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EXHIBIT 1.01
CRESCENT REAL ESTATE EQUITIES COMPANY
(a Texas real estate investment trust)
Common Shares of Beneficial Interest
PURCHASE AGREEMENT
April 23, 1998
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
Crescent Real Estate Equities Company, a Texas real estate
investment trust (the "COMPANY"), proposes to issue and sell to Xxxxxxx Xxxxx &
Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated ("YOU" or the
"UNDERWRITER") an aggregate of 1,365,138 common shares of the Company's common
shares of beneficial interest, $.01 par value per share (the "UNDERWRITTEN
SECURITIES" or "COMMON SHARES"). The Underwriter intends to deposit the Common
Shares with the trustee of the Equity Investor Fund Xxxxx & Steers Realty
Majors Portfolio (A Unit Investment Trust) (the "Trust"), a registered unit
investment trust under the Investment Company Act of 1940, as amended, for
which the Underwriter acts as sponsor and depositor, in exchange for units in
the Trust as soon after the execution and delivery hereof as in the judgment of
the Underwriter is advisable.
The Company has filed with the U.S. Securities and Exchange
Commission (the "COMMISSION") a registration statement on Form S-3 (No.
333-38071) for the registration of certain preferred shares of beneficial
interest, $.01 par value per share (the "PREFERRED SHARES"), common shares of
beneficial interest, $.01 par value per share (the "COMMON SHARES"), and
warrants for the purchase of Common Shares (collectively, the "REGISTERED
SECURITIES") under the Securities Act of 1933, as amended (the "1933 ACT"), and
the offering thereof from time to time in accordance with Rule 415 of the rules
and regulations of the Commission under the 1933 Act (the "1933 ACT
REGULATIONS"), and the Company has filed such
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amendment or amendments thereto as may have been required prior to the
execution of this Purchase Agreement (the "AGREEMENT"). Such registration
statement, as amended, has been declared effective by the Commission. Such
registration statement, including documents incorporated therein by reference,
and the prospectus constituting a part thereof (including, in each case, any
information deemed to be a part thereof pursuant to Rule 430A(b) of the 1933
Act Regulations and any prospectus supplement relating to the offering of the
Underwritten Securities pursuant to Rule 415 of the 1933 Act regulations (a
"PROSPECTUS SUPPLEMENT")), as from time to time amended or supplemented
pursuant to the 1933 Act or otherwise, are hereinafter referred to as the
"REGISTRATION STATEMENT," and the "PROSPECTUS," except that if any revised
prospectus shall be provided to you by the Company for use in connection with
the offering of the Underwritten Securities that differs from the Prospectus on
file at the Commission at the time the Registration Statement became effective
(whether or not such revised prospectus is required to be filed by the Company
pursuant to Rule 424(b) of the 1933 Act Regulations), the term "PROSPECTUS"
shall refer to each such revised prospectus from and after the time it is first
provided to you, for such use; and except further that a Prospectus Supplement
shall be deemed to have supplemented a Prospectus only with respect to the
offering of the Underwritten Securities. All references in this Agreement to
financial statements and schedules and other information that are "contained,"
"included" or "stated" in the Registration Statement or a Prospectus (and all
other references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information that are or are deemed
to be incorporated by reference in the Registration Statement or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement or a Prospectus shall
be deemed to mean and include the filing of any document under the 1934 Act
that is or is deemed to be incorporated by reference in the Registration
Statement or the Prospectus, as the case may be. If the Company elects to rely
on Rule 434 under the 1933 Act Regulations, all references to a Prospectus
shall be deemed to include, without limitation, the form of prospectus and the
abbreviated term sheet, taken together, provided by the Company in reliance on
Rule 434 under the 1933 Act (the "RULE 434 PROSPECTUS").
SECTION 1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE
OPERATING PARTNERSHIP.
(a) The Company and Crescent Real Estate Equities Limited
Partnership, a Delaware limited partnership (the "OPERATING PARTNERSHIP"),
jointly and severally, represent and warrant to you as of the date hereof, as
follows:
(i) The Registration Statement and the Prospectus, at the
time the Registration Statement became effective and as of the date
hereof, complied, and at the Closing Time (as defined herein) or any
Date of Delivery (as
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defined herein) will comply, in all material respects, with the
requirements of the 1933 Act and the 1933 Act Regulations; the
Registration Statement, at the time the Registration Statement became
effective and as of the date hereof, did not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading. The Prospectus, as of the date hereof, does comply, and
at the Closing Time and any Date of Delivery will comply, in all
material respects with the requirements of the 1933 Act and the 1933
Act Regulations, and as of the date hereof does not, and as of the
Closing Date will not, contain an untrue statement of a material fact
or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that the representations
and warranties in this paragraph shall not apply to statements in or
omissions from the Registration Statement or the Prospectus made in
reliance upon and in conformity with written information furnished to
the Company through you specifically for inclusion in the Registration
Statement or the Prospectus.
(ii) 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 the Company or the Operating Partnership, threatened by the
Commission or by the state securities authority of any jurisdiction.
No order preventing or suspending the use of the Prospectus has been
issued, and no proceeding for that purpose has been instituted or, to
the knowledge of the Company or the Operating Partnership, threatened
by the Commission or by the state securities authority of any
jurisdiction.
(iii) Each of Xxxxxx Xxxxxxxx LLP, the accounting firm
whose report on the financial statements and supporting schedule of
the Company is included in the Registration Statement, and any other
accounting firm whose report on financial statements is included in
the Registration Statement, is an independent public accountant as
required by the 1933 Act and the 1933 Act Regulations.
(iv) The financial statements (including the notes
thereto) included in the Registration Statement and the Prospectus
present fairly the financial position of the respective entity or
entities presented therein at the respective dates indicated and the
results of their operations for the respective periods specified, and
except as otherwise stated in the Registration Statement, said
financial statements have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis. The
supporting schedule included in the Registration Statement presents
fairly the information required to be stated therein. The financial
information and data included in the Registration Statement and the
Prospectus present
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fairly the information included therein and have been prepared on a
basis consistent with that of the financial statements included in the
Registration Statement and the Prospectus and the books and records of
the respective entities presented therein. The pro forma financial
information included in the Prospectus has been prepared in accordance
with the applicable requirements of Rules 11-01 and 11-02 of
Regulation S-X under the 1933 Act and other 1933 Act Regulations and
American Institute of Certified Public Accountants ("AICPA")
guidelines with respect to pro forma financial information and
includes all adjustments necessary to present fairly the pro forma
financial position of the respective entity or entities presented
therein at the respective dates indicated and the results of their
operations for the respective periods specified. Other than the
historical and pro forma financial statements (and schedule) included
therein, no other historical or pro forma financial statements (or
schedules) are required by the 1933 Act or the 1933 Act Regulations to
be included in the Registration Statement. Except as reflected or
disclosed in the financial statements included in the Registration
Statement or otherwise set forth in the Prospectus, none of the
Company, the Operating Partnership, any of the Subsidiaries or the
Residential Development Corporations (as such terms are hereinafter
defined) is subject to any material indebtedness, obligation, or
liability, contingent or otherwise.
(v) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as
otherwise stated therein, (A) there has been no material adverse
change in the condition, financial or otherwise, or in the earnings,
assets, business affairs or business prospects of the Company, the
Operating Partnership, the Subsidiaries and the Residential
Development Corporations, considered as one enterprise, whether or not
arising in the ordinary course of business, (B) no material casualty
loss or material condemnation or other material adverse event with
respect to any real property or improvements thereon owned or leased
by any of the Company, the Operating Partnership, any of its
Subsidiaries or any of the Residential Development Corporations,
including any property underlying indebtedness held by the Company
(each individually a "PROPERTY" and collectively, the "PROPERTIES"),
the Operating Partnership, any of the Subsidiaries or any of the
Residential Development Corporations, has occurred that is material to
the Company, the Operating Partnership, the Subsidiaries and the
Residential Development Corporations considered as one enterprise, (C)
there have been no acquisitions or other transactions entered into by
the Company, the Operating Partnership, any Subsidiary or any
Residential Development Corporation other than those in the ordinary
course of business that are material with respect to such entities,
considered as one enterprise, or would result in any inaccuracy in the
representations contained in Section 1(a)(iv) above, (D) except as
described in the Prospectus and except for regular quarterly dividends
or distributions on the Common
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Shares, there has been no dividend or distribution of any kind
declared, paid or made by the Company, or by the Operating Partnership
with respect to its partnership interests, and (E) there has been no
change in the capital stock of the Company or its Subsidiaries or the
Residential Development Corporations or the partnership interests of
the Operating Partnership, or any increase in the indebtedness of the
Company, the Operating Partnership, the Subsidiaries or the
Residential Development Corporations that is material to such
entities, considered as one enterprise.
(vi) The Company has been duly formed as a real estate
investment trust under the laws of the State of Texas with power and
authority to own, lease and operate its properties, to conduct the
business in which it is engaged or proposes to engage as described in
the Prospectus and to enter into and perform its obligations under
this Agreement. According to the County Clerk of Tarrant County,
Texas, the Restated Declaration of Trust of the Company is recorded in
Volume 12645, beginning at Page 1811, in the records of the County
Clerk. The Restated Declaration of Trust is in effect, and no
dissolution, revocation or forfeiture proceedings regarding the
Company have been commenced. The Company is duly qualified as a
foreign organization to transact business and is in good standing in
each jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify would not have a
material adverse effect on the condition, financial or otherwise, or
the earnings, assets, business affairs or business prospects of the
Company, the Operating Partnership, the Subsidiaries and the
Residential Development Corporations considered as one enterprise.
(vii) The Operating Partnership has been duly formed and is
validly existing as a limited partnership in good standing under the
Delaware Revised Uniform Limited Partnership Act (the "DELAWARE ACT")
with partnership power and authority to own, lease and operate its
properties, to conduct the business in which it is engaged or proposes
to engage as described in the Prospectus and to enter into and perform
its obligations under this Agreement. The Operating Partnership is
duly qualified or registered as a foreign partnership and is in good
standing in each jurisdiction in which such qualification or
registration is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure to so qualify or register would not have a material adverse
effect on the condition, financial or otherwise, or the earnings,
assets, business affairs or business prospects of the Company, the
Operating Partnership, the Subsidiaries and the Residential
Development Corporations considered as one enterprise. The Second
Amended and Restated Agreement of Limited Partnership of the Operating
Partnership (the "PARTNERSHIP AGREEMENT"), is a valid and binding
agreement enforceable in accordance with its terms. At Closing Time
(as hereinafter defined), Crescent Real
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Estate Equities, Ltd., a Delaware corporation ("CGP, INC."), a wholly
owned subsidiary of the Company, will be the sole general partner of
the Operating Partnership and will be the holder of one percent (1%)
of the interests in the Operating Partnership. Entities in which the
Company directly or indirectly has a majority ownership interest are
hereinafter referred to as the "SUBSIDIARIES," and each, individually,
as a "SUBSIDIARY." Houston Area Development Corp., a Texas
corporation, Mira Vista Development Corp., a Texas corporation,
Crescent Development Management Corp., a Delaware corporation, Desert
Mountain Development Corporation, a Delaware corporation, and The
Woodlands Land Company, Inc., a Texas corporation, are referred to
herein collectively as the "RESIDENTIAL DEVELOPMENT CORPORATIONS."
(viii) Each of the Subsidiaries and the Residential
Development Corporations has been duly organized and is validly
existing as a corporation, limited partnership, or limited liability
company, as the case may be, in good standing under the laws of its
respective state of organization, with full power and authority to
own, lease and operate its properties, to conduct the business in
which it is engaged or proposes to engage as described in the
Prospectus. Each of the Subsidiaries and the Residential Development
Corporations is duly qualified as a foreign corporation, limited
partnership, or limited liability company, as the case may be, to
transact business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except
where the failure to so qualify would not have a material adverse
effect on the condition, financial or otherwise, or the earnings,
assets, business affairs or business prospects of the Company, the
Operating Partnership, the Subsidiaries and the Residential
Development Corporations considered as one enterprise. Each of the
partnership agreements, limited liability company agreements, or
other, similar instruments to which the Company or any of its
Subsidiaries is a party has been duly authorized, executed and
delivered by the parties thereto and constitutes the valid agreement
thereof, enforceable in accordance with its terms. All of the issued
and outstanding shares of capital stock of each of the corporate
Subsidiaries and the Residential Development Corporations have been
duly authorized and validly issued and are fully paid and
non-assessable. The ownership by the Company, the Operating
Partnership or the Subsidiaries of the shares of capital stock or
limited partnership or equity interests, as the case may be, of each
of the Subsidiaries and the Residential Development Corporations is as
described in the Prospectus and all of such shares or limited
partnership or equity interests, or other, similar instruments owned
by the Company, the Operating Partnership or the Subsidiaries are free
and clear of all liens, charges and encumbrances.
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(ix) The authorized, issued and outstanding beneficial
interests in the Company are as set forth in the Prospectus (except
for subsequent issuances, if any, pursuant to clauses (A) and (B)
below); and all of such beneficial interests have been duly
authorized, are validly issued, fully paid and non-assessable and have
been offered and sold in compliance with all applicable laws
(including, without limitation, federal securities laws). No shares
of capital stock of the Company are reserved for any purpose except in
connection with: (A) the incentive compensation plans of the Company
as described in the Registration Statement, (B) the possible issuance
of Common Shares upon the exchange of units of ownership interest in
the Operating Partnership (the "UNITS") pursuant to the Partnership
Agreement, (C) the possible issuance of Common Shares upon exercise of
an existing option to acquire up to 217,530 Common Shares, (D) certain
options, Common Shares and Preferred Shares issuable in connection
with an Agreement and Plan of Merger, dated as of January 16, 1998,
between the Company and Station Casino Inc. and the transactions
contemplated thereby and (E) the possible issuance of up to 664,294
Common Shares upon the exchange of a portion of a partnership interest
in Desert Mountain Properties Limited Partnership, for which
sufficient Common Shares have been reserved for possible future
issuance. Except for (A) Units, (B) Common Shares issuable upon the
exercise of options for Common Shares or, assuming exchange of Units
for Common Shares, for Units, (C) Common Shares issuable pursuant to
the Forward Stock Purchase Contract agreement, dated as of August 12,
1997 with an affiliate of Union Bank of Switzerland, (D) Common Shares
issuable upon conversion of the 6 3/4% Series A Convertible Cumulative
Preferred Shares and (E) Common Shares issuable pursuant to the Swap
Agreement, dated as of December 12, 1997, with an affiliate of Xxxxxxx
Xxxxx & Co., Inc., there are no outstanding securities convertible
into or exchangeable for any beneficial interests in the Company and
no outstanding options, rights (preemptive or otherwise) or warrants
to purchase or to subscribe for such interests or any other securities
of the Company.
(x) The Underwritten Securities have been duly authorized
for issuance and sale to you pursuant to this Agreement and, when
issued and delivered by the Company pursuant to such Agreement against
payment of the consideration set forth herein, will be validly issued,
fully paid and non-assessable. Upon payment of the purchase price and
delivery of the Underwritten Securities in accordance with this
Agreement you will receive good, valid and marketable title to the
Underwritten Securities, free and clear of all security interests,
mortgages, pledges, liens, encumbrances and claims. The Underwritten
Securities will be offered and sold at Closing Time or the Date of
Delivery, as the case may be, in compliance with all applicable laws
(including, without limitation, federal securities laws). The terms
of the Common Shares conform to all statements and descriptions
related thereto contained in the Prospectus. The form of the
certificate used to evidence the
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Common Shares is in due and proper form and comply with all applicable
legal requirements. The issuance of the Common Shares is not subject
to any preemptive or other similar rights and, except as summarized in
the Prospectus and set forth in the Company's Restated Declaration of
Trust (the "DECLARATION OF TRUST") or the Company's Amended and
Restated Bylaws, as amended (the "BYLAWS"), there are no restrictions
on the voting or transfer of the Common Shares or the Preferred Shares
pursuant to the Company's Declaration of Trust or Bylaws or any
agreement or other instrument.
(xi) The authorized, issued and outstanding Units are as
set forth in the Registration Statement except to the extent of
changes due to the conversion of Units to Common Shares or the
exercise of existing options to acquire Units. All of the Units
outstanding at Closing Time were duly authorized for issuance by the
Operating Partnership and are validly issued and fully paid. The
Units were offered and sold in compliance with all applicable laws
(including, without limitation, federal and state securities laws).
Except as summarized in the Prospectus or set forth in the Partnership
Agreement, there are no preemptive or other rights to subscribe for or
to purchase, nor any restriction upon the voting or transfer of, any
Units pursuant to the Partnership Agreement or any other instrument.
The terms of the Units conform to all statements and descriptions
related thereto contained in the Prospectus.
(xii) None of the Company, the Operating Partnership, any
Subsidiary or any Residential Development Corporation is in violation
of its declaration of trust, charter, by-laws, certificate of limited
partnership, partnership agreement, or limited liability company
agreement, as the case may be, and none of the Company, the Operating
Partnership, any Subsidiary or any Residential Development Corporation
is in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract, indenture,
mortgage, loan agreement, note, lease or other instrument to which
such entity is a party or by which such entity may be bound, or to
which any of the property or assets of such entity is subject, except
where a default thereunder would not have a material adverse effect on
the condition, financial or otherwise, or the earnings, assets,
business affairs or business prospects of the Company, the Operating
Partnership, the Subsidiaries and the Residential Development
Corporations considered as one enterprise.
(xiii) The execution and delivery of this Agreement and the
performance of the obligations set forth herein, and the consummation
of the transactions contemplated hereby or in the Prospectus by the
Company, the Operating Partnership, the Subsidiaries and the
Residential Development Corporations, as applicable, will not conflict
with or constitute a breach or
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violation by such party of, or default under, (A) any material
contract, indenture, mortgage, loan agreement, note, lease, joint
venture or partnership agreement or other instrument or agreement to
which the Company, the Operating Partnership, any Subsidiary or any
Residential Development Corporation is a party or by which they, any
of them, any of their respective assets or any Property may be bound
or subject; (B) the declaration of trust, charter, by-laws,
certificate of limited partnership, partnership agreement, or limited
liability company agreement, as the case may be, of the Company, the
Operating Partnership, any Subsidiary or any Residential Development
Corporation; or (C) any applicable law, rule, order, administrative
regulation or administrative or court decree.
(xiv) The Company has full right, power and authority under
its organizational documents to enter into this Agreement, and this
Agreement has been duly authorized, executed and delivered by the
Company
(xv) The Operating Partnership has full right, power and
authority under its organizational documents to enter into this
Agreement and this Agreement has been duly authorized, executed and
delivered by the Operating Partnership.
(xvi) There is no action, suit or proceeding before or by
any court or governmental agency or body, domestic or foreign, now
pending, or, to the knowledge of the Company or the Operating
Partnership, threatened against or affecting the Company, the
Operating Partnership, any Subsidiary, any Residential Development
Corporation, any Property, or any property underlying indebtedness
held by the Company, the Operating Partnership, any of the
Subsidiaries or any of the Residential Development Corporations, or
any officer or trust manager of the Company that is required to be
disclosed in the Registration Statement (other than as disclosed
therein) or that, if determined adversely to the Company, the
Operating Partnership, any Subsidiary, any Residential Development
Corporation, any Property, including any property underlying
indebtedness held by the Company, the Operating Partnership, any of
the Subsidiaries and any of the Residential Development Corporations,
or any such officer or trust manager, might (A) result in any material
adverse change in the condition, financial or otherwise, or in the
earnings, assets, business affairs or business prospects of the
Company, the Operating Partnership, the Subsidiaries and the
Residential Development Corporations considered as one enterprise or
(B) materially and adversely affect the consummation of the
transactions contemplated by this Agreement. There is no pending
legal or governmental proceeding to which the Company, the Operating
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Partnership, any Subsidiary or any Residential Development Corporation
is a party or of which any of their respective properties or assets or
any Property, including any property underlying indebtedness held by
the Company, the Operating Partnership, any of the Subsidiaries or any
of the Residential Development Corporations, is the subject, including
ordinary routine litigation incidental to the business, that is,
considered in the aggregate, material to the condition, financial or
otherwise, or the earnings, assets, business affairs or business
prospects of the Company, the Operating Partnership, the Subsidiaries
and the Residential Development Corporations considered as one
enterprise. There are no contracts or documents that are required to
be filed as exhibits to the Registration Statement by the 1933 Act or
by the 1933 Act Regulations which have not been filed as exhibits to
the Registration Statement or to a document incorporated therein by
reference.
(xvii) The Company qualified as a real estate investment
trust under the Internal Revenue Code of 1986, as amended (the
"CODE"), with respect to its taxable years ended December 31, 1994,
December 31, 1995, December 31, 1996 and December 31, 1997 and is
organized in conformity with the requirements for qualification as a
real estate investment trust, and its manner of operation has enabled
it to meet the requirements for qualification as a real estate
investment trust as of the date of the Prospectus, and its proposed
manner of operation will enable it to meet the requirements for
qualification as a real estate investment trust in the future.
(xviii) None of the Company, the Operating Partnership, any
Subsidiary or any Residential Development Corporation is, or at
Closing Time will be, required to be registered under the Investment
Company Act of 1940, as amended (the "1940 ACT").
(xix) None of the Company, the Operating Partnership, any
Subsidiary or any Residential Development Corporation is required to
own or possess any trademarks, service marks, trade names or
copyrights (collectively, "PROPRIETARY RIGHTS") not now lawfully owned
or possessed in order to conduct the business now operated by such
entity or as proposed to be operated by it as described in the
Prospectus and no such entity has received any notice or is otherwise
aware of any infringement of or conflict with asserted rights of
others with respect to any proprietary rights.
(xx) All authorizations, approvals and consents of any
court or governmental authority or agency that are necessary in
connection with the offering, issuance or sale of the Underwritten
Securities hereunder have been obtained, except such as may be
required under the 1933 Act or the 1933 Act Regulations or state
securities or real estate syndication laws.
(xxi) Each of the Company, the Operating Partnership, the
Subsidiaries and the Residential Development Corporations possesses
such certificates, authorizations or permits issued by the appropriate
state, federal or foreign regulatory agencies or bodies necessary to
conduct the business
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now conducted by it, or proposed to be conducted by it, as described
in the Prospectus, and none of the Company, the Operating Partnership,
any Subsidiary or any Residential Development Corporation has received
any notice of proceedings relating to the revocation or modification
of any such certificate, authorization or permit which, singly or in
the aggregate, if the subject of an unfavorable decision, ruling or
finding, would materially and adversely affect the condition,
financial or otherwise, or the earnings, assets, business affairs or
business prospects of the Company, the Operating Partnership, the
Subsidiaries and the Residential Development Corporations considered
as one enterprise.
(xxii) The documents incorporated or deemed to be
incorporated by reference in the Prospectus, at the time it was or
hereafter is filed with the Commission, complied and will comply in
all material respects with the requirements of the 1934 Act and the
rules and regulations of the Commission under the 1934 Act (the "1934
ACT REGULATIONS"), and, when read together with the other information
in the Prospectus, at the time the Registration Statement became
effective, as of the date hereof or during the period specified in
Section 3(f) hereof, did not and will not include 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, in the
light of the circumstances under which they were made, not misleading.
(xxiii) No labor dispute with the employees of the Company,
the Operating Partnership, any Subsidiary or any Residential
Development Corporation exists or, to the knowledge of the Company or
the Operating Partnership, is imminent.
(xxiv) Except as otherwise described in the Prospectus, (A)
each of the Company, the Operating Partnership, the Subsidiaries, and
each Residential Development Corporation, as the case may be, has good
and marketable title in fee simple to all real property owned by such
entity and good and marketable title to the improvements, if any,
thereon and all other assets that are required for the effective
operation of such real property in the manner in which they currently
are operated except where the failure to own real property or
improvements thereon in fee simple would not have a material adverse
effect on the condition, financial or otherwise, or on the earnings,
assets, business affairs or business prospects of or with respect to
the Company, the Operating Partnership, the Subsidiaries and the
Residential Development Corporations considered as one enterprise; (B)
any real property and buildings held under lease by the Company, the
Operating Partnership, any Subsidiary or any Residential Development
Corporation are in full force and effect, and such entity is not in
default in respect of any of the terms or provisions of such leases
and such entity has not received notice of the assertion of any claim
by anyone adverse to the Operating
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Partnership's rights as lessee under such leases, or affecting or
questioning the Operating Partnership's right to the continued
possession or use of the real property and buildings held under such
leases or of a default under such leases, in each case with such
exceptions as would not have a material adverse impact on the
condition, financial or otherwise, or on the earnings, assets,
business affairs or business prospects of or with respect to the
Company, the Operating Partnership, the Subsidiaries and the
Residential Development Corporations considered as one enterprise; (C)
all liens, charges, encumbrances, claims, or restrictions on or
affecting any of the Properties, including any property underlying
indebtedness held by the Company, the Operating Partnership, any of
the Subsidiaries or any of the Residential Development Corporations,
and the assets of the Company, the Operating Partnership, any
Subsidiary or any Residential Development Corporation which are
required to be disclosed in the Prospectus are disclosed therein; (D)
none of the Company, the Operating Partnership, any of the
Subsidiaries, any of the Residential Development Corporations or any
tenant of any of the Properties is in default under any of the leases
pursuant to which the Operating Partnership, as lessor, leases its
Property (and neither the Company nor the Operating Partnership knows
of any event which, but for the passage of time or the giving of
notice, or both, would constitute a default under any of such leases)
other than such defaults that would not have a material adverse effect
on the condition, financial or otherwise, or on the earnings, assets,
business affairs or business prospects of or with respect to the
Operating Partnership, any Subsidiary or any Residential Development
Corporation or any Property; (E) except as described in the
Prospectus, no person has an option or right of first refusal to
purchase all or part of any Property or any interest therein, other
than such options or rights of first refusal which would not have a
material adverse effect on the condition, financial or otherwise, or
on the earnings, assets, business affairs or business prospects of or
with respect to the Company, the Operating Partnership, the
Subsidiaries and the Residential Development Corporations, considered
as one enterprise; (F) 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 if and to the extent disclosed in
the Prospectus and except for such failures to comply that would not
individually or in the aggregate have a material adverse impact on the
condition, financial or otherwise, or on the earnings, assets,
business affairs or business prospects of such Property or the
Operating Partnership; (G) there are in effect for the Properties,
including, to the knowledge of the Company, any property underlying
indebtedness held by the Company, the Operating Partnership, any of
the Subsidiaries and any of the Residential Development Corporations,
and the other assets of the Company, the Operating Partnership, the
Subsidiaries and the Residential Development Corporations, insurance
policies covering risks and in amounts that are
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commercially reasonable for the assets owned by them and that are
consistent with the types and amounts of insurance typically
maintained by present owners of similar types of properties; and (H)
neither the Company nor the Operating Partnership has knowledge of any
pending or threatened condemnation proceedings, zoning change, or
other proceeding or action that will in any manner affect the size of,
use of, improvements on, construction on or access to the Properties,
including any property underlying indebtedness held by the Company,
the Operating Partnership, any of the Subsidiaries or any Residential
Development Corporation, except such proceedings or actions that would
not have a material adverse effect on the condition, financial or
otherwise, or on the earnings, assets, business affairs or business
prospects of the Operating Partnership or with respect to such
Property, including any property underlying indebtedness held by the
Company, the Operating Partnership, any of the Subsidiaries or any
Residential Development Corporation.
(xxv) Except as disclosed in the Prospectus, (A) each
Property, including, without limitation, the Environment (as defined
below) associated with such Property, is free of any Hazardous
Substance (as defined below), except for Hazardous Substances that
would not have a material adverse effect on the condition, financial
or otherwise, or on the earnings, assets, business affairs or business
prospects of or with respect to the Company, the Operating
Partnership, the Subsidiaries and the Residential Development
Corporations considered as one enterprise; (B) none of the Company,
the Operating Partnership, any Subsidiary or any Residential
Development Corporation has caused or suffered to occur any Release
(as defined below) of any Hazardous Substance into the Environment on,
in, under or from any Property, and no condition exists on, in, under
or, to the knowledge of the Company and the Operating Partnership,
adjacent to any Property that is reasonably likely to result in the
incurrence of material liabilities or any material violations of any
Environmental Law (as defined below), give rise to the imposition of
any Lien (as defined below) under any Environmental Law, or cause or
constitute a health, safety or environmental hazard to any property,
person or entity; (C) none of the Company, the Operating Partnership,
any Subsidiary or any Residential Development Corporation intends to
use the properties or assets described in the Prospectus or any other
real property for the purpose of handling, burying, storing,
retaining, refining, transporting, processing, manufacturing,
generating, producing, spilling, seeping, leaking, escaping, leaching,
pumping, pouring, emitting, emptying, discharging, injecting, dumping,
transferring or otherwise disposing of or dealing with a Hazardous
Substance, except for materials utilized in the ordinary course of
business of the properties, provided such use would not, in the
ordinary course of business, give rise to liability under any
Environmental Law; (D) none of the Company, the Operating Partnership,
any Subsidiary or any Residential Development Corporation
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has received any notice of a claim under or pursuant to any
Environmental Law or under common law pertaining to Hazardous
Substances on or originating from any Property; (E) none of the
Company, the Operating Partnership, any Subsidiary or any Residential
Development Corporation has received any notice from any Governmental
Authority (as defined below) claiming any violation of any
Environmental Law; (F) no Property is included or, to the knowledge of
the Company and the Operating Partnership, 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
has not otherwise been identified by the EPA as a potential CERCLA
removal, remedial or response site or included or, to the knowledge of
the Company and the Operating Partnership, proposed for inclusion on,
any similar list of potentially contaminated sites pursuant to any
other Environmental Law and (G) there are no underground storage tanks
located on or in any Property except where the presence thereof would
not have a material adverse effect on the condition, financial or
otherwise, or the earnings, assets or business affairs or business
prospects of the Company, the Operating Partnership, the Subsidiaries
and the Residential Development Corporations considered as one
enterprise.
As used herein, "HAZARDOUS SUBSTANCE" shall include, without
limitation, any hazardous substance, hazardous waste, toxic substance,
pollutant, solid waste or similarly designated materials, 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, including any such substance, pollutant or waste identified or
regulated under any Environmental Law (including, without limitation,
materials listed in the United States Department of Transportation
Optional Hazardous Material Table, 49 C.F.R. Section 172.101, as the
same may now or hereafter be amended, or in the EPA's List of
Hazardous Substances and Reportable Quantities, 40 C.F.R. Part 302, as
the same may now or hereafter be amended); "ENVIRONMENT" shall mean
any surface water, drinking water, ground water, land surface,
subsurface strata, river sediment, buildings, structures, and ambient,
workplace and indoor air; "ENVIRONMENTAL LAW" shall mean the
Comprehensive Environmental Response, Compensation and Liability Act
of 1980, as amended (42 U.S.C. Section 9601 et seq.) ("CERCLA"), the
Resource Conservation and Recovery Act of 1976, as amended (42 U.S.C.
Section 6901 et seq.), the Clean Air Act, as amended (42 U.S.C.
Section 7401 et seq.), the Clean Water Act, as amended (33 U.S.C.
Section 1251 et seq.), the Toxic Substances Control Act, as amended
(15 U.S.C. Section 2601 et seq.), the Occupational Safety and Health
Act of 1970, as amended (29 U.S.C. Section 651 et seq.), the
Hazardous
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Materials Transportation Act, as amended (49 U.S.C. Section 1801 et
seq.), and all other federal, state and local laws, ordinances,
regulations, rules, orders, decisions and permits relating to the
protection of the environment 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 (including,
without limitation, underground storage tanks) or other receptacles
containing or previously containing any Hazardous Substance or any
release, emission, discharge or similar term, as those terms are
defined or used in any Environmental Law.
(xxvi) Each of the Company, the Operating Partnership, the
Subsidiaries and the Residential Development Corporations has filed
all federal, state, local and foreign income tax returns which have
been required to be filed (except in any case in which the failure to
so file would not have a material adverse effect on the condition,
financial or otherwise, or the earnings, assets, business affairs or
business prospects of such entities considered as one enterprise) and
has paid all taxes required to be paid and any other assessment, fine
or penalty levied against it, to the extent that any of the foregoing
is due and payable, except, in all cases, for any such tax,
assessment, fine or penalty that is being contested in good faith.
(xxvii) None of the Company, the Subsidiaries, the
Residential Development Corporations or the Operating Partnership, nor
any of their trust managers, directors, officers or controlling
persons, has taken or will take, directly or indirectly, any action
resulting in a violation of Regulation M under the 1934 Act, or
designed to cause or result under the 1934 Act or otherwise in, or
which has constituted or which reasonably might be expected to
constitute, the unlawful stabilization or manipulation of the price of
any security of the Company or facilitation of the sale or resale of
the Underwritten Securities.
(b) Any certificate signed by any officer of the Company
or the Operating Partnership and delivered to you or to your counsel shall be
deemed a representation and warranty by such entity to you as to the matters
covered thereby.
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SECTION 2. PURCHASE AND SALE.
(a) On the basis of the representations, warranties,
covenants and agreements herein contained, and subject to the terms and
conditions herein set forth, the Company agrees to sell to you, and you agree
to purchase from the Company, the Underwritten Securities on the terms and at
the price set forth on Schedule A attached hereto and made a part hereof.
(b) The Company is advised by you that the Underwriter
proposes to deposit the Common Shares with the trustee of the Trust, a
registered unit investment trust under the Investment Company Act of 1940, as
amended, for which the Underwriter acts as sponsor and depositor, in exchange
for units in the Trust as soon after the execution and delivery hereof as in
the judgment of the Underwriter is advisable.
(c) Payment of the purchase price for, and delivery of, the
Underwritten Securities to be purchased by you shall be made at the offices of
Xxxxx & Xxxxxxx L.L.P., Columbia Square, 000 Xxxxxxxxxx Xxxxxx, X.X.,
Xxxxxxxxxx, X.X. 00000-0000, or at such other place as shall be agreed upon by
you and the Company, at 9:00 A.M., New York City time, on the third business
day following the date of this Agreement or, if pricing takes place after 4:30
P.M. New York City time on the date of this Agreement, on the fourth business
day following the date of this Agreement, or at such other time as shall be
agreed upon by you and the Company (such time and date being referred to as the
"CLOSING TIME"). Unless otherwise agreed upon by the parties to this
Agreement, payment shall be made to the Company by wire transfer or by
certified or official bank check or checks in federal or similar same-day funds
payable to the order of the Company against delivery to you for your account.
The Underwritten Securities shall be in such authorized denominations and
registered in such names as you may request in writing at least two business
days prior to the Closing Time. The Underwritten Securities, which may be in
temporary form, will be made available for examination and packaging by you on
or before the first business day prior to the Closing Time.
SECTION 3. COVENANTS OF THE COMPANY AND THE OPERATING PARTNERSHIP.
Each of the Company and the Operating Partnership covenants
with you as follows:
(a) Immediately following the execution of this
Agreement, the Company will prepare a Prospectus Supplement setting forth the
number of Underwritten Securities covered thereby and their terms not otherwise
specified in the Prospectus pursuant to which the Underwritten Securities are
being issued, your name as an underwriter in the offering, the price at which
the Underwritten Securities are to be purchased by you from the Company, the
initial public offering
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price, if any, the selling concession and reallowance, if any, any delayed
delivery arrangements, and such other information as you and the Company deem
appropriate in connection with the offering of the Underwritten Securities; and
the Company will promptly transmit copies of the Prospectus Supplement to the
Commission for filing pursuant to Rule 424(b) of the 1933 Act Regulations
within the time period required by such Rule and will furnish to you as many
copies of the Prospectus and such Prospectus Supplement as you shall reasonably
request. If the Company elects to rely on Rule 434 under the 1933 Act
Regulations, the Company will prepare an abbreviated term sheet that complies
with the requirements of Rule 434 under the 1933 Act Regulations and will
provide you with copies of the form of Rule 434 Prospectus, in such number as
you may reasonably request, and file or transmit for filing with the Commission
the form of Prospectus complying with Rule 434(c)(2) of the 1933 Act
Regulations in accordance with Rule 424(b) of the 1933 Act Regulations by the
close of business in New York on the business day immediately succeeding the
date of this Agreement.
(b) The Company will notify you immediately, and confirm
such notice in writing, of (i) the effectiveness of any amendment to the
Registration Statement relating to or affecting the offering of the
Underwritten Securities, (ii) the transmittal to the Commission for filing of
any Prospectus Supplement or other supplement or amendment to the Prospectus or
any document to be filed pursuant to the 1934 Act relating to or affecting the
offering of the Underwritten Securities, (iii) the receipt of any comments from
the Commission relating to or affecting the offering of the Underwritten
Securities, (iv) any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or for
additional information relating to or affecting the offering of the
Underwritten Securities, and (v) the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement relating to or
affecting the offering of the Underwritten Securities or the initiation of any
proceedings for that purpose; and the Company will make every reasonable effort
to prevent the issuance of any such stop order and, if any stop order is
issued, to obtain the lifting thereof at the earliest possible moment.
(c) At any time when the Prospectus is required to be
delivered under the 1933 Act or the 1934 Act in connection with sales of the
Underwritten Securities, the Company will give you notice of its intention to
file or prepare any amendment to the Registration Statement or any amendment or
supplement to the Prospectus (including any revised prospectus which the
Company proposes for use by you in connection with the offering of Underwritten
Securities which differs from the prospectus on file at the Commission at the
time the Registration Statement became effective, whether or not such revised
prospectus is required to be filed pursuant to Rule 424(b) of the 1933 Act
Regulations), whether pursuant to the 1933 Act, 1934 Act or otherwise, and will
furnish you with copies of any such amendment
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or supplement a reasonable amount of time prior to such proposed filing or
preparation, as the case may be, and will not file or prepare any such
amendment or supplement or other documents in a form to which you or your
counsel shall reasonably object.
(d) The Company will deliver to you, as soon as
available, as many signed and conformed copies of the Registration Statement as
originally filed and of each amendment thereto (including exhibits filed
therewith or incorporated by reference therein) as you may reasonably request.
(e) The Company will furnish to you, from time to time
during the period when the Prospectus is required to be delivered under the
1933 Act or the Exchange Act, such number of copies of the Prospectus (as
amended or supplemented) as you may reasonably request for the purposes
contemplated by the 1933 Act or the 1934 Act or the respective applicable rules
and regulations of the Commission thereunder.
(f) If any event shall occur as a result of which it is
necessary, in the opinion of your counsel or counsel for the Company, to amend
or supplement the Prospectus in order to make the Prospectus not contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances
existing at the time it is delivered to a purchaser, not misleading, or if it
shall be necessary, in the opinion of either such counsel, at any such time to
amend or supplement the Registration Statement or the Prospectus in order to
comply with the 1933 Act or the 1934 Act, the Company will forthwith prepare an
amendment of or supplement to the Registration Statement or the Prospectus (in
form and substance satisfactory to your counsel), whether by filing documents
pursuant to the 1933 Act, the 1934 Act or otherwise, which will amend or
supplement the Prospectus so that it will not contain an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances existing at the time it
is delivered to a purchaser, not misleading, or to make the Registration
Statement and Prospectus comply with such requirements, and the Company will
furnish to you a reasonable number of copies of such amendment or supplement.
(g) With respect to the sale of Underwritten Securities
pursuant to this Agreement, the Company will make generally available to its
security holders as soon as practicable, but not later than 90 days after the
close of the period covered thereby, an earnings statement (in form complying
with the provisions of Rule 158 of the 1933 Act Regulations) covering a
12-month period beginning not later than the first day of the Company's fiscal
quarter next following the "effective date of the registration statement" (as
defined in such Rule 158).
(h) The Company, during the period when the Prospectus is
required to be delivered under the 1933 Act or the 1934 Act in connection with
sales of the Underwritten Securities, will file all documents required to be
filed with the
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Commission pursuant to Section 13, 14 or 15 of the 1934 Act within the time
periods prescribed by the 1934 Act and the 1934 Act Regulations.
(i) If applicable, the Company will use the net proceeds
received by it from the sale of the Underwritten Securities in the manner
specified in the Prospectus under the caption "Use of Proceeds."
(j) The Company will use its best efforts to meet the
requirements to continue to qualify as a "real estate investment trust" under
the Code.
(k) Except for the authorization of actions permitted to
be taken by you as contemplated herein or in the Prospectus, neither the
Company nor the Operating Partnership will (i) take, directly or indirectly,
any action designed to cause or to result in, or that might reasonably be
expected to constitute, the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Underwritten
Securities, (ii) sell, bid for or purchase the Underwritten Securities or pay
any person any compensation for soliciting purchases of the Underwritten
Securities or (iii) pay or agree to pay to any person any compensation for
soliciting another to purchase any other securities of the Company.
(l) During the period from Closing Time until five years
after Closing Time, the Company will deliver to you, (i) promptly upon their
becoming available, copies of all current, regular and periodic reports of the
Company mailed to its stockholders or filed with any securities exchange or
with the Commission or any governmental authority succeeding to any of the
Commission's functions, and (ii) such other information concerning the Company,
the Operating Partnership, any Subsidiary or any Residential Development
Corporation as you may reasonably request.
(m) Prior to Closing Time and if not described in the
Prospectus, the Company and the Operating Partnership will notify you in
writing immediately if any event occurs that renders any of the
representations and warranties of the Company and the Operating Partnership
contained herein inaccurate or incomplete in any respect.
(n) If at any time during the 25-day period after any
amendment to the Registration Statement becomes effective or during the period
prior to the final Date of Delivery, any rumor, publication or event relating
to or affecting the Company shall occur as a result of which in your opinion
the market price of the Underwritten Securities has been or is likely to be
materially affected (regardless of whether such rumor, publication or event
necessitates supplements to or amendments of the Prospectuses), the Company
will, after written notice from you advising the Company to that effect,
promptly prepare, consult with you concerning the substance of, and disseminate
a press release or other public statement,
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reasonably satisfactory to you, responding to or commenting on such rumor,
publication or event.
(o) From the date hereof until notice of termination
pursuant to Section 9(a) hereof is received by you, the Company shall furnish
to you and your counsel, within two days after filing, copies of any document
filed by the Company with the Commission pursuant to Section 13, 14 or 15 of
the 1934 Act.
SECTION 4. PAYMENT OF FEES AND EXPENSES.
The Company will pay all expenses incident to the performance
of its obligations under this Agreement, including (i) the printing and filing
of the Registration Statement as originally filed and of each amendment
thereto, (ii) the printing of this Agreement and other documents related
hereto, (iii) the preparation, issuance and delivery of the certificates for
the Underwritten Securities to you, (iv) the fees and other charges of the
Company's counsel and accountants, (v) the qualification of the Underwritten
Securities and Common Shares issuable upon conversion thereof under securities
laws and real estate syndication laws in accordance with the provisions of
Section 3(g) hereof, including filing fees and the fees and other charges of
your counsel in connection therewith and in connection with the preparation of
a blue sky memorandum (the "BLUE SKY MEMORANDUM"), (vi) the printing and
delivery to you of copies of the Registration Statement as originally filed and
of each amendment thereto, of the preliminary prospectus, and of the Prospectus
and any amendments or supplements thereto, (vii) the printing (and
reproduction) and delivery to you of copies of the Blue Sky Memorandum, and
(viii) the fees and expenses, if any, incurred with respect to the listing of
the Underwritten Securities and the Common Shares issuable upon conversion
thereof on any national securities exchange.
If this Agreement is canceled or terminated by you in
accordance with the provisions of Section 5 or Section 9 hereof, the Company
also shall reimburse you for all of your out-of-pocket expenses, including the
reasonable fees and other charges of your counsel.
SECTION 5. CONDITIONS OF UNDERWRITER'S OBLIGATIONS.
Your obligations hereunder are subject to the accuracy, as of
the date hereof and at Closing Time, of the representations and warranties of
the Company and the Operating Partnership herein contained, to the performance
by the Company and the Operating Partnership of their respective obligations
hereunder, and to the following further conditions:
(a) At the applicable Closing Time (i) no stop order
suspending the effectiveness of the Registration Statement shall have been
issued under the 1933
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Act or proceedings therefor initiated or threatened by the Commission, (ii) the
rating assigned by any nationally recognized statistical rating organization to
any Preferred Shares of the Company and any indebtedness of the Company or the
Operating Partnership as of the date of this Agreement shall not have been
lowered since such date nor shall any such rating organization have publicly
announced that it has placed any Preferred Shares of the Company and any
indebtedness of the Company or the Operating Partnership on what is commonly
termed a "watch list" for possible downgrading, and (iii) there shall not have
come to your attention any facts that would cause you to believe that the
Prospectus, together with the Prospectus Supplement, at the time it was
required to be delivered to purchasers of the Underwritten Securities, included
an untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in light of the
circumstances existing at such time, not misleading.
(b) At Closing Time, you shall have received:
(i) The favorable opinions, dated as of Closing
Time, of Shaw, Pittman, Xxxxx & Xxxxxxxxxx, counsel for each of the
Company, the Operating Partnership and the Significant Subsidiaries,
and Xxxxx Xxxxxxx Rain Xxxxxxx (A Professional Corporation), special
Texas tax counsel for the Subsidiaries that are Texas entities
(collectively with the Residential Development Corporations which are
Texas entities, the "TEXAS ENTITIES"), each in form and substance
satisfactory to your counsel, to the effect that:
(A) The Company has been duly formed as a real
estate investment trust under the laws of the State of Texas.
The Company has power and authority to own, lease and operate
its properties, to conduct the business in which it is engaged
or proposes to engage as described in the Prospectus, and to
enter into and perform its obligations under this Agreement
and the Partnership Agreement (together, the "LISTED
AGREEMENTS"). According to the County Clerk of Tarrant
County, Texas, the Restated Declaration of Trust of the
Company is recorded in Volume 12645, beginning at Page 1811,
in the records of the County Clerk. The Restated Declaration
of Trust is in effect, and no dissolution, revocation or
forfeiture proceedings regarding the Company have been
commenced. The Company is duly qualified as a foreign
organization to transact business and is in good standing in
each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure to so
qualify would not have a material adverse effect on the
condition, financial or otherwise, or the earnings, assets,
business affairs or business prospects of the Company, the
Operating Partnership, the Subsidiaries and the Residential
Development Corporations considered as one enterprise.
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(B) The Operating Partnership has been duly
formed and is validly existing as a limited partnership in
good standing under the Delaware Act. The Operating
Partnership has full partnership power and authority to own,
lease and operate its properties, to conduct the business in
which it is engaged or proposes to engage as described in the
Prospectus and to enter into and perform its obligations under
this Agreement and the Listed Agreements to which it is a
party. The Operating Partnership is duly qualified or
registered as a foreign partnership and is in good standing in
Texas, Colorado, California, Florida, Arizona, New Mexico,
Louisiana, Nebraska and each other jurisdiction in which such
qualification or registration is required, whether by reason
of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify or register
would not have a material adverse effect on the condition,
financial or otherwise, or the earnings, assets, business
affairs or business prospects of the Company, the Operating
Partnership, the Subsidiaries and the Residential Development
Corporations considered as one enterprise. CGP, Inc., a
wholly owned subsidiary of the Company, is the sole general
partner of the Operating Partnership.
(C) Each of Crescent Real Estate Funding I, L.P.,
Crescent Real Estate Funding II, L.P., Crescent Real Estate
Funding VII, L.P. and any other Subsidiary that would be
considered a "Significant Subsidiary" as defined in Article 1,
Rule 1--02 of Regulation S-X promulgated pursuant to the 1933
Act (collectively, the "Significant Subsidiaries") has been
organized and is validly existing as a corporation, limited
partnership or limited liability company, as the case may be,
in good standing under the laws of its respective state of
organization, with full corporate, partnership or limited
liability company (as the case may be) power and authority to
own, lease and operate its properties, to conduct the business
in which it is engaged or proposes to engage as described in
the Prospectus, and to enter into and perform its obligations
under any Listed Agreements to which it is a party. Each of
the Significant Subsidiaries and the Residential Development
Corporations is duly qualified as a foreign corporation,
limited partnership or limited liability company, as the case
may be, to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether
by reason of the ownership or leasing of property or the
conduct of business, except where the failure to so qualify
would not have a material adverse effect on the condition,
financial or otherwise, or the earnings, assets, business
affairs or business prospects of the Company, the Operating
Partnership, the Significant Subsidiaries and the Residential
Development Corporations considered as one enterprise. All of
the issued and outstanding shares of capital stock of each of
the corporate Significant
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Subsidiaries have been duly authorized and validly issued and
are fully paid and non-assessable. The ownership by the
Company, the Operating Partnership and the Significant
Subsidiaries of the shares of capital stock or limited
partnership or equity interests, as the case may be, of each
of the Significant Subsidiaries is as described in the
Prospectus, and such ownership is free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim
or equity.
(D) The authorized, issued and outstanding shares
of beneficial interest of the Company are as set forth in the
Prospectus. All of such shares of beneficial interest are
validly issued, fully paid and non-assessable and have been
offered and sold in compliance with all applicable laws
(including, without limitation, federal securities laws). No
shares of beneficial interest of the Company are reserved for
any purpose except in connection with (i) the option plans of
the Company as described in the Prospectus, (ii) the possible
issuance of Common Shares upon the exchange of Units pursuant
to the Partnership Agreement, (iii) the possible issuance of
Common Shares upon exercise of an existing option to acquire
up to 217,530 Common Shares, and (iv) the possible issuance of
up to 664,294 Common Shares upon the exchange of a portion of
partnership interest in Desert Mountain Properties Limited
Partnership. Except for (a) Units, (b) Common Shares issuable
upon the exercise of options, (c) Units issuable upon the
exercise of options, (d) Common Shares issuable pursuant to
the Forward Stock Purchase Contract agreement, dated as of
August 12, 1997 with an affiliate of Union Bank of Switzerland
and (e) Common Shares issuable pursuant to the Swap Agreement,
dated as of December 12, 1997, with an affiliate of Xxxxxxx
Xxxxx & Co, Inc., there are no outstanding securities
convertible into or exchangeable for any shares of beneficial
interest of the Company and no outstanding options, preemptive
rights or other similar rights under the Texas REIT Act, the
Declaration of Trust, or to the knowledge of such counsel, any
other document or warrants to purchase or to subscribe for
shares of beneficial interest or any other securities of the
Company.
(E) The Underwritten Securities have been duly
authorized for issuance and sale to you pursuant to this
Agreement and, when issued and delivered by the Company
pursuant hereto against payment of the consideration set forth
herein, will be validly issued, fully paid and non-assessable.
Upon payment of the purchase price and delivery of the
Underwritten Securities in accordance herewith you are
receiving good, valid and marketable title to the Underwritten
Securities, free and clear of all security interests,
mortgages, pledges, liens, encumbrances and claims. The
Underwritten Securities will be offered and sold at Closing
Time or the Date of Delivery, as the case
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may be, in compliance with all applicable laws (including,
without limitation, federal securities laws). The terms of
the Underwritten Securities conform to all statements and
descriptions related thereto contained in the Prospectus. The
form of stock certificate evidencing the Underwritten
Securities is in due and proper form and complies with all
applicable legal requirements. The issuance of the
Underwritten Securities is not subject to any preemptive or
other similar rights under the Texas REIT Act, the Declaration
of Trust, or to the knowledge of such counsel, any other
document and, except as set forth in the Prospectus, there are
no restrictions on the voting or transfer of Common Shares
pursuant to the Company's Declaration of Trust or Bylaws or
any agreement or other instrument known to such counsel.
(F) At Closing Time, the number of authorized,
issued and outstanding Units will be as set forth in the
Prospectus, except to the extent of changes due to either the
conversion of Units to Common Shares or the exercise of
existing options to acquire Units. All of the Units
outstanding at Closing Time were duly authorized for issuance
by the Operating Partnership and are validly issued and fully
paid. To our knowledge, the Units were offered and sold in
compliance with all applicable laws (including, without
limitation, federal securities laws). Except as summarized in
the Prospectus or as set forth in the Partnership Agreement,
there are no preemptive or other rights to subscribe for or to
purchase, or any restriction upon the voting or transfer of,
any Units pursuant to the Partnership Agreement or any other
instrument known to such counsel. The terms of the Units
conform to all statements and descriptions related thereto
contained in the Prospectus, including all documents
incorporated therein by reference.
(G) The Common Shares have been duly authorized
by all necessary action on the part of the Company and such
Common Shares, when issued and declared in accordance with the
Declaration of Trust, will be validly issued, fully paid and
non-assessable. The issuance of such Common Shares upon such
conversion will not be subject to preemptive or other similar
rights under the Texas REIT Act, the Declaration of Trust, or
to the knowledge of such counsel, any other document.
(H) This Agreement has been duly authorized,
executed and delivered by each of the Company and the
Operating Partnership.
(I) None of the Company, the Operating
Partnership or any Significant Subsidiary is in violation of
its declaration of trust, charter,
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by-laws, certificate of limited partnership, partnership
agreement, limited liability company agreement or similar
instrument, as the case may be, and, to the knowledge of
counsel, none of the Company, the Operating Partnership or any
Significant Subsidiary is in default in the performance or
observance of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan
agreement, note, lease or other instrument filed as an exhibit
to the Registration Statement or any document incorporated
therein by reference or as otherwise identified by the Company
as material in an officer's certificate to which such entity
is a party or by which such entity is bound, or to which any
of the property or assets of such entity is subject, except
where a default thereunder would not have a material adverse
effect on the condition, financial or otherwise, or the
earnings, assets, business affairs or business prospects of
the Company, the Operating Partnership, the Subsidiaries and
the Residential Development Corporations considered as one
enterprise.
(J) Each of the Listed Agreements was duly and
validly authorized, executed and delivered by the Company and
the Operating Partnership, as applicable, and, assuming due
authorization, execution and delivery by any other party
thereto, is a valid and binding agreement, enforceable in
accordance with its terms, except as such enforceability may
be (1) limited by bankruptcy, insolvency, reorganization,
liquidation, moratorium and other similar laws affecting the
rights and remedies of creditors generally and (2) subject to
general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at
law).
(K) The execution and delivery of the Listed
Agreements, the performance of the obligations set forth in
each of the Listed Agreements, and the consummation of the
transactions contemplated thereby or in the Prospectus by the
Company, the Operating Partnership and the Significant
Subsidiaries as applicable, will not conflict with or
constitute a breach or violation of, or default under: (1) to
the knowledge of counsel, any material contract, indenture,
mortgage, loan agreement, note, lease, joint venture or
partnership agreement or other instrument or agreement filed
as an exhibit to the Registration Statement or any document
incorporated therein by reference or as otherwise identified
by the Company as material in an officer's certificate to
which the Company, the Operating Partnership or any
Significant Subsidiary is a party or by which they or any of
them or any of their respective properties or other assets or
any Property may be bound or subject; (2) the declaration of
trust, charter, by-laws, certificate of limited partnership,
partnership agreement, or limited liability company agreement,
or similar instrument, as the
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case may be, of the Company, the Operating Partnership or any
Significant Subsidiary; or (3) any federal or Texas law or the
Delaware Act. The descriptions of the Listed Agreements, if
any, contained in the Prospectus are correct and complete in
all material respects.
(L) To the knowledge of counsel, there is no
action, suit or proceeding before or by any court or
governmental agency or body, domestic or foreign, now pending
or threatened against or affecting the Company, the Operating
Partnership or any Significant Subsidiary, any Property, any
property underlying indebtedness held by the Company, the
Operating Partnership or any of the Significant Subsidiaries
or any officer or trust manager of the Company that is
required to be disclosed in the Registration Statement (other
than as disclosed therein or that, if determined adversely to
the Company, the Operating Partnership, any Significant
Subsidiary, any Property, including any property underlying
indebtedness held by the Company, the Operating Partnership,
any of the Significant Subsidiaries or any such officer or
trust manager, would reasonably be expected to (1) result in
any material adverse change in the condition, financial or
otherwise, or in the earnings, assets, business affairs or
business prospects of the Company, the Operating Partnership,
the Subsidiaries and the Residential Development Corporations,
considered as one enterprise, or (2) materially and adversely
affect the consummation of the transactions contemplated by
this Agreement. To the knowledge of counsel, there is no
pending legal or governmental proceeding to which the Company,
the Operating Partnership or any Significant Subsidiary is a
party or of which any of their respective properties or assets
or any Property, including any property underlying
indebtedness held by the Company, the Operating Partnership,
or any of the Significant Subsidiaries is the subject,
including ordinary routine litigation incidental to the
business, that is, considered in the aggregate, material to
the condition, financial or otherwise, or the earnings,
assets, business affairs or business prospects of the Company,
the Operating Partnership, the Subsidiaries and the
Residential Development Corporations, considered as one
enterprise. To the knowledge of counsel, there are no
contracts or documents of the Company, the Operating
Partnership, or the Significant Subsidiaries which are
required to be filed as exhibits to the Registration Statement
by the 1933 Act or by the 1933 Act Regulations which have not
been filed or incorporated by reference as exhibits to the
Registration Statement.
(M) The Company qualified as a real estate
investment trust under the Code with respect to its taxable
years ending on or before December 31, 1997 and is organized
in conformity with the
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requirements for qualification as a real estate investment
trust, its manner of operation has enabled it to meet the
requirements for qualification as a real estate investment
trust as of the date of the Prospectus Supplement, and its
proposed manner of operation will enable it to meet the
requirements for qualification as a real estate investment
trust in the future. In connection therewith, you are
entitled to rely on the opinions of Shaw, Pittman, Xxxxx &
Xxxxxxxxxx filed as Exhibit 8.01 to the Registration
Statement, the opinions attached to such opinions as exhibits
thereto, and any other opinions rendered to the Company with
respect to tax matters and described in the Prospectus, all as
if rendered to you on the Closing Date.
(N) None of the Company, the Operating
Partnership or any Significant Subsidiary is required to be
registered under the 0000 Xxx.
(O) All authorizations, approvals and consents of
any court or governmental authority or agency that are
necessary in connection with the offering, issuance or sale of
the Underwritten Securities under this Agreement have been
obtained, except such as may be required under the 1933 Act or
the 1933 Act Regulations or the securities and real estate
syndication laws of any U.S. state or other jurisdiction with
respect to the Securities.
(P) The Registration Statement has been declared
effective under the 1933 Act and, to the knowledge of counsel,
no stop order suspending the effectiveness of the Registration
Statement has been issued under the 1933 Act or proceedings
therefor initiated or threatened by the Commission.
(Q) The Registration Statement and the Prospectus
(other than the financial statements and supporting schedules
included therein, as to which no opinion need be rendered) as
of their respective effective or issue dates and on the date
hereof complied as to form in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations.
Each document filed pursuant to the 1934 Act (other than the
financial statements and supporting schedules, included
therein as to which no opinion need be rendered) and
incorporated or deemed to be incorporated by reference in the
Prospectus complied when so filed or incorporated or deemed to
be incorporated as to form in all material respects with the
1934 Act and the 1934 Act Regulations.
(R) The information in the Registration Statement
under the captions "Description of Common Shares," "Certain
Provisions of the Declaration of Trust, Bylaws and Texas Law"
and "ERISA
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Considerations," to the extent applicable to the offering of
the Underwritten Securities and to the extent that it
constitutes matters of law or legal conclusions, has been
reviewed by such counsel, is correct and presents fairly the
information required to be disclosed therein.
(S) The information in the Prospectus Supplement
under the caption "Federal Income Tax Considerations" and in
the Prospectus under the caption "Risks Relating to
Qualification and Operation as a REIT" fairly summarizes the
federal income tax considerations that are likely to be
material to a holder of Underwritten Securities and, to the
extent that they constitute matters of law or legal
conclusions, they have been reviewed by such counsel, they are
correct and present fairly the information required to be
disclosed therein.
In giving the opinions required by this
Section 5(b)(i), such counsel shall in addition provide the
opinions referenced in the Prospectus under the caption
"Federal Income Tax Consequences."
In giving the opinions required by this
Section 5(b)(i), such counsel shall additionally state (which
shall not constitute an opinion) that nothing has come to the
attention of such counsel that causes it to believe that the
Registration Statement or any post-effective amendment thereto
(except for financial statements and schedules and other
financial data included therein or omitted therefrom, as to
which counsel need make no statement), at the time such
Registration Statement became effective under the 1933 Act or
at the time an Annual Report on Form 10-K or the latest
Quarterly Report on Form 10-Q was filed by the Company with
the Commission (whichever is later) or at the date of this
Agreement, or as of the date such opinions are given,
contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or
the Prospectus or any Prospectus Supplement (except for
financial statements and schedules and other financial data
included therein, as to which counsel need make no statement),
as of the date of this Agreement, or as of the date of such
opinion, included an untrue statement of a material fact or
omitted to state a material fact necessary in order to make
the statements therein, in light of the circumstances under
which they were made, not misleading.
In giving the opinions required by this
Section 5(b)(i), Shaw, Pittman, Xxxxx & Xxxxxxxxxx and Xxxxx
Xxxxxxx Rain Xxxxxxx (A Professional Corporation) may rely,
(A) as to all matters of fact, upon certificates and written
statements of officers and employees of and
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accountants for each of the Company, the Operating
Partnership, the Subsidiaries or the Residential Development
Corporations; (B) as to the continued existence of the
Company, upon a certificate of an officer of the Company, and
as to the qualification and good standing of each of the
Operating Partnership or a Significant Subsidiary to do
business in any jurisdiction, upon certificates of appropriate
government officials or opinions of counsel in such
jurisdictions; and (C) as to all Texas franchise tax matters,
upon the opinion, dated as of Closing Time, of Xxxxx Xxxxxxx
Rain Xxxxxxx (A Professional Corporation).
The opinion of Xxxxx Xxxxxxx Rain Xxxxxxx (A
Professional Corporation) shall be limited to the laws of the
State of Texas.
(ii) The favorable opinion, dated as of Closing
Time, of Xxxxx Xxxxxxx Rain Xxxxxxx (A Professional Corporation),
counsel to each of the Company and the Operating Partnership, that it
has reviewed the discussion in the Prospectus under the caption
"Federal Income Tax Considerations - State and Local Taxes" with
respect to Texas franchise matters and is of the opinion that it
accurately summarizes the Texas franchise tax matters expressly
described therein.
(iii) The favorable opinion, dated as of Closing
Time, of Xxxxx & Xxxxxxx L.L.P., your counsel, with respect to the
matters set forth in (A) (first sentence only), (B) (first sentence
only), (E) (first and fourth sentences only), (G)(first sentence
only), (H), (P) and (Q) (first sentence only) of Section 5(b)(i) and a
statement (which shall not constitute an opinion) similar to the
statement referred to in the third to last paragraph of Section
5(b)(i) above. In giving its opinion, Xxxxx & Xxxxxxx L.L.P. may
rely, (A) as to all matters of fact, upon certificates and written
statements of officers and employees of and accountants for each of
the Company, the Operating Partnership, the Subsidiaries or the
Residential Development Corporations, (B) as to the qualification and
good standing of each of the Company, the Operating Partnership, or
the Significant Subsidiaries to do business in any state or
jurisdiction, upon certificates of appropriate government officials or
opinions of counsel in such jurisdictions, which opinions shall be in
form and substance satisfactory to your counsel, and (C) as to certain
matters of law, upon the opinion of Shaw, Pittman, Xxxxx & Xxxxxxxxxx
given pursuant to Section 5(b)(i) above.
(c) At Closing Time, (i) there shall not have been, since
the respective dates as of which information is given in the Registration
Statement and the Prospectus, any material adverse change in the condition,
financial or otherwise, or in the earnings, assets, business affairs or
business prospects of the Company, the Operating Partnership, the Subsidiaries,
the Residential Development Corporations and the Properties considered as one
enterprise,
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whether or not arising in the ordinary course of business, (ii) no proceedings
shall be pending or, to the knowledge of the Company or the Operating
Partnership, threatened against such entity before or by any federal, state or
other commission, board or administrative agency wherein an unfavorable
decision, ruling or finding might result in a material adverse change in the
condition, financial or otherwise, or in the earnings, assets, business affairs
or business prospects of the Company, the Operating Partnership, the
Subsidiaries, the Residential Development Corporations and the Properties
considered as one enterprise other than as set forth in the Prospectus, (iii)
no stop order suspending the effectiveness of the Registration Statement or any
part thereof shall have been issued and no proceedings for that purpose shall
have been instituted or, to the knowledge of the Company or the Operating
Partnership, threatened by the Commission or by the state securities authority
of any jurisdiction, and (iv) you shall have received, at Closing Time, a
Certificate of the Chief Executive Officer or any Senior Vice President of the
Company and CGP, Inc., on behalf of the Operating Partnership, and the chief
financial or chief accounting officer of each such entity, dated as of Closing
Time, evidencing compliance with the provisions of this subsection (c), stating
that the representations and warranties set forth in Section 1(a) hereof are
accurate as though expressly made at and as of Closing Time, and stating that
the conditions precedent set forth in this Section 5 have been satisfied or
waived. As used in this Section 5(c), the term "Prospectus" means the
Prospectus in the form first used to confirm sales of the Underwritten
Securities.
(d) At the time of execution of this Agreement, you shall
have received from Xxxxxx Xxxxxxxx LLP a letter dated such date, in form and
substance satisfactory to you, to the effect that: (i) they are independent
public accountants with respect to the Company and the Rainwater Property Group
(as defined in the financial statements included in the Registration Statement)
as required by the 1933 Act and the 1933 Act Regulations; (ii) it is their
opinion that the financial statements and supporting schedule included in the
Registration Statement and covered by their opinions therein comply as to form
in all material respects with the applicable accounting requirements of the
1933 Act and the 1933 Act Regulations; (iii) they have performed limited
procedures, not constituting an audit, including a reading of the latest
available consolidated interim financial statements of the Company, a reading
of the minute books of the Company, inquiries of officials of the Company
responsible for financial and accounting matters and such other inquiries and
procedures as may be specified in such letter, and on the basis of such limited
review and procedures nothing came to their attention that caused them to
believe that (A) the unaudited financial statements and supporting schedules of
the Rainwater Property Group included in the Registration Statement do not
comply as to form in all material respects with the applicable accounting
requirements of the 1933 Act and the 1933 Act Regulations or are not in
conformity with generally accepted accounting principles applied on a basis
substantially consistent with that of the audited financial statements included
in the Registration Statement, (B) the
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unaudited operating data and balance sheet data of the Company set forth in the
Prospectus under the caption "Selected Financial Information" were not
determined on a basis substantially consistent with that used in determining
the corresponding amounts in the audited financial statements included in the
Registration Statement (C) the pro forma financial information included in the
Registration Statement was not prepared in accordance with the applicable
accounting requirements of the 1933 Act and the 1933 Act Regulations with
respect to pro forma financial information or was not determined on a basis
substantially consistent with that of the audited financial statements included
in the Registration Statement or (D) at a specified date not more than three
days prior to the date of this Agreement, there has been any change in the
shareholders' equity or debt of the Company or any increase in the debt of the
Company or any decrease in the net assets of the Company, as compared with the
amounts shown in the most recent consolidated balance sheet of the Company
included in the Registration Statement or, during the period from most recent
consolidated statement of operations included in the Registration Statement to
a specified date not more than three days prior to the date of this Agreement,
there were any decreases, as compared with the corresponding period in the
preceding year, in revenues, net income or funds from operations of the
Company, except in all instances for changes, increases or decreases which the
Registration Statement and the Prospectus disclose have occurred or may occur;
and (iv) in addition to the examination referred to in their opinions and the
limited procedures referred to in clause (iii) above, they have carried out
certain specified procedures, not constituting an audit, with respect to
certain amounts, percentages and financial and statistical information which
are included in the Registration Statement and Prospectus (including the
documents incorporated therein by reference), and which are specified by you,
and have found such amounts, percentages and financial and statistical
information to be in agreement with the relevant accounting, financial and
other records of the Company identified in such letter.
(e) At Closing Time, you shall have received from Xxxxxx
Xxxxxxxx LLP a letter dated as of Closing Time to the effect that they reaffirm
the statements made in the letter furnished pursuant to subsection (d) of this
Section 5, except that the "specified date" referred to shall be a date not
more than three days prior to Closing Time and, if the Company has elected to
rely upon Rule 430A of the 1933 Act Regulations, to the further effect that
they have carried out procedures as specified in clause (iv) of subsection (d)
of this Section 5 with respect to certain amounts, percentages and financial
information specified by you and deemed to be a part of the Registration
Statement pursuant to Rule 430A(b) and have found such amounts, percentages and
financial information to be in agreement with the records specified in such
clause (iv).
(f) At Closing Time, your counsel shall have been
furnished with such documents and opinions as they may reasonably require for
the purpose of
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enabling them to pass upon the issuance and sale of the Underwritten Securities
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 Company
in connection with the issuance and sale of the Underwritten Securities as
contemplated herein shall be satisfactory in form and substance to you and your
counsel.
If any condition specified in this Section 5 shall not have
been fulfilled when and as required to be fulfilled, this Agreement may be
terminated by you by notice to the Company at any time at or prior to Closing
Time, and such termination shall be without liability of any party to any other
party, except as provided in Section 4 hereof.
SECTION 6. INDEMNIFICATION.
(a) Each of the Company and the Operating Partnership
agrees, jointly and severally, to indemnify and hold harmless you and each
person, if any, who controls you within the meaning of Section 15 of the 1933
Act, and any of your directors, officers, employees or affiliates as follows:
(i) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, arising out of any untrue
statement or alleged untrue statement of a material fact contained in
the Registration Statement (or any amendment thereto), including the
information deemed to be part of the Registration Statement pursuant
to Rule 430A(b) of the 1933 Act Regulations, if applicable, or the
omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus
or the Prospectus or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; provided, however, that neither the Company nor the
Operating Partnership shall be required under this subsection (i) to
indemnify you with respect to any loss, liability, claim, damage or
expense to the extent such loss, liability, claim, damage or expense
arises out of any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with
written information furnished to the Company by you specifically for
inclusion in the Registration Statement or the Prospectus;
(ii) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation or of any
investigation or proceeding by any
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governmental agency or body, commenced or threatened, or of any claim
whatsoever for which indemnification is provided under subsection (i)
above, if such settlement is effected with the written consent of the
Company and the Operating Partnership; and
(iii) against any and all expense whatsoever
(including, without limitation, the fees and other charges of counsel
chosen by you) reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceedings
by any governmental agency or body, commenced or threatened, or any
claim whatsoever for which indemnification is provided under
subsection (i) above, to the extent that any such expense is not paid
under subsection (i) or (ii) above.
(b) You agree to indemnify and hold harmless the Company
and the Operating Partnership, and each person, if any, who controls the
Company or the Operating Partnership within the meaning of Section 15 of the
1933 Act, and any trust manager, director, officer, employee or affiliate
thereof, against any and all loss, liability, claim, damage and expense
described in the indemnity contained in subsection (a) of this Section 6, as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto) or any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by you specifically for inclusion
in the Registration Statement or the Prospectus.
(c) Each indemnified party shall give notice as promptly
as reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure
to so notify an indemnifying party shall not relieve such indemnifying party
from any liability hereunder to the extent it is not materially prejudiced as a
result thereof and in any event shall not relieve it from any liability which
it may have otherwise than on account of this indemnity agreement. An
indemnifying party may participate at its own expense in the defense of such
action. If it so elects within a reasonable time after receipt of such notice,
an indemnifying party, jointly with any other indemnifying parties receiving
such notice, may assume the defense of such action with counsel chosen by it
and approved by the indemnified parties defendant in such action, provided,
however, that if the defendants in such action include both the indemnified
parties and the indemnifying party and the indemnified parties shall have
reasonably concluded that there may be one or more legal defenses available to
them which are different from or additional to those available to the
indemnifying party, the indemnifying party shall not have the right to direct
the defense of such action on behalf of such indemnified parties and such
indemnified parties shall have the right to select separate counsel to defend
such action on behalf of such indemnified parties. If an indemnifying party
assumes the defense of
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such action, the indemnifying party shall not be liable for any fees and
expenses of counsel for the indemnified parties incurred thereafter in
connection with such action, unless (i) the indemnified parties shall have
employed separate counsel in accordance with the immediately preceding sentence
(but in no event shall the indemnifying party be liable for fees and expenses
of more than one counsel, in addition to any local counsel, separate from their
own counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances) or (ii) the indemnifying party
does not promptly after notice retain counsel reasonably satisfactory to the
indemnified parties at the expense of the indemnifying party or (iii) the
indemnifying party has authorized the employment of counsel for the indemnified
parties at the expense of the indemnifying party. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential
parties thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act by or on behalf of any indemnified party.
(d) If at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified party for fees and
expenses of counsel, such indemnifying party agrees that it shall be liable for
any settlement of the nature contemplated by Section 6(a)(ii) effected without
its written consent if (i) such settlement is entered into more than 45 days
after receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement
at least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
SECTION 7. CONTRIBUTION.
If the indemnification provided for in Section 6 hereof is for
any reason unavailable to or insufficient to hold harmless an indemnified party
in respect of any losses, liabilities, claims, damages or expenses referred to
therein, then each indemnifying party shall contribute to the aggregate amount
of such losses, liabilities, claims, damages and expenses incurred by such
indemnified party, as incurred, (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company, on the one hand, and
you, on the other hand, from the offering of the Underwritten Securities
pursuant to this Agreement or (ii) if the
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allocation provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company, on the one
hand, and of you, on the other hand, in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company, on the one
hand, and by you, on the other hand, in connection with the offering of the
Underwritten Securities pursuant to this Agreement shall be deemed to be in the
same respective proportions as the total net proceeds from the offering of such
Underwritten Securities (before deducting expenses) received by the Company and
the total underwriting discount received by you, in each case as set forth on
the cover of the Prospectus, or, if Rule 434 is used, the corresponding
location on the Term Sheet bear to the aggregate initial public offering price
of such Underwritten Securities as set forth on such cover.
The relative fault of the Company, on the one hand, and you on
the other hand, shall be determined by reference to, among other things,
whether any such untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information and opportunity to
correct or prevent such statement or omission.
The Company and you agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro
rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to above in this Section 7.
The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 7 shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, you shall
not be required to contribute any amount in excess of the amount by which the
total price at which the Underwritten Securities underwritten by you and
distributed to the public were offered to the public exceeds the amount of any
damages which you otherwise have been required to pay by reason of any such
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 0000 Xxx) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation.
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For purposes of this Section 7, each person, if any, who
controls you within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as you, and each
director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
shall have the same rights to contribution as the Company.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY.
All representations, warranties and agreements contained in
this Agreement, or contained in certificates of officers of the Company or CGP,
Inc. on behalf of the Operating Partnership submitted pursuant hereto, shall
remain operative and in full force and effect, regardless of any investigation
made by you or on your behalf or by any controlling person, or by or on behalf
of the Company or the Operating Partnership or any controlling persons, and
shall survive delivery of the Underwritten Securities to you.
SECTION 9. TERMINATION OF AGREEMENT.
(a) This Agreement may be terminated for any reason at
any time by the Company or by you upon the giving of 30 days' written notice of
such termination to the other party hereto, provided that the continued
effectiveness of this Agreement shall not in any way limit or prohibit the
Company's right to offer any or all of the Securities through any other
underwriter or pursuant to any other selling arrangement.
(b) You may also terminate this Agreement, by notice to
the Company, at any time at or prior to Closing Time, (i) if there has been,
since the date of this Agreement or since the date as of which information is
given in the Prospectus, any material adverse change in the condition,
financial or otherwise, or in the earnings, assets, business affairs or
business prospects of the Company, the Operating Partnership, the Subsidiaries
and the Residential Development Corporations considered as one enterprise,
whether or not arising in the ordinary course of business, (ii) if there has
occurred any material adverse change in the financial markets in the United
States or any outbreak of hostilities or other calamity or crisis or escalation
of any existing hostilities, or any change or development involving a
prospective change in national or international political, financial or
economic conditions, in each case the effect of which is such as to make it, in
your judgment, impracticable or inadvisable to (x) proceed with the public
offering or the delivery of the Underwritten Securities on the terms and in the
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manner contemplated in the Prospectus, or (y) commence or continue the offering
of the units of the Trust to the public or enforce contracts for the sale of
the units of the Trust, (iii) if trading in any of the securities of the
Company has been suspended or limited by the Commission or on any exchange or
any over-the-counter market, or if trading generally on either the New York
Stock Exchange or the American Stock Exchange or in the NASDAQ Stock Market's
National Market has been suspended or limited, or minimum or maximum prices for
trading have been fixed, or maximum ranges for prices for securities have been
required, by either of said exchanges or by order of the Commission or any
other governmental authority, or if a banking moratorium has been declared by
federal or New York authorities, (iv) if the rating assigned by any nationally
recognized statistical rating organization to any Preferred Shares of the
Company or any indebtedness of the Company or the Operating Partnership as of
this Agreement shall have been lowered since such date or if any such rating
organization shall have publicly announced that it has placed any Preferred
Shares of the Company or any indebtedness of the Company or the Operating
Partnership on what is commonly termed a "watch list" for possible downgrading,
(v) a banking moratorium has been declared by either Federal or New York
authorities, or (vi) pursuant to Section 10(b) below. As used in this Section
9(b), the term "Prospectus" means the Prospectus in the form first used to
confirm sales of the Underwritten Securities.
(c) In the event of any such termination, (x) the
covenants set forth in Section 3 hereof with respect to any offering of
Underwritten Securities shall remain in effect so long as you own any such
Underwritten Securities purchased from the Company pursuant to this Agreement
and (y) the covenant set forth in Section 3(h) hereof, the provisions of
Section 4 hereof, the indemnity and contribution agreements set forth in
Sections 6 and 7 hereof, and the provisions of Sections 8 and 12 hereof shall
remain in effect.
SECTION 10. NOTICES.
All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted by
any standard form of telecommunication. Notice to you shall be directed to
Xxxxxxx X. Xxxxxxxx, Managing Director, Xxxxxxx Xxxxx & Co., World Financial
Center, Xxxxx Xxxxx 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000; notices to either
the Company or the Operating Partnership shall be directed to each of them, c/o
the Operating Partnership at 000 Xxxx Xxxxxx, Xxxxx 0000, Xxxx Xxxxx, Xxxxx,
00000, attention of Xxxxxx X. Xxxxxxx, Chief Executive Officer of Crescent and
CGP, Inc.
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SECTION 11. PARTIES.
This Agreement shall inure to the benefit of and be binding
upon the parties hereto and thereto and their respective successors. Nothing
expressed or mentioned in this Agreement is intended or shall be construed to
give any person, firm or corporation, other than those referred to in Sections
6 and 7 hereof and their successors, heirs and legal representatives, any legal
or equitable right, remedy or claim under or in respect of this Agreement or
any provision herein or therein contained. This Agreement and all conditions
and provisions hereof and thereof are intended to be for the sole and exclusive
benefit of the parties hereto and thereto and their respective successors and
said controlling persons and officers, directors and trust managers and their
heirs and legal representatives, and for the benefit of no other person, firm
or corporation. No purchaser of Underwritten Securities from you shall be
deemed to be a successor merely by reason of such purchase.
SECTION 12. GOVERNING LAW AND TIME.
This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to agreements made
and to be performed in said State. Specified times of day refer to New York
City time.
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If the foregoing is in accordance with your understanding of
our agreement please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement among the Underwriter, the Company and the Operating Partnership in
accordance with its terms.
Very truly yours,
CRESCENT REAL ESTATE EQUITIES COMPANY
BY:/s/ XXXXXX X. XXXXX
-------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chief Financial Officer
CRESCENT REAL ESTATE EQUITIES
LIMITED PARTNERSHIP
By: Crescent Real Estate Equities, Ltd.
General Partner
By:/s/ XXXXXX X. XXXXX
--------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chief Financial Officer
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By:/s/ XXXX X. XXXXX
---------------------------------
Name: Xxxx X. Xxxxx
Title: Managing Director
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SCHEDULE A
The Underwritten Securities shall have the following terms:
TITLE OF SECURITIES: Common Shares
NUMBER OF SHARES: 1,365,138
PUBLIC OFFERING PRICE PER SHARE: $34.0625
PURCHASE PRICE PER SHARE: $32.2742
OTHER TERMS: N/A
CLOSING DATE AND LOCATION: April 29, 1998 at the offices of Xxxxx & Xxxxxxx
L.L.P., 000 00xx Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000-0000.
