EXHIBIT 1.2
THE TOWN AND COUNTRY TRUST
Preferred Shares of Beneficial Interest
(par value $.01 per share)
UNDERWRITING AGREEMENT
To the Representatives of the several
Underwriters named in the respective
Pricing Agreements hereinafter described.
Dear Sirs:
From time to time The Town and Country Trust, a Maryland real estate
investment trust (the "Trust") and a general partner of The TC Operating
Limited Partnership, a Delaware limited partnership (the "Operating
Partnership"), proposes to enter into one or more Pricing Agreements (each a
"Pricing Agreement") in the form of Annex I hereto, with such additions and
deletions as the parties thereto may determine, and, subject to the terms and
conditions stated herein and therein, to issue and sell to the firms named in
Schedule I to the applicable Pricing Agreement (such firms constituting the
"Underwriters" with respect to such Pricing Agreement and the securities
specified therein) certain of its preferred shares of beneficial interest,
par value $.01 per share (collectively, the "Shares"). The Shares specified
in such Pricing Agreement are referred to as the "Firm Shares". If specified
in such Pricing Agreement, the Trust may grant to the Underwriters the right
to purchase at their election an additional number of shares, specified in
such Pricing Agreement as provided in Section 3 hereof (the "Optional
Shares"). The Firm Shares and the Optional Shares, if any, which the
Underwriters elect to purchase pursuant to Section 3 hereof are herein
collectively called the "Designated Shares".
The terms and rights of any particular issuance of Designated Shares
shall be as specified in the Pricing Agreement relating thereto.
1. Particular sales of Designated Shares may be made from time
to time to the Underwriters of such Shares, for whom the firms designated as
representatives of the Underwriters of such Shares in the Pricing Agreement
relating thereto will act as representatives (the "Representatives"). The
term "Representatives" also refers to a single firm acting as sole
representative of the Underwriters and to Underwriters who act without any
firm being designated as their representative. This Underwriting Agreement
shall not be construed as an obligation of the Trust to sell any of the
Shares or as an obligation of any of the Underwriters to purchase any of the
Shares. The obligation of the Trust to issue and sell any of the Shares and
the obligation of any of the Underwriters to purchase any of the Shares shall
be evidenced by the Pricing Agreement with respect to the Designated Shares
specified therein. Each Pricing Agreement shall specify the aggregate number
of the Firm Shares, the maximum number of Optional Shares, if any, the
initial public offering price of such Firm Shares and Optional Shares or the
manner of determining such price, the purchase price to the Underwriters of
such Designated Shares, the names of the Underwriters of such Designated
Shares, the names of the Representatives of such Underwriters, the number of
such Designated Shares to be purchased by each Underwriter and the
commission, if any, payable to the Underwriters with respect thereto and
shall set forth the date, time and manner of delivery of such Firm Shares and
Optional
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Shares, if any, and payment therefor. The Pricing Agreement shall also
specify (to the extent not set forth in the registration statement and
prospectus with respect thereto) the terms of such Designated Shares. A
Pricing Agreement shall be in the form of an executed writing (which may be
in counterparts), and may be evidenced by an exchange of telegraphic
communications or any other rapid transmission device designed to produce a
written record of communications transmitted. The obligations of the
Underwriters under this Agreement and each Pricing Agreement shall be several
and not joint.
2. Each of the Trust and the Operating Partnership represents
and warrants to, and agrees with, each of the Underwriters that:
(a) A registration statement on Form S-3 (File No.
333-_______) (the "Initial Registration Statement") in respect of the
Shares has been filed with the Securities and Exchange Commission (the
"Commission"); the Initial Registration Statement and any
post-effective amendment thereto, each in the form heretofore delivered
or to be delivered to the Representatives and, excluding exhibits to
the Initial Registration Statement, but including all documents
incorporated by reference in the prospectus included therein, to the
Representatives for each of the other Underwriters, have been declared
effective by the Commission in such form; other than a registration
statement, if any, increasing the size of the offering (a "Rule 462(b)
Registration Statement"), filed pursuant to Rule 462(b) under the
Securities Act of 1933, as amended (the "Act"), which became effective
upon filing, no other document with respect to the Initial Registration
Statement or document incorporated by reference therein has heretofore
been filed, or transmitted for filing, with the Commission (other than
prospectuses filed pursuant to Rule 424(b) of the rules and regulations
of the Commission under the Act, each in the form heretofore delivered
to the Representatives); and no stop order suspending the effectiveness
of the Initial Registration Statement, any post-effective amendment
thereto or the Rule 462(b) Registration Statement, if any, has been
issued and no proceeding for that purpose has been initiated or
threatened by the Commission (any preliminary prospectus included in
the Initial Registration Statement, any post-effective amendment
thereto or filed with the Commission pursuant to Rule 424(a) under the
Act, is hereinafter called a "Preliminary Prospectus"; the various
parts of the Initial Registration Statement and the Rule 462(b)
Registration Statement, if any, including all exhibits thereto and the
documents incorporated by reference in the prospectus contained in the
Initial Registration Statement at the time such part of the Initial
Registration Statement became effective, or such part of the Rule
462(b) Registration Statement, if any, became or hereafter becomes
effective, each as amended at the time such part of the Initial
Registration Statement or the Rule 462(b) Registration Statement became
effective, hereinafter collectively called the "Registration
Statement"; the prospectus relating to the Shares, in the form in which
it has most recently been filed, or transmitted for filing, with the
Commission on or prior to the date of this Agreement, being hereinafter
called the "Prospectus"); any reference herein to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include
the documents incorporated by reference therein pursuant to the
applicable form under the Act, as of the date of such Preliminary
Prospectus or Prospectus, as the case may be; any reference to any
amendment or supplement to any Preliminary Prospectus or the Prospectus
shall be deemed to refer to and include any documents filed after the
date of such Preliminary Prospectus or Prospectus, as the case may be,
under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and incorporated by reference in such Preliminary Prospectus or
Prospectus, as the case may be; any reference to any amendment to the
Registration Statement shall be deemed to refer to and include any
annual report of the Trust filed pursuant to Section 13(a) or 15(d) of
the Exchange Act after the effective date of the Registration Statement
that is incorporated by reference in
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the Registration Statement; and any reference to the Prospectus as
amended or supplemented shall be deemed to refer to the Prospectus as
amended or supplemented in relation to the applicable Designated Shares
in the form in which it is filed with the Commission pursuant to Rule
424(b) under the Act in accordance with Section 5(a) hereof, including
any documents incorporated by reference therein as of the date of such
filing);
(b) The documents incorporated by reference in the
Prospectus, when they became effective or were filed with the
Commission, as the case may be, conformed in all material respects to
the requirements of the Act or the Exchange Act, applicable, and the
rules and regulations of the Commission thereunder, and none of such
documents 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; and any further documents
so filed and incorporated by reference in the Prospectus or any further
amendment or supplement thereto, when such documents become effective
or are filed with the Commission, as the case may be, will conform in
all material respects to the requirements of the Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission
thereunder 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; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Trust by an Underwriter of
Designated Shares through the Representatives expressly for use in the
Prospectus as amended or supplemented relating to such Shares;
(c) The Registration Statement and the Prospectus
conform, and any further amendments or supplements to the Registration
Statement or the Prospectus will conform, in all material respects to
the requirements of the Act and the rules and regulations of the
Commission thereunder and do not and will not, as of the applicable
effective date as to the Registration Statement and any amendment
thereto and as of the applicable filing date as to the Prospectus and
any amendment or supplement thereto, contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Trust by an
Underwriter of Designated Shares through the Representatives expressly
for use in the Prospectus as amended or supplemented relating to such
Shares;
(d) None of the Trust, the Operating Partnership or any
of their respective partnership or corporate subsidiaries (the
Operating Partnership and the partnership and corporate subsidiaries of
the Trust and the Operating Partnership are collectively referred to
herein as "subsidiaries") has sustained, since the date the date of the
latest audited financial statements included or incorporated by
reference in the Prospectus, any material loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus, and, since the respective dates as of
which information is given in the Registration Statement and the
Prospectus, there has not been (A) any material change in the
beneficial interests of the Trust or any material increase in long-term
debt of the Trust, the Operating Partnership or any of their respective
subsidiaries, (B) any material adverse change, or any development
involving a prospective material adverse change, in or affecting the
general affairs, management, financial position, shareholders' equity
(or, with respect to
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the Operating Partnership and the other partnership subsidiaries,
partnership capital) or results of operations of the Trust and its
subsidiaries, taken as a whole, otherwise than as set forth or
contemplated in the Prospectus; (C) any transactions entered into by
the Trust or any of the Trust's subsidiaries, other than those in the
ordinary course of business, which are material with respect to the
Trust and its subsidiaries considered as one enterprise and (D) except
for regular dividends, any dividend or distribution of any kind
declared, paid or made by the Trust on any class of its shares of
beneficial interest;
(e) The Trust and its subsidiaries have good and
marketable title in fee simple to, or good and marketable leasehold
estates in, all real property owned or leased, as the case may be, by
them, and good and marketable title to all personal property owned by
them which is material to the business of the Trust, in each case free
and clear of all liens, encumbrances and defects except such as are
described in the Prospectus or such as do not materially affect the
value of such property, and do not interfere with the use made and
proposed to be made of such property by the Trust and its subsidiaries;
and any real property and buildings held under lease by the Trust and
its subsidiaries are held by them under valid and subsisting leases
with such exceptions as are not material and do not interfere with the
use made and proposed to be made of such property and buildings by the
Trust and its subsidiaries, in each case as set forth or contemplated
in the Prospectus;
(f) The Trust has been duly organized and is validly
existing as a real estate investment trust in good standing under the
laws of the State of Maryland, with power and authority (trust and
other) to own its properties and conduct its business as described in
the Prospectus;
(g) Each partnership and corporate subsidiary of the
Trust which is a significant subsidiary, as defined in Rule 405 of
Regulation C of the regulations promulgated under the Act (each, a
"Significant Subsidiary") has been duly organized and is validly
existing as a partnership or a corporation in good standing under the
laws of its jurisdiction of organization, with power and authority
(partnership or corporate, as the case may be, and other) to own its
properties and to conduct its business as described in the Prospectus;
(h) The Trust and each Significant Subsidiary has been
duly qualified for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties or conducts any business so as to require qualification;
(i) The Trust has an authorized capitalization as set
forth in the Prospectus, and all of the issued shares of beneficial
interest in the Trust have been duly and validly authorized and issued
and are fully paid and non-assessable; the Trust is a general partner
of the Operating Partnership; all of the partnership interests of each
partnership subsidiary have been duly authorized and issued and are
owned, directly or indirectly, by the Trust and/or the Operating
Partnership, free and clear of all liens, encumbrances, equities or
claims; all of the issued shares of capital stock of the corporate
subsidiaries of the Trust have been duly and validly authorized and
issued, are fully paid and non-assessable and are owned directly or
indirectly by the Trust, free and clear of all liens, encumbrances,
equities or claims;
(j) The Shares have been duly and validly authorized,
and, when the Firm Shares are issued and delivered pursuant to this
Agreement and the Pricing Agreement with respect to such Designated
Shares and, in the case of any Optional Shares, pursuant to
Over-allotment Options (as defined in Section 3 hereof) with respect to
such Shares,
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such Designated Shares will be duly and validly issued and fully paid
and non-assessable; the Shares conform to the description thereof
contained in the Registration Statement and the Designated Shares will
conform to the description thereof contained in the Prospectus as
amended or supplemented with respect to such Designated Shares; and no
holder of any beneficial interest in the Trust has any pre-emptive or
similar rights or has any rights to require or participate in the
registration of beneficial interests under the Act;
(k) The issue and sale of the Shares and the compliance
by the Trust and the Operating Partnership with all of the provisions
of this Agreement, any Pricing Agreement and each Over-allotment
Option, if any, and the consummation of the transactions contemplated
herein and therein will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Trust or any of its subsidiaries
is a party or by which the Trust or any of its subsidiaries is bound or
to which any of the property or assets of the Trust or any of its
subsidiaries is subject, other than such conflicts, breaches,
violations or defaults that would not have a material adverse effect on
the business operation, consolidated financial position, shareholders'
equity or results of operations of the Trust and its subsidiaries, and
that would not affect the validity of the Designated Shares nor will
such action result in any violation of the provisions of the Amended
and Restated Declaration of Trust or By-Laws of the Trust or the
Certificate of Limited Partnership or partnership agreement of the
Operating Partnership (the "OP Partnership Agreement") or any statute
or any order, rule or regulation of any court or governmental agency or
body having jurisdiction over the Trust or any of its subsidiaries or
any of their properties; and no consent, approval, authorization,
order, registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale of the
Shares or the consummation by the Trust of the transactions
contemplated by this Agreement or any Pricing Agreement or any
Over-allotment Option, except such as have been, or will have been
prior to each Time of Delivery (as defined in Section 4 hereof),
obtained under the Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and
distribution of the Designated Shares by the Underwriters;
(l) Other than as set forth in the Prospectus, there are
no legal or governmental proceedings pending to which the Trust or any
of its subsidiaries is a party or of which any property of the Trust or
any of its subsidiaries is the subject, which, if determined adversely
to the Trust or any of its subsidiaries, would individually or in the
aggregate have a material adverse effect on the consolidated financial
position, shareholders' equity (or net assets, as the case may be) or
results of operations of the Trust and its subsidiaries; and, to the
best of the Trust's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(m) The Trust is in substantial compliance with, and
conducts its business in substantial conformity with, all applicable
laws and governmental regulations;
(n) Neither the Trust nor any of its subsidiaries is in
violation of its organizational documents or in default in the
performance or observance of any material obligation, agreement,
covenant or condition contained in any indenture, mortgage, deed of
trust, loan agreement, lease or other agreement or instrument to which
it is a party or by which it or any of its properties may be bound;
(o) The statements set forth in the Prospectus as amended
or supplemented
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under the caption "Description of Our Shares of Beneficial Interest",
insofar as they purport to constitute a summary of the terms of the
Shares, and under the captions "Material Federal Income Tax
Considerations", "Plan of Distribution" and "Underwriting", insofar as
they purport to describe the provisions of the laws and documents
referred to therein, are accurate, complete and fair;
(p) Neither the Trust nor any of its subsidiaries is, and
after giving effect to the offering and sale of the Designated Shares,
will be an "investment company" or an entity "controlled by an
investment company", as such terms are defined in the Investment
Company Act of 1940, as amended (the "Investment Company Act");
(q) Ernst & Young LLP, who have certified certain
financial statements of the Trust and its subsidiaries, are independent
public accountants as required by the Act and the rules and regulations
of the Commission thereunder; and
(r) The Trust has reviewed its operations and that of its
subsidiaries and any third parties with which the Trust or any of its
subsidiaries has a material relationship to evaluate the extent to
which the business or operations of the Trust or any of its
subsidiaries will be affected by the Year 2000 Problem. As a result of
such review, the Trust has no reason to believe, and does not believe,
that the Year 2000 Problem will have a material adverse effect on the
general affairs, management, the current or future consolidated
financial position, business prospects, shareholders' equity or results
of operations of the Trust and its subsidiaries or result in any
material loss or interference with the Trust's business or operations.
The "Year 2000 Problem" as used herein means any significant risk that
computer hardware or software used in the receipt, transmission,
processing, manipulation, storage, retrieval, retransmission or other
utilization of data or in the operation of mechanical or electrical
systems of any kind will, not, in the case of dates or time periods
occurring after December 31, 1999, function at least as effectively as
in the case of dates or time periods occurring prior to January 1,
2000.
3. Upon the execution of the Pricing Agreement applicable to
any Designated Shares and authorization by the Representatives of the release
of the Firm Shares, the several Underwriters propose to offer the Firm Shares
for sale upon the terms and conditions set forth in the Prospectus as amended
or supplemented.
The Trust may specify in the Pricing Agreement applicable to any
Designated Shares that the Trust thereby grants to the Underwriters the right
(an "Over-allotment Option") to purchase at their election up to the number
of Optional Shares set forth in such Pricing Agreement, on the terms set
forth in the paragraph above, for the sole purpose of covering
over-allotments in the sale of the Firm Shares. Any such election to purchase
Optional Shares may be exercised by written notice from the Representatives
to the Trust, given within a period specified in the Pricing Agreement,
setting forth the aggregate number of Optional Shares to be purchased and the
date on which such Optional Shares are to be delivered, as determined by the
Representatives but in no event earlier than the First Time of Delivery (as
defined in Section 4 hereof) or, unless the Representatives and the Trust
otherwise agree in writing, earlier than or later than the respective number
of business days after the date of such notice set forth in such Pricing
Agreement.
The number of Optional Shares to be added to the number of Firm
Shares to be purchased by each Underwriter as set forth in Schedule I to the
Pricing Agreement applicable to such Designated Shares shall be, in each
case, the number of Optional Shares which the Trust has been advised by the
Representatives have been attributed to such Underwriter; provided that, if
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the Trust has not been so advised, the number of Optional Shares to be so
added shall be, in each case, that proportion of Optional Shares which the
number of Firm Shares to be purchased by such Underwriter under such Pricing
Agreement bears to the aggregate number of Firm Shares (rounded as the
Representatives may determine to the nearest 100 shares) to be purchased by
all the Underwriters pursuant to such Pricing Agreement.
4. Certificates for the Firm Shares and Optional Shares to be
purchased by each Underwriter pursuant to the Pricing Agreement relating
thereto, in the form specified in such Pricing Agreement and in such
authorized denominations and registered in such names as the Representatives
may request, shall be delivered by or on behalf of the Trust to the
Representatives for the account of such Underwriter, against payment by such
Underwriter or on its behalf of the purchase price therefor by wire transfer
of immediately available funds to the account specified by the Trust, (i)
with respect to the Firm Shares, all in the manner and at the place and time
and date specified in such Pricing Agreement or at such other place and time
and date as the Representatives and the Trust may agree upon in writing, such
time and date being herein called the "First Time of Delivery" and (ii) with
respect to the Optional Shares, if any, in the manner and at the time and
date specified by the Representatives in the written notice given by the
Representatives of the Underwriters' election to purchase such Optional
Shares, or at such other time and date as the Representatives and the Trust
may agree upon in writing, such time and date, if not the First Time of
Delivery, herein called the "Second Time of Delivery". Each such time and
date for delivery is herein called a "Time of Delivery". Certificates for the
Firm Shares and the Optional Shares shall be made available to the
Representatives at an office specified by the Representatives at least 48
hours prior to the Time of Delivery.
5. The Trust agrees with each of the Underwriters of any
Designated Shares:
(a) To prepare the Prospectus as amended and supplemented
in relation to the applicable Designated Shares in a form approved by
the Representatives and to file such Prospectus pursuant to Rule 424(b)
under the Act not later than the Commission's close of business on the
second business day following the execution and delivery of the Pricing
Agreement relating to the applicable Designated Shares or, if
applicable, such earlier time as may be required by Rule 424(b); to
make no further amendment or any supplement to the Registration
Statement or Prospectus as amended or supplemented after the date of
the Pricing Agreement relating to such Shares and prior to any Time of
Delivery for such Shares which shall be disapproved by the
Representatives for such Shares promptly after reasonable notice
thereof; to advise the Representatives promptly of any such amendment
or supplement after any Time of Delivery for such Shares and furnish
the Representatives with copies thereof; to file promptly all reports
and any definitive proxy or information statements required to be filed
by the Trust with the Commission pursuant to Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act for so long as the delivery of a
prospectus is required in connection with the offering or sale of such
Shares, and during such same period to advise the Representatives,
promptly after it receives notice thereof, of the time when any
amendment to the Registration Statement has been filed or becomes
effective or any supplement to the Prospectus or any amended Prospectus
has been filed with the Commission, of the issuance by the Commission
of any stop order or of any order preventing or suspending the use of
any prospectus relating to the Shares, of the suspension of the
qualification of such Shares for offering or sale in any jurisdiction,
of the initiation or threatening of any proceeding for any such
purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or Prospectus or for
additional information; and, in the event of the issuance of any such
stop order or of any such order preventing or suspending the use of any
prospectus relating to the Shares or suspending any such qualification,
promptly to use its
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best efforts to obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify such Shares for
offering and sale under the securities laws of such jurisdictions as
the Representatives may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the
distribution of such Shares, provided that in connection therewith the
Trust shall not be required to qualify as a foreign corporation or to
file a general consent to service of process in any jurisdiction;
(c) Prior to 10:00 A.M., New York City time, on the New
York Business Day next succeeding the date of this Agreement and from
time to time, to furnish the Underwriters with copies of the Prospectus
as amended or supplemented in such quantities as the Representatives
may from time to time reasonably request, and, if the delivery of a
prospectus is required at any time in connection with the offering or
sale of the Shares and if at such time any event shall have occurred as
a result of which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made when such
Prospectus is delivered, not misleading, or, if for any other reason it
shall be necessary during such same period to amend or supplement the
Prospectus or to file under the Exchange Act any document incorporated
by reference in the Prospectus in order to comply with the Act or the
Exchange Act, to notify the Representatives and upon their request to
file such document and to prepare and furnish without charge to each
Underwriter and to any dealer in securities as many copies as the
Representatives may from time to time reasonably request of an amended
Prospectus or a supplement to the Prospectus which will correct such
statement or omission or effect such compliance;
(d) To make generally available to its security holders
as soon as practicable, but in any event not later than eighteen months
after the effective date of the Registration Statement (as defined in
Rule 158(c) under the Act), an earnings statement of the Trust and its
subsidiaries (which need not be audited) complying with Section 11(a)
of the Act and the rules and regulations of the Commission thereunder
(including, at the option of the Trust, Rule 158);
(e) That during the period beginning from the date of the
Pricing Agreement for such Designated Shares and continuing to and
including the date specified in the Pricing Agreement, neither the
Trust nor any of its subsidiaries will directly or indirectly
(including by the writing or purchase of a cash-settled derivative
instrument) offer, sell, contract to sell or otherwise dispose of,
except as provided hereunder, any Shares or any other securities of the
Trust that are substantially similar to the Designated Shares,
including but not limited to any securities that are convertible into
or exchangeable for, or that represent the right to receive, Shares or
any such substantially similar securities, without the prior written
consent of the Representatives;
(f) To use its best efforts to meet the requirements to
qualify as a real estate investment trust ("REIT") under the Internal
Revenue Code of 1986, as amended (the "Code"); and
(g) If the Trust elects to rely upon Rule 462(b), the
Trust 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 the Pricing Agreement, and the Trust
8
shall at the time of filing either pay 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 11(b) under
the Act.
6. The Trust covenants and agrees with the several
Underwriters that the Trust will pay or cause to be paid the following: (i)
the fees, disbursements and expenses of the Trust's counsel and accountants
in connection with the registration of the Shares under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or
producing any Agreement among Underwriters, this Agreement, any Pricing
Agreement, any Blue Sky and Legal Investment Memoranda, closing documents
(including any compilations thereof) and any other documents in connection
with the offering, purchase, sale and delivery of the Shares; (iii) all
expenses in connection with the qualification of the Shares for offering and
sale under state securities laws as provided in Section 5(b) hereof,
including the reasonable fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection with the
Blue Sky and Legal Investment survey(s); (iv) any fees charged by securities
rating services for rating the Shares; (v) any filing fees incident to, and
the reasonable fees and disbursements of counsel for the Underwriters in
connection with, any required reviews by the National Association of
Securities Dealers, Inc. of the terms of the sale of the Shares; (vi) the
cost of preparing certificates for the Shares; (vii) the cost and charges of
any transfer agent or registrar or dividend disbursing agent and (viii) all
other costs and expenses incident to the performance of its obligations
hereunder and under any Over-allotment Options which are not otherwise
specifically provided for in this Section. It is understood, however, that,
except as provided in this Section and Sections 8 and 11 hereof, the
Underwriters will pay all of their own costs and expenses, including the fees
of their counsel, transfer taxes on resale of any of the Shares by them, and
any advertising expenses connected with any offers they may make.
7. The obligations of the Underwriters of any Designated
Shares under the Pricing Agreement relating to such Designated Shares shall
be subject, in the discretion of the Representatives, to the condition that
all representations and warranties and other statements of the Trust and the
Operating Partnership in or incorporated by reference in the Pricing
Agreement relating to such Designated Shares are, at and as of each Time of
Delivery for such Designated Shares, true and correct, the condition that the
Trust shall have performed all of its obligations hereunder theretofore to be
performed, and the following additional conditions:
(a) The Prospectus as amended or supplemented in relation
to such Designated Shares shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed
for such filing by the rules and regulations under the Act and in
accordance with Section 5(a) hereof; if the Trust has elected to rely
upon Rule 462(b), the Rule 462(b) Registration Statement shall have
become effective by 10:00 P.M., Washington, D.C. time, on the date of
the Pricing Agreement; no stop order suspending the effectiveness of
the Registration Statement or any part thereof shall have been issued
and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and all requests for additional
information on the part of the Commission shall have been complied with
to the Representatives' reasonable satisfaction;
(b) ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Underwriters,
shall have furnished to the Representatives such written opinion or
opinions, dated each Time of Delivery for such Designated Shares, with
respect to the formation of the Trust, the validity of the Designated
Shares being delivered at such Time of Delivery, the Registration
Statement,
9
the Prospectus and other related matters as the Representatives may
reasonably request, and such counsel shall have received such papers
and information as they may reasonably request to enable them to pass
upon such matters;
(c) Berick, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ Co., L.P.A., or other
counsel for the Trust satisfactory to the Representatives, shall have
furnished the Representatives its written opinions dated each Time of
Delivery for such Designated Shares, in form and substance satisfactory
to the Representatives, to the effect that:
(i) The Trust has been duly organized and is
validly existing as a real estate investment trust in good
standing under the laws of the State of Maryland, with trust
power and authority to own its properties and conduct its
business as described in the Prospectus as amended or
supplemented;
(ii) The Operating Partnership has been duly
formed and is validly existing as a limited partnership under
the laws of the State of Maryland with partnership power and
authority to own its properties and conduct its business as
described in the Prospectus as amended or supplemented; the
Partnership Agreement has been duly authorized, executed and
delivered by the Trust and the other parties thereto and is
valid, legally binding and enforceable in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency
and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles;
all of the partnership interests of the Operating Partnership
have been duly and validly authorized and issued, are fully
paid and non-assessable and (except as set forth in the
Prospectus) are owned, directly or indirectly, by the Trust,
free and clear of all liens, encumbrances, equities or claims;
(iii) Each Significant Subsidiary of the Trust
(other than the Operating Partnership) has been duly organized
and is validly existing as a partnership or a corporation in
good standing under the laws of its jurisdiction of
organization, with corporate or partnership (as the case may
be) power and authority to own its properties and conduct its
business as described in the Prospectus; the partnership
agreement of each partnership subsidiary (other than the
Operating Partnership) of the Trust has been duly authorized,
executed and delivered by the Trust and the other parties
thereto and is valid, legally binding and enforceable in
accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency and other laws of general applicability
relating to or affecting creditors' rights and to general
equity principles; all of the partnership interests of each
partnership subsidiary (other than the Operating Partnership)
have been duly and validly authorized and issued, are fully
paid and non-assessable and (except as set forth in the
Prospectus) are owned, directly or indirectly, by the Trust
and/or the Operating Partnership, free and clear of all liens,
encumbrances, equities or claims; all of the issued shares of
capital stock of each corporate subsidiary have been duly and
validly authorized and issued, are fully paid and
non-assessable and all such issued shares of capital stock are
owned, directly or indirectly, by the Trust, free and clear of
all liens, encumbrances, equities or claims (such counsel
being entitled to rely in respect of the opinion in this
clause upon opinions of local counsel and in respect of
matters of fact upon certificates of officers of the Trust or
its subsidiaries, provided that such counsel shall state that
they believe that both you and they are justified in relying
upon such opinions and certificates);
(iv) The Trust and each Significant Subsidiary
has been duly qualified
10
for the transaction of business and is in good standing under
the laws of each jurisdiction in which it owns or leases
properties or conducts any business so as to require
qualification or is subject to no material liability or
disability by reason of failure to be so qualified in any such
jurisdiction (such counsel being entitled to rely in respect
of the opinion in this clause upon opinions of local counsel
and in respect of matters of fact upon certificates of
officers of the Trust or its subsidiaries, provided that such
counsel shall state that they believe that both you and they
are justified in relying upon such opinions and certificates);
(v) The Trust has an authorized capitalization
as set forth in the Prospectus as amended or supplemented and
all of the issued shares of beneficial interest in the Trust
(including the Designated Shares being delivered at such Time
of Delivery) have been duly and validly authorized and issued
and are fully paid and non-assessable; and the Designated
Shares conform, as to legal matters, in all material respects
to the description thereof in the Prospectus as amended or
supplemented;
(vi) To such counsel's knowledge and other than as
set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Trust or any of
its subsidiaries is a party or of which any property of the
Trust or any of its subsidiaries is the subject which, if
determined adversely to the Trust or any of its subsidiaries,
would individually or in the aggregate have a material adverse
effect on the consolidated financial position, shareholders'
equity or results of operations of the Trust and its
subsidiaries; and to the best of such counsel's knowledge, no
such proceedings are threatened, or contemplated by
governmental authorities or threatened by others:
(vii) This Agreement and the Pricing Agreement with
respect to the Designated Shares have been duly authorized,
executed and delivered by the Trust and the Operating
Partnership;
(viii) The issue and sale of the Designated Shares
being delivered at such Time of Delivery and the compliance by
the Trust and the Operating Partnership with all of the
provisions of this Agreement and the Pricing Agreement with
respect to the Designated Shares and the consummation of the
transactions herein and therein contemplated will not conflict
with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument known to such counsel to which the Trust or any of
its subsidiaries is a party or by which the Trust or any of
its subsidiaries is bound or to which any of the property or
assets of the Trust is subject, other than such conflicts,
breaches, violations or defaults that would not have a
material adverse effect on the condition, financial or
otherwise, or in the earnings, business affairs or business
prospects of the Trust and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of
business and that would not affect the validity of the
Designated Shares, nor will such action result in any
violation of the provisions of the Amended and Restated
Declaration of Trust or By-laws of the Trust or the
Certificate of Limited Partnership or the OP Partnership
Agreement or any statute or any order, rule or regulation
known to such counsel of any court or governmental agency or
body having jurisdiction over the Trust or any of their
properties;
11
(ix) No consent, approval, authorization, order,
registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale
of the Designated Shares being delivered at such Time of
Delivery or the consummation by the Trust of the transactions
contemplated by this Agreement or the Pricing Agreement,
except such as have been obtained under the Act and such
consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or
Blue Sky laws in connection with the purchase and distribution
of the Designated Shares by the Underwriters;
(x) The statements set forth in the Prospectus
under the caption "Description of Our Shares of Beneficial
Interest", insofar as they purport to constitute a legal
summary of terms of the Shares, under the captions "Material
Federal Income Tax Considerations", under the captions "Plan
of Distribution" and "Underwriting" and the description of
Maryland laws under the captions "Risk Factors" and
"Description of Our Shares of Beneficial Interest", insofar as
they purport to describe the provisions of the laws and
documents referred to therein, are accurate in all material
respects;
(xi) None of the Trust or any of its subsidiaries
is, and after giving effect to the issue and sale of the
Designated Shares none will be, an "investment company" or an
entity "controlled" by an investment company, as such terms
are defined in the Investment Company Act;
(xii) The documents incorporated by reference in
the Prospectus as amended or supplemented (other than the
financial statements, related schedules and other financial
and statistical data derived from accounting records contained
therein, as to which such counsel need express no opinion),
when they became effective or were filed with the Commission,
as the case may be, complied as to form in all material
respects with the requirements of the Act or the Exchange Act,
as applicable, and the rules and regulations of the Commission
thereunder; and such counsel has no reason to believe that any
of such documents, when they became effective or were so
filed, as the case may be, contained, in the case of a
registration statement which became effective under the Act,
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, in the case of
other documents which were filed under the Act or the Exchange
Act with the Commission, an untrue statement of a material
fact or omitted to state a material fact necessary in order to
make the statements therein, in the light of the circumstances
under which they were made when such documents were so filed,
not misleading;
(xiii) The Registration Statement and the
Prospectus as amended or supplemented and any further
amendments and supplements thereto made by the Trust prior to
such Time of Delivery (other than the financial statements,
related schedules and other financial and statistical data
derived from accounting records contained therein, as to which
such counsel need express no opinion) comply as to form in all
material respects with the requirements of the Act and the
rules and regulations thereunder; although such counsel has
not independently verified and does not assume any
responsibility for the accuracy, completeness or fairness of
the statements contained in the Registration Statement or the
Prospectus, except for those referred to in the opinion in
subsection (x) of this Section 7(c), such
12
counsel has no reason to believe that, as of its effective
date, the Registration Statement or any further amendment
thereto made by the Trust prior to such Time of Delivery
(other than the financial statements, related schedules and
other financial and statistical data derived from accounting
records contained therein, as to which such counsel need
express no opinion) contained an untrue statement of a
material fact or omitted to state a material fact required to
be stated therein or necessary in order to make the statements
therein not misleading or that, as of its date, the Prospectus
as amended or supplemented or any further amendment or
supplement thereto made by the Trust prior to such Time of
Delivery (other than the financial statements, related
schedules and other financial and statistical data derived
from accounting records contained therein, as to which such
counsel need express no opinion) contained an untrue statement
of a material fact or omitted 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 or that, as of such Time of Delivery, either the
Registration Statement or the Prospectus as amended or
supplemented or any further amendment or supplement thereto
made by the Trust prior to such Time of Delivery (other than
the financial statements, related schedules and other
financial and statistical data derived from accounting records
contained therein, as to which such counsel need express no
opinion) contains an untrue statement of a material fact 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; and such counsel does
not know of any amendment to the Registration Statement
required to be filed or any contracts or other documents of a
character required to be filed as an exhibit to the
Registration Statement or required to be incorporated by
reference into the Prospectus as amended or supplemented or
required to be described in the Registration Statement or the
Prospectus as amended or supplemented which are not filed or
incorporated by reference or described as required;
(xiv) The Operating Partnership and each other
partnership subsidiary of the Trust is properly treated (x) as
a partnership for federal income tax purposes and (y) not as a
"publicly traded partnership" within the meaning of Section
7704(b) of the Code; and
(xv) In the opinion of such counsel, commencing
with the Trust's taxable year ending December 31, 1993 and
assuming that the elections and other procedural steps
described in the Prospectus under the heading "Material
Federal Income Tax Considerations" are completed by the Trust
in a timely fashion, the Trust has been organized in
conformity with the requirements for qualification as a REIT,
and its current and proposed method of operation will enable
it to meet the requirements for qualification and taxation as
a REIT under the Code.
(d) At a time prior to the execution of the Pricing
Agreement with respect to such Designated Shares and at each Time of
Delivery for such Designated Shares, the independent accountants of the
Trust who have audited the consolidated financial statements of the
Trust and its subsidiaries included or incorporated by reference in the
Registration Statement shall have furnished to the Representatives a
letter, dated the effective date of the Registration Statement or the
date of the most recent report filed with the Commission containing
consolidated financial statements and incorporated by reference in the
Registration Statement, if the date of such report is later than such
effective date, and a letter dated such Time of Delivery, respectively,
to the effect set forth in Annex II hereto, and with respect to such
letter dated such Time of Delivery, as to
13
such other matters as the Representatives may reasonably request and in
form and substance satisfactory to the Representatives;
(e) (i) None of the Trust, the Operating Partnership or
any of their subsidiaries shall have sustained since the date of the
latest audited financial statements included or incorporated by
reference in the Prospectus as amended prior to the date of the Pricing
Agreement relating to the Designated Shares any loss or interference
with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court
or governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus as amended prior to the date of the
Pricing Agreement relating to the Designated Shares, and, (ii) since
the respective dates as of which information is given in the
Prospectus, there shall not have been (A) any change in the beneficial
interests or increase in long-term debt of the Trust, the Operating
Partnership or any of their respective subsidiaries, (B) any change, or
any development involving a prospective change, in or affecting the
general affairs, management, financial position, shareholders' equity
(or, with respect to the Operating Partnership and the other
partnership subsidiaries, partnership capital) or results of operations
of the Trust and its subsidiaries, otherwise than as set forth or
contemplated in the Prospectus as amended prior to the date of the
Pricing Agreement relating to the Designated Shares, (C) any
transactions entered into by the Trust or any of its subsidiaries,
other than those in the ordinary course of business, which are material
with respect to the Trust and its subsidiaries considered as one
enterprise, (D) except for regular dividends, there shall have been any
dividend or distribution of any kind declared, paid or made by the
Trust on any class of its capital stock the effect of which, in any
such case described in clause (ii) is in the judgment of the
Representatives so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Designated Shares on the terms and in the manner contemplated in the
Prospectus as first amended or supplemented relating to the Designated
Shares;
(f) On or after the date of the Pricing Agreement
relating to the Designated Shares (i) no downgrading shall have
occurred in the rating accorded the Trust's debt securities or
preferred stock by any "nationally recognized statistical rating
organization," as that term is defined by the Commission for purposes
of Rule 436(g)(2) under the Act and (ii) no such organization shall
have publicly announced that it has under surveillance or review, with
possible negative implications, its rating of any of the Trust's debt
securities or preferred stock;
(g) On or after the date of the Pricing Agreement
relating to the Designated Shares there shall not have occurred any of
the following (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange; (ii) a suspension
or material limitation in trading in the Trust's securities on the New
York Stock Exchange; (iii) a general moratorium on commercial banking
activities declared by either Federal or New York State authorities; or
(iv) the outbreak or escalation of hostilities involving the United
States or the declaration by the United States of a national emergency
or war, if the effect of any such event specified in this clause (iv)
in the judgment of the Representatives makes it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Firm Shares or Optional Shares or both on the terms and in the manner
contemplated by the Prospectus as first amended or supplemented
relating to the Designated Shares;
(h) The Shares at each Time of Delivery shall have been
duly listed, subject to notice of issuance, on the Exchange;
14
(i) The Trust shall have complied with the provisions of
Section 5(c) hereof with respect to the furnishing of prospectuses
prior to 10:00 A. M., New York City time, on the Next New York Business
Day next succeeding the date of this Agreement; and
(j) The Trust and the Operating Partnership shall have
furnished or caused to be furnished to the Representatives at each Time
of Delivery for the Designated Shares certificates of officers of the
Trust satisfactory to the Representatives as to the accuracy of the
representations and warranties of the Trust and the Operating
Partnership herein at and as of such Time of Delivery, as to the
performance by the Trust and the Operating Partnership of all of their
respective obligations hereunder to be performed at or prior to such
Time of Delivery, as to matters set forth in subsections (a) and (e) of
this Section and as to such other matters as the Representatives may
reasonably request.
8. (a) The Trust and the Operating Partnership, jointly and
severally, will indemnify and hold harmless each Underwriter against any
losses, claims, damages or liabilities, joint or several, to which such
Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as amended
or supplemented and any other prospectus relating to the Shares, or any
amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
and will reimburse each Underwriter for any legal or other expenses
reasonably incurred by such Underwriter in connection with investigating or
defending any such action or claim as such expenses are incurred; provided,
however, that neither the Trust nor the Operating Partnership shall be liable
in any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in any Preliminary Prospectus,
any preliminary prospectus supplement, the Registration Statement, the
Prospectus as amended or supplemented and any other prospectus relating to
the Shares, or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Trust by any Underwriter
of Designated Shares through the Representatives expressly for use in the
Prospectus as amended or supplemented relating to such Shares;
(b) Each Underwriter will indemnify and hold harmless the Trust
and the Operating Partnership against any losses, claims, damages or
liabilities to which the Trust or the Operating Partnership may become
subject, under the Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
an untrue statement or alleged untrue statement of a material fact contained
in any Preliminary Prospectus, any preliminary prospectus supplement, the
Registration Statement, the Prospectus as amended or supplemented and any
other prospectus relating to the Shares, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, in each case to the extent,
but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in any Preliminary
Prospectus, any preliminary prospectus supplement, the Registration
Statement, the Prospectus as amended or supplemented and any other prospectus
relating to the Designated Shares, or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the
Trust and the Operating Partnership by such Underwriter through the
Representatives expressly for use therein; and will reimburse the Trust and
the Operating Partnership or any legal or other expenses reasonably incurred
by the Trust and the Operating Partnership in connection with investigating
or defending any such action or claim as such
15
expenses are incurred;
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against
the indemnifying party under such subsection, notify the indemnifying party
in writing of the commencement thereof; but the omission to notify the
indemnifying party shall not relieve it from any liability which it may have
to any indemnified party otherwise than under such subsection. In case any
such action shall be brought against any indemnified party and it shall
notify the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
shall wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel satisfactory to such indemnified
party (who shall not, except with the consent of the indemnified party, be
counsel to the indemnifying party), and, after notice from the indemnifying
party to such indemnified party of its election to assume the defense
thereof, the indemnifying party shall not be liable to such indemnified party
under such subsection for any legal expenses of other counsel or any other
expenses, in each case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable costs of
investigation. 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 judgment
(i) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does not include any
statement as to or an admission of fault, culpability or a failure to act, by
or on behalf of any indemnified party;
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities
(or actions in respect thereof) in such proportion as is appropriate to
reflect the relative benefits received by the Trust and the Operating
Partnership on the one hand and the Underwriters of the Designated Shares on
the other from the offering of the Designated Shares to which such loss,
claim, damage or liability (or action in respect thereof) relates. 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 subsection (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
but also the relative fault of the Trust and the Operating Partnership on the
one hand and the Underwriters of the Designated Shares 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 benefits received
by the Trust and the Operating Partnership on the one hand and such
Underwriters on the other shall be deemed to be in the same proportion as the
total net proceeds from such offering (before deducting expenses) received by
the Trust bear to the total underwriting discounts and commissions received
by such Underwriters. 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 Trust or 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 Trust, the Operating Partnership and
the Underwriters agree that it would not be just and equitable if
contributions
16
pursuant to this subsection (d) 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 subsection (d). 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
subsection (d) 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 subsection (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at
which the applicable Designated Shares 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. No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The obligations of the Underwriters of
Designated Shares in this subsection (d) to contribute are several in
proportion to their respective underwriting obligations with respect to such
Shares and not joint; and
(e) The obligations of the Trust and the Operating Partnership
under this Section 8 shall be in addition to any liability which the Trust or
the Operating Partnership may otherwise have and shall extend, upon the same
terms and conditions, to each officer, director or partner of any Underwriter
and to each person, if any, who controls any Underwriter within the meaning
of the Act; and the obligations of the Underwriters under this Section 8
shall be in addition to any liability which the respective Underwriters may
otherwise have and shall extend, upon the same terms and conditions, to each
officer and trustee of the Trust and to each person, if any, who controls the
Trust within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation
to purchase the Firm Shares or Optional Shares which it has agreed to
purchase under the Pricing Agreement relating to such Shares, the
Representatives may in their discretion arrange for themselves or another
party or other parties to purchase such Shares on the terms contained herein.
If within thirty-six hours after such default by any Underwriter the
Representatives do not arrange for the purchase of such Firm Shares or
Optional Shares, as the case may be, then the Trust shall be entitled to a
further period of thirty-six hours within which to procure another party or
other parties satisfactory to the Representatives to purchase such Shares on
such terms. In the event that, within the respective prescribed period, the
Representatives notify the Trust that they have so arranged for the purchase
of such Shares, or the Trust notifies the Representatives that it has so
arranged for the purchase of such Shares, the Representatives or the Trust
shall have the right to postpone the Time of Delivery for such Shares for a
period of not more than seven days, in order to effect whatever changes may
thereby be made necessary in the Registration Statement or the Prospectus as
amended or supplemented, or in any other documents or arrangements, and the
Trust agrees to file promptly any amendments or supplements to the
Registration Statement or the Prospectus which in the opinion of the
Representatives may thereby be made necessary. The term "Underwriter" as used
in this Agreement shall include any person substituted under this Section
with like effect as if such person had originally been a party to the Pricing
Agreement with respect to such Designated Shares;
(b) If, after giving effect to any arrangements for the purchase of
the Firm Shares or Optional Shares, as the case may be, of a defaulting
Underwriter or Underwriters by the Representatives and the Trust as provided
in subsection (a) above, the aggregate number of such Shares which remains
unpurchased does not exceed one-eleventh of the aggregate number of the Firm
Shares or Optional Shares, as the case may be, to be purchased at the
respective Time of Delivery, then the Trust shall have the right to require
each non-defaulting Underwriter to
17
purchase the number of Firm Shares or Optional Shares, as the case may be,
which such Underwriter agreed to purchase under the Pricing Agreement
relating to such Designated Shares and, in addition, to require each
non-defaulting Underwriter to purchase its pro rata share (based on the
number of Firm Shares or Optional Shares, as the case may be, which such
Underwriter agreed to purchase under such Pricing Agreement) of the Firm
Shares or Optional Shares, as the case may be, of such defaulting Underwriter
or Underwriters for which such arrangements have not been made; but nothing
herein shall relieve a defaulting Underwriter from liability for its default;
and
(c) If, after giving effect to any arrangements for the
purchase of the Firm Shares or Optional Shares, as the case may be, of a
defaulting Underwriter or Underwriters by the Representatives and the Trust
as provided in subsection (a) above, the aggregate number of Firm Shares or
Optional Shares, as the case may be, which remains unpurchased exceeds
one-eleventh of the aggregate number of the Firm Shares or Optional Shares,
as the case may be, to be purchased at the respective Time of Delivery, as
referred to in subsection (b) above, or if the Trust shall not exercise the
right described in subsection (b) above to require non-defaulting
Underwriters to purchase Firm Shares or Optional Shares, as the case may be,
of a defaulting Underwriter or Underwriters, then the Pricing Agreement
relating to such Firm Shares or the Over-allotment Option relating to such
Optional Shares, as the case may be, shall thereupon terminate, without
liability on the part of any non-defaulting Underwriter or the Trust, except
for the expenses to be borne by the Trust and the Underwriters as provided in
Section 6 hereof and the indemnity and contribution agreements in Section 8
hereof; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
10. The respective indemnities, agreements. representations,
warranties and other statements of the Trust, the Operating Partnership and
the several Underwriters, as set forth in this Agreement or made by or on
behalf of them, respectively, pursuant to this Agreement, shall remain in
full force and effect, regardless of any investigation (or any statement as
to the results thereof) made by or on behalf of any Underwriter or any
officer, director or partner or controlling person of any Underwriter, or the
Trust or the Operating Partnership, or any officer or director or each
controlling person who controls the Trust or the Operating Partnership, and
shall survive delivery of and payment for the Shares.
11. If any Pricing Agreement or Over-allotment Option shall be
terminated pursuant to Section 9 hereof, neither the Trust nor the Operating
Partnership shall then be under any liability to any Underwriter with respect
to the Firm Shares or Optional Shares with respect to which such Pricing
Agreement shall have been terminated except as provided in Sections 6 and 8
hereof; but, if for any other reason, Designated Shares are not delivered by
or on behalf of the Trust as provided herein, the Trust and the Operating
Partnership will reimburse the Underwriters through the Representatives for
all reasonable out-of-pocket expenses approved in writing by the
Representatives, including reasonable fees and disbursements of counsel,
incurred by the Underwriters in making preparations for the purchase, sale
and delivery of such Designated Shares, but the Trust and the Operating
Partnership shall then be under no further liability to any Underwriter with
respect to such Designated Shares except as provided in Sections 6 and 8
hereof.
12. In all dealings hereunder, the Representatives of the
Underwriters of Designated Shares shall act on behalf of each of such
Underwriters, and the parties hereto shall be entitled to act and rely upon
any statement, request, notice or agreement on behalf of any Underwriter made
or given by such Representatives jointly or by such of the Representatives,
if any, as may be designated for such purpose in the Pricing Agreement. All
statements, requests, notices and agreements hereunder shall be in writing,
and if to the
18
Underwriters shall be delivered or sent by mail, telex or facsimile
transmission to the address of the Representatives as set forth in the
Pricing Agreement; and if to the Trust or the Operating Partnership shall be
delivered or sent by mail, telex or facsimile transmission to the address of
the Trust set forth in the Registration Statement, Attention: Chief Executive
Officer; provided, however, that any notice to an Underwriter pursuant to
Section 8(c) hereof shall be delivered or sent by mail, telex or facsimile
transmission to such Underwriter at its address set forth in its
Underwriters' Questionnaire, or telex constituting such Questionnaire, which
address will be supplied to the Trust by the Representatives upon request.
Any such statements, requests, notices or agreements shall take effect upon
receipt thereof.
13. This Agreement and each Pricing Agreement shall be binding
upon, and inure solely to the benefit of, the Underwriters, the Trust, the
Operating Partnership and, to the extent provided in Sections 8 and 10
hereof, the officers and trustees of the Trust, the officers, directors and
partners of any Underwriters and each person who controls the Trust or any
Underwriter, and their respective heirs, executors, administrators,
successors and assigns, and no other person shall acquire or have any right
under or by virtue of this Agreement or any such Pricing Agreement. No
purchaser of any of the Shares from any Underwriter shall be deemed a
successor or assign by reason merely of such purchase.
14. Time shall be of the essence of each Pricing Agreement. As
used herein, the term "business day" shall mean any day when the Commission's
office in Washington, D.C. is open for business.
15. This Agreement and each Pricing Agreement shall be governed
by and construed in accordance with the laws of the State of New York.
16. This Agreement and each Pricing Agreement may be executed
by any one or more of the parties hereto and thereto in any number of
counterparts, each of which shall be deemed to be an original, but all such
respective counterparts shall together constitute one and the same instrument.
19
17. The Trust's First Amended and Restated Declaration of
Trust, dated June 24, 1993, a copy of which is duly filed with the Department
of Assessments and Taxation of the State of Maryland, provides that no
trustee, officer, shareholder, employee or agent of the Trust shall be held
to any personal liability, jointly or severally, for any obligation of or
claim against the Trust. All persons dealing with the Trust in any way shall
look only to the assets of the Trust for the payment of any sum or the
performance of any obligation.
Very truly yours,
THE TOWN AND COUNTRY TRUST
By:
------------------------------------
Name:
Title:
THE TC OPERATING LIMITED PARTNERSHIP
By: The Town and Country Trust,
its General Partner
By:
----------------------------
Name:
Title:
20
ANNEX I
PRICING AGREEMENT
[Names of Representative(s)]
As Representatives of the Several Underwriters
named in Schedule I hereto,
[c/o
---------------------------------
-------------------------------------
-------------------------------------]
Dear Sirs:
The Town and Country Trust, a Maryland real estate investment trust
(the "Trust") and a general partner of The TC Operating Limited Partnership
(the "Operating Partnership"), proposes subject to the terms and conditions
stated herein and in the Underwriting Agreement, dated __________________,
relating to the Trust's Preferred Shares of Beneficial Interest, par value
$.01 per share (the "Underwriting Agreement"), to issue and sell to the
Underwriters named in Schedule I hereto (the "Underwriters") the Shares
specified in Schedule II hereto (the "Designated Shares"
[consisting of Firm Shares and any Optional Shares the Underwriters may elect
to purchase]). Each of the provisions of the Underwriting Agreement is
incorporated herein by reference in its entirety, and shall be deemed to be a
part of this Agreement to the same extent as if such provisions had been set
forth in full herein; and each of the representations and warranties set
forth therein shall be deemed to have been made at and as of the date of this
Pricing Agreement, except that each representation and warranty which refers
to the Prospectus in Section 2 of the Underwriting Agreement shall be deemed
to be a representation or warranty as of the date of the Underwriting
Agreement in relation to the Prospectus (as therein defined), and also a
representation and warranty as of the date of this Pricing Agreement in
relation to the Prospectus as amended or supplemented relating to the
Designated Shares which are the subject of this Pricing Agreement. Each
reference to the Representatives herein and in the provisions of the
Underwriting Agreement so incorporated by reference shall be deemed to refer
to you. Unless otherwise defined herein, terms defined in the Underwriting
Agreement are used herein as therein defined. The Representatives designated
to act on behalf of the Representatives and on behalf of each of the
Underwriters of the Designated Shares pursuant to Section 12 of the
Underwriting Agreement and the address of the Representatives referred to in
such Section 12 are set forth in Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Shares, in the form
heretofore delivered to you is now proposed to be filed with the Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, [(a)] the Trust agrees
to issue and sell to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from the Trust, at the time and
place and at the purchase price to the Underwriters set forth in Schedule II
hereto, the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule I hereto [and, (b) in the event and to the extent that
the Underwriters shall exercise the election to purchase Optional Shares, as
provided below, the Trust agrees to issue and sell to each of the Underwriters,
and each of the Underwriters agrees, severally and not jointly, to purchase from
the Trust at the purchase price to the Underwriters set forth in Schedule II
hereto that portion of the
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number of Optional Shares as to which such election shall have been exercised].
[The Trust hereby grants to each of the Underwriters the right to
purchase at their election up to the number of Optional Shares set forth
opposite the name of such Underwriter in Schedule I hereto on the terms referred
to in the paragraph above for the sole purpose of covering overallotments in the
sale of the Firm Shares. Any such election to purchase Optional Shares may be
exercised by written notice from the Representatives to the Trust given within a
period of 30 calendar days after the date of this Pricing Agreement, setting
forth the aggregate number of Optional Shares to be purchased and the date on
which such Optional Shares are to be delivered, as determined by the
Representatives but in no event earlier than the First Time of Delivery or,
unless the Representatives and the Trust otherwise agree in writing, no earlier
than two or later than ten business days after the date of such notice.]
If the foregoing is in accordance with your understanding, please sign
and return to us [one for the Trust, one for the Operating Partnership and one
for each of the Representatives plus one for each counsel] counterparts hereof,
and upon acceptance hereof by you, on behalf of each of the Underwriters, this
letter and such acceptance hereof, including the provisions of the Underwriting
Agreement incorporated herein by reference, shall constitute a binding agreement
between each of the Underwriters and the Trust. It is understood that your
acceptance of this letter on behalf of each of the Underwriters is or will be
pursuant to the authority set forth in a form of Agreement Among Underwriters,
the form of which shall be submitted to the Trust for examination upon request,
but without warranty on the part of the Representatives as to the authority of
the signers thereof.
The Trust's First Amended and Restated Declaration of Trust, dated June
24, 1993, a copy of which is duly filed with the Department of Assessments and
Taxation of the State of Maryland, provides that no trustee, officer,
shareholder, employee or agent of the Trust shall be held to any personal
liability, jointly or severally, for any obligation of or claim against the
Trust. All persons dealing with the Trust in any way shall look only to the
assets of the Trust for the payment of any sum or the performance of any
obligation.
Very truly yours,
THE TOWN AND COUNTRY TRUST
By:
------------------------------
Name:
Accepted as of the date hereof: Title:
Name(s) of Representative(s) THE TC OPERATING LIMITED PARTNERSHIP
By: By: The Town and Country Trust,
------------------------------- its General Partner
Name:
Title: By:
-------------------------------
Name:
Title:
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SCHEDULE I
[Maximum Number
Number of of Optional
[Firm] Shares Shares Which
UNDERWRITER to be Purchased May be Purchased]
----------- --------------- -----------------
[Names of Underwriters]...........................
[Total.............................. -------------------
-------------------]
SCHEDULE II
TITLE OF DESIGNATED SHARES:
Preferred Shares of Beneficial Interest, par value $.01 per share
DATE OF BOARD RESOLUTION ESTABLISHING THE DESIGNATED SHARES:
---------------------, ---------
NUMBER OF DESIGNATED SHARES:
Number of Firm Shares:
Maximum Number of Optional Shares:
INITIAL OFFERING PRICE TO PUBLIC:
[$__________ Per Share]
PURCHASE PRICE BY UNDERWRITERS:
[$__________ Per Share]
[COMMISSION PAYABLE TO UNDERWRITERS:
$________ per Share in [specify same form of funds as in Specified Funds
below]]
FORM OF DESIGNATED SHARES:
Definitive form, to be made available for checking [and packaging] at
least twenty-four hours prior to the Time of Delivery at the office of
[The Depository Trust Company or its designated custodian] [the
Representatives]
[Book-entry only form represented by one or more global securities
deposited with The Depository Trust Company ("DTC") or its designated
custodian, to be made available for checking by the Representatives at
least twenty-four hours prior to the Time of Delivery at the office of
DTC.]
SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:
Federal (same-day) funds.
DIVIDEND RATE:
[______% per annum]
DIVIDEND PAYMENT DATES:
[months and dates]
DIVIDEND RIGHTS:
[Non-]cumulative
VOTING RIGHTS:
LIQUIDATION RIGHTS:
PREEMPTIVE AND CONVERSION RIGHTS:
REDEMPTION PROVISIONS:
[No provisions for redemption]
[The Designated Shares may be redeemed, [otherwise than through a
mandatory redemption,] in whole or in part at the option of the Trust,
on or after _____________, _____ at the following redemption prices:
REDEMPTION
YEAR PRICE
---- ----------
and thereafter at $ ______ per share, together in each case with
accrued dividends to the redemption date.]
[On any dividend payment date falling on or after ______________,_____,
at the election of the Trust, at a redemption price equal to the stated
amount thereof, plus accrued dividends to the date of redemption.]
[Other possible redemption provisions, such as mandatory redemption
upon occurrence of certain events or redemption for changes in tax law]
MANDATORY REDEMPTION PROVISIONS
[None]
[The Designated Shares are entitled to the benefit of a mandatory
redemption to retire _____ Designated Shares on __________ in each
of the years _____ through _____ at 100% of their stated amount plus
accrued dividends] [, together with [cumulative] [non-cumulative]
redemptions at the option of the Trust to retire an additional
_______ Designated Shares in the years _____ through ______ at 100%
of their stated amounts plus accrued dividends.]
TIME OF DELIVERY:
______________ A.M. (New York City time) [specify date]
CLOSING LOCATION:
NAMES AND ADDRESSES OF REPRESENTATIVES:
Designated Representatives:
Address for Notices, etc.:
[other persons subject to Section 5(e) lockup]
[OTHER TERMS]
ANNEX II
Pursuant to Section 7(d) of the Underwriting Agreement, the
accountants shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants
with respect to the Trust and its subsidiaries within the meaning of
the Act and the applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules audited (and, if
applicable, prospective financial statements and/or pro forma financial
information examined) by them and included or incorporated by reference
in the Registration Statement or the Prospectus comply as to form in
all material respects with the applicable accounting requirements of
the Act or the Exchange Act, as applicable, and the related published
rules and regulations thereunder; and, if applicable, they have made a
review in accordance with standards established by the American
Institute of Certified Public Accountants of the consolidated interim
financial statements, selected financial data, pro forma financial
information, prospective financial statements and/or condensed
financial statements derived from audited financial statements of the
Trust for the periods specified in such letter, as indicated in their
reports thereon, copies of which have been [separately] furnished to
the representatives of the Underwriters (the "Representatives") [and
are attached hereto];
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants
of the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus and/or included in the Trust's quarterly
reports on Form 10-Q incorporated by reference into the Prospectus as
indicated in their reports thereon copies of which [have been
separately furnished to the Representatives] [are attached hereto]; and
on the basis of specified procedures including inquiries of officials
of the Trust who have responsibility for financial and accounting
matters regarding whether the unaudited condensed consolidated
financial statements referred to in paragraph (vi)(A) below comply as
to form in all material respects with the applicable accounting
requirements of the Act and the Exchange Act and the related published
rules and regulations, nothing came to their attention that caused them
to believe that the unaudited condensed consolidated financial
statements do not comply as to form in all material respects with the
applicable accounting requirements of the Act and the Exchange Act and
the related published rules and regulations;
(iv) The unaudited selected financial information with
respect to the consolidated results of operations and financial
position of the Trust for the five most recent fiscal years included in
the Prospectus and included or incorporated by reference in Item 6 of
the Trust's Annual Report on Form 10-K for the most recent fiscal year
agrees with the corresponding amounts (after restatement where
applicable) in the audited consolidated financial statements for such
five fiscal years which were included or incorporated by reference in
the Trust's Annual Reports on Form 10-K for such fiscal years;
(v) They have compared the information in the Prospectus
under selected captions with the disclosure requirements of Regulation
S-K and on the basis of limited procedures specified in such letter
nothing came to their attention as a result of the
2--
foregoing procedures that caused them to believe that this information
does not conform in all material respects with the disclosure
requirements of items 301, 302, 402 and 503(d), respectively, of
Regulation S-K;
(vi) On the basis of limited procedures, not constituting
an audit in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available
interim financial statements of the Trust and its subsidiaries,
inspection of the minute books of the Trust and its subsidiaries since
the date of the latest audited financial statements included or
incorporated by reference in the Prospectus, inquiries of officials of
the Trust and its subsidiaries responsible for financial and accounting
matters and such other inquiries and procedures as may be specified in
such letter, nothing came to their attention that caused them to
believe that:
(A) the unaudited condensed consolidated statements of
income, consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus and/or included or incorporated by reference in
the Trust's Quarterly Reports on Form 10-Q incorporated by reference in the
Prospectus do not comply as to form in all material respects with the
applicable accounting requirements of the Exchange Act and the related
published rules and regulations thereunder or are not in conformity with
generally accepted accounting principles applied on a basis substantially
consistent with the basis for the audited consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus or included or incorporated by reference in the
Trust's Annual Report on Form 10-K for the most recent fiscal year;
(B) any other unaudited income statement data and
balance sheet items included in the Prospectus do not agree with the
corresponding items in the unaudited consolidated financial statements from
which such data and items were derived, and any such unaudited data and items
were not determined on a basis substantially consistent with the basis for
the corresponding amounts in the audited consolidated financial statements
included or incorporated by reference in the Trust's Annual Report on Form
10-K for the most recent fiscal year;
(C) the unaudited financial statements which were not
included in the Prospectus but from which were derived the unaudited
condensed financial statements referred to in clause (A) and any unaudited
income statement data and balance sheet items included in the Prospectus and
referred to in clause (B) were not determined on a basis substantially
consistent with the basis for the audited financial statements included or
incorporated by reference in the Trust's Annual Report on Form 10-K for the
most recent fiscal year;
(D) any unaudited pro forma consolidated condensed
financial statements included or incorporated by reference in the Prospectus
do not comply as to form in all material respects with the applicable
accounting requirements of the Act and the published rules and regulations
thereunder or the pro forma adjustments have not been properly applied to the
historical amounts in the compilation of those statements;
(E) as of a specified date not more than five days
prior to the date of such letter, there have been any changes in the
consolidated beneficial interests (other than issuances of beneficial
interests upon exercise of options which were outstanding on the date of the
latest balance sheet included or incorporated by reference in the Prospectus)
or any increase in the consolidated long-term debt of the Trust and its
subsidiaries, or any decreases in consolidated net current assets or net
assets or other items reasonably specified by the Representatives, or any
3--
increases in any items specified by the Representatives, in each case as
compared with amounts shown in the latest balance sheet included or
incorporated by reference in the Prospectus, except in each case for changes,
increases or decreases which the Prospectus discloses have occurred or may
occur or which are described in such letter; and
(F) For the period from the date of the latest
financial statements included or incorporated by reference in the Prospectus
to the specified date referred to in Clause (E) there were any decreases in
consolidated net revenues or operating profit or the total or per share
amounts of consolidated net income or other items reasonably specified by the
Representatives, or any increases in any items reasonably specified by the
Representatives, in each case as compared with the comparable period of the
preceding year and with any other period of corresponding length specified by
the Representatives, except in each case for increases or decreases which the
Prospectus discloses have occurred or may occur or which are described in
such letter; and
(vii) In addition to the audit referred to in their
report(s) included or incorporated by reference in the Prospectus and
the limited procedures, inspection of minute books, inquiries and other
procedures referred to in paragraphs (iii) and (vi) above, they have
carried out certain specified procedures, not constituting an audit in
accordance with generally accepted auditing standards, with respect to
certain amounts, percentages and financial information specified by the
Representatives which are derived from the general accounting records
of the Trust and its subsidiaries, which appear in the Prospectus
(excluding documents incorporated by reference) or in Part II of, or in
exhibits and schedules to, the Registration Statement specified by the
Representatives or in documents incorporated by reference in the
Prospectus specified by the Representatives, and have compared certain
of such amounts, percentages and financial information with the
accounting records of the Trust and its subsidiaries and have found
them to be in agreement.
All references in this Annex II to the Prospectus shall be
deemed to refer to the Prospectus (including the documents incorporated by
reference therein) as defined in the Underwriting Agreement as of the date of
the letter delivered on the date of the Pricing Agreement for purposes of such
letter and to the Prospectus as amended or supplemented (including the documents
incorporated by reference therein) in relation to the applicable Designated
Shares for purposes of the letter delivered at the Time of Delivery for such
Designated Shares.
4--