EXHIBIT 1
Execution Copy
10,000,000 Shares
BERKSHIRE REALTY COMPANY, INC.
Common Shares of Beneficial Interest
UNDERWRITING AGREEMENT
November 4, 1997
Xxxxxx Brothers Inc.
BT Alex. Xxxxx Incorporated
X.X. Xxxxxxx & Sons, Inc.
Xxxx Xxxxx Xxxx Xxxxxx Incorporated
Salomon Brothers Inc
As Representatives of the several
Underwriters named in Schedule 1,
c/x Xxxxxx Brothers Inc.
Three World Financial Center
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Berkshire Realty Company, Inc., a Delaware real estate investment
trust (the "Company"), BRI OP Limited Partnership, a Delaware limited
partnership (the "Operating Partnership") and Berkshire Apartments, Inc., the
sole general partner of the Operating Partnership (the "General Partner," and,
together with the Company and the Operating Partnership, the "Transaction
Entities"), each wish to confirm as follows its agreement with the
Underwriters named in Schedule 1 hereto (the "Underwriters," which term shall
also include any underwriter substituted as hereinafter provided in Section 9
of this Agreement) for whom Xxxxxx Brothers Inc., BT Alex. Xxxxx, X.X. Xxxxxxx
& Sons, Inc., Xxxx Xxxxx Xxxx Xxxxxx Incorporated and Salomon Brothers Inc are
acting as representatives (the "Representatives"), with respect to the sale by
the Company and the purchase by the Underwriters, acting severally and not
jointly (the "Offering"), of an aggregate of 10,000,000 shares (the "Firm
Shares") of the Company's common stock, par value $.01 per share (the "Common
Shares"). In addition, the Company proposes to grant to the Underwriters an
option to purchase up to an additional 1,500,000 Common Shares on the terms
and for the purposes
set forth in Section 2 (the "Option Shares"). The Firm
Shares and the Option Shares, if purchased, are hereinafter collectively
called the "Shares."
Capitalized terms used but not otherwise defined herein shall have
the meanings given to those terms in the Prospectus (as herein defined).
1. Representations, Warranties and Agreements of the Transaction
Entities. Each of the Transaction Entities, jointly and severally,
represents, warrants and agrees that, as of the date hereof:
(a) A registration statement on Form S-3 (No. 333-32565), and any
amendments thereto, with respect to the Shares has (i) been 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 "Rules
and Regulations") of the United States Securities and Exchange Commission
(the "Commission") thereunder, (ii) been filed with the Commission under
the Securities Act and (iii) become effective under the Securities Act.
Copies of such registration statement and any amendments thereto have been
delivered by the Company to you as the Representatives of the Underwriters.
As used in this Agreement, "Effective Time" means the date and the time as
of which such registration statement, or the most recent post-effective
amendment thereto, if any, was declared effective by the Commission;
"Effective Date" means the date of the Effective Time; "Preliminary
Prospectus" means the prospectus, included in such registration statement,
or amendments thereto, before it became effective under the Securities Act
and any prospectus filed with the Commission by the Company with the
consent of the Representatives pursuant to Rule 424(a) of the Rules and
Regulations; "Registration Statement" means such registration statement as
amended at the respective Effective Time, including all information
contained in the final prospectus filed with the Commission pursuant to
Rule 424(b) of the Rules and Regulations and deemed to be a part of the
registration statement as of the Effective Time pursuant to paragraph (b)
of Rule 430A of the Rules and Regulations; and "Prospectus" means such
final prospectus as supplemented by the Preliminary Prospectus Supplement
dated October 14, 1997 (the "Preliminary Prospectus Supplement") and the
Final Prospectus Supplement dated October 14, 1997 (the "Prospectus
Supplement"), as first filed with the Commission pursuant to paragraph (5)
of Rule 424(b) of the Rules and Regulations. Any registration statement
(including any amendment or supplement thereto or information which is
deemed to be a part thereof) filed by the Company to register additional
Common Shares under Rule 462(b) of the Rules and Regulations ("Rule 462(b)
Registration Statement") shall be deemed a part of the Registration
Statement. Any prospectus (including any amendment or supplement thereto or
information which is deemed to be a part thereof) included in a Rule 462(b)
Registration Statement shall be deemed to be part of the Prospectus. If a
Rule 462(b)
2
Registration Statement is filed in connection with the offering
and sale of the Shares, the Company will have complied or will comply with
the requirements of Rule 111 under the Securities Act relating to the
payment of filing fees therefor. The Company has not distributed, and prior
to the later of the Closing Date and the completion of the distribution of
the Shares, will not distribute, any offering material in connection with
the offering or sale of the Shares other than the Registration Statement,
the Preliminary Prospectus, the Prospectus or any other materials, if any,
permitted by the Act (which were disclosed to the Underwriters and
Underwriters' counsel).
(b) Each Preliminary Prospectus included as part of the Registration
Statement as originally filed or as part of any amendment or supplement
thereto, or filed pursuant to Rule 424 under the Securities Act and the
Rules and Regulations, complied when so filed in all material respects with
the provisions of the Securities Act.
(c) The Registration Statement conforms in all material respects, and
the Prospectus and any further amendments or supplements to the
Registration Statement or the Prospectus will, when they become effective
or are filed with the Commission, as the case may be, conform in all
material respects to the requirements of the Securities Act and the Rules
and Regulations and do not and will not, as of the applicable Effective
Date (as to the Registration Statement and any amendment thereto) and as of
the applicable filing date and at the First Delivery Date (as defined
herein) (as to the Prospectus and any amendment or supplement thereto)
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 (with respect to the Prospectus, in light of the
circumstances under which they were made); provided that no representation
or warranty is made as to information contained in or omitted from the
Registration Statement or the Prospectus in reliance upon and in conformity
with written information furnished to the Company through the
Representatives by or on behalf of any Underwriter specifically for
inclusion therein. The Prospectus delivered to the Underwriters for use in
connection with the offering of Shares will, at the time of such delivery,
be identical to the electronically transmitted copies thereof filed with
the Commission pursuant to XXXXX, except to the extent permitted by
Regulation S-T.
(d) The documents incorporated or deemed to be incorporated by
reference in the Registration Statement as of the applicable Effective
Date, the Prospectus as of its date or any Preliminary Prospectus, complied
in all material respects with the Exchange Act and the rules and
regulations thereunder, and none of such documents, at such dates,
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or
3
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.
(e) No stop order suspending the effectiveness of the Registration
Statement or any part thereof has been issued and no proceeding for that
purpose has been instituted or, to the knowledge of any of the Transaction
Entities, threatened by the Commission or by the state securities authority
of any jurisdiction. No order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus has been issued and no proceeding
for that purpose has been instituted or, to the knowledge of any of the
Transaction Entities threatened by the Commission, after due inquiry, or by
the state securities authority of any jurisdiction.
(f) The Company has been duly formed and is validly existing as a
corporation in good standing under the laws of the State of Delaware, is
duly qualified to do business and is in good standing as a foreign
corporation in each jurisdiction in which its ownership or lease of
property and other assets or the conduct of its business requires such
qualification, except where the failure to do so will not have a Material
Adverse Effect (as defined herein), and has all corporate power and
authority necessary to own or hold its properties and other assets, to
conduct the business in which it is engaged and to enter into and perform
its obligations under this Agreement and the other Operative Documents (as
herein defined) to which it is a party. None of the subsidiaries of the
Company (other than the General Partner) is a "significant subsidiary," as
such term is defined in Rule 405 of the Rules and Regulations. Except as
described in the Prospectus and listed in Schedule 2 hereto, the Company
owns no direct or indirect equity interest in any entity other than the
Transaction Entities.
(g) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued Common Shares, Series 1997-A Preferred
(as defined below) and Warrants (as defined below) (other than the Shares)
have been duly and validly authorized and issued, are fully paid and
non-assessable, have been offered and sold in compliance with all
applicable laws (including, without limitation, federal or state securities
laws), and conform to the description thereof contained in the Prospectus.
The issuance and sale of the Series 1997-A Preferred and the Warrants were
exempt from the registration requirements of applicable federal and state
securities laws. Except as disclosed in the Prospectus under the headings
"Prospectus Supplement Summary - The Offering," "Capitalization," and
"Recent Developments", no Common Shares are reserved for any purpose and
except for the (i) units of limited partnership in the Operating
Partnership ("Units"), (ii) shares of the Company's Series 1997-A
Convertible Preferred Stock (the "Series 1997-A Preferred"), (iii) warrants
of the Company, par value $.01 per warrant, to acquire Common Shares
("Warrants"), and (iv)
4
stock options granted pursuant to the Berkshire Realty Company, Inc. 1996
Stock Option Plan (the "Stock Option Plan"), there are no outstanding
securities convertible into or exchangeable for any Common Shares, and no
outstanding options, rights (preemptive or otherwise) or warrants to
purchase or subscribe for Common Shares or any other securities of the
Company.
(h) The Operating Partnership has been duly formed and is validly
existing as a limited partnership in good standing under the laws of the
State of Delaware, is duly qualified to do business and is in good standing
as a foreign limited partnership in each jurisdiction in which its
ownership or lease of property and other assets or the conduct of its
business requires such qualification, except where the failure to do so
will not have a Material Adverse Effect, and has all partnership power and
authority necessary to own or hold its properties and other assets, to
conduct the business in which it is engaged and to enter into and perform
its obligations under this Agreement and the other Operative Documents to
which it is a party. The General Partner, a wholly-owned subsidiary of the
Company, is the sole general partner of the Operating Partnership. The
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 and the limited partners
in the Operating Partnership are as set forth in the Prospectus; provided
that to the extent any portion of the over-allotment option described in
Section 2 hereof is exercised at the First Delivery Date, the percentage
interest of such partners in the Operating Partnership will be adjusted
accordingly. Additionally, to the extent any portion of such over-allotment
option is exercised subsequent to the First Delivery Date, the Company will
contribute the proceeds from the sale of the Option Shares to the Operating
Partnership in exchange for a number of Units equal to the number of Option
Shares issued.
(i) The General Partner has been duly formed and is validly existing
as a corporation in good standing under the laws of the State of Delaware,
is duly qualified to do business and is in good standing as a foreign
corporation in each jurisdiction in which its ownership or lease of
property and other assets or the conduct of its business requires such
qualification, except where the failure to do so will not have a Material
Adverse Effect, and has all corporate power and authority necessary to own
or hold its properties and other assets, to conduct the business in which
it is engaged and to enter into and perform its obligations under this
Agreement and the other Operative Documents to which it is a party. The
General Partner is a wholly owned subsidiary of the Company. All of the
issued and outstanding capital stock of the General Partner has been duly
authorized and validly issued, is fully paid and non-assessable, has been
offered and sold in compliance with all applicable laws (including, without
limitation, federal or state securities laws) and, all of such capital
stock owned by the Company is owned
5
free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim, restriction or equities. No shares of capital stock of
the General Partner are reserved for any purpose, and there are no
outstanding securities convertible into or exchangeable for any capital
stock of the General Partner and no outstanding options, rights (preemptive
or otherwise) or warrants to purchase or to subscribe for shares of such
capital stock or any other securities of the General Partner.
(j) Each of the Company's subsidiaries listed on Schedule 2 hereof
(the "Subsidiaries") (other than the Operating Partnership and the General
Partner) has been duly formed and is validly existing as a corporation,
limited partnership or other legal entity, as the case may be, in good
standing under the laws of its respective jurisdiction of formation, is
duly qualified to do business and is in good standing as a foreign
corporation, limited partnership or other legal entity, as the case may be,
in each jurisdiction in which its ownership or lease of property and other
assets or the conduct of its business requires such qualification, except
where the failure to do so will not have a Material Adverse Effect, and has
all power and authority necessary to own or hold its properties and other
assets, to conduct the business in which it is engaged and to enter into
and perform its obligations under this Agreement and the other Operative
Documents to which it is a party or other equity interests, as the case may
be. All of the issued and outstanding capital stock of each Subsidiary has
been duly authorized and validly issued, is fully paid and non-assessable,
has been offered and sold in compliance with all applicable laws
(including, without limitation, federal or state securities laws) and, all
of such capital stock is owned by the Company and the Operating
Partnership, free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim, restriction or equities, except for the Company's
50.1% joint venture interest in the Spring Valley Partnership which is
pledged to the lenders pursuant to the BankBoston Facility. No shares of
capital stock or other equity interests, as the case may be are reserved
for any purpose, and there are no outstanding securities convertible into
or exchangeable for any capital stock or other equity interests, as the
case may be of each Subsidiary and no outstanding options, rights
(preemptive or otherwise) or warrants to purchase or to subscribe for
shares of such capital stock or any other securities of each Subsidiary.
(k) The Shares have been duly and validly authorized and, when issued
and delivered against payment therefor as provided herein, will be duly and
validly issued, fully paid and non-assessable. Upon payment of the purchase
price and delivery of the Shares in accordance herewith, each of the
Underwriters will receive good, valid and marketable title to the Shares,
free and clear of all security interests, mortgages, pledges, liens,
encumbrances, claims, restrictions
6
and equities. The terms of the Common Shares conform in substance to all
statements and descriptions related thereto contained in the Prospectus.
The form of the certificates to be used to evidence the Common Shares will,
at the First Delivery Date, be in due and proper form and will comply with
all applicable legal requirements. The issuance of the Shares is not
subject to any preemptive or other similar rights.
(l) At the Closing Date, (i) the outstanding Units and any Units
deferred as to issuance have, and will have, as the case may be, been duly
and validly authorized and issued, fully paid and non-assessable and will
have been offered and sold in compliance with all applicable laws
(including, without limitation, federal or state securities laws), and (ii)
the Units to be issued in connection with the Questar Transaction, will
have been duly and validly authorized for issuance and will be offered and
sold in compliance with all applicable laws (including, without limitation,
federal and state securities laws). After the Closing Date and the closing
of the Questar Transaction and not including any Units issued in exchange
for proceeds received by the Company in connection with the sale of the
Shares, 8,048,905 Units will be issued and outstanding. The issuance and
sale by the Operating Partnership of the Units are exempt from the
registration requirements of the Securities Act and applicable state
securities, real estate syndication and blue sky laws. The terms of the
Units conform in substance to all statements and descriptions related
thereto contained in the Prospectus.
(m) (A) This Agreement has been duly and validly authorized, executed
and delivered by each of the Transaction Entities, and assuming due
authorization, execution and delivery by the Representatives, is a valid
and binding agreement of each of the Transaction Entities, enforceable
against the Transaction Entities in accordance with its terms and (B) the
Operating Partnership Agreement and the organizational documents of the
General Partner and Subsidiaries (the "Subsidiary Documents") have been
duly and validly authorized, executed and delivered by the each Transaction
Entity that is a party thereto and are valid and binding agreements of each
Transaction Entity that is a party thereto, enforceable against such
Transaction Entity that is a party thereto in accordance with their terms;
(C) the Company expects to acquire 18 apartment communities and the
Management Operations thereto, four development projects and the right to
acquire future apartment development projects (the "Questar Documents"),
the agreements pursuant to which have been duly and validly authorized,
executed and delivered by each Transaction Entity that is a party thereto,
and is a valid and binding agreement, enforceable against such Transaction
Entity in accordance with their terms; (D) the employment and
noncompetition agreements between the Company and each of Xxxxx X.
Xxxxxxxx, Ridge X. Xxxx, Xxxxx X. Xxxxx, Xxxxxx Xxxxxx and Xxxxxxxx
Xxxxxxxxx (the
7
"Employment Agreements") have been duly and validly authorized, executed
and delivered by each Transaction Entity that is a party thereto and each
is a valid and binding agreement, enforceable against such Transaction
Entity that is a party thereto in accordance with its terms; (E) Bank
Boston and FNMA Facilities and the related financing documents (the
"Financing Agreements") have been duly and validly authorized, executed and
delivered by each Transaction Entity that is a party thereto and each is a
valid and binding agreement, enforceable against such Transaction Entity
that is a party thereto in accordance with its terms; and (F) at the First
Delivery Date, the lockup agreements by each of the Company, the Operating
Partnership, certain executive officers, directors and other affiliated
parties of the Company and (the "Lock-up Agreements") will have been duly
and validly authorized, executed and delivered by such parties and will be
a valid and binding agreement of such parties, enforceable against such
parties in accordance with their terms. This Agreement, the Operating
partnership Agreement, the Subsidiary Documents, the Questar Documents, the
Employment Agreements, the Financing Agreements and the Lock-Up Agreements
are hereinafter collectively called the "Operative Documents."
(n) The execution, delivery and performance of each Operative Document
by each of the Transaction Entities which is a party hereto and the
consummation of the transactions contemplated hereby and thereby will not
conflict with or result in a breach or violation of any of the material
terms or provisions of, or constitute (with or without the giving of notice
or the passage of time, or both) a default (or give rise to any right of
termination, cancellation or acceleration) under any of the material terms,
conditions or provisions of any note, bond, indenture, mortgage, deed of
trust, lease, license, contract, loan agreement or other agreement or
instrument to which any of the Transaction Entities is a party or by which
any of the Transaction Entities is bound or to which any of the Properties
or other assets of any of the Transaction Entities is subject, nor will
such actions result in any material violation of any of the provisions of
the charter, by-laws, certificate of limited partnership, agreement of
limited partnership or other organizational document of any of the
Transaction Entities or, to the knowledge of any of the Transaction
Entities, any statute or any order, writ, injunction, decree, rule or
regulation of any court or governmental agency or body having jurisdiction
over any of the Transaction Entities or any of their properties or assets;
and except for the registration of the Shares under the Securities Act and
such consents, approvals, authorizations, registrations or qualifications
as may be required under the Exchange Act by the New York Stock Exchange,
Inc. ("NYSE"), or the National Association of Securities Dealers, Inc.
("NASD"), and applicable state securities laws in connection with the
purchase and distribution of the Shares by the Underwriters, no consent,
approval, authorization or order of, or filing or registration with, any
such court or governmental agency or body is required for the execution,
delivery
8
and performance of the Operative Documents by the Transaction Entities, and
the consummation of the transactions contemplated hereby.
(o) Except with the respect to the 6,281,909 shares of Common Shares
reserved for issuance upon the exchange of outstanding Units, the 1,766,996
shares of Common Shares to be reserved for issuance upon the exchange of a
maximum of 1,766,996 Units to be issued in the Questar Transaction and the
400,000 shares of Common Shares to be issued in the Questar Transaction as
described in the Prospectus, there are no contracts, agreements or
understandings between the Company and any person granting such person the
right to require the Company to file a registration statement under the
Securities Act with respect to any securities of the Company owned or to be
owned by such person or to require the Company to include such securities
in the securities registered pursuant to the Registration Statement or in
any securities being registered pursuant to any other registration
statement filed by the Company under the Securities Act.
(p) Except as described in the Prospectus, no Transaction Entity has
sold or issued any securities during the six-month period preceding the
date of the Prospectus, including any sales pursuant to Rule 144A under, or
Regulations D or S of, the Securities Act.
(q) None of the Transaction Entities nor any of the Properties has
sustained, since the date of the latest audited financial statements
included in the Prospectus, any material loss to, or interference with the
business of the Transaction Entities from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, other than as set forth or
contemplated in the Prospectus; and, since such date, there has not been
any change in the capital stock or long-term debt of any of the Transaction
Entities or any material adverse change, or any development involving a
prospective material adverse change, in or affecting the business,
prospects, operations, management, financial position, net worth,
stockholders' equity or results of operations of any of the Transaction
Entities, other than as set forth or contemplated in the Prospectus.
(r) The financial statements (including the related notes and
supporting schedules) filed as part of, or incorporated by reference in,
the Registration Statement or included in the Prospectus present fairly the
financial condition, the results of operations, the statements of cash
flows and the statements of stockholders' equity and other information
purported to be shown thereby of the Company and its consolidated
subsidiaries, at the dates and for the periods indicated, have been
prepared in conformity with generally accepted accounting
9
principles applied on a consistent basis throughout the periods involved
and are correct and complete and are in accordance with the books and
records of the Company and its consolidated subsidiaries. The summary and
selected financial data included in, or incorporated by reference in, the
Prospectus present fairly the information shown therein as at the
respective dates and for the respective periods specified, and the summary
and selected financial data have been presented on a basis consistent with
the financial statements so set forth in the Prospectus and other financial
information. Pro forma financial information included in the Prospectus has
been prepared in accordance with the applicable requirements of the
Securities Act, the Rules and Regulations and AICPA guidelines with respect
to pro forma financial information and includes all adjustments necessary
to present fairly the pro forma financial position of the Company at the
respective dates indicated and the results of operations for the respective
periods specified. No other financial statements (or schedules) of the
Company, or any predecessor of the Company are required by the Securities
Act or the Exchange Act to be included in, or incorporated by reference in,
the Registration Statement or the Prospectus. Coopers & Xxxxxxx LLP, who
have reported on such financial statements, schedules and related notes,
are independent public accountants with respect to the Company as required
by the Securities Act.
(s) Coopers & Xxxxxxx LLP, who have certified certain financial
statements of the Company, whose reports appear in the Prospectus and who
have delivered the initial letter referred to in Section 7(f) hereof, are,
and during the periods covered by such reports were, independent public
accountants as required by the Securities Act and the Rules and
Regulations.
(t) M/PF Research, Inc., whose market data is referred to and relied
upon in the Prospectus and who consented to reference to the firm as an
expert in market research was, as of the date of such report, and is, as of
the date hereof, an independent real estate consulting firm with respect to
the Company.
(u) (A) At or immediately following the Closing Date, the Operating
Partnership and its subsidiaries will have good and marketable title to
each of the Properties, in each case free and clear of all liens,
encumbrances, claims, security interests and defects, other than those
referred to in the Prospectus or those which are not material in amount or
those which would not have a material adverse effect on the business,
prospects, operations, management, consolidated financial position, net
worth, stockholders' equity or results of operations of the Transaction
Entities or use or value of any of the Properties (each a "Material Adverse
Effect"); (B) all liens, charges, encumbrances, claims or restrictions on
or affecting any of the Properties and the assets of any Transaction Entity
which are required to be disclosed in the Prospectus are disclosed therein;
(C) no Transaction Entity or subsidiary is in default under any of the
mortgages or other
10
security documents or other agreements encumbering or otherwise recorded
against the Properties, and no Transaction Entity knows of any event which,
but for the passage of time or the giving of notice, or both, would
constitute a default under any of such documents or agreements; (D) each of
the Properties complies with all applicable codes, laws and regulations
(including, without limitation, building and zoning codes, laws and
regulations and laws relating to access to the Properties), except for such
failures to comply that would not have a Material Adverse Effect; and (E)
no Transaction Entity has knowledge of any pending or threatened
condemnation proceedings, zoning change or other proceeding or action that
will in any material manner affect the size of, use of, improvements on,
construction on or access to the Properties which would have a Material
Adverse Effect.
(v) The mortgages and deeds of trust which will encumber the
Properties are not convertible into equity securities of the entity owning
such Property and said mortgages and deeds of trust are not cross-defaulted
or cross-collateralized with any property other than other Properties.
(w) At or immediately following the Closing Date, the Operating
Partnership and its subsidiaries have obtained title insurance on the fee
interests in each of the Properties, in an amount at least equal to the
greater of (a) the mortgage indebtedness of each such Property or (b) the
purchase price of each such Property.
(x) Except as disclosed in the Prospectus; (A) to the knowledge of the
Transaction Entities, after due inquiry, the operations of the Transaction
Entities and the Properties are in compliance with all Environmental Laws
(as defined below) and all requirements of applicable permits, licenses,
approvals and other authorizations issued pursuant to Environmental Laws;
(B) to the knowledge of the Transaction Entities, after due inquiry, none
of the Transaction Entities or any Property has caused or suffered to occur
any Release (as defined below) of any Hazardous Substance (as defined
below) into the Environment (as defined below) on, in, under or from any
Property, and no condition exists on, in, under or adjacent to any Property
that could result in the incurrence of liabilities under, or any violations
of, any Environmental Law or give rise to the imposition of any Lien (as
defined below), under any Environmental Law; (C) none of the Transaction
Entities has received any written notice of a claim under or pursuant to
any Environmental Law or under common law pertaining to Hazardous
Substances on, in, under or originating from any Property; (D) none of the
Transaction Entities has actual knowledge of, or received any written
notice from any Governmental Authority (as defined below) claiming any
violation of any Environmental Law or a determination to undertake and/or
request the investigation, remediation, clean-up or removal of any
Hazardous Substance
11
released into the Environment on, in, under or from any Property; and (E)
no Property is included or, to the knowledge of the Transaction Entities
proposed for inclusion on the National Priorities List issued pursuant to
CERCLA (as defined below) by the United States Environmental Protection
Agency (the "EPA") or on the Comprehensive Environmental Response,
Compensation, and Liability Information System database maintained by the
EPA, and none of the Transaction Entities has actual knowledge that any
Property has otherwise been identified in a published writing by the EPA as
a potential CERCLA removal, remedial or response site or, to the knowledge
of the Transaction Entities, is included on any similar list of potentially
contaminated sites pursuant to any other Environmental Law.
As used herein, "Hazardous Substance" shall include any hazardous
substance, hazardous waste, toxic substance, pollutant or hazardous
material, including, without limitation, oil, petroleum or any
petroleum-derived substance or waste, asbestos or asbestos-containing
materials, PCBs, pesticides, explosives, radioactive materials, dioxins,
urea formaldehyde insulation or any constituent of any such substance,
pollutant or waste which is subject to regulation under any Environmental
Law (including, without limitation, materials listed in the United States
Department of Transportation Optional Hazardous Material Table, 49 C.F.R.
§ 172.101, or in the EPA's List of Hazardous Substances and Reportable
Quantities, 40 C.F.R. Part 302); "Environment" shall mean any surface
water, drinking water, ground water, land surface, subsurface strata, river
sediment, buildings, structures, and ambient, workplace and indoor and
outdoor air; "Environmental Law" shall mean the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (42 U.S.C.
§ 9601 et seq.) ("CERCLA"), the Resource Conservation and Recovery Act
of 1976, as amended (42 U.S.C. § 6901, et seq.), the Clean Air Act, as
amended (42 U.S.C. § 7401, et seq.), the Clean Water Act, as amended
(33 U.S.C. § 1251, et seq.), the Toxic Substances Control Act, as
amended (15 U.S.C. § 2601, et seq.), the Occupational Safety and
Health Act of 1970, as amended (29 U.S.C. § 651, et seq.), the
Hazardous Materials Transportation Act, as amended (49 U.S.C. § 1801,
et seq.), and all other federal, state and local laws, ordinances,
regulations, rules and orders relating to the protection of the
environments or of human health from environmental effects; "Governmental
Authority" shall mean any federal, state or local governmental office,
agency or authority having the duty or authority to promulgate, implement
or enforce any Environmental Law; "Lien" shall mean, with respect to any
Property, any mortgage, deed of trust, pledge, security interest, lien,
encumbrance, penalty, fine, charge, assessment, judgment or other liability
in, on or affecting such Property; and "Release" shall mean any spilling,
leaking, pumping, pouring, emitting, emptying, discharging, injecting,
escaping, leaching, dumping, emanating or disposing of any Hazardous
Substance into the Environment, including, without limitation, the
abandonment
12
or discard of barrels, containers, tanks (including, without limitation,
underground storage tanks) or other receptacles containing or previously
containing any Hazardous Substance.
To the knowledge of the Company, none of the environmental consultants
which prepared environmental and asbestos inspection reports with respect
to any of the Properties was employed for such purpose on a contingent
basis or has any substantial interest in the Company or any of its
Subsidiaries, and none of them nor any of their directors, officers or
employees is connected with the Company or any of its subsidiaries as a
promoter, selling agent, voting trustee, director, officer or employee.
(y) The Transaction Entities are insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts
and covering such risks as are customary in the businesses in which they
are engaged, and the Transaction Entities have no reason to believe that
they will not be able to renew their existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar
insurers as may be necessary to continue their business at a cost that
would not have a Material Adverse Effect.
(z) Each Transaction Entity owns or possesses adequate rights to use
all material patents, patent applications, trademarks, service marks, trade
names, trademark registrations, service xxxx registrations, copyrights and
licenses necessary for the conduct of its business and has no reason to
believe that the conduct of its business will conflict with, and has not
received any notice of any claim of conflict with, any such rights of
others.
(aa) Except as described in the Prospectus, there are no legal or
governmental proceedings pending to which any Transaction Entity or any
Subsidiary is the subject which, if determined adversely to such
Transaction Entity or Subsidiary, might have a Material Adverse Effect; and
to the knowledge of the Transaction Entities, no such proceedings are
threatened.
(bb) There are no contracts or other documents which are required to
be described in the Prospectus or filed as exhibits to the Registration
Statement by the Securities Act or by the Rules and Regulations which have
not been described in the Prospectus or filed as exhibits to the
Registration Statement or incorporated therein by reference as permitted by
the Rules and Regulations. Each agreement described in the Registration
Statement and the Prospectus or listed in the exhibits to the Registration
Statement is in full force and effect and is valid and enforceable by and
against the Transaction Entities in accordance with its terms. Neither the
Transaction Entities, nor to the knowledge of the Transaction Entities, any
other party to such agreement is in default in the
13
observance or performance of any term or obligation to be performed by it
under any such agreement, and no event has occurred which with notice or
lapse of time or both would constitute such a default, in any such case
which default or event would have a Material Adverse Effect. No default
exists, and no event has occurred which with notice or lapse of time or
both would constitute a default, in the due performance and observance of
any term, covenant or condition, by the Transaction Entities or any
Subsidiary of any other agreement or instrument to which the Transaction
Entities or any Subsidiary is a party or by which any of them or their
respective properties or businesses may be bound or affected which default
or event would have a Material Adverse Effect.
(cc) No relationship, direct or indirect, exists between or among any
of the Transaction Entities on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Transaction Entities on the
other hand, which is required by the Securities Act to be described in the
Prospectus which is not so described.
(dd) No labor disturbance by the employees of any Transaction Entity
exists or, to the knowledge of the Transaction Entities, is imminent which
might be expected to have a material adverse effect on the consolidated
financial position, stockholders' equity, results of operations, business
or prospects of such Transaction Entity.
(ee) Each Transaction Entity is in compliance in all material respects
with all presently applicable provisions of the Employee Retirement Income
Security Act of 1974, as amended, including the regulations and published
interpretations thereunder ("ERISA"); no "reportable event" (as defined in
ERISA) has occurred with respect to any "pension plan" (as defined in
ERISA) for which any Transaction Entity would have any liability; no
Transaction Entity has incurred or expects to incur liability under (i)
Title IV of ERISA with respect to termination of, or withdrawal from, any
"pension plan" or (ii) sections 412 or 4971 of the Internal Revenue Code of
1986, as amended, including the regulations and published interpretations
thereunder (the "Code"); and each "pension plan" for which any Transaction
Entity would have any liability that is intended to be qualified under
Section 401(a) of the Code is so qualified in all material respects and
nothing has occurred, whether by action or by failure to act, which would
cause the loss of such qualification.
(ff) Each Transaction Entity and Subsidiary has filed all federal,
state and local income and franchise tax returns required to be filed
through the date hereof and has paid all taxes due thereon, and no tax
deficiency has been determined adversely to any Transaction Entity or any
Subsidiary which has had (nor does any Transaction Entity have any
knowledge of any tax deficiency
14
which, if determined adversely to it might have) a material adverse effect
on the financial position, stockholders' equity, results of operations,
business or prospects of such Transaction Entity or Subsidiary.
(gg) At all times commencing with its taxable year ended December 31,
1991 the Company has been, and upon the sale of the Shares will continue to
be, organized and operated in conformity with the requirements for
qualification and taxation as a real estate investment trust ("REIT") under
the Internal Revenue Code of 1986, as amended (the "Code") and the proposed
method of operations will enable the Company to continue to meet the
requirements for qualification and taxation as a REIT under the Code.
(hh) Since the date as of which information is given in the Prospectus
through the date hereof, and except as may otherwise be disclosed in the
Prospectus, (i) no Transaction Entity has (a) issued or granted any
securities, (b) incurred any liability or obligation, direct or contingent,
other than liabilities and obligations which were incurred in the ordinary
course of business, (c) entered into any transaction not in the ordinary
course of business or (d) declared or paid any dividend on its capital
stock (other than regular quarterly dividends); and (ii) there has been no
Material Adverse Effect.
(ii) Each Transaction Entity and each subsidiary (i) makes and keeps
accurate books and records and (ii) maintains internal accounting controls
which provide reasonable assurance that (A) transactions are executed in
accordance with management's authorization, (B) transactions are recorded
as necessary to permit preparation of its financial statements and to
maintain accountability for its assets, (C) access to its assets is
permitted only in accordance with management's authorization and (D) the
reported accountability for its assets is compared with existing assets at
reasonable intervals.
(jj) Neither any Transaction Entity nor any Subsidiary (i) is in
violation of its charter, by-laws, certificate of limited partnership,
agreement of limited partnership or other similar organizational document,
(ii) is in default in any material respect, and no event has occurred
which, with notice or lapse of time or both, would constitute a default in
any material respect in the due performance or observance of any material
term, covenant or condition contained in any material indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which it
is a party or by which it is bound or to which any of the Properties or any
of its other properties or assets is subject or (iii) is in violation in
any material respect of any law, ordinance, governmental rule, regulation
or court decree to which it or the Properties or any of its other
properties or assets may be subject or has failed to obtain any material
license, permit, certificate, franchise or other governmental authorization
or permit necessary to the
15
ownership of the Properties or any of its other properties or assets or to
the conduct of its business.
(kk) To the knowledge of such Transaction Entities, no Transaction
Entity, nor any director, officer, agent, employee or other person
associated with or acting on behalf of any Transaction Entity, has used any
corporate funds for any unlawful contribution, gift, entertainment or other
unlawful expense relating to political activity; made any direct or
indirect unlawful payment to any foreign or domestic government official or
employee from corporate funds; violated or is in violation of any provision
of the Foreign Corrupt Practices Act of 1977; or made any bribe, rebate,
payoff, influence payment, kickback or other unlawful payment.
(ll) Neither any Transaction Entity nor any Subsidiary is an
"investment company" within the meaning of such term under the Investment
Company Act of 1940, as amended, and the rules and regulations of the
Commission thereunder.
(mm) The Common Shares are listed on the NYSE on the First Delivery
Date and the Shares have been approved for listing on the NYSE upon
official notice of issuance.
(nn) At or immediately following the Closing Date, the Questar
Transaction will be consummated in the manner described in the Prospectus.
(oo) Other than this Agreement and as set forth in the Prospectus
under the heading "Underwriting," there are no contracts, agreements or
understandings between any Transaction Entity and any person that would
give rise to a valid claim against any Transaction Entity or any
Underwriter for a brokerage commission, finder's fee or other like payment
with respect to the consummation of the transactions contemplated by this
Agreement.
(pp) The net proceeds from the sale of the Shares being sold by the
Company will be applied in accordance with the description set forth in the
Prospectus under the caption "Use of Proceeds."
(qq) Except as stated in this Agreement and in the Prospectus, no
Transaction Entity has taken, nor will any Transaction Entity take,
directly or indirectly, any action designed to or that might reasonably be
expected to cause or result in stabilization or manipulation of the price
of the Common Shares to facilitate the sale or resale of the Shares.
16
(rr) Except for Xxxxx Securities Corporation, which is owned by an
entity affiliated with Xxxxxxx Xxxxx and is a NASD member, and except for
Xxxxxxx Xxxxx, who holds an NASD broker license, there are no affiliations
with the NASD among the Transaction Entities' officers, directors or, to
the best knowledge of the Transaction Entities, any five percent or greater
stockholder of the Company, except as set forth in the Registration
Statement or otherwise disclosed in writing to the Representatives of the
Underwriters.
2. Purchase of the Shares by the Underwriters. On the basis of
the representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell 10,000,000 Firm
Shares, severally and not jointly, to the several Underwriters and each of the
Underwriters, severally and not jointly, agrees to purchase the number of Firm
Shares set forth opposite that Underwriter's name in Schedule 1 hereto. The
respective purchase obligations of the Underwriters with respect to the Firm
Shares shall be rounded among the Underwriters to avoid fractional shares, as
the Representatives may determine.
In addition, the Company grants to the Underwriters an option to
purchase up to 1,500,000 Option Shares. Such option is granted solely for the
purpose of covering over-allotments in the sale of Firm Shares and is
exercisable as provided in Section 4 hereof. Option Shares shall be purchased
severally for the account of the Underwriters in proportion to the number of
Firm Shares set forth opposite the names of such Underwriters in Schedule 1
hereto. The respective purchase obligations of each Underwriter with respect
to the Option Shares shall be adjusted by the Representatives so that no
Underwriter shall be obligated to purchase Option Shares other than in
100-share amounts. The price of both the Firm Shares and any Option Shares
shall be $10.40 per share.
The Company shall not be obligated to deliver any of the Shares to
be delivered on the First Delivery Date or the Second Delivery Date (as
hereinafter defined), as the case may be, except upon payment for all the
Shares to be purchased on such Delivery Date as provided herein.
3. Offering of Shares by the Underwriters.
Upon authorization by the Representatives of the release of the Firm
Shares, the several Underwriters propose to offer the Firm Shares for sale
upon the terms and conditions set forth in the Prospectus.
4. Delivery of and Payment for the Shares. Delivery of and
payment for the Firm Shares shall be made at the office of Xxxxxx & Xxxxx, 000
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such other date or place as shall
be determined by agreement between the Representatives and the Company, at
10:00 A.M., New York City time, on the third full business day following the
date of this Agreement or on the fourth full business day if the
17
Agreement is executed after the daily closing time of the NYSE (unless postponed
in accordance with the provisions of Section 9 hereof). This date and time are
sometimes referred to as the "First Delivery Date." On the First Delivery Date,
the Company shall deliver or cause to be delivered certificates representing the
Firm Shares to the Representatives for the account of each Underwriter against
payment to or upon the order of the Company of the purchase price by wire
transfer of same-day funds. Time shall be of the essence, and delivery at the
time and place specified pursuant to this Agreement is a further condition of
the obligation of each Underwriter hereunder. Upon delivery, the Firm Shares
shall be registered in such names and in such denominations as the
Representatives shall request in writing not less than two full business days
prior to the First Delivery Date. For the purpose of expediting the checking and
packaging of the certificates for the Firm Shares, the Company shall make the
certificates representing the Firm Shares available for inspection by the
Representatives in New York, New York, not later than 2:00 P.M., New York City
time, on the business day prior to the First Delivery Date.
At any time on or before the thirtieth day after the date of this
Agreement, the option granted in Section 2 may be exercised, in whole or in
part, from time to time, by written notice being given to the Company by the
Representatives. Such notice shall set forth the aggregate number of Option
Shares as to which the option is being exercised, the names in which the
Option Shares are to be registered, the denominations in which the Option
Shares are to be issued and the date and time, as determined by the
Representatives, when the Option Shares are to be delivered; provided,
however, that this date and time shall not be earlier than the First Delivery
Date nor earlier than the second business day after the date on which the
option shall have been exercised nor later than the fifth business day after
the date on which the option shall have been exercised. The date and time the
Option Shares are delivered are sometimes referred to as the "Second Delivery
Date" and the First Delivery Date and the Second Delivery Date are sometimes
each referred to as a "Delivery Date."
Delivery of and payment for the Option Shares shall be made at the
place specified in the first sentence of the first paragraph of this Section 4
(or at such other place as shall be determined by agreement between the
Representatives and the Company) at 10:00 A.M., New York City time, on the
Second Delivery Date. On the Second Delivery Date, the Company shall deliver
or cause to be delivered the certificates representing the Option Shares to
the Representatives for the account of each Underwriter against payment to or
upon the order of the Company of the purchase price by wire transfer of
same-day funds. Time shall be of the essence, and delivery at the time and
place specified pursuant to this Agreement is a further condition of the
obligation of each Underwriter hereunder. Upon delivery, the Option Shares
shall be registered in such names and in such denominations as the
Representatives shall request in the aforesaid written notice. For the
purpose of expediting the checking and packaging of the certificates for the
Option Shares, the Company shall make the certificates representing the Option
Shares available for inspection by the Representatives in New York, New York,
not later than 2:00 P.M., New York City time, on the business day prior to the
Second Delivery Date.
18
5. Further Agreements of the Transaction Entities. Each of the
Transaction Entities jointly and severally agrees:
(a) To prepare the Prospectus in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b) under
the Securities Act not later than the Commission's close of business on the
second business day following the execution and delivery of this Agreement
or, if applicable, such earlier time as may be required by Rule 430A(a)(3)
under the Securities Act; to make no further amendment or any supplement to
the Registration Statement or to the Prospectus except as permitted herein;
to advise the Representatives, promptly after it receives notice thereof,
of the time when any amendment to the Registration Statement has been filed
or becomes effective or any supplement to the Prospectus or any amended
Prospectus has been filed and to furnish the Representatives with copies
thereof; to advise the Representatives, promptly after it receives notice
thereof, of the issuance by the Commission of any stop order or of any
order preventing or suspending the use of the Prospectus, of the suspension
of the qualification of the Shares for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for any
such purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or the Prospectus or for
additional information; and, in the event of the issuance of any stop order
or of any order preventing or suspending the use of the Prospectus or
suspending any such qualification, to use promptly its best efforts to
obtain its withdrawal; that the Prospectus and any amendments or
supplements thereto furnished to the Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to XXXXX, except to the extent permitted by Regulation S-T;
(b) To furnish promptly to the Representatives and to counsel for the
Underwriters a signed copy of the Registration Statement as originally
filed with the Commission, and each amendment thereto filed with the
Commission, including all consents and exhibits filed therewith or
incorporated by reference therein and all documents incorporated by
reference therein;
(c) To deliver promptly to the Representatives such number of the
following documents as the Representatives shall reasonably request: (i)
conformed copies of the Registration Statement as originally filed with the
Commission and each amendment thereto (in each case including consents and
exhibits other than this Agreement and the computation of per share
earnings) and (ii) the Prospectus and any amended or supplemented
Prospectus; and, if the delivery of a prospectus is required at any time
after the Effective Time in connection with the offering or sale of the
Shares or any other securities relating thereto and if at such time any
events shall have occurred as a result of which the
19
Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances
under which they were made when the Prospectus is delivered, not
misleading, or, if for any other reason it shall be necessary to amend or
supplement the Prospectus in order to comply with the Securities Act or the
Exchange Act, to notify the Representatives and, upon its request, to file
such document and to prepare and furnish without charge to each Underwriter
and to any dealer in securities as many copies as the Representatives may
from time to time reasonably request of an amended or supplemented
Prospectus which will correct such statement or omission or effect such
compliance. The aforementioned documents furnished to the Underwriters will
be identical to the electronically transmitted copies thereof filed with
the Commission pursuant to XXXXX except to the extent permitted by
Regulation S-T;
(d) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the
Prospectus that may, in the judgment of the Representatives or Counsel to
the Underwriters, be required by the Securities Act or requested by the
Commission;
(e) Prior to filing with the Commission any amendment to the
Registration Statement or supplement to the Prospectus or any Prospectus
pursuant to Rule 424 of the Rules and Regulations, to furnish a copy
thereof to the Representatives and counsel for the Underwriters within a
reasonable period of time prior to the filing thereof; and obtain the
consent of the Representatives to the filing;
(f) The Company will make generally available to its security holders
as soon as practicable but no later than 60 days after the close of the
period covered thereby an earnings statement (in form complying with the
provisions of Section 11(a) of the Securities Act and Rule 158 of the Rules
and Regulations), which need not be certified by independent certified
public accountants unless required by the Securities Act or the Rules and
Regulations, covering a twelve-month period commencing after the "effective
date" (as defined in said Rule 158) of the Registration Statement;
(g) The Company will furnish to each Underwriter, from time to time
during the period when the Prospectus is required to be delivered under the
Securities Act or the Exchange Act of such number of copies of the
Prospectus (as amended or supplemented) as such Underwriter may reasonably
request for the purposes contemplated by the Securities Act or the Exchange
Act or the respective applicable rules and regulations of the Commission
thereunder.
20
(h) For a period of five years following the Effective Date, to
furnish to the Representatives copies of all materials furnished by the
Company to its stockholders and all public reports and all reports and
financial statements furnished by the Company to the principal national
securities exchange upon which the Common Shares may be listed pursuant to
requirements of or agreements with such exchange or to the Commission
pursuant to the Exchange Act or any rule or regulation of the Commission
thereunder;
(i) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the Shares for offering
and sale under the securities, real estate syndication or Blue Sky laws of
such jurisdictions as the Representatives may reasonably request and to
comply with such laws so as to permit the continuance of sales and dealings
therein in such jurisdictions for as long as may be necessary to complete
the distribution of the Shares, provided, however, that no Transaction
Entity shall be required to qualify as a foreign corporation in any
jurisdiction other than those in which it is presently so qualified;
(j) For a period of 180 days from the date of the Prospectus, the
Company and the Operating Partnership (i) will not, (1) directly or
indirectly, offer for sale, sell, contract to sell, pledge or otherwise
dispose of (or enter into any transaction or device which is designed to,
or could be expected to, result in the disposition by any person at any
time in the future of) any Common Shares, Units or securities convertible
into or exercisable or exchangeable for Common Shares or Units (other than
the Shares, shares issued pursuant to employee benefit plans, stock option
plans or other employee compensation plans existing on the date hereof),
or sell or grant options, rights or warrants with respect to any Common
Shares, convertible units or securities exercisable, or exchangeable for
Common Shares or Units (other than the grant of options pursuant to option
plans existing on the date hereof), or (2) enter into any swap or other
derivatives transaction that transfers to another, in whole or in part, any
of the economics benefit or risks of ownership of Common Shares, whether
any such transaction described in clause (1) or (2) above is to be settled
by delivery of Common Shares, Units or other securities, in cash or
otherwise, in each case without the prior written consent of Xxxxxx
Brothers Inc., provided, however, that the foregoing provisions in this
clause (i) shall not be applicable to the merger or consolidation of the
Company or the sale of all or substantially all of the Company's and/or
Operating Partnership's assets nor will such provisions be applicable to
the Questar Transaction or any acquisition of real estate assets in the
ordinary course of business involving the exchange of Units or Common
Shares (provided, that in the case of such acquisition in the ordinary
course of business, any recipient of such Units or Common Shares agrees to
be bound by the provisions of this Section 5(j)), and provided, further,
that the Company will not waive or accelerate any rights any party has with
respect to the Company in connection
21
with registration and/or conversion rights without the prior written
consent of Xxxxxx Brothers Inc.; and (ii) will cause each of those parties
listed on Schedule 3 hereto to furnish to the Representatives, prior to the
First Delivery Date, a letter or letters, in form and substance reasonably
satisfactory to counsel for the Underwriters, pursuant to which each such
person shall agree not to, (1) directly or indirectly, offer for sale,
sell, contract to sell, pledge or otherwise dispose of (or enter into any
transaction or device which is designed to, or could be expected to, result
in the disposition by any person at any time in the future of) any Common
Shares or securities convertible into or exercisable or exchangeable for
Common Shares, or sell or grant options, rights or warrants with respect to
any Common Shares or securities, convertible units or exercisable, or
exchangeable for Common Shares, or (2) enter into any swap or other
derivatives transaction that transfers to another, in whole or in part, any
of the economics benefit or risks of ownership of Common Shares, whether
any such transaction described in clause (1) or (2) above is to be settled
by delivery of Common Shares or other securities, in cash or otherwise, in
each case without the prior written consent of Xxxxxx Brothers Inc.,
provided, however, that the foregoing provisions in this clause (ii) shall
not be applicable to (x) the merger or consolidation of the Company through
any exchange and/or tender offer and/or sale of substantially all of the
Company's or Operating Partnership's assets or to (y) lenders under
Financing Agreements or loan agreements of the individuals or entities
listed on Schedule 3 hereto, pursuant to which such Common Shares or
securities may be pledged (provided that any pledgee agrees to be bound by
the provisions of this Section 5(j)).
(k) To file with the NYSE all documents and notices required by such
exchange of companies that have securities listed on the NYSE, and to use
its best efforts to maintain the listing of the Common Shares thereon;
prior to the Closing Date, to apply for the listing of the Shares and to
complete that listing, subject only to official notice of issuance, prior
the First Delivery Date.
(l) To apply the net proceeds from the sale of the Shares being sold
by the Company in accordance with the description set forth in the
Prospectus under the caption "Use of Proceeds;"
(m) To take such steps as shall be necessary to ensure that none of
the Transaction Entities shall become an "investment company" within the
meaning of such term under the Investment Company Act of 1940, as amended,
and the rules and regulations of the Commission thereunder;
22
(n) Except as stated in this Agreement and in the Preliminary
Prospectus and Prospectus, no Transaction Entity has taken, nor will any
Transaction Entity take, directly or indirectly, any action designed to or
that might reasonably be expected to cause or result in stabilization or
manipulation of the price of the Common Shares to facilitate the sale or
resale of the Shares;
(o) The Company will use its best efforts to continue to meet the
requirements to qualify as a "real estate investment trust" under the Code
unless the Company's Board of Directors determines that it is no longer in
the best interests of the Company to be so qualified;
(p) If this Agreement shall be terminated by the Underwriters because
of any failure or refusal on the part of the Transaction Entities to comply
with the terms or fulfill any of the material conditions of this Agreement,
the Transaction Entities jointly and severally agree to reimburse the
Representatives for all reasonable out-of-pocket expenses (including fees
and expenses of counsel for the Underwriters) incurred by the
Representatives in connection herewith and such reimbursement shall be the
sole compensation, except as otherwise permitted under Section 10 hereof,
to which the Representatives shall be entitled in the event of such a
termination;
(q) Each of the Transaction Entities will use its best efforts to
maintain the listing of the Shares on the NYSE for a period of two years
after the Closing Date and thereafter unless the Company's Board of
Directors determines that it is no longer in the best interests of the
Company for the Shares to continue to be so listed, provided, however, that
this requirement shall not be applicable in the event the shareholders vote
to liquidate the Company prior to two years after the Closing; and
(r) Each of the Transaction Entitles will use its best efforts to do
and perform all things required to be done and performed under this
Agreement by the Company prior to the Closing Date or any Option Closing
Date, as the case may be, and to satisfy all conditions precedent to the
delivery of the Shares.
6. Expenses. The Transaction Entities jointly and severally
agree to pay (a) the costs incident to the authorization, issuance, sale and
delivery of the Shares and any taxes payable in that connection; (b) the costs
incident to the preparation, printing, filing and distribution under the
Securities Act of the Registration Statement and any amendments and exhibits
thereto; (c) the costs of distributing the Registration Statement as
originally filed and each amendment thereto and any post-effective amendments
thereof (including, in each case, exhibits), any Preliminary Prospectus, the
Prospectus and any amendment or supplement to the Prospectus, including the
Prospectus Supplement, all as provided in this Agreement; (d) the costs of
producing and distributing this Agreement and any other related documents in
connection with
23
the offering, purchase, sale and delivery of the Shares; (f) the filing fees
incident to securing any required review by the NASD of the terms of sale of the
Shares; (g) any applicable listing or other fees; (h) the fees and expenses of
qualifying the Shares under the securities laws of the several jurisdictions as
provided in Section 5(i) and of preparing, printing and distributing a Blue Sky
Memorandum (including related fees and expenses of counsel to the Underwriters);
(i) all other costs and expenses incident to the performance of the obligations
of the Transaction Entities under this Agreement; (j) the costs and charges of
any transfer agent and registrar; (k) any expenses incurred by the Company in
connection with a "road show" presentation to potential investors; and (l) the
fees and disbursements of the Company's counsel and accountants; provided that,
except as provided in this Section 6 and in Section 12 the Underwriters shall
pay their own costs and expenses, including the costs and expenses of their
counsel, any transfer taxes on the Shares which they may sell and the expenses
of advertising any offering of the Shares made by the Underwriters.
7. Conditions of Underwriters' Obligations. The respective
obligations of the Underwriters hereunder are subject to the accuracy, when
made and on each Delivery Date, of the representations and warranties of the
Transaction Entities contained herein, to the performance by each Transaction
Entity and of its obligations hereunder, and to each of the following
additional terms and conditions:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for the Registration Statement or a post-effective amendment
thereto to be declared effective before the offering of the Shares may
commence, the Registration Statement or such post-effective amendment shall
have become effective not later than 5:30 P.M., New York City time, on the
date hereof, or at such later date and time as shall be consented to in
writing by the Representatives, and all filings, if any, required by Rules
424 and 430A under the Rules and Regulations shall have been timely made;
no stop order suspending the effectiveness of the Registration Statement
shall have been issued and no proceeding for that purpose shall have been
instituted or, to the knowledge of the Transaction Entities, or any
Underwriter, threatened by the Commission, and any request of the
Commission for additional information (to be included in the Registration
Statement or the Prospectus or otherwise) shall have been complied with to
the reasonable satisfaction of the Representatives.
(b) Subsequent to the effective date of this Agreement, there shall
not have occurred (i) any Material Adverse Effect, or (ii) any event or
development relating to or involving any Transaction Entity, or any
partner, officer, director or trustee of any Transaction Entity, which
makes any statement of a material fact made in the Prospectus untrue or
which, in the opinion of the Company and its counsel or the Underwriters
and their counsel, requires the making of any addition to or change in the
Prospectus in order to state a material fact required by the Securities Act
or any other law to be stated therein or necessary in order
24
to make the statements therein not misleading, if amending or supplementing
the Prospectus to reflect such event or development would, in the
Representative's reasonable opinion, adversely affect the market for the
Shares.
(c) All corporate proceedings and other legal matters incident to the
authorization, form and validity of this Agreement, the Operative
Documents, the Shares, the Registration Statement and the Prospectus, and
all other legal matters relating to this Agreement and the transactions
contemplated hereby shall be reasonably satisfactory in all material
respects to counsel for the Underwriters, and the Company shall have
furnished to such counsel all documents and information that they may
reasonably request to enable them to pass upon such matters.
(d) Peabody & Xxxxx shall have furnished to the Representatives its
written opinion, as counsel to the Company, addressed to the Underwriters
and dated such Delivery Date, in form and substance reasonably satisfactory
to the Representatives and counsel to the Underwriters, to the effect that:
(i) The Company has been duly formed and is validly existing as a
corporation in good standing under the laws of the State of Delaware,
is duly qualified to do business and is in good standing as a foreign
corporation in each jurisdiction in which its ownership or lease of
property or other assets or the conduct of its business requires such
qualification, except where the failure to do so will not have a
Material Adverse Effect, and has all corporate power and authority
necessary to own or hold its properties or other assets, to conduct
the business in which it is engaged as described in the Registration
Statement and the Prospectus, and to enter into and perform its
obligations under this Agreement and the other Operative Documents to
which it is a party.
(ii) The Company has an authorized capitalization as set forth in
the Prospectus, and all of the issued Common Shares (other than the
Shares) have been duly and validly authorized and issued, are fully
paid and non-assessable, have been offered and sold in compliance with
all applicable laws (including, without limitation, federal and state
securities laws) and conform to the description thereof contained in
the Prospectus. Except as disclosed in the Prospectus, to the
knowledge of such counsel, no Common Shares are reserved for any
purpose and except for the Units, Series 1997-A Preferred, Warrants
and stock options issued pursuant to the Stock Option Plan, there are
no outstanding securities convertible into or exchangeable for any
Common Shares, and no outstanding options, rights (preemptive or
otherwise) or warrants to purchase or subscribe for shares of
beneficial interest or any other
25
securities of the Company. The issuance and sale of the Series 1997-A
Preferred and, to the knowledge of such counsel, the issuance of the
Warrants were exempt, and the issuance and sale of Units and Common
Shares in connection with the Questar Transaction, at or immediately
following the Closing Date, are exempt, from the registration
requirements of the Securities Act and the applicable state securities
laws.
(iii) The Operating Partnership has been duly formed and is
validly existing as a limited partnership in good standing under the
laws of the State of Delaware, is duly qualified to do business and is
in good standing as a foreign limited partnership in each jurisdiction
in which its ownership or lease of property and other assets or the
conduct of its business requires such qualification, except where
failure to do so will not have a Material Adverse Effect, and has all
partnership power and authority necessary to own or hold its
properties and other assets, to conduct the business in which it is
engaged as described in the Registration Statement and the Prospectus,
and to enter into and perform its obligations under this Agreement and
the other Operative Documents to which it is a party. The General
Partner is the sole general partner of the Operating Partnership. The
Operating Partnership Agreement is in full force and effect, and, to
the knowledge of such counsel, the aggregate percentage interests of
the Company and the limited partners in the Operating Partnership are
as set forth in the Prospectus.
(iv) The General Partner has been duly formed and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, is duly qualified to do business and is in good standing
as a foreign corporation in each jurisdiction in which its ownership
or lease of property and other assets or the conduct of its business
requires such qualification, except where failure to do so will not
have a Material Adverse Effect, and has all corporate power and
authority necessary to own or hold its properties and other assets, to
conduct the business in which it is engaged and to enter into and
perform its obligations under this Agreement. The General Partner is a
wholly-owned subsidiary of the Company. All of the issued and
outstanding capital stock of the General Partner has been duly
authorized and validly issued and is fully paid and non-assessable,
has been offered and sold in compliance with all applicable laws
(including, without limitation, federal or state securities laws) and,
to the knowledge of such counsel, all of such capital stock owned by
the Company is owned free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim, restriction or equities.
To the knowledge of such counsel, no shares of capital stock of the
General Partner are reserved for any purpose, and there are
26
no outstanding securities convertible into or exchangeable for any
capital stock of the General Partner and no outstanding options,
rights (preemptive or otherwise) or warrants to purchase or to
subscribe for shares of such capital stock or any other securities of
the General Partner.
(v) Each of the Subsidiaries (other than the Operating
Partnership and the General Partners) has been duly formed and is
validly existing as a corporation, limited partnership or other legal
entity, as the case may be, under the laws of its respective
jurisdiction of formation, is duly qualified to do business and is in
good standing as a corporation, limited partnership or other legal
entity, as the case may be, in each jurisdiction in which its
ownership or lease of property and other assets or the conduct of its
business requires such qualification, except where failure to do so
will not have a Material Adverse Effect, and has all power and
authority necessary to own or hold its properties and other assets, to
conduct the business in which it is engaged as described in the
Registration Statement and the Prospectus, and to enter into and
perform its obligations under this Agreement and the other Operative
Documents to which it is a party. To such counsel's knowledge, all of
the issued and outstanding capital stock or other equity interests, as
the case may be, of each Subsidiary (other than the Operating
Partnership and the General Partner) have been duly authorized and
validly issued and is fully paid and non-assessable, has been offered
and sold in compliance with all applicable laws (including, without
limitation, federal or state securities laws) and, to the knowledge of
such counsel, all of such capital stock is owned by the Company and/or
the Operating Partnership, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim, restriction or equities.
To the knowledge of such counsel, no shares of capital stock or other
equity interests, as the case may be, of each Subsidiary (other than
the Operating Partnership and the General Partner) are reserved for
any purpose, and there are no outstanding securities convertible into
or exchangeable for any capital stock or other equity interests, as
the case may be, of each Subsidiary (other than the Operating
Partnership and the General Partner) and no outstanding options,
rights (preemptive or otherwise) or warrants to purchase or to
subscribe for shares of such capital stock or any other securities or
other equity interests, as the case may be of each Subsidiary (other
than the Operating Partnership and the General Partner).
(vi) The Shares have been duly and validly authorized and, when
issued and delivered against payment therefor as provided herein, will
be duly and validly issued, fully paid and non-assessable. Upon
payment of the purchase price and delivery of the Shares in accordance
herewith, each of
27
the Underwriters will receive good, valid and marketable title to the
Shares, free and clear of all security interests, mortgages, pledges,
liens, encumbrances, claims, restrictions and equities. The terms of
the Common Shares conform in substance to all statements and
descriptions related thereto contained in the Prospectus. The form of
the certificates to be used to evidence the Common Shares are in due
and proper form and comply with all applicable legal requirements. The
issuance of the Shares is not subject to any preemptive or other
similar rights arising under the Articles of Incorporation or by-laws
of the Company, Delaware General Corporate Law or any agreement or
other instrument to which the Company is a party known to such
counsel.
(vii) To such counsel's knowledge, the outstanding Units have
been duly and validly authorized, duly and validly issued, fully paid
and non-assessable and have been offered and sold in compliance with
all applicable laws (including, without limitation, federal and state
securities laws). To the knowledge of such counsel, the issuance and
sale by the Operating Partnership of the Units was exempt from the
registration requirements of the Securities Act and applicable state
securities laws. The terms of the Units conform in substance to all
statements and descriptions related thereto contained in the
Prospectus.
(viii) (A) This Agreement has been duly and validly authorized,
executed and delivered by the each of the Transaction Entities and,
and assuming due authorization, execution and delivery by the
Representatives, and is a valid and binding agreement of each of the
Transaction Entities, enforceable against the Transaction Entities in
accordance with its terms; (B) the Operating Partnership Agreement and
the Subsidiary Documents have each been duly and validly authorized,
executed and delivered by each Transaction Entity which is a party
thereto and are each valid and binding agreements of each Transaction
Entity that is a party thereto, enforceable against such parties in
accordance with their respective terms; (C) each of the Questar
Documents has been duly and validly authorized, executed and delivered
by each Transaction Entity that is a party thereto, and is a valid and
binding agreement of each Transaction Entity that is a party thereto,
enforceable against such Transaction Entity, in accordance with its
terms; (D) the Employment Agreements have been duly and validly
authorized, executed and delivered by each Transaction Entity that is
a party thereto and are valid and binding
28
agreements, enforceable against such parties thereto, in accordance
with their respective terms; (E) the Financing Agreements have been
duly and validly authorized, executed and delivered by each
Transaction Entity that is a party thereto and are valid and binding
agreements, enforceable against such parties thereto, in accordance
with their respective terms; and (F) the Lock-up Agreements have been
duly and validly authorized, executed and delivered by the each
Transaction Entity that is a party thereto and are valid and binding
agreements, enforceable against such parties thereto, in accordance
with their terms.
(ix) The execution, delivery and performance of each Operative
Document by each of the Transaction Entities and the consummation of
the transactions contemplated hereby and thereby, to the knowledge of
such counsel, will not conflict with or result in a breach or
violation of any of the material terms or provisions of, or constitute
(with or without the passage of time or the giving of notice, or both)
a default (or give rise to any right of termination, cancellation or
acceleration) under any of the material terms, conditions or
provisions of, any note, bond, indenture, mortgage, deed of trust,
lease, license, contract, loan agreement or other agreement or
instrument to which any of the Transaction Entities is a party or by
which any of the Transaction Entities is bound or to which any of the
Properties or other assets of any of the Transaction Entities is
subject, nor will such actions result in any material violation of the
provisions of the charter, by-laws, certificate of limited
partnership, agreement of limited partnership, or other organizational
documents of any of the Transaction Entities, or, to such counsel's
knowledge, any statute or any order, writ, injunction, decree, rule or
regulation of any court or governmental agency or body having
jurisdiction over any of the Transaction Entities or any of their
properties or assets; and except for the registration of the Shares
under the Securities Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under the Exchange
Act, by the NYSE or the NASD and applicable state securities laws in
connection with the purchase and distribution of the Shares by the
Underwriters, no consent, approval, authorization or order of, or
filing or registration with, any such court or governmental agency or
body is required for the execution, delivery and performance of the
Operative Documents by the Transaction Entities and the consummation
of the transactions contemplated hereby and thereby.
(x) To such counsel's knowledge, except with the respect to the
6,281,909 shares of Common Shares reserved for issuance upon the
exchange of outstanding Units, the 1,766,996 shares of Common Shares
to be reserved for issuance upon the exchange of a maximum of
1,766,996 Units to be issued in the Questar Transaction and the
400,000 shares of Common Shares to be issued in the Questar
29
Transaction as described in the Prospectus, there are no
contracts, agreements or understandings between the Company and any
person granting such person the right to require the Company to file a
registration statement under the Securities Act with respect to any
securities of the Company owned or to be owned by such person or to
require the Company to include such securities in the securities
registered pursuant to the Registration Statement or in any securities
being registered pursuant to any other registration statement filed by
the Company under the Securities Act.
(xi) To such counsel's knowledge, the Operating Partnership and
each Subsidiary has good and marketable title to each of its
respective interests in the Properties and other assets, in each case
free and clear of all liens, encumbrances, claims, security interests
and defects, other than those referred to in the Prospectus or those
which are not material in amount or those which would not have a
Material Adverse Effect.
(xii) To such counsel's knowledge, other than as set forth in the
Prospectus, there are no legal or governmental proceedings pending to
which any Transaction Entity or Subsidiary is a party or of which any
property or assets of any Transaction Entity is the subject which, if
determined adversely to such Transaction Entity or any Subsidiary,
might reasonably be expected to have a Material Adverse Effect; and to
the knowledge of such counsel no such proceedings are threatened.
(xiii) To such counsel's knowledge, there are no contracts or
other documents which are required to be described in the Prospectus
or filed as exhibits to the Registration Statement by the Securities
Act or by the Rules and Regulations which have not been described in
the Prospectus or filed as exhibits to the Registration Statement or
incorporated therein by reference as permitted by the Rules and
Regulations.
(xiv) To such counsel's knowledge, no relationship, direct or
indirect, exists between or among any of the Transaction Entities on
the one hand, and the directors, officers, stockholders, customers or
suppliers of the Transaction Entities on the other hand, which is
required by the Securities Act to be described in the Prospectus which
is not so described.
(xv) To such counsel's knowledge and other than as described in
the Prospectus, no Transaction Entity or Subsidiary (i) is in
30
violation of its charter, by-laws, certificate of limited partnership,
agreement of limited partnership or other similar organizational
document, (ii) is in default in any material respect, and no event has
occurred which, with notice or lapse of time or both, would constitute
such a default, in the due performance or observance of any material
term, covenant or condition contained in any material indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which it is a party or by which it is bound or to which
any of the Properties or any of its other properties or assets is
subject or (iii) is in violation in any material respect of any law,
ordinance, governmental rule, regulation or court decree to which it
or the Properties or any of its other properties or assets may be
subject or has failed to obtain any material license, permit,
certificate, franchise or other governmental authorization or permit
necessary to the ownership of the Properties or any of its other
properties or assets or to the conduct of its business.
(xvi) Commencing with the taxable year ended December 31, 1991,
the Company has been organized and has operated in conformity with the
requirements for qualifications and taxation as a REIT under the Code,
and the proposed method of operations will enable the Company to meet
the requirements for qualification and taxation as a REIT under the
Code; and the Operating Partnership will continue to be classified as
a partnership and not as (a) an association taxable as a corporation
or (b) a "publicly traded partnership" within the meaning of Section
7704(b) of the Code.
(xvii) No Transaction Entity or Subsidiary is an "investment
company" within the meaning of such term under the Investment Company
Act of 1940, as amended and the rules and regulations of the
Commission thereunder.
(xviii) The Common Shares have been approved for listing on the
New York Stock Exchange upon notice of issuance.
(xix) The Registration Statement was declared effective under the
Securities Act as of the date and time specified in such opinion, the
Prospectus was filed with the Commission pursuant to the subparagraph
of Rule 424(b) of the Rules and Regulations specified in such opinion
on the date specified therein and, to the best knowledge of such
counsel, no stop order suspending the effectiveness of the
Registration Statement has been issued and, to the best knowledge of
such counsel, no proceeding for that purpose is pending or threatened
by the Commission.
31
(xx) The Registration Statement and the Prospectus and any
further amendments or supplements thereto made by the Company prior to
such Delivery Date (other than the financial statements and related
schedules and other financial and statistical data included therein,
as to which such counsel need express no opinion) comply as to form in
all material respects with the requirements of the Securities Act and
the Rules and Regulations.
(xxi) To the knowledge of such counsel, the documents
incorporated or deemed to be incorporated by reference in the
Prospectus pursuant to Item 12 of Form S-3 (other than the financial
statements and related schedules and financial information and data
included therein, as to which no opinion need be rendered), at the
time they were filed with the Commission, complied and will comply as
to form in all material respects with the requirements of the Exchange
Act and the rules and regulations thereunder.
(xxii) The statements contained in the Prospectus Supplement
under the captions "Prospectus Supplement Summary," "Risk Factors,"
"The Company" and "The Questar Transaction" and in the base Prospectus
under the captions "Description of Capital Stock of the Company,"
"Federal Income Tax Considerations," "Description of Debt Securities"
and "Description of Securities Warrants" insofar as those statements
are descriptions of contracts, agreements or other legal documents, or
they describe federal statutes, rules and regulations or legal
conclusions, constitute a fair summary thereof, and the opinion of
such counsel filed as Exhibit 8 to the Registration Statement is
confirmed and the Underwriters may rely upon such opinion as if it
were addressed to them.
In rendering such opinion, such counsel may (i) state that its opinion is
limited to matters governed by the Federal laws of the United States of
America and the States of Delaware and New York; (ii) rely (to the extent
such counsel deems proper and specifies in their opinion), as to matters
involving the application of the laws of the State of Delaware upon the
opinion of other counsel of good standing, provided that such other counsel
is satisfactory to counsel for the Underwriters and furnishes a copy of its
opinion to the Representatives; (iii) in giving the opinion referred to in
Section 7(d)(viii), state that such opinion with respect to the
enforceability of such documents may be limited by bankruptcy, fraudulent
conveyance, insolvency, reorganization, moratorium, and other laws relating
to or affecting creditors' rights generally and by general equitable
principles; and (iv) in giving the opinion referred to in Section 7(d)(xi),
state that no examination of record titles for the purpose of such opinion
has been made,
32
and that it is relying upon a general review of the titles of the Company
and its subsidiaries, upon opinions of local counsel and abstracts, reports
and policies of title companies rendered or issued at or subsequent to the
time of acquisition of such property by the Company or its subsidiaries,
and, in respect of matters of fact, upon certificates of officers of the
Company or its subsidiaries, provided that such counsel shall state that it
believes that both the Underwriters and it are justified in relying upon
such opinions, of local counsel and abstracts, reports, policies and
certificates. Such counsel shall also have furnished to the Representatives
a written statement, addressed to the Underwriters and dated such Delivery
Date, in form and substance satisfactory to the Representatives and counsel
to the Underwriters, to the effect that (x) such counsel has acted as
counsel to the Company in connection with the preparation of the
Registration Statement and the Prospectus, and (y) based on the foregoing,
no facts have come to the attention of such counsel which lead it to
believe that the Registration Statement, as of the Effective Date,
contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make
the statements therein not misleading, or that the Prospectus, as of its
date, as of the date hereof, and as of each applicable Date of Delivery,
contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading. The
foregoing opinion and statement may be qualified by a statement to the
effect that such counsel does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus except as indicated in Section
7(d)(xxii), and may state that such counsel expresses no belief with
respect to the financial statements and notes thereto and other financial
and statistical data included in, or incorporated by reference in, the
Registration Statement or the Prospectus.
(e) The Representatives shall have received from Xxxxxx & Xxxxx,
counsel for the Underwriters, such opinion or opinions, dated such Delivery
Date, with respect to the issuance and sale of the Shares, the Registration
Statement, the Prospectus and other related matters as the Representatives
may reasonably require, and the Company shall have furnished to such
counsel such documents as they reasonably request for the purpose of
enabling them to pass upon such matters.
(f) At the time of execution of this Agreement, the Representatives
shall have received from Coopers & Xxxxxxx LLP a letter, in form and
substance reasonably satisfactory to the Representatives, addressed to the
Underwriters and dated the date hereof (i) confirming that they are
independent public accountants within the meaning of the Securities Act and
are in compliance with the applicable requirements relating to the
qualification of accountants under
33
Rule 2-01 of Regulation S-X of the Commission, and (ii) stating, as of the
date hereof (or, with respect to matters involving changes or developments
since the respective dates as of which specified financial information is
given in, or incorporated by reference in, the Prospectus, as of a date not
more than five days prior to the date hereof), the conclusions and findings
of such firm with respect to the financial information and other matters
ordinarily covered by accountants' "comfort letters" to underwriters in
connection with registered public offerings as contemplated in the
Statement on Auditing Standards No. 72.
(g) With respect to the letter of Coopers & Xxxxxxx LLP referred to in
the preceding paragraph and delivered to the Representatives concurrently
with the execution of this Agreement (the "initial letter"), the Company
shall have furnished to the Representatives a letter (the "bring-down
letter") of such accountants, addressed to the Underwriters and dated such
Delivery Date (i) confirming that they are independent public accountants
within the meaning of the Securities Act and are in compliance with the
applicable requirements relating to the qualification of accountants under
Rule 2-01 of Regulation S-X of the Commission, (ii) stating, as of the date
of the bring-down letter (or, with respect to matters involving changes or
developments since the respective dates as of which specified financial
information is given in the Prospectus, as of a date not more than five
days prior to the date of the bring-down letter), the conclusions and
findings of such firm with respect to the financial information and other
matters covered by the initial letter and (iii) confirming in all material
respects the conclusions and findings set forth in the initial letter.
(h) Each Transaction Entity shall have furnished to the
Representatives a certificate, dated each applicable Delivery Date, signed
by its Chief Executive Officer and its chief financial officer, who in
signing such certificate shall be acting solely in their capacity as
officers of the Company, stating that:
(i) The representations, warranties and agreements of the
Transaction Entities in Section 1 are true and correct as of such
Delivery Date; the Transaction Entities have complied with all its
agreements contained herein; and the conditions set forth in Sections
7(a), (b), (c), (j) and (m) have been fulfilled; and
(ii) They have carefully examined the Registration Statement and
the Prospectus and, in their opinion (A) as of the Effective Date, the
Registration Statement and Prospectus did not include any untrue
statement of a material fact and did not omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading (with respect to the Prospectus, in light of
the circumstances in which they were made), and (B) since the
applicable
34
Effective Date no event has occurred which should have been set forth
in a supplement or amendment to the Registration Statement or the
Prospectus and has not been so set forth.
(i) (i) None of the Transaction Entities nor any of the Properties
shall have sustained since the date of the latest audited financial
statements included in the Prospectus any material loss to or interference
with the business of the Transaction Entities from fire, explosion, flood
or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise than as
set forth or contemplated in the Prospectus or (ii) since such date there
shall not have been any change in the capital stock or long-term debt of
any Transaction Entity or any material adverse change, or any development
involving a prospective material adverse change, in or affecting the
general affairs, management, financial position, stockholders' equity or
results of operations of either Transaction Entity, otherwise than as set
forth or contemplated in the Prospectus, the effect of which, in any such
case described in clause (i) or (ii), is, in the reasonable judgment of the
Representatives, so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Shares being delivered on such Delivery Date on the terms and in the manner
contemplated in the Prospectus.
(j) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange or the American Stock Exchange or
in the over-the-counter market, or trading in any securities of the Company
on any exchange or in the over-the-counter market, shall have been
suspended or minimum prices shall have been established on any such
exchange or such market by the Commission, by such exchange or by any other
regulatory body or governmental authority having jurisdiction, (ii) a
banking moratorium shall have been declared by Federal or state
authorities, (iii) the United States shall have become engaged in
hostilities, there shall have been an escalation in hostilities involving
the United States or there shall have been a declaration of a national
emergency or war by the United States or (iv) there shall have occurred
such a material adverse change in general economic, political or financial
conditions (or the effect of international conditions on the financial
markets in the United States shall be such) as to make it, in the judgment
of a majority in interest of the several Underwriters, impracticable or
inadvisable to proceed with the public offering or delivery of the Shares
being delivered on such Delivery Date on the terms and in the manner
contemplated in the Prospectus.
(k) The NYSE shall have approved the Shares for listing, subject only
to official notice of issuance.
35
(l) The Transaction Entities shall not have failed at or prior to such
Delivery Date to have performed or complied with any of their material
agreements herein contained and required to be performed or complied with
by them hereunder at or prior to such Delivery Date.
(m) On the First Delivery Date, counsel for the Underwriters shall
have been furnished with such documents and opinions as they may reasonably
require for the purpose of enabling them to pass upon the issuance and sale
of the Shares as herein contemplated, or in order to evidence the accuracy
of any of the representations or warranties, or the fulfillment of any of
the conditions, herein contained; and all proceedings taken by the
Transaction Entities in connection with the issuance and sale of the Shares
as herein contemplated shall be reasonably satisfactory in form and
substance to the Representatives and counsel for the Underwriters.
(n) The Representatives shall have been furnished with the written
agreements referred to in Section 5(j) hereof.
(o) The Transaction Entities shall have furnished or caused to be
furnished to the Representatives such further certificates and documents as
the Representatives or counsel to the Underwriters shall have reasonably
requested.
(p) In the event that the Underwriters exercise their option provided
in Section 2(b) hereof to purchase all or any portion of the Option Shares,
the representations and warranties of the Transaction Entities contained
herein and the statements in any certificates furnished by the Transaction
Entities hereunder shall be true and correct as of each Date of Delivery
and, at the relevant Date of Delivery, the Representatives shall have
received:
(i) A certificate, dated such Date of Delivery, of the Chief
Executive Officer and the chief financial officer of each Transaction
Entity confirming that the certificate delivered on the First Delivery
Date pursuant to Section 7(h) hereof remains true and correct as of
such Date of Delivery.
(ii) The favorable opinion of Peabody & Xxxxx, counsel for the
Transaction Entities, in form and substance satisfactory to counsel
for the Underwriters, dated such Date of Delivery, relating to the
Option Shares to be purchased on such Date of Delivery and otherwise
to the same effect as the opinions required by Section 7(d) hereof.
36
(iii) The favorable opinion of Xxxxxx & Xxxxx, counsel for the
Underwriters, dated such Date of Delivery, relating to the Option
Shares to be purchased on such Date of Delivery and otherwise to the
same effect as the opinion required by Section 7(e) hereof.
(iv) A letter from Coopers & Xxxxxxx LLC, in form and substance
satisfactory to the Representatives and dated such Date of Delivery,
substantially the same in form and substance as the letters furnished
to the Representatives pursuant to Section 7(g) hereof.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably
satisfactory to counsel for the Underwriters.
Any certificate or document signed by any officer of the Transaction
Entities and delivered to the Underwriters, or to counsel for the
Underwriters, shall be deemed a representation and warranty by the Transaction
Entities to each Underwriter as to the statements made therein.
The several obligations of the Underwriters to purchase Option
Shares hereunder are subject to the satisfaction on and as of any Date of
Delivery of the conditions set forth in this Section 7, except that, if any
Date of Delivery is other than the First Delivery Date, the certificates,
opinions and letters referred to in Sections 7(d) through 7(h) hereof shall be
dated the Date of Delivery in question and the opinions called for by Sections
7(d) and 7(e) hereof shall be revised to reflect the sale of Option Shares.
8. Effective Date of Agreement.
This Agreement shall become effective: (i) upon the execution
hereof by the parties hereto; or (ii) if, at the time this Agreement is
executed and delivered, it is necessary for the Registration Statement or a
post-effective amendment thereto to be declared effective before the offering
of the Shares may commence, when notification of the effectiveness of the
Registration Statement or such post-effective amendment has been released by
the Commission.
9. Default by One or More of the Underwriters.
If, on either Delivery Date, any Underwriter defaults in the
performance of its obligations under this Agreement, the remaining
non-defaulting Underwriters shall be obligated to purchase the Shares which
the defaulting Underwriter agreed but failed to purchase on such Delivery Date
in the respective proportions which the number of Firm Shares set forth
opposite the name of each remaining non-defaulting Underwriter in Schedule 1
hereto bears to the total number of Firm Shares set forth opposite the names of
all the remaining non-defaulting Underwriters in Schedule 1 hereto; provided,
however, that the remaining non-defaulting
37
Underwriters shall not be obligated to purchase any of the Shares of such
defaulting Underwriter or Underwriters on such Delivery Date if the total number
of Shares which the defaulting Underwriter or Underwriters agreed but failed to
purchase on such date exceeds 9.09% of the total number of Shares to be
purchased on such Delivery Date, and any remaining non-defaulting Underwriter
shall not be obligated to purchase more than 110% of the number of Shares which
it agreed to purchase on such Delivery Date pursuant to the terms of Section 2.
If the foregoing maximums are exceeded, the remaining non-defaulting
Underwriters, or those other underwriters satisfactory to the Representatives
who so agree, shall have the right, but shall not be obligated, to purchase, in
such proportion as may be agreed upon among them, all the Shares of the
defaulting Underwriter or Underwriters to be purchased on such Delivery Date. If
the remaining Underwriters or other underwriters satisfactory to the
Representatives do not elect to purchase the Shares which the defaulting
Underwriter or Underwriters agreed but failed to purchase on such Delivery Date,
this Agreement (or, with respect to the Second Delivery Date, the obligation of
the Underwriters to purchase, and of the Company to sell, the Option Shares)
shall terminate without liability on the part of any non-defaulting Underwriter
or the Transaction Entities, except that the Transaction Entities will continue
to be liable for the payment of expenses to the extent set forth in Sections 6
and 12. As used in this Agreement, the term "Underwriter" includes, for all
purposes of this Agreement unless the context requires otherwise, any party not
listed in Schedule 1 hereto who, pursuant to this Section 9, purchases Initial
Shares which a defaulting Underwriter agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of
any liability it may have to the Transaction Entities for damages caused by
its default. If other underwriters are obligated or agree to purchase the
Shares of a defaulting or withdrawing Underwriter, either the Representatives
or the Company may postpone the Delivery Date for up to seven full business
days in order to effect any changes that in the opinion of counsel for the
Company or counsel for the Underwriters may be necessary in the Registration
Statement, the Prospectus or in any other document or arrangement.
10. Indemnification and Contribution.
(a) The Transaction Entities jointly and severally, shall
indemnify and hold harmless each Underwriter, its officers and employees and
each person, if any, who controls any Underwriter within the meaning of the
Securities Act, from and against any loss, claim, damage or liability, joint
or several, or any action in respect thereof (including, but not limited to,
any loss, claim, damage, liability or action relating to purchases and sales
of Shares), to which that Underwriter, officer, employee or controlling person
may become subject, under the Securities Act or otherwise, insofar as such
loss, claim, damage, liability or action arises out of, or is based upon, (i)
any untrue statement or alleged untrue statement of a material fact contained
(a) in any Preliminary Prospectus, the Registration Statement or the
Prospectus or in any amendment or supplement thereto, including the Prospectus
Supplement, or (b) in any blue sky application or other document prepared or
executed by the Company (or based upon any written information furnished by
the Company) specifically for the purpose of qualifying any or all of
38
the Shares under the securities laws of any state or other jurisdiction (any
such application, document or information being hereinafter called a "Blue Sky
Application"), (ii) the omission or alleged omission to state in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or in any amendment or
supplement thereto, or in any Blue Sky Application any material fact required to
be stated therein or necessary to make the statements therein not misleading
(with respect to the Prospectus, in light of the circumstances under which they
were made) or (iii) any act or failure to act or any alleged act or failure to
act by any Underwriter 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 the
Transaction Entities shall not be liable under this clause (iii) to the extent
that it is determined in a final judgment 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 such
Underwriter through its gross negligence or willful misconduct), and shall
reimburse each Underwriter and each such officer, employee or controlling person
promptly upon demand for any legal or other expenses reasonably incurred by that
Underwriter, officer, employee or controlling person in connection with
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that the Transaction Entities shall not be liable in any such case to the extent
that any such loss, claim, damage, liability or action arises out of, or is
based upon, any untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration Statement
or the Prospectus, or in any such amendment or supplement, including the
Prospectus Supplement, or in any Blue Sky Application, in reliance upon and in
conformity with written information concerning such Underwriter furnished to the
Company through the Representatives by or on behalf of any Underwriter
specifically for inclusion therein. The foregoing indemnity agreement is in
addition to any liability which the Transaction Entities may otherwise have to
any Underwriter or to any officer, employee or controlling person of that
Underwriter.
(b) Each Underwriter, severally and not jointly, shall indemnify
and hold harmless each Transaction Entity, its officers and employees, each of
its directors (including any person who, with his consent, is named in the
Registration Statement as about to become a director of the Company), and each
person, if any, who controls each Transaction Entity within the meaning of the
Securities Act, from and against any loss, claim, damage or liability, joint
or several, or any action in respect thereof, to which each Transaction Entity
and or any such director, officer or controlling person may become subject,
under the Securities Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue statement
or alleged untrue statement of a material fact contained (A) in any
Preliminary Prospectus, the Registration Statement or the Prospectus or in any
amendment or supplement thereto, including the Prospectus Supplement, or (B)
in any Blue Sky Application or (ii) the omission or alleged omission to state
in any Preliminary Prospectus, the Registration Statement or the Prospectus,
or in any amendment or supplement thereto, including the Prospectus
Supplement, or in any Blue Sky Application any material fact required to be
stated
39
therein or necessary to make the statements therein not misleading, but in each
case only to the extent that the untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with
written information concerning such Underwriter furnished to the Company through
the Representatives by or on behalf of that Underwriter specifically for
inclusion therein, and shall reimburse each Transaction Entity and any such
director, officer or controlling person for any legal or other expenses
reasonably incurred by each Transaction Entity or any such director, officer or
controlling person in connection with investigating or defending or preparing to
defend against any such loss, claim, damage, liability or action as such
expenses are incurred. The foregoing indemnity agreement is in addition to any
liability which any Underwriter may otherwise have to each Transaction Entity or
any such director, officer, employee or controlling person.
(c) Promptly after receipt by an indemnified party under this
Section 10 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against
the indemnifying party under this Section 10, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however,
that the failure to notify the indemnifying party shall not relieve it from
any liability which it may have under this Section 10 except to the extent it
has been materially prejudiced by such failure and, provided further, that the
failure to notify the indemnifying party shall not relieve it from any
liability which it may have to an indemnified party otherwise than under this
Section 10. If any such claim or action shall be brought against an
indemnified party, and it shall notify the indemnifying party thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
that it wishes, jointly with any other similarly notified indemnifying party,
to assume the defense thereof with counsel reasonably satisfactory to the
indemnified party. After notice from the indemnifying party to the
indemnified party of its election to assume the defense of such claim or
action, the indemnifying party shall not be liable to the indemnified party
under this Section 10 for any legal or other expenses subsequently incurred by
the indemnified party in connection with the defense thereof other than
reasonable costs of investigation; provided, however, that the Representatives
shall have the right to employ counsel to represent jointly the
Representatives and those other Underwriters and their respective officers,
employees and controlling persons who may be subject to liability arising out
of any claim in respect of which indemnity may be sought by the Underwriters
against the Transaction Entities under this Section 10 if, in the reasonable
judgment of the Representatives, it is advisable for the Representatives and
those Underwriters, officers, employees and controlling persons to be jointly
represented by separate counsel, and in that event the fees and expenses of
such separate counsel shall be paid by the indemnifying party. No
indemnifying party shall (i) without the prior written consent of the
indemnified parties (which consent shall not be unreasonably withheld), settle
or compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional
release of each indemnified party from all liability arising out of such
claim, action, suit or proceeding, or (ii) be liable for any settlement of any
such action
40
effected without its written consent (which consent shall not be unreasonably
withheld), but if settled with the consent of the indemnifying party or if there
be a final judgment of the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 10 shall
for any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 10(a) or 10(b) in respect of any loss, claim,
damage or liability, or any action in respect thereof, referred to therein,
then each indemnifying party shall, in lieu of indemnifying such indemnified
party, contribute to the amount paid or payable by such indemnified party as a
result of such loss, claim, damage or liability, or action in respect thereof,
(i) in such proportion as shall be appropriate to reflect the relative
benefits received by the Transaction Entities on the one hand and the
Underwriters on the other from the offering of the Shares or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Transaction
Entities on the one hand and the Underwriters on the other with respect to the
statements or omissions which resulted in such loss, claim, damage or
liability, or action in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the Transaction
Entities on the one hand and the Underwriters on the other with respect to
such offering shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Shares purchased under this Agreement
(before deducting expenses) received by the Transaction Entities, on the one
hand, and the total underwriting discounts and commissions received by the
Underwriters with respect to the Shares purchased under this Agreement, on the
other hand, bear to the total gross proceeds from the offering of the Shares
under this Agreement, in each case as set forth in the table on the cover page
of the Prospectus. The 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 Transaction Entities or the Underwriters, the intent of the parties and
their relative knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Transaction Entities and the
Underwriters agree that it would not be just and equitable if contributions
pursuant to this Section were to be determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) 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, damage or liability, or
action in respect thereof, referred to above in this Section shall be deemed
to include, for purposes of this Section 10(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 10(d), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Shares underwritten
by it and distributed to the public was offered to the public exceeds the
amount of any damages which such Underwriter has otherwise paid or become
liable to pay by reason of any untrue or alleged untrue statement or omission
or alleged omission. No person guilty of
41
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
contribute as provided in this Section 10(d) are several in proportion to their
respective underwriting obligations and not joint.
(e) The Underwriters severally confirm and each Transaction
Entity acknowledges that (i) the name of the Underwriters set forth on the
front cover page and the back cover page of, (ii) the legend concerning
over-allotments on the inside front cover page of and (iii) the names of the
Underwriters and the number of Shares which they are each purchasing, the
concession and reallowance figures and, pursuant to Item 508 of Regulation S-K
of the Securities Act, the information contained in the ninth, tenth and
eleventh paragraphs, in each case under the caption "Underwriting" in the
Prospectus are correct and constitute the only information concerning such
Underwriters furnished in writing to the Company by or on behalf of the
Underwriters specifically for inclusion in the Registration Statement and the
Prospectus.
11. Termination. The obligations of the Underwriters hereunder
may be terminated by the Representatives by notice given to and received by
the Company prior to delivery of and payment for the Firm Shares if, prior to
that time, any of the events described in Sections 7(i), 7(j) or 7(l), shall
have occurred or if the Underwriters shall decline to purchase the Shares for
any reason permitted under this Agreement.
12. Reimbursement of Underwriters' Expenses. If (a) the Company
shall fail to tender the Shares for delivery to the Underwriters by reason of
any failure, refusal or inability on the part of the Transaction Entities to
perform any agreement on their part to be performed, or because any other
condition of the Underwriters' obligations hereunder required to be fulfilled
by the Transaction Entities is not fulfilled, the Transaction Entities will
reimburse the Underwriters for all reasonable out-of-pocket expenses
(including fees and disbursements of counsel) incurred by the Underwriters in
connection with this Agreement and the proposed purchase of the Shares, and
upon demand the Transaction Entities shall pay the full amount thereof to the
Representatives. If this Agreement is terminated pursuant to Section 9 by
reason of the default of one or more Underwriters, the Transaction Entities
shall not be obligated to reimburse any defaulting Underwriter on account of
those expenses.
13. Notices, etc. All statements, requests, notices and
agreements hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail,
telex or facsimile transmission to Xxxxxx Brothers Inc., Three World
Financial Center, New York, New York 10285, Attention: Syndicate
Department (Fax: 000-000-0000), with a copy, in the case of any notice
pursuant to Section 10(c), to the Director of Litigation, Office of
the General Counsel, Xxxxxx Brothers Inc., 0 Xxxxx Xxxxxxxxx Xxxxxx,
00xx Xxxxx, Xxx Xxxx, XX 00000;
42
(b) if to the Transaction Entities shall be delivered or sent by
mail, telex or facsimile transmission to the Company, 000 Xxxxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: Xxxxx X. Xxxxxxxx,
with copies to Xxxxxxxx Xxxxxxxxx of the Company and to Peabody &
Xxxxx, 000 Xxxxxxx Xxxxxx, Xxxxxx, XX 00000; Attention: Xxxxxxxxx X.
Xxxxxx;
provided, however, that any notice to an Underwriter pursuant to Section 10(c)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to the
Representatives, which address will be supplied to any other party hereto by
the Representatives upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Transaction
Entities shall be entitled to act and rely upon any request, consent, notice
or agreement given or made on behalf of the Underwriters by Xxxxxx Brothers
Inc.
14. Persons Entitled to Benefit of Agreement. This Agreement
shall inure to the benefit of and be binding upon the Underwriters, the
Transaction Entities, and their respective personal representatives and
successors. This Agreement and the terms and provisions hereof are for the
sole benefit of only those persons, except that (a) the representations,
warranties, indemnities and agreements of the Transaction Entities contained
in this Agreement shall also be deemed to be for the benefit of the person or
persons, if any, who control any Underwriter within the meaning of Section 15
of the Securities Act and (b) the indemnity agreement of the Underwriters
contained in Section 10(b) of this Agreement shall be deemed to be for the
benefit of directors of the Transaction Entities, officers of the Company who
have signed the Registration Statement and any person controlling the
Transaction Entities within the meaning of section 15 of the Securities Act.
Nothing in this Agreement is intended or shall be construed to give any
person, other than the persons referred to in this Section 14, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision contained herein.
15. Survival. The respective indemnities, representations,
warranties and agreements of the Transaction Entities, and the Underwriters
contained in this Agreement or made by or on behalf on them, respectively,
pursuant to this Agreement, shall survive the delivery of and payment for the
Shares and shall remain in full force and effect, regardless of any
investigation made by or on behalf of any of them or any person controlling
any of them.
16. Definition of the Terms "Business Day" and "Subsidiary".
For purposes of this Agreement, (a) "business day" means any day on which the
New York Shares Exchange, Inc. is open for trading and (b) "subsidiary" has
the meaning set forth in Rule 405 of the Rules and Regulations.
17. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of New York.
43
18. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
19. Headings. The headings herein are inserted for convenience
of reference only and are not intended to be part of, or to affect the meaning
or interpretation of, this Agreement.
44
If the foregoing correctly sets forth the agreement between the
Transaction Entities and the Underwriters, please indicate your acceptance in
the space provided for that purpose below.
Very truly yours,
BERKSHIRE REALTY COMPANY, INC.
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: President
BERKSHIRE APARTMENTS, INC.
By: Berkshire Realty Company, Inc.,
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: President
BRI OP LIMITED PARTNERSHIP
By: Berkshire Apartments, Inc.,
its general partner
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: President
45
Accepted:
Xxxxxx Brothers Inc.
BT Alex. Xxxxx
X.X. Xxxxxxx & Sons, Inc.
Xxxx Xxxxx Xxxx Xxxxxx Incorporated
Salomon Brothers Inc
By: Xxxxxx Brothers
By: /s/ Xxxxxxx X. Xxxx
---------------------------------
Name: Xxxxxxx X. Xxxx
Title: Managing Director
For themselves and as Representatives
of the several Underwriters named
in Schedule 1 hereto
46
Schedule 1
Number of
Underwriters Firm Shares
------------ -----------
Xxxxxx Brothers 2,000,000
X.X. Xxxxxxx & Sons, Inc. 2,000,000
BT Alex. Xxxxx Incorporated 2,000,000
Xxxx Xxxxx Xxxx Xxxxxx Incorporated 2,000,000
Salomon Brothers Inc 2,000,000
---------
Total 10,000,000
==========
47
Schedule 2
Subsidiaries and Ownership Interest
[COMPANY'S OWNERSHIP CHART]
48
Schedule 3
Lockup Agreement Signatories
1)The Company
2)The Operating Partnership
3)Xxxxxxx Xxxxx
4)GN Limited Partnership
5)The Berkshire Companies Limited Partnership
6)Turtle Creek Associates Limited Partnership
7)Xxxxx X. Xxxxxxxx
8)Xxxxxxx X. Xxxx
49
