EXHIBIT 10.1
5,000,000 SHARES
XX XXXXX REALTY CORP.
Common Stock
UNDERWRITING AGREEMENT
July 19, 2001
Xxxxxxx Xxxxx Barney Inc.
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
XX Xxxxx Realty Corp., a Maryland corporation (the "COMPANY"), which
qualifies for federal income tax purposes as a real estate investment trust
pursuant to Sections 856 through 860 of the Internal Revenue Code of 1986, as
amended, including the regulations and published interpretations thereunder (the
"CODE"), XX Xxxxx Operating Partnership, L.P., a Delaware limited partnership
and the sole general partner of which is the Company (the "OPERATING
PARTNERSHIP"), XX Xxxxx Management LLC, a Delaware limited liability company and
a wholly owned subsidiary of the Operating Partnership (the "MANAGEMENT LLC" and
collectively with the Company and the Operating Partnership, the "TRANSACTION
ENTITIES") each wish to confirm as follows its agreement with Xxxxxxx Xxxxx
Barney Inc. (the "UNDERWRITER"), with respect to the sale by the Company and the
purchase by the Underwriter (the "OFFERING"), of an aggregate of 5,000,000
shares for an aggregate purchase price of $149,000,000 ($29.80 per share) (the
"SHARES") of the Company's common stock, par value $.01 per share (the "COMMON
SHARES").
Capitalized terms used but not otherwise defined herein shall have
the meanings ascribed to them in the Prospectus (as hereinafter defined).
The Transaction Entities understand that the Underwriter proposes to
make a public offering of the Shares as soon as the Underwriter deems advisable
after this Agreement has been executed and delivered.
1. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE TRANSACTION
ENTITIES. Each of the Transaction Entities, jointly and severally, represents,
warrants and agrees that, as of the date hereof and as of each Delivery Date (as
hereinafter defined):
(a) The Company has prepared and filed with the Securities and
Exchange Commission (the "COMMISSION") a registration statement on Form
S-3 (File No. 333-68493), including a prospectus, relating to, among other
securities, the Shares and the offering thereof from time to time in
accordance with Rule 415 under the United States Securities Act of 1933,
as amended (the "SECURITIES ACT"). Such registration statement has been
declared effective by the Commission. As provided in Section 3(a), a
prospectus supplement reflecting the terms of the offering of the Shares
and the other matters set forth therein has been prepared and will be
filed pursuant to Rule 424 under the Securities Act. Such prospectus
supplement, in the form first filed after the Effective Time (as defined
below) pursuant to Rule 424, is herein referred to as the "PROSPECTUS
SUPPLEMENT." Such registration statement, as amended at the Effective
Time, including the exhibits and schedules thereto and the documents
incorporated by reference therein pursuant to Item 12 of Form S-3, is
herein called the "REGISTRATION STATEMENT," and the
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basic prospectus included therein relating to all offerings of securities
under the Registration Statement, as supplemented by the Prospectus
Supplement, is herein called the "PROSPECTUS," except that, if such basic
prospectus is amended or supplemented on or prior to the date on which the
Prospectus Supplement is first filed pursuant to Rule 424, the term
"PROSPECTUS" shall refer to the basic prospectus as so amended or
supplemented and as supplemented by the Prospectus Supplement, in either
case including the documents filed by the Company with the Commission
pursuant to the United States Securities Exchange Act of 1934, as amended
(the "EXCHANGE ACT"), that are incorporated by reference therein. As used
herein, "EFFECTIVE TIME" means the date and the time as of which the
aforementioned registration statement, or the most recent post-effective
amendment thereto, if any, was declared effective by the Commission;
"EFFECTIVE DATE" means the date of the Effective Time; "PRELIMINARY
PROSPECTUS SUPPLEMENT" means each Prospectus Supplement included in a
registration statement, or amendments thereof, after the Registration
Statement became effective under the Securities Act but containing a
"Subject to Completion" legend comparable to that contained in paragraph
10 of Item 501 under Regulation S-K of the Securities Act Regulations (as
defined below).
For purposes of this Agreement, all references to the
Registration Statement, any preliminary prospectus, the Prospectus or any
amendment or supplement to any of the foregoing shall be deemed to include
the copy filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval system ("XXXXX").
All references in this Agreement to financial statements and
schedules and other information which is "contained," "included" or
"stated" in the Registration Statement, any preliminary prospectus or the
Prospectus (or other references of like import) shall be deemed to mean
and include all such financial statements and schedules and other
information which is incorporated by reference in the Registration
Statement, any preliminary prospectus or the Prospectus, as the case may
be, at or prior to the date of this Agreement; and all references in this
Agreement to amendments or supplements to the Registration Statement, any
preliminary prospectus or the Prospectus shall be deemed to mean and
include the filing of any document under the Exchange Act which is
incorporated by reference in the Registration Statement, such preliminary
prospectus or the Prospectus, as the case may be, after the date of this
Agreement.
The term "SUBSIDIARY" means a corporation or a partnership a
majority of the outstanding voting stock, partnership or membership
interests, as the case may be, of which is owned or controlled, directly
or indirectly, by the Company, the Operating Partnership, or by one or
more other Subsidiaries of the Company or the Operating Partnership.
Carlyle/XX Xxxxx 0000 Xxxxxxxx XXX, XXX 000 Xxxx XXX, XXXX Realty Partners
I, LLC, MSSG Realty Partners II, LLC, MSSG Realty Partners III, LLC,
xXxxxx.XXX LLC and One Park JV LLC are each a "JOINT VENTURE ENTITY", and
together, the "JOINT VENTURE ENTITIES."
(b) (i) The Company meets the requirements for use of Form S-3
under the Securities Act and, as of the applicable Effective Time of the
Registration Statement and any amendment thereto, as of the applicable
filing date of the Prospectus Supplement and any amendments thereto and as
of each Delivery Date, and (ii) the Registration Statement, and amendments
thereto, complied and will comply with the
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requirements of the Securities Act and the rules and regulations (the
"SECURITIES ACT REGULATIONS") of the Commission thereunder.
(c) The Registration Statement conforms, and the Prospectus
and any further amendments or supplements to the Registration or any
Prospectus Supplement will, when they become effective or are filed with
the Commission, as the case may be, conform in all material respects to
the requirements of the Securities Act and the Securities Act Regulations
and do not and will not, as of the applicable Effective Time (as to the
Registration Statement and any amendment thereto), as of the applicable
filing date (as to the Prospectus and any supplement thereto) and as of
the Delivery Date contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to
make the statements therein (in the case of the Prospectus, in light of
the circumstances under which they were made) not misleading; PROVIDED,
that no representation or warranty is made as to information contained in
or omitted from the Registration Statement or any Prospectus in reliance
upon and in conformity with written information furnished to the Company
through the Underwriter specifically for inclusion therein.
(d) The documents incorporated by reference or deemed to be
incorporated in the Prospectus or Prospectus Supplement pursuant to Item
12 of the Registration Statement on Form S-3 under the Securities Act, at
the time they were or hereafter are filed with the Commission, complied in
all material respects with the requirements of the Exchange Act, and the
rules and regulations of the Commission thereunder (the "EXCHANGE ACT
REGULATIONS") and, when read together and with the other information in
the Prospectus, as of the applicable Effective Times of the Registration
Statement and any amendment thereto, did not and will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
(e) No stop order suspending the effectiveness of the
Registration Statement or any part thereof has been issued and no
proceeding for that purpose has been instituted or, to the knowledge of
any of the Transaction Entities, threatened by the Commission or by the
state securities authority of any jurisdiction. No order preventing or
suspending the use of any Preliminary Prospectus or the Prospectus has
been issued and no proceeding for that purpose has been instituted or, to
the knowledge of any of the Transaction Entities, threatened by the
Commission or by the state securities authority of any jurisdiction.
(f) The Company has been duly formed and is validly existing
as a corporation in good standing under the laws of the State of Maryland,
is duly qualified to do business and is in good standing as a foreign
corporation in each jurisdiction in which its ownership or lease of
property and other assets or the conduct of its business requires such
qualification, except where the failure to so qualify will not have a
material adverse effect on the business, prospects, operations,
management, consolidated financial position, net worth, stockholders'
equity or results of operations of the Transaction Entities considered as
one enterprise or on the use or value of the Properties as a whole (as
hereinafter defined) (collectively, a "MATERIAL ADVERSE EFFECT"), and has
all power and authority necessary to own or hold its properties and other
assets, to conduct the business
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in which it is engaged and to enter into and perform its obligations under
this Agreement and the other Operative Documents (as hereinafter defined)
to which it is a party.
(g) The Company has an authorized capitalization as set forth
in the Prospectus, and all of the issued Common Shares (other than the
Shares) have been duly and validly authorized and issued, are fully paid
and non-assessable, have been offered and sold in compliance with all
applicable laws (including, without limitation, federal or state
securities laws) and not in violation of the preemptive or other similar
rights of any security holder of the Company, and conform to the
description thereof contained in the Prospectus. Except as disclosed in
the Prospectus, (i) no Common Shares are reserved for any purpose, (ii)
except for the equity interests in the Operating Partnership ("UNITS"),
there are no outstanding securities convertible into or exchangeable for
any Common Shares, and (iii) there are no outstanding options, rights
(preemptive or otherwise) or warrants to purchase or subscribe for Common
Shares or any other securities of the Company.
(h) The Operating Partnership has been duly formed and is
validly existing as a limited partnership in good standing under the laws
of the State of Delaware, is duly qualified to do business and is in good
standing as a foreign limited partnership in each jurisdiction in which
its ownership or lease of property and other assets or the conduct of its
business requires such qualification, except where the failure to so
qualify will not have a Material Adverse Effect, and has all power and
authority necessary to own or hold its properties and other assets, to
conduct the business in which it is engaged and to enter into and perform
its obligations under this Agreement and the other Operative Documents (as
hereinafter defined) to which it is a party. The Company is the sole
general partner of the Operating Partnership. The Agreement of Limited
Partnership of the Operating Partnership, as amended (the "OPERATING
PARTNERSHIP AGREEMENT") is in full force and effect, and the aggregate
percentage interests of the Company and the limited partners in the
Operating Partnership are as set forth in the Prospectus.
(i) All issued and outstanding Units have been duly authorized
and validly issued and have been offered and sold or exchanged in
compliance in all material respects with all applicable laws (including,
without limitation, federal or state securities laws). Except as disclosed
in the Prospectus, no Units are reserved for any purpose and there are no
outstanding securities convertible into or exchangeable for any Units and
no outstanding options, rights (preemptive or otherwise) or warrants to
purchase or subscribe for Units or other securities of the Operating
Partnership. The terms of the Units conform in all material respects to
statements and descriptions related thereto contained in the Prospectus.
(j) The Operating Partnership is the only Subsidiary that is a
"SIGNIFICANT SUBSIDIARY" of the Company (as such term is defined in Rule
1-02 of Regulation S-X). The only Subsidiaries of the Company are (a) the
Subsidiaries listed in Exhibit 21 to the Registration Statement and (b)
certain other Subsidiaries which, considered in the aggregate as a single
Subsidiary, do not constitute a "SIGNIFICANT SUBSIDIARY" as defined in
Rule 1-02 of Regulation S-X.
(k) The Company has been informed that X.X. Xxxxx Management
Corp., a New York corporation (the "SERVICE CORPORATION"), has been
dissolved by proclamation in New York for non-payment of taxes. The
Company believes that the
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Service Corporation has paid all taxes due in New York. The Company will
use its best efforts to reinstate the good standing of the Service
Corporation in New York as promptly as practicable.
(l) The Management LLC has been duly formed and is validly
existing as a limited liability company in good standing under the laws of
the State of Delaware, is duly qualified to do business and is in good
standing as a foreign limited liability company in each jurisdiction in
which its ownership or lease of property and other assets or the conduct
of its business requires such qualification, except where the failure to
so qualify would not have a Material Adverse Effect, and has all power and
authority necessary to own or hold its properties and other assets, to
conduct the business in which it is engaged and to enter into and perform
its obligations under this Agreement and the other Operative Documents (as
hereinafter defined) to which it is a party. All of the issued and
outstanding membership interests of the Management LLC have been duly
authorized and validly issued, are fully paid and non-assessable, have
been offered and sold in compliance with all applicable laws (including,
without limitation, federal or state securities laws), and 100% of the
membership interests are owned by the Operating Partnership free and clear
of any security interest, mortgage, pledge, lien, encumbrance, claim,
restriction or equities. No membership interests of the Management LLC are
reserved for any purpose, and there are no outstanding securities
convertible into or exchangeable for any membership interests of the
Management LLC and no outstanding options, rights (preemptive or
otherwise) or warrants to purchase or to subscribe for membership
interests or any other securities of the Management LLC.
(m) Intentionally omitted.
(n) Intentionally omitted.
(o) The Shares have been duly and validly authorized for
issuance and sale to the Underwriter and, when issued and delivered
against payment therefor as provided herein, will be duly and validly
issued, fully paid and non-assessable. Upon payment of the purchase price
and delivery of the Shares in accordance herewith, the Underwriter will
receive good, valid and marketable title to the Shares, free and clear of
all security interests, mortgages, pledges, liens, encumbrances, claims,
restrictions and equities. The terms of the Common Shares conform in
substance to all statements and descriptions related thereto contained in
the Prospectus. The form of the certificates to be used to evidence the
Common Shares will, at the Delivery Date, be in due and proper form and
will comply with all applicable legal requirements. The issuance of the
Shares is not subject to any preemptive or other similar rights.
(p) (A) This Agreement has been duly and validly authorized,
executed and delivered by each of the Transaction Entities, and assuming
due authorization, execution and delivery by the Underwriter, is a valid
and binding agreement of each of the Transaction Entities, enforceable
against the Transaction Entities in accordance with its terms, except to
the extent that such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization or other similar laws relating to
or affecting creditors' rights and general principles of equity and except
as rights to indemnity and contribution thereunder may be limited by
applicable law or policies underlying such law; (B) each of the Operating
Partnership Agreement and the members agreement of the Management LLC has
been duly and validly authorized,
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executed and delivered by the parties thereto and is a valid and binding
agreement of the parties thereto, enforceable against such parties in
accordance with its terms, except to the extent that such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization or
other similar laws relating to or affecting creditors' rights and general
principles of equity and except as rights to indemnity and contribution
thereunder may be limited by applicable law or policies underlying such
law; (C) each of the agreements by and between the Management LLC and the
Company (the "MANAGEMENT AGREEMENTS") has been duly and validly
authorized, executed and delivered by the parties thereto and is a valid
and binding agreement, enforceable against the parties thereto in
accordance with its terms, except to the extent that such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization or
other similar laws relating to or affecting creditors' rights and general
principles of equity and except as rights to indemnity and contribution
thereunder may be limited by applicable law or policies underlying such
law; (D) each of the members agreements of the Joint Venture Entities (the
"JOINT VENTURE AGREEMENTS") has been duly and validly authorized, executed
and delivered by the parties thereto and is a valid and binding agreement
of the parties thereto, enforceable against such parties in accordance
with its terms, except to the extent that such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization or other
similar laws relating to or affecting creditors' rights and general
principles of equity and except as rights to indemnity and contribution
thereunder may be limited by applicable law or policies underlying such
law; (E) the employment and noncompetition agreements (the "EMPLOYMENT
AGREEMENTS") between the Company and each of Xxxxxxx X. Xxxxx, Xxxx
Xxxxxxxx, Xxxxxxx Xxxx, Xxxxxx Xxxxxx, Xxxxxx Xxxxxx and Xxxxxx Xxxxx (the
"EXECUTIVE OFFICERS") have been duly and validly authorized, executed and
delivered by the parties thereto and are each a valid and binding
agreement, enforceable against the parties thereto in accordance with its
terms, except to the extent that such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization or other similar laws
relating to or affecting creditors' rights and general principles of
equity and except as rights to indemnity and contribution thereunder may
be limited by applicable law or policies underlying such law; and (F) the
lockup agreements by each of the Executive Officers and a certain director
(the "LOCK-UP AGREEMENTS") described in Section 5(j) below have been duly
and validly authorized, executed and delivered by such parties and are
each a valid and binding agreement of such parties, enforceable against
such parties in accordance with their terms except to the extent that such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws relating to or affecting creditors'
rights and general principles of equity and except as rights to indemnity
and contribution thereunder may be limited by applicable law or policies
underlying such law. This Agreement, the Operating Partnership Agreement,
the Employment Agreements and the Lock-Up Agreements are sometimes herein
collectively called the "OPERATIVE DOCUMENTS."
(q) The Company is the sole owner and holder of the mezzanine
loans described on SCHEDULE 1 hereto (the "LOANS"), and has not sold,
assigned, hypothecated or otherwise encumbered such Loans, except as set
forth on such Schedule 1. Each of the related notes and other loan
documents executed in connection with the Loans is in full force and
effect and constitute the legal, valid and binding obligation of the maker
thereof. There is no offset, defense, counterclaim or right to rescission
with respect to any of the notes or any of the other loan documents. The
(A) the outstanding principal balance of the Loans, (B) the aggregate
amount of accrued and unpaid interest due under
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the Loans, and (C) the aggregate amount of late charges, penalties and
default interest due under the Loans, as of the date hereof, is as set
forth on SCHEDULE 1 hereto. The Company has neither given or received a
written notice of default under any of the notes or the other loan
documents, and to the Company's knowledge, no event exists which, with the
giving of notice or the passing of time, or both, would constitute an
event of default thereunder. As of the date hereof, no prepayments have
been made on the notes. There is no pending or, to the Company's
knowledge, threatened litigation or like proceeding, that would have an
adverse effect or impair or otherwise limit any makers' obligations under
its respective loan documents or the enforcement thereof or have an
adverse effect on the collateral securing the Loans.
(r) The execution, delivery and performance of each Operative
Document by each of the Transaction Entities and the consummation of the
transactions contemplated hereby and thereby do not and will not conflict
with or result in a breach or violation of any of the terms or provisions
of, or constitute (with or without the giving of notice or the passage of
time, or both) a default (or give rise to any right of termination,
redemption, repurchase, cancellation or acceleration) under any of the
terms, conditions or provisions of any note, bond, indenture, mortgage,
deed of trust, lease, license, contract, loan agreement or other agreement
or instrument to which any of the Transaction Entities is a party or by
which any of the Transaction Entities is bound or to which any of the
Properties (as hereinafter defined) or other assets of any of the
Transaction Entities is subject, nor will such actions result in any
violation of any of the provisions of the charter, by-laws, certificate of
limited partnership, agreement of limited partnership or other
organizational document of any of the Transaction Entities or Joint
Venture Entities, or any statute or any order, writ, injunction, decree,
rule or regulation of any court or governmental agency or body having
jurisdiction over any of the Transaction Entities or any of their
properties or assets, except for any such breach or violation that would
not have a Material Adverse Effect; and except for such consents,
approvals, authorizations, registrations or qualifications as may be
required under the Exchange Act, by the New York Stock Exchange, Inc.
("NYSE"), or by the National Association of Securities Dealers, Inc.
("NASD"), and applicable state securities laws in connection with the
purchase and distribution of the Shares by the Underwriter, no consent,
approval, authorization or order of, or filing or registration with, any
such court or governmental agency or body is required for the execution,
delivery and performance of the Operative Documents by the Transaction
Entities and the consummation of the transactions contemplated hereby and
thereby.
(s) Except as disclosed in the Prospectus and except with
respect to that certain Amended and Restated Registration Rights Agreement
by and among Xxxxxx Xxxxxxx Real Estate Fund III, L.P., MSREF III Special
Fund, L.P., MSP Real Estate Fund, L.P., Xxxxxx Xxxxxxx Real Estate
Investors III, L.P. and the Company, effective July 28, 1999 (the "XXXXXX
XXXXXXX REGISTRATION RIGHTS AGREEMENT"), there are no contracts,
agreements or understandings between the Company and any person granting
such person the right to require the Company to file a registration
statement under the Securities Act with respect to any securities of the
Company owned or to be owned by such person or to require the Company to
include such securities in the securities registered pursuant to the
Registration Statement or in any securities being
7
registered pursuant to any other registration statement filed by the
Company under the Securities Act.
(t) Except as described in the Prospectus, no Transaction
Entity has sold or issued any securities during the six-month period
preceding the date of the Prospectus, including any sales pursuant to Rule
144A under, or Regulations D or S of, the Securities Act, other than
shares issued pursuant to employee benefit plans, qualified stock options
plans or other employee compensation plans or pursuant to outstanding
options, rights or warrants, that would be required to be integrated with
the sale of the Shares.
(u) Except as would not have a Material Adverse Effect, none
of the Company or any of its Subsidiaries, any Joint Venture Entity or any
of the Properties (as hereinafter defined) has sustained, since the date
of the latest financial statements included in the Prospectus, any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree, other than as set forth
or contemplated in the Prospectus; and, since the date of the latest
financial statements included in the Prospectus, there has not been any
change in the capital stock or long-term debt of any of the Transaction
Entities or any material adverse change, or any development involving a
prospective material adverse change, in or affecting any of the Properties
or the business, prospects, operations, management, financial position,
net worth, stockholders' equity or results of operations of the
Transaction Entities considered as one enterprise or use or value of the
Properties as a whole, other than as set forth or contemplated in the
Prospectus.
(v) The financial statements (including the related notes and
supporting schedules) filed as part of the Registration Statement or
included in the Prospectus present fairly the financial condition, the
results of operations, the statements of cash flows and the statements of
stockholders' equity and other information purported to be shown thereby
of the Company and its consolidated Subsidiaries, at the dates and for the
periods indicated, have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis throughout
the periods involved. The summary and selected financial data included in
the Prospectus present fairly the information shown therein as at the
respective dates and for the respective periods specified, and the summary
and selected financial data have been presented on a basis consistent with
the financial statements so set forth in the Prospectus and other
financial information. Pro forma financial information included in the
Prospectus has been prepared in accordance with the applicable
requirements of the Securities Act and the Regulations with respect to pro
forma financial information and includes all adjustments necessary to
present fairly the pro forma financial position of the Company at the
respective dates indicated and the results of operations for the
respective periods specified. No other financial statements (or schedules)
of the Company, or any predecessor of the Company, are required by the
Securities Act to be included in the Registration Statement or the
Prospectus. The other financial statistical information and data included
in, or incorporated by reference in, the Prospectus or Prospectus
Supplement, historical and PRO FORMA, have been derived from the financial
records of the Company (or its predecessors) and, in all material
respects, have been prepared on a basis consistent with such books and
records of the Company (or its predecessor).
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(w) Ernst & Young LLP, who have certified certain financial
statements of the Company, whose reports appear in the Prospectus and who
have delivered the initial letter referred to in Section 7(f) hereof, are,
and during the periods covered by such reports were, independent public
accountants as required by the Securities Act and the Securities Act
Regulations.
(x) (A) The Operating Partnership, directly or indirectly, or
any Joint Venture Entity in which any of the Company or the Operating
Partnership, directly or indirectly, owns an interest, as the case may be,
has good and marketable title to each of the interests in the Properties
and the other assets described in the Prospectus as being directly or
indirectly owned by the Operating Partnership or the applicable Joint
Venture Entity, respectively, (the "PROPERTIES"), in each case free and
clear of all liens, encumbrances, claims, security interests and defects,
other than those referred to in the Prospectus or those which would not
have a Material Adverse Effect; (B) all liens, charges, encumbrances,
claims or restrictions on or affecting any of the Properties and the
assets of any Transaction Entity or Joint Venture Entity which are
required to be disclosed in the Prospectus are disclosed therein; (C)
except as otherwise described in the Prospectus, neither any Transaction
Entity or Joint Venture Entity nor any tenant of any of the Properties is
in default under (i) any space leases (as lessor or lessee, as the case
may be) relating to the Properties, or (ii) any of the mortgages or other
security documents or other agreements encumbering or otherwise recorded
against the Properties, and no Transaction Entity knows of any event
which, but for the passage of time or the giving of notice, or both, would
constitute a default under any of such documents or agreements except with
respect to (i) and (ii) immediately above any such default that would not
have a Material Adverse Effect; (D) no tenant under any of the leases at
the Properties has a right of first refusal to purchase the premises
demised under such lease; (E) to the knowledge of the Company, each of the
Properties complies with all applicable codes, laws and regulations
(including, without limitation, building and zoning codes, laws and
regulations and laws relating to access to the Properties), except for
such failures to comply that would not have a Material Adverse Effect; and
(F) no Transaction Entity has knowledge of any pending or threatened
condemnation proceedings, zoning change or other proceeding or action that
will in any material manner affect the size of, use of, improvements on,
construction on or access to the Properties.
(y) The mortgages and deeds of trust which encumber the
Properties are not convertible into equity securities of the entity owning
such Property and said mortgages and deeds of trust are not
cross-defaulted or cross-collateralized with any property other than other
Properties.
(z) The Operating Partnership, directly or indirectly, has
obtained title insurance on the fee interests in each of the Properties,
in an amount at least equal to the greater of (a) the mortgage
indebtedness of each such Property or (b) the purchase price of each such
Property.
(aa) Except as disclosed in the Prospectus: (A) to the
knowledge of the Transaction Entities, after due inquiry, the operations
of the Transaction Entities, the Joint Venture Entities and the Properties
are in compliance with all Environmental Laws (as defined below) and all
requirements of applicable permits, licenses, approvals and other
authorizations issued pursuant to Environmental Laws; (B) to the knowledge
of the
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Transaction Entities, after due inquiry, none of the Transaction Entities,
any Joint Venture Entity or any Property has caused or suffered to occur
any Release (as defined below) of any Hazardous Substance (as defined
below) into the Environment (as defined below) on, in, under or from any
Property, and no condition exists on, in, under or adjacent to any
Property that could result in the incurrence of liabilities under, or any
violations of, any Environmental Law or give rise to the imposition of any
Lien (as defined below), under any Environmental Law; (C) none of the
Transaction Entities or any Joint Venture Entity has received any written
notice of a claim under or pursuant to any Environmental Law or under
common law pertaining to Hazardous Substances on, in, under or originating
from any Property; (D) none of the Transaction Entities has actual
knowledge of, or received any written notice from any Governmental
Authority (as defined below) claiming any violation of any Environmental
Law or a determination to undertake and/or request the investigation,
remediation, clean-up or removal of any Hazardous Substance released into
the Environment on, in, under or from any Property; and (E) no Property is
included or, to the knowledge of the Transaction Entities, after due
inquiry, proposed for inclusion on the National Priorities List issued
pursuant to CERCLA (as defined below) by the United States Environmental
Protection Agency (the "EPA") or on the Comprehensive Environmental
Response, Compensation, and Liability Information System database
maintained by the EPA, and none of the Transaction Entities has actual
knowledge that any Property has otherwise been identified in a published
writing by the EPA as a potential CERCLA removal, remedial or response
site or, to the knowledge of the Transaction Entities, is included on any
similar list of potentially contaminated sites pursuant to any other
Environmental Law.
As used herein, "HAZARDOUS SUBSTANCE" shall include any
hazardous substance, hazardous waste, toxic substance, pollutant or
hazardous material, including, without limitation, oil, petroleum or any
petroleum-derived substance or waste, asbestos or asbestos-containing
materials, PCBs, pesticides, explosives, radioactive materials, dioxins,
urea formaldehyde insulation or any constituent of any such substance,
pollutant or waste which is subject to regulation under any Environmental
Law (including, without limitation, materials listed in the United States
Department of Transportation Optional Hazardous Material Table, 49 C.F.R.
ss. 172.101, or in the EPA's List of Hazardous Substances and Reportable
Quantities, 40 C.F.R. Part 302); "ENVIRONMENT" shall mean any surface
water, drinking water, ground water, land surface, subsurface strata,
river sediment, buildings, structures, and ambient, workplace and indoor
and outdoor air; "ENVIRONMENTAL LAW" shall mean the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended
(42 U.S.C. ss. 9601 ET SEQ.) ("CERCLA"), the Resource Conservation and
Recovery Act of 1976, as amended (42 U.S.C. ss. 6901, ET seq.), the Clean
Air Act, as amended (42 U.S.C. ss. 7401, ET SEQ.), the Clean Water Act, as
amended (33 U.S.C. ss. 1251, ET SEQ.), the Toxic Substances Control Act,
as amended (15 U.S.C. ss. 2601, ET SEQ.), the Occupational Safety and
Health Act of 1970, as amended (29 U.S.C. ss. 651, ET SEQ.), the Hazardous
Materials Transportation Act, as amended (49 U.S.C. ss. 1801, ET SEQ.),
and all other federal, state and local laws, ordinances, regulations,
rules and orders relating to the protection of the environments or of
human health from environmental effects; "GOVERNMENTAL AUTHORITY" shall
mean any federal, state or local governmental office, agency or authority
having the duty or authority to promulgate, implement or enforce any
Environmental Law; "LIEN" shall mean, with respect to any Property, any
mortgage, deed of trust, pledge, security interest, lien, encumbrance,
penalty, fine, charge, assessment, judgment or other liability in, on or
10
affecting such Property; and "RELEASE" shall mean any spilling, leaking,
pumping, pouring, emitting, emptying, discharging, injecting, escaping,
leaching, dumping, emanating or disposing of any Hazardous Substance into
the Environment, including, without limitation, the abandonment or discard
of barrels, containers, tanks (including, without limitation, underground
storage tanks) or other receptacles containing or previously containing
any Hazardous Substance.
None of the environmental consultants which prepared
environmental and asbestos inspection reports with respect to any of the
Properties was employed for such purpose on a contingent basis or has any
substantial interest in the Company or any of its Subsidiaries, and none
of them nor any of their directors, officers or employees is connected
with the Company or any of its Subsidiaries as a promoter, selling agent,
voting trustee, director, officer or employee.
(bb) Except as described or referred to in the Registration
Statement, the Company, the Subsidiaries and the Joint Venture Entities
are insured by insurers of recognized financial responsibility against
such losses and risks and in such amounts and covering such risks as are
customary in the businesses in which they are engaged or propose to engage
after giving effect to the transactions described in the Prospectus; and
neither the Company nor any other Transaction Entity has any reason to
believe that it, any Subsidiary of the Company or any Joint Venture Entity
will not be able to renew its existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar insurers as
may be necessary to continue their business at a cost that would not have
a Material Adverse Effect.
(cc) Each of the Company, the Subsidiaries and the Joint
Venture Entities owns or possesses adequate rights to use all material
patents, patent applications, trademarks, service marks, trade names,
trademark registrations, service xxxx registrations, copyrights and
licenses necessary for the conduct of its business and has no reason to
believe that the conduct of its business will conflict with, and has not
received any notice of any claim of conflict with, any such rights of
others.
(dd) Except as described in the Prospectus, there are no legal
or governmental proceedings pending to which any of the Company, its
Subsidiaries or any Joint Venture Entity is a party or of which any
property or assets of any of the Company, its Subsidiaries or any Joint
Venture Entity is the subject which, if determined adversely to such
entities, might have a Material Adverse Effect; and to the knowledge of
the Transaction Entities, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others.
(ee) There are no contracts or other documents which are
required to be described in the Prospectus or filed as exhibits to the
Registration Statement by the Securities Act or by the Securities Act
Regulations which have not been described in the Prospectus or filed as
exhibits to the Registration Statement or incorporated therein by
reference as permitted by the Securities Act Regulations. Neither the
Company, nor to the Company's knowledge, any other party is in default in
the observance or performance of any term or obligation to be performed by
it under any agreement listed in the exhibits to the Registration
Statement, and no event has occurred which with notice or lapse of time or
both would constitute such a default, in any such case which default or
event would have a Material Adverse Effect. No default exists, and no
event has occurred
11
which with notice or lapse of time or both would constitute a default, in
the due performance and observance of any term, covenant or condition, by
the Company or any of its Subsidiaries of any other agreement or
instrument to which the Company or any of its Subsidiaries is a party or
by which any of them or their respective properties or businesses may be
bound or affected which default or event would have a Material Adverse
Effect.
(ff) No relationship, direct or indirect, exists between or
among any of the Transaction Entities on the one hand, and the directors,
officers, stockholders, customers or suppliers of the Transaction
Entities, their Subsidiaries or any Joint Venture Entity on the other
hand, which is required to be described in the Prospectus which is not so
described.
(gg) No labor disturbance by the employees of any Transaction
Entity, their Subsidiaries or any Joint Venture Entity exists or, to the
knowledge of the Transaction Entities, is imminent which might be expected
to have a Material Adverse Effect.
(hh) Each Transaction Entity is in compliance in all material
respects with all presently applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA"); no
"REPORTABLE EVENT" (as defined in ERISA) has occurred with respect to any
"PENSION PLAN" (as defined in ERISA) for which any Transaction Entity
would have any liability; no Transaction Entity has incurred or expects to
incur liability under (i) Title IV of ERISA with respect to termination
of, or withdrawal from, any "pension plan" or (ii) Sections 412 or 4971 of
the Code; and each "pension plan" for which any Transaction Entity would
have any liability that is intended to be qualified under Section 401(a)
of the Code is so qualified in all material respects and nothing has
occurred, whether by action or by failure to act, which would cause the
loss of such qualification, except where the failure to be so qualified
would not have a Material Adverse Effect.
(ii) Except as noted in Section 1(k) above, each of the
Transaction Entities, their Subsidiaries or any Joint Venture Entity has
filed all federal, state and local income and franchise tax returns
required to be filed through the date hereof and has paid all taxes due
thereon or otherwise due and payable, and no tax deficiency has been
determined adversely to any of the Transaction Entities, their
Subsidiaries or any Joint Venture Entity which has had (nor does any
Transaction Entity have any knowledge of any tax deficiency which, if
determined adversely to it might have) a Material Adverse Effect.
(jj) At all times since August 14, 1997, the Company, the
Operating Partnership, the Management LLC and the Service Corporation have
been and upon the sale of Shares will continue to be, organized and
operated in conformity with the requirements for qualification of the
Company as a real estate investment trust ("REIT") under the Code and the
proposed method of operation of the Company, the Operating Partnership,
the Management LLC and the Service Corporation as described in the
Prospectus will enable the Company to continue to meet the requirements
for qualification and taxation as a REIT under the Code, and no actions
have been taken (or not taken which are required to be taken) which would
cause such qualification to be lost.
12
(kk) Since the date as of which information is given in the
Prospectus through the date hereof, and except as may otherwise be
disclosed in the Prospectus, (i) no Transaction Entity has (a) issued or
granted any securities, (b) incurred any liability or obligation, direct
or contingent, other than liabilities and obligations which were incurred
in the ordinary course of business, (c) entered into any transaction not
in the ordinary course of business or (d) declared or paid any dividend on
its capital stock; and (ii) there has been no Material Adverse Effect.
(ll) Each Transaction Entity (i) makes and keeps accurate
books and records and (ii) maintains internal accounting controls which
provide reasonable assurance that (A) transactions are executed in
accordance with management's authorization, (B) transactions are recorded
as necessary to permit preparation of its financial statements and to
maintain accountability for its assets, (C) access to its assets is
permitted only in accordance with management's authorization and (D) the
reported accountability for its assets is compared with existing assets at
reasonable intervals.
(mm) None of the Company, its Subsidiaries or any Joint
Venture Entity (i) is in violation of its charter, by-laws, certificate of
limited partnership, agreement of limited partnership or other similar
organizational document, (ii) is in default, and no event has occurred
which, with notice or lapse of time or both, would constitute a default
(or give rise to any right of termination, redemption, repurchase,
cancellation or acceleration), in the due performance or observance of any
term, covenant or condition contained in any material indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which it
is a party or by which it is bound or to which any of the Properties or
any of its other properties or assets is subject, except for any such
default which would not have a Material Adverse Effect or (iii) is in
violation of any law, ordinance, governmental rule, regulation or court
decree to which it or the Properties or any of its other properties or
assets may be subject or has failed to obtain any material license,
permit, certificate, franchise or other governmental authorization or
permit necessary to the ownership of the Properties or any of its other
properties or assets or to the conduct of its business except for any such
violation which would not have a Material Adverse Effect.
(nn) None of the Company, its Subsidiaries or any Joint
Venture Entity, nor any director, officer, agent, employee or other person
associated with or acting on behalf of such entity, has used any corporate
funds for any unlawful contribution, gift, entertainment or other unlawful
expense relating to political activity; made any direct or indirect
unlawful payment to any foreign or domestic government official or
employee from corporate funds; violated or is in violation of any
provision of the Foreign Corrupt Practices Act of 1977; or made any bribe,
rebate, payoff, influence payment, kickback or other unlawful payment.
(oo) Neither the Company nor the Operating Partnership is an
"investment company" within the meaning of such term under the Investment
Company Act of 1940, as amended, and the rules and regulations of the
Commission thereunder.
(pp) Intentionally omitted.
(qq) Other than this Agreement and as set forth in the
Prospectus under the heading "Underwriting," there are no contracts,
agreements or understandings between any Transaction Entity and any person
that would give rise to a valid claim
13
against any Transaction Entity or the Underwriter for a brokerage
commission, finder's fee or other like payment with respect to the
consummation of the transactions contemplated by this Agreement.
(rr) The Company intends to apply the net proceeds from the
sale of the Shares being sold by the Company in accordance with the
description set forth in the Prospectus under the caption "Use of
Proceeds."
(ss) Intentionally omitted.
(tt) Intentionally omitted.
(uu) Each of the Company, its Subsidiaries and the Joint
Venture Entities possess such permits, licenses, approvals, consents and
other authorizations (collectively, "GOVERNMENTAL LICENSES") issued by the
appropriate federal, state, local or foreign regulatory agencies or bodies
necessary to conduct the business now operated by them except where
failure to possess any such Governmental Licenses would not result in a
Material Adverse Effect; the Company, its Subsidiaries and the Joint
Venture Entities are in compliance with the terms and conditions of all
such Governmental Licenses, except where the failure so to comply would
not, singly or in the aggregate, result in a Material Adverse Effect; all
of the Governmental Licenses are valid and in full force and effect,
except when the invalidity of such Governmental Licenses or the failure of
such Governmental Licenses to be in full force and effect would not result
in a Material Adverse Effect; and none of the Company, its Subsidiaries
and the Joint Venture Entities has received any notice of proceedings
relating to the revocation or modification of any such Governmental
Licenses which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a Material
Adverse Effect.
(vv) None of the Transaction Entities, nor any of their
respective trustees, directors, officers, members or controlling persons,
has taken or will take, directly or indirectly, any action resulting in a
violation of Regulation M under the Exchange Act, or designed to cause or
result in, or that has constituted or that reasonably might be expected to
constitute, the stabilization or manipulation of the price of any security
of the Company to facilitate the sale or resale of the Securities.
2. PURCHASE OF THE SHARES BY THE UNDERWRITER. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell 5,000,000 Shares to
the Underwriter and the Underwriter agrees to purchase 5,000,000 Shares at a
purchase price of $29.80 per Share.
The Company shall not be obligated to deliver any of the Shares to
be delivered on the Delivery Date except upon payment for all the Shares to be
purchased on the Delivery Date as provided herein.
3. OFFERING OF SHARES BY THE UNDERWRITER.
Upon authorization by the Underwriter of the release of the Shares,
the Underwriter proposes to offer the Shares for sale upon the terms and
conditions set forth in the Prospectus.
4. DELIVERY OF AND PAYMENT FOR THE SHARES.
14
(a) Delivery of and payment for the Shares shall be made at
the office of Xxxxxxxx Chance Xxxxxx & Xxxxx LLP, 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, or at such other date or place as shall be
determined by agreement between the Underwriter and the Company, at 10:00
A.M., New York City time, on the third full business day following the
date of this Agreement or on the fourth full business day if the Agreement
is executed after the daily closing time of the New York Stock Exchange.
This date and time are sometimes referred to as the "DELIVERY DATE." On
the Delivery Date, the Company shall deliver or cause to be delivered
certificates representing the Shares to the Underwriter for the account of
the Underwriter against payment to or upon the order of the Company of the
purchase price by wire transfer of same-day funds. Time shall be of the
essence, and delivery at the time and place specified pursuant to this
Agreement is a further condition of the obligation of the Underwriter
hereunder. Upon delivery, the Shares shall be registered in such names and
in such denominations as the Underwriter shall request in writing not less
than two full business days prior to the Delivery Date. For the purpose of
expediting the checking and packaging of the certificates for the Shares,
the Company shall make the certificates representing the Shares available
for inspection by the Underwriter in New York, New York, not later than
2:00 P.M., New York City time, on the business day prior to the Delivery
Date.
(b) Intentionally omitted.
(c) Intentionally omitted.
5. FURTHER AGREEMENTS OF THE COMPANY. The Company agrees:
(a) To prepare the Prospectus Supplement in a form approved by
the Underwriter and to file such Prospectus Supplement pursuant to Rule
424(b) under the Securities Act not later than the Commission's close of
business on the second business day following the execution and delivery
of this Agreement; to make no further amendment or any supplement to the
Registration Statement or to the Prospectus except as permitted herein; to
advise the Underwriter, promptly after it receives notice thereof, of the
time when any amendment to the Registration Statement has been filed or
becomes effective or any supplement to the Prospectus or any amended
Prospectus has been filed and to furnish the Underwriter with copies
thereof; to advise the Underwriter, promptly after it receives notice
thereof, of the issuance by the Commission of any stop order or of any
order preventing or suspending the use of any Preliminary Prospectus or
the Prospectus, of the suspension of the qualification of the Shares for
offering or sale in any jurisdiction, of the initiation or threatening of
any proceeding for any such purpose, or of any request by the Commission
for the amending or supplementing of the Registration Statement or the
Prospectus or for additional information; and, in the event of the
issuance of any stop order or of any order preventing or suspending the
use of any Preliminary Prospectus Supplement or the Prospectus Supplement
or suspending any such qualification, to use promptly its best efforts to
obtain its withdrawal;
(b) To furnish promptly to the Underwriter and to counsel for
the Underwriter a signed copy of the Registration Statement as originally
filed with the Commission, and each amendment thereto filed with the
Commission, including all consents and exhibits filed therewith;
(c) To deliver promptly to the Underwriter such number of the
following documents as the Underwriter shall reasonably request: (i)
conformed copies
15
of the Registration Statement as originally filed with the Commission and
each amendment thereto (in each case including consents and exhibits other
than this Agreement and the computation of per share earnings) and (ii)
each Preliminary Prospectus Supplement, the Prospectus Supplement and any
amended or supplemented Prospectus Supplement; and, if the delivery of a
prospectus is required at any time after the Effective Time in connection
with the offering or sale of the Shares and if at such time any events
shall have occurred as a result of which the Preliminary Prospectus
Supplement or the Prospectus as then amended or supplemented would include
an untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such Preliminary Prospectus
Supplement or the Prospectus is delivered, not misleading, or, if for any
other reason it shall be necessary to amend or supplement the Preliminary
Prospectus Supplement or the Prospectus in order to comply with the
Securities Act or the Exchange Act, to notify the Underwriter and, upon
its request, to file such document and to prepare and furnish without
charge to the Underwriter and to any dealer in securities as many copies
as the Underwriter may from time to time reasonably request of an amended
or supplemented Preliminary Prospectus Supplement or the Prospectus which
will correct such statement or omission or effect such compliance. The
aforementioned documents furnished to the Underwriter will be identical to
the electronically transmitted copies thereof filed with the Commission
pursuant to XXXXX, except to the extent permitted by Regulation S-T;
(d) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus Supplement or any supplement to
the Prospectus Supplement that may, in the judgment of the Underwriter or
Counsel to the Underwriter, be required by the Securities Act or the
Exchange Act or requested by the Commission;
(e) Prior to filing with the Commission any amendment to the
Registration Statement or supplement to the Prospectus pursuant to Rule
424 of the Securities Act Regulations, to furnish a copy thereof to the
Underwriter and counsel for the Underwriter and obtain the consent of the
Underwriter to the filing;
(f) The Company will make generally available to its security
holders as soon as practicable but no later than 60 days after the close
of the period covered thereby an earnings statement (in form complying
with the provisions of Section 11(a) of the Securities Act and Rule 158 of
the Securities Act Regulations), which need not be certified by
independent certified public accountants unless required by the Securities
Act or the Securities Act Regulations, covering a twelve-month period
commencing after the "effective date" (as defined in said Rule 158) of the
Registration Statement;
(g) The Company will furnish to the Underwriter, from time to
time during the period when the Prospectus is required to be delivered
under the Securities Act or the Exchange Act such number of copies of the
Prospectus (as amended or supplemented) as the Underwriter may reasonably
request for the purposes contemplated by the Securities Act or the
Exchange Act or the respective applicable rules and regulations of the
Commission thereunder;
(h) For a period of five years following the Effective Date,
to furnish to the Underwriter copies of all materials furnished by the
Company to its stockholders
16
and all public reports and all reports and financial statements furnished
by the Company to the principal national securities exchange upon which
the Common Shares may be listed pursuant to requirements of or agreements
with such exchange or to the Commission pursuant to the Exchange Act or
any rule or regulation of the Commission thereunder;
(i) Promptly from time to time to take such action as the
Underwriter may reasonably request to qualify the Shares for offering and
sale under the securities, real estate syndication or Blue Sky laws of
such jurisdictions as the Underwriter may request and to comply with such
laws so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution
of the Shares by the Underwriters;
(j) For a period of 30 days from the date of the Prospectus,
the Company and the Operating Partnership will not, directly or
indirectly, (1) offer for sale, sell, contract to sell, pledge, hedge or
otherwise dispose of (or enter into any transaction or device which is
designed to, or could be expected to, result in the disposition by any
person at any time in the future of), directly or indirectly, any Common
Shares, Units or securities convertible into or exercisable or
exchangeable for Common Shares or Units (other than the Shares, shares
issued pursuant to employee benefit plans, qualified stock option plans or
other employee compensation plans existing on the date hereof and except
in connection with the acquisition of real property or interests therein,
including mortgage or leasehold interests or in conjunction with any joint
venture transaction to which the Company or an affiliate of the Company is
or becomes a party), or sell or grant options, rights or warrants with
respect to any Common Shares, Units or securities convertible into or
exercisable or exchangeable for Common Shares or Units (except pursuant to
customary compensation arrangements and employee benefit plans), or (2)
enter into any swap or other derivatives transaction that transfers to
another, in whole or in part, any of the economic benefits or risks of
ownership of such shares of Common Stock, whether any such transaction
described in clause (1) or (2) above is to be settled by delivery of
Common Stock or other securities, in cash or otherwise, or (3) publicly
disclose an intention to make any such offer, sale, pledge, hedge, swap or
other transaction, in each case without the prior written consent of the
Underwriter; and to cause each Executive Officer and a certain director to
furnish to the Underwriter, prior to the Delivery Date, a letter or
letters, in form and substance satisfactory to counsel for the
Underwriter, pursuant to which each such person shall agree not to,
directly or indirectly, (1) offer for sale, sell, pledge or otherwise
dispose of (or enter into any transaction or device which is designed to,
or could be expected to, result in the disposition by any person at any
time in the future of), directly or indirectly, any Common Shares
including, without limitation, Common Shares that may be deemed to be
beneficially owned by such party in accordance with the Securities Act
Regulations and Common Shares that may be issued upon exercise of any
option or warrant or securities convertible into or exchangeable for
Common Shares owned by such party on the date the letter is completed or
(2) enter into any swap or other derivatives transaction that transfers to
another, in whole or in part, any of the economic benefits or risks of
ownership of such Common Shares, whether any such transaction described in
clause (1) or (2) above is to be settled by delivery of Common Shares or
other securities, in cash or otherwise, in each case for a period of 30
days from the date of the Prospectus Supplement, without the prior written
consent of the Underwriter;
17
(k) To use its best efforts to effect the listing of the
Shares, and to maintain the listing of the Common Shares, on the NYSE;
(l) To take such steps as shall be necessary to ensure that
neither the Company nor the Operating Partnership shall become an
"investment company" within the meaning of such term under the Investment
Company Act of 1940, as amended, and the rules and regulations of the
Commission thereunder;
(m) The Company will use its best efforts to continue to meet
the requirements to qualify as a REIT under the Code; and
(n) Intentionally omitted.
(o) Except for the authorization of actions permitted to be
taken by the Underwriter as contemplated herein or in the Prospectus,
neither the Company nor the Operating Partnership will (a) take, directly
or indirectly, any action designed to cause or to result in, or that might
reasonably be expected to constitute, the stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale
of the Shares, and (b) until the Delivery Date, (i) sell, bid for or
purchase the Securities or pay any person any compensation for soliciting
purchases of the Securities or (ii) pay or agree to pay to any person any
compensation for soliciting another to purchase any other securities of
the Company.
6. EXPENSES. The Transaction Entities jointly and severally agree to
pay (a) the costs incident to the authorization, issuance, sale and delivery of
the Shares and any taxes payable in that connection; (b) the costs incident to
the preparation, printing, filing and distribution under the Securities Act of
the Registration Statement and any amendments and exhibits thereto; (c) the
costs of distributing the Registration Statement as originally filed and each
amendment thereto and any post-effective amendments thereof (including, in each
case, exhibits), any Preliminary Prospectus Supplement, the Prospectus
Supplement and any amendment or supplement to the Prospectus Supplement and any
document incorporated by reference therein, all as provided in this Agreement;
(d) the costs of producing and distributing this Agreement and any other related
documents in connection with the offering, purchase, sale and delivery of the
Shares; (f) the filing fees, if any, incident to securing any required review by
the NASD of the terms of sale of the Shares; (g) any applicable listing or other
fees; (h) the fees and expenses of qualifying the Shares under the securities
laws of the several jurisdictions as provided in Section 5(i) and of preparing,
printing and distributing a Blue Sky Memorandum (including related reasonable
fees and expenses of counsel to the Underwriter); (j) all costs and expenses of
the Underwriter, including the reasonable fees and disbursements of counsel for
the Underwriter, incident to the offer and sale of the Common Shares by the
Underwriter to employees and persons having business relationships with the
Company and its Subsidiaries, as described in Section 4; (k) all other costs and
expenses incident to the performance of the obligations of the Transaction
Entities under this Agreement; (l) the costs and charges of any transfer agent
and registrar; (m) any expenses incurred by the Company in connection with a
"road show" presentation to potential investors; and (n) the fees and
disbursements of the Company's counsel and accountants; PROVIDED that, except as
provided in this Section 6 and in Section 12 the Underwriter shall pay its own
costs and expenses, including the costs and expenses of its counsel, any
transfer taxes on the Shares which it may sell and the expenses of advertising
any offering of the Shares made by the Underwriter.
18
7. CONDITIONS OF UNDERWRITER'S OBLIGATIONS. The obligations of
the Underwriter hereunder are subject to the accuracy, when made and on each
Delivery Date, of the representations and warranties of the Transaction Entities
contained herein, to the performance by each Transaction Entity and of its
obligations hereunder, and to each of the following additional terms and
conditions:
(a) If, at the time this Agreement is executed and delivered,
it is necessary a post-effective amendment to the Registration Statement
to be declared effective before the offering of the Shares may commence,
such post-effective amendment shall have become effective not later than
5:30 P.M., New York City time, on the date hereof, or at such later date
and time as shall be consented to in writing by you, and all filings, if
any, required by Rule 424 under the Securities Act Regulations shall have
been timely made; no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and no
proceeding for that purpose shall have been instituted or, to the
knowledge of the Transaction Entities, or the Underwriter, threatened by
the Commission, and any request of the Commission for additional
information (to be included in the Registration Statement or the
Prospectus or otherwise) shall have been complied with to the satisfaction
of the Underwriter.
(b) Subsequent to the Effective Date of this Agreement, there
shall not have occurred (i) any Material Adverse Effect, or (ii) any event
or development relating to or involving the Company, its Subsidiaries, any
Joint Venture Entity, or any partner, officer, director or trustee
thereof, which makes any statement of a material fact made in the
Prospectus untrue or which, in the opinion of the Company and its counsel
or the Underwriter and its counsel, requires the making of any addition to
or change in the Prospectus in order to state a material fact required by
the Securities Act or any other law to be stated therein or necessary in
order to make the statements therein not misleading, if amending or
supplementing the Prospectus to reflect such event or development would,
in your opinion, adversely affect the market for the Shares.
(c) All corporate proceedings and other legal matters incident
to the authorization, form and validity of this Agreement, the Shares, the
Registration Statement and the Prospectus, and all other legal matters
relating to this Agreement and the transactions contemplated hereby shall
be reasonably satisfactory in all material respects to counsel for the
Underwriter, and the Company shall have furnished to such counsel all
documents and information that they may reasonably request to enable them
to pass upon such matters.
(d) Sidley Xxxxxx Xxxxx & Xxxx LLP shall have furnished to the
Underwriter its written opinion, as counsel to the Company, addressed to
the Underwriter and dated such Delivery Date, in form and substance
reasonably satisfactory to the Underwriter and counsel to the Underwriter,
to the effect that:
(i) The Company has been duly formed and is
validly existing as a corporation in good standing under the laws of
the State of Maryland, is in good standing with the State Department
of Assessments and Taxation of Maryland and is duly qualified to do
business and is in good standing as a foreign corporation in each
jurisdiction in which its ownership or lease of property or other
assets or the conduct of its business requires such qualification,
except where the failure to so qualify would not have a Material
Adverse Effect,
19
and has all power and authority necessary to own or hold its
properties or other assets, to conduct the business in which it is
engaged as described in the Registration Statement and the
Prospectus, and to enter into and perform its obligations under this
Agreement and the other Operative Documents to which it is a party.
(ii) All of the issued Common Shares (other than
the Shares) have been duly and validly authorized and issued, are
fully paid and non-assessable, have been offered and sold in
compliance with all applicable laws (including, without limitation,
federal and state securities laws) and conform to the description
thereof contained in the Prospectus. Except as disclosed in the
Prospectus, to such counsel's knowledge, no Common Shares are
reserved for any purpose and except for the Units, there are no
outstanding securities convertible into or exchangeable for any
Common Shares, and no outstanding options, rights (preemptive or
otherwise) or warrants to purchase or subscribe for Common Shares or
any other securities of the Company.
(iii) The Operating Partnership has been duly
formed and is validly existing as a limited partnership in good
standing under the laws of the State of Delaware, is duly qualified
to do business and is in good standing as a foreign limited
partnership in each jurisdiction in which its ownership or lease of
property and other assets or the conduct of its business requires
such qualification, except where the failure to so qualify would not
have a Material Adverse Effect, and has all power and authority
necessary to own or hold its properties and other assets, to conduct
the business in which it is engaged as described in the Registration
Statement and the Prospectus, and to enter into and perform its
obligations under this Agreement and the other Operative Documents
to which it is a party. The Company is the sole general partner of
the Operating Partnership. The Operating Partnership Agreement is in
full force and effect, and the aggregate percentage interests of the
Company and the limited partners in the Operating Partnership are as
set forth in the Prospectus.
(iv) The Management LLC has been duly formed and
is validly existing as a limited liability company in good standing
under the laws of the State of Delaware, is duly qualified to do
business and is in good standing as a foreign limited liability
company in each jurisdiction in which its ownership or lease of
property and other assets or the conduct of its business requires
such qualification, except where the failure to so qualify would not
have a Material Adverse Effect, and has all power and authority
necessary to own or hold its properties and other assets, to conduct
the business in which it is engaged as described in the Registration
Statement and the Prospectus and to enter into and perform its
obligations under this Agreement and the other Operative Documents
to which it is a party. All of the issued and outstanding membership
interests of the Management LLC have been duly authorized and
validly issued, and 100% of the membership interest is owned by the
Operating Partnership. To such counsel's knowledge, no membership
interests of the Management LLC are reserved for any purpose, and
there are no outstanding securities convertible into or exchangeable
for any membership interests of the Management LLC and no
outstanding options, rights (preemptive or otherwise) or warrants to
purchase or to
20
subscribe for membership interests or any other securities of the
Management LLC.
(v) Intentionally omitted.
(vi) The Shares have been duly and validly
authorized and, when issued and delivered against payment therefor
as provided herein, will be duly and validly issued, fully paid and
non-assessable. The terms of the Common Shares conform in substance
to all statements and descriptions related thereto contained in the
Prospectus. The form of the certificate to be used to evidence the
Common Shares is in due and proper form and comply with all
applicable legal requirements. The issuance of the Shares is not
subject to any preemptive or other similar rights arising under the
Articles of Incorporation or by-laws of the Company, the
Corporations and Associations Article of the Annotated Code of
Maryland, as amended, or to such counsel's knowledge, otherwise.
(vii) All issued and outstanding Units have been
duly authorized and validly issued. Except as set forth in the
Prospectus, to such counsel's knowledge, no Units are reserved for
any purpose, and there are no outstanding securities convertible
into or exchangeable for any Units and no outstanding options,
rights (preemptive or otherwise) or warrants to purchase or to
subscribe for Units or other securities of the Operating
Partnership. The terms of the Units conform in all material respects
to the statements and descriptions related thereto contained in the
Prospectus.
(viii)(A) This Agreement has been duly and validly
authorized, executed and delivered by each of the Transaction
Entities, and assuming due authorization, execution and delivery by
the Underwriter, is a valid and binding agreement of each of the
Transaction Entities, enforceable against such parties in accordance
with its terms, except to the extent that such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization or
other similar laws relating to or affecting creditors' rights and
general principles of equity and except as rights to indemnity and
contribution thereunder may be limited by applicable law or policies
underlying such law; (B) the Operating Partnership Agreement has
been duly and validly authorized, executed and delivered by each
Transaction Entity which is a party thereto and is a valid and
binding agreement, enforceable against such Transaction Entity in
accordance with its terms, except to the extent that such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws relating to or affecting
creditors' rights and general principals of equity and except as
rights to indemnity and contribution thereunder may be limited by
applicable law or policies underlying such law; and (C) the
Employment Agreements have been duly and validly authorized,
executed and delivered by the Company and are valid and binding
agreements, enforceable against the Company in accordance with their
respective terms, except to the extent that such enforceability may
be limited by applicable bankruptcy, insolvency, reorganization or
other similar laws relating to or affecting creditors' rights and
general principles of equity and except as rights to indemnity and
contribution thereunder may be limited by applicable law or policies
underlying such law.
21
(ix) The execution, delivery and performance of
each Operative Document by each of the Transaction Entities and the
consummation of the transactions contemplated hereby and thereby
will not (as of the date of such opinion) conflict with or result in
a breach or violation of any of the terms or provisions of, or
constitute a default under any of the terms, conditions or
provisions of, any note, bond, indenture, mortgage, deed of trust,
lease, license, contract, loan agreement or other agreement or
instrument to which any of the Transaction Entities is a party or by
which any of the Transaction Entities is bound or to which any of
the Properties or other assets of any of the Transaction Entities is
subject and which has been listed as an exhibit to the Registration
Statement, nor will such actions result in any violation of the
provisions of the charter, by-laws, certificate of limited
partnership, agreement of limited partnership, or other
organizational documents of any of the Transaction Entities, or any
statute or any order, writ, injunction, decree, rule or regulation
of any court or governmental agency or body having jurisdiction over
any of the Properties or the Transaction Entities or any of their
properties or assets, except, in each case, for any such breach,
violation or default that would not have a Material Adverse Effect;
and except for such consents, approvals, authorizations,
registrations or qualifications as may be required under the
Exchange Act, by the NYSE or the NASD and applicable state
securities or real estate syndication laws in connection with the
purchase and distribution of the Shares by the Underwriter, no
consent, approval, authorization or order of, or filing or
registration with, any such court or governmental agency or body is
required for the execution, delivery and performance of this
Agreement by the Transaction Entities and the consummation of the
transactions contemplated hereby.
(x) To such counsel's knowledge, other than as set
forth or referred to in the Prospectus and Registration Statement
and except for the Xxxxxx Xxxxxxx Registration Rights Agreement,
there are no contracts, agreements or understandings between the
Company and any person granting such person the right to require the
Company to file a registration statement under the Securities Act
with respect to any securities of the Company owned or to be owned
by such person or to require the Company to include such securities
in the securities registered pursuant to the Registration Statement
or in any securities being registered pursuant to any other
registration statement filed by the Company under the Securities
Act.
(xi) To such counsel's knowledge, other than as
set forth in the Prospectus, there are no legal or governmental
proceedings pending to which any Transaction Entity is a party or of
which any property or assets of any Transaction Entity is the
subject which, if determined adversely to such Transaction Entity,
might reasonably be expected to have a Material Adverse Effect; and
to the best knowledge of such counsel no such proceedings are
threatened or contemplated by governmental authorities or threatened
by others.
(xii) All descriptions in the Registration
Statement of contracts and other documents which are filed as
exhibits to the Form 10-K for the most recent fiscal year and to the
Form 10-Q for the first fiscal quarter of 2001 and to the Current
Reports on Form 8-K of the Company filed with the Commission after
the filing of the Form 10-K (the "8-Ks") to which the
22
Company, the Operating Partnership or any Subsidiary is a party are
accurate in all material respects. To the best knowledge of such
counsel, there are no contracts or other documents which are
required to be described in the Prospectus or filed as exhibits to
the Registration Statement by the Securities Act or by the
Securities Act Regulations which have not been described in the
Prospectus or filed as exhibits to the Registration Statement or
incorporated therein by reference as permitted by the Securities Act
Regulations.
(xiii) To the best knowledge of such counsel, no
relationship, direct or indirect, exists between or among any of the
Transaction Entities on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Transaction Entities on
the other hand, which is required to be described in the Prospectus
which is not so described.
(xiv) To the best knowledge of such counsel and
other than as described in the Prospectus, no Transaction Entity (i)
is in violation of its charter, by-laws, certificate of limited
partnership, agreement of limited partnership or other similar
organizational document, (ii) is in default, and no event has
occurred which, with notice or lapse of time or both, would
constitute a default, in the due performance or observance of any
term, covenant or condition contained in any material indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which it is a party or by which it is bound or to
which any of the Properties or any of its other properties or assets
is subject and which has been filed as an exhibit to the
Registration Statement or (iii) is in violation of any law,
ordinance, governmental rule, regulation or court decree to which it
or the Properties or any of its other properties or assets may be
subject or has failed to obtain any material license, permit,
certificate, franchise or other governmental authorization or permit
necessary to the ownership of the Properties or any of its other
properties or assets or to the conduct of its business, except, in
the case of each of (i), (ii) and (iii) immediately above, any such
violation or default that would not have a Material Adverse Effect.
(xv) Commencing with its taxable year ended
December 31, 1997, the Company was organized and has been operated
in conformity with the requirements for qualification and taxation
as a REIT under the Code and the proposed method of operation of the
Company will enable the Company to continue to meet the requirements
for qualification and taxation as a REIT under the Code and the
Operating Partnership is classified as a partnership and not as (a)
an association taxable as a corporation or (b) a "publicly traded
partnership" taxable as a corporation under Section 7704(a) of the
Code.
(xvi) Neither the Company nor the Operating
Partnership is an "investment company" within the meaning of such
term under the Investment Company Act of 1940, as amended and the
rules and regulations of the Commission thereunder.
(xvii) The Shares have been approved for listing
on the NYSE, subject to official notice of issuance.
(xviii) The Registration Statement was declared
effective under the Securities Act as of the date and time specified
in such opinion, the
23
Prospectus was filed with the Commission pursuant to the
subparagraph of Rule 424(b) of the Securities Act Regulations
specified in such opinion on the date specified therein and, to the
best knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued and, to
the best knowledge of such counsel, no proceeding for that purpose
is pending or threatened by the Commission.
(xix) The Registration Statement, at the time that
it became effective, and the Prospectus, as of its date and as of
the date hereof (in each case, other than documents incorporated by
reference therein and the financial statements, supporting schedules
and other financial data included or incorporated by reference
therein or omitted therefrom, as to which no opinion is rendered),
complied as to form, in all material respects, with the applicable
requirements of the Securities Act and the Securities Act
Regulations.
(xx) The documents incorporated by reference in
the Prospectus (other than the financial statements, supporting
schedules and other financial data included or incorporated by
reference therein or omitted therefrom, as to which no opinion is
rendered), when they became effective or were filed with the
Commission, as the case may be, complied as to form, in all material
respects, with the requirements of the Securities Act, the
Securities Act Regulations, the Exchange Act, and the Exchange Act
Regulations, as applicable.
(xxi) The statements contained in the Prospectus
under the captions "Description of Common Stock," "Restrictions on
Ownership of Capital Stock," and "Material Federal Income Tax
Consequences," insofar as those statements are descriptions of
contracts, agreements or other legal documents, or they describe
federal statutes, rules and regulations or legal conclusions,
constitute a fair summary thereof, and the opinion of such counsel
filed as Exhibit 8 to the Registration Statement is confirmed and
the Underwriter may rely upon such opinion as if it were addressed
to it.
In rendering such opinion, such counsel may (i) state that its opinion is
limited to matters governed by the Federal laws of the United States of
America and the States of Delaware, Maryland and New York; (ii) rely (to
the extent such counsel deems proper and specifies in their opinion), as
to matters involving the application of the laws of the States of Maryland
and Delaware, upon the opinion of other counsel of good standing, PROVIDED
that such other counsel is reasonably satisfactory to counsel for the
Underwriter and furnishes a copy of its opinion to the Underwriter; (iii)
in respect of matters of fact, upon certificates of officers of the
Company or its Subsidiaries, PROVIDED that such counsel shall state that
it believes that both the Underwriter and it are justified in relying upon
such opinions of local counsel. Such counsel shall also have furnished to
the Underwriter a written statement, addressed to the Underwriter and
dated such Delivery Date, in form and substance satisfactory to the
Underwriter and counsel to the Underwriter, to the effect that (x) such
counsel has acted as counsel to the Company in connection with the
preparation of the Registration Statement and the Prospectus, and (y)
based on the foregoing, no facts have come to the attention of such
counsel which lead it to believe that the Registration Statement, as of
the Effective Date and as of the date the Company's Annual Report on Form
10-K was filed, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary in order to
24
make the statements therein not misleading, or that the Prospectus as of
its date or at the Delivery Date, contained or contains any untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The foregoing
opinion and statement may be qualified by a statement to the effect that
such counsel does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus and may state that such counsel makes no
statement with respect to the financial statements and notes thereto and
other financial data included in the Registration Statement or the
Prospectus.
(e) The Underwriter shall have received from Xxxxxxxx Chance
Xxxxxx & Xxxxx LLP, counsel for the Underwriter, such opinion or opinions,
dated such Delivery Date, with respect to the issuance and sale of the
Shares, the Registration Statement, the Prospectus and other related
matters as the Underwriter may reasonably require, and the Company shall
have furnished to such counsel such documents as they reasonably request
for the purpose of enabling them to pass upon such matters.
(f) At the time of execution of this Agreement, the
Underwriter shall have received from Ernst & Young LLP a letter, in form
and substance satisfactory to the Underwriter, addressed to the
Underwriter and dated the date hereof (i) confirming that they are
independent public accountants within the meaning of the Securities Act
and are in compliance with the applicable requirements relating to the
qualification of accountants under Rule 2-01 of Regulation S-X of the
Commission, and (ii) stating, as of the date hereof (or, with respect to
matters involving changes or developments since the respective dates as of
which specified financial information is given in the Prospectus, as of a
date not more than five days prior to the date hereof), the conclusions
and findings of such firm with respect to the financial information and
other matters ordinarily covered by accountants' "comfort letters" to
underwriters in connection with registered public offerings as
contemplated in the Statement on Auditing Standards No. 72.
(g) With respect to the letter of Ernst & Young LLP referred
to in the preceding paragraph and delivered to the Underwriter
concurrently with the execution of this Agreement (the "INITIAL LETTER"),
the Company shall have furnished to the Underwriter a letter (the
"BRING-DOWN LETTER") of such accountants, addressed to the Underwriter and
dated such Delivery Date (i) confirming that they are independent public
accountants within the meaning of the Securities Act and are in compliance
with the applicable requirements relating to the qualification of
accountants under Rule 2-01 of Regulation S-X of the Commission, (ii)
stating, as of the date of the bring-down letter (or, with respect to
matters involving changes or developments since the respective dates as of
which specified financial information is given in the Prospectus, as of a
date not more than five days prior to the date of the bring-down letter),
the conclusions and findings of such firm with respect to the financial
information and other matters covered by the initial letter and (iii)
confirming in all material respects the conclusions and findings set forth
in the initial letter.
(h) The Company and the Operating Partnership shall have
furnished to the Underwriter a certificate, dated such Delivery Date, of
its, or its general partner's Chairman of the Board, its President or a
Vice President and its chief financial officer stating that:
25
(i) The representations, warranties and agreements
of the Transaction Entities in Section 1 are true and correct as of
such Delivery Date; the Company has complied with all its agreements
contained herein; and the conditions set forth in Sections 7(a) and
(b) have been fulfilled; and
(ii) They have carefully examined the Registration
Statement and the Prospectus and, in their opinion (A) as of the
Effective Date, the Registration Statement and Prospectus did not
include any untrue statement of a material fact and did not omit to
state a material fact required to be stated therein or necessary to
make the statements therein (with respect to the Prospectus, in
light of the circumstances under which they were made) not
misleading, and (B) since the Effective Date no event has occurred
which should have been set forth in a supplement or amendment to the
Registration Statement or the Prospectus.
(i) The NYSE shall have approved the Shares for listing,
subject only to official notice of issuance.
(j) On the Delivery Date, counsel for the Underwriter shall
have been furnished with such documents and opinions as they may require
for the purpose of enabling them to pass upon the issuance and sale of the
Shares as herein contemplated and related proceedings, or in order to
evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all
proceedings taken by the Transaction Entities in connection with the
issuance and sale of the Shares as herein contemplated shall be
satisfactory in form and substance to the Underwriter and counsel for the
Underwriter.
(k) The Company shall have furnished or caused to be furnished
to you such further certificates and documents as the Underwriter or
counsel to the Underwriter shall have reasonably requested.
(l) Intentionally omitted.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriter.
Any certificate or document signed by any officer of the Transaction
Entities and delivered to the Underwriter, or to counsel for the Underwriter,
shall be deemed a representation and warranty by the Transaction Entities to the
Underwriter as to the statements made therein.
8. EFFECTIVE DATE OF AGREEMENT.
This Agreement shall become effective: (i) upon the execution hereof
by the parties hereto; or (ii) if, at the time this Agreement is executed and
delivered, it is necessary for a post-effective amendment to the Registration
Statement to be declared effective before the offering of the Shares may
commence, when notification of the effectiveness of such post-effective
amendment has been released by the Commission.
9. Intentionally omitted.
10. INDEMNIFICATION AND CONTRIBUTION.
26
(a) The Transaction Entities jointly and severally, shall
indemnify and hold harmless the Underwriter, its officers and employees
and each person, if any, who controls the Underwriter within the meaning
of the Securities Act, from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof (including,
but not limited to, any loss, claim, damage, liability or action relating
to purchases and sales of Shares), to which that Underwriter, officer,
employee or controlling person may become subject, under the Securities
Act or otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained in any Preliminary
Prospectus Supplement, the Registration Statement or the Prospectus or in
any amendment or supplement thereto or (ii) the omission or alleged
omission to state in any Preliminary Prospectus Supplement, the
Registration Statement or the Prospectus, or in any amendment or
supplement thereto, any material fact required to be stated therein or
necessary to make the statements therein (with respect to the Prospectus,
in light of the circumstances under which they were made) not misleading,
and shall reimburse the Underwriter and each such officer, employee or
controlling person promptly upon demand for any legal or other expenses
reasonably incurred by the Underwriter, officer, employee or controlling
person in connection with investigating or defending or preparing to
defend against any such loss, claim, damage, liability or action as such
expenses are incurred; PROVIDED, HOWEVER, that the Transaction Entities
shall not be liable in any such case to the extent that any such loss,
claim, damage, liability or action arises out of, or is based upon, any
untrue statement or alleged untrue statement or omission or alleged
omission made in any Preliminary Prospectus Supplement, the Registration
Statement or the Prospectus, or in any such amendment or supplement, in
reliance upon and in conformity with written information concerning the
Underwriter furnished to the Company by or on behalf of the Underwriter
specifically for inclusion therein, which information consists solely of
the information specified in Section 10(e). The foregoing indemnity
agreement is in addition to any liability which the Transaction Entities
may otherwise have to the Underwriter or to any officer, employee or
controlling person of the Underwriter.
(b) The Underwriter shall indemnify and hold harmless each
Transaction Entity, its officers and employees, each of its directors, and
each person, if any, who controls each Transaction Entity within the
meaning of the Securities Act, from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which
each Transaction Entity or any such director, officer or controlling
person may become subject, under the Securities Act or otherwise, insofar
as such loss, claim, damage, liability or action arises out of, or is
based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus Supplement, the
Registration Statement or the Prospectus or in any amendment or supplement
thereto, or (ii) the omission or alleged omission to state in any
Preliminary Prospectus Supplement, the Registration Statement or the
Prospectus, or in any amendment or supplement thereto, any material fact
required to be stated therein or necessary to make the statements therein
not misleading, but in each case only to the extent that the untrue
statement or alleged untrue statement or omission or alleged omission was
made in reliance upon and in conformity with written information
concerning the Underwriter furnished to the Company by or on behalf of the
Underwriter specifically for inclusion therein, and shall reimburse each
Transaction Entity and any such director, officer or controlling person
for any legal or other expenses reasonably
27
incurred by each Transaction Entity or any such director, officer or
controlling person in connection with investigating or defending or
preparing to defend against any such loss, claim, damage, liability or
action as such expenses are incurred. The foregoing indemnity agreement is
in addition to any liability which the Underwriter may otherwise have to
each Transaction Entity or any such director, officer, employee or
controlling person.
(c) Promptly after receipt by an indemnified party under this
Section 10 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under this Section 10, notify the
indemnifying party in writing of the claim or the commencement of that
action; PROVIDED, HOWEVER, that the failure to notify the indemnifying
party shall not relieve it from any liability which it may have under this
Section 10 except to the extent it has been materially prejudiced by such
failure and, PROVIDED FURTHER, that the failure to notify the indemnifying
party shall not relieve it from any liability which it may have to an
indemnified party otherwise than under this Section 10. If any such claim
or action shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly
with any other similarly notified indemnifying party, to assume the
defense thereof with counsel reasonably satisfactory to the indemnified
party. After notice from the indemnifying party to the indemnified party
of its election to assume the defense of such claim or action, the
indemnifying party shall not be liable to the indemnified party under this
Section 10 for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall (i) without
the prior written consent of the indemnified parties (which consent shall
not be unreasonably withheld), settle or compromise or consent to the
entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified
parties are actual or potential parties to such claim or action) unless
such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim,
action, suit or proceeding, or (ii) be liable for any settlement of any
such action effected without its written consent (which consent shall not
be unreasonably withheld), but if settled with the consent of the
indemnifying party or if there be a final judgment of the plaintiff in any
such action, the indemnifying party agrees to indemnify and hold harmless
any indemnified party from and against any loss or liability by reason of
such settlement or judgment.
(d) If the indemnification provided for in this Section 10
shall for any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 10(a) or 10(b) in respect of any loss,
claim, damage or liability, or any action in respect thereof, referred to
therein, then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such
indemnified party as a result of such loss, claim, damage or liability, or
action in respect thereof, (i) in such proportion as shall be appropriate
to reflect the relative benefits received by the Transaction Entities on
the one hand and the Underwriter on the other from the offering of the
Shares or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the
28
Transaction Entities on the one hand and the Underwriter on the other with
respect to the statements or omissions which resulted in such loss, claim,
damage or liability, or action in respect thereof, as well as any other
relevant equitable considerations. The relative benefits received by the
Transaction Entities on the one hand and the Underwriter on the other with
respect to such offering shall be deemed to be in the same proportion as
the total net proceeds from the offering of the Shares purchased under
this Agreement (before deducting expenses) received by the Transaction
Entities, on the one hand, and the total underwriting discounts and
commissions received by the Underwriter with respect to the Shares
purchased under this Agreement, on the other hand, bear to the total gross
proceeds from the offering of the Shares under this Agreement, in each
case as set forth in the table on the cover page of the Prospectus. The
relative fault shall be determined by reference to whether the untrue or
alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the
Transaction Entities or the Underwriter, the intent of the parties and
their relative knowledge, access to information and opportunity to correct
or prevent such statement or omission. The Transaction Entities and the
Underwriter agree that it would not be just and equitable if contributions
pursuant to this Section were to be determined by pro rata allocation or
by any other method of allocation which does not take into account the
equitable considerations referred to herein. The amount paid or payable by
an indemnified party as a result of the loss, claim, damage or liability,
or action in respect thereof, referred to above in this Section shall be
deemed to include, for purposes of this Section 10(d), any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 10(d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at
which the Shares underwritten by it and distributed to the public was
offered to the public exceeds the amount of any damages which the
Underwriter has otherwise paid or become liable to pay by reason of any
untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation.
(e) The Underwriter confirms and each Transaction Entity
acknowledges that (i) the statements with respect to the public offering
of the Shares by the Underwriter set forth on the cover page of the
Prospectus Supplement and (ii) the name of the Underwriter and the number
of Shares which it is purchasing and the information contained in the
third, tenth and eleventh paragraphs, in each case appearing under the
caption "Underwriting" in the Prospectus Supplement are correct and
constitute the only information concerning the Underwriter furnished in
writing to the Company by or on behalf of the Underwriter specifically for
inclusion in the Registration Statement and the Prospectus.
11. TERMINATION. The obligations of the Underwriter hereunder may
be terminated by notice given to and received by the Company prior to delivery
of and payment for the Shares if, prior to that time, any of the following
events shall have occurred or if the Underwriter shall decline to purchase the
Shares for any reason permitted under this Agreement:
(a) (i) Any of the Transaction Entities or any Property shall
have sustained, since the date of the latest financial statements included
in the Prospectus, any loss or interference with its business from fire,
explosion, flood or other calamity,
29
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus or (ii) since the date of the latest
financial statements included in the Prospectus there shall have been any
change in the capital stock or long-term debt of any Transaction Entity or
any change, or any development involving a prospective change, in or
affecting any Property or the general affairs, management, financial
position, stockholders' equity or results of operations of any Transaction
Entity, otherwise than as set forth or contemplated in the Prospectus, the
effect of which, in any such case described in clause (i) or (ii), is, in
the judgment of the Underwriter, so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or the
delivery of the Shares being delivered on such Delivery Date on the terms
and in the manner contemplated in the Prospectus;
(b) Subsequent to the execution and delivery of this Agreement
there shall have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange or the American Stock Exchange or
in the over-the-counter market, or trading in any securities of the
Company on any exchange or in the over-the-counter market, shall have been
suspended or minimum prices shall have been established on any such
exchange or such market by the Commission, by such exchange or by any
other regulatory body or governmental authority having jurisdiction, (ii)
a banking moratorium shall have been declared by Federal or New York state
authorities, (iii) the United States shall have become engaged in
hostilities, there shall have been an escalation in hostilities involving
the United States or there shall have been a declaration of a national
emergency or war by the United States or (iv) there shall have occurred
such a material adverse change in general economic, political or financial
conditions (or the effect of international conditions on the financial
markets in the United States shall be such) as to make it, in the sole
judgment of the Underwriter, impracticable or inadvisable to proceed with
the public offering or delivery of the Shares being delivered on such
Delivery Date on the terms and in the manner contemplated in the
Prospectus; or
(c) The Transaction Entities shall have failed at or prior to
such Delivery Date to have performed or complied with any of their
agreements herein contained and required to be performed or complied with
by them hereunder at or prior to such Delivery Date.
12. REIMBURSEMENT OF UNDERWRITER'S EXPENSES. If (a) the Company
shall fail to tender the Shares for delivery to the Underwriter by reason of any
failure, refusal or inability on the part of the Transaction Entities to perform
any agreement on their part to be performed, or because any condition specified
in Sections 11(a) and (c) hereof required to be fulfilled by the Transaction
Entities is not fulfilled, the Transaction Entities will reimburse the
Underwriter for all reasonable out-of-pocket expenses (including reasonable fees
and disbursements of counsel) incurred by the Underwriter in connection with
this Agreement and the proposed purchase of the Shares, and upon demand the
Transaction Entities shall pay the full amount thereof to the Underwriter. If
this Agreement is terminated pursuant to Section 11(b) by reason of the default
of the Underwriter, the Transaction Entities shall not be obligated to reimburse
the defaulting Underwriter on account of those expenses.
13. NOTICES, ETC. All statements, requests, notices and agreements
hereunder shall be in writing, and:
30
(a) if to the Underwriter, shall be delivered or sent by mail,
telex or facsimile transmission to Xxxxxxx Xxxxx Xxxxxx Inc., 000
Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxx
Xxxxxxxx.
(b) if to the Transaction Entities shall be delivered or sent
by mail, telex or facsimile transmission to the Company, 000 Xxxxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxx Xxxxxxxx and Xxxxxx
Xxxxxx (Fax: (000) 000-0000).
14. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall
inure to the benefit of and be binding upon the Underwriter, the Transaction
Entities, and their respective personal representatives and successors. This
Agreement and the terms and provisions hereof are for the sole benefit of only
those persons, except that (a) the representations, warranties, indemnities and
agreements of the Transaction Entities contained in this Agreement shall also be
deemed to be for the benefit of the person or persons, if any, who control the
Underwriter within the meaning of Section 15 of the Securities Act and (b) the
indemnity agreement of the Underwriter contained in Section 10(b) of this
Agreement shall be deemed to be for the benefit of directors of the Transaction
Entities, officers of the Company who have signed the Registration Statement and
any person controlling the Transaction Entities within the meaning of Section 15
of the Securities Act. Nothing in this Agreement is intended or shall be
construed to give any person, other than the persons referred to in this Section
14, any legal or equitable right, remedy or claim under or in respect of this
Agreement or any provision contained herein.
15. SURVIVAL. The respective indemnities, representations,
warranties and agreements of the Transaction Entities and the Underwriter
contained in this Agreement or made by or on behalf on them, respectively,
pursuant to this Agreement, shall survive the delivery of and payment for the
Shares and shall remain in full force and effect, regardless of any
investigation made by or on behalf of any of them or any person controlling any
of them.
16. DEFINITION OF THE TERMS "BUSINESS DAY" AND "SUBSIDIARY". For
purposes of this Agreement, (a) "business day" means any day on which the New
York Stock Exchange, Inc. is open for trading and (b) "subsidiary" has the
meaning set forth in Rule 405 of the Securities Act Regulations.
17. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of New York.
18. COUNTERPARTS. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
19. HEADINGS. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
[Remainder of page intentionally left blank.]
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If the foregoing correctly sets forth the agreement between the
Company and the Underwriter, please indicate your acceptance in the space
provided for that purpose below.
Very truly yours,
XX XXXXX REALTY CORP.
By: /s/ Xxxxxxx X. Xxxx
--------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Chief Operating Officer
XX XXXXX OPERATING PARTNERSHIP, L.P.
By: XX Xxxxx Realty Corp.,
its general partner
By: /s/ Xxxxxxx X. Xxxx
----------------------------------
Name: Xxxxxxx X. Xxxx
Title: Chief Operating Officer
XX XXXXX MANAGEMENT LLC
By: XX Xxxxx Operating Partnership, L.P.,
its managing member
By: /s/ Xxxxxxx X. Xxxx
-------------------------------
Name: Xxxxxxx X. Xxxx
Title: Chief Operating Officer
32
Accepted:
XXXXXXX XXXXX XXXXXX INC.
By: /s/ Xxxxxxx Xxxxxxxx
--------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Managing Director
33
