Exhibit 1.1
RECKSON OPERATING PARTNERSHIP, L.P.
UNDERWRITING AGREEMENT
TABLE OF CONTENTS
Page
UNDERWRITING AGREEMENT.........................................................................................1
SECTION 1. Representations and Warranties..................................................................3
(a) Representations and Warranties by the Operating Partnership.....................................3
(1) Compliance with Registration Requirements..............................................3
(2) Incorporated Documents.................................................................4
(3) Independent Accountants................................................................5
(4) Financial Statements...................................................................5
(5) No Material Adverse Change in Business.................................................5
(6) Good Standing of the Company...........................................................6
(7) Good Standing of the Operating Partnership.............................................6
(8) Good Standing of the Subsidiaries......................................................6
(9) Capitalization of Operating Partnership................................................7
(10) Authorization of Debt Securities and Indenture.........................................7
(11) Descriptions of the Underwritten Securities and the Indenture..........................7
(12) Authorization of this Underwriting Agreement and Terms Agreement.......................8
(13) Absence of Defaults and Conflicts......................................................8
(14) Absence of Labor Dispute...............................................................9
(15) Absence of Proceedings.................................................................9
(16) Accuracy of Exhibits...................................................................9
(17) REIT Qualification.....................................................................9
(18) Investment Company Act.................................................................9
(19) Intellectual Property..................................................................9
(20) Absence of Further Requirements.......................................................10
(21) Possession of Licenses and Permits....................................................10
(22) Title to Property.....................................................................10
(23) Environmental Laws....................................................................11
(24) Tax Returns...........................................................................12
(25) Environmental Consultants.............................................................12
(26) Title Insurance.......................................................................12
(27) Absence of Regulation M Violation.....................................................12
(b) Officers' Certificates.........................................................................13
SECTION 2. Sale and Delivery to Underwriters; Closing.....................................................13
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TABLE OF CONTENTS
(continued)
Page
(a) Underwritten Securities........................................................................13
(b) Option Underwritten Securities.................................................................13
(c) Payment........................................................................................13
(d) Denominations; Registration....................................................................14
SECTION 3. Covenants of the Operating Partnership.........................................................14
(a) Compliance with Securities Regulations and Commission Requests.................................14
(b) Filing of Amendments...........................................................................15
(c) Delivery of Registration Statements............................................................15
(d) Delivery of Prospectuses.......................................................................15
(e) Continued Compliance with Securities Laws......................................................15
(f) Blue Sky Qualifications........................................................................16
(g) Earnings Statement.............................................................................16
(h) Reporting Requirements.........................................................................16
(i) Restriction on Sale of Securities..............................................................16
(j) REIT Qualification.............................................................................17
(k) Use of Proceeds................................................................................17
(l) Exchange Act Filings...........................................................................17
(m) No Manipulation of Market for Securities.......................................................17
SECTION 4. Payment of Expenses............................................................................17
(a) Expenses.......................................................................................17
(b) Termination of Agreement.......................................................................18
SECTION 5. Conditions of Underwriters' Obligations........................................................18
(a) Effectiveness of Registration Statement........................................................18
(b) Opinion of Counsel for the Operating Partnership...............................................19
(c) Opinion of Counsel for Underwriters............................................................19
(d) Officers' Certificate..........................................................................19
(e) Accountant's Comfort Letter....................................................................19
(f) Ratings........................................................................................20
(g) Approval of Listing............................................................................20
(h) Over-Allotment Option..........................................................................20
(i) Additional Documents...........................................................................21
(j) Termination of Terms Agreement.................................................................21
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TABLE OF CONTENTS
(continued)
Page
SECTION 6. Indemnification................................................................................21
(a) Indemnification of Underwriters................................................................21
(b) Indemnification of the Operating Partnership...................................................22
(c) Actions against Parties; Notification; Settlement without Consent if Failure to
Reimburse......................................................................................22
SECTION 7. Contribution...................................................................................23
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.................................24
SECTION 9. Termination....................................................................................24
(a) Underwriting Agreement.........................................................................24
(b) Terms Agreement................................................................................24
(c) Liabilities....................................................................................25
SECTION 10. Default by One or More of the Underwriters.....................................................25
SECTION 11. Notices........................................................................................26
SECTION 12. Parties........................................................................................26
SECTION 13. Governing Law and Time.........................................................................26
SECTION 14. Effect of Headings.............................................................................26
SECTION 15. Counterparts...................................................................................27
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RECKSON OPERATING PARTNERSHIP, L.P.
(a Delaware limited partnership)
Debt Securities
UNDERWRITING AGREEMENT
January 14, 2004
To the Representatives named in a Terms Agreement
Ladies and Gentlemen:
Reckson Operating Partnership, L.P., a Delaware limited partnership
(the "Operating Partnership"), proposes to issue and sell up to $150,000,000
aggregate initial public offering price of its debt securities ("Debt
Securities") from time to time, in or pursuant to one or more offerings on
terms to be determined at the time of sale.
The terms and rights of any particular issuance of Debt Securities
shall be as specified in the Terms Agreement (as defined below) relating
thereto and in or pursuant to the indenture and any supplements or amendments
thereto (the "Indenture") identified in such Terms Agreement.
Whenever the Operating Partnership determines to make an offering of
Debt Securities through the Representatives or through an underwriting
syndicate managed by the Representatives, the Operating Partnership will enter
into an agreement (each, a "Terms Agreement") providing for the sale of such
Debt Securities to, and the purchase and offering thereof by, the
Representatives and such other underwriters, if any, selected by the
Representatives as have authorized the Representatives to enter into such
Terms Agreement on their behalf (the "Underwriters", which term shall include
the Representatives whether acting alone in the sale of the Underwritten
Securities or as a member of an underwriting syndicate or any Underwriter
substituted pursuant to Section 10 hereof); provided, that, the Operating
Partnership is not obligated, and shall have complete and absolute discretion
to determine if and when, to make any offering, to make any offering through
the Representatives or any other person, or to enter into any Terms Agreement.
Prior to execution of a Terms Agreement, this Underwriting Agreement shall not
be construed as an obligation of the Operating Partnership to sell any Debt
Securities or as an obligation of any of the Underwriters to purchase Debt
Securities. The obligation of the Operating Partnership to issue and sell any
Debt Securities and the obligation of any of the Underwriters to purchase any
Debt Securities shall be evidenced by the Terms Agreement with respect to the
Underwritten Securities (as defined below) specified therein. The Terms
Agreement relating to the offering of Debt Securities shall specify the
aggregate principal amount of Debt Securities to be initially issued (the
"Initial Underwritten Securities"), the name of each Underwriter participating
in such offering (subject to substitution as provided in Section 10 hereof),
the aggregate principal amount of Initial Underwritten Securities which each
such Underwriter severally agrees to purchase, whether such offering is on a
fixed or variable price basis and, if on a fixed price basis, the initial
offering price, the price at which the Initial Underwritten Securities are to
be purchased by the Underwriters, the form,
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time, date and place of delivery and payment of the Initial Underwritten
Securities and any other material variable terms of the Initial Underwritten
Securities. In addition, if applicable, such Terms Agreement shall specify
whether the Operating Partnership has agreed to grant to the Underwriters an
option to purchase additional Debt Securities to cover over-allotments, if
any, and aggregate principal amount of Debt Securities subject to such option
(the "Option Underwritten Securities"). As used herein, the term "Underwritten
Securities" shall include the Initial Underwritten Securities and all or any
portion of any Option Underwritten Securities. The Terms Agreement, which
shall be substantially in the form of Exhibit A hereto, may take the form of
an exchange of any standard form of written telecommunication between the
Operating Partnership and the Representatives, acting for themselves and, if
applicable, as representatives of any other Underwriters. Each offering of
Underwritten Securities will be governed by this Underwriting Agreement, as
supplemented by the applicable Terms Agreement.
Reckson Associates Realty Corp., a Maryland corporation (the
"Company") and the Operating Partnership have filed with the Securities and
Exchange Commission (the "Commission") a registration statement on Form S-3
(No. 333-67129), for the registration of certain securities, including the
Debt Securities, under the Securities Act of 1933, as amended (the "1933
Act"), and the offering thereof from time to time in accordance with Rule 415
of the rules and regulations of the Commission under the 1933 Act (the "1933
Act Regulations"), and the Company and the Operating Partnership have filed
such post-effective amendments thereto as may be required prior to the
execution of the applicable Terms Agreement. Such registration statement (as
so amended, if applicable) has been declared effective by the Commission. Such
registration statement (as so amended, if applicable), including the
information, if any, deemed to be a part thereof pursuant to Rule 430A(b) of
the 1933 Act Regulations (the "Rule 430A Information") or Rule 434(d) of the
1933 Act Regulations (the "Rule 434 Information"), is referred to herein as
the "Registration Statement"; and the final prospectus constituting a part
thereof and the applicable prospectus supplement relating to the offering of
the Underwritten Securities, in the form first furnished to the Underwriters
by the Operating Partnership for use in connection with the offering of the
Underwritten Securities, are collectively referred to herein as the
"Prospectus"; provided, however, that all references to the "Registration
Statement" and the "Prospectus" shall be deemed to include all documents
incorporated therein by reference pursuant to the Securities Exchange Act of
1934, as amended (the "1934 Act"), prior to the execution of the applicable
Terms Agreement; provided, further, that if the Operating Partnership files a
registration statement with the Commission pursuant to Section 462(b) of the
1933 Act Regulations (the "Rule 462(b) Registration Statement"), then, after
such filing, all references to "Registration Statement" shall be deemed to
include the Rule 462(b) Registration Statement; provided, however, a
prospectus supplement shall be deemed to have supplemented the Prospectus only
with respect to the offering of the Underwritten Securities to which it
relates, and provided, further, that if the Operating Partnership elects to
rely upon Rule 434 of the 1933 Act Regulations, then all references to
"Prospectus" shall be deemed to include the final or preliminary prospectus
and the applicable term sheet or abbreviated term sheet (the "Term Sheet"), as
the case may be, in the form first furnished to the Underwriters by the
Operating Partnership in reliance upon Rule 434 of the 1933 Act Regulations,
and all references in this Underwriting Agreement to the date of the
Prospectus shall mean the date of the Term Sheet. A "preliminary prospectus"
shall be deemed to refer to any prospectus used before the registration
statement became effective and any prospectus that omitted, as applicable, the
Rule 430A Information, the Rule 434 Information or other information to be
included upon pricing in a form
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of prospectus filed with the Commission pursuant to Rule 424(b) of the 1933
Act Regulations, that was used after such effectiveness and prior to the
execution and delivery of the applicable Terms Agreement. For purposes of this
Underwriting Agreement, all references to the Registration Statement,
Prospectus, Term Sheet or preliminary prospectus or to any amendment or
supplement to any of the foregoing shall be deemed to include the copy filed
with the Commission pursuant to its Electronic Data Gathering, Analysis and
Retrieval system ("XXXXX"). Capitalized terms used but not otherwise defined
herein shall have the meanings given to those terms in the Prospectus.
All references in this Underwriting Agreement to financial statements
and schedules and other information which is "contained," "included" or
"stated" (or other references of like import) in the Registration Statement,
Prospectus or preliminary prospectus shall be deemed to mean and include all
such financial statements and schedules and other information which is or
deemed to be incorporated by reference in the Registration Statement,
Prospectus or preliminary prospectus, as the case may be; and all references
in this Underwriting Agreement to amendments or supplements to the
Registration Statement, Prospectus or preliminary prospectus shall be deemed
to mean and include the filing of any document under the 1934 Act which is or
is deemed to be incorporated by reference in the Registration Statement,
Prospectus or preliminary prospectus, as the case may be.
The term "Subsidiary" means a corporation or a partnership a majority
of the outstanding voting stock, partnership or membership interests, as the
case may be, of which is owned or controlled, directly or indirectly, by the
Operating Partnership or by one or more other Subsidiaries of the Operating
Partnership.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Operating Partnership. The
Operating Partnership, represents and warrants to the Representatives, as of
the date hereof, and to the Representatives and each other Underwriter named
in the applicable Terms Agreement, as of the date thereof, as of the Closing
Time (as defined below) and, if applicable, as of each Date of Delivery (as
defined below) (in each case, a "Representation Date"), as follows:
(1) Compliance with Registration Requirements. The Operating
Partnership meets the requirements for use of Form S-3 under the 1933
Act. Each of the Registration Statement and any Rule 462(b) Registration
Statement has become effective under the 1933 Act and no stop order
suspending the effectiveness of the Registration Statement or any Rule
462(b) Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or, to
the knowledge of the Operating Partnership, are contemplated by the
Commission or the state securities authority of any jurisdiction, and any
request on the part of the Commission for additional information has been
complied with. No order preventing or suspending the use of the
Prospectus has been issued and no proceeding for that purpose has been
instituted or, to the knowledge of the Operating Partnership, threatened
by the Commission or the state securities authority of any jurisdiction.
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At the respective times the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto
(including the filing of the Operating Partnership's most recent Annual
Report on Form 10-K with the Commission (the "Annual Report on Form
10-K")) became effective and at each Representation Date, the
Registration Statement, any Rule 462(b) Registration Statement and any
amendments and supplements thereto complied and will comply in all
material respects with the requirements of the 1933 Act and the 1933 Act
Regulations and the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), and the rules and regulations of the Commission under
the Indenture Act (the "1939 Act Regulations") and did not and will not
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading. At the date of the Prospectus, and at
each Representation Date, the Prospectus, and any amendments and
supplements thereto did not and will not include an untrue statement of a
material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which
they were made, not misleading. If the Operating Partnership elects to
rely upon Rule 434 of the 1933 Act Regulations, the Operating Partnership
will comply with the requirements of Rule 434. Notwithstanding the
foregoing, the representations and warranties in this subsection shall
not apply to statements in or omissions from the Registration Statement,
or the Prospectus made in reliance upon and in conformity with
information furnished to the Operating Partnership in writing by any
Underwriter through the Representatives expressly for use in the
Registration Statement or the Prospectus.
Each preliminary prospectus and Prospectus filed 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 1933 Act,
complied when so filed in all material respects with the 1933 Act and the
1933 Act Regulations and, if applicable, each preliminary prospectus and
the Prospectus delivered to the Underwriters for use in connection with
the offering of Underwritten Securities 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.
If a Rule 462(b) Registration Statement is required in connection
with the offering and sale of the Securities, the Operating Partnership
has complied or will comply with the requirements of Rule 111 under the
1933 Act Regulations relating to the payment of filing fees therefor.
(2) Incorporated Documents. The documents incorporated or deemed to
be incorporated by reference in the Registration Statement and the
Prospectus, at the time they were or hereafter are filed with the
Commission, complied and will comply in all material respects with the
requirements of the 1934 Act and the rules and regulations of the
Commission thereunder (the "1934 Act Regulations") and, when read
together with the other information in the Prospectus, at the date of the
Prospectus and at each Representation Date, or during the period
specified in Section 3(e), did not and will not include an untrue
statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
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(3) Independent Accountants. The accountants who certified the
financial statements and supporting schedules included in, or
incorporated by reference into, the Registration Statement and the
Prospectus are independent public accountants as required by the 1933 Act
and the 1933 Act Regulations.
(4) Financial Statements. The financial statements of the Operating
Partnership included, or incorporated by reference, in the Registration
Statement and the Prospectus, together with the related schedules and
notes, as well as those financial statements, schedules and notes of any
other entity acquired or to be acquired by the Operating Partnership
included therein, present fairly the financial position of the respective
entity or entities or group presented therein at the respective dates
indicated and the statement of operations, stockholders' equity and cash
flows data of such entity, as the case may be, for the periods specified.
Such financial statements have been prepared in conformity with generally
accepted accounting principles ("GAAP") applied on a consistent basis
throughout the periods involved. The supporting schedules, if any,
included or incorporated by reference in the Registration Statement and
the Prospectus present fairly, in accordance with GAAP, the information
required to be stated therein. In addition, any pro forma financial
information and the related notes thereto included or incorporated by
reference in the Registration Statement and the Prospectus present fairly
the information shown therein, have been prepared in accordance with the
Commission's rules and guidelines of the American Institute of Certified
Public Accountants ("AICPA") with respect to pro forma information and
have been properly compiled on the bases described therein, and the
assumptions used in the preparation thereof were then reasonable and the
adjustments used therein were then appropriate to give effect to the
transactions and circumstances referred to therein. All historical
financial statements and information and all pro forma financial
statements and information relating to the Operating Partnership or any
entity acquired or to be acquired by the Operating Partnership required
by the 1933 Act, the 1933 Act Regulations, the 1934 Act and the 1934 Act
Regulations are included, or incorporated by reference, in the
Registration Statement and the Prospectus.
(5) No Material Adverse Change in Business. Since the respective
dates as of which information is given in the Registration Statement and
the Prospectus, except as otherwise stated therein, (A) there has been no
material adverse change in the condition, financial or otherwise, or in
the earnings, assets, business affairs or business prospects of the
Operating Partnership and the Subsidiaries considered as one enterprise
whether or not arising in the ordinary course of business, which would be
material to the Operating Partnership, taken as a whole (anything which
would be material to the Operating Partnership taken as a whole, being
hereinafter referred to as "Material;" and such a material adverse
change, a "Material Adverse Effect"), (B) no casualty loss or
condemnation or other adverse event with respect to any of the interests
held directly or indirectly in any of the real properties or real
property interests, including without limitation, any interest or
participation, direct or indirect, in any mortgage obligation owned,
directly or indirectly, by the Operating Partnership or any Subsidiary
(the "Properties") has occurred which would be Material, (C) there have
been no transactions or acquisitions entered into by the Operating
Partnership or any Subsidiary, other than those in the ordinary course of
business, which would be Material, (D) except for regular
5
quarterly distributions on units of the Operating Partnership (the
"Units"), there has been no dividend or distribution of any kind
declared, paid or made by the Operating Partnership with respect to
its Units, and (E) there has been no increase in the long term debt
or decrease in the capital of the Operating Partnership or any
Subsidiary.
(6) Good Standing of the Company. The Company has been duly
organized and is validly existing as a corporation in good standing under
the laws of the State of Maryland and has corporate power and authority
to own, lease and operate its properties and to conduct its business as
described in the Prospectus and to enter into and perform its obligations
under, or as contemplated under this Underwriting Agreement and the
applicable Terms Agreement. The Company is duly qualified or registered
as a foreign corporation to transact business and is in good standing in
each other jurisdiction in which such qualification or registration is
required, whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure to so qualify or
register or be in good standing would not result in a Material Adverse
Effect.
(7) Good Standing of the Operating Partnership. The Operating
Partnership is duly organized and validly existing as a limited
partnership in good standing under the laws of the State of Delaware,
with partnership power and authority to own, lease and operate its
properties, to conduct the business in which it is engaged and proposes
to engage as described in the Prospectus and to enter into and perform
its obligations under this Underwriting Agreement and the applicable
Terms Agreement. The Operating Partnership is duly qualified or
registered as a foreign partnership and is in good standing in each
jurisdiction in which such qualification or registration is required,
whether by reason of the ownership or leasing of property or the conduct
of business, except where the failure to so qualify or register would not
have a Material Adverse Effect. The Company is the sole general partner
of the Operating Partnership and holds such number and/or percentage of
Units as disclosed in the Prospectus as of the dates set forth therein.
The Amended and Restated Agreement of Limited Partnership of the
Operating Partnership, dated June 2, 1995, as amended through December 6,
1995 (the "Operating Partnership Agreement"), is in full force and
effect.
(8) Good Standing of the Subsidiaries. Each Subsidiary that is a
"significant subsidiary" as such term is defined in Section 1-02 of
Regulation S-X (each a "Significant Subsidiary," and collectively, the
"Significant Subsidiaries") is listed on Exhibit B hereto and has been
duly organized and is validly existing as a corporation, limited
partnership, limited liability company or other legal entity, as the case
may be, in good standing under the laws of the state of its jurisdiction
of incorporation or organization, as the case may be, with the requisite
power and authority to own, lease and operate its properties, and to
conduct the business in which it is engaged or proposes to engage as
described in the Prospectus. Each such entity is duly qualified or
registered as a foreign corporation, limited partnership or limited
liability company or other legal entity, as the case may be, to transact
business and is in good standing in each jurisdiction in which such
qualification or registration is required, whether by reason of the
ownership or leasing of property or the conduct of business, except where
the failure to so qualify or register would not have a Material Adverse
Effect. Except as otherwise stated in the Registration Statement and the
Prospectus, all of the issued and outstanding
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capital stock or other equity interests of each such entity 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 are owned,
directly or indirectly, by the Operating Partnership, in each case free
and clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity (collectively, "Liens"). No shares of capital stock or
other equity interests of such entities are reserved for any purpose, and
there are no outstanding securities convertible into or exchangeable for
any capital stock or other equity interests of such entities and no
outstanding options, rights (preemptive or otherwise) or warrants to
purchase or to subscribe for shares of such capital stock or other equity
interests or any other securities of such entities, except as disclosed
in the Prospectus.
(9) Capitalization of Operating Partnership. The capitalization of
the Operating Partnership is as set forth in the Prospectus as of the
date referenced therein. All the issued and outstanding Units have been
duly authorized and are validly issued, fully paid and non-assessable and
have been offered and sold or exchanged in compliance with all applicable
laws (including, without limitation, federal and state securities laws).
There are no Units reserved for any purpose and there are no outstanding
securities convertible into or exchangeable for any Units and no
outstanding options, rights (preemptive or otherwise) or warrants to
purchase or to subscribe for Units, except for rights granted to the
partners in Omni Partners, L.P. (the "Omni Partnership") and the rights
of holders of Class C common Units and Series A, B, C, D and F preferred
Units.
(10) Authorization of Debt Securities and Indenture. The
Underwritten Securities have been duly authorized by the Operating
Partnership, and, when issued and delivered pursuant to this Underwriting
Agreement and the applicable Terms Agreement against payment of the
requisite consideration therefor, such Underwritten Securities will have
been duly executed, authenticated, issued and delivered and will
constitute valid and legally binding obligations of the Operating
Partnership entitled to the benefits provided by the Indenture, subject,
as to enforcement, to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting creditors' rights
and to general equity principles; the Indenture has been duly qualified
under the Trust Indenture Act and has been duly authorized by the
Operating Partnership and, at the Closing Time and each Date of Delivery
for such Underwritten Securities will constitute a valid and legally
binding agreement, enforceable in accordance with its terms, subject, as
to enforcement, to bankruptcy, insolvency, reorganization and other laws
of general applicability relating to or affecting creditors' rights and
to general equity principles.
(11) Descriptions of the Underwritten Securities and the Indenture.
The Underwritten Securities being sold pursuant to the applicable Terms
Agreement and the Indenture will conform in all material respects to the
statements relating thereto contained in the Prospectus and will be in
substantially the form filed or incorporated by reference, as the case
may be, as an exhibit to the Registration Statement. The form of debt
security to be used to evidence the Underwritten Securities will be in
due and proper form and will comply with all applicable legal
requirements.
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(12) Authorization of this Underwriting Agreement and Terms
Agreement. This Underwriting Agreement has been, and the applicable Terms
Agreement as of the date thereof will have been, duly authorized,
executed and delivered by the Operating Partnership.
(13) Absence of Defaults and Conflicts. Neither the Operating
Partnership nor any Subsidiary is in violation of its charter, by-laws,
certificate of limited partnership or partnership agreement or other
organizational document, as the case may be, or in default in the
performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or other agreement or instrument to
which any such entity is a party or by which any of them may be bound, or
to which any of its property or assets may be bound or subject
(collectively, "Agreements and Instruments"), except for such violations
or defaults that would not result in a Material Adverse Effect and except
that no representation is made as to whether there has been any default
under the Agreements and Instruments with regard to insurance coverage
for acts of terrorism. The execution, delivery and performance of this
Underwriting Agreement, the applicable Terms Agreement, the Indenture and
any other agreement or instrument entered into or issued or to be entered
into or issued by the Operating Partnership in connection with the
transactions contemplated hereby or thereby or in the Registration
Statement and the Prospectus and the consummation of the transactions
contemplated herein and in the Registration Statement and the Prospectus
(including the issuance and sale of the Underwritten Securities and the
use of the proceeds from the sale of the Underwritten Securities as
described under the caption "Use of Proceeds") and compliance by the
Operating Partnership with its obligations hereunder and thereunder have
been duly authorized by all necessary partnership action and do not and
will not, whether with or without the giving of notice or passage of time
or both, conflict with or constitute a breach of, or default or Repayment
Event (as defined below) under, or result in the creation or imposition
of any lien, charge or encumbrance upon any assets, properties or
operations of the Operating Partnership or any Subsidiary pursuant to,
any Agreements and Instruments, except for such conflicts, breaches,
defaults, Repayment Events (as defined below) or liens, charges or
encumbrances that would not result in a Material Adverse Effect, nor will
such action result in any violation of the provisions of the charter,
by-laws or the organizational documents of the Operating Partnership or
any Subsidiary or any applicable law, statute, rule, regulation,
judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over
the Operating Partnership or any Subsidiary or any of their assets,
properties or operations, except for such violations that would not have
a Material Adverse Effect. As used herein, a "Repayment Event" means any
event or condition which gives the holder of any note, debenture or other
evidence of indebtedness (or any person acting on such holder's behalf)
the right to require the repurchase, redemption or repayment of all or a
material portion of such indebtedness by the Operating Partnership or any
Subsidiary.
(14) Absence of Labor Dispute. No labor dispute with the employees
of the Operating Partnership or any Subsidiary exists or, to the
knowledge of the Operating Partnership, is imminent, and the Operating
Partnership is not aware of any existing or
8
imminent labor disturbance by the employees of any of its or any
Subsidiary's principal suppliers, manufacturers, customers or
contractors, which dispute or disturbance, in either case, may reasonably
be expected to result in a Material Adverse Effect.
(15) Absence of Proceedings. There is no action, suit, proceeding,
inquiry or investigation before or by any court or governmental agency or
body, domestic or foreign, now pending, or to the knowledge of the
Operating Partnership threatened against or affecting the Operating
Partnership or any Subsidiary or any of their respective assets,
properties or operations or any officer or director of the Company which
is required to be disclosed in the Registration Statement and the
Prospectus (other than as stated therein), or which might reasonably be
expected to result in a Material Adverse Effect, or which might
reasonably be expected to materially and adversely affect the
consummation of this Underwriting Agreement, the applicable Terms
Agreement, the Indenture or the transactions contemplated herein or
therein. The aggregate of all pending legal or governmental proceedings
to which the Operating Partnership or any Subsidiary is a party or of
which any of their respective assets, properties or operations is the
subject which are not described in the Registration Statement and the
Prospectus, including ordinary routine litigation incidental to the
business, could not reasonably be expected to result in a Material
Adverse Effect.
(16) Accuracy of Exhibits. There are no contracts or documents which
are required to be described in the Registration Statement, the
Prospectus or the documents incorporated by reference therein or to be
filed as exhibits thereto which have not been so described and/or filed
as required and the descriptions thereof or references thereto are
correct in all Material respects.
(17) REIT Qualification. At all times since January 1, 1995 the
Company has been, and upon the sale of the applicable Underwritten
Securities, the Company will continue to be, organized and operated in
conformity with the requirements for qualification as a real estate
investment trust under the Internal Revenue Code of 1986, as amended (the
"Code"), and its proposed method of operation will enable it to continue
to meet the requirements for taxation as a real estate investment trust
under the Code, and no actions have been taken (or not taken which are
required to be taken) which would cause such qualification to be lost.
(18) Investment Company Act. Each of the Company, the Operating
Partnership and any Significant Subsidiary is not, and upon the issuance
and sale of the Underwritten Securities as herein contemplated and the
application of the net proceeds therefrom as described in the Prospectus
will not be, an "investment company" within the meaning of the Investment
Company Act of 1940, as amended (the "1940 Act").
(19) Intellectual Property. To the knowledge of the Operating
Partnership, neither the Operating Partnership nor any Subsidiary is
required to own, possess or obtain the consent of any holder of any
trademarks, service marks, trade names or copyrights not now lawfully
owned, possessed or licensed in order to conduct the business now
operated by such entity, and none of the Operating Partnership or any
Subsidiary has received any notice or is otherwise aware of any
infringement of or conflict with asserted rights of
9
others with respect to any such proprietary rights, and which
infringement or conflict (if the subject of any unfavorable decisions,
ruling or finding) singly or in the aggregate would result in any
Material Adverse Effect.
(20) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
or any other entity or person is necessary or required for the
performance by the Operating Partnership of its obligations under this
Underwriting Agreement, the applicable Terms Agreement, the Indenture or
in connection with the transactions contemplated under this Underwriting
Agreement, such Terms Agreement or the Indenture, except such as have
been already obtained or as may be required under state securities laws
or under the by-laws and rules of the National Association of Securities
Dealers, Inc. (the "NASD") or under state securities or real estate
syndication laws.
(21) Possession of Licenses and Permits. Each of the Operating
Partnership and the Subsidiaries possesses such certificates, permits,
licenses, approvals, consents and other authorizations (collectively,
"Governmental Licenses") issued by the appropriate federal, state, local
or foreign regulatory agencies or bodies necessary to conduct the
business now operated by them except for such Governmental Licenses, the
failure to obtain would not, singly or in the aggregate, result in a
Material Adverse Effect. The Operating Partnership and the Subsidiaries
are in compliance with the terms and conditions of all such Governmental
Licenses, except where the failure so to comply would not, singly or in
the aggregate, result in a Material Adverse Effect. All of the
Governmental Licenses are valid and in full force and effect, except
where the invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not result in
a Material Adverse Effect. Neither the Operating Partnership nor any
Subsidiary has received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would result in a Material Adverse Effect.
(22) Title to Property. The Operating Partnership, the Subsidiaries
or any joint venture partnership in which the Operating Partnership owns
an interest, as the case may be, have good and marketable fee simple
title or leasehold title, as the case may be, to all real property and
related improvements and other assets owned or leased, or represented to
be owned or leased, as applicable, by the Operating Partnership or the
Subsidiaries, and good title to all other properties owned by them, and
any improvements thereon and all other assets that are required for the
effective operation of such properties in the manner in which they
currently are operated, free and clear of all liens, encumbrances,
claims, security interests and defects, except such as are Permitted
Encumbrances (as defined below). All liens, charges, encumbrances, claims
or restrictions on or affecting any of the Properties and the assets of
any of the Operating Partnership, the Subsidiaries or any joint venture
partnership in which the Operating Partnership owns an interest that are
required to be disclosed in the Prospectus are disclosed therein. Each of
the Properties comply with all applicable codes, laws and regulations and
(including, without limitation, building and zoning codes, laws and
regulations and laws relating to access to
10
the Properties), except if and to the extent disclosed in the
Prospectus and except for such failures to comply that would not in the
aggregate have a Material Adverse Effect. There are in effect for the
assets of each of the Operating Partnership, the Subsidiaries or any
joint venture partnership in which the Operating Partnership owns an
interest, insurance policies covering the risks and in amounts that are
commercially reasonable for the types of assets owned by them and that
are consistent with the types and amounts of insurance typically
maintained by prudent owners of properties similar to such assets in the
markets in which such assets are located, and none of the Operating
Partnership, the Subsidiaries or any joint venture partnership in which
the Operating Partnership owns an interest has received from any
insurance company notice of any material defects or deficiencies
affecting the insurability of any such assets or any notices of
cancellation or intent to cancel any such policies. The Operating
Partnership has no knowledge of any pending or threatened litigation,
moratorium, condemnation proceedings, zoning change, or other similar
proceeding or action that could in any manner affect the size of, use of,
improvements on, construction on, access to or availability of utilities
or other necessary services to the Properties, except such proceedings or
actions that would not have a Material Adverse Effect. All of the leases
and subleases material to the business of the Operating Partnership and
the Subsidiaries considered as one enterprise, and under which the
Operating Partnership or any Subsidiary holds Properties described in the
Prospectus, are in full force and effect, and neither the Operating
Partnership nor any Subsidiary has received any notice of any material
claim of any sort that has been asserted by anyone adverse to the rights
of the Operating Partnership nor any Subsidiary under any of the leases
or subleases mentioned above, or affecting or questioning the rights of
the Operating Partnership or any Subsidiary of the continued possession
of the leased or subleased premises under any such lease or sublease.
"Permitted Encumbrance" shall mean (a) liens on certain Properties
securing any of the Operating Partnership, any Subsidiary or joint
venture partnership obligations, (b) other liens which are expressly
described in, or which are incorporated by reference into, the Prospectus
and (c) customary easements and encumbrances and other exceptions to
title which do not impair the operation, development or use of the
Properties for the purposes intended therefor as contemplated in the
Prospectus.
(23) Environmental Laws. Except as otherwise stated in the
Registration Statement and the Prospectus and except such violations as
would not, singly or in the aggregate, result in a Material Adverse
Effect, to the knowledge of the Operating Partnership and any Subsidiary,
as the case may be, after due inquiry, (A) neither the Operating
Partnership nor any Subsidiary is in violation of any federal, state,
local or foreign statute, law, rule, regulation, ordinance or code,
policy or rule of common law and any judicial or administrative
interpretation thereof including any judicial or administrative order,
consent, decree of judgment, relating to pollution or protection of human
health, the environment (including, without limitation, ambient air,
surface water, groundwater, land surface or subsurface strata) including,
without limitation, laws and regulations relating to the release or
threatened release of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum or petroleum products
(collectively, "Hazardous Materials") or to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials (collectively, "Environmental Laws"), (B) the
Operating Partnership and any
11
Subsidiaries have all permits, authorizations and approvals required
under any applicable Environmental Laws and are each in compliance with
their requirements, (C) there are no pending or threatened
administrative, regulatory or judicial actions, suits, demands, demand
letters, claims, liens, notices of noncompliance or violation,
investigation or proceedings pursuant to any Environmental Law against
the Operating Partnership or any Subsidiaries, and (D) there are no
events or circumstances that might reasonably be expected to form the
basis of an order for clean-up or remediation, or an action, suit or
proceeding by any private party or governmental body or agency, against
or affecting the Operating Partnership, any Subsidiary or any of their
assets relating to any Hazardous Materials or the violation of any
Environmental Laws.
(24) Tax Returns. Each of the Operating Partnership and any
Subsidiary has filed all federal, state, local and foreign income tax
returns which have been required to be filed (except in any case in which
an extension has been granted or the failure to so file would not have a
Material Adverse Effect) and has paid all taxes required to be paid and
any other assessment, fine or penalty levied against it, to the extent
that any of the foregoing is due and payable, except, in all cases, for
any such tax, assessment, fine or penalty that is being contested in good
faith.
(25) Environmental Consultants. None of the environmental
consultants which prepared environmental and asbestos inspection reports
with respect to certain of the Properties was employed for such purpose
on a contingent basis or has any substantial interest in the Company, the
Operating Partnership or any Subsidiary and none of them nor any of their
directors, officers or employees is connected with the Company, the
Operating Partnership or any Subsidiary as a promoter, selling agent,
voting trustee, director, officer or employee.
(26) Title Insurance. The Operating Partnership and any Subsidiary,
as the case may be, have obtained title insurance on the fee interests
and leasehold interests in each of the Properties in an amount at least
equal to the greater of (A) the mortgage indebtedness on each such
Property or (B) the purchase price paid for each such Property (in the
case of any Property having been acquired by the Operating Partnership
via an exchange of Units for partnership interests in the entity holding
such property, the "purchase price" of such Property being deemed to be
the sum of (i) the per-share price of the Common Stock of the Company on
the date such Property was exchanged for Units multiplied by the number
of Units exchanged for such Property or interests in the entity holding
such Property and (ii) the amount of any assumed indebtedness secured by
such Property), except that Omni Partnership has obtained title insurance
insuring Omni Partnership's interest in its real property assets in an
amount not less than $48 million.
(27) Absence of Regulation M Violation. None of the Company, the
Operating Partnership, the Subsidiaries, nor any of their respective
directors, officers, members or controlling persons, has taken or will
take, directly or indirectly, any action resulting in a violation of
Regulation M under the 1934 Act, or designed to cause or result in, or
that has constituted or that reasonably might be expected to constitute,
the stabilization or manipulation of the price of any security of the
Operating Partnership to facilitate the sale or resale of the Securities.
12
(b) Officers' Certificates. Any certificate signed by any authorized
representative of the Operating Partnership and delivered to any Underwriter
or to counsel for the Underwriters in connection with the offering of the
Underwritten Securities shall be deemed a representation and warranty by such
entity or person, as the case may be, to each Underwriter as to the matters
covered thereby on the date of such certificate and, unless subsequently
amended or supplemented, at each Representation Date subsequent thereto.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Underwritten Securities. The several commitments of the
Underwriters to purchase the Underwritten Securities pursuant to the
applicable Terms Agreement shall be deemed to have been made on the basis of
the representations and warranties herein contained and shall be subject to
the terms and conditions herein set forth.
(b) Option Underwritten Securities. In addition, subject to the terms
and conditions set forth therein, the Operating Partnership, as applicable,
may grant, if so provided in the applicable Terms Agreement, an option to the
Underwriters, severally and not jointly, to purchase up to the aggregate
principal amount of the Option Underwritten Securities set forth therein at a
price per Option Underwritten Security equal to the price per Initial
Underwritten Security, less an amount equal to any interest paid or payable on
the Initial Underwritten Securities but not payable on the Option Underwritten
Securities. Such option, if granted, will expire 30 days after the date of
such Terms Agreement, and may be exercised in whole or in part from time to
time only for the purpose of covering over-allotments which may be made in
connection with the offering and distribution of the Initial Underwritten
Securities upon notice by the Representatives to the Operating Partnership
setting forth the aggregate principal amount of Option Underwritten Securities
as to which the several Underwriters are then exercising the option and the
time, date and place of payment and delivery for such Option Underwritten
Securities. Any such time and date of payment and delivery (each, a "Date of
Delivery") shall be determined by the Representatives, but shall not be later
than seven full business days after the exercise of said option, nor in any
event prior to the Closing Time, unless otherwise agreed upon by the
Representatives and the Operating Partnership. If the option is exercised as
to all or any portion of the Option Underwritten Securities, each of the
Underwriters, severally and not jointly, will purchase that proportion of the
total aggregate principal amount of Option Underwritten Securities then being
purchased which the aggregate principal amount of Initial Underwritten
Securities each such Underwriter has severally agreed to purchase as set forth
in such Terms Agreement bears to the total aggregate principal amount of
Initial Underwritten Securities, subject to such adjustments as the
Representatives in their discretion shall make to eliminate any sales or
purchases of a fractional aggregate principal amount of Option Underwritten
Securities.
(c) Payment. Payment of the purchase price for, and delivery of, the
Initial Underwritten Securities shall be made at the office of Sidley Xxxxxx
Xxxxx & Xxxx LLP, or at such other place as shall be agreed upon by the
Representatives and the Operating Partnership, at 10:00 a.m. (Eastern time) on
the third (fourth, if the pricing occurs after 4:30 p.m. (Eastern time) on any
given day) business day after the date of the applicable Terms Agreement
(unless postponed in accordance with the provisions of Section 10 hereof), or
such other time not later than ten business days after such date as shall be
agreed upon by the Representatives and the
13
Operating Partnership (such time and date of payment and delivery being herein
called "Closing Time"). In addition, in the event that the Underwriters have
exercised their option, if any, to purchase any or all of the Option
Underwritten Securities, payment of the purchase price for, and delivery of
such Option Underwritten Securities, shall be made at the above-mentioned
offices of Sidley Xxxxxx Xxxxx & Xxxx LLP, or at such other place as shall be
agreed upon by the Representatives and the Operating Partnership on the
relevant Date of Delivery as specified in the notice from the Representatives
to the Operating Partnership.
Payment shall be made to the Operating Partnership by wire transfer
of Federal funds or similar same day funds payable to the order of the
Operating Partnership against delivery to the Representatives for the
respective accounts of the Underwriters of the Underwritten Securities to be
purchased by them. It is understood that each Underwriter has authorized the
Representatives, for their account, to accept delivery of, receipt for, and
make payment of the purchase price for, the Underwritten Securities which it
has severally agreed to purchase. The Representatives, each individually and
not as representatives of the Underwriters, may (but shall not be obligated
to) make payment of the purchase price for the Underwritten Securities to be
purchased by any Underwriter whose check has not been received by the Closing
Time or the relevant Date of Delivery, as the case may be, but such payment
shall not relieve such Underwriter from its obligations hereunder.
(d) Denominations; Registration. The Underwritten Securities shall be
in such denominations and registered in such names as the Representatives may
request in writing at least one full business day prior to the Closing Time or
the relevant Date of Delivery, as the case may be. The Underwritten Securities
will be made available for examination and packaging by the Representatives in
The City of New York not later than 10:00 a.m. (Eastern time) on the business
day prior to the Closing Time or the relevant Date of Delivery, as the case
may be.
SECTION 3. Covenants of the Operating Partnership.
The Operating Partnership covenants with the Representatives and with
each Underwriter participating in the offering of Underwritten Securities, as
follows:
(a) Compliance with Securities Regulations and Commission Requests.
The Operating Partnership, subject to Section 3(b), will comply with the
requirements of the 1933 Act Regulations, including Rule 430A and Rule 434,
and will notify the Representatives immediately, and confirm the notice in
writing, of (i) the effectiveness of any post-effective amendment to the
Registration Statement or the filing of any supplement or amendment to the
Prospectus, (ii) the receipt of any comments from the Commission, (iii) any
request by the Commission for any amendment to the Registration Statement or
any amendment or supplement to the Prospectus or for additional information,
and (iv) the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing or
suspending the use of any preliminary prospectus, or of the suspension of the
qualification of the Underwritten Securities for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings for any
of such purposes. The Operating Partnership will promptly effect the filings
necessary pursuant to Rule 424 and will take such steps as it deems necessary
to ascertain promptly whether the Prospectus transmitted for filing under Rule
424 was received for filing by the Commission and, in the event that it was
not, it will promptly file the
14
Prospectus. The Operating Partnership will make every reasonable effort to
prevent the issuance of any stop order and, if any stop order is issued, to
obtain the lifting thereof at the earliest possible moment.
(b) Filing of Amendments. At any time when the Prospectus is required
to be delivered under the 1933 Act or the 1934 Act in connection with sales of
the Underwritten Securities, the Operating Partnership will give the
Representatives notice of its intention to file or prepare any amendment to
the Registration Statement (including any filing under Rule 462(b) of the 1933
Act Regulations), any Term Sheet or any amendment, supplement or revision to
either the prospectus included in the Registration Statement at the time it
became effective or to the Prospectus, whether pursuant to the 1933 Act, the
1934 Act or otherwise, will furnish the Representatives with copies of any
such documents a reasonable amount of time prior to such proposed filing or
use, as the case may be, and will not file or use any such document to which
the Representatives or counsel for the Underwriters shall reasonably object.
(c) Delivery of Registration Statements. The Operating Partnership
has furnished or will deliver to the Representatives and counsel for the
Underwriters, without charge, a signed copy of the Registration Statement as
originally filed and of each amendment thereto (including exhibits filed
therewith or incorporated by reference therein and documents incorporated or
deemed to be incorporated by reference therein) and signed copies of all
consents and certificates of experts, and will also deliver to the
Representatives and counsel for the Underwriters, without charge, conformed
copies of the Registration Statement as originally filed and of each amendment
thereto for each of the Underwriters. If applicable, the copies of the
Registration Statement and each amendment 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.
(d) Delivery of Prospectuses. The Operating Partnership will deliver
to each Underwriter, without charge, as many copies of each preliminary
prospectus as such Underwriter may reasonably request, and the Operating
Partnership hereby consents to the use of such copies for purposes permitted
by the 1933 Act. The Operating Partnership will furnish to each Underwriter,
without charge, during the period when the Prospectus is required to be
delivered under the 1933 Act or the 1934 Act and prior to 4:00 p.m. New York
City time on the New York business day next succeeding the date of the
applicable Terms Agreement, such number of copies of the Prospectus as such
Underwriter may reasonably request. If applicable, 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.
(e) Continued Compliance with Securities Laws. The Operating
Partnership will comply with the 1933 Act and the 1933 Act Regulations and the
1934 Act and the 1934 Act Regulations so as to permit the completion of the
distribution of the Underwritten Securities as contemplated in this
Underwriting Agreement and the applicable Terms Agreement and in the
Registration Statement and the Prospectus. If at any time when the applicable
preliminary prospectus or Prospectus is required by the 1933 Act or the 1934
Act to be delivered in connection with sales of the Securities, any event
shall occur or condition shall exist as a result of which it is necessary, in
the opinion of counsel for the Underwriter or for the Operating
15
Partnership, to amend the Registration Statement in order that the
Registration Statement will not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or to amend or supplement the
applicable preliminary prospectus or Prospectus in order that the applicable
preliminary prospectus or Prospectus will not include an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein not misleading in the light of the circumstances existing
at the time it is delivered to a purchaser, or if it shall be necessary, in
the opinion of such counsel, at any such time to amend the Registration
Statement or amend or supplement the applicable preliminary prospectus or
Prospectus in order to comply with the requirements of the 1933 Act or the
1933 Act Regulations, the Operating Partnership will promptly prepare and file
with the Commission, subject to Section 3(b), such amendment or supplement as
may be necessary to correct such statement or omission or to make the
Registration Statement, applicable preliminary prospectus or the Prospectus
comply with such requirements, and the Operating Partnership will furnish to
the Underwriters and counsel for the Underwriters, without charge, such number
of copies of such amendment or supplement as the Underwriters may reasonably
request.
(f) Blue Sky Qualifications. The Operating Partnership will use its
best efforts, in cooperation with the Underwriters, to qualify the
Underwritten Securities for offering and sale under the applicable securities
laws of such states and other jurisdictions (domestic or foreign) as the
Representatives may designate and to maintain such qualifications in effect
for a period of not less than one year from the date of the applicable Terms
Agreement; provided, however, that the Operating Partnership shall not be
obligated to file any general consent to service of process or to qualify or
register as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or registered, or to subject
itself to taxation in respect of doing business in any jurisdiction in which
it is not otherwise so subject. In each jurisdiction in which the Underwritten
Securities have been so qualified or registered, the Operating Partnership
will file such statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for a period of not less
than one year from the date of such Terms Agreement.
(g) Earnings Statement. The Operating Partnership will timely file
such reports pursuant to the 1934 Act as are necessary in order to make
generally available to its security holders as soon as practicable an earnings
statement (in form complying with Rule 158 of the 1933 Act Regulations) for
the purposes of, and to provide the benefits contemplated by, the last
paragraph of Section 11(a) of the 1933 Act.
(h) Reporting Requirements. The Operating Partnership, during the
period when the Prospectus is required to be delivered under the 1933 Act or
the 1934 Act, will file all documents required to be filed with the Commission
pursuant to the 1934 Act within the time periods required by the 1934 Act and
the 1934 Act Regulations.
(i) Restriction on Sale of Securities. Between the date of the
applicable Terms Agreement and the Closing Time and/or such other date
specified in such Terms Agreement, the Operating Partnership and any other
entity or person named in the applicable Terms Agreement will not, without the
prior written consent of the Representatives, directly or indirectly, issue,
16
sell, offer to sell, grant any option for the sale of, or otherwise dispose
of, the securities specified in such Terms Agreement subject to any conditions
listed therein.
(j) REIT Qualification. The Company will use its best efforts to
continue to meet the requirement to qualify as a "real estate investment
trust" under the Code for each of its taxable years.
(k) Use of Proceeds. The Operating Partnership will use the net
proceeds received by it from the sale of the Underwritten Securities in the
manner specified in the Prospectus under "Use of Proceeds."
(l) Exchange Act Filings. During the period from each Closing Time
until March 31, 2006, the Operating Partnership will deliver to the
Representatives, (i) promptly upon their becoming available, copies of all
current, regular and periodic reports of the Operating Partnership mailed to
its unitholders or filed with any securities exchange or with the Commission
or any governmental authority succeeding to any of the Commission's functions,
and (ii) such other information concerning the Operating Partnership as the
Representatives may reasonably request.
(m) No Manipulation of Market for Securities. Except for the
authorization of actions permitted to be taken by the Underwriters as
contemplated herein or in the Prospectus, the Operating Partnership will not
(a) take, directly or indirectly, any action designed to cause or to result
in, or that might reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Operating Partnership to
facilitate the sale or resale of the Underwritten Securities, and (b) until
the Closing Date, or the Date of Delivery, if any, (i) sell, bid for or
purchase the Underwritten Securities or pay any person any compensation for
soliciting purchases of the Underwritten Securities or (ii) pay or agree to
pay to any person any compensation for soliciting another to purchase any
other securities of the Operating Partnership.
(p) Rule 462(b) Registration Statement. If the Operating Partnership
elects to rely upon Rule 462(b), the Operating Partnership shall file a Rule
462(b) Registration Statement with the Commission in compliance with Rule
462(b) by 10:00 P.M., Washington, D.C. time, on the date of this Agreement,
and the Company shall at the time of filing either pay to the Commission the
filing fee for the Rule 462(b) Registration Statement or give irrevocable
instructions for the payment of such fee pursuant to Rule 111(b) under the
1933 Act.
SECTION 4. Payment of Expenses.
(a) Expenses. The Operating Partnership will pay all expenses
incident to the performance of its obligations under this Underwriting
Agreement and each applicable Terms Agreement, including (i) the preparation,
printing and filing of the Registration Statement (including financial
statements and exhibits) as originally filed and of each amendment thereto,
(ii) the printing and delivery to the Underwriters of this Underwriting
Agreement, any Terms Agreement, any Agreement among Underwriters, the
Indenture and such other documents as may be required in connection with the
offering, purchase, sale and delivery of the Underwritten Securities, (iii)
the preparation, issuance and delivery of the Underwritten Securities to the
Underwriters, (iv) the fees and disbursements of the Operating Partnership's
counsel,
17
accountants and other advisors or agents (including transfer agents and
registrars), as well as the fees and disbursements of any trustee or its
agents under any Indenture and their respective counsel, (v) the qualification
of the Underwritten Securities under state securities and real estate
syndication laws in accordance with the provisions of Section 3(f) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriters in connection therewith and in connection with the
preparation, printing and delivery of the Blue Sky Survey, (vi) the printing
and delivery to the Underwriters of copies of each preliminary prospectus, any
Term Sheet, the Registration Statement (including financial statements and
exhibits) as originally filed and of each amendment thereto and the Prospectus
and any amendments or supplements thereto, (vii) the fees charged by
nationally recognized statistical rating organizations for the rating of the
Underwritten Securities, (viii) the fees and expenses incurred with respect to
the listing of the Underwritten Securities, (ix) the fees and expenses of any
Underwriter acting in the capacity of a "qualified independent underwriter"
(as defined in Rule 2720(a)(15) of the Conduct Rules of the NASD), if
applicable, and (x) all other costs and expenses incident to the performance
of its obligations hereunder which are not otherwise specifically provided for
in this Section.
(b) Termination of Agreement. If the applicable Terms Agreement is
terminated by the Representatives in accordance with the provisions of Section
5 or Section 9(b) hereof, the Operating Partnership shall reimburse the
Underwriters for all of their out-of-pocket expenses, including the reasonable
fees and disbursements of counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations.
The obligations of the Underwriters to purchase and pay for the
Underwritten Securities pursuant to the applicable Terms Agreement are subject
to the accuracy of the representations and warranties of the Operating
Partnership contained in Section 1 hereof or in certificates of any officer or
authorized representative of the Operating Partnership delivered pursuant to
the provisions hereof, to the performance by the Operating Partnership of its
covenants and other obligations hereunder, and to the following further
conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement has become effective under the 1933 Act (and in the case of a Rule
462(b) Registration Statement such Registration Statement shall have become
effective by 10:00 P.M. Washington, D.C. time on the date of this Agreement)
and no stop order suspending the effectiveness of the Registration Statement
shall have been issued under the 1933 Act or proceedings therefor initiated or
threatened by the Commission or the state securities authority of any
jurisdiction, and any request on the part of the Commission or the state
securities authority of any jurisdiction for additional information shall have
been complied with to the reasonable satisfaction of counsel to the
Underwriters. A prospectus containing information relating to the description
of the Underwritten Securities, the specific method of distribution and
similar matters shall have been filed with the Commission in accordance with
Rule 424(b)(1), (2), (3), (4) or (5), as applicable (or any required
post-effective amendment providing such information shall have been filed and
declared effective in accordance with the requirements of Rule 430A), or, if
the Operating Partnership has elected to rely upon Rule 434 of the 1933 Act
Regulations, a Term Sheet including the Rule 434 Information shall have been
filed with the Commission in accordance with Rule 424(b)(7).
18
(b) Opinion of Counsel for the Operating Partnership. (i) At Closing
Time, the Representatives shall have received the favorable opinion, dated as
of Closing Time, of Sidley Xxxxxx Xxxxx & Xxxx LLP, counsel for the Operating
Partnership, in form and substance satisfactory to counsel for the
Underwriters, together with signed or reproduced copies of such letter for
each of the other Underwriters, such opinion shall address such of the items
set forth in Exhibit C hereto as may be relevant to the particular offering
contemplated or to such further effect as counsel to the Underwriters may
reasonably request.
(ii) At Closing Time, the Representatives shall have received the
favorable opinion, dated as of Closing Time, of Solomon and Xxxxxxxx LLP,
special tax counsel for the Operating Partnership, to the effect that:
(A) at all times since January 1, 1995, the Company has been
organized and conducts its business in a manner that will enable it to qualify
as (and has timely taken all necessary steps to maintain qualification) as a
real estate investment trust under the Code. The proposed method of operation,
as described in the Prospectus, of the Company will enable the Company to
continue to meet the requirements for taxation as a real estate investment
trust under the Code and to the best of our knowledge, no actions have been
taken (or not been taken which are required to be taken) which could cause
such qualification to be lost for any of its subsequent taxable years; and
(B) the information in the Prospectus Supplement under
"Certain Federal Income Tax Considerations" and in the Prospectus under
"Federal Income Tax Considerations" has been reviewed by us and is correct in
all material respects.
(c) Opinion of Counsel for Underwriters. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of Closing
Time, of Xxxxxxxx Chance US LLP, counsel for the Underwriters, or such other
counsel as may be designated by the Representatives together with signed or
reproduced copies of such letter for each of the other Underwriters, with
respect to the matters set forth in (1) (with respect to the first sentence
only), (2) (with respect to the first clause of the first sentence only), (5),
(6), (7), (8), (9) (with respect to the Prospectus Supplement only and not
inclusive of any tax disclosure), and (16) of Exhibit C hereto and the last
two paragraphs of Exhibit C hereto. In giving such opinion, such counsel may
rely, as to all matters governed by the laws of jurisdictions other than the
law of the State of New York, the federal law of the United States and the
General Corporation Law of the State of Delaware, upon the opinions of counsel
satisfactory to the Representatives. Such counsel may also state that, insofar
as such opinion involves factual matters, they have relied, to the extent they
deem proper, upon certificates of authorized representatives of the Operating
Partnership and certificates of public officials.
(d) Officers' Certificate. At Closing Time, there shall not have
been, since the date of the applicable Terms Agreement or since the respective
dates as of which information is given in the Prospectus, any material adverse
change in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Operating Partnership or any Subsidiary
considered as one enterprise, whether or not arising in the ordinary course of
business, and the Representatives shall have received a certificate of the
President or a Vice President of the Company, as general partner of the
Operating Partnership, and of the chief financial officer or
19
chief accounting officer of the Company, as general partner of the Operating
Partnership, dated as of Closing Time, to the effect that (i) there has been
no such material adverse change, (ii) the representations and warranties in
Section 1 are true and correct, in all material respect, with the same force
and effect as though expressly made at and as of the Closing Time, (iii) the
Operating Partnership has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to the Closing
Time and (iv) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
initiated or threatened by the Commission or by the state securities authority
of any jurisdiction.
(e) Accountant's Comfort Letter. At the Closing Time, the
Representatives shall have received from Ernst & Young LLP a letter, dated
such date, in form and substance satisfactory to the Representatives and
counsel to the Underwriters, together with signed or reproduced copies of such
letter for each of the other Underwriters, containing statements and
information of the type ordinarily included in accountants' "comfort letters"
as set forth in the AICPA's Statement on Auditing Standards 72 to underwriters
with respect to the financial statements and certain financial information
contained in the Registration Statement and the Prospectus.
(f) Ratings. At Closing Time and at any relevant Date of Delivery,
the Underwritten Securities shall have the ratings accorded by any "nationally
recognized statistical rating organization," as defined by the Commission for
purposes of Rule 436(g)(2) of the 1933 Act Regulations, if and as specified in
the applicable Terms Agreement, and the Operating Partnership shall have
delivered to the Representatives a letter, dated as of such date, from each
such rating organization, or other evidence satisfactory to the
Representatives, confirming that the Underwritten Securities have such
ratings. Since the time of execution of such Terms Agreement, there shall not
have occurred a downgrading in the rating assigned to the Underwritten
Securities or any of the Operating Partnership's other securities by any such
rating organization, and no such rating organization shall have publicly
announced that it has under surveillance or review, with possible negative
implications, its rating of the Underwritten Securities or any of the
Operating Partnership's other securities.
(g) Approval of Listing. At Closing Time, the Underwritten Securities
shall be listed or shall have been approved for listing, subject only to
official notice of issuance, if and as specified in the applicable Terms
Agreement.
(h) Over-Allotment Option. In the event that the Underwriters are
granted an over-allotment option by the Operating Partnership in the
applicable Terms Agreement and the Underwriters exercise their option to
purchase all or any portion of the Option Underwritten Securities, the
representations and warranties of the Operating Partnership contained herein
and the statements in any certificates furnished by the Operating Partnership
hereunder shall be true and correct as of each Date of Delivery, and, at the
relevant Date of Delivery, the Representatives shall have received:
(1) A certificate dated such Date of Delivery, of the President or a
Vice President of the Company, as general partner of the Operating
Partnership, and the chief financial officer or chief accounting officer
of the Company, as general partner of the
20
Operating Partnership, confirming that the certificate delivered at the
Closing Time pursuant to Section 5(d) hereof remains true and correct as
of such Date of Delivery.
(2) The favorable opinion of Sidley Xxxxxx Xxxxx & Xxxx LLP, counsel
for the Operating Partnership, in form and substance satisfactory to
counsel for the Underwriters, dated such Date of Delivery, relating to
the Option Underwritten Securities and otherwise to the same effect as
the opinion required by Section 5(b)(i) hereof.
(3) The favorable opinion of Xxxxxxxx Chance US LLP, counsel for the
Underwriters, dated such Date of Delivery, relating to the Option
Underwritten Securities and otherwise to the same effect as the opinion
required by Section 5(c) hereof.
(4) A letter from Ernst & Young LLP, in form and substance
satisfactory to the Representatives and dated such Date of Delivery, to
the effect that they reaffirm the statements made in the letter furnished
pursuant to Subsection (e) of this Section 5, except that the "specified
date" on the letter furnished pursuant to this paragraph shall be a date
not more than three business days prior to such Date of Delivery.
(5) The favorable opinion of Solomon and Xxxxxxxx LLP, special tax
counsel for the Operating Partnership, in form and substance satisfactory
to counsel for the Underwriters, dated such Date of Delivery, relating to
the Option Underwritten Securities and otherwise to the same effect as
the opinion required by Section 5(b)(ii) hereof.
(i) Additional Documents. At Closing Time and at each Date of
Delivery, counsel for the Underwriters shall have been furnished with such
documents and opinions as they may require for the purpose of enabling them to
pass upon the issuance and sale of the Underwritten Securities 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.
(j) Termination of Terms Agreement. If any condition specified in
this Section 5 shall not have been fulfilled when and as required to be
fulfilled, the applicable Terms Agreement (or, with respect to the
Underwriters' exercise of any applicable over-allotment option for the
purchase of Option Underwritten Securities on a Date of Delivery after the
Closing Time, the obligations of the Underwriters to purchase the Option
Underwritten Securities on such Date of Delivery) may be terminated by the
Representatives by notice to the Operating Partnership at any time at or prior
to the Closing Time (or such Date of Delivery, as applicable), and such
termination shall be without liability of any party to any other party except
as provided in Section 4, and except that Sections 1, 6 and 7 shall survive
any such termination and remain in full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of Underwriters. The Operating Partnership agrees
to indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the 1933 Act, and
any director, officer, employee or affiliate thereof, as follows:
21
(1) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement or a material fact contained in the Registration
Statement (or any amendment thereto), including the information deemed to
be part of the Registration Statement pursuant to Rule 430A (b) of the
1933 Act Regulations, if applicable, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary
to make the statements therein not misleading or arising out of any
untrue statement or alleged untrue statement of a material fact contained
in any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto) or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(2) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation or of any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever for which indemnification is provided under subsection (1)
above, if such settlement is effected with the written consent of the
indemnifying party, which consent shall not be unreasonably withheld; and
(3) against any and all expense whatsoever (including without
limitation, the fees and disbursements of counsel chosen by the
Representatives) reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceedings by
any governmental agency or body, commenced or threatened, or any claim
whatsoever for which indemnification is provided under subsection (1)
above, to the extent that any such expense is not paid under subsection
(1) or (2) above; provided, however, that the indemnity agreement
provided for in this Section 6(a) shall not apply to any loss, liability,
claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Operating Partnership by any Underwriter through the Representatives
expressly for use in the Registration Statement (or any amendment
thereto) or any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto); provided, however, that neither the
Company nor the Operating Partnership shall be required to indemnify any
Underwriter with respect to any preliminary prospectus to the extent that
any loss, claim, damage or expense of such Underwriter results solely
from an untrue statement of a material fact contained in, or the omission
of a material fact from, such preliminary prospectus which untrue
statement or omission was corrected in the Prospectus and identified to
such Underwriter in writing and which corrected Prospectus was furnished
by the Company to such Underwriter pursuant to Section 3(d) hereof but it
shall be established that such Prospectus was not sent or given by such
Underwriter to the purchaser of the Underwritten Securities at or prior
to the written confirmation of such sale and such correction would have
cured the defect giving rise to such loss, claim, damage or expense.
(b) Indemnification of the Operating Partnership. Each Underwriter
severally and not jointly agrees to indemnify and hold harmless the Operating
Partnership, and each person, if any, who controls the Operating Partnership
within the meaning of Section 15 of the 1933 Act, and any employee or
affiliate thereof, against any and all loss, liability, claim, damage, and
expense
22
described in the indemnity contained in subsection (a) of this Section 6, as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto) or any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Operating Partnership by such Underwriter
through the Representatives expressly for use in the Registration Statement
(or any amendment thereto) or any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto).
(c) Actions against Parties; Notification; Settlement without Consent
if Failure to Reimburse. Each indemnified party shall give notice as promptly
as reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure
so to notify an indemnifying party shall not relieve such indemnifying party
from any liability which it may have otherwise than on account of this
indemnity agreement. An indemnifying party may participate at its own expense
in the defense of such action. If it so elects within a reasonable time after
receipt of such notice, an indemnifying party, jointly with any other
indemnifying parties receiving such notice, may assume the defense of such
action with counsel chosen by it and reasonably approved by the other
indemnifying parties defendant in such action and reasonably approved by the
indemnified party (who shall not, except with the consent of the indemnified
party, be counsel to an indemnifying party), unless such other indemnifying
parties or an indemnified party reasonably object to such assumption on the
ground that the named parties to any such action (including any impleaded
parties) include both such indemnified party and an indemnifying party, and
such indemnified party reasonably believes that there may be legal defenses
available to it which are different from or in addition to those available to
such indemnifying party. If an indemnifying party assumes the defense of such
action, the indemnifying parties shall not be liable for any fees and expenses
of counsel for the indemnified parties incurred thereafter in connection with
such action. In no event shall the indemnifying parties be liable for fees and
expenses of more than one counsel (in addition to any local counsel) separate
from their own counsel for all indemnified parties in connection with any one
action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances. No indemnifying
party shall, without the written consent of the indemnified party, effect the
settlement or compromise of, or consent to the entry of any judgment with
respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgement (i) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any indemnified party.
SECTION 7. Contribution.
In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in Section 6
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, the Operating Partnership, on the one hand, and
the Underwriters, on the other, shall contribute to the aggregate losses,
liabilities claims, damages and expenses of the nature contemplated by said
indemnity agreement incurred by the Operating
23
Partnership and the Underwriters, as incurred, in such proportions that the
Underwriters are responsible for that portion represented by the percentage
that the underwriting discount appearing on the cover page of the Prospectus
bears to the initial public offering price appearing thereon and the Operating
Partnership are responsible for the balance. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law or if the indemnified party failed to give the notice required under
Section 6(c) above, then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits allocation referred to
in the first sentence of this Section 7 but also the relative fault of the
Operating Partnership, on the one hand, and the Underwriters on the other, in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Operating
Partnership, on the one hand, or such Underwriters, on the other, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Operating Partnership and
the Underwriters agree that it would not be just and equitable if contribution
pursuant to this Section 7 were 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 account of the equitable
considerations referred to above in this Section 7. The amount paid or payable
by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above in this Section
shall be deemed to include 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 7, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the applicable Underwritten Securities
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. Notwithstanding the foregoing, no person guilty
of fraudulent misrepresentation (within the meaning of section 11(f) of the
0000 Xxx) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. For purposes of this Section, each
person, if any, who controls an Underwriter within the meaning of Section 15
of the 1933 Act shall have the same rights to contribution as such
Underwriter, and each employee or affiliate of the Operating Partnership and
each person, if any, who controls the Operating Partnership within the meaning
of Section 15 of the 1933 Act shall have the same rights to contribution as
the Operating Partnership.
The Underwriters' obligations to contribute pursuant to this Section
7 are several in proportion to their respective underwriting commitments and
not joint.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery.
All representations, warranties and agreements contained in this
Underwriting Agreement or the applicable Terms Agreement or in certificates of
authorized representatives of the Operating Partnership submitted pursuant
hereto or thereto shall remain operative and in full force and effect,
regardless or any investigation made by or on behalf of any Underwriter or
24
controlling person, or by or on behalf of the Operating Partnership, and shall
survive delivery of and payment for the Underwritten Securities.
SECTION 9. Termination.
(a) Underwriting Agreement. This Underwriting Agreement (excluding
the applicable Terms Agreement) may be terminated for any reason at any time
by the Operating Partnership or by the Representatives upon the giving of 30
days' prior written notice of such termination to the other party hereto.
(b) Terms Agreement. The Representatives may terminate the applicable
Terms Agreement, by notice to the Operating Partnership, at any time at or
prior to the Closing Time or any relevant Date of Delivery, if (i) there has
been, since the time of execution of such Terms Agreement or since the
respective dates as of which information is given in the Prospectus, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Operating Partnership
and any Subsidiaries considered as one enterprise, whether or not arising in
the ordinary course of business, in each case the effect of which is such as
to make it, in the judgment of the Representatives, impracticable or
inadvisable to market the Underwritten Securities, or (ii) there has occurred
any material adverse change in the financial markets in the United States or
internationally or any outbreak or escalation of hostilities or acts of
terrorism involving the United States or there is a declaration by the United
States of a national emergency or war or escalation thereof or other calamity
or crisis, or any change or development involving a prospective change in
national or international political, financial, or economic conditions, in
each case the effect of which is such as to make it, in the sole judgment of
the Representatives, impracticable or inadvisable to proceed with the offering
or delivery of the Underwritten Securities or to enforce contracts for the
sale of the Underwritten Securities, or (iii) trading in any securities of the
Company or the Operating Partnership has been suspended or limited by the
Commission or the New York Stock Exchange, or if trading in securities
generally on the New York Stock Exchange or the American Stock Exchange or in
the over-the-counter market has been suspended or limited, or minimum or
maximum prices for trading have been fixed, or maximum ranges for prices have
been required, by either of said exchanges or by such system or by order of
the Commission, the NASD or any other governmental authority, or (iv) a
banking moratorium has been declared by either Federal or New York State
authorities.
(c) Liabilities. If this Underwriting Agreement or the applicable
Terms Agreement is terminated pursuant to this Section 9, such termination
shall be without liability of any party to any other party except as provided
in Section 4 hereof, and provided further that Sections 1, 6, 7, 8 and 13
hereof shall survive such termination and remain in full force and effect.
SECTION 10. Default by One or More of the Underwriters.
If one or more of the Underwriters shall fail at the Closing Time or
the relevant Date of Delivery, as the case may be, to purchase the
Underwritten Securities which it or they are obligated to purchase under the
applicable Terms Agreement (the "Defaulted Securities"), then the
Representatives shall have the right, within 24 hours thereafter, to make
arrangements for one or more of the non-defaulting Underwriters, or any other
underwriters, to purchase all, but not
25
less than all, of the Defaulted Securities in such amounts as may be agreed
upon and upon the terms herein set forth; if, however, the Representatives
shall not have completed such arrangements within such 24-hour period, then:
(a) if the aggregate principal amount of Defaulted Securities does
not exceed 10% of the aggregate principal amount of Underwritten
Securities to be purchased on such date pursuant to such Terms Agreement,
the non-defaulting Underwriters named in such Terms Agreement shall be
obligated, severally and not jointly, to purchase the full amount thereof
in the proportions that their respective underwriting obligations under
such Terms Agreement bear to the underwriting obligations of all
non-defaulting Underwriters, or
(b) if the aggregate principal amount of Defaulted Securities
exceeds 10% of the aggregate principal amount of Underwritten Securities
to be purchased pursuant to such Terms Agreement, such Terms Agreement
(or, with respect to the Underwriters' exercise of any applicable
over-allotment option for the purchase of Option Underwritten Securities
on a Date of Delivery after the Closing Time, the obligations of the
Underwriters to purchase, and the Operating Partnership to sell, such
Option Underwritten Securities on such Date of Delivery) shall terminate
without liability on the part of any non-defaulting Underwriter except as
provided by Section 9(c).
No action taken pursuant to this Section 10 shall relieve any
defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in (i) a
termination of the applicable Terms Agreement or (ii) in the case of a Date of
Delivery after the Closing Time, a termination of the obligations of the
Underwriters and the Operating Partnership with respect to the related Option
Underwritten Securities, as the case may be, either the Representatives or the
Operating Partnership shall have the right to postpone the Closing Time or the
relevant Date of Delivery, as the case may be, for a period not exceeding
seven days in order to effect any required changes in the Registration
Statement or the Prospectus or in any other documents or arrangements.
SECTION 11. Notices.
All notices and other communications hereunder shall be in writing
and shall be deemed to have been duly given or transmitted by any standard
form of telecommunication. Notices to the Underwriters shall be directed as
provided in a Terms Agreement, and notices to the Operating Partnership shall
be directed to them at 000 Xxxxxxxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000,
attention of Xxxxx X. Xxxxxxx, Chief Executive Officer and President.
SECTION 12. Parties.
This Underwriting Agreement and the applicable Terms Agreement shall
each inure to the benefit of and be binding upon the parties hereto and, upon
execution of such Terms Agreement, any other Underwriters and their respective
successors. Nothing expressed or mentioned in this Underwriting Agreement or
such Terms Agreement is intended or shall be
26
construed to give any person, firm or corporation, other than the
Underwriters, the Operating Partnership and their respective successors and
the controlling persons and officers and directors referred to in Sections 6
and 7 and their heirs and legal representatives, any legal or equitable right,
remedy or claim under or in respect of this Underwriting Agreement or such
Terms Agreement or any provision herein or therein contained. This
Underwriting Agreement and such Terms Agreement and all conditions and
provisions hereof and thereof are intended to be for the sole and exclusive
benefit of the parties hereto and thereto and their respective successors, and
said controlling persons and officers and directors and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation.
No purchaser of Underwritten Securities from any Underwriter shall be deemed
to be a successor by reason merely of such purchase.
SECTION 13. Governing Law and Time.
THIS UNDERWRITING AGREEMENT AND ANY APPLICABLE TERMS AGREEMENT SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SAID STATE.
SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 14. Effect of Headings.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 15. Counterparts.
This Underwriting Agreement and the applicable Terms Agreements may
be executed in one or more counterparts, and if executed in more than one
counterpart, the executed counterparts shall constitute a single instrument.
27
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Operating Partnership an executed
counterpart of the applicable Terms Agreement, whereupon this Underwriting
Agreement, along with the applicable Terms Agreement, will become a binding
agreement among the Underwriters and the Operating Partnership in accordance
with their terms.
Very truly yours,
RECKSON OPERATING PARTNERSHIP, L.P.
By: Reckson Associates Realty Corp.
its General Partner
By: /s/ Xxxxxxx Xxxxxx
----------------------------------
Name: Xxxxxxx Xxxxxx
Title: Executive Vice President
and Chief Financial Officer
Exhibit A
---------
RECKSON OPERATING PARTNERSHIP, L.P.
(a Delaware limited partnership)
Debt Securities
TERMS AGREEMENT
__________ __, 200_
To: Reckson Operating Partnership, L.P.
000 Xxxxxxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
We understand that Reckson Operating Partnership, L.P. (the
"Operating Partnership") proposes to issue and sell $ in aggregate principal
amount of its debt securities (the "Notes") ([securities also being
hereinafter referred to as] the "Initial Underwritten Securities"). Subject to
the terms and conditions set forth or incorporated by reference herein, the
underwriters named below (the "Underwriters") offer to purchase, severally and
not jointly, the respective aggregate principal amount of Initial Underwritten
Securities set forth below opposite their names at the purchase price set
forth below, and a proportionate share of Option Underwritten Securities (as
defined in the Underwriting Agreement referred to below) set forth below, to
the extent any are purchased.
Aggregate Principal Amount of
Initial Underwritten Securities
Total [$]
A-1
The Underwritten Securities shall have the following terms:
Title:
Aggregate Principal Amount: $
Aggregate Principal Amount of Option
Underwritten Securities: $
Initial public offering price: $
Purchase price: $
Interest rate:
Interest Payment Date:
Maturity Date:
Redemption provisions:
Sinking Fund requirements:
Conversion provisions:
Other terms and conditions:
Closing date and location:
All of the provisions contained in the document attached as Annex I
hereto entitled "RECKSON OPERATING PARTNERSHIP, L.P. -- Debt Securities --
UNDERWRITING AGREEMENT" are hereby incorporated by reference in their entirety
herein and shall be deemed to be a part of this Terms Agreement to the same
extent as if such provisions had been set forth in full herein. Terms defined
in such document are used herein as therein defined.
A-2
Please accept this offer no later than o'clock p.m. (New York
City time) on by signing a copy of this Terms Agreement in the space set forth
below and returning the signed copy to us.
Very truly yours,
[ ]
[address for Notice]
By: ________________________________
Name:
Title:
Acting on behalf of itself and as Representative[s] for the
other named Underwriters.
Accepted:
RECKSON OPERATING PARTNERSHIP, L.P.
By: RECKSON ASSOCIATES REALTY CORP., its sole general partner
By: ___________________________
Name:
Title:
A-3
Exhibit B
---------
SIGNIFICANT SUBSIDIARIES
Reckson 1185 Avenue of the Americas LLC Reckson MEZZ 1185 Avenue of
the Americas LLC Reckson Tri-State Member LLC RT Tri-State LLC
Metropolitan Partners LLC Metropolitan Operating Partnership, L.P.
Metropolitan 919 Manager LLC 919 JV LLC
B-1
Exhibit C
---------
FORM OF OPINION OF THE COMPANY'S AND THE
OPERATING PARTNERSHIP'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)(i)
(1) The Company has been duly incorporated and is validly existing as
a corporation and is in good standing with the State Department of Assessment
and Taxation of Maryland. The Company has the corporate power and authority to
own, lease and operate its properties and to conduct its business as described
in the Prospectus and to enter into and perform its obligations under, or as
contemplated under, the Underwriting Agreement and the applicable Terms
Agreement and is duly qualified or registered as a foreign corporation to
transact business and is in good standing in the jurisdictions indicated on
Schedule I hereto.
(2) The Operating Partnership has been duly organized and is validly
existing as a limited partnership and is in good standing with the Secretary
of State of Delaware. The Operating Partnership has the partnership power and
authority to own, lease and operate its properties and to conduct its business
as described in the Prospectus and to enter into and perform its obligations
under, or as contemplated under, the Underwriting Agreement and the applicable
Terms Agreement and is duly qualified or registered as a foreign corporation
to transact business and is in good standing in the jurisdictions indicated on
Schedule I hereto.
(3) All the outstanding Units have been duly authorized for issuance
by the Operating Partnership to the holders of Units and, assuming that the
holders of Units, as limited partners of the Operating Partnership do not
participate in the control of the business of the Operating Partnership, the
Units will represent valid and, subject to the qualifications set forth
herein, fully paid and non-assessable limited partner interests in the
Operating Partnership, as to which the holders of Units, in their capacity as
limited partners of the Operating Partnership, will have no liability in
excess of their obligations to make contributions to the Operating
Partnership, their obligations to make other payments provided for in the
Operating Partnership Agreement and their share of the Operating Partnership's
assets and undistributed profits (subject to the obligation of a limited
partner of the Operating Partnership to repay any funds wrongfully distributed
to it). No Units are reserved for any purpose and except for the "put rights"
accorded to Odyssey Partners, L.P., under Section 12.4 of the Second Amended
and Restated Agreement of Limited Partnership of the Omni Partnership, and the
rights of the holders of the Class C common units, Series A, B, C, D and F
preferred units of limited partner interest in the Operating Partnership, and
as otherwise described in the Registration Statement, to our knowledge, there
are no outstanding securities convertible into or exchangeable for any Units
and no outstanding options, rights (preemptive or otherwise) or warrants to
purchase or subscribe for Units or any other securities of the Operating
Partnership arising by operation of law or under the organizational documents
of the Operating Partnership or any contracts to which the Operating
Partnership is a party of which we are aware.
C-1
(4) Each Significant Subsidiary has been duly incorporated or
organized 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 the
jurisdiction of its incorporation or organization, as the case may be, and has
the partnership or limited liability company power and authority to own, lease
and operate its properties and to conduct the business in which it is engaged
or proposes to engage as described in the Prospectus and is duly qualified or
registered as a foreign corporation, limited partnership or other legal
entity, as the case may be, to transact business and is in good standing in
the jurisdictions indicated on Schedule I hereto. Except as otherwise stated
in the Registration Statement and the Prospectus, all of the issued and
outstanding capital stock or other equity interests, as the case may be, of
each Significant Subsidiary has been duly authorized and is validly issued,
fully paid and non-assessable.
(5) The Underwriting Agreement and the applicable Terms Agreement has
been duly authorized, executed and delivered by the Operating Partnership.
(6) The Indenture has been duly authorized, executed and delivered by
the Operating Partnership and constitutes a valid and legally binding
agreement, enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors' rights and to
general equity principles; and the Indenture has been duly qualified under the
Trust Indenture Act.
(7) The Underwritten Securities have been duly authorized by the
Operating Partnership and, when issued and delivered pursuant to the
Indenture, the Underwriting Agreement and the applicable Terms Agreement
against payment of the requisite consideration therefor, such Underwritten
Securities will have been duly executed and delivered by the Operating
Partnership and will constitute valid and legally binding obligations of the
Operating Partnership entitled to the benefits provided by the Indenture,
subject, as to enforcement, to bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or affecting creditors' rights
generally and to general equity principles.
(8) The Underwritten Securities being sold pursuant to the applicable
Terms Agreement and the Indenture conform, in all material respects, to the
statements relating thereto contained in the Prospectus and are in
substantially the form filed or incorporated by reference, as the case may be,
as an exhibit to the Registration Statement.
(9) The information in the Prospectus under "Description of Debt
Securities" and "Description of Notes," and such other information in the
Prospectus Supplement or in any Annual Report on Form 10-K of the Company as
may be agreed upon from time to time by the Company and the Representatives,
to the extent that it constitutes matters of law, descriptions of statutes,
rules or regulations, summaries of legal matters, the Operating Partnership's
legal proceedings, or legal conclusions, has been reviewed by us and is
correct in all material respects and fairly summarizes the information
required to be disclosed therein.
(10) To our knowledge, neither the Company, the Operating Partnership
nor any of the Significant Subsidiaries is in violation of its charter,
by-laws, partnership agreement, or other organizational document, as the case
may be, and to our knowledge no default by the Operating Partnership or any
Significant Subsidiary exists in the due performance or observance of any
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obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other agreement or
instrument that is filed or incorporated by reference as an exhibit to the
Registration Statement, except for such defaults that would not have a
Material Adverse Effect, and except that we express no opinion concerning
whether there has been a default under any such contract, indenture, mortgage,
loan agreement, note, lease or other agreement or instrument with regard to
insurance coverage for acts of terrorism.
(11) The execution, delivery and performance of the Underwriting
Agreement, the applicable Terms Agreement and the Indenture and consummation
of the transactions contemplated in the Underwriting Agreement and such Terms
Agreement and in the Registration Statement and the Prospectus (including the
issuance and sale of the Underwritten Securities) and compliance by the
Operating Partnership or any Significant Subsidiary with its obligations
thereunder do not and will not, whether with or without the giving of notice
or passage of time or both, conflict with or constitute a breach of, or
default or Repayment Event under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the Operating
Partnership or any Significant Subsidiary pursuant to, any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note, lease or
any other agreement or instrument, filed or incorporated by reference as an
exhibit to the Registration Statement to which the Operating Partnership or
any Significant Subsidiary is a party or by which it or any of them may be
bound, or to which any of the assets, properties or operations of the
Operating Partnership or any Significant Subsidiary is subject, except for
such conflicts, breaches, defaults, events or liens, charges or encumbrances
that would not result in a Material Adverse Effect, nor will such action
result in any violation of the provisions of the charter, by-laws, or
agreement of limited partnership, as applicable, of the Operating Partnership
or any Significant Subsidiary or any applicable Delaware Revised Uniform
Limited Partnership Act, Maryland, New York or U.S. federal laws, statute,
rule, regulations, judgment, order, writ or decree, known to us, of any
Delaware, Maryland, New York or U.S. federal government, government
instrumentality or court, domestic or foreign, having jurisdiction over the
Operating Partnership or any Significant Subsidiary or any of their assets,
properties or operations.
(12) To our knowledge, except as disclosed in the Prospectus, there
are no pending or threatened actions, suits or proceedings against or
affecting any of the Operating Partnership or any Subsidiary or any of their
respective properties or other assets that, if determined adversely to any
such entity would individually or in the aggregate have a Material Adverse
Effect or would materially adversely affect the ability of the Operating
Partnership to perform its obligations under the Underwriting Agreement and
the applicable Terms Agreement.
(13) The descriptions in the Registration Statement of the
$150,000,000 5.15% Notes due 2011 to be issued pursuant to the Indenture,
dated as of March 26, 1999 between the Company, Reckson Associates Realty
Corp. and The Bank of New York as well as contracts and other documents filed
as exhibits to the Operating Partnership's Annual Report on Form 10-K to which
the Operating Partnership or any Subsidiary is a party, are accurate in all
material respects. To our knowledge, there are no franchises, contracts,
indentures, mortgages, loan agreements, notes, leases or other instruments
required to be described or referred to in the Registration Statement or to be
filed as exhibits thereto other than those described or referred to therein or
filed or incorporated by reference as exhibits thereto.
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(14) The Registration Statement was declared effective under the 1933
Act as of March 11, 1999. Any required filing of the Prospectus pursuant to
Rule 424(b) has been made in the manner and within the time period required by
Rule 424(b). To our knowledge, no stop order suspending the effectiveness of
the Registration Statement has been issued under the 1933 Act or proceedings
therefor initiated or threatened by the Commission.
(15) The Registration Statement, the Prospectus, excluding the
documents incorporated by reference therein, and each amendment or supplement
to the Registration Statement and the Prospectus, excluding the documents
incorporated by reference therein, as of their respective effective or issue
dates (other than the financial statements, supporting schedules and other
financial data included or incorporated by reference therein or omitted
therefrom or the Trustee's Statement of Eligibility on Form T-1, as to which
we express no opinion), complied as to form in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations and the Trust
Indenture Act and 1939 Act Regulations.
(16) The documents incorporated by reference in the Prospectus (other
than the financial statements, supporting schedules and other financial data
included or incorporated by reference therein or omitted therefrom, as to
which we express no opinion), when they were filed with the Commission, (or,
if later, upon the filing of an amendment thereto), complied as to form in all
material respects with the requirements of the 1934 Act and the rules and
regulations of the Commission thereunder.
(17) No filing with, or authorization, approval, consent, license,
order registration, qualification or decree of, any Delaware, Maryland, New
York or U.S. federal court or governmental authority or agency is necessary or
required for the performance by the Operating Partnership of its obligations
under the Underwriting Agreement or the applicable Terms Agreement or in
connection with the transactions contemplated under the Underwriting Agreement
or such Terms Agreement other than under the 1933 Act, the 1933 Act
Regulations, the Trust Indenture Act or the 1939 Act Regulations, which have
been obtained, or as may be required under the by-laws and rules of the NASD,
state securities or blue sky laws.
(18) The Operating Partnership is not an "investment company" within
the meaning of the Investment Company Act of 1940, as amended (the "1940
Act").
No fact has come to our attention that has caused us to believe that
the Registration Statement (other than the financial statements, supporting
schedules and other financial data included or incorporated by reference
therein or omitted therefrom and for statistical information derived from such
financial statements, schedules or other financial data or the Trustee's
Statement of Eligibility of Form T-1, as to which we have not been requested
to comment), at the time the Registration Statement or any post-effective
amendment thereto (including the filing of the Operating Partnership's Annual
Report on Form 10-K with the Commission) became effective or at the date of
the applicable Terms Agreement, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that the Prospectus
or any amendment or supplement thereto (other than the financial statements,
supporting schedules and other financial data included or incorporated by
reference therein or omitted therefrom and for statistical information derived
from such financial statements, schedules or other financial data, as to which
we have
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not been requested to comment), at the time the Prospectus was issued,
at the time any such amended or supplemented prospectus was issued or at the
Closing Time, included or includes an untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
In rendering such opinion, such counsel may rely as to matters of
fact (but not as to legal conclusions), to the extent they deem proper, on
certificates of authorized representatives of the Operating Partnership and
public officials. Such opinion shall not state that it is to be governed or
qualified by, or that it is otherwise subject to, any treatise, written policy
or other document relating to legal opinions, including, without limitation,
the Legal Opinion Accord of the ABA Section of Business Law (1991).
C-5
Schedule I
----------
1. Reckson Associates Realty Corp.
o New York
o New Jersey
o Connecticut
2. Reckson Operating Partnership, L.P.
o New York
o New Jersey
o Connecticut
3. Metropolitan Partners LLC
o New York
4. Metropolitan Operating Partnership, L.P.
o New York
S-1
Annex I
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[FORM OF ACCOUNTANTS' COMFORT LETTER PURSUANT TO SECTION 5(e)]
We are independent public accountants with respect to the Company within the
meaning of the 1933 Act and the applicable published 1933 Act Regulations.
(i) in our opinion, the audited financial statements and the
related financial statement schedules included or incorporated by
reference in the Registration Statement and the Prospectus comply as
to form in all material respects with the applicable accounting
requirements of the 1933 Act and the published rules and regulations
thereunder;
(ii) on the basis of procedures (but not an examination in
accordance with generally accepted auditing standards) consisting of
a reading of the unaudited interim [consolidated] financial
statements of the Company for the [three month periods ended
__________, ____, and __________, ____, the three and six month
periods ended __________, ____, and __________, ____, and the three
and nine month periods ended __________, ____, and __________, ____,
included or incorporated by reference in the Registration Statement
and the Prospectus (collectively, the "10-Q Financials")]1 [, a
reading of the unaudited interim [consolidated] financial statements
of the Company for the _____-month periods ended __________, ____,
and __________, ____, included in the Registration Statement and the
Prospectus (the "_____-month financials")]2 [, a reading of the
latest available unaudited interim [consolidated] financial
statements of the Company],3 a reading of the minutes of all meetings
of the stockholders and directors of the Company [and its
subsidiaries] and the Committees of the Company's Board of Directors
[and any subsidiary committees] since [day after end of last audited
period], inquiries of certain officials of the Company [and its
subsidiaries] responsible for financial and accounting matters, a
review of interim financial information in accordance with standards
established by the American Institute of Certified Public Accountants
in Statement on Auditing Standards Xx. 00, Xxxxxxx Xxxxxxxxx
Xxxxxxxxxxx ("XXX 00"),0
------------------------------
1 Include the appropriate dates of the 10-Q Financials.
2 Include if non-10-Q interim financial statements are included in the
Registration Statement and the Prospectus.
3 Include if the most recent unaudited financial statements are not
included in the Registration Statement and the Prospectus.
4 Note that a review in accordance with Statements on Auditing Standards
("SAS") No. 71 is required for an accountant to give negative assurance on
interim financial information. A review in accordance with SAS No. 71 will
only be performed at the request of the Company and the accountant's report,
if any, related to that review will be addressed only to the Company. Many
companies have a SAS No. 71 review performed in connection with the
preparation of their 10-Q financial statements. See Codification of Statements
on Auditing Standards, AU ss. 722 for a description of the procedures that
constitute such a review. The comfort letter itself should recite that the
review was performed and a copy of the report, if any, should be attached to
the comfort letter. Any report issued pursuant to SAS No. 71
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with respect to the [description of relevant periods]5 and such
other inquiries and procedures as may be specified in such letter,
nothing came to our attention that caused us to believe that:
[(A) the 10-Q Financials incorporated by reference
in the Registration Statement and the Prospectus do not
comply as to form in all material respects with the
applicable accounting requirements of the 1934 Act and the
1934 Act Regulations applicable to unaudited financial
statements included in Form 10-Q or any material
modifications should be made to the 10-Q Financials
incorporated by reference in the Registration Statement and
the Prospectus for them to be in conformity with generally
accepted accounting principles;]6
[( ) the _____-month financials included in the
Registration Statement and the Prospectus do not comply as
to form in all material respects with the applicable
accounting requirements of the 1933 Act and the 1933 Act
Regulations applicable to unaudited interim financial
statements included in registration statements or any
material modifications should be made to the _____-month
financials included in the Registration Statement and the
Prospectus for them to be in conformity with generally
accepted accounting principles;]7
( ) at [____________, ____ and at]8 a specified
date not more than five days9 prior to the date of the
applicable Terms Agreement, there was any change in the
__________ of the Company [and its subsidiaries] or any
decrease in the _________ of the Company [and its
subsidiaries] or any increase in the
---------------------------
that is mentioned in the Registration Statement should also be included in the
Registration Statement as an exhibit. If a review in accordance with SAS No.
71 has not and will not be performed by the accountants, they should be
prepared to perform certain agreed-upon procedures on the interim financial
information and to report their findings thereon in the comfort letter. See
Codification of Statements on Auditing Standards, AU ss. 622 for a discussion
of reports related to the accountant's performance of agreed-upon procedures.
Any question as to whether a review in accordance with SAS No. 71 will be
performed by the accountants should be resolved early.
5 The relevant periods include all interim unaudited condensed
consolidation financial statements included or incorporated by reference in
the Registration Statement and the Prospectus.
6 Include if the 10-Q Financials are incorporated by reference in the
Registration Statement and the Prospectus.
7 Include if unaudited financial statements, not just selected unaudited
data, are included in the Registration Statement and the Prospectus.
8 Include, and insert the date of most recent balance sheet of the
Company, if those statements are more recent than the unaudited financial
statements included in the Registration Statement and the Prospectus.
9 According to Example A of SAS No. 72, the specified date should be five
calendar days prior to the date of the applicable Terms Agreement. However, in
unusual circumstances, five business days may be used.
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___________ of the Company [and its subsidiaries,]10 in each
case as compared with amounts shown in the latest balance
sheet included in the Registration Statement and the
Prospectus, except in each case for changes, decreases or
increases that the Registration Statement and the Prospectus
disclose have occurred or may occur; or
( ) [for the period from ___________, ____ to
___________, ____ and]11 for the period from _________, ____
to a specified date not more than five days prior to the
date of the applicable Terms Agreement, there was any
decrease in __________, ___________ or ___________,12 in
each case as compared with the comparable period in the
preceding year, except in each case for any decreases that
the Registration Statement and the Prospectus discloses have
occurred or may occur;
(iii) based upon the procedures set forth in clause (ii)
above and a reading of the [Selected Financial Data] included in the
Registration Statement and the Prospectus [and a reading of the
financial statements from which such data were derived,]13 nothing
came to our attention that caused us to believe that the [Selected
Financial Data] included in the Registration Statement and the
Prospectus do not comply as to form in all material respects with the
disclosure requirements of Item 301 of Regulation S-K of the 1933 Act
[, that the amounts included in the [Selected Financial Data] are not
in agreement with the corresponding amounts in the audited
[consolidated] financial statements for the respective periods or
that the financial statements not included in the Registration
Statement and the Prospectus from which certain of such data were
derived are not in conformity with generally accepted accounting
principles];14
------------------------
10 The blanks should be filled in with significant balance sheet items,
selected by the banker and tailored to the issuer's industry in general and
operations in particular. While the ultimate decision of which items should be
included rests with the banker, comfort is routinely requested for certain
balance sheet items, including long-term debt, stockholders' equity, capital
stock and net current assets.
11 Include, and insert dates to describe the period from the date of the
most recent financial statements in the Registration Statement and the
Prospectus to the date of the most recent unaudited financial statements of
the Company, if those dates are different. Regardless of whether this language
is inserted or not, the period including five days prior to the date of the
applicable Terms Agreement should run from the date of the last financial
statement included in the Registration Statement and the Prospectus, not from
the later one that is not included in the Registration Statement and the
Prospectus.
12 The blanks should be filled in with significant income statements
items, selected by the banker and tailored to the issuer's industry in general
and operations in particular. While the ultimate decision of which items
should be included rests with the banker, comfort is routinely requested for
certain income statement items, including net sales, total and per share
amounts of income before extraordinary items and of net income.
13 Include only if there are selected financial data that have been
derived from financial statements not included in the Registration Statement
and the Prospectus.
14 In unusual circumstances, the accountants may report on "Selected
Financial Data" as described in SAS No. 42, Reporting on Condensed Financial
Statements and Selected Financial Data, and include
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(iv) we have compared the information in the Registration
Statement and the Prospectus under selected captions with the
disclosure requirements of Regulation S-K of the 1933 Act and on the
basis of limited procedures specified herein. Nothing came to our
attention that caused us to believe that this information does not
comply as to form in all material respects with the disclosure
requirements of Items 302, 402 and 503(d), respectively, of
Regulation S-K;
[(v) based upon the procedures set forth in clause (ii)
above, a reading of the unaudited financial statements of the Company
for [the most recent period] that have not been included in the
Registration Statement and the Prospectus and a review of such
financial statements in accordance with SAS 71, nothing came to our
attention that caused us to believe that the unaudited amounts for
__________________ for the [most recent period] do not agree with the
amounts set forth in the unaudited consolidated financial statements
for those periods or that such unaudited amounts were not determined
on a basis substantially consistent with that of the corresponding
amounts in the audited [consolidated] financial statements;]15
[(vi)] we are unable to and do not express any opinion on
the [Pro Forma Combining Statement of Operations] (the "Pro Forma
Statement") included in the Registration Statement and the Prospectus
or on the pro forma adjustments applied to the historical amounts
included in the Pro Forma Statement; however, for purposes of this
letter we have:
(A) read the Pro Forma Statement;
(B) performed [an audit] [a review in
accordance with SAS 71] of the financial statements
to which the pro forma adjustments were applied;
(C) made inquiries of certain officials of
the Company who have responsibility for financial
and accounting matters about the basis for their
determination of the pro forma adjustments and
whether the Pro Forma Statement complies as to form
in all material respects with the applicable
accounting requirements of Rule 11-02 of Regulation
S-X; and
-----------------------
in their report in the Registration Statement and the Prospectus the paragraph
contemplated by SAS No. 42.9. This situation may arise only if the Selected
Financial Data do not include interim period data and the five-year selected
data are derived entirely from financial statements audited by the auditors
whose report is included in the Registration Statement and the Prospectus. If
the guidelines set forth in SAS No. 42 are followed and the accountant's
report as included in the Registration Statement and the Prospectus includes
the additional language prescribed by SAS No. 42.9, the bracketed language may
be eliminated.
15 This language should be included when the Registration Statement and
the Prospectus include earnings or other data for a period after the date of
the latest financial statements in the Registration Statement and the
Prospectus, but the unaudited interim financial statements from which the
earnings or other data is derived is not included in the Registration
Statement and the Prospectus. The blank should be filled in with a description
of the financial statement item(s) included.
A-4
(D) proved the arithmetic accuracy of the
application of the pro forma adjustments to the
historical amounts in the Pro Forma Statement; and
on the basis of such procedures and such other inquiries and
procedures as specified herein, nothing came to our
attention that caused us to believe that the Pro Forma
Statement included in the Registration Statement does not
comply as to form in all material respects with the
applicable requirements of Rule 11-02 of Regulation S-X or
that the pro forma adjustments have not been properly
applied to the historical amounts in the compilation of
those statements;16 and
[(vii)] in addition to the procedures referred to in clause
(ii) above, we have performed other procedures, not constituting an
audit, with respect to certain amounts, percentages, numerical data
and financial information appearing in the Registration Statement and
the Prospectus, which are specified herein, and have compared certain
of such items with, and have found such items to be in agreement
with, the accounting and financial records of the Company;17 and
[(viii) in addition, we [comfort on a financial forecast
that is included in the Registration Statement and the Prospectus.18]
-----------------------
16 If an audit or a review in accordance with SAS No. 71 has not been
performed by the accountants with respect to the underlying historical
financial statements, or if negative assurance on the Company's pro forma
financial statements is not otherwise available, the accountants should be
requested to perform certain other procedures with respect to such pro forma
financial statements. See Example O of SAS No. 72.
17 This language is intended to encompass all other financial/numerical
information appearing in the Registration Statement and the Prospectus for
which comfort may be given, including (but not limited to) amounts appearing
in the Registration Statement and the Prospectus narrative and other summary
financial data appearing in tabular form (e.g., the capitalization table).
18 Accountants' services with respect to a financial forecast may be in
one of three forms: an examination of the forecast, a compilation of the
forecast or the application of agreed-upon procedures to the forecast. If the
accountant is to perform an examination of the forecast included in the
Registration Statement and the Prospectus, delivery of the related report
should be treated separately in Section 5(f) as follows (remember to change
subsequent letters accordingly):
(f) At the time that the applicable Terms Agreement is executed by
the Company, you shall have received from _________________ a report, dated
such date, in form and substance satisfactory to you, together with signed or
reproduced copies of such report for each of the other Underwriters, stating
that, in their opinion, the forecasted financial statements for the [relevant
period or periods] included in the Registration Statement and the Prospectus
are presented in conformity with guidelines for presentation of a forecast
established by the AICPA, and that the underlying assumptions provide a
reasonable basis for management's forecast.
If the accountant is to perform a compilation of the forecasted financial
statements included in the Registration Statement and the Prospectus, delivery
of the related report should be treated separately in Section 5(e) as follows:
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-------------------------
(f) At the time that the applicable Terms Agreement is executed by
the Company, you shall have received from _________________ a report, dated
such date, in form and substance satisfactory to you, together with signed or
reproduced copies of such report of each of the other Underwriters, stating
that they have compiled the forecasted financial statements for the [relevant
period or periods] included in the Registration Statement and the Prospectus
in accordance with the guidelines established by the AICPA.
Finally, if the accountant is to perform agreed-upon procedures on a forecast
included in the Registration Statement and the Prospectus, SAS No. 72 requires
that the accountant first prepare a compilation report with respect to the
forecast and attach that report to the comfort letter. The accountant may then
report on specific procedures performed and findings obtained.
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