Exhibit 10.1
RECKSON OPERATING PARTNERSHIP, L.P.
UNDERWRITING AGREEMENT
TABLE OF CONTENTS
PAGE
UNDERWRITING AGREEMENT.........................................................1
SECTION 1 Representations and Warranties......................................3
(a) Representations and Warranties by the Operating Partnership...........3
(1) Compliance with Registration Requirements........................3
(2) Incorporated Documents...........................................4
(3) Independent Accountants..........................................5
(4) Financial Statements.............................................5
(5) No Material Adverse Change in Business...........................5
(6) Good Standing of the Company.....................................6
(7) Good Standing of the Operating Partnership.......................6
(8) Good Standing of the Subsidiaries................................6
(9) Capitalization of Operating Partnership..........................7
(10) Authorization of Debt Securities and Indenture...................7
(11) Descriptions of the Underwritten Securities and
the Indenture....................................................7
(12) Authorization of this Underwriting Agreement and
Terms Agreement..................................................8
(13) Absence of Defaults and Conflicts................................8
(14) Absence of Labor Dispute.........................................9
(15) Absence of Proceedings...........................................9
(16) Accuracy of Exhibits.............................................9
(17) REIT Qualification...............................................9
(18) Investment Company Act...........................................9
(19) Intellectual Property............................................9
(20) Absence of Further Requirements.................................10
(21) Possession of Licenses and Permits..............................10
(22) Title to Property...............................................10
(23) Environmental Laws..............................................11
(24) Tax Returns.....................................................12
(25) Environmental Consultants.......................................12
(26) Title Insurance.................................................12
(27) Absence of Regulation M Violation...............................12
(28) Year 2000 Problem...............................................13
(b) Officers' Certificates...............................................13
SECTION 2 Sale and Delivery to Underwriters; Closing.........................13
(a) Underwritten Securities..............................................13
(b) Option Underwritten Securities.......................................13
(c) Payment..............................................................14
(d) Denominations; Registration..........................................14
SECTION 3 Covenants of the Operating Partnership.............................15
(a) Compliance with Securities Regulations and Commission Requests.......15
(b) Filing of Amendments.................................................15
(c) Delivery of Registration Statements..................................15
(d) Delivery of Prospectuses.............................................16
(e) Continued Compliance with Securities Laws............................16
(f) Blue Sky Qualifications..............................................16
(g) Earnings Statement...................................................17
(h) Reporting Requirements...............................................17
(i) Restriction on Sale of Securities....................................17
(j) REIT Qualification...................................................17
(k) Use of Proceeds......................................................17
(l) Exchange Act Filings.................................................17
(m) No Manipulation of Market for Securities.............................17
SECTION 4 Payment of Expenses................................................18
(a) Expenses.............................................................18
(b) Termination of Agreement.............................................18
SECTION 5 Conditions of Underwriters' Obligations............................18
(a) Effectiveness of Registration Statement..............................19
(b) Opinion of Counsel for the Operating Partnership.....................19
(c) Opinion of Counsel for Underwriters..................................19
(d) Officers' Certificate................................................19
(e) Accountant's Comfort Letter..........................................20
(f) Bring-down Comfort Letter............................................20
(g) Ratings..............................................................20
(h) Approval of Listing..................................................20
(j) Over-Allotment Option................................................20
(k) Additional Documents.................................................21
(l) Termination of Terms Agreement.......................................21
SECTION 6 Indemnification....................................................21
(a) Indemnification of Underwriters......................................21
(b) Indemnification of Operating Partnership.............................22
(c) Actions against Parties; Notification; Settlement without
Consent if Failure to Reimburse......................................23
SECTION 7 Contribution.......................................................23
SECTION 8 Representations, Warranties and Agreements to Survive Delivery.....24
SECTION 9 Termination........................................................25
(a) Underwriting Agreement...............................................25
(b) Terms Agreement......................................................25
(c) Liabilities..........................................................25
SECTION 10 Default by One or More of the Underwriters.........................25
SECTION 11 Notices............................................................26
SECTION 12 Parties............................................................26
SECTION 13 GOVERNING LAW AND TIME.............................................27
SECTION 14 Effect of Headings.................................................27
RECKSON OPERATING PARTNERSHIP, L.P.
(a Delaware limited partnership)
Debt Securities
UNDERWRITING AGREEMENT
March 23, 1999
XXXXXXX, XXXXX & CO.
c/o Goldman, Sachs & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Reckson Operating Partnership, L.P., a Delaware limited partnership
(the "Operating Partnership"), proposes to issue and sell up to $500,000,000
aggregate initial public offering price of its debt securities ("Debt
Securities") from time to time, in or pursuant to one or more offerings on
terms to be determined at the time of sale.
The terms and rights of any particular issuance of Debt Securities
shall be as specified in the Terms Agreement (as defined below) relating
thereto and in or pursuant to the indenture and any supplements or amendments
thereto (the "Indenture") identified in such Terms Agreement.
Whenever the Operating Partnership determines to make an offering of
Debt Securities through Xxxxxxx, Xxxxx & Co. ("Xxxxxxx Sachs") or through an
underwriting syndicate managed by Xxxxxxx Xxxxx, Xxxxxxx Xxxxx and the
Operating Partnership will enter into an agreement (each, a "Terms Agreement")
providing for the sale of such Debt Securities to, and the purchase and
offering thereof by, Xxxxxxx Sachs and such other underwriters, if any,
selected by Xxxxxxx Xxxxx (the "Underwriters", which term shall include
Xxxxxxx Sachs, whether acting as sole Underwriter or as a member of an
underwriting syndicate, as well as any Underwriter substituted pursuant to
Section 10 hereof); provided, that, the Operating Partnership is not
obligated, and shall have complete and absolute discretion to determine if and
when, to make any offering, to make any offering through Xxxxxxx Xxxxx or any
other person, or to enter into any Terms Agreement. Prior to execution of a
Terms Agreement, this Underwriting Agreement shall not be construed as an
obligation of the Operating Partnership to sell any Debt Securities or as an
obligation of any of the Underwriters to purchase Debt Securities. The
obligation of the Operating Partnership to issue and sell any Debt Securities
and the obligation of any of the Underwriters to purchase any Debt Securities
shall be evidenced by the Terms Agreement with respect to the Underwritten
Securities (as defined below) specified therein. The Terms Agreement relating
to the offering of Debt Securities shall specify the aggregate principal
amount of Debt Securities to be initially issued (the "Initial Underwritten
Securities"), the name of each Underwriter participating in such offering
(subject to substitution as provided in Section 10 hereof), the name of any
Underwriter other than Xxxxxxx Sachs acting as co-manager in connection with
such offering, the aggregate principal amount of Initial Underwritten
Securities which each such Underwriter severally agrees to purchase, whether
such offering is on a fixed or variable price basis and, if on a fixed price
basis, the initial offering price, the price at which the Initial Underwritten
Securities are to be purchased by the Underwriters, the form, time, date and
place of delivery and payment of the Initial Underwritten Securities and any
other material variable terms of the Initial Underwritten Securities. In
addition, if applicable, such Terms Agreement shall specify whether the
Operating Partnership has agreed to grant to the Underwriters an option to
purchase additional Debt Securities to cover over-allotments, if any, and
aggregate principal amount of Debt Securities subject to such option (the
"Option Underwritten Securities"). As used herein, the term "Underwritten
Securities" shall include the Initial Underwritten Securities and all or any
portion of any Option Underwritten Securities. The Terms Agreement, which
shall be substantially in the form of Exhibit A hereto, may take the form of
an exchange of any standard form of written telecommunication between the
Operating Partnership and Xxxxxxx Xxxxx, acting for itself and, if applicable,
as representative of any other Underwriters. Each offering of Underwritten
Securities through Xxxxxxx Sachs as sole Underwriter or through an
underwriting syndicate managed by Xxxxxxx Xxxxx will be governed by this
Underwriting Agreement, as supplemented by the applicable Terms Agreement.
Reckson Associates Realty Corp., a Maryland corporation (the
"Company") and the Operating Partnership have filed with the Securities and
Exchange Commission (the "Commission") a registration statement on Form S-3
(No. 333-67129), for the registration of certain securities, including the
Debt Securities, under the Securities Act of 1933, as amended (the "1933
Act"), and the offering thereof from time to time in accordance with Rule 415
of the rules and regulations of the Commission under the 1933 Act (the "1933
Act Regulations"), and the Company and the Operating Partnership have filed
such post-effective amendments thereto as may be required prior to the
execution of the applicable Terms Agreement. Such registration statement (as
so amended, if applicable) has been declared effective by the Commission. Such
registration statement (as so amended, if applicable), including the
information, if any, deemed to be a part thereof pursuant to Rule 430A(b) of
the 1933 Act Regulations (the "Rule 430A Information") or Rule 434(d) of the
1933 Act Regulations (the "Rule 434 Information"), is referred to herein as
the "Registration Statement"; and the final prospectus constituting a part
thereof and the applicable prospectus supplement relating to the offering of
the Underwritten Securities, in the form first furnished to the Underwriters
by the Operating Partnership for use in connection with the offering of the
Underwritten Securities, are collectively referred to herein as the
"Prospectus"; provided, however, that all references to the "Registration
Statement" and the "Prospectus" shall be deemed to include all documents
incorporated therein by reference pursuant to the Securities Exchange Act of
1934, as amended (the "1934 Act"), prior to the execution of the applicable
Terms Agreement; provided, further, that if the Operating Partnership files a
registration statement with the Commission pursuant to Section 462(b) of the
1933 Act Regulations (the "Rule 462(b) Registration Statement"), then, after
such filing, all references to "Registration Statement" shall be deemed to
include the Rule 462(b) Registration Statement; provided, however, a
prospectus supplement shall be deemed to have supplemented the Prospectus only
with respect to the offering of the Underwritten Securities to which it
relates, and provided, further, that if the Operating Partnership elects to
rely upon Rule 434 of the 1933 Act Regulations, then all references to
"Prospectus" shall be deemed to include the final or preliminary prospectus
and the applicable term sheet or abbreviated term sheet (the "Term Sheet"), as
the case may be, in the form first furnished to the Underwriters by the
Operating Partnership in reliance upon Rule 434 of the 1933 Act Regulations,
and all references in this Underwriting Agreement to the date of the
Prospectus shall mean the date of the Term Sheet. A "preliminary prospectus"
shall be deemed to refer to any prospectus used before the registration
statement became effective and any prospectus that omitted, as applicable, the
Rule 430A Information, the Rule 434 Information or other information to be
included upon pricing in a form of prospectus filed with the Commission
pursuant to Rule 424(b) of the 1933 Act Regulations, that was used after such
effectiveness and prior to the execution and delivery of the applicable Terms
Agreement. For purposes of this Underwriting Agreement, all references to the
Registration Statement, Prospectus, Term Sheet or preliminary prospectus or to
any amendment or supplement to any of the foregoing shall be deemed to include
the copy filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval system ("XXXXX"). Capitalized terms used but not
otherwise defined herein shall have the meanings given to those terms in the
Prospectus.
All references in this Underwriting Agreement to financial statements
and schedules and other information which is "contained," "included" or
"stated" (or other references of like import) in the Registration Statement,
Prospectus or preliminary prospectus shall be deemed to mean and include all
such financial statements and schedules and other information which is or
deemed to be incorporated by reference in the Registration Statement,
Prospectus or preliminary prospectus, as the case may be; and all references
in this Underwriting Agreement to amendments or supplements to the
Registration Statement, Prospectus or preliminary prospectus shall be deemed
to mean and include the filing of any document under the 1934 Act which is or
is deemed to be incorporated by reference in the Registration Statement,
Prospectus or preliminary prospectus, as the case may be.
The term "Subsidiary" means a corporation or a partnership a majority
of the outstanding voting stock, partnership or membership interests, as the
case may be, of which is owned or controlled, directly or indirectly, by the
Operating Partnership or by one or more other Subsidiaries of the Operating
Partnership.
SECTION 1. Representations and Warranties.
(a) REPRESENTATIONS AND WARRANTIES BY THE OPERATING PARTNERSHIP. The
Operating Partnership represents and warrants to Xxxxxxx Xxxxx, as of the date
hereof, and to each Underwriter named in the applicable Terms Agreement, as of
the date thereof, as of the Closing Time (as defined below) and, if
applicable, as of each Date of Delivery (as defined below) (in each case, a
"Representation Date"), as follows:
(1) Compliance with Registration Requirements. The Operating
Partnership meets the requirements for use of Form S-3 under the 1933 Act.
Each of the Registration Statement and any Rule 462(b) Registration
Statement has become effective under the 1933 Act and no stop order
suspending the effectiveness of the Registration Statement or any Rule
462(b) Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or, to
the knowledge of the Operating Partnership, are contemplated by the
Commission or the state securities authority of any jurisdiction, and any
request on the part of the Commission for additional information has been
complied with. No order preventing or suspending the use of the Prospectus
has been issued and no proceeding for that purpose has been instituted or,
to the knowledge of the Operating Partnership threatened by the Commission
or the state securities authority of any jurisdiction.
At the respective times the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto
(including the filing of the Operating Partnership's most recent Annual
Report on Form 10-K with the Commission (the "Annual Report on Form
10-K")) became effective and at each Representation Date, the Registration
Statement, any Rule 462(b) Registration Statement and any amendments and
supplements thereto complied and will comply in all material respects with
the requirements of the 1933 Act and the 1933 Act Regulations and the
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), and
the rules and regulations of the Commission under the Indenture Act (the
"1939 Act Regulations") and did not and will not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading. At the date of the Prospectus, and at each Representation
Date, the Prospectus, and any amendments and supplements thereto did not
and will not include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading. If the Operating Partnership elects to rely upon Rule 434 of
the 1933 Act Regulations, the Operating Partnership will comply with the
requirements of Rule 434. Notwithstanding the foregoing, the
representations and warranties in this subsection shall not apply to
statements in or omissions from the Registration Statement, or the
Prospectus made in reliance upon and in conformity with information
furnished to the Operating Partnership in writing by any Underwriter
through Xxxxxxx Sachs expressly for use in the Registration Statement or
the Prospectus.
Each preliminary prospectus and Prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment or
supplement thereto, or filed pursuant to Rule 424 under the 1933 Act,
complied when so filed in all material respects with the 1933 Act and the
1933 Act Regulations and, if applicable, each preliminary prospectus and
the Prospectus delivered to the Underwriters for use in connection with
the offering of Underwritten Securities will, at the time of such
delivery, be identical to the electronically transmitted copies thereof
filed with the Commission pursuant to XXXXX, except to the extent
permitted by Regulation S-T.
If a Rule 462(b) Registration Statement is required in connection
with the offering and sale of the Securities, the Operating Partnership
has complied or will comply with the requirements of Rule 111 under the
1933 Act Regulations relating to the payment of filing fees therefor.
(2) Incorporated Documents. The documents incorporated or deemed to
be incorporated by reference in the Registration Statement and the
Prospectus, at the time they were or hereafter are filed with the
Commission, complied and will comply in all material respects with the
requirements of the 1934 Act and the rules and regulations of the
Commission thereunder (the "1934 Act Regulations") and, when read together
with the other information in the Prospectus, at the date of the
Prospectus and at each Representation Date, or during the period specified
in Section 3(e), did not and will not include an untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading.
(3) Independent Accountants. The accountants who certified the
financial statements and supporting schedules included in the Registration
Statement and the Prospectus are independent public accountants as
required by the 1933 Act and the 1933 Act Regulations.
(4) Financial Statements. The financial statements of the Operating
Partnership included, or incorporated by reference, in the Registration
Statement and the Prospectus, together with the related schedules and
notes, as well as those financial statements, schedules and notes of any
other entity acquired or to be acquired by the Operating Partnership
included therein, present fairly the financial position of the respective
entity or entities or group presented therein at the respective dates
indicated and the statement of operations, stockholders' equity and cash
flows of such entity, as the case may be, for the periods specified.
Except as otherwise stated in the Registration Statement, such financial
statements have been prepared in conformity with generally accepted
accounting principles ("GAAP") applied on a consistent basis throughout
the periods involved. The supporting schedules, if any, included or
incorporated by reference in the Registration Statement and the Prospectus
present fairly, in accordance with GAAP, the information required to be
stated therein. In addition, any pro forma financial information and the
related notes thereto included or incorporated by reference in the
Registration Statement and the Prospectus present fairly the information
shown therein, have been prepared in accordance with the Commission's
rules and guidelines with respect to pro forma information and have been
properly compiled on the bases described therein, and the assumptions used
in the preparation thereof were then reasonable and the adjustments used
therein were then appropriate to give effect to the transactions and
circumstances referred to therein. All historical financial statements and
information and all pro forma financial statements and information
relating to the Operating Partnership or any entity acquired or to be
acquired by the Operating Partnership required by the 1933 Act, the 1933
Act Regulations, the 1934 Act and the 1934 Act Regulations are included,
or incorporated by reference, in the Registration Statement and the
Prospectus.
(5) No Material Adverse Change in Business. Since the respective
dates as of which information is given in the Registration Statement and
the Prospectus, except as otherwise stated therein, (A) there has been no
material adverse change in the condition, financial or otherwise, or in
the earnings, assets, business affairs or business prospects of the
Operating Partnership and the Subsidiaries considered as one enterprise
whether or not arising in the ordinary course of business, which would be
material to the Operating Partnership, taken as a whole (anything which
would be material to the Operating Partnership taken as a whole, being
hereinafter referred to as "Material;" and such a material adverse change,
a "Material Adverse Effect"), (B) no casualty loss or condemnation or
other adverse event with respect to any of the interests held directly or
indirectly in any of the real properties or real property interests,
including without limitation, any interest or participation, direct or
indirect, in any mortgage obligation owned, directly or indirectly, by the
Operating Partnership or any Subsidiary (the "Properties") has occurred
which would be Material, (C) there have been no transactions or
acquisitions entered into by the Operating Partnership or any Subsidiary,
other than those in the ordinary course of business, which would be
Material, (D) except for regular quarterly distributions on units of the
Operating Partnership (the "Units"), there has been no dividend or
distribution of any kind declared, paid or made by the Operating
Partnership with respect to its Units, and (E) there has been no increase
in the long term debt or decrease in the capital of the Operating
Partnership or any Subsidiary.
(6) Good Standing of the Company. The Company has been duly organized
and is validly existing as a corporation in good standing under the laws
of the State of Maryland and has corporate power and authority to own,
lease and operate its properties and to conduct its business as described
in the Prospectus and to enter into and perform its obligations under, or
as contemplated under this Underwriting Agreement and the applicable Terms
Agreement. The Company is duly qualified as a foreign corporation to
transact business and is in good standing in each other jurisdiction in
which such qualification is required, whether by reason of the ownership
or leasing of property or the conduct of business, except where the
failure to so qualify or be in good standing would not result in a
Material Adverse Effect.
(7) Good Standing of the Operating Partnership. The Operating
Partnership is duly organized and validly existing as a limited
partnership in good standing under the laws of the State of Delaware, with
partnership power and authority to own, lease and operate its properties,
to conduct the business in which it is engaged and proposes to engage as
described in the Prospectus and to enter into and perform its obligations
under this Agreement and the applicable Terms Agreement. The Operating
Partnership is duly qualified or registered as a foreign partnership and
is in good standing in each jurisdiction in which such qualification or
registration is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure to so
qualify or register would not have a Material Adverse Effect. The Company
is the sole general partner of the Operating Partnership. The Amended and
Restated Agreement of Limited Partnership of the Operating Partnership,
dated June 2, 1995, as amended through December 6, 1995 (the "Operating
Partnership Agreement"), is in full force and effect.
(8) Good Standing of the Subsidiaries. Each Subsidiary that is a
"significant subsidiary" as such term is defined in Section 1-02 of
Regulation S-X (each a "Significant Subsidiary," and collectively, the
"Significant Subsidiaries") is listed on Exhibit B hereto and has been
duly organized and is validly existing as a corporation, limited
partnership, limited liability company or other entity, as the case may
be, in good standing under the laws of the state of its jurisdiction of
incorporation or organization, as the case may be, with the requisite
power and authority to own, lease and operate its properties, and to
conduct the business in which it is engaged or proposes to engage as
described in the Prospectus. Each such entity is duly qualified or
registered as a foreign corporation, limited partnership or limited
liability company or other entity, as the case may be, to transact
business and is in good standing in each jurisdiction in which such
qualification or registration is required, whether by reason of the
ownership or leasing of property or the conduct of business, except where
the failure to so qualify or register would not have a Material Adverse
Effect. Except as otherwise stated in the Registration Statement and the
Prospectus, all of the issued and outstanding capital stock or other
equity interests of each such entity has been duly authorized and validly
issued and is fully paid and non-assessable, has been offered and sold in
compliance with all applicable laws (including, without limitation,
federal or state securities laws) and are owned, directly or indirectly,
by the Operating Partnership, in each case free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity
(collectively, "Liens"). No shares of capital stock or other equity
interests of such entities are reserved for any purpose, and there are no
outstanding securities convertible into or exchangeable for any capital
stock or other equity interests of such entities and no outstanding
options, rights (preemptive or otherwise) or warrants to purchase or to
subscribe for shares of such capital stock or other equity interests or
any other securities of such entities, except as disclosed in the
Prospectus.
(9) Capitalization of Operating Partnership. The capitalization of
the Operating Partnership is as set forth in the Prospectus as of the date
referenced therein. All the issued and outstanding Units have been duly
authorized and are validly issued, fully paid and non-assessable and have
been offered and sold or exchanged in compliance with all applicable laws
(including, without limitation, federal and state securities laws). There
are no Units reserved for any purpose and there are no outstanding
securities convertible into or exchangeable for any Units and no
outstanding options, rights (preemptive or otherwise) or warrants to
purchase or to subscribe for Units, except for rights granted to the
partners in Omni Partners, L.P. (the "Omni Partnership") and except for
the Merger Agreement, dated December 8, 1998 by and among the Company, the
Operating Partnership, Metropolitan Partners LLC and Tower Realty Trust,
Inc. (the "Tower Merger Agreement").
(10) Authorization of Debt Securities and Indenture. The Underwritten
Securities have been duly authorized by the Operating Partnership, and,
when issued and delivered pursuant to this Agreement and the applicable
Terms Agreement against payment of the requisite consideration therefor,
such Underwritten Securities will have been duly executed, authenticated,
issued and delivered and will constitute valid and legally binding
obligations of the Operating Partnership entitled to the benefits provided
by the Indenture, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles; the
Indenture has been duly qualified under the Trust Indenture Act and has
been duly authorized by the Operating Partnership and, at the Closing Time
and each Date of Delivery for such Underwritten Securities will constitute
a valid and legally binding agreement, enforceable in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles.
(11) Descriptions of the Underwritten Securities and the Indenture.
The Underwritten Securities being sold pursuant to the applicable Terms
Agreement and the Indenture, will conform in all material respects to the
statements relating thereto contained in the Prospectus and will be in
substantially the form filed or incorporated by reference, as the case may
be, as an exhibit to the Registration Statement. The form of debt security
to be used to evidence the Underwritten Securities will be in due and
proper form and will comply with all applicable legal requirements.
(12) Authorization of this Underwriting Agreement and Terms
Agreement. This Underwriting Agreement has been, and the applicable Terms
Agreement as of the date thereof will have been, duly authorized, executed
and delivered by the Operating Partnership.
(13) Absence of Defaults and Conflicts. Neither the Operating
Partnership nor any Subsidiary is in violation of its charter, by-laws,
certificate of limited partnership or partnership agreement or other
organizational document, as the case may be, or in default in the
performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or other agreement or instrument to
which each entity is a party or by which or any of them may be bound, or
to which any of its property or assets may be bound or subject
(collectively, "Agreements and Instruments"), except for such violations
or defaults that would not result in a Material Adverse Effect. The
execution, delivery and performance of this Underwriting Agreement, the
applicable Terms Agreement, the Indenture and any other agreement or
instrument entered into or issued or to be entered into or issued by the
Operating Partnership in connection with the transactions contemplated
hereby or thereby or in the Registration Statement and the Prospectus and
the consummation of the transactions contemplated herein and in the
Registration Statement and the Prospectus (including the issuance and sale
of the Underwritten Securities and the use of the proceeds from the sale
of the Underwritten Securities as described under the caption "Use of
Proceeds") and compliance by the Operating Partnership with its
obligations hereunder and thereunder have been duly authorized by all
necessary partnership action and do not and will not, whether with or
without the giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined below)
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any assets, properties or operations of the Operating
Partnership or any Subsidiary pursuant to, any Agreements and Instruments,
except for such conflicts, breaches, defaults, Repayment Events or liens,
charges or encumbrances that would not result in a Material Adverse
Effect, nor will such action result in any violation of the provisions of
the charter, by-laws or the organizational documents of the Operating
Partnership or any Subsidiary or any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over
the Operating Partnership or any Subsidiary or any of their assets,
properties or operations, except for such violations that would not have a
Material Adverse Effect. As used herein, a "Repayment Event" means any
event or condition which gives the holder of any note, debenture or other
evidence of indebtedness (or any person acting on such holder's behalf)
the right to require the repurchase, redemption or repayment of all or a
material portion of such indebtedness by the Operating Partnership or any
Subsidiary.
(14) Absence of Labor Dispute. No labor dispute with the employees of
the Operating Partnership or any Subsidiary exists or, to the knowledge of
the Operating Partnership, is imminent, and the Operating Partnership is
not aware of any existing or imminent labor disturbance by the employees
of any of its or any Subsidiary's principal suppliers, manufacturers,
customers or contractors, which dispute or disturbance, in either case,
may reasonably be expected to result in a Material Adverse Effect.
(15) Absence of Proceedings. There is no action, suit, proceeding,
inquiry or investigation before or by any court or governmental agency or
body, domestic or foreign, now pending, or to the knowledge of the
Operating Partnership threatened against or affecting the Operating
Partnership or any Subsidiary or any of their respective assets,
properties or operations or any officer or director of the Company which
is required to be disclosed in the Registration Statement and the
Prospectus (other than as stated therein), or which might reasonably be
expected to result in a Material Adverse Effect, or which might reasonably
be expected to materially and adversely affect the consummation of this
Underwriting Agreement, the applicable Terms Agreement, the Indenture or
the transactions contemplated herein or therein. The aggregate of all
pending legal or governmental proceedings to which the Operating
Partnership or any Subsidiary is a party or of which any of their
respective assets, properties or operations is the subject which are not
described in the Registration Statement and the Prospectus, including
ordinary routine litigation incidental to the business, could not
reasonably be expected to result in a Material Adverse Effect.
(16) Accuracy of Exhibits. There are no contracts or documents which
are required to be described in the Registration Statement, the Prospectus
or the documents incorporated by reference therein or to be filed as
exhibits thereto which have not been so described and/or filed as required
and the descriptions thereof or references thereto are correct in all
Material respects.
(17) REIT Qualification. At all times since January 1, 1995 the
Company has been, and upon the sale of the applicable Underwritten
Securities, the Company will continue to be, organized and operated in
conformity with the requirements for qualification as a real estate
investment trust under the Internal Revenue Code of 1986, as amended (the
"Code"), and its proposed method of operation will enable it to continue
to meet the requirements for taxation as a real estate investment trust
under the Code, and no actions have been taken (or not taken which are
required to be taken) which would cause such qualification to be lost.
(18) Investment Company Act. Each of the Company, the Operating
Partnership and any Significant Subsidiary is not, and upon the issuance
and sale of the Underwritten Securities as herein contemplated and the
application of the net proceeds therefrom as described in the Prospectus
will not be, an "investment company" within the meaning of the Investment
Company Act of 1940, as amended (the "1940 Act").
(19) Intellectual Property. To the knowledge of the Operating
Partnership, none of the Operating Partnership or any Subsidiary is
required to own, possess or obtain the consent of any holder of any
trademarks, service marks, trade names or copyrights not now lawfully
owned, possessed or licensed in order to conduct the business now operated
by such entity, and none of the Operating Partnership or any Subsidiary
has received any notice or is otherwise aware of any infringement of or
conflict with asserted rights of others with respect to any such
proprietary rights, and which infringement or conflict (if the subject of
any unfavorable decisions, ruling or finding) singly or in the aggregate
would result in any Material Adverse Effect.
(20) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
or any other entity or person is necessary or required for the performance
by the Operating Partnership of its obligations under this Underwriting
Agreement, the applicable Terms Agreement, the Indenture or in connection
with the transactions contemplated under this Underwriting Agreement, such
Terms Agreement or the Indenture, except such as have been already
obtained or as may be required under state securities laws or under the
by-laws and rules of the National Association of Securities Dealers, Inc.
(the "NASD").
(21) Possession of Licenses and Permits. Each of the Operating
Partnership and the Subsidiaries possesses 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 for such Governmental Licenses, the failure to
obtain would not, singly or in the aggregate, result in a Material Adverse
Effect. The Operating Partnership and the Subsidiaries are in compliance
with the terms and conditions of all such Governmental Licenses, except
where the failure so to comply would not, singly or in the aggregate,
result in a Material Adverse Effect. All of the Governmental Licenses are
valid and in full force and effect, except where the invalidity of such
Governmental Licenses or the failure of such Governmental Licenses to be
in full force and effect would not result in a Material Adverse Effect.
Neither the Operating Partnership nor any Subsidiary has received any
notice of proceedings relating to the revocation or modification of any
such Governmental Licenses which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would result in a
Material Adverse Effect.
(22) Title to Property. The Operating Partnership, the Subsidiaries
or any joint venture partnership in which the Operating Partnership owns
an interest, as the case may be, have good and marketable fee simple title
or leasehold title, as the case may be, to all real property owned or
leased, or represented to be owned or leased, as applicable, by the
Operating Partnership or the Subsidiaries, and good title to all other
properties owned by them, and any improvements thereon and all other
assets that are required for the effective operation of such properties in
the manner in which they currently are operated, free and clear of all
liens, encumbrances, claims, security interests and defects, except such
as are Permitted Encumbrances (as defined below); (B) all liens, charges,
encumbrances, claims or restrictions on or affecting any of the Properties
and the assets of any of the Operating Partnership, the Subsidiaries or
any joint venture partnership in which the Operating Partnership owns an
interest that are required to be disclosed in the Prospectus are disclosed
therein; (C) each of the Properties comply with all applicable codes, laws
and regulations and (including, without limitation, building and zoning
codes, laws and regulations and laws relating to access to the
Properties), except if and to the extent disclosed in the Prospectus and
except for such failures to comply that would not in the aggregate have a
Material Adverse Effect; (D) there are in effect for the assets of each of
the Operating Partnership, the Subsidiaries or any joint venture
partnership in which the Operating Partnership owns an interest, insurance
policies covering the risks and in amounts that are commercially
reasonable for the types of assets owned by them and that are consistent
with the types and amounts of insurance typically maintained by prudent
owners of properties similar to such assets in the markets in which such
assets are located, and none of the Operating Partnership, the
Subsidiaries or any joint venture partnership in which the Operating
Partnership owns an interest has received from any insurance company
notice of any material defects or deficiencies affecting the insurability
of any such assets or any notices of cancellation or intent to cancel any
such policies; and (E) the Operating Partnership has no knowledge of any
pending or threatened, litigation, moratorium, condemnation proceedings,
zoning change, or other similar proceeding or action that could in any
manner affect the size of, use of, improvements on, construction on,
access to or availability of utilities or other necessary services to the
Properties, except such proceedings or actions that would not have a
Material Adverse Effect. All of the leases and subleases material to the
business of the Operating Partnership and the Subsidiaries considered as
one enterprise, and under which the Operating Partnership or any
Subsidiary holds Properties described in the Prospectus, are in full force
and effect, and neither the Operating Partnership nor any Subsidiary has
received any notice of any material claim of any sort that has been
asserted by anyone adverse to the rights of the Operating Partnership nor
any Subsidiary under any of the leases or subleases mentioned above, or
affecting or questioning the rights of the Operating Partnership or any
Subsidiary of the continued possession of the leased or subleased premises
under any such lease or sublease. "Permitted Encumbrance" shall mean (a)
liens on certain Properties securing any of the Operating Partnership, any
Subsidiary or joint venture partnership obligations, (b) other liens which
are expressly described in, or which are incorporated by reference into,
the Prospectus and (c) customary easements and encumbrances and other
exceptions to title which do not impair the operation, development or use
of the Properties for the purposes intended therefor as contemplated in
the Prospectus.
(23) Environmental Laws. Except as otherwise stated in the
Registration Statement and the Prospectus and except such violations as
would not, singly or in the aggregate, result in a Material Adverse
Effect, to the knowledge of the Operating Partnership and any Subsidiary,
as the case may be, after due inquiry, (A) neither the Operating
Partnership nor any Subsidiary is in violation of any federal, state,
local or foreign statute, law, rule, regulation, ordinance or code,
including any judicial or administrative order, consent, decree of
judgment, relating to pollution or protection of human health, the
environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) including, without
limitation, laws and regulations relating to the release or threatened
release of chemicals, pollutants, contaminants, wastes, toxic substances,
hazardous substances, petroleum or petroleum products (collectively,
"Hazardous Materials") or to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous
Materials (collectively, "Environmental Laws"), (B) the Operating
Partnership and any Subsidiaries have all permits, authorizations and
approvals required under any applicable Environmental Laws and are each in
compliance with their requirements, (C) there are no pending or threatened
administrative, regulatory or judicial actions, suits, demands, demand
letters, claims, liens, notices of noncompliance or violation,
investigation or proceedings relating to any Environmental Law against the
Operating Partnership or any Subsidiaries, and (D) there are no events or
circumstances that might reasonably be expected to form the basis of an
order for clean-up or remediation, or an action, suit or proceeding by any
private party or governmental body or agency, against or affecting the
Operating Partnership or any Subsidiary relating to any Hazardous
Materials or the violation of any Environmental Laws.
(24) Tax Returns. Each of the Operating Partnership and any
Subsidiary has filed all federal, state, local and foreign income tax
returns which have been required to be filed (except in any case in which
an extension has been granted or the failure to so file would not have a
Material Adverse Effect) and has paid all taxes required to be paid and
any other assessment, fine or penalty levied against it, to the extent
that any of the foregoing is due and payable, except, in all cases, for
any such tax, assessment, fine or penalty that is being contested in good
faith.
(25) Environmental Consultants. None of the environmental consultants
which prepared environmental and asbestos inspection reports with respect
to certain of the Properties was employed for such purpose on a contingent
basis or has any substantial interest in the Company, the Operating
Partnership or any Subsidiary and none of them nor any of their directors,
officers or employees is connected with the Company, the Operating
Partnership or any Subsidiary as a promoter, selling agent, voting
trustee, director, officer or employee.
(26) Title Insurance. The Operating Partnership and any Subsidiary,
as the case may be, have obtained, title insurance on the fee interests
and leasehold interests in each of the Properties in an amount at least
equal to the greater of (A) the mortgage indebtedness on each such
Property or (B) the purchase price paid for each such Property (in the
case of any Property having been acquired by the Operating Partnership via
an exchange of Units for partnership interests in the entity holding such
property, the "purchase price" of such Property being deemed to be the sum
of (i) the per-share price of the Common Stock of the Company on the date
such Property was exchanged for Units multiplied by the number of Units
exchanged for such Property or interests in the entity holding such
Property and (ii) the amount of any assumed indebtedness secured by such
Property), except that Omni Partnership has obtained title insurance
insuring Omni Partnership's interest in its real property assets in an
amount not less than $48 million.
(27) Absence of Regulation M Violation. None of the Company, the
Operating Partnership, the Subsidiaries, nor any of their respective
directors, officers, members or controlling persons, has taken or will
take, directly or indirectly, any action resulting in a violation of
Regulation M under the 1934 Act, or designed to cause or result in, or
that has constituted or that reasonably might be expected to constitute,
the stabilization or manipulation of the price of any security of the
Operating Partnership to facilitate the sale or resale of the Securities.
(28) Year 2000 Problem The Operating Partnership has reviewed its
operations and that of the Subsidiaries and any third parties with which
the Operating Partnership or any Subsidiaries has a material relationship
to evaluate the extent to which the business or operations of the
Operating Partnership or any Subsidiaries will be affected by the Year
2000 Problem. As a result of such review, the Operating Partnership has no
reason to believe, and does not believe, that the Year 2000 Problem will
have a Material Adverse Effect or result in any material loss or
interference with the Operating Partnership's business or operations. The
"Year 2000 Problem" as used herein means any significant risk that
computer hardware or software used in the receipt, transmission,
processing, manipulation, storage, retrieval, retransmission or other
utilization of data or in the operation of mechanical or electrical
systems of any kind will not, in the case of dates or time periods
occurring after December 31, 1999, function at least as effectively as in
the case of dates or time periods occurring prior to January 1, 2000.
(b) OFFICERS' CERTIFICATES. Any certificate signed by any authorized
representative of the Operating Partnership and delivered to any Underwriter
or to counsel for the Underwriters in connection with the offering of the
Underwritten Securities shall be deemed a representation and warranty by such
entity or person, as the case may be, to each Underwriter as to the matters
covered thereby on the date of such certificate and, unless subsequently
amended or supplemented, at each Representation Date subsequent thereto.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) UNDERWRITTEN SECURITIES. The several commitments of the Underwriters
to purchase the Underwritten Securities pursuant to the applicable Terms
Agreement shall be deemed to have been made on the basis of the
representations and warranties herein contained and shall be subject to the
terms and conditions herein set forth.
(b) OPTION UNDERWRITTEN SECURITIES. In addition, subject to the terms and
conditions set forth therein, the Operating Partnership, as applicable, may
grant, if so provided in the applicable Terms Agreement, an option to the
Underwriters, severally and not jointly, to purchase up to the aggregate
principal amount of the Option Underwritten Securities set forth therein at a
price per Option Underwritten Security equal to the price per Initial
Underwritten Security, less an amount equal to any interest paid or payable on
the Initial Underwritten Securities but not payable on the Option Underwritten
Securities. Such option, if granted, will expire 30 days after the date of
such Terms Agreement, and may be exercised in whole or in part from time to
time only for the purpose of covering over-allotments which may be made in
connection with the offering and distribution of the Initial Underwritten
Securities upon notice by Xxxxxxx Xxxxx to the Operating Partnership setting
forth the aggregate principal amount of Option Underwritten Securities as to
which the several Underwriters are then exercising the option and the time,
date and place of payment and delivery for such Option Underwritten
Securities. Any such time and date of payment and delivery (each, a "Date of
Delivery") shall be determined by Xxxxxxx Sachs, but shall not be later than
seven full business days after the exercise of said option, nor in any event
prior to the Closing Time, unless otherwise agreed upon by Xxxxxxx Xxxxx and
the Operating Partnership. If the option is exercised as to all or any portion
of the Option Underwritten Securities, each of the Underwriters, severally and
not jointly, will purchase that proportion of the total aggregate principal
amount of Option Underwritten Securities then being purchased which the
aggregate principal amount of Initial Underwritten Securities each such
Underwriter has severally agreed to purchase as set forth in such Terms
Agreement bears to the total aggregate principal amount of Initial
Underwritten Securities, subject to such adjustments as Xxxxxxx Sachs in its
discretion shall make to eliminate any sales or purchases of a fractional
aggregate principal amount of Option Underwritten Securities.
(c) PAYMENT. Payment of the purchase price for, and delivery of, the
Initial Underwritten Securities shall be made at the office of Xxxxx & Xxxx
LLP, or at such other place as shall be agreed upon by Xxxxxxx Sachs and the
Operating Partnership, at 10:00 a.m. (Eastern time) on the third (fourth, if
the pricing occurs after 4:30 p.m. (Eastern time) on any given day) business
day after the date of the applicable Terms Agreement (unless postponed in
accordance with the provisions of Section 10 hereof), or such other time not
later than ten business days after such date as shall be agreed upon by
Xxxxxxx Xxxxx and the Operating Partnership (such time and date of payment and
delivery being herein called "Closing Time"). In addition, in the event that
the Underwriters have exercised their option, if any, to purchase any or all
of the Option Underwritten Securities, payment of the purchase price for, and
delivery of such Option Underwritten Securities, shall be made at the
above-mentioned offices of Xxxxx & Wood LLP, or at such other place as shall
be agreed upon by Xxxxxxx Xxxxx and the Operating Partnership on the relevant
Date of Delivery as specified in the notice from Xxxxxxx Sachs to the
Operating Partnership.
Payment shall be made to the Operating Partnership by wire transfer
of Federal funds or similar same day funds payable to the order of the
Operating Partnership against delivery to Xxxxxxx Xxxxx for the respective
accounts of the Underwriters of the Underwritten Securities to be purchased by
them. It is understood that each Underwriter has authorized Xxxxxxx Sachs, for
its account, to accept delivery of, receipt for, and make payment of the
purchase price for, the Underwritten Securities which it has severally agreed
to purchase. Xxxxxxx Xxxxx, individually and not as representative of the
Underwriters, may (but shall not be obligated to) make payment of the purchase
price for the Underwritten Securities to be purchased by any Underwriter whose
check has not been received by the Closing Time or the relevant Date of
Delivery, as the case may be, but such payment shall not relieve such
Underwriter from its obligations hereunder.
(d) DENOMINATIONS; REGISTRATION. The Underwritten Securities shall be in
such denominations and registered in such names as Xxxxxxx Sachs may request
in writing at least one full business day prior to the Closing Time or the
relevant Date of Delivery, as the case may be. The Underwritten Securities
will be made available for examination and packaging by Xxxxxxx Xxxxx in The
City of New York not later than 10:00 a.m. (Eastern time) on the business day
prior to the Closing Time or the relevant Date of Delivery, as the case may
be.
SECTION 3. Covenants of the Operating Partnership.
The Operating Partnership covenants with Xxxxxxx Sachs and with each
Underwriter participating in the offering of Underwritten Securities, as
follows:
(a) COMPLIANCE WITH SECURITIES REGULATIONS AND COMMISSION REQUESTS. The
Operating Partnership, subject to Section 3(b), will comply with the
requirements of the 1933 Act Regulations, including Rule 430A and Rule 434,
and will notify Xxxxxxx Xxxxx immediately, and confirm the notice in writing,
of (i) the effectiveness of any post-effective amendment to the Registration
Statement or the filing of any supplement or amendment to the Prospectus, (ii)
the receipt of any comments from the Commission, (iii) any request by the
Commission for any amendment to the Registration Statement or any amendment or
supplement to the Prospectus or for additional information, and (iv) the
issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement or of any order preventing or suspending the use of
any preliminary prospectus, or of the suspension of the qualification of the
Underwritten Securities for offering or sale in any jurisdiction, or of the
initiation or threatening of any proceedings for any of such purposes. The
Operating Partnership will promptly effect the filings necessary pursuant to
Rule 424 and will take such steps as it deems necessary to ascertain promptly
whether the Prospectus transmitted for filing under Rule 424 was received for
filing by the Commission and, in the event that it was not, it will promptly
file the Prospectus. The Operating Partnership will make every reasonable
effort to prevent the issuance of any stop order and, if any stop order is
issued, to obtain the lifting thereof at the earliest possible moment.
(b) FILING OF AMENDMENTS. At any time when the Prospectus is required to
be delivered under the 1933 Act or the 1934 Act in connection with sales of
the Underwritten Securities, the Operating Partnership will give Xxxxxxx Sachs
notice of their intention to file or prepare any amendment to the Registration
Statement (including any filing under Rule 462(b) of the 1933 Act
Regulations), any Term Sheet or any amendment, supplement or revision to
either the prospectus included in the Registration Statement at the time it
became effective or to the Prospectus, whether pursuant to the 1933 Act, the
1934 Act or otherwise, will furnish Xxxxxxx Xxxxx with copies of any such
documents a reasonable amount of time prior to such proposed filing or use, as
the case may be, and will not file or use any such document to which Xxxxxxx
Sachs or counsel for the Underwriters shall reasonably object.
(c) DELIVERY OF REGISTRATION STATEMENTS. The Operating Partnership has
furnished or will deliver to Xxxxxxx Xxxxx and counsel for the Underwriters,
without charge, a signed copy of the Registration Statement as originally
filed and of each amendment thereto (including exhibits filed therewith or
incorporated by reference therein and documents incorporated or deemed to be
incorporated by reference therein) and signed copies of all consents and
certificates of experts, and will also deliver to Xxxxxxx Sachs and counsel
for the Underwriters, without charge, conformed copies of the Registration
Statement as originally filed and of each amendment thereto for each of the
Underwriters. If applicable, the copies of the Registration Statement and each
amendment thereto furnished to the Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission pursuant
to XXXXX, except to the extent permitted by Regulation S-T.
(d) DELIVERY OF PROSPECTUSES. The Operating Partnership will deliver to
each Underwriter, without charge, as many copies of each preliminary
prospectus as such Underwriter may reasonably request, and the Operating
Partnership hereby consents to the use of such copies for purposes permitted
by the 1933 Act. The Operating Partnership will furnish to each Underwriter,
without charge, during the period when the Prospectus is required to be
delivered under the 1933 Act or the 1934 Act and prior to 4:00 p.m. New York
City time on the New York business day next succeeding the date of the
applicable Terms Agreement, such number of copies of the Prospectus as such
Underwriter may reasonably request. If applicable, the Prospectus and any
amendments or supplements thereto furnished to the Underwriters will be
identical to the electronically transmitted copies thereof filed with the
Commission pursuant to XXXXX, except to the extent permitted by Regulation
S-T.
(e) CONTINUED COMPLIANCE WITH SECURITIES LAWS. The Operating Partnership
will comply with the 1933 Act and the 1933 Act Regulations and the 1934 Act
and the 1934 Act Regulations so as to permit the completion of the
distribution of the Underwritten Securities as contemplated in this
Underwriting Agreement and the applicable Terms Agreement and in the
Registration Statement and the Prospectus. If at any time when the applicable
preliminary prospectus or Prospectus is required by the 1933 Act or the 1934
Act to be delivered in connection with sales of the Securities, any event
shall occur or condition shall exist as a result of which it is necessary, in
the opinion of counsel for the Underwriter or for the Operating Partnership,
to amend the Registration Statement in order that the Registration Statement
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading or to amend or supplement the applicable
preliminary prospectus or Prospectus in order that the applicable preliminary
prospectus or Prospectus will not include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements therein not misleading in the light of the circumstances existing
at the time it is delivered to a purchaser, or if it shall be necessary, in
the opinion of such counsel, at any such time to amend the Registration
Statement or amend or supplement the applicable preliminary prospectus or
Prospectus in order to comply with the requirements of the 1933 Act or the
1933 Act Regulations, the Operating Partnership will promptly prepare and file
with the Commission, subject to Section 3(b), such amendment or supplement as
may be necessary to correct such statement or omission or to make the
Registration Statement, applicable preliminary prospectus or the Prospectus
comply with such requirements, and the Operating Partnership will furnish to
the Underwriters and counsel for the Underwriters, without charge, such number
of copies of such amendment or supplement as the Underwriters may reasonably
request.
(f) BLUE SKY QUALIFICATIONS. The Operating Partnership will use its best
efforts, in cooperation with the Underwriters, to qualify the Underwritten
Securities for offering and sale under the applicable securities laws of such
states and other jurisdictions (domestic or foreign) as Xxxxxxx Xxxxx may
designate and to maintain such qualifications in effect for a period of not
less than one year from the date of the applicable Terms Agreement; provided,
however, that the Operating Partnership shall not be obligated to file any
general consent to service of process or to qualify or register as a foreign
corporation or as a dealer in securities in any jurisdiction in which it is
not so qualified or registered, or to subject itself to taxation in respect of
doing business in any jurisdiction in which it is not otherwise so subject. In
each jurisdiction in which the Underwritten Securities have been so qualified
or registered, the Operating Partnership will file such statements and reports
as may be required by the laws of such jurisdiction to continue such
qualification in effect for a period of not less than one year from the date
of such Terms Agreement.
(g) EARNINGS STATEMENT. The Operating Partnership will timely file such
reports pursuant to the 1934 Act as are necessary in order to make generally
available to its security holders as soon as practicable an earnings statement
(in form complying with Rule 158 of the 1933 Act Regulations) for the purposes
of, and to provide the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act.
(h) REPORTING REQUIREMENTS. The Operating Partnership, during the period
when the Prospectus is required to be delivered under the 1933 Act or the 1934
Act, will file all documents required to be filed with the Commission pursuant
to the 1934 Act within the time periods required by the 1934 Act and the 1934
Act Regulations.
(i) RESTRICTION ON SALE OF SECURITIES. Between the date of the applicable
Terms Agreement and the Closing Time and/or such other date specified in such
Terms Agreement, the Operating Partnership and any other entity or person
named in the applicable Terms Agreement will not, without the prior written
consent of Xxxxxxx Sachs, directly or indirectly, issue, sell, offer to sell,
grant any option for the sale of, or otherwise dispose of, the securities
specified in such Terms Agreement subject to any conditions listed therein.
(j) REIT QUALIFICATION. The Company will use its best efforts to continue
to meet the requirement to qualify as a "real estate investment trust" under
the Code for each of its taxable years.
(k) USE OF PROCEEDS. The Operating Partnership will use the net proceeds
received by it from the sale of the Underwritten Securities in the manner
specified in the Prospectus under "Use of Proceeds."
(l) EXCHANGE ACT FILINGS. During the period from each Closing Time until
March 31, 2002, the Operating Partnership will deliver to Xxxxxxx Xxxxx, (i)
promptly upon their becoming available, copies of all current, regular and
periodic reports of the Operating Partnership mailed to its unitholders or
filed with any securities exchange or with the Commission or any governmental
authority succeeding to any of the Commission's functions, and (ii) such other
information concerning the Operating Partnership as Xxxxxxx Sachs may
reasonably request.
(m) NO MANIPULATION OF MARKET FOR SECURITIES. Except for the
authorization of actions permitted to be taken by the Underwriters as
contemplated herein or in the Prospectus, the Operating Partnership will not
(a) take, directly or indirectly, any action designed to cause or to result
in, or that might reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Operating Partnership to
facilitate the sale or resale of the Underwritten Securities, and (b) until
the Closing Date, or the Date of Delivery, if any, (i) sell, bid for or
purchase the Underwritten Securities or pay any person any compensation for
soliciting purchases of the Underwritten Securities or (ii) pay or agree to
pay to any person any compensation for soliciting another to purchase any
other securities of the Operating Partnership.
(p) RULE 462(B) REGISTRATION STATEMENT. If the Operating Partnership
elects to rely upon Rule 462(b), the Operating Partnership shall file a Rule
462(b) Registration Statement with the Commission in compliance with Rule
462(b) by 10:00 P.M., Washington, D.C. time, on the date of this Agreement,
and the Company shall at the time of filing either pay to the Commission the
filing fee for the Rule 462(b) Registration Statement or give irrevocable
instructions for the payment of such fee pursuant to Rule 111(b) under the
1933 Act.
SECTION 4. Payment of Expenses.
(a) EXPENSES. The Operating Partnership will pay all expenses incident to
the performance of its obligations under this Underwriting Agreement and each
applicable Terms Agreement, including (i) the printing and filing of the
Registration Statement (including financial statements and exhibits) as
originally filed and of each amendment thereto, (ii) the printing and delivery
to the Underwriters of this Underwriting Agreement, any Terms Agreement, any
Agreement among Underwriters, the Indenture and such other documents as may be
required in connection with the offering, purchase, sale and delivery of the
Underwritten Securities (iii) the preparation, issuance and delivery of the
Underwritten Securities to the Underwriters, (iv) the fees and disbursements
of the Operating Partnership's counsel, accountants and other advisors or
agents (including transfer agents and registrars), as well as the fees and
disbursements of any trustee or its agents under any Indenture and their
respective counsel, (v) the qualification of the Underwritten Securities under
state securities and real estate syndication laws in accordance with the
provisions of Section 3(f) hereof, including filing fees and the reasonable
fees and disbursements of counsel for the Underwriters in connection therewith
and in connection with the preparation, printing and delivery of the Blue Sky
Survey, (vi) the printing and delivery to the Underwriters of copies of each
preliminary prospectus, any Term Sheet, the Registration Statement (including
financial statements and exhibits) as originally filed and of each amendment
thereto and the Prospectus and any amendments or supplements thereto, (vii)
the fees charged by nationally recognized statistical rating organizations for
the rating of the Underwritten Securities, (viii) the fees and expenses
incurred with respect to the listing of the Underwritten Securities, (ix) the
fees and expenses of any Underwriter acting in the capacity of a "qualified
independent underwriter" (as defined in Rule 2720(a)(15) of the Conduct Rules
of the NASD), if applicable, and (x) all other costs and expenses incident to
the performance of its obligations hereunder which are not otherwise
specifically provided for in this Section.
(b) TERMINATION OF AGREEMENT. If the applicable Terms Agreement is
terminated by Xxxxxxx Xxxxx in accordance with the provisions of Section 5 or
Section 9(b) hereof, the Operating Partnership shall reimburse the
Underwriters for all of their out-of-pocket expenses, including the reasonable
fees and disbursements of counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations.
The obligations of the Underwriters to purchase and pay for the
Underwritten Securities pursuant to the applicable Terms Agreement are subject
to the accuracy of the representations and warranties of the Operating
Partnership contained in Section 1 hereof or in certificates of any officer or
authorized representative of the Operating Partnership delivered pursuant to
the provisions hereof, to the performance by the Operating Partnership of its
covenants and other obligations hereunder, and to the following further
conditions:
(a) EFFECTIVENESS OF REGISTRATION STATEMENT. The Registration Statement
has become effective under the 1933 Act (and in the case of a Rule 462(b)
Registration Statement such Registration Statement shall have become effective
by 10:00 P.M. Washington, D.C. time on the date of this Agreement) and no stop
order suspending the effectiveness of the Registration Statement shall have
been issued under the 1933 Act or proceedings therefor initiated or threatened
by the Commission or the state securities authority of any jurisdiction, and
any request on the part of the Commission or the state securities authority of
any jurisdiction for additional information shall have been complied with to
the reasonable satisfaction of counsel to the Underwriters. A prospectus
containing information relating to the description of the Underwritten
Securities, the specific method of distribution and similar matters shall have
been filed with the Commission in accordance with Rule 424(b)(1), (2), (3),
(4) or (5), as applicable (or any required post-effective amendment providing
such information shall have been filed and declared effective in accordance
with the requirements of Rule 430A), or, if the Operating Partnership has
elected to rely upon Rule 434 of the 1933 Act Regulations, a Term Sheet
including the Rule 434 Information shall have been filed with the Commission
in accordance with Rule 424(b)(7).
(b) OPINION OF COUNSEL FOR THE OPERATING PARTNERSHIP. At Closing Time,
Xxxxxxx Sachs shall have received the favorable opinion, dated as of Closing
Time, of Xxxxx & Xxxx LLP, counsel for the Operating Partnership, in form and
substance satisfactory to counsel for the Underwriters, together with signed
or reproduced copies of such letter for each of the other Underwriters, such
opinion shall address such of the items set forth in Exhibit C hereto as may
be relevant to the particular offering contemplated or to such further effect
as counsel to the Underwriters may reasonably request.
(c) OPINION OF COUNSEL FOR UNDERWRITERS. At Closing Time, Xxxxxxx Sachs
shall have received the favorable opinion, dated as of Closing Time, of Xxxxxx
& Xxxxx LLP, counsel for the Underwriters, or such other counsel as may be
designated by Xxxxxxx Sachs together with signed or reproduced copies of such
letter for each of the other Underwriters, with respect to the matters set
forth in (1), (2) (with respect to the first clause of the first sentence
only), (6), (7), (8), (9) (with respect to the first three sentences only),
(12), (18) (with respect to the first and third sentences only) and (21) of
Exhibit C hereto and the last two paragraphs of Exhibit C hereto. In giving
such opinion, such counsel may rely, as to all matters governed by the laws of
jurisdictions other than the law of the State of New York, the federal law of
the United States and the General Corporation Law of the State of Delaware,
upon the opinions of counsel satisfactory to Xxxxxxx Xxxxx. Such counsel may
also state that, insofar as such opinion involves factual matters, they have
relied, to the extent they deem proper, upon certificates of authorized
representatives of the Operating Partnership and certificates of public
officials.
(d) OFFICERS' CERTIFICATE. At Closing Time, there shall not have been,
since the date of the applicable Terms Agreement or since the respective dates
as of which information is given in the Prospectus, any material adverse
change in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Operating Partnership or any Subsidiary
considered as one enterprise, whether or not arising in the ordinary course of
business, and Xxxxxxx Xxxxx shall have received a certificate of the President
or a Vice President of the Company, as general partner of the Operating
Partnership, and of the chief financial officer or chief accounting officer of
the Company, as general partner of the Operating Partnership, dated as of
Closing Time, to the effect that (i) there has been no such material adverse
change, (ii) the representations and warranties in Section 1 are true and
correct, in all material respect, with the same force and effect as though
expressly made at and as of the Closing Time, (iii) the Operating Partnership
has complied with all agreements and satisfied all conditions on its part to
be performed or satisfied at or prior to the Closing Time and (iv) no stop
order suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been initiated or threatened
by the Commission or by the state securities authority of any jurisdiction.
(e) ACCOUNTANT'S COMFORT LETTER. At the time of the execution of the
applicable Terms Agreement, Xxxxxxx Sachs shall have received from Ernst &
Young LLP a letter, dated such date, in form and substance satisfactory to
Xxxxxxx Xxxxx and counsel to the Underwriters, together with signed or
reproduced copies of such letter for each of the other Underwriters,
containing statements and information of the type ordinarily included in
accountants' "comfort letters" as set forth in the AICPA's Statement on
Auditing Standards 72 to underwriters with respect to the financial statements
and certain financial information contained in the Registration Statement and
the Prospectus.
(f) BRING-DOWN COMFORT LETTER. At Closing Time, Xxxxxxx Sachs shall have
received from Ernst & Young LLP a letter, dated as of Closing Time, to the
effect that they reaffirm the statements made in the letter furnished pursuant
to subsection (e) of this Section 5, except that the specified date referred
to shall be a date not more than three business days prior to the Closing
Time.
(g) RATINGS. At Closing Time and at any relevant Date of Delivery, the
Underwritten Securities shall have the ratings accorded by any "nationally
recognized statistical rating organization," as defined by the Commission for
purposes of Rule 436(g)(2) of the 1933 Act Regulations, if and as specified in
the applicable Terms Agreement, and the Operating Partnership shall have
delivered to Xxxxxxx Xxxxx a letter, dated as of such date, from each such
rating organization, or other evidence satisfactory to Xxxxxxx Sachs,
confirming that the Underwritten Securities have such ratings. Since the time
of execution of such Terms Agreement, there shall not have occurred a
downgrading in the rating assigned to the Underwritten Securities or any of
the Operating Partnership's other securities by any such rating organization,
and no such rating organization shall have publicly announced that it has
under surveillance or review, with possible negative implications, its rating
of the Underwritten Securities or any of the Operating Partnership's other
securities.
(h) APPROVAL OF LISTING. At Closing Time, the Underwritten Securities
shall be listed or shall have been approved for listing, subject only to
official notice of issuance, if and as specified in the applicable Terms
Agreement.
(i) [Intentionally Omitted]
(j) OVER-ALLOTMENT OPTION. In the event that the Underwriters are granted
an over-allotment option by the Operating Partnership in the applicable Terms
Agreement and the Underwriters exercise their option to purchase all or any
portion of the Option Underwritten Securities, the representations and
warranties of the Operating Partnership contained herein and the statements in
any certificates furnished by the Operating Partnership hereunder shall be
true and correct as of each Date of Delivery, and, at the relevant Date of
Delivery, Xxxxxxx Xxxxx shall have received:
(1) A certificate dated such Date of Delivery, of the President or a
Vice President of the Company, as general partner of the Operating
Partnership, and the chief financial officer or chief accounting officer
of the Company, as general partner of the Operating Partnership,
confirming that the certificate delivered at the Closing Time pursuant to
Section 5(d) hereof remains true and correct as of such Date of Delivery.
(2) The favorable opinion of Xxxxx & Wood LLP, counsel for the
Operating Partnership, in form and substance satisfactory to counsel for
the Underwriters, dated such Date of Delivery, relating to the Option
Underwritten Securities and otherwise to the same effect as the opinion
required by Section 5(b) hereof.
(3) The favorable opinion of Xxxxxx & Xxxxx LLP, counsel for the
Underwriters, dated such Date of Delivery, relating to the Option
Underwritten Securities and otherwise to the same effect as the opinion
required by Section 5(c) hereof.
(4) A letter from Ernst & Young LLP, in form and substance
satisfactory to Xxxxxxx Xxxxx and dated such Date of Delivery,
substantially in the same form and substance as the letter furnished to
Xxxxxxx Sachs pursuant to Section 5(f) hereof, except that the "specified
date" on the letter furnished pursuant to this paragraph shall be a date
not more than three business days prior to such Date of Delivery.
(k) ADDITIONAL DOCUMENTS. At Closing Time and at each Date of Delivery,
counsel for the Underwriters shall have been furnished with such documents and
opinions as they may require for the purpose of enabling them to pass upon the
issuance and sale of the Underwritten Securities as herein contemplated, or in
order to evidence the accuracy of any of the representations or warranties, or
the fulfillment of any of the conditions, herein contained.
(l) TERMINATION OF TERMS AGREEMENT. If any condition specified in this
Section 5 shall not have been fulfilled when and as required to be fulfilled,
the applicable Terms Agreement (or, with respect to the Underwriters' exercise
of any applicable over-allotment option for the purchase of Option
Underwritten Securities on a Date of Delivery after the Closing Time, the
obligations of the Underwriters to purchase the Option Underwritten Securities
on such Date of Delivery) may be terminated by Xxxxxxx Xxxxx by notice to the
Company at any time at or prior to the Closing Time (or such Date of Delivery,
as applicable), and such termination shall be without liability of any party
to any other party except as provided in Section 4, and except that Sections
1, 6 and 7 shall survive any such termination and remain in full force and
effect.
SECTION 6. Indemnification.
(a) INDEMNIFICATION OF UNDERWRITERS. The Operating Partnership agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the 1933 Act, and
any director, officer, employee or affiliate thereof, as follows:
(1) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement or a material fact contained in the Registration
Statement (or any amendment thereto), including the information deemed to
be part of the Registration Statement pursuant to Rule 430A(b) of the
1933 Act Regulations, if applicable, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary
to make the statements therein not misleading or arising out of any
untrue statement or alleged untrue statement of a material fact contained
in any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto) or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(2) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation or of any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever for which indemnification is provided under subsection (1)
above, if such settlement is effected with the written consent of the
indemnifying party, which consent shall not be unreasonably withheld; and
(3) against any and all expense whatsoever (including without
limitation, the fees and disbursements of counsel chosen by Xxxxxxx
Sachs) reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceedings by any
governmental agency or body, commenced or threatened, or any claim
whatsoever for which indemnification is provided under subsection (1)
above, to the extent that any such expense is not paid under subsection
(1) or (2) above; provided, however, that the indemnity agreement
provided for in this Section 6(a) shall not apply to any loss, liability,
claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Operating Partnership by any Underwriter through Xxxxxxx Xxxxx expressly
for use in the Registration Statement (or any amendment thereto) or any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto); provided, however, that neither the Company nor the Operating
Partnership shall be required to indemnify any Underwriter with respect
to any preliminary prospectus to the extent that any loss, claim, damage
or expense of such Underwriter results solely from an untrue statement of
a material fact contained in, or the omission of a material fact from,
such preliminary prospectus which untrue statement or omission was
corrected in the Prospectus and identified to such Underwriter in writing
and which corrected Prospectus was furnished by the Company to such
Underwriter pursuant to Section 3(d) hereof but it shall be established
that such Prospectus was not sent or given by such Underwriter to the
purchaser of the Underwritten Securities at or prior to the written
confirmation of such sale and such correction would have cured the defect
giving rise to such loss, claim, damage or expense.
(b) INDEMNIFICATION OF OPERATING PARTNERSHIP. Each Underwriter severally
and not jointly agrees to indemnify and hold harmless the Operating
Partnership, and each person, if any, who controls the Operating Partnership
within the meaning of Section 15 of the 1933 Act, and any employee or
affiliate thereof, against any and all loss, liability, claim, damage, and
expense described in the indemnity contained in subsection (a) of this Section
6, as incurred, but only with respect to untrue statements or omissions, or
alleged untrue statements or omissions, made in the Registration Statement (or
any amendment thereto) or any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Operating Partnership by such Underwriter
through Xxxxxxx Sachs expressly for use in the Registration Statement (or any
amendment thereto) or any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto).
(c) ACTIONS AGAINST PARTIES; NOTIFICATION; SETTLEMENT WITHOUT CONSENT IF
FAILURE TO REIMBURSE. Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure
so to notify an indemnifying party shall not relieve such indemnifying party
from any liability which it may have otherwise than on account of this
indemnity agreement. An indemnifying party may participate at its own expense
in the defense of such action. If it so elects within a reasonable time after
receipt of such notice, an indemnifying party, jointly with any other
indemnifying parties receiving such notice, may assume the defense of such
action with counsel chosen by it and reasonably approved by the other
indemnifying parties defendant in such action and reasonably approved by the
indemnified party (who shall not, except with the consent of the indemnified
party, be counsel to an indemnifying party), unless such other indemnifying
parties or an indemnified party reasonably object to such assumption on the
ground that the named parties to any such action (including any impleaded
parties) include both such indemnified party and an indemnifying party, and
such indemnified party reasonably believes that there may be legal defenses
available to it which are different from or in addition to those available to
such indemnifying party. If an indemnifying party assumes the defense of such
action, the indemnifying parties shall not be liable for any fees and expenses
of counsel for the indemnified parties incurred thereafter in connection with
such action. In no event shall the indemnifying parties be liable for fees and
expenses of more than one counsel (in addition to any local counsel) separate
from their own counsel for all indemnified parties in connection with any one
action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances. No indemnifying
party shall, without the written consent of the indemnified party, effect the
settlement or compromise of, or consent to the entry of any judgment with
respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgement (i) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any indemnified party.
SECTION 7. Contribution.
In order to provide for just and equitable contribution in circumstances
in which the indemnity agreement provided for in Section 6 hereof is for any
reason unavailable to or insufficient to hold harmless an indemnified party in
respect of any losses, liabilities, claims, damages or expenses referred to
therein, the Operating Partnership, on the one hand, and the Underwriters, on
the other, shall contribute to the aggregate losses, liabilities claims,
damages and expenses of the nature contemplated by said indemnity agreement
incurred by the Operating Partnership and the Underwriters, as incurred, in
such proportions that the Underwriters are responsible for that portion
represented by the percentage that the underwriting discount appearing on the
cover page of the Prospectus bears to the initial public offering price
appearing thereon and the Operating Partnership are responsible for the
balance. If, however, the allocation provided by the immediately preceding
sentence is not permitted by applicable law or if the indemnified party failed
to give the notice required under Section 6(c) above, then each indemnifying
party shall contribute to such amount paid or payable by such indemnified
party in such proportion as is appropriate to reflect not only such relative
benefits allocation referred to in the first sentence of this Section 7 but
also the relative fault of the Operating Partnership, on the one hand, and the
Underwriters on the other, in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable considerations. The
relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Operating Partnership, on the one hand, or such Underwriters,
on the other, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Operating Partnership and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this Section 7 were determined by
PRO RATA allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to above in this Section 7. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to
above in this Section shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 7, no Underwriter shall be required to contribute any amount in excess
of the amount by which the total price at which the applicable Underwritten
Securities underwritten by it and distributed to the public were offered to
the public exceeds the amount of any damages which such Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. Notwithstanding the foregoing, no
person guilty of fraudulent misrepresentation (within the meaning of section
11(f) of the 0000 Xxx) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. For purposes of this
Section, each person, if any, who controls an Underwriter within the meaning
of Section 15 of the 1933 Act shall have the same rights to contribution as
such Underwriter, and each employee or affiliate of the Operating Partnership
and each person, if any, who controls the Operating Partnership within the
meaning of Section 15 of the 1933 Act shall have the same rights to
contribution as the Operating Partnership.
The Underwriters' obligations to contribute pursuant to this Section 7
are several in proportion to their respective underwriting commitments and not
joint.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this
Underwriting Agreement or the applicable Terms Agreement or in certificates of
authorized representatives of the Operating Partnership submitted pursuant
hereto or thereto shall remain operative and in full force and effect,
regardless or any investigation made by or on behalf of any Underwriter or
controlling person, or by or on behalf of the Operating Partnership, and shall
survive delivery of and payment for the Underwritten Securities.
SECTION 9. Termination.
(a) UNDERWRITING AGREEMENT. This Underwriting Agreement (excluding the
applicable Terms Agreement) may be terminated for any reason at any time by
the Operating Partnership or by Xxxxxxx Xxxxx upon the giving of 30 days'
prior written notice of such termination to the other party hereto.
(b) TERMS AGREEMENT. Xxxxxxx Sachs may terminate the applicable Terms
Agreement, by notice to the Operating Partnership, at any time at or prior to
the Closing Time or any relevant Date of Delivery, if (i) there has been,
since the time of execution of such Terms Agreement or since the respective
dates as of which information is given in the Prospectus, any material adverse
change in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Operating Partnership and any
Subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, in each case the effect of which is such as to
make it, in the judgment of Xxxxxxx Xxxxx, impracticable or inadvisable to
market the Underwritten Securities, or (ii) there has occurred any material
adverse change in the financial markets in the United States or
internationally or any outbreak of hostilities or escalation thereof or other
calamity or crisis, or any change or development involving a prospective
change in national or international political, financial, or economic
conditions, in each case the effect of which is such as to make it, in the
judgment of Xxxxxxx Sachs, impracticable or inadvisable to market the
Underwritten Securities or to enforce contracts for the sale of the
Underwritten Securities, or (iii) trading in any securities of the Operating
Partnership has been suspended or limited by the Commission or the New York
Stock Exchange, or if trading generally on the New York Stock Exchange or the
American Stock Exchange or in the over-the-counter market has been suspended
or limited, or minimum or maximum prices for trading have been fixed, or
maximum ranges for prices have been required, by either of said exchanges or
by such system or by order of the Commission, the NASD or any other
governmental authority, or (iv) a banking moratorium has been declared by
either Federal or New York authorities.
(c) LIABILITIES. If this Underwriting Agreement or the applicable Terms
Agreement is terminated pursuant to this Section 9, such termination shall be
without liability of any party to any other party except as provided in
Section 4 hereof, and provided further that Sections 1, 6, 7, 8 and 13 hereof
shall survive such termination and remain in full force and effect.
SECTION 10. Default by One or More of the Underwriters.
If one or more of the Underwriters shall fail at the Closing Time or the
relevant Date of Delivery, as the case may be, to purchase the Underwritten
Securities which it or they are obligated to purchase under the applicable
Terms Agreement (the "Defaulted Securities"), then Xxxxxxx Xxxxx shall have
the right, within 24 hours thereafter, to make arrangements for one or more of
the non-defaulting Underwriters, or any other underwriters, to purchase all,
but not less than all, of the Defaulted Securities in such amounts as may be
agreed upon and upon the terms herein set forth; if, however, Xxxxxxx Sachs
shall not have completed such arrangements within such 24-hour period, then:
(a) if the aggregate principal amount of Defaulted Securities does
not exceed 10% of the aggregate principal amount of Underwritten
Securities to be purchased on such date pursuant to such Terms Agreement,
the non-defaulting Underwriters named in such Terms Agreement shall be
obligated, severally and not jointly, to purchase the full amount thereof
in the proportions that their respective underwriting obligations under
such Terms Agreement bear to the underwriting obligations of all
non-defaulting Underwriters, or
(b) if the aggregate principal amount of Defaulted Securities
exceeds 10% of the aggregate principal amount of Underwritten Securities
to be purchased pursuant to such Terms Agreement, such Terms Agreement
(or, with respect to the Underwriters' exercise of any applicable
over-allotment option for the purchase of Option Underwritten Securities
on a Date of Delivery after the Closing Time, the obligations of the
Underwriters to purchase, and the Company to sell, such Option
Underwritten Securities on such Date of Delivery) shall terminate without
liability on the part of any non-defaulting Underwriter except as
provided by Section 9(c).
No action taken pursuant to this Section 10 shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in (i) a
termination of the applicable Terms Agreement or (ii) in the case of a Date of
Delivery after the Closing Time, a termination of the obligations of the
Underwriters and the Company with respect to the related Option Underwritten
Securities, as the case may be, either Xxxxxxx Xxxxx or the Operating
Partnership shall have the right to postpone the Closing Time or the relevant
Date of Delivery, as the case may be, for a period not exceeding seven days in
order to effect any required changes in the Registration Statement or the
Prospectus or in any other documents or arrangements.
SECTION 11. Notices.
All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given or transmitted by any standard form of
telecommunication. Notices to the Underwriters shall be directed to Xxxxxxx
Sachs at 00 Xxx Xxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, attention:
Registration Department; and notices to the Operating Partnership shall be
directed to them at 000 Xxxxxxxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000, attention
of Xxxxx X. Xxxxxxx, Chief Operating Officer.
SECTION 12. Parties.
This Underwriting Agreement and the applicable Terms Agreement shall each
inure to the benefit of and be binding upon the parties hereto and, upon
execution of such Terms Agreement, any other Underwriters and their respective
successors. Nothing expressed or mentioned in this Underwriting Agreement or
such Terms Agreement is intended or shall be construed to give any person,
firm or corporation, other than the Underwriters and the Operating Partnership
and their respective successors and the controlling persons and officers and
directors referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Underwriting Agreement or such Terms Agreement or any
provision herein or therein contained. This Underwriting Agreement and such
Terms Agreement and all conditions and provisions hereof and thereof are
intended to be for the sole and exclusive benefit of the parties hereto and
thereto and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Underwritten
Securities from any Underwriter shall be deemed to be a successor by reason
merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME.
THIS UNDERWRITING AGREEMENT AND ANY APPLICABLE TERMS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SAID STATE. SPECIFIED
TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 14. Effect of Headings.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Operating Partnership a counterpart
hereof, whereupon this Underwriting Agreement, along with all counterparts,
will become a binding agreement between Xxxxxxx Sachs and the Operating
Partnership in accordance with its terms.
Very truly yours,
RECKSON OPERATING PARTNERSHIP, L.P.
By: Reckson Associates Realty Corp.
its General Partner
By: /s/ Xxxxxxx Xxxxxx
---------------------------
Name:
Title
CONFIRMED AND ACCEPTED,
as of the date first
above written:
XXXXXXX, SACHS & CO.
By: /s/ Xxxxxxx, Xxxxx & Co.
-------------------------
(Xxxxxxx, Sachs & Co.)
Exhibit A
RECKSON OPERATING PARTNERSHIP, L.P.
(a Delaware limited partnership)
Debt Securities
TERMS AGREEMENT
__________ __, 199_
To: Reckson Operating Partnership, L.P.
000 Xxxxxxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
We understand that Reckson Operating Partnership, L.P. (the
"Operating Partnership") proposes to issue and sell $ in aggregate principal
amount of its debt securities (the "Notes") ([securities also being
hereinafter referred to as] the "Initial Underwritten Securities"). Subject to
the terms and conditions set forth or incorporated by reference herein, the
underwriters named below (the "Underwriters") offer to purchase, severally and
not jointly, the respective aggregate principal amount of Initial Underwritten
Securities set forth below opposite their names at the purchase price set
forth below, and a proportionate share of Option Underwritten Securities (as
defined in the Underwriting Agreement referred to below) set forth below, to
the extent any are purchased.
Aggregate Principal Amount of
Initial Underwritten Securities
Total [$]
The Underwritten Securities shall have the following terms:
Title:
Aggregate Principal Amount: $
Aggregate Principal Amount of Option
Underwritten Securities: $
Initial public offering price: $
Purchase price: $
Interest rate:
Interest Payment Date:
Maturity Date:
Redemption provisions:
Sinking Fund requirements:
Conversion provisions:
Other terms and conditions:
Closing date and location:
All of the provisions contained in the document attached as Annex I
hereto entitled "RECKSON OPERATING PARTNERSHIP, L.P. -- Debt Securities --
UNDERWRITING AGREEMENT" are hereby incorporated by reference in their entirety
herein and shall be deemed to be a part of this Terms Agreement to the same
extent as if such provisions had been set forth in full herein. Terms defined
in such document are used herein as therein defined.
Please accept this offer no later than o'clock p.m. (New York City
time) on _________ by signing a copy of this Terms Agreement in the space set
forth below and returning the signed copy to us.
Very truly yours,
XXXXXXX, XXXXX & CO.
By: ________________________________
(Xxxxxxx, Sachs & Co.)
Acting on behalf of itself and the other named Underwriters.
Accepted:
RECKSON OPERATING PARTNERSHIP, L.P.
By: RECKSON ASSOCIATES REALTY CORP., its sole general partner
By: ___________________________
Name:
Title:
Exhibit B
SIGNIFICANT SUBSIDIARIES
(1) Reckson FS Limited Partnership, a Delaware limited partnership
Exhibit C
FORM OF OPINION OF THE COMPANY'S AND THE
OPERATING PARTNERSHIP'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(1) The Company has been duly incorporated and is validly existing as a
corporation and is in good standing with the State Department of Assessment
and Taxation of Maryland. The Company has the corporate power and authority to
own, lease and operate its properties and to conduct its business as described
in the Prospectus and to enter into and perform its obligations under, or as
contemplated under, the Underwriting Agreement and the applicable Terms
Agreement and is duly qualified or registered as a foreign corporation to
transact business and is in good standing in each jurisdiction in which such
qualification or registration is required, whether by reason of the ownership
or leasing of property or the conduct of business, except where the failure to
so qualify or register or be in good standing would not result in a Material
Adverse Effect.
(2) The Operating Partnership has been duly organized and is validly
existing as a limited partnership and is in good standing with the Secretary
of State of Delaware. The Operating Partnership has the power and authority to
own, lease and operate its properties and to conduct its business as described
in the Prospectus and to enter into and perform its obligations under, or as
contemplated under, the Underwriting Agreement and the applicable Terms
Agreement and is duly qualified or registered as a foreign corporation to
transact business and is in good standing in each jurisdiction in which such
qualification or registration is required, whether by reason of the ownership
or leasing of property or the conduct of business, except where the failure to
so qualify or register or be in good standing would not result in a Material
Adverse Effect.
(3) All the outstanding Units have been duly authorized for issuance by
the Operating Partnership to the holders of Units and, assuming that the
holders of Units, as limited partners of the Operating Partnership do not
participate in the control of the business of the Operating Partnership, the
Units will represent valid and, subject to the qualifications set forth
herein, fully paid and non-assessable limited partner interests in the
Operating Partnership, as to which the holders of Units, in their capacity as
limited partners of the Operating Partnership, will have no liability in
excess of their obligations to make contributions to the Operating
Partnership, their obligations to make other payments provided for in the
Operating Partnership Agreement and their share of the Operating Partnership's
assets and undistributed profits (subject to the obligation of a limited
partner of the Operating Partnership to repay any funds wrongfully distributed
to it). No Units are reserved for any purpose and except for the "put rights"
accorded to Odyssey Partners, L.P., under Section 12.4 of the Second Amended
and Restated Agreement of Limited Partnership of the Omni Partnership, the
Merger Agreement, dated December 8, 1998 by and among the Company, the
Operating Partnership, Metropolitan Partners LLC and Tower Realty Trust, Inc.
(the "Tower Merger Agreement"), the rights of the holders of the Series A, B,
C and D preferred units of limited partner interest in the Operating
Partnership, the rights of the holder of the preferred interest in
Metropolitan Partners LLC pursuant to the terms of the limited liability
operating agreement of Metropolitan Partners LLC dated December 8, 1998, and
as otherwise described in the Registration Statement, to our knowledge, there
are no outstanding securities convertible into or exchangeable for any Units
and no outstanding options, rights (preemptive or otherwise) or warrants to
purchase or subscribe for Units or any other securities of the Operating
Partnership arising by operation of law or under the organizational documents
of the Operating Partnership or any contracts to which the Operating
Partnership is a party of which we are aware.
(4) Each Significant Subsidiary has been duly incorporated or organized
and is validly existing as a corporation, limited partnership or other legal
entity, as the case may be, in good standing under the laws of the
jurisdiction of its incorporation or organization, as the case may be, and has
the requisite power and authority to own, lease and operate its properties and
to conduct the business in which it is engaged or proposes to engage as
described in the Prospectus and is duly qualified or registered as a foreign
corporation, limited partnership or other legal entity, as the case may be, to
transact business and is in good standing in each jurisdiction in which such
qualification or registration is required, whether by reason of the ownership
or leasing of property or the conduct of business, except where the failure to
so qualify or register or to be in good standing would not result in a
Material Adverse Effect. Except as otherwise stated in the Registration
Statement and the Prospectus, all of the issued and outstanding capital stock
or other equity interests, as the case may be, of each Significant Subsidiary
has been duly authorized and is validly issued, fully paid and non-assessable
and has been offered and sold in compliance with all applicable laws of the
United States and the organizational laws of the jurisdictions of organization
of such entity, and to the best of our knowledge and information, is owned,
directly or indirectly, by the Operating Partnership, in each case, free and
clear of any material Liens, except for such liens that would not have a
Material Adverse Effect.
(5) The Underwriting Agreement and the applicable Terms Agreement has
been duly authorized, executed and delivered by the Operating Partnership.
(6) The Indenture has been duly authorized, executed and delivered by the
Operating Partnership and constitutes a valid and legally binding agreement,
enforceable in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity principles;
and the Indenture has been duly qualified under the Trust Indenture Act.
(7) The Underwritten Securities have been duly authorized by the
Operating Partnership and, when issued and delivered pursuant to the
Indenture, the Underwriting Agreement and the applicable Terms Agreement
against payment of the requisite consideration therefor, such Underwritten
Securities will have been duly executed and delivered by the Operating
Partnership and will constitute valid and legally binding obligations of the
Operating Partnership entitled to the benefits provided by the Indenture,
subject, as to enforcement, to bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or affecting creditors' rights
generally and to general equity principles.
(8) The Underwritten Securities being sold pursuant to the applicable
Terms Agreement and the Indenture conform, in all material respects, to the
statements relating thereto contained in the Prospectus and are in
substantially the form filed or incorporated by reference, as the case may be,
as an exhibit to the Registration Statement.
(9) The information in the Prospectus under "Description of Debt
Securities," "Description of Notes" and "Federal Income Tax Considerations,"
and such other information in the Prospectus Supplement or in any Annual
Report on Form 10-K of the Company as may be agreed upon from time to time by
the Company and Xxxxxxx Xxxxx, to the extent that it constitutes matters of
law, descriptions of statutes, rules or regulations, summaries of legal
matters, the Operating Partnership's documents or legal proceedings, or legal
conclusions, has been reviewed by us and is correct in all material respects
and fairly summarizes the information required to be disclosed therein and our
opinion set forth in Exhibit 8.1 of the Prospectus as to tax matters is
confirmed.
(10) To the best of our knowledge, neither the Company, the Operating
Partnership nor any of the Significant Subsidiaries is in violation of its
charter, by-laws, partnership agreement, or other organizational document, as
the case may be, and no default by the Operating Partnership or any
Significant Subsidiary exists in the due performance or observance of any
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other agreement or
instrument that is filed or incorporated by reference as an exhibit to the
Registration Statement.
(11) The execution, delivery and performance of the Underwriting
Agreement, the applicable Terms Agreement and the Indenture and consummation
of the transactions contemplated in the Underwriting Agreement and such Terms
Agreement and in the Registration Statement and the Prospectus (including the
issuance and sale of the Underwritten Securities) and compliance by the
Operating Partnership or any Significant Subsidiary with its obligations
thereunder do not and will not, whether with or without the giving of notice
or passage of time or both, conflict with or constitute a breach of, or
default or Repayment Event under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the Operating
Partnership or any Significant Subsidiary pursuant to, any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note, lease or
any other agreement or instrument, known to us, to which the Operating
Partnership or any Significant Subsidiary is a party or by which it or any of
them may be bound, or to which any of the assets, properties or operations of
the Operating Partnership or any Significant Subsidiary is subject, except for
such conflicts, breaches, defaults, events or liens, charges or encumbrances
that would not result in a Material Adverse Effect, nor will such action
result in any violation of the provisions of the charter, by-laws, or
agreement of limited partnership, as applicable, of the Operating Partnership
or any Significant Subsidiary or any applicable laws, statute, rule,
regulations, judgment, order, writ or decree, known to us, of any government,
government instrumentality or court, domestic or foreign, having jurisdiction
over the Operating Partnership or any Significant Subsidiary or any of their
assets, properties or operations.
(12) To our knowledge, except as disclosed in the Prospectus, there are
no pending or threatened actions, suits or proceedings against or affecting
any of the Operating Partnership or any Subsidiary or any of their respective
properties or other assets that, if determined adversely to any such entity
would individually or in the aggregate have a Material Adverse Effect or would
materially adversely affect the ability of the Operating Partnership to
perform its obligations under the Underwriting Agreement and the applicable
Terms Agreement.
(13) At all times since January 1, 1995, the Company has been organized
and conducts its business in a manner that will enable it to qualify as (and
has timely taken all necessary steps to maintain qualification) as a real
estate investment trust under the Internal Revenue Code of 1986, as amended
(the "Code"). The proposed method of operation, as described in the
Prospectus, of the Company will enable the Company to continue to meet the
requirements for taxation as a real estate investment trust under the Code and
to the best of our knowledge, no actions have been taken (or not been taken
which are required to be taken) which could cause such qualification to be
lost for any of its subsequent taxable years.
(14) The statements in the Prospectus regarding [agreements to be
specified in each transaction] are accurate in all material respects. To the
best of our knowledge, there are no franchises, contracts, indentures,
mortgages, loan agreements, notes, leases or other instruments required to be
described or referred to in the Registration Statement or to be filed as
exhibits thereto other than those described or referred to therein or filed or
incorporated by reference as exhibits thereto, and the descriptions thereof or
references thereto are correct in all material respects.
(15) The Registration Statement was declared effective under the 1933 Act
as of March 11, 1999. Any required filing of the Prospectus pursuant to Rule
424(b) has been made in the manner and within the time period required by Rule
424(b). To the best of our knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued under the 1933 Act
or proceedings therefor initiated or threatened by the Commission.
(16) The Registration Statement, the Prospectus, excluding the documents
incorporated by reference therein, and each amendment or supplement to the
Registration Statement and the Prospectus, excluding the documents
incorporated by reference therein, as of their respective effective or issue
dates (other than the financial statements, supporting schedules or other
financial data included or incorporated by reference therein or the Trustee's
Statement of Eligibility on Form T-1, as to which we express no opinion),
complied as to form in all material respects with the requirements of the 1933
Act and the 1933 Act Regulations and the Trust Indenture Act and 1939 Act
Regulations.
(17) The documents incorporated by reference in the Prospectus (other
than the financial statements, supporting schedules or other financial data
included or incorporated by reference therein, as to which we express no
opinion), when they were filed with the Commission, (or, if later, upon the
filing of an amendment thereto), complied as to form in all material respects
with the requirements of the 1934 Act and the rules and regulations of the
Commission thereunder.
(18) No filing with, or authorization, approval, consent, license, order
registration, qualification or decree of, any court or governmental authority
or agency is necessary or required for the performance by the Operating
Partnership of its obligations under the Underwriting Agreement or the
applicable Terms Agreement or in connection with the transactions contemplated
under the Underwriting Agreement or such Terms Agreement other than under the
1933 Act, the 1933 Act Regulations, the Trust Indenture Act or the 1939 Act
Regulations, which have been obtained, or as may be required under the by-laws
and rules of the NASD, state securities or blue sky laws.
(19) The Operating Partnership is not an "investment company" within the
meaning of the Investment Company Act of 1940, as amended (the "1940 Act").
Nothing has come to our attention that would lead us to believe that the
Registration Statement (other than financial statements, supporting schedules
or other financial data included or incorporated by reference therein or the
Trustee's Statement of Eligibility of Form T-1, as to which we have not been
requested to comment), at the time the Registration Statement or any
post-effective amendment thereto (including the filing of the Operating
Partnership's Annual Report on Form 10-K with the Commission) became effective
or at the date of the applicable Terms Agreement, contained an untrue
statement of a material fact or omitted to state a material fact required to
be stated therein or necessary to make the statements therein not misleading
or that the Prospectus or any amendment or supplement thereto (other than
financial statements, supporting schedules or other financial data included or
incorporated by reference therein, as to which we have not been requested to
comment), at the time the Prospectus was issued, at the time any such amended
or supplemented prospectus was issued or at the Closing Time, included or
includes an untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
In rendering such opinion, such counsel may rely as to matters of fact
(but not as to legal conclusions), to the extent they deem proper, on
certificates of authorized representatives of the Operating Partnership and
public officials. Such opinion shall not state that it is to be governed or
qualified by, or that it is otherwise subject to, any treatise, written policy
or other document relating to legal opinions, including, without limitation,
the Legal Opinion Accord of the ABA Section of Business Law (1991).
Annex I
[FORM OF ACCOUNTANTS' COMFORT LETTER PURSUANT TO SECTION 5(e)]
We are independent public accountants with respect to the Company within the
meaning of the 1933 Act and the applicable published 1933 Act Regulations.
(i) in our opinion, the audited financial statements and the related
financial statement schedules included or incorporated by reference in
the Registration Statement and the Prospectus comply as to form in all
material respects with the applicable accounting requirements of the 1933
Act and the published rules and regulations thereunder;
(ii) _____ on the basis of procedures (but not an examination in
accordance with generally accepted auditing standards) consisting of a
reading of the unaudited interim [consolidated] financial statements of
the Company for the [three month periods ended __________, 19__, and
__________, 19__, the three and six month periods ended __________, 19__,
and __________, 19__, and the three and nine month periods ended
__________, 19__, and __________, 19__, included or incorporated by
reference in the Registration Statement and the Prospectus (collectively,
the "10-Q Financials")]1 [, a reading of the unaudited interim
[consolidated] financial statements of the Company for the _____-month
periods ended __________, 19__, and __________, 19__, included in the
Registration Statement and the Prospectus (the "_____-month
financials")]2 [, a reading of the latest available unaudited interim
[consolidated] financial statements of the Company],3 a reading of the
minutes of all meetings of the stockholders and directors of the Company
[and its subsidiaries] and the Committees of the Company's Board of
Directors [and any subsidiary committees] since [day after end of last
audited period], inquiries of certain officials of the Company [and its
subsidiaries] responsible for financial and accounting matters, a review
of interim financial information in accordance with standards established
by the American Institute of Certified Public Accountants in Statement on
Auditing Standards Xx. 00, Xxxxxxx Xxxxxxxxx Xxxxxxxxxxx ("XXX 00"),0
with respect to the [description of relevant periods]5 and such other
inquiries and procedures as may be specified in such letter, nothing came
to our attention that caused us to believe that:
[(A) _____ the 10-Q Financials incorporated by reference in the
Registration Statement and the Prospectus do not comply as to form
in all material respects with the applicable accounting requirements
of the 1934 Act and the 1934 Act Regulations applicable to unaudited
financial statements included in Form 10-Q or any material
modifications should be made to the 10-Q Financials incorporated by
reference in the Registration Statement and the Prospectus for them
to be in conformity with generally accepted accounting principles;]6
[( ) _____ the _____-month financials included in the
Registration Statement and the Prospectus do not comply as to form
in all material respects with the applicable accounting requirements
of the 1933 Act and the 1933 Act Regulations applicable to unaudited
interim financial statements included in registration statements or
any material modifications should be made to the _____-month
financials included in the Registration Statement and the Prospectus
for them to be in conformity with generally accepted accounting
principles;]7
( ) ______ at [____________, 19__ and at]8 a specified date not
more than five days9 prior to the date of the applicable Terms
Agreement, there was any change in the __________ of the Company
[and its subsidiaries] or any decrease in the _________ of the
Company [and its subsidiaries] or any increase in the ___________ of
the Company [and its subsidiaries,]10 in each case as compared with
amounts shown in the latest balance sheet included in the
Registration Statement and the Prospectus, except in each case for
changes, decreases or increases that the Registration Statement and
the Prospectus disclose have occurred or may occur; or
( ) ______ [for the period from ___________, 19__ to
___________, 19__ and]11 for the period from _________, 19__ to a
specified date not more than five days prior to the date of the
applicable Terms Agreement, there was any decrease in __________,
___________ or ___________,12 in each case as compared with the
comparable period in the preceding year, except in each case for any
decreases that the Registration Statement and the Prospectus
discloses have occurred or may occur;
(iii) ____ based upon the procedures set forth in clause (ii) above
and a reading of the [Selected Financial Data] included in the
Registration Statement and the Prospectus [and a reading of the financial
statements from which such data were derived,]13 nothing came to our
attention that caused us to believe that the [Selected Financial Data]
included in the Registration Statement and the Prospectus do not comply
as to form in all material respects with the disclosure requirements of
Item 301 of Regulation S-K of the 1933 Act [, that the amounts included
in the [Selected Financial Data] are not in agreement with the
corresponding amounts in the audited [consolidated] financial statements
for the respective periods or that the financial statements not included
in the Registration Statement and the Prospectus from which certain of
such data were derived are not in conformity with generally accepted
accounting principles];14
(iv) _____ we have compared the information in the Registration
Statement and the Prospectus under selected captions with the disclosure
requirements of Regulation S-K of the 1933 Act and on the basis of
limited procedures specified herein. Nothing came to our attention that
caused us to believe that this information does not comply as to form in
all material respects with the disclosure requirements of Items 302, 402
and 503(d), respectively, of Regulation S-K;
[(v) _____ based upon the procedures set forth in clause (ii) above,
a reading of the unaudited financial statements of the Company for [the
most recent period] that have not been included in the Registration
Statement and the Prospectus and a review of such financial statements in
accordance with SAS 71, nothing came to our attention that caused us to
believe that the unaudited amounts for __________________ for the [most
recent period] do not agree with the amounts set forth in the unaudited
consolidated financial statements for those periods or that such
unaudited amounts were not determined on a basis substantially consistent
with that of the corresponding amounts in the audited [consolidated]
financial statements;]15
[(vi)] we are unable to and do not express any opinion on the [Pro
Forma Combining Statement of Operations] (the "Pro Forma Statement")
included in the Registration Statement and the Prospectus or on the pro
forma adjustments applied to the historical amounts included in the Pro
Forma Statement; however, for purposes of this letter we have:
(A) read the Pro Forma Statement;
(B) _____ performed [an audit] [a review in accordance with SAS
71] of the financial statements to which the pro forma adjustments
were applied;
(C) _____ made inquiries of certain officials of the Company
who have responsibility for financial and accounting matters about
the basis for their determination of the pro forma adjustments and
whether the Pro Forma Statement complies as to form in all material
respects with the applicable accounting requirements of Rule 11-02
of Regulation S-X; and
(D) _____ proved the arithmetic accuracy of the application of
the pro forma adjustments to the historical amounts in the Pro Forma
Statement; and
on the basis of such procedures and such other inquiries and procedures
as specified herein, nothing came to our attention that caused us to
believe that the Pro Forma Statement included in the Registration
Statement does not comply as to form in all material respects with the
applicable requirements of Rule 11-02 of Regulation S-X or that the pro
forma adjustments have not been properly applied to the historical
amounts in the compilation of those statements;16 and
[(vii)] in addition to the procedures referred to in clause (ii)
above, we have performed other procedures, not constituting an audit,
with respect to certain amounts, percentages, numerical data and
financial information appearing in the Registration Statement and the
Prospectus, which are specified herein, and have compared certain of such
items with, and have found such items to be in agreement with, the
accounting and financial records of the Company;17 and
[(viii) in addition, we [comfort on a financial forecast that is
included in the Registration Statement and the Prospectus.18]
1 Include the appropriate dates of the 10-Q Financials.
2 Include if non-10-Q interim financial statements are included in the
Registration Statement and the Prospectus.
3 Include if the most recent unaudited financial statements are not
included in the Registration Statement and the Prospectus.
4 Note that a review in accordance with Statements on Auditing Standards
("SAS") No. 71 is required for an accountant to give negative assurance on
interim financial information. A review in accordance with SAS No. 71 will
only be performed at the request of the Company and the accountant's report,
if any, related to that review will be addressed only to the Company. Many
companies have a SAS No. 71 review performed in connection with the
preparation of their 10-Q financial statements. See Codification of Statements
on Auditing Standards, AU ss. 722 for a description of the procedures that
constitute such a review. The comfort letter itself should recite that the
review was performed and a copy of the report, if any, should be attached to
the comfort letter. Any report issued pursuant to SAS No. 71 that is mentioned
in the Registration Statement should also be included in the Registration
Statement as an exhibit. If a review in accordance with SAS No. 71 has not and
will not be performed by the accountants, they should be prepared to perform
certain agreed-upon procedures on the interim financial information and to
report their findings thereon in the comfort letter. See Codification of
Statements on Auditing Standards, AU ss. 622 for a discussion of reports
related to the accountant's performance of agreed-upon procedures. Any
question as to whether a review in accordance with SAS No. 71 will be
performed by the accountants should be resolved early.
5 The relevant periods include all interim unaudited condensed
consolidation financial statements included or incorporated by reference in
the Registration Statement and the Prospectus.
6 Include if the 10-Q Financials are incorporated by reference in the
Registration Statement and the Prospectus.
7 Include if unaudited financial statements, not just selected unaudited
data, are included in the Registration Statement and the Prospectus.
8 Include, and insert the date of most recent balance sheet of the Company,
if those statements are more recent than the unaudited financial statements
included in the Registration Statement and the Prospectus.
9 According to Example A of SAS No. 72, the specified date should be five
calendar days prior to the date of the applicable Terms Agreement. However, in
unusual circumstances, five business days may be used.
10 The blanks should be filled in with significant balance sheet items,
selected by the banker and tailored to the issuer's industry in general and
operations in particular. While the ultimate decision of which items should be
included rests with the banker, comfort is routinely requested for certain
balance sheet items, including long-term debt, stockholders' equity, capital
stock and net current assets.
11 Include, and insert dates to describe the period from the date of the
most recent financial statements in the Registration Statement and the
Prospectus to the date of the most recent unaudited financial statements of
the Company, if those dates are different. Regardless of whether this language
is inserted or not, the period including five days prior to the date of the
applicable Terms Agreement should run from the date of the last financial
statement included in the Registration Statement and the Prospectus, not from
the later one that is not included in the Registration Statement and the
Prospectus.
12 The blanks should be filled in with significant income statements items,
selected by the banker and tailored to the issuer's industry in general and
operations in particular. While the ultimate decision of which items should be
included rests with the banker, comfort is routinely requested for certain
income statement items, including net sales, total and per share amounts of
income before extraordinary items and of net income.
13 Include only if there are selected financial data that have been derived
from financial statements not included in the Registration Statement and the
Prospectus.
14 In unusual circumstances, the accountants may report on "Selected
Financial Data" as described in SAS No. 42, REPORTING ON CONDENSED FINANCIAL
STATEMENTS AND SELECTED FINANCIAL DATA, and include in their report in the
Registration Statement and the Prospectus the paragraph contemplated by SAS
No. 42.9. This situation may arise only if the Selected Financial Data do not
include interim period data and the five-year selected data are derived
entirely from financial statements audited by the auditors whose report is
included in the Registration Statement and the Prospectus. If the guidelines
set forth in SAS No. 42 are followed and the accountant's report as included
in the Registration Statement and the Prospectus includes the additional
language prescribed by SAS No. 42.9, the bracketed language may be eliminated.
15 This language should be included when the Registration Statement and the
Prospectus include earnings or other data for a period after the date of the
latest financial statements in the Registration Statement and the Prospectus,
but the unaudited interim financial statements from which the earnings or
other data is derived is not included in the Registration Statement and the
Prospectus. The blank should be filled in with a description of the financial
statement item(s) included.
16 If an audit or a review in accordance with SAS No. 71 has not been
performed by the accountants with respect to the underlying historical
financial statements, or if negative assurance on the Company's pro forma
financial statements is not otherwise available, the accountants should be
requested to perform certain other procedures with respect to such pro forma
financial statements. See Example O of SAS No. 72.
17 This language is intended to encompass all other financial/numerical
information appearing in the Registration Statement and the Prospectus for
which comfort may be given, including (but not limited to) amounts appearing
in the Registration Statement and the Prospectus narrative and other summary
financial data appearing in tabular form (e.g., the capitalization table).
18 Accountants' services with respect to a financial forecast may be in one
of three forms: an examination of the forecast, a compilation of the forecast
or the application of agreed-upon procedures to the forecast. If the
accountant is to perform an examination of the forecast included in the
Registration Statement and the Prospectus, delivery of the related report
should be treated separately in Section 5(f) as follows (remember to change
subsequent letters accordingly):
(f) At the time that the applicable Terms Agreement is executed by the
Company, you shall have received from _________________ a report, dated such
date, in form and substance satisfactory to you, together with signed or
reproduced copies of such report for each of the other Underwriters, stating
that, in their opinion, the forecasted financial statements for the [relevant
period or periods] included in the Registration Statement and the Prospectus
are presented in conformity with guidelines for presentation of a forecast
established by the AICPA, and that the underlying assumptions provide a
reasonable basis for management's forecast.
If the accountant is to perform a compilation of the forecasted financial
statements included in the Registration Statement and the Prospectus, delivery
of the related report should be treated separately in Section 5(e) as follows:
(f) At the time that the applicable Terms Agreement is executed by the
Company, you shall have received from _________________ a report, dated such
date, in form and substance satisfactory to you, together with signed or
reproduced copies of such report of each of the other Underwriters, stating
that they have compiled the forecasted financial statements for the [relevant
period or periods] included in the Registration Statement and the Prospectus
in accordance with the guidelines established by the AICPA.
Finally, if the accountant is to perform agreed-upon procedures on a forecast
included in the Registration Statement and the Prospectus, SAS No. 72 requires
that the accountant first prepare a compilation report with respect to the
forecast and attach that report to the comfort letter. The accountant may then
report on specific procedures performed and findings obtained.
