<PAGE>
EXHIBIT 2.1
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AGREEMENT AND PLAN OF MERGER
AMONG
FLAG FUND V LLC,
CA ACQUISITION REIT,
CAPITAL AUTOMOTIVE REIT,
CALP MERGER L.P.,
AND
CAPITAL AUTOMOTIVE L.P.
DATED AS OF SEPTEMBER 2, 2005
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TABLE OF CONTENTS
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ARTICLE I The
Mergers....................................................
2
1.1 The
Mergers......................................................
2
1.2 Declaration of Trust and
Bylaws.................................. 3
1.3 Effective
Times..................................................
3
1.4
Closing..........................................................
4
1.5 Trustees and Officers of the
Surviving REIT...................... 4
1.6 Partnership
Matters.............................................. 4
ARTICLE II Merger Consideration; Effect of
Mergers on Shares of Capital
Stock of the Constituent Companies, Company Share Options and
Partnership Units.............................................
4
2.1 Effect on
Shares.................................................
4
2.2 Effect on Partnership
Interests.................................. 6
2.3 Exchange of
Certificates......................................... 7
2.4 Withholding
Rights............................................... 9
2.5 Dissenters'
Rights............................................... 10
2.6 Adjustment of Company Common Share
Merger Consideration,
Partnership Merger Consideration or OP LP LLC Membership
Interests........................................................
10
ARTICLE III Representations and Warranties
of the Company................ 10
3.1 Existence; Good Standing;
Authority; Compliance with Law......... 10
3.2
Capitalization...................................................
12
3.3 Authority Relative to this
Agreement; Shareholder Approval....... 14
3.4 Reports; Financial
Statements.................................... 15
3.5 No Undisclosed
Liabilities....................................... 16
3.6 Absence of
Changes............................................... 16
3.7 Consents and Approvals; No
Violations............................ 17
3.8 No
Default.......................................................
17
3.9
Litigation.......................................................
18
3.10 Compliance with
Applicable Law................................... 18
3.11
Properties.......................................................
18
3.12 Employee
Plans...................................................
23
3.13 Labor
Matters....................................................
24
3.14 Environmental
Matters............................................ 25
3.15 Tax
Matters......................................................
27
3.16 Material
Contracts...............................................
31
3.17 Opinion of Financial
Advisor..................................... 33
3.18
Brokers..........................................................
33
3.19 Takeover
Statutes................................................
33
3.20 Related Party
Transactions....................................... 33
3.21 Investment Company Act
of 1940................................... 33
3.22 Trademarks, Patents and
Copyrights............................... 33
3.23
Insurance........................................................
34
3.24 Disclosure Controls and
Procedures............................... 34
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3.25 Definition of the
Company's Knowledge............................ 35
3.26 Proxy Statement;
Company Information............................. 35
ARTICLE IV Representations and Warranties
of Parent and Merger Sub....... 35
4.1 Corporate
Organization...........................................
35
4.2 Authority Relative to this
Agreement............................. 36
4.3 Consents and Approvals; No
Violations............................ 37
4.4
Litigation.......................................................
37
4.5
Brokers..........................................................
37
4.6 Available Funds;
Guaranty........................................ 37
4.7 Takeover
Statutes................................................
38
4.8 Ownership of Merger Sub and Merger
Partnership; No Prior
Activities.......................................................
38
4.9 No Ownership of Company Capital
Stock............................ 38
4.10 Proxy
Statement..................................................
38
ARTICLE V Conduct of Business Pending the
Mergers........................ 38
5.1 Conduct of Business by the
Company............................... 38
5.2 Distribution by Company and
Partnership of REIT Taxable Income... 43
ARTICLE VI
Covenants.....................................................
43
6.1 Preparation of the Proxy
Statement; Shareholders Meeting......... 43
6.2 Other
Filings....................................................
44
6.3 Additional
Agreements............................................ 44
6.4 No
Solicitations.................................................
45
6.5 Officers' and Directors'
Indemnification......................... 46
6.6 Access to Information;
Confidentiality........................... 48
6.7 Public
Announcements.............................................
49
6.8 Employee Benefit
Arrangements.................................... 49
6.9 Certain Tax
Matters.............................................. 50
6.10 REIT
Opinion.....................................................
50
6.11 Sale of
Properties...............................................
51
6.12 Equity Raising Property
Sales.................................... 51
6.13 Interim Period
Dividends......................................... 52
ARTICLE VII Conditions to the
Mergers.................................... 52
7.1 Conditions to the Obligations of
Each Party to Effect the
Mergers..........................................................
52
7.2 Conditions to Obligations of
Parent and Merger Sub............... 53
7.3 Conditions to Obligations of the
Company......................... 54
7.4 Frustration of Closing
Conditions................................ 54
ARTICLE VIII Termination, Amendment and
Waiver........................... 55
8.1
Termination......................................................
55
8.2 Effect of
Termination............................................
56
8.3 Fees and
Expenses................................................
58
8.4 Payment of Amount or
Expense..................................... 59
8.5
Amendment........................................................
60
8.6 Extension;
Waiver................................................ 60
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ARTICLE IX General
Provisions............................................ 60
9.1
Notices..........................................................
60
9.2 Certain
Definitions..............................................
62
9.3 Terms Defined
Elsewhere.......................................... 63
9.4
Interpretation...................................................
67
9.5 Non-Survival of Representations,
Warranties, Covenants and
Agreements.......................................................
67
9.6
Miscellaneous....................................................
67
9.7 Assignment;
Benefit.............................................. 68
9.8
Severability.....................................................
68
9.9 Choice of Law/Consent to
Jurisdiction............................ 68
9.10
Counterparts.....................................................
68
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COMPANY DISCLOSURE SCHEDULE
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Section Title
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3.1(c) Subsidiaries
3.1(e) Equity or Voting
Securities
3.2(b) Debt Instruments
3.2(c) Company Stock
Rights
3.2(d) Voting or Transfer
Agreements
3.2(e) Company Share
Acquisition Obligations
3.2(f) Registration
Obligations
3.2(g) List of Holders of
Partnership Common Units; Partnership Share
Acquisition Obligations
3.4
Company SEC Reports
3.5
Undisclosed Liabilities
3.6
Absence of Changes
3.7
Consents and Approvals; No Violations
3.9
Litigation
3.10 Compliance
with Applicable Law
3.11(a) Properties
3.11(b) Personal Property
Transactions
3.11(c) Title Insurance
3.11(d) Permits
3.11(e) Properties: No
Violations
3.11(f) Company Leases
3.11(g) Performance; Payments
3.11(h) Lessee Ground Leases
3.11(j) Option Agreements; Rights of
First Refusal
3.11(k) Reimbursement Agreements
3.11(m) Third Party Management
Agreements
3.11(n) Participation Agreements
3.11(o) Notices from Lenders or
Insurance Carriers
3.11(p) Construction or
Alterations
3.12(a) Employee Benefit Plans
3.12(f) Continuing Coverage
3.12(h) Effect of REIT Merger on
Employee Benefit Plans
3.13(a) Labor Agreements
3.13(b) Labor Organizations
3.13(d) Labor Complaints
3.13(e) Labor Compliance
3.14
Environmental Matters
3.15(a) Appeals of Local Tax
Assessments
3.15(h) Tax Extensions
3.15(i) Tax Sharing Agreements
3.15(j) Private Letter Rulings
3.15(n) Tax Protection
Agreements
3.16(a) Material Contracts
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3.16(c) Lending Contracts
3.16(d) Derivatives
3.16(e) Continuing Liability
3.20 Related Party
Transactions
3.22
Intellectual Property
3.23
Insurance
3.25
Individuals with Company Knowledge
5.1
Permitted Transactions
5.1(c) Existing Property
Transactions; Guidelines
5.1(g) Corporate Budget
5.1(j) Change in Employee
Benefit Arrangements
6.5(b) Officers' and
Directors' Indemnification
6.8(b) Employee Benefit
Arrangements
6.12(a) Identified Company
Properties
6.12(e) Sales Guidelines
9.2
Material Tenants
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Additional Schedules:
Schedule 2.2(a) Term Sheet for Membership
Interest Election
EXHIBITS
Exhibit A Form of Membership Interest
Election
Exhibit B Form of Guaranty
Exhibit C Form of REIT Opinion
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AGREEMENT AND PLAN OF
MERGER
THIS AGREEMENT
AND PLAN OF MERGER (this "Agreement"), dated as of September
2, 2005, is by and among Flag Fund V LLC, a
Delaware limited liability company
("Parent"), CA Acquisition REIT, a Maryland
real estate investment trust
("Merger Sub"), Capital Automotive REIT, a
Maryland real estate investment trust
(the "Company"), CALP Merger L.P., a
Delaware limited partnership (the "Merger
Partnership") and Capital Automotive L.P.,
a Delaware limited partnership (the
"Partnership").
WITNESSETH:
WHEREAS, the
parties wish to effect a business combination through a merger
of Merger Sub with and into the Company
(the "REIT Merger") on the terms and
conditions set forth in this Agreement and
in accordance with Title 8 of the
Corporations and Associations Article of
the Annotated Code of Maryland, as
amended (the "Maryland REIT Law");
WHEREAS, the
parties also wish to effect a merger of the Merger Partnership
with and into the Partnership, immediately
following the consummation of the
REIT Merger (the "Partnership Merger" and,
together with the REIT Merger, the
"Mergers"), on the terms and subject to the
conditions set forth in this
Agreement and in accordance with Section
17-211 of the Delaware Revised Uniform
Limited Partnership Act, as amended
("DRULPA");
WHEREAS, the
Company is the sole general partner of the Partnership through
which the Company operates its
business;
WHEREAS, as of
the date hereof, the Company owns approximately 85% of the
common units of limited partnership
interest in the Partnership ("Partnership
Common Units") as well as 100% of the
Series A, Series B, Convertible and
Monthly Income Preferred units of limited
partnership interest in the
Partnership ("Partnership Preferred
Units"). The Partnership Common Units and
Partnership Preferred Units are
collectively referred to herein as "Partnership
Units;"
WHEREAS, the
Board of Trustees of the Company (the "Company Board"), upon
recommendation of the Special Committee of
the Company Board, has approved this
Agreement, the REIT Merger and the other
transactions contemplated by this
Agreement and deems it advisable and in the
best interests of the Company
shareholders to enter into this Agreement
and to consummate the REIT Merger on
the terms and conditions set forth
herein;
WHEREAS, Parent,
as the sole shareholder of Merger Sub, has approved this
Agreement, the REIT Merger and the
transactions contemplated by this Agreement
pursuant to action taken by unanimous
written consent in accordance with the
requirements of the Maryland REIT Law and
the declaration of trust and bylaws of
Merger Sub;
WHEREAS, the
Company, as the sole general partner of the Partnership, has
determined that it is advisable and in the
best interests of the Partnership and
the limited partners of the Partnership for
the Partnership to enter into this
Agreement and to consummate the Partnership
Merger on the terms and conditions
set forth herein;
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WHEREAS, prior
to the Partnership Merger, the holders of Partnership Common
Units other than the Company (the "Minority
Limited Partners") may elect, on the
terms and conditions specified herein, to
receive, in exchange for Partnership
Common Units, membership interests ("OP LP
LLC Membership Interests") in a newly
created Delaware limited liability company
("OP LP LLC") simultaneously with the
Partnership Merger (each such Minority
Limited Partner, an "Electing Limited
Partner"). In the Partnership Merger, any
Partnership Common Units held by any
Minority Limited Partners not making the
foregoing election will be converted
into the right to receive cash per
Partnership Common Unit (each such Minority
Limited Partner, a "Cash-Out Limited
Partner") in an amount as described in
Section 2.2(a);
WHEREAS, Merger
Sub, the general partner of Merger Partnership, has
approved this Agreement and the Partnership
Merger and deems it advisable and in
the best interests of the limited partners
of Merger Partnership for Merger
Partnership to enter into this Agreement
and consummate the Partnership Merger
on the terms and subject to the conditions
set forth herein; and
WHEREAS, Parent,
Partnership, Merger Sub, Merger Partnership and the
Company desire to make certain
representations, warranties, covenants and
agreements in connection with the Mergers,
and also to prescribe various
conditions to the Mergers.
NOW, THEREFORE,
in consideration of the mutual representations, warranties,
covenants and agreements set forth herein,
and intending to be legally bound,
Parent, Partnership, Merger Sub, Merger
Partnership and the Company hereby agree
as follows:
ARTICLE I
THE MERGERS
1.1 The
Mergers.
(a) Subject to the terms and conditions of this Agreement, at the
REIT
Merger Effective
Time (as defined herein), the Company and Merger Sub shall
consummate the
REIT Merger, pursuant to which (i) Merger Sub shall be
merged with and
into the Company and the separate corporate existence of
Merger Sub shall
thereupon cease and (ii) the Company shall be the
surviving REIT
in the REIT Merger (the "Surviving REIT") and shall become a
direct
Subsidiary of Parent by virtue of ownership of all of the
Company
Common Shares,
as defined below. The corporate existence of the Company,
with all its
purposes, rights, privileges, franchises, powers and objects,
shall continue
unaffected and unimpaired by the REIT Merger and, as the
Surviving REIT,
it shall be governed by the laws of the State of Maryland.
(b) Subject to the terms and conditions of this Agreement, and
in
accordance with
Section 17-211 of DRULPA, at the Partnership Merger
Effective Time
(as defined herein), Merger Partnership and the Partnership
shall consummate
the Partnership Merger pursuant to which (i) Merger
Partnership
shall be merged with and into the Partnership
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and the separate
existence of Merger Partnership shall thereupon cease and
(ii) the
Partnership shall be the surviving partnership in the
Partnership
Merger (the
"Surviving Partnership"). The Partnership Merger shall have the
effects
specified in Section 17-211 of DRULPA.
1.2 Declaration
of Trust and Bylaws.
(a) The name of the Surviving REIT shall be "Capital Automotive
REIT."
(b) The declaration of trust of the Company, as in effect
immediately
prior to the
REIT Merger Effective Time, shall be the declaration of trust
of the Surviving
REIT until thereafter amended as provided therein or by
Law (as
hereinafter defined) (the "Surviving REIT Declaration of
Trust").
(c) The bylaws of the Company, as in effect immediately prior to
the
REIT Merger
Effective Time, shall be the bylaws of the Surviving REIT until
thereafter
amended as provided by Law, by the Surviving REIT Declaration
of
Trust or by such
bylaws (the "Surviving REIT Bylaws").
(d) The name of the Surviving Partnership shall be "Capital
Automotive
L.P."
(e) The limited partnership agreement of the Partnership, as
amended
pursuant to the
term sheet described in Section 2.2(a) hereof, shall be the
limited partnership
agreement of the Surviving Partnership until thereafter
amended as
provided therein or by Law (the "Surviving Partnership
Agreement").
1.3 Effective
Times.
(a) On the Closing Date, Merger Sub and the Company shall duly
execute
and file
articles of merger (the "Articles of Merger") with the State
Department of
Assessments and Taxation of Maryland (the "SDAT") in
accordance with
the Maryland REIT Law. The REIT Merger shall become
effective upon
the filing date of the Articles of Merger with the SDAT (the
"REIT Merger
Effective Time").
(b) On the Closing Date, immediately after the REIT Merger
Effective
Time, the
Partnership shall file with the Secretary of State of the State
of Delaware (the
"DSOS") a certificate of merger (the "Partnership Merger
Certificate"),
executed in accordance with the applicable provisions of
DRULPA, and
shall make all other filings or recordings required under
DRULPA to effect
the Partnership Merger. The Partnership Merger shall
become effective
after the REIT Merger Effective Time upon such time as the
Partnership
Merger Certificate has been accepted by the DSOS (the
"Partnership
Merger Effective Time").
(c) Unless
otherwise agreed, the parties shall cause the REIT Merger
Effective Time
and the Partnership Merger Effective Time to occur on the
Closing Date (as
defined below).
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1.4 Closing. The
closing of the Mergers (the "Closing") shall occur as
promptly as practicable (but in no event
later than the second (2nd) Business
Day) after all of the conditions set forth
in Article VII (other than conditions
that by their terms are required to be
satisfied or waived as of the Closing
Date (as hereinafter defined)) shall have
been satisfied or, to the extent
permitted by applicable Law, waived by the
party entitled to the benefit of the
same (unless extended by the mutual
agreement of the parties hereto), and,
subject to the foregoing, shall take place
at 10:00 a.m., local time, on such
date (the "Closing Date"), provided that
the Closing Date shall not be earlier
than December 1, 2005, at the offices of
Blank Rome LLP, 405 Lexington Avenue,
24th Floor, New York, NY 10174, or at such
other time and place as mutually
agreed to by the parties hereto.
1.5 Trustees and
Officers of the Surviving REIT. The trustees of Merger Sub
immediately prior to the REIT Merger
Effective Time shall become the trustees of
the Surviving REIT as of the REIT Merger
Effective Time and the officers of
Merger Sub immediately prior to the REIT
Merger Effective Time shall become the
officers of the Surviving REIT as of the
REIT Merger Effective Time, each to
hold office in accordance with the
Surviving REIT Declaration of Trust and
Surviving REIT Bylaws. Resignations shall
be tendered for all current trustees
of the Company effective upon the REIT
Merger Effective Time.
1.6 Partnership
Matters. The Surviving REIT shall be the general partner
and OP LP LLC shall be the limited partner
of the Surviving Partnership
following the Partnership Merger Effective
Time.
ARTICLE II
MERGER
CONSIDERATION; EFFECT OF MERGERS ON SHARES OF CAPITAL STOCK OF
THE CONSTITUENT
COMPANIES, COMPANY SHARE OPTIONS AND PARTNERSHIP UNITS
2.1 Effect on
Shares. At the REIT Merger Effective Time, by virtue of the
REIT Merger and without any action on the
part of any holder thereof:
(a) Shares of Merger Sub. Each common share of beneficial
interest,
par value $0.01
per share, of Merger Sub issued and outstanding immediately
prior to the
REIT Merger Effective Time shall be converted into one (1)
fully paid and
nonassessable common share of beneficial interest, par value
$0.01 per share,
of the Surviving REIT.
(b) Conversion of Company Common Shares. Each common share of
beneficial
interest, par value $0.01 per share, of the Company (each a
"Company Common
Share") (other than Excluded Shares, as defined below)
issued and
outstanding immediately prior to the REIT Merger Effective Time
shall
automatically be converted into the right to receive an amount
in
cash equal to
Thirty-eight Dollars and Seventy-five Cents ($38.75) (the
"Company Common
Share Merger Consideration").
(c) Cancellation of Parent-Owned and Merger Sub-Owned Company
Common
Shares. Each
issued and outstanding Company Common Share that is owned by
Parent, Merger
Sub or any Subsidiary of Parent or Merger Sub immediately
prior to the
REIT Merger Effective Time (collectively, the "Excluded
Shares") shall
automatically be canceled and retired and shall cease to
exist, and no
cash, Company Common Share or other consideration shall be
delivered or
deliverable in exchange therefor.
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(d) Cancellation of Company Common Shares. As of the REIT
Merger
Effective Time,
all Company Common Shares (other than Excluded Shares)
issued and
outstanding immediately prior to the REIT Merger Effective Time
shall no longer
be outstanding and shall automatically be canceled and
retired and
shall cease to exist, and each holder of a Company Common Share
shall cease to
have any rights with respect to such interest, except, in
all cases, the
right to receive the Company Common Share Merger
Consideration,
without interest.
(e) Preferred Shares.
(i) The REIT
Merger shall have no effect on the Company's 7.5%
Series A Cumulative Redeemable Preferred Shares, par value $0.01
per
share (the "Company Series A Preferred Shares"), issued and
outstanding immediately prior to the REIT Merger Effective Time
and,
at and after the REIT Merger Effective Time, the Company Series
A
Preferred Shares shall remain outstanding and shall continue to
represent Company Series A Preferred Shares of the Surviving REIT;
and
(ii) The REIT Merger shall have no effect on the Company's 8%
Series B Cumulative Redeemable Preferred Shares, par value $0.01
per
share (the "Company Series B Preferred Shares") issued and
outstanding
immediately prior to the REIT Merger Effective Time and, at and
after
the REIT Merger Effective Time, the Company Series B Preferred
Shares
shall remain outstanding and shall continue to represent
Company
Series B Preferred Shares of the Surviving REIT.
The Company
Common Shares, Company Series A Preferred Shares and Company
Series B Preferred Shares shall be
sometimes collectively referred to herein as
the "Company Shares."
(f) Company Share Options. Immediately prior to the REIT Merger
Effective Time,
each outstanding qualified or nonqualified option to
purchase Company
Common Shares (each, a "Company Share Option") under the
Company's Second
Amended and Restated 1998 Equity Incentive Plan (the
"Company Share
Option Plan"), all of which are listed on Schedule 3.2(c) of
the Company
Disclosure Schedule attached hereto, whether or not then vested
or exercisable
and regardless of the exercise price or purchase price, as
the case may be,
thereof, shall be cancelled, immediately prior to or at
the REIT Merger
Effective Time, in exchange for the holder's right to
receive a single
lump sum cash payment from the Company equal to the
product of (x)
the number of Company Common Shares subject to such Company
Share Option
immediately prior to the REIT Merger Effective Time, whether
or not vested or
exercisable, and (y) the excess, if any, of the Company
Common Share
Merger Consideration over the exercise price or purchase price
per share of
such Company Share Option (the "Option Merger Consideration").
If the exercise
price or purchase price per share of any such Company
5
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Share Option is
equal to or greater than the Company Common Share Merger
Consideration,
such Company Share Option shall be cancelled without any
cash payment
being made in respect thereof. The Company Common Share Merger
Consideration
and the Option Merger Consideration shall be collectively
referred to
herein as the "Merger Consideration."
(g) Restricted Shares, Phantom Shares, Deferred Restricted Shares
and
Deferred Fee
Accounts. Immediately prior to the REIT Merger Effective Time,
each restricted
share granted under the Company Share Option Plan
("Restricted
Shares"), phantom share ("Phantom Shares") issued pursuant to
the Company's
Phantom Share Purchase Program (the "Phantom Plan"),
Restricted
Shares deferred under a Restricted Share Deferral Agreement
("Deferred
Restricted Shares") and phantom shares ("Fee Shares") under the
Company's
Deferred Compensation and Stock Plan for Trustees (the
"Trustees
Deferred
Compensation Plan") shall be fully vested, non-forfeitable and
payable to each
participant in full, and all Company Common Shares which
the Company has
the option of issuing in settlement of the Phantom Shares
or the Fee
Shares shall be considered outstanding for all purposes of this
Agreement, including receipt of
the Merger Consideration.
2.2 Effect on
Partnership Interests. As of the Partnership Merger Effective
Time, by virtue of the Partnership Merger
and without any action on the part of
the holder of any partnership interest of
the Partnership:
(a) Each Partnership Common Unit held by a Minority Limited
Partner
(the "LP
Minority Units"), subject to the terms and conditions set forth
herein, shall be
converted into, and shall be cancelled in exchange for,
the right to
receive cash in an amount without interest per LP Minority
Unit equal to
the product of (A) the Company Common Share Merger
Consideration
multiplied by (B) the number of Company Common Shares
issuable upon
redemption of each such LP Minority Unit pursuant to the
limited
partnership agreement of the Partnership (such product, the
"Partnership
Merger Consideration") in consideration for each such LP
Minority Unit;
provided that if any Minority Limited Partner has previously
made an election
to receive OP LP LLC Membership Interests pursuant to the
Form of
Membership Interest Election (in the form attached hereto as
Exhibit A), in
lieu of receiving the Partnership Merger Consideration, such
holder shall
exchange each LP Minority Unit held by it for OP LP LLC
Membership
Interests, in accordance with the procedures and time periods
specified in
Section 2.3 hereof and upon such terms as are described in the
term sheet
attached hereto as Schedule 2.2(a) (the "Membership Interest
Election").
(b) Each Partnership Common Unit held by the Company or any of
its
Subsidiaries
immediately prior to the Partnership Merger Effective Time
shall, by virtue
of the Partnership Merger, automatically be cancelled and
cease to exist,
and the holders thereof shall cease to have any rights with
respect thereto
and no payment shall be made with respect thereto.
(c) Each Partnership Preferred Unit outstanding immediately prior
to
the Partnership
Merger Effective Time shall be unaffected by the
Partnership
Merger and shall remain outstanding as units of limited
partnership
interest of the Surviving Partnership.
6
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(d) The general partner interests of the Partnership
outstanding
immediately
prior to the Partnership Merger Effective Time shall remain
outstanding as
general partner interests of the Surviving Partnership,
entitling the
holder thereof to such rights, duties and obligations as are
more fully set
forth in the Surviving Partnership Agreement.
2.3 Exchange of
Certificates
(a) Paying Agent. Prior to the mailing of the Proxy Statement
(as
defined herein),
Parent shall appoint a bank or trust company reasonably
satisfactory to
the Company to act as Paying Agent (the "Paying Agent") for
(i) the payment
or exchange in accordance with this Article II of the
Company Common
Share Merger Consideration and the Partnership Merger
Consideration
(such cash consideration constituting both the Company Common
Share Merger
Consideration and the Partnership Merger Consideration being
referred to
herein as the "Exchange Fund") and (ii), if Parent wishes the
Paying Agent to
so act, in Parent's discretion, the exchange of Partnership
Common Units for
OP LP LLC Membership Interests in accordance with this
Article II
pursuant to the Membership Interest Election. On or before the
REIT Merger
Effective Time, Parent shall deposit with the Paying Agent the
Exchange Fund
for the benefit of the holders of Company Common Shares and
Cash-Out Limited
Partners, as applicable. The Paying Agent shall make
payments of the
Company Common Share Merger Consideration and the
Partnership
Merger Consideration out of the Exchange Fund in accordance
with this
Agreement, the Articles of Merger and the Partnership Merger
Certificate. The
Company shall cooperate with Parent and any title company
escrow agent to
facilitate an orderly transfer of funds. The Exchange Fund
shall not be
used for any other purpose. Any and all interest earned on
cash deposited
in the Exchange Fund shall be paid to the Surviving REIT.
(b) Share and Unit Transfer Books. On the Closing Date, the
share
transfer books
of the Company shall be closed and thereafter there shall be
no further
registration of transfers of the Company Common Shares or
Partnership
Common Units. From and after the Closing Date, the holders of
certificates
evidencing ownership of the Company Common Shares or
Partnership
Common Units outstanding immediately prior to the REIT Merger
Effective Time
or Partnership Merger Effective Time, as applicable (each, a
"Certificate")
shall cease to have rights with respect to such shares or
units, as
applicable, except as otherwise provided for herein. On or
after
the Closing
Date, any Certificates presented to the Paying Agent, the
Surviving REIT
or the transfer agent for any reason shall be exchanged for
the Company
Common Share Merger Consideration, Partnership Merger
Consideration or
OP LP LLC Membership Interests, as applicable, with
respect to the
Company Common Shares or Partnership Common Units formerly
represented
thereby.
(c) Exchange Procedures. As soon as possible after the Closing
Date
(but in any
event within three (3) Business Days), the Surviving REIT shall
cause the Paying Agent to mail to
each holder of record of a Certificate or
Certificates
that, immediately
7
<PAGE>
prior to the
REIT Merger Effective Time, represented outstanding Company
Common Shares or
that, immediately prior to the Partnership Merger
Effective Time,
represented Partnership Common Units whose shares or units,
as applicable,
were converted into the right to receive or be exchanged for
the Company
Common Share Merger Consideration, Partnership Merger
Consideration or
OP LP LLC Membership Interests, as applicable, pursuant to
Sections 2.1 and
2.2: (i) a letter of transmittal (which shall specify that
delivery shall
be effected, and risk of loss and title to the Certificates
shall pass to
the Paying Agent, only upon delivery of the Certificates to
the Paying
Agent, and which letter shall be in such form and have such
other provisions
as Parent and the Company may reasonably specify) and (ii)
instructions for
use in effecting the surrender of the Certificates in
exchange for the
Company Common Share Merger Consideration, Partnership
Merger
Consideration or OP LP LLC Membership Interests, as applicable,
to
which the holder
thereof is entitled. Upon surrender of a Certificate for
cancellation to
the Paying Agent or to such other agent or agents
reasonably
satisfactory to the Company as may be appointed by Parent,
together with
such letter of transmittal, duly executed and completed in
accordance with
the instructions thereto, and such other documents as may
reasonably be
required by the Paying Agent, the holder of such Certificate
shall be
entitled to receive in exchange therefor the Company Common
Share
Merger
Consideration, Partnership Merger Consideration or OP LP LLC
Membership
Interests, as applicable, payable in respect of the Company
Common Shares or
Partnership Common Units, as applicable, previously
represented by
such Certificate pursuant to the provisions of this Article
II, and the
Certificate so surrendered shall forthwith be canceled. In the
event of a
transfer of ownership of Company Common Shares or Partnership
Common Units
that is not registered in the transfer records of the Company
or Partnership,
payment may be made to a Person other than the Person in
whose name the
Certificate so surrendered is registered, if such
Certificate
shall be properly endorsed or otherwise be in proper form for
transfer and the
Person requesting such payment shall pay any transfer or
other taxes
required by reason of the payment to a Person other than the
registered
holder of such Certificate or establish to the reasonable
satisfaction of
Parent that such tax has been paid or is not applicable.
Until
surrendered as contemplated by this Section 2.3, each
Certificate
shall be deemed
at any time after the Closing Date to represent only the
right to
receive, upon such surrender, the Company Common Share Merger
Consideration,
Partnership Merger Consideration or OP LP LLC Membership
Interests, as
applicable, as contemplated by this Section 2.3. No interest
shall be paid or
accrue on any cash payable upon surrender of any
Certificate.
(d) No Further Ownership Rights in the Company Common Shares,
Company
Share Options or
Partnership Common Units. On the Closing Date, holders of
Company Common
Shares or Partnership Common Units shall cease to be, and
shall have no
rights as, shareholders of the Company or limited partners of
the Partnership
other than the right to receive the Company Common Share
Merger
Consideration, Partnership Merger Consideration or OP LP LLC
Membership
Interests, as applicable, provided under this Article II. The
Company Common
Share Merger Consideration, Partnership Merger Consideration
or OP LP LLC
Membership Interests, as applicable, paid or delivered upon
the surrender
for exchange of Certificates evidencing Company Common Shares
or Partnership
Common Units, in accordance with the terms of this Article
II shall be
deemed to have been paid or delivered, as the case may be, in
full
satisfaction of all rights
8
<PAGE>
and privileges
pertaining to the Company Common Shares or Partnership
Common Units,
exchanged therefor. The Option Merger Consideration paid with
respect to
Company Share Options in accordance with the terms of this
Article II shall
be deemed to have been paid in full satisfaction of all
rights and
privileges pertaining to the canceled Company Share Options and
on and after the
REIT Merger Effective Time the holders of a Company Share
Option shall
have no further rights with respect to any Company Share
Option, other
than the right to receive the Option Merger Consideration as
provided in
Section 2.1 (f).
(e) Termination of Exchange Fund. Any portion of the Exchange
Fund
which remains
undistributed to the holders of the Certificates for twelve
(12) months
after the Closing Date, shall be delivered to Surviving REIT
and any holders
of Company Common Shares or Partnership Common Units prior
to the REIT
Merger or Partnership Merger, as applicable, who have not
theretofore
complied with this Article II shall thereafter look only to the
Surviving REIT
and only as general creditors thereof for payment of the
Company Common
Share Merger Consideration or Partnership Merger
Consideration,
as applicable.
(f) No Liability. None of Parent, Merger Sub, the Surviving REIT,
the
Partnership,
Merger Partnership, Surviving Partnership, the Company or the
Paying Agent, or
any employee, officer, trustee, director, agent or
Affiliate
thereof, shall be liable to any Person in respect of Company
Common Share
Merger Consideration or Partnership Merger Consideration, as
applicable, from
the Exchange Fund delivered to a public official pursuant
to any
applicable abandoned property, escheat or similar Law.
(g) Investment of Exchange Fund. The Paying Agent shall invest
any
cash included in
the Exchange Fund, as directed by the Surviving REIT, on a
daily basis. Any
interest and other income resulting from such investments
shall be paid to
Parent. To the extent that there are losses with respect
to such
investments, or the Exchange Fund diminishes for other reasons
below the level
required to make prompt payments of the Company Common
Share Merger
Consideration and Partnership Merger Consideration as
contemplated
hereby, Parent shall promptly replace or restore the portion
of the Exchange
Fund lost through investments or other events so as to
ensure that the
Exchange Fund is, at all times, maintained at a level
sufficient to
make such payments.
(h) Lost Certificates. If any Certificate shall have been lost,
stolen
or destroyed,
upon the making of an affidavit of that fact by the Person
claiming such
Certificate to be lost, stolen or destroyed and the posting
of a bond to the
reasonable satisfaction of Parent and the Paying Agent,
the Paying Agent
will issue, in exchange for such lost, stolen or destroyed
Certificate, the
Company Common Share Merger Consideration, Partnership
Merger
Consideration or OP LP LLC Membership Interests, as applicable,
payable in
respect thereof, pursuant to this Agreement.
2.4 Withholding
Rights. The Surviving REIT, Surviving Partnership or the
Paying Agent, as applicable, shall be
entitled to deduct and withhold from the
consideration otherwise payable pursuant to
this Agreement to any holder of
Company Common Shares, Company Share
Options or to any holders of Partnership
Common Units such amounts as it is required
to deduct
9
<PAGE>
and withhold with respect to the making of
such payment under the Code (as
defined herein), and the rules and
regulations promulgated thereunder, or any
provision of state, local or foreign tax
Law. To the extent that amounts are so
withheld by the Surviving REIT, Surviving
Partnership or the Paying Agent, as
applicable, such withheld amounts shall be
treated for all purposes of this
Agreement as having been paid to the holder
of Company Common Shares,
Partnership Common Units or Company Share
Options in respect of which such
deduction and withholding was made by the
Surviving REIT, Surviving Partnership
or the Paying Agent, as applicable.
2.5 Dissenters'
Rights. No dissenters' or appraisal rights shall be
available with respect to the Mergers.
2.6 Adjustment
of Company Common Share Merger Consideration, Partnership
Merger Consideration or OP LP LLC
Membership Interests. In the event that,
subsequent to the date of this Agreement
but prior to the REIT Merger Effective
Time or Partnership Merger Effective Time,
as applicable, the Company Common
Shares or Partnership Common Units issued
and outstanding shall, through a
reorganization, recapitalization,
reclassification, stock dividend, stock split,
reverse stock split or other similar change
in the capitalization of the Company
or Partnership, as applicable, increase or
decrease in number or be changed into
or exchanged for a different kind or number
of securities, then an appropriate
and proportionate adjustment shall be made
to the Company Common Share Merger
Consideration, Partnership Merger
Consideration or OP LP LLC Membership
Interests, provided, however, that nothing
set forth in this Section 2.6 shall
be construed to supersede or in any way
limit the prohibitions set forth in
Section 5.1 hereof.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in
the disclosure schedule attached to this Agreement
(the "Company Disclosure Schedule"), the
Company and the Partnership represent
and warrant to Parent, Merger Sub and
Merger Partnership as follows:
3.1 Existence;
Good Standing; Authority; Compliance with Law.
(a) The Company is a real estate investment trust duly formed,
validly
existing and in
good standing under the laws of the State of Maryland. The
Amended and
Restated Declaration of Trust of the Company, as amended
through the date
hereof (the "Company Declaration of Trust") is in effect
and no
dissolution, revocation or forfeiture proceedings regarding the
Company have
been commenced. The Company is duly qualified or licensed to
do business as a
foreign entity and is in good standing under the laws of
any other
jurisdiction in which the character of the properties owned,
leased or
operated by it therein or in which the transaction of its
business makes
such qualification or licensing necessary, other than in
such
jurisdictions where the failure to be so qualified or licensed
does
not have and
would not reasonably be likely to have, individually or in the
aggregate, a
Material Adverse Effect (as hereinafter defined). The Company
has all
requisite trust power and authority to own, operate, lease and
encumber its
properties and carry on its business as now conducted.
10
<PAGE>
(b) The Partnership is a limited partnership duly organized,
validly
existing and in
good standing under the laws of the State of Delaware. The
certificate of
limited partnership of the Partnership is in effect and no
dissolution,
revocation or forfeiture proceedings regarding the Partnership
have been
commenced. The Partnership is duly qualified or licensed to do
business as a
foreign limited partnership and is in good standing under the
laws of any
other jurisdiction in which the character of the properties
owned, leased or
operated by it therein or in which the transaction of its
business makes
such qualification or licensing necessary, other than in
such
jurisdictions where the failure to be so qualified or licensed
does
not have and
would not reasonably be likely to have, individually or in the
aggregate, a
Material Adverse Effect. The Partnership has all requisite
partnership
power and authority to own, operate, lease and encumber its
properties and
carry on its business as now conducted.
(c) Section 3.1(c) of the Company Disclosure Schedule sets
forth:
(i) each direct and indirect Subsidiary of the Company;
(ii) the legal form of each of the Company's Subsidiaries
including the state or country of formation;
(iii) the identity and ownership interest of each of the
Company's Subsidiaries that is held by the Company or its
Subsidiaries, and with respect to Third Party (as hereinafter
defined)
owners, the identity and ownership interest as set forth in the
operative documents, in each case, including but not limited to
the
amount of securities of such Subsidiary owned by such owner;
(iv) each
jurisdiction in which each of the Company's
Subsidiaries is qualified or licensed to do business; and
(v) each assumed name under which each of the Company's
Subsidiaries conducts business in any jurisdiction.
Except as listed in Section 3.1(c) of the Company Disclosure
Schedule,
the Company does
not own, directly or indirectly, beneficially or of
record, any
shares of stock or other security of any other entity or any
other investment
in any other entity, which would be deemed a Subsidiary of
the Company.
(d) Each of the Company's Subsidiaries is duly qualified or
licensed
to do business
and in good standing under the laws of each jurisdiction in
which the
character of the properties owned, leased or operated by it
therein or in
which the transaction of its business makes such
qualification or
licensing necessary, other than in such jurisdictions
where the
failure to be so qualified or licensed does not have and would
not reasonably
be likely to have, individually or in the aggregate, a
Material Adverse
Effect.
11
<PAGE>
(e) Except as set forth in Section 3.1(e) of the Company
Disclosure
Schedule, all of
the outstanding equity or voting securities or other
interests of
each of the Company's Subsidiaries have been validly issued
and are (A)
fully paid and nonassessable, (B) owned by the Company or by
one of the
Company's Subsidiaries, and (C) owned, directly or indirectly,
free and clear
of any Lien (as hereinafter defined) (including any
restriction on
the right to vote or sell the same, except as may be
provided as a
matter of Law), and all equity or voting interests in each of
the Company's
Subsidiaries that is a partnership, joint venture, limited
liability
company or trust which are owned by the Company, by one of the
Company's
Subsidiaries or by the Company and one of the Company's
Subsidiaries are owned
free and clear of any Lien (including any
restriction on
the right to vote or sell the same, except as may be
provided as a
matter of Law). For purposes of this Agreement, "Lien" means,
with respect to
any asset (including any security), any mortgage, claim,
lien, pledge,
charge, security interest or encumbrance of any kind in
respect of such
asset.
(f) The Company has previously provided to Parent true and
complete
copies of the
Company Declaration of Trust and the Second Amended and
Restated Bylaws
of the Company (the "Company Bylaws"), each as amended
through the date
hereof, and any other organizational documents (and in
each such case,
all amendments thereto) of the Company as currently in
effect.
(g) The Company has previously provided to Parent true and
complete
copies of the
Partnership's Certificate of Limited Partnership and Second
Amended and
Restated Agreement of Limited Partnership (the "Partnership
Agreement"),
each as amended through the date hereof, and the other
organizational
documents (and in each such case, all amendments thereto) of
the Partnership
as currently in effect.
3.2
Capitalization.
(a) The authorized shares of beneficial interest of the Company
consist of
100,000,000 Company Common Shares, of which, as of August 31,
2005, 46,453,994
were issued and outstanding and 20,000,000 Company
Preferred Shares
of which, as of August 31, 2005, 3,950,000 designated as
Company Series A
Preferred Shares were issued and outstanding and 2,600,000
designated as
Company B Preferred Shares were issued and outstanding.
3,092,672
Company Common Shares have been reserved for issuance upon
conversion of
the Company's 6% Convertible Notes due 2024 ("Convertible
Notes") and
357,865 Company Common Shares have been
reserved for
issuance pursuant to the Company Share Option Plan, Phantom
Share Purchase
Program, Restricted Share dividend equivalent rights and
Trustees
Deferred Compensation Plan as listed in Section 3.2(c) of the
Company
Disclosure Schedule, subject to adjustment on the terms set
forth
in such plans
and/or agreements, and 208,129 Company Share Options, 141,995
Phantom Shares,
6,506 Fee Shares and 1,235 Restricted Share dividend
equivalent
rights were outstanding as of August 31, 2005. As of the date
of
this Agreement,
the Company had no Company Common Shares reserved for
issuance or
required to be reserved for issuance other than as described
above. All such
issued and outstanding shares of the Company are, and all
shares subject
to issuance as specified above, upon issuance on the terms
and conditions
specified in the instruments pursuant to
12
<PAGE>
which they are
issuable will be, when issued, duly authorized, validly
issued, fully
paid, nonassessable and free of preemptive rights under any
provisions of
the Maryland REIT Law, the Company Declaration of Trust or
Company Bylaws
or any agreement to which the Company is a party or is
otherwise
bound.
(b) The Company has issued and outstanding the secured and
unsecured
debt instruments
listed in Section 3.2(b) of the Company Disclosure
Schedule.
Section 3.2(b) of the Company Disclosure Schedule sets forth an
accurate list of
all such instruments, their outstanding principal amounts
as of June 30,
2005, interest rates and maturity dates. Except as listed in
Section 3.2(b)
of the Company Disclosure Schedule, no obligation under such
debt instruments
shall be accelerated nor shall any Person have the right
to accelerate
such obligation, and none of the other provisions of such
debt instruments
shall be affected in any material respect, by virtue of
the REIT Merger.
Except for the Convertible Notes, the Company has no
outstanding
bonds, debentures, notes or other obligations the holders of
which have the
right to vote (or which are convertible into or exercisable
for securities
having the right to vote) with the shareholders of the
Company on any
matter.
(c) Except for the Company Share Options, Restricted Shares,
Phantom
Shares, Deferred
Restricted Shares, Fee Shares and any dividend equivalent
rights thereon
(collectively, the "Company Stock Rights"), the Convertible
Notes, the
Partnership Common Units and the Partnership Preferred Units,
there are no
existing options, warrants, calls, subscription rights,
convertible
securities or other rights, agreements or commitments
(contingent or
otherwise) which obligate the Company to issue, transfer or
sell any shares
of beneficial interest (or similar ownership interest) of
the Company or
any investment which is convertible into or exercisable or
exchangeable for
any such shares. Section 3.2(c) of the Company Disclosure
Schedule sets
forth a true, complete and correct list of the Company Stock
Rights,
including the name of the Person to whom such Company Stock
Right
has been
granted, the number of shares subject to each Company Stock
Right,
the type of
Company Stock Right, the per share exercise price or purchase
price for each
Company Stock Right that is a Company Share Option, whether
the Company
Share Option is qualified and the vesting schedule for each
Company Stock
Right as of the date of this Agreement. Except for the
Company Stock
Rights, the Company has not issued any share appreciation
rights, dividend
equivalent rights, performance awards, restricted stock
unit awards or
"phantom" shares. True and complete copies of all
instruments (or
the forms of such instruments) referred to in this Section
3.2(c) have been
furnished or made available to Parent.
(d) Except as set forth in Section 3.2(d) of the Company
Disclosure
Schedule and
Article VIII of the Company Declaration of Trust, there are no
agreements or
understandings to which the Company is a party with respect
to the voting of
any shares of beneficial interest of the Company or which
restrict the
transfer of any such shares, nor does the Company have
knowledge of any
third party agreements or understandings with respect to
the voting of
any such shares or which restrict the transfer of any such
shares.
(e) Except as set forth in Section 3.2(c) and Section 3.2(e) of
the
Company
Disclosure Schedule, there are no outstanding contractual
obligations of
the Company to repurchase, redeem, exchange, convert or
otherwise
acquire any shares of beneficial interest or any other
securities
of the
Company.
13
<PAGE>
(f) Except as set forth in Section 3.2(f) of the Company
Disclosure
Schedule, the
Company is under no obligation, contingent or otherwise, by
reason of any
agreement to register the offer and sale or resale of any of
its securities
under the Securities Act.
(g) The Company is the sole general partner of the Partnership and,
as
of the date
hereof, owns approximately 85% of the Partnership Common Units
as well as 100%
of the Partnership Preferred Units. Section 3.2(g) of the
Company
Disclosure Schedule sets forth a list of all other holders of
the
Partnership
Common Units, such holder's most recent address and the exact
number (e.g.,
general, limited, etc.) of Partnership Common Units held.
There are no
existing options, warrants, calls, subscriptions, convertible
securities, or
other rights, agreements or commitments which obligate the
Partnership to
issue, transfer or sell any partnership interests of such
Partnership.
Except as set forth in Section 3.2(g) of the Company
Disclosure
Schedule, there are no outstanding contractual obligations of
the Partnership
to issue, repurchase, redeem or otherwise acquire any
partnership
interests of the Partnership. Except as set forth in Section
3.2(g) of the
Company Disclosure Schedule, the partnership interests owned
by the Company
are subject only to the restrictions on transfer set forth
in the
Partnership Agreement, and those imposed by applicable
securities
laws.
(h) As of the date hereof, there are fewer than 300 holders of
record,
as such term is
defined in Rule 12g5-1 promulgated under the Securities
Exchange Act of
1934, as amended (the "Exchange Act"), of each of the
Company Series A
Preferred Shares, the Company Series B Preferred Shares
and the
Company's 6.75% Senior Unsecured Monthly Income Notes due 2019.
3.3 Authority
Relative to this Agreement; Shareholder Approval.
(a) The Company has all necessary power and authority to execute
and
deliver this
Agreement and to consummate the REIT Merger and the other
transactions
contemplated hereby. No other proceedings on the part of the
Company or any
of its Subsidiaries are necessary to authorize this
Agreement or to
consummate the REIT Merger and the other transactions
contemplated
hereby (other than, with respect to the REIT Merger and this
Agreement, to
the extent required by Law, the Company Shareholder Approval
(as hereinafter
defined)). This Agreement has been duly and validly
executed and
delivered by the Company and, assuming due authorization,
execution and
delivery hereof by each of Parent, Merger Sub, and Merger
Partnership,
constitutes a valid, legal and binding agreement of the
Company,
enforceable against the Company in accordance with and subject
to
its terms and
conditions, except as enforceability may be limited by
applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer and
similar Laws of general applicability relating to or affecting
creditors'
rights or by general equity principles.
(b) The Company Board has duly and validly authorized the
execution
and delivery of
this Agreement and approved the consummation of the REIT
Merger and
the
14
<PAGE>
other
transactions contemplated hereby, and no other actions are
required
to be taken by
the Company Board for the consummation of the REIT Merger
and the other
transactions contemplated hereby. The Company Board has
directed that
this Agreement be submitted to the shareholders of the
Company for
their approval to the extent required by Law and the Company
Declaration of
Trust and, subject to the provisions of Section 6.4(b)
hereof, will
recommend to the shareholders that they vote in favor of the
REIT Merger. The
affirmative approval of this Agreement and the REIT Merger
by the holders
of Company Common Shares voting together as a single class,
representing at
least a majority of all votes entitled to be cast by the
holders of all
outstanding Company Common Shares as of the record date for
the Company
Shareholders' Meeting (the "Company Shareholder Approval") is
the only vote of
the holders of any class or series of stock of the Company
necessary to
adopt this Agreement and approve the REIT Merger.
(c) The Partnership has all necessary power and authority to
execute
and deliver this
Agreement and to consummate the Partnership Merger and the
other
transactions contemplated hereby. No other proceedings on the part
of
the Partnership
are necessary to authorize this Agreement or to consummate
the Partnership
Merger and the other transactions contemplated hereby
(other than with
respect to the Partnership Merger and this Agreement, to
the extent
required by Law, the Partnership Approval (as defined below).
This Agreement
has been duly and validly executed and delivered by the
Partnership and,
assuming due authorization, execution and delivery hereof
by each of
Parent, Merger Sub, and Merger Partnership, constitutes a
valid,
legal and
binding agreement of the Partnership, enforceable against the
Partnership in
accordance with and subject to its terms and conditions,
except as
enforceability may be limited by applicable bankruptcy,
insolvency,
reorganization, moratorium, fraudulent transfer and similar
Laws of general
applicability relating to or affecting creditors' rights or
by general
equity principles. "Partnership Approval" means the consent of
the holders of
at least two-thirds (2/3rd) of the Partnership Common Units,
including
Partnership Common Units owned by the Company.
3.4 Reports;
Financial Statements. Except as set forth in Section 3.4 of
the Company Disclosure Schedule, the
Company and each of its Subsidiaries has
filed all required forms, reports and
documents with the SEC from January 1,
2002 through the date hereof, each of which
has complied in all material
respects with all applicable requirements
of the Securities Act of 1933, as
amended (the "Securities Act"), and the
Exchange Act, and the rules and
regulations promulgated thereunder
applicable to such forms, reports and
documents, each as in effect on the dates
such forms, reports and documents were
filed, except to the extent that such
forms, reports and documents have been
modified or superceded by later forms,
reports and documents filed prior to the
date of this Agreement. The Company has
made available to Parent, in the form
filed with the SEC (including any
amendments thereto), (i) its Annual Reports on
Form 10-K for each of the fiscal years
ended December 31, 2002, 2003 and 2004,
respectively, (ii) all definitive proxy
statements relating to the Company's
meetings of shareholders (whether annual or
special) held since January 1, 2002,
and (iii) all other reports or registration
statements filed by the Company with
the SEC since January 1, 2002
(collectively, the "Company SEC Reports"). Except
as set forth in Section 3.4 of the Company
Disclosure Schedule, none of such
forms, reports or documents, including any
financial statements or schedules
included or incorporated by reference
therein, contained, when filed, any untrue
statement of a material fact or omitted
to
15
<PAGE>
state a material fact required to be stated
or incorporated by reference therein
or necessary in order to make the
statements therein, in light of the
circumstances under which they were made,
not misleading, except to the extent
that such statements have been modified or
superceded by later Company SEC
Reports filed prior to the date of this
Agreement. To the extent required, the
Company has complied in all material
respects with the requirements of the
Sarbanes-Oxley Act of 2002 (the "S-O Act")
that are currently in effect,
including, without limitation, those
applicable to an "accelerated filer" as
such term is defined thereunder. Except as
set forth in Section 3.4 of the
Company Disclosure Schedule, the
consolidated financial statements of the
Company and its Subsidiaries included in
the Company SEC Reports (except to the
extent such statements have been amended or
modified by later Company SEC
Reports filed prior to the date of this
Agreement) filed prior to the date of
this Agreement complied as to form in all
material respects with applicable
accounting standards and the published
rules and regulations of the SEC with
respect thereto and fairly present in all
material respects, in conformity with
generally accepted accounting principles
("GAAP") (except, in the case of
interim financial statements, as permitted
by the applicable rules and
regulations of the SEC) applied on a
consistent basis during the periods
involved (except as may be indicated in the
notes thereto), the consolidated
financial position of the Company and its
consolidated Subsidiaries as of the
dates thereof and the consolidated results
of their operations and cash flows
for the periods then ended (subject, in the
case of the unaudited interim
financial statements, to normal year-end
adjustments).
3.5 No
Undisclosed Liabilities. Except (i) as set forth in Section 3.5
of
the Company Disclosure Schedule, (ii) as
disclosed in the Company SEC Reports
filed prior to the date hereof and (iii)
for fees and expenses incident to the
consummation of the transactions
contemplated hereby, none of the Company or its
Subsidiaries had any liabilities or
obligations of any nature (whether accrued,
absolute, contingent or otherwise) required
by GAAP to be set forth in a
consolidated balance sheet of the Company
or in the notes thereto, except for
any such liabilities or obligations which
do not have and would not reasonably
be likely to have, individually or in the
aggregate, a Material Adverse Effect,
after taking into account any assets
acquired or services provided in connection
with the incurrence of such liabilities or
obligations.
3.6 Absence of
Changes. Except as set forth in Section 3.6 of the Company
Disclosure Schedule or disclosed in the
Company SEC Reports, from January 1,
2005 through the date hereof, the Company
has conducted its businesses only in
the ordinary course of business and
consistent with past practice, and there has
not been: (a) any declaration, setting
aside or payment of any dividend or other
distribution with respect to any shares of
beneficial interest of the Company,
except for the payment of dividends in the
aggregate amounts of $58,527,456.08
on Company Common Shares, $5,554,687.50 on
Company Series A Preferred Shares,
and $3,900,000 on Company Series B
Preferred Shares (and corresponding regular
quarterly distributions payable to each
class or series of holders of units of
partnership interests in the Partnership);
(b) any material commitment,
contractual obligation (including, without
limitation, any management or
franchise agreement, any lease (capital or
otherwise) or any letter of intent),
borrowing, lending commitment, liability,
guaranty, capital expenditure or
transaction (each, a "Commitment") entered
into by the Company outside the
ordinary course of business; (c) any split,
combination or reclassification of
any Company Shares or any issuance or the
authorization of any issuance of any
other securities in respect of, in lieu of
or in substitution for, or giving the
right to acquire by exchange or exercise,
shares of its beneficial interest or
any issuance of an ownership interest in,
any of the Company's Subsidiaries,
except as contemplated
16
<PAGE>
by this Agreement or for the issuance or
exercise of Company Stock Rights; (d)
any damage, destruction or loss, whether or
not covered by insurance, that has
had, would have and would reasonably be
likely to have a Material Adverse
Effect; (e) any material change in the
Company's accounting principles,
practices or methods except insofar as may
have been required by a change in
GAAP; (f) any amendment of any employment,
consulting, severance, retention or
any other agreement between the Company and
any officer of the Company; or (g)
any event or occurrence of any condition
that has had or would reasonably be
expected to have, individually or in the
aggregate, a Material Adverse Effect.
3.7 Consents and
Approvals; No Violations. Assuming the receipt of the
Company Shareholder Approval, and except
(a) for filings, permits,
authorizations, consents and approvals as
may be required under, and other
applicable requirements of, the Exchange
Act, the Securities Act, the Nasdaq
Stock Market, state securities or state
"blue sky" laws, the HSR Act (as
hereinafter defined) or any other antitrust
law and (b) the filing of the
Articles of Merger, Partnership Merger
Certificate, or as otherwise set forth in
Section 3.7 of the Company Disclosure
Schedule, none of the execution, delivery
or performance of this Agreement by the
Company, the consummation by the Company
of the Mergers or compliance by the Company
with any of the provisions hereof
will (i) conflict with or result in any
breach of any provision of the
organizational documents of the Company or
any of its Subsidiaries, (ii) require
any filing by the Company or any of its
Subsidiaries with, notice to, or permit,
authorization, consent or approval of, any
state or federal government or
governmental authority or by any United
States or state court of competent
jurisdiction (a "Governmental Entity"),
(iii) require any consent or notice
under, result in a violation or breach by
the Company or any of its Subsidiaries
of, constitute (with or without due notice
or lapse of time or both) a default
(or give rise to any right of termination,
amendment, cancellation or
acceleration) under, result in the
triggering of any payment, or result in the
creation of any lien or other encumbrance
on any property or asset of the
Company or any of its Subsidiaries pursuant
to, any of the terms, conditions or
provisions of any note, bond, mortgage,
indenture, lease, license, contract,
agreement, permit, franchise or other
instrument or obligation or Company
Material Contract to which the Company or
any of its Subsidiaries is a party or
by which they or any of their respective
properties or assets may be bound or
(iv) violate any law, order, writ,
injunction, decree, statute, rule or
regulation applicable to the Company or any
of its Subsidiaries or any of their
respective properties or assets (each, a
"Law" and collectively, the "Laws"),
excluding from the foregoing clauses (ii),
(iii) and (iv) such filings, notices,
permits, authorizations, consents,
approvals, violations, breaches, trigger
events, creation of liens or defaults
which, individually or in the aggregate,
(A) would not prevent or materially delay
consummation of the Mergers, (B) would
not otherwise prevent or materially delay
performance by the Company or the
Partnership of its material obligations
under this Agreement or (C) do not have
and would not reasonably be likely to have
a Material Adverse Effect.
3.8 No Default.
Neither the Company nor any of its Subsidiaries is in
violation of (i) any material term of the
Company Declaration of Trust or
Company Bylaws (or other similar
organizational documents), (ii) any agreement
or instrument related to indebtedness for
borrowed money or any other agreement
to which it is a party or by which it is
bound, or (iii) any Law applicable to
the Company, its Subsidiaries or any of
their respective properties or assets,
in each case with respect to clauses (ii)
and (iii) above, except as do not have
and would not reasonably be likely to have,
individually or in the aggregate, a
Material Adverse Effect.
17
<PAGE>
3.9 Litigation.
Except (i) as listed in Section 3.9 of the Company
Disclosure Schedule, (ii) as set forth in
the Company SEC Reports filed prior to
the date of this Agreement, or (iii) for
suits, claims, actions, proceedings or
investigations arising from the usual,
regular and ordinary course of operations
of the Company and its Subsidiaries
involving (A) collection matters or (B)
personal injury or other tort litigation
which are covered by adequate insurance
(subject to customary deductibles), there
is no Dispute (as hereinafter defined)
pending or, to the Company's knowledge,
threatened in writing against the
Company or any of its Subsidiaries or any
of its or their respective properties
or assets that (1) involves amounts in
excess of $100,000 individually or in
excess of $1,000,000 in the aggregate, (2)
questions the validity of this
Agreement or any action to be taken by the
Company or the Partnership in
connection with the consummation of the
Mergers or (3) reasonably can be
expected to have a Material Adverse Effect.
None of the Company or its
Subsidiaries is subject to any order,
judgment, writ, injunction or decree,
except as would not reasonably be expected
to have a Material Adverse Effect.
3.10 Compliance
with Applicable Law. Except as listed in Section 3.10 of
the Company Disclosure Schedule, the
Company and each of its Subsidiaries hold
all permits, licenses, variances,
exemptions, orders and approvals of all
Governmental Entities and third parties
necessary for the lawful conduct of
their respective businesses (the "Company
Permits"), except for Company Permits
the absence of which do not have and would
not reasonably be likely to have,
individually or in the aggregate, a
Material Adverse Effect. The Company and
each of its Subsidiaries are in compliance
with the terms of the Company
Permits, except where the failure to so
comply does not have and would not
reasonably be likely to have, individually
or in the aggregate, a Material
Adverse Effect The businesses of the
Company and each of its Subsidiaries are
not being conducted in violation of any Law
applicable to the Company or its
Subsidiaries except as would not reasonably
be expected to have a Material
Adverse Effect. Except as would not
reasonably be expected to have a Material
Adverse Effect, no investigation, review or
proceeding by any Governmental
Entity with respect to the Company, its
Subsidiaries or their operations is
pending nor, to the Company's knowledge is
threatened in writing, and to the
Company's knowledge, no Governmental Entity
has indicated an intention to
conduct the same.
Notwithstanding
the foregoing, nothing contained in this Section 3.10 shall
be construed to limit the statements set
forth in Section 3.14 hereof.
3.11
Properties.
(a) Section 3.11(a) of the Company Disclosure Schedule sets forth
a
correct and
complete list and address of all real property owned or leased
by the Company
and its Subsidiaries (including its headquarters and leases
of office space)
as of the date of this Agreement and a list of expected
construction
completion dates of all buildings, structures and other
improvements
being funded by or on behalf of the Company (all such real
property,
together with all buildings, structures and other improvements
and fixtures
located on or under such real property and all easements,
rights and other
appurtenances to such real property, are individually
referred to
herein as "Company Property" and collectively referred to
herein as the
"Company Properties"). Each of the Company Properties is
owned or leased
by the Company and its Subsidiaries, as indicated
18
<PAGE>
in Section
3.11(a) of the Company Disclosure Schedule. The Company and its
Subsidiaries own
or, if so indicated in Section 3.11(a) of the Company
Disclosure
Schedule, lease each of the Company Properties, in each case
free and clear
of any Liens, title defects, contractual restrictions,
covenants or
reservations of interests in title (collectively, "Property
Restrictions"),
except for (i) Permitted Liens, (ii) Property Restrictions
imposed or
promulgated by Law or by any Governmental Entity which are
customary and
typical for similar properties or (iii) Property Restrictions
which do not,
individually or in the aggregate, interfere materially with
the current use
of such property, except in the case of clauses (i), (ii)
and (iii) above
as do not have and would not reasonably be likely to have,
individually or
in the aggregate, a Material Adverse Effect. There are no
defaults under
any of the Property Restrictions, except as do not have and
would not
reasonably be likely to have, individually or in the aggregate,
a
Material Adverse
Effect. For purposes of this Agreement, "Permitted Liens"
means (i) Liens
for Taxes not yet due or delinquent or as to which there is
a good faith
dispute and for which there are adequate reserves on the
financial
statements of the Company (if such reserves are required
pursuant
to GAAP), (ii)
with respect to real property, any title exception disclosed
in the Company
Title Insurance Policies (as defined herein) made available
to Parent
(whether material or immaterial), Liens and obligations arising
under the
Company Material Contracts (including any lien securing
mortgage
debt disclosed
in Section 3.2(b) of the Company Disclosure Schedule), the
Company Leases
(as defined herein) and any other Lien which does not,
individually or
in the aggregate, interfere materially with the current use
of such property
(assuming its continued use in the manner in which it is
currently used)
or materially adversely affect the value or marketability
of such
property, (iii) inchoate materialmen's, mechanics', carriers',
workmen's and
repairmen's liens arising in the usual, regular and ordinary
course and not
past due and payable or the payment of which is being
contested in
good faith by appropriate proceedings and for which there are
adequate
reserves on the financial statements of the Company (if such
reserves are
required pursuant to GAAP) and (iv) mortgages and deeds of
trust (which are
listed in the Company Disclosure Schedule).
(b) Section 3.11(b) of the Company Disclosure Schedule sets forth
a
correct and
complete list of all agreements for the pending acquisition,
sale, option to
sell, right of first refusal, right of first offer or any
other
contractual right to sell, dispose of, or lease (by merger,
purchase
or sale of
assets or stock or otherwise) any personal property valued at
$50,000 or more.
The Company and each of its Subsidiaries have good and
sufficient title
to all the material personal and non-real properties and
assets reflected
in their books and records as being owned by them
(including those
reflected in the consolidated balance sheet of the Company
and its
Subsidiaries as of June 30, 2005, except as since sold or
otherwise
disposed of in
the usual, regular and ordinary course of business), free
and clear of all
Liens, except for Permitted Liens.
(c) Except as provided for in Section 3.11(c) of the Company
Disclosure
Schedule, to the Company's knowledge, the Company or its
Subsidiaries has
good, marketable and insurable fee simple title to or a
valid leasehold
interest in the Company Properties and valid policies of
title insurance
(each a "Company Title Insurance Policy") have been issued
insuring, as of
the effective date of each such Company Title Insurance
Policy, the
Company's or the applicable Subsidiary's (or the applicable
predecessor's
or
19
<PAGE>
acquiror's) fee
simple title to or leasehold interest in the Company
Properties,
subject only to the matters disclosed on the Company Title
Insurance
Policies and Permitted Liens, and to the Company's knowledge,
such policies
are, at the date hereof, valid and in full force and effect
and no written
claim has been made against any such policy. A correct and
complete copy of
each Company Title Insurance Policy has been previously
made available
to Parent.
(d) Except as set forth in Section 3.11(d) of the Company
Disclosure
Schedule, the
Company has no knowledge (i) that any certificate, permit or
license from any
Governmental Entity having jurisdiction over any of the
Company
Properties or any agreement, easement or other right of an
unlimited
duration which is necessary to permit the lawful use and
operation of the
buildings and improvements on any of the Company
Properties or
which is necessary to permit the lawful use and operation of
all utilities,
parking areas, detention ponds, driveways, roads and other
means of egress
and ingress to and from any of the Company Properties has
not been
obtained, is not in full force and effect and for which a
renewal
application has
not been timely filed, except for such failures to obtain,
to have in full
force and effect or to renew, which do not have and would
not reasonably
be likely to have, individually or in the aggregate, a
Material Adverse
Effect, or of any pending written threat of modification
or cancellation
of any of same, which have or would reasonably be likely to
have a Material
Adverse Effect; (ii) of written notice of any uncured
violation of or
liability under any Laws, including Environmental Laws,
affecting any of
the Company Properties or operations which have or would
reasonably be
likely to have a Material Adverse Effect; (iii) of any
structural
defects relating to any Company Properties which have or would
reasonably be
likely to have a Material Adverse Effect; (iv) of any Company
Properties whose
building systems are not in working order to an extent
which have or
would reasonably be likely to have a Material Adverse Effect;
or (v) of any
physical damage to any Company Properties to an extent which
have or would
reasonably be likely to have a Material Adverse Effect.
(e) Except as provided for in Section 3.11(e) of the Company
Disclosure
Schedule, to the Company's knowledge, neither the Company nor
any of the
Company's Subsidiaries has received any written notice to the
effect that (i)
any condemnation or rezoning proceedings are pending or
threatened with
respect to any of the Company Properties, or (ii) any Laws
including,
without limitation, any zoning regulation or ordinance,
building
or similar law, code,
ordinance, order or regulation has been violated for
any Company
Property, in the case of clauses (i) and (ii) above which have
or would
reasonably be likely to have, individually or in the aggregate,
a
Material Adverse
Effect.
(f) Except as provided for in Section 3.11(f) of the Company
Disclosure
Schedule, the rent rolls for the Company Properties dated as of
July 2005 which
have previously been made available to Parent, list each
lease, sublease,
ground lease or other right of occupancy that the Company
or its
Subsidiaries are party to as landlord with respect to each of
the
applicable
Company Properties including all amendments, modifications,
supplements,
renewals, extensions and guarantees related thereto (except
for
discrepancies or omissions that do not have and would not
reasonably be
likely to have,
individually or in the aggregate, a Material Adverse Effect
(the "Company
Leases"), and are correct and complete in all respects
(except for
discrepancies that do
20
<PAGE>
not have and
would not reasonably be likely to have, individually or in the
aggregate, a
Material Adverse Effect). The Company has made available to
Parent correct
and complete copies of all Company Leases, as of the date
hereof. Except
as set forth in Section 3.11(f) of the Company Disclosure
Schedule,
neither the Company nor any of the Company's Subsidiaries, on
the
one hand, nor, to the
knowledge of the Company, any other party, on the
other hand, is
conducting or has conducted business in violation of or in a
manner which
would reasonably be expected to result in liability under any
Environmental
Laws at or related to the Company Property that is the
subject of such
Company Lease or in default under any Company Lease, except
for violations
or defaults that are disclosed in the rent rolls or that do
not have and
would not reasonably be likely to have, individually or in the
aggregate, a
Material Adverse Effect. No purchase option, option to sell,
right of first
refusal, right of first offer, right of first negotiation or
any similar
option or right has been exercised under any of the Company
Leases, except
options whose exercise has been evidenced by a written
document as
described in Section 3.11(f) of the Company Disclosure
Schedule.
(g) Except as provided for in Section 3.11(g) of the Company
Disclosure Schedule,
all work required to be performed, payments required
to be made and
actions required to be taken prior to the date hereof
pursuant to any
application, submission or agreement the Company or any of
its Subsidiaries
has entered into with a Governmental Entity in connection
with a site
approval, zoning reclassification or other similar action
relating to any
Company Properties (e.g., local improvement district, road
improvement
district, environmental compliance and environmental
remediation,
abatement and/or mitigation) have been and are being
performed, paid
or taken, as the case may be, in accordance with said
application,
submission or agreement and with applicable Laws, other than
those where,
individually or in the aggregate, the failure does not have
and would not
reasonably be likely to have a Material Adverse Effect.
(h) Section 3.11(h) of the Company Disclosure Schedule sets forth
a
correct and
complete list of each ground lease pursuant to which the
Company or any
of its Subsidiaries is a lessee (individually, "Ground
Lease" and
collectively, "Ground Leases"). Each Ground Lease is in full
force and effect
and is valid, binding and enforceable in accordance with
its terms
against (a) the Company or any of its Subsidiaries, and (b) to
the knowledge of
the Company, the other parties thereto, except as do not
have and would
not reasonably be likely to have, individually or in the
aggregate, a Material Adverse
Effect. Except as listed in Section 3.11(h)
of the Company
Disclosure Schedule or which do not have and would not
reasonably be
likely to have, individually or in the aggregate, a Material
Adverse Effect,
the Company or any of its Subsidiaries have performed all
obligations
required to be performed by it to date under each of the Ground
Leases and
neither the Company nor any of its Subsidiaries, nor to the
knowledge of the
Company, any other party, is in default under any Ground
Lease, which
default has or would reasonably be expected to have a Material
Adverse Effect
(and to the Company's knowledge, no event has occurred
which, with due
notice or lapse of time or both, would constitute such a
default). The
Company has made available to Parent a correct and complete
copy of each
Ground Lease and all amendments thereto.
21
<PAGE>
(i) All rent has been properly calculated and billed to tenants in
all
material
respects pursuant to the Company Leases.
(j) Except as set forth in Section 3.11(j) of the Company
Disclosure
Schedule,
neither the Company nor any of its Subsidiaries has granted any
unexpired option
agreements or rights of first refusal with respect to the
purchase of a
Company Property or any portion thereof or any other
unexpired rights
in favor of any Third Party to purchase or otherwise
acquire a
Company Property or any portion thereof or entered into any
contract for
sale, ground lease or letter of intent to sell or ground lease
any Company
Property or any portion thereof.
(k) Section 3.11(k) of the Company Disclosure Schedule sets forth
a
correct and
complete list of all of the contracts, documents or other
agreements which
are currently in effect whereby the Company or any of its
Subsidiaries is
entitled to receive site work or other reimbursements from
any Third Party,
pursuant to which the Company or any of its Subsidiaries
is currently
entitled to receive in excess of $250,000 (the "Reimbursement
Agreements").
(l) Except for the applicable tenant's management obligations as
set
forth in the
Company Leases, neither the Company nor any of its
Subsidiaries is
a party to any agreement relating to the management of any
of the Company
Properties by a party other than the Company or any
wholly-owned
Company Subsidiaries (a "Third Party").
(m) Except as set forth in Section 3.11(m) of the Company
Disclosure
Schedule,
neither the Company nor any of its Subsidiaries is a party to
any
agreement
pursuant to which the Company or any of its Subsidiaries
manages
any real
properties for any Third Party.
(n) Except for those contracts or agreements set forth in
Section
3.11(n) of the
Company Disclosure Schedule, neither the Company nor any of
its Subsidiaries
has entered into any contract or agreement (collectively,
the "Participation
Agreements") with any Third Party or any employee,
consultant,
Affiliate or other person (the "Participation Party") which
provides for a
right of such Participation Party to participate, invest,
join, partner,
have any interest in whatsoever (whether characterized as a
contingent fee,
profits interest, equity interest or otherwise) or have the
right to any of
the foregoing in any proposed or anticipated investment
opportunity,
joint venture, partnership or any other current or future
transaction or
property in which the Company or any Subsidiary has or will
have an
interest, including but not limited to those transactions or
properties
identified, sourced, produced or developed by such
Participation
Party (a
"Participation Interest"). Section 3.11(n) of the Company
Disclosure
Schedule sets forth the only transactions or Company Properties
for which any
Participation Party currently has a Participation Interest
pursuant to such
Participation Agreements.
(o) Section 3.11(o) of the Company Disclosure Schedule sets forth
a
list of all
notices to the Company from lenders or insurance carriers
currently
requiring material repairs or other material alterations to
Company
Properties.
22
<PAGE>
(p) Except as set forth in Section 3.11(p) of the Company
Disclosure
Schedule, there
is no Company-funded renovation, restoration or other work
in progress (or
commitments related thereto) above $500,000 in each case
and $5,000,000
in the aggregate to any Company Properties.
3.12 Employee
Plans.
(a) All employees of the Company or any of its Subsidiaries are
employed by the
Company or the Partnership. Section 3.12(a) of the Company
Disclosure
Schedule sets forth a list of all "employee benefit plans," as
defined in
Section 3(3) of the Employment Retirement Income Security Act
of
1974, as amended
("ERISA"), and all other material employee benefit plans
or other benefit
arrangements or payroll practices including bonus plans,
fringe benefits,
executive compensation, consulting or other compensation
agreements,
change in control agreements, incentive, equity or equity-based
compensation,
deferred compensation arrangements, stock purchase, severance
pay, sick leave,
vacation pay, salary continuation, hospitalization,
medical
benefits, life insurance, other welfare benefits, scholarship
programs,
directors' benefit, bonus or other incentive compensation,
which
the Company or
the Partnership sponsors, maintains, contributes to or has
any obligation
to contribute to (each a "Company Employee Benefit Plan" and
collectively,
the "Company Employee Benefit Plans"). None of the Company
Employee Benefit
Plans is or has been subject to Title IV of ERISA, or is
or has been
subject to Sections 4063 or 4064 of ERISA, nor is the Company,
its Subsidiaries
or any ERISA Affiliate obligated to contribute to a
multiemployer
plan, as defined in Section 3(37) of ERISA (a "Multiemployer
Plan"). Neither
the Company nor any ERISA Affiliate has incurred any
material present
or contingent liability under Title IV of ERISA, nor does
any condition
exist which could reasonably be likely to result in any such
liability.
(b) Correct and complete copies of the following documents,
with
respect to each
of the Company Employee Benefit Plans, other than a
Multiemployer Plan,
have been made available to Parent by the Company: (i)
plan and related
trust documents, and amendments thereto; (ii) the three
most recent
Forms 5500 and schedules thereto, if applicable; (iii) the most
recent Internal
Revenue Service ("IRS") opinion letter or determination
letter (which
resulted from a proper and timely filing with the IRS), if
any; (iv) the
three most recent financial statements and actuarial
valuations, if
applicable; and (v) summary plan descriptions, if
applicable.
(c) Except as would not have and would not reasonably be likely
to
have, a Material
Adverse Effect, (i) the Company and the Partnership have
performed all
obligations required to be performed by them under all
Company Employee
Benefit Plans; (ii) the Company Employee Benefit Plans
have been
administered in compliance with their terms and the
requirements
of ERISA, the
Code and other applicable Laws; (iii) all contributions
(including all
employer contributions and employee salary reduction
contributions)
required to have been made under any of the Company Employee
Benefit Plans to
any funds or trusts established thereunder or in
connection
therewith have been made by the due date thereof and all
contributions
for any period ending on or before the Closing Date which are
not yet due will
have been paid or accrued prior to the Closing
23
<PAGE>
Date; (iv) there
are no actions, suits, arbitrations, investigations,
audits or claims
(other than routine claims for benefits) filed, or to the
knowledge of the
Company or the Partnership, threatened in writing with
respect to any
Company Employee Benefit Plan; and (v) the Company and the
Partnership have
no liability as a result of any "prohibited transaction"
(as defined in
Section 406 of ERISA or Section 4975 of the Code) for any
excise Tax or
civil penalty.
(d) Neither the Company nor the Partnership is subject to any
unsatisfied
withdrawal liability with respect to any Multiemployer Plan.
(e) Each of the Company Employee Benefit Plans which is intended to
be
"qualified"
within the meaning of Section 401(a) of the Code has received
an opinion
letter or determination letter from the IRS. The Company and
the
Partnership know
of no fact which would adversely affect the qualified
status of any
such Company Employee Benefit Plan or the exemption of such
trust.
(f) Except as set forth in Section 3.12(f) of the Company
Disclosure
Schedule, none
of the Employee Benefit Plans provide for continuing
post-employment
health, life insurance coverage or other welfare benefits
for any
participant or any beneficiary of a participant except as may
be
required under
the Consolidated Omnibus Budget Reconciliation Act of 1985,
as amended, or
similar state law ("COBRA").
(g) No stock or other security issued by the Company forms or
has
formed a
material part of the assets of any tax qualified Company
Employee
Benefit
Plan.
(h) Except as set forth in Section 3.12(h) of the Company
Disclosure
Schedule,
neither the execution and delivery of this Agreement nor the
consummation of
the Mergers will (i) result in any material payment
becoming due, or
materially increase the amount of compensation due, to any
current or
former employee of the Company or any of its Subsidiaries; (ii)
materially increase any benefits
otherwise payable under any Company
Employee Benefit
Plan; or (iii) result in the acceleration of the time of
payment or
vesting of any such material benefits.
3.13 Labor
Matters.
(a) Section 3.13(a) of the Company Disclosure Schedule sets forth
a
list of all
temporary staffing, labor or collective bargaining agreements
to which the
Company or any Subsidiary is party (excluding personal
services
contracts) and, except as set forth therein, there are no such
temporary
staffing, labor or collective bargaining agreements that
pertain
to the Company
or any of its Subsidiaries. The Company has heretofore made
available to
Parent correct and complete copies of the labor or collective
bargaining
agreements listed on Section 3.13(a) of the Company Disclosure
Schedule,
together with all material amendments, modifications,
supplements
and side letters
affecting the duties, rights and obligations of any party
thereunder.
(b) Except as disclosed in Section 3.13(b) of the Company
Disclosure
Schedule, (i) no
employees of the Company or any of its Subsidiaries are
represented by
any labor organization; (ii) no labor organization or group
of employees of
the Company
24
<PAGE>
or any of its
Subsidiaries has made a written demand for recognition or
certification;
(iii) to the Company's knowledge, there are no
representation
or certification proceedings or petitions seeking a
representation
proceeding presently filed, or to the Company's knowledge,
threatened in
writing to be brought or filed with the National Labor
Relations Board
or any other labor relations tribunal or authority; (iv) to
the Company's
knowledge, there are no organizing activities involving the
Company or any
of its Subsidiaries pending with any labor organization or
group of
employees of the Company or any of its Subsidiaries, and (v)
the
Company and its Subsidiaries are
not affected and have not been affected in
the past by any
actual or threatened work stoppage strike or other labor
disturbance.
(c) There are no unfair labor practice charges, grievances or
complaints filed
or, to the Company's knowledge, threatened in writing by
or on behalf of
any employee or group of employees of the Company or any of
its
Subsidiaries.
(d) Except as set forth in Section 3.13(d) of the Company
Disclosure
Schedule, there are no
complaints, charges or claims against the Company or
any of its
Subsidiaries filed or, to the knowledge of the Company,
threatened in
writing to be brought or filed, with any federal, state or
local
Governmental Entity or arbitrator based on, arising out of, in
connection with,
or otherwise relating to the employment or termination of
employment of
any individual by the Company or any of its Subsidiaries.
(e) Except as set forth in Section 3.13(e) of the Company
Disclosure
Schedule, (i)
the Company and each of its Subsidiaries is in compliance in
all material
respects with all Laws relating to the employment of labor,
including all
such Laws relating to wages, hours, the Worker Adjustment and
Retraining
Notification Act and any similar state or local "mass layoff"
or
"plant closing"
Law ("WARN"), collective bargaining, discrimination, civil
rights,
affirmative action, safety and health, workers' compensation
and
the collection
and payment of withholding and/or social security Taxes and
any similar Tax,
except for any non-compliance which does not have and
would not
reasonably be likely to have, a Material Adverse Effect; and
(ii)
there has been
no "mass layoff" or "plant closing
