Exhibit 1.1
PS Business Parks, Inc.
Common Stock
(par value $.01 per share)
_______________________
Underwriting Agreement
----------------------
May 30, 2002
Xxxxxxx, Xxxxx & Co.
00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Acquiport Two Corporation, a corporation organized under the laws of
the State of Delaware (the "Selling Stockholder"), a stockholder of PS Business
Parks, Inc., a California corporation (the "Company"), proposes, subject to the
terms and conditions stated herein, to sell to Xxxxxxx, Sachs & Co. (the
"Underwriter") an aggregate of 3,100,000 shares of common stock, par value $.01
per share ("Stock"), of the Company (the "Shares").
1. (a) The Company and PS Business Parks, L.P., a limited
partnership under the laws of the State of California (the "Operating
Partnership", and together with the Company, the "Primary Entities") jointly
and severally represent and warrant to, and agree with, the Underwriter that:
(i) Two registration statements on Form S-3 (File Nos. 333-
50463 and 333-78627) (the "Initial Registration Statements") in respect
of the Shares have been filed with the Securities and Exchange
Commission (the "Commission"); the Initial Registration Statements and
any post-effective amendment thereto, each in the form heretofore
delivered to the Underwriter, and, excluding exhibits thereto but
including all documents incorporated by reference in the prospectus
included in the latest registration statement, have been declared
effective by the Commission in such form; other than a registration
statement, if any, increasing the size of the offering (a "Rule 462(b)
Registration Statement"), filed pursuant to Rule 462(b) under the
Securities Act of 1933, as amended (the "Act"), which became effective
upon filing, no other document with respect to the Initial Registration
Statements or document incorporated by reference therein has heretofore
been filed with the Commission (other than prospectuses filed pursuant
to Rule 424(b) of the rules and regulations of the Commission under the
Act, each in the form heretofore delivered to the Underwriter); and no
stop order suspending the effectiveness of the Initial Registration
Statements, any post-effective amendment thereto or the Rule 462(b)
Registration Statement, if any, has been issued and no proceeding for
that purpose has been initiated or threatened by the Commission (any
preliminary prospectus included in the Initial Registration Statements
or filed with the Commission pursuant to Rule 424(a) under the Act is
hereinafter called a "Preliminary Prospectus"; the various parts of the
Initial Registration Statements and the Rule 462(b) Registration
Statement, if any, including all exhibits thereto and the documents
incorporated by reference in the prospectus contained in the Initial
Registration Statements at the time such part of the Initial
Registration Statements became effective, each as amended at the time
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such part of the Initial Registration Statements became effective, are
hereinafter collectively called the "Registration Statement"; the
prospectus relating to the Shares, in the form in which it has most
recently been filed, or transmitted for filing, with the Commission on
or prior to the date of this Agreement, is hereinafter called the
"Prospectus"; any reference herein to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under
the Act, as of the date of such Preliminary Prospectus or Prospectus,
as the case may be; any reference to any amendment or supplement to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to
and include any documents filed after the date of such Preliminary
Prospectus or Prospectus, as the case may be, under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and incorporated
by reference in such Preliminary Prospectus or Prospectus, as the case
may be; any reference to any amendment to the Initial Registration
Statements shall be deemed to refer to and include any annual report of
the Company filed pursuant to Section 13(a) or 15(d) of the Exchange
Act after the effective date of the Initial Registration Statements
that is incorporated by reference in the Initial Registration
Statements; and any reference to the Prospectus as amended or
supplemented shall be deemed to refer to the Prospectus as amended or
supplemented in relation to the Shares in the form in which it is filed
with the Commission pursuant to Rule 424(b) under the Act in accordance
with Section 5(a) hereof, including any documents incorporated by
reference therein as of the date of such filing);
(ii) The documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the
case may be, conformed in all material respects to the requirements of
the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder, and none of such documents
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; and any further documents so filed
and incorporated by reference in the Prospectus or any further
amendment or supplement thereto, when such documents become effective
or are filed with the Commission, as the case may be, will conform in
all material respects to the requirements of the Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission
thereunder and will not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by the Underwriter
expressly for use in the Prospectus as amended or supplemented;
(iii) The Registration Statement and the Prospectus conform, and
the Prospectus as amended or supplemented and any further amendments or
supplements to the Registration Statement or the Prospectus will
conform, in all material respects to the requirements of the Act and
the rules and regulations of the Commission thereunder and do not and
will not, as of the applicable effective date as to the Registration
Statement and any amendment thereto and as of the applicable filing
date as to the Prospectus and any amendment or supplement thereto,
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that this
representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Company by the Underwriter expressly for
use in the Prospectus as amended or supplemented;
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(iv) Neither of the Primary Entities nor any subsidiary of the
Company has sustained since the date of the latest audited financial
statements included or incorporated by reference in the Prospectus any
material loss or interference with its respective business from fire,
explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the
Prospectus;
(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, or any development involving a prospective material adverse
change, in or affecting the general affairs, management, financial
position, shareholders' equity or results of operations of the Company
and its subsidiaries (the Company, the Operating Partnership, such
subsidiaries or any entity through which either of the Primary Entities
own a joint venture interest in any property being sometimes
hereinafter collectively referred to as the "Transaction Entities" and
individually as a "Transaction Entity"), or any property in which any
Transaction Entity directly or indirectly owns an interest (a
"Facility"); (B) no material casualty loss or condemnation or other
adverse event with respect to any of the Facilities has occurred; (C)
there have been no material transactions or acquisitions entered into
by the Transaction Entities, other than those in the ordinary course of
business; (D) none of the Transaction Entities has incurred any
material obligation or liability, direct, contingent or otherwise; (E)
there has been no change in the short-term debt or long-term debt of
the Transaction Entities; (F) except for regular quarterly
distributions in amounts per share described in the Prospectus, there
has been no dividend or distribution of any kind declared, paid or made
by the Company, on any class of its capital shares; and (G) there has
been no change in the capital stock of the Company or partnership
interests in the Operating Partnership (the "Units");
(vi) The Company has been duly organized and is validly
existing as a corporation in good standing under and by virtue of the
laws of the State of California, with power and authority (corporate
and other) to own its properties and conduct its business as described
in the Prospectus;
(vii) The Operating Partnership has been duly organized and is
validly existing as a limited partnership in good standing under and by
virtue of the laws of the State of California, with power and authority
(partnership and other) to own its properties and conduct its business
as described in the Prospectus. The Company is the sole general partner
of the Operating Partnership. The Agreement of Limited Partnership of
the Operating Partnership (the "Operating Partnership Agreement") is in
full force and effect in the form in which it was incorporated by
reference as an exhibit in the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 2001, and the aggregate percentage
interests of the general partner and the limited partners in the
Operating Partnership are as set forth therein;
(viii) Each of the Transaction Entities has been duly organized
and is validly existing as a corporation, limited partnership or other
legal entity, as the case may be, in good standing under and by virtue
of the laws of its state of organization with the requisite power and
authority to own its properties and conduct its business. All of the
issued and outstanding capital stock, units of limited partnership or
other equity interest, as the case may be, of each of the Transaction
Entities is duly authorized, validly issued, fully paid and, in the
case of capital stock, non-assessable, and has been offered and sold in
compliance with all applicable laws (including, without limitation,
federal and state securities laws) and, except as disclosed
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in the Prospectus, the capital stock, units of limited partnership or
other equity interest, as the case may be, are owned by the Company,
directly or indirectly, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim, restriction or equities.
No shares of capital stock, units of limited partnership or other
equity interest, as the case may be, of any of the Transaction
Entities are reserved for any purpose, and there are no outstanding
securities convertible into or exchangeable for any capital stock,
units of limited partnership or other equity interest, as the case may
be, of any of the Transaction Entities and no outstanding options,
rights (preemptive or otherwise) or warrants to purchase or to
subscribe for shares of such capital stock, units of limited
partnership or other equity interest, as the case may be, or any other
securities of such Transaction Entities, except as disclosed in the
Prospectus;
(ix) The Company has an authorized capitalization as set forth
in the Prospectus, and all of the issued shares of capital stock of
the Company have been duly and validly authorized and issued and are
fully paid and non-assessable and have been offered and sold in
compliance with all applicable laws (including, without limitation,
federal and state securities laws). Except for Stock issuable upon the
exercise of options granted under the Company's 1997 Stock Option and
Incentive Plan (the "Option Plan"), upon exchange of interests in the
Operating Partnership or as described in the Prospectus, no capital
stock of the Company is reserved for any purpose, and, except for
stock options and restricted stock units granted under the Option Plan
since January 1, 2002, there are (A) no outstanding securities
convertible into or exchangeable for any capital stock of the Company,
(B) no options, rights or warrants to purchase or to subscribe for
such capital stock or any other securities of the Company and (C) no
outstanding preemptive rights, rights of first refusal or co-sale,
registration or similar rights with respect to capital stock of the
Company, which by their terms are applicable to the offering or sale
of the Shares hereunder, which rights have not been waived pursuant to
binding agreements in connection with the offering and sale of the
Shares hereunder;
(x) All the issued and outstanding Units have been duly
authorized and are validly issued and fully paid and have been offered
and sold or exchanged in compliance with all applicable laws
(including, without limitation, federal and state securities laws).
Except as described in the Prospectus, there are no outstanding
securities convertible or exchangeable for any Units and no
outstanding options, rights (preemptive or otherwise) or warrants to
purchase or to subscribe for Units;
(xi) The shares of Stock and preferred stock issuable upon
exchange of any of the outstanding Units are duly and validly
authorized by all necessary action and such shares, when issued upon
such exchange, will be duly and validly issued, fully paid and
non-assessable, and the issuance of such shares upon such exchange
will not be subject to preemptive or other similar rights; the shares
of Stock and preferred stock so issuable conform in all material
respects to all statements relating thereto contained in the
Prospectus;
(xii) The Transaction Entities have good and marketable title in
fee simple to all real property and good and marketable title to all
personal property owned by them, in each case free and clear of all
liens, encumbrances and defects except such as are described in the
Prospectus or such as do not materially affect the value of such
property and do not interfere with the use made and proposed to be
made of such property by the Transaction Entities; and any real
property and buildings held under lease by the Transaction Entities
are held by them under valid, subsisting and enforceable leases with
such exceptions as are not material and
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do not interfere with the use made and proposed to be made of such
property and buildings by the Transaction Entities;
(xiii) The compliance by each of the Primary Entities with all of
the provisions of this Agreement and the consummation of the
transactions herein contemplated will not conflict with or result in a
breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which any of the
Transaction Entities is a party or by which any of the Transaction
Entities is bound or to which any of the property or assets of any of
the Transaction Entities is subject, nor will such action result in
any violation of the provisions of the articles of incorporation,
by-laws, certificate of limited partnership, partnership agreement or
other governing documents of any of the Transaction Entities or any
statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over any of the Transaction
Entities or any of their properties; and no consent, approval,
authorization, order, registration or qualification of or with any
such court or governmental agency or body is required for sale of the
Shares or the consummation by each of the Primary Entities of the
transactions contemplated by this Agreement, except such consents,
approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws, or the listing
requirements of the American Stock Exchange, in connection with the
purchase and distribution of the Shares by the Underwriter;
(xiv) None of the Transaction Entities is in violation of its
articles of incorporation, by-laws, certificate of limited
partnership, agreement of limited partnership or other governing
documents, as the case may be, and none of the Transaction Entities is
in default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument or of any applicable law, rule, order, administrative
regulation or administrative or court decree, to which such entity is
a party or by which such entity or any of its properties may be bound;
(xv) The statements set forth in the Prospectus under the
caption "Description of Common Stock," insofar as they purport to
constitute a summary of the terms of the Stock, under the caption
"Federal Income Tax Consequences," and under the caption
"Underwriting," insofar as they purport to describe the provisions of
the laws and documents referred to therein, are accurate, complete and
fair;
(xvi) Other than as set forth in the Prospectus, there are no
legal or governmental proceedings pending to which any of the
Transaction Entities is a party or of which any property of the
Transaction Entities is the subject which, if determined adversely to
the Transaction Entities, would individually or in the aggregate have
a material adverse effect on the current or future consolidated
financial position, stockholders' equity or results of operations of
the Company and the other Transaction Entities; and, to the best of
the knowledge of each of the Primary Entities, no such proceedings are
threatened or contemplated by governmental authorities or threatened
by others;
(xvii) The Company is not and, after giving effect to the
offering and sale of the Shares, will not be an "investment company",
as such term is defined in the Investment Company Act of 1940, as
amended (the "Investment Company Act");
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(xviii) Neither the Company nor any of its affiliates does
business with the government of Cuba or with any person or affiliate
located in Cuba within the meaning of Section 517.075, Florida
Statutes;
(xix) Ernst & Young LLP, who have certified certain financial
statements of the Company and its subsidiaries, and
PricewaterhouseCoopers LLP, whose report dated January 4, 2002 on the
combined statement of certain revenues and certain operating expenses
of Metro Park North for the year ended March 31, 2001 is incorporated
by reference into the Registration Statement, are each independent
public accountants as required by the Act and the rules and regulations
of the Commission thereunder;
(xx) This Agreement has been duly and validly authorized,
executed and delivered by each of the Primary Entities;
(xxi) No labor dispute with employees of either of the Primary
Entities exists or is imminent, and no Primary Entity is aware of any
existing or imminent labor disturbance by the employees of any of the
Transaction Entities' principal suppliers, manufacturers or
contractors, which, in either case might be expected to result in a
material adverse change in the financial position, shareholders' equity
or results of operations of the Company and the other Transaction
Entities. No collective bargaining agreement exists with the employees
of any of the Primary Entities, and to the best knowledge of either of
the Primary Entities, no such agreement is imminent;
(xxii) There are no contracts or documents of any Transaction
Entity which are required to be filed as exhibits to the Registration
Statement by the Act or which were required to be filed as exhibits to
any of the documents incorporated by reference into the Registration
Statement, which have not been so filed, or which are required to be
incorporated by reference into the Prospectus which have not been so
incorporated;
(xxiii) At all times since its taxable year ended December 31,
1990, the Company has been, and upon the sale of the Shares the Company
will continue to be, organized and operated in conformity with the
requirements for qualification as a real estate investment trust under
the Internal Revenue Code of 1986, as amended (the "Code"), and its
proposed method of operation will enable it to continue to meet the
requirements for taxation as a real estate investment trust under the
Code;
(xxiv) Each of the Transaction Entities has filed all federal,
state, local and foreign income tax returns which have been required to
be filed 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;
(xxv) At all times since its formation, the Operating
Partnership has been, and upon the sale of the Shares will continue to
be, classified as a partnership for federal income tax purposes;
(xxvi) None of the Transaction Entities is required to own or
possess or to obtain the consent of any holder of any trademarks,
service marks, trade names or copyrights not now lawfully owned or
possessed in order to conduct the business proposed to be operated by
the Transaction Entities;
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(xxvii) Each of the Transaction Entities possesses such
certificates, authorizations or permits issued by the appropriate
local, state, federal or foreign regulatory agencies or bodies
necessary to conduct the business now operated by it, or proposed to
be conducted by it, except for such certificates, authorizations and
permits, the failure to obtain, maintain or possess which by any of
the Transaction Entities would not result, singly or in the aggregate,
in a material adverse change in the financial position, shareholders'
equity or results of operations of the Company and the other
Transaction Entities, and none of the Transaction Entities has
received any notice of proceedings relating to the revocation or
modification of any such certificate, authority or permit which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would result in a material adverse change in the
financial position, shareholders' equity or results of operations of
the Company and the other Transaction Entities;
(xxviii) Except as disclosed in the Prospectus, there are no
persons with registration or other similar rights to have any
securities registered pursuant to the Registration Statement that have
not been waived in connection with the offering and sale of the Shares
pursuant to this Agreement;
(xxix) The outstanding shares of Stock, the Company's
Depositary Shares Each Representing 1/1000th of a share of 9 1/4%
Cumulative Preferred Stock, Series A (the "Series A Stock"), the
Company's Depositary Shares Each Representing 1/1000th of a share of
9 1/2% Cumulative Preferred Stock, Series D (the "Series D Stock"),
and the Company's Depositary Shares Each Representing 1/1000th of a
share of 8 3/4% Cumulative Preferred Stock, Series F (the "Series F
Stock") are listed on the American Stock Exchange and the Shares have
been listed on the American Stock Exchange;
(xxx) The Company has taken no action designed to, or likely
to have the effect of, terminating the registration of the Stock or
the Series A Stock, Series D Stock or Series F Stock under the
Exchange Act or delisting the Stock or the Series A Stock, Series D
Stock or Series F Stock from the American Stock Exchange, nor has the
Company received any notification that the Commission or the American
Stock Exchange is contemplating terminating any such registration or
listing;
(xxxi) The Company has not taken and will not take, directly or
indirectly, any action designed to or that might reasonably be
expected to cause or result in stabilization or manipulation of the
price of the Stock to facilitate the sale or resale of the Shares in
violation of the Act;
(xxxii) (i) The Operating Partnership or one of the other
Transaction Entities has good and marketable title (or, with respect
to any Facilities located in Texas, good and indefeasible fee simple
title, or such substantially equivalent quality of title as provided
by the applicable title insurance policy) to each of the Facilities
and all other items of real property (and improvements therein), in
each case free and clear of all liens, encumbrances, claims, security
interests and defects, other than those (A) referred to in the
Registration Statement or described in any document incorporated into
the Registration Statement by reference or (B) which are not material
in amount; (ii) all liens, charges, encumbrances, claims or
restrictions on or affecting any of the Facilities and the assets of
any Transaction Entity which are required to be disclosed in the
Prospectus are disclosed therein; (iii) except as otherwise described
in the Prospectus, neither Primary Entity is, and, to the best
knowledge of each of the Primary Entities, no Transaction Entity is,
in default under (A) any space or ground leases
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(as lessor or lessee, as the case may be) relating to the Facilities,
or (B) any of the mortgage or other security documents or other
agreements encumbering or otherwise recorded against the Facilities,
and no Primary Entity knows, after due inquiry, of any event which,
but for the passage of time or the giving of notice, or both, would
constitute a default under any of such documents or agreements; (iv)
each of the Facilities 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 Facilities);
and (v) no Primary Entity has knowledge of, after due inquiry, any
pending or threatened condemnation proceeding, 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 Facilities,
except in each case for such matters as could not, individually or in
the aggregate, result in a material adverse change in the financial
position, shareholders' equity or results of operations of the Company
and the other Transaction Entities;
(xxxiii) Each of the Facilities has property, title, casualty and
liability insurance in favor of either the Company, the Operating
Partnership, or one of the Transaction Entities with respect to the
Facilities by insurers of recognized financial responsibility against
such losses and risks and in such amounts as are prudent and customary
in the businesses in which they are engaged, provided, that with
respect to certain Facilities, title insurance is held by Public
Storage, Inc., a California corporation ("PSI"), or an affiliate of
PSI under policies the benefits of which have been assigned to the
Company or the Operating Partnership pursuant to a binding agreement,
or PSI has indemnified the Company, the Operating Partnership or the
respective Transaction Entity against material defects in title to the
Facilities pursuant to a binding agreement; and none of the Company,
the Operating Partnership, or the other Transaction Entities has any
reason to believe that they will not be able to renew their existing
insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue
their businesses at a cost that would not result in a material adverse
change in the financial position, shareholders' equity or results of
operations of the Company and the other Transaction Entities, except
as described in or contemplated by the Registration Statement and the
Prospectus;
(xxxiv) Except as disclosed in the Prospectus, and, except for
activities, conditions, circumstances or matters that (1) do not cause
a material adverse change in the financial position, shareholders'
equity or results of operations of the Company and the other
Transaction Entities, or (2) as to which the Transaction Entities have
been indemnified by PSI or another creditworthy entity: (i) the
Company and the Operating Partnership are in compliance with all
Environmental Laws (as defined below) and all requirements of
applicable permits, licenses, approvals and other authorizations
issued pursuant to Environmental Laws; (ii) none of the Transaction
Entities has caused or suffered to occur any Release (as defined
below) of any Hazardous Substance (as defined below) into the
Environment (as defined below) on, in, under or from any Facility or
any developed or undeveloped land held by a Transaction Entity
("Land"), and no condition exists on, in or under any Facility or Land
that could result in the incurrence of liabilities under, or any
violations of, any Environmental Law or give rise to the imposition of
any Lien (as defined below) under any Environmental Law; (iii) none of
the Transaction Entities has received any written notice of a claim
under or pursuant to any Environmental Law or under common law
pertaining to Hazardous Substances on, in, under or originating from
any Facility or Land; (iv) none of the Transaction Entities has
knowledge of, after due inquiry, or has received any written notice
from any Governmental Authority (as defined below) or other person
claiming any violation of any
8
Environmental Law or a determination to undertake and/or request the
investigation, remediation, clean-up or removal of any Hazardous
Substance released into the Environment or in, under or from any
Facility or Land; and (v) no Facility or Land is included or, to the
knowledge of each of the Primary Entities, after due inquiry, proposed
for inclusion on the National Priorities List issued pursuant to
CERCLA (as defined below) by the United States Environmental
Protection Agency (the "EPA") or on the Comprehensive Environmental
Response, Compensation and Liability Information System database
maintained by the EPA and neither of the Primary Entities has
knowledge, after due inquiry, that any Facility or Land has otherwise
been identified in a published writing by the EPA as a potential
CERCLA removal, remedial or response site or, to the knowledge of each
of the Primary Entities, after due inquiry, proposed for inclusion on
any similar list of potentially contaminated sites pursuant to any
other Environmental Law. As used herein, "Hazardous Substance" shall
include any hazardous substance, hazardous waste, toxic substance,
pollutant, hazardous material, or similarly designated materials
including, without limitation, oil, petroleum-derived substance or
waste, asbestos or asbestos-containing materials, PCBs, pesticides,
explosives, radioactive materials, dioxins, urea formaldehyde
insulation or any constituent of any such substance, pollutant or
waste which is identified, regulated, prohibited or limited under any
Environmental Law (including, without limitation, materials listed in
the United States Department of Transportation Optional Hazardous
Material Table, 49 C.F.R. (S) 172.101, or in the EPA's List of
Hazardous Substances and Reportable Quantities, 40 C.F.R. Part 302) 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 and outdoor air; "Environmental Law" shall mean the
Comprehensive Environmental Response, Compensation and Liability Act
of 1980, as amended (42 U.S.C. (S) 9601, et seq.) ("CERCLA"), the
Resource Conservation and Recovery Act of 1976, as amended (42 U.S.C.
(S) 6901, et seq.), the Clean Air Act, as amended (42 U.S.C. (S) 7401,
et seq.), the Clean Water Act, as amended (33 U.S.C. (S) 1251, et
seq.), the Toxic Substances Control Act, as amended (29 U.S.C. (S)
2601 et seq.), the Occupational Safety and Health Act of 1970, as
amended (29 U.S.C. (S) 651, et seq.), the Hazardous Materials
Transportation Act, as amended (49 U.S.C. (S) 1801, et seq.), and all
other federal, state and local laws, ordinances, regulations, rules
and orders relating to the protection of the 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 Facility,
any mortgage, deed of trust, pledge, security interest, lien,
encumbrance, penalty, charge, assessment, judgment or other liability
in, on or affecting such Facility; and "Release" shall mean any
spilling, leaking, dumping, emanating or disposing of any Hazardous
Substance in the Environment, including without limitation the
abandonment or discard of barrels, containers or tanks (including
without limitation underground storage tanks or other receptacles
containing or previously containing any Hazardous Substance), or any
release, emission, discharge or similar terms, as those terms are
defined or used in any Environmental Law;
(xxxv) To the best knowledge of each of the Primary Entities,
none of the environmental consultants which prepared environmental and
asbestos inspection reports with respect to any of the Facilities was
employed for such purpose on a contingent basis or has any substantial
interest in any Transaction Entity, and none of them nor any of their
directors, officers or
9
employees is connected with any Transaction Entity as a promoter,
selling agent, director, officer or employee;
(xxxvi) (i) The Company (A) has been subject to the
requirements of Section 12 of the Exchange Act and has filed all
materials required of it to be filed pursuant to Section 13 and 14 of
the Exchange Act since prior to January 1, 1999; and (B) has filed in a
timely manner all reports required of it to be filed with the
Commission since January 1, 2001; (ii) none of the Transaction Entities
has, since January 1, 2001 (A) failed to pay any dividend or sinking
fund installment on preferred stock; or (B) defaulted (1) on any
installment or installments on indebtedness or borrowed money, or (2)
on any rental on one or more long-term leases, which defaults in the
aggregate were material to the financial position of such Transaction
Entities taken as a whole; (iii) the aggregate market value of the
Stock held by non-affiliates (as defined in Rule 405 under the Act) is
in excess of $150,000,000; and
(xxxvii) Any certificate signed by any officer or authorized
representative of any Primary Entity and delivered to the Underwriter
or to counsel of the Underwriter shall be deemed a representation and
warranty by such entity, as the case may be, to the Underwriter as to
the matter covered thereby.
(b) The Selling Stockholder represents and warrants to, and agrees
with, the Underwriter and the Primary Entities that:
(i) All consents, approvals, authorizations and orders of
all courts, regulatory bodies, administrative agencies and other
governmental bodies necessary for the execution and delivery by the
Selling Stockholder of this Agreement, and for the sale and delivery of
the Shares to be sold by the Selling Stockholder hereunder, have been
obtained, except such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or Blue Sky laws, or the listing requirements of the
American Stock Exchange, in connection with the purchase and
distribution of the Shares by the Underwriter; and the Selling
Stockholder has full right, power and authority to enter into this
Agreement and to sell, assign, transfer and deliver the Shares to be
sold by the Selling Stockholder hereunder;
(ii) The sale of the Shares to be sold by the Selling
Stockholder hereunder and the compliance by the Selling Stockholder
with all of the provisions of this Agreement and the consummation of
the transactions herein contemplated will not conflict with or result
in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Selling
Stockholder is a party or by which the Selling Stockholder is bound or
to which any of the property or assets of the Selling Stockholder is
subject, nor will such action result in any violation of the provisions
of the Certificate of Incorporation or By-laws of the Selling
Stockholder or any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the
Selling Stockholder or the property of the Selling Stockholder;
(iii) The Selling Stockholder has, and immediately prior to
the Time of Delivery (as defined in Section 4 hereof) the Selling
Stockholder will have, good and valid title to the Shares to be sold by
the Selling Stockholder hereunder, free and clear of all liens,
encumbrances, equities or claims; and, upon delivery of the Shares and
payment therefor pursuant hereto, good and valid title to the Shares,
free and clear of all liens, encumbrances, equities or claims, will
pass to the Underwriter;
10
(iv) During the period beginning from the date hereof and
continuing to and including the earlier of the date 90 days after the
date of this Agreement and the date of any consent granted to permit
any action otherwise prohibited by Section 5(e) of this Agreement, not
to offer, sell, contract to sell or otherwise dispose of, except as
provided hereunder, any securities of the Company that are
substantially similar to the Shares, including but not limited to any
securities that are convertible into or exchangeable for, or that
represent the right to receive, Stock or any such substantially similar
securities, without the Underwriter's prior written consent;
(v) The Selling Stockholder has not taken and will not take,
directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares;
(vi) To the extent that any statements or omissions made in the
Registration Statement, any Preliminary Prospectus, the Prospectus as
amended or supplemented or any amendment or supplement thereto are made
in reliance upon and in conformity with information furnished to the
Company in writing by the Selling Stockholder expressly for use
therein, such Preliminary Prospectus and the Registration Statement
did, and the Prospectus as amended or supplemented and any further
amendments or supplements to the Registration Statement and the
Prospectus, when they become effective or are filed with the
Commission, as the case may be, will conform in all material respects
to the requirements of the Act and the rules and regulations of the
Commission thereunder and will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading; and
(vii) In order to document the Underwriter's compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 with respect to the transactions herein
contemplated, the Selling Stockholder will deliver to the Underwriter
prior to or at the Time of Delivery a properly completed and executed
United States Treasury Department Form W-9 (or other applicable form or
statement specified by Treasury Department regulations in lieu
thereof).
2. Subject to the terms and conditions herein set forth, the
Selling Stockholder agrees to sell to the Underwriter, and the Underwriter
agrees to purchase from the Selling Stockholder, at a purchase price per share
of $34.10, the Shares.
3. Upon the authorization by the Underwriter of the release of the
Shares, the Underwriter proposes to offer the Shares for sale upon the terms and
conditions set forth in the Prospectus as amended or supplemented.
4. (a) The Shares to be purchased by the Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in such
names as the Underwriter may request upon at least forty-eight hours' prior
notice to the Selling Stockholder shall be delivered by or on behalf of the
Selling Stockholder to the Underwriter, through the facilities of the Depository
Trust Company ("DTC"), for the account of the Underwriter, against payment by or
on behalf of the Underwriter of the purchase price therefor by wire transfer of
Federal (same-day) funds to the account specified by the Selling Stockholder to
the Underwriter at least forty-eight hours in advance. The Company will cause
the certificates representing the Shares to be made available for checking and
packaging at least twenty-four hours prior to the Time of Delivery (as defined
below) at the office of DTC or its designated custodian (the "Designated
Office"). The time and date of such delivery and payment
11
shall be 9:30 a.m., New York time, on June 4, 2002 or such other time and date
as the Underwriter and the Selling Stockholder may agree upon in writing. Such
time and date for delivery of the Shares is herein called the "Time of
Delivery."
(b) The documents to be delivered at the Time of Delivery by or on
behalf of the parties hereto pursuant to Section 7 hereof, including the cross
receipt for the Shares and any additional documents requested by the Underwriter
pursuant to Section 7(l) hereof, will be delivered at the offices of Xxxx and
Xxxx LLP, 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx (the "Closing Location"), and
the Shares will be delivered at the Designated Office, all at the Time of
Delivery. A meeting will be held at the Closing Location at 3:00 p.m., New York
City time, on the New York Business Day next preceding the Time of Delivery, at
which meeting the final drafts of the documents to be delivered pursuant to the
preceding sentence will be available for review by the parties hereto. For the
purposes of this Section 4, "New York Business Day" shall mean each Monday,
Tuesday, Wednesday, Thursday and Friday which is not a day on which banking
institutions in New York are generally authorized or obligated by law or
executive order to close.
5. The Company agrees with the Underwriter:
(a) To prepare the Prospectus as amended and supplemented in relation
to the Shares in a form approved by the Underwriter and to file such Prospectus
pursuant to Rule 424(b) under the Act not later than the Commission's close of
business on the second business day following the execution and delivery of this
Agreement, or, if applicable, such earlier time as may be required by Rule
424(b); to make no further amendment or any supplement to the Registration
Statement or Prospectus as amended or supplemented prior to the Time of Delivery
for the Shares which shall be disapproved by the Underwriter promptly after
reasonable notice thereof; to advise the Underwriter, promptly after it receives
notice thereof, of the time when any amendment to the Registration Statement has
been filed or becomes effective or any supplement to the Prospectus or any
amended Prospectus has been filed and to furnish the Underwriter with copies
thereof; to file promptly all reports and any definitive proxy or information
statements required to be filed by the Company with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of
the Prospectus as amended or supplemented and for so long as the delivery of a
prospectus is required in connection with the offering or sale of the Shares; to
advise the Underwriter, promptly after it receives notice thereof, of the
issuance by the Commission of any stop order or of any order preventing or
suspending the use of any prospectus relating to the Shares, of the suspension
of the qualification of the Shares for offering or sale in any jurisdiction, of
the initiation or threatening of any proceeding for any such purpose, or of any
request by the Commission for the amending or supplementing of the Registration
Statement or Prospectus or for additional information; and, in the event of the
issuance of any stop order or of any order preventing or suspending the use of
any prospectus relating to the Shares or suspending any such qualification,
promptly to use its best efforts to obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as the Underwriter
may reasonably request to qualify the Shares for offering and sale under the
securities laws of such jurisdictions as the Underwriter may request and to
comply with such laws so as to permit the continuance of sales and dealings
therein in such jurisdictions for as long as may be necessary to complete the
distribution of the Shares, provided that in connection therewith the Company
shall not be required to qualify as a foreign corporation or to file a general
consent to service of process in any jurisdiction;
(c) Prior to 10:00 A.M., New York City time, on the New York Business
Day next succeeding the date of this Agreement and from time to time, to furnish
the Underwriter with written and
12
electronic copies of the Prospectus as amended or supplemented in New York City
in such quantities as the Underwriter may reasonably request, and, if the
delivery of a prospectus is required at any time prior to the expiration of nine
months after the time of issue of the Prospectus as amended or supplemented in
connection with the offering or sale of the Shares and if at such time any
events shall have occurred as a result of which the Prospectus as then amended
or supplemented would include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made when such Prospectus
is delivered, not misleading, or, if for any other reason it shall be necessary
during such period to amend or supplement the Prospectus or to file under the
Exchange Act any document incorporated by reference in the Prospectus in order
to comply with the Act or the Exchange Act, to notify the Underwriter and upon
the Underwriter's request to file such document and to prepare and furnish
without charge to the Underwriter and to any dealer in securities as many
written and electronic copies as the Underwriter may from time to time
reasonably request of an amended Prospectus or a supplement to the Prospectus
which will correct such statement or omission or effect such compliance, and in
case the Underwriter is required to deliver a prospectus in connection with
sales of any of the Shares at any time nine months or more after the time of
issue of the Prospectus as amended or supplemented, upon the Underwriter's
request but at the expense of the Underwriter, to prepare and deliver to the
Underwriter as many written and electronic copies as the Underwriter may request
of an amended or supplemented Prospectus complying with Section 10(a)(3) of the
Act;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the effective
date of the Registration Statement (as defined in Rule 158(c) under the Act), an
earnings statement of the Company and its subsidiaries (which need not be
audited) complying with Section 11(a) of the Act and the rules and regulations
of the Commission thereunder (including, at the option of the Company, Rule
158);
(e) During the period beginning from the date hereof and continuing to
and including the earlier of the date 90 days after the date of this Agreement
and the date of any consent granted to permit any action otherwise prohibited by
Section 1(b)(iv) of this Agreement, not to offer, sell, contract to sell or
otherwise dispose of, except as provided hereunder, any securities of the
Company that are substantially similar to the Shares, including but not limited
to any securities that are convertible into or exchangeable for, or that
represent the right to receive, Stock or any such substantially similar
securities (other than (i) pursuant to employee stock option plans existing on,
or upon the conversion or exchange of convertible or exchangeable securities
outstanding as of, the date of this Agreement, or (ii) Units issued by the
Operating Partnership in connection with the acquisition of real estate assets),
without the Underwriter's prior written consent;
(f) To furnish to its shareholders as soon as practicable after the end
of each fiscal year an annual report (including a balance sheet and statements
of income, shareholders' equity and cash flows of the Company and its
consolidated subsidiaries certified by independent public accountants) and, as
soon as practicable after the end of each of the first three quarters of each
fiscal year (beginning with the fiscal quarter ending after the effective date
of the Registration Statement), to make available to its shareholders
consolidated summary financial information of the Company and its subsidiaries
for such quarter in reasonable detail;
(g) During a period of three years from the date of this Agreement, to
furnish to the Underwriter, to the extent not otherwise available on the
Commission's XXXXX system or another similar document retrieval system of the
Commission or on the Company's website, copies of all reports or other
communications (financial or other) furnished to shareholders, and to deliver to
the Underwriter, subject to the foregoing limitation, (i) as soon as they are
available, copies of any reports
13
and financial statements furnished to or filed with the Commission or any
national securities exchange on which any class of securities of the Company is
listed; and (ii) such additional information concerning the business and
financial condition of the Company as the Underwriter may from time to time
reasonably request;
(h) If the Company elects to rely upon Rule 462(b), the Company shall
file a Rule 462(b) Registration Statement with the Commission in compliance with
Rule 462(b) by 10:00 P.M., Washington, D.C. time, on the date of this Agreement,
and the Company shall at the time of filing either pay to the Commission the
filing fee for the Rule 462(b) Registration Statement or give irrevocable
instructions for the payment of such fee pursuant to Rule 111(b) under the Act;
and
(i) Upon request of the Underwriter, to furnish, or cause to be
furnished, to the Underwriter an electronic version of the Company's trademarks,
servicemarks and corporate logo for use on the website, if any, operated by the
Underwriter for the purpose of facilitating the on-line offering of the Shares
(the "License"); provided, however, that the License shall be used solely for
the purpose described above, is granted without any fee and may not be assigned
or transferred.
6. The Company and the Selling Stockholder covenant and agree with one
another and with the Underwriter that (a) the Company will pay or cause to be
paid the following: (i) the fees, disbursements and expenses of the Company's
counsel and accountants in connection with the registration of the Shares under
the Act and all other expenses in connection with the preparation, printing and
filing of the Registration Statement, any Preliminary Prospectus and the
Prospectus and amendments and supplements thereto and the mailing and delivering
of copies thereof to the Underwriter and dealers; (ii) the cost of printing or
producing this Agreement, the Blue Sky Memorandum, closing documents (including
any compilations thereof) and any other documents in connection with the
offering, purchase, sale and delivery of the Shares; (iii) all expenses in
connection with the qualification of the Shares for offering and sale under
state securities laws as provided in Section 5(b) hereof, including the fees and
disbursements of counsel for the Underwriter in connection with such
qualification and in connection with the Blue Sky survey; (iv) all fees and
expenses in connection with listing the Shares on the American Stock Exchange;
(v) the filing fees incident to, and the fees and disbursements of counsel for
the Underwriter in connection with, securing any required review by the National
Association of Securities Dealers, Inc. of the terms of the sale of the Shares;
(vi) the cost of preparing stock certificates; (vii) the cost and charges of any
transfer agent or registrar; and (viii) all other costs and expenses incident to
the performance of its obligations hereunder which are not otherwise
specifically provided for in this Section; and (b) the Selling Stockholder will
pay or cause to be paid all costs and expenses incident to the performance of
the Selling Stockholder's obligations hereunder which are not otherwise
specifically provided for in this Section, including (i) any fees and expenses
of counsel for the Selling Stockholder and (ii) all expenses and taxes incident
to the sale and delivery of the Shares to be sold by the Selling Stockholder to
the Underwriter hereunder. In connection with clause (b)(ii) of the preceding
sentence, Xxxxxxx, Xxxxx & Co. agrees to pay New York State stock transfer tax,
and the Selling Stockholder agrees to reimburse Xxxxxxx, Sachs & Co. for
associated carrying costs if such tax payment is not rebated on the day of
payment and for any portion of such tax payment not rebated. It is understood,
however, that the Company shall bear, and the Selling Stockholder shall not be
required to pay or to reimburse the Company for, the cost of any other matters
not directly relating to the sale and purchase of the Shares pursuant to this
Agreement, and that, except as provided in this Section, and Sections 8 and 10
hereof, the Underwriter will pay all of its own costs and expenses, including
the fees of its counsel, stock transfer taxes on resale of any of the Shares by
it, and any advertising expenses connected with any offers it may make.
14
7. The obligations of the Underwriter hereunder, as to the Shares to
be delivered at the Time of Delivery, shall be subject, in its discretion, to
the condition that all representations and warranties and other statements of
the Company and of the Selling Stockholder herein are, at and as of the Time of
Delivery, true and correct, the condition that the Company and the Selling
Stockholder shall have performed all of its and their obligations hereunder
theretofore to be performed, and the following additional conditions:
(a) The Prospectus as amended or supplemented in relation to the Shares
shall have been filed with the Commission pursuant to Rule 424(b) within the
applicable time period prescribed for such filing by the rules and regulations
under the Act and in accordance with Section 5(a) hereof; if the Company has
elected to rely upon Rule 462(b), the Rule 462(b) Registration Statement shall
have become effective by 10:00 P.M., Washington, D.C. time, on the date of this
Agreement; no stop order suspending the effectiveness of the Registration
Statement or any part thereof shall have been issued and no proceeding for that
purpose shall have been initiated or threatened by the Commission; and all
requests for additional information on the part of the Commission shall have
been complied with to the Underwriter's reasonable satisfaction;
(b) Xxxx and Xxxx LLP, counsel for the Underwriter, shall have
furnished to the Underwriter such written opinion or opinions (a draft of each
such opinion is attached as Annex II(a) hereto), dated the Time of Delivery,
with respect to the matters covered in paragraphs (i), (v) and (xviii) of
subsection (c) below and paragraph (iii) of subsection (d) below as well as such
other related matters as the Underwriter may reasonably request, and such
counsel shall have received such papers and information as it may reasonably
request to enable it to pass upon such matters; provided, that such counsel may
rely, as to matters of California law, on the opinion of Xxxxx Xxxxxxxx, counsel
to the Company and the Operating Partnership;
(c) Xxxxx Xxxxxxxx, counsel for the Company and the Operating
Partnership, shall have furnished to the Underwriter his written opinion (a
draft of such opinion is attached as Annex II(b) hereto), dated the Time of
Delivery, in form and substance satisfactory to the Underwriter, to the effect
that:
(i) Each of the Company and the Operating Partnership has been
duly incorporated and is validly existing (in the case of the
Company, as a corporation) in good standing under the laws of the
State of California, with power and authority (corporate and other)
to own its properties and conduct its business as described in the
Prospectus as amended or supplemented;
(ii) All of the Company's ownership interest in the Operating
Partnership is owned free and clear of any perfected security
interest and, to such counsel's knowledge, after due inquiry, any
other security interests, liens or encumbrances;
(iii) The Company's authorized equity capitalization is as set
forth in the Prospectus as amended or supplemented; the capital
stock of the Company conforms to the description thereof contained
in the Prospectus in all material respects; the outstanding shares
of Stock (including the Shares being delivered at the Time of
Delivery) have been duly and validly authorized and issued and are
fully paid and non-assessable; and the Shares conform to the
description of the Stock contained in the Prospectus in all material
respects;
(iv) To the best of such counsel's knowledge and other than as
set forth in the Prospectus, there are no legal or governmental
proceedings pending to which the
15
Company or any other Transaction Entity is the subject which, if
determined adversely to the Company or any other Transaction Entity,
would individually or in the aggregate have a material adverse effect
on the current or future consolidated financial position,
shareholders' equity or results of operations of the Company and the
other Transaction Entities; and to the best of such counsel's
knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(v) This Agreement has been duly authorized, executed and
delivered by the Company and the Operating Partnership;
(vi) The compliance by the Company and the Operating
Partnership with all of the provisions of this Agreement and the
consummation of the transactions herein contemplated will not conflict
with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument known
to such counsel to which the Company or any other Transaction Entity
is a party or by which the Company or any other Transaction Entity is
bound or to which any of the property or assets of the Company or any
other Transaction Entity is subject, nor will such action result in
any violation of the provisions of the Articles of Incorporation or
By-laws of the Company or any statute or any order, rule or regulation
known to such counsel of any court or governmental agency or body
having jurisdiction over the Company or any other Transaction Entity
or any of their properties;
(vii) No consent, approval, authorization, order, registration
or qualification of or with any such court or governmental agency or
body is required for the sale of the Shares or the consummation by the
Company or the Operating Partnership of the transactions contemplated
by this Agreement, except such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and
distribution of the Shares by the Underwriter;
(viii) Neither the Company nor any other Transaction Entity is in
violation of its articles of incorporation, by-laws, certificate of
partnership, partnership agreement or other governing documents, or,
to the best of such counsel's knowledge, after due inquiry, in default
in the performance or observance of any material obligation,
agreement, covenant or condition contained in any indenture, mortgage,
deed of trust, loan agreement, or lease or agreement or other
instrument to which it is a party or by which it or any of its
properties may be bound, except for any such default which,
individually or in the aggregate, would not have a material adverse
effect on the current or future consolidated financial position,
shareholders' equity or results of operations of the Company and the
other Transaction Entities;
(ix) The Company and the Operating Partnership have all
requisite power and authority, and, to the best of such counsel's
knowledge, after due inquiry, all necessary material authorizations,
approvals, orders, licenses, certificates and permits of and from all
regulatory or governmental officials, bodies and tribunals, to own or
lease their respective properties and to conduct their respective
businesses as now being conducted and as described in the Prospectus
as amended or supplemented; and, to the best of such counsel's
knowledge, after due inquiry, all such authorizations, approvals,
licenses, certificates and permits are in full force and effect,
except where the failure to be in full
16
force and effect would not cause a material adverse change in the
financial position, shareholders' equity or results of operations of
the Company and the other Transaction Entities, and the Company and
the Operating Partnership are complying with all applicable laws, the
violation of which could cause a material adverse change in the
financial position, shareholders' equity or results of operations of
the Company and the other Transaction Entities;
(x) No holders of securities of the Company have rights to the
registration of such securities under the Registration Statement,
except as provided therein;
(xi) Any required filing of the Prospectus, including any
supplements thereto, pursuant to Rule 424(b) has been made in the
manner and within the time period required by Rule 424(b); and, to the
best of such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or threatened;
(xii) To the best of such counsel's knowledge, after due
inquiry, neither the Company nor the Operating Partnership is in
violation of any law, ordinance, administrative or governmental rule
or regulation applicable to the Company or the Operating Partnership
or of any decree of any court or governmental agency or body having
jurisdiction over the Company or the Operating Partnership, the
violation of which could cause a material adverse change in the
financial position, shareholders' equity or results of operations of
the Company and the other Transaction Entities;
(xiii) The statements in the Registration Statement and
Prospectus, insofar as they are descriptions of contracts, agreements
or other legal documents, or refer to statements of law or legal
conclusions, are accurate and present fairly the information required
to be shown in all material respects;
(xiv) The Company and the Operating Partnership own or have the
right to use all patents, trademarks, trademark registrations, service
marks, service xxxx registrations, trade names, copyrights, licenses,
inventions, trade secrets and rights described in the Prospectus as
being owned by them or any of them or necessary for the conduct of
their respective businesses, and, other than routine proceedings which
if adversely determined would not materially affect the business of
the Company and the Operating Partnership taken as a whole as
described in the Prospectus, to the best of such counsel's knowledge,
there is no claim to the contrary or any challenge by any other person
to the rights of the Company and the Operating Partnership with
respect to the foregoing;
(xv) Except as described in the Prospectus, to the best of such
counsel's knowledge, after due inquiry, there are no outstanding
options, warrants or other rights calling for the issuance of, and
there are no commitments, plans or arrangements to issue, any shares
of capital stock of the Company or any security convertible into or
exchangeable or exercisable for capital stock of the Company, except
for stock options and restricted stock units granted under the Option
Plan since January 1, 2002;
(xvi) Except as described in the Prospectus, to the best of such
counsel's knowledge, after due inquiry, there is no holder of any
security of the Company or any other person who has the right,
contractual or otherwise, to cause the Company to sell or otherwise
issue to them, or to permit them to underwrite the sale of, the Shares
or the right to have any Stock or other securities of the Company
included in the Registration
17
Statement or the right, as a result of the filing of the Registration
Statement, to require registration under the Act of any shares of
Stock or other securities of the Company;
(xvii) The documents incorporated by reference in the Prospectus
as amended or supplemented (other than the financial statements and
related schedules therein, as to which such counsel need express no
opinion), when they became effective or were filed with the
Commission, as the case may be, complied as to form in all material
respects with the requirements of the Act or the Exchange Act, as
applicable and the rules and regulations of the Commission thereunder;
and such counsel has no reason to believe that any of such documents,
when such documents became effective or were so filed, as the case may
be, contained, in the case of a registration statement which became
effective under the Act, 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, in the
case of other documents which were filed under the Exchange Act with
the Commission, an untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made
when such documents were so filed, not misleading; and
(xviii) The Registration Statement and the Prospectus as amended
or supplemented, and any further amendments and supplements thereto
made by the Company prior to the Time of Delivery (other than the
financial statements and related schedules therein, as to which such
counsel need express no opinion) comply as to form in all material
respects with the requirements of the Act and the rules and
regulations thereunder; although such counsel does not assume any
responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectus
as amended or supplemented, such counsel has no reason to believe
that, as of its effective date, the Registration Statement or any
further amendment thereto made by the Company prior to the Time of
Delivery (other than the financial statements and related schedules
therein, as to which such counsel need express no opinion) contained
an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading or that, as of its date, the Prospectus as
amended or supplemented or any further amendment or supplement thereto
made by the Company prior to the Time of Delivery (other than the
financial statements and related schedules therein, as to which such
counsel need express no opinion) contained an untrue statement of a
material fact or omitted to state a material fact necessary to make
the statements therein, in the light of the circumstances under which
they were made, not misleading or that, as of the Time of Delivery,
either the Registration Statement or the Prospectus as amended or
supplemented or any further amendment or supplement thereto made by
the Company prior to the Time of Delivery (other than the financial
statements and related schedules therein, as to which such counsel
need express no opinion) contains an untrue statement of a material
fact or omits to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; and such counsel does not know of any
amendment to the Registration Statement required to be filed or of any
contracts or other documents of a character required to be filed as an
exhibit to the Registration Statement or required to be incorporated
by reference into the Prospectus as amended or supplemented or
required to be described
18
in the Registration Statement or the Prospectus as amended or
supplemented which are not filed or incorporated by reference or
described as required.
(d) Xxxxx & Xxxxxxx, L.L.P., counsel for the Company, shall have
furnished to the Underwriter its written opinion (a draft of such opinion is
attached as Annex II(c) hereto), dated the Time of Delivery, in form and
substance satisfactory to the Underwriter, to the effect that:
(i) The Company was organized and has operated in conformity
with the requirements for qualification and taxation as a real estate
investment trust ("REIT") under the Code for the taxable year ended
December 31, 2001 and the Company's current organization and method of
operation (as described in the Prospectus as amended or supplemented
and the management representation letter) will enable the Company to
continue to meet the requirements for qualification and taxation as a
REIT;
(ii) The statements in the Prospectus under the heading "Certain
Federal Income Tax Considerations" and in the Company's Form 10-Q for
the quarterly period ended March 31, 2002 under the heading "Item 2A -
Risk Factors - We would incur adverse tax consequences if we fail to
qualify as a REIT," read in conjunction with the statements in the
Prospectus as amended or supplemented under the heading "Additional
Federal Income Tax Consequences," to the extent they describe matters
of federal income tax law or federal income tax legal conclusions, are
correct in all material respects;
(iii) The information in the Prospectus under the caption
"Description of Common Stock," to the extent that such information
constitutes matters of law or legal conclusions, has been reviewed by
such counsel, and is correct in all material respects;
(iv) The execution, delivery and performance as of the date of
such opinion by the Company and the Operating Partnership of this
Agreement, the consummation by the Company and the Operating
Partnership of the transactions contemplated by this Agreement, and
the compliance by the Company and the Operating Partnership with their
obligations hereunder will not violate the Articles of Incorporation,
By-laws of the Company or the Operating Partnership Agreement;
(v) Except for the registration of the Shares under the Act and
such consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act and
applicable state securities laws (as to which such counsel need
express no opinion) in connection with the purchase and distribution
of the Shares by the Underwriter, no approval, authorization, decree,
order or consent of, or registration or filing with, the Commission or
any federal government agency is required to be obtained or made by
the Company or the Operating Partnership under Applicable Federal Law
(as such term is defined in such opinion) in connection with the
execution, delivery and performance as of the Time of Delivery by the
Company and the Operating Partnership of this Agreement and the
consummation of the transactions contemplated hereby on the date
hereof;
(vi) The Company is not an "investment company," as such term is
defined in the Investment Company Act;
(vii) The Registration Statement and the Prospectus as amended or
supplemented, excluding the documents incorporated by reference
therein, as of their respective effective or issue dates (except for
the financial statements and supporting
19
schedules and other financial information and data included or
incorporated by reference therein or omitted therefrom, as to which
such counsel need express no opinion), complied as to form in all
material respects with the requirements for registration statements on
Form S-3 under the Act and the applicable rules and regulations
thereunder; and
(viii) Although such counsel did not participate in the
preparation of the documents incorporated by reference in the
Registration Statement, the Prospectus or the Prospectus as amended or
supplemented, such counsel has reviewed such documents. While such
counsel has not undertaken to determine independently, and does not
assume any responsibility for, the accuracy, completeness, or fairness
of the statements in the Registration Statement, the Prospectus or the
Prospectus as amended or supplemented, such counsel may state on the
basis of these conferences and such counsel's activities as counsel to
the Company in connection with the Prospectus as amended or
supplemented that no facts have come to such counsel's attention which
cause such counsel to believe that the Registration Statement
(including the documents incorporated by reference therein), at the
time it became effective or at the date of this Agreement, contained
an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading, or that the Prospectus as amended or
supplemented (including the documents incorporated by reference
therein), as of its date, contained an untrue statement of a material
fact or omitted to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which
they were made, not misleading, or that the Prospectus as amended or
supplemented (including the documents incorporated by reference
therein), as of the Time of Delivery, contains an untrue statement of
a material fact or omits 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; provided that in making the
-------- ----
foregoing statements (which shall not constitute an opinion), such
counsel is not expressing any views as to the financial statements and
supporting schedules and other financial information and data included
or incorporated by reference in or omitted from the Registration
Statement or the Prospectus.
(e) Counsel for the Selling Stockholder shall have furnished to the
Underwriter its written opinion with respect to the Selling Stockholder for whom
it is acting as counsel (a draft of each such opinion is attached as Annex II(d)
hereto), dated the Time of Delivery, in form and substance satisfactory to the
Underwriter, to the effect that:
(i) This Agreement has been duly executed and delivered by or
on behalf of the Selling Stockholder; and the sale of the Shares to be
sold by the Selling Stockholder hereunder and the compliance by the
Selling Stockholder with all of the provisions of this Agreement and
the consummation of the transactions herein contemplated will not (A)
result in a breach or violation of any terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument known to such counsel
to which the Selling Stockholder is a party or by which the Selling
Stockholder is bound or to which any of the property or assets of the
Selling Stockholder is subject, (B) result in any violation of the
provisions of the Certificate of Incorporation or By-laws of the
Selling Stockholder, or (C) result in a violation of any statute,
order, rule or regulation known to such counsel of any court or
governmental
20
agency or body having jurisdiction over the Selling Stockholder or the
property of the Selling Stockholder, which would, as to clauses (A)
and (C), have a material adverse effect upon the Selling Stockholder
or interfere with the Selling Stockholder's ability to consummate the
transactions contemplated by this Agreement;
(ii) No consent, approval, authorization or order of any court
or governmental agency or body is required for the consummation of the
transactions contemplated by this Agreement in connection with the
Shares to be sold by the Selling Stockholder hereunder, except for any
consents, approvals, authorizations or orders as may be required under
the Act or state securities or Blue Sky laws, or the listing
requirements of the American Stock Exchange, in connection with the
purchase and distribution of the Shares by the Underwriter; and
(iii) Good and valid title to the Shares, free and clear of all
liens, encumbrances or claims, has been transferred to the Underwriter
(who counsel may assume purchased such Shares in good faith and
without notice of any such lien, encumbrance or claim or any other
adverse claim within the meaning of the New York Uniform Commercial
Code).
In rendering the opinion in paragraph (iii), such counsel may rely upon a
certificate of the Selling Stockholder in respect of matters of fact as to
ownership of, and liens, encumbrances, equities or claims on, the Shares sold by
the Selling Stockholder, provided that such counsel shall state that it believes
that both the Underwriter and it are justified in relying upon such certificate.
Such opinion may contain such other qualifications and assumptions as are
reasonably acceptable to counsel to the Underwriter;
(f) On the date of this Agreement at a time prior to the execution of this
Agreement, at 9:30 a.m., New York City time, and also at the Time of Delivery,
Ernst & Young LLP shall have furnished to the Underwriter a letter or letters,
dated the respective dates of delivery thereof, in form and substance
satisfactory to the Underwriter, to the effect set forth in Annex I hereto (the
executed copy of the letter delivered prior to the execution of this Agreement
is attached as Annex I(a) hereto and a draft of the form of letter to be
delivered as of the Time of Delivery is attached as Annex I(b) hereto);
(g)(i) Neither the Company nor any other Transaction Entity shall have
sustained since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus as amended or supplemented any loss
or interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus as amended or supplemented (exclusive of any
amendment or supplement thereto filed with the Commission after the date of this
Agreement), and (ii) since the respective dates as of which information is given
in the Prospectus as amended or supplemented there shall not have been any
change in the capital stock or long-term debt of the Company or any other
Transaction Entity or any change, or any development involving a prospective
change, in or affecting the general affairs, management, financial position,
shareholders' equity or results of operations of the Company and the other
Transaction Entities, otherwise than as set forth or contemplated in the
Prospectus as amended or supplemented (exclusive of any amendment or supplement
thereto filed with the Commission after the date of this Agreement), the effect
of which, in any such case described in clause (i) or (ii), is in the judgment
of the Underwriter so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the Shares
being delivered at the Time of Delivery on the terms and in the manner
contemplated in the Prospectus as amended or supplemented
21
(exclusive of any amendment or supplement thereto filed with the Commission
after the date of this Agreement);
(h) On or after the date hereof (i) no downgrading shall have occurred
in the rating accorded the Company's debt securities or preferred stock by any
"nationally recognized statistical rating organization", as that term is defined
by the Commission for purposes of Rule 436(g)(2) under the Act, and (ii) no such
organization shall have publicly announced that it has under surveillance or
review, with possible negative implications, its rating of any of the Company's
debt securities or preferred stock;
(i) On or after the date hereof there shall not have occurred any of
the following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange or on the American Stock Exchange; (ii)
a suspension or material limitation in trading in the Company's securities on
the American Stock Exchange; (iii) a general moratorium on commercial banking
activities declared by either Federal or New York State authorities or a
material disruption in commercial banking or securities settlement or clearance
services in the United States; (iv) the outbreak or escalation of hostilities
involving the United States or the declaration by the United States of a
national emergency or war; or (v) the occurrence of any other calamity or crisis
or any change in financial, political or economic conditions in the United
States or elsewhere, if the effect of any such event specified in clause (iv) or
(v) in the judgment of the Underwriter makes it impracticable or inadvisable to
proceed with the public offering or the delivery of the Shares being delivered
at the Time of Delivery on the terms and in the manner contemplated in the
Prospectus as amended or supplemented (exclusive of any amendment or supplement
thereto filed with the Commission after the date of this Agreement);
(j) The Shares at the Time of Delivery shall have been duly listed on
the American Stock Exchange;
(k) The Company shall have complied with the provisions of Section 5(c)
hereof with respect to the furnishing of prospectuses on the New York Business
Day next succeeding the date of this Agreement; and
(l) The Company and the Selling Stockholder shall have furnished or
caused to be furnished to the Underwriter at the Time of Delivery certificates
of officers of the Company and of the Selling Stockholder, respectively,
satisfactory to the Underwriter as to the accuracy of the representations and
warranties of the Company and the Selling Stockholder, respectively, herein at
and as of the Time of Delivery, as to the performance by the Company and the
Selling Stockholder of all of their respective obligations hereunder to be
performed at or prior to the Time of Delivery, and as to such other matters as
the Underwriter may reasonably request, and the Company shall have furnished or
caused to be furnished certificates as to the matters set forth in subsections
(a) and (g) of this Section.
8. (a) The Primary Entities, jointly and severally, will indemnify and
hold harmless the Underwriter against any losses, claims, damages or liabilities
to which the Underwriter may become subject, under the Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in any Preliminary Prospectus, the Registration
Statement, the Prospectus as amended or supplemented and any other prospectus
relating to the Shares, or any amendment or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and will reimburse the Underwriter for any legal or other
expenses reasonably incurred by
22
the Underwriter in connection with investigating or defending any such action or
claim as such expenses are incurred; provided, however, that the Primary
Entities shall not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any Preliminary
Prospectus, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Shares, or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by the Underwriter expressly for use
therein.
(b) The Selling Stockholder will indemnify and hold harmless the
Underwriter against any losses, claims, damages or liabilities to which the
Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement, the Prospectus as amended or supplemented and any other prospectus
relating to the Shares, or any amendment or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission was
made in any Preliminary Prospectus, the Registration Statement, the Prospectus
as amended or supplemented and any other prospectus relating to the Shares, or
any such amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by the Selling Stockholder expressly for
use therein; and will reimburse the Underwriter for any legal or other expenses
reasonably incurred by the Underwriter in connection with investigating or
defending any such action or claim as such expenses are incurred; provided,
however, that the Selling Stockholder shall not be liable in any such case to
the extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration Statement,
the Prospectus as amended or supplemented and any other prospectus relating to
the Shares, or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by the Underwriter
expressly for use therein, provided, further, that the liability of the Selling
Stockholder shall not exceed the product of the number of Shares sold by such
Selling Stockholder and the price per Share to the Selling Stockholder as set
forth in the Prospectus as amended or supplemented.
(c) The Underwriter will indemnify and hold harmless the Primary
Entities and the Selling Stockholder against any losses, claims, damages or
liabilities to which the Primary Entities or the Selling Stockholder may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Shares, or any amendment
or supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in any Preliminary
Prospectus, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Shares, or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by the Underwriter expressly for use
therein; and will reimburse the Primary Entities and the Selling Stockholder for
any legal or other expenses reasonably incurred by the Primary Entities or the
Selling
23
Stockholder in connection with investigating or defending any such action or
claim as such expenses are incurred.
(d) Promptly after receipt by an indemnified party under subsection
(a), (b) or (c) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under such
subsection for any legal expenses of other counsel or any other expenses, in
each case subsequently incurred by such indemnified party, in connection with
the defense thereof other than reasonable costs of investigation. No
indemnifying party shall, without the written consent of the indemnified party,
effect the settlement or compromise of, or consent to the entry of any judgment
with respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such action
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.
Notwithstanding anything to the contrary contained herein, an indemnifying party
shall not be liable for the settlement of any claim or action effected without
its prior written consent, which consent shall not be unreasonably withheld.
(e) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a), (b) or (c) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Primary Entities and the Selling Stockholder
on the one hand and the Underwriter on the other from the offering of the
Shares. If, however, the allocation provided by the immediately preceding
sentence is not permitted by applicable law or if the indemnified party failed
to give the notice required under subsection (d) above, then each indemnifying
party shall contribute to such amount paid or payable by such indemnified party
in such proportion as is appropriate to reflect not only such relative benefits
but also the relative fault of the Primary Entities and the Selling Stockholder
on the one hand and the Underwriter on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Primary Entities
and the Selling Stockholder on the one hand and the Underwriter on the other
shall be deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Primary Entities and the
Selling Stockholder, as set forth in the table on the cover page of the
Prospectus as amended or supplemented, bear to the total underwriting discounts
and commissions received by the Underwriter. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact
24
relates to information supplied by the Primary Entities or the Selling
Stockholder on the one hand or the Underwriter on the other and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Primary Entities, the Selling
Stockholder and the Underwriter agree that it would not be just and equitable if
contributions pursuant to this subsection (e) 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 subsection (e). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
in this subsection (e) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
subsection (e), the Underwriter shall not be required to contribute any amount
in excess of the amount by which the total price at which the Shares were
offered to the public exceeds the amount of any damages which the Underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. Notwithstanding the provisions of
this subsection (e), the Selling Stockholder shall not be required to contribute
any amount in excess of the amount by which (i) the product of the number of
Shares sold by the Selling Stockholder and the price per Share to the Selling
Stockholder as set forth in the Prospectus as amended and supplemented exceeds
(ii) the amount of any damages which the Selling Stockholder has otherwise been
required to pay under subsection (b) above. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.
(f) The obligations of the Primary Entities and the Selling Stockholder
under this Section 8 shall be in addition to any liability which the Primary
Entities and the Selling Stockholder may otherwise have and shall extend, upon
the same terms and conditions, to each person, if any, who controls the
Underwriter within the meaning of the Act; and the obligations of the
Underwriter under this Section 8 shall be in addition to any liability which the
Underwriter may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company and to each person, if
any, who controls the Company, the Operating Partnership or the Selling
Stockholder within the meaning of the Act.
9. The respective indemnities, agreements, representations, warranties
and other statements of the Primary Entities, the Selling Stockholder and the
Underwriter, as set forth in this Agreement or made by them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless of
any investigation (or any statement as to the results thereof) made by the
Underwriter or any controlling person of the Underwriter, or the Company, or the
Operating Partnership or the Selling Stockholder, or any officer or director or
controlling person of the Company, or any controlling person of the Operating
Partnership or the Selling Stockholder, and shall survive delivery of and
payment for the Shares.
10. If for any reason any Shares are not delivered by or on behalf of
the Selling Stockholder as provided herein, the Company will reimburse the
Underwriter for all out-of-pocket expenses, including fees and disbursements of
counsel, reasonably incurred by the Underwriter in making preparations for the
purchase, sale and delivery of the Shares not so delivered, but the Company and
the Selling Stockholder shall then be under no further liability to the
Underwriter in respect of the Shares not so delivered except as provided in
Sections 6 and 8 hereof.
11. All statements, requests, notices and agreements hereunder shall be
in writing, and if to the Underwriter shall be delivered or sent by mail, telex
or facsimile transmission to it at 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Registration Department; if to the Selling Stockholder
25
shall be delivered or sent by mail, telex or facsimile transmission to counsel
for the Selling Stockholder to Altheimer & Xxxx, 00 Xxxxx Xxxxxx Xxxxx, Xxxxx
0000, Xxxxxxx, Xxxxxxxx 00000, Facsimile No. (000) 000-0000, Attention: Xxxx
Xxxx, Esq.; and if to the Primary Entities shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: Secretary. Any such statements, requests,
notices or agreements shall take effect upon receipt thereof.
12. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriter, the Company, the Operating Partnership and the
Selling Stockholder and, to the extent provided in Sections 8 and 9 hereof, the
officers and directors of the Company and each person who controls the Company,
the Operating Partnership, the Selling Stockholder or the Underwriter, and their
respective heirs, executors, administrators, successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement. No purchaser of any of the Shares from the Underwriter shall be
deemed a successor or assign by reason merely of such purchase.
13. Time shall be of the essence of this Agreement. As used herein,
the term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
14. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
15. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
16. The Company and the Selling Stockholder are authorized, subject to
applicable law, to disclose any and all aspects of this potential transaction
that are necessary to support any U.S. federal income tax benefits expected to
be claimed with respect to such transaction, and all materials of any kind
(including tax opinions and other tax analyses) related to those benefits,
without the Underwriter imposing any limitation of any kind.
26
If the foregoing is in accordance with your understanding, please sign
and return to us six counterparts hereof, and upon the acceptance hereof by you,
this letter and such acceptance hereof shall constitute a binding agreement
among the Underwriter, the Company, the Operating Partnership and the Selling
Stockholder.
Very truly yours,
PS Business Parks, Inc.
By: /s/ Xxxxx Xxxxxxxx
--------------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Vice President
PS Business Parks, L.P.
By: PS Business Parks, Inc.
By: /s/ Xxxxx Xxxxxxxx
--------------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Vice President
Acquiport Two Corporation
By: /s/ Xxxxx X. Xxxxx
--------------------------------------------
Name: Xxxxx X. Xxxxx
Title: Treasurer and Chief Financial Officer
Accepted as of the date hereof at
New York, New York
By: /s/ Xxxxxxx, Sachs & Co.
----------------------------------
(Xxxxxxx, Xxxxx & Co.)
27
ANNEX I
Pursuant to Section 7(f) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriter to the effect that:
(i) They are independent certified public accountants with
respect to the Company and its subsidiaries within the meaning of the
Act and the applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules (and, if applicable,
financial forecasts and/or pro forma financial information) examined by
them and included or incorporated by reference in the Registration
Statement or the Prospectus as amended or supplemented comply as to
form in all material respects with the applicable accounting
requirements of the Act or the Exchange Act, as applicable, and the
related published rules and regulations thereunder; and, if applicable,
they have made a review in accordance with standards established by the
American Institute of Certified Public Accountants of the consolidated
interim financial statements, selected financial data, pro forma
financial information, financial forecasts and/or condensed financial
statements derived from audited financial statements of the Company for
the periods specified in such letter, as indicated in their reports
thereon, copies of which have been separately furnished to the
Underwriter;
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants
of the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus as amended or supplemented and/or included
in the Company's quarterly report on Form 10-Q incorporated by
reference into the Prospectus as amended or supplemented as indicated
in their reports thereon copies of which have been separately furnished
to the Underwriter; and on the basis of specified procedures including
inquiries of officials of the Company who have responsibility for
financial and accounting matters regarding whether the unaudited
condensed consolidated financial statements referred to in paragraph
(vi)(A)(i) below comply as to form in all material respects with the
applicable accounting requirements of the Act and the Exchange Act and
the related published rules and regulations, nothing came to their
attention that caused them to believe that the unaudited condensed
consolidated financial statements do not comply as to form in all
material respects with the applicable accounting requirements of the
Act and the Exchange Act and the related published rules and
regulations;
(iv) The unaudited selected financial information with respect
to the consolidated results of operations and financial position of the
Company for the five most recent fiscal years included in the
Prospectus as amended or supplemented and included or incorporated by
reference in Item 6 of the Company's Annual Report on Form 10-K for
the most recent fiscal year agrees with the corresponding amounts
(after restatement where applicable) in the audited consolidated
financial statements for such five fiscal years which were included or
incorporated by reference in the Company's Annual Reports on Form 10-K
for such fiscal years;
28
(v) They have compared the information in the Prospectus as
amended or supplemented under selected captions with the disclosure
requirements of Regulation S-K and on the basis of limited procedures
specified in such letter nothing came to their attention as a result of
the foregoing procedures that caused them to believe that this
information does not conform in all material respects with the
disclosure requirements of Items 301, 302, 402 and 503(d),
respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available
interim financial statements of the Company and its subsidiaries,
inspection of the minute books of the Company and its subsidiaries
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus as amended or supplemented,
inquiries of officials of the Company and its subsidiaries responsible
for financial and accounting matters and such other inquiries and
procedures as may be specified in such letter, nothing came to their
attention that caused them to believe that:
(A) (i) the unaudited condensed consolidated statements of
income, consolidated balance sheets and consolidated statements
of cash flows included in the Prospectus as amended or
supplemented and/or included or incorporated by reference in the
Company's Quarterly Reports on Form 10-Q incorporated by
reference in the Prospectus as amended or supplemented do not
comply as to form in all material respects with the applicable
accounting requirements of the Exchange Act as it applies to Form
10-Q and the related published rules and regulations, or (ii) any
material modifications should be made to the unaudited condensed
consolidated statements of income, consolidated balance sheets
and consolidated statements of cash flows included in the
Prospectus as amended or supplemented or included in the
Company's Quarterly Reports on Form 10-Q incorporated by
reference in the Prospectus as amended or supplemented, for them
to be conformity with generally accepted accounting principles;
(B) any other unaudited income statement data and balance
sheet items included in the Prospectus as amended or supplemented
do not agree with the corresponding items in the unaudited
consolidated financial statements from which such data and items
were derived, and any such unaudited data and items were not
determined on a basis substantially consistent with the basis for
the corresponding amounts in the audited consolidated financial
statements included or incorporated by reference in the Company's
Annual Report on Form 10-K for the most recent fiscal year;
(C) the unaudited financial statements which were not
included in the Prospectus as amended or supplemented but from
which were derived the unaudited condensed financial statements
referred to in clause (A) and any unaudited income statement data
and balance sheet items included in the Prospectus as amended or
supplemented and referred to in clause (B) were not determined on
a basis substantially consistent with the basis for the audited
financial statements included or incorporated by reference in the
Company's Annual Report on Form 10-K for the most recent fiscal
year;
(D) any unaudited pro forma consolidated condensed
financial statements included or incorporated by reference in the
Prospectus as amended or supplemented do not comply as to form in
all material respects with the applicable accounting requirements
of the Act and the published rules and regulations thereunder or
the pro forma
29
adjustments have not been properly applied to the historical
amounts in the compilation of those statements;
(E) as of a specified date not more than five days prior
to the date of such letter, there have been any changes in the
consolidated capital stock (other than issuances of capital stock
upon exercise of options and stock appreciation rights, upon
earn-outs of performance shares and upon conversions of
convertible securities, in each case which were outstanding on
the date of the latest balance sheet included or incorporated by
reference in the Prospectus as amended or supplemented) or any
increase in the consolidated long-term debt of the Company and
its subsidiaries, or any decreases in consolidated net current
assets or shareholders' equity or other items specified by the
Underwriter, or any increases in any items specified by the
Underwriter, in each case as compared with amounts shown in the
latest balance sheet included or incorporated by reference in the
Prospectus as amended or supplemented, except in each case for
changes, increases or decreases which the Prospectus as amended
or supplemented discloses have occurred or may occur or which are
described in such letter; and
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the
Prospectus as amended or supplemented to the specified date
referred to in clause (E) there were any decreases in
consolidated net revenues or operating profit or the total or per
share amounts of consolidated net income or other items specified
by the Underwriter, or any increases in any items specified by
the Underwriter, in each case as compared with the comparable
period of the preceding year and with any other period of
corresponding length specified by the Underwriter, except in each
case for increases or decreases which the Prospectus as amended
or supplemented discloses have occurred or may occur or which are
described in such letter; and
(vii) In addition to the examination referred to in their
report(s) included or incorporated by reference in the Prospectus as
amended or supplemented and the limited procedures, inspection of
minute books, inquiries and other procedures referred to in paragraphs
(iii) and (vi) above, they have carried out certain specified
procedures, not constituting an examination in accordance with
generally accepted auditing standards, with respect to certain amounts,
percentages and financial information specified by the Underwriter
which are derived from the general accounting records of the Company
and its subsidiaries, which appear in the Prospectus as amended or
supplemented (excluding documents incorporated by reference) or in Part
II of, or in exhibits and schedules to, the Registration Statement
specified by the Underwriter or in documents incorporated by reference
in the Prospectus as amended or supplemented specified by the
Underwriter, and have compared certain of such amounts, percentages and
financial information with the accounting records of the Company and
its subsidiaries and have found them to be in agreement.
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