Exhibit 1.1
[Form of Underwriting Agreement]
10,000,000
▇▇▇▇▇▇▇▇ PROPERTIES TRUST
Common Shares of Beneficial Interest
UNDERWRITING AGREEMENT
----------------------
[ ], 1997
▇▇▇▇▇▇ Brothers Inc.,
As Representative of the several
Underwriters named in Schedule ▇,
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
▇▇▇▇▇▇▇▇ Properties Trust, a Maryland real estate investment trust
(the "Company"), ▇▇▇▇▇▇▇▇ Properties Acquisition Partners, L.P., a Delaware
limited partnership (the "Operating Partnership"), ▇▇▇▇▇▇▇▇ Properties I, Inc.,
a Delaware corporation (the "General Partner"), and ▇▇▇▇▇▇▇▇ Properties Run
Deep, Inc. and ▇▇▇▇▇▇▇▇ Properties Limited II, Inc., each a Delaware corporation
(the "Managers" and together with the Company, the Operating Partnership and the
General Partner, the "Transaction Entities") each wish to confirm as follows its
agreement with the Underwriters named in Schedule 1 hereto (the "Underwriters,"
which term shall also include any underwriter substituted as hereinafter
provided in Section 9 of this Agreement) for whom ▇▇▇▇▇▇ Brothers Inc., Alex.
▇▇▇▇▇ & Sons Incorporated, ▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc., Prudential Securities
Incorporated, ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., Principal Financial Securities, Inc. and
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc. are acting as representatives (the
"Representatives"), with respect to the sale by the Company and the purchase by
the Underwriters, acting severally and not jointly, of an aggregate of
10,000,000 shares (the "Firm Shares") of the Company's common shares of
beneficial interest, par value $.01 per share (the "Common Shares"). In
addition, the Company proposes to grant to the Underwriters an option to
purchase up to an additional 1,500,000 Common Shares on the terms and for the
purposes set forth in Section 2 (the "Option Shares"). The Firm Shares and the
Option Shares, if purchased, are hereinafter collectively called the "Shares."
Capitalized terms used but not otherwise defined herein shall have the
meanings given to those terms in the Prospectus (as herein defined).
1. Representations, Warranties and Agreements of the Transaction
Entities. Each of the Transaction Entities, jointly and severally, represents,
warrants and agrees that, as of the date hereof:
(a) A registration statement on Form S-11 (No. [ ], and any
amendments thereto, with respect to the Shares has (i) been
prepared by the Company in conformity with the requirements of the
United States Securities Act of 1933, as amended (the "Securities
Act") and the rules and regulations (the "Rules and Regulations")
of the United States Securities and Exchange Commission (the
"Commission") thereunder, (ii) been filed with the Commission
under the Securities Act and (iii) become effective under the
Securities Act. Copies of such registration statement and any
amendments thereto have been delivered by the Company to you as
the Representatives of the Underwriters. As used in this
Agreement, "Effective Time" means the date and the time as of
which such registration statement, or the most recent post-
effective amendment thereto, if any, was declared effective by the
Commission; "Effective Date" means the date of the Effective Time;
"Preliminary Prospectus" means each prospectus included in such
registration statement, or amendments thereto, before it became
effective under the Securities Act and any prospectus filed with
the Commission by the Company with the consent of the
Representatives pursuant to Rule 424(a) of the Rules and
Regulations; "Registration Statement" means such registration
statement, as amended at the Effective Time, including all
information contained in the final prospectus filed with the
Commission pursuant to Rule 424(b) of the Rules and Regulations
and deemed to be a part of the registration statement as of the
Effective Time pursuant to paragraph (b) of Rule 430A of the Rules
and Regulations; and "Prospectus" means such final prospectus, as
first filed with the Commission pursuant to paragraph (1) or (4)
of Rule 424(b) of the Rules and Regulations. Any registration
statement (including any amendment or supplement thereto or
information which is deemed to be a part thereof) filed by the
Company to register additional Common Shares under rule 462(b) of
the Rules and Regulations ("Rule 462(b) Registration Statement")
shall be deemed a part of the Registration Statement. Any
prospectus (including any amendment or supplement thereto or
information which is deemed to be a part thereof) included in a
Rule 462(b) Registration Statement shall be deemed to be part of
the Prospectus.
(b) The Registration Statement and each Preliminary Prospectus
conforms, and the Prospectus and any further amendments or
supplements to the Registration Statement or the Prospectus will,
when they become effective or are filed with the Commission, as
the case may be, conform in all respects to the requirements of
the Securities Act and the Rules and Regulations, and do not and
will not, as of the applicable Effective Date (as to the
Registration Statement and any amendment thereto) and as of the
applicable filing date and at the First Delivery Date (as to the
Prospectus and any amendment or supplement thereto) contain an
untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading (with respect to the Prospectus,
in light of the circumstances under which they were made);
provided that no representation or warranty is made as to
information contained in or omitted from the Registration
Statement or the Prospectus in reliance upon and in conformity
with written information furnished to the Company through the
Representatives by or on behalf of any Underwriter specifically
for inclusion therein.
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(c) No stop order suspending the effectiveness of the
Registration Statement or any part thereof has been issued and no
proceeding for that purpose has been instituted or, to the
knowledge of any of the Transaction Entities, threatened by the
Commission or by the state securities authority of any
jurisdiction. No order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus has been issued and no
proceeding for that purpose has been instituted or, to the
knowledge of any of the Transaction Entities, after due inquiry of
the Commission, threatened by the Commission or by the state
securities authority of any jurisdiction.
(d) The Company has been duly formed and is validly existing
as a real estate investment trust in good standing under the laws
of the State of Maryland, is duly qualified to do business and is
in good standing in each jurisdiction in which its ownership or
lease of property or the conduct of its business requires such
qualification, and has all power and authority necessary to own or
hold its properties, to conduct the business in which it is
engaged and to enter into and perform its obligations under this
Agreement. None of the subsidiaries of the Company (other than the
Operating Partnership, the General Partner, each Manager and
Broadmoor Austin Associates) is a "significant subsidiary," as
such term is defined in Rule 405 of the Rules and Regulations.
Except as described in the Prospectus and other than the Property
Affiliates (as defined herein) and the other Transaction Entities,
the Company owns no direct or indirect equity interest in any
entity.
(e) The Company has an authorized capitalization as set forth
in the Prospectus, and all of the issued shares of beneficial
interest of the Company have been duly and validly authorized and
issued, are fully paid and non-assessable and conform to the
description thereof contained in the Prospectus. Except as
disclosed in the Prospectus, no shares of beneficial interest of
the Company are reserved for any purpose and except for the equity
interests in the Operating Partnership ("Units"), there are no
outstanding securities convertible into or exchangeable for any
shares of beneficial interest of the Company, and no outstanding
options, rights (preemptive or otherwise) or warrants to purchase
or subscribe for shares of beneficial interest or any other
securities of the Company.
(f) The Operating Partnership has been duly formed and is
validly existing as a limited partnership under the laws of the
State of Delaware, is duly qualified to do business as a foreign
limited partnership in each jurisdiction in which its ownership or
lease of property or the conduct of its business requires such
qualification, and has all partnership power and authority
necessary to own or hold its properties, to conduct the business
in which it is engaged and to enter into and perform its
obligations under this Agreement. The General Partner is the sole
general partner of the Operating Partnership. The Agreement of
Limited Partnership of the Operating Partnership (the "Operating
Partnership Agreement") is in full force and effect, and the
aggregate percentage interests of the Company, the General Partner
and the limited partners in the Operating Partnership are as set
forth in the Prospectus; provided that to the extent any portion
of the over-allotment option described in Section 2 hereof is
exercised at the First Delivery Date, the percentage interest of
such partners in the Operating Partnership will be adjusted
accordingly. Additionally, to the extent any portion of such over-
allotment option is exercised subsequent to the First Delivery
Date, the Company will contribute the proceeds
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from the sale of the Option Shares to the Operating Partnership in
exchange for a number of Units equal to the number of Option
Shares issued.
(g) The General Partner has been duly formed and is validly
existing as a corporation in good standing under the laws of the
State of Delaware, is duly qualified to do business and is in good
standing in each jurisdiction in which its ownership or lease of
property or the conduct of its business requires such
qualification, and has all corporate power and authority necessary
to own or hold its properties, to conduct the business in which it
is engaged and to enter into and perform its obligations under
this Agreement. All of the issued and outstanding capital stock of
the General Partner has been duly authorized and validly issued
and is fully paid and non-assessable, is owned by the Company free
and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim, restriction or equities and has been offered
and sold in compliance with all applicable laws (including,
without limitation, federal or state securities laws). No shares
of capital stock of the General Partner are reserved for any
purpose, and there are no outstanding securities convertible into
or exchangeable for any capital stock of the General Partner, and
no outstanding options, rights (preemptive or otherwise) or
warrants to purchase or to subscribe for shares of such capital
stock or any other securities of the General Partner.
(h) Each Manager has been duly formed and is validly existing
as a corporation in good standing under the laws of the State of
Delaware, is duly qualified to do business and is in good standing
as a foreign corporation in each jurisdiction in which its
ownership or lease of property or the conduct of its business
requires such qualification, and has all corporate power and
authority necessary to own or hold its properties, to conduct the
business in which it is engaged and to enter into and perform its
obligations under this Agreement. All of the issued and
outstanding capital stock of each Manager has been duly authorized
and validly issued and is fully paid and non-assessable, has been
offered and sold in compliance with all applicable laws
(including, without limitation, federal or state securities laws),
and all of such capital stock owned by the Operating Partnership
(100% of the nonvoting common stock) is owned free and clear of
any security interest, mortgage, pledge, lien, encumbrance, claim,
restriction or equities. The Operating Partnership owns a 95%
economic interest in each Manager. No shares of capital stock of
either Manager are reserved for any purpose, and there are no
outstanding securities convertible into or exchangeable for any
capital stock of either Manager and no outstanding options, rights
(preemptive or otherwise) or warrants to purchase or to subscribe
for shares of such capital stock or any other securities of either
Manager.
(i) Run Deep, L.P., Western Avenue Associates, L.P., Riverside
Investors, L.P., Broadmoor Austin Associates, PL Properties
Associates, L.P. and Fairview Eleven Investors, L.P. [add others]
(the "Property Affiliates") are the only entities other than the
Operating Partnership through which the Company and the Operating
Partnership own interests in the Properties. Each of the Property
Affiliates has been duly organized and is validly existing as a
partnership or corporation, as the case may be, in good standing
(if a corporation) under the laws of its respective jurisdiction
of formation, is duly qualified to do business and (if a
corporation) is in good standing as a foreign corporation in each
jurisdiction in which its ownership or lease of
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property or the conduct of its business requires such
qualification, and has all power and authority necessary to own or
hold its properties and to conduct the business in which it is
engaged. Except as set forth in the Prospectus, all of the issued
shares of capital stock or partnership interests of each Property
Affiliate have been duly and validly authorized and issued, are
fully paid and non-assessable and are owned directly or indirectly
by the Company and the Operating Partnership, free and clear of
any security interest, mortgage, pledge, lien, encumbrance, claim,
restriction or equities.
(j) The Shares have been duly and validly authorized and, when
issued and delivered against payment therefor as provided herein,
will be duly and validly issued, fully paid and non-assessable.
Upon payment of the purchase price and delivery of the Shares in
accordance herewith, each of the Underwriters will receive good,
valid and marketable title to the Shares, free and clear of all
security interests, mortgages, pledges, liens, encumbrances,
claims, restrictions and equities. The terms of the Shares conform
in substance to all statements and descriptions related thereto
contained in the Prospectus. The form of the certificates to be
used to evidence the Shares will at the First Delivery Date be in
due and proper form and will comply with all applicable legal
requirements. The issuance of the Shares is not subject to any
preemptive or other similar rights.
(k) (A) This Agreement has been duly and validly authorized,
executed and delivered by the each of the Transaction Entities,
and assuming due authorization, execution and delivery by the
Representatives, is a valid and binding agreement of each of the
Transaction Entities, enforceable against the Transaction Entities
in accordance with its terms; and (B) the Operating Partnership
Agreement and the partnership agreement or joint venture agreement
of each Property Affiliate, has been duly and validly authorized,
executed and delivered by the parties thereto and is a valid and
binding agreement of the parties thereto, enforceable against such
parties in accordance with its terms;
(l) The execution, delivery and performance of this Agreement
by each of the Transaction Entities and the consummation of the
transactions contemplated hereby will not conflict with or result
in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which
any of the Transaction Entities is a party or by which any of the
Transaction Entities is bound or to which any of the Properties or
other assets of any of the Transaction Entities is subject, nor
will such actions result in any violation of the provisions of the
charter, by-laws, certificate of limited partnership or agreement
of limited partnership of any of the Transaction Entities, or any
statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over any of the
Transaction Entities or any of their properties or assets; and
except for the registration of the Shares under the Securities Act
and such consents, approvals, authorizations, registrations or
qualifications as may be required under the Securities Exchange
Act of 1934, as amended (the "Exchange Act") and applicable state
securities laws in connection with the purchase and distribution
of the Shares by the Underwriters, no consent, approval,
authorization or order of, or filing or registration with, any
such court or governmental agency or body is required for the
execution, delivery and performance
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of this Agreement by the Transaction Entities and the consummation
of the transactions contemplated hereby.
(m) Other than as described in the Prospectus, there are no
contracts, agreements or understandings between the Company and
any person granting such person the right to require the Company
to file a registration statement under the Securities Act with
respect to any securities of the Company owned or to be owned by
such person or to require the Company to include such securities
in the securities registered pursuant to the Registration
Statement or in any securities being registered pursuant to any
other registration statement filed by the Company under the
Securities Act.
(n) Except as described in the Prospectus, no Transaction
Entity has sold or issued any securities during the six-month
period preceding the date of the Prospectus, including any sales
pursuant to Rule 144A under, or Regulations D or S of, the
Securities Act.
(o) None of the Transaction Entities nor any of the Properties
has sustained, since the date of the latest audited financial
statements included in the Prospectus, any material loss or
interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any
labor dispute or court or governmental action, order or decree,
other than as set forth or contemplated in the Prospectus; and,
since such date, there has not been any change in the capital
stock or long-term debt of any of the Transaction Entities or any
material adverse change, or any development involving a
prospective material adverse change, in or affecting any of the
Properties or the general affairs, management, financial position,
stockholders' equity or results of operations of any of the
Transaction Entities, other than as set forth or contemplated in
the Prospectus.
(p) The financial statements (including the related notes and
supporting schedules) filed as part of the Registration Statement
or included in the Prospectus present fairly the financial
condition and results of operations of the entities purported to
be shown thereby, at the dates and for the periods indicated, and
have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout the
periods involved. Pro forma financial information included in the
Prospectus has been prepared in accordance with the applicable
requirements of the Securities Act, the Rules and Regulations and
AICPA guidelines with respect to pro forma financial information
and includes all adjustments necessary to present fairly the pro
forma financial position of the Company at the respective dates
indicated and the results of operations for the respective periods
specified.
(q) Coopers & ▇▇▇▇▇▇▇ L.L.P., who have certified certain
financial statements of the Company, whose reports appear in the
Prospectus and who have delivered the initial letter referred to
in Section 7(f) hereof, are independent public accountants as
required by the Securities Act and the Rules and Regulations.
(r) (A) The Operating Partnership and the Property Affiliates
have good and marketable title to each of the Properties and the
other assets not located in
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Texas, and have good and indefeasible title to each of the
Properties and the other assets located in Texas, in each case
free and clear of all liens, encumbrances, claims, security
interests and defects, other than those referred to in the
Prospectus or those which are not material in amount or those
which would not have a material adverse effect on the business,
operations, use or value of any of the Properties; (B) all liens,
charges, encumbrances, claims or restrictions on or affecting any
of the Properties and the assets of any Transaction Entity which
are required to be disclosed in the Prospectus are disclosed
therein; (C) except as otherwise described in the Prospectus,
neither any Transaction Entity nor any 10% or greater (in terms of
square footage or base rent) tenant of any of the Properties is in
default under (i) any space leases (as lessor or lessee, as the
case may be) relating to the Properties, or (ii) any of the
mortgages or other security documents or other agreements
encumbering or otherwise recorded against the Properties, in each
case which default would have a material adverse effect on the
applicable Property, and no Transaction Entity knows of any event
which, but for the passage of time or the giving of notice, or
both, would constitute a default under any of such documents or
agreements; (D) no tenant under any of the leases at the
Properties has a right of first refusal to purchase the premises
demised under such lease; (E) each of the Properties complies with
all applicable codes, laws and regulations (including, without
limitation, building and zoning codes, laws and regulations and
laws relating to access to the Properties), except for such
failures to comply that would not have a material adverse effect
on the business operations, use or value of such Property; and (F)
no Transaction Entity has knowledge of any pending or threatened
condemnation proceedings, zoning change or other proceeding or
action that will in any material manner affect the size of, use
of, improvements on, construction on or access to the Properties.
(s) The mortgages and deeds of trust which encumber the
Properties are not convertible into equity securities of the
entity owning such Property and said mortgages and deeds of trust
are not cross-defaulted or cross-collateralized with any property
other than other Properties.
(t) The Operating Partnership and the Property Affiliates have
obtained title insurance on the fee or leasehold interests in each
of the Properties, in an amount at least equal to the greater of
(A) the mortgage indebtedness of each such Property or (B) the
purchase price of each such Property.
(u) Except as disclosed in the Prospectus; (A) to the
knowledge of the Transaction Entities, the operations of the
Company, the Operating Partnership, the General Partner, each
Manager, and the Properties are materially in compliance with all
Environmental Laws (as defined below) and all requirements of
applicable permits, licenses, approvals and other authorizations
issued pursuant to Environmental Laws; (B) to the knowledge of the
Transaction Entities, after due inquiry, none of the Transaction
Entities or any Property has caused or suffered to occur any
Release (as defined below) of any Hazardous Substance (as defined
below) into the Environment (as defined below) on, in, under or
from any Property, and no condition exists on, in, under or
adjacent to any Property that could result in the incurrence of
liabilities under, or any violations of, any Environmental Law or
give rise to the imposition of any Lien (as defined below), under
any Environmental Law, except such as in each case would not have
a material adverse effect on any Property
7
or Transaction Entity; (C) none of the Transaction Entities has
received any written notice of a claim under or pursuant to any
Environmental Law or under common law pertaining to Hazardous
Substances on, in, under or originating from any Property; (D)
none of the Transaction Entities has actual knowledge of, or
received any written notice from any Governmental Authority (as
defined below) claiming, any violation of any Environmental Law or
a determination to undertake and/or request the investigation,
remediation, clean-up or removal of any Hazardous Substance
released into the Environment on, in, under or from any Property;
and (E) no Property is included or, to the knowledge of the
Transaction Entities, after due inquiry, proposed for inclusion on
the National Priorities List issued pursuant to CERCLA (as defined
below) by the United States Environmental Protection Agency (the
"EPA") or on the Comprehensive Environmental Response,
Compensation, and Liability Information System database maintained
by the EPA, and none of the Transaction Entities has actual
knowledge that any Property has otherwise been identified in a
published writing by the EPA as a potential CERCLA removal,
remedial or response site or, to the knowledge of the Transaction
Entities, is included on any similar list of potentially
contaminated sites pursuant to any other Environmental Law.
As used herein, "Hazardous Substance" shall include any hazardous
substance, hazardous waste, toxic substance, pollutant or
hazardous material, including, without limitation, oil, petroleum
or any petroleum-derived substance or waste, asbestos or asbestos-
containing materials, PCBs, pesticides, explosives, radioactive
materials, dioxins, urea formaldehyde insulation or any
constituent of any such substance, pollutant or waste which is
subject to regulation under any Environmental Law (including,
without limitation, materials listed in the United States
Department of Transportation Optional Hazardous Material Table, 49
C.F.R. (S) 172.101, or in the EPA's List of Hazardous Substances
and Reportable Quantities, 40 C.F.R. Part 302); "Environment"
shall mean any surface water, drinking water, ground water, land
surface, subsurface strata, river sediment, buildings, structures,
and ambient, workplace and indoor and outdoor air; "Environmental
Law" shall mean the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended (42 U.S.C. (S)
9601 et seq.) ("CERCLA"), the Resource Conservation and Recovery
Act of 1976, as amended (42 U.S.C. (S) 6901, et seq.), the Clean
Air Act, as amended (42 U.S.C. (S) 7401, et seq.), the Clean Water
Act, as amended (33 U.S.C. (S) 1251, et seq.), the Toxic
Substances Control Act, as amended (15 U.S.C. (S) 2601, et seq.),
the Occupational Safety and Health Act of 1970, as amended (29
U.S.C. (S) 651, et seq.), the Hazardous Materials Transportation
Act, as amended (49 U.S.C. (S) 1801, et seq.), and all other
federal, state and local laws, ordinances, regulations, rules and
orders relating to the protection of the environments or of human
health from environmental effects; "Governmental Authority" shall
mean any federal, state or local governmental office, agency or
authority having the duty or authority to promulgate, implement or
enforce any Environmental Law; "Lien" shall mean, with respect to
any Property, any mortgage, deed of trust, pledge, security
interest, lien, encumbrance, penalty, fine, charge, assessment,
judgment or other liability in, on or affecting such Property; and
"Release" shall mean any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching,
dumping, emanating or disposing of any Hazardous Substance into
the Environment, including, without limitation, the abandonment or
discard of barrels, containers, tanks
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(including, without limitation, underground storage tanks) or
other receptacles containing or previously containing any
Hazardous Substance.
(v) Each Transaction Entity and Property carries, or is
covered by, insurance in such amounts and covering such risks as
is adequate for the conduct of its business and the value of such
Property and as is customary for companies engaged in similar
businesses in similar industries.
(w) Each Transaction Entity owns or possesses adequate rights
to use all material patents, patent applications, trademarks,
service marks, trade names, trademark registrations, service ▇▇▇▇
registrations, copyrights and licenses necessary for the conduct
of its business and has no reason to believe that the conduct of
its business will conflict with, and has not received any notice
of any claim of conflict with, any such rights of others.
(x) Except as described in the Prospectus, there are no legal
or governmental proceedings pending to which any Transaction
Entity is a party or of which any property or assets of any
Transaction Entity is the subject which, if determined adversely
to such Transaction Entity, could reasonably be expected to have a
material adverse effect on the consolidated financial position,
shareholders' equity, results of operations, business or prospects
of the Company; and to the best knowledge of the Transaction
Entities, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others.
(y) There are no contracts or other documents which are
required to be described in the Prospectus or filed as exhibits to
the Registration Statement by the Securities Act or by the Rules
and Regulations which have not been described in the Prospectus or
filed as exhibits to the Registration Statement or incorporated
therein by reference as permitted by the Rules and Regulations.
(z) No relationship, direct or indirect, exists between or
among any of the Transaction Entities on the one hand, and the
directors, officers, stockholders, customers or suppliers of the
Transaction Entities on the other hand, which is required to be
described in the Prospectus which is not so described.
(aa) No labor disturbance by the employees of any Transaction
Entity exists or, to the knowledge of the Transaction Entities, is
imminent which might be expected to have a material adverse effect
on the consolidated financial position, stockholders' equity,
results of operations, business or prospects of such Transaction
Entity.
(bb) Each Transaction Entity is in compliance in all material
respects with all presently applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA"); no
"reportable event" (as defined in ERISA) has occurred with respect
to any "pension plan" (as defined in ERISA) for which any
Transaction Entity would have any liability; no Transaction Entity
has incurred or expects to incur liability under (i) Title IV of
ERISA with respect to termination of, or withdrawal from, any
"pension plan" or (ii) sections 412 or 4971 of the Internal
9
Revenue Code of 1986, as amended (the "Code"); and each "pension
plan" for which any Transaction Entity would have any liability
that is intended to be qualified under section 401(a) of the Code
is so qualified in all material respects and nothing has occurred,
whether by action or by failure to act, which would cause the loss
of such qualification.
(cc) Each Transaction Entity has filed all federal, state and
local income and franchise tax returns required to be filed
through the date hereof and has paid all taxes due thereon, and no
tax deficiency has been determined adversely to any Transaction
Entity which has had (nor does any Transaction Entity have any
knowledge of any tax deficiency which, if determined adversely to
it might have) a material adverse effect on the financial
position, stockholders' equity, results of operations, business or
prospects of such Transaction Entity.
(dd) At all times since October 22, 1996, the Company, the
Operating Partnership, the General Partner, and the Managers have
been and upon the sale of the Shares will continue to be,
organized and operated in conformity with the requirements for
qualification of the Company as a real estate investment trust
under the Code and the proposed method of operation of the
Company, the Operating Partnership, the General Partner and the
Managers will enable the Company to continue to meet the
requirements for qualification and taxation as a real estate
investment trust under the Code.
(ee) Since the date as of which information is given in the
Prospectus through the date hereof, and except as may otherwise be
disclosed in the Prospectus, no Transaction Entity has (i) issued
or granted any securities, (ii) incurred any liability or
obligation, direct or contingent, other than liabilities and
obligations which were incurred in the ordinary course of
business, (iii) entered into any transaction not in the ordinary
course of business or (iv) declared or paid any dividend on its
capital stock.
(ff) Each Transaction Entity (i) makes and keeps accurate
books and records and (ii) maintains internal accounting controls
which provide reasonable assurance that (A) transactions are
executed in accordance with management's authorization, (B)
transactions are recorded as necessary to permit preparation of
its financial statements and to maintain accountability for its
assets, (C) access to its assets is permitted only in accordance
with management's authorization and (D) the reported
accountability for its assets is compared with existing assets at
reasonable intervals.
(gg) No Transaction Entity or Property Affiliate (i) is in
violation of its charter, by-laws, certificate of limited
partnership, agreement of limited partnership or other similar
organizational document, (ii) is in default in any material
respect, and no event has occurred which, with notice or lapse of
time or both, would constitute such a default, in the due
performance or observance of any term, covenant or condition
contained in any material indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which it is a party
or by which it is bound or to which any of the Properties or any
of its other properties or assets is subject or (iii) is in
violation in any material respect of any law, ordinance,
10
governmental rule, regulation or court decree to which it or the
Properties or any of its other properties or assets may be subject
or has failed to obtain any material license, permit, certificate,
franchise or other governmental authorization or permit necessary
to the ownership of the Properties or any of its other properties
or assets or to the conduct of its business.
(hh) No Transaction Entity, nor any director, officer, agent,
employee or other person associated with or acting on behalf of
any Transaction Entity, has used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful
expense relating to political activity; made any direct or
indirect unlawful payment to any foreign or domestic government
official or employee from corporate funds; violated or is in
violation of any provision of the Foreign Corrupt Practices Act of
1977; or made any bribe, rebate, payoff, influence payment,
kickback or other unlawful payment.
(ii) No Transaction Entity is an "investment company" within
the meaning of such term under the Investment Company Act of 1940
and the rules and regulations of the Commission thereunder.
(jj) The Common Shares are listed on the New York Stock
Exchange.
(kk) Other than this Agreement and as set forth in the
Prospectus under the heading "Underwriting," there are no
contracts, agreements or understandings between any Transaction
Entity and any person that would give rise to a valid claim
against any Transaction Entity or any Underwriter for a brokerage
commission, finder's fee or other like payment with respect to the
consummation of the transactions contemplated by this Agreement.
(ll) Each Transaction Entity has complied with all provisions
of Florida Statutes (S) 517.075, relating to issuers doing
business with Cuba.
2. Purchase of the Shares by the Underwriters. On the basis of
the representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell the [10,000,000] Firm
Shares, to the several Underwriters and each of the Underwriters, severally and
not jointly, agrees to purchase the number of Firm Shares set forth opposite
that Underwriter's name in Schedule 1 hereto. The respective purchase
obligations of the Underwriters with respect to the Firm Shares shall be rounded
among the Underwriters to avoid fractional shares, as the Representatives may
determine.
In addition, the Company grants to the Underwriters an option to
purchase up to [1,500,000] Option Shares. Such option is granted solely for the
purpose of covering over-allotments in the sale of Firm Shares and is
exercisable as provided in Section 4 hereof. Option Shares shall be purchased
severally for the account of the Underwriters in proportion to the number of
Firm Shares set forth opposite the names of such Underwriters in Schedule 1
hereto. The respective purchase obligations of each Underwriter with respect to
the Option Shares shall be adjusted by the Representatives so that no
Underwriter shall be obligated to purchase Option Shares other than in 100-share
amounts. The price of both the Firm Shares and any Option Shares shall be $[ ]
per share.
11
The Company shall not be obligated to deliver any of the Shares to
be delivered on the First Delivery Date or the Second Delivery Date (as
hereinafter defined), as the case may be, except upon payment for all the Shares
to be purchased on such Delivery Date as provided herein.
3. Offering of Shares by the Underwriters. Upon authorization by
the Representatives of the release of the Firm Shares, the several Underwriters
propose to offer the Firm Shares for sale upon the terms and conditions set
forth in the Prospectus.
4. Delivery of and Payment for the Shares. Delivery of and
payment for the Firm Shares shall be made at the office of ▇▇▇▇▇▇ & ▇▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, at 10:00 A.M., New York City time, on the
third full business day following the date of this Agreement or on the fourth
full business day if this Agreement is executed after the daily closing time of
the New York Stock Exchange (unless postponed in accordance with the provisions
of Section 9 hereof), or at such other date or place as shall be determined by
agreement between the Representatives and the Company. This date and time are
sometimes referred to as the "First Delivery Date." On the First Delivery Date,
the Company shall deliver or cause to be delivered certificates representing the
Firm Shares to the Representatives for the account of each Underwriter against
payment to or upon the order of the Company of the purchase price by certified
or official bank check or checks payable in same day funds. Time shall be of the
essence, and delivery at the time and place specified pursuant to this Agreement
is a further condition of the obligation of each Underwriter hereunder. Upon
delivery, the Firm Shares shall be registered in such names and in such
denominations as the Representatives shall request in writing not less than two
full business days prior to the First Delivery Date. For the purpose of
expediting the checking and packaging of the certificates for the Firm Shares,
the Company shall make the certificates representing the Firm Shares available
for inspection by the Representatives in New York, New York, not later than 2:00
P.M., New York City time, on the business day prior to the First Delivery Date.
At any time on or before the thirtieth day after the date of this
Agreement, the option granted in Section 2 may be exercised by written notice
being given to the Company by the Representatives. Such notice shall set forth
the aggregate number of Option Shares as to which the option is being exercised,
the names in which the Option Shares are to be registered, the denominations in
which the Option Shares are to be issued and the date and time, as determined by
the Representatives, when the Option Shares are to be delivered; provided,
however, that this date and time shall not be earlier than the First Delivery
Date nor earlier than the second business day after the date on which the option
shall have been exercised nor later than the fifth business day after the date
on which the option shall have been exercised. The date and time the Option
Shares are delivered are sometimes referred to as the "Second Delivery Date" and
the First Delivery Date and the Second Delivery Date are sometimes each referred
to as a "Delivery Date."
Delivery of and payment for the Option Shares shall be made at the
place specified in the first sentence of the first paragraph of this Section 4
(or at such other place as shall be determined by agreement between the
Representatives and the Company) at 10:00 A.M., New York City time, on the
Second Delivery Date. On the Second Delivery Date, the Company shall deliver or
cause to be delivered the certificates representing the Option Shares to the
Representative for the account of each Underwriter against payment to or upon
the order of the Company of the purchase price by certified or official bank
check or checks payable in same day funds. Time shall be of the essence, and
delivery at the time and place specified pursuant to this Agreement is a further
condition of the obligation of each Underwriter hereunder. Upon delivery, the
Option Shares shall be registered in such names and in such denominations as the
Representatives shall request in the
12
aforesaid written notice. For the purpose of expediting the checking and
packaging of the certificates for the Option Shares, the Company shall make the
certificates representing the Option Shares available for inspection by the
Representatives in New York, New York, not later than 2:00 P.M., New York City
time, on the business day prior to the Second Delivery Date.
5. Further Agreements of the Transaction Entities. Each of the
Transaction Entities jointly and severally agrees:
(a) To prepare the Prospectus in a form approved by the
Representatives and to file such Prospectus pursuant to Rule
424(b) under the Securities Act not later than the Commission's
close of business on the second business day following the
execution and delivery of this Agreement or, if applicable, such
earlier time as may be required by Rule 430A(a)(3) under the
Securities Act; to make no further amendment or any supplement to
the Registration Statement or to the Prospectus except as
permitted herein; to advise the Representatives, promptly after it
receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has been
filed and to furnish the Representatives with copies thereof; to
advise the Representatives, promptly after it receives notice
thereof, of the issuance by the Commission of any stop order or of
any order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus, of the suspension of the
qualification of the Shares for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding
for any such purpose, or of any request by the Commission for the
amending or supplementing of the Registration Statement or the
Prospectus or for additional information; and, in the event of the
issuance of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or the Prospectus
or suspending any such qualification, to use promptly its best
efforts to obtain its withdrawal;
(b) To furnish promptly to the Representatives and to counsel
for the Underwriters five signed or conformed copies of the
Registration Statement as originally filed with the Commission,
and each amendment thereto filed with the Commission, including
all consents and exhibits filed therewith, and will also furnish
to the Representatives and their counsel such number of conformed
copies of the Registration Statement as originally filed and of
each amendment thereto, as the Representatives may request;
(c) To deliver promptly to the Representatives such number of
the following documents as the Representatives shall reasonably
request: (i) conformed copies of the Registration Statement as
originally filed with the Commission and each amendment thereto
(in each case excluding exhibits other than this Agreement) and
(ii) each Preliminary Prospectus, the Prospectus and any amended
or supplemented Prospectus; and, if the delivery of a prospectus
is required at any time after the Effective Time in connection
with the offering or sale of the Shares or any other securities
relating thereto and if at such time any events shall have
occurred as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact
or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made when such Prospectus is delivered, not misleading,
or, if for any
13
other reason it shall be necessary to amend or supplement the
Prospectus in order to comply with the Securities Act or the
Exchange Act, to notify the Representatives and, upon their
request, to file such document and to prepare and furnish without
charge to each Underwriter and to any dealer in securities as many
copies as the Representatives may from time to time reasonably
request of an amended or supplemented Prospectus which will
correct such statement or omission or effect such compliance.
(d) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the
Prospectus that may, in the judgment of the Company or the
Representatives, be required by the Securities Act or requested by
the Commission;
(e) Prior to filing with the Commission any amendment to the
Registration Statement or supplement to the Prospectus or any
Prospectus pursuant to Rule 424 of the Rules and Regulations, to
furnish a copy thereof to the Representatives and counsel for the
Underwriters and obtain the consent of the Representatives to the
filing;
(f) The Company will make generally available to its security
holders as soon as practicable but no later than 60 days after the
close of the period covered thereby an earnings statement (in form
complying with the provisions of Section 11(a) of the Securities
Act and Rule 158 of the Rules and Regulations), which need not be
certified by independent certified public accountants unless
required by the Securities Act or the Rules and Regulations,
covering a twelve-month period commencing after the "effective
date" (as defined in said Rule 158) of the Registration Statement;
(g) The Company will furnish to each Underwriter, from time to
time during the period when the Prospectus is required to be
delivered under the Securities Act or the Exchange Act, such
number of copies of the Prospectus (as amended or supplemented) as
such Underwriter may reasonably request for the purposes
contemplated by the Securities Act or the Exchange Act or the
respective applicable rules and regulations of the Commission
thereunder.
(h) For a period of five years following the Effective Date,
to furnish to the Representatives copies of all materials
furnished by the Company to its shareholders and all public
reports and all reports and financial statements furnished by the
Company to the principal national securities exchange upon which
the Common Shares may be listed pursuant to requirements of or
agreements with such exchange or to the Commission pursuant to the
Exchange Act or any rule or regulation of the Commission
thereunder;
(i) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the Shares for
offering and sale under the securities, real estate syndication or
Blue Sky laws of such jurisdictions as the Representatives may
request and to comply with such laws so as to permit the
continuance of sales and dealings therein in such jurisdictions
for as long as may be necessary to complete the distribution of
the Shares;
14
(j) For a period of 180 days from the First Delivery Date, the
Company will not, directly or indirectly, offer for sale, contract
to sell, sell or otherwise dispose of (or enter into any
transaction or device which is designed to, or could be expected
to, result in the disposition by any person at any time in the
future of) any Common Shares or securities convertible into or
exercisable or exchangeable for Common Shares (other than the
Shares and shares issued pursuant to employee benefit plans,
qualified stock option plans, share purchase plans or other
employee compensation plans described in the Prospectus and any
Units or shares that may be issued in connection with any
acquisition of a property), or sell or grant options, rights or
warrants with respect to any Common Shares (other than the grant
of options pursuant to option plans existing on the date hereof),
without the prior written consent of ▇▇▇▇▇▇ Brothers Inc.; and to
cause each officer, trustee and affiliate of the Company who owns
Units or Common Shares, and use its best efforts to cause each of
The American Airlines, Inc. Master Fixed Benefit Trust, the
Ameritech Pension Trust and the Public Employee Retirement System
of Idaho (the "Continuing Investors") to furnish to the
Representatives, prior to the First Delivery Date, a letter or
letters, in form and substance satisfactory to counsel for the
Underwriters, pursuant to which each such person shall agree not
to, directly or indirectly, offer for sale, sell, contract to
sell, pledge or otherwise dispose of (or enter into any
transaction or device which is designed to, or could be expected
to, result in the disposition by any person at any time in the
future of) any (i) in the case of such officers, trustees and
affiliates of the Company, Units or Common Shares for a period of
two years from the First Delivery Date and (ii) in the case of the
Continuing Investors, Common Shares for a period of one year from
the First Delivery Date, without the prior written consent of
▇▇▇▇▇▇ Brothers Inc. in each case;
(k) To maintain the listing of the Common Shares on the New
York Stock Exchange, Inc.;
(l) Prior to filing with the Commission any reports on Form SR
pursuant to Rule 463 of the Rules and Regulations, to furnish a
copy thereof to the counsel for the Underwriters and receive and
consider its comments thereon, and to deliver promptly to the
Representatives a signed copy of each report on Form SR filed by
it with the Commission;
(m) To apply the net proceeds from the sale of the Shares
being sold by the Company in accordance with the description set
forth in the Prospectus under the caption "Use of Proceeds";
(n) To take such steps as shall be necessary to ensure that
none of the Transaction Entities shall become an "investment
company" within the meaning of such term under the Investment
Company Act of 1940 and the rules and regulations of the
Commission thereunder;
(o) Except as stated in this Agreement and in the Preliminary
Prospectus and Prospectus, no Transaction Entity has taken, nor
will take, directly or indirectly, any action designed to or that
might reasonably be expected to cause or result in stabilization
or manipulation of the price of the Common Shares to facilitate
the sale or resale of the Shares;
15
(p) The Company will use its best efforts to continue to meet
the requirements to qualify as a "real estate investment trust"
under the Code; and
(q) If this Agreement shall be terminated by the Underwriters
because of any failure or refusal on the part of the Transaction
Entities to comply with the terms or fulfill any of the conditions
of this Agreement, the Transaction Entities jointly and severally
agree to reimburse the Representatives for all reasonable out-of-
pocket expenses (including fees and expenses of counsel for the
Underwriters) incurred by the Representatives in connection
herewith.
6. Expenses. The Transaction Entities jointly and severally agree
to pay (a) the costs incident to the authorization, issuance, sale and delivery
of the Shares and any taxes payable in that connection; (b) the costs incident
to the preparation, printing and filing under the Securities Act of the
Registration Statement and any amendments and exhibits thereto; (c) the costs of
distributing the Registration Statement as originally filed and each amendment
thereto and any post-effective amendments thereof (including, in each case,
exhibits), any Preliminary Prospectus, the Prospectus and any amendment or
supplement to the Prospectus, all as provided in this Agreement; (d) the costs
of producing and distributing this Agreement and any other related documents in
connection with the offering, purchase, sale and delivery of the Shares; (f) the
filing fees incident to securing any required review by the National Association
of Securities Dealers, Inc. of the terms of sale of the Shares; (g) any
applicable listing or other fees; (h) the fees and expenses of qualifying the
Shares under the securities laws of the several jurisdictions as provided in
Section 5(i) and of preparing, printing and distributing a Blue Sky Memorandum
(including related fees and expenses of counsel to the Underwriters); (j) [all
expenses of the Independent Underwriter incurred in connection with its actions
as the Independent Underwriter;] and (k) all other costs and expenses incident
to the performance of the obligations of the Transaction Entities under this
Agreement; provided that, except as provided in this Section 6 and in Section 12
the Underwriters shall pay their own costs and expenses, including the costs and
expenses of their counsel, any transfer taxes on the Shares which they may sell
and the expenses of advertising any offering of the Shares made by the
Underwriters.
7. Conditions of Underwriters' Obligations. The respective
obligations of the Underwriters hereunder are subject to the accuracy, when made
and on each Delivery Date, of the representations and warranties of the
Transaction Entities contained herein, to the performance by each Transaction
Entity of its obligations hereunder, and to each of the following additional
terms and conditions:
(a) If, at the time this Agreement is executed and delivered,
it is necessary for the Registration Statement or a post-effective
amendment thereto to be declared effective before the offering of
the Shares may commence, the Registration Statement or such post-
effective amendment shall have become effective not later than
5:30 P.M., New York City time, on the date hereof, or at such
later date and time as shall be consented to in writing by you,
and all filings, if any, required by Rules 424 and 430A under the
Rules and Regulations shall have been timely made; no stop order
suspending the effectiveness of the Registration Statement shall
have been issued and no proceeding for that purpose shall have
been instituted or, to the knowledge of the Transaction Entities
or any Underwriter, threatened by the Commission, and any request
of the Commission for additional information (to be
16
included in the Registration Statement or the Prospectus or
otherwise) shall have been complied with to the satisfaction of
the Representatives.
(b) Subsequent to the effective date of this Agreement, there
shall not have occurred (i) any change, or any development
involving a prospective change, in or affecting the condition,
financial or otherwise, business, properties, net worth, or
results of operations of any Transaction Entity, any of their
subsidiaries or any Property not contemplated by the Prospectus,
which in the opinion of the Representatives, would materially
adversely affect the market for the Shares, or (ii) any event or
development relating to or involving any Transaction Entity, or
any partner, officer, director or trustee of any Transaction
Entity, which makes any statement of a material fact made in the
Prospectus untrue or which, in the opinion of the Company and its
counsel or the Underwriters and their counsel, requires the making
of any addition to or change in the Prospectus in order to state a
material fact required by the Securities Act or any other law to
be stated therein or necessary in order to make the statements
therein not misleading, if amending or supplementing the
Prospectus to reflect such event or development would, in your
opinion, adversely affect the market for the Shares.
(c) All corporate proceedings and other legal matters incident
to the authorization, form and validity of this Agreement, the
Shares, the Registration Statement and the Prospectus, and all
other legal matters relating to this Agreement and the
transactions contemplated hereby shall be reasonably satisfactory
in all material respects to counsel for the Underwriters, and the
Company shall have furnished to such counsel all documents and
information that they may reasonably request to enable them to
pass upon such matters.
(d) Hunton & ▇▇▇▇▇▇▇▇ shall have furnished to the
Representatives its written opinion, as counsel to the Company,
addressed to the Underwriters and dated such Delivery Date, in
form and substance reasonably satisfactory to the Representatives,
to the effect that:
(i) The Company has been duly formed and is validly
existing as a real estate investment trust in good standing
under and by virtue of the laws of the State of Maryland, is
in good standing with the State Department of Assessments and
Taxation of Maryland and as a foreign trust or corporation in
those jurisdictions listed in such opinion, and has all trust
power and authority necessary to own or hold its properties
and to conduct the business in which it is engaged as
described in the Registration Statement and the Prospectus,
and to enter into and perform its obligations under this
Agreement.
(ii) The Company has an authorized capitalization as set
forth in the Prospectus under the caption "Capitalization,"
and all of the issued shares of beneficial interest of the
Company (other than the Shares) have been duly and validly
authorized and issued, are fully paid and non-assessable and
conform in all material respects to the description thereof
contained in the Prospectus.
17
(iii) The Operating Partnership has been duly formed and
is validly existing as a limited partnership under the laws of
the State of Delaware, is duly qualified to do business as a
foreign limited partnership in [Texas, Missouri, Maryland,
Georgia, Virginia, California, Michigan and Wisconsin], and
has all partnership power and authority necessary to own or
hold its properties, to conduct the business in which it is
engaged as described in the Registration Statement and the
Prospectus, and to enter into and perform its obligations
under this Agreement. The General Partner is the sole general
partner of the Operating Partnership. The Operating
Partnership Agreement is in full force and effect, and the
aggregate percentage interests of the Company, the General
Partner and the limited partners in the Operating Partnership
are as set forth in the Prospectus.
(iv) The General Partner has been duly formed and is
validly existing as a corporation in good standing under the
laws of the State of Delaware, is duly qualified to do
business and is in good standing as a foreign corporation in
[Texas, Missouri, Maryland, Georgia, Virginia, California,
Michigan and Wisconsin], and has all corporate power and
authority necessary to own or hold its properties, to conduct
the business in which it is engaged as described in the
Registration Statement and the Prospectus, and to enter into
and perform its obligations under this Agreement. All of the
issued and outstanding capital stock of the General Partner
has been duly authorized and validly issued and is fully paid
and non-assessable, is owned by the Company free and clear of
any security interest, mortgage, pledge, lien, encumbrance,
claim, restriction or equities and has been offered and sold
in compliance with all applicable laws (including, without
limitation, federal or state securities laws).
(v) Each Manager has been duly formed and is validly
existing as a corporation in good standing under the laws of
the State of Delaware, is duly qualified to do business and is
in good standing as a foreign corporation in each jurisdiction
in which its ownership or lease of property or the conduct of
its business requires such qualification, and has all
corporate and authority necessary to own or hold its
properties, to conduct the business in which it is engaged as
described in the Registration Statement and the Prospectus,
and to enter into and perform its obligations under this
Agreement. All of the issued and outstanding capital stock of
each of the Managers has been duly authorized and validly
issued and is fully paid and non-assessable, has been offered
and sold in compliance with all applicable laws (including,
without limitation, federal or state securities laws) and, all
of such capital stock that is owned by the Operating
Partnership (100% of the nonvoting common stock) is owned free
and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim, restriction or equities.
(vi) Each of the Property Affiliates has been duly
organized and is validly existing as a partnership or
corporation, as the case may be, in good standing (if a
corporation) under the laws of its respective jurisdiction of
formation, is duly qualified to do business and is in good
standing (if a
18
corporation) in each jurisdiction in which its ownership or
lease of property or the conduct of its business requires such
qualification, and has all corporate or partnership power and
authority necessary to own or hold its properties and to
conduct the business in which it is engaged. Except as set
forth in the Prospectus, all of the issued shares of capital
stock or partnership interests of each Property Affiliate have
been duly and validly authorized and issued, are fully paid
and non-assessable and are owned directly or indirectly by the
Company and the Operating Partnership, free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim,
restriction or equities.
(vii) The Shares have been duly and validly authorized
and, when issued and delivered against payment therefor as
provided herein, will be duly and validly issued, fully paid
and non-assessable. Upon payment of the purchase price and
delivery of the Shares in accordance herewith, each of the
Underwriters will receive good, valid and marketable title to
the Shares, free and clear of all security interests,
mortgages, pledges, liens, encumbrances, claims, restrictions
and equities. The terms of the Shares conform in all material
respects to all statements and descriptions related thereto
contained in the Prospectus. The form of the certificates to
be used to evidence the Shares are in due and proper form and
comply with all applicable legal requirements. The issuance of
the Shares is not subject to any preemptive or other similar
rights arising under the Declaration of Trust or by-laws of
the Company, Title 8 of the Corporations and Associations
Article of the Annotated Code of Maryland, as amended, or any
agreement or other instrument to which the Company is a party
known to such counsel.
(viii) (A) This Agreement has been duly and validly
authorized, executed and delivered by the each of the
Transaction Entities, and assuming due authorization,
execution and delivery by the Representatives, is a valid and
binding agreement of each of the Transaction Entities; and (B)
the Operating Partnership Agreement and the partnership
agreement or joint venture agreement of each Property
Affiliate, have been duly and validly authorized, executed and
delivered by each Transaction Entity and ▇▇▇▇▇▇▇▇ Group member
party thereto and are valid and binding agreements of the
parties thereto, enforceable against such parties in
accordance with their terms.
(ix) The execution, delivery and performance of this
Agreement by each of the Transaction Entities and the
consummation of the transactions contemplated hereby will not
conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which any of the Transaction
Entities is a party or by which any of the Transaction
Entities is bound or to which any of the Properties or other
assets of any of the Transaction Entities is subject, nor will
such actions result in any violation of the provisions of the
charter, by-laws, certificate of limited partnership or
agreement of limited partnership of any of the Transaction
Entities, or any statute or any order, rule or regulation of
any court or governmental agency or body having jurisdiction
over any of the
19
Transaction Entities or any of their properties or assets; and
except for the registration of the Shares under the Securities
Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under the
Exchange Act and applicable state securities laws in
connection with the purchase and distribution of the Shares by
the Underwriters, no consent, approval, authorization or order
of, or filing or registration with, any such court or
governmental agency or body is required for the execution,
delivery and performance of this Agreement by the Transaction
Entities and the consummation of the transactions contemplated
hereby.
(x) To such counsel's knowledge, other than as set forth
in the Prospectus, there are no contracts, agreements or
understandings between the Company and any person granting
such person the right to require the Company to file a
registration statement under the Securities Act with respect
to any securities of the Company owned or to be owned by such
person or to require the Company to include such securities in
the securities registered pursuant to the Registration
Statement or in any securities being registered pursuant to
any other registration statement filed by the Company under
the Securities Act.
(xi) To the best knowledge of such counsel, there are no
legal or governmental proceedings pending to which any
Transaction Entity is a party or of which any property or
assets of any Transaction Entity is the subject which are not
disclosed in the Prospectus and which, if determined adversely
to such Transaction Entity, might reasonably be expected to
have a material adverse effect on the consolidated financial
position, stockholders' equity, results of operations,
business or prospects of the Company; and to the best
knowledge of such counsel no such proceedings are threatened
or contemplated by governmental authorities or threatened by
others.
(xii) There are no contracts or other documents which are
required to be described in the Prospectus or filed as
exhibits to the Registration Statement by the Securities Act
or by the Rules and Regulations which have not been described
in the Prospectus or filed as exhibits to the Registration
Statement or incorporated therein by reference as permitted by
the Rules and Regulations.
(xiii) To the best knowledge of such counsel, no
relationship, direct or indirect, exists between or among any
of the Transaction Entities on the one hand, and the
directors, officers, stockholders, customers or suppliers of
the Transaction Entities on the other hand, which is required
to be described in the Prospectus which is not so described.
(xiv) No Transaction Entity or, to the best knowledge of
such counsel, Property Affiliate (i) is in violation of its
charter, by-laws, certificate of limited partnership,
agreement of limited partnership or other similar
organizational document or (ii) is in default in any material
respect, and no event has occurred which, with notice or lapse
of time or both, would constitute such a default, in the due
performance or observance of any term,
20
covenant or condition contained in any material indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which it is a party or by which it is bound or
to which any of the Properties or any of its other properties
or assets is subject and which was filed as an exhibit to the
Registration Statement.
(xv) No consent, approval, authorization or other order
of, or registration or filing with, any court, regulatory
body, administrative agency or other governmental body,
agency, or official is required on the part of the Company
(except as have been obtained under the Securities Act and the
Exchange Act or such as may be required under state
securities, real estate syndication or Blue Sky laws governing
the purchase and distribution of the Shares) for the valid
issuance and sale of the Shares to the Underwriters as
contemplated by this Agreement.
(xvi) No Transaction Entity is an "investment company"
within the meaning of such term under the Investment Company
Act of 1940 and the rules and regulations of the Commission
thereunder. The Shares have been approved for listing on the
New York Stock Exchange upon notice of issuance.
(xvii) The Registration Statement was declared effective
under the Securities Act as of the date and time specified in
such opinion, the Prospectus was filed with the Commission
pursuant to the subparagraph of Rule 424(b) of the Rules and
Regulations specified in such opinion on the date specified
therein and, to the best knowledge of such counsel, no stop
order suspending the effectiveness of the Registration
Statement has been issued and, to the best knowledge of such
counsel, no proceeding for that purpose is pending or
threatened by the Commission.
(xviii) The Registration Statement and the Prospectus and
any further amendments or supplements thereto made by the
Company prior to such Delivery Date (other than the financial
statements and related schedules and other financial data
included therein, as to which such counsel need express no
opinion) comply as to form in all material respects with the
requirements of the Securities Act and the Rules and
Regulations.
(xix) The statements contained in the Prospectus under the
captions "Risk Factors," "Properties," "Policies with Respect
to Certain Activities," "Management," "Description of Shares
of Beneficial Interest," "Certain Provisions of Maryland Law
and of the Company's Declaration of Trust and Bylaws," "Shares
Available for Future Sale," "Operating Partnership Agreement,"
and "Federal Income Tax Considerations," insofar as those
statements are descriptions of contracts, agreements or other
legal documents, or they describe federal statutes, rules and
regulations, and except to the extent such statements are
statistics or calculations constitute a fair summary thereof,
and the opinion of such counsel filed as Exhibit 8 to the
Registration Statement is confirmed and the Underwriters may
rely upon such opinion as if it were addressed to them.
21
In rendering such opinion, such counsel may (i) state that its
opinion is limited to matters governed by the Federal laws of the
United States of America; (ii) rely (to the extent such counsel
deems proper and specifies in their opinion), as to matters
involving the application of the laws of the States of Maryland,
Texas and Delaware upon the opinion of other counsel of good
standing, provided that such other counsel is satisfactory to
counsel for the Underwriters and furnishes a copy of its opinion
to the Representatives; (iii) in giving each of the opinions
referred to in Section 7(d)(iv), (v), and (vii), state that such
opinion is based upon an examination of the statutes and
regulations of certain States referenced in such opinion in the
latest unofficial compilations, and that such opinion is subject
to the broad discretionary powers of securities commissioners or
other authorized officials to, among other things, withdraw or
deny the exempt status accorded by statute to particular classes
of securities or transactions, to impose additional requirements,
to require additional information, and to issue stop orders or to
deny, withdraw, revoke or suspend permits or registrations where
such have been granted; and (iv) in giving the opinion referred to
in subclause (B) in Section 7(d)(viii), state that such opinion
with respect to the enforceability of such documents may be
limited by bankruptcy, fraudulent conveyance, insolvency,
reorganization, moratorium, and other laws relating to or
affecting creditors' rights generally and by general equitable
principles; provided that such counsel shall state that it
believes that both the Underwriters and it are justified in
relying upon such opinions of local counsel. Such counsel shall
also have furnished to the Representatives a written statement,
addressed to the Underwriters and dated such Delivery Date, in
form and substance satisfactory to the Representatives, to the
effect that (x) such counsel has acted as counsel to the Company
in connection with the preparation of the Registration Statement
and the Prospectus, and (y) based on the foregoing, no facts have
come to the attention of such counsel which lead it to believe
that the Registration Statement, as of the Effective Date,
contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary
in order to make the statements therein not misleading, or that
the Prospectus contains any untrue statement of a material fact or
omits to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The
foregoing opinion and statement may be qualified by a statement to
the effect that such counsel does not assume any responsibility
for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus except
for the statements made in the Prospectus under the captions
"Description of Shares of Beneficial Interest" and "Federal Income
Tax Considerations" insofar as such statements relate to the
Shares and concern legal matters, and may state that such counsel
expresses no belief with respect to the financial statements and
notes thereto and other financial data included in the
Registration Statement or the Prospectus.
(e) The Representatives shall have received from ▇▇▇▇▇▇ &
▇▇▇▇▇, counsel for the Underwriters, such opinion or opinions,
dated such Delivery Date, with respect to the issuance and sale of
the Shares, the Registration Statement, the Prospectus and other
related matters as the Representatives may reasonably require, and
the Company shall have furnished to such counsel such documents as
they reasonably request for the purpose of enabling them to pass
upon such matters.
22
(f) At the time of execution of this Agreement, the
Representatives shall have received from Coopers & ▇▇▇▇▇▇▇ L.L.P.
a letter, in form and substance satisfactory to the
Representatives, addressed to the Underwriters and dated the date
hereof (i) confirming that they are independent public accountants
within the meaning of the Securities Act and are in compliance
with the applicable requirements relating to the qualification of
accountants under Rule 2-01 of Regulation S-X of the Commission,
and (ii) stating, as of the date hereof (or, with respect to
matters involving changes or developments since the respective
dates as of which specified financial information is given in the
Prospectus, as of a date not more than five days prior to the date
hereof), the conclusions and findings of such firm with respect to
the financial information and other matters ordinarily covered by
accountants' "comfort letters" to underwriters in connection with
registered public offerings.
(g) With respect to the letter of Coopers & ▇▇▇▇▇▇▇ L.L.P.
referred to in the preceding paragraph and delivered to the
Representatives concurrently with the execution of this Agreement
(the "initial letter"), the Company shall have furnished to the
Representatives a letter (the "bring-down letter") of such
accountants, addressed to the Underwriters and dated such Delivery
Date (i) confirming that they are independent public accountants
within the meaning of the Securities Act and are in compliance
with the applicable requirements relating to the qualification of
accountants under Rule 2-01 of Regulation S-X of the Commission,
(ii) stating, as of the date of the bring-down letter (or, with
respect to matters involving changes or developments since the
respective dates as of which specified financial information is
given in the Prospectus, as of a date not more than five days
prior to the date of the bring-down letter), the conclusions and
findings of such firm with respect to the financial information
and other matters covered by the initial letter and (iii)
confirming in all material respects the conclusions and findings
set forth in the initial letter.
(h) Each Transaction Entity shall have furnished to the
Representatives a certificate, dated such Delivery Date, of its
Chairman of the Board, its President or a Vice President and its
chief financial officer stating that:
(i) The representations, warranties and agreements of
the Transaction Entities in Section 1 are true and correct as
of such Delivery Date; the Transaction Entities complied with
all of their agreements contained herein; and the conditions
set forth in Sections 7(a) and 7(i) have been fulfilled; and
(ii) They have carefully examined the Registration
Statement and the Prospectus and, in their opinion (A) as of
the Effective Date, the Registration Statement and Prospectus
did not include any untrue statement of a material fact and
did not omit to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading (with respect to the Prospectus, in light of the
circumstances in which they were made), and (B) since the
Effective Date no event has occurred which should have been
set forth in a supplement or amendment to the Registration
Statement or the Prospectus.
23
(i) (i) None of the Transaction Entities or any Property shall
have sustained since the date of the latest audited financial
statements included in the Prospectus any loss or interference
with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as
set forth or contemplated in the Prospectus or (ii) since such
date there shall not have been any change in the capital stock or
long-term debt of any Transaction Entity or any change, or any
development involving a prospective change, in or affecting any
Property or the general affairs, management, financial position,
stockholders' equity or results of operations of any Transaction
Entity, otherwise than as set forth or contemplated in the
Prospectus, the effect of which, in any such case described in
clause (i) or (ii), is, in the judgment of the Representatives, so
material and adverse as to make it impracticable or inadvisable to
proceed with the public offering or the delivery of the Shares
being delivered on such Delivery Date on the terms and in the
manner contemplated in the Prospectus.
(j) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in
securities generally on the New York Stock Exchange or the
American Stock Exchange or in the over-the-counter market, or
trading in any securities of the Company on any exchange or in the
over-the-counter market, shall have been suspended or minimum
prices shall have been established on any such exchange or such
market by the Commission, by such exchange or by any other
regulatory body or governmental authority having jurisdiction,
(ii) a banking moratorium shall have been declared by Federal or
state authorities, (iii) the United States shall have become
engaged in hostilities, there shall have been an escalation in
hostilities involving the United States or there shall have been a
declaration of a national emergency or war by the United States or
(iv) there shall have occurred such a material adverse change in
general economic, political or financial conditions (or the effect
of international conditions on the financial markets in the United
States shall be such) as to make it, in the judgment of a majority
in interest of the several Underwriters, impracticable or
inadvisable to proceed with the public offering or delivery of the
Shares being delivered on such Delivery Date on the terms and in
the manner contemplated in the Prospectus.
(k) The Common Shares shall be listed on the New York Stock
Exchange, Inc.
(l) The Transaction Entities shall not have failed at or prior
to such Delivery Date to have performed or complied with any of
their agreements herein contained and required to be performed or
complied with by them hereunder at or prior to such Delivery Date.
(m) On the First Delivery Date, counsel for the Underwriters
shall have been furnished with such documents and opinions as they
may require for the purpose of enabling them to pass upon the
issuance and sale of the Shares as herein contemplated and related
proceedings, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the
Transaction Entities in connection with
24
the issuance and sale of the Shares as herein contemplated shall
be satisfactory in form and substance to the Representatives and
counsel for the Underwriters.
(n) You shall have been furnished with the written agreements
referred to in Section 5(j) hereof.
(o) The Company shall have furnished or caused to be furnished
to you such further certificates and documents as the
Representatives shall have reasonably requested.
(p) In the event that the Underwriters exercise their option
provided in Section 2(b) hereof to purchase all or any portion of
the Option Shares, the representations and warranties of the
Transaction Entities contained herein and the statements in any
certificates furnished by the Transaction Entities hereunder shall
be true and correct as of each Date of Delivery and, at the
relevant Date of Delivery, the Representatives shall have
received:
(i) A certificate, dated such Date of Delivery, of the
President or a Vice President of each Transaction Entity and
of the chief financial or chief accounting officer of each
Transaction Entity confirming that the certificate delivered
on the First Delivery Date pursuant to Section 7(h) hereof
remains true and correct as of such Date of Delivery.
(ii) The favorable opinion of Hunton & ▇▇▇▇▇▇▇▇, counsel
for the Transaction Entities, in form and substance
satisfactory to counsel for the Underwriters, dated such Date
of Delivery, relating to the Option Shares to be purchased on
such Date of Delivery and otherwise to the same effect as the
opinions required by Section 7(d) hereof.
(iii) The favorable opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇, counsel for
the Underwriters, dated such Date of Delivery, relating to the
Option Shares to be purchased on such Date of Delivery and
otherwise to the same effect as the opinion required by
Section (e) hereof.
(iv) A letter from Coopers & ▇▇▇▇▇▇▇ L.L.P., in form and
substance satisfactory to the Representatives and dated such
Date of Delivery, substantially the same in form and substance
as the letters furnished to the Representatives pursuant to
Section 7(f) hereof.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
25
Any certificate or document signed by any officer of the Transaction
Entities and delivered to the Underwriters, or to counsel for the Underwriters,
shall be deemed a representation and warranty by the Transaction Entities to
each Underwriter as to the statements made therein.
The several obligations of the Underwriters to purchase Option Shares
hereunder are subject to the satisfaction on and as of any Date of Delivery of
the conditions set forth in this Section 7, except that, if any Date of Delivery
is other than the First Delivery Date, the certificates, opinions and letters
referred to in Sections 7(d) through 7(h) hereof shall be dated the Date of
Delivery in question and the opinions called for by Sections 7(d) and 7(e)
hereof shall be revised to reflect the sale of Option Shares.
8. Effective Date of Agreement. This Agreement shall become
effective: (i) upon the execution hereof by the parties hereto; or (ii) if, at
the time this Agreement is executed and delivered, it is necessary for the
Registration Statement or a post-effective amendment thereto to be declared
effective before the offering of the Shares may commence, when notification of
the effectiveness of the Registration Statement or such post-effective amendment
has been released by the Commission.
9. Default by One or More of the Underwriters. If, on either Delivery
Date, any Underwriter defaults in the performance of its obligations under this
Agreement, the remaining non-defaulting Underwriters shall be obligated to
purchase the Shares which the defaulting Underwriter agreed but failed to
purchase on such Delivery Date in the respective proportions which the number of
Firm Shares set forth opposite the name of each remaining non-defaulting
Underwriter in Schedule 1 hereto bears to the total number of Firm Shares set
forth opposite the names of all the remaining non-defaulting Underwriters in
Schedule 1 hereto; provided, however, that the remaining non-defaulting
Underwriters shall not be obligated to purchase any of the Shares on such
Delivery Date if the total number of Shares which the defaulting Underwriter or
Underwriters agreed but failed to purchase on such date exceeds 9.09% of the
total number of Shares to be purchased on such Delivery Date, and any remaining
non-defaulting Underwriter shall not be obligated to purchase more than 110% of
the number of Shares which it agreed to purchase on such Delivery Date pursuant
to the terms of Section 2. If the foregoing maximums are exceeded, the remaining
non-defaulting Underwriters, or those other underwriters satisfactory to the
Representatives who so agree, shall have the right, but shall not be obligated,
to purchase, in such proportion as may be agreed upon among them, all the Shares
to be purchased on such Delivery Date. If the remaining Underwriters or other
underwriters satisfactory to the Representatives do not elect to purchase the
Shares which the defaulting Underwriter or Underwriters agreed but failed to
purchase on such Delivery Date, this Agreement (or, with respect to the Second
Delivery Date, the obligation of the Underwriters to purchase, and of the
Company to sell, the Option Shares) shall terminate without liability on the
part of any non-defaulting Underwriter or the Transaction Entities, except that
the Transaction Entities will continue to be liable for the payment of expenses
to the extent set forth in Sections 6 and 12. As used in this Agreement, the
term "Underwriter" includes, for all purposes of this Agreement unless the
context requires otherwise, any party not listed in Schedule 1 hereto who,
pursuant to this Section 9, purchases Initial Shares which a defaulting
Underwriter agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Transaction Entities for damages caused by its
default. If other underwriters are obligated or agree to purchase the Shares of
a defaulting or withdrawing Underwriter, either the Representatives or the
Company may postpone the Delivery Date for up to seven full business days
26
in order to effect any changes that in the opinion of counsel for the Company or
counsel for the Underwriters may be necessary in the Registration Statement, the
Prospectus or in any other document or arrangement.
10. Indemnification and Contribution.
(a) The Transaction Entities jointly and severally, shall indemnify
and hold harmless each Underwriter, its officers and employees and each person,
if any, who controls any Underwriter within the meaning of the Securities Act,
from and against any loss, claim, damage or liability, joint or several, or any
action in respect thereof (including, but not limited to, any loss, claim,
damage, liability or action relating to purchases and sales of Shares), to which
that Underwriter, officer, employee or controlling person may become subject,
under the Securities Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained (A) in any Preliminary
Prospectus, the Registration Statement or the Prospectus or in any amendment or
supplement thereto or (B) in any blue sky application or other document prepared
or executed by the Company (or based upon any written information furnished by
the Company) specifically for the purpose of qualifying any or all of the Shares
under the securities laws of any state or other jurisdiction (any such
application, document or information being hereinafter called a "Blue Sky
Application"), (ii) the omission or alleged omission to state in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or in any amendment or
supplement thereto, or in any Blue Sky Application any material fact required to
be stated therein or necessary to make the statements therein not misleading
(with respect to the Prospectus, in light of the circumstances under which they
were made), or (iii) any act or failure to act or any alleged act or failure to
act by any Underwriter in connection with, or relating in any manner to, the
Shares or the offering contemplated hereby, and which is included as part of or
referred to in any loss, claim, damage, liability or action arising out of or
based upon matters covered by clause (i) or (ii) above (provided that the
Transaction Entities shall not be liable under this clause (iii) to the extent
that it is determined in a final judgment by a court of competent jurisdiction
that such loss, claim, damage, liability or action resulted directly from any
such acts or failures to act undertaken or omitted to be taken by such
Underwriter through its gross negligence or willful misconduct), and shall
reimburse each Underwriter and each such officer, employee or controlling person
promptly upon demand for any legal or other expenses reasonably incurred by that
Underwriter, officer, employee or controlling person in connection with
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that the Transaction Entities shall not be liable in any such case to the extent
that any such loss, claim, damage, liability or action arises out of, or is
based upon, any untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration Statement
or the Prospectus, or in any such amendment or supplement, or in any Blue Sky
Application, in reliance upon and in conformity with written information
concerning such Underwriter furnished to the Company through the Representatives
by or on behalf of any Underwriter specifically for inclusion therein. The
foregoing indemnity agreement is in addition to any liability which the
Transaction Entities may otherwise have to any Underwriter or to any officer,
employee or controlling person of that Underwriter.
(b) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless each Transaction Entity, its officers and employees, each of its
directors, and each person, if any, who controls each Transaction Entity within
the meaning of the Securities Act, from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which
27
each Transaction Entity or any such director, officer or controlling person may
become subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is based upon, (i) any
untrue statement or alleged untrue statement of a material fact contained (A) in
any Preliminary Prospectus, the Registration Statement or the Prospectus or in
any amendment or supplement thereto, or (B) in any Blue Sky Application or (ii)
the omission or alleged omission to state in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or in any amendment or supplement
thereto, or in any Blue Sky Application any material fact required to be stated
therein or necessary to make the statements therein not misleading, but in each
case only to the extent that the untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with
written information concerning such Underwriter furnished to the Company through
the Representatives by or on behalf of that Underwriter specifically for
inclusion therein, and shall reimburse each Transaction Entity and any such
director, officer or controlling person for any legal or other expenses
reasonably incurred by each Transaction Entity or any such director, officer or
controlling person in connection with investigating or defending or preparing to
defend against any such loss, claim, damage, liability or action as such
expenses are incurred. The foregoing indemnity agreement is in addition to any
liability which any Underwriter may otherwise have to each Transaction Entity or
any such director, officer, employee or controlling person.
(c) Promptly after receipt by an indemnified party under this Section
10 of notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 10, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 10 except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this Section 10.
If any such claim or action shall be brought against an indemnified party, and
it shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel reasonably satisfactory to the indemnified party. After notice from
the indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 10 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
the Representatives shall have the right to employ counsel to represent jointly
the Representatives and those other Underwriters and their respective officers,
employees and controlling persons who may be subject to liability arising out of
any claim in respect of which indemnity may be sought by the Underwriters
against the Transaction Entities under this Section 10 if, in the reasonable
judgment of the Representatives, it is advisable for the Representatives and
those Underwriters, officers, employees and controlling persons to be jointly
represented by separate counsel, and in that event the fees and expenses of such
separate counsel shall be paid by the indemnifying party. No indemnifying party
shall (i) without the prior written consent of the indemnified parties (which
consent shall not be unreasonably withheld), settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding, or (ii) be
liable for any settlement of any such action effected without its written
consent
28
(which consent shall not be unreasonably withheld), but if settled with the
consent of the indemnifying party or if there be a final judgment of the
plaintiff in any such action, the indemnifying party agrees to indemnify and
hold harmless any indemnified party from and against any loss or liability by
reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 10 shall for
any reason be unavailable to or insufficient to hold harmless an indemnified
party under Section 10(a) or 10(c) in respect of any loss, claim, damage or
liability, or any action in respect thereof, referred to therein, then each
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Transaction Entities on the one hand and the Underwriters on the
other from the offering of the Shares or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Transaction Entities on the one hand
and the Underwriters on the other with respect to the statements or omissions
which resulted in such loss, claim, damage or liability, or action in respect
thereof, as well as any other relevant equitable considerations. The relative
benefits received by the Transaction Entities on the one hand and the
Underwriters on the other with respect to such offering shall be deemed to be in
the same proportion as the total net proceeds from the offering of the Shares
purchased under this Agreement (before deducting expenses) received by the
Transaction Entities, on the one hand, and the total underwriting discounts and
commissions received by the Underwriters with respect to the Shares purchased
under this Agreement, on the other hand, bear to the total gross proceeds from
the offering of the Shares under this Agreement, in each case as set forth in
the table on the cover page of the Prospectus. The relative fault shall be
determined by reference to whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Transaction Entities or the Underwriters, the
intent of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Transaction
Entities and the Underwriters agree that it would not be just and equitable if
contributions pursuant to this Section were to be determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take into account
the equitable considerations referred to herein. The amount paid or payable by
an indemnified party as a result of the loss, claim, damage or liability, or
action in respect thereof, referred to above in this Section shall be deemed to
include, for purposes of this Section 10(d), any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 10(d), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Shares underwritten
by it and distributed to the public was offered to the public exceeds the amount
of any damages which such Underwriter has otherwise paid or become liable to pay
by reason of any untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute as provided in this Section 10(d) are
several in proportion to their respective underwriting obligations and not
joint.
(e) The Underwriters severally confirm and each Transaction Entity
acknowledges that (i) the statements with respect to the public offering of the
Shares by the Underwriters set forth on the cover page of, (ii) the legend
concerning over-allotments on the inside front cover page of, and (iii) the
names of the Underwriters and the number of Shares which they are
29
each purchasing, the concession and reallowance figures and the information
contained in the seventh, ninth and tenth paragraphs and the first sentence of
the eleventh paragraph, in each case appearing under the caption "Underwriting"
in, the Prospectus are correct and constitute the only information concerning
such Underwriters furnished in writing to the Company by or on behalf of the
Underwriters specifically for inclusion in the Registration Statement and the
Prospectus.
11. Termination. The obligations of the Underwriters hereunder may be
terminated by the Representatives by notice given to and received by the Company
prior to delivery of and payment for the Firm Shares if, prior to that time, any
of the events described in Sections 7(i), 7(j) or 7(l), shall have occurred or
if the Underwriters shall decline to purchase the Shares for any reason
permitted under this Agreement.
12. Reimbursement of Underwriters' Expenses. If the Company shall
fail to tender the Shares for delivery to the Underwriters by reason of any
failure, refusal or inability on the part of the Transaction Entities to perform
any agreement on their part to be performed, or because any other condition of
the Underwriters' obligations hereunder required to be fulfilled by the
Transaction Entities is not fulfilled (other than the condition set forth in
Section 7(j) herein), the Transaction Entities will reimburse the Underwriters
for all reasonable out-of-pocket expenses (including fees and disbursements of
counsel) incurred by the Underwriters in connection with this Agreement and the
proposed purchase of the Shares, and upon demand the Transaction Entities shall
pay the full amount thereof to the Representatives. IF THIS AGREEMENT IS
TERMINATED PURSUANT TO SECTION 9 BY REASON OF THE DEFAULT OF ONE OR MORE
UNDERWRITERS, THE TRANSACTION ENTITIES SHALL NOT BE OBLIGATED TO REIMBURSE ANY
DEFAULTING UNDERWRITER ON ACCOUNT OF THOSE EXPENSES.
13. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by
mail, telex or facsimile transmission to ▇▇▇▇▇▇ Brothers Inc.,
Three World Financial Center, New York, New York 10285, Attention:
Syndicate Department (Fax: ▇▇▇-▇▇▇-▇▇▇▇), with a copy, in the case
of any notice pursuant to Section 10(c), to the Director of
Litigation, Office of the General Counsel, ▇▇▇▇▇▇ Brothers Inc., ▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇;
(b) if to the Transaction Entities shall be delivered or sent
by mail, telex or facsimile transmission to the Company, ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇ (Fax: ▇▇▇-▇▇▇-▇▇▇▇);
provided, however, that any notice to an Underwriter pursuant to Section 10(c)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to the
Representatives, which address will be supplied to any other party hereto by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Transaction
Entities shall be entitled to act and rely upon any request, consent, notice or
agreement given or made on behalf of the Underwriters by ▇▇▇▇▇▇ Brothers Inc.
14. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Underwriters, the Transaction
Entities and their respective
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personal representatives and successors. This Agreement and the terms and
provisions hereof are for the sole benefit of only those persons, except that
(A) the representations, warranties, indemnities and agreements of the
Transaction Entities contained in this Agreement shall also be deemed to be for
the benefit of the person or persons, if any, who control any Underwriter within
the meaning of Section 15 of the Securities Act and (B) the indemnity agreement
of the Underwriters contained in Section 10(b) of this Agreement shall be deemed
to be for the benefit of directors of the Transaction Entities, officers of the
Company who have signed the Registration Statement and any person controlling
the Transaction Entities within the meaning of section 15 of the Securities Act.
Nothing in this Agreement is intended or shall be construed to give any person,
other than the persons referred to in this Section 14, any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provision
contained herein.
15. Survival. The respective indemnities, representations, warranties
and agreements of the Transaction Entities and the Underwriters contained in
this Agreement or made by or on behalf on them, respectively, pursuant to this
Agreement, shall survive the delivery of and payment for the Shares and shall
remain in full force and effect, regardless of any investigation made by or on
behalf of any of them or any person controlling any of them.
16. Definition of the Terms "Business Day" and "Subsidiary". For
purposes of this Agreement, (a) "business day" means any day on which the New
York Stock Exchange, Inc. is open for trading and (b) "subsidiary" has the
meaning set forth in Rule 405 of the Rules and Regulations.
17. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of New York.
18. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
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19. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
If the foregoing correctly sets forth the agreement between the
Company and the Underwriters, please indicate your acceptance in the space
provided for that purpose below.
Very truly yours,
▇▇▇▇▇▇▇▇ PROPERTIES TRUST
By
----------------------------
Name:
Title:
▇▇▇▇▇▇▇▇ PROPERTIES ACQUISITION
PARTNERS, L.P.
By: ▇▇▇▇▇▇▇▇ Properties Trust, its general
partner
By
------------------------
Name:
Title:
▇▇▇▇▇▇▇▇ PROPERTIES I, INC.
By
------------------------------
Name:
Title:
▇▇▇▇▇▇▇▇ PROPERTIES RUN DEEP, INC.
By
------------------------------
Name:
Title:
32
▇▇▇▇▇▇▇▇ PROPERTIES LIMITED II, INC.
By
-------------------------------
Name:
Title:
Accepted:
▇▇▇▇▇▇ Brothers Inc.
By
-------------------------------
Authorized Representatives
For itself and as Representatives
of the several Underwriters named
in Schedule 1 hereto
33
SCHEDULE 1
Number of
Underwriters Shares
------------ ---------
▇▇▇▇▇▇ Brothers Inc................................
Alex. ▇▇▇▇▇ & Sons Incorporated....................
▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc...........................
Prudential Securities Incorporated.................
▇▇▇▇▇ ▇▇▇▇▇▇ Inc...................................
Principal Financial Securities, Inc................
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc....................
Total......................................... 10,000,000
==========
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