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EXHIBIT 1(c)
ASSOCIATED ESTATES REALTY CORPORATION
(an Ohio corporation)
MEDIUM-TERM NOTES
DUE 9 MONTHS OR MORE FROM DATE OF ISSUE
DISTRIBUTION AGREEMENT
March ___, 1997
XXXX XXXXXX XXXXXXXX INC.
Two World Trade Center
New York, New York 10048
XXXX. BROWN & SONS INCORPORATED
000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
FIRST CHICAGO CAPITAL MARKETS, INC.
One First National Plaza
Chicago, Illinois 60670
XXXXXX BROTHERS INC.
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
X.X. XXXXXX SECURITIES INC.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
XXXXXX XXXXXXX & CO. INCORPORATED
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
1. INTRODUCTORY. Associated Estates Realty Corporation, an Ohio corporation
(the "Company"), confirms its agreement with Xxxx
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Xxxxxx Xxxxxxxx Inc., Xxxx. Brown & Sons Incorporated, First Chicago Capital
Markets, Inc., Xxxxxx Brothers Inc., X.X. Xxxxxx Securities Inc. and Xxxxxx
Xxxxxxx & Co. Incorporated (each, an "Agent," and collectively, the "Agents")
with respect to the issue and sale by the Company of its debt securities
denominated "Medium-Term Notes Due 9 Months or More from Date of Issue" (the
"Notes"). The Notes will be either Senior Notes (the "Senior Notes") or
Subordinated Notes (the "Subordinated Notes"). The Senior Notes will be issued
under an indenture dated as of March 31, 1995, as amended, supplemented or
modified from time to time (the "Senior Indenture"), between the Company and
National City Bank, as trustee (the "Senior Trustee"), and the Subordinated
Notes will be issued under an indenture dated as of March 31, 1995, as amended,
supplemented or modified from time to time (the "Subordinated Indenture"),
between the Company and The Chase Manhattan Bank (formerly known as Chemical
Bank), as trustee (the "Subordinated Trustee"). The term "Trustee" as used
herein shall refer to either the Senior Trustee or the Subordinated Trustee, as
appropriate, for Senior Notes or Subordinated Notes. The Senior Indenture and
the Subordinated Indenture, each as amended, supplemented or modified from time
to time, are each sometimes referred to as the "Indenture." Each series of
Senior Notes or Subordinated Notes may vary, as applicable, as to aggregate
principal amount, maturity date, interest rate or formula and timing of payments
thereof, redemption and/or repayment provisions, and any other variable terms
which the Senior Indenture or the Subordinated Indenture, as the case may be,
contemplates may be set forth in the Senior Notes and the Subordinated Notes as
issued from time to time. The Senior Notes or the Subordinated Notes may be
offered either together or separately. As used herein, "Notes" shall mean the
Senior Notes or the Subordinated Notes or any combination thereof.
As of the date hereof, the Company has authorized the issuance and sale of
up to U.S. $117,500,000 aggregate initial offering price (or its equivalent,
based upon the applicable exchange rate at the time of issuance, in such foreign
or composite currencies as the Company shall designate at the time of issuance)
of Notes to or through the Agents pursuant to the terms of this Agreement. It is
understood, however, that the Company may from time to time authorize the
issuance of additional Notes and that such additional Notes may be sold to or
through the Agents pursuant to the terms of this Agreement, all as though the
issuance of such Notes were authorized as of the date hereof. This Agreement
provides both for the sale of Notes by the Company to one or more Agents as
principal for resale to investors and other purchasers and for the sale of Notes
by the Company directly to investors (as may from time to time be agreed to by
the Company and the applicable Agent), in which case such Agent will act as an
agent of the Company in soliciting purchases of the Notes.
As used herein, "you" and "your," unless the context otherwise requires,
shall mean the parties to whom this Agreement is
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addressed together with the other parties, if any, identified in the Prospectus
(as hereinafter defined) as additional Agents with respect to the Notes.
2. APPOINTMENT AS AGENT. (a) Subject to the terms and conditions stated
herein and subject to the reservation by the Company of the right to sell Notes
directly on its own behalf, the Company hereby agrees that Notes will be sold
exclusively to or through the Agents. The Company agrees that it will not
appoint any other agents to act on its behalf, or to assist it, in the placement
of the Notes.
(b) The Company shall not sell or approve the solicitation of purchases of
Notes in excess of the amount which shall be authorized by the Company from time
to time or in excess of the aggregate initial offering price of Notes registered
pursuant to the Registration Statement. The Agents shall have no responsibility
for maintaining records with respect to the aggregate initial offering price of
Notes sold, or of otherwise monitoring the availability of Notes for sale, under
the Registration Statement.
(c) The Agents shall not have any obligation to purchase Notes from the
Company as principal, but one or more Agents may agree from time to time to
purchase Notes as principal for resale to investors and other purchasers
determined by such Agent or Agents. Any such purchase of Notes by an Agent as
principal shall be made in accordance with Section 4(a) hereof.
(d) If agreed upon by an Agent and the Company, such Agent, acting solely
as agent for the Company and not as principal, will solicit purchases of the
Notes. Such Agent will communicate to the Company, orally, each offer to
purchase Notes solicited by it on an agency basis, other than those offers
rejected by such Agent. Such Agent shall have the right, in its discretion
reasonably exercised, to reject any proposed purchase of Notes, as a whole or in
part, and any such rejection shall not be deemed a breach of its agreement
contained herein. The Company may accept or reject any proposed purchase of
Notes, in whole or in part. Such Agent shall make reasonable efforts to assist
the Company in obtaining performance by each purchaser whose offer to purchase
Notes has been solicited by it and accepted by the Company. Such Agent shall not
have any liability to the Company in the event that any such purchase is not
consummated for any reason. If the Company shall default on its obligation to
deliver Notes to a purchaser whose offer it has accepted, the Company shall (i)
hold such Agent harmless against any loss, claim or damage arising from or as a
result of such default by the Company, and (ii) notwithstanding such default,
pay to such Agent any commission to which it would otherwise be entitled.
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(e) The Company and the Agents agree that any Notes purchased by one or
more Agents as principal shall be purchased, and any Notes the placement of
which an Agent arranges as agent shall be placed by such Agent, in reliance on
the representations, warranties, covenants and agreements of the Company
contained herein and on the terms and conditions and in the manner provided
herein.
3. REPRESENTATIONS AND WARRANTIES. (a) The Company represents and warrants
to you, as of the date hereof, as of the date of each acceptance by the Company
of an offer for the purchase of Notes (whether to one or more Agents as
principal or through an Agent as agent), as of the date of each delivery of
Notes (whether to one or more Agents as principal or through an Agent as agent)
(the date of each such delivery to one or more Agents as principal being
hereinafter referred to as a "Settlement Date"), and as of any time the
Registration Statement (as defined below) or the Prospectus (as defined below)
shall be amended or supplemented or there is filed with the Securities and
Exchange Commission (the "Commission") any document incorporated by reference
into the Prospectus (as defined below) (each of the times referenced above being
referred to herein as a "Representation Date"), that:
(i) A Registration Statement on Form S-3 (No. 333-_____) for the
registration of the Notes, under the Securities Act of 1933, as amended
(the "1933 Act"), and the offering thereof from time to time in accordance
with Rule 415 of the rules and regulations of the Securities and Exchange
Commission (the "Commission") under the 1933 Act (the "1933 Act
Regulations"), have heretofore been delivered to you, have been prepared by
the Company in conformity with the requirements of the 1933 Act and the
1933 Act Regulations and have been filed with the Commission under the 1933
Act. One or more amendments to such registration, as may have been required
and copies of which have heretofore been delivered to you, have been so
prepared and filed prior to the execution of this Agreement. Such
registration statement (as amended, if applicable) and the registration
statements of the Company on Form S-3 (No. 33-89622 and 33-80169), to the
extent the applicable Terms Agreement relates to Underwritten Securities
registered thereunder, have been declared effective by the Commission and
each of the Senior Indenture and the Subordinated Indenture has been
qualified under the Trust Indenture Act of 1939, as amended (the "1939
Act"). The registration statement on Form S-3 (No. 333-_____) and the
registration statements of the Company on Form S-3 (No. 33-89622 and
33-80169), to the extent the applicable Terms Agreement relates to
Underwritten Securities registered thereunder (and any further registration
statements which may be filed by the Company for the purpose of registering
additional Notes and in connection with which this Agreement is included or
incorporated by reference as an exhibit), on the one hand, and the
prospectus constituting a
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part thereof and any prospectus supplement and pricing supplement
relating to the offering of Notes, on the other hand, including all
documents incorporated therein by reference, as from time to time amended
or supplemented pursuant to the 1933 Act, the Securities Exchange Act of
1934, as amended (the "1934 Act") or otherwise, are referred to herein as
the "Registration Statement" and the "Prospectus," respectively, except
that if any revised prospectus shall be provided to the Agents by the
Company for use in connection with the offering of Notes, whether or not
such revised prospectus is required to be filed by the Company pursuant to
Rule 424(b) of the 1933 Act Regulations, the term "Prospectus" shall refer
to such prospectus from and after the time it is first provided to the
Agents for such use. If the Company elects to rely on Rule 434 under the
1933 Act Regulations, all references to the Prospectus shall be deemed to
include, without limitation, the form of prospectus and the term sheet,
taken together, provided to the Agents by the Company in reliance on Rule
434 under the 1933 Act (the "Rule 434 Prospectus"). If the Company files a
registration statement to register a portion of the Securities and relies
on Rule 462(b) for such registration statement to become effective upon
filing with the Commission (the "Rule 462 Registration Statement"), then
any reference to "Registration Statement" herein shall be deemed to be to
the registration statements referred to above (Nos. 333-_____, 33-89622 and
33-80169) and the Rule 462 Registration Statement, as each such
registration statement may be amended pursuant to the 1933 Act. All
references in this Agreement to financial statements and schedules and
other information which is "contained," "included" or "stated" in the
Registration Statement or the Prospectus (and all other references of like
import) shall be deemed to mean and include all such financial statements
and schedules and other information which is or is deemed to be
incorporated by reference in the Registration Statement or the Prospectus,
as the case may be; and all references in this Agreement to amendments or
supplements to the Registration Statement or the Prospectus shall be deemed
to mean and include, without limitation, the filing of any document under
the 1934 Act which is or is deemed to be incorporated by reference in the
Registration Statement or the Prospectus, as the case may be.
(ii) At the time the Registration Statement became effective, and at
each time thereafter at which an Annual Report on Form 10-K was filed by
the Company with the Commission, the Registration Statement and the
Prospectus conformed, and as of each applicable Representation Date will
conform, in all material respects to the requirements of the 1933 Act, the
1933 Act Regulations and the 1939 Act. At the time the Registration
Statement became effective and at each time thereafter at which an Annual
Report on Form 10-K was
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filed by the Company with the Commission, the Registration Statement did
not, and as of the applicable Representation Date, will not, contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading. The Prospectus, as of the date hereof does not, and as of
each applicable Representation Date will not, include an untrue statement
of a material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided, however, that the foregoing
representations and warranties shall not apply to information contained in
or omitted from the Registration Statement or the Prospectus in reliance
upon, and in conformity with, written information furnished to the Company
by or on behalf of any Agent, specifically for use in the preparation
thereof or to that part of the Registration Statement which shall
constitute the Statement of Eligibility under the 1939 Act (Form T-1) (the
"Statement of Eligibility") of the Senior Trustee and the Subordinated
Trustee under the Senior Indenture and the Subordinated Indenture,
respectively.
(iii) The documents incorporated or deemed to be incorporated by
reference in the Prospectus pursuant to Item 12 of Form S-3 under the 1933
Act, at the time they were or hereafter are filed with the Commission,
complied and will comply in all material respects with the requirements of
the 1934 Act and the rules and regulations of the Commission under the 1934
Act (the "1934 Act Regulations"), and, when read together with the other
information in the Prospectus, at the time the Registration Statement
became effective and as of the applicable Representation Date or during the
period specified in Section 5(e), did not and will not include 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, in the light
of the circumstances under which they were made, not misleading. As used in
this Agreement the term "subsidiary" includes the Associated Estates
Management Company, Merit Management Corporation, Merit Painting Services
Inc., Estates Mortgage Company and Children's Computer Company (the
"Service Companies") and any corporation, limited or general partnership,
joint venture or other entity through which the Company owns an interest,
either directly or indirectly, in a Property (as defined in the
Prospectus).
(iv) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as otherwise stated
therein, (A) there has been no material adverse change in the condition,
financial or otherwise, of the Company and its subsidiaries considered as
one enterprise, or in the earnings, business affairs or business
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prospects of the Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, (B) there have
been no transactions entered into by the Company or its subsidiaries which
are material with respect to the Company and its subsidiaries considered as
one enterprise other than those in the ordinary course of business, and (C)
except for regular quarterly dividends on the Company's common shares,
there has been no dividend or distribution of any kind declared, paid or
made by the Company on any class of its capital stock.
(v) The consolidated financial statements and supporting schedules of
the Company included in, or incorporated by reference into, the
Registration Statement and the Prospectus present fairly the financial
position of the Company and its consolidated subsidiaries as of the dates
indicated and the results of their operations for the periods specified and
the consolidated financial statements of Associated Estates Group ("AEG")
included in, or incorporated by reference into, the Registration Statement
and the Prospectus present fairly the financial position of AEG as of the
dates indicated and the results of its operations for the periods
specified; except as otherwise stated in the Registration Statement and the
Prospectus, said financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis; and
the supporting schedules included or incorporated by reference in the
Registration Statement and the Prospectus present fairly in all material
respects the information required to be stated therein. The historical
statements of revenues and certain operating expenses included or
incorporated by reference in the Registration Statement and the Prospectus
present fairly the revenues and those operating expenses included in such
statements for the periods specified in conformity with generally accepted
accounting principles; the pro forma condensed consolidated financial
statements included or incorporated by reference in the Registration
Statement and the Prospectus, if any, present fairly the pro forma
financial position of the Company and its consolidated subsidiaries as at
the dates indicated and the pro forma results of their operations for the
periods specified; and the pro forma condensed consolidated financial
statements have been derived from information prepared in conformity with
generally accepted accounting principles applied on a consistent basis, the
assumptions on which such pro forma financial statements have been prepared
are reasonable and are set forth in the notes thereto, such pro forma
financial statements have been prepared, and the pro forma adjustments set
forth therein have been applied, in accordance with the applicable
accounting requirements of the 1933 Act and the 1933 Act Regulations, and
such pro forma adjustments have been properly applied to the historical
amounts in the compilation of such statements.
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(vi) Price Waterhouse LLP, who have expressed their opinion on the
audited financial statements and related schedules included in, or
incorporated by reference into, the Registration Statement, are independent
public accountants within the meaning of the 1933 Act and the applicable
1933 Act Regulations.
(vii) The Company has been duly organized and is validly existing and
in good standing as a corporation under the laws of the State of Ohio, with
power and authority (corporate and other) to own, lease and operate its
properties and to conduct its business as described in the Registration
Statement and the Prospectus; the Company is in possession of and operating
in compliance with all material franchises, grants, authorizations,
licenses, permits, easements, consents, certificates and orders required
for the conduct of its business, all of which are valid and in full force
and effect; and the Company is duly qualified to do business and in good
standing as a foreign corporation in all other jurisdictions where its
ownership or leasing of properties or the conduct of its business requires
such qualification, except where failure to qualify and be in good standing
would not have a material adverse effect on the condition, financial or
otherwise, or on the earnings, business affairs or business prospects of
the Company and its subsidiaries considered as one enterprise.
(viii) Each subsidiary of the Company has been duly incorporated and
is validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate power and authority to
own, lease and operate its properties and to conduct its business and is
duly qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify would not have a material
adverse effect on the condition, financial or otherwise, or the earnings,
business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise.
(ix) The Indenture has been duly and validly authorized, executed and
delivered by the Company and constitutes the valid and legally binding
agreement of the Company, enforceable in accordance with its terms, except
as enforcement thereof may be limited by bankruptcy, insolvency or other
similar laws relating to or affecting enforcement of creditors' rights
generally or by general equity principles (regardless of whether
enforcement is considered in a proceeding in equity or at law).
(x) The Notes have been duly authorized by the Company for issuance
and sale pursuant to this Agreement and, when
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issued, authenticated and delivered pursuant to the provisions of the
Indenture against payment of the consideration therefor specified in the
Prospectus or agreed upon pursuant to the terms of this Agreement, the
Notes will constitute valid and legally binding obligations of the Company,
enforceable in accordance with their terms, except as enforcement thereof
may be limited by bankruptcy, insolvency or other similar laws relating to
or affecting enforcement of creditors' rights generally or by general
equity principles (regardless or whether enforcement is considered in a
proceeding in equity or at law); the Notes and the Indenture conform in all
material respects to all statements relating thereto contained in the
Prospectus; and the Notes will be entitled to the benefits provided by the
Indenture.
(xi) There is no action, suit or proceeding before or by any court or
governmental agency or body, domestic or foreign, now pending, or, to the
knowledge of the Company, threatened against or affecting the Company or
its subsidiaries, which is required to be disclosed in the Prospectus
(other than as disclosed therein), or which might result in any material
adverse change in the condition, financial or otherwise, business affairs
or business prospects of the Company and its subsidiaries considered as one
enterprise, or might materially and adversely affect the properties or
assets thereof or which might materially and adversely affect the
consummation of this Agreement, or the Indenture, or the transactions
contemplated herein and therein; all pending legal or governmental
proceedings to which the Company or any of its subsidiaries is a party or
of which any of their respective property is the subject which are not
described in the Prospectus, including routine litigation incidental to the
business, are, considered in the aggregate, not material; and there are no
material contracts or documents of the Company or its subsidiaries which
are required to be filed as exhibits to the Registration Statement by the
1933 Act or by the Rules and Regulations which have not been so filed.
(xii) Neither the Company nor any of its subsidiaries is in violation
of its Articles of Incorporation, as amended (the "Articles of
Incorporation"), or its Code of Regulations or bylaws, as the case may be
(the "Code of Regulations"), or in default in the performance or observance
of any material obligation, agreement, covenant or condition contained in
any contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which it is a party or by which it or its properties may be
bound, where such defaults in the aggregate would have a material adverse
effect on the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise; and the execution and delivery of this
Agreement and the Indenture, and the consummation of
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the transactions contemplated herein and therein have been duly authorized
by all necessary corporate action and compliance by the Company with its
obligations hereunder and thereunder will not conflict with or constitute a
breach of, or default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or
its subsidiaries pursuant to, any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Company or any of
its subsidiaries is a party or by which it may be bound or to which any of
the property or assets of the Company or any of its subsidiaries is
subject, nor will such action result in any violation of the provisions of
the Articles of Incorporation or Code of Regulations or, to the best of its
knowledge, any law, administrative regulation or administrative or court
order or decree; and no consent, approval, authorization or order of any
court or governmental authority or agency is required for the consummation
by the Company of the transactions contemplated by this Agreement or the
Indenture, except such as has been obtained or as may be required under the
1933 Act, the 1934 Act, state securities or Blue Sky laws or real estate
syndication laws in connection with the purchase and distribution of the
Notes by the Agents.
(xiii) The Company has full right, power and authority to enter into
this Agreement, and this Agreement has been, and as of the applicable
Representation Date will have been duly authorized, executed and delivered
by the Company.
(xiv) With respect to its taxable years ended December 31, 1994, and
1995 the Company has qualified as a Real Estate Investment Trust ("REIT")
and with respect to its taxable years ending December 31, 1996 and
thereafter, the Company has operated and will continue to operate so as to
qualify as a Real Estate Investment Trust ("REIT"), and the Company intends
to make a timely election to be taxed as a REIT with respect to its taxable
year ending December 31, 1996.
(xv) Neither the Company nor any of its subsidiaries is required to be
registered under the Investment Company Act of 1940, as amended (the "1940
Act").
(xvi) Neither the Company nor any of its subsidiaries is required to
own or possess any trademarks, service marks, trade names or copyrights in
order to conduct the business now operated by them.
(xvii) If applicable, the Notes have been approved for listing on the
New York Stock Exchange.
(xviii) (A) The Company or its subsidiaries have good and marketable
title or leasehold interest, as the case may be, to
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the Properties (except with respect to the Properties in which the Company
has a joint venture or partnership interest in which case, for purposes of
this representation (xviii)(A), such joint venture or partnership shall be
substituted for the Company), in each case free and clear of all liens,
encumbrances, claims, security interests and defects (collectively, the
"Defects"), other than those referred to in the Prospectus or in the title
insurance obtained by the Company with respect thereto, provided, however,
that none of such Defects render any of such titles unmarketable, or are
material in amount; (B) the joint venture or partnership interests in the
Properties referred to in the Registration Statement, are owned by the
Company, free and clear of all liens, encumbrances, claims and security
interests other than those referred to or incorporated by reference in the
Prospectus or in the title insurance owned or obtained by such joint
venture or partnership with respect to the Property owned by such joint
venture or partnership; (C) all liens, charges, encumbrances, claims, or
restrictions on or affecting the properties and assets of the Company and
its subsidiaries which are required to be disclosed in the Prospectus are
disclosed therein; (D) neither the Company nor any of its subsidiaries is
in default under any of the leases governing the Properties and the Company
does not know of any event which, but for the passage of time or the giving
of notice, or both, would constitute a default under any of such leases,
except such defaults that would not have a material adverse effect on the
condition, financial or otherwise, or on the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise; (E) each of the Properties complies with all applicable codes
and zoning laws and regulations, except for such failures to comply which
would not individually or in the aggregate have a material adverse effect
on the condition, financial or otherwise, or on the earnings, business
affairs or business prospects of the Company and its subsidiaries
considered as one enterprise; and (F) the Company does not have knowledge
of any pending or threatened condemnation, zoning change, or other
proceeding or action that will in any manner affect the size of, use of,
improvements on, construction on, or access to the Properties, except such
proceedings or actions that would not have a material adverse effect on the
condition, financial or otherwise, or on the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise.
(xix) The Company has title insurance on each of the Properties
(except with respect to the Properties in which the Company has a joint
venture or partnership interests) in an amount at least equal to the cost
of acquisition of such Property; each of the joint ventures or partnerships
owning the Properties in which the Company has a joint venture or
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partnership interest has title insurance on its respective property in an
amount at least equal to the cost of acquisition of the interest by such
joint venture or partnership.
(xx) The mortgages and deeds of trust encumbering the Properties are
not convertible and neither the Company nor any of its subsidiaries hold a
participating interest therein and said mortgages and deeds of trust are
not cross-defaulted or cross-collateralized to any property not owned by
the Company or its subsidiaries.
(xxi) The Company has no knowledge of (a) the unlawful presence of any
hazardous substances, hazardous materials, toxic substances or waste
materials (collectively, "Hazardous Materials") on any of the Properties or
of (b) any unlawful spills, release, discharges or disposal of Hazardous
Materials that have occurred or are presently occurring from the Properties
as a result of any construction on or operation and use of the Properties,
which presence or occurrence would materially adversely affect the
condition, financial or otherwise, or the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise. In connection with the construction on or operation and use of
the Properties, the Company represents that, as of the date of this
Agreement, the Company has no knowledge of any material failure to comply
with all applicable local, state and federal environmental laws,
regulations, ordinances and administrative and judicial orders relating to
the generation, recycling, reuse, sale, storage, handling, transport and
disposal of any Hazardous Materials that would have a material adverse
effect on the condition, financial or otherwise, or on the earnings,
business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise.
(xxii) Each of the documents pursuant to which the Company or its
subsidiaries have accepted the assignment of, and assumed the obligations
under, each of the agreements between the Department of Housing and Urban
Development ("HUD") and the owner of a government-assisted property which
provides for rent subsidies to be paid by HUD to such owner (the "HAP
Contracts"), and the agreements between HUD and the owner of a property,
the mortgage indebtedness of which is insured by HUD, pursuant to which
certain aspects of the operations of such property are regulated (the
"Regulatory Agreements"), has been duly authorized, executed and delivered
by the parties thereto and constituted, at the time of execution and
delivery, and constitutes the valid agreement of the parties thereto,
enforceable in accordance with its terms, except as limited by any
applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the
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enforcement of creditors' rights generally and general equitable
principles. The execution, delivery and performance of the HAP Contracts
and the Regulatory Agreements did not, at the time of such execution and
delivery, and do not, constitute a breach of, or default under, the
articles of incorporation, certificate of limited partnership, partnership
agreement or code of regulations, as the case may be, of the Company or its
subsidiaries, or to the best of the Company's knowledge, the charter or
bylaws of any other party thereto or any material contract, lease or other
instrument to which the Company or any of its subsidiaries, or to the best
of the Company's knowledge, any party thereto is a party or by which any of
them or any of their properties may be bound or any law, administrative
regulation or administrative or court decree.
(xxiii) Neither the Company nor any of its subsidiaries is in
violation, or in default in the performance or observance of any material
provision of any HAP Contract or Regulatory Agreement.
(xxiv) The Senior Notes are rated not less than Baa3 by Xxxxx'x
Investors Service, Inc. and BBB- by Standard & Poor's Corporation. The
Subordinated Notes are rated not less than Ba1 by Xxxxx'x Investors
Service, Inc. and BB+ by Standard & Poor's Corporation.
(b) Any certificate signed by any officer of the Company and delivered to
you or to counsel for the Agents shall be deemed a representation and warranty
by the Company, as the case may be, to each Agent participating in such offering
as to the matters covered thereby on the date of such certificate and, unless
subsequently amended or supplemented, at the applicable Representation Date
subsequent thereto.
4. PURCHASES AS PRINCIPAL; SOLICITATIONS AS AGENT. (a) Unless otherwise
agreed by an Agent and the Company, Notes shall be purchased by such Agent as
principal. Such purchases shall be made in accordance with terms agreed upon by
one or more Agents and the Company (which terms, unless otherwise agreed, shall,
to the extent applicable, include those terms specified in Exhibit A hereto and
be agreed upon orally, with written confirmation prepared by such Agent or
Agents and mailed to the Company). An Agent's commitment to purchase Notes as
principal shall be deemed to have been made on the basis of the representations
and warranties of the Company herein contained and shall be subject to the terms
and conditions herein set forth. Unless the context otherwise requires,
references herein to "this Agreement" shall include the agreement of one or more
Agents to purchase Notes from the Company as principal. Each purchase of Notes,
unless otherwise agreed, shall be at a discount from the principal amount of
each such Note equivalent to the applicable commission set forth in Schedule A
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hereto. The Agents may engage the services of any other broker or dealer in
connection with the resale of the Notes purchased by them as principal and may
allow any portion of the discount received in connection with such purchases
from the Company to such brokers and dealers. At the time of each purchase of
Notes by one or more Agents as principal, such Agent or Agents shall specify the
requirements for the stand-off agreement, officers' certificate, comfort letter
and opinions of counsel pursuant to Sections 5(k), 11(b), 11(c), and 11(d)
hereof.
(b) On the basis of the representations and warranties herein contained,
but subject to the terms and conditions herein set forth, when agreed by the
Company and an Agent, such Agent, as an agent of the Company, will use its
reasonable efforts to solicit offers to purchase the Notes upon the terms and
conditions set forth herein and in the Prospectus. The Agents are not authorized
to appoint sub-agents with respect to Notes sold through them as agent. All
Notes sold through an Agent as agent will be sold at 100% of their principal
amount unless otherwise agreed to by the Company and such Agent.
The Company reserves the right, in its sole discretion, to suspend
solicitation of purchases of the Notes through an Agent, as agent, commencing at
any time for any period of time or permanently. As soon as practicable after
receipt of instructions from the Company, such Agent will suspend solicitation
of purchases from the Company until such time as the Company has advised such
Agent that such solicitation may be resumed.
The Company agrees to pay each Agent a commission, in the form of a
discount, equal to the applicable percentage of the principal amount of each
Senior Note sold by the Company as a result of a solicitation made by such Agent
as set forth in Schedule A hereto. The schedule of commissions payable in
connection with sales of Senior Notes will also apply to sales of Subordinated
Notes unless otherwise agreed to by the Company and the applicable Agent.
(c) The purchase price, interest rate or formula, maturity date and other
terms of the Notes (as applicable) specified in Exhibit A hereto shall be agreed
upon by the Company and the applicable Agent or Agents and specified in a
pricing supplement to the Prospectus (each, a "Pricing Supplement") to be
prepared in connection with each sale of Notes. Except as may be otherwise
specified in the applicable Pricing Supplement, the Notes will be issued in
denominations of U.S. $1,000 or any larger amount that is an integral multiple
of U.S. $1,000. Administrative procedures with respect to the sale of Notes
shall be agreed upon from time to time by the Company, the Agents and the
Trustees (the "Procedures"). The Agents and the Company agree to perform, and
the Company agrees to cause the Trustees to agree to perform, their respective
duties and obligations specifically provided to be performed by them in the
Procedures.
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5. COVENANTS AND AGREEMENTS OF THE COMPANY. The Company covenants with the
Agents participating in the offering of Notes that:
(a) The Company will notify the Agents immediately, and confirm such notice
in writing, of (i) the effectiveness of any amendment to the Registration
Statement, (ii) the transmittal to the Commission for filing of any amendment or
supplement to the Prospectus or any document to be filed pursuant to the 1934
Act (other than any amendment, supplement or document relating solely to
securities other than the Notes), (iii) the receipt of any comments from the
Commission with respect to the Registration Statement or the Prospectus, (iv)
any request by the Commission for any amendment to the Registration Statement or
any amendment or supplement to the Prospectus or for additional information, (v)
the issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement or the initiation of any proceedings for that purpose
and (vi) any change in the rating assigned by any nationally recognized
statistical rating organization to any debt securities of the Company or the
public announcement by any nationally recognized statistical rating organization
that it has under surveillance or review, with possible negative implications,
its rating of any debt securities of the Company. The Company will make every
reasonable effort to prevent the issuance of any stop order and, if any stop
order is issued, to obtain the lifting thereof at the earliest possible moment.
(b) The Company will give the Agents advance notice of its intention to
file or prepare any additional registration statement with respect to the
registration of additional Notes, any amendment to the Registration Statement or
any amendment or supplement to the Prospectus (other than an amendment or
supplement providing solely for a change in the interest rate or formula
applicable to the Notes or a change relating solely to securities other than the
Notes), whether by the filing of documents pursuant to the 1934 Act or the 1933
Act or otherwise, and will furnish to the Agents copies of any such amendment or
supplement or other documents proposed to be filed or used a reasonable time in
advance of such proposed filing or use, as the case may be, and will not file
any such amendment or supplement or other documents in a form to which the
Agents or counsel for the Agents shall reasonably object.
(c) The Company will deliver to the Agent as many signed and conformed
copies of the Registration Statement (as originally filed) and of each amendment
thereto (including exhibits filed therewith or incorporated by reference therein
and documents incorporated by reference in the Prospectus) as the Agents
reasonably request. The Company will furnish to the Agents as many copies of the
Prospectus (as amended or supplemented) as the Agents reasonably request so long
as the Agents are required to deliver a
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Prospectus in connection with sales or solicitations of offers to purchase the
Notes.
(d) The Company will prepare, with respect to any Notes to be sold to or
through one or more Agents pursuant to this Agreement, a Pricing Supplement with
respect to such Notes in a form previously approved by the Agents and will file
such Pricing Supplement pursuant to Rule 424(b) under the 1933 Act not later
than the close of business of the Commission on the first business day after the
date on which such Pricing Supplement is first used.
(e) Except as otherwise provided in subsection (l) of this Section 5, if at
any time during the term of this Agreement any event shall occur or condition
exist as a result of which it is necessary, in the opinion of counsel for the
Agents or counsel for the Company, to amend or supplement the Prospectus in
order that the Prospectus will not include an untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein not misleading in the light of the circumstances existing at
the time the Prospectus is delivered to a purchaser, or if it shall be
necessary, in the opinion of either such counsel, to amend or supplement the
Registration Statement or the Prospectus in order to comply with the
requirements of the 1933 Act or the 1933 Act Regulations, the Company shall give
immediate notice, confirmed in writing, to the Agents to cease the solicitation
of offers to purchase the Notes in an Agent's capacity as agent and to cease
sales of any Notes an Agent may then own as principal, and the Company will
promptly amend the Registration Statement and the Prospectus, whether by filing
documents pursuant to the 1934 Act or the 1933 Act or otherwise, as may be
necessary to correct such untrue statement or omission or to make the
Registration Statement and Prospectus comply with such requirements.
(f) Except as otherwise provided in subsection (l) of this Section 5, on or
prior to the date on which there shall be released to the general public interim
financial statement information related to the Company with respect to each of
the first three quarters of any fiscal year or preliminary financial statement
information with respect to any fiscal year, the Company shall furnish such
information to the Agents, confirmed in writing, and shall cause the Prospectus
to be amended or supplemented to include or incorporate by reference financial
information with respect thereto and corresponding information for the
comparable period of the preceding fiscal year, as well as such other
information and explanations as shall be necessary for an understanding thereof
or as shall be required by the 1933 Act or the 1933 Act Regulations.
(g) Except as otherwise provided in subsection (l) of this Section 5, on or
prior to the date on which there shall be released to the general public
financial information included in or derived from the audited financial
statements of the Company for the
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preceding fiscal year, the Company shall furnish such information to the Agents,
confirmed in writing, and shall cause the Registration Statement and the
Prospectus to be amended, whether by the filing of documents pursuant to the
1934 Act or the 1933 Act or otherwise, to include or incorporate by reference
such audited financial statements and the report or reports, and consent or
consents to such inclusion or incorporation by reference, of the independent
accountants with respect thereto, as well as such other information and
explanations as shall be necessary for an understanding of such financial
statements or as shall be required by the 1933 Act or the 1933 Act Regulations.
(h) The Company will make generally available to its security holders as
soon as practicable, but not later than 90 days after the close of the period
covered thereby, an earnings statement (in form complying with the provisions of
Rule 158 of the 1933 Act Regulations) covering each twelve month period
beginning, in each case, not later than the first day of the Company's fiscal
quarter next following the "effective date" (as defined in such Rule 158) of the
Registration Statement with respect to each sale of Notes.
(i) The Company will endeavor, in cooperation with the Agents, to qualify
the Notes for offering and sale under the applicable securities laws and real
estate syndication laws of such states and other jurisdictions of the United
States as the Agents may designate, and will maintain such qualifications in
effect for as long as may be required for the distribution of the Notes;
PROVIDED, HOWEVER, that the Company shall not be obligated to file any general
consent to service of process or to qualify as a foreign corporation in any
jurisdiction in which it is not so qualified. The Company will file such
statements and reports as may be required by the laws of each jurisdiction in
which the Notes have been qualified as above provided. The Company will promptly
advise the Agents of the receipt by the Company of any notification with respect
to the suspension of the qualification of the Notes for sale in any such state
or jurisdiction or the initiating or threatening of any proceeding for such
purpose.
(j) The Company, during the period when the Prospectus is required to be
delivered under the 1933 Act or the 1934 Act in connection with sales of the
Notes, will file all documents required to be filed with the Commission pursuant
to Sections 13, 14 or 15 of the 1934 Act within the time periods prescribed by
the 1934 Act and the 1934 Act Regulations.
(k) If specified by the applicable Agent or Agents in connection with a
purchase of Notes as principal, between the date of the agreement to purchase
such Notes and the Settlement Date with respect to such purchase, the Company
will not, without the prior written consent of such Agent or Agents, offer or
sell, grant any option for the sale of, or enter into any agreement to sell, any
debt securities of the Company (other than the Notes that are
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to be sold pursuant to such agreement and commercial paper in the
ordinary course of business).
(l) The Company shall not be required to comply with the provisions of
subsections (e), (f) or (g) of this Section 5 for any period during which (i)
the Agents have not agreed with the Company to solicit purchases of Notes in
accordance with Section 2(d) or have suspended such solicitation and (ii) no
Agent is holding any Notes purchased as principal pursuant hereto, until the
time the Agents have agreed with the Company to solicit such purchases of the
Notes or have resumed solicitation in accordance with Section 2(d) or an Agent
shall subsequently purchase Notes from the Company as principal.
(m) The Company will use its best efforts to meet the requirements to
qualify as a REIT under the Internal Revenue Code of 1986, as amended (the
"Code") for the taxable year in which sales of the Notes are to occur, unless
otherwise specified in the Prospectus.
6. PAYMENT OF EXPENSES. The Company will pay, directly or by reimbursement,
all expenses incident to the performance of its obligations under this
Agreement, including (i) the preparation and filing of the Registration
Statement and all amendments thereto and the Prospectus and any amendments or
supplements thereto; (ii) the preparation, filing and reproduction of this
Agreement; (iii) the preparation, printing, issuance and delivery of the Notes,
including any fees and expenses relating to the use of Notes in book-entry form;
(iv) the fees and disbursements of the Company's accountants and counsel, of the
Trustee and its counsel, and of any calculation agent or exchange rate agent;
(v) the reasonable fees and disbursements of counsel to the Agents incurred in
connection with the establishment of the program relating to the Notes and
incurred from time to time in connection with the transactions contemplated
hereby; (vi) the qualification of the Notes under state securities laws in
accordance with the provisions of Section 5(i) hereof, including filing fees and
the reasonable fees and disbursements of counsel for the Agents in connection
therewith and in connection with the preparation of any Blue Sky or Legal
Investment Survey; (vii) the printing and delivery to the Agents in quantities
as hereinabove stated of copies of the Registration Statement and any amendments
thereto, and of the Prospectus and any amendments or supplements thereto, and
the delivery by the Agents of the Prospectus and any amendments or supplements
thereto in connection with solicitations or confirmations of sales of the Notes;
(viii) the preparation, reproduction and delivery to the Agents of copies of the
Indenture and all supplements and amendments thereto; (ix) any fees charged by
rating agencies for the rating of the Notes; (x) the fees and expenses incurred
in connection with any listing of Notes on a securities exchange; (xi) the fees
and expenses incurred with respect to any filing with the National Association
of Securities Dealers, Inc.; (xii) any
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advertising and other out-of-pocket expenses of the Agents incurred with the
approval of the Company; and (xiii) the cost of providing any CUSIP or other
identification numbers for the Notes.
7. INDEMNIFICATION AND CONTRIBUTION. (a) The Company agrees to indemnify
and hold harmless each Agent, and each person, if any, who controls any Agent
within the meaning of Section 15 of the 1933 Act, against any losses, claims,
damages, liabilities or expenses (including the reasonable cost of investigating
and defending against any claims therefor and reasonable counsel fees incurred
in connection therewith), joint or several, as incurred, which may be based upon
the 1933 Act, or any other statute or at common law, arising out of any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), or the omission or alleged
omission therefrom of a material fact required to be stated therein or necessary
to make the statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact contained in the
Prospectus (or any amendment or supplement thereto) or the omission or alleged
omission therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, unless any such statement or omission was made in reliance upon, and
in conformity with, written information furnished to the Company by any Agent,
directly or through you or any other Agent, specifically for use in the
preparation thereof; provided, however, that the Company shall not be liable
with respect to any claims made against any Agent or any such controlling person
under this subsection unless such Agent or controlling person shall have
notified the Company in writing within a reasonable time after the summons or
other first legal process giving information of the nature of the claim shall
have been served upon such Agent or controlling person, but failure to notify
the Company of any such claim shall not relieve either of them from any
liability which they may have to such Agent or controlling person otherwise than
on account of the indemnity agreement contained in this paragraph. The Company
will be entitled to participate at its own expense in the defense, or, if it so
elects, to assume the defense of any suit brought to enforce any such liability,
and, if the Company elects to assume the defense, such defense shall be
conducted by counsel reasonably acceptable to such Agent and chosen by the
Company. In the event the Company elects to assume the defense of any such suit
and retain such counsel, the Agent or Agents or controlling person or persons,
defendant or defendants in the suit, may retain additional counsel but shall
bear the fees and expenses of such counsel unless (i) the Company shall have
specifically authorized the retaining of such counsel or (ii) the parties to
such suit include such Agent or Agents or controlling person or persons and the
Company and such Agent or Agents or controlling person or persons have been
advised by counsel that one or more legal defenses may be available to it or to
them which may not be available to the Company, in which case
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the Company shall not be entitled to assume the defense of such suit
notwithstanding their obligation to bear the fees and expenses of such counsel.
The Company shall not be liable to indemnify any person for any settlement of
any such claim effected without the Company's written consent. The Company shall
not, without the prior written consent of the applicable Agent or Agents, settle
or compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 7, unless
such settlement, compromise or consent (i) includes an unconditional release of
each such Agent from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of
such Agent. This indemnity agreement will be in addition to any liability which
the Company might otherwise have.
(b) Each Agent severally agrees to indemnify and hold harmless the Company,
each of its directors, each of the Company's officers who signed the
Registration Statement and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act against any losses, claims, damages,
liabilities or expenses (including the reasonable cost of investigating and
defending against any claims therefor and reasonable counsel fees incurred in
connection therewith), joint or several, as incurred, which may be based upon
the 1933 Act, or any other statute or at common law, arising out of any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto) or the omission or alleged
omission therefrom of a material fact required to be stated therein or necessary
to make the statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact contained in the
Prospectus (or any amendment or supplement thereto) or the omission or alleged
omission therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, but only insofar as any such statement or omission was made in
reliance upon, and in conformity with, written information furnished to the
Company by such Agent, directly or through you or any other Agent, specifically
for use in the preparation thereof; provided, however, that an Agent shall not
be liable with respect to any claims made against the Company or any person
against whom the action is brought unless the Company or such person shall have
notified such Agent in writing within a reasonable time after the summons or
other first legal process giving information of the nature of the claim shall
have been served upon the Company or such person, but failure to notify such
Agent of such claim shall not relieve it from any liability which it may have to
the Company or such person otherwise than on account of its indemnity agreement
contained in this paragraph. Such Agent
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shall be entitled to participate at its own expense in the defense, or, if it so
elects, to assume the defense of any suit brought to enforce any such liability,
but, if such Agent elects to assume the defense, such defense shall be conducted
by counsel reasonably acceptable to the Company and chosen by such Agent. In the
event that any Agent elects to assume the defense of any such suit and retain
such counsel, the Company, said officer and directors and other Agent or Agents
or controlling person or persons, defendant or defendants in the suit, shall
bear the fees and expenses of any additional counsel retained by them,
respectively, unless (i) such Agent shall have specifically authorized the
retaining of such counsel or (ii) the parties to such suit include any
indemnified party and such Agent, and any such indemnified party has been
advised by counsel that one or more legal defenses may be available to it which
may not be available to such Agent, in which case such Agent shall not be
entitled to assume the defense of such suit notwithstanding its obligation to
bear the fees and expenses of such counsel. The Agent against whom indemnity may
be sought shall not be liable to indemnify any person for any settlement of any
such claim effected without such Agent's consent. No Agent against whom
indemnity may be sought shall, without the prior written consent of the Company,
settle or compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 7, unless
such settlement, compromise or consent (i) includes an unconditional release of
the Company from all liability arising out of such litigation, investigation,
proceeding or claim and (ii) does not include a statement as to or an admission
of fault, culpability or a failure to act by or on behalf of the Company. This
indemnity agreement will be in addition to any liability which such Agent might
otherwise have.
(c) If the indemnification provided for in this Section 7 is unavailable or
insufficient to hold harmless an indemnified party under subsection (a) or (b)
above in respect of any losses, claims, damages, liabilities or expenses (or
actions in respect thereof) referred to herein, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, liabilities or expenses (or actions in
respect thereof), as incurred, in such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand and the Agent on
the other from the offering of the Notes. If, however, the allocation provided
by the immediately preceding sentence is not permitted by applicable law, then
each indemnifying party shall contribute to such amount paid or payable by such
indemnified party, as incurred, in such proportion as is appropriate to reflect
not only such relative benefits but also the relative fault of the Company on
the one hand and the Agents on the other in connection with the statements or
omissions which resulted in such losses, claims, damages,
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liabilities or expenses (or actions in respect thereof), as well as any other
relevant equitable considerations. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Agents and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and the Agents agree that it
would not be just and equitable if contribution were determined by pro rata
allocation (even if the Agents 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. The amount paid or payable by an indemnified
party as a result of the losses, claims, damages, liabilities or expenses (or
actions in respect thereof) referred to above shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such claim. Notwithstanding the
provisions of this subsection (c), no Agent shall be required to contribute any
amount in excess of the amount by which the total price at which the Notes
purchased by or through it and distributed to the public were offered to the
public exceeds the amount of any damages which such Agent 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 1933 Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation. The
Agents' obligations to contribute are several in proportion to their respective
underwriting obligations and not joint.
8. SURVIVAL OF INDEMNITIES, REPRESENTATION, WARRANTIES, ETC. The respective
indemnities, covenants, agreements, representations, warranties and other
statements of the Company, and the Agents, as set forth in this Agreement or
certificates of officers of the Company submitted pursuant hereto or thereto,
shall remain in full force and effect, regardless of any investigation made by
or on behalf of any Agent or the Company or any of their officers or directors
or any controlling person, and shall survive delivery of and payment for the
Notes.
9. CONDITIONS OF AGENTS' OBLIGATIONS. The respective obligations of the
Agents to purchase Notes as agent of the Company, and the obligations of any
purchasers of the Notes sold through an Agent as agent, are subject to the
accuracy of the representations and warranties made herein by the Company, to
the accuracy of the statements of the Company's officers or directors in any
certificate furnished in connection therewith pursuant to the provisions hereof,
to the performance and observance by the Company of all of its covenants and
agreements herein contained and other provisions hereof to be satisfied in
connection therewith, and to the following additional conditions:
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(a) On the date hereof, you shall have received from Price Waterhouse LLP a
letter, dated as of the date hereof and in form and substance satisfactory to
you, to the effect that:
(i) they are independent accountants with respect to the Company,
its subsidiaries and AEG within the meaning of the 1933 Act and the
1933 Act Regulations; (ii) it is their opinion that the consolidated
financial statements and supporting schedules of the Company and AEG
included or incorporated by reference in the Registration Statement
and the Prospectus and covered by their opinions therein comply in
form in all material respects with the applicable accounting
requirements of the 1933 Act and the 1934 Act, and the related
published rules and regulations; (iii) it is their opinion that the
financial statements of the properties acquired or proposed to be
acquired by the Company included in the Company's Form 8-K dated [ ]
all of which are incorporated by reference in the Prospectus or
Company's Registration Statement and covered by their opinions therein
comply as to form with the applicable accounting requirements of the
1933 Act and the 1934 Act with respect to real estate operations
acquired or to be acquired; (iv) they have performed limited
procedures, not constituting an audit, including a reading of the
latest available unaudited interim consolidated financial statements
of the Company and its subsidiaries, a reading of the minute books of
the Company and its subsidiaries, inquiries of certain officials of
the Company and its subsidiaries who have responsibility for financial
and accounting matters and such other inquiries and procedures as may
be specified in such letter, and on the basis of such limited review
and procedures nothing came to their attention that caused them to
believe that (A) the unaudited interim consolidated financial
statements and financial statement schedules of the Company included
or incorporated by reference in the Registration Statement and the
Prospectus do not comply as to form in all material respects with the
applicable accounting requirements of the 1934 Act and the related
published rules and regulations thereunder or that any material
modification should be made to the unaudited condensed interim
financial statements included in or incorporated by reference in the
Registration Statement and the Prospectus for them to be in conformity
with generally accepted accounting principles, (B) the unaudited pro
forma condensed financial statements included in the Company's
aforementioned Forms 8-K do not comply as to form in all material
respects with the applicable accounting requirements of Rule 11-02 of
Regulation S-X under the 1933 Act or that the pro forma adjustments
have not been properly applied to the historical amounts in
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the compilation of such statements, (C) the information included or
incorporated by reference in the Registration Statement and the
applicable Prospectus under the caption "Selected Consolidated
Financial Data" did not conform in all material respects with the
disclosure requirements of item 301 of Regulation S-K, or (D) at a
specified date not more than three days prior to the date of such
letter, there has been any change in the capital stock of the Company
or in the consolidated long term debt of the Company or any decrease
in the net assets of the Company, as compared with the amounts shown
in the most recent consolidated balance sheet included or incorporated
by reference in the Registration Statement and the Prospectus or,
during the period from the date of the most recent consolidated
statement of operations of the Company included or incorporated by
reference in the Registration Statement and the Prospectus to a
specified date not more than three days prior to the date of such
letter, there were any decreases, as compared with the corresponding
period in the preceding year, in consolidated revenues, or decrease in
consolidated net income or consolidated net income per share of the
Company, except in all instances for changes, increases or decreases
which the Registration Statement and the Prospectus disclose have
occurred or may occur; and (v) in addition to the audit referred to in
their opinions and the limited procedures referred to in clause (iv)
above, they have carried out certain specified procedures, not
constituting an audit, with respect to certain amounts, percentages
and financial information which are included or incorporated by
reference in the Registration Statement and the Prospectus and which
are specified by you, and have found such amounts, percentages and
financial information to be in agreement with the relevant accounting,
financial and other records of the Company and its subsidiaries
identified in such letter.
(b) On the date hereof, you shall have received from Xxxxx & Xxxxxxxxx LLP,
counsel for the Company, an opinion, dated as of the date hereof, to the effect
that:
(i) The Company has been duly organized and is validly existing
as a corporation in good standing under the laws of the State of Ohio.
(ii) The Company has full corporate power and authority to own,
lease and operate its properties and to conduct its business as
described in the Prospectus.
(iii) The Company is duly qualified to transact business and is
in good standing in each jurisdiction in
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which it owns real property except where the failure to qualify and be
in good standing would not have a material adverse effect on the
condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its subsidiaries
considered as one enterprise.
(iv) If the Company has one or more significant subsidiaries, as
defined in Rule 405 of the 1933 Act (each a "Significant Subsidiary"),
each Significant Subsidiary has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate power and authority
to own, lease and operate its properties and to conduct its business,
and is duly qualified to transact business and is in good standing in
each jurisdiction in which it owns real property, except where the
failure to so qualify and be in good standing would not have a
material adverse effect on the condition, financial or otherwise, or
the earnings, business affairs or business prospects of the Company
and its Subsidiaries considered as one enterprise.
(v) The Notes have been duly and validly authorized by all
necessary corporate action and, when executed, authenticated and
delivered pursuant to the provisions of this Agreement and the
Indenture against payment of the consideration therefor, the Notes
will constitute valid and legally binding obligations of the Company
entitled to the benefits provided by the Indenture and enforceable in
accordance with their terms except as enforcement thereof may be
limited by bankruptcy, insolvency or other similar laws relating to or
affecting enforcement of creditors' rights generally or by general
equity principles (regardless of whether enforcement is considered in
a proceeding in equity or at law), and except further as enforcement
thereof may be limited by (1) requirements that a claim with respect
to any Notes denominated other than in U.S. dollars (or a foreign
currency or composite currency judgment in respect of such claim) be
converted into U.S. dollars at a rate of exchange prevailing on a date
determined pursuant to applicable law or (2) governmental authority to
limit, delay or prohibit the making of payments outside the United
States.
(vi) This Agreement has been duly authorized, executed and
delivered by the Company.
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(vii) The Indenture has been duly and validly authorized,
executed and delivered by the Company and (assuming due authorization,
execution and delivery by the Trustee) constitutes the valid and
legally binding agreement of the Company, enforceable in accordance
with its terms except as enforcement thereof may be limited by
bankruptcy, insolvency or other similar laws relating to or affecting
enforcement of creditors' rights generally or by general equity
principles (regardless of whether enforcement is considered in a
proceeding in equity or at law).
(viii) The Indenture has been duly qualified under the 1939 Act.
(ix) The Registration Statement is effective under the 1933 Act
and, to the best of their knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued under the
1933 Act or proceedings therefor initiated or threatened by the
Commission.
(x) The Registration Statement and the Prospectus, excluding the
documents incorporated by reference therein, as of their respective
effective or issue dates, comply as to form in all material respects
with the requirements for registration statements on Form S-3 under
the 1933 Act and the 1933 Act Regulations; it being understood,
however, that no opinion need be rendered with respect to the
financial statements, schedules and other financial and statistical
data included or incorporated by reference in the Registration
Statement or the Prospectus or with respect to the Statement of
Eligibility of the Trustee. If applicable, the Rule 434 Prospectus
conforms to the requirements of Rule 434 of the 1933 Act Regulations
in all material respects.
(xi) Each document filed pursuant to the 1934 Act (other than the
financial statements, schedules and other financial and statistical
data included therein, as to which no opinion need be rendered) and
incorporated or deemed to be incorporated by reference in the
Prospectus complied when so filed as to form in all material respects
with the 1934 Act and the 1934 Act Regulations.
(xii) Nothing has come to such counsel's attention that would
lead it to believe that the Registration Statement or any amendment
thereto (excluding the financial statements and financial schedules
included or incorporated by reference therein, as to which such
counsel need express no belief), at the time it became effective or at
the time an Annual Report on Form 10-K
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was filed by the Company with the Commission (whichever is later), or
at the date hereof (or, if such opinion is being delivered in
connection with the purchase of Notes by one or more Agents as
principal pursuant to Section 11(c) hereof, at the date of any
agreement by such Agent or Agents to purchase Notes as principal),
contained or contains an untrue statement of a material fact or
omitted or omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or
that the Prospectus or any amendment or supplement thereto (excluding
the financial statements and financial schedules included or
incorporated by reference therein, as to which such counsel need
express no belief), at the date hereof (or, if such opinion is being
delivered in connection with the purchase of Notes by one or more
Agents as principal pursuant to Section 11(c) hereof, at the date of
any agreement by such Agent or Agents to purchase Notes as principal
and at the Settlement Date with respect thereto, as the case may be),
included or includes an untrue statement of a material fact or omitted
or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading.
(xiii) To the best of their knowledge, there are no legal or
governmental proceedings pending or threatened which are required to
be disclosed in the Prospectus, other than those disclosed therein,
and, to the best of their knowledge, all pending legal or governmental
proceedings to which the Company or its subsidiaries is a party or of
which any of the property of the Company or its subsidiaries is the
subject which are not described in the Registration Statement,
including ordinary routine litigation incidental to the business, are,
considered in the aggregate, not material to the business of the
Company and its subsidiaries considered as one enterprise.
(xiv) To the best of their knowledge, there are no contracts,
indentures, mortgages, loan agreements, notes, leases or other
instruments required to be described or referred to in the
Registration Statement or to be filed as exhibits thereto other than
those described or referred to therein or filed as exhibits thereto,
the descriptions thereof or references thereto are correct in all
material respects, and, to the best of their knowledge, no default
exists in the due performance or observance of any material
obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument so described, referred to or filed which would
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have a material adverse effect on the condition, financial or
otherwise, or in the earnings, business affairs or business prospects
of the Company and its subsidiaries considered as one enterprise.
(xv) No authorization, approval or consent of any court or
governmental authority or agency is required that has not been
obtained in connection with the consummation by the Company of the
transactions contemplated by this Agreement and the Indenture except
such as may be required under the 1933 Act, the 1934 Act, and state
securities laws or Blue Sky laws or real estate syndication laws; to
the best of their knowledge, the execution and delivery of this
Agreement and the consummation of the transactions contemplated herein
and therein and compliance by the Company with its obligations
hereunder and thereunder will not (A) constitute a breach of, or
default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or
its subsidiaries pursuant to, any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Company or any
of its subsidiaries is a party or by which they may be bound or to
which any of the property or assets of the Company or any of its
subsidiaries is subject, except where such breach, default, creation
or imposition would not have a material adverse effect on the
condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its subsidiaries
considered as one enterprise, (B) nor will such action result in
violation of the provisions of the Articles of Incorporation or Code
of Regulations of the Company or subsidiaries or any applicable law,
administrative regulation or administrative or court order or decree.
(xvi) Neither the Company nor any of its subsidiaries is required
to be registered under the 1940 Act.
(xvii) The information in the Prospectus, if applicable, under
the captions "Certain Anti-Takeover Provisions of Ohio Law," "Certain
Federal Income Tax Considerations" and "Federal Income Tax
Considerations," to the extent that it constitutes matters of law or
legal conclusions, has been reviewed by them and is correct in all
material respects.
(xviii) The Company has qualified as a REIT for its taxable years
ended December 31, 1994 and 1995, and the Company is organized and
operates in a manner that will enable it to qualify to be taxed as a
REIT under the Code for the taxable year ending December 31, 1996 and
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thereafter provided the Company continues to meet the asset
composition, source of income, shareholder diversification,
distributions, record keeping, and other requirements of the Code
which are necessary for the Company to qualify as a REIT.
(xix) With respect to each HAP Contract and Regulatory Agreement,
the acceptance by the Company or its subsidiary of the assignment
thereof, and the assumption of the obligations thereunder, did not,
when the documents with respect thereto were executed and delivered,
and do not constitute a breach of, or default under, the articles of
incorporation, or other form of charter (or, in the case of
subsidiaries that are not corporations, other organizational
documents) of the Company or its subsidiaries, or to the best of such
counsel's knowledge, any material contract, lease or other instrument
of which such counsel has knowledge and to which any of the Company or
its subsidiaries is a party or by which any of them or any of their
properties may be bound.
(xx) To the best of such counsel's knowledge neither the Company
nor any of its subsidiaries is in violation, or in default in the
performance or observance of any material provision of any HAP
Contract or Regulatory Agreement.
(c) On the date hereof, you shall have received from Brown & Wood LLP,
counsel for the Agents, their opinion or opinions dated as of the date hereof
with respect to the matters set forth in (i) (as it pertains to the Company),
(v) to (x), inclusive, and (xii) of subsection (b) of this Section 9, and the
Company shall have furnished to such counsel such documents as they may request
for the purpose of enabling them to pass upon such matters.
In giving their opinion, Xxxxx & Wood LLP may rely as to matters involving
the laws of the State of Ohio upon the opinion of Xxxxx & Xxxxxxxxx LLP. Xxxxx &
Xxxxxxxxx LLP and Brown & Wood LLP may rely (i) as to the qualification of the
Company or its subsidiaries to do business in any state or jurisdiction, upon
certificates of appropriate government officials, and (ii) as to matters of
fact, upon certificates and written statements of officers and employees of and
accountants for the Company or its subsidiaries.
(d) At the date hereof, the Agents shall have received a certificate of the
President and the Chief Financial Officer of the Company, dated as of the date
hereof, to the effect that (i) since the respective dates as of which
information is given in the Prospectus or since the date of the applicable
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agreement by one or more Agents to purchase Notes as principal, there has not
been any material adverse change in the condition, financial or otherwise, or in
the earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, (ii) the representations and warranties of the
Company contained in Section 3 hereof are true and correct with the same force
and effect as though expressly made at and as of the date of such certificate
and (iii) the Company has performed or complied with all agreements and
satisfied all conditions on its part to be performed or satisfied at or prior to
the date of such certificate. As used in this Section 9(d), the term
"Prospectus" means the Prospectus in the form first provided to the applicable
Agent or Agents for use in confirming sales of the Notes.
(e) On the date hereof and on each Settlement Date, counsel to the Agents
shall have been furnished with such documents and opinions as such counsel may
reasonably require for the purpose of enabling such counsel to pass upon the
issuance and sale of Notes as herein contemplated and related proceedings, or in
order to evidence the accuracy and completeness of any of the representations
and warranties, or the fulfillment of any of the conditions, herein contained;
and all proceedings taken by the Company in connection with the issuance and
sale of Notes as herein contemplated shall be satisfactory in form and substance
to the Agents and to counsel to the Agents.
If any condition specified in this Section 9 shall not have been fulfilled
when and as required to be fulfilled, this Agreement may be terminated by the
applicable Agent or Agents by notice to the Company at any time and any such
termination shall be without liability of any party to any other party, except
that the covenant regarding provision of an earnings statement set forth in
Section 5(h) hereof, the provision concerning payment of expenses under Section
6 hereof, the indemnity and contribution agreement set forth in Section 7
hereof, the provisions concerning the survival of indemnities, representations,
warranties, etc. of Section 8 hereof, the provision relating to successors set
forth in Section 14, and the provision relating to applicable law set forth in
Section 15 hereof shall remain in effect.
10. DELIVERY OF AND PAYMENT FOR NOTES SOLD THROUGH AN AGENT. Delivery of
Notes sold through an Agent as agent shall be made by the Company to such Agent
for the account of any purchaser only against payment therefor in immediately
available funds. In the event that a purchaser shall fail either to accept
delivery of or to make payment for a Note on the date fixed for settlement, such
Agent shall promptly notify the Company and deliver such Note to the Company
and, if such Agent has theretofore paid the Company for
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31
such Note, the Company will promptly return such funds to such Agent. If such
failure occurred for any reason other than default by such Agent in the
performance of its obligations hereunder, the Company will reimburse such Agent
on an equitable basis for its loss of the use of the funds for the period such
funds were credited to the Company's account.
11. ADDITIONAL COVENANTS OF THE COMPANY. The Company covenants and agrees
with the Agents that:
(a) Each acceptance by the Company of an offer for the purchase of Notes
(whether to one or more Agents as principal or through an Agent as agent), and
each delivery of Notes (whether to one or more Agents as principal or through an
Agent as agent), shall be deemed to be an affirmation that the representations
and warranties of the Company contained in this Agreement and in any certificate
theretofore delivered to the Agents in connection therewith pursuant hereto are
true and correct at the time of such acceptance or sale, as the case may be, and
an undertaking that such representations and warranties will be true and correct
at the time of delivery to such Agent or Agents or to the purchaser or its
agent, as the case may be, of the Note or Notes relating to such acceptance or
sale, as the case may be, as though made at and as of each such time (and it is
understood that such representations and warranties shall relate to the
Registration Statement and Prospectus as amended and supplemented to each such
time).
(b) Each time that (i) the Registration Statement or the Prospectus shall
be amended or supplemented (other than by an amendment or supplement providing
solely for a change in the interest rate or formula applicable to the Notes or
similar changes, and other than by an amendment or supplement which relates
exclusively to the issuance of securities other than the Notes), (ii) there is
filed with the Commission any document incorporated by reference into the
Prospectus (other than any Current Report on Form 8-K relating exclusively to
the issuance of securities other than the Notes), (iii) (if required in
connection with the purchase of Notes by one or more Agents as principal) the
Company sells Notes to such Agent or Agents as principal or (iv) if the Company
issues and sells Notes in a form not previously certified to the Agents by the
Company, the Company shall furnish or cause to be furnished to the Agent(s)
forthwith a certificate dated the date of filing with the Commission of such
supplement or document, the date of effectiveness of such amendment, or the date
of such sale, as the case may be, in form satisfactory to the Agent(s) to the
effect that the statements contained in the certificate referred to in Section
9(d) hereof which were last furnished to the Agents are true and correct at the
time of such amendment, supplement, filing or sale, as the case may be, as
though made at and as of such time (except that such statements shall be deemed
to relate to the Registration Statement and the Prospectus as amended and
supplemented to such time) or, in lieu of such certificate, a
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certificate of the same tenor as the certificate referred to in Section 9(d)
hereof, modified as necessary to relate to the Registration Statement and the
Prospectus as amended and supplemented to the time of delivery of such
certificate.
(c) Each time that (i) the Registration Statement or the Prospectus shall
be amended or supplemented (other than by an amendment or supplement providing
solely for a change in the interest rate or formula applicable to the Notes or
similar changes or solely for the inclusion of additional financial information,
and other than by an amendment or supplement which relates exclusively to the
issuance of securities other than the Notes), (ii) there is filed with the
Commission any document incorporated by reference into the Prospectus (other
than any Current Report on Form 8-K, unless the Agents shall otherwise specify),
(iii) (if required in connection with the purchase of Notes by one or more
Agents as principal) the Company sells Notes to such Agent or Agents as
principal or (iv) if the Company issues and sells Notes in a form not previously
certified to the Agents by the Company, the Company shall furnish or cause to be
furnished forthwith to the Agent(s) and to counsel to the Agents the written
opinions of Xxxxx & Xxxxxxxxx LLP, counsel to the Company, dated the date of
filing with the Commission of such supplement or document, the date of
effectiveness of such amendment, or the date of such sale, as the case may be,
in form and substance satisfactory to the Agent(s), of the same tenor as the
opinion referred to in Section 9(b) hereof, but modified, as necessary, to
relate to the Registration Statement and the Prospectus as amended and
supplemented to the time of delivery of such opinion or, in lieu of such
opinion, counsel last furnishing such opinion to the Agents shall furnish the
Agent(s) with a letter substantially to the effect that the Agent(s) may rely on
such last opinion to the same extent as though it was dated the date of such
letter authorizing reliance (except that statements in such last opinion shall
be deemed to relate to the Registration Statement and the Prospectus as amended
and supplemented to the time of delivery of such letter authorizing reliance);
PROVIDED, HOWEVER, that counsel need not render the opinion required under
Section 9(b)(xviii) upon the filing of any Quarterly Report on Form 10-Q which
does not include information relating to such tax matters, unless the Agents
shall otherwise specify.
(d) Each time that (i) the Registration Statement or the Prospectus shall
be amended or supplemented to include additional financial information (other
than by an amendment or supplement which relates exclusively to the issuance of
securities other than the Notes), (ii) there is filed with the Commission any
document incorporated by reference into the Prospectus which contains additional
financial information, or (iii) (if required in connection with the purchase of
Notes by one or more Agents as principal) the Company sells Notes to such Agent
or Agents as principal, the Company shall cause Price Waterhouse LLP to furnish
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to the Agent(s) a letter, dated the date of effectiveness of such amendment,
supplement or document with the Commission, or the date of such sale, as the
case may be, in form satisfactory to the Agent(s), of the same tenor as the
portions of the letter referred to in clauses (i) and (ii) of Section 9(a)
hereof but modified to relate to the Registration Statement and Prospectus as
amended and supplemented to the date of such letter, and of the same general
tenor as the portions of the letter referred to in clauses (iv) and (v) of said
Section 9(a) with such changes as may be necessary to reflect changes in the
financial statements and other information derived from the accounting records
of the Company.
12. TERMINATION. (a) This Agreement (excluding any agreement hereunder by
one or more Agents to purchase Notes as principal) may be terminated for any
reason, at any time by either the Company or an Agent, as to itself, upon the
giving of 10 days' written notice of such termination to the other party hereto.
(b) The applicable Agent or Agents may terminate any agreement hereunder by
such Agent or Agents to purchase Notes as principal, immediately upon notice to
the Company, at any time prior to the Settlement Date relating thereto (i) if
there has been, since the date of such agreement or since the respective dates
as of which information is given in the Prospectus, any material adverse change
in the condition, financial or otherwise, or in the earnings, business affairs
or business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, or (ii)
if there shall have occurred any material adverse change in the financial
markets in the United States or any outbreak or escalation of hostilities or
other national or international calamity or crisis the effect of which is such
as to make it, in the judgment of such Agent or Agents, impracticable to market
the Notes or enforce contracts for the sale of the Notes, or (iii) if trading in
any securities of the Company has been suspended by the Commission or a national
securities exchange, or if trading generally on either the American Stock
Exchange or the New York Stock Exchange shall have been suspended, or minimum or
maximum prices for trading have been fixed, or maximum ranges for prices for
securities have been required, by either of said exchanges or by order of the
Commission or any other governmental authority, or if a banking moratorium shall
have been declared by either Federal or New York authorities or if a banking
moratorium shall have been declared by the relevant authorities in the country
or countries of origin of any foreign currency or currencies in which the Notes
are denominated or payable, or (iv) if the rating assigned by any nationally
recognized statistical rating organization to any debt securities of the Company
as of the date of such agreement shall have been lowered since that date or if
any such rating organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its rating of any
debt securities of the Company, or (v) if there shall have come to the
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attention of such Agent or Agents any facts that would cause them to believe
that the Prospectus, at the time it was required to be delivered to a purchaser
of Notes, included an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in light of the
circumstances existing at the time of such delivery, not misleading. As used in
this Section 12(b), the term "Prospectus" means the Prospectus in the form first
provided to the applicable Agent or Agents for use in confirming sales of the
related Notes.
(c) In the event of any such termination, neither party will have any
liability to the other party hereto, except that (i) the Agents shall be
entitled to any commission earned in accordance with the third paragraph of
Section 4(b) hereof, (ii) if at the time of termination (a) any Agent shall own
any Notes purchased by it as principal with the intention of reselling them or
(b) an offer to purchase any of the Notes has been accepted by the Company but
the time of delivery to the purchaser or his agent of the Note or Notes relating
thereto has not occurred, the covenants set forth in Sections 5 and 11 hereof
shall remain in effect until such Notes are so resold or delivered, as the case
may be, and (iii) the covenant set forth in Section 5(h) hereof, the provisions
of Section 6 hereof, the indemnity and contribution agreements set forth in
Section 7 hereof, and the provisions of Sections 8, 14 and 15 hereof shall
remain in effect.
13. NOTICES. All communications hereunder shall be in writing and shall be
mailed, delivered or telecopied and confirmed, and any such notice shall be
effective when received at the address specified below:
If to the Company:
Associated Estates Realty Corporation
0000 Xxxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx
President and Chief Executive Officer
Telecopy No.: 000-000-0000
If to the Agents:
Xxxx Xxxxxx Xxxxxxxx Inc.
Two World Trade Center
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: X. Xxxxx Xxxxx
Managing Director
Telecopy No.: 000-000-0000
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Xxxx. Xxxxx & Sons Incorporated
000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxx
Telecopy No.: 000-000-0000
First Chicago Capital Markets, Inc.
Xxx Xxxxx Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Chief Credit Officer
Telecopy No.: 000-000-0000
Xxxxxx Brothers Inc.
3 World Financial Center
12th Floor
New York, New York 10285-1200
Attention: ___________________________________
Telecopy No.: 000-000-0000
X.X. Xxxxxx Securities, Inc.
00 Xxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 000000
Attention: Medium-Term Note Desk
Telecopy No.: 000-000-0000
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
0xx Xxxxx
Xxx Xxxx, New York 10036
Attention: Manager - Continuously Offered Products
Telecopy No.: 000-000-0000
With a copy to:
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxx, Investment Banking
Information Center
Telephone No.: 000-000-0000
Telecopy No.: 000-000-0000
14. SUCCESSORS. This Agreement shall inure to the benefit of and be binding
upon you and the Company and their respective successors and legal
representatives. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person other than the persons mentioned in the
preceding sentence any legal or equitable right, remedy or claim under or in
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respect of this Agreement, or any provisions herein contained, this Agreement
and all conditions and provisions hereof being intended to be and being for the
sole and exclusive benefit of such persons and for the benefit of no other
person; except that the representations, warranties, covenants, agreements and
indemnities of the Company, contained in this Agreement shall also be for the
benefit of the person or persons, if any, who control any Agent within the
meaning of Section 15 of the 1933 Act, and the indemnities given by the several
Agents shall also be for the benefit of each director of the Company, each of
the Company's officers who has signed the Registration Statement and the person
or persons, if any, who control the Company within the meaning of Section 15 of
the 1933 Act.
15. APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to agreements made
and to be performed in said state. Specified times of day refer to New York City
time.
16. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, and if executed in more than one counterpart the executed
counterparts shall constitute a single instrument.
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If the foregoing correctly sets forth our understanding, please indicate
your acceptance thereof in the space provided below for that purpose, whereupon
this letter and your acceptance shall constitute a binding agreement between us.
Very truly yours,
ASSOCIATED ESTATES REALTY
CORPORATION
By: ___________________________
Name:
Title:
Accepted and delivered,
as of the date first above written:
XXXX XXXXXX XXXXXXXX INC.
By: _________________________
Name:
Title:
XXXX. BROWN & SONS INCORPORATED
By: __________________________
Name:
Title:
FIRST CHICAGO CAPITAL MARKETS, INC.
By: __________________________
Name:
Title:
XXXXXX BROTHERS INC.
By: __________________________
Name:
Title:
X.X. XXXXXX SECURITIES INC.
By: __________________________
Name:
Title:
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XXXXXX XXXXXXX & CO. INCORPORATED
By: __________________________
Name:
Title:
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EXHIBIT A
The following terms, if applicable, shall be agreed to by one or more
Agents and the Company in connection with each sale of Notes:
Principal Amount: $__________
(or principal amount of foreign currency or composite
currency)
Senior or Subordinated Rank:
Interest Rate:
If Fixed Rate Note, Interest Rate:
If Floating Rate Note:
Interest Rate Basis:
Initial Interest Rate, if any:
Spread and/or Spread Multiplier, if any:
Interest Reset Date(s):
Interest Payment Date(s):
Index Maturity:
Maximum Interest Rate, if any:
Minimum Interest Rate, if any:
Fixed Rate Commencement Date:
Fixed Interest Rate:
Calculation Agent:
If Redeemable:
Initial Redemption Date:
Initial Redemption Percentage:
Annual Redemption Percentage Reduction, if any:
If Repayable:
Optional Repayment Date(s):
Stated Maturity Date:
Purchase Price: ____%, plus accrued interest, if any, from
_______________________
Settlement Date and Time:
Specified Currency:
Authorized Denominations:
Additional/Other Terms:
Also, in connection with the purchase of Notes by one or more Agents as
principal, agreement as to whether the following will be required:
Officers' Certificate pursuant to Section 11(b) of the Distribution
Agreement.
Legal Opinions pursuant to Section 11(c) of the Distribution
Agreement.
A-1
40
Comfort Letter pursuant to Section 11(d) of the Distribution
Agreement.
Stand-off Agreement pursuant to Section 5(k) of the Distribution
Agreement.
A-2
41
SCHEDULE A
As compensation for the services of the Agents hereunder, the Company shall
pay the applicable Agent, on a discount basis, a commission for the sale of each
Senior Note equal to the principal amount of such Senior Note multiplied by the
appropriate percentage set forth below (the commission payable with respect to
sales of Senior Notes will also apply to sales of Subordinated Notes unless
otherwise agreed by the Company and the applicable Agent):
PERCENT OF
PRINCIPAL
MATURITY RANGES AMOUNT
--------------- ----------
From 9 months to less than 1 year ............................. .125%
From 1 year to less than 18 months ............................ .150
From 18 months to less than 2 years ........................... .200
From 2 years to less than 3 years ............................. .250
From 3 years to less than 4 years ............................. .350
From 4 years to less than 5 years ............................. .450
From 5 years to less than 6 years ............................. .500
From 6 years to less than 7 years ............................. .550
From 7 years to less than 10 years ............................ .600
From 10 years to less than 15 years ........................... .625
From 15 years to less than 20 years ........................... .700
From 20 years to 30 years ..................................... .750
Greater than 30 years ......................................... *
--------------
* As agreed to by the Company and the applicable Agent at the time of sale.
