Draft of July 30, 1997
PAN PACIFIC RETAIL PROPERTIES, INC.
7,000,000 Shares(1)
Common Stock
UNDERWRITING AGREEMENT
August , 1997
----
PRUDENTIAL SECURITIES INCORPORATED
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
XXXXX XXXXXX INC.
As Representatives of the several Underwriters
c/o Prudential Securities Incorporated
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Pan Pacific Retail Properties, Inc., a Maryland corporation intending to
qualify as a real estate investment trust (the "Company") hereby confirms its
agreement with the several underwriters named in Schedule 1 hereto (the
"Underwriters"), for whom you have been duly authorized to act as
representatives (in such capacities, the "Representatives"), as set forth
below. If you are the only Underwriters, all references herein to the
Representatives shall be deemed to be to the Underwriters.
1. SECURITIES. Subject to the terms and conditions herein contained,
the Company proposes to issue and sell to the several Underwriters an
aggregate of 7,000,000 shares (the "Firm Securities") of the Company's common
stock, par value $.01 per share ("Common Stock"). The Company also proposes
to issue and sell to the several Underwriters not more than 1,050,000
additional shares of Common Stock if requested by the Representatives as
provided in Section 3 of this Agreement. Any and all shares of Common Stock
to be purchased by the Underwriters pursuant to such option are referred to
herein as the "Option Securities", and the Firm Securities and any Option
Securities are collectively referred to herein as the "Securities".
--------------------
(1) Plus an option to purchase from Pan Pacific Retail
Properties, Inc. up to 1,050,000 additional shares to cover
over-allotments.
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2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to, and agrees with, each of the several Underwriters that:
(a) A registration statement on Form S-11 (File No. 333-28715)
with respect to the Securities, including a prospectus subject to completion,
has been filed by the Company with the Securities and Exchange Commission
(the "Commission") under the Securities Act of 1933, as amended (the "Act"),
and one or more amendments to such registration statement may have been so
filed. After the execution of this Agreement, the Company will file with the
Commission either (i) if such registration statement, as it may have been
amended, has been declared by the Commission to be effective under the Act,
either (A) if the Company relies on Rule 434 under the Act, a Term Sheet (as
hereinafter defined) relating to the Securities, that shall identify the
Preliminary Prospectus (as hereinafter defined) that it supplements
containing such information as is required or permitted by Rules 434, 430A
and 424(b) under the Act or (B) if the Company does not rely on Rule 434
under the Act, a prospectus in the form most recently included in an
amendment to such registration statement (or, if no such amendment shall have
been filed, in such registration statement), with such changes or insertions
as are required by Rule 430A under the Act or permitted by Rule 424(b) under
the Act, and in the case of either clause (i)(A) or (i)(B) of this sentence
as have been provided to and approved by the Representatives prior to the
execution of this Agreement, or (ii) if such registration statement, as it
may have been amended, has not been declared by the Commission to be
effective under the Act, an amendment to such registration statement,
including a form of prospectus, a copy of which amendment has been furnished
to and approved by the Representatives prior to the execution of this
Agreement. The Company may also file a related registration statement with
the Commission pursuant to Rule 462(b) under the Act for the purpose of
registering certain additional Securities, which registration, assuming
compliance with the requirements of Rule 462(b), shall be effective upon
filing with the Commission. As used in this Agreement, the term "Original
Registration Statement" means the registration statement initially filed
relating to the Securities, as amended at the time when it was or is declared
effective, including all financial schedules and exhibits thereto and
including any information omitted therefrom pursuant to Rule 430A under the
Act and included in the Prospectus (as hereinafter defined); the term "Rule
462(b) Registration Statement" means any registration statement filed with
the Commission pursuant to Rule 462(b) under the Act (including the
Registration Statement and any Preliminary Prospectus or Prospectus
incorporated therein at the time such Registration Statement becomes
effective); the term "Registration Statement" includes both the Original
Registration Statement and any Rule 462(b) Registration Statement; the term
"Preliminary Prospectus" means each prospectus subject to completion filed
with such registration statement and any amendment or supplement thereto
(including the prospectus subject to completion, if any, included in the
Registration Statement or any amendment thereto at the time it was or is
declared effective); the term "Prospectus" means:
(i) if the Company relies on Rule 434 under the Act, the Term Sheet
relating to the Securities that is first filed pursuant to Rule
424(b)(7) under the Act, together with the Preliminary Prospectus
identified therein that such Term Sheet supplements;
(ii) if the Company does not rely on Rule 434 under the Act, the
prospectus first filed with the Commission pursuant to Rule 424(b)
under the Act; or
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(iii) if the Company does not rely on Rule 434 under the Act and
if no prospectus is required to be filed pursuant to Rule 424(b)
under the Act, the prospectus included in the Registration Statement;
and the term "Term Sheet" means any term sheet that satisfies the requirements
of Rule 434 under the Act. Any reference herein to the "date" of a Prospectus
that includes a Term Sheet shall mean the date of such Term Sheet.
(b) The Commission has not issued any order preventing or
suspending use of any Preliminary Prospectus. Each Preliminary Prospectus
provided to Underwriters for use in connection with the issuance and sale of
the Securities (i) contained all statements required to be stated therein in
accordance with, and complied in all material respects with the requirements
of, the Act and the rules and regulations of the Commission thereunder and
(ii) did not include any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. When
the Registration Statement or any amendment thereto was or is declared
effective, it (i) contained or will contain all statements required to be
stated therein in accordance with, and complied or will comply in all
material respects with the requirements of, the Act and the rules and
regulations of the Commission thereunder and (ii) did not or will not include
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading. When the Prospectus
or any Term Sheet that is a part thereof or any amendment or supplement to
the Prospectus is filed with the Commission pursuant to Rule 424(b) (or, if
the Prospectus or part thereof or such amendment or supplement is not
required to be so filed, when the Registration Statement or the amendment
thereto containing such amendment or supplement to the Prospectus was or is
declared effective) and on the Firm Closing Date and any Option Closing Date
(both as hereinafter defined), the Prospectus, as amended or supplemented at
any such time, (i) contained or will contain all statements required to be
stated therein in accordance with, and complied or will comply in all
material respects with the requirements of, the Act and the rules and
regulations of the Commission thereunder and (ii) did not or will not include
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The foregoing
provisions of this paragraph (b) do not apply to statements or omissions made
in any Preliminary Prospectus, the Registration Statement or any amendment
thereto or the Prospectus or any amendment or supplement thereto in reliance
upon and in conformity with written information furnished to the Company by
any Underwriter through the Representatives specifically for use therein.
(c) If the Company has elected to rely on Rule 462(b) and the Rule
462(b) Registration Statement has not been declared effective (i) the Company
has filed a Rule 462(b) Registration Statement in compliance with and that is
effective upon filing pursuant to Rule 462(b) and has received confirmation
of its receipt and (ii) the Company has given irrevocable instructions for
transmission of the applicable filing fee in connection with the filing of
the Rule 462(b) Registration Statement, in compliance with Rule 111
promulgated under the Act or the Commission has received payment of such
filing fee.
(d) The Company and each of its subsidiaries (which are
corporations) have been duly organized and are validly existing as
corporations in good standing under the laws of their respective
jurisdictions of incorporation and are duly qualified to transact business as
foreign corporations and are in good standing under the laws of all other
jurisdictions where the
3
ownership or leasing of their respective properties or the conduct of their
respective businesses requires such qualification, except where the failure
to be so qualified does not amount to a material liability or disability to
the Company and its subsidiaries, taken as a whole. Each of the Company's
subsidiaries (which are partnerships or limited liability companies) have
been duly organized and are validly existing as partnerships or limited
liability companies, as the case may be, in good standing under the laws of
their respective jurisdictions of organization and, as applicable, are duly
qualified to transact business as foreign partnerships and are in good
standing under the laws of all other jurisdictions where the ownership or
leasing of their respective properties or the conduct of their respective
businesses requires such qualification, except where the failure to be so
qualified does not amount to a material liability or disability to the
Company and its subsidiaries, taken as a whole,
(e) The Company and each of its subsidiaries have full power
(corporate or other) to own or lease their respective properties and conduct
their respective businesses as described in the Registration Statement and
the Prospectus or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus; and the Company has full power (corporate or other)
to enter into this Agreement and to carry out all the terms and provisions
hereof to be carried out by it.
(f) The issued shares of capital stock of each of the Company's
subsidiaries (which are corporations) have been duly authorized and validly
issued, are fully paid and nonassessable and, except as otherwise set forth
in the Prospectus or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus, are owned beneficially by the Company free and clear
of any security interests, liens, encumbrances, equities or claims. The
partnership agreements of the Company's subsidiaries (which are partnerships)
have been duly authorized, executed and delivered by the general partners
thereof and constitute the valid and binding obligation of the general
partners thereof. Such partnership agreements reflect the Company and/or one
or more of the Company's subsidiaries as the sole beneficial owners of the
partnership interests in such partnerships. The operating agreements of the
Company's subsidiaries (which are limited liability companies) have been duly
authorized, executed and delivered by the members thereof and constitute the
valid and binding obligation of the members. Such operating agreements
reflect the Company and/or one or more of the Company's subsidiaries as the
sole beneficial owners of all the membership interests in such limited
liability companies.
(g) The Company has an authorized, issued and outstanding
capitalization as set forth in the Prospectus or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus. All of the issued shares
of capital stock of the Company have been duly authorized and validly issued
and are fully paid and nonassessable. The Firm Securities and the Option
Securities have been duly authorized and at the Firm Closing Date or the
related Option Closing Date (as the case may be), after payment therefor in
accordance herewith, will be validly issued, fully paid and nonassessable.
No holders of outstanding shares of capital stock of the Company are entitled
as such to any preemptive or other rights to subscribe for any of the
Securities, and no holder of securities of the Company has any right which
has not been fully exercised or waived to require the Company to register the
offer or sale of any securities owned by such holder under the Act in the
public offering contemplated by this Agreement.
(h) The capital stock of the Company conforms to the description
thereof contained in the Prospectus or, if the Prospectus is not in
existence, the most recent Preliminary
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Prospectus.
(i) Except as disclosed in the Prospectus (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus), there are no
outstanding (A) securities, equity interests or obligations of the Company or
any of its subsidiaries convertible into or exchangeable for any capital
stock or equity interests (as the case may be) of the Company or any such
subsidiary, (B) warrants, rights or options to subscribe for or purchase from
the Company or any such subsidiary any such capital stock or equity interests
or any such convertible or exchangeable securities, equity interests or
obligations, or (C) obligations of the Company or any such subsidiary to
issue any shares of capital stock, equity interests, any such convertible or
exchangeable securities, equity interests or obligations, or any such
warrants, rights or options.
(j) The balance sheet of the Company (including the notes thereto)
included in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus)
fairly presents the financial position of the Company at the date therein
specified. The combined financial statements (including the notes thereto)
of Pan Pacific Development Properties (as defined in the notes thereto) and
schedule of Pan Pacific Development Properties included in the Registration
Statement and the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus) fairly present the financial position,
the results of operations and cash flows and changes in financial condition
of Pan Pacific Development Properties, at the date and for the periods
therein specified. The combined historical summaries of certain revenues and
certain expenses (including the notes thereto) of the Properties included in
the Registration Statement and the Prospectus (or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus) fairly present the
combined certain revenues and certain expenses of the Properties for the
periods therein specified. All of the foregoing financial statements
(including the notes thereto) and schedules have been prepared in accordance
with generally accepted accounting principles consistently applied for each
of the periods presented. The selected financial data set forth under the
caption "Selected Financial Data" in the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus) fairly present, on
the basis stated in the Prospectus (or such Preliminary Prospectus), the
information included therein.
(k) The pro forma condensed combined financial statements
(including the notes thereto) of the Company included in the Registration
Statement and the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus) comply in all material respects with the
applicable requirements of Rule 11-02 of Regulation S-X of the Commission and
the pro forma adjustments have been properly applied to the historical
amounts in the compilation of such information and the assumptions used in
the preparation thereof are, in the opinion of the Company, reasonable.
Other than the historical and pro forma financial statements (and schedules)
included therein, no other historical or pro forma financial statements (or
schedules) are required to be included in the Registration Statement or
Prospectus.
(l) KPMG Peat Marwick LLP, who have audited certain financial
statements and schedules, and delivered their reports with respect to the
financial statements and schedules, included in the Registration Statement
and the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus), are independent public accountants as
required by the Act and the applicable rules and regulations thereunder.
5
(m) The adjustments made to the Company's pro forma Funds
from Operations for the 12 months ended March 31, 1997 fairly reflect (A) the
net increase in contractual rental income for the 12 months ending July 31,
1998 (over actual rental revenue included in pro forma Funds from Operations
for the 12 months ended March 31, 1997); (B) the net increase in revenue from
new executed leases commencing on or after April 1, 1996 for the 12 months
ending July 31, 1998; (C) the net effect of lease expirations for leases
which expired on or after April 1, 1996 for the 12 months ending July 31,
1998 versus rental revenue included in pro forma Funds from Operations for
the 12 months ended March 31, 1997; and (D) the effect of a net increase in
interest expense, calculated in accordance with GAAP, from the pro forma 12
months ended March 31, 1997 to the 12 months ending July 31, 1998. The
assumptions made by the Company disclosed in the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus),
under the caption "Distribution Policy" are reasonable in light of the
expected and intended method of operation of the Company.
(n) The execution and delivery of this Agreement have been duly
authorized by the Company and this Agreement has been duly executed and
delivered by the Company, and is the valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms,
subject to the effect of bankruptcy, insolvency, moratorium, fraudulent
conveyance, reorganization and similar laws relating to creditors' rights
generally and to the application of equitable principles in any proceeding,
whether at law or in equity.
(o) No legal or governmental proceedings are pending to which the
Company or any of its subsidiaries is a party or to which the property of the
Company or any of its subsidiaries is subject that are required to be
described in the Registration Statement or the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus) and
are not described therein, and no such proceedings have been threatened
against the Company or any of its subsidiaries or with respect to any of
their respective properties; and no contract or other document is required to
be described in the Registration Statement or the Prospectus or to be filed
as an exhibit to the Registration Statement that is not described therein
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus) or filed as required.
(p) The issuance, offering and sale of the Securities to the
Underwriters by the Company pursuant to this Agreement, the compliance by the
Company with the other provisions of this Agreement and the consummation of
the other transactions herein contemplated do not (i) require the consent,
approval, authorization, registration or qualification of or with any
governmental authority, except such as have been obtained, such as may be
required under state securities or blue sky laws and, if the registration
statement filed with respect to the Securities (as amended) is not effective
under the Act as of the time of execution hereof, such as may be required
(and shall be obtained as provided in this Agreement) under the Act, or (ii)
conflict with or result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any indenture, mortgage, deed
of trust, lease or other agreement or instrument to which the Company or any
of its subsidiaries is a party or by which the Company or any of its
subsidiaries or any of their respective properties are bound, or the charter
documents or by-laws or certificate of limited partnership or partnership
agreement (as the case may be) of the Company or any of its subsidiaries, or
any statute or any judgment, decree, order, rule or regulation of any court
or other governmental authority or any arbitrator applicable to the Company
or any of its subsidiaries.
6
(q) Each of Revenue Properties Companies Limited, a publicly-held
Canadian real estate company ("Revenue Properties"), Pan Pacific Development
(U.S.) Inc., a Delaware corporation and its affiliates ("PPD") and the
Company and its subsidiaries has full power (corporate or other) to enter
into and deliver (as applicable) the agreements set forth on Schedule 2
hereto and all other agreements and other documents related to the Formation
Transactions (as defined in the Registration Statement and the Prospectus,
or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus) (collectively, the "Transaction Documents") to which each is
party and to carry out all the terms and provisions thereof to be carried out
by each, respectively. The execution and delivery of the Transaction
Documents have been duly authorized by Revenue Properties, PPD and the
Company and its subsidiaries (as applicable), and the Transaction Documents
have been or will be on the Firm Closing Date duly executed and delivered by
Revenue Properties, PPD and the Company and its subsidiaries (as applicable),
and each is the valid and binding agreement of Revenue Properties, PPD and
the Company and its subsidiaries (as applicable), enforceable against Revenue
Properties, PPD and the Company and its subsidiaries (as applicable) in
accordance with its terms, subject to the effect of bankruptcy, insolvency,
moratorium, fraudulent conveyance, reorganization and similar laws relating
to creditors' rights generally and to the application of equitable principles
in any proceeding, whether at law or in equity.
(r) The execution and delivery of the Transaction Documents, the
compliance by Revenue Properties, PPD and the Company and its subsidiaries
(as applicable) with their respective obligations under the Transaction
Documents and the consummation of the Formation Transactions do not (i)
require the consent, approval, authorization, registration or qualification
of or with any governmental authority, except such as have been obtained,
such as may be required under state securities or blue sky laws and, if the
registration statement filed with respect to the Securities (as amended) is
not effective under the Act as of the time of execution hereof, such as may
be required (and shall be obtained as provided in this Agreement) under the
Act, or (ii) conflict with or result in a breach or violation of any of the
terms and provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, lease or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which the Company or any
of its subsidiaries or any of their respective properties are bound, or the
charter documents or by-laws or certificate of limited partnership or
partnership agreement (as the case may be) of the Company or any of its
subsidiaries, or any statute or any judgment, decree, order, rule or
regulation of any court or other governmental authority or any arbitrator
applicable to the Company or any of its subsidiaries.
(s) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus), neither the
Company nor any of its subsidiaries has sustained any material loss or
interference with their respective businesses or properties from fire, flood,
hurricane, accident or other calamity, whether or not covered by insurance,
or from any labor dispute or any legal or governmental proceeding and there
has not been any material adverse change, or any development involving a
prospective material adverse change, in the condition (financial or
otherwise), management, business prospects, net worth, or results of
operations of the Company and its subsidiaries, taken as a whole, except in
each case as described in or contemplated by the Registration Statement and
the Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
7
(t) The Company has not, directly or indirectly, (i) taken any
action designed to cause or to result in, or that has constituted or which
might reasonably be expected to constitute, the stabilization or manipulation
of the price of any security of the Company to facilitate the sale or resale
of the Securities or (ii) since the filing of the Registration Statement (A)
sold, bid for, purchased, or paid anyone any compensation for soliciting
purchases of, the Securities or (B) paid or agreed to pay to any person any
compensation for soliciting another to purchase any other securities of the
Company.
(u) The Company has not distributed and, prior to the later of (i)
the Closing Date and (ii) the completion of the distribution of the
Securities, will not distribute any offering material in connection with the
offering and sale of the Securities other than the Registration Statement or
any amendment thereto, any Preliminary Prospectus or the Prospectus or any
amendment or supplement thereto, or other materials, if any, permitted by the
Act.
(v) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus), (1) the Company
and its subsidiaries have not incurred any material liability or obligation,
direct or contingent, nor entered into any material transaction not in the
ordinary course of business; (2) the Company has not purchased any of its
outstanding capital stock (other than as contemplated by Section 2(j)
hereof); and (3) there has not been any material change in the capital stock
or partnership interests (as the case may be), short-term debt or long-term
debt of the Company and its consolidated subsidiaries, except in each case as
described in or contemplated by the Prospectus (or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus).
(w) Upon consummation of the Formation Transactions including, for
purposes of this Agreement, the consummation of the issuance and sale of the
Firm Securities pursuant to Section 3 hereof, the borrowings under the
Unsecured Credit Facility (as defined in the Registration Statement and the
Prospectus, or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus), and the application of the proceeds from such
issuance and sale and such borrowings (which application shall occur
concurrently with such issuance and sale) as set forth under the caption "Use
of Proceeds" in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus), the
Company or its subsidiaries will have good and marketable title in fee simple
to all items of real property comprising part of the Properties (as defined
in the Registration Statement and the Prospectus, or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus) (except with
respect to the Partially-Owned Properties (as defined in the Registration
Statement and the Prospectus, or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus) and to land held pursuant to a ground
lease or subject to an air space lease) and marketable title to all personal
property comprising part of the Properties, in each case free and clear of
any security interests, liens, encumbrances, equities, claims and other
defects, except such as do not materially and adversely affect the value of
such property and do not interfere with the use made or proposed to be made
of such property by the Company or such subsidiary, and any real property and
buildings comprising part of the Properties held pursuant to or subject to a
ground lease, air space lease or other lease will be held by the Company or
any such subsidiary under or subject to valid, subsisting and enforceable
ground leases, air space leases or other leases, with such exceptions as are
not material and do not interfere with the use made or proposed to be made of
such property and buildings by the Company or such subsidiary, in each case
except as described in or contemplated by the Prospectus (or, if the
Prospectus is
8
not in existence, the most recent Preliminary Prospectus).
(x) No labor dispute with the employees of the Company or any of
its subsidiaries exists or is threatened or imminent that could result in a
material adverse change in the condition (financial or otherwise), business
prospects, net worth or results of operations of the Company and its
subsidiaries, taken as a whole, except as described in or contemplated by the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(y) Upon consummation of the Formation Transactions, the Company
and its subsidiaries will own or possess, or will be able to acquire on
reasonable terms, all material patents, patent applications, trademarks,
service marks, trade names, licenses, copyrights and proprietary or other
confidential information currently employed or proposed to be employed by
them in connection with the business now operated or proposed to be operated
by them as described in the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus), and neither the Company
nor any such subsidiary has received any notice of infringement of or
conflict with asserted rights of any third party with respect to any of the
foregoing which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would result in a material adverse change in the
condition (financial or otherwise), business prospects, net worth or results
of operations of the Company and its subsidiaries, taken as a whole, except
as described in or contemplated by the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus).
(z) Upon consummation of the Formation Transactions, the Company
and each of its subsidiaries will own or possess all contract rights that are
material to the businesses now operated or proposed to be operated by them
taken as a whole as described in the Prospectus (or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus), including all such
contract rights referred to in the Prospectus. All such contracts are in
full force and effect, and neither the Company nor any such subsidiary is
aware of any material breach by any party under any of such contracts.
(aa) As of the Firm Closing Date, the Company and each of its
subsidiaries will be insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are
prudent and customary in the businesses in which they are or will be engaged
as described in the Prospectus (or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus); and neither the Company nor any such
subsidiary has any reason to believe that it will not be able to renew such
insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its business
at a cost that would not materially and adversely affect the condition
(financial or otherwise), business prospects, net worth or results of
operations of the Company and its subsidiaries, taken as a whole, except as
described in or contemplated by the Prospectus (or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus).
(bb) No subsidiary of the Company is currently prohibited, directly
or indirectly, from paying any dividends to the Company, from making any
other distribution on such subsidiary's capital stock or partnership
interests, from repaying to the Company any loans or advances to such
subsidiary from the Company or from transferring any of such subsidiary's
property or assets to the Company or any other subsidiary of the Company,
except as described in or contemplated by the Prospectus (or, if the
Prospectus is not in existence, the most recent
9
Preliminary Prospectus) and except pursuant to (i) existing indebtedness as
in effect on the date hereof, (ii) the Unsecured Credit Facility, (iii)
applicable law and (iv) with respect to prohibitions only against
transferring any of such subsidiary's property or assets to the Company or
any other subsidiary of the Company, (A) customary non-assignment provisions
contained in leases to which the Company or any of its subsidiaries is a
party and (B) security interests, including purchase money obligations,
applicable to any property of the Company or any of its subsidiaries as of
the date hereof.
(cc) The Company and its subsidiaries will possess as of the Firm
Closing Date all certificates, authorizations and permits issued by the
appropriate federal, state or foreign regulatory authorities necessary to
conduct their respective businesses, and neither the Company nor any such
subsidiary has received any notice of proceedings relating to the revocation
or modification of any such certificate, authorization or permit which,
singly or in the aggregate, if the subject of any unfavorable decision,
ruling or finding, would result in a material adverse change in the condition
(financial or otherwise), business prospects, net worth or results of
operations of the Company and its subsidiaries, taken as a whole, except as
described in or contemplated by the Prospectus (or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus).
(dd) The Company is not, and as of the Firm Closing Date and the
Option Closing Date will not be, subject to registration as an investment
company under the Investment Company Act of 1940, as amended.
(ee) Each of the Company and its subsidiaries has filed all
foreign, federal, state and local tax returns that are required to be filed
or has requested in a timely manner and/or has received extensions thereof
(except in any case in which the failure so to file would not have a material
adverse effect on the Company and its subsidiaries, taken as a whole) and has
paid all taxes required to be paid by it and any other interest, assessment,
fine or penalty levied or assessed against it, to the extent that any of the
foregoing is due and payable and for which the Company has adequately
provided for on its financial statements under generally accepted accounting
principles ("GAAP"), except for any such interest, assessment, fine or
penalty that is currently being contested in good faith or as described in or
contemplated by the Prospectus (or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus).
(ff) (i) Except as described in or contemplated by the Prospectus
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus), the Company and its subsidiaries, the Properties and each
business operating at the Properties are in full compliance with
Environmental Laws, and have obtained and are in compliance with all permits,
licenses or other authorizations ("Permits") that are required under
Environmental Laws except where any non-compliance with Environmental Laws or
the failure to obtain or otherwise comply with any such Permits would not,
individually or in the aggregate, result in a material adverse change in the
condition (financial or otherwise), business prospects, net worth or results
of operations of the Company and its subsidiaries, taken as a whole.
(ii) None of the Properties are currently or, to the knowledge of the
Company and its subsidiaries, have in the past been used for the
generation, storage, treatment, transportation disposal of Hazardous
Material except in full compliance with Environmental Laws and only in
reasonable amounts that are customary and necessary for the businesses
located on the Properties.
10
(iii) There are no Releases of Hazardous Materials at, from, onto or
under any of the Properties nor have their been any Releases of Hazardous
Substances in the past at, from, onto or under any of the Properties.
(iv) No Remedial Actions are currently being performed or, to the
best knowledge of the Company, are planned to be performed at any of the
Properties.
(v) None of the Properties have been listed or, to the best of the
Company's knowledge, have been proposed to be listed on the National
Priorities List ("NPL"), the CERCLA Information System ("CERCLIS") or any
similar state list or inventory of sites which have been potentially
contaminated with Release of Hazardous Materials.
(vi) No Environmental Claims have been asserted against the Company
and its subsidiaries, the Properties or any of the businesses operating at
the Properties.
(vii) Except as disclosed in the environmental site assessments, the
property condition reports or seismic risk assessments performed on the
Properties, the Company is not aware of any environmental or engineering
conditions at any of the Properties that would, individually or in the
aggregate, result in a material adverse change in the condition (financial
or otherwise), or business prospects, net worth or results of operations of
the Company and its subsidiaries, taken as a whole,
(viii) None of the environmental consultants who have been retained
to prepare environmental site assessments, the property condition reports
or seismic risk assessments performed on the Properties nor the real estate
advisor, Xxxxxx Xxxxxxx Xxxxxx & Co. who prepared regional economic
overviews and market analysis for the Company, have been employed on a
contingent basis for such purposes or have any substantial interest in the
Company or any of its subsidiaries and none of them or any of their
directors, officers or employees are connected in any way with the Company
and its subsidiaries as a promoter, selling agent, voting trustee,
director, officer or employee.
As used herein, "Environmental Claims" refers to any complaint, summons,
citation, notice, directive, order, claim, litigation, investigation,
judicial or administrative proceeding, judgment, letter or other
communication from any governmental agency, department, bureau, office or
other authority, or any third party involving (i) violations of Environmental
Laws at the Properties or (ii) Releases of Hazardous Materials at, from, onto
or under any of the Properties; (iii) Releases of Hazardous Materials
migrating from adjoining properties or businesses onto or under the
Properties; or (iv) Releases of Hazardous Materials migrating from the
Properties onto or under adjoining properties or businesses "Environmental
Laws" includes the Comprehensive Environmental Response, Compensation and
Liability Act ("CERCLA"), 42 U.S.C. 9601 et seq., as amended; the Resource
Conservation and Recovery Act ("RCRA), 42 U.S.C. 6901 et seq., as amended;
the Clean Air Act ("CAA"), 42 U.S.C. 7401 et seq., as amended; the Clean
Water Act ("CWA"), 33 U.S.C. 1251 et seq., as amended; the Occupational
Safety and Health Act ("OSHA"), 29 U.S.C. 655 et seq., and any other federal,
state, local or municipal laws, statutes, regulations, rules or ordinances
imposing liability or establishing standards of conduct for protection of the
environment.
As used herein, "Environmental Liabilities" means any monetary
obligations, losses, liabilities (including strict liability), damages,
punitive damages, consequential damages,
11
treble damages, costs and expenses (including all reasonable out-of-pocket
fees, disbursements and expenses of counsel, out-of-pocket expert and
consulting fees and out-of-pocket costs for environmental site assessments,
remedial investigation and feasibility studies), fines, penalties, sanctions
and interest incurred as a result of any Environmental Claim filed by any
Governmental Authority or any third party which relate to any violations of
Environmental Laws, Remedial Actions, Releases or threatened Releases of
Hazardous Materials from or onto (i) any property presently or formerly owned
by the Corporation or any of its Subsidiaries or a predecessor in interest,
or (ii) any facility which received Hazardous Materials generated by the
Corporation or any of its Subsidiaries or a predecessor in interest.
As used herein, "Hazardous Materials"- shall include (a) any
element, compound, or chemical that is defined, listed or otherwise
classified as a contaminants, pollutant, toxic pollutant, toxic or hazardous
substances, extremely hazardous substance or chemical, hazardous waste,
biohazardous or infectious waste, special waste, or solid waste under
Environmental Laws; (b) petroleum, petroleum-based or petroleum-derived
products; (c) polychlorinated biphenyls; (d) any substance exhibiting a
hazardous waste characteristic including but not limited to corrosivity,
ignitibility, toxicity or reactivity as well as any radioactive or explosive
materials; and (e) any asbestos-containing materials
As used herein, "Release" means any spilling, leaking, pumping,
emitting, emptying, discharging, injecting, escaping, leaching, migrating,
dumping, or disposing of Hazardous Materials (including the abandonment or
discarding of barrels, containers or other closed receptacles containing
Hazardous Materials) into the environment.
As used herein, "Remedial Action" means all actions taken to (i) clean
up, remove, remediate, contain, treat, monitor, assess, evaluate or in any
other way address Hazardous Materials in the indoor or outdoor environment;
(ii) prevent or minimize a Release or threatened Release of Hazardous
Materials so they do not migrate or endanger or threaten to endanger public
health or welfare or the indoor or outdoor environment; (iii) perform
pre-remedial studies and investigations and post-remedial operation and
maintenance activities; or (iv) any other actions authorized by 42 U.S.C.
9601.
(gg) Each certificate signed by any officer of the Company and
delivered to the Representatives or counsel for the Underwriters on the Firm
Closing Date or on the Option Closing Date shall be deemed to be a
representation and warranty by the Company to each Underwriter as to the
matters covered thereby.
(hh) Except for the shares of capital stock of, or partnership
interests in (as applicable), each of its subsidiaries owned by the Company
and such subsidiaries, neither the Company nor any such subsidiary owns any
shares of stock or any other equity securities of any corporation or has any
equity interest in any firm, partnership, association or other entity, except
as described in or contemplated by the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus).
(ii) The Company and each of its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance that
(1) transactions are executed in accordance with management's general or
specific authorizations; (2) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (3) access to
12
assets is permitted only in accordance with management's general or specific
authorization; and (4) the recorded accountability for assets is compared
with the existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(jj) No default exists, and no event has occurred which, with
notice or lapse of time or both, would constitute a default in the due
performance and observance of any term, covenant or condition of any
indenture, mortgage, deed of trust, lease or other agreement or instrument to
which the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries or any of their respective properties is
bound or may be affected in any material adverse respect with regard to
property, business or operations of the Company and its subsidiaries taken as
a whole.
(kk) No foreclosures have been instituted and none are currently
threatened with respect to any property or assets directly or indirectly
owned (whether now or in the past) by PPD, or the Company or any of its
subsidiaries. Except with respect to the Excluded Assets (as defined in the
Registration Statement and the Prospectus, or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus), PPD and the Company do
not own or operate any real property other than the real properties
comprising part of the Properties.
(ll) Except as otherwise described in the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus), (i)
no proceeding or filing of a petition seeking relief under Title 11 of the
United States Code or any other federal, state or foreign bankruptcy,
insolvency, liquidation or similar law has been commenced or instituted
(whether voluntary or involuntary) by or with respect to PPD or the Company,
(ii) neither PPD nor the Company has applied for or consented to the
appointment of a receiver, trustee, custodian, sequestrator or similar
official for any such persons or for a substantial part of any such persons'
property or assets and (iii) neither PPD nor the Company has made a general
assignment for the benefit of its creditors.
(mm) No relationship, direct or indirect, exists between or among
the Company on the one hand, and the directors, officers, stockholders,
tenants, customers or suppliers of the Company on the other hand, which is
required to be described in the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus) which is not so described.
(nn) The transfer of interests or other assets pursuant to the
agreements and instruments set forth on Schedule 3 hereto (the "Transfer
Documents") does not violate the articles or certificate of incorporation,
by-laws, limited liability company operating agreement, declaration of trust,
certificate of limited partnership, partnership agreement or other
organizational documents, as the case may be, of PPD or the Company or any of
their respective subsidiaries. The Transfer Documents are sufficient to
effect the transfer to the Company or its subsidiaries of all direct or
indirect interests in the Properties and other assets specified therein upon
payment of the consideration therefor. Pursuant to the Transfer Documents,
the Properties and other assets specified therein will be transferred to the
Company or its subsidiaries directly and not by way of a transfer of
interests in partnerships or other types of entities which, immediately prior
to the transfer, own the Properties and such other assets.
(oo) Commencing with the Firm Closing Date, after giving effect to
the Formation Transactions, the Company will be organized in conformity with
the requirements for
13
qualification as a real estate investment trust (a "REIT") under the Internal
Revenue Code of 1986, as amended and the rules and regulations thereunder
(the "Code"), and will have no earnings and profits accumulated in a non-REIT
year within the meaning of Section 857(a)(3)(B) of the Code, and the proposed
method of operation of the Company and its subsidiaries will enable the
Company to meet the requirements for taxation as a REIT under the Code
beginning with its taxable year ending December 31, 1997 and for its
subsequent taxable years except as described in the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus). All
statements in the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus) regarding the Company's qualification as
a REIT are true, complete and correct in all material respects.
(pp) (i) Each of the Properties (including, for purposes of this
paragraph, the Excluded Assets) complies with all applicable codes, laws,
ordinances and regulations (including, without limitation, building and
zoning codes and laws and regulations relating to access to the Properties)
and deed restrictions or other covenants, except for such failures to comply
that would not materially impair the value of any of the Properties or would
not result in a forfeiture or reversion of title; (ii) neither the Company
nor any of its subsidiaries has knowledge of any pending or threatened
litigation, moratorium, condemnation proceedings, zoning change, or other
similar proceeding or action that could in any manner affect the size of, use
of, improvements on, construction on, access to or availability of utilities
or other necessary services to, the Properties, except such proceedings or
actions which are not reasonably expected to, singly or in the aggregate,
result in a material adverse change in the condition (financial or
otherwise), business prospects, net worth or results of operations of the
Company and its subsidiaries, taken as a whole; (iii) all liens, charges,
encumbrances, claims, or restrictions on or affecting the properties and
assets (including the Properties) of the Company or any of its subsidiaries
that are required to be disclosed in the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus) are disclosed
therein; (iv) neither the Company, any of its subsidiaries nor any tenant of
any portion of any of the Properties is in default under any of the ground
leases or air space leases (as lessee), space leases (as lessor or lessee, as
the case may be) or other occupancy or license agreement relating to, or
under any of the mortgages or other security documents or other agreements
encumbering or otherwise recorded against, the Properties and there is no
event which, but for the passage of time or the giving of notice or both,
would constitute a default under any of such documents or agreements, except
such defaults that would not, singly or in the aggregate, result in a
material adverse change in the condition (financial or otherwise), business
prospects, net worth or results of operations of the Company and its
subsidiaries, taken as a whole; and (v) except as described in the Prospectus
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus) and except as otherwise provided by law, upon consummation of the
Formation Transactions, no tenant under any lease pursuant to which the
Company or any of its subsidiaries will lease the Properties will have an
option or right of first refusal to purchase the premises leased thereunder
or the building of which such premises are a part.
(qq) Each of the Properties (including, for purposes of this
paragraph, the Excluded Assets) is in substantial compliance with all
presently applicable provisions of the Americans with Disabilities Act and no
failure of the Company or any of its subsidiaries to comply with all
presently applicable provisions of the Americans with Disabilities Act would
result in a material adverse change in the condition (financial or
otherwise), business prospects, net worth or results of operations of the
Company and its subsidiaries, taken as a whole.
14
(rr) No real estate transfer or similar taxes are or will
become due and payable by the Company or any of its subsidiaries as a result
of the acquisition by the Company or any of its subsidiaries of any direct or
indirect interest in any Property in connection with the Formation
Transactions, other than customary documentary transfer taxes which will be
paid in full on or prior to the Firm Closing Date, or as otherwise described
in the Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(ss) At the Firm Closing Date, the Company or its subsidiaries will
have obtained title insurance on each of the Properties which constitute real
property (including ground leasehold estates) in an amount at least equal to
$______ and with a tie-in endorsement attached to each owner policy and
without coinsurance provisions.
(tt) At or prior to the Firm Closing Date, each of the transactions
constituting the Formation Transactions will have occurred in the manner
described in the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus), except for those transactions
contemplated in the Prospectus (or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus) to occur subsequent to the Firm
Closing Date.
(uu) All of the representations and warranties of the Company, PPD
and Revenue Properties contained in the Transaction Documents are true and
correct in all material respects.
Each reference in this Section 2 to "the condition (financial or
otherwise), management, business prospects, net worth, or results of
operations of the Company and its subsidiaries, taken as a whole" means the
condition (financial or otherwise), management, business prospects, net
worth, or results of operations of the Company and its subsidiaries, taken as
a whole, upon consummation of the Formation Transactions.
3. PURCHASE, SALE AND DELIVERY OF THE SECURITIES. (a) On the basis
of the representations, warranties, agreements and covenants herein contained
and subject to the terms and conditions herein set forth, the Company agrees
to issue and sell to each of the Underwriters, and each of the Underwriters,
severally and not jointly, agrees to purchase from the Company, at a purchase
price of $__ per share, the number of Firm Securities set forth opposite the
name of such Underwriter in Schedule 1 hereto. One or more certificates in
definitive form for the Firm Securities that the several Underwriters have
agreed to purchase hereunder, and in such denomination or denominations and
registered in such name or names as the Representatives request upon notice
to the Company at least 48 hours prior to the Firm Closing Date, shall be
delivered by or on behalf of the Company to the Representatives for the
respective accounts of the Underwriters, against payment by or on behalf of
the Underwriters of the purchase price therefor by wire transfer in same-day
funds (the "Wired Funds") to the account of the Company. Such delivery of
and payment for the Firm Securities shall be made at the offices of Xxxxxx &
Xxxxxxx, 000 Xxxx Xxxxxx Xxxxx, 00xx Xxxxx, Xxxxx Xxxx, Xxxxxxxxxx 00000 at
9:30 A.M., local time, on August [13], 1997, or at such other place, time or
date as the Representatives and the Company may agree upon or as the
Representatives may determine pursuant to Section 9 hereof, such time and
date of delivery against payment being herein referred to as the "Firm
Closing Date". The Company will make such certificate or certificates for
the Firm Securities available for checking and packaging by the
Representatives at the offices in New York, New York of the Company's
transfer agent or registrar or of Prudential
15
Securities Incorporated at least 24 hours prior to the Firm Closing Date.
(b) For the purpose of covering any over-allotments in connection
with the distribution and sale of the Firm Securities as contemplated by the
Prospectus, the Company hereby grants to the several Underwriters an option
to purchase, severally and not jointly, the Option Securities. The purchase
price to be paid for any Option Securities shall be the same price per share
as the price per share for the Firm Securities set forth above in paragraph
(a) of this Section 3, plus, if the purchase and sale of any Option
Securities takes place after the Firm Closing Date and after the Firm
Securities are trading "ex-dividend", an amount equal to the dividends
payable on such Option Securities. The option granted hereby may be exercised
as to all or any part of the Option Securities from time to time within
thirty days after the date of the Prospectus (or, if such 30th day shall be a
Saturday or Sunday or a holiday, on the next business day thereafter when the
New York Stock Exchange is open for trading). The Underwriters shall not be
under any obligation to purchase any of the Option Securities prior to the
exercise of such option. The Representatives may from time to time exercise
the option granted hereby by giving notice in writing or by telephone
(confirmed in writing) to the Company setting forth the aggregate number of
Option Securities as to which the several Underwriters are then exercising
the option and the date and time for delivery of and payment for such Option
Securities. Any such date of delivery shall be determined by the
Representatives but shall not be earlier than two business days or later than
five business days after such exercise of the option and, in any event, shall
not be earlier than the Firm Closing Date. The time and date set forth in
such notice, or such other time on such other date as the Representatives and
Company may agree upon or as the Representatives may determine pursuant to
Section 9 hereof, is herein called the "Option Closing Date" with respect to
such Option Securities. Upon exercise of the option as provided herein, the
Company shall become obligated to sell to each of the several Underwriters,
and, subject to the terms and conditions herein set forth, each of the
Underwriters (severally and not jointly) shall become obligated to purchase
from the Company, the same percentage of the total number of the Option
Securities as to which the several Underwriters are then exercising the
option as such Underwriter is obligated to purchase of the aggregate number
of Firm Securities, as adjusted by the Representatives in such manner as they
deem advisable to avoid fractional shares. If the option is exercised as to
all or any portion of the Option Securities, one or more certificates in
definitive form for such Option Securities, and payment therefor, shall be
delivered on the related Option Closing Date in the manner, and upon the
terms and conditions, set forth in paragraph (a) of this Section 3, except
that reference therein to the Firm Securities and the Firm Closing Date shall
be deemed, for purposes of this paragraph (b), to refer to such Option
Securities and Option Closing Date, respectively.
(c) The Company hereby acknowledges that the wire transfer by or
on behalf of the Underwriters of the purchase price for any Securities does
not constitute closing of a purchase and sale of the Securities. Only
execution and delivery of a receipt for Securities by the Underwriters
indicates completion of the closing of a purchase of the Securities from the
Company. Furthermore, in the event that the Underwriters wire funds to the
Company prior to the completion of the closing of a purchase of Securities,
the Company hereby acknowledges that until the Underwriters execute and
deliver a receipt for the Securities, by facsimile or otherwise, the Company
will not be entitled to the Wired Funds and shall return the Wired Funds to
the Underwriters as soon as practicable (by wire transfer of same-day funds)
upon demand. In the event that the closing of a purchase of Securities is
not completed and the Wired Funds are not returned by the Company to the
Underwriters on the same day the Wired Funds were received by the Company,
the Company agrees to pay to the Underwriters in respect of each
16
day the Wired Funds are not returned by it, in same-day funds, interest on
the amount of such Wired Funds in an amount representing the Underwriters'
cost of financing as reasonably determined by Prudential Securities
Incorporated.
(d) It is understood that any of you, individually and not as one
of the Representatives, may (but shall not be obligated to) make payment on
behalf of any Underwriter or Underwriters for any of the Securities to be
purchased by such Underwriter or Underwriters. No such payment shall relieve
such Underwriter or Underwriters from any of its or their obligations
hereunder.
4. OFFERING BY THE UNDERWRITERS. Upon your authorization of the
release of the Firm Securities, the several Underwriters propose to offer the
Firm Securities for sale to the public upon the terms set forth in the
Prospectus.
5. COVENANTS OF THE COMPANY. The Company covenants and agrees with
each of the Underwriters that:
(a) The Company will use its best efforts to cause the
Registration Statement, if not effective at the time of execution of this
Agreement, and any amendments thereto to become effective as promptly as
possible. If required, the Company will file the Prospectus or any Term
Sheet that constitutes a part thereof and any amendment or supplement thereto
with the Commission in the manner and within the time period required by
Rules 434 and 424(b) under the Act. During any time when a prospectus
relating to the Securities is required to be delivered under the Act, the
Company (i) will comply with all requirements imposed upon it by the Act and
the rules and regulations of the Commission thereunder to the extent
necessary to permit the continuance of sales of or dealings in the Securities
in accordance with the provisions hereof and of the Prospectus, as then
amended or supplemented, and (ii) will not file with the Commission the
Prospectus, Term Sheet or the amendment referred to in the second sentence of
Section 2(a) hereof, any amendment or supplement to such Prospectus, Term
Sheet or any amendment to the Registration Statement or any Rule 462(b)
Registration Statement unless the Representatives previously have been
advised and furnished with a copy for a reasonable period of time prior to
the proposed filing and as to which filing the Representatives shall not have
given their consent. The Company will prepare and file with the Commission,
in accordance with the rules and regulations of the Commission, promptly upon
request by the Representatives or counsel for the Underwriters, any
amendments to the Registration Statement or amendments or supplements to the
Prospectus that may be necessary or advisable in connection with the
distribution of the Securities by the several Underwriters, and will use its
best efforts to cause any such amendment to the Registration Statement to be
declared effective by the Commission as promptly as possible. The Company
will advise the Representatives, promptly after receiving notice thereof, of
the time when the Registration Statement or any amendment thereto has been
filed or declared effective or the Prospectus or any amendment or supplement
thereto has been filed and will provide evidence satisfactory to the
Representatives of each such filing or effectiveness.
(b) The Company will advise the Representatives, promptly after
receiving notice or obtaining knowledge thereof, of (i) the issuance by the
Commission of any stop order suspending the effectiveness of the Original
Registration Statement or any Rule 462(b) Registration Statement or any
amendment thereto or any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or any amendment or supplement
thereto,
17
(ii) the suspension of the qualification of the Securities for offering or
sale in any jurisdiction, (iii) the institution, threatening or contemplation
of any proceeding for any such purpose or (iv) any request made by the
Commission for amending the Original Registration Statement or any Rule
462(b) Registration Statement, for amending or supplementing the Prospectus
or for additional information. The Company will use its best efforts to
prevent the issuance of any such stop order and, if any such stop order is
issued, to obtain the withdrawal thereof as promptly as possible.
(c) The Company will arrange for the qualification of the
Securities for offering and sale under the securities or blue sky laws of
such jurisdictions as the Representatives may designate and will continue
such qualifications in effect for as long as may be necessary to complete the
distribution of the Securities, PROVIDED, HOWEVER, that in connection
therewith the Company shall not be required to qualify as a foreign
corporation or to execute a general consent to service of process in any
jurisdiction.
(d) If, at any time prior to the later of (i) the final date when
a prospectus relating to the Securities is required to be delivered under the
Act or (ii) the Option Closing Date, any event occurs as a result of which
the Prospectus, as then amended or supplemented, would include any 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, or if for any other reason it is
necessary at any time to amend or supplement the Prospectus to comply with
the Act or the rules or regulations of the Commission thereunder, the Company
will promptly notify the Representatives thereof and, subject to Section 5(a)
hereof, will prepare and file with the Commission, at the Company's expense,
an amendment to the Registration Statement or an amendment or supplement to
the Prospectus that corrects such statement or omission or effects such
compliance.
(e) The Company will, without charge, provide (i) to the
Representatives and to counsel for the Underwriters a conformed copy of the
registration statement originally filed with respect to the Securities and
each amendment thereto (in each case including exhibits thereto) or any Rule
462(b) Registration Statement, certified by the Secretary or an Assistant
Secretary of the Company to be true and complete copies thereof as filed with
the Commission by electronic transmission, (ii) to each other Underwriter, a
conformed copy of such registration statement or any Rule 462(b) Registration
Statement and each amendment thereto (in each case without exhibits thereto)
and (iii) so long as a prospectus relating to the Securities is required to
be delivered under the Act, as many copies of each Preliminary Prospectus or
the Prospectus or any amendment or supplement thereto as the Representatives
may reasonably request; without limiting the application of clause (iii) of
this sentence, the Company, not later than (A) 6:00 P.M., New York City time,
on the date of determination of the public offering price, if such
determination occurred at or prior to 10:00 A.M., New York City time, on such
date or (B) 2:00 P.M., New York City time, on the business day following the
date of determination of the public offering price, if such determination
occurred after 10:00 A.M., New York City time, on such date, will deliver to
the Underwriters, without charge, as many copies of the Prospectus and any
amendment or supplement thereto as the Representatives may reasonably request
for purposes of confirming orders that are expected to settle on the Firm
Closing Date. The Company will provide or cause to be provided to each of
the Representatives, and to each Underwriter that so requests in writing, a
copy of each report on Form SR filed by the Company as required by Rule 463
under the Act.
18
(f) The Company, as soon as practicable, will make generally
available to its securityholders and to the Representatives a consolidated
earnings statement of the Company and its subsidiaries that satisfies the
provisions of Section 11(a) of the Act and Rule 158 thereunder.
(g) The Company will apply the net proceeds from the sale of the
Securities as set forth under "Use of Proceeds" in the Prospectus.
(h) The Company will not, directly or indirectly, without the
prior written consent of Prudential Securities Incorporated, on behalf of the
Underwriters, offer, sell, offer to sell, contract to sell, pledge, grant any
option to purchase or otherwise sell or dispose (or announce any offer, sale,
offer of sale, contract of sale, pledge, grant of any option to purchase or
other sale or disposition) of any shares of Common Stock or other capital
stock of the Company or any securities convertible into, or exchangeable or
exercisable for, shares of Common Stock or other capital stock of the Company
for a period of 180 days after the date hereof, except (A) pursuant to this
Agreement, (B) pursuant to a dividend reinvestment plan of the Company, (C)
pursuant to the Company's 1997 Stock Incentive Plan, and (D) in connection
with the acquisition by the Company of real property or interests in entities
holding real property, PROVIDED that the recipient or transferee of such
securities or interests agrees in writing to be subject to the lock-up
contained in this Section 5(h) (without giving effect to clauses (A), (B),
(C) and (D)) for a period ending on the date that is 180 days after the date
hereof.
(i) The Company will not cause any shelf or other registration
statement for the resale of Common Stock of the Company owned by Revenue
Properties, PPD or any of their corporate affiliates, to be filed with the
Commission for a period of three years from the Firm Closing Date without the
prior written consent of Prudential Securities Incorporated; provided,
however, that the filing of a registration statement to cover the resale of
Common Stock in connection with the exercise of remedies pursuant to a pledge
by Revenue Properties or PPD of all of its respective shares of Common Stock
to an affiliate of Prudential Securities Incorporated or its transferees
shall be permitted.
(j) The Company will not, directly or indirectly, (i) take any
action designed to cause or to result in, or that has constituted or which
might reasonably be expected to constitute, the stabilization or manipulation
of the price of any security of the Company to facilitate the sale or resale
of the Securities or (ii) (A) sell, bid for, purchase, or pay anyone any
compensation for soliciting purchases of, the Securities or (B) pay or agree
to pay to any person any compensation for soliciting another to purchase any
other securities of the Company.
(k) The Company will obtain the agreements described in Section
7(f) hereof prior to the Firm Closing Date.
(l) If at any time during the 25-day period after the Registration
Statement becomes effective or the period prior to the Option Closing Date,
any rumor, publication or event relating to or affecting the Company shall
occur as a result of which in your opinion the market price of the Common
Stock has been or is likely to be materially affected (regardless of whether
such rumor, publication or event necessitates a supplement to or amendment of
the Prospectus), subject to the Company's policy on issuing public
statements, the Company will, after notice from you advising the Company to
the effect set forth above, forthwith prepare,
19
consult with you concerning the substance of, and disseminate a press release
or other public statement, reasonably satisfactory to you, responding to or
commenting on such rumor, publication or event.
(m) If the Company elects to rely on Rule 462(b), the Company
shall both file a Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) and pay the applicable fees in accordance with
Rule 111 promulgated under the Act by the earlier of (i) 10:00 P.M. Eastern
time on the date of this Agreement and (ii) the time confirmations are sent
or given, as specified by Rule 462(b)(2).
(n) The Company will cause the Securities to be duly authorized
for listing by the New York Stock Exchange prior to the Firm Closing Date,
subject to official notice of issuance.
(o) The Company will use its best efforts to meet the requirements
to qualify, commencing with the taxable year ending December 31, 1997, as a
REIT under the Code and will file with its United States federal income tax
return for each taxable year commencing with the taxable year ending December
31, 1997, the election to be a REIT as described in Section 856(c)(1) of the
Code.
6. EXPENSES. The Company will pay all costs and expenses incident to
the performance of its obligations under this Agreement, whether or not the
transactions contemplated herein are consummated or this Agreement is
terminated pursuant to Section 11 hereof, including all costs and expenses
incident to (i) the printing or other production of documents with respect to
the transactions, including any costs of printing the registration statement
originally filed with respect to the Securities and any amendment thereto,
any Rule 462(b) Registration Statement, any Preliminary Prospectus and the
Prospectus and any amendment or supplement thereto, this Agreement and any
blue sky memoranda, (ii) all arrangements relating to the delivery to the
Underwriters of copies of the foregoing documents, (iii) the fees and
disbursements of the counsel, the accountants and any other experts or
advisors retained by the Company, (iv) preparation, issuance and delivery to
the Underwriters of any certificates evidencing the Securities, including
transfer agent's and registrar's fees, (v) the qualification of the
Securities under state securities and blue sky laws, including filing fees
and fees and disbursements of counsel for the Underwriters relating thereto,
(vi) the filing fees of the Commission and the National Association of
Securities Dealers, Inc. relating to the Securities, (vii) any listing of the
Securities on the New York Stock Exchange, (viii) any meetings with
prospective investors in the Securities (other than as shall have been
specifically approved by the Representatives to be paid for by the
Underwriters) and (ix) advertising relating to the offering of the Securities
(other than as shall have been specifically approved by the Representatives
to be paid for by the Underwriters). If the sale of the Securities provided
for herein is not consummated because any condition to the obligations of the
Underwriters set forth in Section 7 hereof is not satisfied, because this
Agreement is terminated pursuant to Section 11 hereof or because of any
failure, refusal or inability on the part of the Company to perform all
obligations and satisfy all conditions on its part to be performed or
satisfied hereunder other than by reason of a default by any of the
Underwriters, the Company will reimburse the Underwriters severally upon
demand for all out-of-pocket expenses (including reasonable counsel fees and
disbursements) that shall have been incurred by them in connection with the
proposed purchase and sale of the Securities. The Company shall not in any
event be liable to any of the Underwriters for the loss of anticipated
profits from the
20
transactions covered by this Agreement.
7. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The obligations of
the several Underwriters to purchase and pay for the Firm Securities shall be
subject, in the Representatives' sole discretion, to the accuracy of the
representations and warranties of the Company contained herein as of the date
hereof and as of the Firm Closing Date, as if made on and as of the Firm
Closing Date, to the accuracy of the statements of the Company's officers
made pursuant to the provisions hereof, to the performance by the Company of
its covenants and agreements hereunder and to the following additional
conditions:
(a) If the Original Registration Statement or any amendment
thereto filed prior to the Firm Closing Date has not been declared effective
as of the time of execution hereof, the Original Registration Statement or
such amendment and, if the Company has elected to rely upon Rule 462(b), the
Rule 462(b) Registration Statement shall have been declared effective not
later than the earlier of (i) 11:00 A.M., New York City time, on the date on
which the amendment to the registration statement originally filed with
respect to the Securities or to the Registration Statement, as the case may
be, containing information regarding the initial public offering price of the
Securities has been filed with the Commission and (ii) the time confirmations
are sent or given as specified by Rule 462(b)(2), or with respect to the
Original Registration Statement, or such later time and date as shall have
been consented to by the Representatives; if required, the Prospectus or any
Term Sheet that constitutes a part thereof and any amendment or supplement
thereto shall have been filed with the Commission in the manner and within
the time period required by Rules 434 and 424(b) under the Act; no stop order
suspending the effectiveness of the Registration Statement or any amendment
thereto shall have been issued, and no proceedings for that purpose shall
have been instituted or threatened or, to the knowledge of the Company or the
Representatives, shall be contemplated by the Commission; and the Company
shall have complied with any request of the Commission for additional
information (to be included in the Registration Statement or the Prospectus
or otherwise).
(b) The Representatives shall have received an opinion, dated the
Firm Closing Date, of Xxxxxx & Xxxxxxx, counsel for the Company and its
subsidiaries, to the effect that:
(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Maryland and is duly qualified to transact business as a foreign
corporation and is in good standing under the laws of the States of
California and Delaware, and based solely on certificates from public
officials, such counsel confirms that the Company is duly qualified to
transact business as a foreign corporation and is in good standing
under the laws of the States of Florida, Kentucky, Nevada, New Mexico,
Oregon, Tennessee and Washington.
(ii) the Company and each of its subsidiaries have corporate or
partnership power (as the case may be) to own or lease their
respective properties and conduct their respective businesses as
described in the Registration Statement and the Prospectus, and the
Company has corporate or partnership power (as the case may be) to
enter into this Agreement and to carry out all the terms and
provisions hereof to be carried out by it;
21
(iii) the issued shares of capital stock of each of the
Company's subsidiaries have been duly authorized and validly issued,
are fully paid and nonassessable and, except as otherwise set forth in
the Prospectus, are owned of record and, to the knowledge of such
counsel, beneficially by the Company free and clear of any perfected
security interests or any other security interests, liens,
encumbrances, equities or claims. The issued shares of capital stock
of the Company have been duly authorized and validly issued, are fully
paid and nonassessable and are owned of record and, to the knowledge
of such counsel, beneficially by the Company free and clear of any
perfected security interests or any other security interests, liens,
encumbrances, equities or claims;
(iv) the authorized, issued and outstanding capital stock of the
Company is as set forth under the caption "Capitalization" in the
Prospectus; all necessary and proper corporate proceedings have been
taken in order to authorize validly the Common Stock referred to
therein; all outstanding shares of Common Stock (including the Firm
Securities, when issued and paid for by the Underwriters in accordance
with the terms of this Agreement) have been (or, in the case of the
Firm Securities, will be) duly and validly issued, are fully paid and
nonassessable, have been issued in compliance with the registration
requirements of federal securities laws (or pursuant to an exemption
therefrom), were not, to the knowledge of such counsel, issued in
violation of or subject to, under the Company's charter or Maryland
law or any agreement to which the Company is a party and which is
known to such counsel based on a certificate of the Company's Chairman
of the Board of Directors and its President and Chief Executive
Officer, any preemptive rights or other rights to subscribe for or
purchase any securities, and conform to the description thereof
contained in the Prospectus; to the knowledge of such counsel, no
holders of outstanding shares of capital stock of the Company are
entitled under the Company's charter or Maryland law or any agreement
to which the Company is a party and which is known to such counsel
based on a certificate of the Company's Chairman of the Board of
Directors and its President and Chief Executive Officer, as such, to
any preemptive or other rights to subscribe for any of the Firm
Securities; and to the knowledge of such counsel, no holders of
securities of the Company are entitled to have such securities
registered under the Registration Statement;
(v) except as disclosed in the Registration Statement and the
Prospectus, to the knowledge of such counsel there are no outstanding
(A) securities, equity interests or obligations of the Company or any
of its subsidiaries convertible into or exchangeable for any capital
stock or equity interests (as the case may be) of the Company or any
such subsidiary, (B) warrants, rights or options to subscribe for or
purchase from the Company to any such subsidiary any such capital
stock or equity interests or any such convertible or exchangeable
securities, equity interests or obligations, or (C) obligations of the
Company or any such subsidiary to issue any shares of capital stock,
equity interests, any such convertible or exchangeable securities,
equity interests or obligations, or any such warrants, rights or
options;
(vi) the statements set forth under the headings "Description of
Capital
22
Stock", "Structure and Formation Transactions of the Company",
"Certain Relationships and Related Transactions", "Certain Provisions
of Maryland Law and of the Company's Charter and Bylaws", "Shares
Available for Future Sale", "Federal Income Tax Consequences" and
"ERISA Considerations" in the Prospectus, insofar as such statements
describe statutes, rules or regulations, legal conclusions with
respect to their application or provisions of the organizational
documents of the Company, have been reviewed by such counsel, are
correct in all material respects and present fairly the information
required to be disclosed therein;
(vii) the execution and delivery of this Agreement have been
duly authorized by all necessary corporate or partnership (as the case
may be) action of the Company, and this Agreement has been duly
executed and delivered by the Company, and is the valid and binding
agreement of the Company, enforceable against the Company in
accordance with its terms, subject to the effect of bankruptcy,
insolvency, moratorium, fraudulent conveyance, reorganization and
similar laws relating to creditors' rights generally, to the
application of equitable principles in any proceeding, whether at law
or in equity, as limited by the unenforceability under certain
circumstances under law or court decisions of provisions providing for
the indemnification of or contribution to a party with respect to a
liability where such indemnification or contribution is contrary to
public policy and to the extent that enforceability of such provisions
may be limited due to the existence of an untrue statement of a
material fact in the Prospectus or the Registration Statement or
omission to state a material fact therein necessary to make the
statements in the Prospectus or the Registration Statement,
respectively, not misleading, it being understood that such counsel
need express no view with respect thereto other than as set forth in
the paragraph immediately following clause (xvii) below;
(viii) to the knowledge of such counsel based on the
representations of the Company contained herein, review of the letters
of attorneys delivered to the Company's auditors with respect to the
existence of contingent liabilities of the Company and a certificate
of the chief executive officer and the principal financial or
accounting officer of the Company, (A) no legal or governmental
proceedings are pending to which the Company or any of its
subsidiaries is a party or to which the property of the Company or any
of its subsidiaries is subject that are required to be described in
the Registration Statement or the Prospectus and are not described
therein, and no such proceedings have been threatened against the
Company or any of its subsidiaries or with respect to any of their
respective properties and (B) no contract or other document is
required to be disclosed in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement
that is not disclosed therein or filed as required;
(ix) the issuance, offering and sale of the Securities to the
Underwriters by the Company pursuant to this Agreement, the compliance
by the Company with the other provisions of this Agreement and the
consummation of the other transactions herein contemplated do not (A)
require the consent, approval, authorization, registration or
qualification of or with any federal, or California, New York or
Maryland governmental authority, except such as have
23
been obtained under the Act and such as may be required under state
securities or blue sky laws, or (B) conflict with or result in a
breach or violation of any of the terms and provisions of, or
constitute a default under, any indenture, mortgage, deed of trust,
lease or other agreement or instrument to which the Company or any of
its subsidiaries is a party or by which the Company or any of its
subsidiaries or any of their respective properties are bound
identified by an officer of the Company as material to the Company or
any of its subsidiaries (the "Material Agreements"), or the charter
documents or by-laws or certificate of limited partnership or
partnership agreement (as the case may be) of the Company or any of
its subsidiaries, or any provision of any California, New York or
Maryland statute, rule or regulation (other than federal or state
securities laws, which are addressed elsewhere herein), or court
orders specifically directed to the Company and identified by an
officer of the Company as material to the Company or any of its
subsidiaries (the "Court Orders");
(x) each of the Company and its subsidiaries has the corporate
or partnership power (as the case may be) to enter into and deliver
(as applicable) the agreements and instruments set forth on Schedule 4
hereto (the "Operative Documents") to which it is party and to carry
out all the terms and provisions thereof to be carried out by it. The
execution and delivery of the Operative Documents have been duly
authorized by the Company and its subsidiaries (as applicable) and the
Operative Documents have been or will be on the Firm Closing Date duly
executed and delivered by the Company and its subsidiaries (as
applicable), and each is the valid and binding agreement of the
Company and its subsidiaries (as applicable), enforceable against the
Company and its subsidiaries (as applicable) in accordance with its
terms, subject to the effect of bankruptcy, insolvency, moratorium,
fraudulent conveyance, reorganization and similar laws relating to
creditors' rights generally and to the application of equitable
principles in any proceeding, whether at law or in equity;
(xi) the execution and delivery of the Operative Documents, the
compliance by the Company and its subsidiaries (as applicable) with
their respective obligations under the Operative Documents and the
consummation of the Formation Transactions do not (A) require the
consent, approval, authorization, registration or qualification of or
with any federal, California, New York or Maryland governmental
authority, except such as have been obtained under the Act, such as
may be required under state securities or blue sky laws and, if the
registration statement filed with respect to the Securities (as
amended) is not effective under the Act as of the time of execution
hereof, such as may be required (and shall be obtained as provided in
this Agreement) under the Act, or (B) conflict with or result in a
breach or violation of any of the terms and provisions of, or
constitute a default under, any Material Agreement, or the charter
documents or by-laws or certificate of limited partnership or
partnership agreement (as the case may be) of the Company or any of
its subsidiaries, or any provision of any California, New York,
Maryland, Florida, Kentucky, Nevada, New Mexico, Oregon, Tennessee or
Washington statute, rule or regulation (other than federal or state
securities laws, which are addressed elsewhere herein), or any Court
Order;
24
(xii) the Company is not, and after giving effect to the
Formation Transactions and the other transactions contemplated by this
Agreement will not be, subject to registration as an investment
company under the Investment Company Act of 1940, as amended;
(xiii) the transfer of interests or other assets pursuant to
the Transfer Documents does not violate the articles or certificate of
incorporation, by-laws, limited liability company agreement,
declaration of trust, certificate of limited partnership, partnership
agreement or other organizational documents, as the case may be, of
PPD, the Company or any of its subsidiaries. Subject to certain
assumptions acceptable to the Underwriters with respect to due
authorization, execution and delivery by certain parties to the
Transfer Documents, each of the Transfer Documents has been duly
authorized, executed and delivered by the respective party and is a
valid and binding agreement of the respective party, enforceable in
accordance with its terms, subject to the effect of bankruptcy,
insolvency, moratorium, fraudulent conveyance, reorganization and
similar laws relating to creditors rights generally and to the
application of equitable principles in any proceeding, whether at law
or in equity;
(xiv) the Registration Statement is effective under the Act;
any required filing of the Prospectus, or any Term Sheet that
constitutes a part thereof, pursuant to Rules 424(b) and 434 has been
made in the manner and within the time period required thereby; and
based upon such counsel's due inquiry made to the Office of the
Secretary of the Commission, no stop order suspending the
effectiveness of the Registration Statement or any amendment thereto
has been issued, and no proceedings for that purpose have been
instituted or threatened or, to the knowledge of such counsel, are
contemplated by the Commission;
(xv) the Registration Statement originally filed with respect to
the Securities and each amendment thereto, any Rule 462(b)
Registration Statement and the Prospectus (in each case, other than
the financial statements, schedules and other financial and
statistical data contained therein, as to which such counsel need
express no opinion) comply as to form in all material respects with
the applicable requirements of the Act and the rules and regulations
of the Commission thereunder;
(xvi) if the Company elects to rely on Rule 434, the
Prospectus is not "materially different", as such term is used in Rule
434, from the prospectus included in the Registration Statement at the
time of its effectiveness or an effective post-effective amendment
thereto (including such information that is permitted to be omitted
pursuant to Rule 430A); and
(xvii) upon completion of the Formation Transactions, the
Company will be organized in conformity with the requirements for
qualification as a real estate investment trust under the Code, and
the proposed method of operation of the Company as described in the
Registration Statement and the Prospectus and a certificate of a
responsible officer of the Company will enable the Company to meet the
requirements for taxation as a real estate investment trust under the
Code beginning with the year ended December 31, 1997.
25
Such counsel shall also state that they have participated in conferences
with officers and other representatives of the Company, representatives of
the independent public accountants for the Company, and representatives of
the Underwriters, at which the contents of the Registration Statement and the
Prospectus and related matters were discussed and, although such counsel is
not passing upon, and does not assume any responsibility for, the accuracy,
completeness or fairness of the statements contained in the Registration
Statement and the Prospectus and has not made any independent check or
verification thereof, during the course of such participation (relying as to
materiality to a large extent upon the statements of officers and other
representatives of the Company) no facts came to the attention of such
counsel that caused such counsel to believe that the Registration Statement,
at the time it became effective, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or that the
Prospectus, as of its date or as of the Firm Closing Date, contained an
untrue statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; it being understood that such counsel
need express no belief with respect to the financial statements, schedules
and other financial data included in the Registration Statement or the
Prospectus.
In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Company and public officials. As to matters involving the
application of laws of any jurisdiction other than the State of California,
the State of New York, the Delaware General Corporation Law and the Delaware
Revised Limited Partnership Act or the United States, to the extent
satisfactory in form and scope to counsel for the Underwriters, such counsel
may rely upon the opinions of Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx, Baltimore,
Maryland, a copy of which shall be delivered to the Underwriters and their
counsel and which must be in form and scope satisfactory to the Underwriters
and their counsel. As to matters involving the application of laws of
Florida, Kentucky, Nevada, New Mexico, Oregon, Tennessee and Washington,
portions of the above opinions may be rendered directly by local counsel to
the Company in such jurisdictions, provided that the identity of such counsel
and the form and scope of such opinions must be satisfactory to the
Underwriters and their counsel.
References to the Registration Statement and the Prospectus in this
paragraph (b) shall include any amendment or supplement thereto at the date
of such opinion.
(c) The Representatives shall have received an opinion, dated
the Firm Closing Date, of Pryor, Cashman, Xxxxxxx & Xxxxx, counsel for the
Underwriters, with respect to the issuance and sale of the Firm Securities,
the Registration Statement and the Prospectus, and such other related matters
as the Representatives may reasonably require, and the Company shall have
furnished to such counsel such documents as they may reasonably request for
the purpose of enabling them to pass upon such matters.
(d) The Representatives shall have received from KPMG Peat
Marwick LLP a letter or letters dated, respectively, the date hereof and the
Firm Closing Date, in form and substance satisfactory to the Representatives,
to the effect that:
(i) they are independent accountants with respect to the
Company and its consolidated subsidiaries, Pan Pacific Development
Properties, Chico
26
Crossroads, Monterey Plaza, Fairmont Shopping Center and
Lakewood Shopping Center within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) in their opinion, the financial statements and
schedules and pro forma condensed combined financial statements
audited by them and included in the Registration Statement and the
Prospectus comply in form in all material respects with the
applicable accounting requirements of the Act and the related
published rules and regulations;
(iii) on the basis of a reading of the latest available
interim unaudited financial statements of the Company, Pan Pacific
Development Properties, Chico Crossroads, Monterey Plaza, Fairmont
Shopping Center and Lakewood Shopping Center, carrying out certain
specified procedures (which do not constitute an examination made in
accordance with generally accepted auditing standards) that would not
necessarily reveal matters of significance with respect to the
comments set forth in this paragraph (iii), a reading of the minute
books of the stockholders, the board of directors and any committees
thereof of the Company and PPD and its subsidiaries and inquiries of
certain officials of the Company and PPD and its subsidiaries who have
responsibility for financial and accounting matters, nothing came to
their attention that caused them to believe that:
(A) the unaudited consolidated condensed financial
statements of the Company, Pan Pacific Development Properties, Chico
Crossroads, Monterey Plaza, Fairmont Shopping Center and Lakewood
Shopping Center included in the Registration Statement and the
Prospectus do not comply in form in all material respects with the
applicable accounting requirements of the Act and the related
published rules and regulations thereunder or are not in conformity
with generally accepted accounting principles applied on a basis
substantially consistent with that of the audited consolidated
financial statements included in the Registration Statement and the
Prospectus;
(B) at a specific date (not more than five business
days prior to the date of such letter), there were any increases in
indebtedness or decrease in owner's equity of Pan Pacific Development
Properties as compared with amounts shown in the March 31, 1997
unaudited combined balance sheet included in the Registration
Statement and the Prospectus, or for the period from April 1, 1997 to
June 30, 1997, there were any decreases, as compared with the
corresponding period of the preceding year, in net income, total
revenue or funds from operations of Pan Pacific Development
Properties, except in all instances for increases or decreases which
the Registration Statement and the Prospectus disclose have occurred
or may occur; and
(C) at a specific date (not more than five business
days prior to the date of such letter), with respect to Pan Pacific
Development Properties, there were any increases in borrowings as
compared with amounts shown in the March 31, 1997 balance sheet
included in the Registration Statement and the Prospectus, except in
all instances for increases which the Registration
27
Statement and the Prospectus disclose have occurred or may occur.
(iv) they have carried out certain specified procedures, not
constituting an audit, with respect to certain amounts, percentages
and financial information that are derived from the general accounting
records of the Company, Pan Pacific Development Properties, Chico
Crossroads, Monterey Plaza, Fairmont Shopping Center and Lakewood
Shopping Center and are included in the Registration Statement and the
Prospectus and have compared such amounts, percentages and financial
information with such records of the Company, Pan Pacific Development
Properties, Chico Crossroads, Monterey Plaza, Fairmont Shopping Center
and Lakewood Shopping Center and with information derived from such
records and have found them to be in agreement, excluding any
questions of legal interpretation; and
(v) on the basis of a reading of the unaudited pro forma
condensed combined financial statements included in the Registration
Statement and the Prospectus, carrying out certain specified
procedures that would not necessarily reveal matters of significance
with respect to the comments set forth in this paragraph (v),
inquiries of certain officials of the Company who have responsibility
for financial and accounting matters and proving the arithmetic
accuracy of the application of the pro forma adjustments to the
historical amounts in the unaudited pro forma condensed combined
financial statements, nothing came to their attention that caused them
to believe that the unaudited pro forma condensed combined financial
statements do not comply as to form in all material respects with the
applicable accounting requirements of Rule 11-02 of Regulation S-X or
that the pro forma adjustments have not been properly applied to the
historical amounts in the compilation of such statements.
In the event that the letters referred to above set forth any such changes,
decreases or increases, it shall be a further condition to the obligations of
the Underwriters that (A) such letters shall be accompanied by a written
explanation of the Company as to the significance thereof, unless the
Representatives deem such explanation unnecessary, and (B) such changes,
decreases or increases do not, in the sole judgment of the Representatives, make
it impractical or inadvisable to proceed with the purchase and delivery of the
Securities as contemplated by the Registration Statement, as amended as of the
date hereof.
References to the Registration Statement and the Prospectus in this
paragraph (d) with respect to either letter referred to above shall include any
amendment or supplement thereto at the date of such letter.
(e) The Representatives shall have received a certificate, dated the
Firm Closing Date, of the chief executive officer and the principal financial or
accounting officer of the Company to the effect that:
(i) the representations and warranties of the Company in this
Agreement are true and correct as if made on and as of the Firm
Closing Date; the Registration Statement, as amended as of the Firm
Closing Date, does not include any untrue statement of a material fact
or omit to state any material fact necessary to make the statements
therein not misleading, and the Prospectus, as
28
amended or supplemented as of the Firm Closing Date, does not include
any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading; and
the Company has performed all covenants and agreements and satisfied
all conditions on its part to be performed or satisfied at or prior
to the Firm Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement or any amendment thereto has been issued, and
no proceedings for that purpose have been instituted or threatened or,
to the best of the Company's knowledge, are contemplated by the
Commission; and
(iii) subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus,
neither the Company nor any of its subsidiaries has sustained any
material loss or interference with their respective businesses or
properties from fire, flood, hurricane, accident or other calamity,
whether or not covered by insurance, or from any labor dispute or any
legal or governmental proceeding, and there has not been any material
adverse change, or any development involving a prospective material
adverse change, in the condition (financial or otherwise), management,
business prospects, net worth or results of operations of the Company
and its subsidiaries, taken as a whole, except in each case as
described in or contemplated by the Registration Statement and the
Prospectus (exclusive of any amendment or supplement thereto).
(f) The Representatives shall have received from PPD and
the executive officers of the Company agreements to the effect that such
person will not, directly or indirectly, without the prior written consent of
Prudential Securities Incorporated, on behalf of the Underwriters, offer,
sell, offer to sell, contract to sell, pledge, grant any option to purchase
or otherwise sell or dispose (or announce any offer, sale, offer of sale,
contract of sale, pledge, grant of an option to purchase or other sale or
disposition) of any shares of Common Stock or other capital stock of the
Company or any securities convertible into, or exchangeable or exercisable
for, shares of Common Stock or other capital stock of the Company, for a
period of three years after the date of this Agreement; provided, however,
that PPD's agreement shall apply only to 2,932,802 shares of Common Stock
owned by it and providing that a pledge by PPD of all of its shares of Common
Stock to an affiliate of Prudential Securities Incorporated shall be
permitted.
(g) On or before the Firm Closing Date, the
Representatives and counsel for the Underwriters shall have received such
further certificates, documents or other information as they may have
reasonably requested from the Company.
(h) Prior to the commencement of the offering of the
Securities, the Securities shall have been approved for listing on the New
York Stock Exchange, subject to official notice of issuance.
(i) The Formation Transactions shall have been
consummated or shall occur simultaneously with the closing of the purchase
and sale of the Firm Securities hereunder.
29
(j) On or before the Firm Closing Date, all necessary consents to
the Formation Transactions shall have been obtained.
(k) On or before the Firm Closing Date, the Company shall have
delivered to you with respect to each of the Properties (including, for
purposes of the applicable provisions of this paragraph, the Excluded Assets)
copies of:
(i) an owner's policy or policies of title insurance
insuring that the Company owns fee simple title to the real property (other
than the Partially-Owned Properties or the land in which the Company is
acquiring a ground leasehold estate) comprising the Properties, in an
amount not less than the fair market value, which policies shall be issued
by a title insurance company acceptable to (the "Title Company"), which
policies shall include tie-in endorsements, but shall not contain any
coinsurance provisions. The Title Company shall take as exception to title
only those exceptions acceptable to the Representatives;
(ii) all third party consents, waivers, licenses,
permits, authorizations, agreements, certificates and the like necessary
to operate each of the Properties;
(iii) policies or certificates of insurance (including
earthquake insurance) relating to each of the Properties evidencing
coverages and in amounts as are prudent and customary in the businesses in
which they are or will be engaged;
(iv) UCC, judgment and tax lien searches confirming
that the real and personal property comprising the Properties is subject
to no liens, charges, encumbrances, claims or restrictions;
(v) such affidavits, certificates and instruments of
indemnification as shall reasonably be required to induce the Title Company
to issue the policies contemplated in clause (i) of this Section 7(k);
(vii) checks payable to the appropriate public officials
in payment of all recording costs and transfer taxes (or checks or wire
transfers to the Title Company in respect of such amounts) due in respect
of the recording of any instruments to be recorded in connection with the
Formation Transactions, together with a check or wire transfer for the
Title Company in payment of the Title Company's premium, search and
examination charges, survey costs and any other amounts due in connection
with the issuance of its policy; and
(viii) if any of the Properties is subject to an existing
mortgage, a current payoff letter from the holder of such existing mortgage
indicating the principal amount required to satisfy all amounts then
secured by such existing mortgage and the additional amount required for
each day after the date of such letter necessary to satisfy all obligations
secured thereby.
All opinions, certificates, letters and documents delivered pursuant to
this Agreement will comply with the provisions hereof only if they are
reasonably satisfactory in all material respects to the Representatives and
counsel for the Underwriters. The Company shall furnish to the
30
Representatives such conformed copies of such opinions, certificates, letters
and documents in such quantities as the Representatives and counsel for the
Underwriters shall reasonably request.
The respective obligations of the several Underwriters to purchase and
pay for any Option Securities shall be subject, in their discretion, to each
of the foregoing conditions to purchase the Firm Securities, except that all
references to the Firm Securities and the Firm Closing Date shall be deemed
to refer to such Option Securities and the related Option Closing Date,
respectively.
8. INDEMNIFICATION AND CONTRIBUTION. (a) The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Securities Exchange Act of 1934 (the "Exchange Act"),
against any losses, claims, damages or liabilities, joint or several, to
which such Underwriter or such controlling person may become subject under
the Act or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement made
by the Company in Section 2 of this Agreement,
(ii) any untrue statement or alleged untrue statement of any
material fact contained in (A) the Registration Statement or any
amendment thereto, any Preliminary Prospectus or the Prospectus or any
amendment or supplement thereto or (B) any application or other
document, or any amendment or supplement thereto, executed by the
Company or based upon written information furnished by or on behalf of
the Company filed in any jurisdiction in order to qualify the
Securities under the securities or blue sky laws thereof or filed with
the Commission or any securities association or securities exchange
(each an "Application"),
(iii) the omission or alleged omission to state in the
Registration Statement or any amendment thereto, any Preliminary
Prospectus or the Prospectus or any amendment or supplement thereto,
or any Application a material fact required to be stated therein or
necessary to make the statements therein not misleading or
(iv) any untrue statement or alleged untrue statement of any
material fact contained in any audio or visual materials used in
connection with the marketing of the Securities, including, without
limitation, slides, videos, films and tape recordings,
and will reimburse, as incurred, each Underwriter and each such controlling
person for any legal or other expenses reasonably incurred by such
Underwriter or such controlling person in connection with investigating,
defending against or appearing as a third-party witness in connection with
any such loss, claim, damage, liability or action; PROVIDED, HOWEVER, that
the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon any untrue
statement or alleged untrue statement or
31
omission or alleged omission made in such registration statement or any
amendment thereto, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto or any Application in reliance upon and in
conformity with written information furnished to the Company by such
Underwriter through the Representatives specifically for use therein; and
PROVIDED, FURTHER, that the Company will not be liable to any Underwriter or
any person controlling such Underwriter with respect to any such untrue
statement or omission made in any Preliminary Prospectus that is corrected in
the Prospectus (or any amendment or supplement thereto) if the person
asserting any such loss, claim, damage or liability purchased Securities from
such Underwriter but was not sent or given a copy of the Prospectus (as
amended or supplemented) at or prior to the written confirmation of the sale
of such Securities to such person in any case where such delivery of the
Prospectus (as amended or supplemented) is required by the Act, unless such
failure to deliver the Prospectus (as amended or supplemented) was a result
of noncompliance by the Company with Section 5(d) and (e) of this Agreement.
This indemnity agreement will be in addition to any liability which the
Company may otherwise have. The Company will not, without the prior written
consent of the Underwriter or Underwriters purchasing, in the aggregate, more
than fifty percent (50%) of the Securities, settle or compromise or consent
to the entry of any judgment in any pending or threatened claim, action, suit
or proceeding in respect of which indemnification may be sought hereunder
(whether or not any such Underwriter or any person who controls any such
Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act is a party to such claim, action, suit or proceeding), unless
such settlement, compromise or consent includes an unconditional release of
all of the Underwriters and such controlling persons from all liability
arising out of such claim, action, suit or proceeding.
(b) Each Underwriter, severally and not jointly, will indemnify
and hold harmless the Company, each of its directors, each of its officers
who signed the Registration Statement and each person, if any, who controls
the Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act against any losses, claims, damages or liabilities to which the
Company or any such director, officer or controlling person may become
subject under the Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
(i) any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement or any amendment thereto, any
Preliminary Prospectus or the Prospectus or any amendment or supplement
thereto, or any Application or (ii) the omission or the alleged omission to
state therein a material fact required to be stated in the Registration
Statement or any amendment thereto, any Preliminary Prospectus or the
Prospectus or any amendment or supplement thereto, or any Application or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such
Underwriter through the Representatives specifically for use therein; and,
subject to the limitation set forth immediately preceding this clause, will
reimburse, as incurred, any legal or other expenses reasonably incurred by
the Company or any such director, officer or controlling person in connection
with investigating or defending any such loss, claim, damage, liability or
any action in respect thereof. This indemnity agreement will be in addition
to any liability which such Underwriter may otherwise have. No Underwriter
will, without the prior consent of the Company, settle or compromise or
consent to the entry of any judgment in any pending or threatened claim,
action, suit or proceeding in respect of which indemnification may be sought
hereunder (whether or not the Company, any of its directors or officers who
signed the Registration Statement or any person who controls the
32
Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act is a party to such claim, action, suit or proceeding), unless
such settlement, compromise or consent includes an unconditional release of
the Company, its officers and directors who signed the Registration Statement
and such controlling persons from all liability arising out of such claim,
action, suit or proceeding.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying
party under this Section 8, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not
relieve it from (i) any liability which it may have to any indemnified party
under this Section 8 except to the extent that the indemnifying party has
been prejudiced as a result thereof or (ii) any liability which it may have
to any indemnified party otherwise than under this Section 8. In case any
such action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will
be entitled to participate therein and, to the extent that it may wish,
jointly with any other indemnifying party similarly notified, to assume the
defense thereof, with counsel satisfactory to such indemnified party;
PROVIDED, HOWEVER, that if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be one or more legal defenses
available to it and/or other indemnified parties which are different from or
additional to those available to the indemnifying party, the indemnifying
party shall not have the right to direct the defense of such action on behalf
of such indemnified party or parties and such indemnified party or parties
shall have the right to select separate counsel to defend such action on
behalf of such indemnified party or parties. After notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof and approval by such indemnified party of counsel appointed
to defend such action, the indemnifying party will not be liable to such
indemnified party under this Section 8 for any legal or other expenses, other
than reasonable costs of investigation, subsequently incurred by such
indemnified party in connection with the defense thereof, unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence (it being understood, however, that in
connection with such action the indemnifying party shall not be liable for
the expenses of more than one separate counsel (in addition to local counsel)
in any one action or separate but substantially similar actions in the same
jurisdiction arising out of the same general allegations or circumstances,
designated by the Representatives in the case of paragraph (a) of this
Section 8, representing the indemnified parties under such paragraph (a) who
are parties to such action or actions) or (ii) the indemnifying party does
not promptly retain counsel satisfactory to the indemnified party or (iii)
the indemnifying party has authorized the employment of counsel for the
indemnified party at the expense of the indemnifying party. After such
notice from the indemnifying party to such indemnified party, the
indemnifying party will not be liable for the costs and expenses of any
settlement of such action effected by such indemnified party without the
consent of the indemnifying party.
(d) In circumstances in which the indemnity agreement provided
for in the preceding paragraphs of this Section 8 is unavailable or
insufficient, for any reason, to hold harmless an indemnified party in
respect of any losses, claims, damages or liabilities (or actions in respect
thereof), each indemnifying party, in order to provide for just and equitable
contribution, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities
(or actions in respect thereof) in such proportion as is appropriate to
reflect (i) the relative benefits received by the indemnifying party or
parties on
33
the one hand and the indemnified party on the other from the offering of the
Securities or (ii) if the allocation provided by the foregoing clause (i) is
not permitted by applicable law, not only such relative benefits but also the
relative fault of the indemnifying party or parties on the one hand and the
indemnified party on the other in connection with the statements or omissions
or alleged statements or omissions that resulted in such losses, claims,
damages or liabilities (or actions in respect thereof), as well as any other
relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriters on the other shall be deemed to
be in the same proportion as the total proceeds from the offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Underwriters. The relative fault
of the parties 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 Underwriters, the parties' relative intents,
knowledge, access to information and opportunity to correct or prevent such
statement or omission, and any other equitable considerations appropriate in
the circumstances. The Company and the Underwriters agree that it would not
be equitable if the amount of such contribution were determined by pro rata
or per capita allocation (even if the Underwriters were treated as one entity
for such purpose) or by any other method of allocation that does not take
into account the equitable considerations referred to above in this paragraph
(d). Notwithstanding any other provision of this paragraph (d), no
Underwriter shall be obligated to make contributions hereunder that in the
aggregate exceed the total public offering price of the Securities purchased
by such Underwriter under this Agreement, less the aggregate amount of any
damages that such Underwriter has otherwise been required to pay in respect
of the same or any substantially similar claim, and no person guilty of
fraudulent misrepresentation (within the meaning of Section 11 (f) of the
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Underwriters' obligations to
contribute hereunder are several in proportion to their respective
underwriting obligations and not joint, and contributions among Underwriters
shall be governed by the provisions of the Prudential Securities Incorporated
Master Agreement Among Underwriters. For purposes of this paragraph (d), each
person, if any, who controls an Underwriter within the meaning of Section 15
of the Act or Section 20 of the Exchange Act shall have the same rights to
contribution as such Underwriter, and each director of the Company, each
officer of the Company who signed the Registration Statement and each person,
if any, who controls the Company within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act, shall have the same rights to contribution
as the Company.
9. DEFAULT OF UNDERWRITERS. If one or more Underwriters default in
their obligations to purchase Firm Securities or Option Securities hereunder
and the aggregate number of such Securities that such defaulting Underwriter
or Underwriters agreed but failed to purchase is ten percent or less of the
aggregate number of Firm Securities or Option Securities to be purchased by
all of the Underwriters at such time hereunder, the other Underwriters may
make arrangements satisfactory to the Representatives for the purchase of
such Securities by other persons (who may include one or more of the
non-defaulting Underwriters, including the Representatives), but if no such
arrangements are made by the Firm Closing Date or the related Option Closing
Date, as the case may be, the other Underwriters shall be obligated severally
in proportion to their respective commitments hereunder to purchase the Firm
Securities or Option Securities that such defaulting Underwriter or
Underwriters agreed but failed to purchase. If one or more Underwriters so
default with respect to an aggregate number of Securities that is more than
ten percent of the aggregate number of Firm Securities or Option Securities,
as the case
34
may be, to be purchased by all of the Underwriters at such time hereunder,
and if arrangements satisfactory to the Representatives are not made within
36 hours after such default for the purchase by other persons (who may
include one or more of the non-defaulting Underwriters, including the
Representatives) of the Securities with respect to which such default occurs,
this Agreement will terminate without liability on the part of any
non-defaulting Underwriter or the Company other than as provided in Section
10 hereof. In the event of any default by one or more Underwriters as
described in this Section 9, the Representatives shall have the right to
postpone the Firm Closing Date or the Option Closing Date, as the case may
be, established as provided in Section 3 hereof for not more than seven
business days in order that any necessary changes may be made in the
arrangements or documents for the purchase and delivery of the Firm
Securities or Option Securities, as the case may be. As used in this
Agreement, the term "Underwriter" includes any person substituted for an
Underwriter under this Section 9. Nothing herein shall relieve any defaulting
Underwriter from liability for its default.
10. SURVIVAL. The respective representations, warranties, agreements,
covenants, indemnities and other statements of the Company, its officers and
the several Underwriters set forth in this Agreement or made by or on behalf
of them, respectively, pursuant to this Agreement shall remain in full force
and effect, regardless of (i) any investigation made by or on behalf of the
Company, any of its officers or directors, any Underwriter or any controlling
person referred to in Section 8 hereof and (ii) delivery of and payment for
the Securities. The respective agreements, covenants, indemnities and other
statements set forth in Sections 6 and 8 hereof shall remain in full force
and effect, regardless of any termination or cancellation of this Agreement.
11. TERMINATION. (a) This Agreement may be terminated with respect
to the Firm Securities or any Option Securities in the sole discretion of the
Representatives by notice to the Company given prior to the Firm Closing Date
or the related Option Closing Date, respectively, in the event that the
Company shall have failed, refused or been unable to perform all obligations
and satisfy all conditions on its part to be performed or satisfied hereunder
at or prior thereto or, if at or prior to the Firm Closing Date or such
Option Closing Date, respectively,
(i) the Company or any of its subsidiaries shall have,
in the sole judgment of the Representatives, sustained any material
loss or interference with their respective businesses or properties
from fire, flood, hurricane, accident or other calamity, whether or
not covered by insurance, or from any labor dispute or any legal or
governmental proceeding or there shall have been any material adverse
change, or any development involving a prospective material adverse
change (including without limitation a change in management or control
of the Company), in the condition (financial or otherwise), business
prospects, net worth or results of operations of the Company and its
subsidiaries, taken as a whole, except in each case as described in or
contemplated by the Registration Statement and the Prospectus
(exclusive of any amendment or supplement thereto);
(ii) trading in the Common Stock shall have been suspended
by the Commission or the New York Stock Exchange or trading in
securities generally on the New York Stock Exchange shall have been
suspended or minimum or maximum prices shall have been established
on any such exchange;
35
(iii) a banking moratorium shall have been declared by New
York, California or United States authorities; or
(iv) there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power, (B) an
outbreak or escalation of any other insurrection or armed conflict
involving the United States or (C) any other calamity or crisis or
material adverse change in general economic, political or financial
conditions having an effect on the U.S. financial markets that, in the
sole judgment of the Representatives, makes it impractical or
inadvisable to proceed with the public offering or the delivery of the
Securities as contemplated by the Registration Statement, as amended
as of the date hereof.
(b) Termination of this Agreement pursuant to this Section 11 shall
be without liability of any party to any other party except as provided in
Section(s) 6 and 10 hereof.
12. INFORMATION SUPPLIED BY UNDERWRITERS. The statements set forth in
the last paragraph on the front cover page and under the heading
"Underwriting" in any Preliminary Prospectus or the Prospectus (to the extent
such statements relate to the Underwriters) constitute the only information
furnished by any Underwriter through the Representatives to the Company for
the purposes of Sections 2(b) and 8 hereof. The Underwriters confirm that
such statements (to such extent) are correct.
13. NOTICES. All communications hereunder shall be in writing and, if
sent to any of the Underwriters, shall be delivered or sent by mail, telex or
facsimile transmission and confirmed in writing to Prudential Securities
Incorporated, Xxx Xxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Equity
Transactions Group; and if sent to the Company, shall be delivered or sent by
mail, telex or facsimile transmission and confirmed in writing to the Company
at 0000-X Xxxxx Xxxxxxx Xxxxx, Xxxxx, Xxxxxxxxxx 00000, Attention: Chief
Executive Officer.
14. SUCCESSORS. This Agreement shall inure to the benefit of and shall
be binding upon the several Underwriters, the Company and their respective
successors and legal representatives, and nothing expressed or mentioned in
this Agreement is intended or shall be construed to give any other person any
legal or equitable right, remedy or claim under or in 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 (i) the indemnities of the Company contained in Section 8 of this
Agreement shall also be for the benefit of any person or persons who control
any Underwriter within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act and (ii) the indemnities of the Underwriters contained in
Section 8 of this Agreement shall also be for the benefit of the directors of
the Company, the officers of the Company who have signed the Registration
Statement and any person or persons who control the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act. No
purchaser of Securities from any Underwriter shall be deemed a successor
because of such purchase.
15. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT,
AND THE TERMS AND CONDITIONS SET FORTH HEREIN, SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING
EFFECT TO ANY PROVISIONS RELATING TO
36
CONFLICTS OF LAWS.
16. CONSENT TO JURISDICTION AND SERVICE OF PROCESS. All judicial
proceedings arising out of or relating to this Agreement may be brought in
any state or federal court of competent jurisdiction in the State of New
York, and by execution and delivery of this Agreement, the Company accepts
for itself and in connection with its properties, generally and
unconditionally, the nonexclusive jurisdiction of the aforesaid courts and
waives any defense of forum non conveniens and irrevocably agrees to be bound
by any judgment rendered thereby in connection with this Agreement. The
Company designates and appoints [Corporation Service Company], and such other
persons as may hereafter be selected by the Company irrevocably agreeing in
writing to so serve, as its agent to receive on its behalf service of all
process in any such proceedings in any such court, such service being hereby
acknowledged by the Company to be effective and binding service in every
respect. A copy of any such process so served shall be mailed by registered
mail to the Company at its address provided in Section 13 hereof; PROVIDED,
HOWEVER, that, unless otherwise provided by applicable law, any failure to
mail such copy shall not affect the validity of service of such process. If
any agent appointed by the Company refuses to accept service, the Company
hereby agrees that service of process sufficient for personal jurisdiction in
any action against the Company in the State of New York may be made by
registered or certified mail, return receipt requested, to the Company at its
address provided in Section 13 hereof, and the Company hereby acknowledges
that such service shall be effective and binding in every respect. Nothing
herein shall affect the right to serve process in any other manner permitted
by law or shall limit the right of any Underwriter to bring proceedings
against the Company in the courts of any other jurisdiction.
17. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
37
If the foregoing correctly sets forth our understanding, please indicate
your acceptance thereof in the space provided below for that purpose,
whereupon this letter shall constitute an agreement binding the Company and
each of the several Underwriters.
Very truly yours,
PAN PACIFIC RETAIL PROPERTIES, INC.
By:
----------------------------------
Name: Xxxxxx X. Xxxx
Title: President and Chief Executive
Officer
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
PRUDENTIAL SECURITIES INCORPORATED
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
XXXXX XXXXXX INC.
By: PRUDENTIAL SECURITIES INCORPORATED
By
---------------------------------------
Xxxx-Xxxxxx Canfin, Managing Director
For itself and on behalf of the Representatives.
38
SCHEDULE 1
UNDERWRITERS
NUMBER OF FIRM SECURITIES
UNDERWRITER TO BE PURCHASED
----------- -------------------------
Prudential Securities Incorporated
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation
Xxxxx Xxxxxx Inc.
39
