EXHIBIT 1.1
THE XXXXX CORPORATION
FORM OF
UNDERWRITING AGREEMENT
Table of Contents
Page
UNDERWRITING AGREEMENT.......................................................1
SECTION 1. Representations and Warranties..................................4
(a) Representations and Warranties by the Company and the Operating
Partnership....................................................4
(1) Compliance with Registration Requirements..................4
(2) Incorporated Documents.....................................5
(3) Independent Accountants....................................6
(4) Financial Statements.......................................6
(5) No Material Adverse Change in Business.....................7
(6) Good Standing of the Company...............................7
(7) Good Standing of the Operating Partnership.................7
(8) Good Standing of the Subsidiaries..........................8
(9) Good Standing of Property Partnerships.....................9
(10) Capitalization............................................9
(11) Authorization of Units....................................9
(12) Authorization of this Underwriting Agreement and Terms
Agreement..............................................10
(13) Authorization of Common Stock............................10
(14) Authorization of Preferred Stock.........................10
(15) Authorization of Common Stock Warrants...................11
(16) Authorization of Warrant Agreement.......................11
(17) Authorization of Underlying Securities...................11
(18) Descriptions of the Underwritten Securities, Underlying
Securities and Warrant Agreement.......................12
(19) Absence of Defaults and Conflicts........................12
(20) Absence of Labor Dispute.................................13
(21) Absence of Proceedings...................................13
(22) Accuracy of Exhibits.....................................14
(23) REIT Qualification.......................................14
(24) Absence of Further Requirements..........................14
(25) Possession of Intellectual Property......................14
(26) Possession of Licenses and Permits.......................14
(27) Registration Rights......................................15
(28) Title to Property........................................15
(29) Insurance................................................16
(30) Investment Company Act...................................16
(31) Environmental Laws.......................................17
(32) Tax Returns..............................................17
(33) Beneficial Owners, Directors and Officers of the
Company................................................17
(34) Compliance with Cuba Act.................................18
Stabilization/Manipulation....................................18
(b) Officers' Certificates.............................................18
SECTION 2. Sale and Delivery to Underwriters; Closing.....................18
(a) Underwritten Securities............................................18
(b) Option Underwritten Securities.....................................18
(c) Payment............................................................19
(d) Denominations; Registration........................................20
SECTION 3. Covenants of the Company and the Operating Partnerships.......20
2
(a) Compliance with Securities Regulations and Commission
Requests.........................................................20
(b) Filing of Amendments...............................................21
(c) Delivery of Registration Statements................................21
(d) Delivery of Prospectuses...........................................21
(e) Continued Compliance with Securities Laws..........................22
(f) Blue Sky Qualifications............................................22
(g) Earnings Statement.................................................23
(h) Reporting Requirements.............................................23
(i) Listing............................................................23
(j) Restriction on Sale of Securities..................................23
(k) REIT Qualification.................................................23
(l) Reservation of Securities..........................................23
(m) Use of Proceeds....................................................23
SECTION 4. Payment of Expenses............................................24
(a) Expenses...........................................................24
(b) Termination of Agreement...........................................25
SECTION 5. Conditions of Underwriters' Obligations........................25
(a) Effectiveness of Registration Statement............................25
(b) Opinion of Counsel for Company.....................................25
(c) Opinion of Counsel for Underwriters................................26
(d) Officers' Certificate..............................................26
(e) Accountant's Comfort Letter........................................26
(f) Bring-down Comfort Letter..........................................27
(g) Ratings............................................................27
(h) Approval of Listing................................................27
(i) No Objection.......................................................27
(j) Lock-up Agreements.................................................27
(k) Over-Allotment Option..............................................28
(l) Additional Documents...............................................28
(m) Termination of Terms Agreement.....................................29
SECTION 6. Indemnification................................................29
(a) Indemnification of Underwriters....................................29
(b) Indemnification of Company, Directors and Officers.................30
(c) Actions against Parties; Notification..............................30
(d) Settlement without Consent if Failure to Reimburse.................31
SECTION 7. Contribution...................................................32
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery.....................................................33
SECTION 9. Termination....................................................34
(a) Underwriting Agreement.............................................34
(b) Terms Agreement....................................................34
(c) Liabilities........................................................34
SECTION 10. Default by One or More of the Underwriters....................35
SECTION 11. Notices.......................................................35
SECTION 12. Parties.......................................................36
SECTION 13. GOVERNING LAW AND TIME........................................36
SECTION 14. Effect of Headings............................................36
SECTION 15. Counterparts..................................................37
ii
THE XXXXX CORPORATION
(a Delaware corporation)
Common Stock, Preferred Stock and
Warrants to Purchase Common Stock
UNDERWRITING AGREEMENT
March 12, 1997
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
c/o Merrill Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
The Xxxxx Corporation, a Delaware corporation (the "Company")
proposes to issue and sell up to $250,000,000 aggregate initial public
offering price (or its equivalent based on the exchange rate at the time of
sale) of its (i) shares of common stock, par value $.01 per share (the
"Common Stock"), (ii) warrants to purchase shares of Common Stock (the
"Common Stock Warrants"), or (iii) shares of preferred stock, par value $.01
per share (the "Preferred Stock"), or any combination thereof, from time to
time, in or pursuant to one or more offerings on terms to be determined at
the time of sale.
The Preferred Stock will be issued in one or more series and each
series of Preferred Stock may vary, as applicable, as to the title, specific
number of shares, rank, stated value, liquidation preference, dividend rate
or rates (or method of calculation), dividend payment dates, redemption
provisions, sinking fund requirements, conversion provisions, voting
provisions (and terms of the related Underlying Securities (as defined
below)) and any other variable terms as set forth in the applicable
certificate of designations (each, the "Certificate of Designations")
relating to such series of Preferred Stock.
Each issue of Common Stock Warrants will be issued pursuant to a
separate warrant agreement (each, a "Warrant Agreement") between the Company
and the warrant agent identified therein (each, a "Warrant Agent"). The
Common Stock Warrants may vary, as applicable, as to, among other terms,
title, type, specific number, exercise dates or periods, exercise price(s)
and expiration date(s).
As used herein, "Securities" shall mean the Common Stock, Common
Stock Warrants, or Preferred Stock, or any combination thereof, initially
issuable by the Company and "Underlying Securities" shall mean the Common
Stock issuable upon exercise of the Common Stock Warrants or upon conversion
of the Preferred Stock, as applicable.
Whenever the Company determines to make an offering of Securities
through Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated ("Xxxxxxx Xxxxx") or through an underwriting syndicate managed
by Xxxxxxx Xxxxx, the Company will enter into an agreement (each, "Terms
Agreement") providing for the sale of such Securities to, and the purchase
and offering thereof by, Xxxxxxx Xxxxx and such other underwriters, if any,
selected by Xxxxxxx Xxxxx (the "Underwriters," which term shall include
Xxxxxxx Xxxxx, whether acting as sole Underwriter or as a member of an
underwriting syndicate, as well as any Underwriter substituted pursuant to
Section 10 hereof). The Terms Agreement relating to the offering of
Securities shall specify the number of Securities to be initially issued (the
"Initial Underwritten Securities"), the name of each Underwriter
participating in such offering (subject to substitution as provided in
Section 10 hereof) and the name of any Underwriter other xxxx Xxxxxxx Xxxxx
acting as co-manager in connection with such offering, the number of Initial
Underwritten Securities which each such Underwriter severally agrees to
purchase, whether such offering is on a fixed or variable price basis and, if
on a fixed price basis, the initial offering price, the price at which the
Initial Underwritten Securities are to be purchased by the Underwriters, the
form, time, date and place of delivery and payment of the Initial
Underwritten Securities and any other material variable terms of the Initial
Underwritten Securities, as well as the material variable terms of any
related Underlying Securities. In addition, if applicable, such Terms
Agreement shall specify whether the Company has agreed to grant to the
Underwriters an option to purchase additional Securities to cover
over-allotments, if any, and the number of Securities subject to such option
(the "Option Underwritten Securities"). As used herein, the term
"Underwritten Securities" shall include the Initial Underwritten Securities
and all or any portion of any Option Underwritten Securities. The Terms
Agreement, which shall be substantially in the form of Exhibit A hereto, may
take the form of an exchange of any standard form of written
telecommunication between the Company and Xxxxxxx Xxxxx acting for itself,
and, if applicable, as representative of any other Underwriters. Each
offering of Underwritten Securities through Xxxxxxx Xxxxx, acting as sole
Underwriter or through an underwriting syndicate managed by Xxxxxxx Xxxxx
will be governed by Underwriting Agreement, as supplemented by the applicable
Terms Agreement.
2
The Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-3 (No. 333-13363) and
Pre-Effective Amendment No. 1 thereto, for the registration of the Securities
and the Underlying Securities under the Securities Act of 1933, as amended
(the "1933 Act"), and the offering thereof from time to time in accordance
with Rule 430A or Rule 415 of the rules and regulations of the Commission
under the 1933 Act (the "1933 Act Regulations"), and the Company has filed
such post-effective amendments thereto as may be required prior to the
execution of the applicable Terms Agreement. Such registration statement (as
so amended, if applicable) has been declared effective by the Commission.
Such registration statement (as so amended, if applicable), including the
information, if any, deemed to be a part thereof pursuant to Rule 430A(b) of
the 1933 Act Regulations (the "Rule 430A Information") or Rule 434(d) of the
1933 Act Regulations (the "Rule 434 Information"), is referred to herein as
the "Registration Statement"; and the final prospectus and the prospectus
supplement relating to the offering of the Underwritten Securities, in the
form first furnished to the Underwriters by the Company for use in connection
with the offering of the Underwritten Securities, are collectively referred
to herein as the "Prospectus"; provided, however, that all references to the
"Registration Statement" and the "Prospectus" shall be deemed to include all
documents incorporated therein by reference pursuant to the Securities
Exchange Act of 1934, as amended (the "1934 Act"), prior to the execution of
the applicable Terms Agreement; provided, further, that if the Company files
a registration statement with the Commission pursuant to Section 462(b) of
the 1933 Act Regulations (the "Rule 462 Registration Statement"), then, after
such filing, all references to "Registration Statement" shall be deemed to
include the Rule 462 Registration Statement; and provided, further, that if
the Company elects to rely upon Rule 434 of the 1933 Act Regulations, then
all references to "Prospectus" shall be deemed to include the final or
preliminary prospectus and the applicable term sheet or abbreviated term
sheet (the "Term Sheet"), as the case may be, in the form first furnished to
the Underwriters by the Company in reliance upon Rule 434 of the 1933 Act
Regulations, and all references in this Underwriting Agreement to the date of
the Prospectus shall mean the date of the Term Sheet. A "preliminary
prospectus" shall be deemed to refer to any prospectus used before the
registration statement became effective and any prospectus that omitted, as
applicable, the Rule 430A Information, the Rule 434 Information or other
information to be included upon pricing in a form of prospectus filed with
the Commission pursuant to Rule 424(b) of the 1933 Act Regulations, that was
used after such effectiveness and prior to the execution and delivery of the
applicable Terms Agreement. For purposes of this Underwriting Agreement, all
references to the Registration Statement, Prospectus, Term Sheet or
preliminary prospectus or to any amendment or supplement to any of the
foregoing shall be deemed to include the copy filed with the Commission
pursuant to its Electronic Data Gathering, Analysis and Retrieval system
("XXXXX").
3
All references in this Underwriting Agreement to financial
statements and schedules and other information which is "contained,"
"included" or "stated" (and all references of like import) in the
Registration Statement, Prospectus or preliminary prospectus shall be deemed
to mean and include all such financial statements and schedules and other
information which is incorporated by reference in the Registration Statement,
Prospectus or preliminary prospectus, as the case may be; and all references
in this Underwriting Agreement to amendments or supplements to the
Registration Statement, Prospectus or preliminary prospectus shall be deemed
to mean and include the filing of any document under the 1934 Act which is
incorporated by reference in the Registration Statement, Prospectus or
preliminary prospectus, as the case may be.
The term "subsidiary" also includes, without limitation, each entity
listed on Exhibit B hereto.
The term "Property Partnership" means any entity which owns any of
the Properties (as such term is defined in the Prospectus) or any direct or
indirect interest in any of the Properties.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company and the Operating
Partnership. The Company and the Operating Partnership jointly and severally
represent and warrant to Xxxxxxx Xxxxx, as of the date hereof, and to each
Underwriter named in the applicable Terms Agreement, as of the date thereof,
as of the Closing Time (as defined below) and, if applicable, as of each Date
of Delivery (as defined below) (in each case, a "Representation Date"), as
follows:
(1) Compliance with Registration Requirements. The Company meets
the requirements for use of Form S-3 under the 1933 Act. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or, to
the knowledge of the Company or the Operating Partnership, after due
inquiry, are contemplated by the Commission, and any request on the part
of the Commission for additional information has been complied with. No
order preventing or suspending the use of the Prospectus has been issued
and no proceeding for that purpose has been instituted or, to the
knowledge of the Company or the Operating Partnership, after due
inquiry, threatened by the Commission or the state securities authority
of any jurisdiction.
4
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments thereto
(including the filing of the Company's most recent Annual Report on Form
10-K with the Commission (the "Annual Report on Form 10-K")) became
effective and at each Representation Date, the Registration Statement, any
Rule 462(b) Registration Statement and any amendments and supplements
thereto complied and will comply in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations and did not 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. At the date of the Prospectus, at the
Closing Time and at each Date of Delivery, if any, the Prospectus and any
amendments and supplements thereto did not and will not include an untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. If the Company elects to rely
upon Rule 434 of the 1933 Act Regulations, the Company will comply with the
requirements of Rule 434. Notwithstanding the foregoing, the
representations and warranties in this subsection shall not apply to
statements in or omissions from the Registration Statement or the
Prospectus made in reliance upon and in conformity with information
furnished to the Company in writing by any Underwriter through Xxxxxxx
Xxxxx expressly for use in the Registration Statement or the Prospectus.
Each preliminary prospectus and Prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when so
filed in all material respects with the 1933 Act Regulations and, if
applicable, each preliminary prospectus and the Prospectus delivered to the
Underwriters for use in connection with the offering of Underwritten
Securities will, at the time of such delivery, be identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to XXXXX, except to the extent permitted by Regulation S-T.
If a Rule 462(b) Registration Statement is required in connection
with the offering and sale of the Securities, the Company has complied or
will comply with the requirements of Rule 111 under the 1933 Act
Regulations relating to the payment of filing fees therefor.
(2) Incorporated Documents. The documents incorporated or deemed
to be incorporated by reference in the Registration Statement and the
Prospectus, at the time they were or hereafter are filed with the
Commission, complied and will comply in all material respects with the
requirements of the 1934 Act and the rules and regulations of the
Commission thereunder (the "1934 Act Regulations") and, when read
together with the other information in the Prospectus, at the date
5
of the Prospectus, at the Closing Time and at each Date of Delivery, if
any, did not and will not include an untrue statement of a material fact
or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading.
(3) Independent Accountants. The accountants who certified the
financial statements and supporting schedules included in, or
incorporated by reference into, the Registration Statement and the
Prospectus are independent public accountants as required by the 1933
Act and the 1933 Act Regulations.
(4) Financial Statements. The financial statements of the
Company included, or incorporated by reference, in the Registration
Statement and the Prospectus, together with the related schedules and
notes, as well as those financial statements, schedules and notes of any
other entity included therein, present fairly the financial position of
the respective entity or entities or group presented therein at the
respective dates indicated and the statement of operations,
stockholders' equity and cash flows data of such entity, as the case may
be, for the periods specified. Such financial statements have been
prepared in conformity with generally accepted accounting principles
("GAAP") applied on a consistent basis throughout the periods involved.
The supporting schedules, if any, included or incorporated by reference
in the Registration Statement and the Prospectus present fairly, in
accordance with GAAP, the information required to be stated therein.
The selected financial data, the summary financial information and other
financial information and data included in, or incorporated by reference
into, the Prospectus present fairly the information shown therein and
have been compiled on a basis consistent with that of the audited
financial statements included, or incorporated by reference, in the
Registration Statement and the Prospectus. In addition, any pro forma
financial information and the related notes thereto included or
incorporated by reference in the Registration Statement and the
Prospectus present fairly the information shown therein, have been
prepared in accordance with the Commission's rules and the guidelines of
the American Institute of Certified Public Accountants ("AICPA") with
respect to pro forma information and have been properly compiled on the
bases described therein, and the assumptions used in the preparation
thereof are, in the opinion of the Company, reasonable and the
adjustments used therein are appropriate to give effect to the
transactions and circumstances referred to therein. All historical
financial statements and information and all pro forma financial
statements and information required by the 1933 Act, the 1933 Act
Regulations, the 1934 Act and the 1934 Act Regulations are included, or
incorporated by reference, in the Registration Statement and the
Prospectus.
(5) No Material Adverse Change in Business. 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
6
adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company, the
Operating Partnership, the subsidiaries and the Property Partnerships
considered as one enterprise (a "Material Adverse Effect"), whether or
not arising in the ordinary course of business, (B) no casualty loss or
condemnation or other adverse event with respect to the Properties or
any development site (as referred to in the Prospectus as "Xxxxx Under
Development") (the "Development Sites") has occurred which would have a
Material Adverse Effect, (C) there have been no transactions entered
into by the Company, the Operating Partnership, any subsidiary or any
Property Partnership, other than those arising in the ordinary course of
business, which would have a Material Adverse Effect, (D) except for
regular distributions on the Company's common stock in amounts per share
that are consistent with past practice and regular quarterly
distributions on units of the Operating Partnership (the "Units") there
has been no dividend or distribution of any kind declared, paid or made
by the Company on any class of its capital stock or any distribution by
the Operating Partnership with respect to its Units and (E) there has
been no material change in the capital stock of the Company or the
partnership interests of the Operating Partnership, or any material
increase in the indebtedness of the Company, the Operating Partnership,
its subsidiaries and any Property Partnership considered as one
enterprise.
(6) Good Standing of the Company. The Company has been
duly organized and is validly existing as a corporation in good standing
under the laws of the State of Delaware and has corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and to enter into and perform
its obligations under, or as contemplated under, this Underwriting
Agreement and the applicable Terms Agreement. The Company is duly
qualified or registered as a foreign corporation to transact business
and is in good standing in each other jurisdiction in which such
qualification or registration is required, whether by reason of the
ownership or leasing of property or the conduct of business, except
where the failure to so qualify or register or be in good standing would
not result in a Material Adverse Effect.
(7) Good Standing of the Operating Partnership. The
Operating Partnership is duly formed and validly existing as a limited
partnership in good standing under the laws of the State of Delaware,
with partnership power and authority to own, lease and operate its
properties, to conduct the business in which it is engaged and proposes
to engage as described in the Prospectus and to enter into and perform
its obligations under this Underwriting Agreement and the applicable
Terms Agreement. The Operating Partnership is duly qualified or
registered as a foreign partnership and is in good standing in each
jurisdiction in which such qualification or registration is required,
whether by reason of the
7
ownership or leasing of property or the conduct of business, except
where the failure to so qualify or register would not have a Material
Adverse Effect. The Company is the sole general partner of the
Operating Partnership and holds such number and/or percentage of Units
as disclosed in the Prospectus. The Agreement of Limited Partnership of
the Operating Partnership, dated April 21, 1994, as amended through the
Closing Time and at each Date of Delivery (the "Operating Partnership
Agreement"), is in full force and effect.
(8) Good Standing of the Subsidiaries. Each subsidiary
that is a "significant subsidiary" as such term is defined in Section
1-02 of Regulation S-X (each a "Significant Subsidiary," and
collectively, the "Significant Subsidiaries") and each subsidiary listed
on Exhibit B hereto and has been duly organized and is validly existing
as a corporation, limited partnership, limited liability company or
other legal entity, as the case may be, in good standing under the laws
of the state of its jurisdiction of incorporation or organization, as
the case may be, with the requisite power and authority to own, lease
and operate its properties, and to conduct the business in which it is
engaged or proposes to engage as described in the Prospectus. Each such
entity is duly qualified or registered as a foreign corporation, limited
partnership or limited liability company or other entity, as the case
may be, to transact business and is in good standing in each
jurisdiction in which such qualification or registration is required,
whether by reason of the ownership or leasing of property or the conduct
of business, except where the failure to so qualify or register would
not have a Material Adverse Effect. Except as otherwise stated in the
Registration Statement and the Prospectus, all of the issued and
outstanding capital stock or other equity interests of such entity has
been duly authorized and validly issued and is fully paid and
non-assessable and with respect to partnership entities have been fully
paid and are owned directly or indirectly by the Company or the
Operating Partnership, in each case free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity
(collectively, "Liens"). No shares of capital stock or other equity
interests of such entities are reserved for any purpose, and there are
no outstanding securities convertible into or exchangeable for any
capital stock or other equity interests of such entities and no
outstanding options, rights (preemptive or otherwise) or warrants to
purchase or to subscribe for shares of such capital stock or other
equity interests or any other securities of such entities, except as
disclosed in the Prospectus.
(9) Good Standing of Property Partnerships. Each of the
Property Partnerships is duly organized and validly existing as a
limited or general partnership, limited liability company or other legal
entity, as the case may be, in good standing under the laws of its
respective jurisdiction of formation; each of the Property Partnerships
has the requisite power and authority to own, lease and operate its
properties, and to conduct the business in which it is engaged. Each of
the partnership, operating or other organizational agreements, as the
8
case may be, of the Property Partnerships is in full force and effect.
Each of the Property Partnerships is duly qualified or registered as a
foreign partnership, limited liability company or other legal entity to
transact business and is in good standing in each jurisdiction in which
such qualification or registration is required, whether by reason of the
ownership or leasing of property or the conduct of business, except
where the failure to so qualify or register would not have a Material
Adverse Effect.
(10) Capitalization. If the Prospectus contains a
"Capitalization" section, the authorized, issued and outstanding shares
of capital stock of the Company is as set forth therein (except for
subsequent issuances thereof, if any, contemplated under this
Underwriting Agreement, pursuant to employee benefit plans referred to
in the Prospectus or pursuant to the exercise of convertible securities
or options referred to in the Prospectus or upon the exchange of Units).
Such shares of capital stock have been duly authorized and validly
issued by the Company and are fully paid and non-assessable and were
offered in compliance with all applicable laws (including, without
limitation, Federal and State Securities laws), and none of such shares
of capital stock were issued in violation of preemptive or other similar
rights arising by operation of law, under the charter and by-laws of the
Company or under any agreement to which the Company or any of its
subsidiaries is a party or otherwise. Except for shares of Common Stock
issuable upon exchange of Units or upon the exercise of options or the
grant of restricted shares under the stock option plans of the Company,
there are no shares of capital stock of the Company reserved for any
purpose and there are no outstanding securities convertible into or
exchangeable for any shares of capital stock of the Company and except
as granted in this Underwriting Agreement, any Terms Agreement and any
Warrant Agreement, there are no outstanding options, rights (preemptive
or otherwise) or warrants to purchase or to subscribe for shares of such
stock or any other securities of the Company.
(11) Authorization of Units. All the issued and outstanding Units
have been duly authorized, validly issued, and fully paid, and sold or
exchanged in compliance with all applicable laws (including, without
limitation, federal and state securities laws). There are no Units
reserved for any purpose, no outstanding securities convertible into or
exchangeable for any Units and no outstanding options, rights
(preemptive or otherwise) or warrants to purchase or to subscribe for
Units.
(12) Authorization of this Underwriting Agreement and Terms
Agreement. This Underwriting Agreement has been, and the applicable
Terms Agreement as of the date thereof will have been, duly authorized,
executed and delivered by the Company and the
9
Operating Partnership, to the extent each is a party thereto and
assuming due authorization, execution and delivery by Xxxxxxx Xxxxx and
any other Underwriter, is enforceable against the Company and the
Operating Partnership, to the extent each is a party thereto, in
accordance with its terms except as (A) the enforceability thereof may
be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally or (b) the
availability of equitable remedies may be limited by equitable
principles of general applicability.
(13) Authorization of Common Stock. If the Underwritten Securities
being sold pursuant to the applicable Terms Agreement include Common
Stock, such Underwritten Securities have been, or as of the date of such
Terms Agreement will have been, duly authorized by the Company for
issuance and sale pursuant to this Underwriting Agreement and such Terms
Agreement. Such Underwritten Securities, when issued and delivered by
the Company pursuant to this Underwriting Agreement and such Terms
Agreement against payment of the consideration therefor specified in
such Terms Agreement, will be validly issued, fully paid and
non-assessable and will not be subject to preemptive or other similar
rights arising by operation of law, under the charter and by-laws of the
Company or under any agreement to which the Company, the Operating
Partnership, any subsidiary or any Property Partnership is a party, or
otherwise. No holder of such Underwritten Securities is or will be
subject to personal liability by reason of being such a holder. The
form of stock certificate to be used to evidence the Common Stock will
be in due and proper form and will comply with all applicable legal
requirements.
(14) Authorization of Preferred Stock. If the Underwritten
Securities being sold pursuant to the applicable Terms Agreement include
Preferred Stock, such Underwritten Securities have been, or as of the
date of such Terms Agreement will have been, duly authorized by the
Company for issuance and sale pursuant to this Underwriting Agreement
and such Terms Agreement. Such Underwritten Securities, when issued and
delivered by the Company pursuant to this Underwriting Agreement and
such Terms Agreement against payment of the consideration therefor,
specified in such Terms Agreement, will be validly issued, fully paid
and non-assessable and will not be subject to preemptive or other
similar rights arising by operation of law, under the charter and
by-laws of the Company or under any agreement to which the Company, the
Operating Partnership, any subsidiary or any Property Partnership is a
party, or otherwise. No holder of Preferred Stock is or will be subject
to personal liability by reason of being such a holder. The applicable
Certificate of Designations will be in full force and effect prior to
the Closing Time. The form of stock certificate to be used to evidence
the Preferred Stock will be in due and proper form and will comply with
all applicable legal requirements.
(15) Authorization of Common Stock Warrants. If the Underwritten
Securities being sold pursuant to the applicable Terms Agreement include
Common Stock Warrants, such Underwritten Securities have been, or as of
the
10
date of such Terms Agreement will have been, duly authorized by the
Company for issuance and sale pursuant to this Underwriting Agreement
and such Terms Agreement. Such Underwritten Securities, when issued and
authenticated in the manner provided for the applicable Warrant
Agreement and delivered against payment of the consideration therefor
specified in such Terms Agreement, will constitute valid and legally
binding obligations of the Company, entitled to the benefits provided by
such Warrant Agreement and enforceable against the Company in accordance
with their terms, except as except as (A) the enforceability thereof may
be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally or (b) the
availability of equitable remedies may be limited by equitable
principles of general applicability.
(16) Authorization of Warrant Agreement. If the Underwritten
Securities being sold pursuant to the applicable Terms Agreement include
Common Stock Warrants, each applicable Warrant Agreement has been, or
prior to the issuance of such Underwritten Securities will have been,
duly authorized, executed and delivered by the Company and, upon such
authorization, execution and delivery, will constitute a valid and
legally binding agreement of the Company, enforceable against the
Company in accordance with its terms, except as (A) the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally or (b)
the availability of equitable remedies may be limited by equitable
principles of general applicability.
(17) Authorization of Underlying Securities. The Underlying
Securities related to the Underwritten Securities being sold pursuant to
the applicable Terms Agreement have been, or as of the date of such
Terms Agreement will have been, duly authorized and reserved for
issuance by the Company upon exercise of the Common Stock Warrants or
upon conversion of the related Preferred Stock, as applicable. Such
Underlying Securities, when issued upon such exercise or conversion, as
applicable, will be validly issued, fully paid and non-assessable and
will not be subject to preemptive or other similar rights arising by
operation of law, under the charter and by-laws of the Company or under
any agreement to which the Company, the Operating Partnership, any
subsidiary or any Property Partnership is a party, or otherwise. No
holder of such Common Stock will be subject to personal liability by
reason of being such a holder.
(18) Descriptions of the Underwritten Securities, Underlying
Securities and Warrant Agreement. The Underwritten Securities being
sold pursuant to the applicable Terms Agreement and each applicable
Warrant Agreement, as of the date of the Prospectus, and any Underlying
Securities, when issued and delivered in accordance with the terms of
the related Underwritten Securities, will conform in all material
respects to the statements relating thereto contained in the
11
Prospectus and will be in substantially the form filed or incorporated
by reference, as the case may be, as an exhibit to the Registration
Statement.
(19) Absence of Defaults and Conflicts. None of the Company, the
Operating Partnership, any subsidiary or any Property Partnership is in
violation of its charter, by-laws, certificate of limited partnership or
partnership agreement or other organizational document, as the case may
be, or in default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any material
contract, indenture, mortgage, deed of trust, loan or credit agreement,
note, lease or other agreement or instrument to which any such entity is
a party or by which or any of them may be bound, or to which any of its
assets or the Properties may be bound or are subject (collectively,
"Agreements and Instruments"), except for such defaults that would not
result in a Material Adverse Effect. The execution, delivery and
performance of this Underwriting Agreement, the applicable Terms
Agreement and each applicable Warrant Agreement and any other agreement
or instrument entered into or issued or to be entered into or issued by
the Company or the Operating Partnership in connection with the
transactions contemplated hereby or thereby or in the Registration
Statement and the Prospectus and the consummation of the transactions
contemplated herein and in the Registration Statement and the Prospectus
(including the issuance and sale of the Underwritten Securities and the
use of the proceeds from the sale of the Underwritten Securities as
described under the caption "Use of Proceeds") and compliance by the
Company and the Operating Partnership with their obligations hereunder
and thereunder have been duly authorized by all necessary corporate or
partnership action, as the case may be, and do not and will not, whether
with or without the giving of notice or passage of time or both,
conflict with or constitute a breach of, or default or Repayment Event
(as defined below) under, or result in the creation or imposition of any
lien, charge or encumbrance upon any assets, properties or operations of
the Company, the Operating Partnership, any subsidiary or any Property
Partnership pursuant to, any Agreements and Instruments, except for such
conflicts, breaches, defaults, events or liens, charges or encumbrances
that would not result in a Material Adverse Effect, nor will such action
result in any violation of the provisions of the charter, by-laws of the
Company or the organizational documents of the Operating Partnership,
any subsidiary or any Property Partnership or any applicable law,
statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Company, the Operating Partnership, any
subsidiary or any Property Partnership or any of their assets,
properties or operations. As used herein, a "Repayment Event" means any
event or condition which gives the holder of any note, debenture or
other evidence of indebtedness (or any person acting on such holder's
behalf) the right to require the repurchase, redemption or repayment of
all or a portion of such indebtedness by the Company, the Operating
Partnership, any subsidiary or any Property Partnership.
12
(20) Absence of Labor Dispute. No labor dispute with the employees
of the Company, the Operating Partnership, any subsidiary or any
Property Partnership exists or, to the knowledge of the Company or the
Operating Partnership is imminent.
(21) Absence of Proceedings. There is no action, suit, proceeding,
inquiry or investigation before or by any court or governmental agency
or body, domestic or foreign, now pending, or, to the knowledge of the
Company or the Operating Partnership threatened against or affecting the
Company, the Operating Partnership, any subsidiary or any Property
Partnership which is required to be disclosed in the Registration
Statement and the Prospectus (other than as stated therein), or which
might reasonably be expected to result in a Material Adverse Effect, or
which might reasonably be expected to materially and adversely affect
the assets, properties or operations thereof or the consummation of this
Underwriting Agreement, the applicable Terms Agreement or any applicable
Warrant Agreement or the transactions contemplated herein or therein.
The aggregate of all pending legal or governmental proceedings to which
the Company, the Operating Partnership, any subsidiary or any Property
Partnership is a party or of which any of their respective assets,
properties or operations is the subject which are not described in the
Registration Statement and the Prospectus, including ordinary routine
litigation incidental to the business, could not reasonably be expected
to result in a Material Adverse Effect.
(22) Accuracy of Exhibits. There are no contracts or documents
which are required to be described in the Registration Statement, the
Prospectus or the documents incorporated by reference therein or to be
filed as exhibits thereto which have not been so described and/or filed
as required and the descriptions thereof or references thereto are
correct in all material respects and no material defaults exist in the
due performance or observance of any material obligation, agreement,
covenant or condition contained in any such contract or document.
(23) REIT Qualification. The Company was organized and has
operated in conformity with the requirements for qualification and
taxation 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 for each of
its subsequent taxable years, and no actions have been taken (or not
taken which are required to be taken) which would cause such
qualification to be lost.
(24) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order registration,
qualification or decree of, any court or governmental authority or
agency is necessary or required for the performance
13
by the Company or the Operating Partnership of its obligations under
this Underwriting Agreement or the applicable Terms Agreement or in
connection with the transactions contemplated under this Underwriting
Agreement, such Terms Agreement or any applicable Warrant Agreement,
except such as have been already obtained or as may be required in
connection with the National Association of Securities Dealers, Inc.
(the "NASD") or under state securities or real estate syndication laws.
(25) Possession of Intellectual Property. None of the Company, the
Operating Partnership or any subsidiary is required to own or possess
any trademarks, service marks, trade names, copyrights or other
intellectual property (collectively "proprietary rights") not now
lawfully owned or possessed by such entity in order to lawfully conduct
the business now operated by such entity or as proposed to be operated
by it as described in the Prospectus, and no such entity has received
any notice or is otherwise aware of any infringement of or conflict with
asserted rights of others with respect to any proprietary rights, other
than such conflict or infringement which would not have a Material
Adverse Effect.
(26) Possession of Licenses and Permits. Each of the Company, the
Operating Partnership, the subsidiaries and the Property Partnerships
possesses such certificates, permits, licenses, approvals, consents and
other authorizations (collectively, "Governmental Licenses") issued by
the appropriate federal, state, local or foreign regulatory agencies or
bodies necessary to conduct the business now operated by them. Each of
the Company, the Operating Partnership, the subsidiaries and the
Property Partnerships are in compliance with the terms and conditions of
all such Governmental Licenses, except where the failure so to comply
would not, singly or in the aggregate, result in a Material Adverse
Effect. All of the Governmental Licenses are valid and in full force
and effect, except where the invalidity of such Governmental Licenses or
the failure of such Governmental Licenses to be in full force and effect
would not result in a Material Adverse Effect. None of the Company, the
Operating Partnership, any subsidiary or any Property Partnership has
received any notice of proceedings relating to the revocation or
modification of any such Governmental Licenses which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding,
would result in a Material Adverse Effect.
(27) Registration Rights. Except as disclosed in the Prospectus
and for registration rights of holders of Units, and certain holders of
Common Stock who acquired such shares from the Company's former Chief
Executive Officer, there are no persons with registration or other
similar rights to have any securities registered pursuant to the
Registration Statement or otherwise registered by the Company under the
1933 Act.
14
(28) Title to Property. The Company, the Operating Partnership,
the subsidiaries and the Property Partnerships have good and marketable
title to all real property and related improvements and other assets
owned by the Company, the Operating Partnership, the subsidiaries and
the Property Partnerships, respectively, and good title to all other
properties owned by them, in each case, free and clear of all mortgages,
pledges, liens, security interests, claims, restrictions or encumbrances
of any kind, except (A) as otherwise stated in the Registration
Statement and the Prospectus or (B) those which do not, singly or in the
aggregate, 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 Company, the Operating Partnership, any subsidiary or any Property
Partnership, as the case may be. All of the leases and subleases
material to the business of the Company, the Operating Partnership, the
subsidiaries and the Property Partnerships considered as one enterprise,
and under which the Company or any subsidiary holds properties described
in the Prospectus, are in full force and effect, and none of the
Company, the Operating Partnership, any subsidiary or any Property
Partnership has received any notice of any material claim of any sort
that has been asserted by anyone adverse to the rights of the Company,
the Operating Partnership, any subsidiary or any Property Partnership
under any of the leases or subleases mentioned above, or affecting or
questioning the rights of the Company, the Operating Partnership, such
subsidiary or such Property Partnership of the continued possession of
the leased or subleased premises under any such lease or sublease. All
material liens, charges, encumbrances, claims, restrictions on or
affecting any of the Properties or Development Sites and the assets of
the Company, the Operating Partnership, the subsidiaries or any Property
Partnership which are required to be disclosed in the Registration
Statement and the Prospectus are disclosed therein. No tenant under any
of the leases, pursuant to which the Company, the Operating Partnership,
any subsidiary or any Property Partnership, as lessor, leases its
Property, has an option or right of first refusal to purchase the
premises demised under such lease, the exercise of which would have a
Material Adverse Effect. Except as disclosed in the Registration
Statement or Prospectus, each Property complies with all applicable
codes, laws, regulations (including without limitation, building and
zoning codes, laws and regulations and laws relating to access to such
Property), except for such failure to comply that would not,
individually or in the aggregate, have a Material Adverse Effect.
Neither the Company nor the Operating Partnership has knowledge of any
pending or threatened condemnation proceeding, zoning change or other
proceeding or action that will, in any material manner, affect the size
of, use of, improvements on, development of, construction on or access
to, the Properties or the Development Sites, except such proceedings or
actions that would not have a Material Adverse Affect.
(29) Insurance. The Company, the Operating Partnership, the
subsidiaries and/or the Property Partnerships, as applicable, have
insurance
15
policies in effect for the Properties, Development Sites and other
assets of the Company, the Operating Partnership, the subsidiaries
and/or the Property Partnerships, as applicable, covering risks and in
amounts that are commercially reasonable for the assets owned by such
entities and that are consistent with the types and amounts of insurance
typically maintained by prudent owners of similar types of properties
and assets, and none of such entities has reason to believe that it will
not be able to renew its existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar insurers as
may be necessary to continue its business at a cost that would not
result in a Material Adverse Effect.
(30) Investment Company Act. None of the Company, the Operating
Partnership, any subsidiary or any Property Partnership is, and upon the
issuance and sale of the Underwritten Securities as herein contemplated
and the application of the net proceeds therefrom as described in the
Prospectus will be, an "investment company" within the meaning of the
Investment Company Act of 1940, as amended (the "1940 Act").
(31) Environmental Laws. Except as otherwise stated in the
Registration Statement and the Prospectus and except such violations as
would not, singly or in the aggregate, result in a Material Adverse
Effect, (A) none of the Company, the Operating Partnership, any
subsidiary or any Property Partnership is in violation of any federal,
state, local or foreign statute, law, rule, regulation, ordinance, code,
policy or rule of common law and any judicial or administrative
interpretation thereof including any judicial or administrative order,
consent, decree of judgment, relating to pollution or protection of
human health, the environment (including, without limitation, ambient
air, surface water, groundwater, land surface or subsurface strata) or
wildlife, including, without limitation, laws and regulations relating
to the release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum
or petroleum products (collectively, "Hazardous Materials") or to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials (collectively,
"Environmental Laws"), (B) each of the Company, the Operating
Partnership, the subsidiaries and the Property Partnerships has all
permits, authorizations and approvals required under any applicable
Environmental Laws and each is in compliance with their requirements,
(C) there are no pending or, to our knowledge, threatened
administrative, regulatory or judicial actions, suits, demands, demand
letters, claims, liens, notices of noncompliance or violation,
investigation or proceedings pursuant to any Environmental Law against
the Company, the Operating Partnership, any subsidiary or any Property
Partnership and (D) there are no events or circumstances that might
reasonably be expected to form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party or
governmental body or agency, against
16
the Company, the Operating Partnership, any subsidiary or any Property
Partnership or any of their assets relating to any Hazardous Materials
or the violation of any Environmental Laws.
(32) Tax Returns. Each of the Company, the Operating Partnership,
the subsidiaries and the Property Partnerships has filed all federal,
state, local and foreign income tax returns which have been required to
be filed (except in any case in which an extension has been granted or
the failure to so file would not have a Material Adverse Effect) 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.
(33) Beneficial Owners, Directors and Officers of the Company. No
person who (a) in the aggregate beneficially owns 5% or more of the
common stock of the Company (a "Beneficial Owner"), (b) is a director of
the Company or (c) is an officer of the Company, is a member of the
NASD, a controlling stockholder of a member, or an affiliate of a
member, or of an underwriter or related person of a member or
underwriter with respect to any proposed offering under this
Underwriting Agreement and any applicable Terms Agreement. No
beneficial owner of the Company's unregistered securities acquired
within the 12 months prior to the filing of the Registration Statement,
or any amendments thereto, or to the filing of the Prospectus, or any
amendment or supplement thereto, has any direct or indirect affiliation
or association with any NASD member.
(34) Compliance with Cuba Act. The Company has complied with, and
is and will be in compliance with, the provisions of that certain
Florida act relating to disclosure of doing business with Cuba, codified
as Section 517.075 of the Florida statutes, and the rules and
regulations thereunder or is exempt therefrom.
(35) Stabilization/Manipulation. Neither the Company, the
Operating Partnership nor any of their directors, officers or
controlling persons nor Kan Am U.S., Inc., a Delaware corporation and an
affiliate of the Company ("Kan AM"), has taken or will take, directly or
indirectly, any action resulting in the violation of Regulation M, or
designed to cause or result under the 1934 Act or otherwise in, or which
has constituted or which reasonably might be expected to constitute, the
stabilization or manipulation of the price of any security of the
Company or facilitation of the sale or resale of any such securities.
(b) Officers' Certificates. Any certificate signed by any officer of
the Company or any authorized representative of the Operating Partnership and
delivered to any Underwriter or to counsel for the Underwriters in connection
with the offering of the Underwritten Securities shall be deemed a
representation and warranty by such
17
entity to each Underwriter as to the matters covered thereby on the date of
such certificate and, unless subsequently amended or supplemented, at each
Representation Date subsequent thereto.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Underwritten Securities. The several commitments of the
Underwriters to purchase the Underwritten Securities pursuant to the
applicable Terms Agreement shall be deemed to have been made on the basis of
the representations and warranties herein contained and shall be subject to
the terms and conditions herein set forth.
(b) Option Underwritten Securities. In addition, subject to the terms
and conditions set forth therein, the Company may grant, if so provided in
the applicable Terms Agreement, an option to the Underwriters named therein,
severally and not jointly, to purchase up to the number of the Option
Underwritten Securities set forth therein at a price per Option Underwritten
Security equal to the price per Initial Underwritten Security, less an amount
equal to any dividends or distributions declared by the Company and paid or
payable on the Initial Underwritten Securities but not payable on the Option
Underwritten Securities. Such option, if granted, will expire 30 days or
such lesser number of days as may be specified in the applicable Terms
Agreement, after the date of such Terms Agreement, and may be exercised in
whole or in part from time to time only for the purpose of covering
over-allotments which may be made in connection with the offering and
distribution of the Initial Underwritten Securities upon notice by Xxxxxxx
Xxxxx to the Company setting forth the number of Option Underwritten
Securities as to which the several Underwriters are then exercising the
option and the time, date and place of payment and delivery for such Option
Underwritten Securities. Any such time and date of payment and delivery
(each, a "Date of Delivery") shall be determined by Xxxxxxx Xxxxx, but shall
not be later than seven full business days after the exercise of said option,
nor in any event prior to the Closing Time, unless otherwise agreed upon by
Xxxxxxx Xxxxx and the Company. If the option is exercised as to all or any
portion of the Option Underwritten Securities, each of the Underwriters,
severally and not jointly, will purchase that proportion of the total number
of Option Underwritten Securities then being purchased which the number of
Initial Underwritten Securities each such Underwriter has severally agreed to
purchase as set forth in such Terms Agreement bears to the total number of
Initial Underwritten Securities, subject to such adjustments as Xxxxxxx Xxxxx
in its discretion shall make to eliminate any sales or purchases of a
fractional number of Option Underwritten Securities.
(c) Payment. Payment of the purchase price for, and delivery of, the
Initial Underwritten Securities shall be made at the office of Xxxxx &
Xxxxxxx L.L.P., 000 00xx Xxxxxx, X.X. Xxxxxxxxxx, X.X., 00000, or at such
other place as shall be agreed upon by Xxxxxxx Xxxxx and the Company, at 9:00
A.M. (Eastern time) on the third
18
(fourth, if the pricing occurs after 4:30 P.M. (Eastern time) on any given
day) business day after the date of the applicable Terms Agreement (unless
postponed in accordance with the provisions of Section 10 hereof), or such
other time not later than ten business days after such date as shall be
agreed upon by Xxxxxxx Xxxxx and the Company (such time and date of payment
and delivery being herein called "Closing Time"). In addition, in the event
that the Underwriters have exercised their option, if any, to purchase any or
all of the Option Underwritten Securities, payment of the purchase price for,
and delivery of such Option Underwritten Securities, shall be made at the
above-mentioned offices of Xxxxxx & Xxxxx, or at such other place as shall be
agreed upon by Xxxxxxx Xxxxx and the Company, on the relevant Date of
Delivery as specified in the notice from Xxxxxxx Xxxxx to the Company.
Payment shall be made to the Company by wire transfer of immediately
available funds payable to the order of the Company, against delivery to
Xxxxxxx Xxxxx for the respective accounts of the Underwriters of the
Underwritten Securities to be purchased by them. It is understood that each
Underwriter has authorized Xxxxxxx Xxxxx, for its account, to accept delivery
of, receipt for, and make payment of the purchase price for, the Underwritten
Securities which it has severally agreed to purchase. Xxxxxxx Xxxxx,
individually and not as a representative of the Underwriters, may (but shall
not be obligated to) make payment of the purchase price for the Underwritten
Securities to be purchased by any Underwriter whose check has not been
received by the Closing Time or the relevant Date of Delivery, as the case
may be, but such payment shall not relieve such Underwriter from its
obligations hereunder.
(d) Denominations; Registration. The Underwritten Securities shall be
in such denominations and registered in such names as Xxxxxxx Xxxxx may
request in writing at least one full business day prior to the Closing Time
or the relevant Date of Delivery, as the case may be. The Underwritten
Securities will be made available for examination and packaging by Xxxxxxx
Xxxxx in The City of New York not later than 10:00 A.M. (Eastern time) on the
business day prior to the Closing Time or the relevant Date of Delivery, as
the case may be.
SECTION 3. Covenants of the Company and the Operating Partnerships.
Each of the Company and the Operating Partnership covenants with Xxxxxxx
Xxxxx and with each Underwriter participating in the offering of Underwritten
Securities, as follows:
(a) Compliance with Securities Regulations and Commission Requests. The
Company, subject to Section 3(b), will comply with the requirements of Rule
430A of the 1933 Act Regulations and/or Rule 434 of the 1933 Act Regulations,
if and as applicable, and will notify Xxxxxxx Xxxxx immediately, and confirm
the notice in writing, of (i) the effectiveness of any post-effective
amendment to the Registration
19
Statement or the filing of any supplement or amendment to the Prospectus,
(ii) the receipt of any comments from the Commission, (iii) any request by
the Commission for any amendment to the Registration Statement or any
amendment or supplement to the Prospectus or for additional information, and
(iv) the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing or
suspending the use of any preliminary prospectus, or of the suspension of the
qualification of the Underwritten Securities for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings for any
of such purposes. The Company will promptly effect the filings necessary
pursuant to Rule 424 and will take such steps as it deems necessary to
ascertain promptly whether the Prospectus transmitted for filing under Rule
424 was received for filing by the Commission and, in the event that it was
not, it will promptly file the Prospectus. The Company will make every
reasonable effort to prevent the issuance of any stop order and, if any stop
order is issued, to obtain the lifting thereof at the earliest possible
moment.
(b) Filing of Amendments. The Company and the Operating Partnership
will give Xxxxxxx Xxxxx notice of their intention to file or prepare any
amendment to the Registration Statement (including any filing under Rule
462(b) of the 1933 Act Regulations), any Term Sheet or any amendment,
supplement or revision to either the prospectus included in the Registration
Statement at the time it became effective or to the Prospectus, whether
pursuant to the 1933 Act, the 1934 Act or otherwise, will xxxxxxx Xxxxxxx
Xxxxx with copies of any such documents a reasonable amount of time prior to
such proposed filing or use, as the case may be, and will not file or use any
such document to which Xxxxxxx Xxxxx or counsel for the Underwriters shall
reasonably object.
(c) Delivery of Registration Statements. The Company has furnished or
will deliver to Xxxxxxx Xxxxx and counsel for the Underwriters, without
charge, signed copies of the Registration Statement as originally filed and
of each amendment thereto (including exhibits filed therewith or incorporated
by reference therein and documents incorporated or deemed to be incorporated
by reference therein) and signed copies of all consents and certificates of
experts, and will also deliver to Xxxxxxx Xxxxx and counsel for the
Underwriters, without charge, conformed copies of the Registration Statement
as originally filed and of each amendment thereto for each of the
Underwriters. If applicable, the copies of the Registration Statement and
each amendment thereto furnished to the Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission pursuant
to XXXXX, except to the extent permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company will deliver to each
Underwriter, without charge, as many copies of each preliminary prospectus as
such Underwriter may reasonably request, and the Company hereby consents to
the use of such copies for purposes permitted by the 1933 Act. The Company
will furnish to each
20
Underwriter, without charge, during the period when the Prospectus is
required to be delivered under the 1933 Act or the 1934 Act, such number of
copies of the Prospectus as such Underwriter may reasonably request. If
applicable, the Prospectus and any amendments or supplements thereto
furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to XXXXX,
except to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will comply
with the 1933 Act and the 1933 Act Regulations and the 1934 Act and the 1934
Act Regulations so as to permit the completion of the distribution of the
Underwritten Securities as contemplated in this Underwriting Agreement and
the applicable Terms Agreement and in the Registration Statement and the
Prospectus. If at any time when the Prospectus is required by the 1933 Act or
the 1934 Act to be delivered in connection with sales of the Underwritten
Securities, any event shall occur or condition shall exist as a result of
which it is necessary, in the reasonable opinion of counsel for the
Underwriters or for the Company, to amend the Registration Statement in order
that the Registration Statement 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 or to amend or
supplement the Prospectus in order that the Prospectus will not include an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading in the light
of the circumstances existing at the time it is delivered to a purchaser, or
if it shall be necessary, in the reasonable opinion of such counsel, at any
such time to amend the Registration Statement or amend or supplement the
Prospectus in order to comply with the requirements of the 1933 Act or the
1933 Act Regulations, the Company will promptly prepare and file with the
Commission, subject to Section 3(b), such amendment or supplement as may be
necessary to correct such statement or omission or to make the Registration
Statement or the Prospectus comply with such requirements, and the Company
will furnish to the Underwriters and counsel for the Underwriters, without
charge, such number of copies of such amendment or supplement as the
Underwriters may reasonably request.
(f) Blue Sky Qualifications. The Company will use its best efforts, in
cooperation with the Underwriters, to qualify the Underwritten Securities and
any related Underlying Securities for offering and sale under the applicable
securities laws of such states and other jurisdictions (domestic or foreign)
as Xxxxxxx Xxxxx may designate and to maintain such qualifications so long as
may be required for the distribution of the Underwritten Securities or any
related Underlying Securities in effect for a period of not less than one
year from the date of the applicable Terms Agreement; provided, however, that
the Company shall not be obligated to file any general consent to service of
process or to qualify or register as a foreign corporation or as a dealer in
securities in any jurisdiction in which it is not so qualified or registered,
or to subject itself to taxation in respect of doing business in any
21
jurisdiction in which it is not otherwise so subject. In each jurisdiction
in which the Underwritten Securities or any related Underlying Securities
have been so qualified or registered, the Company will file such statements
and reports as may be required by the laws of such jurisdiction to continue
such qualification in effect for so long as may be required for the
distribution of the Underwritten Securities or any related Underlying
Securities.
(g) Earnings Statement. The Company will timely file such reports
pursuant to the 1934 Act as are necessary in order to make generally
available to its security holders as soon as practicable an earnings
statement (in form complying with Rule 158 of the 1933 Act Regulations) for
the purposes of, and to provide the benefits contemplated by, the last
paragraph of Section 11(a) of the 1933 Act.
(h) Reporting Requirements. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act,
will file all documents required to be filed with the Commission pursuant to
Section 13, 14 or 15 of the 1934 Act within the time periods required by the
1934 Act and the 1934 Act Regulations.
(i) Listing. The Company will use its best efforts to effect and
maintain the listing of the Underwritten Securities and any related
Underlying Securities, prior to the Closing Time, on any national securities
exchange or quotation system if and as specified in the applicable Terms
Agreement.
(j) Restriction on Sale of Securities. Between the date of the
applicable Terms Agreement and the Closing Time and/or such other date
specified in such Terms Agreement, the Company, the Operating Partnership and
any other entity or person named in the applicable Terms Agreement will not,
without the prior written consent of Xxxxxxx Xxxxx, directly or indirectly,
issue, sell, offer to sell, contract to sell, grant any option for the sale
of, or otherwise dispose of, the securities specified in such Terms Agreement
for a period of 90 days following the date of this Agreement, subject to any
conditions listed therein.
(k) REIT Qualification. The Company will use its best efforts to
continue to meet the requirements to qualify as a "real estate investment
trust" under the Code for each of its taxable years in which sales of the
Underwritten Securities are to occur.
(l) Reservation of Securities. If the applicable Terms Agreement
specifies that any related Underlying Securities include Common Stock, the
Company will reserve and keep available at all times, free of preemptive or
other similar rights, a sufficient number of shares of Common Stock for the
purpose of enabling the Company to satisfy any obligations to issue such
Underlying Securities upon exercise of the
22
related Common Stock Warrants, as applicable, or upon conversion of the
Preferred Stock, as applicable.
(m) Use of Proceeds. The Company will use the net proceeds received by
it from the sale of the Underwritten Securities in the manner specified in
the Prospectus under "Use of Proceeds."
(n) Exchange Act Filings. During the period from each Closing Time
until five years after such Closing Time, the Company will deliver to Xxxxxxx
Xxxxx, (i) promptly upon their becoming available, copies of all current,
regular and periodic reports of the Company mailed to its stockholders or
filed with any securities exchange or with the Commission or any governmental
authority succeeding to any of the Commission's functions, and (ii) such
other information concerning the Company as Xxxxxxx Xxxxx may reasonably
request.
SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay all expenses incident to the
performance of its obligations under this Underwriting Agreement each
applicable Terms Agreement, including (i) the preparation, printing and
filing of the Registration Statement (including financial statements and
exhibits) as originally filed and of each amendment thereto, (ii) the
preparation and delivery to the Underwriters of this Underwriting Agreement,
any Terms Agreement, any Agreement among Underwriters, any Warrant Agreement
and such other documents as may be required in connection with the offering,
purchase, sale and delivery of the Underwritten Securities or any related
Underlying Securities, (iii) the preparation, issuance and delivery of the
Underwritten Securities and any related Underlying Securities, any
certificates for the Underwritten Securities or such Underlying Securities,
as applicable, to the Underwriters, (iv) the fees and disbursements of the
Company's counsel, accountants and other advisors or agents (including
transfer agents and registrars), as well as the reasonable fees and
disbursements of any Warrant Agent, and their respective counsel, (v) the
qualification of the Underwritten Securities and any related Underlying
Securities under state securities and real estate syndication laws in
accordance with the provisions of Section 3(f) hereof, including filing fees
and the reasonable fees and disbursements of counsel for the Underwriters in
connection therewith and in connection with the preparation and delivery of
the Blue Sky Survey, (vi) the printing and delivery to the Underwriters of
copies of each preliminary prospectus, any Term Sheet, and the Prospectus and
any amendments or supplements thereto, (vii) the fees charged by nationally
recognized statistical rating organizations for the rating of the
Underwritten Securities and any related Underlying Securities, if applicable,
(viii) the fees and expenses incurred with respect to the listing of the
Underwritten Securities and any related Underlying Securities, if applicable
on a national securities exchange, (i) the filing fees incident to, and the
23
reasonable fees and disbursements of counsel to the Underwriters in
connection with, the review, if any, by the NASD of the terms of the sale of
the Underwritten Securities and any related Underlying Securities, (x) the
fees and expenses of any Underwriter acting in the capacity of a "qualified
independent underwriter" (as defined in Section 2710(c)(8) of the Conduct
Rules of the NASD), if applicable, and (xi) any transfer taxes imposed on the
sale of the Underwritten Securities to the several Underwriters.
(b) Termination of Agreement. If the applicable Terms Agreement is
terminated by Xxxxxxx Xxxxx in accordance with the provisions of Section 5 or
Section 9(b)(i) or Section 10 hereof, the Company shall reimburse the
Underwriters for all of their out-of-pocket expenses, including the
reasonable fees and disbursements of counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations.
The obligations of the Underwriters to purchase and pay for the
Underwritten Securities pursuant to the applicable Terms Agreement are
subject to the accuracy of the representations and warranties of the Company
and the Operating Partnership contained in Section 1 hereof or in
certificates of any officer or authorized representative of the Company or
the Operating Partnership delivered pursuant to the provisions hereof, to the
performance by each of the Company and the Operating Partnership of its
covenants and other obligations hereunder, and to the following further
conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective under the 1933 Act and no stop order suspending the effectiveness
of the Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission and any
request on the part of the Commission for additional information shall have
been complied with to the reasonable satisfaction of counsel to the
Underwriters. A prospectus containing information relating to the
description of the Underwritten Securities and any related Underlying
Securities, the specific method of distribution and similar matters shall
have been filed with the Commission in accordance with Rule 424(b)(1), (2),
(3), (4) and/or (5), as applicable (or any required post-effective amendment
providing such information shall have been filed and declared effective in
accordance with the requirements of Rule 430A), or, if the Company has
elected to rely upon Rule 434 of the 1933 Act Regulations, a Term Sheet
including the Rule 434 Information shall have been filed with the Commission
in accordance with Rule 424(b)(7).
(b) Opinion of Counsel for Company. At Closing Time, Xxxxxxx Xxxxx
shall have received the favorable opinion, dated as of Closing Time, of Xxxxx
& Xxxxxxx L.L.P., counsel for the Company and the Operating Partnership in
form and substance
24
reasonably satisfactory to counsel for the Underwriters, together with signed
or reproduced copies of such letter for each of the other Underwriters, if
any, to the effect set forth in Exhibit C hereto and to such further effect
as counsel to the Underwriters may reasonably request.
(c) Opinion of Counsel for Underwriters. At Closing Time, Xxxxxxx Xxxxx
shall have received the favorable opinion, dated as of Closing Time, of
Xxxxxx & Xxxxx, counsel for the Underwriters, or such other counsel as may be
designated by Xxxxxxx Xxxxx together with signed or reproduced copies of such
letter for each of the other Underwriters, if any, with respect to the
matters set forth in opinions (A) (first sentence only), (K), (N) (except for
the last two sentences), (X) (with respect to "Description of Securities"
only), (U), (V), and the penultimate paragraph of Exhibit C hereto. In
giving such opinion, such counsel may rely, as to all matters governed by the
laws of jurisdictions other than the law of the State of New York, the
federal law of the United States and the General Corporation Law of the State
of Delaware, upon the opinions of counsel satisfactory to Xxxxxxx Xxxxx.
Such counsel may also state that, insofar as such opinion involves factual
matters, they have relied, to the extent they deem proper, upon certificates
of officers or authorized representatives of the Company and the Operating
Partnership and certificates of public officials.
(d) Officers' Certificate. At Closing Time, there shall not have been,
since the date of the applicable Terms Agreement or since the respective
dates as of which information is given in the Prospectus, any material
adverse change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company, the Operating
Partnership, the subsidiaries and the Property Partnerships considered as one
enterprise, whether or not arising in the ordinary course of business, and
Xxxxxxx Xxxxx shall have received a certificate of the President or a Vice
President of the Company for itself and as general partner of the Operating
Partnership and of the chief financial officer or chief accounting officer of
the Company for itself and as general partner of the Operating Partnership,
dated as of Closing Time, to the effect that (i) there has been no such
material adverse change, (ii) the representations and warranties in Section 1
are true and correct, in all material respect, with the same force and effect
as though expressly made at and as of the Closing Time, (iii) each of the
Company and the Operating Partnership has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied at or prior
to the Closing Time, and (iv) no stop order suspending the effectiveness of
the Registration Statement or any part thereof has been issued and no
proceedings for that purpose have been initiated or threatened by the
Commission.
(e) Accountant's Comfort Letter. At the time of the execution of the
applicable Terms Agreement, Xxxxxxx Xxxxx shall have received from the
accountants who certified the financial statements included in or
incorporated by reference into the Registration Statement or the Prospectus,
a letter, dated such date, in form and substance reasonably satisfactory to
Xxxxxxx Xxxxx and counsel to the Underwriters,
25
together with signed or reproduced copies of such letter for each of the
other Underwriters, if any, containing statements and information of the type
ordinarily included in accountants' "comfort letters" as set forth in the
AICPA's Statement on Auditing Standards 72 to underwriters with respect to
the financial statements and certain financial information contained in the
Registration Statement and the Prospectus.
(f) Bring-down Comfort Letter. At Closing Time, Xxxxxxx Xxxxx shall
have received from the accountants who certified the financial statements
included in or incorporated by reference into the Registration Statement or
the Prospectus, a letter, dated as of Closing Time, to the effect that they
reaffirm the statements made in the letter furnished pursuant to subsection
(e) of this Section 5, except that the specified date referred to shall be a
date not more than three business days prior to the Closing Time.
(g) Ratings. At Closing Time and at any relevant Date of Delivery, the
Underwritten Securities shall have the ratings accorded by any "nationally
recognized statistical organization," as defined by the Commission for
purposes of Rule 436(g)(2) of the 1933 Act Regulations, if and as specified
in the applicable Terms Agreement, and the Company shall have delivered to
Xxxxxxx Xxxxx a letter, dated as of such date, from each such rating
organization, or other evidence reasonably satisfactory to Xxxxxxx Xxxxx,
confirming that the Underwritten Securities have such ratings. Since the
time of execution of such Terms Agreement, there shall not have occurred a
downgrading in the rating assigned to the Underwritten Securities or any of
the Company's other securities by any such rating organization, and no such
rating organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its rating of
the Underwritten Securities or any of the Company's other securities.
(h) Approval of Listing. At Closing Time, the Underwritten Securities
shall be listed or shall have been approved for listing, on the New York
Stock Exchange (the "NYSE") subject only to official notice of issuance, if
and as specified in the applicable Terms Agreement.
(i) No Objection. If the Registration Statement or an offering of
Underwritten Securities has been filed with the NASD for review, the NASD
shall not have raised any objection with respect to the fairness and
reasonableness of the underwriting terms and arrangements.
(j) Lock-up Agreements. On the date of the applicable Terms Agreement,
Xxxxxxx Xxxxx shall have received, in form and substance satisfactory to it,
each lock-up agreement, if any, specified in such Terms Agreement as being
required to be delivered by the persons listed therein.
26
(k) Over-Allotment Option. In the event that the Underwriters are
granted an over-allotment option by the Company in the applicable Terms
Agreement and the Underwriters exercise their option to purchase all or any
portion of the Option Underwritten Securities, the representations and
warranties of the Company and the Operating Partnership contained herein and the
statements in any certificates furnished by the Company or the Operating
Partnership hereunder shall be true and correct as of each Date of Delivery,
and, at the relevant Date of Delivery, Xxxxxxx Xxxxx shall have received:
(1) A certificate, dated such Date of Delivery, of the President or a
Vice President of the Company for itself and as general partner of the
Operating Partnership and the chief financial officer or chief accounting
officer of the Company for itself and as general partner of the Operating
Partnership confirming that the certificate delivered at the Closing Time
pursuant to Section 5(d) hereof remains true and correct as of such Date of
Delivery.
(2) The favorable opinion of Xxxxx & Xxxxxxx L.L.P., counsel for the
Company, the Operating Partnership and the subsidiaries, in form and
substance reasonably satisfactory to counsel for the Underwriters, dated
such Date of Delivery, relating to the Option Underwritten Securities and
otherwise to the same effect as the opinion required by Section 5(b)
hereof.
(3) The favorable opinion of Xxxxxx & Xxxxx, counsel for the
Underwriters, dated such Date of Delivery, relating to the Option
Underwritten Securities and otherwise to the same effect as the opinion
required by Section 5(c) hereof.
(4) A letter from the accountants who certified the financial
statements included in or incorporated by reference into the Registration
Statements of the Prospectus, in form and substance reasonably satisfactory
to Xxxxxxx Xxxxx and dated such Date of Delivery, substantially in the same
form and substance as the letter furnished to Xxxxxxx Xxxxx pursuant to
Section 5(f) hereof, except that the "specified date" on the letter
furnished pursuant to this paragraph shall be a date not more than three
business days prior to such Date of Delivery.
(l) Additional Documents. At Closing Time and at each Date of Delivery,
counsel for the Underwriters shall have been furnished with such documents and
opinions (including the opinion of Xxxxx & Xxxxxxx L.L.P., as to the Company's
qualification as a real estate investment trust under the Internal Revenue Code
of 1986, as amended, and as to certain other tax matters, in form and substance
reasonably satisfactory to counsel for the Underwriters, dated the Closing Time)
as they may require for the purpose of enabling them to pass upon the issuance
and sale of the Underwritten Securities as herein contemplated, or in order to
evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the
27
conditions, herein contained; and all proceedings taken by the Company in
connection with the issuance and sale of the Underwritten Securities as
herein contemplated shall be satisfactory in form and substance to Xxxxxxx
Xxxxx and counsel for the Underwriters.
(m) Termination of Terms Agreement. If any condition specified in this
Section 5 shall not have been fulfilled when and as required to be fulfilled,
the applicable Terms Agreement (or, with respect to the Underwriters' exercise
of any applicable over-allotment option for the purchase of Option Underwritten
Securities on a Date of Delivery after the Closing Time, the obligations of the
Underwriters to purchase the Option Underwritten Securities on such Date of
Delivery) may be terminated by Xxxxxxx Xxxxx by notice to the Company at any
time at or prior to the Closing Time (or such Date of Delivery, as applicable),
and such termination shall be without liability of any party to any other party
except as provided in Section 4, and except that Sections 1, 6 and 7 shall
survive any such termination and remain in full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of Underwriters. The Company and the Operating
Partnership agree, jointly and severally, to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act as
follows:
(1) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), including the Rule 430A Information and the
Rule 434 Information deemed to be a part thereof, if applicable, or the
omission or alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein not misleading
or arising out of any untrue statement or alleged untrue statement of a
material fact included in any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto), or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading;
(2) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
6(d) below) any such settlement is
28
effected with the written consent of the Company and the Operating
Partnership; and
(3) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by Xxxxxxx Xxxxx), reasonably
incurred in investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission, to
the extent that any such expense is not paid under (1) or (2) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company or the
Operating Partnership by any Underwriter through Xxxxxxx Xxxxx expressly for use
in the Registration Statement (or any amendment thereto), including the 430A
Information and the Rule 434 Information deemed to be a part thereof, if
applicable, or any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto).
(b) Indemnification of Company, Directors and Officers. Each Underwriter
severally agrees to indemnify and hold harmless the Company and the Operating
Partnership, each of the Company's directors, each of its officers who signed
the Registration Statement, and each person, if any, who controls the Company or
the Operating Partnership within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act against any and all loss, liability, claim, damage
and expense described in the indemnity contained in subsection (a) of this
Section, as incurred, but only with respect to untrue statements or omissions,
or alleged untrue statements or omissions, made in the Registration Statement
(or any amendment thereto), including the Rule 430A Information and the Rule 434
Information deemed to be a part thereof, if applicable, or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the
Company or the Operating Partnership by such Underwriter through Xxxxxxx Xxxxx
expressly for use in the Registration Statement (or any amendment thereto) or
such preliminary prospectus or the Prospectus (or any amendment or supplement
thereto).
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party
of any action commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability hereunder to the extent it
is not materially prejudiced as a result thereof and in any event shall not
relieve it from any liability which it may have
29
otherwise than on account of this indemnity agreement. In the case of
parties indemnified pursuant to Section 6(a) above, counsel to the
indemnified parties shall be selected by Xxxxxxx Xxxxx, and, in the case of
parties indemnified pursuant to Section 6(b) above, counsel to the
indemnified parties shall be selected by the Company. An indemnifying party
may participate at its own expense in the defense of any such action;
provided, however, that counsel to the indemnifying party shall not (except
with the consent of the indemnified party) also be counsel to the indemnified
party. In no event shall the indemnifying parties be liable for fees and
expenses of more than one counsel (in addition to any local counsel) separate
from their own counsel for all indemnified parties in connection with any one
action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding
by any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be
sought under this Section 6 or Section 7 hereof (whether or not the
indemnified parties are actual or potential parties thereto), unless such
settlement, compromise or consent (i) includes an unconditional release of
each indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as
to or an admission of fault, culpability or a failure to act by or on behalf
of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel in accordance with the
provisions hereof, such indemnifying party agrees that it shall be liable for
any settlement of the nature contemplated by Section 6(a)(2) effected without
its written consent if (i) such settlement is entered into more than 45 days
after receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
30
SECTION 7. Contribution.
If the indemnification provided for in Section 6 hereof is for any reason
unavailable to or insufficient to hold harmless an indemnified party in respect
of any losses, liabilities, claims, damages or expenses referred to therein,
then each indemnifying party shall contribute to the aggregate amount of such
losses, liabilities, claims, damages and expenses incurred by such indemnified
party, as incurred, (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Operating Partnership, on the
one hand, and the Underwriters, on the other hand, from the offering of the
Underwritten Securities pursuant to the applicable Terms Agreement or (ii) if
the allocation provided by clause (i) is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Operating Partnership, on the one hand, and of the Underwriters, on the
other hand, in connection with the statements or omissions which resulted in
such losses, liabilities, claims, damages or expenses, as well as any other
relevant equitable considerations.
The relative benefits received by the Company and the Operating
Partnership, on the one hand, and the Underwriter, on the other hand, in
connection with the offering of the Underwritten Securities pursuant to the
applicable Terms Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of such Underwritten
Securities (before deducting expenses) received by the Company and the total
underwriting discount received by the Underwriters, in each case as set forth on
the cover of the Prospectus, or, if Rule 434 is used, the corresponding location
on the Term Sheet, bear to the aggregate initial public offering price of such
Underwritten Securities as set forth on such cover.
The relative fault of the Company and the Operating Partnership, on the one
hand, and the Underwriters, on the other hand, shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Operating Partnership or
by the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, the Operating Partnership and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this Section
7. The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 7 shall
be deemed to include
31
any legal or other expenses reasonably incurred by such indemnified party in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged
untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Underwritten Securities underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages which
such Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company or the
Operating Partnership within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as the
Company. The Underwriters' respective obligations to contribute pursuant to
this Section 7 are several in proportion to the number of Initial Underwritten
Securities set forth opposite their respective names in the applicable Terms
Agreement and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery.
All representations, warranties and agreements contained in this
Underwriting Agreement or the applicable Terms Agreement or in certificates of
officers of the Company or authorized representatives of the Operating
Partnership submitted pursuant hereto or thereto shall remain operative and in
full force and effect, regardless of any investigation made by or on behalf of
any Underwriter or controlling person, or by or on behalf of the Company or the
Operating Partnership, and shall survive delivery of and payment for the
Underwritten Securities.
32
SECTION 9. Termination.
(a) Underwriting Agreement. This Underwriting Agreement (excluding the
applicable Terms Agreement) may be terminated for any reason at any time by the
Company or by Xxxxxxx Xxxxx upon the giving of 30 days' prior written notice of
such termination to the other party hereto.
(b) Terms Agreement. Xxxxxxx Xxxxx may terminate the applicable Terms
Agreement, by notice to the Company, at any time at or prior to the Closing Time
or any relevant Date of Delivery, if (i) there has been, since the time of
execution of such Terms Agreement or since the respective dates as of which
information is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company, the Operating Partnership, the subsidiaries
and the Property Partnership considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) there has occurred any
material adverse change in the financial markets in the United States or any
outbreak of hostilities or escalation thereof or other calamity or crisis, or
any change or development involving a prospective change in national or
international political, financial, or economic conditions, in each case the
effect of which is such as to make it, in the judgment of Xxxxxxx Xxxxx,
impracticable to market the Underwritten Securities or to enforce contracts for
the sale of the Underwritten Securities, (iii) trading in any securities of the
Company has been suspended or limited by the Commission or the New York Stock
Exchange, or if trading generally on the New York Stock Exchange or the American
Stock Exchange or in the over-the-counter market has been suspended or limited,
or minimum or maximum prices for trading have been fixed, or maximum ranges for
prices have been required, by either of said exchanges or by such system or by
order of the Commission, the NASD or any other governmental authority, or (iv) a
banking moratorium has been declared by either Federal, New York authorities.
(c) Liabilities. If this Underwriting Agreement or the applicable Terms
Agreement is terminated pursuant to this Section 9, such termination shall be
without liability of any party to any other party except as provided in Section
4 hereof, and provided further that Sections 1, 6, 7, 8, and 13 hereof shall
survive such termination and remain in full force and effect.
SECTION 10. Default by One or More of the Underwriters.
If one or more of the Underwriters shall fail at the applicable Closing
Time or the relevant Date of Delivery, as the case may be, to purchase the
Underwritten Securities which it or they are obligated to purchase under the
applicable Terms Agreement (the "Defaulted Securities"), then Xxxxxxx Xxxxx
shall have the right, within 24 hours thereafter, to make arrangements for one
or more of the non-defaulting Underwriters, or any other underwriters, to
purchase all, but not less than all, of the Defaulted Securities in such amounts
as may be agreed upon and upon the terms herein set forth; if, however, Xxxxxxx
Xxxxx shall not have completed such arrangements within such 24-hour period,
then:
(a) if the number of Defaulted Securities does not exceed 10% of the
number of Underwritten Securities to be purchased on such date pursuant to
33
such Terms Agreement, the non-defaulting Underwriters named in such Terms
Agreement shall be obligated, severally and not jointly, to purchase the
full amount thereof in the proportions that their respective underwriting
obligations under such Terms Agreement bear to the underwriting obligations
of all non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the number
of Underwritten Securities to be purchased on such date pursuant to such
Terms Agreement, such Terms Agreement (or, with respect to the
Underwriters' exercise of any applicable over-allotment option for the
purchase of Option Underwritten Securities on a Date of Delivery after the
Closing Time, the obligations of the Underwriters to purchase, and the
Company to sell, such Option Underwritten Securities on such Date of
Delivery) shall terminate without liability on the part of any
non-defaulting Underwriter.
No action taken pursuant to this Section 10 shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in (i) a termination
of the applicable Terms Agreement or (ii) in the case of a Date of Delivery
after the Closing Time, a termination of the obligations of the Underwriters and
the Company with respect to the related Option Underwritten Securities, as the
case may be, either Xxxxxxx Xxxxx or the Company shall have the right to
postpone the Closing Time or the relevant Date of Delivery, as the case may be,
for a period not exceeding seven days in order to effect any required changes in
the Registration Statement or the Prospectus or in any other documents or
arrangements.
SECTION 11. Notices.
All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given or transmitted by any standard form of
telecommunication. Notices to the Underwriters shall be directed to Xxxxxxx
Xxxxx at Xxxxxxx Xxxxx & Co., Xxxxxxx Xxxxx, Xxxxxx Xxxxxx & Xxxxx Incorporated,
World Financial Center, Xxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, Attention of
Xxxxxxx Xxxxxxxxx, Managing Director; and notices to either the Company or the
Operating Partnership shall be directed to them at 0000 Xxxxxx Xxxx., Xxxxx 000,
Xxxxxxxxx, Xxxxxxxx 00000, Attention of Xxxxxxxx X. Xxxxxx.
34
SECTION 12. Parties.
This Underwriting Agreement and the applicable Terms Agreement shall each
inure to the benefit of and be binding upon the parties hereto and, upon
execution of such Terms Agreement, any other Underwriters and their respective
successors. Nothing expressed or mentioned in this Underwriting Agreement or
such Terms Agreement is intended or shall be construed to give any person, firm
or corporation, other than the Underwriters and the Company and the Operating
Partnership and their respective successors and the controlling persons and
officers and directors referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Underwriting Agreement or such Terms Agreement or any provision
herein or therein contained. This Underwriting Agreement and such Terms
Agreement and all conditions and provisions hereof and thereof are intended to
be for the sole and exclusive benefit of the parties hereto and thereto and
their respective successors, and said controlling persons and officers and
directors and their heirs and legal representatives, and for the benefit of no
other person, firm or corporation. No purchaser of Underwritten Securities from
any Underwriter shall be deemed to be a successor by reason merely of such
purchase.
SECTION 13. GOVERNING LAW AND TIME.
THIS UNDERWRITING AGREEMENT AND ANY APPLICABLE TERMS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SAID STATE. SPECIFIED
TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 14. Effect of Headings.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 15. Counterparts.
This Underwriting Agreement and the applicable Terms Agreements may be
executed in one or more counterparts, and if executed in more than one
counterpart, the executed counterparts shall constitute a single instrument.
35
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
Underwriting Agreement, along with all counterparts, will become a binding
agreement between Xxxxxxx Xxxxx, the Company and the Operating Partnership in
accordance with its terms.
Very truly yours,
THE XXXXX CORPORATION, for itself and, as the general
partner, on behalf of The Xxxxx Limited Partnership
By: ___________________________________________
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first
above written:
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
By: Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
By: ________________________________________
Name:
Title: Authorized Signatory
Exhibit A
THE XXXXX CORPORATION
(a Delaware corporation)
Common Stock, Preferred Stock and
Warrants to Purchase Common Stock
TERMS AGREEMENT
__________ __, 1997
To: The Xxxxx Corporation
0000 Xxxxxx Xxxx., Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
We understand that The Xxxxx Corporation, a Delaware corporation (the
"Company"), proposes to issue and sell [ shares of its common stock, par
value $0.01 per share (the "Common Stock")] [ shares of its preferred stock,
par value $0.01 per share (the "Preferred Stock")] [ warrants (the "Common
Stock Warrants") to purchase Common Stock] ([such securities also being
hereinafter referred to as] the "Initial Underwritten Securities"). Subject to
the terms and conditions set forth or incorporated by reference herein, the
underwriters named below (the "Underwriters") offer to purchase, severally and
not jointly, the respective number of Initial Underwritten Securities set forth
below opposite their names at the purchase price set forth below, and a
proportionate share of Option Underwritten Securities (as defined in the
Underwriting Agreement referred to below) set forth below, to the extent any are
purchased.
Number of [Initial]
Underwriter Underwritten Securities
----------- -----------------------
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Total [$]
37
The Underwritten Securities shall have the following terms:
[Common Stock]
Title:
Number of shares:
Number of Option Underwritten Securities:
Initial public offering price per share: $
Purchase price per share: $
Listing requirements:
Black-out provisions:
Lock-up provisions:
Other terms and conditions:
Closing date and location:
[Preferred Stock]
Title:
Rank:
Ratings:
Number of shares:
Number of Option Underwritten Securities:
Dividend rate (or formula) per share: $
Dividend payment dates:
Stated value: $
Liquidation preference per share: $
Redemption provisions:
Sinking fund requirements:
Conversion provisions:
Voting Provisions:
Listing requirements:
Black-out provisions:
Initial public offering price per share: $ plus accumulated dividends, if
any, from
Purchase price per share: $____ plus accumulated dividends, if any, from _______
Other terms and conditions:
Closing date and location:
[Common Stock Warrants]
Title:
Type:
Number:
38
Warrant Agent:
Issuable jointly with Common Stock: [Yes] [No]
Number of Common Stock Warrants issued with each share of Common Stock:
Date(s) from which or period(s) during which Common Stock Warrants are
exercisable:
Date(s) on which Common Stock Warrants] expire:
Exercise price(s): $
Initial public offering price: $
Purchase price: $
Title of Underlying Securities:
Number of shares purchasable upon exercise of one Common Stock Warrant:
Terms of Underlying Securities:
Other terms and conditions:
Closing date and location:
All of the provisions contained in the document attached as Annex I hereto
entitled "THE XXXXX CORPORATION--Common Stock, Preferred Stock and Warrants to
Purchase Common Stock--Underwriting Agreement" are hereby incorporated by
reference in their entirety herein and shall be deemed to be a part of this
Terms Agreement to the same extent as if such provisions had been set forth in
full herein. Terms defined in such document are used herein as therein defined.
39
Please accept this offer no later than o'clock P.M. (New York City
time) on by signing a copy of this Terms Agreement in the space set
forth below and returning the signed copy to us.
Very truly yours,
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
By: ________________________________
Name:
Title: Authorized Signatory
Acting on behalf of itself and the other named Underwriters.
Accepted:
THE XXXXX CORPORATION
By: ___________________________
Name:
Title:
40
Exhibit B
SIGNIFICANT SUBSIDIARIES
The Xxxxx Limited Partnership
Xxxxxxxx Xxxxx Entities
Xxxxxxxx Xxxxx Residual Limited Partnership ("FMRLP")
Xxxxxxxx Xxxxx Associates Limited Partnership ("FMLP")
Ontario Xxxxx Entities
Ontario Xxxxx Limited Partnership ("OMLP")
Ontario Xxxxx Residual Limited Partnership ("OMRLP")
Ontario Xxxxx, L.L.C. ("OMLLC")
Ontario Xxxxx Residual, L.L.C. ("OMRLLC")
Gurnee Xxxxx Entities
Gurnee Xxxxx (MLP) Limited Partnership ("GMLP")
Gurnee Xxxxx L.L.C. ("GMLLC I")
Gurnee Xxxxx II L.L.C. ("GMLLC")
Potomac Xxxxx Entities
Potomac Xxxxx Limited Partnership ("PMLP")
Potomac Xxxxx L.L.C. ("PMLLC")
Sawgrass Xxxxx Entities
Sawgrass Xxxxx Phase II Limited Partnership ("SMLP II")
Sawgrass Xxxxx Phase II, L.L.C. (SMLLC II")
WSM South Florida Corp. ("WSM")
Sunrise Xxxxx (MLP) Limited Partnership ("SMLP")
Sunrise Xxxxx L.L.C. ("SMLLC")
Grapevine Xxxxx Entities
Xxxxx Services of Grapevine, Inc. ("MSGI")
Grapevine Xxxxx Residual Limited Partnership ("GVMRLP")
Grapevine Xxxxx Limited Partnership ("GVMLP")
Grapevine Xxxxx Residual Operating Company, L.L.C. ("GVMRLLC")
Grapevine Xxxxx Operating Company, L.L.C. ("GVMLLC")
Developing Property Entities
Arizona Xxxxx L.L.C. ("AMLLC")
Meadowlands Xxxxx L.L.C. ("MMLLC")
Additional Entities
Xxxxx Management L.L.C. ("MMLLC")
Management Associates Limited Partnership ("MALP")
Xxxxx-Xxx Am Columbus/Sawgrass Limited Partnership ("MKLP")
Orange City Xxxxx Limited Partnership ("OCMLP")
Xxxx Club Road Properties Associates Limited Partnership
Potomac Gurnee Finance Corp.
Washington Potomac Partners Corp.
Sawgrass Finance L.L.C.
The Xxxxx XX, Inc.
MillsServices Corp.
Premises Providers, Inc.
Mainstreet Retail Limited Partnership
Community Center Entities
Coopers Crossing Associates (MLP) Limited Partnership
Coopers Crossing L.L.C.
Fashion Center Associates of Illinois No. 1 (MLP) Limited Partnership
Fashion Center L.L.C.
Mount Prospect Plaza (MLP) Limited Partnership
Mount Prospect Plaza L.L.C.
Crosswinds Center Associates of St. Petersburg (MLP) L.P.
Crosswinds L.L.C.
Echo Hills Center Associates (MLP) Limited Partnership
West Falls Church L.L.C.
Xxxxxxxxxx Village Ground (MLP) Limited Partnership
Xxxxxxxxxx Village Ground L.L.C.
Xxxxxxxxxx Village Associates (MLP) Limited Partnership
Xxxxxxxxxx Village Associates L.L.C.
Germantown Development Associates (MLP) Limited Partnership
Germantown Development Associates L.L.C.
Gwinnett Marketfair Associates Limited Partnership
Gwinnett L.L.C.
Fashion Place Associates Limited Partnership
Fashion Place Associates L.L.C.
Exhibit C
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
a) The Company was incorporated, and is validly existing and in good
standing as of the applicable Closing Time, under the laws of the State of
Delaware. The Company has the corporate power and authority under the Amended
and Restated Certificate of Incorporation of the Company (the "Certificate of
Incorporation") and the Delaware General Corporation Law (the "DGCL") to own,
lease and operate its current properties and to conduct its business as
described in the Prospectus and to enter into and perform its obligations under
the Underwriting Agreement and applicable Terms Agreement. The Company is
authorized to transact business as a foreign corporation in the states listed on
Exhibit B to this opinion.
(B) The Operating Partnership is a limited partnership formed, and
validly existing and in good standing as of the applicable Closing Time, under
the laws of the State of Delaware. The Operating Partnership has the
partnership power and authority under the Agreement of Limited Partnership, as
amended, of the Operating Partnership (the "Operating Partnership Agreement")
and the Delaware Uniform Limited Partnership Act (the "Delaware Partnership
Act") to own, lease and operate its current properties and to conduct its
business as described in the Prospectus and to enter into and perform its
obligations under the Underwriting Agreement. The Operating Partnership is
registered as a foreign limited partnership under the laws of the states listed
on Exhibit B to this opinion.
(C) MillsServices was incorporated, and is validly existing and in
good standing as of the applicable Closing Time under the laws of the State of
Delaware. MillsServices has the corporate power and authority under its
certificate of incorporation and the DGCL to own, lease and operate its current
properties and to conduct its business as described in the Prospectus.
MillsServices is authorized to transact business as a foreign corporation in the
states listed on Exhibit B to this opinion.
(D) MALP is a limited partnership formed, and validly existing and in
good standing as of the applicable Closing Time under the laws of the State of
Delaware. MALP has the partnership power and authority under its amended and
restated agreement of limited partnership and the Delaware Partnership Act to
own, lease and operate its current properties and to conduct its business as
described in the Prospectus. MALP is registered as a foreign limited
partnership under the laws of the states listed on Exhibit B to this opinion.
C-1
(E) OMLLC, GMLLC, PMLLC, SMLLC II, SMLLC, GVMLLC, AMLLC and MMLLC
(the "LLC Subsidiaries") (i) were formed and are validly existing and in good
standing as of the applicable Closing Time, under the laws of the State of
Delaware and (ii) are authorized to transact business as a foreign limited
liability company in the states listed on Exhibit B to this opinion.
(F) OMLP, SMLP II, GVMLP, MKLP and OCMLP (together with GMLP, FMLP,
SMLP, and PMLP, the "Partnership Significant Subsidiaries") (i) were formed, and
are validly existing and in good standing as of the applicable Closing Time,
under the laws of the State of Delaware and (ii) each of the Partnership
Significant Subsidiaries, except GMLP, FMLP, SMLP, and PMLP, are authorized to
transact business in the states listed in Exhibit B to this opinion.
(G) PMLP was formed, and is validly existing and in good standing as
of the applicable Closing Time under the laws of the Commonwealth of Virginia.
(H) GMLP was formed, and is validly existing and in good standing as
of the applicable Closing Time under the laws of the State of Illinois.
(I) Each of FMLP and SMLP was formed, and is validly existing and in
good standing as of the applicable Closing Time under the laws of the District
of Columbia and is registered as a foreign limited partnership under the laws of
the states listed on Exhibit B to this opinion.
(J) The Operating Partnership Agreement has been duly executed and
delivered by the Company as the sole general partner of the Operating
Partnership and on behalf of the Operating Partnership, and constitutes a valid
and binding obligation of the Operating Partnership, enforceable against the
Company in accordance with its terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors' rights
(including, without limitation, the effect of statutory and other laws regarding
fraudulent conveyances, fraudulent transfers and potential transfers) and as may
be limited by the exercise of judicial discretion and the application of
principles of equity including, without limitation, requirements of good faith,
fair dealing, conscionablity or materiality (regardless of whether such
agreement is considered in a proceeding in equity or in law.)
(K) Each of the Underwriting Agreement and the applicable Terms
Agreement has been duly authorized, executed and delivered on behalf of the
Company, and the Underwriting Agreement has been duly authorized, executed and
delivered by the Company as the sole general partner of the Operating
Partnership and on behalf of the Operating Partnership.
C-2
(L) The execution, delivery and performance as of the applicable
Closing Time by the Company and the Operating Partnership of the Underwriting
Agreement, and by the Company of the Terms Agreement, and the consummation by
the Company and the Operating Partnership of the transactions contemplated by
the Underwriting Agreement and the Terms Agreement, and the compliance by the
Company and the Operating Partnership with their obligations thereunder do not
(i) violate the Certificate of Incorporation or the Amended and Restated Bylaws
of the Company (the "Bylaws") or the DGCL, (ii) violate the Operating
Partnership Agreement or the Delaware Partnership Act, (iii) to our knowledge,
violate any federal (other than compliance with any obligation of indemnity or
contribution under Articles 6 and 7 of the Underwriting Agreement, as to which
such counsel need express no opinion) or Delaware law, statutes, rules,
regulations, orders, judgments, writs, or decrees of any federal or Delaware
court or governmental agency or body having jurisdiction over the Company or the
Operating Partnership or their assets or (iv) breach or constitute a default
(with or without the giving of notice or the passage of time) under any
agreement or contract filed as an exhibit to the Registration Statement or the
10-K. The foregoing opinion shall not be deemed to address any federal
securities law matters specifically covered elsewhere in the opinion letter.
(M) The authorized, issued and outstanding capital stock of the
Company, as of [insert date], was as set forth under the caption
"Capitalization" in the Prospectus. All shares of Common Stock of the Company
shown as issued and outstanding under said caption are duly authorized and,
assuming the receipt of consideration therefor as provided in resolutions of the
Company's Board of Directors authorizing issuance thereof, are validly issued,
fully paid and non-assessable. To the knowledge of such counsel, the Company
has not issued any outstanding securities convertible into or exchangeable for,
or outstanding options, warrants or other rights to purchase or to subscribe
for, any shares of capital stock or other securities of the Company, except as
described in the Prospectus and other than the possible issuance of options or
restricted stock under the Company's stock option plans. No holder of
outstanding shares of Common Stock of the Company has any statutory preemptive
right under the DGCL or, to our knowledge, any contractual right to subscribe
for any of the Common Stock.
(N) [Include, if the Underwritten Securities being sold pursuant to
the applicable Terms Agreement includes Common Stock and/or Preferred Stock] The
Shares have been duly authorized by the Company for issuance and sale pursuant
to the Underwriting Agreement and the applicable Terms Agreement. When issued
and delivered by the Company in accordance with the provisions of the
Underwriting Agreement and such Terms Agreement, the Shares will be validly
issued, fully paid and non-assessable and will not be subject to any pre-emptive
right to purchase the Shares under the DGCL. The form of certificate evidencing
the Common Stock complies with requirements of Section 158 of the DGCL. [The
applicable certificate of designations is in full force and effect.]
C-3
(O) [Include if the Underwritten Securities being sold pursuant to
the applicable Terms Agreement include Common Stock Warrants--] The
Underwritten Securities have been duly authorized by the Company for issuance
and sale pursuant to the Underwriting Agreement and the applicable Terms
Agreement. When issued and authenticated in accordance with the provisions of
the applicable Warrant Agreement, the Underwritten Securities will constitute
valid and legally binding obligations of the Company, entitled to the benefits
provided by such Warrant Agreement and enforceable against the Company in
accordance with their terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors' rights (including,
without limitation, the effect of statutory and other laws regarding fraudulent
conveyances, fraudulent transfers and potential transfers) and as may be limited
by the exercise of judicial discretion and the application of principles of
equity including, without limitation, requirements of good faith, fair dealing,
conscionablity or materiality (regardless of whether such agreement is
considered in a proceeding in equity or in law.)
(P) [Include if the Underwritten Securities being sold pursuant to
the applicable Terms Agreement include Common Stock Warrants--] The [Each]
applicable Warrant Agreement has been duly authorized, executed and delivered by
the Company and (assuming due authorization, execution and delivery thereof by
the applicable Warrant Agent) constitutes a valid and legally binding agreement
of the Company, enforceable against the Company in accordance with its terms,
except as may be limited by bankruptcy, insolvency, reorganization, moratorium
or other laws affecting creditors' rights (including, without limitation, the
effect of statutory and other laws regarding fraudulent conveyances, fraudulent
transfers and potential transfers) and as may be limited by the exercise of
judicial discretion and the application of principles of equity including,
without limitation, requirements of good faith, fair dealing, conscionablity or
materiality (regardless of whether such agreement is considered in a proceeding
in equity or in law.)
(Q) [Include if the Underlying Securities related to the Underwritten
Securities being sold pursuant to the applicable Terms Agreement include Common
Stock and/or Preferred Stock--] The Underlying Securities have been duly
authorized and reserved for issuance by the Company [upon exercise of the Common
Stock Warrants] [upon conversion of the related [Preferred Stock]]. The
Underlying Securities, when issued upon such [exercise] [conversion], will be
validly issued, fully paid and non-assessable and will not be subject to
preemptive or other similar rights of any securityholder of the Company. No
holder of the Underlying Securities is or will be subject to personal liability
by reason of being such a holder.
(R) The Underwritten Securities being sold pursuant to the applicable
Terms Agreement and the [each] applicable [Warrant Agreement] conform, and any
Underlying Securities, when issued and delivered in accordance with the
C-4
terms of the related Underwritten Securities, will conform, in all material
respects to the statements relating thereto contained in the Prospectus and
are in substantially the form filed or incorporated by reference, as the case
may be, as an exhibit to the Registration Statement.
(S) The issued and outstanding Units as of [insert date] was as
described under the caption "Capitalization" in the Prospectus. All of such
Units are duly authorized and fully paid and were validly issued under the
applicable provisions of the Delaware Partnership Act. To our knowledge, the
Operating Partnership has not issued any outstanding securities convertible into
or exchangeable for, or outstanding options, warrants or other rights to
purchase or subscribe for, any Units, except as described in the Registration
Statement and Prospectus.
(T) Except as otherwise stated in the Registration Statement and the
Prospectus, all of the issued and outstanding capital stock or other equity
interests, as the case may be, of each of MillsServices and the LLC Subsidiaries
(other than AMLLC, as to which no opinion no opinion need be expressed) has been
duly authorized and is validly issued, fully paid and non-assessable under the
applicable provisions of the DGCL or the Delaware Limited Liability Company Act,
as the case may be, and except as provided in Exhibit A to this opinion, to the
knowledge of such counsel, is or are owned directly or indirectly by the Company
or the Operating Partnership. Except as otherwise stated in the Registration
Statement and the Prospectus, all of the issued and outstanding partnership
interests of each of the Partnership Significant Subsidiaries has been duly
authorized and fully paid and were validly issued.
(U) The Registration Statement has become effective under the 1933
Act, the required filings of the Prospectus pursuant to Rule 424(b) promulgated
pursuant to the 1933 Act have been made in the manner and within the time period
required by Rule 424(b) and, to the knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement or suspending or
preventing the use of the Prospectus has been issued and no proceedings for that
purpose have been instituted or are threatened by the Commission.
(V) The Registration Statement and the Prospectus (except for the
financial statements and supporting schedules included or incorporated by
referenced therein, as to which no opinion need be expressed) comply as to form
in all material respects with the requirements of the 1933 Act and the
applicable rules and regulations thereunder.
(W) The documents incorporated by reference into the Prospectus
(other than the financial statements and supporting schedules included or
incorporated by reference therein, as to which no opinion need be expressed),
when
C-5
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
1934 Act and the 1934 Act Regulations.
(X) The information in the Prospectus under the captions "Description
of Common Stock," "Description of Preferred Stock," "Description of Common Stock
Warrants," and "Federal Income Tax Considerations," and such other information
in the Prospectus Supplement or in any Annual Report on Form 10-K, or other 1934
Act filings of the Company incorporated by reference into the Registration
Statement as may be agreed upon from time to time by the Company and Xxxxxxx
Xxxxx, to the extent that such information constitutes matters of law, legal
conclusions, or summaries of legal matters or of provisions of the Certificate
of Incorporation or Bylaws, has been reviewed by us, and is correct in all
material respects. The Common Stock, Preferred Stock and/or Common Stock
Warrants conform in all material respects to the description thereof set forth
in the Prospectus under the caption "Description of Common Stock," "Description
of Preferred Stock" and "Description of Common Stock Warrants."
(Y) Except for the registration of the Shares under the 1933 Act and
such consents, approvals, authorizations, registrations or qualifications as may
be required under the 1934 Act and applicable state securities laws (as to which
no opinion need be expressed) in connection with the purchase and distribution
of the Shares by the Underwriters, no approval, authorization, decree, order or
consent of, or registration or filing with, the Commission or any Delaware court
or governmental agency or body is required to be obtained or made by the Company
or the Operating Partnership in connection with the execution, delivery and
performance as of the date hereof by the Company and the Operating Partnership
of the Underwriting Agreement or the Terms Agreement and the consummation of the
transactions contemplated thereby.
(Z) The Shares have been authorized for listing by the NYSE.
(AA) Neither the Company nor the Operating Partnership is an
"investment company" as such term is defined in the Investment Company Act of
1940, as amended.
The opinion expressed in Paragraph J above shall be understood to mean
only that if there is a default in performance of an obligation, (i) if a
failure to pay or other damage can be shown and (ii) if the defaulting party can
be brought into a court which will hear the case and apply the governing law,
then, subject to the availability of defenses, and to the exceptions set forth
in Paragraph J above, the court will provide a money damage (or perhaps
injunctive or specific performance) remedy.
C-6
During the course of the preparation of the Registration Statement,
the Prospectus, such counsel has participated in conferences with officers and
other representatives of the Company, with representatives of the independent
public accountants of the Company and with Xxxxxxx Xxxxx and Xxxxxxx Xxxxx'x
representatives. 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, or
Prospectus or any documents incorporated therein by reference, such counsel may
state on the basis of these conferences and its activities as counsel to the
Company and the Operating Partnership in connection with the Registration
Statement and the Prospectus that no facts have come to its attention which
cause it to believe that (i) the Registration Statement (including the Form
10-K), at the time it became effective, 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 of its date or as of the applicable Closing Time thereof,
contained or contains an untrue statement of a material fact or omitted or omits
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading, (ii)
there is any action, suit, proceeding, inquiry or investigation pending or
threatened against the Company or the Operating Partnership before or by any
court or governmental body, that is required to be disclosed in the Registration
Statement or the Prospectus, other than those disclosed therein, or (iii) there
are any contracts or documents of a character required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement (including the Form 10-K) that are not described or
referred to therein or so filed; 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 data included or incorporated by reference in or omitted from
the Registration Statement or the Prospectus.
In rendering such opinion, such counsel may rely as to matters of fact (but
not as to legal conclusions), to the extent they deem proper, on certificates of
responsible officers of the Company and public officials. Such opinion shall
not state that it is to be governed or qualified by, or that it is otherwise
subject to, any treatise, written policy or other document relating to legal
opinions, including, without limitation, the Legal Opinion Accord of the ABA
Section of Business Law (1991).
C-7
Annex I
[FORM OF ACCOUNTANTS' COMFORT LETTER PURSUANT TO SECTION 5(e)]
We are independent public accountants with respect to the Operating Partnership
within the meaning of the 1933 Act and the applicable published 1933 Act
Regulations.
(i) in our opinion, the audited financial statements and the
related financial statement schedules included or incorporated by reference
in the Registration Statement and the Prospectus comply as to form in all
material respects with the applicable accounting requirements of the 1933
Act and the published rules and regulations thereunder;
(ii) on the basis of procedures (but not an examination in
accordance with generally accepted auditing standards) consisting of a
reading of the unaudited interim [consolidated] financial statements of the
Operating Partnership for the [three month periods ended __________, 19__,
and __________, 19__, the three and six month periods ended __________,
19__, and __________, 19__, and the three and nine month periods ended
__________, 19__, and __________, 19__, included or incorporated by
reference in the Registration Statement and the Prospectus (collectively,
the "10-Q Financials")](1) [, a reading of the unaudited interim
[consolidated] financial statements of the Operating Partnership for the
_____-month periods ended __________, 19__, and __________, 19__, included
in the Registration Statement and the Prospectus (the "_____-month
financials")](2) [, a reading of the latest available unaudited interim
[consolidated] financial statements of the Operating Partnership],(3) a
reading of the minutes of all meetings of the stockholders and directors of
the Operating Partnership [and its subsidiaries] and the Committees of the
Operating Partnership's Board of Directors [and any subsidiary committees]
since [day after end of last audited period], inquiries of certain
officials of the Operating Partnership [and its subsidiaries] responsible
for financial and accounting matters, a review of interim financial
information in accordance with standards established by the American
Institute of Certified Public Accountants in Statement on Auditing
Standards
-----------------------------
(1) Include the appropriate dates of the 10-Q Financials.
(2) Include if non-10-Q interim financial statements are included in the
Registration Statement and the Prospectus.
(3) Include if the most recent unaudited financial statements are not included
in the Registration Statement and the Prospectus.
Annex I-1
No. 71, Interim Financial Information ("SAS 71"),(4) with respect to the
[description of relevant periods](5) and such other inquiries and
procedures as may be specified in such letter, nothing came to our
attention that caused us to believe that:
[(A) the 10-Q Financials incorporated by reference in the
Registration Statement and the Prospectus do not comply as to form in
all material respects with the applicable accounting requirements of
the 1934 Act and the 1934 Act Regulations applicable to unaudited
financial statements included in Form 10-Q or any material
modifications should be made to the 10-Q Financials incorporated by
reference in the Registration Statement and the Prospectus for them to
be in conformity with generally accepted accounting principles;](6)
[( ) the _____-month financials included in the Registration
Statement and the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the 1933 Act
and the 1933 Act Regulations applicable to unaudited interim financial
---------------------------------
(4) Note that a review in accordance with Statements on Auditing Standards
("SAS") No. 71 is required for an accountant to give negative
assurance on interim financial information. A review in accordance
with SAS No. 71 will only be performed at the request of the Company
and the accountant's report, if any, related to that review will be
addressed only to the Company. Many companies have a SAS No. 71
review performed in connection with the preparation of their 10-Q
financial statements. See Codification of Statements on Auditing
Standards, AU Section 722 for a description of the procedures that
constitute such a review. The comfort letter itself should recite
that the review was performed and a copy of the report, if any, should
be attached to the comfort letter. Any report issued pursuant to SAS
No. 71 that is mentioned in the Registration Statement should also be
included in the Registration Statement as an exhibit. If a review in
accordance with SAS No. 71 has not and will not be performed by the
accountants, they should be prepared to perform certain agreed-upon
procedures on the interim financial information and to report their
findings thereon in the comfort letter. See Codification of
Statements on Auditing Standards, AU Section 622 for a discussion of
reports related to the accountant's performance of agreed-upon
procedures. Any question as to whether a review in accordance with
SAS No. 71 will be performed by the accountants should be resolved
early.
(5) The relevant periods include all interim unaudited condensed
consolidation financial statements included or incorporated by
reference in the Registration Statement and the Prospectus.
(6) Include if the 10-Q Financials are incorporated by reference in the
Registration Statement and the Prospectus.
Annex I-2
statements included in registration statements or any material
modifications should be made to the _____-month financials included in
the Registration Statement and the Prospectus for them to be in
conformity with generally accepted accounting principles;](7)
( ) at [____________, 19__ and at](8) a specified date not more
than five days(9)prior to the date of the applicable Terms Agreement,
there was any change in the __________ of the Operating Partnership
[and its subsidiaries](10) or any decrease in the _________ of the
Operating Partnership [and its subsidiaries] or any increase in the
___________ of the Operating Partnership [and its subsidiaries,] (10)
in each case as compared with amounts shown in the latest balance
sheet included in the Registration Statement and the Prospectus,
except in each case for changes, decreases or increases that the
Registration Statement and the Prospectus disclose have occurred or
may occur; or
( ) [for the period from ___________, 19__ to ___________,
19__ and](11) for the period from _________, 19__ to a specified
date not more than five days prior to the date of the applicable
Terms Agreement,
-----------------------
(7) Include if unaudited financial statements, not just selected unaudited
data, are included in the Registration Statement and the Prospectus.
(8) Include, and insert the date of most recent balance sheet of the
Company, if those statements are more recent than the unaudited
financial statements included in the Registration Statement and the
Prospectus.
(9) According to Example A of SAS No. 72, the specified date should be
five calendar days prior to the date of the applicable Terms
Agreement. However, in unusual circumstances, five business days may
be used.
(10) The blanks should be filled in with significant balance sheet items,
selected by the banker and tailored to the issuer's industry in
general and operations in particular. While the ultimate decision of
which items should be included rests with the banker, comfort is
routinely requested for certain balance sheet items, including
long-term debt, stockholders' equity, capital stock and net current
assets.
(11) Include, and insert dates to describe the period from the date of the
most recent financial statements in the Registration Statement and the
Prospectus to the date of the most recent unaudited financial
statements of the Company, if those dates are different. Regardless
of whether this language is inserted or not, the period including five
days prior to the date of the applicable Terms Agreement should run
from the date of the last financial statement included in the
Registration Statement and the Prospectus, not from the later one that
is not included in the Registration Statement and the Prospectus.
Annex I-3
there was any decrease in __________, ___________ or ___________,(12)
in each case as compared with the comparable period in the preceding
year, except in each case for any decreases that the Registration
Statement and the Prospectus discloses have occurred or may occur;
(iii) based upon the procedures set forth in clause (ii) above
and a reading of the [Selected Financial Data] included in the
Registration Statement and the Prospectus [and a reading of the
financial statements from which such data were derived,](13) nothing
came to our attention that caused us to believe that the [Selected
Financial Data] included in the Registration Statement and the
Prospectus do not comply as to form in all material respects with the
disclosure requirements of Item 301 of Regulation S-K of the 1933 Act
[, that the amounts included in the [Selected Financial Data] are not
in agreement with the corresponding amounts in the audited
[consolidated] financial statements for the respective periods or that
the financial statements not included in the Registration Statement
and the Prospectus from which certain of such data were derived are
not in conformity with generally accepted accounting principles];(14)
(iv) we have compared the information in the Registration
Statement and the Prospectus under selected captions with the
disclosure requirements of Regulation S-K of the 1933 Act and on the
basis of limited procedures specified herein. Nothing came to our
attention that caused us to believe that this information does not
comply as to form in all material respects
-----------------------------
(12) The blanks should be filled in with significant income statements
items, selected by the banker and tailored to the issuer's industry in
general and operations in particular. While the ultimate decision of
which items should be included rests with the banker, comfort is
routinely requested for certain income statement items, including net
sales, total and per share amounts of income before extraordinary
items and of net income.
(13) Include only if there are selected financial data that have been
derived from financial statements not included in the Registration
Statement and the Prospectus.
(14) In unusual circumstances, the accountants may report on "Selected
Financial Data" as described in SAS No. 42, Reporting on Condensed
Financial Statements and Selected Financial Data, and include in
their report in the Registration Statement and the Prospectus the
paragraph contemplated by SAS No. 42.9. This situation may arise
only if the Selected Financial Data do not include interim period
data and the five-year selected data are derived entirely from
financial statements audited by the auditors whose report is included
in the Registration Statement and the Prospectus. If the guidelines
set forth in SAS No. 42 are followed and the accountant's report as
included in the Registration Statement and the Prospectus includes
the additional language prescribed by SAS No. 42.9, the bracketed
language may be eliminated.
Annex I-4
with the disclosure requirements of Items 302, 402 and 503(d),
respectively, of Regulation S-K;
[(v) based upon the procedures set forth in clause (ii) above, a
reading of the unaudited financial statements of the Operating
Partnership for [the most recent period] that have not been included
in the Registration Statement and the Prospectus and a review of such
financial statements in accordance with SAS 71, nothing came to our
attention that caused us to believe that the unaudited amounts for
__________________ for the [most recent period] do not agree with the
amounts set forth in the unaudited consolidated financial statements
for those periods or that such unaudited amounts were not determined
on a basis substantially consistent with that of the corresponding
amounts in the audited [consolidated] financial statements;](15)
[(vi)] we are unable to and do not express any opinion on the
[Pro Forma Combining Statement of Operations] (the "Pro Forma Statement")
included in the Registration Statement and the Prospectus or on the pro
forma adjustments applied to the historical amounts included in the Pro
Forma Statement; however, for purposes of this letter we have:
(A) read the Pro Forma Statement;
(B) performed [an audit] [a review in accordance with
SAS 71] of the financial statements to which the pro forma
adjustments were applied;
(C) made inquiries of certain officials of the Operating
Partnership who have responsibility for financial and accounting
matters about the basis for their determination of the pro forma
adjustments and whether the Pro Forma Statement complies as to
form in all material respects with the applicable accounting
requirements of Rule 11-02 of Regulation S-X; and
(D) proved the arithmetic accuracy of the application of
the pro forma adjustments to the historical amounts in the Pro
Forma Statement; and
----------------------------
(15) This language should be included when the Registration Statement and
the Prospectus include earnings or other data for a period after the
date of the latest financial statements in the Registration Statement
and the Prospectus, but the unaudited interim financial statements
from which the earnings or other data is derived is not included in
the Registration Statement and the Prospectus. The blank should be
filled in with a description of the financial statement item(s)
included.
Annex I-5
on the basis of such procedures and such other inquiries and
procedures as specified herein, nothing came to our attention that
caused us to believe that the Pro Forma Statement included in the
Registration Statement does not comply as to form in all material
respects with the applicable requirements of Rule 11-02 of Regulation
S-X or that the pro forma adjustments have not been properly applied
to the historical amounts in the compilation of those statements;(16)
and
[(vii)] in addition to the procedures referred to in clause
(ii) above, we have performed other procedures, not constituting an
audit, with respect to certain amounts, percentages, numerical data
and financial information appearing in the Registration Statement and
the Prospectus, which are specified herein, and have compared certain
of such items with, and have found such items to be in agreement with,
the accounting and financial records of the Operating Partnership;(17)
and
[(viii) in addition, we [comfort on a financial forecast that
is included in the Registration Statement and the Prospectus.(18)]
----------------------------------
(16) If an audit or a review in accordance with SAS No. 71 has not been
performed by the accountants with respect to the underlying historical
financial statements, or if negative assurance on the Company's pro
forma financial statements is not otherwise available, the accountants
should be requested to perform certain other procedures with respect
to such pro forma financial statements. See Example O of SAS No. 72.
(17) This language is intended to encompass all other financial/numerical
information appearing in the Registration Statement and the Prospectus
for which comfort may be given, including (but not limited to) amounts
appearing in the Registration Statement and the Prospectus narrative
and other summary financial data appearing in tabular form (e.g., the
capitalization table).
(18) Accountants' services with respect to a financial forecast may be in
one of three forms: an examination of the forecast, a compilation of
the forecast or the application of agreed-upon procedures to the
forecast. If the accountant is to perform an examination of the
forecast included in the Registration Statement and the Prospectus,
delivery of the related report should be treated separately in Section
5(f) as follows (remember to change subsequent letters accordingly):
(f) At the time that the applicable Terms Agreement is
executed by the Company, you shall have received from
_________________ a report, dated such date, in form and
substance satisfactory to you, together with signed or reproduced
copies of such report for each of the other Underwriters, stating
that, in their opinion, the forecasted financial statements for
the [relevant period or periods] included in the Registration
Statement and the Prospectus are presented
Annex I-6
---------------------------------------
in conformity with guidelines for presentation of a forecast
established by the AICPA, and that the underlying assumptions
provide a reasonable basis for management's forecast.
If the accountant is to perform a compilation of the forecasted
financial statements included in the Registration Statement and the
Prospectus, delivery of the related report should be treated
separately in Section 5(e) as follows:
(f) At the time that the applicable Terms Agreement is
executed by the Company, you shall have received from
_________________ a report, dated such date, in form and
substance satisfactory to you, together with signed or reproduced
copies of such report of each of the other Underwriters, stating
that they have compiled the forecasted financial statements for
the [relevant period or periods] included in the Registration
Statement and the Prospectus in accordance with the guidelines
established by the AICPA.
Finally, if the accountant is to perform agreed-upon procedures on a
forecast included in the Registration Statement and the Prospectus,
SAS No. 72 requires that the accountant first prepare a compilation
report with respect to the forecast and attach that report to the
comfort letter. The accountant may then report on specific procedures
performed and findings obtained.
Annex I-7
