CALI REALTY CORPORATION
UNDERWRITING AGREEMENT
November 18, 1996
To the Representatives named in Schedule 1 hereto of the
several Underwriters named in Schedule 2 hereto
Dear Sirs:
Cali Realty Corporation, a Maryland corporation qualified as a real
estate investment trust (the "Company"), hereby confirms its agreement with the
several underwriters named in Schedule 2 hereto (the "Underwriters"), for whom
you have been duly authorized to act as representatives (in such capacities, the
"Representatives"), as set forth below. If you are the only Underwriters, all
references herein to the Representatives shall be deemed to be to the
Underwriters.
1. SECURITIES. Subject to the terms and conditions herein
contained, the Company proposes to issue and sell to the several Underwriters
certain securities of the Company identified in Schedule 1 hereto (the "Firm
Securities"). The Company also proposes to issue and sell to the several
Underwriters the additional securities identified in Schedule 1 if requested by
the Representatives as provided in Section 3 of this Agreement. Any and all
shares of such additional securities to be purchased by the several Underwriters
pursuant to such option are referred to herein as the "Option Securities," and
the Firm Securities and any Option Securities are collectively referred to
herein as the "Securities."
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. THE Company
represents and warrants to, and agrees with, each of the several Underwriters
that:
(a) The Company meets the requirements for use of Form S-3 under
the Securities Act of 1933, as amended (the "Act"). A registration statement
(the file number of which is set forth in Schedule 1 hereto) on such Form with
respect to the Securities, including a basic prospectus, has been filed by the
Company with the Securities and Exchange Commission (the "Commission") under the
Act, and one or more amendments to such registration statement
may also have been so filed. Such registration statement, as so amended, has
been declared by the Commission to be effective under the Act. Such
registration statement, as amended at the date of this Agreement as specified in
Schedule 1 hereto, meets the requirements set forth in Rule 415(a)(1)(x) under
the Act and complies in all other material respects with said Rule. The Company
will next file with the Commission either (A) if the Company relies on Rule 434
under the Act, a Term Sheet (as hereinafter defined) relating to the Securities,
that shall identify the Preliminary Prospectus (as hereinafter defined) that it
supplements and, if required to be filed pursuant to Rules 434(c)(2) and 424(b),
an Integrated Prospectus (as hereinafter defined), in either case, containing
such information as is required or permitted by Rules 434, 430A, and 424(b)
under the Act or (B) if the Company does not rely on Rule 434 under the Act,
pursuant to Rule 424(b) under the Act a final prospectus supplement to the basic
prospectus included in such registration statement, as so amended, describing
the Securities and the offering thereof, in such form as has been provided to,
or discussed with, and approved by the Representatives as provided in section
4(a) of this Agreement. As used in this Agreement, the term "Registration
Statement" means such registration statement, as amended at the time when it was
declared effective, including (i) all financial schedules and exhibits thereto,
(ii) all documents incorporated by reference or deemed to be incorporated by
reference therein and (iii) any information omitted therefrom pursuant to Rule
430A under the Act and included in the Prospectus (as hereinafter defined) or,
if required to be filed pursuant to Rules 434(c)(2) and 424(b), in the
Integrated Prospectus; the term "Basic Prospectus" means the prospectus included
in the Registration Statement; the term "Preliminary Prospectus" means any
preliminary form of the Prospectus (as defined herein) specifically relating to
the Securities, in the form first filed with, or transmitted for filing to, the
Commission pursuant to Rule 424 of the Rules and Regulations; the term
"Prospectus Supplement" means any prospectus supplement specifically relating to
the Securities, in the form first filed with, or transmitted for filing to, the
Commission pursuant to Rule 424 under the Securities Act; the term "Prospectus"
means: (A) if the Company relies on Rule 434 under the Act, the Term Sheet
relating to the Securities that is first filed pursuant to Rule 424(b)(7) under
the Act, together with the Preliminary Prospectus identified therein that such
Term Sheet supplements; (B) if the Company does not rely on Rule 434 under the
Act, the Preliminary Prospectus; or (C) if the Company does not rely on Rule 434
under the Act and if no prospectus is required to be filed pursuant to Rule 424
under the Act, the Basic Prospectus, including, in each case, the Prospectus
Supplement; "Basic Prospectus," "Prospectus," "Preliminary Prospectus" and
"Prospectus Supplement" shall include in each case the documents, if any, filed
by the Company with the Commission pursuant to the United States Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and incorporated by
reference therein; the term "Integrated Prospectus" means a prospectus first
filed with the Commission pursuant to Rules 434(c)(2) and 424(b) under the Act;
and the term "Term Sheet" means any abbreviated term sheet that satisfies the
requirements of Rule 434 under the Act. Any reference in this Agreement to an
"amendment" or "supplement" to any Preliminary Prospectus, the Prospectus, or
any Integrated
2
Prospectus or an "amendment" to any registration statement (including the
Registration Statement) shall be deemed to include any document incorporated by
reference therein that is filed with the Commission under the Exchange Act after
the date of such Preliminary Prospectus, Prospectus, Integrated Prospectus or
registration statement, as the case may be. For purposes of the preceding
sentence, any reference to the "effective date" of an amendment to a
registration statement shall, if such amendment is effected by means of the
filing with the Commission under the Exchange Act of a document incorporated by
reference in such registration statement, be deemed to refer to the date on
which such document was so filed with the Commission; any reference herein to
the "date" of a Prospectus that includes a Term Sheet shall mean the date of
such Term Sheet.
(b) The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus. When any Preliminary
Prospectus was filed with the Commission it (i) contained all statements
required to be stated therein in accordance with, and complied in all material
respects with the requirements of, the Act, the Exchange Act and the respective
rules and regulations of the Commission thereunder and (ii) did not include any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. When the Registration Statement or any
amendment thereto was or is declared effective, it (i) contained or will contain
all statements required to be stated therein in accordance with, and complied or
will comply in all material respects with the requirements of, the Act, the
Exchange Act and the respective rules and regulations of the Commission
thereunder and (ii) did not or will not include any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein not misleading. When the Prospectus or any Term Sheet that
is a part thereof or any Integrated Prospectus or any amendment or supplement to
the Prospectus is filed with the Commission pursuant to Rule 424(b), on the date
when the Prospectus is otherwise amended or supplemented and on the Firm Closing
Date and any Option Closing Date (both as hereinafter defined), each of the
Prospectus and, if required to be filed pursuant to Rules 434(c)(2) and 424(b)
under the Act, the Integrated Prospectus, as amended or supplemented at any such
time, (i) contained or will contain all statements required to be stated therein
in accordance with, and complied or will comply in all material respects with
the requirements of, the Act and the Exchange Act and the respective rules and
regulations of the Commission thereunder and (ii) did not or will not include
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The foregoing
provisions of this paragraph (b) do not apply to statements or omissions made in
any Preliminary Prospectus or any amendment or supplement thereto, the
Registration Statement or any amendment thereto, the Prospectus or, if required
to be filed pursuant to Rules 434(c)(2) and 424(b) under the Act, the Integrated
Prospectus or any amendment or supplement thereto in reliance upon and in
conformity with written information
3
furnished to the Company by any Underwriter through the Representatives
specifically for use therein.
(c) The Company has been duly organized and is validly existing
as a corporation in good standing under the laws of the State of Maryland and is
duly qualified to transact business and is in good standing under the laws of
all other jurisdictions where the ownership or leasing of its properties or the
conduct of its business requires such qualification, except where the failure to
be so qualified does not amount to a material liability or disability to the
Company and its subsidiaries, taken as a whole.
(d) Each of the subsidiaries of the Company (the "Subsidiaries")
has been duly organized and is validly existing as a general or limited
partnership or corporation in good standing under the laws of the jurisdiction
of its organization, and is duly qualified to transact business and is in good
standing under the laws of all other jurisdictions where the ownership or
leasing of its properties or the conduct of its business requires such
qualification, except where the failure to be so qualified does not amount to a
material liability or disability to the Company and its subsidiaries, taken as a
whole. The issued shares of capital stock of each of the Subsidiaries that is a
corporation are duly authorized, validly issued, fully paid and nonassessable,
and all of the partnership interests in each Subsidiary that is a partnership
are validly issued and fully paid. Except as described in the Prospectus and
any Integrated Prospectus (or, if the Prospectus and any required Integrated
Prospectus are not in existence, the most recent Preliminary Prospectus), all of
such shares and interests in the Subsidiaries owned by the Company are owned
beneficially by the Company or another Subsidiary free and clear of any security
interests, mortgages, pledges, grants, liens, encumbrances, equities or claims.
(e) There are no outstanding (A) securities or obligations of
the Company or any of the Subsidiaries convertible into or exchangeable for any
capital stock of the Company or any Subsidiary, (B) warrants, rights or options
to subscribe for or purchase from the Company or any Subsidiary any such capital
stock or any such convertible or exchangeable securities or obligations, or (C)
obligations of the Company or any such Subsidiary to issue any shares of capital
stock, any such convertible or exchangeable securities or obligations, or any
such warrants, rights or options, except as described in the Prospectus and any
Integrated Prospectus (or, if the Prospectus and any required Integrated
Prospectus are not in existence, the most recent Preliminary Prospectus).
(f) The Company and each of the Subsidiaries has full power,
corporate or other, to own or lease their respective properties and conduct
their respective businesses as described in the Registration Statement, the
Prospectus and any Integrated Prospectus (or, if the Prospectus and any required
Integrated Prospectus are not in existence, the most recent
4
Preliminary Prospectus); and the Company has full power, corporate or other, to
enter into this Agreement and any other agreement pursuant to which the
Securities are issued as specified in Schedule 1 to this Agreement (the
"Securities Documents") and to carry out all the terms and provisions hereof and
thereof to be carried out by it.
(g) The Company has an authorized, issued and outstanding
capitalization as set forth in the Prospectus and any Integrated Prospectus (or,
if the Prospectus and any required Integrated Prospectus are not in existence,
the most recent Preliminary Prospectus). All of the capital stock of the
Company has been duly authorized and the capital stock of the Company
outstanding is validly issued, fully paid and nonassessable.
(h) The Securities have been duly authorized, and, when such
securities are issued and delivered as contemplated by the terms of this
Agreement and the applicable Securities Document such securities will be validly
issued, fully paid and non-assessable.
(i) The execution and delivery of the Securities have been duly
authorized by all necessary corporate action, and, at the Firm Closing Date or
the related Option Closing Date (as the case may be), the Securities will have
been duly executed and delivered by the Company, and if applicable, assuming due
authorization, execution and delivery of the Securities by parties other than
the Company, will be the legal, valid, binding and enforceable obligations of
the Company, subject to the effect of bankruptcy, insolvency, moratorium,
fraudulent conveyance, reorganization and similar laws relating to creditors'
rights generally and to the application of equitable principles in any
proceeding, whether at law or in equity.
(j) The securities of the Company issuable in exchange for or
upon conversion of the Securities as specified in Schedule 1 to this Agreement
(the "Underlying Securities") have been duly authorized and reserved, and, when
such securities are issued and delivered as contemplated by the terms of the
applicable Securities Document, such securities will be validly issued, fully
paid and non-assessable.
(g) The execution and delivery of the Securities Documents has
been duly authorized by all necessary corporate action of the Company, and, at
the Firm Closing Date or the related Option Closing Date (as the case may be),
such agreements will have been duly executed and delivered by the Company, and
assuming due authorization, execution and delivery of the Securities Documents
by parties other than the Company as specified in the applicable Securities
Documents, and, if required, such Securities Documents have been filed with the
Secretary of State of the State of Maryland or any other applicable
jurisdiction, and such agreements will constitute valid and binding instruments
of the Company enforceable against the Company in accordance with their
respective terms, subject to the effect of bankruptcy,
5
insolvency, moratorium, fraudulent conveyance, reorganization and similar laws
relating to creditors' rights generally and to the application of equitable
principles in any proceeding, whether at law or in equity.
(k) No holders of outstanding shares of capital stock of the
Company are entitled as such to any preemptive or other rights to subscribe for
any of the Securities or Underlying Securities, and no holder of securities of
the Company or any Subsidiary has any right which has not been waived to require
the Company to register the offer or sale of any securities owned by such holder
under the Act in the public offering contemplated by this Agreement.
(l) The Securities and Underlying Securities conform to their
description contained in the Prospectus and any Integrated Prospectus (or, if
the Prospectus and any required Integrated Prospectus are not in existence, the
most recent Preliminary Prospectus).
(m) The combined financial statements and schedules of the
Company and the Cali Group (as defined in the Registration Statement) and the
consolidated financial statements and schedules of the Company and its
consolidated subsidiaries included in or incorporated by reference in the
Registration Statement, the Prospectus and any Integrated Prospectus (or, if the
Prospectus and any required Integrated Prospectus are not in existence, the most
recent Preliminary Prospectus) fairly present the combined financial position of
the Company and the Cali Group and fairly present the consolidated financial
position of the Company and its consolidated subsidiaries, as the case may be,
and the results of operations and changes in financial condition as of the dates
and periods therein specified. Such combined and consolidated financial
statements and schedules have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the periods
involved (except as otherwise noted therein).
(n) The selected financial data set forth under the caption
"Selected Financial Data" in the Prospectus and any Integrated Prospectus (or,
if the Prospectus and any required Integrated Prospectus are not in existence,
the most recent Preliminary Prospectus) fairly present, on the basis stated in
the Prospectus and any Integrated Prospectus (or such Preliminary Prospectus)
and such Annual Report, the information included therein. The pro forma
financial statements and other pro forma financial information included in or
incorporated therein in the Prospectus and any Integrated Prospectus (or, if the
Prospectus and any required Integrated Prospectus are not in existence, the most
recent Preliminary Prospectus) comply in all material respects with the
applicable requirements of Rule 11-02 of Regulation S-X of the Commission and
the pro forma adjustments have been properly applied to the historical amounts
in the compilation of such statements and the assumptions used in the
preparation thereof are, in the opinion of the Company, reasonable.
6
(o) Price Waterhouse LLP, which has certified certain financial
statements of the Company and its consolidated subsidiaries and of the Cali
Group and delivered its reports with respect to the audited consolidated
financial statements and schedules included or incorporated by reference in the
Registration Statement, the Prospectus and any Integrated Prospectus (or, if the
Prospectus and any required Integrated Prospectus are not in existence, the most
recent Preliminary Prospectus), are independent public accountants as required
by the Act, the Exchange Act and the respective rules and regulations
thereunder.
(p) The execution and delivery of this Agreement has been duly
authorized by the Company and this Agreement has been duly executed and
delivered by the Company, and is the valid and binding agreement of the Company
enforceable against the Company in accordance with the terms hereof, subject to
the effect of bankruptcy, insolvency, moratorium, fraudulent conveyance,
reorganization and similar laws relating to creditors' rights generally and to
the application of equitable principles in any proceeding, whether at law or in
equity and except as rights to indemnity and contribution hereunder may be
limited by federal or state securities laws or principles of public policy.
(q) No legal or governmental proceedings are pending to which
the Company or any of the Subsidiaries or to which the property of the Company
or any of the Subsidiaries is subject, that are required to be described in the
Registration Statement, the Prospectus or any Integrated Prospectus (or, if the
Prospectus and any required Integrated Prospectus are not in existence, the most
recent Preliminary Prospectus) and are not described therein, and no such
proceedings have been threatened against the Company or any of the Subsidiaries;
and no contract or other document is required to be described in the
Registration Statement, the Prospectus or any Integrated Prospectus (or, if the
Prospectus and any required Integrated Prospectus are not in existence, the most
recent Preliminary Prospectus) or to be filed as an exhibit to the Registration
Statement that is not described therein or filed as required.
(r) The issuance, offering and sale of the Securities to the
Underwriters by the Company pursuant to this Agreement and the Securities
Documents, the compliance by the Company with the other provisions of this
Agreement, the Securities and the Securities Documents and the consummation of
the other transactions herein and therein contemplated do not (i) require the
consent, approval, authorization, registration or qualification of or with any
governmental authority, except such as have been obtained, such as may be
required under state securities or blue sky laws and, if the registration
statement filed with respect to the Securities (as amended) is not effective
under the Act as of the time of execution hereof, such as may be required (and
shall be obtained as provided in this Agreement) under the Act, or (ii) conflict
with or result in a breach or violation of any of the terms and provisions of,
or constitute a default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any of the properties or
7
assets of the Company or any of the Subsidiaries pursuant to any indenture,
mortgage, deed of trust, lease or other agreement or instrument to which the
Company or any of the Subsidiaries is a party or by which the Company or any of
the Subsidiaries or any other of their respective properties are bound, or the
Articles of Incorporation, By-laws or other organizational documents, as the
case may be, of the Company or any of the Subsidiaries, or any statute or any
judgment, decree, order, rule or regulation of any court or other governmental
authority or any arbitrator applicable to the Company or any of the Subsidiaries
or any of their properties.
(s) The Company has not, directly or indirectly, (i) taken any
action designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Securities or (ii) since the filing of the Registration Statement (A) sold, bid
for, purchased, or paid anyone any compensation for soliciting purchases of, the
Securities or (B) paid or agreed to pay to any person any compensation for
soliciting another to purchase any other securities of the Company.
(t) Subsequent to the respective dates as of which information
is given in the Registration Statement, the Prospectus and any Integrated
Prospectus (or, if the Prospectus and any required Integrated Prospectus are not
in existence, the most recent Preliminary Prospectus), (1) neither the Company
nor any of the Subsidiaries has incurred any material liability or obligation,
direct or contingent, or entered into any material transaction, which is not in
the ordinary course of business; (2) the Company has not purchased any of its
outstanding capital stock, nor declared, paid or otherwise made any dividend or
distribution of any kind on its capital stock; and (3) there has not been any
material change in the capital stock, short-term debt or long-term debt of the
Company or the Subsidiaries, except in each case as described in or
contemplated by the Prospectus and any Integrated Prospectus (or, if the
Prospectus and any required Integrated Prospectus are not in existence, the most
recent Preliminary Prospectus).
(u) The Company or the Subsidiaries have good and indefeasible
title in fee simple to all of the Properties (as defined in the Prospectus) and
marketable title to all other property owned by each of them, in each case free
and clear of any security interest, lien, mortgage, pledge, encumbrance, equity,
claim and other defect, except liens which do not materially and adversely
affect the value of such property and will not interfere with the use made or
proposed to be made of such property by the Company or such Subsidiary, and any
and all real property and buildings held under lease by the Company or any such
Subsidiary are held under valid, subsisting and enforceable leases, with such
exceptions as are not material and do not interfere with the use made or
proposed to be made of such property and buildings by the Company or such
Subsidiary, in each case except as described in the Prospectus and any
8
Integrated Prospectus (or, if the Prospectus and any required Integrated
Prospectus are not in existence, the most recent Preliminary Prospectus).
(v) No labor dispute with the employees of the Company or any of
the Subsidiaries exists or is threatened or imminent that could result in a
material adverse change in the condition (financial or otherwise), business
prospects, net worth or results of operations of the Company and the
Subsidiaries, taken as a whole, except as described in the Prospectus and any
Integrated Prospectus (or, if the Prospectus and any required Integrated
Prospectus are not in existence, the most recent Preliminary Prospectus).
(w) The Company and the Subsidiaries own or possess, or can
acquire on reasonable terms, all material patents, trademarks, service marks,
trade names, licenses, copyrights and proprietary and other confidential
information currently employed by them in connection with their respective
businesses, and neither the Company nor any of the Subsidiaries has received any
notice of infringement of or conflict with asserted rights of any third party
with respect to the foregoing which, singly or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would result in a material
adverse change in the condition (financial or otherwise), business prospects,
net worth or results of operations of the Company and the Subsidiaries, taken as
a whole, except as described in the Prospectus and any Integrated Prospectus
(or, if the Prospectus and any required Integrated Prospectus are not in
existence, the most recent Preliminary Prospectus).
(x) The Company and each of the Subsidiaries is insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses in which they
will be engaged; neither the Company nor any of the Subsidiaries has been
refused any insurance coverage sought or applied for; and neither the Company
nor any of the Subsidiaries has any reason to believe that any of them will not
be able to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be necessary
to continue its business at a cost that would not have material adverse effect
on the condition (financial or otherwise), business prospects, net worth or
results of operations of the Company and the Subsidiaries, taken as a whole,
except as described in the Prospectus and any Integrated Prospectus (or, if the
Prospectus and any required Integrated Prospectus are not in existence, the most
recent Preliminary Prospectus).
(y) None of the Subsidiaries is currently prohibited, directly
or indirectly, from paying any dividends to the Company, from making any other
distribution on such subsidiary's capital stock or other equity interest, from
repaying to the Company any loans or advances to such Subsidiary from the
Company or from transferring any of such Subsidiary's property or assets to the
Company or any of the other Subsidiaries, except as described in the
9
Prospectus and any Integrated Prospectus (or, if the Prospectus and any required
Integrated Prospectus are not in existence, the most recent Preliminary
Prospectus).
(z) The Company and each of the Subsidiaries has complied with
all laws, regulations and orders applicable to it or its respective business and
properties except where the failure to so comply would not result in a material
adverse change in the condition (financial or otherwise), business prospects,
net worth or results of operations of the Company and the Subsidiaries, taken as
a whole; the Company and the Subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal, state, municipal
or foreign regulatory authorities necessary to conduct their respective
businesses except where the failure to possess the same would not result in a
material adverse change in the condition (financial or otherwise), business
prospects, net worth or results of operations of the Company and the
Subsidiaries, taken as a whole; and neither the Company nor any of the
Subsidiaries has received any notice of proceedings relating to the revocation
or modification of any such certificate, authorization or permit which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a material adverse change in the condition (financial
or otherwise), business prospects, net worth or results of operations of the
Company and the Subsidiaries, taken as a whole, except as described in the
Prospectus and any Integrated Prospectus (or, if the Prospectus and any required
Integrated Prospectus are not in existence, the most recent Preliminary
Prospectus).
(aa) The Company will conduct its operations in a manner that
will not subject it to registration as an investment company under the
Investment Company Act of 1940, as amended, and the transactions contemplated by
this Agreement will not cause the Company to become an investment company
subject to registration under such Act.
(bb) The Company and each of the Subsidiaries has filed all
foreign, federal, state and local tax returns that are required to be filed or
have requested extensions thereof (except in any case in which the failure so to
file would not have a material adverse effect on the condition (financial or
otherwise), business prospects, net worth or results of operations of the
Company and the Subsidiaries, taken as a whole) and has paid all taxes required
to be paid by it and any other assessment, fine or penalty levied against it, to
the extent that any of the foregoing is due and payable, except for any such
assessment, fine or penalty that is currently being contested in good faith or
as described in the Prospectus and any Integrated Prospectus (or, if the
Prospectus and any required Integrated Prospectus are not in existence, the most
recent Preliminary Prospectus).
(cc) The Company is organized in conformity with the
requirements for qualification as a real estate investment trust (a "REIT")
under the Internal Revenue Code of 1986,
10
as amended (the "Code"), and the present and contemplated method of operation of
the Company and the Subsidiaries does and will enable the Company to meet the
requirements for taxation as a REIT under the Code.
(dd) Neither the Company nor any of the Subsidiaries is in violation
of any federal or state law or regulation relating to occupational safety and
health and the Company and the Subsidiaries have received all permits, licenses
or other approvals required of them under applicable federal and state
occupational safety and health and environmental laws and regulations to conduct
their respective businesses, and the Company and each of the Subsidiaries is in
compliance with all terms and conditions of any such permit, license or
approval, except any such violation of law or regulation, failure to receive
required permits, licenses or other approvals or failure to comply with the
terms and conditions of such permits, licenses or approvals which would not,
singly or in the aggregate result in a material adverse change in the condition
(financial or otherwise), business prospects, net worth or results of operations
of the Company and the Subsidiaries, taken as a whole, except as described in
the Prospectus and any Integrated Prospectus (or, if the Prospectus and any
required Integrated Prospectus are not in existence, the most recent Preliminary
Prospectus).
(ee) Except for the shares of capital stock of each of the
Subsidiaries owned by the Company or another Subsidiary, neither the Company nor
any of the Subsidiaries owns any shares of stock or any other equity securities
of any corporation or has any equity interest in any firm, partnership,
association or other entity, except as described in or contemplated by the
Prospectus and any Integrated Prospectus (or, if the Prospectus and any required
Integrated Prospectus are not in existence, the most recent Preliminary
Prospectus).
(ff) The Company and the Subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurance that (1)
transactions are executed in accordance with management's general or specific
authorizations; (2) transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted accounting
principles and to maintain asset accountability; (3) access to assets is
permitted only in accordance with management's general or specific
authorization; and (4) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(gg) Neither the Company nor any of the Subsidiaries is in violation
of any term or provision of its Articles of Incorporation, By-laws, partnership
agreements or other organizational documents, as the case may be; no default
exists, and no event has occurred which, with notice or lapse of time or both,
would constitute a default, and the consummation of the transactions by this
Agreement and under the Securities Documents will not result in any default
11
in the due performance and observance of any term, covenant or condition of any
indenture, mortgage, deed of trust, lease or other agreement or instrument to
which the Company or any Subsidiary is a party or by which the Company, the
Subsidiaries or the Properties or any of their respective other properties is
bound or may be affected except such as would not result in any material adverse
effect in the condition (financial or otherwise), business prospects, net worth
or results of operations of the Company and the Subsidiaries, taken as a whole.
(hh) If required as set forth in Schedule 1 hereto, the Securities
and any Underlying Securities have been approved for listing on the New York
Stock Exchange, subject to official notice of issuance.
(ii) (A) Neither the Company nor any Subsidiary knows of any
violation of any municipal, state or federal law, rule or regulation (including
those pertaining to environmental matters) concerning the Properties or any part
thereof which would have a material adverse effect in the condition (financial
or otherwise), business prospects, net worth or results of operations of the
Company and the Subsidiaries, taken as a whole; (B) each of the Properties
complies with all applicable zoning laws, ordinances, regulations and deed
restrictions or other covenants in all material respects and, if and to the
extent there is a failure to comply, such failure does not materially impair the
value of any of the Properties and will not result in a forfeiture or reversion
of title; (C) neither the Company nor any Subsidiary has received from any
governmental authority any written notice of any condemnation of or zoning
change affecting the Properties or any part thereof, and neither the Company nor
any Subsidiary knows of any such condemnation or zoning change which is
threatened and which if consummated would have a material adverse effect in the
condition (financial or otherwise), business prospects, net worth or results of
operations of the Company and the Subsidiaries, taken as a whole; (D) all liens,
charges, encumbrances, claims, or restrictions on or affecting the properties
and assets (including the Properties) of the Company or any of the Subsidiaries
that are required to be described in the Prospectus and any Integrated
Prospectus (or, if the Prospectus and any required Integrated Prospectus are not
in existence, the most recent Preliminary Prospectus) are disclosed therein; (E)
no lessee of any portion of any of the Properties is in default under any of the
leases governing such properties and there is no event which, but for the
passage of time or the giving of notice or both would constitute a default under
any of such leases, except such defaults that would not have a material adverse
effect in the condition (financial or otherwise), business prospects, net worth
or results of operations of the Company and the Subsidiaries, taken as a whole;
and (F) except as provided by law no tenant under any lease pursuant to which
the Company or any of the Subsidiaries leases the Properties will have an option
or right of first refusal to purchase the premises leased thereunder or the
building of which such premises are a part.
12
(jj) Except as otherwise disclosed in the Prospectus and any
Integrated Prospectus (or, if the Prospectus and any required Integrated
Prospectus are not in existence, the most recent Preliminary Prospectus) or in
the Phase I Environmental Audits prepared by Environmental Waste Management
Associates, Inc. previously delivered to the Representatives (the "Audits"), (i)
neither the Company, any of the Subsidiaries nor, to the best knowledge of the
Company, any other owners of the property at any time or any other party has at
any time, handled, stored, treated, transported, manufactured, spilled, leaked,
or discharged, dumped, transferred or otherwise disposed of or dealt with,
Hazardous Materials (as hereinafter defined) on, to or from the Properties,
other than by any such action taken in compliance with all applicable
Environmental Statutes or by the Company, any of the Subsidiaries or any other
party in connection with the ordinary use of residential, retail or commercial
properties owned by the Company; (ii) the Company does not intend to use the
Properties or any subsequently acquired properties for the purpose of handling,
storing, treating, transporting, manufacturing, spilling, leaking, discharging,
dumping, transferring or otherwise disposing of or dealing with Hazardous
Materials other than by any such action taken in compliance with all applicable
Environmental Statues or by the Company, any of the Subsidiaries or any other
party in connection with the ordinary use of residential, retail or commercial
properties owned by the Company; (iii) neither the Company nor any of the
Subsidiaries knows of any seepage, leak, discharge, release, emission, spill, or
dumping of Hazardous Materials into waters on or adjacent to the Properties or
any other real property owned or occupied by any such party, or onto lands from
which Hazardous Materials might seep, flow or drain into such waters; (iv)
neither the Company nor any of the Subsidiaries has received any notice of, or
has any knowledge of any occurrence or circumstance which, with notice or
passage of time or both, would give rise to a claim under or pursuant to any
federal, state or local environmental statute or regulation or under common law,
pertaining to Hazardous Materials on or originating from any of the Properties
or any assets described in the Prospectus and any Integrated Prospectus (or, if
the Prospectus and any required Integrated Prospectus are not in existence, the
most recent Preliminary Prospectus) or any other real property owned or occupied
by any such party or arising out of the conduct of any such party, including
without limitation a claim under or pursuant to any Environmental Statute
(hereinafter defined); (v) neither the Properties nor any other land owned by
the Company or any of the Subsidiaries is included or, to the best of the
Company's knowledge, proposed for inclusion on the National Priorities List
issued pursuant to CERCLA (as hereinafter defined) by the United States
Environmental Protection Agency (the "EPA") or, to the best of the Company's
knowledge, proposed for inclusion on any similar list or inventory issued
pursuant to any other Environmental Statute or issued by any other Governmental
Authority (as hereinafter defined).
As used herein, "Hazardous Material" shall include, without limitation
any flammable explosives, radioactive materials, hazardous materials, hazardous
wastes, toxic substances, or related materials, asbestos or any hazardous
material as defined by any federal,
13
state or local environmental law, ordinance, rule or regulation including
without limitation the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended, 42 U.S.C. Sections 9601-9675 ("CERCLA"), the
Hazardous Materials Transportation Act, as amended, 49 U.S.C. Sections
1801-1819, the Resource Conservation and Recovery Act, as amended, 42 U.S.C.
Sections 6901-6992K, the Emergency Planning and Community Right-to-Know Act of
1986, 42 U.S.C. Sections 11001-11050, the Toxic Substances Control Act, 15
U.S.C. Sections 2601-2671, the Federal Insecticide, Fungicide and Rodenticide
Act, 7 U.S.C. Sections 136-136y, the Clean Air Act, 42 U.S.C. Sections
7401-7642, the Clean Water Act (Federal Water Pollution Control Act), 33 U.S.C.
Sections 1251-1387, the Safe Drinking Water Act, 42 U.S.C. Sections
300f-300j-26, and the Occupational Safety and Health Act, 29 U.S.C. Sections
651-678, as any of the above statutes may be amended from time to time, and in
the regulations promulgated pursuant to each of the foregoing (individually, an
"Environmental Statute") or by any federal, state or local governmental
authority having or claiming jurisdiction over the properties and assets
described in the Prospectus (a "Governmental Authority").
(kk) The Company has complied and will comply with all the provisions
of Florida H.B. 1771, codified as Section 517.075 of the Florida Statutes, as
contemplated by the regulations promulgated thereunder relating to issuers doing
business with Cuba.
(ll) Each certificate signed by any officer of the Company and
delivered to the Representatives or counsel for the Underwriters shall be deemed
to be a representation and warranty by the Company to each Underwriter as to the
matters covered thereby.
(mm) The Company has not distributed and, prior to the later of (i)
the Closing Date and (ii) the completion of the distribution of the Securities,
will not distribute any material in connection with the offering and sale of the
Securities other than the Registration Statement or any amendment thereto, any
Preliminary Prospectus, the Prospectus or any Integrated Prospectus or any
amendment or supplement thereto, or other materials, if any, permitted by the
Act.
3. PURCHASE, SALE AND DELIVERY OF THE SECURITIES.
(a) On the basis of the representations, warranties, agreements and
covenants herein contained and subject to the terms and conditions herein set
forth, the Company agrees to issue and sell to each of the Underwriters, and
each of the Underwriters, severally and not jointly, agrees to purchase from the
Company, at the purchase price specified in Schedule 1 hereto, the number of
Firm Securities set forth opposite the name of such Underwriter in Schedule 2
hereto. One or more certificates in definitive form for the Firm Securities
that the several Underwriters have agreed to purchase hereunder, and in such
denomination or denominations and
14
registered in such name or names as the Representatives request upon notice to
the Company at least 48 hours prior to the Firm Closing Date, shall be delivered
by or on behalf of the Company to the Representatives for the respective
accounts of the Underwriters, against payment by or on behalf of the
Underwriters of the purchase price therefor to the Company in such funds as are
specified in Schedule 1 hereto. Such delivery of and payment for the Firm
Securities shall be made at the date, time and place identified in Schedule 1
hereto, or at such other date, time or place as the Representatives and the
Company may agree upon or as the Representatives may determine pursuant to
Section 8 hereof, such date and time of delivery against payment being herein
referred to as the "Firm Closing Date". The Company will make such certificate
or certificates for the Firm Securities available for checking and packaging by
the Representatives at the offices in New York, New York of the Company's
transfer agent or registrar or warrant agent or of Prudential Securities
Incorporated at least 24 hours prior to the Firm Closing Date.
(b) For the purpose of covering any over-allotments in connection
with the distribution and sale of the Firm Securities as contemplated by the
Prospectus and any Integrated Prospectus, the Company hereby grants to the
several Underwriters an option to purchase, severally and not jointly, the
Option Securities. The purchase price to be paid for any Option Securities
shall be the same price per share as the price per share for the Firm Securities
set forth in Schedule 1 to this Agreement, plus, if the purchase and sale of any
Option Securities takes place after the Firm Closing Date and after the Firm
Securities are trading "ex-dividend", an amount equal to the dividends payable
on such Option Securities. The option granted hereby may be exercised as to all
or any part of the Option Securities from time to time within thirty days after
the date of the Prospectus or any Integrated Prospectus (or, if such 30th day
shall be a Saturday or Sunday or a holiday, on the next business day thereafter
when the New York Stock Exchange is open for trading). The Underwriters shall
not be under any obligation to purchase any of the Option Securities prior to
the exercise of such option. The Representatives may from time to time exercise
the option granted hereby by giving notice in writing or by telephone (confirmed
in writing) to the Company setting forth the aggregate number of Option
Securities as to which the several Underwriters are then exercising the option
and the date and time for delivery of and payment for such Option Securities.
Any such date of delivery shall be determined by the Representatives but shall
not be earlier than two business days or later than five business days after
such exercise of the option and, in any event, shall not be earlier than the
Firm Closing Date. The time and date set forth in such notice, or such other
time on such other date as the Representatives and the Company may agree upon or
as the Representatives may determine pursuant to Section 9 hereof, is herein
called the "Option Closing Date" with respect to such Option Securities. Upon
exercise of the option as provided herein, the Company shall become obligated to
sell to each of the several Underwriters, and, subject to the terms and
conditions herein set forth, each of the Underwriters (severally and not
jointly) shall become obligated to purchase from
15
the Company the same percentage of the total number of the Option Securities as
to which the several Underwriters are then exercising the option as such
Underwriter is obligated to purchase of the aggregate number of Firm Securities,
as adjusted by the Representatives in such manner as they deem advisable to
avoid fractional shares. If the option is exercised as to all or any portion of
the Option Securities, one or more certificates in definitive form for such
Option Securities, and payment therefor, shall be delivered on the related
Option Closing Date in the manner, and upon the terms and conditions, set forth
in paragraph (a) of this Section 3 and Schedule 1 to this Agreement, except that
reference therein to the Firm Securities and the Firm Closing Date shall be
deemed, for purposes of this paragraph (b), to refer to such Option Securities
and Option Closing Date, respectively.
(c) It is understood that any of you, individually and not as one of
the Representatives, may (but shall not be obligated to) make payment on behalf
of any Underwriter or Underwriters for any of the Securities to be purchased by
such Underwriter or Underwriters. No such payment shall relieve such
Underwriter or Underwriters from any of its or their obligations hereunder.
4. COVENANTS OF THE COMPANY. THE COMPANY COVENANTS AND AGREES WITH EACH
OF THE UNDERWRITERS THAT:
(a) The Company will file the Prospectus or any Term Sheet that
constitutes a part thereof, any Integrated Prospectus or the Prospectus
Supplement, as the case may be, and any amendment or supplement thereto with the
Commission in the manner and within the time period required by Rules 434 and
424(b) under the Act. During any time when a prospectus relating to the
Securities is required to be delivered under the Act, the Company (i) will
comply with all requirements imposed upon it by the Act and the Exchange Act and
the respective rules and regulations of the Commission thereunder to the extent
necessary to permit the continuance of sales of or dealings in the Securities in
accordance with the provisions hereof and of the Prospectus and any Integrated
Prospectus, as then amended or supplemented, and (ii) will not file with the
Commission the Prospectus, Term Sheet, any Integrated Prospectus or any
amendment or supplement thereto or any amendment to the Registration Statement
of which the Representatives shall not previously have been advised and
furnished with a copy for a reasonable period of time prior to the proposed
filing and as to which filing the Representatives shall not have given their
consent. The Company will prepare and file with the Commission, in accordance
with the rules and regulations of the Commission, promptly upon request by the
Representatives or counsel for the Underwriters, any amendment to the
Registration Statement or amendment or supplement to the Prospectus and any
Integrated Prospectus that may be necessary or advisable in connection with the
distribution of the Securities by the several Underwriters, and will use its
best efforts to cause any such amendment to the Registration Statement to be
declared effective
16
by the Commission as promptly as possible. The Company will advise the
Representatives, promptly after receiving notice thereof, of the time when any
amendment to the Registration Statement has been filed or declared effective or
the Prospectus, any Integrated Prospectus or any amendment or supplement thereto
has been filed and will provide evidence satisfactory to the Representatives of
each such filing or effectiveness.
(b) The Company will advise the Representatives, promptly after
receiving notice or obtaining knowledge thereof, of (i) the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment thereto or any order directed at any
document incorporated by reference in the Registration Statement, the Prospectus
or any Integrated Prospectus or any amendment or supplement thereto or any order
preventing or suspending the use of any Preliminary Prospectus, the Prospectus
or any Integrated Prospectus or any amendment or supplement thereto, (ii) the
suspension of the qualification of the Securities for offering or sale in any
jurisdiction, (iii) the institution, threatening or contemplation of any
proceeding for any such purpose or (iv) any request made by the Commission for
amending the Registration Statement, for amending or supplementing any
Preliminary Prospectus, the Prospectus or any Integrated Prospectus or for
additional information. The Company will use its best efforts to prevent the
issuance of any such stop order and, if any such stop order is issued, to obtain
the withdrawal thereof as promptly as possible.
(c) The Company will arrange for the qualification of the Securities
and any Underlying Securities for offering and sale under the securities or blue
sky laws of such jurisdictions as the Representatives may designate and will
continue such qualifications in effect for as long as may be necessary to
complete the distribution of the Securities and any Underlying Securities;
PROVIDED, HOWEVER, that in connection therewith the Company shall not be
required to qualify as a foreign corporation or to execute a general consent to
service of process in any jurisdiction.
(d) If at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of which
the Prospectus or any Integrated Prospectus, as then amended or supplemented,
would include any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading, or if for any
other reason it is necessary at any time to amend or supplement the Prospectus
or any Integrated Prospectus to comply with the Act or Exchange Act or the
respective rules or regulations of the Commission thereunder, the Company will
promptly notify the Representatives thereof and, subject to Section 4(a) of this
Agreement, will prepare and file with the Commission, at the Company's expense,
an amendment to the Registration Statement or an amendment or supplement
17
to the Prospectus and any Integrated Prospectus that corrects such statement or
omission or effects such compliance.
(e) The Company will, without charge, provide (i) to the
Representatives and to counsel for the Underwriters, a conformed copy of the
registration statement originally filed with respect to the Securities and any
amendment thereto (in each case including exhibits thereto), (ii) to each other
Underwriter, a conformed copy of such registration statement and any amendment
thereto relating to the Securities (in each case without exhibits thereto) and
(iii) so long as a prospectus relating to the Securities is required to be
delivered under the Act, as many copies of each Preliminary Prospectus, the
Prospectus or any Integrated Prospectus or any amendment or supplement thereto
as the Representatives may reasonably request; without limiting the application
of clause (iii) of this sentence, the Company, not later than (A) 6:00 p.m., New
York city time, on the date of determination of the public offering price, if
such determination occurred at or prior to 10:00 AM, New York City time, on such
date or (B) 12:00 Noon, New York City time, on the business day following the
date of determination of the public offering price, if such determination
occurred after 10:00 AM, New York city time, on such date, will deliver to the
Representatives, without charge, as many copies of the Prospectus or any
Integrated Prospectus and any amendment or supplement thereto as the
Representatives may reasonably request for purposes of confirming orders that
are expected to settle on the Firm Closing Date.
(f) The Company, as soon as practicable, will make generally
available to its securityholders and to the Representatives a consolidated
earning statement of the Company and its subsidiaries that satisfies the
provisions of Section 11(a) of the Act and Rule 158 thereunder.
(g) The Company will apply the net proceeds from the sale of the
Securities as set forth under "Use of Proceeds" in the Prospectus and any
Integrated Prospectus.
(h) The Company will not, directly or indirectly, without the prior
written consent of Prudential Securities Incorporated, on behalf of the
Underwriters, offer, sell, offer to sell, contract to sell, pledge, grant any
option to purchase or otherwise sell or dispose (or announce any offer, sale,
offer of sale, contract of sale, pledge, grant of any option to purchase or
other sale or disposition) of (i) any securities of the Company that are
substantially similar to the Securities or the Underlying Securities, (ii) any
securities convertible into, or exchangeable or exercisable for, the Securities
or Underlying Securities to any unaffiliated third party for a period commencing
on the date hereof and terminating 90 days after the date of the Prospectus or
any Integrated Prospectus, except pursuant to this agreement; provided, however,
that the Company may issue shares of Common Stock in exchange for Units existing
at the date of this Agreement.
18
(i) If required as set forth in Schedule 1 hereto, the Company will
obtain the agreements described in Section 6(g) hereof prior to the Firm Closing
Date.
(j) The Company will not, directly or indirectly, (i) take any action
designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Securities or (ii) (A) sell, bid for, purchase, or pay anyone any compensation
for soliciting purchases of the Securities or (B) pay or agree to pay to any
person any compensation for soliciting another to purchase any other securities
of the Company.
(k) If at any time during the 25-day period after the Registration
Statement becomes effective or the period prior to the Option Closing Date, any
rumor, publication or event relating to or affecting the Company shall occur as
a result of which in your opinion the market price of the Common Stock has been
or is likely to be materially affected (regardless of whether such rumor,
publication or event necessitates a supplement to or amendment of the Prospectus
or any Integrated Prospectus), the Company will, after written notice from you
advising the Company to the effect set forth above, forthwith prepare, consult
with you concerning the substance of, and disseminate a press release or other
public statement, reasonably satisfactory to you, responding to or commenting on
such rumor, publication or event.
(l) If required as set forth in Schedule 1 hereto, the Company will
cause the Securities and any Underlying Securities to be duly authorized for
listing by the New York Stock Exchange.
(m) The Company will continue to use its best efforts to meet the
requirements to qualify as a REIT under the Code.
5. EXPENSES. The company will pay all costs and expenses incident to the
performance of its obligations under this agreement, whether or not the
transactions contemplated herein are consummated or this agreement is terminated
pursuant to section 10 hereof, including all costs and expenses incident to (i)
the printing or other production of documents with respect to the transactions,
including any costs of printing the registration statement originally filed with
respect to the securities and any amendment thereto, any preliminary prospectus,
the prospectus and any integrated prospectus and any amendment or supplement
thereto, this agreement, the securities documents and any blue sky memoranda,
(ii) all arrangements relating to the delivery to the underwriters of copies of
the foregoing documents, (iii) the fees and disbursements of counsel,
accountants and any other experts or advisors retained by the company, (iv)
preparation, issuance and delivery to the underwriters of any certificates
evidencing the securities, including the fees and expenses of the transfer
agent, exchange agent or registrar, (v) the qualification of
19
the securities and any underlying securities under state securities and blue sky
laws and real estate syndication laws, including filing fees and fees and
disbursements of counsel for the underwriters relating thereto and relating to
the preparation of a blue sky memoranda, (vi) the filing fees of the commission
relating to the securities, (vii) any listing of the securities and underlying
securities on the new york stock exchange, (viii) any meetings with prospective
investors in the securities arranged by the company (other than as shall have
been specifically approved by the representatives to be paid for by the
underwriters) and (ix) advertising relating to the offering of the securities
requested by the company (other than as shall have been specifically approved by
the representatives to be paid for by the underwriters). If the sale of the
securities provided for herein is not consummated because any condition to the
obligations of the underwriters set forth in section 6 of this agreement is not
satisfied, because this agreement is terminated pursuant to section 10 of this
agreement or because of any failure, refusal or inability on the part of the
company to perform all obligations and satisfy all conditions on its part to be
performed or satisfied hereunder other than by reason of a default by and of the
underwriters, the company will reimburse the underwriters severally upon demand
for all out-of-pocket expenses (including counsel fees and disbursements) that
shall have been incurred by them in connection with the proposed purchase and
sale of the securities. The company shall not in any event be liable to any of
the underwriters for the loss of anticipated profits from the transactions
covered by this agreement.
6. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The obligations of the
underwriters to purchase and pay for the firm securities shall be subject, in
the representatives' sole discretion, to the accuracy of the representations and
warranties of the company contained herein as of the date of this agreement as
specified in schedule 1 hereto and as of the firm closing date, as if made on
and as of the firm closing date, to the accuracy of the statements of the
company's officers made pursuant to the provisions hereof, to the performance by
the company of its covenants and agreements hereunder and to the following
additional conditions:
(a) The Prospectus, any Integrated Prospectus or the Prospectus
Supplement, as the case may be, and any amendment or supplement thereto shall
have been filed with the Commission in the manner and within the time period
required by Rules 434 and 424(b) under the Act; no stop order suspending the
effectiveness of the Registration Statement or any post-effective amendment
thereto and no order directed at any document incorporated by reference in the
Registration Statement, the Prospectus or any Integrated Prospectus or any
amendment or supplement thereto shall have been issued, and no proceedings for
that purpose shall have been instituted or threatened or, to the knowledge of
the Company or the Representatives, shall be contemplated by the Commission; and
the Company shall have complied with any request of the Commission for
additional information (to be included in the Registration Statement, the
Prospectus or any Integrated Prospectus or otherwise).
20
(b) The Representatives shall have received an opinion, dated the
Firm Closing Date, from Pryor, Cashman, Xxxxxxx & Xxxxx, counsel for the
Company, to the effect that:
(i) the Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the State of
Maryland and is duly qualified to transact business and is in good standing
under the laws of all other jurisdictions where the ownership or leasing of
its properties or the conduct of its business requires such qualification,
except where the failure to be so qualified does not amount to a material
liability or disability to the Company and the Subsidiaries, taken as a
whole. Each of the Subsidiaries has been duly organized and is validly
existing as a general or limited partnership or corporation in good
standing under the laws of the jurisdiction of its organization, and is
duly qualified to transact business and is in good standing under the laws
of all other jurisdictions where the ownership or leasing of its properties
or the conduct of its business requires such qualification, except where
the failure to be so qualified does not amount to a material liability or
disability to the Company and the Subsidiaries, taken as a whole;
(ii) the Company and each of the Subsidiaries have full
power, corporate or other, to own or lease their respective properties and
conduct their respective businesses as described in the Registration
Statement, the Prospectus and any Integrated Prospectus and each of the
Company and the Subsidiaries have full power, corporate or other, to enter
into this Agreement and the Securities Documents and to carry out all the
terms and provisions hereof and thereof to be carried out by it;
(iii) the issued shares of capital stock of each of the
Subsidiaries that is a corporation are duly authorized, validly issued,
fully paid and nonassessable, and all of the partnership interests in each
Subsidiary that is a partnership are validly issued and fully paid. Except
as described in the Registration Statement, the Prospectus and any
Integrated Prospectus, all of such shares and interests owned by the
Company or another Subsidiary are owned beneficially by the Company or such
Subsidiary free and clear of any security interest, mortgage, pledge, lien,
encumbrance, equity or claim;
(iv) the Company has an authorized, issued and outstanding
capitalization as set forth in the Prospectus and any Integrated Prospectus
(or, if the Prospectus and any required Integrated Prospectus are not in
existence, the most recent Preliminary Prospectus). All of the capital
stock of the Company has been duly authorized and the capital stock of the
Company outstanding is validly issued, fully paid and nonassessable;
21
(v) the Securities have been duly authorized, and when
executed and delivered against payment therefor in accordance with the
Underwriting Agreement, will be validly issued, fully paid and
non-assessable, and the execution and delivery of the Securities (other
than any Contract Securities) have been duly authorized by all necessary
corporate action, and the Securities have been duly executed and delivered
by the Company, and assuming due authorization, execution and delivery of
the Securities by parties other than the Company, are, and any Contract
Securities, when executed and delivered in the manner provided in the
Securities Documents, will be, the legal, valid, binding and enforceable
obligations of the Company, subject to the effect of bankruptcy,
insolvency, moratorium, fraudulent conveyance, reorganization and similar
laws relating to creditors' rights generally and to the application of
equitable principles in any proceeding, whether at law or in equity;
(vi) the Underlying Securities have been duly authorized
and reserved, and, when such securities are issued and delivered as
contemplated by the terms of the applicable Securities Document such
securities will be validly issued, fully paid and non-assessable;
(vii) the execution and delivery of the Securities
Documents has been duly authorized by all necessary corporate action of the
Company, and have been duly executed and delivered by the Company, and
assuming due authorization, execution and delivery of the Securities
Documents by parties other than the Company as specified in the applicable
Securities Documents, such agreements are valid and binding instruments of
the Company enforceable against the Company in accordance with their
respective terms, subject to the effect of bankruptcy, insolvency,
moratorium, fraudulent conveyance, reorganization and similar laws relating
to creditors' rights generally and to the application of equitable
principles in any proceeding, whether at law or in equity;
(viii) no holders of outstanding shares of capital stock of
the Company are entitled as such to any preemptive or other rights to
subscribe for any of the Securities or Underlying Securities, and no holder
of securities of the Company or any Subsidiary has any right which has not
been waived to require the Company to register the offer or sale of any
securities owned by such holder under the Act in the public offering
contemplated by this Agreement;
(ix) the statements set forth under the heading
"Description of Common Stock", "Description of Preferred Stock" and
"Description of Warrants" in the Prospectus and any Integrated Prospectus
insofar as such statements purport to summarize certain provisions of the
Securities of the Company, provide a fair summary of such provi-
22
sions; and the statements set forth under the headings "Restrictions on
Ownership of Offered Securities" and "Certain United States Federal Income
Tax Considerations to the Company of its REIT Election" in the Prospectus
and "Risk Factors", "Certain United States Federal Income Tax
Considerations to Holders of Common Stock" and "Underwriting", in the
Prospectus Supplement, insofar as such statements constitute a summary of
the legal matters, documents or proceedings referred to therein, provide a
fair summary of such legal matters, documents and proceedings;
(x) the execution and delivery of this Agreement has been
duly authorized by all necessary corporate action of the Company and this
Agreement has been duly executed and delivered by the Company, and are the
valid and binding agreements of the Company, enforceable against the
Company in accordance with their respective terms, subject to the effect of
bankruptcy, insolvency, moratorium, fraudulent conveyance, reorganization
and similar laws relating to creditors' rights generally and to the
application of equitable principles in any proceeding, whether at law or in
equity and except as rights to indemnity and contribution hereunder may be
limited by federal or state securities laws or principles of public policy;
(xi) (A) no legal or governmental proceedings are pending
to which the Company, any of the Subsidiaries, or any of their respective
directors or officers in their capacity as such, is a party or to which the
Properties or any other property of the Company or any of the Subsidiaries
is subject that are required to be described in the Registration Statement
or the Prospectus and are not described therein, and, to the best knowledge
of such counsel, no such proceedings have been threatened against the
Company or any of the Subsidiaries or with respect to the Properties or any
of their respective other properties and (B) no contract or other document
is required to be described in the Registration Statement, the Prospectus
or any Integrated Prospectus or to be filed as an exhibit to the
Registration Statement that is not described therein or filed as required;
(xii) the issuance, offering and sale of the Securities to
the Underwriters by the Company pursuant to this Agreement, the compliance
by the Company with the other provisions of this Agreement, any Securities
Documents and the consummation of the other transactions herein
contemplated do not (A) require the consent, approval, authorization,
registration or qualification of or with any governmental authority, except
such as have been obtained and such as may be required under state
securities or blue sky laws (as to which such counsel need not opine) or
(B) conflict with or result in a breach or violation of any of the terms
and provisions of, or constitute a default under, or result in the creation
or imposition of any lien, charge or encumbrance upon any of the Properties
or any other properties or assets of the Company or any of the
23
Subsidiaries pursuant to any indenture, mortgage, deed of trust, lease or
other agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries
or the Properties or any other of their respective properties are bound, or
the Articles of Incorporation, By-laws or other organizational documents,
as the case may be, of the Company or any of the Subsidiaries, or any
statute or any judgment, decree, order, rule or regulation of any court or
other governmental authority or (to the best knowledge of such counsel) any
arbitrator applicable to the Company or any of the Subsidiaries or any of
the Properties;
(xiii) none of the Subsidiaries is currently contractually
prohibited, directly or indirectly, from paying any dividends to the
Company, from making any other distribution on such subsidiary's capital
stock or other equity interests, from repaying to the Company any loans or
advances to such Subsidiary from the Company or from transferring any of
such Subsidiary's property or assets to the Company or any of the other
Subsidiaries, except as described in the Prospectus and any Integrated
Prospectus;
(xiv) to the best knowledge of such counsel, the Company
and the Subsidiaries possess all certificates, authorizations, licenses and
permits issued by the appropriate federal, state, municipal or foreign
regulatory authorities necessary to conduct their respective businesses
except for such certificates, authorizations, licenses and permits the
failure of which to possess would not be expected to result in a material
adverse change in the condition (financial or otherwise), business,
prospects, net worth or results of operations of the Company and the
Subsidiaries, taken as a whole, and neither the Company nor any of the
Subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization, license
or permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a material adverse
change in the condition (financial or otherwise), business, prospects, net
worth or results of operations of the Company and the Subsidiaries, taken
as a whole, except as described in the Prospectus and any Integrated
Prospectus;
(xv) the Company is not subject to registration as an
investment company under the Investment Company Act of 1940, as amended,
and the transactions contemplated by this Agreement will not cause the
Company to become an investment company subject to registration under such
Act;
(xvi) neither the Company nor any of the Subsidiaries is in
violation of any term or provision of its articles of incorporation,
bylaws, partnership agreements or other organizational documents, as the
case may be; no default exists, and no event has occurred which, with
notice or lapse of time or both, would constitute a default, and the
24
issuance, offering and sale of the Securities to the Underwriters by the
Company pursuant to this Agreement and the Securities Documents the
compliance by the Company with the other provisions of this Agreement, the
Securities and the Securities Documents and the consummation of the other
transactions herein and therein contemplated will not result in any
default, in the due performance and observance of any term, covenant or
condition of any indenture, mortgage or deed of trust, or any material
lease or other agreement or instrument known to such counsel after due
inquiry to which the Company or any of the Subsidiaries is a party or by
which the Company, any of the Subsidiaries, any of the Properties or any of
their respective other properties is bound or may be affected except such
as would not result in any material adverse effect in the condition
(financial or otherwise), business prospects, net worth or results of
operations of the Company and its subsidiaries, taken as a whole;
(xvii) as set forth in Schedule 1 hereto, the Securities and
any Underlying Securities have been approved for listing on the New York
Stock Exchange, subject to official notice of issuance;
(xviii) the Registration Statement is effective under the
Act; the Prospectus or any Term Sheet that constitutes a part thereof and
any Integrated Prospectus or the Prospectus Supplement, as the case may be,
has been filed with the Commission in the manner and within the time period
required by Rules 434 and 424(b); and no stop order suspending the
effectiveness of the Registration Statement or any post-effective amendment
thereto and no order directed at any document incorporated by reference in
the Registration Statement, the Prospectus, any Integrated Prospectus or
any amendment or supplement thereto has been issued, and no proceedings for
that purpose have been instituted or, to the best knowledge of such
counsel, threatened by the Commission; and
(xix) the Registration Statement originally filed with
respect to the Securities and each amendment thereto, the Prospectus and
any Integrated Prospectus (in each case, including the documents
incorporated by reference therein but not including the financial
statements and other financial and statistical data contained therein, as
to which such counsel need express no opinion) comply as to form in all
material respects with the applicable requirements of the Act and the
Exchange Act and the respective rules and regulations of the Commission
thereunder.
Such counsel shall also state that they have no reason to believe that
the Registration Statement, as of its effective date, 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 the Prospectus or any Integrated Prospectus, as of the
25
date of the Prospectus Supplement or any required Integrated Prospectus and the
date of such opinion, included or includes any untrue statement of a material
fact or omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Company and public officials and, as to matters involving the
application of laws of any jurisdiction other than the States of New York, New
Jersey and Delaware or the United States, to the extent satisfactory in form and
scope to counsel for the Underwriters, upon the opinion of local counsel. The
foregoing opinion shall also state that the Underwriters are justified in
relying upon such opinion of local counsel, and copies of such opinion shall be
delivered to the Representatives and counsel for the Underwriters.
References to the Registration Statement, the Prospectus and any
Integrated Prospectus in this paragraph (b) shall include any amendment or
supplement thereto at the date of such opinion.
(c) The Representatives shall have received an opinion, dated
the Firm Closing Date, of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel
for the Underwriters, with respect to the issuance and sale of the
Securities, the Registration Statement, the Prospectus, and any Integrated
Prospectus and such other related matters as the Representatives may
reasonably require, and the Company shall have furnished to such counsel such
documents as they may reasonably request for the purpose of enabling them to
pass upon such matters.
(d) The Representatives shall have received from Price
Waterhouse LLP (with respect to the Company) and Xxxxxxxxxx Xxxxxx Xxxxxxxxx
& Co., LLC (with respect to the properties described in the Current Reports
on Form 8-K dated October 8 and October 29, 1996 (the "Form 8-K") a letter
or letters dated, respectively, the date of this Agreement as specified in
Schedule 1 hereto and the Firm Closing Date, in form and substance
satisfactory to the Representatives, to the effect that:
(i) they are independent accountants with respect to the
Company and its subsidiaries within the meaning of the Act, the Exchange
Act and the applicable published rules and regulations thereunder;
(ii) in their opinion, the financial statements audited by
them and incorporated by reference in the Registration Statement, the
Prospectus and any Integrated Prospectus comply as to form in all material
respects with the applicable accounting re-
26
quirements of the Act, the Exchange Act and the related published rules and
regulations thereunder;
(iii) a reading of the minute books of the shareholders, the
board of directors and any committees thereof of the Company and each of
its consolidated subsidiaries, and inquiries of certain officials of the
Company and its consolidated subsidiaries who have responsibility for
financial and accounting matters, nothing came to their attention that
caused them to believe that:
(A) (i) any unaudited consolidated condensed financial
statements of the Company and its consolidated subsidiaries
included in the Registration Statement, the Prospectus and any
Integrated Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the Act,
the Exchange Act and the related published rules and regulations
thereunder, or (ii) any material modification should be made to
the unaudited consolidated condensed financial statements for
them to be in conformity with generally accepted accounting
principles;
(B) at a specific date not more than five business days
prior to the date of such letter, there were any changes in the
common stock or increase in mortgages and loans payable of the
Company and its consolidated subsidiaries, in each case compared
with amounts shown on the most recent consolidated balance sheet
included in the Registration Statement, the Prospectus and any
Integrated Prospectus, except for such changes set forth in such
letter;
(iv) they have carried out certain specified procedures,
not constituting an audit, with respect to certain amounts, percentages and
financial information that are derived from the general accounting records
of the Company and its consolidated subsidiaries and are included in the
Registration Statement, the Prospectus and any Integrated Prospectus and in
Exhibit 12 to the Registration Statement, including the information
included or incorporated in the Company's most recent Annual Report on Form
10-K under the captions "Business" (Item 1), "Selected Financial Data"
(Item 6) and "Management's Discussion and Analysis of Financial Condition
and Results of Operations" (Item 7) and the information included or
incorporated in the Company's Quarterly Reports on Form 10-Q under the
caption "Management's Discussion and Analysis of Financial Condition and
Results of Operations,"and have compared such amounts, percentages and
financial information with such records and with information derived from
such
27
records and have found them to be in agreement, excluding any questions of
legal interpretation; and
(v) on the basis of a reading of any unaudited pro forma
consolidated condensed financial statements included in the Registration
Statement, the Prospectus and any Integrated Prospectus, carrying out
certain specified procedures that would not necessarily reveal matters of
significance with respect to the comments set forth in this paragraph (v),
inquiries of certain officials of the Company, its consolidated
subsidiaries and any acquired company who have responsibility for financial
and accounting matters and proving the arithmetic accuracy of the
application of the pro forma adjustments to the historical amounts in the
unaudited pro forma consolidated condensed financial statements, nothing
came to their attention that caused them to believe that the unaudited pro
forma consolidated condensed financial statements do not comply in form in
all material respects with the applicable accounting requirements of
Rule 11-02 of Regulation S-X or that the pro forma adjustments have not
been properly applied to the historical amounts in the compilation of such
statements.
In the event that the letters referred to above set forth any such
changes, decreases or increases, it shall be a further condition to the
obligations of the Underwriters that (A) such letters shall be accompanied
by a written explanation of the Company as to the significance thereof,
unless the Representatives deem such explanation unnecessary, and (B) such
changes, decreases or increases do not, in the sole judgment of the
Representatives, make it impractical or inadvisable to proceed with the
purchase and delivery of the Securities as contemplated by the Registration
Statement.
References to the Registration Statement, the Prospectus and any
Integrated Prospectus in this paragraph (d) with respect to either letter
referred to above shall include any amendment or supplement thereto at the
date of such letter.
(e) The Representatives shall have received a certificate, dated
the Firm Closing Date, of the chief executive officer and the chief financial or
accounting officer of the Company to the effect that:
(i) the representations and warranties of the Company in
this Agreement are true and correct as if made on and as of the Firm
Closing Date; the Registration Statement, as amended as of the Firm Closing
Date, does not include any untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein not
misleading, and the Prospectus or any Integrated Prospectus, as amended or
supplemented as of the Firm Closing Date, does not include any untrue
statement of a
28
material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading; and the Company has performed all covenants and
agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to the Firm Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereto and no order
directed at any document incorporated by reference in the Registration
Statement, the Prospectus or any Integrated Prospectus or any amendment or
supplement thereto has been issued, and no proceedings for that purpose
have been instituted or threatened or, to the best of the Company's
knowledge, are contemplated by the Commission; and
(iii) subsequent to the respective dates as of which
information is given in the Registration Statement, the Prospectus and any
Integrated Prospectus, neither the Company nor any of its subsidiaries has
sustained any material loss or interference with their respective
businesses or properties from fire, flood, hurricane, accident or other
calamity, whether or not covered by insurance, or from any labor dispute or
any legal or governmental proceeding, and there has not been any material
adverse change, or any development involving a prospective material adverse
change, in the condition (financial or otherwise), management, business
prospects, net worth or results of operations of the Company or any of its
subsidiaries, except in each case as described in or contemplated by the
Prospectus or any Integrated Prospectus (exclusive of any amendment or
supplement thereto).
(f) On or before the Firm Closing Date, the Representatives and
counsel for the Underwriters shall have received such further certificates,
documents or other information as they may have reasonably requested from the
Company.
(g) The Representatives shall have received from each person who
is a director or executive officer of the Company an agreement to the effect
that such person will not, directly or indirectly, without the prior written
consent of Prudential Securities Incorporated, on behalf of the Underwriters,
offer, sell, offer to sell, contract to sell, pledge, grant any option to
purchase or otherwise sell or dispose (or announce any offer, sale, offer of
sale, contract of sale, pledge, grant of an option to purchase or other sale or
disposition) of any shares of Securities or any securities convertible into, or
exchangeable or exercisable for, the Securities for a period of 90 days after
the date of this Agreement.
29
(h) If applicable, prior to the commencement of the offering of
the Securities, the Securities and any Underlying Securities shall have been
approved for listing on the New York Stock Exchange, subject to official
notice of issuance.
All opinions, certificates, letters and documents delivered pursuant
to this Agreement will comply with the provisions hereof only if they are
reasonably satisfactory in all material respects to the Representatives and
counsel for the Underwriters. The Company shall furnish to the Representatives
such conformed copies of such opinions, certificates, letters and documents in
such quantities as the Representatives and counsel for the Underwriters shall
reasonably request.
The respective obligations of the several Underwriters to purchase and
pay for any Option Securities shall be subject, in their discretion, to each of
the foregoing conditions to purchase the Firm Securities, except that all
references to the Firm Securities and the Firm Closing Date shall be deemed to
refer to such Option Securities and the related Option Closing Date,
respectively.
7. INDEMNIFICATION AND CONTRIBUTION. (a)The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter or such controlling
person may become subject under the Act, the Exchange Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon:
(i) any untrue statement or alleged untrue statement made
by the Company in Section 2 of this Agreement,
(ii) any untrue statement or alleged untrue statement of
any material fact contained in (A) the Registration Statement or any
amendment thereto or any Preliminary Prospectus, the Prospectus or any
Integrated Prospectus or any amendment or supplement thereto or (B) any
application or other document, or any amendment or supplement thereto,
executed by the Company or based upon written information furnished by or
on behalf of the Company filed in any jurisdiction in order to qualify the
Securities under the securities or blue sky laws thereof or filed with the
Commission or any securities association or securities exchange (each an
"Application"),
(iii) the omission or alleged omission to state in the
Registration Statement or any amendment thereto, any Preliminary
Prospectus, the Prospectus or any Integrated Prospectus or any amendment or
supplement thereto, or any Application a mate-
30
rial fact required to be stated therein or necessary to make the statements
therein not misleading or
(iv) any untrue statement or alleged untrue statement of
any material fact contained in any audio or visual materials used in
connection with the marketing of the Securities, including, without
limitation, slides, videos, films and tape recordings,
and will reimburse, as incurred, each Underwriter and each such controlling
person for any legal or other expenses reasonably incurred by such Underwriter
or such controlling person in connection with investigating, defending against
or appearing as a third-party witness in connection with any such loss, claim,
damage, liability or action; PROVIDED, HOWEVER, that the Company will not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in such registration statement or
any amendment thereto, any Preliminary Prospectus, the Prospectus or any
Integrated Prospectus or any amendment or supplement thereto, or any
Application in reliance upon and in conformity with written information
furnished to the Company by such Underwriter through the Representatives
specifically for use therein. This indemnity agreement will be in addition to
any liability which the Company may otherwise have. The Company will not,
without the prior written consent of the Underwriter or Underwriters purchasing,
in the aggregate, more than 50% of the Firm Securities, settle or compromise or
consent to the entry of any judgment in any pending or threatened claim, action,
suit or proceeding in respect of which indemnification may be sought hereunder
(whether or not any such Underwriter or any person who controls any such
Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act is a party to such claim, action, suit or proceeding), unless such
settlement, compromise or consent includes an unconditional release of all of
the Underwriters and such controlling persons from all liability arising out of
such claim, action, suit or proceeding.
(b) Each Underwriter, severally and not jointly, will indemnify
and hold harmless the Company, each of its directors, each of its officers who
signed the Registration Statement, as amended at the date of this Agreement as
specified in Schedule 1 hereto, and each person, if any, who controls the
Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act against any losses, claims, damages or liabilities to which the
Company or any such director, officer or controlling person may become subject
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon (i)
any untrue statement or alleged untrue statement of any material fact contained
in the Registration Statement, as amended at the date of this Agreement as
specified in Schedule 1 hereto, any Preliminary Prospectus, the Prospectus or
any Integrated Prospectus or any amendment or supplement thereto, or any
Application or (ii) the omission or the alleged
31
omission to state therein a material fact required to be stated in the
Registration Statement, as amended at the date of this Agreement as specified in
Schedule 1 hereto, any Preliminary Prospectus, the Prospectus or any Integrated
Prospectus or any amendment or supplement thereto, or any Application or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such Underwriter
through the Representatives specifically for use therein; and, subject to the
limitation set forth immediately preceding this clause, will reimburse, as
incurred, any legal or other expenses reasonably incurred by the Company or any
such director, officer or controlling person in connection with investigating or
defending any such loss, claim, damage, liability or any action in respect
thereof. This indemnity agreement will be in addition to any liability which
such Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section 7 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 7, notify the indemnifying party of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party otherwise than under
this Section 7. In case any such action is brought against any indemnified
party, and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent
that it may wish, jointly with any other indemnifying party similarly notified,
to assume the defense thereof, with counsel satisfactory to such indemnified
party; PROVIDED, HOWEVER, that if the defendants in any such action include both
the indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be one or more legal defenses available
to it and/or other indemnified parties which are different from or additional to
those available to the indemnifying party, the indemnifying party shall not have
the right to direct the defense of such action on behalf of such indemnified
party or parties and such indemnified party or parties shall have the right to
select separate counsel to defend such action on behalf of such indemnified
party or parties. After notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof and approval by such
indemnified party of counsel appointed to defend such action, the indemnifying
party will not be liable to such indemnified party under this Section 7 for any
legal or other expenses, other than reasonable costs of investigation,
subsequently incurred by such indemnified party in connection with the defense
thereof, unless (i) the indemnified party shall have employed separate counsel
in accordance with the proviso to the next preceding sentence (it being
understood, however, that in connection with such action the indemnifying party
shall not be liable for the expenses of more than one separate counsel (in
addition to local counsel) in any one action or separate but substantially
similar actions in the same jurisdiction arising out of the same general
allegations or circumstances, designated by the Representatives in the case of
paragraph
32
(a) of this Section 7, representing the indemnified parties under such paragraph
(a) who are parties to such action or actions) or (ii) the indemnifying party
does not promptly retain counsel satisfactory to the indemnified party or (iii)
the indemnifying party has authorized the employment of counsel for the
indemnified party at the expense of the indemnifying party. After such notice
from the indemnifying party to such indemnified party, the indemnifying party
will not be liable for the costs and expenses of any settlement of such action
effected by such indemnified party without the consent of the indemnifying
party.
(d) In circumstances in which the indemnity agreement provided
for in the preceding paragraphs of this Section 7 is unavailable or
insufficient, for any reason, to hold harmless an indemnified party in respect
of any losses, claims, damages or liabilities (or actions in respect thereof),
each indemnifying party, in order to provide for just and equitable
contribution, shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages or liabilities (or actions in
respect thereof) in such proportion as is appropriate to reflect (i) the
relative benefits received by the indemnifying party or parties on the one hand
and the indemnified party on the other from the offering of the Securities or
(ii) if the allocation provided by the foregoing clause (i) is not permitted by
applicable law, not only such relative benefits but also the relative fault of
the indemnifying party or parties on the one hand and the indemnified party on
the other in connection with the statements or omissions or alleged statements
or omissions that resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriters on the other shall be deemed to be in the same proportion
as the total proceeds from the offering (before deducting expenses) received by
the Company bear to the total underwriting discounts and commissions received by
the Underwriters. The relative fault of the parties shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Underwriters, the parties'
relative intents, knowledge, access to information and opportunity to correct or
prevent such statement or omission, and any other equitable considerations
appropriate in the circumstances. The Company and the Underwriters agree that
it would not be equitable if the amount of such contribution were determined by
pro rata or per capita allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation that does not take
into account the equitable considerations referred to above in this paragraph
(d). Notwithstanding any other provision of this paragraph (d), no Underwriter
shall be obligated to make contributions hereunder that in the aggregate exceed
the total public offering price of the Securities purchased by such Underwriter
under this Agreement, less the aggregate amount of any damages that such
Underwriter has otherwise been required to pay in respect of the same or any
substantially similar claim, and no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution
33
from any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute hereunder are several in proportion to
their respective underwriting obligations and not joint, and contributions among
Underwriters shall be governed by the provisions of the Prudential Securities
Incorporated Master Agreement Among Underwriters. For purposes of this
paragraph (d), each person, if any, who controls an Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act shall have
the same rights to contribution as such Underwriter, and each director of the
Company, each officer of the Company who signed the Registration Statement as
amended at the date of this Agreement as specified in Schedule 1 hereto and each
person, if any, who controls the Company within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act, shall have the same rights to
contribution as the Company.
8. DEFAULT OF UNDERWRITERS. If one or more Underwriters default in
their obligations to purchase Firm Securities or Option Securities hereunder and
the aggregate number of such securities that such defaulting Underwriter or
Underwriters agreed but failed to purchase is ten percent or less of the
aggregate number of Firm Securities or Option Securities to be purchased by all
of the Underwriters at such time hereunder, the other Underwriters may make
arrangements satisfactory to the Representatives for the purchase of such
Securities by other persons (who may include one or more of the non-defaulting
Underwriters, including the Representatives), but if no such arrangements are
made by the Firm Closing Date or the related Option Closing Date, as the case
may be, the other Underwriters shall be obligated severally in proportion to
their respective commitments hereunder to purchase the Firm Securities or Option
Securities that such defaulting Underwriter or Underwriters agreed but failed to
purchase. If one or more Underwriters so default with respect to an aggregate
number of securities that is more than ten percent of the aggregate number of
Firm Securities or Option Securities, as the case may be, to be purchased by all
of the Underwriters at such time hereunder, and if arrangements satisfactory to
the Representatives are not made within 36 hours after such default for the
purchase by other persons (who may include one or more of the non-defaulting
Underwriters, including the Representatives) of the Securities with respect to
which such default occurs, this Agreement will terminate without liability on
the part of any non-defaulting Underwriter or the Company other than as provided
in Section 9 hereof. In the event of any default by one or more Underwriters as
described in this Section 8, the Representatives shall have the right to
postpone the Firm Closing Date or the Option Closing Date, as the case may be,
established as provided in Section 3 of this Agreement for not more than seven
business days in order that any necessary changes may be made in the
arrangements or documents for the purchase and delivery of the Firm Securities
or Option Securities, as the case may be. As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 8. Nothing herein shall relieve any defaulting Underwriter from
liability for its default.
34
9. SURVIVAL. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the company, its
officers and the several underwriters set forth in this agreement or made by or
on behalf of them, respectively, pursuant to this agreement shall remain in full
force and effect, regardless of (i) any investigation made by or on behalf of
the company, any of its officers or directors, any underwriter or any
controlling person referred to in section 7 hereof and (ii) delivery of and
payment for the securities. The respective agreements, covenants, indemnities
and other statements set forth in sections 5 and 7 hereof shall remain in full
force and effect, regardless of any termination or cancellation of this
agreement.
10. TERMINATION. This Agreement may be terminated with respect to
the Firm Securities or any Option Securities in the sole discretion of the
Representatives by notice to the Company given prior to the Firm Closing Date or
the related Option Closing Date, respectively, in the event that the Company
shall have failed, refused or been unable to perform all obligations and satisfy
all conditions on its part to be performed or satisfied hereunder at or prior
thereto or, if at or prior to the Firm Closing Date or such Option Closing Date,
respectively,
(i) the Company or any of the Subsidiaries shall have, in
the sole judgment of the Representatives, sustained any material loss or
interference with their respective businesses or properties from fire,
flood, hurricane, accident or other calamity, whether or not covered by
insurance, or from any labor dispute or any legal or governmental
proceeding or there shall have been any material adverse change, or any
development involving a prospective material adverse change (including
without limitation a change in management or control of the Company, which
includes the termination of the employment of Xxxx X. Xxxx or Xxxxxx X.
Xxxx), in the condition (financial or otherwise), business prospects, net
worth or results of operations of the Company and the Subsidiaries, except
in each case as described in or contemplated by the Prospectus (exclusive
of any amendment or supplement thereto);
(ii) trading in the Common Stock shall have been suspended
by the Commission or the New York Stock Exchange or trading in securities
generally on the New York Stock Exchange shall have been suspended or
minimum or maximum prices shall have been established on such exchange;
(iii) there shall have been any downgrading in the rating
of any debt securities or preferred stock of the Company by any "nationally
recognized statistical rating organization" (as defined for purposes of
Rule 436(g) under the Act), or any public announcement that any such
organization has under surveillance or review its rating of any debt
securities or preferred stock of the Company (other than an announcement
with
35
positive implications of a possible upgrading, and no implication of a
possible downgrading, of such rating);
(iv) a banking moratorium shall have been declared by New
York or United States authorities; or
(v) there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power, (B) an
outbreak or escalation of any other insurrection or armed conflict
involving the United States or (C) any other calamity or crisis or material
adverse change in general economic, political or financial conditions
having an effect on the U.S. financial markets that, in the sole judgment
of the Representatives, makes it impractical or inadvisable to proceed with
the public offering or the delivery of the Securities as contemplated by
the Registration Statement, as amended at the date of this Agreement as
specified in Schedule 1 hereto
(b) Termination of this Agreement pursuant to this Section 10
shall be without liability of any party to any other party except as provided in
Section 9 hereof.
11. INFORMATION SUPPLIED BY UNDERWRITERS. The statements set forth
in the last paragraph on the front cover page of the Prospectus Supplement and
under the heading "Underwriting" in the Prospectus Supplement (to the extent
such statements relate to the Underwriters) constitute the only information
furnished by any underwriter through the representatives to the Company for the
purposes of Sections 2(b) and 7(b) hereof. The Underwriters confirm that such
statements (to such extent) are correct.
12. NOTICES. All communications hereunder shall be in writing and,
if sent to any of the Underwriters, shall be delivered or sent by mail, telex or
facsimile transmission and confirmed in writing to Prudential Securities
Incorporated, Xxx Xxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Equity
Transactions Group; and if sent to the Company, shall be delivered or sent by
mail, telex or facsimile transmission and confirmed in writing to the Company at
00 Xxxxxxxx Xxxxx, Xxxxxxxx, Xxx Xxxxxx, 00000, Attention: Xxxxxx X. Xxxx.
13. SUCCESSORS. This Agreement shall inure to the benefit of and
shall be binding upon the several Underwriters, the Company and their respective
successors and legal representatives, and nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any other person any legal
or equitable right, remedy or claim under or in respect of this Agreement, or
any provisions herein contained, this agreement and all conditions and
provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person except that (i)
the indemnities of the Company
36
contained in Section 7 of this Agreement shall also be for the benefit of any
person or persons who control any Underwriter within the meaning of Section 15
of the Act or Section 20 of the Exchange Act and (ii) the indemnities of the
Underwriters contained in Section 7 of this Agreement shall also be for the
benefit of the directors of the Company, the officers of the Company who have
signed the Registration Statement as amended at the date of this Agreement as
specified in Schedule 1 hereto and any person or persons who control the Company
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act.
No purchaser of Securities from any Underwriter shall be deemed a successor
because of such purchase.
14. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS
AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN, SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAWS.
15. COUNTERPARTS. This agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this letter shall constitute an agreement binding the Company and each
of the several Underwriters.
Very truly yours,
CALI REALTY CORPORATION
By:
------------------------------
Name:
Xxxxxx X. Xxxx
Title:
President and CEO
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
37
PRUDENTIAL SECURITIES INCORPORATED
By:
--------------------------------
Name: Xxxx-Xxxxxx Canfin
Title: Director
38
SCHEDULE 1
DESCRIPTION OF SECURITIES; TERMS OF OFFERING
1. REGISTRATION STATEMENT: File No. 333-9081
2. DATE OF UNDERWRITING AGREEMENT: November 18, 1996
3. REPRESENTATIVES: Prudential Securities Incorporated, Xxxx Xxxxxx Xxxxxxxx,
Inc., Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation, Xxxxxx Xxxxxxx &
Co. Incorporated and Xxxxx Xxxxxx Inc.
UNDERWRITERS: See Schedule 2 hereto
4. TITLE OF SECURITIES:
Common Stock, par value $.01 per share
5. AGGREGATE NUMBER OF FIRM SECURITIES:
Common Stock, par value $.01 per share: 15,250,000 shares
6. AGGREGATE NUMBER OF OPTION SECURITIES:
Common Stock, par value $.01 per share: 2,287,500 shares
7. PRICE TO PUBLIC:
Common Stock, par value $.01 per share: $26.625 per share
8. PURCHASE PRICE BY UNDERWRITERS:
Common Stock, par value $.01 per share: $25.225 per share
1
9. SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:
Wire Transfer of Same Day Funds
10. SECURITIES DOCUMENTS, IF ANY:
N/A
11. TERMS OF SECURITIES:
Preferred Stock: N/A
Warrants: N/A
Other Provisions: N/A
12. LOCK-UP REQUIREMENTS:
As set forth in Sections 4(h) and 6(g) of this Agreement
13. DELIVERY OF SECURITIES:
Firm Securities:
Prudential Securities Incorporated, Xxx Xxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx
on or about November 22, 1996
Option Securities:
Prudential Securities Incorporated, Xxx Xxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx
on or before December 22, 1996, if option exercised
14. PRE-CLOSING LOCATION:
Pryor, Cashman, Xxxxxxx, & Xxxxx, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx on
November 21, 1996
2
15. CLOSING LOCATION:
Pryor, Cashman, Xxxxxxx, & Xxxxx, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx on
November 22, 1996
3
SCHEDULE 2
UNDERWRITERS
Number of
Firm Securities
Underwriter to be purchased
----------- ---------------
Prudential Securities Incorporated ................................. 2,272,250
Xxxx Xxxxxx Xxxxxxxx Inc. ....................................... 2,272,250
Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation ............................................ 2,272,250
Xxxxxx Xxxxxxx & Co. Incorporated .................................. 2,272,250
Xxxxx Xxxxxx Inc. ................................................. 2,272,250
Alex. Xxxxx & Sons Incorporated .................................. 305,000
CS First Boston Corporation ....................................... 305,000
X.X. Xxxxxxx & Sons, Inc. ....................................... 305,000
Everen Securities, Inc. ............................................ 305,000
Xxxxxxx, Xxxxx & Co. ............................................ 305,000
Xxxxxx Brothers Inc. ............................................ 305,000
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated .............. 305,000
PaineWebber Incorporated ........................................... 305,000
Salomon Brothers Inc. ............................................ 305,000
Xxxxxx Xxxxxxxxxx Xxxxx Inc. ....................................... 152,500
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated ............................. 152,500
XxXxxxxx & Company Securities, Inc. ............................. 152,500
Principal Financial Securities, Inc ............................. 152,500
Xxxxxxx Xxxxx & Associates, Inc .................................. 152,500
Sutro & Co. Incorporated ........................................... 152,500
Xxxxxx Xxxxxxx Incorporated ....................................... 152,500
Pennsylvania Merchant Group Ltd .................................. 76,250
-------
Total ...................................................... 15,250,000
----------
----------
4
