My current location: Los Angeles, CA | Change location
Featured Attorneys
Providing Exceptional Representation for Businesses. Call Today to Speak with Our Attorneys. 1-888-WHGCLaw (944-2529)
1-888-WHGCLaw

AGREEMENT AND PLAN OF MERGER

among

EQUITY OFFICE PROPERTIES TRUST,

EOP OPERATING LIMITED PARTNERSHIP,

SPIEKER PROPERTIES, INC.

and

SPIEKER PROPERTIES, L.P.

Dated as of February 22, 2001

TABLE OF CONTENTS

ARTICLE 1

THE MERGERS
             
Page
1.1
   The Partnership Merger     2  
1.2
   The Merger     2  
1.3
   Closing     2  
1.4
   Effective Time     3  
1.5
   Effect of Partnership Merger on Agreement of Limited Partnership     3  
1.6
   Effect of Merger on Declaration of Trust and Bylaws     3  
1.7
   Trustees of Equity Office     3  
1.8
   Effect on Capital Stock     3  
1.9
   Effect on Partnership Interests     4  
1.10
   Partnership Merger Consideration; Merger Consideration     4  
1.11
   Partner Approval     6  
1.12
   Appraisal or Dissenters Rights     7  
1.13
   Exchange of Certificates; Pre-Closing Dividends; Fractional Shares     7  
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF SPIEKER AND SPIEKER PARTNERSHIP
2.1
   Organization, Standing and Power     11  
2.2
   Spieker Subsidiaries     11  
2.3
   Capital Structure     12  
2.4
   Other Interests     14  
2.5
   Authority; Noncontravention; Consents     14  
2.6
   SEC Documents; Financial Statements; Undisclosed Liabilities     15  
2.7
   Absence of Certain Changes or Events     16  
2.8
   Litigation     16  
2.9
   Properties     17  
2.10
   Environmental Matters     18  
2.11
   Related Party Transactions     20  
2.12
   Employee Benefits     20  
2.13
   Employee Policies     21  
2.14
   Taxes     21  
2.15
   No Payments to Employees, Officers or Directors     22  
2.16
   Broker; Schedule of Fees and Expenses     22  
2.17
   Compliance with Laws     23  
2.18
   Contracts; Debt Instruments     23  
2.19
   Opinion of Financial Advisor     24  
2.20
   State Takeover Statutes     24  
2.21
   Stockholder Rights Plan     24  
2.22
   Investment Company Act of 1940     24  
2.23
   Definition of Knowledge of Spieker     24  
2.24
   Required Stockholder Approvals and Partner Approvals     25  

i

             
Page
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF EQUITY OFFICE AND EOP PARTNERSHIP
3.1
   Organization, Standing and Power of Equity Office     25  
3.2
   Equity Office Subsidiaries     25  
3.3
   Capital Structure     26  
3.4
   Other Interests     28  
3.5
   Authority; Noncontravention; Consents     28  
3.6
   SEC Documents; Financial Statements; Undisclosed Liabilities     29  
3.7
   Absence of Certain Changes or Events     30  
3.8
   Litigation     30  
3.9
   Properties     30  
3.10
   Environmental Matters     32  
3.11
   Taxes     32  
3.12
   Brokers; Schedule of Fees and Expenses     33  
3.13
   Compliance with Laws     33  
3.14
   Contracts; Debt Instruments     33  
3.15
   Opinion of Financial Advisor     34  
3.16
   State Takeover Statutes     34  
3.17
   Investment Company Act of 1940     34  
3.18
   Definition of Knowledge of Equity Office     34  
3.19
   Required Shareholder Approvals and Partner Approvals     34  
ARTICLE 4
COVENANTS
4.1
   Conduct of Spieker’s and Spieker Partnership’s Business Pending Merger     34  
4.2
   Conduct of Equity Office’s and EOP Partnership’s Business Pending Merger     37  
4.3
   No Solicitation     38  
4.4
   Affiliates     40  
4.5
   Other Actions     40  
ARTICLE 5
ADDITIONAL COVENANTS
5.1
   Preparation of the Form S-4 and the Proxy Statement; Spieker Stockholders Meeting, Spieker Unitholders Consent Solicitation and Equity Office Shareholders Meeting     41  
5.2
   Access to Information; Confidentiality     43  
5.3
   Commercially Reasonable Efforts; Notification     43  
5.4
   Tax Matters     44  
5.5
   Public Announcements     44  
5.6
   Listing     44  
5.7
   Transfer and Gains Taxes     44  
5.8
   Benefit Plans and Other Employee Arrangements     45  
5.9
   Indemnification     46  
5.10
   Declaration of Dividends and Distributions     48  
5.11
   Transfer of Spieker TRS     49  
5.12
   Notices     49  
5.13
   Resignations     50  
5.14
   Assumption of Existing Tax Protection Agreements     50  
5.15
   EOP Partnership Agreement     50  
5.16
   Registration Rights Agreements     50  

ii

             
Page
ARTICLE 6
CONDITIONS
6.1
   Conditions to Each Party’s Obligation to Effect the Mergers     50  
6.2
   Conditions to Obligations of Equity Office and EOP Partnership     51  
6.3
   Conditions to Obligations of Spieker and Spieker Partnership     52  
ARTICLE 7
TERMINATION, AMENDMENT AND WAIVER
7.1
   Termination     53  
7.2
   Certain Fees and Expenses     54  
7.3
   Effect of Termination     56  
7.4
   Amendment     56  
7.5
   Extension; Waiver     56  
ARTICLE 8
GENERAL PROVISIONS
8.1
   Nonsurvival of Representations and Warranties     57  
8.2
   Notices     57  
8.3
   Interpretation     58  
8.4
   Counterparts     58  
8.5
   Entire Agreement; No Third-Party Beneficiaries     58  
8.6
   Governing Law     58  
8.7
   Assignment     58  
8.8
   Enforcement     58  
8.9
   Severability     58  
8.10
   Exculpation     58  
8.11
   Joint and Several Obligations     59  

iii

EXHIBITS

                 
Exhibit A     —     Form of Delaware Certificate of Merger
Exhibit B     —     Form of California Certificate of Merger
Exhibit C     —     Form of Maryland Articles of Merger
Exhibit D     —     Form of Articles Supplementary Designating Equity Office Series E Preferred Shares
Exhibit E     —     Form of Articles Supplementary Designating Equity Office Series F Preferred Shares
Exhibit F     —     Form of Articles Supplementary Designating Equity Office Series G Preferred Shares
Exhibit G     —     Form of Articles Supplementary Designating Equity Office Series H Preferred Shares
Exhibit H     —     Form of Amendment to EOP Partnership Agreement Creating Equity Office Preferred OP Units
Exhibit I     —     Form of Proposed Equity Office Charter Amendments
Exhibit J     —     Form of Nonsolicitation Agreement
Exhibit K     —     Form of Amendment to EOP Partnership Agreement Addressing Certain Federal Income Tax Matters

iv

Index of Defined Terms

     
Acquisition Proposal
   4.3(a)(i)
Additional Corresponding Equity Office Dividends and Distributions
   5.10
Affiliate
   2.11
Agreement
   Preamble
AICPA Statement
   5.1(b)
Articles of Merger
   E
Base Amount
   7.2
Break-Up Expenses
   7.2
Break-Up Fee
   7.2
Break-Up Fee Tax Opinion
   7.2
California Certificate of Merger
   D
Cash Amount Per Share
   1.10(b)(i)
CERCLA
   2.10(a)
Certificate
   1.10(b)(vii)
Closing
   1.3
Closing Date
   1.3
Code
   F
Commitment
   4.1(j)
Confidentiality Agreement
   4.3(b)
Controlled Group Member
   2.12
Corresponding Equity Office Dividends and Distributions
   1.13(d)(ii)
CRULPA
   1.1(a)
Delaware Certificate of Merger
   C
Department
   1.4
DRULPA
   1.1(a)
Effective Time
   1.4
Effective Times
   1.4
Employee Plan
   2.12
Encumbrances
   2.9(a)
Environmental Law
   2.10(a)
Environmental Mitigation
   2.9(d)
Environmental Permits
   2.10(b)(iv)
EOP Partnership
   Preamble
EOP Partnership Agreement
   1.5
Equity Office
   Preamble
Equity Office Bylaws
   1.6
Equity Office Common Shares
   1.10(b)(i)
Equity Office Counter Proposal
   4.3(c)
Equity Office Declaration of Trust
   1.6
Equity Office Disclosure Letter
   Art. 3
Equity Office Exchangeable Notes
   3.3(b)
Equity Office Existing Preferred OP Units
   3.3(e)
Equity Office Existing Preferred Shares
   3.3(a)
Equity Office Financial Statement Date
   3.7
Equity Office Material Adverse Effect
   3.1
Equity Office Non-controlled Subsidiaries
   3.2(a)
Equity Office Options
   3.3(b)
Equity Office OP Units
   1.10(a)(i)
Equity Office Other Interests
   3.4
Equity Office Partner Approvals
   1.11
Equity Office Preferred OP Units
   1.10(a)(vi)

v

     
Equity Office Preferred Shares
   1.10(b)(vi)
Equity Office Properties
   3.9(a)
Equity Office Rent Roll
   3.9(g)
Equity Office SEC Documents
   3.6
Equity Office Series A Preferred OP Unit
   3.3(e)
Equity Office Series B Preferred OP Unit
   3.3(e)
Equity Office Series C Preferred OP Unit
   3.3(e)
Equity Office Series D Preferred OP Unit
   1.10(a)(ii)
Equity Office Series E Preferred OP Unit
   1.10(a)(iii)
Equity Office Series F Preferred OP Unit
   1.10(a)(iv)
Equity Office Series G Preferred OP Unit
   1.10(a)(v)
Equity Office Series H Preferred OP Unit
   1.10(a)(vi)
Equity Office Series A Preferred Shares
   3.3(a)
Equity Office Series B Preferred Shares
   3.3(a)
Equity Office Series C Preferred Shares
   3.3(a)
Equity Office Series D Preferred Share
   1.10(b)(ii)
Equity Office Series E Preferred Share
   1.10(b)(iii)
Equity Office Series F Preferred Share
   1.10(b)(iv)
Equity Office Series G Preferred Share
   1.10(b)(v)
Equity Office Series H Preferred Share
   1.10(b)(vi)
Equity Office Shareholder Approvals
   3.5(a)
Equity Office Shareholders Meeting
   5.1(c)
Equity Office Space Lease
   3.9(g)
Equity Office Subsidiaries
   3.1
Equity Office TRS
   I
ERISA
   2.12
Exchange Act
   2.6
Exchange Agent
   1.13(a)
Exchange Fund
   1.13(b)
Final Spieker Dividend
   1.13(d)(i)
Final Spieker Partnership Distribution
   1.13(d)(i)
Form S-4
   5.1(a)
Former Spieker Properties
   2.10(b)(ii)
GAAP
   2.6
Governmental Entity
   2.5(c)
Hazardous Materials
   2.10(a)
HSR Act
   2.5(c)
Indebtedness
   2.18(b)
Indemnification Parties
   5.9(b)
Indemnified Parties
   5.9(a)
Indemnifying Parties
   5.9(a)
Joint Proxy Statement
   5.1(a)
Knowledge of Spieker
   2.23
Knowledge of Equity Office
   3.18
Laws
   2.5(c)
Lease Guidelines
   4.1(j)
Liens
   2.2(b)
Maximum Amount
   7.2
Merger
   A
Merger Consideration
   1.10(b)
Mergers
   B
NYSE
   5.6
Partner Approvals
   1.11

vi

     
Partnership Merger
   B
Partnership Merger Consideration
   1.10(a)
Payor
   7.2
Pension Plan
   2.12
Permitted Title Exceptions
   2.9(a)
Person
   2.2(a)
Property Restrictions
   2.9(a)
Proposed Equity Office Charter Amendments
   4.2(h)
Qualifying Income
   7.2
Recipient
   7.2
REIT
   2.14(b)
REIT Requirements
   7.2
Release
   2.10(a)
Rule 145 Affiliates
   4.4
SEC
   2.5(c)
Securities Act
   2.3(g)
Shareholder Approvals
   3.5(a)
Spieker
   Preamble
Spieker Acquisition Agreement
   7.2
Spieker Articles
   2.1
Spieker Bylaws
   2.1
Spieker Class B Common Stock
   2.3(a)
Spieker Class C Common Stock
   2.3(a)
Spieker Common Stock
   1.10(b)(i)
Spieker Disclosure Letter
   Art. 2
Spieker Financial Statement Date
   2.7
Spieker Material Adverse Effect
   2.1
Spieker OP Units
   1.10(a)(i)
Spieker Other Interests
   2.4
Spieker Partner Approvals
   1.11
Spieker Partnership
   Preamble
Spieker Partnership Agreement
   1.5
Spieker Preferred OP Units
   1.10(a)(vi)
Spieker Preferred Stock
   1.10(b)(vi)
Spieker Properties
   2.9(a)
Spieker Recent SEC Documents
   2.6
Spieker Rent Roll
   2.9(e)
Spieker Representative
   4.3(a)(ii)
Spieker Rights
   2.21
Spieker Rights Agreement
   2.21
Spieker SEC Documents
   2.6
Spieker Series A Preferred OP Unit
   1.10(a)(ii)
Spieker Series B Preferred OP Unit
   1.10(a)(iii)
Spieker Series C Preferred OP Unit
   1.10(a)(iv)
Spieker Series D Preferred OP Unit
   1.10(a)(v)
Spieker Series E Preferred OP Unit
   1.10(a)(vi)
Spieker Series A Preferred Share
   1.10(b)(ii)
Spieker Series B Preferred Share
   1.10(b)(iii)
Spieker Series C Preferred Share
   1.10(b)(iv)
Spieker Series D Preferred Share
   1.10(b)(v)
Spieker Series E Preferred Share
   1.10(b)(vi)
Spieker Space Lease
   2.9(e)
Spieker Stockholder Approvals
   2.5(a)

vii

     
Spieker Stockholders Meeting
   5.1(d)
Spieker Stock Options
   2.3(b)
Spieker Stock Rights
   2.3(b)
Spieker Subsidiaries
   2.2(a)
Spieker TRS
   I
Spieker Voting Agreement
   J
Stock Amount Per Share
   1.10(b)(i)
Stock Purchase Agreement
   I
Subsidiary
   2.2(a)
Substituted Option
   5.8(c)
Superior Acquisition Proposal
   4.3(d)
Surviving Partnership
   1.1(a)
Surviving Trust
   1.2
Takeover Statute
   2.20
Taxes
   2.14(a)
Tax Protection Agreements
   2.18(j)
Third Party Provisions
   8.5
Title 3
   1.2
Title 8
   1.2
Transfer
   4.3(a)(i)
Transfer and Gains Taxes
   5.7
Welfare Plan
   2.12
1940 Act
   2.22

viii

AGREEMENT AND PLAN OF MERGER

      THIS AGREEMENT AND PLAN OF MERGER (this “Agreement”), dated as of February 22, 2001, by and among EQUITY OFFICE PROPERTIES TRUST, a Maryland real estate investment trust (“Equity Office”), EOP OPERATING LIMITED PARTNERSHIP, a Delaware limited partnership (“EOP Partnership”), SPIEKER PROPERTIES, INC., a Maryland corporation (“Spieker”), and SPIEKER PROPERTIES, L.P., a California limited partnership (“Spieker Partnership”).

R E C I T A L S:

      A.  The Board of Trustees of Equity Office and the Board of Directors of Spieker deem it advisable and in the best interests of their respective shareholders, upon the terms and subject to the conditions contained herein, that Spieker shall merge with and into Equity Office (the “Merger”).

      B.  Equity Office, as the sole general partner of EOP Partnership, and Spieker, as the sole general partner of Spieker Partnership, deem it advisable and in the best interests of their respective limited partners, subject to the conditions and other provisions contained herein, that, immediately prior to the Merger, Spieker Partnership shall merge with and into EOP Partnership (or such other entity as provided in Section 1.1(a)), with the holders of partnership interests in Spieker Partnership at the time of the Partnership Merger receiving in any event units of limited partnership interest in EOP Partnership, as set forth herein (the “Partnership Merger” and, together with the Merger, the “Mergers”).

      C.  Upon the terms and subject to the conditions set forth herein, immediately prior to the Merger, EOP Partnership and Spieker Partnership shall execute a Certificate of Merger (the “Delaware Certificate of Merger”) in substantially the form attached hereto as Exhibit A and shall file such Delaware Certificate of Merger in accordance with Delaware law to effectuate the Partnership Merger.

      D.  Upon the terms and subject to the conditions set forth herein, immediately prior to the Merger, EOP Partnership and Spieker Partnership shall execute a Certificate of Merger (the “California Certificate of Merger”) in substantially the form attached hereto as Exhibit B and shall file such California Certificate of Merger in accordance with California law to effectuate the Partnership Merger.

      E.  Upon the terms and subject to the conditions set forth herein, immediately following the effectiveness of the Partnership Merger, Equity Office and Spieker shall execute Articles of Merger (the “Articles of Merger”) in substantially the form attached hereto as Exhibit C and shall file such Articles of Merger in accordance with Maryland law to effectuate the Merger.

      F.  For federal income tax purposes, it is intended that the Merger shall qualify as a reorganization under Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”), and that this Agreement shall constitute a plan of reorganization under Section 368(a) of the Code.

      G.  For federal income tax purposes, it is intended that the Partnership Merger, regardless of form, be treated as a contribution by Spieker Partnership of all of its assets to EOP Partnership in exchange for partnership interests in EOP Partnership, as provided for herein, under Section 721 of the Code, and a distribution of such partnership interests by Spieker Partnership to its partners under Section 731 of the Code.

      H.  Equity Office, EOP Partnership, Spieker and Spieker Partnership desire to make certain representations, warranties, covenants and agreements in connection with the Mergers.

      I.   Concurrently with the execution of this Agreement and as an inducement to Equity Office and EOP Partnership to enter into this Agreement, Messrs. Warren E. Spieker, Jr., John K. French and Dennis E. Singleton, as owners of voting capital stock of Spieker Northwest, Inc., a California corporation (“Spieker TRS”), have entered into a Stock Purchase Agreement, dated as of the date hereof, relating to the voting capital stock of Spieker TRS (the “Stock Purchase Agreement”), providing for the sale of their shares of outstanding voting capital stock of Spieker TRS to Equity Office Properties Management Corp. (“Equity Office TRS”) or its assigns.

      J.  As an inducement to Equity Office to enter into this Agreement, certain executive officers of Spieker have entered into a voting agreement (each, a “Spieker Voting Agreement”), pursuant to which such person has agreed, among other things, to vote his shares of Spieker Common Stock and Spieker OP Units (as defined herein) to approve this Agreement, the respective Mergers and any other matter which requires his vote in connection with the transactions contemplated by this Agreement.

      NOW, THEREFORE, in consideration of the premises and the mutual representations, warranties, covenants and agreements contained herein, the parties hereto hereby agree as follows:

ARTICLE 1

THE MERGERS

      1.1  The Partnership Merger.

      (a)  Upon the terms and subject to the conditions of this Agreement, and in accordance with Title 6, Chapter 17 of the Delaware Code Annotated, as amended (the “DRULPA”), and Title 2, Chapter 3, Article 7.5 of the California Corporations Code, as amended (the “CRULPA”), immediately prior to the consummation of the Merger, Spieker Partnership shall be merged with and into EOP Partnership with EOP Partnership as the surviving limited partnership (or, at EOP Partnership’s option, with a limited liability company owned entirely, directly and/or indirectly, by EOP Partnership, or a limited partnership owned entirely, directly and/or indirectly, by EOP Partnership, as determined by Equity Office and EOP Partnership), with the entity designated by EOP Partnership being the surviving limited partnership or limited liability company, as applicable, provided that the alternative structure does not materially adversely affect any class or series of partnership interests in Spieker Partnership) (the “Surviving Partnership”), and with the holders of partnership interests in Spieker Partnership receiving in any event units of partnership interest in EOP Partnership, as set forth in Section 1.10(a).

      (b)  Pursuant to Treasury Regulation § 1.708-1(c)(3), EOP Partnership and Spieker Partnership intend that the Partnership Merger be treated as an “assets over” form of merger, with the consequences set forth in Treasury Regulation § 1.708-1(c)(3)(i). In addition, if and to the extent that any transaction entered into pursuant to this Agreement or otherwise deemed undertaken in connection with the transactions contemplated by this Agreement is treated for federal income tax purposes as a direct or indirect transfer of cash from EOP Partnership to a holder of Spieker OP Units or Spieker Preferred OP Units that would be characterized as a sale for federal income tax purposes, pursuant to Treasury Regulation § 1.708-1(c)(4) such sale shall be treated by all parties as a sale by the former holder of Spieker OP Units or Spieker Preferred OP Units receiving (or deemed to receive) such cash of Spieker OP Units or Spieker Preferred OP Units to EOP Partnership and as a direct purchase by EOP Partnership of such Spieker OP Units or Spieker Preferred OP Units from such former holder of Spieker OP Units or Spieker Preferred OP Units immediately prior to the Partnership Merger (and not as a transfer of cash from EOP Partnership to Spieker Partnership as part of the Partnership Merger). Each holder of Spieker OP Units or Spieker Preferred OP Units who receives, directly or indirectly, any cash in connection with the Partnership Merger shall be deemed, by such holder’s act of receiving and accepting such cash, to have agreed to the characterization of such transaction set forth in the immediately preceding sentence for purposes of Treasury Regulation § 1.708-1(c)(4).

      1.2  The Merger. Upon the terms and subject to the conditions set forth in this Agreement, and in accordance with Title 3 of the Corporations and Associations Article of the Annotated Code of Maryland, as amended (“Title 3”), and Title 8 of the Corporations and Associations Article of the Annotated Code of Maryland, as amended (“Title 8”), Spieker shall be merged with and into Equity Office, with Equity Office surviving as a real estate investment trust (the “Surviving Trust”).

      1.3  Closing. The closing of the Mergers (the “Closing”) will take place commencing at 9:00 a.m., local time, on the date to be specified by the parties, which (subject to satisfaction or waiver of the conditions set forth in Article 6) shall be no later than the third business day after satisfaction or waiver of the conditions set forth in Section 6.1 (the “Closing Date”), at the offices of Hogan & Hartson L.L.P., 885 Third Avenue, New York, NY 10022, unless another date or place is agreed to in writing by the parties.

2

      1.4  Effective Time. As soon as practicable on the Closing Date, (i) EOP Partnership and Spieker Partnership shall execute and file the Delaware Certificate of Merger, executed in accordance with the DRULPA, with the Office of the Secretary of State of the State of Delaware, and the California Certificate of Merger, executed in accordance with the CRULPA, with the Office of the Secretary of State of the State of California and (ii) Equity Office and Spieker shall then execute and file the Articles of Merger, executed in accordance with Title 3 and Title 8, with the State Department of Assessments and Taxation of Maryland (the “Department”), and shall make all other filings and recordings required, with respect to the Partnership Merger, under the DRULPA and the CRULPA or, with respect to the Merger, under Title 3 and Title 8. The Mergers shall become effective (each an “Effective Time” and collectively the “Effective Times”) at such times as Equity Office and Spieker shall agree should be specified in the Delaware Certificate of Merger, the California Certificate of Merger and the Articles of Merger (not to exceed thirty (30) days after the Articles of Merger are accepted for record by the Department). Unless otherwise agreed, the parties shall c