AGREEMENT AND PLAN OF MERGER

Agreement and Plan of Merger

You are currently viewing:

This Agreement and Plan of Merger involves

ARDEN REALTY INC | ARDEN REALTY LIMITED PARTNERSHIP | GENERAL ELECTRIC CAPITAL CORPORATION | TRIZEC PROPERTIES, INC. | TRIZEC HOLDINGS OPERATING LLC | ATLAS MERGER SUB, INC. | ATLAS PARTNERSHIP MERGER SUB, INC.

. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here.

Title: AGREEMENT AND PLAN OF MERGER
Governing Law: New York Date: 12/28/2005
Industry: Real Estate Operations Law Firm: King & Spalding LLP; Latham & Watkins LLP; Hogan & Hartson LLP Sector: Services

Exhibit 2.1

AGREEMENT AND PLAN OF MERGER

by and among

ARDEN REALTY, INC.

ARDEN REALTY LIMITED PARTNERSHIP

GENERAL ELECTRIC CAPITAL CORPORATION

TRIZEC PROPERTIES, INC.

TRIZEC HOLDINGS OPERATING LLC

ATLAS MERGER SUB, INC.

AND

ATLAS PARTNERSHIP MERGER SUB, INC.

Dated as of December 21, 2005

TABLE OF CONTENTS

		Page

ARTICLE I	DEFINITIONS	3

SECTION 1.01.	Definitions	3

ARTICLE II	THE MERGER	10

SECTION 2.01.	Admission of New Partner Sub	10
SECTION 2.02.	Redemption of OP Units For LLC Interests	10
SECTION 2.03.	Contribution of Redemption Core Properties in Exchange for TZ Units	14
SECTION 2.04.	Partnership Merger	15
SECTION 2.05.	TZ Asset Distribution	16
SECTION 2.06.	Asset Sale	16
SECTION 2.07.	REIT Merger	16
SECTION 2.08.	Charter; Bylaws; Partnership Agreement	16
SECTION 2.09.	Effective Times	17
SECTION 2.10.	Closing	17
SECTION 2.11.	Directors and Officers of the Surviving Entity	17
SECTION 2.12.	Partnership Matters	18

ARTICLE III	EFFECT OF THE MERGERS	18

SECTION 3.01.	Effect on Shares	18
SECTION 3.02.	Effect on Partnership Interests	19
SECTION 3.03.	Exchange of Certificates, Unit Certificates and Uncertificated Units	19
SECTION 3.04.	Withholding Rights	23
SECTION 3.05.	Dissenters’ Rights	23

ARTICLE IV	REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE PARTNERSHIP	24

SECTION 4.01.	Existence; Good Standing; Authority; Compliance with Law	24
SECTION 4.02.	Capitalization	25
SECTION 4.03.	Authority Relative to this Agreement	27
SECTION 4.04.	No Conflict; Required Filings and Consents	28
SECTION 4.05.	Permits; Compliance	29
SECTION 4.06.	SEC Filings; Financial Statements	29
SECTION 4.07.	Absence of Certain Changes or Events	30
SECTION 4.08.	Absence of Litigation	31
SECTION 4.09.	Employee Benefit Plans	31
SECTION 4.10.	Labor Matters	32
SECTION 4.11.	Proxy Statement	33
SECTION 4.12.	Property and Leases	34
SECTION 4.13.	Intellectual Property	37

SECTION 4.14.	Taxes	38
SECTION 4.15.	Environmental Matters	40
SECTION 4.16.	Material Contracts	41
SECTION 4.17.	Brokers	42
SECTION 4.18.	Opinion of Financial Advisor	42
SECTION 4.19.	Insurance	42
SECTION 4.20.	Related Party Transactions	42
SECTION 4.21.	Takeover Statutes	43
SECTION 4.22.	Investment Company Act	43
SECTION 4.23.	Patriot Act	43

ARTICLE V	REPRESENTATIONS AND WARRANTIES OF PARENT AND REIT MERGER SUB	43

SECTION 5.01.	Corporate Organization	43
SECTION 5.02.	Authority Relative to this Agreement	44
SECTION 5.03.	Consents and Approvals; No Violations	44
SECTION 5.04.	Litigation	45
SECTION 5.05.	Brokers	45
SECTION 5.06.	Available Funds	45
SECTION 5.07.	Ownership of REIT Merger Sub; No Prior Activities	45
SECTION 5.08.	Proxy Statement	45

ARTICLE VI	REPRESENTATIONS AND WARRANTIES OF TZ REIT and TZ OP	46

SECTION 6.01.	Corporate Organization	46
SECTION 6.02.	Capitalization	46
SECTION 6.03.	Authority Relative to this Agreement	46
SECTION 6.04.	Consents and Approvals; No Violations	47
SECTION 6.05.	SEC Filings; Financial Statements	48
SECTION 6.06.	Litigation	49
SECTION 6.07.	REIT Status	49
SECTION 6.08.	Brokers	49

ARTICLE VII	CONDUCT OF BUSINESS PENDING THE CLOSING	49

SECTION 7.01.	Conduct of Business by the Company	49

ARTICLE VIII	ADDITIONAL AGREEMENTS	53

SECTION 8.01.	Stockholders’ Meeting	53
SECTION 8.02.	Proxy Statement	54
SECTION 8.03.	Access to Information; Confidentiality	54
SECTION 8.04.	No Solicitation of Transactions	56
SECTION 8.05.	Further Action; Reasonable Best Efforts	57
SECTION 8.06.	Public Announcements	58
SECTION 8.07.	Indemnification	58
SECTION 8.08.	Employee Benefit Matters	61

SECTION 8.09.	Transfer Taxes	62
SECTION 8.10.	Form of Election	63
SECTION 8.11.	Tax Matters	63
SECTION 8.12.	Asset Sale	64
SECTION 8.13.	Treatment of AVP	65

ARTICLE IX	CONDITIONS	65

SECTION 9.01.	Conditions to the Obligations	65
SECTION 9.02.	Conditions to the Obligations of Parent and REIT Merger Sub	66
SECTION 9.03.	Conditions to the Obligations of the Company	67
SECTION 9.04.	Conditions to the Obligations of TZ OP	67

ARTICLE X	TERMINATION, AMENDMENT AND WAIVER	67

SECTION 10.01.	Termination	67
SECTION 10.02.	Effect of Termination	68
SECTION 10.03.	Fees and Expenses	69

ARTICLE XI	GENERAL PROVISIONS	70

SECTION 11.01.	Non-Survival of Representations and Warranties	70
SECTION 11.02.	Notices	70
SECTION 11.03.	Severability	71
SECTION 11.04.	Amendment	72
SECTION 11.05.	Entire Agreement; Assignment	72
SECTION 11.06.	Parties in Interest	72
SECTION 11.07.	Specific Performance	72
SECTION 11.08.	Governing Law	73
SECTION 11.09.	Waiver of Jury Trial	73
SECTION 11.10.	Headings	73
SECTION 11.11.	Counterparts	73
SECTION 11.12.	Mutual Drafting	74

iii

EXHIBITS

Exhibit A	Term Sheet for Contribution Agreement and Registration Rights Agreement

Exhibit B	Redemption Core Properties

Exhibit C	REIT Opinion

AGREEMENT AND PLAN OF MERGER

THIS AGREEMENT AND PLAN OF MERGER (this “ Agreement ”), dated as of December 21, 2005, is made by and among General Electric Capital Corporation, a Delaware corporation (“ Parent ”), Atlas Merger Sub, Inc., a Maryland corporation and wholly owned subsidiary of the Parent (“ REIT Merger Sub ”), Trizec Properties, Inc., a Delaware corporation (“ TZ REIT ”), Trizec Holdings Operating LLC, a Delaware limited liability company (“ TZ OP ”), Arden Realty, Inc., a Maryland corporation (the “ Company ”), Atlas Partnership Merger Sub, Inc., a Maryland corporation and wholly owned subsidiary of the Company (“ Partnership Merger Sub ”), and Arden Realty Limited Partnership, a Maryland limited partnership (the “ Partnership ”).

RECITALS

WHEREAS, the Board of Directors of the Company (the “ Company Board ”), having determined that it is advisable and in the best interests of the Company and its shareholders, and of the Partnership and its partners, wishes to enter into a series of transactions, including merger transactions on the terms and subject to the terms and conditions set forth in this Agreement;

WHEREAS, immediately following completion of the Admission, the Redemption, the Exchange, the Partnership Merger, the TZ Asset Distribution and the Asset Sale (each as hereinafter defined), the Company and REIT Merger Sub wish to effect a business combination through a merger of the Company with and into REIT Merger Sub (the “ REIT Merger ”) on the terms and subject to the conditions set forth in this Agreement and in accordance with the Maryland General Corporation Law (the “ MGCL ”);

WHEREAS, prior to any of the other transactions described herein, a newly formed wholly owned subsidiary of the Company (“ New Partner Sub ”) will be admitted to the Partnership as a limited partner and will acquire a 0.01% interest in the Partnership in exchange for a capital contribution (the “ Admission ”);

WHEREAS, immediately following the Admission and prior to any of the other transactions described below, the Partnership wishes to offer to eligible partners of the Partnership the right to have their Partnership Units redeemed (the “ Redemption ”) in exchange for the Redemption Core Property LLC Interests, subject to and in accordance with the terms hereof;

WHEREAS, immediately following completion of the Redemption and prior to all of the other transactions described below, TZ OP wishes to offer to the Redeeming OP Unit Holders (as hereinafter defined) the right to receive TZ Units in exchange for the Redemption Core Property LLC Interests (the “ Exchange ”) in the amount specified herein and subject to and in accordance with the terms hereof;

WHEREAS, one-day following completion of the Exchange and prior to all of the other transactions described below, the Company wishes to cause the merger of Partnership Merger Sub with and into the Partnership (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 the MGCL and Section 10-208 of the Maryland Revised Uniform Limited Partnership Act, as amended (“ MRULPA ”);

WHEREAS, immediately following completion of the Partnership Merger and prior to all of the other transactions described below, the Surviving Partnership will distribute (the “ TZ Asset Distribution ”) to the Company all of its right, title and interest in and to the assets to be sold to TZ OP pursuant to the Purchase and Sale Agreement (the “ TZ Assets ”);

WHEREAS, following completion of TZ Asset Distribution and prior to the REIT Merger, Parent shall cause the Company to sell the TZ Assets to TZ OP (the “ Asset Sale ”);

WHEREAS, the Company Board has approved this Agreement, the REIT Merger and the other transactions contemplated by this Agreement and declared that the REIT Merger and the other transactions contemplated by this Agreement are advisable and in the best interests of the Company and its stockholders on the terms and subject to the conditions set forth herein;

WHEREAS, the Company, as the sole general partner of the Partnership, which has the authority to approve the Partnership Merger, has approved this Agreement, the Admission, the Redemption, the Exchange, the Partnership Merger, the TZ Asset Distribution and the Asset Sale and deemed such transactions advisable and in the best interests of the Partnership and the limited partners of the Partnership and authorized the Partnership to enter into this Agreement and to consummate such transactions on the terms and conditions set forth herein;

WHEREAS, the board of directors of Partnership Merger Sub has declared that this Agreement and the Partnership Merger are advisable on the terms and subject to the conditions set forth herein, and in the best interests of the stockholders of Partnership Merger Sub;

WHEREAS, the Company, as the sole stockholder of Partnership Merger Sub, has approved this Agreement and the Partnership Merger;

WHEREAS, the Company, in its capacity as the sole general partner of the Partnership after the Partnership Effective Time has approved the REIT Merger, the transfer of the Company’s general partner interest in the Partnership pursuant to the REIT Merger and the admission of the Surviving Entity as the general partner of the Partnership as of the Effective Time;

WHEREAS, the board of directors of REIT Merger Sub has declared that this Agreement and the REIT Merger are advisable on the terms and subject to the conditions set forth herein, and in the best interests of the stockholders of REIT Merger Sub;

WHEREAS, Parent, as the sole stockholder of REIT Merger Sub, has approved this Agreement and the REIT Merger;

WHEREAS, as an inducement to the Parent’s and the REIT Merger Sub’s entering into this Agreement and incurring the obligations set forth herein, concurrently with the execution and delivery of this Agreement, certain executive officers of the Company are entering into

voting agreements (the “ Voting Agreements ”) relating to the Company Common Shares owned by such directors and officers; and

WHEREAS, the parties hereto desire to make certain representations, warranties, covenants and agreements in connection with the Admission, the Redemption, the Exchange, the Partnership Merger, the TZ Asset Distribution, the Asset Sale and the REIT Merger, and also to prescribe various conditions to such transactions.

ARTICLE I

DEFINITIONS

SECTION 1.01. Definitions.

(a) For purposes of this Agreement:

“ Acquisition Proposal ” shall mean any proposal or offer for, whether in one transaction or a series of related transactions, any (a) merger, consolidation or similar transaction involving the Company, or any Significant Subsidiary, (b) sale, lease or other disposition, directly or indirectly, by merger, consolidation, share exchange or otherwise, of any assets of the Company or the Subsidiaries representing 30% or more of the consolidated assets of the Company and the Subsidiaries, (c) issue, sale or other disposition of (including by way of merger, consolidation, share exchange or any similar transaction) securities (or options, rights or warrants to purchase, or securities convertible into, such securities) representing 30% or more of any class of equity or voting securities of the Company, or (d) tender offer or exchange offer in which any Person or “group” (as such term is defined under the Exchange Act) shall acquire “beneficial ownership” (as such term is defined in Rule 13d-3 under the Exchange Act), or the right to acquire beneficial ownership of 30% or more of any class of equity or voting securities of the Company; provided , however , that the term “Acquisition Proposal” shall not include the Mergers or the Asset Sale.

“ Action ” means any claim, action, suit, proceeding, arbitration, mediation or other investigation.

“ Affiliate ” of a specified person means a person who, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such specified person.

“ Business Day ” means any day on which the principal offices of the SEC in Washington, D.C. are open to accept filings, or, in the case of determining a date when any payment is due, any day on which banks are not required or authorized to close in New York City.

“ Certificates ” means any certificate evidencing Company Common Shares.

“ Company Stockholder Meeting ” means the meeting of the holders of the Company Common Shares for the purpose of seeking the Company Stockholder Approval.

“ control ” (including the terms “ controlled by ” and “ under common control with ”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, as trustee or executor, by contract or otherwise.

“ Credit Agreement ” means that certain Fourth Amended and Restated Revolving Credit Agreement, dated as of July 7, 2005, among the Partnership, Wells Fargo Bank, National Association and the banks party thereto.

“ Environmental Laws ” means any United States federal, state or local Laws in existence relating to or imposing liability or standards of conduct concerning any Hazardous Substances, natural resources, pollution or protection of the environment or human health and safety.

“ Governmental Damages ” means (i) any penalties or fines paid by the Company or any Subsidiary to a Governmental Authority or (ii) any restitution paid by the Company or any Subsidiary to a third party, in each case, resulting from the (x) conviction (including as a result of the entry of a guilty plea, a consent judgment or a plea of nolo contendere ) of the Company or any Subsidiary of a crime or (y) settlement with a Governmental Authority for the purpose of closing a Governmental Investigation.

“ Governmental Investigation ” means an investigation by a Governmental Authority for the purpose of imposing criminal sanctions on the Company or any Subsidiary.

“ Hazardous Substances ” means (i) those substances, listed in, defined in or regulated under any Environmental Law, including without limitation, the following federal statutes and their state counterparts, as each may be amended from time to time, and all regulations thereunder: the Resource Conservation and Recovery Act, the Comprehensive Environmental Response, Compensation and Liability Act, the Toxic Substances Control Act, the Clean Water Act, the Safe Drinking Water Act, the Atomic Energy Act and the Clean Air Act; (ii) petroleum and petroleum products, including crude oil and any fractions thereof; (iii) polychlorinated biphenyls, methane, asbestos, and radon; and (iv) any substance, material, or waste regulated by any Governmental Authority pursuant to any Environmental Law.

“ Intellectual Property ” means (i) United States, international, and foreign patents, patent applications and statutory invention registrations, (ii) trademarks, service marks, trade dress, logos, trade names, corporate names and other source identifiers, and registrations and applications for registration thereof, (iii) copyrightable works, copyrights, and registrations and applications for registration thereof, and (iv) confidential and proprietary information, including trade secrets and know-how.

“ knowledge of the Company ” or “ Company’s knowledge ” means the actual knowledge of Richard S. Ziman, Victor J. Coleman, Richard S. Davis, Robert C. Peddicord, David A. Swartz, Howard S. Stern and Greg Huseby.

“ Liens ” means with respect to any asset (including any security), any mortgage, claim, lien, pledge, charge, security interest, preferential arrangement, restriction, or encumbrance of any kind in respect of such asset, including any restriction on the use, voting, transfer, receipt of income or other exercise of any attributes of ownership.

“ Material Adverse Effect ” means any event, circumstance, change or effect that is materially adverse to the business, assets, properties, financial condition or results of operations of the Company and the Subsidiaries, taken as a whole; provided , however , that “Material Adverse Effect” shall not include any event, circumstance, change or effect arising out of or resulting from (i) any decrease in the market price of the Company Common Shares (but not any event, circumstance, change or effect underlying such decrease to the extent that such event, circumstance, change or effect would otherwise constitute a Material Adverse Effect), (ii) any events, circumstances, changes or effects that affect the office industry generally, (iii) any changes in the United States or global economy or capital, financial or securities markets generally, including changes in interest or exchange rates, (iv) any changes in the legal or regulatory conditions in the geographic regions in which the Company and its Subsidiaries operate, (v) the commencement or escalation of a war or material armed hostilities or the occurrence of acts of terrorism or sabotage, (vi) any events, circumstances, changes or effects arising from the consummation or anticipation of the Mergers or the announcement of the execution of this Agreement, (vii) any events, circumstances, changes or effects arising from the compliance with the terms of, or the taking of any action required by, this Agreement, or (viii) changes in Law or GAAP affecting the office industry, which in the case of each of clauses (ii), (iii), (v), and (viii) do not disproportionately affect the Company and the Subsidiaries, taken as a whole, relative to other participants in the office industry in the United States, and in the case of clause (iv) does not disproportionately affect the Company and the Subsidiaries, taken as a whole, relative to other participants in the office industry in the geographic regions in which the Company and its Subsidiaries operate.

“ Miscellaneous Rights Agreement ” means that certain Miscellaneous Rights Agreement, dated as of September 1996, entered into by and among the Company, the Partnership, NAMIZ, Inc., a California corporation, and Richard S. Ziman.

“ Partnership Unit ” shall have the meaning assigned to it in the Partnership Agreement.

“ Permitted Liens ” means (i) Liens for Taxes not yet delinquent or being contested in good faith and in each case for which there are adequate reserves on the financial statements of the Company (if such reserves are required pursuant to GAAP); (ii) inchoate mechanics’ and materialmen’s Liens for construction in progress and not past due and payable; (iii) inchoate workmen’s, repairmen’s, warehousemen’s and carriers’ Liens arising in the ordinary course of business consistent with past practice and

not past due and payable; (iv) zoning restrictions, survey exceptions, utility easements, rights of way and similar Liens that are imposed by any Governmental Authority having jurisdiction thereon and consistent with the current use of the Company property in question; (v) with respect to real property, any title exception disclosed in any Company Title Insurance Policy provided or made available by the Company to Parent (whether material or immaterial), Liens and obligations arising under the Material Contracts (including but not limited to any Lien securing mortgage debt disclosed in Section 4.02(b) of the Disclosure Schedule), the Company Leases and any other Lien that does not 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; (vi) easement agreements and all other matters disclosed on any Company Title Insurance Policy provided or made available by the Company to Parent; (vii) matters that arise or have arisen in the ordinary course of business and that would be disclosed on current title reports or surveys and/or (viii) other Liens being contested in good faith in the ordinary course of business consistent with past practice and for which there are adequate reserves on the financial statement of the Company.

“ Person ” means an individual, corporation, partnership, limited partnership, limited liability company, syndicate, person (including, without limitation, a “person” as defined in Section 13(d)(3) of the Exchange Act), trust, association or entity or government, political subdivision, agency or instrumentality of a government.

“ Representative ” means, with respect to any Person, such Person’s officers, directors, employees, accountants, auditors, attorneys, consultants, legal counsel, agents, investment banker, financial advisor and other representatives.

“ Restricted Shares ” means restricted Company Common Shares issued pursuant to any Company Equity Plan.

“ Significant Subsidiary ” means any Subsidiary whose assets represent 20% or more of the consolidated assets of the Company and the Subsidiaries.

“ Subsidiary ” means any corporation more than 50% of whose outstanding voting securities, or any partnership, limited liability company, joint venture or other entity more than 50% of whose total equity interest, is directly or indirectly owned by the Company. Without limiting the generality of the foregoing, the Partnership is a Subsidiary of the Company for purposes of this Agreement.

A “ Superior Proposal ” means an Acquisition Proposal (on its most recently amended and modified terms, if amended and modified) made by a Proposing Party which the Company Board determines in its good faith judgment (based on, among other things, consultation with its financial advisor) to be more favorable to the holders of Company Common Shares than the REIT Merger (taking into account all of the terms and conditions of such Acquisition Proposal, including the financing terms, any conditions to consummation, any termination fee or expense reimbursement payable under this Agreement, the likelihood of such Acquisition Proposal being consummated, and the time reasonably expected to be required for consummation). For the purposes of

this definition, the term “Acquisition Proposal” shall have the meaning set forth in the above definition of Acquisition Proposal, except that all references to “30%” shall be deemed references to “50%.”

“ Taxes ” means any and all taxes, fees, levies, duties, tariffs, imposts and other charges of any kind (together with any and all interest, penalties, additions to tax and additional amounts imposed with respect thereto) imposed by any Governmental Authority or taxing authority, including, without limitation: taxes or other charges on or with respect to income, franchise, windfall or other profits, gross receipts, property, sales, use, capital stock, payroll, employment, social security, workers’ compensation, unemployment compensation or net worth; taxes or other charges in the nature of excise, withholding (including dividend withholding and withholding required pursuant to Sections 1445 and 1446 of the Code), ad valorem, stamp, transfer, value-added or gains taxes; license, registration and documentation fees; and customers’ duties, tariffs and similar charges.

“ Tax Return ” means any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.

“ TZ Material Adverse Effect ” means any event, circumstance, change or effect that is materially adverse to the business, assets, properties, financial condition or results of operations of TZ REIT, TZ OP and their subsidiaries taken as a whole.

“ Unit Certificates ” means any certificate evidencing Partnership Units.

(b) The following terms have the meaning set forth in the Sections set forth below:

Defined Term		Location of Definition
1031 Exchange		§ 8.12(b)
2005 Balance Sheet		§ 4.06(d)
Accredited Investor		§ 2.02(a)
Acquisition Agreement		§ 8.04(b)
Admission		Recitals
Adverse Recommendation Change		§ 8.04(b)
Aggregate Redemption Value		§ 2.02(g)
Agreement		Preamble
Articles of Merger		§ 2.09(b)
Arden Indemnified Parties		§ 8.07(a)
Asset Sale		Recitals
AVP		§ 8.13
AVP Entities		§ 8.13
Blue Sky Laws		§ 4.04(b)
Capital		§ 8.13
Claim		§ 8.07(a)
Closing		§ 2.10

Closing Date		§ 2.10
Code		§ 4.09(a)
Company		Preamble
Company Board		Recitals
Company Bylaws		§ 4.01(f)
Company Charter		§ 4.01(a)
Company Common Share Merger Consideration		§ 3.01(c)
Company Common Shares		§ 3.01(b)
Company Employees		§ 8.08(a)
Company Equity Plans		§ 3.01(d)
Company Intellectual Property		§ 4.13
Company Leases		§ 4.12(f)
Company Plans		§ 8.08(a)
Company Property		§ 4.12(a)
Company Representatives		§ 8.04(a)
Company Share Options		§ 3.01(d)
Company Stock Rights		§ 4.02(c)
Company Stockholder Approval		§ 4.03(b)
Company Title Insurance Policy		§ 4.12(c)
Confidentiality Agreement		§ 8.03(c)
Disclosure Schedule		Article IV
Effective Time		§ 2.09(b)
ERISA		§ 4.09(a)
Exchange		Recitals
Exchange Act		§ 4.04(b)
Exchange Effective Time		§ 2.03(a)
Exchange Fund		§ 3.03(a)
Exchanging OP Unit Holder		§ 2.03(a)
Existing Units		§ 3.02(a)
Expenses		§ 8.07(a)
Expiration Date		§ 10.01(c)
Form of Election		§ 8.10(a)
GAAP		§ 4.06(b)
Governmental Authority		§ 4.04(b)
Ground Lease(s)		§ 4.12(h)
HSR Act		§ 4.04(b)
Incentive Plan		§ 3.01(e)
Interim Period		§ 7.01(a)
IRS		§ 4.09(a)
Law		§ 4.04(a)
Material Contract		§ 4.16(a)
Mergers		Recitals
MGCL		Recitals
MRULPA		Recitals
New Partner Sub		Recitals

NYSE		§ 4.04(b)
Option Merger Consideration		§ 3.01(d)
Parent		Preamble
Parent Benefit Plans		§ 8.08(a)
Parent Expenses		§ 10.03©
Participation Agreements		§ 4.12(m)
Participation Interest		§ 4.12(m)
Participation Party		§ 4.12(m)
Partnership		Preamble
Partnership Agreement		§ 4.01(f)
Partnership Merger		Recitals
Partnership Merger Articles		§ 2.09(a)
Partnership Merger Consideration		§ 3.02(a)
Partnership Merger Effective Time		§ 2.09(a)
Partnership Merger Sub		Preamble
Paying Agent		§ 3.03(a)
Permits		§ 4.05
Plans		§ 4.09(a)
Property Restrictions		§ 4.12(a)
Proposing Party		§ 8.04(a)
Proxy Statement		§ 4.04(b)
Purchase and Sale Agreement		§ 2.06
Purchased LLC Interest		§ 2.01(a)
Qualifying Debt		§ 2.02(g)
Redeeming OP Unit Holder		§ 2.02(a)
Redemption		Recitals
Redemption Core Properties		§ 2.02(g)
Redemption Core Property I		§ 2.02(g)
Redemption Core Property II		§ 2.02(g)
Redemption Core Property I Debt		§ 2.02(g)
Redemption Core Property II Debt		§ 2.02(g)
Redemption Core Property II Allocated Value		§ 2.02(g)
Redemption Core Property I LLC		§ 2.02(g)
Redemption Core Property II LLC		§ 2.02(g)
Redemption Core Property I LLC Interest		§ 2.02(g)
Redemption Core Property II LLC Interest		§ 2.02(g)
Redemption Core Property I Net Value		§ 2.02(g)
Redemption Core Property II Net Value		§ 2.02(g)
Redemption Effective Time		§ 2.02(g)
Redemption OP Units		§ 2.02(g)
Redemption Percentage		§ 2.02(g)
REIT		§ 4.14(b)
REIT Merger		Recitals
REIT Merger Sub		Preamble
Required Debt		§ 2.02(a)
SDAT		§ 2.09(b)

SEC		§ 4.04(b)
SEC Reports		§ 4.06(a)
Section 16		§ 8.08(d)
Securities Act		§ 4.04(b)
Subsequent Determination		§ 8.04(b)
Surviving Bylaws		§ 2.08(a)
Surviving Charter		§ 2.08(a)
Surviving Entity		§ 2.07
Surviving Partnership		§ 2.04
Surviving Partnership Agreement		§ 2.08(b)
Tax Protection Agreement		§ 4.14(o)
Termination Date		§ 10.01
Termination Fee		§ 10.03(b)(i)
Third Party		§ 4.12(i)
Transfer Taxes		§ 8.09
TZ Asset Distribution		Recitals
TZ Assets		Recitals
TZ Confidentiality Agreement		§ 8.03(d)
TZ OP		Preamble
TZ OP Unit Value		§ 2.03(a)
TZ REIT		Preamble
TZ SEC Reports		§ 6.05(a)
TZ Unit		§ 2.03(a)
Uncertificated Units		§ 3.03(e)
Voting Agreements		Recitals

ARTICLE II

THE MERGER

SECTION 2.01. Admission of New Partner Sub.

Prior to the effective time of any of the other transactions provided for in this Article II, at the Closing, the New Partner Sub shall be admitted to the Partnership as a limited partner and shall acquire Partnership Units of a new series of Partnership Interests, designated by the Company, representing a 0.01% interest in the Partnership in exchange for an appropriate capital contribution to the Partnership.

SECTION 2.02. Redemption of OP Units For LLC Interests.

(a) Following the Admission and prior to the effective time of any of the other transactions provided for in this Article II, all holders of Partnership Units (other than the Company or any of its Subsidiaries) who qualify as “accredited investors” (within the meaning of Rule 501 of Regulation D promulgated under the Securities Act) (each, an “ Accredited Investor ”) and who shall have properly submitted and not have subsequently withdrawn Forms of Election in accordance with the procedures and time periods specified in Section 8.10 , all in accordance with the terms and subject to the conditions hereof and as contemplated hereby

(each, a “ Redeeming OP Unit Holder ”), shall, to the extent so elected, have their Partnership Units redeemed (with an aggregate value equal to the Aggregate Redemption Value (as defined below)) by the Partnership, and the Partnership agrees to redeem such Partnership Units, in exchange for (1) first, a percentage interest in Redemption Core Property I LLC equal to the lesser of (A) 100% or (B) the percentage equal to (x) the Aggregate Redemption Value divided by (y) the Redemption Core Property I Net Value, and (2) second, if the Redemption Core Property I Net Value is less than the Aggregate Redemption Value, then the Redeeming OP Unit Holders shall receive a percentage interest in Redemption Core Property II LLC equal to the percentage equal to (x) the Aggregate Redemption Value minus the Redemption Core Property I Net Value divided by (y) the Redemption Core Property II Net Value. Notwithstanding the foregoing, if the Redemption Core Property I Debt is less than an amount equal to 110% of the aggregate of the “negative tax capital account” balances of the Redeeming OP Unit Holders, as of the Redemption Effective Time (the “ Required Debt ”), the amount of which Required Debt shall in no event exceed $75.0 million, the Redeeming OP Unit Holders shall receive interests in Redemption Core Property I LLC and Redemption Core Property II LLC with values equal, in the aggregate, to the Aggregate Redemption Value. Such redemption distributions shall be made to the individual Redeeming OP Unit Holders in proportion to their respective Redemption Percentages.

(b) In connection with the Redemption, the Partnership shall provide Redeeming OP Unit Holders with the opportunity to guarantee the Redemption Core Property I Debt and/or Redemption Core Property II Debt, in an aggregate amount not less than the Required Debt, which guarantee opportunity shall be allocated among the Redeeming OP Unit Holders as determined by the Partnership. One-hundred percent (100%) of any Redemption Core Property II Debt shall be made available for guarantee by Redeeming OP Unit Holders at the time it is incurred.

(c) Prior to the Redemption Effective Time, (i) the Partnership and any other Company Subsidiary that owns any right, title or interest in the Redemption Core Properties shall have conveyed to Redemption Core Property I LLC and Redemption Core Property II LLC, as applicable, all of their respective right, title and interest in the Redemption Core Properties, free and clear of all Liens other than Permitted Liens (excluding any Liens securing the Redemption Core Property I Debt or Redemption Core Property II Debt), and (ii) each of Redemption Core Property I LLC and Redemption Core Property II LLC shall have assumed and accepted from the Partnership and any such Company Subsidiaries all liabilities and obligations of such parties arising from and after the Redemption Effective Time under any leases and contracts primarily related to the Redemption Core Property I and Redemption Core Property II, as applicable (other than any leasing or management agreement or other service agreement under which the Company or any Company Subsidiary is entitled to provide services with respect to any Redemption Core Property, which agreements shall be terminated as of the Closing Date) and the obligations under the Redemption Core Property I Debt and the Redemption Core Property II Debt, if any. The parties agree that the value of Redemption Core Property I has been allocated as set forth on Exhibit B hereto. The terms of the Redemption pursuant to this Section 2.02 shall not be affected by any change in the value of the Redemption OP Units or of the Redemption Core Properties, in each case, during the Interim Period.

(d) Except with respect to a Redeeming OP Unit Holder that has contributed property to the Partnership in exchange for Redemption OP Units in the seven years prior to the Redemption, the Company and the Partnership intend that, for U.S. federal and state income tax purposes, the Redemption will be treated as a non-taxable distribution of an undivided interest in the Redemption Core Properties from the Partnership to the Redeeming OP Unit Holders in liquidation and redemption of the Redeeming OP Unit Holders’ entire interests in the Partnership under Section 731 of the Code, with no gain required to be recognized by the Redeeming OP Unit Holders or the Partnership as a result thereof, subject to each Redeeming OP Unit Holder assuming or otherwise guaranteeing a portion of the Redemption Core Property I Debt and Redemption Core Property II Debt as necessary to avoid income or gain attributable to any “negative tax capital account” attributable to such holder.

(e) Concurrently with the Redemption, the Partnership shall assume and the Company and the Partnership shall indemnify and hold harmless all Redeeming OP Unit Holders from, all liability under debt guarantees, contribution agreements and deficit restoration obligations previously executed by Redeeming OP Unit Holders, to the extent that such guarantee agreements or obligations are related to any debt of the Company, the Partnership or an affiliate of the Company or the Partnership other than the Redemption Core Property I Debt and the Redemption Core Property II Debt. After the REIT Merger, Parent shall guarantee all such obligations.

(f) At the Redemption Effective Time, the Partnership shall distribute to each Redeeming OP Unit Holder for each Redemption OP Unit an amount in cash equal to $0.505 multiplied by the quotient obtained by dividing (x) the number of days between the last day of the last fiscal quarter for which full quarterly dividends on the Redemption OP Units have been declared and paid and the Closing Date (including the Closing Date) by (y) the total number of days in the fiscal quarter during which the Closing Date occurs.

(g) For purposes of this Agreement:

“Aggregate Redemption Value” means the product of (A) the aggregate number of Redemption OP Units times (B) $45.25.

“Qualifying Debt” shall be nonrecourse indebtedness (i) provided by a lender that does not have an interest in TZ OP and is not related to TZ OP (other than as a lender) with the meaning of Section 465 of the Code, and (ii) secured by a Lien on Redemption Core Property I or Redemption Core Property II, as applicable, and each property shall have a value of no less than two times the aggregate amount of the guarantees of the indebtedness of such property executed by Redeeming OP Unit Holders. Indebtedness shall not be Qualifying Debt if and when there is another guarantee (other than a guarantee by a Redeeming OP Unit Holder) of the same portion of such indebtedness guaranteed by the Redeeming OP Unit Holder, except that TZ OP shall be permitted to enter into a guarantee of any such debt so long as in connection with such guarantee, TZ OP offers to the Redeeming OP Unit Holders the opportunity to indemnify and hold TZ OP harmless with respect to TZ OP’s guarantee in an amount and on the terms of the Redeeming OP Unit Holder’s direct liability to the lender under the terms of the Redeeming OP Unit Holder’s guarantee.

“Redemption Core Properties” means Redemption Core Property I and Redemption Core Property II.

“Redemption Core Property I” means that Company Property identified on Exhibit B attached hereto as Redemption Core Property I.

“Redemption Core Property II” means an asset otherwise to be transferred pursuant to the Purchase and Sale Agreement to be identified by TZ OP prior to the Closing, which shall have a Redemption Core Property II Allocated Value greater than or equal to the sum of (A) the Aggregate Redemption Value minus (B) the Redemption Core Property I Net Value.

“Redemption Core Property II Allocated Value” means value allocated to Redemption Core Property II and mutually agreed upon by TZ OP and the Partnership.

“Redemption Core Property LLC Interests” means, collectively, the Redemption Core Property I LLC Interests and the Redemption Core Property II LLC Interests.

“Redemption Core Property I Debt” means the aggregate of any principal and accrued but unpaid interest with respect to any Qualified Debt secured by any Lien on Redemption Core Property I.

“Redemption Core Property II Debt” means the aggregate of any principal and accrued but unpaid interest with respect to any Qualified Debt secured by any Lien on Redemption Core Property II, and any Redemption Core Property II Debt shall contain commercially reasonable terms, and have a remaining term of at least 2 years at the time of the Redemption or be refinanced with Qualified Debt that is available for guarantee by the Redeeming OP Unit Holders.

“Redemption Core Property I LLC” means the limited liability company that owns at the Redemption Effective Time all of the Partnership’s right, title and interest in Redemption Core Property I.

“Redemption Core Property II LLC” means the limited liability company that owns at the Redemption Effective Time all of the Partnership’s right, title and interest in Redemption Core Property II.

“Redemption Core Property I LLC Interest” means the interest in Redemption Core Property I LLC.

“Redemption Core Property II LLC Interest” means the interest in Redemption Core Property II LLC.

“Redemption Core Property I Net Value” means the value allocated to Redemption Core Property I (as set forth on Exhibit B) minus the Redemption Core Property I Debt.

“Redemption Core Property II Net Value” means the Redemption Core Property II Allocated Value minus the Redemption Core Property II Debt.

“Redemption Effective Time” means the time at which the Redemption closes.

“Redemption OP Units” means, with respect to any Redeeming OP Unit Holder, the aggregate number of Partnership Units held by such Redeeming OP Unit Holder that such holders have elected to have redeemed pursuant to this Section 2.02 at the Redemption Effective Time.

“Redemption Percentage” means, with respect to each Redeeming OP Unit Holder, a percentage determined by dividing the number of Redemption OP Units held by such holder as of the Redemption Effective Time by the aggregate Redemption OP Units held by all Redeeming OP Unit Holders as of such time.

SECTION 2.03. Contribution of Redemption Core Properties in Exchange for TZ Units.

(a) Following the Admission and Redemption and prior to the effective time of any of the other transactions provided for in this Article II, at the Closing, each Redeeming OP Unit Holder shall contribute to TZ OP all of such holder’s right, title and interest in the Redemption Core Property LLC Interests and shall be admitted as a member of TZ OP and TZ OP agrees to, and shall deliver to such holder, in exchange for such contribution a number of Class B Series II interests in TZ OP (each, a “ TZ Unit ”) equal to the number of Redemption OP Units such Redeeming OP Unit Holder elected to have redeemed by the Partnership multiplied by the quotient (carried out to four decimal places) determined by dividing $45.25 by the TZ OP Unit Value. For purposes hereof, “TZ OP Unit Value” shall mean $21.89, provided, however, that if the average closing price of a share of common stock of TZ REIT on the New York Stock Exchange for the ten (10) consecutive trading days ending on the third trading day prior to the Closing Date (the “ TZ REIT Ten Day Average ”) is greater than $23.50, or less than $18.89, then the TZ OP Unit Value shall equal the TZ REIT Ten Day Average. The time at which the Exchange closes is referred to herein as the “ Exchange Effective Time .” Each TZ Unit shall entitle such holder (each, an “ Exchanging OP Unit Holder ”) to the rights, duties and obligations as more fully set forth in the Limited Liability Company Agreement of TZ OP, dated as of December 22, 2004, as amended in connection with the Exchange, and in the applicable Contribution Agreement and Registration Rights Agreement. TZ OP shall be admitted as a member of Redemption Core Property I LLC and Redemption Core Property II LLC and shall hold all legal and beneficial right and title to the membership interests contributed by the Exchanging OP Unit Holders. No fractional TZ Units shall be issued to any Exchanging OP Unit Holder in the Exchange. Instead, the number of TZ Units to be issued to each Exchanging OP Unit Holder in the Exchange shall be rounded to the nearest whole number of TZ Units, with one-half of a TZ Unit being rounded up to a whole TZ Unit.

(b) If TZ OP changes the number of TZ Units issued and outstanding prior to the Closing Date by way of unit split, recapitalization or similar transaction, the number of TZ Units to be issued in exchange for each Redemption OP Unit shall be proportionately adjusted, as applicable, to reflect such a transaction or transactions.

(c) At the Exchange Effective Time, each of TZ REIT and TZ OP shall execute and deliver, for the benefit of each Exchanging OP Unit Holder a contribution agreement (the “ Contribution Agreement ”) and registration rights agreement (the “ Registration Rights Agreement ”), each of which shall be negotiated in good faith and mutually agreed to by TZ REIT, TZ OP and the Partnership and shall be consistent with and incorporate the terms for such agreements set forth in the term sheet attached hereto as Exhibit A . The terms of such Contribution Agreement will govern the maintenance and repayment of the Redemption Core Property I Debt and the Redemption Core Property II Debt.

(d) TZ REIT, TZ OP, the Company and the Partnership intend that, for U.S. federal and state income tax purposes, the Exchange will be treated as a non-taxable contribution by the Exchanging OP Unit Holders of their interests in Redemption Core Properties to TZ OP in exchange for partnership interests in TZ OP, with no gain required to be recognized by the Exchanging OP Unit Holders as a result thereof, subject to each Exchanging OP Unit Holder continuing to be allocated a portion of the indebtedness of TZ OP as necessary to avoid income or gain attributable to any “negative tax capital account” attributable to such holder.

(e) Notwithstanding anything herein to the contrary, each of the parties acknowledge and agree that the completion of the Exchange is not, and shall not be, a condition of the REIT Merger, the Partnership Merger or the Asset Sale and the parties hereto shall be obligated to consummate the REIT Merger and the Partnership Merger in accordance with the terms of this Agreement, provided that nothing in this Section 2.03(e) shall relieve any party to this Agreement from any liability resulting from or arising out of any breach of any agreement or covenant hereunder. In the event that the Exchange does not occur due to a breach of any agreement or any covenant by TZ REIT or TZ OP, Exchanging OP Unit Holders shall be paid the Partnership Merger Consideration by Parent and TZ OP shall pay to each Exchanging OP Unit Holder the sum of (i) the amount of taxable income or gain recognized by the Exchanging OP Unit Holder by virtue of the occurrence of the transactions contemplated hereby, multiplied by the maximum combined federal and applicable state and local income tax rates for the related taxable year and applicable to the character of the resulting gain, plus (ii) a “gross-up” amount equal to the taxes (calculated at the rates described above) associated with the payment of the amount described in clause (i) and this clause (ii). TZ REIT and TZ OP shall have no liability for damages arising from such breach of this Agreement other than payment of the foregoing amounts.

(f) In the event that the Closing does not occur on or before June 30, 2006, other than by reason of a breach of any agreement or covenant by TZ REIT or TZ OP hereunder, the obligations of TZ OP to effect the Exchange shall terminate.

SECTION 2.04. Partnership Merger.

Subject to the terms and conditions of this Agreement, and in accordance with the MGCL and Section 10-208 of the MRULPA one day after the completion of the Admission, Redemption and Exchange, at the Partnership Merger Effective Time, Partnership Merger Sub and the Partnership shall consummate the Partnership Merger pursuant to which (i) Partnership Merger Sub shall be merged with and into the Partnership and the separate existence of Partnership Merger Sub 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 the MGCL and Section 10-208(j) of the MRULPA. The Company and the Partnership intend that, for U.S. federal and state income tax purposes, the Partnership Merger will be treated as a redemption of interests in the Partnership by those partners receiving cash.

SECTION 2.05. TZ Asset Distribution.

Following the Admission, Redemption, Exchange and Partnership Merger and prior to the effective time of any of the other transactions provided for in this Article II, at the Closing, the Partnership shall distribute all of its right, title and interest in the TZ Assets to the Company in partial redemption of its Partnership Units.

SECTION 2.06. Asset Sale.

In accordance with the purchase and sale agreement by and between TZ OP and Parent (the “ Purchase and Sale Agreement ”) following the Admission, Redemption, Exchange, Partnership Merger and TZ Asset Distribution, and prior to the Effective Time, Parent shall cause the Company to sell the TZ Assets to TZ OP (or its designee). The parties shall take all necessary steps and execute all necessary documents to cause the Company to be permitted and obligated to sell the TZ Assets to TZ OP. The parties acknowledge and agree that the consummation of the Asset Sale is not a condition to the REIT Merger, and in the event the Asset Sale does not occur, the parties hereto shall nevertheless be obligated to consummate the REIT Merger in accordance with the terms of this Agreement; provided that nothing in this Section 2.06 shall relieve any party to this Agreement from any liability resulting from or arising out of any breach of any agreement or covenant hereunder.

SECTION 2.07. REIT Merger.

Subject to the terms and conditions of this Agreement, and in accordance with the MGCL, at the Effective Time, REIT Merger Sub and the Company shall consummate the REIT Merger pursuant to which (i) the Company shall be merged with and into REIT Merger Sub and the separate existence of the Company shall thereupon cease and (ii) REIT Merger Sub shall be the surviving entity in the REIT Merger (the “Surviving Entity”). The REIT Merger shall have the effects specified in Section 3-114 of the MGCL. Parent, the Company and the Partnership intend that, for U.S. federal and state income tax purposes, the REIT Merger shall be treated as a taxable sale by the Company of all of its assets to REIT Merger Sub in exchange for the Merger Consideration and the assumption of the Company’s liabilities, followed by a liquidating distribution of such Merger Consideration to the holders of the Company’s Common Shares, pursuant to Section 331 and Section 562 of the Code.

SECTION 2.08. Charter; Bylaws; Partnership Agreement.

(a) The Charter and bylaws of REIT Merger Sub shall be the charter (the “ Surviving Charter ”) and bylaws (the “ Surviving Bylaws ”) of the Surviving Entity until the same shall be amended as provided by Law and such Surviving Charter.

(b) No later than the Effective Time, Parent shall specify the form of limited partnership agreement which shall be the limited partnership agreement of the Surviving Partnership in full force and effect immediately following the Effective Time until thereafter amended as provided therein or by Law (the “ Surviving Partnership Agreement ”).

SECTION 2.09. Effective Times.

(a) At the Closing, the Partnership shall file with the SDAT articles of merger (the “ Partnership Merger Articles ”), executed in accordance with the applicable provisions of the MGCL and the MRULPA and shall make all other filings or recordings required under the MGCL and the MRULPA to effect the Partnership Merger. The Partnership Merger shall become effective at such time as the Partnership Merger Articles has been accepted for record by the SDAT, or such later time which the Company and Parent shall have agreed upon and designated in the Partnership Merger Articles in accordance with the MGCL and the MRULPA as the effective time of the Partnership Merger (the “ Partnership Merger Effective Time ”).

(b) At the Closing, REIT 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 MGCL. The REIT Merger shall become effective at such time as the Articles of Merger have been accepted for record by the SDAT, or such later time which the Company and Parent shall have agreed upon and designated in the Articles of Merger in accordance with Section 3-113 of the MGCL as the Effective Time, but not to exceed thirty (30) days after the Articles of Merger are accepted for record by the SDAT (the “ Effective Time ”).

SECTION 2.10. Closing. The closing of the Admission, the Redemption, the Exchange, the Partnership Merger, the TZ Asset Distribution, the Asset Sale and the REIT Merger (the “ Closing ”) shall occur over two (2) successive Business Days and as promptly as practicable (but in no event later than the second (2nd) Business Day) after all of the conditions set forth in Article IX (other than conditions which by their terms are required to be satisfied or waived at the Closing) shall have been satisfied or waived by either the Company or Parent (whichever is entitled to the benefit of the same) and, subject to the foregoing, shall take place at such time and on a date to be specified by the parties (the “ Closing Date ”). The Closing shall take place at the offices of Latham & Watkins LLP, 633 W. Fifth Street, Ste. 4000, Los Angeles, CA, or at such other place as agreed to by the parties hereto. The Admission, the Redemption and the Exchange will occur on the first Business Day and the Partnership Merger, the TZ Asset Distribution, the Asset Sale and the REIT Merger shall occur on the second Business Day of the Closing. The Admission, the Redemption, the Exchange, the Partnership Merger, the TZ Asset Distribution and the Asset Sale shall not be conditions to the consummation of the REIT Merger.

SECTION 2.11. Directors and Officers of the Surviving Entity. The directors of REIT Merger Sub immediately prior to the Effective Time shall be the initial directors of the Surviving Entity, each to hold office in accordance with the Surviving Charter and Surviving Bylaws of the Surviving Entity, in each case until their respective successors are duly elected or appointed and qualified or until their earlier death, resignation or removal.

SECTION 2.12. Partnership Matters. The Surviving Entity shall be the general partner of the Surviving Partnership following the Effective Time.

ARTICLE III
EFFECT OF THE MERGERS

SECTION 3.01. Effect on Shares.

As of the Effective Time, by virtue of the REIT Merger and without any action on the part of the holder of any shares of common stock of the Company or the REIT Merger Sub:

(a) Each share of stock of REIT Merger Sub issued and outstanding immediately prior to the Effective Time shall remain as one issued and outstanding share of stock of the Surviving Entity.

(b) Each share of common stock, par value $0.01 per share, of the Company (collectively, the “ Company Common Shares ”) that is owned by any Subsidiary or by REIT Merger Sub shall, immediately prior to the Effective Time, automatically be canceled and retired and shall cease to exist, and no payment shall be made with respect thereto.

(c) Each Company Common Share issued and outstanding immediately prior to the Effective Time (other than shares to be canceled in accordance with Section 3.01(b) ) shall automatically be converted into, and canceled in exchange for, the right to receive (i) an amount in cash to be paid by Parent equal to $45.25, plus (ii) an amount in cash to be paid by the Company equal to $0.505 multiplied by the quotient obtained by dividing (x) the number of days between the last day of the last fiscal quarter for which full quarterly dividends on the Company Common Shares have been declared and paid and the Closing Date (including the Closing Date) by (y) the total number of days in the fiscal quarter during which the Closing Date occurs (collectively, the “ Company Common Share Merger Consideration ”).

(d) Immediately prior to the Effective Time, each outstanding qualified or nonqualified option to purchase Company Common Shares (“ Company Share Options ”) under any employee share option or compensation plan or arrangement of the Company (“ Company Equity Plans ”), whether or not then exercisable and regardless of the exercise price thereof, shall be canceled in exchange for the right to receive a single lump sum cash payment, equal to the product of (i) the number of Company Common Shares subject to such Company Share Option immediately prior to the Effective Time, whether or not vested or exercisable, and (ii) the excess, if any, of the Company Common Share Merger Consideration over the exercise price per share of such Company Share Option (the “ Option Merger Consideration ”). If the exercise price per share of any such Company Share Option is equal to or greater than the Company Common Share Merger Consideration, such Company Share Option shall be canceled without any cash payment being made in respect thereof. Parent shall cause the Paying Agent to make, and the Paying Agent shall make, all payments under this paragraph out of the Exchange Fund within five (5) Business Days following the Closing Date.

(e) Parent and REIT Merger Sub acknowledge that Restricted Shares issued pursuant to the Third Amended and Restated Stock Option and Incentive Plan of Arden Realty, Inc. and Arden Realty Limited Partnership (the “ Incentive Plan ”) as set forth in Section 3.01(e)

of the Disclosure Schedule will not be subject to any forfeiture or vesting requirements and all such Restricted Shares shall be considered outstanding shares for all purposes of this Agreement, including receipt of the Company Common Share Merger Consideration.

SECTION 3.02. 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 or Partnership Merger Sub:

(a) Each partnership interest in the Partnership issued and outstanding immediately prior to the Partnership Merger Effective Time (the “ Existing Units ”) (other than Existing Units held by the Company or any of the Subsidiaries), subject to the terms and conditions set forth herein, shall, in consideration of the Partnership Merger, be converted into, and canceled in exchange for, the right to receive (i) an amount in cash to be paid by Parent equal to $45.25, plus (ii) an amount in cash to be paid by the Partnership equal to $0.505 multiplied by the quotient obtained by dividing (x) the number of days between the last day of the last fiscal quarter for which full quarterly dividends on the Existing Units have been declared and paid and the Closing Date (including the Closing Date) by (y) the total number of days in the fiscal quarter during which the Closing Date occurs (collectively, the “ Partnership Merger Consideration ”).

(b) Each share of stock in the Partnership Merger Sub shall automatically be canceled and cease to exist, the holder thereof shall cease to have any rights with respect thereto and no payment shall be made with respect thereto.

(c) The general partner interests of the Partnership and the partnership interests held by New Partner Sub shall continue to be partner interests in the Surviving Partnership, entitling the holder thereof to such rights, duties and obligations as are more fully set forth in the Surviving Partnership Agreement.

SECTION 3.03. Exchange of Certificates, Unit Certificates and Uncertificated Units.

(a) Paying Agent . Prior to the Effective Time, Parent shall appoint a bank or trust company reasonably satisfactory to the Company to act as Paying Agent (the “ Paying Agent ”) for the payment in accordance with this Article III of the Company Common Share Merger Consideration, the Option Merger Consideration and the Partnership Merger Consideration (collectively, such cash and shares being referred to as the “ Exchange Fund ”). On or before the Effective Time, (i) Parent shall deposit with the Paying Agent the portion of the Company Common Share Merger Consideration payable by it pursuant to Section 3.01(c) and the Option Merger Consideration, (ii) the Company shall deposit with the Paying Agent the portion of the Company Common Share Merger Consideration payable by it pursuant to Section 3.01(c) and (iii) the Partnership shall deposit with the Paying Agent the portion of the Partnership Merger Consideration payable by it in respect of Existing Units pursuant to Section 3.02(a) , in each case for the benefit of the holders of Company Common Shares, Company Share Options and Existing Units who will receive the merger consideration in accordance with the provisions of this Article III. The Parent shall cause the Paying Agent to make, and the Paying

Agent shall make, payments of the Company Common Share Merger Consideration, the Option 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 Articles. 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 Entity.

(b) Share and Existing Unit Transfer Books . At the Effective Time, 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. From and after the Effective Time, persons who held Company Common Shares immediately prior to the Effective Time shall cease to have rights with respect to such shares, except as otherwise provided for herein. On or after the Effective Time, any Certificates or Unit Certificates (other than Unit Certificates for Redemption OP Units) presented to the Paying Agent, the Surviving Entity or the transfer agent for any reason shall be exchanged for the Company Common Share Merger Consideration with respect to the Company Common Shares formerly represented thereby or, as applicable, for the Partnership Merger Consideration with respect to the Existing Units formerly represented thereby. From and after the Partnership Merger Effective Time, there shall be no transfers on the transfer books of the Partnership or the Surviving Partnership of Existing Units. From and after the Partnership Merger Effective Time, the holders of Existing Units outstanding immediately prior to the Partnership Merger Effective Time shall cease to have rights with respect to such Existing Units, except as otherwise provided for herein.

(c) Exchange Procedures for Certificates . Promptly after the Effective Time (but in any event within five (5) Business Days), the Surviving Entity shall cause the Paying Agent to mail to each person who immediately prior to the Effective Time held Company Common Shares that were exchanged for the right to receive the Company Common Share Merger Consideration pursuant to Section 3.01 : (i) a letter of transmittal (which shall specify that delivery of Certificates 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 may reasonably specify) and (ii) instructions for use in effecting the surrender of the holder’s Certificates in exchange for the Company Common Share Merger Consideration 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 receive in exchange therefor the Company Common Share Merger Consideration payable in respect of the Company Common Shares previously represented by such Certificate pursuant to the provisions of this Article III , and the Certificate so surrendered shall forthwith be canceled. In the event of a transfer of ownership of Company Common Shares that is not registered in the transfer records of the Company, 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 satisfaction of Parent that such tax has been paid or is not applicable. Until surrendered as contemplated by this Section 3.03 , each Certificate shall be deemed at any time after the Effective Time to represent

only the right to receive, upon such surrender, the Company Common Share Merger Consideration as contemplated by this Section 3.03 . No interest shall be paid or accrue on the Common Share Merger Consideration.

(d) Exchange Procedures for Unit Certificates . Promptly after the Partnership Merger Effective Time (but in any event within five (5) Business Days), the Surviving Entity shall cause the Paying Agent to mail to each person who immediately prior to the Partnership Merger Effective Time held Existing Units that were represented by Unit Certificates and that were exchanged for the right to receive the Partnership Merger Consideration pursuant to Section 3.02 : (i) a letter of transmittal (which shall specify that delivery of Unit Certificates shall be effected, and risk of loss and title to the Unit Certificates shall pass to the Paying Agent, only upon delivery of the Unit Certificates to the Paying Agent, and which letter shall be in such form and have such other provisions as Parent may reasonably specify) and (ii) instructions for use in effecting the surrender of the holder’s Unit Certificates in exchange for the Partnership Merger Consideration to which the holder thereof is entitled. Upon surrender of a Unit 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 Unit Certificate shall receive in exchange therefor the Partnership Merger Consideration payable in respect of the Existing Units previously represented by such Unit Certificate pursuant to the provisions of this Article III , and the Unit Certificate so surrendered shall forthwith be canceled. In the event of a transfer of ownership of Existing Units that is not registered in the transfer records of the Partnership, payment may be made to a person other than the person in whose name the Unit Certificate so surrendered is registered if such Unit 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 Unit Certificate or establish to the satisfaction of Parent that such tax has been paid or is not applicable. Until surrendered as contemplated by this Section 3.03 , each Unit Certificate, other than Unit Certificates representing Redemption OP Units, shall be deemed at any time after the Partnership Merger Effective Time to represent only the right to receive, upon such surrender, the Partnership Merger Consideration as contemplated by this Section 3.03 . No interest shall be paid or accrue on the Partnership Merger Consideration.

(e) Exchange Procedures for Uncertificated Existing Units . Promptly after the Partnership Merger Effective Time (but in any event within five (5) Business Days), the Surviving Entity shall cause the Paying Agent to mail to each person who immediately prior to the Partnership Merger Effective Time held Existing Units that were not represented by Unit Certificates (“ Uncertificated Units ”) and that were exchanged for the right to receive the Partnership Merger Consideration pursuant to Section 3.02 : (i) a letter of transmittal (which letter shall be in such form and have such other provisions as Parent may reasonably specify) and (ii) instructions for use in effecting the exchange of the Uncertificated Units for the Partnership Merger Consideration to which the holder thereof is entitled. Upon delivery of 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 Uncertificated Units shall receive in exchange therefor the Partnership Merger Consideration payable in respect of the Existing Units previously held pursuant to the provisions of this Article III .

In the event of a transfer of ownership of Existing Units that is not registered in the transfer records of the Partnership, payment may be made to a person other than the person in whose name such records indicate if Parent shall be presented with a proper form for such 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 indicated in such records or establish to the satisfaction of Parent that such tax has been paid or is not applicable. Until the procedures set forth in this Section 3.03(e) have been satisfied, each Uncertificated Unit shall be deemed at any time after the Partnership Merger Effective Time to represent only the right to receive the Partnership Merger Consideration as contemplated by this Section 3.03 . No interest shall be paid or accrue on the Partnership Merger Consideration.

(f) No Further Ownership Rights in Company Common Shares, Company Share Options or Existing Units Exchanged for Partnership Merger Consideration; Share Transfers and Existing Unit Transfers . At the Effective Time, holders of Company Common Shares shall cease to be, and shall have no rights as, stockholders of the Company other than the right to receive the Company Common Share Merger Consideration, provided under this Article III . The Company Common Share Merger Consideration paid upon the surrender for exchange of Certificates representing Company Common Shares in accordance with the terms of this Article III shall be deemed to have been paid in full satisfaction of all rights and privileges pertaining to the Company Common Shares exchanged theretofore and represented by such Certificates. The Option Merger Consideration paid with respect to Company Share Options in accordance with the terms of this Article III 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 Effective Time the holder 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 3.01(d) . The Partnership Merger Consideration paid with respect to Existing Units that are exchanged therefor in accordance with the terms of this Article III shall be deemed to have been paid in full satisfaction of all rights and privileges pertaining to such Existing Units, and on and after the Partnership Merger Effective Time the holder of any such Existing Unit shall have no further rights with respect to any Existing Unit, other than the right to receive the Partnership Merger Consideration provided under this Article III .

(g) Termination of Exchange Fund . Any portion of the Exchange Fund which remains undistributed to the holders of Company Common Shares, Company Share Options or Existing Units which were exchanged for the right to receive Partnership Merger Consideration for twelve (12) months after the Effective Time shall be delivered to the Parent and any holders of shares of Company Common Shares, Company Share Options or Existing Units prior to the Mergers who have not theretofore complied with this Article III shall thereafter look only to the Surviving Entity and/or the Surviving Partnership for payment of the Company Common Share Merger Consideration, the Option Merger Consideration or the Partnership Merger Consideration, as applicable.

(h) No Liability . None of Parent, REIT Merger Sub, Partnership Merger Sub, the Surviving Entity, the Company, the Partnership, the Surviving Partnership or the Paying Agent, or any employee, officer, director, agent or Affiliate thereof, shall be liable to any person in respect of the Company Common Share Merger Consideration, Option Merger Consideration

or Partnership Merger Consideration, as applicable, if the Exchange Fund has been delivered to a public official pursuant to any applicable abandoned property, escheat or similar Law.

(i) Investment of Exchange Fund . The Paying Agent shall invest the Exchange Fund, as directed by the Surviving Entity, on a daily basis. Any net profit resulting from, or interest or income produced by, such investments, shall be property of, and paid to, the Surviving Entity. 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, Option Merger Consideration or 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.

(j) Lost Certificates or Unit Certificates . If any Certificate or Unit Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming such Certificate or Unit Certificate to be lost, stolen or destroyed and, if required by the Surviving Entity or the Paying Agent, the posting by such person of a bond in such amount as the Surviving Entity or the Paying Agent reasonably may direct, the Paying Agent will issue in exchange for such lost, stolen or destroyed Certificate the Company Common Share Merger Consideration payable in respect thereof, or will issue in exchange for such lost, stolen or destroyed Unit Certificate the Partnership Merger Consideration payable in respect thereof pursuant to this Agreement.

SECTION 3.04. Withholding Rights.

The Surviving Entity, the 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 shares of Company Common Shares or Company Share Options or to any holders of Existing Units such amounts as it is required to deduct and withhold with respect to the making of such payment under the Code, 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 Entity, the 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 the Company Common Shares, Company Share Options or Existing Units in respect of which such deduction and withholding was made by the Surviving Entity, the Surviving Partnership or the Paying Agent, as applicable.

SECTION 3.05. Dissenters’ Rights.

No appraisal rights or objectors’ rights shall be available with respect to the Mergers or the other transactions contemplated hereby.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE
COMPANY AND THE PARTNERSHIP

Concurrently with the execution and delivery of this Agreement, the Company and the Partnership are delivering to Parent a disclosure schedule with numbered sections corresponding to the relevant sections in this Agreement (the “ Disclosure Schedule ”). Any exception, qualification, limitation, document or other item listed or described in any section or subsection of the Disclosure Schedule shall be deemed to be listed or fully disclosed with respect to all other sections or subsections of the Disclosure Schedule as, and to the extent, it is reasonably clear on the face of the Disclosure Schedule that such item applies to such other section or subsection. Nothing in the Disclosure Schedule is intended to broaden the scope of any representation or warranty contained in this Article IV .

Subject to the exceptions and qualifications set forth in the Disclosure Schedule, the Company and the Partnership hereby jointly and severally represent and warrant to Parent and REIT Merger Sub that:

SECTION 4.01. Existence; Good Standing; Authority; Compliance with Law.

(a) The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Maryland. The charter of the Company (the “ Company Charter ”) is in effect. 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 would not have a Material Adverse Effect. Section 4.01(a) of the Disclosure Schedule sets forth the jurisdictions in which the Company is qualified as a foreign corporation. The Company has all requisite corporate power and authority to own, operate, lease and encumber its properties and carry on its business as now conducted.

(b) The Partnership is a limited partnership duly formed, validly existing and in good standing under the laws of the State of Maryland. The certificate of limited partnership of the Partnership is in effect. 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 would not have a Material Adverse Effect. Section 4.01(b) of the Disclosure Schedule sets forth the jurisdictions in which the Partnership is qualified as a foreign limited partnership. 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 4.01(c) of the Disclosure Schedule sets forth: (i) each Subsidiary; (ii) the legal form of each Subsidiary, including the state of formation; and (iii) the identity and ownership interest of each of the Subsidiaries that is held by the Company or its Subsidiaries. Except as listed in Section 4.01(c) or 4.12(m) of the Disclosure Schedule, the Company does not own, directly or indirectly, beneficially or of record, any shares of stock or other equity interest of any other Person.

(d) Each of the 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 would not have or would not reasonably be expected to have a Material Adverse Effect. Section 4.01(d) of the Disclosure Schedule sets forth the jurisdictions in which each Subsidiary is qualified as a foreign entity. Each Subsidiary has all requisite power and authority to own, operate, lease and encumber its properties and carry on its business as now conducted.

(e) Except as set forth in Section 4.01(e) of the Disclosure Schedule, all of the outstanding equity or voting securities or other interests of each of the Subsidiaries have been validly issued and are (i) fully paid and nonassessable, (ii) owned by the Company or by one of the Subsidiaries, and (iii) owned, directly or indirectly, free and clear of any Lien, and all equity or voting interests in each of the Subsidiaries that is a partnership, joint venture, limited liability company or trust which are owned by the Company, by one of the Subsidiaries or by the Company and one of the Subsidiaries are owned free and clear of any Lien.

(f) The Company has previously made available to Parent true and complete copies of (i) the Company Charter and the Bylaws of the Company (the “ Company Bylaws ”); (ii) the Partnership’s Certificate of Limited Partnership and Second Amended and Restated Agreement of Limited Partnership (the “ Partnership Agreement ”); and (iii) the certificate of incorporation, bylaws, partnership agreement, operating agreement and similar organizational documents for each of the Subsidiaries, each as amended through the date hereof (except as contemplated by this Agreement).

SECTION 4.02. Capitalization.

(a) The authorized shares of stock of the Company consist of (i) 100,000,000 Company Common Shares, of which, as of December 1, 2005, 67,316,215 were issued and outstanding, and (ii) 20,000,000 shares of the preferred stock, par value $0.01 per share, of the Company, of which none are issued. As of December 1, 2005, 2,341,100 Company Common Shares have been reserved for issuance pursuant to the Incentive Plan, as listed in Section 4.02(a) of the Disclosure Schedule and 929,820 Company Share Options were outstanding. The Company has no Company Common Shares reserved for issuance or required to be reserved for issuance other than as described above. Since December 1, 2005, the Company has not issued or sold any Company Common Shares, Restricted Shares or Company Share Options (other than issuances, if any, of Company Common Shares upon the exercise of Company Share Options). 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 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 MGCL, the Company Charter or the Company Bylaws.

(b) The Company has issued and outstanding the secured and unsecured debt instruments listed in Section 4.02(b) of the Disclosure Schedule. Section 4.02(b) of the Disclosure Schedule sets forth a list of all such instruments, their outstanding principal amounts

as of November 30, 2005, interest rates and maturity dates. 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 stockholders of the Company or the partners of the Partnership on any matter.

(c) Except for the Company Share Options and Restricted Shares (collectively, the “ Company Stock Rights ”), and the Existing Units, there are no existing options, warrants, calls, subscription rights, convertible securities or other rights, agreements or commitments (contingent or otherwise) that obligate the Company, the Partnership or any Subsidiary to issue, transfer or sell any shares of common stock, partnership interests or other equity interests or any investment that is convertible into or exercisable or exchangeable for any such shares or interests. Section 4.02(c) of the Disclosure Schedule sets forth a list of the Company Stock Rights, 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, and whether the Company Share Option is qualified or nonqualified, in each case, 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, “phantom” shares or similar rights or awards. True and complete copies of all instruments (or the forms of such instruments) referred to in this Section 4.02(c) have been made available to Parent.

(d) Except for the Voting Agreements and as set forth in Section 4.02(d) of the Disclosure Schedule, there are no agreements or understandings to which the Company is a party with respect to the voting of any Company Common Shares, nor does the Company have knowledge, as of the date of this Agreement, of any third party agreements or understandings with respect to the voting of any such shares.

(e) Except as set forth in the Miscellaneous Rights Agreement or Section 4.02(e) of the 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.

(f) The Company is the sole general partner of the Partnership and, as of the date hereof, owns approximately 97.5% of the Partnership Units. Section 4.02(f) of the Disclosure Schedule sets forth a list of all other holders of the Partnership Units and the number and type (e.g., general, limited, etc.) of Partnership Units held. There are no existing options, warrants, calls, subscriptions, convertible securities, or other rights, agreements or commitments that obligate the Partnership to issue, transfer or sell any partnership interests of such Partnership. Except as set forth in the Partnership Agreement or Section 4.02(f) of the 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 4.02(f) of the 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.

SECTION 4.03. Authority Relative to this Agreement.

(a) Each of the Company and Partnership Merger Sub has all necessary corporate power and authority to execute and deliver this Agreement and to consummate the REIT Merger and the other transactions contemplated hereby. No other corporate or partnership proceedings on the part of the Company or any of its Subsidiaries are necessary to authorize this Agreement or to consummate the Mergers and the other transactions contemplated hereby (other than, with respect to the REIT Merger and this Agreement, the Company Stockholder Approval). This Agreement has been duly and validly executed and delivered by the Company and Partnership Merger Sub and, assuming due authorization, execution and delivery hereof by each of Parent, REIT Merger Sub, TZ REIT and TZ OP each constitutes a valid, legal and binding agreement of the Company and Partnership Merger Sub, enforceable against the Company and Partnership Merger Sub 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 Merger Sub is a direct wholly owned subsidiary of the Company. Partnership Merger Sub has not conducted any activities other than in connection with its organization, the negotiation and execution of this Agreement and the consummation of the transactions contemplated hereby. Partnership Merger Sub has no subsidiaries. The sole stockholder of Partnership Merger Sub has duly and validly authorized the execution and delivery of this Agreement and approved the consummation of the Mergers (to the extent that it is a party thereto), and taken all corporate actions required to be taken by the sole stockholder of Partnership Merger Sub for the consummation of the Mergers (to the extent that it is a party thereto).

(b) The Company Board has duly and validly authorized the execution and delivery of this Agreement and approved the consummation of the REIT Merger, the Partnership Merger and the other transactions contemplated hereby, and no other actions are required to be taken by the Company Board for the consummation of the REIT Merger, the Partnership Merger, and the other transactions contemplated hereby. The Company Board has directed that this Agreement be submitted to the stockholders of the Company for their approval to the extent required by Law and the Company Charter and, subject to the Company’s compliance, in all material respects, with the provisions of Section 8.04(b) hereof, will recommend to the stockholders 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 two-thirds (2/3) of all votes entitled to be cast by the holders of all outstanding Company Common Shares as of the record date for the Company Stockholder Meeting (the “ Company Stockholder Approval ”), is the only vote of the holders of any class or series of security of the Company necessary to adopt this Agreement and approve the REIT Merger.

(c) The Partnership has all necessary partnership power and authority to execute and deliver this Agreement to which it is a party and to consummate the Partnership Merger and the other transactions contemplated hereby. Except for the consent of the holders of 66% of the partnership units of the Partnership which are outstanding after the Partnership Merger, which consent has already been given by the Company, which will own 99.99% of the

outstanding partnership units at that time, no partnership proceedings on the part of the Partnership or its general or limited partners (other than the Company sending notice to the New Partner Sub of the vote on the REIT Merger and the vote on the amendment to the Partnership Agreement) are necessary to authorize this Agreement or to consummate the Partnership Merger and the other transactions contemplated hereby. 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, REIT Merger Sub, TZ REIT and TZ OP each 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.

SECTION 4.04. No Conflict; Required Filings and Consents.

(a) Except as set forth in Section 4.04 of the Disclosure Schedule, the execution and delivery by the Company, the Partnership and Partnership Merger Sub of this Agreement do not, and the performance of their respective obligations hereunder will not, (i) conflict with or violate the organizational documents of the Company, the Partnership or any other Subsidiary, (ii) assuming that all consents, approvals, authorizations and other actions described in subsection (b) have been obtained and all filings and obligations described in subsection (b) have been made, conflict with or violate any foreign or domestic statute, law, ordinance, regulation, rule, code, executive order, injunction, judgment, decree or other order (“ Law ”) applicable to the Company, the Partnership or any other Subsidiary or by which any property or asset of the Company, the Partnership or any other Subsidiary is bound or affected, or (iii) result in any breach of or constitute a default (or an event which, with notice or lapse of time or both, would become a default) under, or give to others any right of termination, amendment, acceleration or cancellation of, require any consent or notice, trigger any payment, or result in the creation of a Lien on any property or asset of the Company, the Partnership or any other Subsidiary pursuant to, any note, bond, mortgage, indenture, contract, agreement (including, without limitation, any Plan), lease, ground lease, license, permit, franchise or other instrument or obligation, except, with respect to clauses (ii) and (iii), for any such conflicts, violations, breaches, defaults or other occurrences that would not have or would not reasonably be expected to have a Material Adverse Effect.

(b) The execution and delivery by the Company, the Partnership and Partnership Merger Sub of this Agreement do not, and the performance of their respective obligations hereunder will not, require any consent, approval, authorization or permit of, or filing with or notification to, any United States federal, state, county or local or any foreign government, governmental, regulatory or administrative authority, agency, instrumentality or commission or any court, tribunal, or judicial or arbitral body (a “ Governmental Authority ”), except (i) for (A) applicable requirements, if any, of the Securities Act of 1933, as amended (the “ Securities Act ”), the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), state securities or “blue sky” laws (“ Blue Sky Laws ”) and state takeover Laws, (B) the pre-merger notification requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “ HSR Act ”), (C) the filing with the Securities and Exchange Commission (the “ SEC ”) of a proxy statement relating to the Mergers to be sent to the Company’s stockholders

(as amended or supplemented from time to time, the “ Proxy Statement ”), (D) any filings required under the rules and regulations of the New York Stock Exchange (the “ NYSE ”), and (E) as to the REIT Merger, the filing of the Articles of Merger with, and the acceptance for record thereof by, the SDAT, and as to the Partnership Merger, the filing of the Partnership Merger Articles with, and the acceptance for record thereof by, the SDAT, and (ii) where the failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications, would not have a Material Adverse Effect.

SECTION 4.05. Permits; Compliance.

Except as set forth in Section 4.05 of the Disclosure Schedule, each of the Company, the Partnership and the other Subsidiaries is in possession of all franchises, grants, authorizations, licenses, permits, consents, certificates, approvals and orders of any Governmental Authority necessary for each of the Company, the Partnership or the Subsidiaries to own, lease and operate its properties or to carry on its business as it is now being conducted (the “ Permits ”), except where the failure to have, or the suspension or cancellation of, any of the Permits would not have or would not reasonably be expected to have a Material Adverse Effect. No suspension, cancellation or modification of any of the Permits is pending or, to the knowledge of the Company, threatened except where the failure to have or the suspension, cancellation or modification would not have a Material Adverse Effect. Neither the Company, the Partnership nor any Subsidiary is in conflict with, or in default, breach or violation of, (i) any Law applicable to the Company, the Partnership or any other Subsidiary or by which any of their properties or assets is bound or affected, or (ii) any note, bond, mortgage, indenture, contract, agreement, lease, license, Permit, franchise or other instrument or obligation to which the Company, the Partnership or any other Subsidiary is a party or by which the Company, the Partnership or any other Subsidiary or any of their properties or assets is bound, except for any such conflicts, defaults, breaches or violations that would not have or would not reasonably be expected to have a Material Adverse Effect. None of the Company or any Subsidiary nor, to the knowledge of the Company, any of their respective directors, managers, members, partners or officers, has (i) used any of the Company’s, the Partnership’s or any Subsidiary’s funds for any unlawful contribution, endorsement, gift, entertainment or other unlawful expense relating to political activity; (ii) made any direct or indirect unlawful payment to any domestic government official or employee from any of the Company’s, Partnership’s or any Subsidiary’s funds; or (iii) made any bribe, rebate, payoff, influence payment, “kickback” or other unlawful payment to any person or entity with respect to any of the Company’s, Partnership’s or any Subsidiary’s matters.

SECTION 4.06. SEC Filings; Financial Statements.

(a) Each of the Company and the Partnership has filed or furnished all forms, reports and documents (including all exhibits) required to be filed or furnished (as the case may be) by it with the SEC since January 1, 2003 (the “ SEC Reports ”). The SEC Reports, each as amended prior to the date hereof, (i) have been prepared, in all material respects, in accordance with the requirements of the Securities Act or the Exchange Act, as the case may be, and the rules and regulations promulgated thereunder, and (ii) did not when, filed or furnished as amended prior to the date hereof, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. No

Subsidiary, other than the Partnership, is required to file any form, report or other docum

SITE SEARCH

AGREEMENTS / CONTRACTS

CLAUSES

Search Contract Clauses >>

Browse Contract Clause Library>>

Get Email Updates

AGREEMENT AND PLAN OF MERGER