2,750,000 COMMON SHARES
AMLI RESIDENTIAL PROPERTIES TRUST
(A MARYLAND REAL ESTATE INVESTMENT TRUST)
(PAR VALUE $.01 PER SHARE)
PURCHASE AGREEMENT
November 21, 1996
XXXXXX BROTHERS INC.
XXXX XXXXXX XXXXXXXX INC.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
EVEREN SECURITIES, INC.
c/x Xxxxxx Brothers Inc.
Three World Financial Center
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Amli Residential Properties Trust, a Maryland real estate investment
trust (the "Company"), proposes to sell 2,750,000 shares (the "Firm Stock") of
the Company's common shares of beneficial interest, par value $.01 per share
(the "Common Stock"). In addition, the Company proposes to grant to the
Underwriters named in Schedule 1 hereto (the "Underwriters") an option to
purchase up to an additional 412,500 shares of the Common Stock on the terms and
for the purposes set forth in Section 2 (the "Option Stock"). The Firm Stock
and the Option Stock, if purchased, are hereinafter collectively called the
"Stock." This is to confirm the agreement concerning the purchase of the Stock
from the Company by the Underwriters.
1. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY AND THE
OPERATING PARTNERSHIP. Each of the Company and Amli Residential Properties,
L.P., a Delaware limited partnership (the "Operating Partnership"), jointly and
severally represents and warrants to each of the Underwriters as of the date
hereof as follows:
(a) A registration statement on Form S-3, an amendment and a
post-effective amendment thereto, with respect to the preferred shares of
beneficial interest, $.01 par value per share (the "Preferred Stock"), Common
Stock and securities warrants to purchase either of the foregoing (the
"Securities Warrants" and, together with the Preferred Stock and the Common
Stock, the "Shelf Securi-
ties") to be issued from time to time have (i) been prepared by the Company in
conformity with the requirements of the Securities Act of 1933, as amended (the
"Securities Act"), and the rules and regulations (the "Rules and Regulations")
of the Securities and Exchange Commission (the "Commission") thereunder, (ii)
been filed with the Commission under the Securities Act and (iii) become
effective under the Securities Act. Copies of such registration statement and
the amendments thereto have been delivered by the Company to you. As used in
this Agreement, "Effective Time" means the date and the time as of which such
registration statement, or the most recent post-effective amendment thereto, if
any, was declared effective by the Commission; "Effective Date" means the date
of the Effective Time. The registration statement as amended to the date of
this Agreement is hereinafter referred to as the "Registration Statement" and
the related prospectus covering the Shelf Securities in the form first used to
confirm sales of the Stock is hereinafter referred to as the "Basic Prospectus."
The Basic Prospectus as supplemented by the prospectus supplement specifically
relating to the Stock in the form first filed pursuant to Rule 424 is
hereinafter referred to as the "Prospectus." Any reference in this Agreement to
the Registration Statement, the Basic Prospectus, any preliminary form of
Prospectus (a "Preliminary Prospectus") previously filed with the Commission
pursuant to Rule 424 or the Prospectus shall be deemed to refer to and include
the documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the Securities Act which were filed under the Securities Exchange Act of
1934, as amended, and the rules and regulations of the Commission thereunder
(collectively, the "Exchange Act") on or before the date of this Agreement, any
Preliminary Prospectus or the Prospectus, as the case may be; and any reference
to "amend," "amendment" or "supplement" with respect to the Registration
Statement, the Basic Prospectus, any Preliminary Prospectus or the Prospectus
shall be deemed to refer to and include any documents filed under the Exchange
Act after the date of this Agreement, any Preliminary Prospectus or the
Prospectus, as the case may be, which are deemed to be incorporated by reference
therein. The Commission has not issued any order preventing or suspending the
use of any Preliminary Prospectus. As described in the Prospectus, the Company
owns partnership interests in Amli Residential Properties, L.P., a Delaware
limited partnership (the "Operating Partnership"). The term "subsidiaries,"
when used with respect to the Company, includes, without limitation, the
Operating Partnership, Amli Management Company (the "Management Company"), Amli
Institutional Advisors, Inc. ("AIA") and Amli Residential Construction, Inc.
("Amrescon" and, together with the Management Company and AIA, the "Service
Companies") unless otherwise noted. Capitalized terms used herein but not
otherwise defined shall have the respective meanings ascribed to such terms in
the Prospectus.
As described in the Prospectus, as of the date hereof and as of any
Delivery Date (as hereinafter defined), (i) the Company is and will be the sole
general partner of, and does and will (assuming no conversion of outstanding
units in the Operating Partnership (the "Units") for Common Stock or exercises
of
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outstanding convertible securities of the Company or the Operating Partnership
prior to each such Delivery Date, and subject to adjustment to reflect the
issuance of the Firm Stock as of the Second Delivery Date) own a 81.6%
partnership interest in, the Operating Partnership, (ii) the Operating
Partnership does and will directly, indirectly or through co-investment joint
ventures own each of the 46 multi-family apartment communities (the
"Properties") described in the Prospectus under the heading "The Communities,"
(iii) the Operating Partnership is and will be the sole general partner (except
in the case of co-investment joint ventures which constitute general
partnerships) or managing member of each of the co-investment joint ventures
(the "Co-Investment Joint Ventures") which own the Co-Investment Communities,
(iv) the Operating Partnership does and will own five percent of the common
stock and 100% of the preferred stock of each of the Service Companies and (v)
the Operating Partnership does and will own certain parcels of land described in
the Prospectus upon which it intends to commence development (the "Land
Parcels"). For purposes of this Agreement, the partnership that owns Phases I
and II of the Sope Creek Crossing Community and partnerships or limited
liability companies (other than the Operating Partnership) that own the Co-
Investment Communities at any Delivery Date (and in which the Operating
Partnership will own an interest) are collectively referred to as the "Property
Partnerships." The Company owns the remaining interests in the partnership that
owns Phases I and II of the Sope Creek Crossing Community. For purposes of
this Agreement, the Service Companies and the Property Partnerships are
collectively referred to as the "Subsidiaries."
(b) The documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the case may
be, conformed in all material respects to the requirements of the Securities Act
or the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder, and none of such documents contained an untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and any
further documents so filed and incorporated by reference in the Prospectus or
any further amendment or supplement thereto, when such documents become
effective or are filed with the Commission, as the case may be, will conform in
all material respects to the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder and will
not contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading; PROVIDED, HOWEVER, that no representation or warranty is made as
to any statements or omissions made in reliance upon and in conformity with
written information furnished to the Company by you specifically for inclusion
therein.
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(c) The Registration Statement conforms, and the Prospectus and
any further amendments or supplements to the Registration Statement or the
Prospectus will, when they become effective or are filed with the Commission, as
the case may be, conform in all material respects to the requirements of the
Securities Act and the Rules and Regulations and do not and will not, as of the
applicable effective date (as to the Registration Statement and any amendment
thereto) and as of the applicable filing date (as to the Prospectus and any
amendment or supplement thereto) contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; PROVIDED, HOWEVER, that no
representation or warranty is made as to any statements or omissions made in
reliance upon and in conformity with written information furnished to the
Company by you specifically for inclusion therein.
(d) KPMG Peat Marwick LLP, the accounting firm that certified
the financial statements and supporting schedules included in the Registration
Statement, are independent public accountants as required by the Securities Act
and the Rules and Regulations.
(e) The financial statements (including the notes thereto)
included in the Registration Statement and the Prospectus present fairly the
financial position of the respective entity or entities presented therein as at
the respective dates indicated and the results of their operations for the
respective periods specified; except as otherwise stated in the Registration
Statement, said financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis. The
supporting schedules included in the Registration Statement present fairly the
information required to be stated therein. The financial information and data
included in the Registration Statement and the Prospectus present fairly the
information included therein and have been prepared on a basis consistent with
that of the financial statements included in the Registration Statement and the
Prospectus and the books and records of the respective entities presented
therein. Pro forma financial information included in the Prospectus has been
prepared in accordance with the applicable requirements of the Securities Act,
the Rules and Regulations and AICPA guidelines with respect to pro forma
financial information and includes all adjustments necessary to present fairly
the pro forma financial position of the respective entity or entities presented
therein at the respective dates indicated and the results of their operations
for the respective periods specified.
(f) Since the respective dates as of which information is given
in 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 Properties
(taken as a whole) or of the Company, whether or not arising in the ordinary
course of business, (B) there have
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been no transactions entered into by the Company, the Operating Partnership or
any of the Subsidiaries, other than those in the ordinary course of business,
which are material with respect to the Properties (taken as a whole) or to the
Company, (C) there has been no casualty loss or condemnation or other adverse
event with respect to any Property that is material with respect to the
Properties (taken as a whole), (D) there has been no dividend or distribution of
any kind declared, paid or made by the Company or the Service Companies on any
class of their capital stock or shares of beneficial interest or by the
Operating Partnership or any Property Partnership with respect to their
partnership interests, and (E) there has been no change in the capital stock or
shares of beneficial interest of the Company or the Service Companies or in the
partnership interests of the Operating Partnership or any Property Partnership,
or any material increase in the indebtedness of the Company, the Operating
Partnership or any of the Subsidiaries, taken as a whole.
(g) The Company has been duly organized and is validly existing
as a real estate investment trust in good standing under the laws of the State
of Maryland with full 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 to enter into and perform its
obligations under this Agreement. The Company is duly qualified to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure to so qualify
would not have a material adverse effect on the condition, financial or
otherwise, or the earnings, assets, business affairs or business prospects of
the Properties (taken as a whole) or of the Company.
(h) Each of the Service Companies has been duly incorporated and
is validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation with corporate 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 of the
Service Companies is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure to so qualify
would not have a material adverse effect on the condition, financial or
otherwise, or the earnings, assets, business affairs or business prospects of
the Properties (taken as a whole) or of the Company. All of the issued and
outstanding capital stock of each of the Service Companies has been duly
authorized and at any Delivery Date will be validly issued, fully paid and
nonassessable and will be owned as described in the Prospectus, in each case
free and clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity.
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(i) The Operating Partnership has been duly formed and is
validly existing as a limited partnership in good standing under the Delaware
Revised Uniform Limited Partnership Act (the "Delaware Act") with partnership
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 to enter into and perform its obligations under this 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 on the condition,
financial or otherwise, or the earnings, assets, business affairs or business
prospects of the Properties (taken as a whole) or of the Company. The Operating
Partnership and the other subsidiaries identified in the Registration Statement
are the only subsidiaries of the Company required to be identified as such in
the Company's Annual Report on Form 10-K pursuant to Item 601 of Regulation S-K.
(j) Each Property Partnership has been duly formed and is
validly existing as a limited or general partnership or limited liability
company, as the case may be, in good standing (in the case of each limited
partnership or limited liability company) under the laws of the jurisdiction of
its formation with the power and authority to own, lease and operate its
properties, to conduct the business in which it is engaged or proposes to engage
as described in the Prospectus. Each Property 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 would not have a material adverse effect on the
condition, financial or otherwise, or the earnings, assets, business affairs or
business prospects of the Properties (taken as a whole) or of the Company. As
of any Delivery Date, all of the partnership or limited liability company
interests of each Property Partnership will be duly authorized for issuance and
validly issued and fully paid, in each case free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity. Each
partnership agreement relating to a Property Partnership is in full force and
effect. As of any Delivery Date, except for the Property Partnerships that
constitute Co-Investment Joint Ventures, the Operating Partnership and the
Company will own all of the partnership interests of each Property Partnership.
As of any Delivery Date, the Operating Partnership will be the sole general
partner (except in the case of Co-Investment Joint Ventures that are general
partnerships) or managing member of, and will own at least the percentage
partnership or membership interest as indicated in the Prospectus under the
heading "The Communities" in, each of the Co-Investment Joint Ventures.
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(k) The authorized shares of beneficial interest of the Company
are as set forth in the Prospectus under the heading "Description of Common
Shares," and the issued and outstanding shares of beneficial interest of the
Company are as set forth in the Prospectus under the heading "Capitalization"
(except for subsequent issuances, if any, pursuant to this Agreement or pursuant
to employee, trustee or director benefit plans of the Company, the Operating
Partnership and the Service Companies as described in the Prospectus or the
issuance of Units in connection with the acquisition of property, directly or
indirectly, by the Operating Partnership). The issued and outstanding Common
Stock has been duly authorized and validly issued and is fully paid and, except
as described in the Prospectus, nonassessable; the Stock has been duly
authorized for issuance and sale to the Underwriters pursuant to this Agreement
and, when issued and delivered by the Company pursuant to this Agreement against
payment of the consideration set forth herein, will be validly issued and fully
paid and, except as described in the Prospectus, nonassessable; the Company has
duly reserved a sufficient number of shares of Common Stock for issuance upon
exchange of outstanding Units; the terms of the Common Stock are accurately
described in all material respects in the Prospectus; and the issuance of the
Stock is not subject to preemptive or other similar rights.
(l) Except as disclosed in the Prospectus, or except to the
extent that the inaccuracy of any of the following, either individually or in
the aggregate, would not result in any material adverse change in the condition,
financial or otherwise, or in the earnings, assets, business affairs or business
prospects of the Properties (taken as a whole) or of the Company (a "Material
Adverse Change") or which would not materially impair the consummation of the
transactions contemplated by this Agreement (together with a Material Adverse
Change, a "Material Adverse Effect"): (A) none of the Company, the Operating
Partnership or any Subsidiary is in violation of its declaration of trust,
charter, by-laws, certificate of limited partnership, partnership agreement or
other governing document, as the case may be, and none of such entities is in
default in the performance or observance of any obligation, agreement, covenant
or condition contained in any contract, indenture, mortgage, loan agreement,
note, lease or other instrument to which such entity is a party or by which such
entity may be bound or affected, or to which any of the property or assets of
such entity is subject; and (B) the execution, delivery and performance of this
Agreement by the Company and the Operating Partnership and the consummation of
the transactions contemplated herein and compliance by each of the Company and
the Operating Partnership with its obligations hereunder have been duly
authorized by all necessary corporate, trust or partnership action, as the case
may be, and will not conflict with or constitute a breach of, or default under,
or result in the creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Company, the Operating Partnership or any of the
Subsidiaries pursuant to, any contract, indenture, mortgage, loan agreement,
note, lease or other instrument to which such entity is a party or by which such
entity may be
7
bound or affected, or to which any of the property or assets of such entity is
subject, nor will such action result in any violation of the declaration of
trust, charter, by-laws, certificate of limited partnership, partnership
agreement or other governing document, as the case may be, of such entity or any
applicable law, administrative regulation or administrative or court decree.
(m) No labor dispute, material to the Company, with the
employees of the Company, the Operating Partnership or any of the Subsidiaries
exists or, to the knowledge of the Company, the Operating Partnership or any of
the Subsidiaries, is imminent.
(n) There is no action, suit or proceeding before or by any
court or governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Company or the Operating Partnership, threatened against or
affecting the Company, the Operating Partnership or any Subsidiary, or of which
any of their respective property or assets is the subject, which is required to
be disclosed in the Registration Statement, other than as disclosed therein, or
which, if determined adversely, individually or in the aggregate, might result
in a Material Adverse Effect; all pending legal or governmental proceedings to
which the Company, the Operating Partnership or any Subsidiary is a party or to
which any of their respective property or assets is subject which are not
described in the Registration Statement, including ordinary routine litigation
incidental to the business, are, considered in the aggregate, not material to
the Company; and there are no contracts, indentures, mortgages, loan agreements,
notes, leases or other instruments or documents which are required to be
described or referred to in the Registration Statement or to be filed as
exhibits thereto by the Securities Act or the Rules and Regulations, other than
those described or referred to therein or filed as exhibits thereto, and the
descriptions thereof or references thereto in the Registration Statement are
correct.
(o) The Company, the Operating Partnership and the Subsidiaries
own or have a royalty-free license to use all of the trademarks, service marks
and trade names (collectively, the "Proprietary Rights") presently employed by
them in connection with the business now engaged by them or proposed to be
engaged by them as described in the Prospectus, and neither the Company, the
Operating Partnership nor the Subsidiaries have received any notice or are
otherwise aware of any infringement of or conflict with asserted rights of
others with respect to any Proprietary Rights, or of any facts which would
render any of the Proprietary Rights invalid or inadequate to protect the
interest of the Company, the Operating Partnership or any of the Subsidiaries
therein, and which infringement or conflict (if the subject of any unfavorable
decision, ruling or finding) or invalidity or inadequacy, individually or in the
aggregate, would result in any Material Adverse Change.
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(p) Commencing with the Company's taxable year ending
December 31, 1994, the Company has been organized in conformity with the
requirements for qualification as a real estate investment trust (a "REIT")
under the Internal Revenue Code of 1986, as amended (the "Code"), and its
proposed method of operation as described in the Prospectus will enable it to
continue to satisfy the requirements for taxation as a REIT under the Code.
(q) No authorization, approval, consent or order of any court or
governmental authority or agency is necessary in connection with the offering,
issuance or sale of the Stock hereunder, except such as may be required under
the Securities Act or the Rules and Regulations or state securities laws of any
state or other jurisdiction and except for such as have been obtained.
(r) Each of the Company, the Operating Partnership and the
Subsidiaries possesses such certificates, authorizations or permits issued by
the appropriate state, federal or foreign regulatory agencies or bodies
necessary to conduct the business now operated by them or proposed to be
operated by them as described in the Prospectus, and none of such entities has
received any notice of proceedings relating to the revocation or modification of
any such certificate, authorization or permit which, individually or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would
result in a Material Adverse Change.
(s) Except as disclosed in the Prospectus, or except to the
extent that the inaccuracy of any of the following, either individually or in
the aggregate, would not have a Material Adverse Effect: (A) At any Delivery
Date, the Operating Partnership or the Property Partnerships will have good and
marketable fee simple title (or, with respect to any Properties located in
Texas, good and indefeasible fee simple title, or such substantially equivalent
quality of title as provided by the applicable title insurance policy) to the
land underlying each of the Properties and the Co-Investment Communities (except
for Towne Creek Crossing, which is subject to a ground lease (the "Towne Creek
Ground Lease") dated April 12, 1989) and good and marketable title (or, with
respect to Properties located in Texas, good and indefeasible title) to the
improvements thereon (in each case with title insurance thereon in full force
and effect and which is adequate in accordance with industry standards) and all
other assets that are required for the effective operation of such Properties in
the manner in which they currently are operated subject only to Permitted
Exceptions (as herein defined); (B) at any Delivery Date, the Towne Creek Ground
Lease and all other leases under which the Company, the Operating Partnership or
the Subsidiaries will lease any property as lessee will be in full force and
effect, and neither the Company, the Operating Partnership nor any Subsidiary
will be in default in any material respect of any of the terms or provisions of
any of such leases and no claim has been asserted by anyone adverse to any such
entity's rights as lessee under any of such leases, or affecting or questioning
any such entity's right to the continued possession or use of the properties
under any such leases or assert-
9
ing a default under any such leases; (C) all liens, charges or encumbrances on
or affecting any of the Wholly-Owned Communities or the Co-Investment
Communities or the other property and assets of the Company, the Operating
Partnership or any of the Subsidiaries which are required to be disclosed in the
Prospectus are disclosed therein; (D) neither the Company, the Operating
Partnership, any Property Partnership nor, to the knowledge of the Company, the
Operating Partnership or the Subsidiaries, any tenant of any of the Wholly-Owned
Communities or the Co-Investment Communities is in default under any of the
leases pursuant to which the Operating Partnership or any Property Partnership,
as lessor, will lease its Property as of any Delivery Date, and none of the
Company, the Operating Partnership or any of the Subsidiaries knows of any event
which, but for the passage of time or the giving of notice, or both, would
constitute a default under any of such leases; (E) at any Delivery Date, the
Operating Partnership or the Property Partnerships (or the Management Company as
agent for the Property Partnerships or the Operating Partnership) will be the
lessor of all tenant leases at each of the Wholly-Owned Communities and the Co-
Investment Communities; (F) each of the Properties complies with all applicable
federal, state and local codes, laws and regulations (including, without
limitation, building and zoning codes, laws and regulations and laws relating to
handicapped access to the Properties); (G) none of the Company, the Operating
Partnership or any of the Subsidiaries has knowledge of any pending or
threatened condemnation proceedings, zoning change, or other proceeding or
action that will in any manner adversely affect the size of, use of,
improvements on, construction on or access to the Properties; and (H) neither
the Company, the Operating Partnership nor any of the Subsidiaries has received
from any governmental authority notice of any violation of any municipal, state
or federal law, rule or regulation (including relating to environmental matters)
concerning the Wholly-Owned Communities or the Co-Investment Communities or any
part thereof which has not heretofore been cured. As used in this Agreement,
"Permitted Exceptions" means: (i) real estate taxes and assessments not yet
delinquent; (ii) covenants, restrictions, easements and other similar
agreements, provided that the same are not violated by existing improvements or
the current use and operation of a Property; (iii) zoning laws, ordinances and
regulations, building codes, rules and other governmental laws, regulations,
rules and orders affecting each Property, provided that the same are not
violated by existing improvements or the current use and operation of a
Property; (iv) any state of facts disclosed by the surveys relating to the
Properties; (v) any minor imperfection of title which does not affect the
current use, operation or enjoyment of a Property and does not render title to
such Property unmarketable or uninsurable and does not impair the value of such
Property; and (iv) mortgage financing as described in the Prospectus.
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(t) (A) As of any Delivery Date, no person or entity will have
an option or right of first refusal (except for buy-sell or similar provisions,
in the case of the Co-Investment Communities, as set forth in the partnership or
limited liability company agreements of the partnerships or limited liability
companies of the partnerships or limited liability companies that own the Co-
Investment Communities) to purchase all or any part of any Property or any
interest therein; and (B) there is in effect for the Properties and other assets
of the Company, the Operating Partnership and the Subsidiaries insurance
coverages (including title insurance) that are commercially reasonable and
adequate for the types of assets and properties owned, operated or managed by
them, and neither the Company, the Operating Partnership, nor any Subsidiary has
received from any insurance company notice of any material defects or
deficiencies affecting the insurability of any of the Properties or such other
assets.
(u) (A) Except as specifically described in the Prospectus,
each of the Company, the Operating Partnership and each of the Subsidiaries has
complied and is in compliance in all material respects with all Environmental
Statutes (as hereinafter defined).
(B) Neither the Company, the Operating Partnership nor
any of the Subsidiaries intends to use the properties or assets
described in the Prospectus or any other real property owned or
occupied by any such party for the purpose of handling, burying,
storing, retaining, refining, transporting, processing, manufacturing,
generating, producing, spilling, seeping, leaking, escaping, leaching,
pumping, pouring, emitting, emptying, discharging, injecting, dumping,
transferring or otherwise disposing of or dealing with Hazardous
Materials, except for materials utilized in the ordinary course of
business of the Properties, provided such use would not, in the
ordinary course of business, give rise to liability under any
Environmental Statute.
(C) Except as would not, individually or in the
aggregate, have a material adverse effect on the condition, financial
or otherwise, or the earnings, assets, business affairs or business
prospects of the Company, any Wholly-Owned Community, any Co-
Investment Community or a Land Parcel, neither the Company, the
Operating Partnership nor any of the Subsidiaries knows of any
seepage, leak, escape, xxxxx, discharge, injection, release, emission,
spill, pumping, pouring, emptying or dumping of Hazardous Materials
into waters on or adjacent to the properties described in the
Prospectus or any other real property owned or occupied by any such
party, or onto lands from which Hazardous Materials might seep, flow
or drain into such waters.
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(D) Neither the Company, the Operating Partnership nor
any of the Subsidiaries has received any notice of, or has any
knowledge of, any occurrence or circumstance that, with notice or
passage of time or both, would give rise to a claim under or pursuant
to any federal, state or local environmental statute or regulation or
under common law, pertaining to Hazardous Materials on or originating
from any properties or assets described in the Prospectus or any other
real property owned or occupied by any such party or arising out of
the conduct of any such party, including without limitation pursuant
to any Environmental Statute, which would not individually or in the
aggregate have a Material Adverse Effect on the condition, financial
or otherwise, of the Company or the Properties and the Land Parcels.
(E) Neither the properties described in the Prospectus
nor any other land owned by the Company, the Operating Partnership or
any of the Subsidiaries is included or, to the best knowledge of the
Company, the Operating Partnership or the Subsidiaries, proposed for
inclusion on the National Priorities List issued pursuant to CERCLA
(as hereinafter defined) by the United States Environmental Protection
Agency (the "EPA") or on the inventory of other potential "Problem"
sites issued by the EPA and has not otherwise been publicly identified
by the EPA as a potential CERCLA site or included or, to the best
knowledge of the Company, the Operating Partnership or the
Subsidiaries, proposed for inclusion on any list or inventory issued
pursuant to any other Environmental Statute or issued by any other
Governmental Authority (as hereinafter defined).
As used herein, "Hazardous Material" shall include
without limitation any flammable explosives, radioactive materials,
hazardous materials, hazardous wastes, toxic substances or related
materials, asbestos or any hazardous material as defined by any
federal, state or local environmental law, ordinance, rule or
regulation, including without limitation the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as
amended, 42 U.S.C. Sections 9601 ET SEQ. ("CERCLA"), the Hazardous
Materials Transportation Act, as amended, 49 U.S.C. Sections 1801 ET
SEQ., the Resource Conservation and Recovery Act, as amended, 42
U.S.C. Sections 9601 ET SEQ., the Emergency Planning and Community
Right-to-Know Act of 1986, 42 U.S.C. Sections 11001 ET SEQ., the Toxic
Substances Control Act, 15 U.S.C. Sections 2601 ET SEQ., the Federal
Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. Sections 136 ET
SEQ., the Clean Air Act, 42 U.S.C. Sections 7401 ET SEQ., the Clean
Water Act
12
(Federal Water Pollution Control Act), 33 U.S.C. Sections 1251 ET seq., the
Safe Drinking Water Act, 42 U.S.C. Sections 300f to 300j-11, and the
Occupational Safety and Health Act, 29 U.S.C. Sections 651 ET SEQ., as any
of the above statutes may be amended from time to time, and in the
regulations adopted and publications promulgated pursuant to each of the
foregoing (individually, an "Environmental Statute") or by any federal,
state or local governmental authority having or claiming jurisdiction over
the properties and assets described in the Prospectus (a "Governmental
Authority").
(v) Neither the Company, the Operating Partnership nor any of
their directors, officers or controlling persons has taken or will take,
directly or indirectly, any action resulting in a violation of Rule 10b-6 under
the Exchange Act or designed to cause or result under the Securities Act or
otherwise in, or which has constituted or which reasonably might be expected to
constitute, the stabilization or manipulation of the price of any security of
the Company or facilitation of the sale or resale of the Stock.
(w) This Agreement has been duly executed and delivered by the
Company and the Operating Partnership.
(x) Neither the Company nor the Operating Partnership is, or at
any Delivery Date will be, required to be registered under the Investment
Company Act of 1940, as amended (the "1940 Act").
(y) There are no persons with registration or other similar
rights to have any securities of the Company, the Operating Partnership or the
Subsidiaries registered pursuant to the Registration Statement.
(z) The Company has complied and will comply with all of the
provisions of Florida H.B. 1771, codified as Section 517.075 of the Florida
statutes, and all regulations promulgated thereunder relating to issuers doing
business with Cuba.
Any certificate signed by any officer of the Company or the Operating
Partnership and delivered to the Underwriters or to counsel for the Underwriters
shall be deemed a representation and warranty by each of the Company and the
Operating Partnership (jointly and severally) to each Underwriter as to the
matters covered thereby.
13
2. PURCHASE OF THE STOCK BY THE UNDERWRITERS. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell 2,750,000 shares of
the Firm Stock to the several Underwriters and each of the Underwriters,
severally and not jointly, agrees to purchase the number of shares of the Firm
Stock set opposite that Underwriter's name in Schedule 1 hereto. The number of
shares of Firm Stock subject to the respective purchase obligations of the
Underwriters shall be rounded among the Underwriters to avoid fractional shares,
as the Underwriters may determine.
In addition, the Company grants to the Underwriters an option to
purchase up to 375,000 shares of Option Stock. Such option is granted solely
for the purpose of covering over-allotments in the sale of Firm Stock and is
exercisable as provided in Section 4 hereof. Shares of Option Stock shall be
purchased severally for the account of the Underwriters in proportion to the
number of shares of Firm Stock set opposite the name of such Underwriters in
Schedule 1 hereto. The number of shares of Option Stock subject to the
respective purchase obligations of each Underwriter shall be adjusted by the
Underwriters so that no Underwriter shall be obligated to purchase Option Stock
other than in 100 share amounts. The price of both the Firm Stock and any
Option Stock shall be $20.61 per share.
The Company shall not be obligated to deliver any of the Stock to be
delivered on the First Delivery Date or the Second Delivery Date (as hereinafter
defined), as the case may be, except upon payment for all the Stock to be
purchased on such Delivery Date as provided herein.
3. OFFERING OF STOCK BY THE UNDERWRITER. Upon authorization by the
Underwriters of the release of the Firm Stock, the several Underwriters propose
to offer the Firm Stock for sale upon the terms and conditions set forth in the
Prospectus.
4. DELIVERY OF AND PAYMENT FOR THE STOCK. Delivery of and payment
for the Firm Stock shall be made at the office of Xxxxxx Brothers Inc., Three
World Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 10:00 A.M., New York City
time, on the third full business day following the date of this Agreement or at
such other date or place as shall be determined by agreement between the
Underwriters and the Company. This date and time are sometimes referred to as
the "First Delivery Date." On the First Delivery Date, the Company shall
deliver or cause to be delivered certificates representing the Firm Stock to the
Underwriters for the account of each Underwriter against payment to or upon the
order of the Company of the purchase price by wire transfer in immediately
available funds. Time shall be of the essence, and delivery at the time and
place specified pursuant to this Agreement is a further condition of the
obligation of each Underwriter hereunder. Upon delivery, the Firm Stock shall
be registered in such names and in
14
such denominations as the Underwriters shall request in writing not less than
two full business days prior to the First Delivery Date. For the purpose of
expediting the checking and packaging of the certificates for the Firm Stock,
the Company shall make the certificates representing the Firm Stock available
for inspection by the Underwriters in New York, New York, not later than 2:00
P.M., New York City time, on the business day prior to the First Delivery Date.
At any time on or before the thirtieth day after the date of this
Agreement (or, if such thirtieth day shall be a Saturday, Sunday or holiday, on
the next business day) the option granted in Section 2 may be exercised by
written notice being given to the Company by the Underwriters. Such notice
shall set forth the aggregate number of shares of Option Stock as to which the
option is being exercised, the names in which the shares of Option Stock are to
be registered, the denominations in which the shares of Option Stock are to be
issued and the date and time, as determined by the Underwriters, when the shares
of Option Stock are to be delivered; PROVIDED, HOWEVER, that this date and time
shall not be earlier than the First Delivery Date nor earlier than the second
business day after the date on which the option shall have been exercised nor
later than the fifth business day after the date on which the option shall have
been exercised. The date and time the shares of Option Stock are delivered are
sometimes referred to as the "Second Delivery Date" and the First Delivery Date
and the Second Delivery Date are sometimes each referred to as a "Delivery
Date."
Delivery of and payment for the Option Stock shall be made at the
place specified in the first sentence of the first paragraph of this Section 4
(or at such other place as shall be determined by agreement between the
Underwriters and the Company) at 10:00 A.M., New York City time, on the Second
Delivery Date. On the Second Delivery Date, the Company shall deliver or cause
to be delivered the certificates representing the Option Stock to the
Underwriters for the account of each Underwriter against payment to or upon the
order of the Company of the purchase price by wire transfer in immediately
available funds. Time shall be of the essence, and delivery at the time and
place specified pursuant to this Agreement is a further condition of the
obligation of each Underwriter hereunder. Upon delivery, the Option Stock shall
be registered in such names and in such denominations as the Underwriters shall
request in the aforesaid written notice. For the purpose of expediting the
checking and packaging of the certificates for the Option Stock, the Company
shall make the certificates representing the Option Stock available for
inspection by the Underwriters in New York, New York, not later than 2:00 P.M.,
New York City time, on the business day prior to the Second Delivery Date.
15
5. FURTHER AGREEMENTS OF THE COMPANY. The Company agrees:
(a) To prepare the Prospectus in a form approved by the
Underwriters and to file such Prospectus pursuant to Rule 424(b) under the
Securities Act not later than the Commission's close of business on the second
business day following the execution and delivery of this Agreement; to make no
further amendment or any supplement to the Registration Statement or to the
Prospectus except as permitted herein; to advise the Underwriters, promptly
after it receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or becomes effective or any supplement to
the Prospectus or any amended Prospectus has been filed and to furnish the
Underwriters with copies thereof; to advise the Underwriters, promptly after it
receives notice thereof, of the issuance by the Commission of any stop order or
of any order preventing or suspending the use of any Preliminary Prospectus or
the Prospectus, of the suspension of the qualification of the Stock for offering
or sale in any jurisdiction, of the initiation or threatening of any proceeding
for any such purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or the Prospectus or for additional
information; and, in the event of the issuance of any stop order or of any order
preventing or suspending the use of any Preliminary Prospectus or the Prospectus
or suspending any such qualification, to use promptly its best efforts to obtain
its withdrawal;
(b) To furnish promptly to the Underwriters and to counsel for
the Underwriters a signed copy of the Registration Statement as originally filed
with the Commission, and each amendment thereto filed with the Commission,
including all consents and exhibits filed therewith;
(c) To deliver promptly to the Underwriters such number of the
following documents as the Underwriters shall reasonably request: (i) conformed
copies of the Registration Statement as originally filed with the Commission and
each amendment thereto (in each case excluding exhibits other than this
Agreement and the computation of per share earnings) and (ii) each Preliminary
Prospectus, the Prospectus and any amended or supplemented Prospectus; and, if
the delivery of a prospectus is required at any time prior to the expiration of
nine months after the Effective Time in connection with the offering or sale of
the Stock and if at such time any event shall have occurred as a result of which
the Prospectus as then amended or supplemented would include an untrue statement
of a material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made when such Prospectus is delivered, not misleading, or, if for any other
reason it shall be necessary in the reasonable opinion of counsel for the
Underwriters during such same period to amend or supplement the Prospectus or to
file under the Exchange Act any document incorporated by reference in the
Prospectus in order to comply with the Securities Act or the Exchange Act, to
notify the Underwriters and, upon their request, to file
16
such document and to prepare and furnish without charge to each Underwriter and
to any dealer in securities as many copies as the Underwriters may from time to
time reasonably request of an amended Prospectus or a supplement to the
Prospectus which will correct such statement or omission or effect such
compliance, and in case the Underwriters are required to deliver a prospectus in
connection with sales of any of the Stock at any time nine months or more after
the Effective Time, upon their request but at their expense, to prepare and
deliver to the Underwriters as many copies as the Underwriters may reasonably
request of an amended or supplemented Prospectus complying with Section 10(a)(3)
of the Securities Act;
(d) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the Prospectus
that may, in the reasonable judgment of the Company or the Underwriters, be
required by the Securities Act or requested by the Commission;
(e) Prior to filing with the Commission (i) any amendment to the
Registration Statement or supplement to the Prospectus, any document
incorporated by reference in the Prospectus or (ii) any Prospectus pursuant to
Rule 424 of the Rules and Regulations, to furnish a copy thereof to the
Underwriters and counsel for the Underwriters and obtain consent of the
Underwriters to the filing, which consent shall not be unreasonably withheld or
delayed;
(f) As soon as practicable after the Effective Date, but in any
event not later than 60 days after the end of its fiscal quarter in which the
first anniversary date of the Effective Date occurs, to make generally available
to the Company's security holders and to deliver to the Underwriters an earning
statement of the Company and its subsidiaries (which need not be audited)
complying with Section 11(a) of the Securities Act and the Rules and Regulations
(including, at the option of the Company, Rule 158);
(g) Promptly from time to time to take such action as the
Underwriters may reasonably request to qualify the Stock for offering and sale
under the securities laws of such jurisdictions as the Underwriters may request
and to comply with such laws so as to permit the continuance of sales and
dealings therein in such jurisdictions for as long as may be necessary to
complete the distribution of the Stock; except that in no event shall the
Company be obligated in connection therewith to take any action that would
subject it to income taxation in such jurisdiction, to qualify as a foreign
corporation in such jurisdiction, or to execute a general consent to service of
process;
(h) For a period of 90 days from the date of the Prospectus, not
to offer for sale, sell or otherwise dispose of, directly or indirectly, any
shares of Common Stock (other than the Stock, or Common Stock issuable pursuant
to the Company's existing employee benefit and director plans or to redeem
Units), or sell
17
or grant options, rights or warrants with respect to any shares of Common Stock
(other than the grant of options to purchase up to an aggregate of 120,000
shares of Common Stock pursuant to the Company's, the Operating Partnership's
and the Service Companies' existing employee, trustee or director benefit plans
or the issuance of Units in connection with the acquisition of property,
directly or indirectly, by the Operating Partnership, notice of which shall be
provided to Xxxxxx Brothers Inc. promptly following any such issuance),
otherwise than in accordance with this Agreement or as contemplated in the
Prospectus, without the prior written consent of Xxxxxx Brothers Inc.;
(i) To file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act for so long as
the delivery of a prospectus is required in connection with the offering or sale
of the Stock.
(j) To use its reasonable best efforts to meet the requirements
to qualify, effective for the fiscal year ending December 31, 1996, as a REIT
under the Code;
(k) To apply the net proceeds from the sale of the Stock being
sold by the Company as set forth in the Prospectus; and
(l) To take such steps as shall be necessary to ensure that
neither the Company nor any subsidiary shall become an "investment company"
within the meaning of such term under the 1940 Act and the rules and regulations
of the Commission thereunder.
6. EXPENSES. The Company agrees to pay (a) the costs incident to the
authorization, issuance, sale and delivery of the Stock and any stock transfer
taxes, stamp duties and similar taxes payable in that connection; (b) the costs
incident to the preparation, printing and filing under the Securities Act of the
Registration Statement and any amendments and exhibits thereto; (c) the costs of
distributing the Registration Statement as originally filed and each amendment
thereto and any post-effective amendments thereof (including, in each case,
exhibits), any Preliminary Prospectus, the Prospectus and any amendment or
supplement to the Prospectus, all as provided in this Agreement; (d) the costs
of printing, reproducing and distributing this Agreement (and related
agreements) and all other agreements, memoranda, correspondence and other
documents printed, distributed or delivered in connection with the offering of
the Stock; (e) the filing fees incident to securing any required review by the
National Association of Securities Dealers, Inc. of the terms of sale of the
Stock; (f) any applicable listing or other fees; (g) the fees and expenses of
qualifying the Stock under the securities laws of the several jurisdictions as
provided in Section 5(g) and of preparing, printing and distributing a Blue Sky
18
Memorandum (including related fees and expenses of counsel for the
Underwriters); and (h) all other costs and expenses incident to the performance
of the obligations of the Company under this Agreement; PROVIDED that, except as
provided in this Section 6, Section 8 and Section 11, the Underwriters shall pay
their own costs and expenses, including the costs and expenses of counsel for
the Underwriters, any transfer taxes on the Stock which the Underwriters may
sell and the expenses of advertising any offering of the Stock made by the
Underwriters.
7. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The respective
obligations of the Underwriters hereunder are subject to the accuracy, when made
and on each Delivery Date, of the representations and warranties of the Company
contained herein, to the performance by the Company of its obligations
hereunder, and to each of the following additional terms and conditions:
a. The Prospectus shall have been timely filed with the
Commission in accordance with Section 5(a); no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have been
issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and any request of the Commission for inclusion of
additional information in the Registration Statement or the Prospectus or
otherwise shall have been complied with.
b. No Underwriter shall have discovered and disclosed to the
Company on or prior to such Delivery Date that the Registration Statement or the
Prospectus or any amendment or supplement thereto contains an untrue statement
of a fact which, in the opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx
(Illinois), counsel for the Underwriters, is material or omits to state a fact
which, in the opinion of such counsel, is material and is required to be stated
therein or is necessary to make the statements therein not misleading.
c. All corporate proceedings and other legal matters incident
to the authorization, form and validity of this Agreement, the Stock, the
Registration Statement and the Prospectus, and all other legal matters relating
to this Agreement and the transactions contemplated hereby shall be reasonably
satisfactory in all material respects to counsel for the Underwriters, and the
Company shall have furnished to such counsel all documents and information that
they may reasonably request to enable them to pass upon such matters.
x. Xxxxx, Xxxxx & Xxxxx shall have furnished to the
Underwriters their written opinion, as counsel to the Company, addressed to the
Underwriters and dated such Delivery Date, in form and substance reasonably
satisfactory to the Underwriters, to the effect that:
19
(A) The Company has been duly organized
and is validly existing as a real estate investment trust in
good standing under the laws of the State of Maryland.
(B) The Company has 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 to enter into and perform
its obligations under this Agreement.
(C) The Company is duly qualified to
transact business and is in good standing in each
jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure to so
qualify would not have a material adverse effect on the
condition, financial or otherwise, or the earnings, assets,
business affairs or business prospects of the Properties
(taken as a whole) or of the Company (such counsel being
entitled to rely in respect of matters of fact upon
certificates of public officials or officers of the
Company).
(D) The description of the shares of
beneficial interest of the Company set forth in the
Prospectus under the heading "Shares of Beneficial Interest
and Shareholder Liability" is true and correct in all
material respects and the issued and outstanding shares of
beneficial interest of the Company are as set forth in the
Prospectus under the heading "Capitalization" (except for
subsequent issuances, if any, pursuant to this Agreement or
pursuant to employee, trustee or director benefit plans of
the Company, the Operating Partnership and the Service
Companies as described in the Prospectus or the issuance of
Units in connection with the acquisition of properties,
directly or indirectly, by the Operating Partnership). The
issued and out standing shares of Common Stock have been
duly authorized and validly issued and are fully paid and,
except as described in the Prospectus, nonassessable.
20
(E) The Stock has been duly authorized
for issuance and sale to the Underwriters pursuant to this
Agreement and, when issued and delivered by the Company
pursuant to this Agreement against payment of the
consideration set forth herein, will be validly issued and
fully paid and, except as described in the Prospectus,
nonassessable.
(F) The issuance of the Stock is not
subject to preemptive or other similar rights arising by
operation of law, under the charter or by-laws of the
Company or, to such counsel's knowledge, otherwise.
(G) Each of the Service Companies has
been duly incorporated and is validly existing as a
corporation in good standing under the laws of the
jurisdiction of its incorporation (such counsel being
entitled to rely in respect of matters of fact upon
certificates of public officials or officers of the
Company). Each of the Service Companies has corporate 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. To such counsel's
knowledge, each of the Service Companies is duly qualified
as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the
failure to so qualify would not have a material adverse
effect on the condition, financial or otherwise, or the
earnings, assets, business affairs or business prospects of
the Properties (taken as a whole) or of the Company (such
counsel being entitled to rely in respect of matters of fact
upon certificates of public officials or officers of the
Company). All of the issued and outstanding capital stock
of each of the Service Companies has been duly authorized
and validly issued, is fully paid and nonassessable and, to
such counsel's knowledge, is owned as described in the
Prospectus, in each case free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or
equity. To such counsel's knowledge, the Operating
21
Partnership and the other subsidiaries identified in the Registration
Statement are the only subsidiaries of the Company required to be
identified as such in the Company's Annual Report on Form 10-K
pursuant to Item 601 of Regulation S-K.
(H) The Operating Partnership has been
duly formed and is validly existing as a limited partnership
in good standing under the Delaware Act (such counsel being
entitled to rely in respect of matters of fact upon
certificates of public officials or officers of the
Company). The Operating Partnership has partnership power
and authority to own, lease and operate its properties, to
conduct the business in which it is engaged or proposes to
engage as described in the Prospectus, and to enter into and
perform its obligations under this 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
on the condition, financial or otherwise, or the earnings,
assets, business affairs or business prospects of the
Properties (taken as a whole) or of the Company (such
counsel being entitled to rely in respect of matters of fact
upon certificates of public officials or officers of the
Company). The Company is the sole general partner of the
Operating Partnership and is the holder of ______ Units, or
approximately ____% of the _______ issued and outstanding
Units (such counsel to supply the appropriate numbers and
percentages as of such Delivery Date).
(I) This Agreement has been duly
authorized, executed and delivered by the Company and the
Operating Partnership and constitutes the valid and binding
agreement of such party, enforceable against such party in
accordance with its terms, except as such enforceability may
be limited by bankruptcy, insolvency, reorganization or
other similar laws affecting creditors' rights generally and
by
22
general principles of equity and, to the extent this Agreement
contains indemnification provisions for violations of federal or state
securities laws, as enforceability of such provisions may be limited
under federal and state securities laws.
(J) From and after the Company's
taxable year ending December 31, 1994, the Company has been
organized in conformity with the requirements for
qualification as a real estate investment trust under the
Code, and its proposed method of operation as described in
the Prospectus and as represented by the management of the
Company will enable it to continue to satisfy the
requirements for taxation as a real estate investment trust
under the Code.
(K) Neither the Company, the Operating
Partnership nor any Subsidiary is required to be registered
under the 1940 Act.
(L) The Registration Statement has been
declared effective under the Securities Act, and to such
counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued
under the Securities Act or proceedings therefor initiated
or threatened by the Commission.
(M) At the time the Registration
Statement became effective and at the date hereof, the
Registration Statement (other than the financial statements
and supporting schedules included therein, as to which no
opinion need be rendered) complied as to form in all
material respects with the requirements of the Securities
Act and the Rules and Regulations.
(N) The terms of the Common Stock are
accurately described in all material respects in the
Prospectus, and the form of certificate used to evidence the
Common Stock is in due and proper form and complies with all
applicable statutory requirements.
23
(O) To such counsel's knowledge, there
is no action, suit or proceeding before or by any court or
governmental agency or body, domestic or foreign, now
pending, threatened against or affecting the Company, the
Operating Partnership or any Subsidiary, or of which any of
their respective property or assets is the subject, which is
required to be disclosed in the Registration Statement,
other than as disclosed therein, or which, if determined
adversely, individually or in the aggregate, might result in
a Material Adverse Effect; to such counsel's knowledge, all
pending legal or governmental proceedings to which the
Company, the Operating Partnership or any Subsidiary is a
party or to which any of their property or assets is subject
which are not described in the Registration Statement,
including ordinary routine litigation incidental to the
business, are, considered in the aggregate, not material to
the Company. To such counsel's knowledge, there are no
contracts, indentures, mortgages, loan agreements, notes,
leases or other instruments or documents which are required
to be described or referred to in the Registration Statement
or to be filed as exhibits thereto by the Securities Act or
the Rules and Regulations, other than those described or
referred to therein or filed as exhibits thereto, and the
descriptions thereof or references thereto are correct in
all material respects.
(P) The information in the Prospectus
under the captions "Management," "Shares of Beneficial
Interest and Shareholder Liability," "Description of Common
Shares," "Description of Preferred Shares," "Description of
Securities Warrants," "Federal Income Tax Considerations"
and "Certain United States Tax Considerations for Non-U.S.
Shareholders," to the extent that it constitutes matters of
law or legal conclusions, has been reviewed by such counsel
and is correct in all material respects.
(Q) Except as disclosed in the
Prospectus and except to the extent that the inaccuracy of
any of the following, either individually or in the
aggregate, would not have a Material Adverse Effect: to
such counsel's knowledge, none of the
24
Company, the Operating Partnership or any Service Company is in
violation of its declaration of trust, charter, by-laws, certificate
of limited partnership, partnership agreement or other governing
document, as the case may be, and none of such entities is in default
in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage,
loan agreement, note, lease or other instrument to which such entity
is or was a party or by which such entity may be bound or affected, or
to which any of the property or assets of such entity is subject; to
such counsel's knowledge, the execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated
herein by the Company, the Operating Partnership and the Service
Companies (and any entity controlled by such entities), as applicable,
did not and will not conflict with or constitute a breach of, or
default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any of the Properties or any other property
or assets of any such entity pursuant to any contract, indenture,
mortgage, loan agreement, note, lease or other instrument, including
without limitation any partnership agreement, to which such entity is
a party or by which such entity may be bound, or to which any of the
property or assets of such entity is subject, nor has such action
resulted or will such action result in any violation of the
declaration of trust, charter, by-laws, certificate of limited
partnership, partnership agreement or other governing document, as the
case may be, of such entity or any applicable law, administrative
regulation or administrative or court decree .
(R) No authorization, approval, consent
or order of any court or governmental authority or agency is
required in connection with the offering, issuance or sale
of the Stock to the Underwriters, except such as may be
required under the Securities Act or the Rules and
Regulations or state securities laws of any state or other
jurisdiction and except for such as have been obtained.
25
(S) To such counsel's knowledge, there
are no persons with registration or other similar rights to
have any securities of the Company, the Operating
Partnership or the Subsidiaries registered pursuant to the
Registration Statement.
(T) The Operating Partnership will be
treated for Federal income tax purposes as a partnership,
and not as an association taxable as a corporation.
(e) Xxxx X. Xxxxx, Vice Chairman of the Board of the Company,
shall have furnished to the Underwriters his written opinion addressed to the
Underwriters and dated such Delivery Date, in form and substance reasonably
satisfactory to the Underwriters, to the effect that:
(A) Each Property Partnership has been
duly formed and is validly existing as a limited or general
partnership or limited liability company, as the case may
be, in good standing (in the case of each limited
partnership or limited liability company) under the laws of
the jurisdiction of its formation (such counsel being
entitled to rely in respect of matters of fact upon
certificates of public officials or officials of the
Company). Each Property Partnership has the power and
authority to own, lease and operate its properties, to
conduct the business in which it is engaged or proposes to
engage as described in the Prospectus. To such counsel's
knowledge, each Property 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 on the condition, financial or
otherwise, or the earnings, assets, business affairs or
business prospects of such Property Partnership or any
Property; all of the partnership or limited liability
company interests in each Property Partnership have been
duly authorized for issuance and are validly issued and
fully paid, in each case free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or
equity. Each partnership agreement
26
relating to a Property Partnership is in full force and effect.
Except for the Property Partnerships that constitute Co-Investment
Joint Ventures, the Operating Partnership and the Company own all of
the partnership interests of each Property Partnership. The Operating
Partnership is the sole general partner (except in the case of Co-
Investment Joint Ventures that are general partnerships) or managing
member of, and owns at least the percentage partnership or membership
interest indicated in the Prospectus under the heading "The
Communities" in, each of the Co-Investment Joint Ventures.
(B) Except as disclosed in the
Prospectus and except to the extent that the inaccuracy of
any of the following, either individually or in the
aggregate, would not have a Material Adverse Effect: to
such counsel's knowledge, none of the Property Partnerships
is in violation of its declaration of trust, charter, by-
laws, certificate of limited partnership, partnership
agreement or other governing document, as the case may be,
and none of such entities is in default in the performance
or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage,
loan agreement, note, lease or other instrument to which
such entity is or was a party or by which such entity may be
bound or affected, or to which any of the property or assets
of such entity is subject; to such counsel's knowledge, the
execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated herein by
the Company, the Operating Partnership and the Subsidiaries,
as applicable, did not and will not conflict with or
constitute a breach of, or default under, or result in the
creation or imposition of any lien, charge or encumbrance
upon any of the Properties or any other property or assets
of any Property Partnership pursuant to any contract,
indenture, mortgage, loan agreement, note, lease or other
instrument, including without limitation any partnership
agreement, to which any such Property Partnership is a party
or by which any such Property Partnership may be bound, or
to which any of the property or assets of any such Property
Partnership is subject, nor
27
has such action resulted or will such action result in any violation
of the declaration of trust, charter, by-laws, certificate of limited
partnership, partnership agreement or other governing document, as the
case may be, of any such Property Partnership or any applicable law,
administrative regulation or administrative or court decree .
(f) The Underwriters shall have received from Skadden, Arps,
Slate, Xxxxxxx & Xxxx (Illinois), counsel for the Underwriters, such opinion or
opinions, dated such Delivery Date, with respect to the issuance and sale of the
Stock, the Registration Statement, the Prospectus and other related matters as
the Underwriters may reasonably require, and the Company shall have furnished to
such counsel such documents as they reasonably request for the purpose of
enabling them to pass upon such matters.
(g) In giving their opinions required by subsections (7)(d) and
(7)(f), respectively, of this Section 7, Xxxxx, Xxxxx & Xxxxx and Skadden, Arps,
Slate, Xxxxxxx & Xxxx (Illinois) shall each additionally state that nothing has
come to their attention that would lead them to believe that the Registration
Statement (except for financial statements and schedules and other financial or
statistical data included therein, as to which counsel need make no statement),
at the time it became effective or at the applicable Delivery Date, 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 (except for financial statements and schedules and other
financial or statistical data included therein, as to which counsel need make no
statement), at the applicable Delivery Date, 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. The opinion described
in Paragraph (J) above may be based on assumptions relating to the organization
and operation of the partnerships in which the Operating Partnership will hold
an interest and of the Subsidiaries, and may be conditioned upon representations
made by the Company as to certain factual matters relating to the Company's
organization and intended or expected manner or operation, and the opinion in
Paragraph (T) above may be based upon representations of the Company and may
assume that the Operating Partnership will not constitute a "publicly traded
partnership" within the meaning of Section 7704(b) of the Code.
(h) At the time of execution of this Agreement, the Underwriters
shall have received from KPMG Peat Marwick LLP a letter, in form and substance
satisfactory to the Underwriters, addressed to the Underwriters and dated the
date hereof (i) confirming that they are independent public accountants within
the meaning of the Securities Act and are in compliance with the applicable
requirements
28
relating to the qualification of accountants under Rule 2-01 of Regulation S-X
of the Commission, (ii) stating, as of the date hereof (or, with respect to
matters involving changes or developments since the respective dates as of which
specified financial information is given in the Prospectus, as of a date not
more than five days prior to the date hereof), the conclusions and findings of
such firm with respect to the financial information and other matters ordinarily
covered by accountants' "comfort letters" to underwriters in connection with
registered public offerings.
(i) With respect to the letter of KPMG Peat Marwick LLP referred
to in the preceding paragraph and delivered to the Underwriters concurrently
with the execution of this Agreement (the "initial letter"), as of the Delivery
Date the Company shall have furnished to the Underwriters a letter (the "bring-
down letter") of such accountants, addressed to the Underwriters and dated such
Delivery Date (i) confirming that they are independent public accountants within
the meaning of the Securities Act and are in compliance with the applicable
requirements relating to the qualification of accountants under Rule 2-01 of
Regulation S-X of the Commission, (ii) stating, as of the date of the bring-down
letter (or, with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given in the
Prospectus, as of a date not more than five days prior to the date of the bring-
down letter), the conclusions and findings of such firm with respect to the
financial information and other matters covered by the initial letter and
(iii) confirming in all material respects the conclusions and findings set forth
in the initial letter.
(j) The Company shall have furnished to the Underwriters a
certificate, dated such Delivery Date, of (i) its Chairman of the Board, its
Vice Chairman of the Board, its President or a Vice President and (ii) its chief
financial officer stating that:
(i) The representations, warranties and agreements of
the Company in Section 1 are true and correct as of such Delivery
Date; the Company has complied with all its agreements contained
herein; and the conditions set forth in Sections 7(a) and 7(k) have
been fulfilled;
(ii) No stop order suspending the effectiveness of the
Registration Statement has been issued and, to the best of each such
officers' knowledge, no proceeding for that purpose is pending or
threatened by the Commission;
(iii) All filings required by Rule 424(b) of the Rules
and Regulations have been made; and
29
(iv) They have carefully examined the Registration
Statement and the Prospectus and, in their opinion (A) as of the
Effective Date, the Registration Statement and Prospectus did not
include any untrue statement of a material fact and did not omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading, and (B) since the
Effective Date no event has occurred which should have been set forth
in a supplement or amendment to the Registration Statement or the
Prospectus which has not been so set forth.
(k) (i) Neither the Company nor any of its subsidiaries shall
have sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus any loss or interference
with its business from fire, explosion, flood, earthquake or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus or (ii) since such date there shall not have been
any change in the stock, partnership interests or long-term debt of the Company
or any of its subsidiaries or any Material Adverse Change, otherwise than as set
forth or contemplated in the Prospectus, the effect of which, in any such case
described in clause (i) or (ii), is, in the judgment of the Underwriters, so
material and adverse as to make it impracticable or inadvisable to proceed with
the public offering or the delivery of the Stock being delivered on such
Delivery Date on the terms and in the manner contemplated in the Prospectus.
(l) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange or the American Stock Exchange or in
the over-the-counter market, or trading in any securities of the Company on any
exchange or in the over-the-counter market, shall have been suspended or minimum
prices shall have been established on any such exchange or such market by the
Commission, by such exchange or by any other regulatory body or governmental
authority having jurisdiction, (ii) a banking moratorium shall have been
declared by Federal or state authorities, (iii) the United States shall have
become engaged in hostilities, there shall have been an escalation in
hostilities involving the United States or there shall have been a declaration
of a national emergency or war by the United States or (iv) there shall have
occurred such a material adverse change in general economic, political or
financial conditions (or the effect of international conditions on the financial
markets in the United States shall be such) as to make it, in the judgment of a
majority in interest of the several Underwriters, impractical or inadvisable to
proceed with the public offering or delivery of the Stock being delivered on
such Delivery Date on the terms and in the manner contemplated in the
Prospectus.
(m) The New York Stock Exchange, Inc. shall have approved the
Stock for listing, subject only to official notice of issuance.
30
All opinions, letters, evidence and certificates mentioned above or elsewhere in
this Agreement shall be deemed to be in compliance with the provisions hereof
only if they are in form and substance reasonably satisfactory to counsel for
the Underwriters. The Company shall furnish to the Underwriters conformed
copies of such opinions, certificates, letters and other documents in such
number as the Underwriters shall reasonably request. If any of the conditions
specified in this Section 7 shall not have been fulfilled when and as required
by this Agreement, the Agreement and all of the respective obligations of the
several Underwriters hereunder may be cancelled at, or at any time prior to,
each Delivery Date, by the Underwriters. Any such cancellation shall be without
liability of the Underwriters to the Company. Notice of such cancellation shall
be given the Company in writing, or by telegraph or telephone and confirmed in
writing.
8. INDEMNIFICATION AND CONTRIBUTION
(a) Each of the Company and the Operating Partnership shall
indemnify and hold harmless each Underwriter, its officers and employees, and
each person, if any, who controls any Underwriter within the meaning of the
Securities Act, from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof (including, but not limited to, any
loss, claim, damage, liability or action relating to purchases and sales of
Stock), to which that Underwriter, officer or employee or controlling person may
become subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is based upon, (i) any
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus or in any
amendment or supplement thereto or (ii) the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and shall reimburse each Underwriter and
each such officer, employee or controlling person promptly upon demand for any
legal or other expenses reasonably incurred by that Underwriter, officer,
employee or controlling person in connection with investigating or defending or
preparing to defend against any such loss, claim, damage, liability or action as
such expenses are incurred; PROVIDED, HOWEVER, that neither the Company nor the
Operating Partnership shall be liable in any such case to the extent that any
such loss, claim, damage, liability or action arises out of, or is based upon,
any untrue statement or alleged untrue statement or omission or alleged omission
made in any Preliminary Prospectus, the Registration Statement or the Prospectus
or in any such amendment or supplement in reliance upon and in conformity with
written information concerning such Underwriter furnished to the Company through
the Underwriters by or on behalf of any Underwriter specifically for inclusion
therein. The foregoing indemnity agreement is in addition to any liability
which the Company or the Operating Partnership may otherwise have to any
Underwriter or to any officer, employee or controlling person of that
Underwriter.
31
(b) Each Underwriter, severally and not jointly, shall indemnify
and hold harmless the Operating Partnership, the Company, the Company's
officers, employees and directors (including any person who, with his or her
consent, is named in the Registration Statement as about to become a director of
the Company), the Company's officers who signed the Registration Statement and
each person, if any, who controls the Company or the Operating Partnership
within the meaning of the Securities Act, from and against any loss, claim,
damage or liability, joint or several, or any action in respect thereof, to
which the Operating Partnership, the Company or any such director, officer or
controlling person may become subject, under the Securities Act or otherwise,
insofar as such loss, claim, damage, liability or action arises out of, or is
based upon, (i) any untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus, the Registration Statement or the
Prospectus or in any amendment or supplement thereto or (ii) the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, but in each case
only to the extent that the untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with
written information concerning such Underwriter furnished to the Company through
the Underwriters by or on behalf of that Underwriter specifically for inclusion
therein, and shall reimburse the Company, the Operating Partnership and any such
director, officer or controlling person for any legal or other expenses
reasonably incurred by the Company, the Operating Partnership or any such
director, officer or controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action as such expenses are incurred. The foregoing indemnity agreement is
in addition to any liability which any Underwriter may otherwise have to the
Operating Partnership, the Company or any such director, officer or controlling
person.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party in
writing of the claim or the commencement of that action; PROVIDED, HOWEVER, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 8 except to the extent it has
been materially prejudiced by such failure and, PROVIDED, FURTHER, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this Section 8.
If any such claim or action shall be brought against an indemnified party, and
it shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel reasonably satisfactory to the indemnified party. After notice
from the indemnifying party to the indemnified party of its election to assume
the defense of such claim or action, the indemnifying party shall not be liable
to the
32
indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; PROVIDED, HOWEVER, that
the Underwriters shall have the right to employ counsel to represent jointly the
Underwriters and their respective officers, employees and controlling persons
who may be subject to liability arising out of any claim in respect of which
indemnity may be sought by the Underwriters against the Company or the Operating
Partnership under this Section 8 if, in the reasonable judgment of the
Underwriters, it is advisable for the Underwriters and those officers, employees
and controlling persons to be jointly represented by separate counsel as a
result of actual or perceived conflicts of interest between such parties, on the
one hand, and the Company and the Operating Partnership, on the other hand, and
in that event the fees and expenses of such separate counsel (but not more that
one firm, in addition to any local counsel, shall be reimbursed hereunder) shall
be paid by the Company and the Operating Partnership. No indemnifying party
shall (i) without the prior written consent of the indemnified parties (which
consent shall not be unreasonably withheld), settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding, or (ii) be
liable for any settlement of any such action effected without its written
consent (which consent shall not be unreasonably withheld), but if settled with
the consent of the indemnifying party or if there be a final judgment of the
plaintiff in any such action, the indemnifying party agrees to indemnify and
hold harmless any indemnified party from and against any loss or liability by
reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 8 shall
for any reason be unavailable to or insufficient to hold harmless an indemnified
party under Section 8(a) or 8(b) in respect of any loss, claim, damage or
liability, or any action in respect thereof, referred to therein, then each
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Company and the Operating Partnership on the one hand and the
Underwriters on the other from the offering of the Stock or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Operating Partnership on the one hand and the Underwriters on the other with
respect to the statements or omissions which resulted in such loss, claim,
damage or liability, or action in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Operating Partnership on the one
33
hand and the Underwriters on the other with respect to such offering shall be
deemed to be in the same proportion as the total net proceeds from the offering
of the Stock purchased under this Agreement (before deducting expenses) received
by the Company, on the one hand, and the total underwriting discounts and
commissions received by the Underwriters with respect to the shares of the Stock
purchased under this Agreement, on the other hand, bear to the total gross
proceeds from the offering of the shares of the Stock under this Agreement, in
each case as set forth in the table on the cover page of the Prospectus. The
relative fault shall be determined by reference to whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the Company, the Operating
Partnership or the Underwriters, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company, the Operating Partnership and the
Underwriters agree that it would not be just and equitable if contributions
pursuant to this Section 8(d) were to be 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 into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, damage or liability, or action in respect
thereof, referred to above in this Section 8(d) shall be deemed to include, for
purposes of this Section 8(d), any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 8(d), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Stock underwritten by it and distributed
to the public was offered to the public exceeds the amount of any damages which
such Underwriter has otherwise paid or become liable to pay by reason of any
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
The Underwriters' obligations to contribute as provided in this
Section 8(d) are several in proportion to their respective underwriting
obligations and not joint. For purposes of this Section 8, the Company and the
Operating Partnership shall be deemed one party and jointly and severally liable
for any obligations hereunder.
(e) The Underwriters severally confirm and the Company
acknowledges that the statements with respect to the public offering of the
Stock by the Underwriters set forth on the cover page of, the legend concerning
over-allotments on the inside front cover page of and the concession and
reallowance figures appearing under the caption "Underwriting" in, the
Prospectus are correct and constitute the only information concerning such
Underwriters furnished in
34
writing to the Company by or on behalf of the Underwriters specifically for
inclusion in the Registration Statement and the Prospectus.
9. DEFAULTING UNDERWRITERS.
If, on either Delivery Date, any Underwriter defaults in the
performance of its obligations under this Agreement, the remaining non-
defaulting Underwriters shall be obligated to purchase the Stock which the
defaulting Underwriter agreed but failed to purchase on such Delivery Date in
the respective proportions which the number of shares of the Firm Stock set
opposite the name of each remaining non-defaulting Underwriter in Schedule 1
hereto bears to the total number of shares of the Firm Stock set opposite the
names of all the remaining non-defaulting Underwriters in Schedule 1 hereto;
PROVIDED, HOWEVER, that the remaining non-defaulting Underwriters shall not be
obligated to purchase any of the Stock on such Delivery Date if the total number
of shares of the Stock which the defaulting Underwriter or Underwriters agreed
but failed to purchase on such date exceeds 9.09% of the total number of shares
of the Stock to be purchased on such Delivery Date, and any remaining non-
defaulting Underwriter shall not be obligated to purchase more than 110% of the
number of shares of the Stock which it agreed to purchase on such Delivery Date
pursuant to the terms of Section 2. If the foregoing maximums are exceeded, the
remaining non-defaulting Underwriters, or those other underwriters satisfactory
to the Underwriters who so agree, shall have the right, but shall not be
obligated, to purchase, in such proportion as may be agreed upon among them, all
the Stock to be purchased on such Delivery Date. If the remaining Underwriters
or other underwriters satisfactory to the Underwriters do not elect to purchase
the shares which the defaulting Underwriter or Underwriters agreed but failed to
purchase on such Delivery Date, this Agreement (or, with respect to the Second
Delivery Date, the obligation of the Underwriters to purchase, and of the
Company to sell, the Option Stock) shall terminate without liability on the part
of any non-defaulting Underwriter or the Company, except that the Company will
continue to be liable for the payment of expenses to the extent set forth in
Sections 6 and 11. As used in this Agreement, the term "Underwriter" includes,
for all purposes of this Agreement unless the context requires otherwise, any
party not listed in Schedule 1 hereto who, pursuant to this Section 9, purchases
Firm Stock which a defaulting Underwriter agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Company for damages caused by its default. If
other underwriters are obligated or agree to purchase the Stock of a defaulting
or withdrawing Underwriter, either the Underwriters or the Company may postpone
the Delivery Date for up to seven full business days in order to effect any
changes that in the opinion of counsel for the Company or counsel for the
Underwriters may be necessary in the Registration Statement, the Prospectus or
in any other document or arrangement.
35
10. TERMINATION. The obligations of the Underwriters hereunder may
be terminated by the Underwriters by notice given to and received by the Company
prior to delivery of and payment for the Firm Stock, if, prior to that time, any
of the events described in Sections 7(k) or 7(l) shall have occurred or if the
Underwriters shall decline to purchase the Stock for any reason permitted under
this Agreement.
11. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the Company shall
fail to tender the Stock for delivery to the Underwriters by reason of any
failure, refusal or inability on the part of the Company to perform any
agreement on its part to be performed hereunder, or because any other condition
of the Underwriters' obligations hereunder required to be fulfilled by the
Company is not fulfilled, the Company will reimburse the Underwriters for all
reasonable out-of-pocket expenses (including fees and disbursements of counsel)
incurred by the Underwriters in connection with this Agreement and the proposed
purchase of the Stock. If this Agreement is terminated pursuant to Section 9 by
reason of the default of one or more Underwriters, the Company shall not be
obligated to reimburse any defaulting Underwriter on account of those expenses.
12. NOTICES, ETC. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail,
telex or facsimile transmission to Xxxxxx Brothers Inc. at Three World Financial
Center, New York, New York 10285-1100, Attention: Syndicate Registration
Department (Fax: 000-000-0000);
(b) if to the Company, shall be delivered or sent by mail, telex
or facsimile transmission to it at 000 Xxxxx Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx,
Xxxxxxxx 00000, Attention: President; Facsimile: (000) 000-0000;
PROVIDED, HOWEVER, that any notice to an Underwriter pursuant to Section 8(c)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to the
Underwriters, which address will be supplied to any other party hereto by the
Underwriters upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company shall
be entitled to act and rely upon any request, consent, notice or agreement given
or made on behalf of the Underwriters by Xxxxxx Brothers Inc. on behalf of the
Underwriters.
Any such statements, requests, notices or agreements shall take effect at the
time of receipt thereof.
36
13. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall
inure to the benefit of and be binding upon the Underwriters, the Company and
their respective successors. This Agreement and the terms and provisions hereof
are for the sole benefit of only those persons, except that (A) the
representations, warranties, indemnities and agreements of the Company contained
in this Agreement shall also be deemed to be for the benefit of the person or
persons, if any, who control any Underwriter within the meaning of Section 15 of
the Securities Act and (B) the indemnity agreement of the Underwriters contained
in Section 8(b) of this Agreement shall be deemed to be for the benefit of
directors of the Company, officers of the Company who have signed the
Registration Statement and any person controlling the Company within the meaning
of Section 15 of the Securities Act. Nothing in this Agreement is intended or
shall be construed to give any person, other than the persons referred to in
this Section 13, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision contained herein.
14. SURVIVAL. The respective indemnities, representations,
warranties and agreements of the Company and the Underwriters contained in this
Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall survive the delivery of and payment for the Stock and shall
remain in full force and effect, regardless of any investigation made by or on
behalf of any of them or any person controlling any of them.
15. DEFINITION OF THE TERMS "BUSINESS DAY" AND "SUBSIDIARY". For
purposes of this Agreement, (a) "business day" means any day on which the New
York Stock Exchange, Inc. is open for trading and (b) "subsidiary" has the
meaning set forth in Rule 405 of the Rules and Regulations.
16. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of New York.
17. COUNTERPARTS. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
18. HEADINGS. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
19. LIMITATION OF LIABILITY OF SHAREHOLDERS AND OFFICERS OF THE
COMPANY. No obligation or liability of the Company which may arise at any time
under this Agreement or any obligation or liability which may be incurred by it
pursuant to any other instrument, transaction or undertaking contemplated hereby
37
shall be personally binding upon, nor shall resort for the enforcement thereof
be had to, the property of any of the Company's shareholders, trustees,
officers, employees or agents solely as a result of their status as, and solely
in their capacities as, shareholders, trustees, officers, employees or agents,
as the case may be, regardless of whether such obligation or liability is in the
nature of contract, tort or otherwise.
38
If the foregoing correctly sets forth the agreement between the
Company and the Underwriters, please indicate your acceptance in the space
provided for that purpose below.
Very truly yours,
AMLI RESIDENTIAL PROPERTIES TRUST
By:
----------------------------------------------
Name:
Title:
AMLI RESIDENTIAL PROPERTIES, L.P.
By: AMLI RESIDENTIAL
PROPERTIES TRUST, General Partner
By:
----------------------------------------------
Name:
Title:
Accepted:
XXXXXX BROTHERS INC.
XXXX XXXXXX XXXXXXXX INC.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
EVEREN SECURITIES, INC.
By: XXXXXX BROTHERS INC.
------------------------
By:
Its:
39
SCHEDULE 1
Underwriters Number of
------------ Shares
------
Xxxxxx Brothers Inc.. . . . . . . . . . . . . . . . . . 687,500
Xxxx Xxxxxx Xxxxxxxx Inc. . . . . . . . . . . . . . . . 687,500
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated. . . 687,500
EVEREN Securities, Inc. . . . . . . . . . . . . . . . . 687,500
Total 2,750,000
---------
---------
40
