1,085,000 Shares
HOME PROPERTIES OF NEW YORK, INC.
Common Stock
$0.01 Par Value
UNDERWRITING AGREEMENT
May 27, 1998
PAINEWEBBER INCORPORATED
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Ladies and Gentlemen:
Home Properties of New York, Inc., a Maryland corporation (the
"Company"), and Home Properties of New York, L.P., a New York limited
partnership subsidiary of the Company (the "Operating Partnership"), confirm
their agreement with PaineWebber Incorporated ("PaineWebber"), as follows:
1. DESCRIPTION OF SHARES. The Company proposes to issue and
sell to PaineWebber 1,085,000 shares of common stock, par value $0.01 per share
(the "Common Stock"). The shares of Common Stock to be issued and sold by the
Company are hereinafter referred to as the "Shares." PaineWebber intends to
deposit the Shares with the trustee of PaineWebber Equity Trust REIT Series I
(A Unit Investment Trust), a registered unit investment trust under the
Investment Company Act of 1940, as amended, for which PaineWebber acts as
sponsor and depositor (the "Trust"), in exchange for units in the Trust.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
and the Operating Partnership represent and warrant to and agree with
PaineWebber that:
(a) A registration statement on Form S-3 (File No. 333-02674)
(the "First Registration Statement") and a registration statement on Form
S-3 (File No. 333-52601) (the "Second Registration Statement"), with
respect to the Shares, each including a prospectus, have been carefully
prepared by the Company in conformity with the requirements of the
Securities Act of 1933, as amended (the "Securities Act"), and the rules
and regulations (the "Securities Act Rules and Regulations") of the
Securities and Exchange Commission (the "Commission") thereunder, have
been filed with the Commission and have been declared effective. Such
registration statements and prospectuses may have been amended or
supplemented prior to the date of this Underwriting Agreement; any such
amendment or supplement was so prepared and filed, and any such amendment
filed after the effective date of such registration statements has been
declared effective. No stop order suspending the effectiveness of either
of such registration statements has been issued, and no proceeding for
that purpose has been instituted or threatened by the Commission. A
prospectus supplement (the "Prospectus Supplement") setting forth the
terms of the offering, sale and plan of distribution of the Shares and
additional information concerning the Company and its business has been
or will be so prepared and will be filed pursuant to Rule 424(b) of the
Securities Act Rules and Regulations on or before the second business day
after the date hereof (or such earlier time as may be required by the
Securities Act Rules and Regulations). Copies of such registration
statements and prospectuses, any such amendments or supplements and all
documents incorporated by reference therein that were filed with the
Commission on or prior to the date of this Underwriting Agreement
(including one fully executed copy of each registration statement and of
each amendment thereto for PaineWebber and its counsel) have been
delivered to PaineWebber and PaineWebber's counsel. The First
Registration Statement and the Second Registration Statement, as they may
have heretofore been amended, are referred to herein as the
"Registration Statements," and the final form of prospectus included in
the Second Registration Statement, as supplemented by the Prospectus
Supplement, is referred to herein as the "Prospectus." Any reference
herein to the Registration Statements, the Prospectus, any preliminary
prospectus or any amendment or supplement thereto shall be deemed to
refer to and include the documents incorporated by reference therein, and
any reference herein to the terms "amend," "amendment" or "supplement"
with respect to the Registration Statements, the Prospectus or any
preliminary prospectus shall be deemed to refer to and include the filing
after the execution hereof of any document with the Commission deemed to
be incorporated by reference therein. For purposes of this Underwriting
Agreement, all references to the Registration Statements, the Prospectus,
any preliminary prospectus or to any amendment or supplement thereto
shall be deemed to include any copy filed with the Commission pursuant to
its Electronic Data Gathering Analysis and Retrieval System (XXXXX), and
such copy shall be identical in content to any Prospectus delivered to
PaineWebber for use in connection with the offering of the Shares.
(b) Each part of the Registration Statements, when such part
became or becomes effective, and the Prospectus and any amendment or
supplement thereto, on the date of filing thereof with the Commission and
at the Closing Date (as hereinafter defined), conformed or will conform
in all material respects with the requirements of the Securities Act and
the Securities Act Rules and Regulations; each part of the Registration
Statements, when such part became or becomes effective, or when such part
was filed with the Commission, did not or will not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading; the Prospectus and any amendment or supplement thereto, on
the date of filing thereof with the Commission and at the Closing Date,
did not or will not include an untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading; except that the foregoing shall not apply to statements in,
or omissions from, any such document in reliance upon, and in conformity
with, written information concerning PaineWebber that was furnished to
the Company by PaineWebber specifically for use in the preparation
thereof.
(c) The documents incorporated by reference in the
Registration Statements, the Prospectus or any amendment or supplement
thereto, when they became or become effective under the Securities Act or
were or are filed with the Commission under the Securities Act or the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), as the
case may be, conformed or will conform in all material respects with the
requirements of the Securities Act, the Securities Act Rules and
Regulations, the Exchange Act and/or the rules and regulations of the
Commission under the Exchange Act (the "Exchange Act Rules and
Regulations"), as applicable.
(d) The consolidated financial statements of the Company,
together with the related schedules and notes thereto, set forth or
included or incorporated by reference in the Registration Statements and
Prospectus fairly present the financial condition of the Company and its
consolidated subsidiaries as of the dates indicated and the results of
operations, changes in financial position, stockholders' equity and cash
flows for the periods therein specified, in conformity with generally
accepted accounting principles consistently applied throughout the
periods involved (except as otherwise stated therein). The summary and
selected financial and statistical data included or incorporated by
reference in the Registration Statements and the Prospectus present
fairly the information shown therein and, to the extent based upon or
derived from the financial statements, have been compiled on a basis
consistent with the financial statements presented therein. In addition,
the pro forma financial statements of the Company, and the related notes
thereto, included or incorporated by reference in the Registration
Statements and the Prospectus present fairly the information shown
therein, have been prepared in accordance with the Commission's rules and
guidelines with respect to pro forma financial statements and have been
properly compiled on the basis described therein, and the assumptions
used in the preparation thereof are reasonable and the adjustments used
therein are appropriate to give effect to the transactions and
circumstances referred to therein. Furthermore, all financial statements
required by Rule 3-14 of Regulation S-X ("Rule 3-14") have been included
or incorporated by reference in the Registration Statements and the
Prospectus and any such financial statements are in conformity with the
requirements of Rule 3-14. No other financial statements are required to
be set forth or to be incorporated by reference in the Registration
Statements or the Prospectus under the Securities Act or the Securities
Act Rules and Regulations thereunder.
(e) To the best of the Company's and the Operating
Partnership's knowledge, Coopers & Xxxxxxx L.L.P., whose reports are
incorporated by reference in the Registration Statements, are and, during
the periods covered by their reports, were independent public accountants
as required by the Securities Act and the Securities Act Rules and
Regulations.
(f) The Company has been duly formed and is validly existing
as a corporation in good standing under the laws of the State of
Maryland, is duly qualified to do business and is in good standing in
each jurisdiction in which its ownership or lease of property or the
conduct of its business requires such qualification (except where the
failure to be so qualified would not have a material adverse effect on
the earnings, assets, properties, business, results of operations or
condition (financial or otherwise) of the Company, the Subsidiaries and
the GP Entities taken as a whole), and has full corporate power and
authority necessary to own or hold its properties, to conduct the
business in which it is engaged and to enter into and perform its
obligations under this Underwriting Agreement. Except for the
Subsidiaries (as hereinafter defined) and the GP Entities (as hereinafter
defined), the Company owns no direct or indirect equity or other
beneficial interest in any corporation, partnership, joint venture or
other business entity.
(g) The Operating Partnership has been duly formed and is
validly existing as a limited partnership under the laws of the State of
New York, is duly qualified to do business as a foreign limited
partnership in each jurisdiction in which its ownership or lease of
property or the conduct of its business requires such qualification
(except where the failure to be so qualified would not have a material
adverse effect on the earnings, assets, properties, business, results of
operations or condition (financial or otherwise) of the Company, the
Subsidiaries and the GP Entities taken as a whole), and has all
partnership power and authority necessary to own or hold its properties
and its interests in its subsidiaries, to conduct the business in which
it is engaged and to enter into and perform its obligations under this
Underwriting Agreement. The Company is the sole general partner of the
Operating Partnership. The Second Restated and Amended Agreement of
Limited Partnership of the Operating Partnership, as amended, (the
"Operating Partnership Agreement"), is in full force and effect, and the
aggregate percentage interests of the Company, Home Properties Trust, a
wholly-owned Maryland real estate trust and qualified REIT subsidiary of
the Company (the "QRS"), and the other limited partners in the Operating
Partnership are 1%, 57.2% and 41.8%, respectively. To the extent the
Shares are issued in accordance with this Underwriting Agreement, (i) the
percentage interest of the partners in the Operating Partnership will be
adjusted accordingly and (ii) the Company will contribute the proceeds
from the sale of the Shares to the QRS, which in turn will contribute
such proceeds to the Operating Partnership in exchange for a number of
units of limited partner interest equal to the number of Shares issued.
(h) The QRS has been duly formed and is validly existing as a
real estate trust under the laws of the State of Maryland, is duly
qualified to do business in each jurisdiction in which its ownership or
lease of property or the conduct of its business requires such
qualification (except where the failure to be so qualified would not have
a material adverse effect on the earnings, assets, properties, business,
results of operations or condition (financial or otherwise) of the
Company, the Subsidiaries and the GP Entities taken as a whole), and has
all power and authority necessary to own or hold its assets and to
conduct the business in which it is engaged.
(i) Each of the subsidiaries (as defined in the Securities Act
Rules and Regulations) of the Company, including the Operating
Partnership and the QRS, are listed on SCHEDULE A hereto (collectively,
the "Subsidiaries"). Each of the Subsidiaries has been duly incorporated
or formed, as the case may be, and is an existing corporation, general or
limited partnership, or other legal entity, as the case may be, in good
standing under the laws of its jurisdiction of incorporation or
formation, as the case may be. Each of the Subsidiaries has full power
(corporate and other) and authority to own or hold its properties and to
conduct the business in which it is engaged, and is duly qualified or
registered to do business in each jurisdiction in which it owns or leases
real property or in which the conduct of its business requires such
qualification or registration, except where the failure to be so
qualified or registered, considering all such cases in the aggregate,
would not have a material adverse effect on the earnings, assets,
properties, business, results of operations or condition (financial or
otherwise) of the Company, the Subsidiaries and GP Entities taken as a
whole.
(j) The Company and the Subsidiaries hold general partner or
other controlling interests in an aggregate of 119 general or limited
partnerships or other entities owning apartment communities and/or other
real estate assets (the "GP Entities"). Each of the GP Entities has been
duly incorporated or formed, as the case may be, and, to the knowledge of
the Company, is an existing corporation, general or limited partnership,
or other legal entity, as the case may be, in good standing under the
laws of its jurisdiction of incorporation or formation, as the case may
be. Each of the GP Entities has full power (corporate and other) and
authority to own or hold its properties and to conduct the business in
which it is engaged, and, to the knowledge of the Company, is duly
qualified or registered to do business in each jurisdiction in which it
owns or leases real property or in which the conduct of its business
requires such qualification or registration, except where the failure to
be so qualified or registered, considering all such cases in the
aggregate, would not have a material adverse effect on the earnings,
assets, properties, business, results of operations or condition
(financial or otherwise) of the Company, the Subsidiaries and the GP
Entities taken as a whole.
(k) All of the issued and outstanding capital stock or
ownership interests of each Subsidiary have been duly authorized and are
validly issued, fully paid and nonassessable and, except as specified on
SCHEDULE B hereto, are wholly-owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity. All of the issued and outstanding
capital stock or ownership interests of each GP Entity have been duly
authorized and are validly issued, fully paid and nonassessable.
(l) The Company has authorized, issued and outstanding capital
stock of 12,357,257 shares, rounded to the nearest share, as of the date
hereof. All of the issued and outstanding shares of capital stock of the
Company have been duly authorized and are validly issued, fully paid and
nonassessable and conform to the description thereof in the Registration
Statements and the Prospectus. The stockholders of the Company and the
holders of interests in the Operating Partnership have no preemptive
rights with respect to the issuance of the Shares except for those
preemptive rights which have been waived.
(m) The Shares will be as of the Closing Date duly authorized
by the Company for issuance and sale pursuant to this Underwriting
Agreement and, when issued and delivered by the Company pursuant to this
Underwriting Agreement against payment of the consideration therefor
specified herein, will be validly issued, fully paid and nonassessable.
The Shares conform to the description thereof in, or incorporated by
reference into, the Registration Statements and the Prospectus.
(n) Except as contemplated in the Prospectus, subsequent to
the respective dates as of which information is given in the Registration
Statements and the Prospectus, the Company, the Subsidiaries and GP
Entities have not incurred any liabilities or obligations, direct or
contingent, or entered into any transactions, not in the ordinary course
of business, that are material to the Company, the Subsidiaries and the
GP Entities on a consolidated basis; and there has not been any material
change in the capital stock or structure, short-term debt or long-term
debt of the Company and the Subsidiaries; and there has not been any
adverse material change in the capital stock or structure, short-term
debt or long-term debt of the GP Entities; or any material adverse
change, or any development that is reasonably likely to involve a
prospective material adverse change, in the condition (financial or
other), business, net worth or results of operations of the Company, the
Subsidiaries and the GP Entities on a consolidated basis; and, except for
regular distributions on the Common Stock, in amounts per share that are
consistent with past practice or the charter documents of the Company,
there has been no dividend or distribution of any kind declared, paid or
made by the Company on any class of its capital stock.
(o) Except as set forth in the Prospectus, there is not
pending or, to the knowledge of the Company, threatened any litigation,
action, suit or proceeding to which the Company, any of the Subsidiaries
or the GP Entities or any of its officers or directors is a party, or
that any of its properties or other assets is the subject of, before or
by any court or governmental agency or body, that is reasonably likely to
result in any material adverse change in the condition (financial or
other), business, net worth or results of operations of the Company, the
Subsidiaries and the GP Entities.
(p) During the period of at least the last 24 calendar months
prior to the date of this Underwriting Agreement, the Company has timely
filed with the Commission all documents and other material required to be
filed pursuant to Sections 13, 14 and 15(d) under the Exchange Act.
During the period of at least the last 36 calendar months preceding the
filing of the Second Registration Statement, the Company has filed all
reports required to be filed pursuant to Sections 13, 14 and 15(d) under
the Exchange Act. Immediately preceding the filing of the Second
Registration Statement, the aggregate market value of the Company's
voting stock held by nonaffiliates of the Company was equal to or greater
than $150 million.
(q) There are no contracts or documents of the Company that
are required to be filed as exhibits to the Registration Statements or to
any of the documents incorporated by reference therein by the Securities
Act or the Exchange Act or by the Securities Act Rules and Regulations
and the Exchange Act Rules and Regulations that have not been so filed.
All of the contracts to which any of the Company, the Subsidiaries or the
GP Entities is a party and which are material to the business and
operations of any of the Company, the Subsidiaries or the GP Entities
(i) have been duly authorized, executed and delivered by such entity,
constitute valid and binding agreements of such entity and are
enforceable against such entity in accordance with the terms thereof,
except as such enforcement may be limited by (A) bankruptcy, insolvency,
reorganization or similar other laws affecting creditors' rights
generally and (B) general equity principles and limitations on the
availability of equitable relief or (ii) in the case of any contract to
be executed on or before the Closing Date, will on the Closing Date be
duly authorized, executed and delivered by the Company and/or a
Subsidiary, and constitute valid and binding agreements of such entity
enforceable against each entity in accordance with the terms thereof,
except as such enforcement may be limited by (A) bankruptcy, insolvency,
reorganization or similar other laws affecting creditors' rights
generally and (B) general equity principles and limitations on the
availability of equitable relief.
(r) The Company and the Operating Partnership have full power
and authority, corporate or otherwise, to enter into this Underwriting
Agreement. This Underwriting Agreement has been duly authorized,
executed and delivered by the Company and the Operating Partnership.
(s) The execution and performance of this Underwriting
Agreement and the consummation of the transactions contemplated herein,
including the issuance of the Shares, will not result in a breach or
violation of any of the terms and provisions of, or constitute a default
under, (i) any agreement or instrument to which the Company, the
Subsidiaries or the GP Entities is a party or by which they are bound or
to which any of the property or other assets of the Company, the
Subsidiaries or the GP Entities is subject except where such breach,
violation or default would not have a material adverse effect on the
Company, the Subsidiaries and the GP Entities taken as a whole, (ii) the
articles of incorporation, charter, by-laws, certificate of general or
limited partnership, partnership agreement or other organizational
document, as applicable, of the Company, the Subsidiaries or the GP
Entities or (iii) any statute, order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company, the
Subsidiaries or the GP Entities or any of their properties or other
assets; no consent, approval, authorization or order of, filing with, or
notice to any court or governmental agency or body is required for the
consummation of the transactions contemplated by this Underwriting
Agreement in connection with the issuance or sale of the Shares by the
Company, except such as may be required under the Securities Act and
applicable state securities, blue sky, or real estate syndication laws,
if any, or pursuant to the listing requirements of the New York Stock
Exchange ("NYSE"); and the Company has full power and authority to
authorize, issue and sell the Shares as contemplated by this Underwriting
Agreement, free of any preemptive rights.
(t) The Company, the Subsidiaries and the GP Entities have
complied in all material respects with all laws, regulations and orders
applicable to them or their respective businesses; the Company, the
Subsidiaries and the GP Entities are not in default under any indenture,
mortgage, deed of trust, voting trust agreement, loan agreement, bond,
debenture, note agreement or evidence of indebtedness, lease, contract or
other agreement or instrument to which they are a party or by which they
or any of their properties or other assets are bound, violation of which
would individually or in the aggregate have a material adverse effect on
the Company, the Subsidiaries and the GP Entities on a consolidated
basis, and no other party under any such agreement or instrument to which
the Company, the Subsidiaries or the GP Entities are a party is, to the
knowledge of the Company, in default in any material respect thereunder;
and the Company, the Subsidiaries and the GP Entities are not in
violation of their respective articles of incorporation, charter, by-
laws, certificate of general or limited partnership, partnership
agreement or other organizational documents, as the case may be.
(u) Except as specifically disclosed in the Registration
Statements, Prospectus or any amendment or supplement thereto or on
SCHEDULE C attached hereto, there is no material defect in the condition
of any property owned or held by the Company or the Subsidiaries, the
improvements thereon, the structural elements thereof, or the mechanical
systems therein, nor any material damage from casualty or other cause,
nor any soil condition of any such property that will not support all of
the improvements thereon without the need for unusual or new subsurface
excavations, fill, footings, caissons or other installations, except for
(a) ordinary wear and tear and (b) any such defect, damage or condition
that has been corrected or will be corrected in the ordinary course of
the business of such property as part of the Company's scheduled annual
maintenance and improvement program, and (c) any defects, damages or
conditions that would not have a material adverse effect on the Company,
the Subsidiaries and the GP Entities taken as a whole.
(v) The Company and each of the Subsidiaries and the GP
Entities have good and marketable title to all properties and assets
owned by them, free and clear of all liens, charges, encumbrances,
claims, restrictions or defects, except such as are (i) described in the
Prospectus, (ii) not material in relation to the business or operations
of the Company, the Subsidiaries and the GP Entities, or (iii) with
respect to the GP Entities, related to, or a consequence of, any
commercially reasonable mortgage indebtedness on the properties or assets
of such GP Entities; the Company, the Subsidiaries and the GP Entities
have valid, subsisting and enforceable leases for the properties listed
on SCHEDULE D hereto as leased to the Company, the Subsidiaries and the
GP Entities, with such exceptions as are not material and do not
interfere with the use made and proposed to be made of such properties by
the Company, the Subsidiaries and the GP Entities; all liens, charges,
encumbrances, claims or restrictions on or affecting any of the
properties or the assets of the Company, the Subsidiaries and the GP
Entities which are required to be disclosed in the Prospectus are
disclosed therein; no tenant under any of the leases pursuant to which
the Company, the Subsidiaries or the GP Entities lease their properties
has an option or right of first refusal to purchase the premises demised
under such lease; the use and occupancy of each of the properties of the
Company, the Subsidiaries and the GP Entities comply in all material
respects with all applicable codes and zoning laws and regulations; the
Company, the Subsidiaries and the GP Entities have no knowledge of any
pending or threatened condemnation or zoning change that will in any
material respect affect the size of, use of, improvement of, construction
on, or access to any of the properties of the Company, the Subsidiaries
and the GP Entities; and the Company, the Subsidiaries and the GP
Entities have no knowledge of any pending or threatened proceeding or
action that will in any manner materially affect the size of, use of,
improvements or construction on, or access to any of the properties of
the Company, the Subsidiaries or the GP Entities.
(w) Except for those properties listed on SCHEDULE E hereto,
title insurance in favor of the Company and the Subsidiaries is
maintained with respect to each of the properties described in the
Prospectus in an amount at least equal to the cost of acquisition of such
property.
(x) Except as disclosed in, or incorporated by reference into,
the Registration Statements , Prospectus and any amendment or supplement
thereto, there are no mortgages or deeds of trust encumbering any of the
properties. The mortgages encumbering the properties are not convertible
nor does the Company or any of the Subsidiaries or the GP Entities hold
a participating interest therein and, except as disclosed in the
Registration Statements, Prospectus and any amendment or supplement
thereto, such mortgages are not cross-defaulted or cross-collateralized
to any party other than the Company, and the Subsidiaries).
(y) Except as would not, singularly or in the aggregate, have
a material adverse effect on the earnings, assets, properties, business,
results of operations or condition (financial or otherwise) of the
Company, the Subsidiaries and the GP Entities taken as a whole, (i)
there does not exist on any of the properties described in the Prospectus
any Hazardous Materials (as hereinafter defined) in unlawful quantities,
(ii) there has not occurred on or off such properties any unlawful
spills, releases, discharges or disposal of Hazardous Materials and (iii)
the Company, the Subsidiaries and the GP Entities have not failed to
comply with all applicable local, state and Federal environmental laws,
regulations, ordinances and administrative and judicial orders relating
to the generation, recycling, sale, storage, handling, transport and
disposal of any Hazardous Materials.
As used herein, "Hazardous Material" shall include, without
limitation, any flammable explosives, radioactive materials, oil,
petroleum, petroleum products, hazardous materials, hazardous wastes,
hazardous or toxic substances, asbestos or any material as defined by any
environmental laws, including, without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as
amended (42 U.S.C. Section 9601, ET SEQ.) (CERCLA), the Hazardous
Materials Transportation Act, as amended (49 U.S.C. Section 1801, ET
SEQ.), the Resource Conservation and Recovery Act, as amended (42 U.S C.
Section 6901, ET SEQ.), and in the regulations adopted pursuant to each
of the foregoing or by any Federal, state or local governmental authority
having jurisdiction over the properties as described in the Prospectus.
Substantially all of the properties of the Company and the
Subsidiaries have been, and it is contemplated that all future
acquisitions will be, subjected to a Phase I or similar environmental
assessment (which generally includes a site inspection, interviews and a
records review, but no subsurface sampling). These assessments and
follow-up investigations, if any, (including, as appropriate, asbestos,
radon and lead surveys, additional public record review, subsurface
sampling and other testing) of the properties have not revealed any
environmental liability that the Company believes would have a material
adverse effect on the earnings, assets, properties, business, results of
operations or condition (financial or otherwise) of the Company, the
Subsidiaries and the GP Entities taken as a whole.
(z) The Company has and maintains property and casualty
insurance in favor of the Company and the Subsidiaries with respect to
them and each of the properties, in an amount and on such terms as is
reasonable and customary for businesses of the type proposed to be
conducted by the Company and the Subsidiaries. Neither the Company nor
any of the Subsidiaries or the GP Entities has received from any
insurance company written notice of any material defects or deficiencies
affecting the insurability of any such properties.
(aa) No holder of outstanding shares of capital stock or units
representing rights to acquire shares of capital stock of the Company has
any rights to the registration of shares of capital stock of the Company
which would or could require such securities to be included in either of
the Registration Statements except for those registration rights which
have been waived.
(bb) Subsequent to the respective dates as of which information
is given in the Registration Statements and the Prospectus, except as
described therein, (i) there has not been any material adverse change in
the assets or properties, business, results of operations, or condition
(financial or otherwise) of the Company or any of the Subsidiaries or the
GP Entities whether or not arising from transactions in the ordinary
course of business; (ii) neither the Company nor any of the Subsidiaries
or the GP Entities has sustained any material loss or interference with
its assets, businesses or properties (whether owned or leased) from fire,
explosion, earthquake, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or any court or legislative or other
governmental action, order or decree; and (iii) neither the Company nor
any of the Subsidiaries or the GP Entities has undertaken any liability
or obligation, direct or contingent, except (1) such liabilities or
obligations undertaken in the ordinary course of business, (2) as
disclosed or incorporated by reference in the Registration Statements,
the Prospectus and any amendment or supplement thereto or (3) with
respect to the GP Entities, such liabilities or obligations undertaken in
connection with the establishment of commercially reasonable mortgage
indebtedness on the properties or assets of such GP Entities.
(cc) The Company has filed all Federal, state and foreign
income and franchise tax returns required to be filed on or prior to the
date hereof and has paid taxes shown as due thereon, other than taxes
which are being contested in good faith and for which adequate reserves
have been established in accordance with generally accepted accounting
principles; and the Company has no knowledge, after due inquiry, of any
tax deficiency which has been asserted or threatened against the Company.
To the knowledge of the Company, there are no tax returns of the Company
or any of the Subsidiaries or the GP Entities that are currently being
audited by state, local or Federal taxing authorities or agencies which
would have material adverse effect on the assets, properties, business,
results of operations, or condition (financial or otherwise) of the
Company, the Subsidiaries and the GP Entities taken as a whole.
(dd) Each approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or other
governmental body necessary in connection with the execution and delivery
by the Company of this Underwriting Agreement and the consummation of the
transactions herein contemplated has been obtained or made and is in full
force and effect.
(ee) No material labor dispute with the employees of the
Company or any of the Subsidiaries or the GP Entities exists or, to the
knowledge of the Company is imminent or threatened.
(ff) The Company, the Subsidiaries and the GP Entities own, or
are licensed or otherwise have the right to use the material patents,
patent rights, licenses, inventions, copyrights, know-how (including
trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service
marks and trade names (collectively, "proprietary rights") presently
employed by them or which are necessary in connection with the conduct of
the business now operated by them, and neither the Company nor any of the
Subsidiaries or the GP Entities has received any written notice or
otherwise has actual knowledge after due inquiry of any infringement of
rights of others or any other claims with respect to any proprietary
rights. The Company and the Subsidiaries hold all material permits from
governmental authorities which are necessary to conduct their businesses
and are in compliance with the terms and conditions of such permits.
(gg) The Company, the Subsidiaries and the GP Entities are
conducting their respective businesses in material compliance with all
applicable laws, rules and regulations of the jurisdictions in which they
are conducting business, including, without limitation, the Americans
with Disabilities Act of 1990 and all applicable local, state and Federal
employment, truth-in-advertising, franchising and immigration laws and
regulations, except where the failure to be so in compliance would not
have a material adverse effect on the assets, properties, business,
results of operations, or condition (financial or otherwise) of the
Company, the Subsidiaries and the GP Entities taken as a whole.
(hh) No transaction has occurred between or among the Company
and any of its officers or directors or any affiliate or affiliates of
any such officer or director that is required to be described in and is
not described or incorporated by reference in the Registration Statements
and the Prospectus.
(ii) The Company has not taken, nor will it take, directly or
indirectly, any action designed to or which might reasonably be expected
to cause or result in, or which has constituted or which might reasonably
be expected to constitute, the stabilization or manipulation of the price
of any capital stock of the Company to facilitate the sale or resale of
any of the Shares.
(jj) The Company has continuously been organized and operated
in conformity with the requirements for qualification as a "real estate
investment trust" under Sections 856 through 860 of the Code (as
hereinafter defined) for all taxable years commencing with its taxable
year ended December 31, 1994. The Company has filed an election to be
taxable as a REIT for its taxable year ended December 31, 1997, and such
election has not been terminated. The Company's method of operation will
permit it to continue to meet the requirements for taxation as a real
estate investment trust (a "REIT") under the Code. The Company intends
to continue to operate in a manner which would permit it to qualify as a
REIT under the Code. The Company's method of operation will permit it to
meet and to continue to meet the requirements for taxation as a REIT
under the Code. The Company has no intention of changing its operations
or engaging in activities which would cause it to fail to qualify, or
make economically undesirable its continued qualification, as a REIT.
(kk) Neither the Company nor any Subsidiary is an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended, and the rules and regulations promulgated thereunder.
(ll) The Shares have been approved for listing on the NYSE,
subject to official notice of issuance.
(mm) The Company, the Subsidiaries and the GP Entities maintain
a system of internal accounting controls which the Company believes is
sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit the
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (iii)
access to financial assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any
differences.
(nn) Neither the Company, nor any of the Subsidiaries or the GP
Entities, to the knowledge of the Company, any employee or agent of the
Company or any Subsidiary or GP Entity, has made any payment of funds of
the Company, or any Subsidiary or GP Entity or received or retained any
funds in violation of any law, rule or regulation or of a character
required to be disclosed in the Prospectus.
(oo) The Company has not distributed and, prior to the later to
occur of (i) the Closing Date or (ii) completion of the distribution of
the Shares, will not distribute any offering material in connection with
the offering and sale of the Shares other than the Registration
Statements, the Prospectus or other materials, if any, permitted by the
Securities Act.
(pp) As of the date of this Underwriting Agreement, the Company
or its Subsidiaries, as the case may be, had entered into guarantees
relating to (1) temporary construction financing in an aggregate amount
of $3,413,000, (2) a guarantee of the Low Income Housing Tax Credit to
limited partners in thirty-one partnerships in an aggregate amount of
approximately $22,000,000, (3) a guarantee of the successful construction
of properties under the Federal government's Low Income Housing Tax
Credit Program in the amount of approximately $21,500,000 and (4)
guarantees by the Company of certain of the Operating Partnership's
obligations. Such guarantees represent the only guarantees entered into
by the Company, any of the Subsidiaries or the GP Entities. The Company
has no knowledge of any conditions that would obligate the Company to
make any payments under any of the guarantees.
(qq) Each property owned or held by the Company, the
Subsidiaries and the GP Entities is served by all utilities necessary for
its use and operation as currently used and fronts on or has lawful
access to a public road or right of way.
3. PURCHASE, SALE AND DELIVERY OF FIRM SHARES. On the basis of
the representations, warranties and agreements contained herein, but subject to
the terms and conditions set forth herein, the Company agrees to issue and sell
to PaineWebber, and PaineWebber agrees to purchase from the Company, 1,085,000
Shares at a purchase price of $25.2344 per share (the "Purchase Price"). The
Company is advised by PaineWebber that it proposes to deposit the Shares with
the trustee of the Trust, a registered unit investment trust under the
Investment Company Act of 1940, as amended, for which PaineWebber acts as
sponsor and depositor, in exchange for units in the Trust as soon after the
execution and delivery hereof as in the judgment of PaineWebber is advisable
(and, if necessary, any post-effective amendment to the Registration
Statements).
The Shares to be purchased by PaineWebber will be delivered by the
Company to the office of PaineWebber at 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, in accordance with the terms of this Underwriting Agreement and
against payment of the Purchase Price therefor by wire transfer of same day
funds payable to the order of the Company in the aggregate amount of
$27,379,324 at the bank account designated in writing by the Company at least
one business day prior to the Closing Date, at 10:00 a.m., New York time, on
May 29, 1998 (or if the NYSE or commercial banks in the City of New York are
not open on such day, the next day on which such exchanges and banks are open)
(any such day being a "Business Day"), or at such other time not later than
eight full business days thereafter as PaineWebber and the Company mutually
agree, such time being herein referred to as the "Closing Date." If requested
by PaineWebber, the Shares will be prepared in definitive form and in such
authorized denominations and registered in such names as PaineWebber may
request upon at least two Business Days' prior notice to the Company and will
be made available for checking and packaging at the office of PaineWebber at
least one Business Day prior to the Closing Date.
4. COVENANTS. The Company and the Operating Partnership, as the
case may be, covenant and agree with PaineWebber that:
(a) The Company will cause the Prospectus Supplement to be
filed as required by Section 2(a) hereof (but only if PaineWebber or its
counsel have not reasonably objected thereto by notice to the Company
after having been furnished a copy a reasonable time prior to filing) and
will notify PaineWebber promptly of such filing. During the period in
which a prospectus relating to the Shares is required to be delivered
under the Securities Act or such date which is 90 days after the Closing
Date, whichever is later, the Company will notify PaineWebber promptly of
the time when any subsequent amendment to the Registration Statements has
become effective or any subsequent supplement to the Prospectus has been
filed, or of any request by the Commission for any amendment or
supplement to the Registration Statements or Prospectus or for additional
information; the Company will prepare and file with the Commission,
promptly upon PaineWebber's request, any amendments or supplements to the
Registration Statements or Prospectus that, in PaineWebber's opinion, may
be necessary or advisable in connection with PaineWebber's distribution
of the Shares; and the Company will file no amendment or supplement to
the Registration Statements or Prospectus (other than any prospectus
supplement relating to the offering of other securities registered under
the Registration Statements or any document required to be filed under
the Exchange Act that upon filing is deemed to be incorporated by
reference therein) to which PaineWebber or its counsel shall reasonably
object by notice to the Company after having been furnished a copy a
reasonable time prior to the filing.
(b) The Company will advise PaineWebber, promptly after it
shall receive notice or obtain knowledge thereof, of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statements, of the suspension of the qualification or
registration of the Shares for offering or sale in any jurisdiction, or
of the initiation or threatening of any proceeding for any such purpose;
and it will promptly use its best efforts to prevent the issuance of any
stop order or to obtain its withdrawal if such a stop order should be
issued.
(c) The Company will comply with all requirements imposed upon
it by the Securities Act, the Securities Act Rules and Regulations, the
Exchange Act and the Exchange Act Rules and Regulations as from time to
time in force, so far as necessary to permit the continuance of sales of,
or dealings in, the Shares as contemplated by the provisions hereof and
the Prospectus. If during such period where a prospectus relating to the
Shares is required to be delivered under the Securities Act, any event
occurs as a result of which, in the opinion of PaineWebber's counsel, the
Registration Statements contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading or the Prospectus as then
amended or supplemented contains an untrue statement of a material fact
or omits to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading, or if during such period it is necessary to amend or
supplement the Registration Statements or Prospectus to comply with the
Securities Act, the Company will promptly notify PaineWebber and will
amend or supplement the Registration Statements or Prospectus (at the
expense of the Company) so as to correct such statement or omission or
effect such compliance.
(d) The Company will furnish to PaineWebber copies of the
Registration Statements, the Prospectus (including all documents
incorporated by reference therein), each preliminary prospectus and all
amendments and supplements to the Registration Statements and Prospectus
that are filed with the Commission during the period in which a
prospectus relating to the Shares is required to be delivered under the
Securities Act (including all documents filed with the Commission during
such period that are deemed to be incorporated by reference therein), in
each case as soon as available and in such quantities as PaineWebber may
from time to time reasonably request.
(e) During the period of five years commencing on the date
upon which the Prospectus Supplement is filed pursuant to Rule 424(b)
under the Securities Act, the Company will furnish PaineWebber with
copies of filings of the Company under the Securities Act and Exchange
Act and with all other financial statements and periodic and special
reports it distributes generally to the holders of any class of its
capital stock.
(f) The Company will make generally available to its
stockholders as soon as practicable, and in the manner contemplated by
Rule 158 of the Securities Act Rules and Regulations but in any event not
later than 15 months after the end of the Company's current fiscal
quarter, an earning statement (which need not be audited) covering a 12-
month period beginning after the date upon which the Prospectus
Supplement is filed pursuant to Rule 424(b) under the Securities Act that
shall satisfy the provisions of Section 11(a) of the Securities Act and
Rule 158 of the Securities Act Rules and Regulations and will advise
PaineWebber in writing when such statement has been made available.
(g) Whether or not the transactions contemplated by this
Underwriting Agreement are consummated or this Underwriting Agreement is
terminated, the Company will pay, or reimburse if paid by PaineWebber,
all costs and expenses incident to the performance of the obligations of
the Company under this Underwriting Agreement, including but not limited
to costs and expenses of or relating to (i) the preparation, printing and
filing of the Registration Statements and exhibits thereto, each
preliminary prospectus, the Prospectus and any amendment or supplement to
the Registration Statements or the Prospectus, (ii) the preparation and
delivery of certificates representing the Shares, (iii) the printing and
reproduction of this Underwriting Agreement, (iv) the costs incurred by
the Company in furnishing (including costs of shipping, mailing and
courier) such copies of the Registration Statements, the Prospectus and
any preliminary prospectus, and all amendments and supplements thereto,
as may be requested for use in connection with the offering and sale of
the Shares by the PaineWebber or by dealers to whom Shares may be sold,
(v) the listing of the Shares on the NYSE, (vi) the registration or
qualification of the Shares for offer and sale under the securities or
blue sky laws of such jurisdictions designated by PaineWebber or the
notification with respect thereto required by any such jurisdiction,
including the fees, disbursements and other charges of PaineWebber's
counsel in connection therewith, and the preparation and printing of blue
sky memoranda; provided, however, that no such registration or
qualification would subject the Company to service of process or require
it to qualify to do business in any such jurisdiction, (vii) counsel to
the Company, (viii) the transfer agent for the Shares and (ix) the
accountants of the Company.
(h) If this Underwriting Agreement shall be terminated
pursuant to Section 8 hereof or if for any reason the Company shall be
unable to perform its obligations hereunder, the Company will reimburse
PaineWebber for all out-of-pocket expenses (including the fees,
disbursements and other charges of PaineWebber's counsel) reasonably
incurred by PaineWebber in connection herewith.
(i) The Company will not at any time, directly or indirectly,
take any action designed to, or which might reasonably be expected to,
cause or result in, or which has constituted or which might reasonably be
expected to constitute, the stabilization of the price of its capital
stock to facilitate the sale or resale of any of the Shares.
(j) The Company and the Operating Partnership will apply the
net proceeds from the sale of the Shares as set forth under the caption
"Use of Proceeds" in the Prospectus Supplement.
(k) The executive officers of the Company will not, directly
or indirectly, offer, sell, contract to sell, pledge, grant any option to
purchase or otherwise dispose of any shares of capital stock, or any
securities convertible into, or exercisable, exchangeable or redeemable
for, shares of capital stock, except for the exercise of options
outstanding on the date hereof for a period of 45 days from the date of
the Prospectus Supplement, without the prior written consent of
PaineWebber.
(l) Each of the Company, the Operating Partnership and the QRS
has been organized and operated in conformity with the requirements for
qualification and taxation of the Company as a "real estate investment
trust" under the Code, and each of the Company's, the Operating
Partnership's and the QRS's proposed methods of operation will enable the
Company to continue to meet the requirements for qualification and
taxation as a REIT under the Code for subsequent taxable years.
5. CONDITIONS OF PAINEWEBBER'S OBLIGATIONS. PaineWebber's
obligation to purchase and pay for the Shares as provided herein shall be
subject to the accuracy, as of the date hereof and the Closing Date (as if made
at the Closing Date), of the representations and warranties of the Company
herein, to the performance by the Company of its obligations hereunder and to
the following additional conditions:
(a) The Registration Statements shall have been declared
effective under the Securities Act; the Prospectus shall have been filed
as required by Section 2(a) hereof; and no stop order suspending the
effectiveness of the Registration Statements shall have been issued and
no proceeding for that purpose shall have been instituted or, to
PaineWebber's knowledge or the knowledge of the Company, threatened by
the Commission, nor has any state securities authority suspended the
qualification or registration of the Shares for offering or sale in any
jurisdiction and any request of the Commission for additional information
(to be included in the Registration Statements or the Prospectus or
otherwise) shall have been complied with to the satisfaction of
PaineWebber and PaineWebber's counsel.
(b) PaineWebber shall not have advised the Company that the
Registration Statements or any amendment thereto contains an untrue
statement of fact that in the opinion of PaineWebber or PaineWebber's
counsel is material or omits to state a fact that in the opinion of
PaineWebber or PaineWebber's counsel is material, and is required to be
stated therein or is necessary to make the statements therein not
misleading, or that the Prospectus, or any amendment or supplement
thereto, contains an untrue statement of fact that in the opinion of
PaineWebber or PaineWebber's counsel is material or omits to state a fact
that in the opinion of PaineWebber or PaineWebber's counsel is material
and is necessary, in the light of the circumstances under which they were
made, to make the statements therein not misleading.
(c) Except as contemplated in the Prospectus Supplement,
subsequent to the respective dates as of which information is included or
incorporated by reference in the Registration Statements and the
Prospectus, there shall not have been any change, on a consolidated
basis, in the equity capitalization, short-term debt or long-term debt of
the Company, or any material adverse change, or any development involving
a prospective adverse change, in the condition (financial or other),
business, net worth or results of operations of the Company, the
Subsidiaries or the GP Entities or any adverse change in the rating
assigned to any securities of the Company, that, in PaineWebber's
judgment, makes it impractical or inadvisable to offer or deliver the
Shares on the terms and in the manner contemplated in the Prospectus.
(d) Nixon, Hargrave, Devans & Xxxxx, L.L.P., counsel for the
Company, shall have furnished to PaineWebber its written opinion, as
counsel to the Company, addressed to PaineWebber and dated such Closing
Date, as to which for matters of Maryland law Xxxxxx & Xxxxx LLP may rely
upon, in form and substance satisfactory to PaineWebber, to the effect
that:
(i) Each of the Company and its Subsidiaries has been
duly incorporated or formed, as the case may be, and is validly
existing as a corporation, general or limited partnership, or other
legal entity, as the case may be, in good standing under the laws
of its jurisdiction of incorporation or formation, as the case may
be, and has full power (corporate or other) and authority to
conduct its business as described in the Registration Statements
and Prospectus, and to enter into and perform its obligations under
this Underwriting Agreement and is duly qualified or registered to
do business in each jurisdiction in which it owns or leases real
property or in which the conduct of its business requires such
qualification or registration, except, where the failure to be so
qualified or registered, considering all such cases in the
aggregate, does not involve a material risk to the business,
properties, financial position or results of operations of the
Company, the Subsidiaries and the GP Entities taken as a whole;
(ii) The Company has authorized capital stock as set
forth in the Prospectus. The Shares have been duly authorized by
the Company for issuance and sale and when issued and sold pursuant
to this Underwriting Agreement will be duly and validly issued,
fully paid and nonassessable and none of them will have been issued
in violation of any preemptive or other similar right under the
charter documents of the Company or the laws of the State of
Maryland, as the case may be. The issued and outstanding capital
stock of the Company and the Shares conform, or will conform, in
all material respects to the descriptions thereof contained in, or
incorporated by reference into, the Registration Statements and the
Prospectus. The form of certificate used to evidence the Shares is
in due and proper form and complies with all applicable statutory
requirements, with any applicable requirements of the Company's
organizational documents and with the requirements of the NYSE;
(iii) The Registration Statements have become effective
under the Securities Act, the Prospectus Supplement has been filed
as required by Section 2(a) hereof and, to the best knowledge of
such counsel, after due inquiry, no stop order suspending the
effectiveness of the Registration Statements have been issued and
no proceeding for that purpose has been instituted or threatened by
the Commission;
(iv) Each part of the Registration Statements, when such
part became effective, and the Prospectus and any amendment or
supplement thereto, on the date of filing thereof with the
Commission and at the Closing Date, complied as to form in all
material respects with the requirements of the Securities Act and
the Securities Act Rules and Regulations. Nothing has come to the
attention of such counsel that has caused it to believe that either
(i) any part of the Registration Statements, when such part became
effective or was filed under the Securities Act or the Exchange
Act, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading or (ii) the Prospectus
and any amendment or supplement thereto, on the date of filing
thereof with the Commission or at the Closing Date, included an
untrue statement of a material fact or omitted to state a material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; it being
understood that such counsel need express no opinion as to the
financial statements, financial schedules or other financial or
statistical data included in, or incorporated by reference into,
the Registration Statements or the Prospectus;
(v) The descriptions in the Registration Statements and
Prospectus of statutes, legal and governmental proceedings,
contracts and other documents are accurate and fairly present the
information required to be shown; and such counsel does not know of
any statutes or legal or governmental proceedings required to be
described in the Prospectus that are not described as required, or
of any contracts or documents of a character required to be
described in the Registration Statements or Prospectus;
(vi) This Underwriting Agreement has been duly
authorized, executed and delivered by the Company and the Operating
Partnership and constitutes the legal, valid and binding
obligations of the Company and the Operating Partnership
enforceable against them in accordance with its terms, except as
the enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and by
general equitable principles; the execution, delivery and
performance of this Underwriting Agreement and the consummation of
the transactions contemplated herein will not result in a breach or
violation of any of the terms and provisions of, or constitute a
default under, (a) any statute, indenture, mortgage, deed of trust,
voting trust agreement, loan agreement, bond, debenture, note
agreement or evidence of indebtedness, lease, contract or other
agreement or instrument known to such counsel to which the Company
or its Subsidiaries are a party or by which they are bound or to
which any of the property or other assets of the Company or the
Subsidiaries is subject except where such breach, violation or
default would not have a material adverse effect on the Company,
the Subsidiaries and the GP Entities taken as a whole, (b) the
articles of incorporation, by-laws, certificate of general or
limited partnership, partnership agreement, or other organizational
document of the Company or any of the Subsidiaries, as applicable,
or (c) except as may be required under any securities or blue sky
laws, any order, rule or regulation known to such counsel of any
court or governmental agency or body having jurisdiction over the
Company or the Subsidiaries or any of their properties or other
assets; and except as may be required under any securities or blue
sky laws, no consent, approval, authorization, notice to, order of,
or filing with, any court or governmental agency or body is
required for the consummation of the transactions contemplated by
this Underwriting Agreement in connection with the issuance or sale
of the Shares by the Company, except such as have been obtained
under the Securities Act or from the NYSE;
(vii) The Company has continuously been organized and
operated in conformity with the requirements for qualification as a
"real estate investment trust" under Sections 856 through 860 of
the Code for all taxable years commencing with its taxable year
ended December 31, 1994. The Company's method of operation, as
described in the Prospectus, will permit it to continue to meet the
requirements for taxation as a REIT under the Code. The disclosure
contained in the Prospectus under the caption "Federal Income Tax
Considerations," to the extent such information constitutes matters
of law, summaries of legal matters or legal conclusions, has been
reviewed by such counsel and are accurate in all material respects;
(viii) To the best of such counsel's knowledge, there is no
litigation or governmental or other proceeding or investigation,
before any court or before or by any public body or board pending
or threatened against, or involving the assets, properties or
businesses of, the Company or any of the Subsidiaries, involving
the Company's or any of its Subsidiaries' officers or directors or
to which any of the Company's or any of its Subsidiaries'
properties or other assets are subject which would have a material
adverse effect upon the assets or properties, business, results of
operations, or condition (financial or otherwise) of the Company or
the Subsidiaries taken as a whole; and
(ix) Neither the Company nor any of its Subsidiaries is
an "investment company" within the meaning of the Investment
Company Act of 1940, as amended, and the rules and regulations
thereunder.
(e) Xxx X. XxXxxxxxx, Esq., General Counsel of the Company,
shall have furnished to PaineWebber her written opinion addressed to
PaineWebber and dated such Closing Date, in form and substance
satisfactory to PaineWebber, to the effect that:
(i) Each of the GP Entities has been duly incorporated
or formed, as the case may be, and, to the knowledge of such
counsel, is an existing corporation, general or limited
partnership, or other legal entity, as the case may be, in good
standing under the laws of its jurisdiction of incorporation or
formation, as the case may be, and has full power (corporate and
other) and authority to own or hold its properties and to conduct
the business in which it is engaged, and, to the knowledge of such
counsel, is duly qualified or registered to do business in each
jurisdiction in which it owns or leases real property or in which
the conduct of its business requires such qualification or
registration, except where the failure to be so qualified or
registered, considering all such cases in the aggregate, would not
have a material adverse effect on the earnings, assets, properties,
business, results of operations or condition (financial or
otherwise) of the Company, the Subsidiaries and the GP Entities
taken as a whole;
(ii) All of the issued and outstanding shares of capital
stock of the Company have been duly and validly authorized and
issued, and all of the issued and outstanding shares of capital
stock of the Company are fully paid and nonassessable and none of
them was issued in violation of any preemptive or other similar
right under the charter documents of the Company or the laws of the
State of Maryland, as the case may be. Except as disclosed in the
Registration Statements and the Prospectus, there is no outstanding
option, warrant or other right calling for the issuance of, and, to
the knowledge of such counsel, no commitment, plan or arrangement
to issue, any shares of capital stock of the Company or any
security convertible into, exercisable for, or exchangeable for
shares of capital stock of the Company. No holder of any security
of the Company has the right to have any security owned by such
holder included for registration in the Registration Statements.
All of the issued and outstanding capital stock or ownership
interests of each of the Subsidiaries has been duly authorized and
are validly issued, fully paid and nonassessable and, except as
specified on SCHEDULE B hereto, are wholly owned by the Company,
directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity;
(iii) The documents incorporated by reference in the
Registration Statements or Prospectus or any amendment or
supplement thereto, when they became effective under the Securities
Act or were filed with the Commission under the Securities Act or
Exchange Act, as the case may be, complied as to form in all
material respects with the requirements of the Securities Act or
the Exchange Act, as applicable, and the rules and regulations of
the Commission thereunder;
(iv) Such counsel does not know of any contracts or
documents of a character (1) to be filed under the Exchange Act if
upon such filing they would be incorporated by reference in the
Registration Statements or the Prospectus or (2) to be filed as
exhibits to the Registration Statements that are not described and
filed as required;
(v) The execution, delivery and performance of this
Underwriting Agreement and the consummation of the transactions
contemplated herein will not result in a breach or violation of any
of the terms and provisions of, or constitute a default under,
(a) any statute, indenture, mortgage, deed of trust, voting trust
agreement, loan agreement, bond, debenture, note agreement or
evidence of indebtedness, lease, contract or other agreement or
instrument known to such counsel to which the GP Entities are a
party or by which they are bound or to which any of the property or
other assets of the GP Entities is subject except where such
breach, violation or default would not have a material adverse
effect on the Company, the Subsidiaries and the GP Entities taken
as a whole, (b) the articles of incorporation, by-laws, certificate
of general or limited partnership, partnership agreement, or other
organizational document of the GP Entities or (c) except as may be
required under any securities or blue sky laws, any order, rule or
regulation known to such counsel of any court or governmental
agency or body having jurisdiction over the GP Entities or any of
their properties or other assets;
(vi) To the best of such counsel's knowledge, neither the
Company nor any of the Subsidiaries or the GP Entities is in
violation of any term or provision of their respective articles of
incorporation, charter, by-laws, certificate of general or limited
partnership, partnership agreement or other organizational
document, as applicable, or in violation of or default under any
indenture, mortgage, deed of trust, voting trust agreement, loan
agreement, bond, debenture, note agreement or evidence of
indebtedness, lease, contract, permit, judgment, decree, order,
statute, rule or regulation; where such violation or default would
have a material adverse effect on the Company, the Subsidiaries and
the GP Entities taken as a whole; and
(vii) To the best of such counsel's knowledge, there is no
litigation or governmental or other proceeding or investigation,
before any court or before or by any public body or board pending
or threatened against, or involving the assets, properties or
businesses of, the GP Entities, involving the Company's or any of
its Subsidiaries' officers or directors or to which any of the
Company's or any of its Subsidiaries' properties or other assets
are subject which would have a material adverse effect upon the
assets or properties, business, results of operations, or condition
(financial or otherwise) of the Company, the Subsidiaries and the
GP Entities taken as a whole.
(f) PaineWebber shall have received from Xxxxxx & Xxxxx LLP,
PaineWebber's counsel, such opinion or opinions, dated the Closing Date,
with respect to the validity of the Securities, the Registration
Statements, the Prospectus and other related matters as PaineWebber
reasonably may request, and such counsel shall have received such papers
and information as they request to enable them to pass upon such matters.
(g) At the time of execution of this Underwriting Agreement,
PaineWebber shall have received a letter, dated the date of delivery
thereof, from Coopers & Xxxxxxx L.L.P., the independent public
accountants of the Company, in the form previously agreed to by
PaineWebber.
(h) PaineWebber shall have received from the Company a
certificate, signed by the Chairman, the President, either of the Co-
Chief Executive Officers, the Executive Vice President or a Vice
President and by the principal financial or accounting officer of the
Company, dated the Closing Date, to the effect that, to the best of their
knowledge based upon reasonable investigation:
(i) The representations and warranties of the Company in this
Underwriting Agreement are true and correct in all material respects, as
if made at and as of the Closing Date, and the Company has complied with
all the agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing Date;
(ii) No stop order suspending the effectiveness of the
Registration Statements have been issued, and no proceeding for
that purpose has been instituted or, to such officer's knowledge,
is threatened by the Commission nor has any state securities
authority suspended the qualification or registration of the Shares
for offering or sale in any jurisdiction;
(iii) Since the effective date of the Registration
Statements, there has occurred no event required to be set forth in
an amendment or supplement to the Registration Statements or
Prospectus that has not been so set forth, and there has been no
document required to be filed under the Exchange Act and the
Exchange Act Rules and Regulations of the Commission thereunder
that upon such filing would be deemed to be incorporated by
reference in the Prospectus that has not been so filed;
(iv) Since the respective dates as of which information
is given in the Registration Statements and the Prospectus, (a)
there has not been, and no development has occurred which could
reasonably be expected to result in, a material adverse change in
the general affairs, business, properties, management, condition
(financial or otherwise) or results of operations of the Company,
the Subsidiaries and the GP Entities, taken as a whole, whether or
not arising from transactions in the ordinary course of business,
in each case other than as set forth in or contemplated by the
Registration Statements and the Prospectus and (b) neither the
Company nor any of the Subsidiaries or the GP Entities has
sustained any material loss or interference with its business or
properties from fire, explosion, flood or other casualty, whether
or not covered by insurance, or from any labor dispute or any court
or legislative or other governmental action, order or decree, which
is not set forth in the Registration Statements and the Prospectus;
and
(v) such other matters as PaineWebber or PaineWebber's
counsel may reasonably request.
(i) On or prior to the Closing Date, PaineWebber shall have
received the executed agreements referred to in Section 4(k).
(j) Prior to the Closing Date, the Securities shall have been
duly authorized for listing by the NYSE upon official notice of issuance.
(k) All such opinions, certificates, letters and other
documents will be in compliance with the provisions hereof only if they
are satisfactory in form and substance to PaineWebber or PaineWebber's
counsel. The Company will furnish PaineWebber with such conformed copies
of such opinions, certificates, letters and other documents as
PaineWebber shall reasonably request and the Company shall furnish to
PaineWebber such further certificates and documents as PaineWebber shall
have reasonably requested.
(l) Subsequent to the execution and delivery of this
Underwriting Agreement (i) no downgrading or adverse change shall have
occurred in the rating accorded any security of the Company by any
"nationally recognized statistical rating organization," as that term is
defined by the Commission for purposes of Rule 436(g)(2) of the
Securities Act Rules and Regulations and (ii) no such organization shall
have publicly announced that it has under surveillance or review, with
possible negative implications, its rating of any security of the
Company, that, in either event, makes it impractical or inadvisable, in
PaineWebber's judgment, to offer or deliver the Shares on the terms and
in the manner contemplated by the Prospectus.
6. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company and the Operating Partnership agree to
indemnify and hold harmless PaineWebber, its directors, officers,
employees and agents and each person, if any, who controls it within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act from and against any and all losses, claims, liabilities, expenses
and damages (including, but not limited to, any and all investigative,
legal and other expenses reasonably incurred in connection with, and any
and all amounts paid in settlement of, any action, suit or proceeding
between any of the indemnified parties and any indemnifying parties or
between any indemnified party and any third party, or otherwise, or any
claim asserted), as and when incurred to which PaineWebber, or any such
person, may become subject under the Securities Act, the Exchange Act or
other Federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, liabilities, expenses or
damages arise out of or are based on (i) any untrue statement or alleged
untrue statement of a material fact contained in any preliminary
prospectus, the Registration Statements or the Prospectus or any
amendment or supplement to the Registration Statements or the Prospectus
or in any documents filed under the Exchange Act and deemed to be
incorporated by reference into the Prospectus, or in any application or
other document executed by or on behalf of the Company or based on
written information furnished by or on behalf of the Company filed in any
jurisdiction in order to qualify the Shares under the securities or blue
sky laws thereof or filed with the Commission, (ii) the omission or
alleged omission to state in such document a material fact required to be
stated in it or necessary to make the statements in it, in the light of
the circumstances under which they were made, not misleading or (iii) any
act or failure to act or any alleged act or failure to act by PaineWebber
in connection with, or relating in any manner to, the Shares or the
offering contemplated hereby, and which is included as part of or
referred to in any loss, claim, damage, liability or action arising out
of or based upon matters covered by clause (i) or (ii) above (provided
that neither the Company nor the Operating Partnership shall be liable
under this clause (iii) to the extent it is finally judicially determined
by a court of competent jurisdiction that such loss, claim, damage,
liability or action resulted directly from any such acts or failures to
act undertaken or omitted to be taken by PaineWebber through their gross
negligence or willful misconduct); provided that neither the Company nor
the Operating Partnership will be liable to the extent that such loss,
claim, liability, expense or damage arises from the sale of the Shares in
the public offering to any person and is based on an untrue statement or
omission or alleged untrue statement or omission made in reliance on and
in conformity with information relating to PaineWebber furnished in
writing to the Company by PaineWebber expressly for inclusion in the
Registration Statements or the Prospectus. PaineWebber confirms to the
Company and the Company acknowledges that only the following information
appearing in the Prospectus with respect to the public offering of the
Shares has been furnished to the Company by PaineWebber for use in the
Prospectus: (i) the name of PaineWebber contained on the cover page and
back cover page of the Prospectus Supplement; (ii) the second sentence of
the second full paragraph on the front cover page of the Prospectus
Supplement; (iii) the last full paragraph on the front cover page of the
Prospectus Supplement; (iv) the stabilization legend on the inside front
cover page of the Prospectus Supplement; and (iii) the information in the
second, fourth and fifth paragraphs under the caption "Underwriting" in
the Prospectus Supplement. This indemnity agreement will be in addition
to any liability that the Company or the Operating Partnership might
otherwise have.
(b) PaineWebber will indemnify and hold harmless the Company
and the Operating Partnership, each person, if any, who controls the
Company or the Operating Partnership within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act, each director of
the Company and each officer of the Company who signs the Second
Registration Statement to the same extent as the foregoing indemnity from
the Company and the Operating Partnership to PaineWebber, but only
insofar as losses, claims, liabilities, expenses or damages arise out of
or are based on any untrue statement or omission or alleged untrue
statement or omission made in reliance on and in conformity with
information relating to PaineWebber furnished in writing to the Company
by PaineWebber expressly for use in the Second Registration Statement or
the Prospectus. This indemnity will be in addition to any liability that
PaineWebber might otherwise have; provided, however, that in no case
shall PaineWebber be liable or responsible for any amount in excess of
the underwriting discounts and commissions received by PaineWebber.
(c) Any party that proposes to assert the right to be
indemnified under this Section 6 will, promptly after receipt of notice
of commencement of any action against such party in respect of which a
claim is to be made against an indemnifying party or parties under this
Section 6, notify each such indemnifying party of the commencement of
such action, enclosing a copy of all papers served, but the omission so
to notify such indemnifying party will not relieve it from any liability
that it may have to any indemnified party under the foregoing provisions
of this Section 6 unless, and only to the extent that, such omission
results in the forfeiture of substantive rights or defenses by the
indemnifying party. If any such action is brought against any
indemnified party and it notifies the indemnifying party of its
commencement, the indemnifying party will be entitled to participate in
and, to the extent that it elects by delivering written notice to the
indemnified party promptly after receiving notice of the commencement of
the action from the indemnified party, jointly with any other
indemnifying party similarly notified, to assume the defense of the
action, with counsel reasonably satisfactory to the indemnified party,
and after notice from the indemnifying party to the indemnified party of
its election to assume the defense, the indemnifying party will not be
liable to the indemnified party for any legal or other expenses except as
provided below and except for the reasonable costs of investigation
subsequently incurred by the indemnified party in connection with the
defense. The indemnified party will have the right to employ its own
counsel in any such action, but the fees, expenses and other charges of
such counsel will be at the expense of such indemnified party unless (i)
the employment of counsel by the indemnified party has been authorized in
writing by the indemnifying party, (ii) the indemnified party has
reasonably concluded (based on advice of counsel) that there may be legal
defenses available to it or other indemnified parties that are different
from or in addition to those available to the indemnifying party, (iii) a
conflict or potential conflict exists (based on advice of counsel to the
indemnified party) between the indemnified party and the indemnifying
party (in which case the indemnifying party will not have the right to
direct the defense of such action on behalf of the indemnified party) or
(iv) the indemnifying party has not in fact employed counsel to assume
the defense of such action within a reasonable time after receiving
notice of the commencement of the action, in each of which cases the
reasonable fees, disbursements and other charges of counsel will be at
the expense of the indemnifying party or parties. It is understood that
the indemnifying party or parties shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for
the reasonable fees, disbursements and other charges of more than one
additional firm admitted to practice in such jurisdiction at any one time
for all such indemnified party or parties. All such fees, disbursements
and other charges will be reimbursed by the indemnifying party promptly
as they are incurred. An indemnifying party will not be liable for any
settlement of any action or claim effected without its written consent
(which consent will not be unreasonably withheld); provided, however, no
indemnifying party shall, without the prior written consent of each
indemnified party, settle or compromise or consent to the entry of any
judgment in any pending or threatened claim, action or proceeding
relating to the matters contemplated by this Section 6 (whether or not
any indemnified party is a party thereto), unless such settlement,
compromise or consent includes an unconditional release of each
indemnified party from all liability arising or that may arise out of
such claim, action or proceeding. Notwithstanding any other provision of
this Section 6(c), if at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified party for
fees and expenses of counsel, such indemnifying party agrees that it
shall be liable for any settlement effected without its written consent
if (i) such settlement is entered into more than 45 days after receipt by
such indemnifying party of the aforesaid request, (ii) such indemnifying
party shall have received notice of the terms of such settlement at least
30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the foregoing
paragraphs of this Section 6 is applicable in accordance with its terms
but for any reason is held to be unavailable from the Company or the
Operating Partnership or PaineWebber, the Company, the Operating
Partnership and PaineWebber will contribute to the total losses, claims,
liabilities, expenses and damages (including any investigative, legal and
other expenses reasonably incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or any claim
asserted, but after deducting any contribution received by the Company or
the Operating Partnership from persons other than PaineWebber, such as
persons who control the Company or the Operating Partnership within the
meaning of the Securities Act, officers of the Company who signed the
Registration Statements and directors of the Company, who also may be
liable for contribution) to which the Company, the Operating Partnership
and PaineWebber may be subject in such proportion as shall be appropriate
to reflect the relative benefits received by the Company and the
Operating Partnership on the one hand and PaineWebber on the other. The
relative benefits received by the Company and the Operating Partnership
on the one hand and PaineWebber on the other shall be deemed to be in the
same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by PaineWebber, in each
case as set forth in the table on the cover page of the Prospectus
Supplement. If, but only if, the allocation provided by the foregoing
sentence is not permitted by applicable law, the allocation of
contribution shall be made in such proportion as is appropriate to
reflect not only the relative benefits referred to in the foregoing
sentence but also the relative fault of the Company or the Operating
Partnership on the one hand, and PaineWebber, on the other, with respect
to the statements or omissions which resulted in such loss, claim,
liability, expense or damage, or action in respect thereof, as well as
any other relevant equitable considerations with respect to such
offering. Such relative fault shall be determined by reference to
whether the untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to
information supplied by the Company, the Operating Partnership or
PaineWebber, the intent of the parties and their relative knowledge,
access to information and opportunity to correct or prevent such
statement or omission. The Company, the Operating Partnership and
PaineWebber agree that it would not be just and equitable if
contributions pursuant to this Section 6(d) were to be determined by pro
rata allocation or by any other method of allocation which does not take
into account the equitable considerations referred to herein. The amount
paid or payable by an indemnified party as a result of the loss, claim,
liability, expense or damage, or action in respect thereof, referred to
above in this Section 6(d) shall be deemed to include, for purpose of
this Section 6(d), any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any
such action or claim. Notwithstanding the provisions of this Section
6(d), PaineWebber shall not be required to contribute any amount in
excess of the underwriting discounts and commissions received by
PaineWebber and no person found guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) will be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 6(d), any
person who controls a party to this Underwriting Agreement within the
meaning of the Securities Act will have the same rights to contribution
as that party, and each officer of the Company who signed the
Registration Statements will have the same rights to contribution as the
Company and the Operating Partnership, subject in each case to the
provisions hereof. Any party entitled to contribution, promptly after
receipt of notice of commencement of any action against such party in
respect of which a claim for contribution may be made under this Section
6(d), will notify any such party or parties from whom contribution may be
sought, but the omission so to notify will not relieve the party or
parties from whom contribution may be sought from any other obligation it
or they may have under this Section 6(d). Except for a settlement
entered into pursuant to the last sentence of Section 6(c) hereof, no
party will be liable for contribution with respect to any action or claim
settled without its written consent (which consent will not be
unreasonably withheld).
(e) The indemnity and contribution agreements contained in
this Section 6 and the representations and warranties of the Company and
the Operating Partnership contained in this Underwriting Agreement shall
remain operative and in full force and effect regardless of (i) any
investigation made by or on behalf of PaineWebber, (ii) acceptance of the
Shares and payment therefor or (iii) any termination of this Underwriting
Agreement.
7. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All
representations, warranties and agreements of the Company contained herein or
in certificates delivered pursuant hereto, and PaineWebber's agreements
contained in Sections 4(g) and 6 hereof, shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of
PaineWebber or any controlling persons, or the Company or any of its officers,
directors or any controlling persons, and shall survive delivery of and payment
for the Shares hereunder.
8. TERMINATION. PaineWebber shall have the right by giving
notice as hereinafter specified at any time at or prior to the Closing Date, to
terminate this Underwriting Agreement if (i) the Company shall have failed,
refused or been unable, at or prior to the Closing Date, to perform any
material agreement on its part to be performed hereunder, (ii) any condition of
PaineWebber's obligations specified in Section 5 hereof is not fulfilled when
due, (iii) trading on the NYSE shall have been wholly suspended, (iv) minimum
or maximum prices for trading shall have been fixed, or maximum ranges for
prices for the Common Stock shall have been required, on the NYSE by the NYSE
or by order of the Commission or any other governmental authority having
jurisdiction, (v) a banking moratorium shall have been declared by Federal or
New York authorities, or (vi) an outbreak of major hostilities in which the
United States is involved, a declaration of war by Congress, any other
substantial national or international calamity or any other event or occurrence
of a similar character shall have occurred since the execution of this
Underwriting Agreement that, in PaineWebber's sole judgment, makes it
impractical or inadvisable to proceed with the completion of the sale of and
payment for the Shares. Any such termination shall be without liability of any
party to any other party with respect to Shares not purchased by reason of such
termination except that the provisions of Sections 4(g) and 6 hereof shall at
all times be effective. If PaineWebber elects to terminate this Underwriting
Agreement as provided in this Section 8, the Company shall be notified promptly
by PaineWebber by telephone, telex or telecopy, confirmed by letter.
9. NOTICES. All notices or communications hereunder shall be in
writing and if sent to PaineWebber shall be mailed, delivered, telexed or
telecopied and confirmed to the PaineWebber in care of PaineWebber at 0000
Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, c/o Real Estate Investment
Banking, attention: Xxxxx X. Xxxxxx (with copy to Xxx X. Xxxxxxxxx, Esq., c/x
Xxxxxx & Xxxxx LLP, 200 Park Avenue, New York, New York 10166), or if sent to
the Company, shall be mailed, delivered, telexed or telecopied and confirmed to
Xxx X. XxXxxxxxx, Esq., c/o the Company at 000 Xxxxxxx Xxxxxx, Xxxxxxxxx, XX
00000 (with copy to Xxxxxxx XxXxxx Xxxxx, Esq., c/o Nixon, Hargrave, Devans &
Xxxxx, L.L.P., 0000 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx 00000). Any party to
this Underwriting Agreement may change such address for notices by sending to
the other party to this Underwriting Agreement written notice of a new address
for such purpose.
10. PARTIES. This Underwriting Agreement shall inure to the
benefit of, and be binding upon, the Company and PaineWebber and their
respective successors and the controlling persons, officers, directors,
employees and representatives referred to in Section 6 hereof, and no other
person will have any right or obligation hereunder.
11. APPLICABLE LAW. This Underwriting Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York.
If the foregoing correctly sets forth the understanding among the
Company, the Operating Partnership and PaineWebber, please so indicate in the
space provided below for that purpose, whereupon this letter shall constitute a
binding agreement between the Company, the Operating Partnership and
PaineWebber.
Very truly yours,
HOME PROPERTIES OF NEW YORK, INC.
By: /S/XXX X. XXXXXXXXX
Name: Xxx X. XxXxxxxxx
Title: Vice President
HOME PROPERTIES OF NEW YORK, L.P.
By: Home Properties of New York, Inc., its
general partner
By: /S/XXX X. XXXXXXXXX
Name: Xxx X. XxXxxxxxx
Title: Vice President
ACCEPTED as of the date first above
written:
PAINEWEBBER INCORPORATED
By: /S/XXXXX X. XXXXXX
Name: Xxxxx X. Xxxxxx
Title: Managing Director
