EXHIBIT 1.1
GENERAL GROWTH PROPERTIES, INC.
DEPOSITARY SHARES
EACH REPRESENTING 1/40 OF A SHARE OF
7.25% PREFERRED INCOME EQUITY REDEEMABLE STOCK, SERIES A
(PAR VALUE $100 PER SHARE)
(LIQUIDATION PREFERENCE EQUIVALENT
TO $25.00 PER DEPOSITARY SHARE)
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UNDERWRITING AGREEMENT
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June 4, 1998
Xxxxxx Brothers Inc.
Xxxxxxx, Sachs & Co.
Xxxxxx Xxxxxxx & Co. Incorporated
PaineWebber Incorporated
Prudential Securities Incorporated
SBC Warburg Dillon Read Inc.
As Representatives of the several
Underwriters named in Schedule I,
c/x Xxxxxx Brothers Inc.
Three World Financial Center
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
General Growth Properties, Inc., a Delaware corporation (the "Company") and
the general partner of GGP Limited Partnership, a Delaware limited partnership
(the "Operating Partnership"), proposes to issue and sell up to an aggregate of
345,000 shares of its 7.25% Preferred Income Equity Redeemable Stock, Series A,
par value $100 per share ("PIERS"), more fully identified in Schedule II hereto.
The PIERS will, when issued, be deposited by the Company against delivery of
depositary receipts (the "Receipts") to be issued by Norwest Bank Minnesota,
N.A., as depositary (the "Depositary"), under a deposit agreement (the "Deposit
Agreement") to be dated as of June 10, 1998 among the Company, the Depositary
and the holders from time to time of the Receipts. The Receipts will evidence
depositary shares (each, a "Depositary Share"), and each Depositary Share will
represent 1/40 of a PIERS. The PIERS, together with the Depositary Shares, are
herein collectively called "Shares". Subject to the terms and conditions stated
herein, the Company hereby agrees to sell to the firms named in Schedule I
hereto (the "Underwriters"), and each of the Underwriters agrees, severally and
not jointly, to purchase from the Company, at the time and place and at the
purchase price to the Underwriters
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set forth in Schedule II hereto, the number of Depositary Shares specified in
Schedule I hereto (the "Firm Shares"). At the election of the Underwriters, the
Underwriters may purchase up to an additional number of Depositary Shares as set
forth in Schedule II hereto, as provided in Section 2 hereof (the "Optional
Shares"), each representing an interest in a PIERS as aforesaid. In the event
and to the extent that the Underwriters shall exercise the election to purchase
Optional Shares pursuant to Section 2 hereof, the Company agrees to issue and
sell to each of the Underwriters, and each of the Underwriters agree, severally
and not jointly, to purchase from the Company at the purchase price to the
Underwriters set forth in Schedule II hereto that portion of the number of
Optional Shares as set forth in Section 2 hereof, as to which such election
shall have been exercised. If the firm or firms listed in Schedule II hereto
include only the firm or firms listed in Schedule I hereto, then the terms
"Underwriters" and "Representatives" shall each be deemed to refer to such firm
or firms.
The PIERS will be convertible at the option of the holders thereof into
shares of Common Stock, par value $.10 per share ("Common Stock"), of the
Company. The shares of Common Stock issuable upon conversion or redemption of
the PIERS are herein called the "Common Shares".
This is to confirm the agreement concerning the purchase of the Shares from
the Company by the Underwriters named in Schedule II hereto.
1. The Company and the Operating Partnership, jointly and severally,
represent and warrant to, and agree with, each of the Underwriters that:
(a) A registration statement on Form S-3 (File No. 333-37247) in
respect of the Shares has been filed with the Securities and Exchange
Commission (the "Commission"); such registration statement and any post-
effective amendment thereto, each in the form heretofore delivered or to be
delivered to the Representatives and, excluding exhibits to such
registration statement, but including all documents incorporated by
reference in the prospectus included therein, to the Representatives for
each of the other Underwriters have been declared effective by the
Commission in such form; no other document with respect to such
registration statement or document incorporated by reference therein has
heretofore been filed, or transmitted for filing, with the Commission
(other than documents incorporated by reference in such prospectus and
prospectuses filed pursuant to Rule 424(b) of the rules and regulations of
the Commission under the Securities Act of 1933, as amended (the "Act"),
each in the form heretofore delivered to the Representatives); and no stop
order suspending the effectiveness of such registration statement has been
issued and no proceeding for that purpose has been initiated or threatened
by the Commission (any preliminary prospectus included in such registration
statement or filed with the Commission pursuant to Rule 424(a) under the
Act, is hereinafter called a "Preliminary Prospectus"; the various parts of
such registration statement, including all exhibits thereto and the
documents incorporated by reference in the prospectus contained in the
registration statement at the time such part of the registration statement
became effective, each as amended at the time such part of the registration
statement became effective, are hereinafter collectively called the
"Registration Statement"; the prospectus relating to the Shares, in the
form in which it has most
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recently been filed, or transmitted for filing, with the Commission on or
prior to the date of this Agreement, is hereinafter called the
"Prospectus"; any reference herein to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to the applicable form under the
Act, as of the date of such Preliminary Prospectus or Prospectus, as the
case may be; any reference to any amendment or supplement to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include any documents filed after the date of such Preliminary Prospectus
or Prospectus, as the case may be, under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and incorporated by reference in
such Preliminary Prospectus or Prospectus, as the case may be; any
reference to any amendment to the Registration Statement shall be deemed to
refer to and include any annual report of the Company filed pursuant to
Section 13(a) or 15(d) of the Exchange Act after the effective date of the
Registration Statement that is incorporated by reference in the
Registration Statement; and any reference to the Prospectus as amended or
supplemented shall be deemed to refer to the Prospectus as amended or
supplemented in the form in which it is filed with the Commission pursuant
to Rule 424(b) under the Act in accordance with Section 4(a) hereof,
including any documents incorporated by reference therein as of the date of
such filing);
(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 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 this representation and warranty shall
not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter through the Representatives expressly for use in the Prospectus
as amended or supplemented;
(c) The Registration Statement and the Prospectus conform, and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of
the Act and the rules and regulations of the Commission thereunder 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 or 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 this representation and
warranty shall not apply to any statements or omissions made in reliance
upon and in conformity with information furnished in writing
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to the Company by an Underwriter through the Representatives expressly for
use in the Prospectus as amended or supplemented;
(d) Neither the Company nor any of its subsidiaries ("subsidiaries",
as used in this Agreement, shall include the Operating Partnership and each
other partnership which is together wholly-owned by the Company and the
Operating Partnership (each, a "Property Partnership")), has sustained
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth
or contemplated in the Prospectus; and, since the respective dates as of
which information is given in the Registration Statement and the Prospectus
as amended or supplemented, there has not been any change in the capital
stock (other than issuances pursuant to stock option plans) of the Company
or the short-term or long-term debt of the Company (other than reductions
in short-term or long-term debt pursuant to scheduled reductions in the
applicable debt instruments and other than an increase in short-term and
long-term debt of the Company of approximately $304 million since March 31,
1998 (representing indebtedness assumed or incurred in connection with
property acquisitions by the Company and indebtedness incurred for working
capital purposes)) or the capital stock or equity capital of any of its
subsidiaries or any material adverse change, or any development involving a
prospective material adverse change, in or affecting the general affairs,
management, financial position, stockholders' equity (or, with respect to
partnership subsidiaries, partnership capital) or results of operations of
the Company and its subsidiaries, taken as a whole, otherwise than as set
forth or contemplated in the Prospectus;
(e) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of Delaware with power and
authority (corporate and other) to own its properties and conduct its
business as described in the Prospectus, and has been duly qualified as a
foreign corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties, or conducts any business, so as to require such qualification,
or is subject to no material liability or disability by reason of the
failure to be so qualified in any such jurisdiction; and each material
subsidiary of the Company has been duly organized and is validly existing
as a partnership or corporation, as the case may be, in good standing (to
the extent applicable) under the laws of its jurisdiction of organization
and has been duly qualified for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it owns or
leases properties, or conducts any business, so as to require such
qualification, or is subject to no material liability or disability by
reason of the failure to be so qualified in any such jurisdiction:
(f) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued and are fully paid and
non-assessable. Except as disclosed in the Prospectus, no shares of the
Company's Common Stock are reserved for
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any purpose and except for the equity interests in the Operating
Partnership ("Units") and for shares of capital stock of GGP/Homart, Inc.,
there are no outstanding securities convertible into or exchangeable for
any shares of Common Stock of the Company, and no outstanding options,
rights (preemptive or otherwise) or warrants to purchase or subscribe for
shares of Common Stock or any other securities of the Company (except, in
the case of options, any options granted on or after the date on which the
Company filed its definitive proxy statement on Schedule 14A).;
(g) The PIERS have been duly and validly authorized and, when the
Shares are issued and delivered pursuant to this Agreement, such PIERS will
be validly issued, fully paid and non-assessable; no holder thereof will be
subject to personal liability by reason of being such a holder; such PIERS
will not be subject to the preemptive rights or other similar rights of any
stockholder of the Company; and all corporate action required to be taken
for the authorization, issue and sale of the Shares has been validly and
sufficiently taken; and upon deposit by the Company of the PIERS with the
Depositary pursuant to the Deposit Agreement and the due execution by the
Depositary of the Deposit Agreement and the Receipts evidencing the
Depositary Shares in accordance with the Deposit Agreement, such Depositary
Shares shall represent legal and valid interests in the PIERS; the Shares
will conform to the description thereof contained in the Prospectus as
amended or supplemented; the PIERS are convertible into Common Stock in
accordance with their terms and the terms of the Certificate of
Designations relating to the PIERS (the "Certificate of Designations"); the
Common Shares have been duly and validly authorized and reserved for
issuance upon such conversion and, if and when issued upon such conversion
in accordance with the Certificate of Designations, will be duly
authorized, validly issued and fully paid, non-assessable and free of any
preemptive or other similar rights and will conform as to legal matters to
the description of the Common Stock contained in the Prospectus;
(h) The issue and sale of the Shares by the Company, the issuance of
the Common Shares upon conversion of the PIERS, the compliance by the
Company with all of the provisions of this Agreement and the Deposit
Agreement and the consummation of the transactions contemplated herein and
therein will not conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Company or any subsidiary is a party or by which the Company or
any subsidiary is bound or to which any of the property or assets of the
Company or any subsidiary is subject, except for a conflict, breach,
violation, or default which would not have a material adverse effect on (i)
the Company's ability to perform its obligations hereunder or (ii) the
Company and its subsidiaries taken as a whole, nor will such action result
in any violation of the provisions of the certificate of incorporation or
bylaws of the Company or the constituent documents of any subsidiary or any
statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company or any of its
subsidiaries or any of their properties; and no consent, approval,
authorization, order, registration or qualification of or with any such
court or governmental agency or body is required for the issue and sale of
the Shares, the issuance
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of Common Shares upon conversion of the PIERS or the consummation by the
Company of the transactions contemplated by this Agreement, except (i) such
as have been, or will have been prior to each Time of Delivery (as defined
in Section 3 hereof), obtained under the Act, (ii) the filing of the
Certificate of Designations with the Secretary of State of the State of
Delaware, (iii) the registration of the Depositary Shares under the
Exchange Act, (iv) the listing of the Depositary Shares and the Common
Shares on the New York Stock Exchange (the "NYSE") and (v) such consents,
approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Shares by the Underwriters;
(i) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any of
its subsidiaries is the subject, which might reasonably be expected to
individually or in the aggregate have a material adverse effect on the
current or future consolidated financial position, stockholders' equity or
results of operations of the Company and its subsidiaries taken as a whole;
and, to the best of the Company's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened by
others;
(j) Neither the Company nor any of its subsidiaries is in violation of
its certificate of incorporation or certificate of limited partnership, as
the case may be, or bylaws or partnership agreement, as the case may be, or
in breach of or default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or
instrument or under any applicable law, rule, order, administrative
regulation or administrative or court decree to which it is a party or by
which it or any of its properties may be bound, which breaches or defaults
do not, in the aggregate, have a material adverse effect;
(k) The statements set forth in the Prospectus (i) under the captions
"Capital Stock", "Description of Common Stock", "Description of Preferred
Stock", Description of Depositary Shares" and "Description of PIERS",
insofar as they purport to constitute a summary of the terms of the
securities of the Company and the provisions of the laws and documents
referred to therein, and (ii) under the caption "Certain Federal Income
Tax Considerations", insofar as they purport to describe the provisions of
the laws and documents referred to therein, are accurate and complete;
(l) Neither the Company, nor any of its subsidiaries, is, or will be,
after giving effect to the issue and sale of the Shares by the Company, an
"investment company" or a company "controlled" by an "investment company"
within the meaning of the Investment Company Act of 1940, as amended (the
"Investment Company Act");
(m) Coopers & Xxxxxxx L.L.P., who have certified certain financial
statements of the Company and its subsidiaries or affiliates, are
independent public accountants as required by the Act and the rules and
regulations of the Commission thereunder;
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(n) The Company and its subsidiaries have good and marketable title in
fee simple to, or good and marketable leasehold estates in, all real
property described in the Prospectus as being owned by them, and good and
marketable title to all personal property owned by them which is material
to the business of the Company and its subsidiaries, in each case free and
clear of all liens, encumbrances and defects except such as are described
in the Prospectus or such as do not materially affect the value of such
property, and do not materially interfere with the use made and proposed to
be made of such property by the Company and its subsidiaries; and any real
property and buildings held under lease by the Company and its subsidiaries
are held by them under valid and subsisting leases, in each case except as
set forth or contemplated in the Prospectus;
(o) The partnership agreement or shareholder agreement of each
subsidiary of the Company has been duly authorized, executed and delivered
by each party thereto and is valid, legally binding and enforceable in
accordance with its terms; all of the partnership interests in each
partnership subsidiary of the Company have been duly and validly authorized
and issued and (except as described in the Prospectus and for a 50.0%
interest in Dayjay Associates) are owned directly or indirectly by the
Company or the Operating Partnership free and clear of all liens,
encumbrances, equities and claims; all of the stock of each corporate
subsidiary of the Company has been duly and validly authorized and issued
and (except as described in the Prospectus) is owned directly by the
Company free and clear of all liens, encumbrances, equities and claims;
(p) Application will be made to list the Depositary Shares and the
Common Shares on the NYSE;
(q) This Agreement has been duly and validly authorized, executed and
delivered by each of the Company and the Operating Partnership and is a
valid and legally binding agreement of each of the Company and the
Operating Partnership in accordance with its terms; and the Deposit
Agreement has been duly and validly authorized, executed and delivered by
the Company and is a valid and legally binding agreement of the Company in
accordance with its terms;
(r) The financial statements (including the related notes and
supporting schedules) filed as part of, or incorporated by reference in,
the Registration Statement and the Prospectus present fairly the financial
condition and results of operations of the entities purported to be shown
thereby, at the dates and for the periods indicated, and have been prepared
in conformity with generally accepted accounting principles applied on a
consistent basis throughout the periods involved. Pro forma financial
information included in or incorporated by reference in the Registration
Statement and the Prospectus has been prepared in accordance with
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 Company at the respective dates indicated and the
results of operations for the respective periods specified;
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(s) Each of the Company and the Operating Partnership and their
subsidiaries, and each property carries, or is covered by, insurance in
such amounts and covering such risks as is adequate for the conduct of its
business and the value of such property and as is customary for companies
engaged in similar businesses in similar industries;
(t) At all times commencing with the Company's taxable year ending
December 31, 1994, the Company and the Operating Partnership have been and
upon the sale of the Shares will continue to be, organized and operated in
conformity with the requirements for qualification of the Company as a real
estate investment trust under the Code and the proposed method of operation
of the Company and the Operating Partnership will enable the Company to
continue to meet the requirements for qualification and taxation as a real
estate investment trust under the Code;
2. Upon the authorization by the Representatives of the release of the
Firm Shares, the several Underwriters propose to offer the Firm Shares for sale
upon the terms and conditions set forth in the Prospectus as amended or
supplemented.
The Company hereby grants to the Underwriters the right (an
"Overallotment Option") to purchase at their election up to the number of
Optional Shares set forth in Schedule II hereto on the terms referred to herein
for the sole purpose of covering over-allotments in the sale of the Firm Shares.
Any such election to purchase Optional Shares may be exercised by written notice
from the Representatives to the Company given within a period of 30 calendar
days after the date of this Agreement, setting forth the aggregate number of
Optional Shares to be purchased and the date on which such Optional Shares are
to be delivered, as determined by the Representatives, but in no event earlier
than the First Time of Delivery or, unless the Representatives and the Company
otherwise agree in writing, no earlier than two or later than ten business days
after the date of such notice.
The number of Optional Shares to be added to the number of Firm Shares
to be purchased by each Underwriter as set forth in Schedule I hereto shall be,
in each case, the number of Optional Shares which the Company has been advised
by the Representatives have been attributed to such Underwriter; provided that,
if the Company has not been so advised, the number of Optional Shares to be so
added shall be, in each case, that proportion of Optional Shares which the
number of Firm Shares to be purchased by such Underwriter under this Agreement
bears to the aggregate number of Firm Shares (rounded as the Representatives may
determine to the nearest 100 shares). The total number of Shares to be
purchased by all the Underwriters pursuant to this Agreement shall be the
aggregate number of Firm Shares set forth in Schedule I to this Agreement plus
the aggregate number of Optional Shares which the Underwriters elect to
purchase.
3. Depositary receipts in definitive form for the Firm Shares and the
Optional Shares to be purchased by each Underwriter pursuant to this Agreement,
in the form specified in Schedule II hereto and in such authorized denominations
and registered in such names as the Representatives may request upon at least
forty-eight hours' prior notice to the Company, shall be delivered by or on
behalf of the Company to the Representatives for the account of such
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Underwriter, against payment by such Underwriter or on its behalf of the
purchase price therefor by certified or official bank check or checks or by
transfer to an account designated by the Company, payable to the order of the
Company in funds specified in Schedule II, (i) with respect to the Firm Shares,
all in the manner and at the place and time and date specified in Schedule II or
at such other place and time and date as the Representatives and the Company may
agree upon in writing, such time and date being herein called the "First Time of
Delivery" and (ii) with respect to the Optional Shares, if any, in the manner
and at the time and date specified by the Representatives in the written notice
given by the Representatives of the Underwriters' election to purchase such
Optional Shares, or at such other time and date as the Representatives and the
Company may agree upon in writing, such time and date, if not the First Time of
Delivery, herein called the "Second Time of Delivery". Each such time and date
for delivery is herein called a "Time of Delivery". Receipts will be made
available for checking and packaging at least twenty-four hours prior to each
Time of Delivery at the office of the Depositary, located in New York City.
4. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus as amended and supplemented in a form
approved by the Representatives and to file such Prospectus pursuant to Rule
424(b) under the Act not later than the Commission's close of business on the
second business day following the execution and delivery of this Agreement or,
if applicable, such earlier time as may be required by Rule 424(b); to make no
further amendment or any supplement to the Registration Statement or Prospectus
as amended or supplemented after the date of this Agreement and prior to any
Time of Delivery which shall be disapproved by the Representatives promptly
after reasonable notice thereof; to advise the Representatives promptly of any
such amendment or supplement after any Time of Delivery for such Shares and
furnish the Representatives with copies thereof; to file promptly all reports
and any definitive proxy or information statements required to be filed by the
Company with the Commission pursuant to Sections 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 Shares, and during such same period
to advise the Representatives, 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 with the Commission, of the issuance by the Commission of any stop order
or of any order preventing or suspending the use of any prospectus relating to
the Shares, of the suspension of the qualification of such Shares for offering
or sale in any jurisdiction, of the initiation or threatening of any proceeding
for any such purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or Prospectus or for additional
information; and, in the event of the issuance of any such stop order or of any
such order preventing or suspending the use of any prospectus relating to the
Shares or suspending any such qualification, promptly to use its best efforts to
obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as the Representatives
may reasonably request to qualify such Shares for offering and sale under the
securities laws of such jurisdictions as the Representatives may request and to
comply with such laws so as to permit the
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continuance of sales and dealings therein in such jurisdictions for as long as
may be necessary to complete the distribution of such Shares, provided that in
connection therewith the Company shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in any
jurisdiction;
(c) To furnish the Underwriters with copies of the Prospectus as amended or
supplemented in such quantities as the Representatives may from time to time
reasonably request, and, if the delivery of a prospectus is required at any time
in connection with the offering or sale of the Shares 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
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 Act or the Exchange Act, to notify the Representatives
and upon their request to file such document and to prepare and furnish without
charge to each Underwriter and to any dealer in securities as many copies as the
Representatives 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 any Underwriter is required
to deliver a prospectus in connection with sales of any of the Shares at any
time nine months or more after the date hereof, upon the request of the
Representatives but at the expense of such Underwriter, as many copies as the
Representatives may from time to time reasonably request of an amended or
supplemented Prospectus complying with Section 10(a)(3) of the Act;
(d) To make generally available to its security holders as soon as
practicable, but in any event not later than eighteen months after the effective
date of the Registration Statement (as defined in Rule 158(c) under the Act), an
earnings statement of the Company and its subsidiaries (which need not be
audited) complying with Section 11(a) of the Act and the rules and regulations
of the Commission thereunder (including, at the option of the Company, Rule
158);
(e) To use its best efforts to list, subject to notice of issuance, the
Depositary Shares and the Common Shares on the NYSE;
(f) For a period of 90 days from the date of the Prospectus, the Company
will not, directly or indirectly, offer for sale, contract to sell, sell or
otherwise dispose of any Common Stock or securities convertible, exercisable or
exchangeable for Common Stock in an underwritten offering to the public (other
than the Shares and any Units or Common Stock that have been or may be issued in
connection with any acquisition of a property or business and any Common Stock
offered on behalf of selling security-holders pursuant to existing registration
rights agreements or similar contractual arrangements), or sell or grant
options, rights or warrants with respect to any Common Stock (except pursuant to
customary compensation arrangements and employee benefit plans or as permitted
by the preceding parenthetical), without the prior written consent of Xxxxxx
Brothers Inc.; and
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(g) Except as stated in this Agreement and in the Prospectus, neither the
Company nor the Operating Partnership has taken, nor will take, directly or
indirectly, any action designed to or that might reasonably be expected to cause
or result in stabilization or manipulation of the price of the Shares or the
Common Stock to facilitate the sale or resale of the Shares.
5. The Company covenants and agrees with the several Underwriters that
the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Shares under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or producing
any Agreement among Underwriters, this Agreement, the Certificate of
Designations, the Deposit Agreement, any Blue Sky Memorandum, closing documents
(including compilations thereof) and any other documents in connection with the
offering, purchase, sale and delivery of the Shares; (iii) all expenses in
connection with the qualification of the Shares and the Common Shares for
offering and sale under state securities laws as provided in Section 4(b)
hereof, including the reasonable fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection with the
Blue Sky survey(s); (iv) any filing fees incident to, and the fees and
disbursements of counsel for the Underwriters in connection with, any required
reviews by the National Association of Securities Dealers, Inc. of the terms of
the sale of the Shares and the Common Shares; (v) the cost of preparing
certificates for the Shares and Receipts; (vi) the cost and charges of the
Depositary and any transfer agent or registrar or conversion agent or dividend
disbursing agent; (vii) listing fees of the NYSE; (viii) fees payable to credit
rating agencies; and (ix) all other costs and expenses incident to the
performance of its obligations hereunder which are not otherwise specifically
provided for in this Section. It is understood, however, that, except as
provided in this Section, and Sections 7 and 10 hereof, the Underwriters will
pay all of their own costs and expenses, including the fees of their counsel,
transfer taxes on resale of any of the Shares by them, and any advertising
expenses connected with any offers they may make.
6. The obligations of the Underwriters shall be subject, in the
discretion of the Representatives, to the condition that all representations and
warranties and other statements of the Company and the Operating Partnership in
this Agreement are, at and as of each Time of Delivery, true and correct, the
condition that the Company and the Operating Partnership shall have performed
all of their obligations hereunder theretofore to be performed, and the
following additional conditions:
(a) The Prospectus as amended or supplemented shall have been filed with
the Commission pursuant to Rule 424(b) within the applicable time period
prescribed for such filing by the rules and regulations under the Act and in
accordance with Section 4(a) hereof; 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 all requests for additional information on the part of the
Commission shall have been complied with to the Representatives' reasonable
satisfaction;
12
(b) The resolutions contained in the Certificate of Designations shall have
been duly adopted by the board of directors of the Company and the Certificate
of Designations shall have been duly filed with the Secretary of State of the
State of Delaware in compliance with the applicable provisions of the Delaware
General Corporation Law; and the Deposit Agreement shall have been executed and
delivered by the respective parties thereto;
(c) The Underwriters shall have received from Xxxxxxx Xxxxxxx & Xxxxxxxx,
counsel for the Underwriters, such opinion or opinions, dated such Time of
Delivery, with respect to the issuance and sale of the Shares, 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;
(d) Xxxxxxxx & Xxxxxxxx, special counsel for the Company, shall have
furnished to the Representatives their written opinion or opinions, dated each
Time of Delivery, in form and substance satisfactory to the Representatives, to
the effect that:
(i) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the General Corporation Law of the
State of Delaware;
(ii) The authorized capital stock of the Company is as follows: (x)
210,000,000 shares of Common Stock, par value $.10 per share; and (y)
5,000,000 shares of Preferred Stock, par value $100 per share;
(iii) The PIERS have been duly authorized and, upon payment and
delivery for the Depositary Shares as provided in this Agreement will be,
validly issued and fully paid and non-assessable;
(iv) The PIERS are convertible into and redeemable for Common Shares
in accordance with the Company's certificate of incorporation, and the
Common Shares initially issuable upon conversion or redemption of the PIERS
have been duly authorized and reserved for issuance upon such conversion or
redemption and, when issued upon such conversion or redemption, will be
validly issued, fully paid and non-assessable;
(v) The Deposit Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and legally binding
obligation of the Company enforceable in accordance with its terms, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles, provided that, such
-------------
counsel need not express an opinion as to Section 5.3 or Section 5.6 of the
Deposit Agreement;
(vi) The persons in whose names the Depositary Receipts are registered
will be entitled to the rights specified therein and in the Deposit
Agreement;
13
(vii) This Agreement has been duly authorized, executed and delivered
by the Company;
(viii) The issuance of the PIERS and the sale of the Shares to you
pursuant to this Agreement and the Deposit Agreement, and the issuance of
the Common Shares upon conversion of the PIERS, will not, (i) violate the
certificate of incorporation or by-laws of the Company, in each case as in
effect as of the date hereof, or (ii) violate any existing Federal law of
the United States or existing law of the State of New York or the existing
General Corporation Law of the State of Delaware; provided that such
counsel need not express any opinion with respect to Federal or state
securities laws;
(ix) The Company is not an "investment company" as that term is
defined in the Investment Company Act of 1940; and
(x) All regulatory consents, authorizations, approvals and filings
required to be obtained or made by the Company under the Federal laws of
the United States and the laws of the State of New York for the issuance,
sale and delivery of the Shares by the Company to you have been obtained or
made.
In addition, you shall have received from Xxxxxxxx & Xxxxxxxx a letter
stating that as special counsel to the Company, they reviewed the Registration
Statement, the prospectus contained therein (the "Basic Prospectus") and the
prospectus supplement, dated June 4, 1998 (the "Prospectus Supplement"),
participated in discussions with your representatives and those of the Company
and its accountants, and advised the Company as to the requirements of the Act
and the applicable rules and regulations thereunder; on the basis of the
information that such counsel gained in the course of the performance of such
services, considered in the light of their understanding of the applicable law
(including the requirements of Form S-3 and the character of the prospectus
contemplated thereby) and the experience they have gained through their practice
under the Act, they confirm to you that, in their opinion, the Registration
Statement and the Basic Prospectus, as supplemented by the Prospectus
Supplement, as of the date of the Prospectus Supplement and as of the date of
such letter, appeared on their face to be appropriately responsive, in all
material respects relevant to the offering of the Shares, to the requirements of
the Act and the applicable rules and regulations of the Commission thereunder;
nothing that came to such counsel's attention in the course of such review has
caused such counsel to believe, insofar as relevant to the offering of the
Shares, that the Registration Statement, as of the date of the Prospectus
Supplement and as of the date of such letter, contained any untrue statement of
a material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading or that,
insofar as relevant to the offering of the Shares, the Basic Prospectus, as
supplemented by the Prospectus Supplement, as of the date of the Prospectus
Supplement and as of the date of such letter, contained any untrue statement of
a material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. Such counsel may
state that the limitations inherent in the independent verification of factual
matters and the character of determinations involved in the registration process
are such that they do not assume any responsibility for the accuracy,
completeness or fairness of the
14
statements contained in the Registration Statement, the Basic Prospectus or the
Prospectus Supplement except for those made under the captions "Description of
Capital Stock," "Description of Common Stock," "Description of Preferred Stock,"
"Description of Depositary Shares" and "Plan of Distribution" in the Basic
Prospectus, as supplemented by the statements made under the captions
"Description of PIERS," "Description of Depositary Shares" and "Underwriting" in
the Prospectus as amended or supplemented, respectively, insofar as they relate
to provisions of documents therein described; and that such counsel do not
express any opinion or belief as to the financial statements or other financial
data contained in the Registration Statement, the Basic Prospectus or the
Prospectus Supplement.
(e) Xxxx, Gerber & Xxxxxxxxx, counsel for the Company, shall have furnished
to the Representatives its written opinion or opinions, dated each Time of
Delivery, in form and substance satisfactory to the Representatives, to the
effect that:
(i) The Company has been duly qualified as a foreign corporation for
the transaction of business and is in good standing under the laws of each
other jurisdiction in which it owns or leases properties, or conducts any
business, so as to require such qualification, or is subject to no material
liability or disability by reason of its failure to be so qualified in any
such jurisdiction (such counsel being entitled to rely in respect of the
opinion in this clause upon opinions of local counsel and in respect of
matters of fact upon certificates of officers of the Company, provided that
such counsel shall state that they believe that both you and they are
justified in relying upon such opinions and certificates;
(ii) Each subsidiary of the Company has been duly organized and is
validly existing as a partnership, limited liability company or
corporation, as the case may be, in good standing (to the extent
applicable) under the laws of its jurisdiction of incorporation or
organization; the partnership agreement or shareholder agreement of each
subsidiary of the Company has been duly authorized, executed and delivered
by each party thereto and is valid, legally binding and enforceable in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and the effect of
general principles of equity; all of the partnership interests in each
partnership subsidiary of the Company have been duly and validly authorized
and issued and (except as described in the Prospectus) are owned directly
or indirectly by the Company or the Operating Partnership, free and clear
of all liens, encumbrances, equities and claims (except with respect to the
pledge of the Pledged Partnership Interests); all of the membership
interests in each limited liability company subsidiary of the Company have
been duly and validly authorized and issued and (except as described in the
Prospectus) are owned directly or indirectly by the Company or the
Operating Partnership, free and clear of all liens, encumbrances, equities
and claims; all of the stock of each corporate subsidiary of the Company
has been duly and validly authorized and issued and (except as described in
the Prospectus) is owned directly or indirectly by the Company or the
Operating Partnership, free and clear of all liens, encumbrances, equities
and claims (Such counsel being entitled to rely in respect of the opinion
in this clause (iii) upon opinions of local counsel and in
15
respect of matters of fact upon certificates of officers of the Company or
its subsidiaries, provided that such counsel shall state that they believe
both you and they are justified in relying upon such opinions and
certificates);
(iii) All of the issued shares of capital stock of the Company
(provided that no opinion is being delivered hereunder for Shares being
delivered at each Time of Delivery) have been duly and validly authorized
and issued and are fully paid and non-assessable;
(iv) To the best of such counsel's knowledge and other than as set
forth in the Prospectus, there are no legal or governmental proceedings
pending to which the Company or any of its subsidiaries is a party or of
which any property of the Company or any of its subsidiaries is the subject
which, if determined adversely to the Company or any of its subsidiaries,
would individually or in the aggregate have a material adverse effect on
the current or future consolidated financial position, stockholders' equity
or results of operations of the Company and its subsidiaries taken as a
whole; and to the best of such counsel's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened by
others;
(v) The issue and sale of the Shares being delivered at such Time of
Delivery, the issuance of the Common Shares upon conversion of the PIERS
and the compliance by the Company and the Operating Partnership with all of
the provisions of this Agreement and the Deposit Agreement and the
consummation of the transactions herein and therein contemplated will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument known to such
counsel to which the Company or the Operating Partnership is a party or by
which the Company or the Operating Partnership is bound or to which any of
the property or assets of the Company, the Operating Partnership or any
Property Partnership is subject, nor will such action result in any
violation of the provisions of the certificate of incorporation or bylaws
of the Company or the certificate of limited partnership or partnership
agreement of the Operating Partnership or any statute or any order, rule or
regulation known to such counsel of any court or governmental agency or
body having jurisdiction over the Company or the Operating Partnership or
any of their properties;
(vi) The PIERS and the Common Shares issuable upon conversion of the
PIERS are free of any preemptive or other similar rights created by the
Certificate of Designations and the Company's Second Amended and Restated
Certificate of Incorporation, as amended, and, to our knowledge, are free
of any preemptive or other similar rights created pursuant to any agreement
entered into by the Company;
(vii) Neither the Company nor, to our knowledge, any of its
subsidiaries, is in violation of its certificate of incorporation,
certificate of limited partnership or operating agreement, as the case may
be, or bylaws or partnership agreement, as the case may be, or in default
in the performance or observance of any material obligation, agreement,
covenant or condition contained in any indenture, mortgage, deed of trust,
loan
16
agreement, lease or other agreement or instrument known to us to which it
is a party or by which it or any of its properties may be bound;
(viii) The partnership agreement of the Operating Partnership has
been duly authorized, executed and delivered by the Company and is the
valid and legally binding obligation of, and is enforceable against, the
Company, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and the effect of general
principles of equity; and the partnership agreement of each Property
Partnership has been duly authorized, executed and delivered by the Company
in its corporate capacity or by the Company or a subsidiary of the Company
in its capacity as general partner of the Operating Partnership or the
Property Partnerships;
(ix) Each partnership in which the Company owns an interest in excess
of 10 percent is properly treated (x) as a partnership for federal income
tax purposes and (y) not as a "publicly traded partnership" as defined in
the Code;
(x) The statements set forth in the Prospectus under the caption
"Certain Federal Income Tax Considerations" insofar as they purport to
describe the provisions of the laws, legal conclusions with respect thereto
and documents referred to therein, are accurate and complete in all
material respects; and
(xi) In the opinion of such counsel, commencing with the Company's
taxable year ending December 31, 1993, the Company has been organized in
conformity with the requirements for qualification as a REIT, and its
historic and proposed methods of operation have enabled and will enable it
to meet the requirements for qualification and taxation as a REIT under the
Code and the right, in certain circumstances, of holders of interests in
the Operating Partnership to exchange those interests for shares of Common
Stock has not caused and will not cause the Company to fail the diversity
test of Section 856(a)(6) of the Code.
(f) On the date of this Agreement and at each Time of Delivery, Coopers &
Xxxxxxx L.L.P., who have certified certain financial statements of the Company
and its subsidiaries included or incorporated by reference in the Registration
Statement, shall have furnished to the Representatives a letter, dated the date
of this Agreement, and a letter dated such Time of Delivery, to the effect set
forth in Annex I hereto and as to such other matters as the Representatives may
reasonably request and in form and substance satisfactory to the
Representatives;
(g) On the date of this Agreement, (i) KPMG Peat Marwick, L.L.P., who have
certified certain of the combined statements of revenues and certain expenses of
certain retail properties of MEPC American Holdings Inc., U.K.-American
Properties, Inc. and Caledonian Holdings Company, Inc. (collectively, the "MEPC
American Group"), included in the Registration Statement, and (ii) Deloitte &
Touche, L.L.P., who have certified certain of the combined statements of
revenues and certain expenses of Landmark Mall, Mayfair Complex,
00
Xxx Xxxxxxx, Xxxxxxxxx Xxxx, Xxxxxxxxxx Mall and Park City Center (collectively,
the "Malls"), included in the Registration Statement, shall in each case have
furnished to the Representatives a letter, dated the date of this Agreement, to
the effect set forth in Annex II hereto and as to such other matters as the
Representatives may reasonably request and in form and substance satisfactory to
the Representatives;
(h) (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 as amended prior to the date of this
Agreement relating to the Shares any loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by insurance,
or from any labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Prospectus as amended prior
to the date of this Agreement, and (ii) since the respective dates as of which
information is given in the Prospectus as amended prior to the date of this
Agreement there shall not have been any change in the capital stock (other than
issuances pursuant to stock option plans) or long-term or short-term debt of the
Company or any of its subsidiaries (other than reductions in short-term or long-
term debt pursuant to scheduled reductions in the applicable debt instrument and
other than an increase in short-term and long-term debt of the Company of
approximately $304 million since March 31, 1998 (representing indebtedness
assumed or incurred in connection with property acquisitions by the Company and
indebtedness incurred for working capital purposes)) or any change, or any
development involving a prospective change, in or affecting the general affairs,
management, financial position, stockholders' equity or results of operations of
the Company and its subsidiaries, otherwise than as set forth or contemplated in
the Prospectus as amended prior to the date of this Agreement, the effect of
which, in any such case described in Clauses (i) or (ii), is in the judgment of
the Representatives so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the Shares on
the terms and in the manner contemplated in the Prospectus as first amended or
supplemented;
(i) On or after the date of this Agreement (i) no downgrading shall have
occurred in the rating accorded the Company's debt securities or preferred stock
by any "nationally recognized statistical rating organization", as that term is
defined by the Commission for purposes of Rule 436(g)(2) under the Act, and (ii)
no such organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its rating of any
of the Company's debt securities or preferred stock;
(j) On or after the date of this Agreement there shall not have occurred
any of the following: (i) a suspension or material limitation in trading in
securities generally on the NYSE; (ii) a suspension or material limitation in
trading in the Company's securities on the NYSE; (iii) a general moratorium on
commercial banking activities declared by either Federal or New York State
authorities; and (iv) the outbreak or escalation of hostilities involving the
United States or the declaration by the United States of a national emergency or
war, if the effect of any such event specified in this Clause (iv) in the
judgment of the Representatives made it impracticable or inadvisable to proceed
with the public offering or the delivery of the Firm Shares or Optional Shares
or both on the terms and in the manner contemplated in the Prospectus as first
amended or supplemented;
18
(k) The Depositary Shares at each Time of Delivery shall have been duly
listed, subject to notice of issuance, on the NYSE; and
(l) The Company shall have furnished or caused to be furnished to the
Representatives at such Time of Delivery certificates of officers of the Company
satisfactory to the Representatives as to the accuracy of the representations
and warranties of the Company herein at and as of such Time of Delivery, as to
the performance by the Company of all of its obligations hereunder to be
performed at or prior to such Time of Delivery, as to the matters set forth in
subsections (a) and (g) of this Section and as to such other matters as
Representatives may reasonably request.
7. (a) The Company and the Operating Partnership jointly and severally,
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
Shares), to which that Underwriter, officer, employee or controlling person may
become subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is based upon, (i) any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement or the Prospectus or in any amendment or supplement
thereto (with respect to the Prospectus, in light of the circumstances under
which they were made), (ii) the omission or alleged omission to state in the
Registration Statement or the Prospectus, or in any amendment or supplement
thereto, any material fact required to be stated therein or necessary to make
the statements therein not misleading (with respect to the Prospectus, in light
of the circumstances under which they were made), or (iii) any act or failure to
act or any alleged act or failure to act by any Underwriter in connection with,
or relating in any manner to, the Shares or the offering contemplated hereby,
and which is included as part of or referred to in any loss, claim, damage,
liability or action arising out of or based upon matters covered by clause (i)
or (ii) above (provided that neither the Company nor the Operating Partnership
shall be liable under this clause (iii) to the extent that it is determined in a
final judgment by a court of competent jurisdiction that such loss, claim,
damage, liability or action resulted directly from any such acts or failures to
act undertaken or omitted to be taken by such Underwriter through its gross
negligence or willful misconduct), and shall reimburse each Underwriter and each
such officer, employee or controlling person 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 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
and the
19
Operating Partnership may otherwise have to any Underwriter or to any officer,
employee or controlling person of that Underwriter.
(b) Each Underwriter, severally and not jointly, shall indemnify and hold
harmless each of the Company and the Operating Partnership, its officers and
employees, each of its directors, 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 each of the Company or the Operating
Partnership 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 the
Registration Statement or the Prospectus or in any amendment or supplement
thereto, or (ii) the omission or alleged omission to state in the Registration
Statement or the Prospectus, or in any amendment or supplement thereto, any
material fact required to be stated therein or necessary to make the statements
therein not misleading, but in each case only to the extent that the untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with written information concerning 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 or the Operating Partnership and any such director, officer or
controlling person for any legal or other expenses reasonably incurred by the
Company or 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 Company, the Operating
Partnership or any such director, officer, employee or controlling person.
(c) Promptly after receipt by an indemnified party under this Section 7 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 7, 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 7 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 7. If any such claim or
action shall be brought against an indemnified party, and it shall notify the
indemnifying party thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 7 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 indemnified party shall have the right to employ its own counsel, with such
counsel, in the case of the Underwriters, to represent jointly the Underwriters
and their respective officers, employees and controlling persons who may be
20
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 7 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, and in that event the
fees and expenses of such separate counsel 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 7 shall for any
reason be unavailable to or insufficient to hold harmless an indemnified party
under Section 7(a) or 7(c) 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 Shares or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company and the Operating Partnership on the one
hand and the Underwriters on the other with respect to the statements or
omission 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 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 Shares purchased under this Agreement (before deducting
expenses) received by the Company or the Operating Partnership, on the one hand,
and the total underwriting discounts and commissions received by the
Underwriters with respect to the Shares purchased under this Agreement, on the
other hand, bear to the total gross proceeds from the offering of the Shares
under this Agreement. 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 or 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 were to be determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
21
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 shall be deemed to
include, for purposes of this Section 7(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 7(d), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Shares underwritten
by it and distributed to the public was offered to the public exceeds the amount
of any damages which 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 7(d) are
several in proportion to their respective underwriting obligations and not
joint.
(e) The Underwriters severally confirm and the Company and the Operating
Partnership each acknowledge that the statements with respect to the public
offering of the Shares by the Underwriters set forth on the cover page of, the
legend concerning stabilization on the inside cover of, and the concession and
reallowance information and, pursuant to Item 508 of Regulation S-K of the Act,
the seventh, eighth and ninth paragraphs appearing in the section captioned
"Underwriting" in, the Prospectus are correct and constitute the only
information concerning such Underwriters furnished in writing to the Company by
or on behalf of the Underwriters specifically for inclusion in the Registration
Statement and the Prospectus.
8. (a) If any Underwriter shall default in its obligation to purchase
the Firm Shares or Optional Shares which it has agreed to purchase under this
Agreement, the Representatives may in their discretion arrange for themselves or
another party or other parties to purchase such Shares on the terms contained
herein. If within thirty-six hours after such default by any Underwriter the
Representatives do not arrange for the purchase of such Firm Shares or Optional
Shares, as the case may be, then the Company shall be entitled to a further
period of thirty-six hours within which to procure another party or other
parties reasonably satisfactory to the Representatives to purchase such Shares
on such terms. In the event that, within the respective prescribed period, the
Representatives notify the Company that they have so arranged for the purchase
of such Shares, or the Company notifies the Representatives that it has so
arranged for the purchase of such Shares, the Representatives or the Company
shall have the right to postpone a Time of Delivery for such Shares for a period
of not more than seven days, in order to effect whatever changes may thereby be
made necessary in the Registration Statement or the Prospectus as amended or
supplemented, or in any other documents or arrangements, and the Company agrees
to file promptly any amendments or supplements to the Registration Statement or
the Prospectus which in the opinion of the Representatives may thereby be made
necessary. The term "Underwriter" as used in this Agreement shall include any
person substituted under this Section with like effect as if such person had
originally been a party to this Agreement.
(b) If, after giving effect to any arrangements for the purchase of the
Firm Shares or Optional Shares, as the case may be, of a defaulting Underwriter
or Underwriters by the
22
Representatives and the Company as provided in subsection (a) above, the
aggregate number of such Shares which remains unpurchased does not exceed one-
eleventh of the aggregate number of the Firm Shares or Optional Shares, as the
case may be, to be purchased at the respective Time of Delivery, then the
Company shall have the right to require each non-defaulting Underwriter to
purchase the number of Firm Shares or Optional Shares, as the case may be, which
such Underwriter agreed to purchase under this Agreement and, in addition, to
require each non-defaulting Underwriter to purchase its pro rata share (based on
the number of Firm Shares or Optional Shares, as the case may be, which such
Underwriter agreed to purchase under this Agreement) of the Firm Shares or
Optional Shares, as the case may be, of such defaulting Underwriter or
Underwriters for which such arrangements have not been made; but nothing herein
shall relieve a defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Firm Shares or Optional Shares, as the case may be, of a defaulting Underwriter
or Underwriters by the Representatives and the Company as provided in subsection
(a) above, the aggregate number of Firm Shares or Optional Shares, as the case
may be, which remains unpurchased exceeds one-eleventh of the aggregate number
of the Firm Shares or Optional Shares, as the case may be, to be purchased at
the respective Time of Delivery, as referred to in subsection (b) above, or if
the Company shall not exercise the right described in subsection (b) above to
require non-defaulting Underwriters to purchase Firm Shares or Optional Shares,
as the case may be, of a defaulting Underwriter or Underwriters, then this
Agreement shall thereupon terminate, without liability on the part of any non-
defaulting Underwriter or the Company, except for the expenses to be borne by
the Company and the Underwriters as provided in Section 5 hereof and the
indemnity and contribution agreements in Section 7 hereof; but nothing herein
shall relieve a defaulting Underwriter from liability for its default.
9. The respective indemnities, agreements, representations, warranties
and other statements of the Company, the Operating Partnership and the several
Underwriters, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof)
made by or on behalf of any Underwriter or any controlling person of any
Underwriter, or the Company or the Operating Partnership, or any officer or
director or controlling person of the Company or the Operating Partnership, and
shall survive delivery of and payment for the Shares.
10. If this Agreement shall be terminated pursuant to Section 8 hereof, or
if any Shares are not delivered by the Company as provided herein because the
condition set forth in Section 6(j) hereof has not been met, the Company shall
not then be under any liability to any Underwriter except as provided in
Sections 5 and 7 hereof; but, if for any other reason, Shares are not delivered
by or on behalf of the Company as provided herein, the Company will reimburse
the Underwriters through the Representatives for all out-of-pocket expenses
approved in writing by the Representatives, including fees and disbursements of
counsel, reasonably incurred by the Underwriters in making preparations for the
purchase, sale and delivery of such Shares, but neither the Company nor the
Operating Partnership shall then be under any further
23
liability to any Underwriter with respect to such Shares except as provided in
Sections 5 and 7 hereof.
11. In all dealings hereunder, the Representatives of the Underwriters of
Shares shall act on behalf of each of such Underwriters, and the parties hereto
shall be entitled to act any rely upon any statement, request, notice or
agreement on behalf of any Underwriter made or given by such Representatives
jointly or by such of the Representatives, if any, as may be designated for such
purpose in Schedule II hereto.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Representatives as set forth in
Schedule II hereto; and if to the Company or the Operating Partnership shall be
delivered or sent by mail, telex or facsimile transmission to the address of the
Company set forth in the Registration Statement, Attention: Secretary; provided,
however, that any notice to an Underwriter pursuant to Section 7(c) hereof shall
be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its Underwriters' Questionnaire, or
telex constituting such Questionnaire, which address will be supplied to the
Company by the Representatives upon request. Any such statements, requests,
notices or agreements shall take effect upon receipt thereof.
12. This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters, the Company, the Operating Partnership and, to the extent
provided in Sections 7 and 9 hereof, the officers and directors of the Company
and the Operating Partnership and each person who controls the Company, the
Operating Partnership or any Underwriter, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any of the
Shares from any Underwriter shall be deemed a successor or assign by reason
merely of such purchase.
13. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
14. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
15. This Agreement may be executed by any one or more of the parties
hereto and thereto in any number of counterparts, each of which shall be deemed
to be an original, but all such respective counterparts shall together
constitute one and the same instrument.
If the foregoing is in accordance with your understanding, please sign and
return to us (one for the Company and one for each of the Representatives plus
one for each counsel) counterparts hereof.
24
Very truly yours,
GENERAL GROWTH PROPERTIES, INC.
By: ____________________________
Name:
Title:
GGP LIMITED PARTNERSHIP
By: GENERAL GROWTH PROPERTIES, INC.
By: _________________________
Name:
Title:
Accepted as of the date hereof:
Xxxxxx Brothers Inc.
Xxxxxxx, Sachs & Co.
Xxxxxx Xxxxxxx & Co. Incorporated
PaineWebber Incorporated
Prudential Securities Incorporated
SBC Warburg Dillon Read Inc.
For themselves and as Representatives
of the several Underwriters named
in Schedule I hereto
By: Xxxxxx Brothers Inc.
By: ___________________________________
Authorized Representative
SCHEDULE I
NUMBER OF
FIRM SHARES
TO BE PURCHASED
----------------
UNDERWRITERS
------------
Xxxxxx Brothers Inc.......................................... 3,693,750
Xxxxxxx, Xxxxx & Co.......................................... 1,593,750
Xxxxxx Xxxxxxx & Co. Incorporated............................ 1,312,500
PaineWebber Incorporated..................................... 1,312,500
Prudential Securities Incorporated........................... 1,312,500
SBC Warburg Dillon Read Inc.................................. 656,250
USB Securities LLC........................................... 656,250
BancAmerica Xxxxxxxxx Xxxxxxxx............................... 112,500
X.X. Xxxxxxx & Sons, Inc..................................... 112,500
EVEREN Securities Inc........................................ 112,500
Advest, Inc.................................................. 75,000
Xxxx Xxxxxxxx Xxxxxxx........................................ 75,000
Xxxxxxxxxx & Co. Inc......................................... 75,000
Xxxxxx Xxxxxxxxxx Xxxxx Inc.................................. 75,000
Xxxxxx X. Xxxxx & Co., L.P................................... 75,000
First of Michigan Corporation................................ 75,000
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated......................... 75,000
XxXxxxxx & Company Securities, Inc........................... 75,000
Xxxxx Xxxxxxx Inc............................................ 75,000
Xxxxxxx Xxxxx & Associates, Inc.............................. 75,000
Xxxxxx, Xxxxxxxx & Company Incorporated...................... 75,000
The Xxxxxxxx-Xxxxxxxx Company, LLC........................... 75,000
Sutro & Co. Incorporated..................................... 75,000
Xxxxxx Xxxxxxx Incorporated.................................. 75,000
Wheat First Securities, Inc.................................. 75,000
----------
Total..................................................... 12,000,000
==========
SCHEDULE II
DESIGNATION OF PREFERRED STOCK:
7.25% Preferred Income Equity Redeemable Stock, Series A ("PIERS")
LIQUIDATION PREFERENCE:
$1,000 per PIERS (equivalent to $25 per Depositary Share)
FRACTIONAL VALUE OF DEPOSITARY SHARES:
Each representing one-fortieth (1/40) of a PIERS
NUMBER OF DEPOSITARY SHARES:
Number of Firm Shares: 12,000,000
Maximum Number of Optional Shares: 1,800,000
INITIAL OFFERING PRICE TO PUBLIC:
$25.00 per Depositary Share
PURCHASE PRICE BY UNDERWRITERS:
$24.00 per Depositary Share
COMMISSION PAYABLE TO UNDERWRITERS:
$1.00 per Depositary Share in immediately available funds
TIME OF PAYMENT OF DIVIDENDS:
January 15, April 15, July 15 and October 15 of each year, commencing
October 15, 1998
SINKING FUND PROVISIONS:
None
REDEMPTION PROVISIONS:
Except in certain circumstances, not redeemable at option of the Company prior
to July 15, 2003. Thereafter, redeemable at option of the Company pursuant
to, and in accordance with, the terms and conditions described in the
Prospectus
2
Subject to mandatory redemption on July 15, 2008, at a price of $1,000.00 per
PIERS (equivalent to a price of $25.00 per Depositary Share)
REPAYMENT PROVISIONS:
None
LISTING:
New York Stock Exchange
FORM OF DEPOSITARY RECEIPTS:
Temporary form, registered in the name of Cede & Co., as nominee of The
Depository Trust Company
SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:
Wire transfer of immediately available funds
TIME OF DELIVERY:
10 a.m. (New York City time), June 10, 1998
CLOSING LOCATION:
Xxxxxxxx & Xxxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
NAMES AND ADDRESSES OF REPRESENTATIVES:
Xxxxxx Brothers Inc.
Xxxxxxx, Xxxxx & Co.
Xxxxxx Xxxxxxx & Co. Incorporated
PaineWebber Incorporated
Prudential Securities Incorporated
SBC Warburg Dillon Read Inc.
c/x Xxxxxx Brothers Inc.
Three World Financial Center
Xxx Xxxx, Xxx Xxxx 00000
Designated Representative: Xxxxxx Brothers Inc.
Address for Notices, etc.: Three World Financial Center, New York, New York
10285,
Attention: Syndicate Department
(Fax: 000-000-0000)
ANNEX I
Pursuant to Section 6(f) of the Underwriting Agreement, the accountants shall
furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect to the
Company and its subsidiaries within the meaning of the Act and the applicable
published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules (and, if applicable, financial forecasts
and/or pro forma financial information) examined by them and included or
incorporated by reference in the Registration Statement or the Prospectus
comply as to form in all material respects with the applicable accounting
requirements of the Act or the Exchange Act, as applicable, and the related
published rules and regulations thereunder; and, if applicable, they have made
a review in accordance with standards established by the American Institute of
Certified Public Accountants of the unaudited consolidated interim financial
statements, selected financial data, pro forma financial information,
financial forecasts and/or condensed financial statements derived from audited
financial statements of the Company for the periods specified in such letter,
as indicated in their reports thereon, copies of which have been furnished to
the representatives of the Underwriters (the "Representatives") and are
attached hereto;
(iii) They have made a review in accordance with standards established by
the American Institute of Certified Public Accountants of the unaudited
condensed consolidated statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the Prospectus and/or
included in the Company's quarterly reports on Form 10-Q incorporated by
reference into the Prospectus as indicated in their reports thereon copies of
which are attached hereto; and on the basis of specified procedures including
inquiries of officials of the Company who have responsibility for financial
and accounting matters regarding whether the unaudited condensed consolidated
financial statements referred to in paragraph (iv)(A)(i) below comply as to
form in all material respects with the applicable accounting requirements of
the Act and the Exchange Act and the related published rules and regulations,
nothing came to their attention that caused them to believe that the unaudited
condensed consolidated financial statements do not comply as to form in all
material respects with the applicable accounting requirements of the Act and
the Exchange Act and the related published rules and regulations;
(iv) On the basis of limited procedures, not constituting an audit in
accordance with generally accepted auditing standards, consisting of a reading
of the unaudited financial statements and other information referred to below,
a reading of the latest available interim financial statements of the Company
and its subsidiaries, inspection of the minute books of the Company and its
subsidiaries since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus, inquiries of
officials of the Company and its subsidiaries responsible for financial and
accounting matters and such other inquiries and procedures as may be specified
in such letter, nothing came to their attention that caused them to believe
that:
2
(A) (i) the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus and/or included or incorporated by reference in
the Company's Quarterly Reports on Form 10-Q incorporated by reference in
the Prospectus do not comply as to form in all material respects with the
applicable accounting requirements of the Exchange Act and the related
published rules and regulations, or (ii) any material modifications should
be made to the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus or included in the Company's Quarterly Reports
on Form 10-Q incorporated by reference in the Prospectus, for them to be in
conformity with generally accepted accounting principles:
(B) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus do not
comply as to form in all material respects with the applicable accounting
requirements of the Act and the published rules and regulations thereunder
or the pro forma adjustments have not been properly applied to the
historical amounts in the compilation of those statements;
(C) as of a specified date not more than five days prior to the date
of such letter, there have been any changes in the consolidated stock
(other than issuances of capital stock upon exercise of options and stock
appreciation rights, upon earn-outs of performance shares and upon
conversions of convertible securities, in each case which were outstanding
on the date of the latest balance sheet included or incorporated by
reference in the Prospectus) or any increase in the consolidated long-term
debt of the Company and its subsidiaries, or any decreases in consolidated
net current assets or stockholders' equity or other items specified by the
Representatives, or any increases or decreases in inventories or other
items specified by the Representatives, in each case as compared with
amounts shown in the latest balance sheet included or incorporated by
reference in the Prospectus, except in each case for changes, increases or
decreases which the Prospectus discloses have occurred or may occur or
which are described in such letter; and
(D) for the period from the date of the latest financial statements
included or incorporated by reference in the Prospectus to the specified
date referred to in Clause (C) there were any decreases in consolidated net
revenues or operating profit or the total or per share amounts of
consolidated net income or other items specified by the Representatives, or
any increases in any items specified by the Representatives, in each case
as compared with the comparable period of the preceding year and with any
other period of corresponding length specified by the Representatives,
except in each case for increases or decreases which the Prospectus
discloses have occurred or may occur or which are described in such letter;
and
(v) In addition to the examination referred to in their report(s) included
or incorporated by reference in the Prospectus and the limited procedures,
inspection of minute books, inquiries and other procedures referred to in
paragraphs (iii) and (iv) above, they have
3
carried out certain specified procedures, not constituting an examination in
accordance with generally accepted auditing standards, with respect to certain
amounts, percentages and financial information specified by the
Representatives which are derived from the general accounting records of the
Company and its subsidiaries, which appear in the Prospectus (excluding
documents incorporated by reference), or in Part II of, or in exhibits and
schedules to, the Registration Statement specified by the Representatives or
in documents incorporated by reference in the Prospectus specified by the
Representatives, and have compared certain of such amounts, percentages and
financial information with the accounting records of the Company and its
subsidiaries and have found them to be in agreement.
All references in this Annex I to the Prospectus shall be deemed to refer
to the Prospectus as amended or supplemented (including the documents
incorporated by reference therein) for purposes of each letter delivered.
ANNEX II
Pursuant to Section 6(g) of the Underwriting Agreement, the accountants shall
furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect to the
prior owner of the properties within the meaning of the Act and the applicable
published rules and regulations thereunder;
(ii) In their opinion, the combined statement of revenues and certain
expenses audited by them and included in the registration statement complies
as to form in all material respects with the applicable accounting
requirements of the Act and the related rules and regulations adopted
thereunder;
(iii) They have made a review in accordance with standards established by
the American Institute of Certified Public Accountants of the unaudited
condensed consolidated statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the Prospectus and/or
included in the Company's quarterly reports on Form 10-Q incorporated by
reference into the Prospectus; and on the basis of specified procedures
including inquiries of officials of the Company who have responsibility for
financial and accounting matters regarding whether the unaudited condensed
consolidated financial statements comply as to form in all material respects
with the applicable accounting requirements of the Act and the Exchange Act
and the related published rules and regulations, nothing came to their
attention that caused them to believe that the unaudited condensed
consolidated financial statements do not comply as to form in all material
respects with the applicable accounting requirements of the Act and the
Exchange Act and the related published rules and regulations.
