to one of the Purchaser Parties in
exchange for (i) the Merger Consideration, (ii) the
preferred
units of limited liability company
interests of the Surviving Company to be issued to the
holders
of the Company’s shares of
preferred stock and (iii) the assumption of the Company’s
liabilities,
followed by a liquidating
distribution pursuant to Section 331 and Section 562 of the Code of
(A)
the Merger Consideration to the
holders of Company Common Shares and (B) the preferred
units
of limited liability company
interests of the Surviving Company to be issued to the holders of
the
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Company’s shares of preferred stock whose
shares are exchanged therefor; and (b) subject to the last sentence
of Section 5.13(a), the Partnership Merger shall, in the case of
each holder of LP Units that receives consideration in the
Partnership Merger other than common or preferred units of limited
partnership interest in the Surviving Partnership in exchange for
such holder’s LP Units, be treated as a taxable purchase of
LP Units directly by Purchaser Sub, and in the case of each such
holder, if any, that retains its LP Units in the Partnership Merger
(such LP Units to remain outstanding as common or preferred units
of limited partnership interest in the Surviving Partnership), not
be treated as a realization or recognition event to such
holder.
NOW, THEREFORE, in consideration of the
foregoing and the mutual covenants and agreements herein contained,
and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and upon the terms
and subject to conditions hereof, and intending to be legally bound
hereby, the parties hereto agree as follows:
Section 1.1 The Mergers
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(a) Upon the terms and subject to
the conditions set forth in this Agreement, at the Merger Effective
Time, the Company shall merge with and into Pur- chaser Sub (the
“ Merger ”), and the separate existence of the
Company shall cease. Purchaser Sub shall continue as the surviving
entity in the Merger (the “ Surviving Com- pany
”) and shall continue its existence under the laws of the
State of Delaware, with all its rights, privileges, immunities,
powers and franchises. Immediately after the Merger, the Surviving
Company shall continue to be a wholly owned or majority-owned
subsidi- ary of Parent. The Merger shall have the effects set forth
in the General Corporation Law of the State of Delaware (the
“ DGCL ”) and the Limited Liability Company Act
of the State of Delaware (the “DLLCA” )
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(b) Upon the terms and subject to
the conditions set forth in this Agreement, at the Partnership
Merger Effective Time, Purchaser LP shall merge with and, subject
to the last sentence of Section 5.13(a), into the Operating
Partnership (the “ Partnership Merger ” and
together with the Merger, the “ Mergers ”), and
the separate existence of Purchaser LP shall cease. The Operating
Partnership shall continue as the surviving partnership in the
Partnership Merger (the “ Surviving Partnership
”) and shall continue its existence under the laws of the
State of Delaware, with all its rights, privileges, immunities,
powers and franchises. Immediately after the Partnership Merger,
the Surviving Partnership shall be a wholly owned or majority-owned
subsidiary of the Surviving Company. The Partnership Merger shall
have the effects set forth in the Delaware Revised Uniform Limited
Partnership Act (the “ DRULPA ”).
Section 1.2 Closing . The
closing of the Mergers (the “ Closing ”) will
take place at 10:00 a. m. , New York City time, on the third (3rd)
Business Day after the satisfaction or waiver of all of the
conditions (other than those conditions that by their nature are to
be satisfied by actions taken at the Closing, but subject to the
fulfillment or waiver of those conditions) set
2
forth in
Article VI (the date of the Closing being the “ Closing
Date ”), at the offices of Wachtell, Lipton, Rosen &
Katz, 51 West 52nd Street, New York, New York 10019, unless another
time, date or place is agreed to in writing by the
parties.
Section 1.3 Effective Times . As soon as
practicable following the satisfaction or waiver of the conditions
set forth in Article VI, on the Closing Date, (a) the Company and
Purchaser Sub shall execute and file the Company Certificate of
Merger in accordance with, and shall make all other filings or
recordings and take all such other action required with respect to
the Merger under, the DGCL and DLLCA; and (b) the Operating
Partnership and Purchaser LP shall execute and file the Partnership
Certificate of Merger in accordance with, and shall make all other
filings or recordings and take all such other action required with
respect to the Partner- ship Merger under, the DRULPA. The Merger
shall become effective when the Company Certificate of Merger has
been accepted for record by the Delaware Secretary of State or at
such other time as the parties shall agree and specify in the
Company Certificate of Merger (the “ Merger Effective
Time ”), and the Partnership Merger shall become
effective when the Part- nership Certificate of Merger has been
accepted for record with the Delaware Secretary of State or at such
other time as the parties shall agree and specify in the
Partnership Certificate of Merger (the “ Partnership
Merger Effective Time ”), it being understood that the
parties shall cause the Merger Effective Time and the Partnership
Merger Effective Time to occur concur- rently and as soon as
practicable after the Closing.
Section 1.4 Tax Characterizations .
Parent and the Company intend that, for U. S. federal and state
income tax purposes, the Merger shall be treated as a taxable sale
by the Company of all of the Company’s assets to one of the
Purchaser Parties in exchange for (a) the Merger Consideration, (b)
the preferred units of limited liability company interests of the
Surviv- ing Company to be issued to the holders of the
Company’s shares of preferred stock whose shares are
exchanged therefor and (c) the assumption of the Company’s
liabilities, followed by a liquidating distribution pursuant to
Section 331 and Section 562 of the Code of (i) the Merger
Consideration to the holders of Company Common Shares and (ii) the
preferred units of limited liability company interests of the
Surviving Company to be issued to the holders of the
Company’s shares of preferred stock whose shares are
exchanged therefor. This Agreement shall constitute a “plan
of liquidation” of the Company for U. S. federal income tax
purposes. Subject to the last sentence of Section 5.13(a), Parent
and the Operating Partnership intend that, for U. S. federal and
state income tax purposes, the Partnership Merger shall, in the
case of each holder of LP Units that receives consideration other
than common units of limited partnership interest in the Surviving
Partnership in the Partnership Merger in exchange for such
holder’s LP Units, be treated as a taxable purchase of LP
Units directly by Purchaser Sub, and in the case of each such
holder, if any, that retains its LP Units in the Partnership Merger
(such LP Units to remain out- standing as common units of limited
partnership interest in the Surviving Partnership), not be treated
as a realization or recognition event to such holder.
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Section
1.5 Organization
of Holdings, Purchaser Sub and Purchaser LP; Organizational
Documents .
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(a) As promptly as practicable
following the execution of this Agreement, Parent shall organize a
new corporation ( “Holdings” ) under the laws of
the State of Delaware for the purpose of effectuating the
transactions contemplated hereby. Hold-
3
ings shall
be a direct or indirect wholly owned subsidiary of Parent. The
certificate of incorporation and bylaws of Holdings shall be in
such forms as determined by Parent as soon as practicable following
the execution of this Agreement.
(b) As promptly
as practicable following the execution of this Agreement and the
organization of Holdings, Parent shall cause Holdings to organize a
new limited liability company ( “Purchaser Sub”
) under the laws of the State of Delaware for the purpose of
effectuating the Merger and the other transactions contemplated
hereby. Purchaser Sub shall be a direct wholly owned subsidiary of
Holdings. The certificate of formation and the limited liability
company agreement of Purchaser Sub shall be in such forms as
determined by Parent as soon as practicable following the execution
of this Agreement.
(c) As
promptly as practicable following the execution of this Agreement
and the organization of Holdings and Purchaser Sub, Parent shall
cause Purchaser Sub to organize a new limited partnership (
“Purchaser LP” ) under the laws of the State of
Delaware for the purpose of effectuating the Partnership Merger and
the other transactions contemplated hereby. Purchaser LP shall be a
direct wholly owned subsidiary of Purchaser Sub. The limited
partnership agreement of Purchaser LP shall be in such form as
determined by Parent as soon as practicable following the execution
of this Agree- ment.
(d) Unless
otherwise agreed in writing between the Company and
Parent:
(i) The
certificate of formation of Purchaser Sub shall be the certificate
of formation of the Surviving Company following the Merger
Effective Time until amended in accordance with its terms and the
DLLCA. The limited liability company agreement of Purchaser Sub
shall be the limited liability com- pany agreement of the Surviving
Company following the Merger Effective Time until amended in
accordance with its terms and the DLLCA; provided that the
limited liability company agreement of the Surviving Company shall
provide for and permit the issuance, as of the Merger Effective
Time, of the Mirror Series B Units, Mirror Series C Units, Mirror
Series E Units, Mirror Series F Units and Mirror Series G Units
(together, the “ Mirror Units ”), which Mirror
Units shall have substantially the same rights, preferences,
privileges and voting power as (and in no event shall any
differences be materially adverse as compared to) those in the
Series B Shares, Series C Shares, Series E Shares, Series F Shares
and Se- ries G Shares, respectively, provided for under the
applicable certificate of desig- nations immediately prior to the
Merger (taking into account any modifications as a result of the
Merger) and such other rights, preferences, privileges and voting
power as required to be provided to the Mirror Units to comply with
the certificate of designations of the applicable Preferred
Stock.
(ii) The limited partnership
agreement of the Operating Partnership shall be the limited
partnership agreement of the Surviving Partnership following the
Partnership Merger Effective Time until amended in
accordance
4
with its
terms and the DRULPA; provided that (1) in the event of the
Public Hold ing Company Scenario, the limited partnership agreement
of the Surviving Part- nership shall provide that each common unit
of limited partnership interest in the Surviving Partnership shall
be convertible into one share of Holdings Common Stock (instead of
one Company Common Share), subject to customary anti- dilution
adjustments, and (2) in the event of the Private Holding Company
Sce- nario, the limited partnership agreement of the Surviving
Partnership shall pro- vide for the preferred units of limited
partnership interest of the Surviving Part- nership with terms as
set forth in Section 2.5(a) .
(iii)
The certificate of incorporation of Holdings shall be amended
and restated immediately prior to the Merger Effective Time so that
it has substantially the same terms as (and in no event shall any
differences be mate rially adverse as compared to) those terms in
the certificate of incorporation of the Company as in effect
immediately prior to the Merger Effective Time (taking into account
any modifications as a result of the Merger, but without the
certificate of designations of the Preferred Shares and subject to
Section 1.8(a)), until amended in accordance with its terms and the
DGCL.
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Section 1.6
Managing Member and Officers of the Surviving
Company; General Partner of the Surviving Partnership
.
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(a) The
managing member of the Surviving Company immediately af- ter the
Merger Effective Time shall be Holdings, until changed in
accordance with the Surviving Company’s limited liability
company agreement. The officers of the Surviving Company
immediately after the Merger Effective Time shall consist of the
officers of Purchaser Sub as of immediately prior to the Merger
Effective Time, until their succes- sors shall have been duly
elected or appointed, or until their death, resignation or removal
from office in accordance with the Surviving Company’s
limited liability company agreement.
(b) The
general partner of the Surviving Partnership immediately after the
Partnership Merger Effective Time shall be the Surviving Company,
until a successor shall have been duly elected or appointed, in
accordance with the Surviving Partnership’s limited
partnership agreement.
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Section
1.7 Further
Assurances .
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(a) As promptly as
practicable following the formation of Holdings, Purchaser Sub and
Purchaser LP, Parent shall cause and take all such actions as to
ensure that (i) the directors of Holdings, the managing member of
Purchaser Sub and the general partner of Purchaser LP ratify and
approve this Agreement, (ii) the stockholders, limited liability
members and limited partners of Holdings, Purchaser Sub and
Purchaser LP, re- spectively, adopt this Agreement and (iii) each
of Holdings, Purchaser Sub and Purchaser LP has authorized
sufficient shares of their respective capital stock or equity
interests, as appropriate, so as to effect the transactions
contemplated by Article V of this Agreement.
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(b) As promptly as practicable after the date
hereof, the parties shall
cause this Agreement to be amended
to add Holdings, Purchaser Sub and Purchaser LP as
parties hereto, and each such
Person shall agree to become a constituent entity in its
re-
spective merger under this
Agreement.
(c) If at any time after the
Effective Time the Surviving Company
shall consider or be advised that
any deeds, bills of sale, assignments or assurances or
any
other acts or things are necessary,
desirable or proper (a) to vest, perfect or confirm, of
record or otherwise, in the
Surviving Company its right, title or interest in, to or
under
any of the rights, privileges,
powers, franchises, properties or assets of either
Purchaser
Sub or the Company, or (b)
otherwise to carry out the purposes of this Agreement,
the
Surviving Company and its proper
officers and directors or their designees shall be au-
thorized to execute and deliver, in
the name and on behalf of either of the Purchaser Sub
and the Company, all such deeds,
bills of sale, assignments and assurances and to do, in
the name and on behalf of either
Purchaser Sub or the Company, all such other acts and
things as may be necessary,
desirable or proper to vest, perfect or confirm the
Surviving
Company’s right, title or
interest in, to or under any of the rights, privileges,
powers,
franchises, properties or assets of
Purchaser Sub or the Company and otherwise to carry
out the purposes of this
Agreement.
Section 1.8 Restructuring
.
(a) If the Company reasonably
believes that the issuance of Holdings
Common Stock in the Merger may
cause the Closing not to occur prior to the Termina-
tion Date, then the Company may
alter the transactions contemplated by this Agreement
so that neither the Stock
Consideration nor the Stock Election is available in the
Merger,
and solely the Per Share Cash
Consideration will be issued in the Merger. If such
altera-
tion is made, the covenants
relating to the Registration Statement, and the condition
set
forth in Section 6.1(e), and such
other covenants that are necessary solely for the
issuance
of the Stock Consideration, shall
no longer be applicable.
(b) In the event that Parent, after
consultation with KPMG, reasonably
determines in good faith that the
Merger, together with the transactions contemplated by
Section 5.13, could reasonably be
expected not to result in a step-up in the basis of the
assets of the Company and the
Operating Partnership (assuming the Operating Partner-
ship has in effect or makes an
election under Section 754 of the Code) for U.S. federal
income tax purposes, then the
Parent may require the transaction to be restructured in
a
manner that would, in the
reasonable, good-faith judgment of Parent, better assure
such
tax treatment; provided ,
however , that any such restructuring shall (i) not affect
the con-
sideration contemplated by this
Agreement to be received by the holders of Company
Common Shares or the holders of LP
Units, (ii) (x) result in the receipt by the holders of
Preferred Stock of securities that
have substantially the same rights, preferences, privi-
leges and voting power as (and in
no event shall any differences be materially adverse as
compared to) those provided to the
Series B Shares, Series C Shares, Series E Shares, Se-
ries F Shares and Series G Shares
under the applicable certificate of designations,
includ-
ing the same preferential rights to
distributions or dividends, and in liquidation, as the
se-
curities they are contemplated to
receive under the terms hereof, (y) be in accordance
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with, and shall not contravene, in any material
respect, the terms of the certificates of des-
ignation of the Preferred Shares
and (z) not give rise to the requirement that the
holders
of any Preferred Shares approve the
transaction as so restructured, (iii) not jeopardize, or
delay in any material way, the
Closing, and (iv) not require the Company or the Operat-
ing Partnership or any of their
Subsidiaries to take any action in contravention of Law;
provided , further , that if the Company
provides Parent with a written opinion from an in-
dependent tax advisor (which
advisor is reasonably acceptable to Parent) to the effect
that
the Merger, together with the
transactions contemplated by Section 5.13, should result
in
a step up in the basis of the
assets of the Company and the Operating Partnership
(assum-
ing the Operating Partnership has
in effect or makes an election under Section 754 of the
Code) for U.S. federal income tax
purposes, then Parent shall not be permitted to require
that the transaction be so
restructured. In the event that the transaction is
restructured,
none of the representations,
warranties or covenants of the Company and the Operating
Partnership shall be deemed to
apply to, or deemed breached or violated by, any
transac-
tion requested by Parent pursuant
to this Section 1.8(b) .
(c) Parent and the Company may
mutually agree to restructure the
transactions contemplated by this
Agreement so that Parent or a wholly owned Subsidiary
conduct a tender offer to acquire
all Company Common Shares. Such tender offer could
be an offer to acquire Company
Common Shares solely for cash equal to the Per Share
Cash Consideration.
ARTICLE II
EFFECTS OF THE MERGERS; EXCHANGE
OF CERTIFICATES
Section 2.1 Merger
Consideration .
(a) At the Merger Effective Time,
by virtue of the Merger and without
any further action on the part of
any party hereto or any holder of capital stock of the
Company:
(i) each Company Common Share
issued and outstanding im-
mediately prior to the Merger
Effective Time that is owned by the Company as
treasury stock or by Parent or any
of its wholly owned Subsidiaries (other than, in
each case, shares in trust
accounts, managed accounts, custodial accounts and the
like that are beneficially owned by
third parties) shall automatically be cancelled
and retired and shall cease to
exist, and no payment shall be made with respect
thereto; and
(ii) each Company Common Share
issued and outstanding im-
mediately prior to the Merger
Effective Time, other than (A) Company Common
Shares cancelled pursuant to
Section 2.1(a)(i) and (B) shares that are owned by
stockholders who have perfected and
not withdrawn a demand for appraisal rights
pursuant to Section 262 of the DGCL
(“ Dissenting Shares ”), shall
automatically
be converted into the right to
receive either an amount in cash equal to $21.00 per
share (the “ Per Share
Cash Consideration ”) or one (the “ Exchange
Ratio ”) val-
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idly issued, fully paid and non-assessable
share of common stock, par value $0.01
per share, of Holdings (each such
share being a share of “ Holdings Common
Stock ”) (the “ Stock
Consideration ”), in each case as determined pursuant to
and
subject to the limitations set
forth in Section 2.3 and Section 2.4. The Per Share
Cash Consideration and the Stock
Consideration are together referred to herein as
the “ Merger
Consideration ”. The shares of the Holdings Common Stock
issued
in the Merger shall be listed on a
U.S. national securities exchange and shall be
registered under Section 12 of the
Exchange Act (but only so long as any re-
quirements of such exchange with
respect to number of holders or similar re-
quirements have been satisfied). At
any time prior to the date of the Company
Stockholder Meeting, Parent may, in
its sole and absolute discretion, increase ei-
ther the Per Share Cash
Consideration or the Exchange Ratio or both.
(b) The shares of common stock of
Purchaser Sub outstanding imme-
diately prior to the Merger
Effective Time will, at the Merger Effective Time,
remain
outstanding and will constitute all
of the issued and outstanding shares of common stock
of the Surviving Company
immediately after the Merger Effective Time.
(c) At the Merger Effective Time,
all Company Common Shares
(other than Dissenting Shares)
shall no longer be outstanding and shall automatically
be
canceled and retired and shall
cease to exist, and each holder of a Common Share
Certifi-
cate shall cease to have any rights
with respect thereto, except the right to receive the
Merger Consideration to be paid in
consideration therefor upon the surrender of such
Common Share Certificates in
accordance with Section 2.10.
(d) The capitalization (including
number of outstanding shares) of
Holdings will be adjusted (through
stock split or otherwise) so that, as of the Merger Ef-
fective Time, the number of shares
of Holdings Common Stock that shall be issued and
outstanding shall be equal to (i)
the sum of the aggregate number of Company Common
Shares and LP Units that will be
converted in the Merger and the Partnership Merger, re-
spectively, into the right to
receive the Per Share Cash Consideration pursuant to
Section
2.1(a)(ii) or Section 2.2(a)(i),
plus the aggregate number of Dissenting Shares, plus
the
aggregate number of Company Common
Shares held by Parent or any of its wholly
owned Subsidiaries that were
cancelled pursuant to Section 2.1(a)(i) (such sum, the
“ Parent Interest
”), plus (ii) the aggregate number of Company Common
Shares and LP
Units that will be converted in the
Merger and the Partnership Merger, respectively, into
the right to receive the Stock
Consideration pursuant to Section 2.1(a)(ii) and Section
2.2(a)(i), respectively. As of the
Merger Effective Time, Parent or a wholly owned or
majority owned Subsidiary of Parent
shall hold a number of shares of Holdings Common
Stock equal to the Parent
Interest.
Section 2.2 Partnership Merger
Consideration .
(a) At the Partnership Merger
Effective Time, by virtue of the Partner-
ship Merger and without any further
action on the part of any party hereto or the holders
of any Partnership
Units:
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(i) each LP Unit issued and outstanding
immediately prior to
the Partnership Merger Effective
Time, other than (A) any LP Unit that is owned
by Parent, the Company or any of
their respective direct or indirect Subsidiaries
(unless such LP Unit is in a trust
account, managed account, custodial account or
similar account and is beneficially
owned by a third party) and (B) any LP Unit
owned of record by an Electing
Holder and with respect to which a Roll-Over
Election has been made, shall,
subject to Section 2.3 and Section 2.4, automati-
cally be converted into the right
to receive the Merger Consideration;
(ii) each LP Unit issued and
outstanding immediately prior to
the Partnership Merger Effective
Time that is (A) owned by Parent, the Company
or any of their respective direct
or indirect Subsidiaries (other than, in each case,
such LP Units in trust accounts,
managed accounts, custodial accounts and the
like that are beneficially owned by
third parties) or (B) owned of record by an
Electing Holder and with respect to
which a Roll-Over Election has been made
shall remain outstanding as a
common unit of limited partnership interest in the
Surviving Partnership;
provided , however , that in the Private Holding
Company
Scenario such LP Units owned of
record by an Electing Holder shall be converted
into preferred units of limited
partnership interest in the Surviving Partnership as
contemplated by Section 2.5(a) (the
Merger Consideration and the common unit
(or preferred unit, if applicable)
of limited partnership interest in the Surviving
Partnership are together referred
to herein as the “ Partnership Merger
Consid-
eration ”); and
(iii) all of the common units of
limited partnership interest of
Purchaser LP outstanding
immediately prior to the Partnership Merger Effective
Time shall automatically be
converted into the right to receive a number of com-
mon units of limited partnership
interest in the Surviving Partnership equal to the
number of LP Units that were
converted into the right to receive the Merger Con-
sideration pursuant to Section
2.2(a)(i) .
(b) The general partnership
interest of the Operating Partnership held
by the Company shall remain
outstanding and constitute the only outstanding general
partnership interest in the
Surviving Partnership immediately following the
Partnership
Merger.
Section 2.3 Stock Election
.
(a) Subject to Section 2.4, each
holder of Company Common Shares
(other than holders of such shares
that are to be canceled pursuant to Section 2.1(a)(i)
and
other than the holders of
Dissenting Shares) and each holder of LP Units (other
than
holders of such units that are to
remain outstanding or be converted into preferred units
pursuant to Section 2.2(a)(ii))
shall be entitled to submit a request specifying (i) the
num-
ber of Company Common Shares or LP
Units, as the case may be, which such holder de-
sires to have converted into the
right to receive the Per Share Cash Consideration in the
Merger or the Partnership Merger
(such request with respect to Company Common
Shares or LP Units, a “
Cash Election ”) and (ii) the number of Company Common
Shares
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or LP Units which such holder desires to have
converted into the right to receive the
Stock Consideration in the Merger
or the Partnership Merger (such request with respect
to Company Common Shares or LP
Units, a “ Stock Election ”). Any Cash Election
or
Stock Election is referred to
herein as a “ Cash/Stock Election ”. All such
Cash/Stock
Elections shall be made on a form
specified by Parent and reasonably acceptable to the
Company for that purpose (a “
Cash/Stock Election Form ”). Holders of record of
Com-
pany Common Shares who hold such
Company Common Shares as nominees, trustees or
in other representative capacities
may submit multiple Cash/Stock Election Forms, pro-
vided that such nominee, trustee or
representative certifies that each such Cash/Stock
Election Form covers all Company
Common Shares held for a particular beneficial
owner.
(b) Parent shall cause the Exchange
Agent to mail to each holder of
record of Company Common Shares as
of the record date for the Company Stockholder
Meeting, together with the Proxy
Statement/Prospectus pursuant to Section 5.2(c), (i) a
Cash/Stock Election Form, (ii) a
letter of transmittal in customary form (a “ Letter
of
Transmittal
”) that shall specify that
delivery shall be effected and risk of loss and title to
the certificates representing
Company Common Shares (each, a “ Common Share
Cer-
tificate ”) shall pass only upon delivery of the
Common Share Certificates (or affidavits
of loss in lieu thereof in
accordance with Section 2.10(g)) to the Exchange Agent and
(iii)
instructions for use in effecting
the surrender of the Common Share Certificates (or affi-
davits of loss in lieu thereof in
accordance with Section 2.10(g)) in exchange for the
Merger Consideration. Parent shall
also cause the Exchange Agent to mail to each holder
of LP Units, at the same time that
the Proxy Statement/Prospectus is mailed to the holders
of Company Common Shares, (A) a
Cash/Stock Election Form, (B) a letter of transmittal
or certificate (a “
Unitholder Letter of Transmittal ”) that shall certify
to Parent and to
the Exchange Agent the number of LP
Units held by such holder and (C) instructions for
use in effecting the delivery of
the Unitholder Letter of Transmittal to receive the
Merger
Consideration. The forms of the
Letter of Transmittal, Unitholder Letter of Transmittal
and instructions shall be
reasonably agreed upon by Parent and the Company. The
Com-
pany shall use commercially
reasonable efforts to mail or otherwise make available
the
Cash/Stock Election Form and a
Letter of Transmittal to all persons who become record
holders of Company Common Shares
during the period between the record date for the
Company Stockholders Meeting and
the Cash/Stock Election Deadline.
(c) Cash/Stock Elections shall be
made by holders of Company Com-
mon Shares or LP Units by
delivering the Cash/Stock Election Form to the Exchange
Agent (it being understood that the
Cash/Stock Election Form may be combined with the
Letter of Transmittal and/or the
Unitholder Letter of Transmittal in one document). To be
effective, a Cash/Stock Election
Form must be properly completed, signed and submitted
to the Exchange Agent by no later
than the date and time set forth in the Cash/Stock Elec-
tion Form (the “
Cash/Stock Election Deadline ”), which Cash/Stock
Election Deadline
shall be no later than 5:00 p.m.
(New York City time) on the Business Day preceding the
date of the Company Stockholders
Meeting. The Cash/Stock Election Form shall be ac-
companied by (i) a properly
completed and signed Letter of Transmittal or Unitholder
Letter of Transmittal, as
applicable, and (ii) only in the case of holders of
Company
Common Shares, (A) the Common Share
Certificates representing the Company Com-
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mon Shares as to which the Cash/Stock Election
is being made or (B) an appropriate
guarantee of delivery of such
Common Share Certificates as set forth in such
Cash/Stock
Election Form from a firm that is a
member of a registered national securities exchange
or of the National Association of
Securities Dealers, Inc. or a commercial bank or trust
company having an office or
correspondent in the United States; provided that
such
Common Share Certificates are in
fact delivered to the Exchange Agent within three New
York Stock Exchange (“
NYSE ”) trading days after the date of execution of
such guaran-
tee of delivery (a “
Guarantee of Delivery ”). Failure to deliver Common
Share Certifi-
cates covered by any Guarantee of
Delivery within three (3) NYSE trading days after the
date of execution of such Guarantee
of Delivery shall be deemed to invalidate any other-
wise properly made Cash Election or
Stock Election.
(d) The Exchange Agent will have
the discretion to determine whether
Cash/Stock Election Forms have been
properly and timely completed, signed and submit-
ted or revoked and to disregard
immaterial defects in Cash/Stock Election Forms. The
good-faith decision of the Exchange
Agent in such matters shall be conclusive and bind-
ing; provided that the
Exchange Agent may, in its discretion, seek guidance from
both
Parent and the Company in
connection therewith. Neither Parent nor the Company nor
the Exchange Agent will be under
any obligation to notify any person of any defect in a
Cash/Stock Election Form submitted
to the Exchange Agent. The Exchange Agent shall
also make all computations
contemplated by Section 2.4 and all such computations
shall
be conclusive and binding on the
holders of Company Common Shares in the absence of
manifest error. Any Cash/Stock
Election Form may be changed or revoked prior to the
Cash/Stock Election Deadline. In
the event a Cash/Stock Election Form is revoked prior
to the Cash/Stock Election
Deadline, the Company shall, or shall cause the Exchange
Agent to, cause the Certificates
representing the Company Common Shares covered by
such Cash/Stock Election Form to be
promptly returned without charge to the Person
submitting the Cash/Stock Election
Form upon written request to that effect from such
Person.
(e) For the purpose hereof, unless
waived by Parent in its sole and ab-
solute discretion, a holder of
Company Common Shares or LP Units that (A) does not
submit a properly completed and
signed Cash/Stock Election Form that is received by the
Exchange Agent prior to the
Cash/Stock Election Deadline (including a holder who
sub-
mits and then revokes such
holder’s Cash/Stock Election Form and does not resubmit
a
Cash/Stock Election Form which is
timely received by the Exchange Agent), or (B) sub-
mits a Cash/Stock Election Form
without the corresponding Common Shares Certificates
or a Guarantee of Delivery, or (C)
submits a Cash/Stock Election Form that is defective
in any manner such that the
Exchange Agent cannot reasonably determine the election
preference of the holder submitting
such Cash/Stock Election Form, shall be deemed to
have made a “
Non-Election ”.
(f) Each Company Common Share or LP
Unit that is subject to a Non-
Election shall be deemed for all
purposes of this Article II to be subject to a Cash
Elec-
tion; accordingly, each Company
Common Share or LP Unit subject to a Non-Election or
to a valid Cash Election shall be
converted in the Merger or the Partnership Merger, as
the case may be, into the Per Share
Cash Consideration.
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(g) The rights of holders of Dissenting Shares
shall be determined in
accordance with Section 262 of
Delaware Law and as provided in Section 2.8.
Section 2.4 Proration
.
(a) The determination of whether
Company Common Shares (other
than Company Common Shares that are
to be canceled pursuant to Section 2.1(a)(i)) or
the LP Units shall be converted in
the Merger or the Partnership Merger, as the case may
be, into the Per Share Cash
Consideration or the Stock Consideration shall be made as
set
forth in this Section
2.4.
(b) Each Company Common Share or LP
Unit that is subject to a Cash
Election (or, pursuant to Section
2.3(f), deemed subject to a Cash Election) shall be con-
verted in the Merger or the
Partnership Merger, as the case may be, into the Per
Share
Cash Consideration. As is more
fully set forth below, the aggregate number of Company
Common Shares and LP Units to be
converted in the Merger into the right to receive the
Stock Consideration shall in no
event result in the issuance to holders of Company Com-
mon Shares or LP Units of an
aggregate number of shares of Holdings Common Stock in
excess of the Maximum Holdings
Common Share Amount.
(c) If Stock Elections are received
for a number of Company Common
Shares and LP Units which, after
giving effect to the Merger or the Partnership Merger,
as the case may be, would result in
the issuance of more than the Maximum Holdings
Common Share Amount, then each
Company Common Share and LP Unit for which a
valid Stock Election has been
received shall be converted in the Merger or the
Partner-
ship Merger, as the case may be,
into the Stock Consideration in the following manner:
for each valid Stock Election, the
number of Company Common Shares or LP Units cov-
ered by such Stock Election that
shall receive the Stock Consideration shall be the total
number of Company Common Shares and
LP Units covered by such Stock Election mul-
tiplied by the Stock Election
Proration Factor. Each Company Common Share or LP
Unit covered by a Stock Election,
if not converted into the right to receive the Stock
Con-
sideration in accordance with this
Section 2.4(c), shall be converted into the right to re-
ceive the Per Share Cash
Consideration.
(d) Notwithstanding anything to the
contrary in this Agreement, if
Stock Elections are received for a
number of Company Common Shares or LP Units that,
after giving effect to the Merger
and the Partnership Merger, would result in the issuance
of less than the Minimum Holdings
Common Share Amount, each Company Common
Share or LP Unit (other than LP
Units with respect to which a valid and timely Roll-Over
Election has been made) shall be
converted in the Merger or the Partnership Merger, as
the case may be, into the Per Share
Cash Consideration.
Section 2.5 Roll-Over
Election .
(a) Each Eligible Holder may, at
such holder’s sole discretion, elect
(each a “ Roll-Over
Election ”) to continue as a limited partner of the
Surviving Partner-
ship, in accordance with the terms
of the partnership agreement of the Surviving Partner-
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ship, as
follows: (i) if any Company Common Shares are converted into Stock
Considera
tion in the Merger pursuant to
Section 2.3 and Section 2.4 (the “ Public Holding
Com-
pany Scenario
”), Eligible Holders may make
a Roll-Over Election to receive common
units of limited partnership
interest, with substantially the same rights, preferences,
privi-
leges and voting power as those of
the LP Units (it being understood that such common
units of limited partnership
interest shall be convertible into Holding Common Stock
in-
stead of Company Common Shares);
(ii) if no Company Common Shares are converted
into Stock Consideration in the
Merger pursuant to Section 2.3 and Section 2.4 (the “
Pri-
vate Holding Company
Scenario ”),
Eligible Holders may make a Roll-Over Election to
receive preferred units of limited
partnership interest in customary form with a liquida-
tion preference per unit equal to
the Per Share Cash Consideration entitling the holder to
preferential distributions at 6.00%
per annum of such liquidation preference (the “
Cou-
pon Amount
”), carrying a right to be
redeemed at the election of the holder of the pre-
ferred unit for cash at its
liquidation preference plus accrued and unpaid Coupon
Amounts at any time upon reasonable
notice after the earlier of (1) the three-year anni-
versary of the Partnership Merger
Effective Time and (2) the occurrence of any event that
would result in an allocation of
income or gain in excess of the Coupon Amount to such
holder for tax purposes with
respect to such preferred units, and providing the
Surviving
Company with a right to redeem such
preferred unit for cash at its liquidation preference
plus accrued and unpaid Coupon
Amounts at any time after the tenth anniversary of the
Partnership Merger Effective Time;
or (iii) in either the Public Holding Company Sce-
nario or the Private Holding
Company Scenario, as may be contemplated by Section
5.13,
to become limited partners of a
newly formed Subsidiary of the Surviving Partnership
that (A) succeeds to substantially
all of the business and assets of the Surviving Partner-
ship and (B) has a limited
partnership agreement in a form reasonably agreed upon
by
Parent and the Company (the “
New Partnership ”) (it being understood that the terms
of
the partnership interests in the
New Partnership will be consistent with terms set forth
in
clauses (i) and (ii) above, as
applicable). An Eligible Holder making a Roll-Over Elec-
tion shall not be entitled to
receive the Merger Consideration and Section 2.2(a)(ii)
shall
apply.
(b) Roll-Over Elections shall be
made in a form agreed by Parent and
the Company for that purpose (a
“ Roll-Over Election Form ”). Concurrently with
the
mailing of the Proxy
Statement/Prospectus pursuant to Section 5.2(c), the
Operating
Partnership shall mail the
Roll-Over Election Form and Unitholder Letter of
Transmittal
to each Eligible Holder of LP Units
registered on the transfer books of the Operating
Partnership. The Roll-Over Election
Form shall (i) specify the number of LP Units with
respect to which the Electing
Holder is making a Roll-Over Election, (ii) state that,
by
making a Roll-Over Election, a
holder of LP Units shall be deemed to have uncondition-
ally and irrevocably waived any and
all rights such holder may have against the Company
or the Operating Partnership or any
of their respective Subsidiaries, Affiliates or repre-
sentatives under the Partnership
Agreement, (iii) provide any information or
certification
relating to Taxes that is
reasonably required in connection with the transactions
contem-
plated hereby and (iv) if
applicable, provide for the Electing Holder to become a
limited
partner in the New Partnership. To
be effective, a Roll-Over Election Form must be duly
completed, signed and submitted to
the Exchange Agent, and must be received by the
Exchange Agent by the date (the
“ Roll-Over Election Deadline ”) specified in
the Roll-
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Over Election Form, which Roll-Over Election
Deadline shall be no later than 5:00 p.m.
(New York City time) on the
Business Day preceding the date of the Company Stock-
holders Meeting. Any Eligible
Holder that has the right to make, and has made, a Roll-
Over Election pursuant to this
Section 2.5 (each an “ Electing Holder ”) may at
any time
prior to the Roll-Over Election
Deadline revoke such Roll-Over Election by written no-
tice to the Exchange Agent received
by the Exchange Agent prior to the Roll-Over Elec-
tion Deadline. Any Electing Holder
that does not submit a properly completed Roll-Over
Election Form which is received by
the Exchange Agent prior to the Roll-Over Election
Deadline, or that has duly revoked
such Roll-Over Election, shall be deemed not to have
made a Roll-Over Election and shall
be entitled to receive the Merger Consideration pur-
suant to Section 2.2(a)(i) . The
Exchange Agent shall, in its reasonable discretion,
deter-
mine whether a Roll-Over Election
Form has been properly completed, signed and sub-
mitted or revoked and whether to
disregard immaterial defects in such form and such de-
cision shall be conclusive and
binding; provided that the Exchange Agent may, in its
dis-
cretion, seek guidance from both
Parent and the Company in connection therewith. Nei-
ther Parent nor the Company nor the
Exchange Agent will be under any obligation to no-
tify any person of any defect in a
Roll-Over Election Form submitted to the Exchange
Agent. Any materially defective
Roll-Over Election not cured prior to the Roll-Over
Election Deadline shall be deemed
to be of no force and effect and the holder making
such purported Roll-Over Election
shall be deemed not to have made a Roll-Over Elec-
tion and shall be entitled to
receive the Merger Consideration pursuant to Section
2.2(a)(i) and Section
2.4.
(c) For purposes of this Agreement,
an “ Eligible Holder ” means (i) in
the Public Holding Company
Scenario, any holder of LP Units and (ii) in the Private
Holding Company Scenario, any
holder of LP Units who is an Accredited Investor and
holds at least 5,000
Units.
Section 2.6 Preferred Stock and
Preferred Units .
(a) Each (i) Series B Share issued
and outstanding immediately prior
to the Merger Effective Time shall
automatically be converted into one Series B cumula-
tive redeemable preferred unit of
limited liability company interest in the Surviving
Company (“ Mirror Series B
Units ”), (ii) Series C Share issued and outstanding
immedi-
ately prior to the Merger Effective
Time shall automatically be converted into one Series
C cumulative redeemable preferred
unit of limited liability company interest in the Sur-
viving Company (“ Mirror
Series C Units ”), (iii) Series E Share issued and
outstanding
immediately prior to the Merger
Effective Time shall automatically be converted into one
Series E cumulative redeemable
preferred unit of limited liability company interest in
the
Surviving Company (“
Mirror Series E Units ”), (iv) Series F Share issued
and out-
standing immediately prior to the
Merger Effective Time shall automatically be con-
verted into one Series F cumulative
redeemable preferred unit of limited liability com-
pany interest in the Surviving
Company (“ Mirror Series F Units ”) and (v)
Series G
Share issued and outstanding
immediately prior to the Merger Effective Time shall
auto-
matically be converted into one
Series G cumulative redeemable preferred unit of limited
liability company interest in the
Surviving Company (“ Mirror Series G Units
”).
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(b) Each Preferred Unit issued and outstanding
immediately prior to
the Partnership Merger Effective
Time shall remain issued and outstanding immediately
after the Partnership Merger
Effective Time in accordance with its terms.
Section 2.7 Company Options;
Company SARs; Restricted Shares .
(a) At the Merger Effective Time,
each outstanding option to purchase
Company Common Shares
(collectively, the “ Company Options ”) granted
under the
Company’s 1999 Stock Option
Plan, 1994 Amended and Restated Executive Equity In-
centive Plan and 2004 Stock
Incentive Plan (collectively, the “ Company Equity
Plans
and each outstanding stock
appreciation right and cash-settled restricted stock unit
(col-
lectively, the “ Company
SARs ”), other than Out-of-the-Money Options, whether or
not
then vested or exercisable, shall
be cancelled and of no further force and effect and the
holder of each such Company Option
or Company SAR shall be entitled to receive from
Parent, as soon as practicable
after, but in no event more than three (3) Business Days
af
ter, the Merger Effective Time, an
amount in cash equal to the product of (i) the number
of Company Common Shares subject to
each such Company Option or Company SAR,
as applicable and (ii) the excess
of the Per Share Cash Consideration over the exercise
price per share of such Company
Option or Company SAR, as applicable, which cash
payment shall be treated as
compensation and shall be net of any applicable
statutory
minimum withholding Tax. In
connection with the Merger, as of immediately prior to
the Merger Effective Time, any
restrictions with respect to outstanding restricted
shares
shall terminate or lapse. Upon the
termination or lapse of such restrictions, such shares
shall be outstanding Company Common
Shares and shall be converted into the right to
receive the Merger Consideration in
accordance with Section 2.1(a)(ii) and Section 2.3
this Agreement.
(b) In the event that the exercise
price per share of any Company Op
tion equals or exceeds the Per
Share Cash Consideration (any such Company Option, an
“ Out-of-the-Money
Option ”), then such Out-of-the-Money Option shall be
cancelled
and of no further force and
effect.
Section 2.8 Dissenting
Shares . No holder of Company Common Shares that
has perfected a demand for
appraisal rights with respect to its Company Common Shares
pursu
ant to Section 262 of the DGCL (a
“ Dissenting Stockholder ”) shall be entitled to
receive the
Merger Consideration with respect
to the Company Common Shares owned by such Dissenting
Stockholder unless and until such
Dissenting Stockholder shall have effectively withdrawn
or
lost such Dissenting
Stockholder’s right to appraisal under the DGCL. Each
Dissenting Stock-
holder shall be entitled to receive
only the payment provided by Section 262 of the DGCL
with
respect to Dissenting Shares. The
Company shall give Parent (i) prompt notice upon receipt
by
the Company of any written demands
for appraisal, attempted withdrawals of such demands,
any other instruments served
pursuant to applicable Law that are received by the Company
relat
ing to stockholders’ rights
of appraisal and (ii) the opportunity to direct all negotiations
and pro
ceedings with respect to any demand
for appraisal under the DGCL. The Company shall not,
except with the prior written
consent of Parent, voluntarily make any payment with respect
to
any demands for appraisal of
Dissenting Shares, offer to settle or settle any such demands or
ap
prove any withdrawal of any such
demands.
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Section 2.9 Fractional Shares . No
fractional shares of Holdings Common
Stock shall be issued in the
Merger, either as a result of any proration pursuant to Section 2.4
or
otherwise, but in lieu thereof each
holder of Company Common Shares or LP Units otherwise
entitled to a fractional share of
Holdings Common Stock will be entitled to receive, from the
Ex-
change Agent in accordance with the
provisions of this Section 2.9, a cash payment in lieu
of
such fractional share of Holdings
Common Stock equal to the product of such fractional
share
interest to which such holder of
Company Common Shares or LP Units would otherwise be
enti-
tled multiplied by the Per Share
Cash Consideration.
Section 2.10 Exchange of and
Payment for Securities .
(a) Exchange Agent . Prior
to the record date for the Company Stock-
holders Meeting, Parent shall
appoint a bank or trust company reasonably agreeable to
the Company to act as exchange and
paying agent (the “ Exchange Agent ”) for
the
Merger Consideration and for
purposes of receiving Cash/Stock Election Forms and
Roll-
Over Election Forms and
determining, in accordance with this Article II, the form
of
Merger Consideration to be received
by each holder of Company Common Shares or LP
Units (which bank or trust company
shall agree in writing to comply with the provisions
of this Article II applicable to
it). On or before the Merger Effective Time, Parent
shall
deposit with the Exchange Agent (i)
certificates representing the shares of Holdings
Common Stock issuable as Stock
Consideration to such holders in the Merger and the
Partnership Merger pursuant to this
Article II and (ii) cash sufficient to pay the aggregate
Per Share Cash Consideration to be
paid pursuant to this Article II, the aggregate cash to
be paid pursuant to Section 2.7 and
the aggregate cash in lieu of fractional shares of
Holdings Common Stock to be paid
pursuant to Section 2.9 (such certificates and cash,
together with any dividends or
distributions with respect thereto, being referred to as
the
“ Exchange Fund
”). The Exchange Agent shall invest any cash included in the
Exchange
Fund as directed by the Surviving
Company (so long as such directions do not impair the
rights of the holders of Company
Common Shares or the ability of the Exchange Agent to
make timely payments as required
hereby), in direct obligations of the United States of
America or any state thereof,
obligations for which the full faith and credit of the
United
States of America or any such state
is pledged to provide for the payment of principal and
interest, commercial paper either
rated of the highest quality by Moody’s Investors
Ser-
vice, Inc. or Standard &
Poor’s Corporation or certificates of deposit issued by, or
other
deposit accounts of, a commercial
bank having at least $1,000,000,000 in capital and sur-
plus, in each case with a maturity
of three months or less; provided that no such
invest-
ment or losses thereon shall affect
the Per Share Cash Consideration or other amounts
payable pursuant to this Article
II, and that Parent shall promptly provide, or shall
cause
the Surviving Company to provide,
additional funds to the Exchange Agent in the amount
of any shortfall in funds payable
pursuant to this Article II. Any earnings with respect
thereto shall be paid to the
Surviving Company as and when requested by the Surviving
Company. The Exchange Agent shall
pay the Merger Consideration out of the Exchange
Fund in accordance with this
Agreement. The Exchange Fund shall not be used for any
other purpose.
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16
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(b) Payment with Respect to Company Common
Shares.
(i) Upon surrender of a Common
Share Certificate for cancel-
lation (or an affidavit of loss in
lieu thereof in accordance with Section 2.10(g)) to
the Exchange Agent, together with a
duly executed Cash/Stock Election Form and
Letter of Transmittal, the holder
of such Company Share Certificate (or, if appli-
cable, the signatory to such
affidavit of loss) representing Company Common
Shares that have been converted
into the right to receive the Per Share Cash Con-
sideration will be entitled to
receive in exchange therefor an amount of cash equal
to (A) the number of Company Common
Shares represented by such Common
Share Certificate (or, if
applicable, affidavit of loss), multiplied by (B) the
Per
Share Cash Consideration, and as
soon as practicable after the Merger Effective
Time the Exchange Agent shall
distribute to each such holder a check for the
amount of cash to which each such
holder is entitled and the Common Share Cer-
tificate surrendered by each such
holder shall forthwith be cancelled. Until sur-
rendered as contemplated by this
Section 2.10, each such Common Share Certifi-
cate shall be deemed at any time
after the Merger Effective Time to represent only
the right to receive upon such
surrender an amount equal to (1) the number of
Company Common Shares represented
by such Common Share Certificate, multi-
plied by (2) the Per Share Cash Merger
Consideration.
(ii) Upon surrender of a Common
Share Certificate for cancel-
lation (or an affidavit of loss in
lieu thereof in accordance with Section 2.10(g)) to
the Exchange Agent, together with a
duly executed Cash/Stock Election Form and
Letter of Transmittal, the holder
of such Company Share Certificate (or, if appli-
cable, the signatory to such
affidavit of loss) representing Company Common
Shares that have been converted
into the right to receive the Stock Consideration
will be entitled to receive in
exchange therefor a number of whole shares of Hold-
ings Common Stock equal to (A) the
number of Company Common Shares repre-
sented by such Common Share
Certificate (or, if applicable, affidavit of loss),
multiplied by
(B) the Exchange Ratio (subject to
Section 2.4 and Section 2.9), and
as soon as practicable after the
Merger Effective Time the Exchange Agent shall
distribute to each such holder a
certificate representing the shares of Holdings
Common Stock to which each such
holder is entitled and the Common Share Cer-
tificate so surrendered shall
forthwith be cancelled. Until surrendered as contem-
plated by this Section 2.10, each
such Common Share Certificate shall be deemed
at any time after the Merger
Effective Time to represent only the right to receive
upon such surrender a number of
whole shares of Holdings Common Stock equal
to (1) the number of Company Common
Shares represented by such Common
Share Certificate, multiplied
by (2) the Exchange Ratio (subject to Section 2.4
and
Section 2.9) . Each share of
Holdings Common Stock into which a Company
Common Share shall be converted
shall be deemed to have been issued at the
Merger Effective Time by the
Surviving Company.
(iii) In the event of a proper
transfer of ownership of Company
Common Shares that is not
registered in the transfer records of the Company, the
Merger Consideration shall be paid
to a transferee if (A) the Common Share Cer-
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tificate evidencing such Company Common Shares
is presented to the Exchange
Agent properly endorsed or
accompanied by appropriate stock powers and other-
wise in proper form for transfer
and accompanied by all documents reasonably
required by the Exchange Agent to
evidence and effect such transfer and (B) such
transferee shall pay any transfer
or other Taxes required by reason of the payment
to a Person other than the
registered holder of the Common Share Certificate or
establish to the satisfaction of
the Exchange Agent and the Surviving Company
that such Tax has been paid or is
not applicable.
(c) Payment with Respect to LP
Units . This Section 2.10(c) shall apply
only to those LP Units with respect
to which a valid and timely Roll-Over Election has
not been made pursuant to Section
2.5.
(i) Upon delivery of a duly
executed Cash/Stock Election
Form and Unitholder Letter of
Transmittal and any other documents reasonably
required by the Exchange Agent or
the Surviving Partnership, the holder of the LP
Units identified in such Cash/Stock
Election Form and Unitholder Letter of
Transmittal that have been
converted into the right to receive the Per Share Cash
Consideration will be entitled to
receive in exchange therefor an amount of cash
equal to (A) the number of such LP
Units, multiplied by (B) the Per Share Cash
Consideration, and as soon as
practicable after the Partnership Merger Effective
Time the Exchange Agent shall
distribute to each such holder a check for the
amount of cash to which each such
holder is entitled.
(ii) Upon delivery of a duly
executed Cash/Stock Election
Form and Letter of Transmittal and
any other documents reasonably required by
the Exchange Agent or the Surviving
Partnership, the holder of the LP Units iden-
tified in such Cash/Stock Election
Form and Unitholder Letter of Transmittal that
have been converted into the right
to receive the Stock Consideration will be enti-
tled to receive in exchange
therefor a number of whole shares of Holdings Com-
mon Stock equal to (A) the number
of such LP Units, multiplied by (B) the Ex-
change Ratio (subject to Section
2.4 and Section 2.9), and as soon as practicable
after the Partnership Merger
Effective Time the Exchange Agent shall distribute
to each such holder a certificate
representing the shares of Holdings Common
Stock to which each such holder is
entitled. Each share of Holdings Common
Stock into which an LP Unit shall
be converted shall be deemed to have been is-
sued at the Partnership Merger
Effective Time by the Surviving Company.
(iii) In the event of a proper
transfer of ownership of LP Units
in accordance with the limited
partnership agreement of the Operating Partner-
ship, which transfer is not
registered in the transfer records of the Operating
Part-
nership, the Merger Consideration
shall be paid to a transferee if (A) such trans-
feree delivers a Cash/Stock
Election Form and/or Unitholder Letter of Transmittal
in accordance with Section
2.10(c)(i) and (B) such transferee shall pay any trans-
fer or other Taxes required by
reason of the payment to a Person other than the
registered holder of the LP Unit or
establish to the satisfaction of the Exchange
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18
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Agent and the Surviving Partnership that such
Tax has been paid or is not appli-
cable.
(d) No Further Ownership
Rights .
(i) The Merger Consideration paid
upon the surrender or ex-
change of the Common Share
Certificates evidencing Company Common Shares
in accordance with the terms hereof
shall be deemed to have been paid in full sat-
isfaction of all rights pertaining
to such Company Common Shares and, after the
Merger Effective Time, there shall
be no further registration on the transfer books
of the Company of transfers of
Company Common Shares. If, after the Merger
Effective Time, Common Share
Certificates are presented to the Surviving Com-
pany, for any reason, they shall be
cancelled and exchanged as provided in this
Article II.
(ii) The Merger Consideration paid
with respect to the LP
Units in accordance with the terms
hereof shall be deemed to have been paid in
full satisfaction of all rights
pertaining to such LP Units and, after the Partnership
Merger Effective Time, there shall
be no further registration on the transfer books
of the Operating Partnership of
transfers of LP Units, except for any LP Units that
shall remain outstanding or be
converted into preferred units pursuant to Section
2.2(a)(ii) .
(e) Termination of Exchange
Fund . Any portion of the Exchange
Fund (including any interest and
other income received with respect thereto) that remains
unclaimed by the former holders of
Company Common Shares or LP Units on the first
anniversary of the Merger Effective
Time shall be delivered to the Surviving Company or
the Surviving Partnership, as
applicable, upon demand, and any former holders of Com-
pany Common Shares or LP Units who
have not theretofore received any Merger Con-
sideration or Partnership Merger
Consideration, as applicable, to which they are entitled
under this Article II, shall
thereafter look only to the Surviving Company or the
Surviv-
ing Partnership, as applicable, or
to Parent for payment of their claims with respect
thereto.
(f) No Liability . None of
Parent, Holdings, Purchaser Sub, Purchaser
LP, the Surviving Company, the
Surviving Partnership or any other Person shall be
liable
to any former holder of Company
Common Shares or LP Units for any part of the Merger
Consideration or Partnership Merger
Consideration, as applicable, delivered to a public
official pursuant to any applicable
abandoned property, escheat or similar Laws. Any
amounts remaining unclaimed by
former holders of any such Company Common Shares
or LP Units immediately prior to
the time at which such amounts would otherwise es-
cheat to, or become property of,
any federal, state or local government or any court,
regu-
latory or administrative agency or
commission, governmental arbitrator or other govern-
mental authority or
instrumentality, domestic or foreign (a “ Governmental
Entity ”),
shall, to the extent permitted by
applicable Law, become the property of the Surviving
Company or the Surviving
Partnership, as applicable, free and clear of any claims or
in-
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19
terest of
any such holders or their successors, assigns or personal
representatives previ- ously entitled thereto.
(g) Lost, Stolen or Destroyed
Certificates . If any Common Share Cer- tificate shall have
been lost, stolen or destroyed, upon the making of an affidavit of
that fact by the Person claiming such Common Share Certificate to
be lost, stolen or de- stroyed and, if required by Parent or the
Surviving Company, the posting by such Person of a bond in
customary amount and upon such customary terms as may be required
by Parent or the Surviving Company as indemnity against any claim
that may be made against it with respect to such Common Share
Certificate, the Exchange Agent shall pay in exchange for such
lost, stolen or destroyed Common Share Certificate an amount equal
to (i) the number of Company Common Shares represented by such
lost, stolen or de- stroyed Common Share Certificate, multiplied
by (ii) the Merger Consideration.
(h) Withholding of Tax .
Each of Parent, the Surviving Company, the Surviving Partnership
and the Exchange Agent shall be entitled to deduct and withhold
from the Merger Consideration and the Partnership Merger
Consideration otherwise pay- able pursuant to this Agreement to any
holder of Company Common Shares or LP Units such amount as Parent,
the Surviving Company, the Surviving Partnership or the Ex- change
Agent is required to deduct and withhold with respect to the making
of such pay- ment under the Code, and the rules and regulations
promulgated thereunder, or any provi- sion of state, local or
foreign Law related to Taxes. To the extent that amounts are so
withheld by Parent, the Surviving Company, the Surviving
Partnership or the Exchange Agent, such withheld amounts shall be
(i) paid over to the applicable Governmental En- tity in accordance
with applicable Law and (ii) treated for all purposes of this
Agreement as having been paid to the former holder of Company
Common Shares or LP Units in re- spect of which such deduction and
withholding was made.
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Section
2.11
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Adjustments
to Prevent Dilution .
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(a) If, at any time during the
period between the date of this Agree- ment and the Merger
Effective Time, there is a change in the number of Company Com- mon
Shares, or securities convertible or exchangeable into or
exercisable for Company Common Shares, issued and outstanding prior
to the Merger Effective Time as a result of a reclassification,
stock split (including a reverse stock split), stock dividend or
stock dis- tribution, recapitalization, merger, subdivision, issuer
tender or exchange offer, or other similar transaction, the
Exchange Ratio, the Per Share Cash Consideration and the Stock
Consideration shall be equitably adjusted to reflect such
change.
(b) If, at any time during the
period between the date of this Agree- ment and the Partnership
Merger Effective Time, there is a change in the number of LP Units,
or securities convertible or exchangeable into or exercisable for
LP Units, issued and outstanding prior to the Partnership Merger
Effective Time as a result of a reclassifi- cation, unit split
(including a reverse unit split), unit dividend or unit
distribution, recapi- talization, merger, subdivision, issuer
tender or exchange offer, or other similar transac- tion, the
Exchange Ratio, the Per Share Cash Consideration and the Stock
Consideration shall be equitably adjusted to reflect such
change.
20
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REPRESENTATIONS AND WARRANTIES
OF THE COMPANY AND THE
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OPERATING
PARTNERSHIP
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Except as set forth in (a) any Company SEC
Document filed with the SEC after January 1, 2006, or (b) the
disclosure letter, dated as of the date hereof and delivered to
Parent in connection with the execution and delivery of this
Agreement (the “ Company Disclosure Letter ”),
each of the Company and the Operating Partnership represents and
warrants to the Purchaser Parties as follows:
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Section
3.1
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Organization and Good Standing
.
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(a)
The Company is a corporation duly organized, validly existing and
in good standing under the Laws of the State of Delaware. The
Company has all requi- site corporate power and authority and all
necessary government approvals or licenses to own, lease, operate
its properties, and to carry on its business as now being
conducted, except where the absence thereof, individually or in the
aggregate, is not material. The Company is duly qualified or
licensed to do business and is in good standing in each ju-
risdiction (to the extent such concepts exist in such
jurisdictions) in which the nature of the business it is
conducting, or the ownership, operation or leasing of its
properties or the management of properties for others makes such
qualification or licensing necessary, except for those
jurisdictions where the failure to be so qualified or licensed or
in good standing, individually or in the aggregate, is not
material. The Company has heretofore made available to Parent
complete and correct copies of the Company’s certificate of
in- corporation (the “ Company Charter ”) and
bylaws (the “ Company Bylaws ”), in each case as
currently in effect. No dissolution, revocation or forfeiture
proceedings regarding the Company have been commenced.
(b) The
Operating Partnership is a limited partnership duly formed, validly
existing and in good standing under the Laws of the State of
Delaware. The Op- erating Partnership has all requisite partnership
power and authority and all necessary government approvals or
licenses to own, lease, operate its properties, and to carry on its
business as now being conducted, except where the absence thereof,
individually or in the aggregate, is not material. The Operating
Partnership is duly qualified or licensed to do business and is in
good standing in each jurisdiction (to the extent such concepts
exist in such jurisdictions) in which the nature of the business it
is conducting, or the ownership, operation or leasing of its
properties or the management of properties for others makes such
qualification or licensing necessary, except for those
jurisdictions where the failure to be so qualified or licensed or
in good standing, individually or in the aggregate, is not
material. The Company has heretofore made available to Parent
complete and correct copies of the Operating Partnership’s
certificate of limited partnership and limited part- nership
agreement, in each case as currently in effect. No dissolution,
revocation or for- feiture proceedings regarding the Operating
Partnership have been commenced.
21
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Section 3.2
Subsidiaries
.
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(a)
Each Company Subsidiary is duly organized or formed, validly ex-
isting and in good standing under the Laws of its jurisdiction of
organization or formation (to the extent that such concept exists
in such jurisdiction). Each Company Subsidiary has all requisite
corporate, partnership, limited liability company or other
organizational power and authority and all necessary government
approvals or licenses to own, lease and operate its properties, and
to carry on its business as now being conducted, except where the
absence thereof, individually or in the aggregate, is not material.
Each Company Subsidiary is duly qualified or licensed to do
business and is in good standing in each ju- risdiction (to the
extent that such concept exists in such jurisdiction) in which the
nature of its business or the ownership, operation or leasing of
its properties or the management of properties for others makes
such qualification or licensing necessary, except for those
jurisdictions where the failure to be so qualified or licensed or
in good standing, indi- vidually or in the aggregate, is not
material.
(b) Section
3.2(b) of the Company Disclosure Letter sets forth (i) all Company
Subsidiaries and their respective jurisdictions of organization or
formation; (ii) each holder of equity interests in each Company
Subsidiary; (iii) the current unreturned capital contribution
account balance (or account balance for any equity or other similar
interests) of the Company or any Company Subsidiary with respect to
each Company Subsidiary that is not a wholly owned Subsidiary and
for which the Company maintains records of unreturned capital
contribution account balances (or account balances for any equity
or other similar interests); and (iv) any commitments to make any
future capital contributions by the Company or any Company
Subsidiary to any Company Subsidiary that is not a wholly owned
Subsidiary. All outstanding equity interests in each Company
Subsidiary have been duly authorized and are validly issued, fully
paid and (except for partnership interests) non-assessable, and are
not subject to any preemptive rights and are owned directly or
indirectly by the Company, free and clear of all pledges, claims,
liens, charges, encumbrances and security interests of any kind or
nature whatsoever (collec- tively, “ Liens ”),
except as, individually or in the aggregate, are not material.
There are no outstanding options, warrants or other rights to
acquire ownership interests from any Company Subsidiary. The
Company has heretofore made available to Parent complete and
correct copies of each Company Subsidiary’s organizational
documents and any amendments thereto, in each case as currently in
effect. No dissolution, revocation or forfeiture proceedings
regarding any of the Company Subsidiaries have been com-
menced.
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Section
3.3
Capitalization
.
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(a) The
Company . The authorized shares of capital stock of the Company
consist of (i) 100,000,000 Company Common Shares, par value $0.01
per share, (ii) 50,000,000 shares of non-voting common stock and
(iii) 20,000,000 Preferred Shares, par value $0.01 per share. As of
January 1, 2007 (the “ Capitalization Date ”),
there are issued and outstanding: (1) 56,890,666 Company Common
Shares (which amount includes 129,842 of an aggregate of 321,958
restricted Company Common Shares granted under the Company Equity
Plans), (2) no shares of non-voting common stock, (3)
4,300,000
22
shares of
Series B cumulative redeemable preferred stock, par value $0.01 per
share (“ Series B Shares ”), (4) 3,500,000
shares of Series C cumulative redeemable preferred stock, par value
$0.01 per share (“ Series C Shares ”), (5) no
shares of Series D cumula- tive redeemable preferred stock, par
value $0.01 per share (“ Series D Shares ”), (6)
8,545,000 shares of Series E cumulative redeemable preferred stock,
par value $0.01 per share (“ Series E Shares ”),
(7) 316,250 shares of Series F convertible cumulative re- deemable
preferred stock, par value $0.01 per share (“ Series F
Shares ”) and (8) 92,000 shares of Series G cumulative
redeemable preferred stock, par value $0.01 per share (“
Series G Shares ”, and together with the Series B
Shares, Series C Shares, Series D Shares, Series E Shares and
Series F Shares, the “ Preferred Shares ”) . As
of the Capi- talization Date, no other series of shares of
beneficial interest of the Company are issued and outstanding. In
addition, as of the Capitalization Date, there are outstanding Com-
pany Options to purchase an aggregate of 276,262 Company Common
Shares, and Com- pany Options to purchase not less than 99,292
Company Common Share are Out-of-the- Money Options. Since the
Capitalization Date and prior to the date of this Agreement, no
equity securities of the Company or of any Company Subsidiary have
been issued, other than pursuant to conversions of Series F Shares
or exercises of Company Options. Ex- cept as set forth in this
Section 3.3, there are no issued and outstanding shares or other
equity securities of the Company (or shares or other equity
securities of the Company re- served for issuance), and there are
no securities of the Company convertible into or ex- changeable for
stock or other equity securities of the Company or any Company
Subsidi- ary, or other subscriptions, options, warrants, conversion
rights, stock appreciation rights, “phantom” stock,
stock units, calls, claims, rights of first refusal, rights
(including pre- emptive rights), commitments, arrangements or
agreements to which the Company or any Company Subsidiary is a
party or by which it is bound in any case obligating the Com- pany
or any Company Subsidiary to issue, deliver, sell, purchase, redeem
or acquire, or cause to be issued, delivered, sold, purchased,
redeemed or acquired, stock or other eq- uity securities of the
Company or of any Company Subsidiary, or obligating the Com- pany
or any Company Subsidiary to grant, extend or enter into any such
subscription, op- tion, warrant, conversion right, stock
appreciation right, call, right, commitment, ar- rangement or
agreement. All outstanding shares of the Company are, and all
shares re- served for issuance will be, upon issuance in accordance
with the terms specified in the instruments or agreements pursuant
to which they are issuable, duly authorized, validly issued, fully
paid and nonassessable and not subject to or issued in violation
of, any pre- emptive right, purchase option, call option, right of
first refusal, subscription or any other similar right.
(b) Operating Partnership . As of the
Capitalization Date, there are is- sued and outstanding (i) 650,718
units of general partner interest in the Operating Part- nership
(the “ GP Units ”), (ii) 64,421,069 LP Units and
(iii) 16,928,250 preferred units of limited partnership interest in
the Operating Partnership (the “ Preferred Units
”, and to- gether with the LP Units and the GP Units, the
“ Partnership Units ”) . None of the Part-
nership Units are evidenced by certificates. All such partnership
interests are duly au- thorized, validly issued and are not subject
to preemptive rights and any capital contribu- tions required to be
made by the holders thereof have been made. The Company is the sole
general partner of the Operating Partnership and holds all of the
outstanding GP Units in the Operating Partnership. Section 3.3(b)
of the Company Disclosure Letter sets
23
forth the
name of, and the number and class of GP Units, LP Units and
Preferred Units held by, each partner in the Operating Partnership.
Each LP Unit held by a limited partner of the Operating Partnership
may, under the circumstances and subject to the conditions set
forth in the Partnership Agreement, be redeemed for, as of the
Capitalization Date, one Company Common Share. Each Series D
cumulative redeemable preferred unit of limited partnership in the
Operating Partnership may, under the circumstances and sub- ject to
the conditions set forth in the Partnership Agreement, be converted
into one Series D Share.
(c)
Miscellaneous . Except for this Agreement and the
Partnership Agreement, there are not any (i) stockholder
agreements, voting trusts, proxies or other agreements or
understandings relating to the voting of any shares of the Company
or partnership interests in the Operating Partnership or any
ownership interests in any other Company Subsidiary to which the
Company or any Company Subsidiary is a party or by which it is
bound, (ii) agreements or understandings requiring or restricting
the sale or transfer (including agreements imposing transfer
restrictions) of any shares of the Com- pany or the Operating
Partnership to which the Company or any Company Subsidiary is a
party or by which it is bound or (iii) restrictions on the
Company’s ability to vote the eq- uity interests of any of
the Company Subsidiaries.
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Section
3.4
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Authority;
No Violations .
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(a) The
Company has all requisite corporate power and authority to execute
and deliver this Agreement, to perform its obligations hereunder
and to consummate the transactions contemplated hereby, subject to
receipt of the Company Stockholder Approval and the acceptance of
the Company Certificate of Merger by the Dela-ware Secretary of
State. The Operating Partnership has all requisite partnership
power and authority to execute and deliver this Agreement, to
perform its obligations hereunder and to consummate the
transactions contemplated hereby, subject to the acceptance of the
Partnership Certificate of Merger by the Delaware Secretary of
State. The Board of Directors of the Company (the “
Company Board of Directors ”) and the Company, as
general partner of the Operating Partnership, have duly and validly
authorized and approved the execution, delivery and performance of
this Agreement by the Company and the Operating Partnership,
respectively, and the consummation of the transactions contemplated
by this Agreement, including the Mergers, and the Company Board of
Directors has declared advisable the Merger and the other
transactions contemplated by this Agreement and has directed that
this Agreement and the transactions contemplated by this Agreement,
including the Merger, be submitted for approval and adoption at a
special meeting of the holders of Company Common Shares (the
“ Company Stockholder Meeting ”). No other
corporate proceedings on the part of the Company or the Operating
Partnership are necessary to authorize this Agreement or to
consummate the transactions contemplated by this Agreement other
than the receipt of the Company Stockholder Approval. No other
approval of any equity holder or governing body of the Company or
of the Operating Partnership is required to approve or adopt this
Agreement or the transactions contemplated by this
Agreement.
24
(b) This
Agreement has been duly and validly executed and delivered by the
Company and the Operating Partnership and, subject to receipt of
the Company Stockholder Approval and assuming due authorization,
execution and delivery by each Purchaser Party, constitutes a
legal, valid and binding obligation of the Company and the
Operating Partnership, enforceable against the Company and the
Operating Partnership in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other Laws of general applicability
relating to or affecting creditors’ rights and by general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
(c) Subject
to receipt of the affirmative vote of a majority of the votes
entitled to be cast by the holders of Company Common Shares at the
Company Stock- holder Meeting (the “ Company Stockholder
Approval ”), the execution and delivery of this Agreement
by the Company and the Operating Partnership do not, and the
consum- mation of the transactions contemplated hereby and the
performance of their obligations hereunder will not, conflict with,
or result in any violation of, or default (with or without notice
or lapse of time, or both) under, or give rise to a right of
termination, amendment, cancellation or acceleration of any
obligation, or result in the triggering of any payments or the loss
of a benefit under, or give rise to a right of purchase under,
result in the crea- tion of any Lien upon any of the properties or
assets of the Company or any of the Com- pany Subsidiaries under,
require the consent or approval of any third party or otherwise
result in a detriment or default to the Company or any of the
Company Subsidiaries un- der, any provision of (i) the Company
Charter or the Company Bylaws or any provision of the comparable
charter or organizational documents of any of the Company
Subsidiar- ies, (ii) any loan or credit agreement or note, or any
bond, mortgage, indenture, lease, contract or other agreement,
instrument, permit, concession, franchise or license applica- ble
to the Company or any of the Company Subsidiaries, or to which
their respective properties or assets are bound or any guarantee by
the Company or any of the Company Subsidiaries of any of the
foregoing, (iii) any joint venture or other ownership arrange- ment
or (iv) assuming the consents, approvals, authorizations or permits
and filings or notifications referred to in Section 3.5 are duly
and timely obtained or made and the Company Stockholder Approval
has been obtained, any Law or Order applicable to or binding upon
the Company or any of the Company Subsidiaries, or any of their
respec- tive properties or assets, other than, in the case of
clauses (ii), (iii) and (iv), any such con- flicts, violations,
defaults, rights, Liens or detriments that, individually or in the
aggre- gate, (A) would not prevent or materially delay consummation
of the Merger or the other transactions contemplated by this
Agreement or (B) are not material.
Section 3.5
Governmental Approvals and Notices . No consent, approval,
order or authorization of, or registration, declaration or filing
with, notice to or permit from, any Governmental Entity, is
required by or on behalf of the Company or any of the Company
Subsidiaries in connection with the execution and delivery of this
Agreement by the Company or the Operating Partnership or the
consummation by the Company or the Operating Partnership of the
transactions contemplated hereby and the performance of their
respective obligations hereunder, except for: (a) the filing with
the Securities and Exchange Commission (the “ SEC
”) of (i) (A) a proxy or information statement in preliminary
and definitive form relating to the Company Stockholder Meeting to
be held in connection with the Merger or (B) other documents
otherwise
25
required
in connection with the transactions contemplated hereby and (ii)
such reports under Section 13(a) of the Securities Exchange Act of
1934, as amended (the “ Exchange Act ”), and
such other compliance with the Exchange Act and the rules and
regulations thereunder, as may be required in connection with this
Agreement and the transactions contemplated hereby; (b) the filing
of the Company Certificate of Merger with, and the acceptance for
record of the Company Certificate of Merger by, the Delaware
Secretary of State; (c) the filing of the Partnership Certificate
of Merger with, and the acceptance for record of the Partnership
Certificate of Merger by, the Delaware Secretary of State; (d) such
filings and approvals as may be required by any applicable state
securities or “blue sky” Laws; (e) such filings as may
be required in connection with state or local transfer and gains
taxes; (f) any filings or notices required under the rules and
regulations of the NYSE; (g) compliance with any applicable
requirements of laws, rules and regulations in other foreign
jurisdictions governing antitrust or merger control matters; (h)
compliance with any applicable requirements of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended
(the “ HSR Act ”), and (i) any such other
consent, approval, order, authorization, registration, declaration,
notice, filing or permit where the failure to obtain or make the
same, individually or in the aggregate, (A) would not prevent or
materially delay consummation of the Merger or other transactions
contemplated by this Agreement or (B) is not material.
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Section
3.6
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Company SEC
Documents; Financial Statements .
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(a) The Company has made available
to Parent (by public filing with the SEC or otherwise) each report,
schedule, registration statement, other statement (in- cluding
proxy statements) and information filed by the Company with the SEC
since January 1, 2004 (including the 2005 10-K, the September 30
10-Q and the 2006 10-K, only to the extent that they are filed with
the SEC, the “ Company SEC Documents ”)
.
(b) Except for the Restatement and
Related Matters, the Company SEC Documents, as finally amended and
publicly available and except to the extent that statements in the
Company SEC Documents have been modified or superseded by later
Company SEC Documents filed and publicly available prior to the
date hereof, (i) com- plied as to form in all material respects
with the applicable requirements of the Securities Act or the
Exchange Act, as the case may be, and the rules and regulations of
the SEC promulgated thereunder, in each case as in effect at the
time of its filing and (ii) did not contain any untrue statement of
a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in
light of the circum- stances under which they were made, not
misleading.
(c) For purposes of this Agreement,
the “ Company Balance Sheet ” means the
unaudited consolidated balance sheet (or, from and after the date
such consoli- dated balance sheet is audited, the audited
consolidated balance sheet) of the Company as of December 31, 2005,
and the “ Balance Sheet Date ” means December
31, 2005. Each of the audited consolidated balance sheets and
audited consolidated income statements and statements of cash flows
as of and for the years ended December 31, 2005, December 31, 2004
and December 31, 2003 (including, in each case, any related notes
thereto) which will have been included in the 2005 10-K, and which
will have been filed with the SEC prior to the Closing Date, will
fairly present in all material respects, in conformity with the
rules and regulations of the SEC and GAAP applied on a consistent
basis (except
26
as may be
indicated in the notes thereto), the consolidated financial
position of the Com- pany as of the dates thereof and the
consolidated results of operations and cash flows for the years
then ended (subject to any adjustments described therein). To the
Knowledge of the Company, after due inquiry of the Company’s
independent auditors, the 2005 10-K will not include any
qualifications made by such auditor, other than a qualification due
principally to the maturity date of the Credit Agreement or the
Goldman Sachs Loan.
(d) Upon the filing of the 2006 10-K and the
Company’s Quarterly Report on Form 10-Q for the quarter ended
March 31, 2007, in each case with the SEC, the Company will be in
compliance in all material respects with (i) the applicable provi-
sions of the Exchange Act and the Sarbanes Oxley Act of 2002 (the
“ Sarbanes Oxley Act ”), other than Section 404
of the Sarbanes Oxley Act, and the respective rules and regulations
promulgated thereunder and (ii) the applicable listing and
corporate govern- ance rules and regulations of the NYSE. To the
Knowledge of the Company, after due inquiry of the Company’s
independent auditors, the 2006 10-K will not include any quali-
fications made by such auditor, other than a qualification due
principally to the maturity date of the Credit Agreement or the
Goldman Sachs Loan.
(e) Each of the unaudited consolidated
financial statements (including, in each case, any related notes
thereto) which will have been included in the September 30 10-Q,
and which will have been filed with the SEC prior to the Closing
Date, will fairly present in all material respects, in conformity
with the rules and regulations of the SEC and GAAP applied on a
consistent basis (except as may be indicated in the notes thereto),
the consolidated financial position of the Company as of the dates
thereof and the consolidated results of operations and cash flows
for the nine-month periods then ended (subject to any adjustments
described therein).
(f) Each of the audited consolidated balance
sheets and audited con- solidated income statements and statements
of cash flows as of and for the years ended December 31, 2006,
December 31, 2005 and December 31, 2004 (including, in each case,
any related notes thereto) which will have been included in the
2006 10-K will fairly pre- sent in all material respects, in
conformity with the rules and regulations of the SEC and GAAP
applied on a consistent basis (except as may be indicated in the
notes thereto), the consolidated financial position of the Company
as of the dates thereof and the consoli- dated results of
operations and cash flows for the years then ended (subject to any
ad- justments described therein).
(g) Section 3.6(g) of the Company Disclosure
Letter sets forth, as of September 30, 2006, (i) the aggregate
liability of the Company, the Operating Partnership and the other
Company Subsidiaries under the operating leases, letters of credit,
construc- tion contracts, lease agreements, loan guarantees and
employment contracts of the Com- pany, the Operating Partnership or
any of the other Company Subsidiaries that constitute material
commitments, contingent contractual liabilities or off-balance
sheet contractual items (the “ September 30 Contractual
Commitments Schedule ”) and (ii) the aggregate
consolidated working capital of the Company (the “
September 30 Working Capital Schedule ”) .
27
(h) Section
3.6(h) of the Company Disclosure Letter sets forth the ma- terial
joint ventures of the Operating Partnership and its Subsidiaries
(the “ Joint Ven- tures ”) .
(i) Section
3.6(i) of the Company Disclosure Letter sets forth, as of September
30, 2006, the aggregate unconsolidated debt of the Company and the
Com- pany Subsidiaries (the “ September 30 Unconsolidated
Debt Schedule ”) .
Section
3.7 Absence of Certain Changes
. Since the Balance Sheet Date through the date of this Agreement,
the Company and the Company Subsidiaries have conducted their
business only in the ordinary course consistent with past practice
and there has not been: (a) a Company Material Adverse Effect; (b)
any declaration, setting aside for payment or payment of any
dividend or other distribution (whether in cash, stock or property)
with respect to any of the Company Common Shares or any LP Units;
(c) any amendment of any material term of any outstanding security
of the Company or any Company Subsidiary; (d) any repurchase,
redemption or other acquisition by the Company or any Company
Subsidiary of any outstanding shares, stock or other securities of,
or other ownership interests in, the Company or any Company
Subsidiary, other than pursuant to or in connection with any
Company Employee Benefit Plan; or (e) any incurrence, assumption or
guarantee by the Company or any Company Subsidiary of any
indebtedness (other than trade payables in the ordinary course of
business) in excess of $10 million.
Section
3.8 No Undisclosed Material
Liabilities . There are no Liabilities of the Company or any of
the Company Subsidiaries, whether accrued, contingent, absolute or
determined, other than: (a) Liabilities reflected or provided for
in the Company Balance Sheet or in the notes thereto, (b)
Liabilities incurred in the ordinary course of business since the
Balance Sheet Date, (c) Liabilities arising, or permitted to be
incurred, under this Agreement (including Section 5.1), (d)
Liabilities reflected on the September 30 Contractual Commitments
Schedule, the September 30 Working Capital Schedule or the
September 30 Unconsolidated Debt Schedule, and (e) such other
Liabilities not required by GAAP to be reflected on the
Company’s financial statements as, individually or in the
aggregate, do not constitute and would not reasonably be expected
to constitute a Company Material Adverse Effect.
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Section
3.9
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Compliance
with Applicable Laws .
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(a) The
Company and the Company Subsidiaries hold all permits, li- censes,
certificates, registrations, variances, exemptions, orders,
franchises and approvals of all Governmental Entities necessary or
required by any applicable Law or Order for the lawful conduct of
their respective businesses (the “ Company Permits
”), except where the failure to so hold, individually or in
the aggregate, does not constitute and would not reasonably be
expected to constitute a Company Material Adverse Effect. The
Company and the Company Subsidiaries are in compliance with the
terms of the Com- pany Permits, except where the failure to so
comply, individually or in the aggregate, is not
material.
(b) Other
than the Restatement and Related Matters, since January 1, 2004,
the Company and the Company Subsidiaries have conducted their
respective busi-
28
nesses in
compliance with applicable Law, except for any violations that,
individually or in the aggregate, are not material.
(c)
Other than the Restatement and Related Matters, no investigation or
review by any Governmental Entity with respect to the Company or
any Company Subsidiary is pending or, to the Knowledge of the
Company, is threatened, other than those the outcome of which,
individually or in the aggregate, would not reasonably be expected
to be material.
Section
3.10 Litigation . Other
than the Restatement and Related Matters, there is no litigation,
arbitration, claim, investigation, suit, action or proceeding
pending or, to the Knowledge of the Company, threatened in writing
against the Company or any Company Subsidiary or any of their
respective property or assets that, individually or in the
aggregate, is material, nor is there any such litigation,
arbitration, claim, investigation, suit, action or proceeding or
any Order outstanding against the Company or any Company Subsidiary
or any of their respective properties or assets which in any manner
challenges or seeks to prevent or enjoin, alter or materially delay
the Merger, the Partnership Merger or the other transactions
contemplated by this Agreement.
|
Section
3.11 Taxes . Except as would not, individually or in the
aggregate, be material:
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(a)
Each of the Company and the Company Subsidiaries (i) has timely
filed (or had filed on its behalf) all material Tax Returns
required to be filed by any of them (after giving effect to any
filing extension granted by a Governmental Entity) and (ii) has
paid (or had paid on its behalf) or will timely pay all material
Taxes (whether or not shown on such Tax Returns) that are required
to be paid by it (other than those that are being contested in good
faith through appropriate proceedings or for which appropriate
reserves have been established in accordance with GAAP). To the
Knowledge of the Company, such Tax Returns are true, correct and
complete in all material respects. The Company Balance Sheet
reflects an adequate reserve (excluding any reserve for deferred
Taxes established to reflect timing differences between book and
Tax income) for all Taxes payable by the Company and the Company
Subsidiaries for all taxable periods and portions thereof through
the date of such financial statements and Taxes payable by the
Company and Company Subsidiaries on the Closing Date will not
exceed such reserve as adjusted through the Closing Date in
accordance with the past custom and practice of the Company and the
Company Subsidiaries in filing their Tax Returns. True and
materially complete copies of all federal Tax Returns that have
been filed with the Internal Revenue Service (the
“IRS” ) by each of the Company and the Operating
Partnership with respect to the taxable years commencing on or
after January 1, 2003 have been provided or made available to
representatives of Parent. Neither the Company nor any of the
Company Subsidiaries has executed or filed with the IRS or any
other taxing authority any agreement, waiver or other document or
arrangement extending the period for assessment or collection of
material Taxes (including any applicable statute of limitation),
which waiver or extension is currently in effect, and, to the
knowledge of the Company, no power of attorney with respect to any
Tax matter is currently in force with respect to the Company or any
of the Company Subsidiaries.
29
(b) The Company, (i) for all
taxable years commencing with the Com- pany’s taxable year
ending December 31, 1997 through December 31, 2006, has been
subject to taxation as a real estate investment trust within the
meaning of Section 856 of the Code (a “ REIT ”)
and has been organized and operated in conformity with the re-
quirements for qualification and taxation as a REIT for such years,
(ii) has operated since December 31, 2006 to the date hereof in a
manner that will permit it to qualify as a REIT for the taxable
year that includes the date hereof, and (iii) intends to continue
to operate in such a manner as to permit it to continue to qualify
as a REIT for the taxable year of the Company that will end with
the Merger. To the knowledge of the Company, no chal- lenge to the
Company’s status as a REIT is pending or has been threatened
in writing. No Company Subsidiary, excluding any Company Subsidiary
in which the Company holds 10% or less by both vote and value,
within the meaning of Code Section 856(c)(4)(B)(iii), is a
corporation for U. S. federal income tax purposes, other than a
cor- poration that qualifies as a “qualified REIT
subsidiary,” within the meaning of Section 856(i)(2) of the
Code, or as a “taxable REIT subsidiary,” within the
meaning of Section 856(1) of the Code.
(c) Each Company Subsidiary that is a
partnership, joint venture, or limited liability company and which
has not elected to be a “taxable REIT subsidiary”
within the meaning of Code Section 856(1)(i) has been since its
formation treated for U. S. federal income tax purposes as a
partnership or disregarded entity, as the case may be, and not as a
corporation or an association taxable as a corporation and (ii) has
not since the later of its formation or the acquisition by the
Company of a direct or indirect interest therein owned any assets
(including securities) that have caused the Company to violate
Section 856(c)(4) of the Code or would cause the Company to violate
Section 856(c)(4) of the Code on the last day of any calendar
quarter after the date hereof.
(d) Neither the Company nor any Company
Subsidiary holds any asset the disposition of which would be
subject to rules similar to Section 1374 of the Code.
(e) Since January 1, 2003, (i) the Company and
the Company Subsidi- aries have not incurred any liability for
material Taxes under Sections 857(b), 860(c) or 4981 of the Code
which have not been previously paid and (ii) neither the Company
nor any Company Subsidiary has incurred any material liability for
Taxes that have become due and that have not been previously paid
other than in the ordinary course of business. To the knowledge of
the Company, neither the Company nor any Company Subsidiary (other
than a “taxable REIT subsidiary” or any subsidiary of a
“taxable REIT subsidi- ary”) has engaged at any time in
any “prohibited transactions” within the meaning of
Sec- tion 857(b)(6) of the Code. To the knowledge of the Company,
neither the Company nor any Company Subsidiary has engaged in any
transaction that would give rise to “rede- termined rents,
redetermined deductions and excess interest” described in
section 857(b)(7) of the Code. To the knowledge of the Company, no
event has occurred, and no condition or circumstance exists, which
presents a material risk that any material Tax de- scribed in the
preceding sentences will be imposed on the Company or any Company
Subsidiary.
30
(f) All material deficiencies
asserted or material assessments made with respect to the Company
or any Company Subsidiary and that have been set forth in writing
to the Company or any such Company Subsidiary as a result of any
examinations by the IRS or any other taxing authority of the Tax
Returns of or covering or including the Company or any Company
Subsidiary have been fully paid, and, to the knowledge of the
Company, there are no other material audits, examinations or other
proceedings relat- ing to any material Taxes of the Company or any
Company Subsidiary by any taxing au- thority in progress. Neither
the Company nor any Company Subsidiary has received any written
notice from any taxing authority that it intends to conduct such an
audit, examina- tion or other proceeding in respect of a material
amount of Taxes or make any material assessment for Taxes. Neither
the Company nor any Company Subsidiary is a party to any litigation
or pending litigation or administrative proceeding relating to a
material amount of Taxes (other than litigation dealing with
appeals of property tax valuations).
(g) The Company and the Company Subsidiaries
have complied, in all material respects, with all applicable Laws,
rules and regulations relating to the payment and withholding of
Taxes (including withholding of Taxes pursuant to Sections 1441,
1442, 1445, 1446, and 3402 of the Code or similar provisions under
any foreign laws) and have duly and timely withheld and have paid
over to the appropriate taxing authori- ties all material amounts
required to be so withheld and paid over on or prior to the due
date thereof under all applicable Laws.
(h) To the Knowledge of the Company no material
claim has been made in writing by a taxing authority in a
jurisdiction where the Company or any Com- pany Subsidiary does not
file Tax Returns that the Company or any such Company Sub- sidiary
is or may be subject to taxation by that jurisdiction.
(i) Neither the Company nor any Company
Subsidiary has requested any extension of time within which to file
any material Tax Return, which material Tax Return has not yet been
filed.
(j) Neither the Company nor any Company
Subsidiary is a party to any Tax sharing or similar agreement or
arrangement other than any agreement or ar- rangement solely
between the Company and any Company Subsidiary, pursuant to which
it will have any obligation to make any payments after the
Closing.
(k) Neither the Company nor any Company
Subsidiary has requested a private letter ruling from the IRS or
comparable rulings from other taxing authorities.
(l) Neither the Company nor any Company
Subsidiary (A) is or has ever been a member of an affiliated group
(other than a group the common parent of which is the Company or a
directly or indirectly wholly-owned Company Subsidiary) fil- ing a
consolidated federal income tax return and (B) has any liability
for the Taxes of an- other person other than the Company and the
Company Subsidiaries under Treasury regu- lation 1.1502-6 (or any
similar provision of state, local or foreign law), as a transferee
or successor or by contract.
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(m) Other than Liens for
Taxes not yet delinquent and Liens for Taxes being contested in
good faith and for which there are adequate reserves on the
financial statements of the Company (if such reserves are required
pursuant to GAAP), there are no Liens for a material amount of
Taxes (other than Taxes not yet due and payable for which adequate
reserves have been made in accordance with GAAP) upon any of the
as- sets of the Company or any Company Subsidiary.
(n) There are no Tax Protection
Agreements currently in force and, as of the date of this
Agreement, no person has raised in writing, or to the knowledge of
the Company threatened to raise, a material claim against the
Company, the Operating Part- nership or any Company Subsidiary for
any breach of any Tax Protection Agreement.
(o) To the knowledge of the
Company, neither the Company nor any of the Company Subsidiaries is
a party to any understanding or arrangement described in Section
6662(d)(2)(C)(ii) of the Code or Treasury Regulations Section
1.6011-4(b) or is a material advisor as defined in Section 6111(b)
of the Code.
(p) Neither the Company nor any of
the Company Subsidiaries has en- tered into any “closing
agreement” as described in Section 7121 of the Code (or any
cor- responding or similar provision of state, local or foreign
income Tax law).
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Section
3.12
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Pension and
Benefit Plans; ERISA .
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(a) Section 3.12(a) of the Company
Disclosure Letter lists each mate- rial “employee welfare
plan” and “employee pension benefit plan” (as
those terms are re- spectively defined in Sections 3(1) and 3(2) of
the Employee Retirement Income Security Act of 1974, as amended
(“ ERISA ”)), other than a “multiemployer
plan” (as defined in Section 3(37) of ERISA), and each
material retirement or deferred compensation plan, incentive
compensation plan, stock plan, profit-sharing, unemployment
compensation plan, vacation pay, severance pay, post-employment,
supplemental employment or un- employment benefit plan or
arrangement, bonus or benefit arrangement, insurance (in- cluding
any self-insurance) or hospitalization program or any other fringe
or other benefit or compensation plan, program or arrangement for
any current or former employee, trus- tee, director, consultant or
agent, whether pursuant to contract, arrangement, custom or
informal understanding, or any other “employee benefit
plan” (as defined in Section 3(3) of ERISA), and each
material employment, severance, termination, consultancy or other
similar agreement, in each case that the Company or any Company
Subsidiary sponsors, participates in or contributes to for the
benefit of employees or former employees of the Company and/or the
Company Subsidiaries (each, a “ Company Employee Benefit
Plan ”) .
(b) A true and correct copy of each
written Company Employee Bene- fit Plan, and a true and correct
summary of any material unwritten Company Employee Benefit Plan,
has been made available to Parent. A true and correct copy of the
most re- cent annual report (Form 5500 Series), actuarial report,
annual financial report, summary plan description and IRS
determination letter with respect to each Company
Employee
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Benefit
Plan, in each case to the extent applicable, has been supplied or
made available to Parent.
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(c)
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Except as
would not, individually or in the aggregate, be material: (i) All
Company Employee Benefit Plans comply and have
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been administered in compliance
in all material respects with all applicable re- quirements of Law,
and no event has occurred that would reasonably be expected to
cause any such Company Employee Benefit Plan to fail to comply with
such requirements and no notice has been issued by any Governmental
Entity question- ing or challenging such compliance.
(ii) (A) All Company Employee Benefit Plans
which are em- ployee pension benefit plans comply in all material
respects with all applicable requirements of Sections 401(a) and
501(a) of the Code; (B) each Company Em- ployee Benefit Plan that
is intended to be qualified under Section 401(a) of the Code has
received a favorable determination letter, or has pending an
application for such determination from the IRS with respect to
those provisions for which the remedial amendment period under
Section 401(b) of the Code has not expired, and the Company is not
aware of any reason why any such determination letter should be
revoked; (C) there have been no amendments to such plans that are
not the subject of a favorable determination letter issued with
respect thereto by the IRS (other than an amendment for which the
remedial amendment period under Section 401(b) of the Code has not
expired); and (D) no event has occurred that would reasonably be
expected to give rise to disqualification of any such plan un- der
such sections.
(iii) There are no actions, suits, claims,
audits or investigations (other than routine claims for benefits)
pending or, to the Knowledge of the Com- pany, threatened involving
any Company Employee Benefit Plan or the assets thereof and, to the
Knowledge of the Company, no facts exist that would reasona- bly be
expected to give rise to any such actions, suits, claims, audits or
investiga- tions (other than routine claims for
benefits).
(iv) Neit
