2,500,000 Shares
XXXXXXX REAL ESTATE, INC.
Common Stock
($.01 Par Value)
UNDERWRITING AGREEMENT
----------------------
October 29, 1996
PAINEWEBBER INCORPORATED
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, X.X. 00000
Dear Sirs:
Xxxxxxx Real Estate, Inc., a Maryland corporation (the "Company", which term,
unless the context otherwise requires, includes Xxxxxxx Real Estate Trust, a
Massachusetts business trust), confirms its agreement with you, as underwriter
(the "Underwriter"), as follows:
1. DESCRIPTION OF SECURITIES. The Company proposes to issue and sell to you
2,500,000 shares of Common Stock, $.01 par value (hereinafter referred to as the
"Securities").
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents and
warrants to, and agrees with, you that:
(a) A registration statement on Form S-3 (File No. 33-87084) with respect to
the Securities, including a prospectus, has been carefully prepared by the
Company in conformity with the requirements of the Securities Act of 1933
("Act") and the rules and regulations ("Rules and Regulations") of the
Securities and Exchange Commission ("Commission") thereunder and has been filed
with the Commission and has become effective. Such registration statement and
prospectus may have been amended or supplemented prior to the date of this
Agreement; any such amendment or supplement was so prepared and filed, and any
such amendment filed after the effective date of such registration statement has
become effective. No stop order suspending the effectiveness of the
registration statement has been issued, and no proceeding for that purpose has
been instituted or threatened by the Commission. A prospectus supplement
("Prospectus Supplement") setting forth the terms of the Securities and of their
sale and distribution and an updating amendment containing no material change to
the most recently amended prospectus have been or will be so prepared and will
be filed pursuant to Rule 424(b) of the Rules and Regulations on or before the
second business day after the date hereof (or such earlier time as may be
required by the Rules and Regulations). Copies of such registration statement
and prospectus, any such amendments or supplements and all documents
incorporated by reference therein that were filed with the Commission on or
prior to the date of this Agreement (including one fully executed copy of the
registration statement and of each amendment
thereto for you and for your counsel) have been delivered to you. Such
registration statement, as it may have heretofore been amended, is referred to
herein as the "Registration Statement," and the final form of prospectus
included in the Registration Statement, as supplemented by the Prospectus
Supplement, is referred to herein as the "Prospectus". Each form of Prospectus,
or Prospectus and Prospectus Supplement heretofore made available for use in
offering the Securities, is referred to herein as a "Preliminary Prospectus."
Any reference herein to the Registration Statement, the Prospectus, any
amendment or supplement thereto or any Preliminary Prospectus shall be deemed to
refer to and include the documents incorporated by reference therein, and any
reference herein to the terms "amend", "amendment" or "supplement" with respect
to the Registration Statement or Prospectus shall be deemed to refer to and
include the filing after the execution hereof of any document with the
Commission deemed to be incorporated by reference therein. As described in the
Prospectus Supplement, the Company owns partnership interests in Xxxxxxx
Operating Limited Partnership, a Delaware limited partnership (the
"Partnership").
(b) Each part of the Registration Statement, when such part became or becomes
effective, each Preliminary Prospectus on the date of filing thereof with the
Commission, and the Prospectus and any amendment or supplement thereto, on the
date of filing thereof with the Commission and at the Closing Date (as
hereinafter defined), conformed or will conform in all material respects with
the requirements of the Act and the Rules and Regulations; each part of the
Registration Statement, when such part became or becomes effective, did not or
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; each Preliminary Prospectus on the date of filing
thereof with the Commission, and the Prospectus and any amendment or supplement
thereto, on the date of filing thereof with the Commission and at the Closing
Date, did not or 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; except that the
foregoing shall not apply to statements in or omissions from any such document
in reliance upon, and in conformity with, written information furnished to the
Company by you, specifically for use in the preparation thereof.
(c) The documents incorporated by reference in the Registration Statement, the
Prospectus, any amendment or supplement thereto or any Preliminary Prospectus,
when they became or become effective under the Act or were or are filed with the
Commission under the Securities Exchange Act of 1934 ("Exchange Act"), as the
case may be, conformed or will conform in all material respects with the
requirements of the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder.
(d) The financial statements of the Company set forth or incorporated by
reference in the Registration Statement and Prospectus fairly present the
financial condition of the Company as of the dates indicated and the results of
operations and changes in financial position for the periods therein specified
in conformity with generally accepted accounting principles consistently applied
throughout the periods involved (except as otherwise stated therein). The
summary financial, pro forma financial and statistical data included or
incorporated by reference in the Registration Statement and the Prospectus
present fairly the information shown therein and, to the extent based upon or
derived from the financial statements, have been compiled on a basis consistent
with the financial statements presented therein. No other financial statements
are
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required to be set forth in the Registration Statement or the Prospectus
under the Act or the Rules and Regulations thereunder.
(e) The only subsidiaries (as defined in the Rules and Regulations) of the
Company are the subsidiaries listed on Schedule A hereto, including the
Partnership (the "Subsidiaries"). The Company and each of its Subsidiaries has
been duly incorporated or formed, as the case may be, and is an existing
corporation or general or limited partnership, as the case may be, in good
standing under the laws of its jurisdiction of incorporation or formation, as
the case may be. The Company and each of its Subsidiaries has full power and
authority (corporate and other) to conduct its business as described in the
Registration Statement and Prospectus, and is duly qualified to do business in
each jurisdiction in which it owns or leases real property or in which the
conduct of its business requires such qualification except where the failure to
be so qualified, considering all such cases in the aggregate, does not involve a
material risk to the business, properties, financial position or results of
operations of the Company; and, other than the Subsidiaries, the Company owns no
amounts of stock or other beneficial interest in any corporation, partnership,
joint venture or other business entity.
(f) The outstanding Securities have been duly authorized and are, or when
issued as contemplated hereby will be, validly issued, fully paid and non-
assessable by the Company and conform, or when so issued will conform, to the
description thereof in the Prospectus. The stockholders of the Company have no
preemptive rights with respect to the Securities. All of the partnership
interests of the Partnership have been duly and validly authorized and issued
and are fully paid and 96% of such partnership interests are owned of record by
the Company free and clear of all liens, encumbrances, equities or claims.
(g) Except as contemplated in the Prospectus, subsequent to the respective
dates as of which information is given in the Registration Statement and the
Prospectus, the Company and its Subsidiaries have not incurred any liabilities
or obligations, direct or contingent, or entered into any transactions, not in
the ordinary course of business, that are material to the Company and its
Subsidiaries on a consolidated basis, and there has not been any material change
in the capital stock, short-term debt or long-term debt of the Company and its
Subsidiaries, or any material adverse change, or any development involving a
prospective material adverse change, in the condition (financial or other),
business, prospects, net worth or results of operations of the Company and its
Subsidiaries on a consolidated basis.
(h) Except as set forth in the Prospectus, there is not pending or, to the
knowledge of the Company, threatened any action, suit or proceeding to which the
Company or any of its Subsidiaries is a party, before or by any court or
governmental agency or body, that might result in any material adverse change in
the condition (financial or other), business, prospects, net worth or results of
operations of the Company and its Subsidiaries, or might materially and
adversely affect the properties or assets thereof.
(i) There are no contracts or documents of the Company that are required to be
filed as exhibits to the Registration Statement or to any of the documents
incorporated by reference therein by the Act or the Exchange Act or by the rules
and regulations of the Commission thereunder that have not been so filed.
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(j) The performance of this Agreement and the consummation of the transactions
herein contemplated will not result in a breach or violation of any of the terms
and provisions of, or constitute a default under, any statute, any agreement or
instrument to which the Company is a party or by which it is bound or to which
any of the property of the Company is subject, the Company's charter or by-laws,
or any order, rule or regulation of any court of governmental agency or body
having jurisdiction over the Company or any of its properties; no consent,
approval, authorization or order of, or filing with, any court or governmental
agency or body is required for the consummation of the transactions contemplated
by this Agreement in connection with the issuance or sale of the Securities by
the Company, except such as may be required under the Act or state securities
laws; and the Company has full power and authority to authorize, issue and sell
the Securities as contemplated by this Agreement, free of any preemptive rights.
(k) The Company has complied in all respects with all laws, regulations and
orders applicable to it or its respective businesses; the Company is not in
default under any indenture, mortgage, deed of trust, voting trust agreement,
loan agreement, bond, debenture, note agreement or the evidence of indebtedness,
lease, contract or other agreement or instrument to which it is a party or by
which it or any of its properties are bound, violation of which would
individually or in the aggregate have a material adverse effect on the Company,
and no other party under any such agreement or instrument to which the Company
is a party is, to the knowledge of the Company, in default in any material
respect thereunder; and the Company is not in violation of its charter or by-
laws, as the case may be.
(l) The Company, each of its Subsidiaries and any partnership or joint venture
in which such party is a participant (a "Related Entity") have good and
marketable title to all properties and assets, as described in the Prospectus,
owned by them, free and clear of all liens, charges, encumbrances or
restrictions, except such as are described in the Prospectus or are not material
in relation to the business of the Company, its Subsidiaries and Related
Entities, and the Company, its Subsidiaries and Related Entities have valid,
subsisting and enforceable leases for the properties described in the Prospectus
as leased by the Company, its Subsidiaries and Related Entities with such
exceptions as are not material and do not interfere with the use made and
proposed to be made of such properties by the Company, its Subsidiaries and
Related Entities; no tenant under any of the leases pursuant to which the
Company, its Subsidiaries and Related Entities lease their properties has an
option or right of first refusal to purchase the premises demised under such
lease; the use and occupancy of each of the properties of the Company, its
Subsidiaries and Related Entities complies in all material respects with all
applicable codes and zoning laws and regulations; the Company, its Subsidiaries
and Related Entities have no knowledge of any pending or threatened condemnation
or zoning change that will in any material respect affect the size of, use of,
improvement of, construction on, or access to any of the properties of the
Company, its Subsidiaries or Related Entities; and the Company, its Subsidiaries
and Related Entities have no knowledge of any pending or threatened proceeding
or action that will in any manner materially affect the size of, use of,
improvements on, construction on, or access to any of the properties of the
Company, its Subsidiaries or Related Entities.
(m) Title insurance in favor of the mortgagee, the Company, its Subsidiaries
and Related Entities is maintained with respect to each of the properties owned
by the Company, its Subsidiaries and Related Entities in an amount at least
equal to the greater of (i) the cost of
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acquisition of such property and (ii) the cost of construction by the Company,
its Subsidiaries or Related Entities of the improvements located on such
property (measured at the time of such construction), except, in each case,
where the failure to maintain such title insurance would not have a material
adverse effect on the condition, financial or otherwise, or the earnings,
business affairs or business prospects of the Company, its Subsidiaries and
Related Entities taken as a whole.
(n) The mortgages and deeds of trust encumbering the properties and assets
described in the Prospectus are not convertible nor does the Company or the
Partnership hold a participating interest therein.
(o) Except as set forth in the Prospectus Supplement, neither the Company nor
any of its Subsidiaries has any knowledge of (i) the unlawful presence of any
hazardous substances, hazardous materials, toxic substances or waste materials
(collectively, "Hazardous Materials") on any of the properties owned by each of
them, or (ii) any unlawful spills, releases, discharges or disposal of Hazardous
Materials that have occurred or are presently occurring off such properties as a
result of any construction on or operation and use of such properties, which
presence or occurrence would have a material adverse effect on the condition,
financial or otherwise, or the earnings, business affairs or business prospects
of the Company and its Subsidiaries taken as a whole. In connection with the
construction on or operation and use of the properties owned by the Company and
its Subsidiaries, the Company and each of its Subsidiaries represents that, as
of the date of this Agreement, it has no knowledge of any failure to comply with
all applicable local, state and federal environmental laws, regulations,
ordinances and administrative and judicial orders relating to the generation,
recycling, sale, storage, handling, transport and disposal of any Hazardous
Materials, which failure would have a material adverse effect on the condition,
financial or otherwise, or the earnings, business affairs or business prospects
of the Company and its Subsidiaries taken as a whole.
(p) Property and casualty insurance in favor of each of the Company and its
Subsidiaries is maintained with respect to each of the properties owned by each
of them in an amount and on such items as is reasonable and customary for
businesses of this type.
(q) No holder of outstanding shares of capital stock of the Company has any
rights to the registration of shares of capital stock of the Company which would
or could require such securities to be included in the Registration Statement.
(r) The Company has filed all Federal, State and foreign income tax returns
which have been required to be filed and has paid all taxes indicated by said
returns and all assessments received by it to the extent that such taxes have
become due.
(s) Each approval, consent, order, authorization, designation, declaration or
filing by or with any regulatory, administrative or other governmental body
necessary in connection with the execution and delivery by the Company of this
Agreement and the consummation of the transactions herein contemplated (except
such additional steps as may be required by the National Association of
Securities Dealers, Inc. (the "NASD") or by the New York Stock Exchange (the
"NYSE"), or as may be necessary to qualify the Securities for public offering by
5
you under State securities or Blue Sky laws) has been obtained or made and is in
full force and effect.
(t) The Company holds all material licenses, certificates and permits from
governmental authorities which are necessary to the conduct of its business; and
the Company has not infringed any patents, patent rights, trade names,
trademarks or copyrights, which infringement is material to the business of the
Company taken as a whole.
(u) For all applicable tax years as to which the Company's tax returns are
subject to audit and the Company is subject to assessment for taxes reportable
therein, the Company has continuously been organized and operating in conformity
with the requirements for qualification as the real estate investment trust
under the Internal Revenue Code of 1986, as amended (the "Code"). The Company's
method of operation will permit it to continue to meet the requirements for
taxation as a real estate investment trust under the Code. The Company has no
intention of changing its operations or engaging in activities which would
adversely affect its ability to qualify, or make economically undesirable its
continued qualification as, a real estate investment trust.
(v) Neither the Company nor any Subsidiary is an "investment company" within
the meaning of the Investment Company Act of 1940, as amended.
(w) The Securities have been approved for listing upon official notice of
issuance on the NYSE.
(x) Each of the partnership and joint venture agreements to which the Company
or any of its subsidiaries is a party, and which relates to real property
described in the Prospectus, has been duly authorized, executed and delivered by
such applicable party and constitutes the valid agreement thereof, enforceable
in accordance with its terms except to the extent that enforcement thereof may
be limited by (1) bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights generally
and (2) general principles of equity (regardless of whether enforceability is
considered in a proceeding at law or in equity) and the execution, delivery and
performance of any of such agreements did not and will not, at the time of
execution and delivery, and does not and will not constitute a breach of, or a
default under, the charter, partnership agreement or bylaws of the Company or
any of its Subsidiaries or any material contract, lease or other instrument to
which the Company or any of its Subsidiaries is a party or to which any of their
property may be bound or any law, administrative regulation or administrative or
court decree.
3. PURCHASE, SALE AND DELIVERY OF SECURITIES. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to issue and sell to
you, and you agree to purchase from the Company, the Securities at a purchase
price of $15.675 per share.
The Securities to be purchased by you will be delivered by the Company to you
at your office at 1285 Avenue of the Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, against
payment of the purchase price therefore by certified or official bank check in
New York Clearing House (next day) funds payable to the order of the Company at
the office of Xxxxxxx, Procter & Xxxx XXX, Xxxxxxxx Xxxxx, Xxxxxx,
0
Xxxxxxxxxxxxx 00000, at 10:00 a.m., New York time, on November 4, 1996 (or if
the NYSE or American Stock Exchange or commercial banks in The City of New York
are not open on such day, the next day on which such exchanges and banks are
open), or at such other time not later than eight full business days thereafter
as you and the Company determine, such time being herein referred to as the
"Closing Date." If requested by you, the Securities will be prepared in
definitive form and in such authorized denominations and registered in such
names as you may request upon at least two business days' prior notice to the
Company and will be made available for checking and packaging at your office at
least one business day prior to the Closing Date.
4. COVENANTS. The Company covenants and agrees with you that:
(a) The Company will cause the Prospectus Supplement and the updating
amendment to the prospectus to be filed as required by Section 2(a) hereof (but
only if you have not reasonably objected thereto by notice to the Company after
having been furnished a copy a reasonable time prior to filing) and will notify
you promptly of such filing. During the period in which a prospectus relating to
the Securities is required to be delivered under the Act, the Company will
notify you promptly of the time when any subsequent amendment to the
Registration Statement has become effective or any subsequent supplement to the
Prospectus has been filed and of any request by the Commission for any amendment
or supplement to the Registration Statement or Prospectus or for additional
information; it will prepare and file with the Commission, promptly upon your
request, any amendments or supplements to the Registration Statement or
Prospectus that, in your opinion, may be necessary or advisable in connection
with your distribution of the Securities; and it will file no amendment or
supplement to the Registration Statement or Prospectus (other than any
prospectus supplement relating to the offering of other securities registered
under the Registration Statement or any document required to be filed under the
Exchange Act that upon filing is deemed to be incorporated by reference therein)
to which you shall reasonably object by notice to the Company after having been
furnished a copy a reasonable time prior to the filing.
(b) The Company will advise you, promptly after it shall receive notice or
obtain knowledge thereof, of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement, of the suspension of
the qualification of the Securities for offering or sale in any jurisdiction, or
of the initiation or threatening of any proceeding for any such purpose; and it
will promptly use its best efforts to prevent the issuance of any stop order or
to obtain its withdrawal if such a stop order should be issued.
(c) Within the time during which a prospectus relating to the Securities is
required to be delivered under the Act, the Company will comply as far as it is
able with all requirements imposed upon it by the Act and by the Rules and
Regulations as from time to time in force, so far as necessary to permit the
continuance of sales of or dealings in the Securities as contemplated by the
provisions hereof and the Prospectus. If during such period any event occurs as
a result of which the Prospectus as then amended or supplemented would include
an untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances then
existing, not misleading, or if during such period it is necessary to amend or
supplement the Registration Statement or Prospectus to comply with the Act, the
Company will promptly notify you and will amend or supplement the Registration
7
Statement or Prospectus (at the expense of the Company) so as to correct such
statement or omission or effect such compliance.
(d) The Company will furnish to you copies of the Registration Statement, the
Prospectus (including all documents incorporated by reference therein) and all
amendments and supplements to the Registration Statement and Prospectus that are
filed with the Commission during the period in which a prospectus relating to
the Securities is required to be delivered under the Act (including all
documents filed with the Commission during such period that are deemed to be
incorporated by reference therein), in each case as soon as available and in
such quantities as you may from time to time reasonably request.
(e) The Company will make generally available to its security holders as soon
as practicable, but in any event not later than 15 months after the end of the
Company's current fiscal quarter, an earning statement (which need not be
audited) covering a 12-month period beginning after the date upon which the
Prospectus Supplement is filed pursuant to Rule 424 under the Act that shall
satisfy the provisions of Section 11(a) of the Act and Rule 158 of the Rules and
Regulations and will advise you in writing when such statement has been made
available.
(f) The Company, whether or not the transactions contemplated hereunder are
consummated or this Agreement is terminated, (i) will pay the costs and charges
of any transfer agent or registrar, and the cost of preparing stock
certificates; and (ii) will pay all other expenses incident to the performance
of its obligations hereunder, the expenses of printing all documents relating to
the offering, and will reimburse you for any filing fee of the NASD relating to
the Securities. If the sale of the Securities provided for herein is not
consummated by reason of any failure, refusal or inability on the part of the
Company to perform any agreement on its part to be performed, or because any
other condition of your obligations hereunder required to be fulfilled by the
Company is not fulfilled, the Company will reimburse you for all reasonable out-
of-pocket disbursements (including reasonable fees and disbursements of counsel)
incurred by you in connection with your investigation, preparing to market and
marketing the Securities or in contemplation of performing your obligations
hereunder. The Company shall not in any event be liable to you for loss of
anticipated profits from the transactions covered by this Agreement.
(g) The Company will apply the net proceeds from the sale of the Securities as
set forth in the Prospectus.
(h) The Company, its executive officers and the members of its Board of
Directors will not, directly or indirectly, offer, sell or otherwise dispose of
any shares of capital stock or securities convertible into or exchangeable for,
or any rights to purchase or acquire, shares of capital stock, except as
provided in the Prospectus Supplement, prior to the expiration of 90 days from
the date of this Agreement without your prior written consent.
(i) The Company will continue to elect to qualify as a "real estate investment
trust" under the Code, and will use its best efforts to continue to meet the
requirements to qualify as a "real estate investment trust."
8
5. CONDITIONS OF UNDERWRITER'S OBLIGATIONS. Your obligation to purchase and
pay for the Securities as provided herein shall be subject to the accuracy, as
of the date hereof and the Closing Date (as if made at the Closing Date), of the
representations and warranties of the Company herein, to the performance by the
Company of its obligations hereunder and to the following additional conditions:
(a) The Prospectus shall have been filed as required by Section 2(a) hereof;
and no stop order suspending the effectiveness of the Registration Statement
shall have been issued and no proceeding for that purpose shall have been
instituted or, to your knowledge or the knowledge of the Company, threatened by
the Commission, and any request of the Commission for additional information (to
be included in the Registration Statement or the Prospectus or otherwise) shall
have been complied with to your satisfaction.
(b) You shall not have advised the Company that the Registration Statement or
Prospectus, or any amendment or supplement thereto, contains an untrue statement
of fact that in your opinion is material, or omits to state a fact that in your
opinion is material and is required to be stated therein or is necessary to make
the statements therein not misleading.
(c) Except as contemplated in the Prospectus, subsequent to the respective
dates as of which information is given in the Registration Statement and the
Prospectus, there shall not have been any change, on a consolidated basis, in
the equity capitalization, short-term debt or long-term debt of the Company, or
any adverse change, or any development involving a prospective adverse change,
in the condition (financial or other), business, prospects, net worth or results
of operations of the Company or any change in the rating assigned to any
securities of the Company, that, in your judgment, makes it impractical or
inadvisable to offer or deliver the Securities on the terms and in the manner
contemplated in the Prospectus.
(d) You shall have received the opinion of Xxxxxxx, Procter & Xxxx LLP,
counsel for the Company, dated the Closing Date, to the effect that:
(i) The Company and each of its Subsidiaries has been duly incorporated or
formed, as the case may be, and is validly existing as a corporation or
general or limited partnership, as the case may be, and in good standing
under the laws of its jurisdiction of incorporation or formation, as the case
may be, has full power and authority to conduct its business as described in
the Registration Statement and Prospectus, and is duly qualified to do
business in each jurisdiction in which it owns or leases real property or in
which the conduct of its business requires such qualification except where
the failure to be so qualified, considering all such cases in the aggregate,
does not involve a material risk to the business, properties, financial
position or results of operations of the Company and its Subsidiaries taken
as a whole;
(ii) The outstanding shares of capital stock of the Company and the
Securities have been duly authorized and are, or when issued as contemplated
hereby will be, fully paid and nonassessable by the Company and conform, or
when so issued will conform, to the description thereof in the Prospectus,
and the stockholders of the Company have no preemptive rights with respect to
the Securities. All of the partnership interests of the Partnership owned by
the Company are owned by the Company free and clear of all liens, charges and
encumbrances;
9
(iii) The Registration Statement has become effective under the Act; the
Prospectus Supplement has been filed as required by Section 2(a) hereof, and
to the best knowledge of such counsel no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceeding
for that purpose has been instituted or threatened by the Commission;
(iv) Each part of the Registration Statement, when such part became
effective, and the Prospectus and any amendment or supplement thereto, on the
date of filing thereof with the Commission and at the Closing Date, complied
as to form in all material respects with the requirements of the Act and the
Rules and Regulations; and such counsel have no reason to believe that either
any part of the Registration Statement, when such part 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 and any amendment or
supplement thereto, on the date of filing thereof with the Commission or at
the Closing Date, included an untrue statement of a material fact or omitted
to state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading; and
the documents incorporated by reference in the Registration Statement or
Prospectus or any amendment or supplement thereto, when they became effective
under the Act or were filed with the Commission under the Exchange Act, as
the case may be, complied as to form in all material respects with the
requirements of the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder; it being understood that such
counsel need express no opinion as to the financial statements or other
financial data included in any other documents mentioned in this clause;
(v) The descriptions in the Registration Statement and Prospectus of
statutes, legal and governmental proceedings, contracts and other documents
are accurate and fairly present the information required to be shown; and
such counsel do not know of any statutes or legal or governmental proceedings
required to be described in the Prospectus that are not described as
required, or of any contracts or documents of a character required to be
described in the Registration Statement or Prospectus (or required to be
filed under the Exchange Act if upon such filing they would be incorporated
by reference therein) or to be filed as exhibits to the Registration
Statement that are not described and filed as required;
(vi) This Agreement has been duly authorized, executed and delivered by the
Company; the performance of this Agreement and the consummation of the
transactions herein contemplated will not result in a breach or violation of
any of the terms and provisions of, or constitute a default under, any
statute, any agreement or instrument known to such counsel to which the
Company is a party or by which it is bound or to which any of the property of
the Company is subject, the Company's charter or by-laws, or any order, rule
or regulation known to such counsel of any court of governmental agency or
body having jurisdiction over the Company or any of its properties; and no
consent, approval, authorization or order of, or filing with, any court or
governmental agency or body is required for the consummation of the
transactions contemplated by this Agreement in connection with the issuance
or sale of the Securities by the Company,
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except such as have been obtained under the Act and such as may be required
under state securities laws in connection with the purchase and distribution
of the Securities by you;
(vii) For all applicable tax years as to which the Company's tax returns
are subject to audit and the Company is subject to assessment for taxes
reportable therein, the Company has continuously been organized and operated
in conformity with the requirements for qualification as a "real estate
investment trust" under the Internal Revenue Code of 1986, as amended (the
"Code"). The Company's method of operation will permit it to continue to meet
the requirements for taxation as a "real estate investment trust" under the
Code. The federal income tax treatment described in the Prospectus under the
caption "Taxation" is accurate;
(viii) Neither the Company nor any Subsidiary is an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.
(e) You shall have received from Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP,
your counsel, such opinion or opinions, dated the Closing Date, with respect to
the organization of the Company, the validity of the Securities, the
Registration Statement, the Prospectus and other related matters as you
reasonably may request, and such counsel shall have received such papers and
information as they request to enable them to pass upon such matters.
(f) At the time of execution of this Agreement and at the Closing Date, you
shall have received a letter from KPMG Peat Marwick LLP, dated the date of
delivery thereof, to the effect set forth in Exhibit I hereto.
---------
(g) You shall have received from the Company a certificate, signed by the
President or a Vice President and by the principal financial or accounting
officer of the Company, dated the Closing Date, to the effect that, to the best
of their knowledge based upon reasonable investigation:
(i) The representations and warranties of the Company in this Agreement are
true and correct, as if made at and as of the Closing Date, and the Company
has complied with all the agreements and satisfied all the conditions on its
part to be performed or satisfied at or prior to the Closing Date;
(ii) No stop order suspending the effectiveness of the Registration
Statement has been issued, and no proceeding for that purpose has been
instituted or is threatened, by the Commission; and
(iii) Since the effective date of the Registration Statement, there has
occurred no event required to be set forth in an amendment or supplement to
the Registration Statement or Prospectus that has not been so set forth, and
there has been no document required to be filed under the Exchange Act and
the rules and regulations of the Commission thereunder that upon such filing
would be deemed to be incorporated by reference in the Prospectus that has
not been so filed.
11
(h) The Company shall have furnished to you such further certificates and
documents as you shall have reasonably requested.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are satisfactory in form and
substance to you. The Company will furnish you with such conformed copies of
such opinions, certificates, letters and other documents as you shall reasonably
request.
6. INDEMNIFICATION AND CONTRIBUTION. (a) The Company will indemnify and hold
you harmless against any losses, claims, damages or liabilities to which you may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any part of the registration statement when such part became
effective, or in the Registration Statement, any Preliminary Prospectus, the
Prospectus, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and will reimburse you for any legal or other expenses reasonably incurred by
you in connection with investigating or defending against such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that the Company shall not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by you, specifically for use in the preparation thereof.
(b) You will indemnify and hold harmless the Company against any losses,
claims, damages or liabilities to which the Company may become subject, under
the Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue statement
or alleged untrue statement of a material fact contained in any part of the
Registration Statement when such part became effective, or in the Registration
Statement, any Preliminary Prospectus, the Prospectus or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made therein in reliance upon and
in conformity with written information furnished to the Company by you,
specifically for use in the preparation thereof; and you will reimburse the
Company for any legal or other expenses reasonably incurred by the Company in
connection with investigating or defending against any such loss, claim, damage,
liability or action as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a) or (b)
above of notice of the commencement of any action, such indemnified party shall,
if a claim in respect thereof is to be made against the indemnifying party under
such subsection, notify the indemnifying party in writing of the commencement
thereof; but the omission so to notify the indemnifying party shall not relieve
it from any liability that it may have to any indemnified party otherwise than
under such subsection. In case any such action shall be brought against any
indemnified party, and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
in, and, to the extent that it shall wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party (who shall not, except with the consent
of the indemnified party, be counsel to the indemnifying party), and after
notice from
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the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party shall not be liable to such
indemnified party under such subsection for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation.
(d) If the indemnification provided for in this Section 6 is unavailable or
insufficient to hold harmless an indemnified party under subsection (a) or (b)
above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above, (i) in such proportion
as is appropriate to reflect the relative benefits received by the Company on
the one hand and you on the other from the offering of the Securities or (ii) if
the allocation provided by clause (i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on
the one hand and you on the other in connection with the statements or omissions
that resulted in such losses, claims, damages or liabilities, as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and you on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducing
expenses) received by the Company bear to the total underwriting discounts and
commissions received by you, in each case as set forth in the table on the cover
page of the Prospectus Supplement. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or you and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. The Company and you agree that it would not
be just and equitable if contributions pursuant to this subsection (d) were to
be determined by pro rata allocation or by any other method of allocation that
does not take account of the equitable considerations referred to in the first
sentence of this subsection (d). The amount paid by an indemnified party as a
result of the losses, claims, damages or liabilities referred to in the first
sentence of this subsection (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending against any action or claim that is the subject of
this subsection (d). Notwithstanding the provisions of this subsection (d), you
shall not be required to contribute any amount in excess of the amount by which
the total price at which the Securities underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages that you
have 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 Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.
(e) The obligations of the Company under this Section 6 shall be in addition
to any liability that the Company may otherwise have and shall extend, upon the
same terms and conditions, to each person, if any, who controls you within the
meaning of the Act, and your obligations under this Section 6 shall be in
addition to any liability that you may otherwise have and shall extend, upon the
same terms and conditions, to each member of the Board of Directors of the
Company (including any person who, with his consent, is named in the
Registration Statement as about to become a member of the Board of Directors of
the Company), to each officer of the Company who has signed the Registration
Statement and to each person, if any, who controls the Company within the
meaning of the Act.
7. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All representations,
warranties and agreements of the Company herein or in certificates delivered
pursuant hereto, and your agreements
13
contained in Section 6 hereof, shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of you or any
controlling persons, or the Company or any of its officers, directors or any
controlling persons, and shall survive delivery of and payment for the
Securities hereunder.
8. TERMINATION. You shall have the right by giving notice as hereinafter
specified at any time at or prior to the Closing Date, to terminate this
Agreement if (i) the Company shall have failed, refused or been unable, at or
prior to the Closing Date, to perform any agreement on its part to be performed
hereunder, (ii) any other condition of your obligations hereunder is not
fulfilled, (iii) trading on the NYSE or the American Stock Exchange shall have
been wholly suspended, (iv) minimum or maximum prices for trading shall have
been fixed, or maximum ranges for prices for securities shall have been
required, on the NYSE or the American Stock Exchange, by such Exchange or by
order of the Commission or any other governmental authority having jurisdiction,
(v) a banking moratorium shall have been declared by Federal or New York
authorities, or (vi) an outbreak of major hostilities in which the United States
is involved, a declaration of war by Congress, any other substantial national or
international calamity or any other event or occurrence of a similar character
shall have occurred since the execution of this Agreement that, in your
judgment, makes it impractical or inadvisable to proceed with the completion of
the sale of and payment for the Securities. Any such termination shall be
without liability of any party to any other party with respect to Securities not
purchased by reason of such termination except that the provisions of Section
4(f) and Section 6 hereof shall at all times be effective. If you elect to
terminate this Agreement as provided in this Section, the Company shall be
notified promptly by you by telephone, telex or telecopy, confirmed by letter.
9. NOTICES. All notices or communications hereunder shall be in writing and
if sent to you shall be mailed, delivered, telexed or telecopied and confirmed
to you at 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or if sent to
the Company, shall be mailed, delivered, telexed or telecopied and confirmed to
the Company at 00 Xxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000-0000.
Any party to this Agreement may change such address for notices by sending to
the other party to this Agreement written notice of a new address for such
purpose.
10. PARTIES. This Agreement shall inure to the benefit of and be binding upon
the Company and the Underwriter and their respective successors and the
controlling persons, officers and directors referred to in Section 6 hereof, and
no other person will have any right or obligation hereunder.
11. APPLICABLE LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
12. OVERALLOTMENT OPTION. (a) In addition to the shares of Common Stock being
sold by the Company and described in Section 1 hereof (which are referred to
herein as the "Firm Shares"), you, at your option, shall have the right to
purchase from the Company up to an aggregate of 375,000 additional shares of
Common Stock, par value $.01 per share ("Optional Shares"). The first two
paragraphs of Section 3 hereof shall be deemed to apply only to the purchase,
sale and delivery of the Firm Shares. References in those two paragraphs to the
"Securities" shall be deemed to be references to the "Firm Shares"; except as
otherwise provided in this Section 12, other references in this Agreement to the
"Securities" shall be deemed to include the Firm Shares and the Optional Shares.
14
(b) Upon written notice from you given to the Company not more than 30 days
subsequent to the date of the public offering of the Securities, you may
purchase all or less than all of the Optional Shares at the purchase price per
share to be paid for the Firm Shares. Such Optional Shares may be purchased by
you only for the purpose of covering over-allotments made in connection with the
sale of the Firm Shares. No Optional Shares shall be sold or delivered unless
the Firm Shares previously have been, or simultaneously are, sold and delivered.
The right to purchase the Optional Shares or any portion thereof may be
surrendered and terminated at any time upon notice by you to the Company. The
"Closing Date" as defined in Section 3 hereof, shall be deemed to be the "First
Closing Date," and the time for the delivery of and payment for the Optional
Shares, is herein referred to as the "Second Closing Date" (which may be the
First Closing Date). The Second Closing Date shall be determined by you but
shall be not later than 10 days after you give to the Company written notice of
election to purchase Optional Shares. The preparation, registration, checking
and delivery of, and payment for, the Optional Shares shall occur or be made in
the same manner as provided in Section 3 hereof for the Firm Shares, except as
you and the Company may otherwise agree.
(c) The conditions to your obligations set forth in Section 5 shall be deemed
to be conditions to your obligation to purchase and pay for the Securities to be
purchased on each of the First Closing Date and the Second Closing Date, as the
case may be; references in that Section and in Sections 2, 8 and 9 hereof to the
"Closing Date" shall be deemed to be references to the First Closing Date or the
Second Closing Date, as the case may be, and references to the "Securities" in
Section 5 hereof shall be deemed to be references to the Securities to be
purchased at such Closing Date. A termination of this Agreement as to the
Optional Shares after the First Closing Date will not terminate this Agreement
as to the Firm Shares.
If the foregoing correctly sets forth the understanding between the Company
and you, please so indicate in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement between the Company
and you.
Very truly yours,
XXXXXXX REAL ESTATE, INC.
By:
Name:
----------------------------
Title:
---------------------------
ACCEPTED as of the date first above
written
PAINEWEBBER INCORPORATED
By:
Name:
------------------------------
Title:
-----------------------------
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SCHEDULE B
Subsidiaries
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Xxxxxxx Real Estate Management, Inc., a Massachusetts corporation
Xxxxxxx Midwest Management, Inc., a Minnesota corporation
Xxxxxxx Operating Limited Partnership, a Delaware limited partnership
Xxxxxxx Financing Corp., a Delaware corporation
Xxxxxxx Management Corp., a Delaware corporation
Xxxxxxx Financing Partnership, a Delaware general partnership
Xxxxxxx Management Limited Partnership, a Delaware limited partnership
Xxxxxxxxxx Square Associates Limited Partnership, an Illinois limited
partnership
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EXHIBIT I
(1) They are independent certified public accountants with respect to the
Company and within the meaning of the Act and the Rules and Regulations.
(2) In their opinion, the financial statements and schedules examined by them
and included in the Registration Statement and Prospectus comply as to form in
all material respects with the applicable accounting requirements of the Act or
the Exchange Act, as applicable, and the published rules and regulations of the
Commission thereunder.
(3) They have made a review in accordance with standards established by the
American Institute of Certified Public Accountants of the unaudited financial
statements incorporated by reference in the Prospectus.
(4) On the basis of procedures referred to in such letter, including a reading
of the latest available interim financial statements of the Company and
inquiries of officials of the Company responsible for financial and accounting
matters, nothing caused them to believe that:
(A) the audited information with respect to the results of operations for
each of the three years ended December 31, 1995 and the financial position at
December 31, 1994 and December 31, 1995 included or incorporated by reference
in the Company's Annual Report on Form 10-K for the year ended December 31,
1995 does not comply as to form in all material respects with the applicable
accounting requirements of the Exchange Act and the published rules and
regulations of the Commission thereunder, is not fairly stated in all
material respects in relation to the audited financial statements from which
it has been derived, or does not agree with the corresponding amounts in the
audited financial statements for each of the years then ended;
(B) the unaudited financial statements included in the Company's Quarterly
Reports on Form 10-Q for the quarters ended March 31, 1996 and June 30, 1996
do not comply as to form in all material respects with the applicable
accounting requirements of the Exchange Act and the published rules and
regulations of the Commission thereunder or are not in conformity with
generally accepted accounting principles applied on a basis substantially
consistent with that of the audited financial statements included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1995;
(C) for the period from June 30, 1996 to the date of the latest available
internal balance sheet of the Company and to a subsequent specified date not
more than five days prior to the date of such letter, there was any change in
capital stock, mortgage loans or the line of credit of the Company or any
decrease, as compared with the corresponding period of the previous year, in
net assets, except in all cases for changes or decreases that the Prospectus
discloses have occurred or may occur or as may be set forth in such letter.
(5) In addition to their examination referred to in their reports included or
incorporated by reference in the Registration Statement and Prospectus and the
procedures referred to in (4) above, they have carried out certain other
specified procedures, not constituting an audit, with respect to the dollar
17
amounts, percentages and other financial information that are included or
incorporated by reference in the Prospectus and appear in the Prospectus under
the captions "Prospectus Supplement Summary," "Risk Factors," and "the Company"
and appear or are incorporated by reference in the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1995 and its Quarterly Reports
on Form 10-Q for the quarters ended March 31, 1996 and June 30, 1996 under the
captions, "Business," "Market for the Registrant's Shares and Related
Stockholder Matters," "Selected Financial Data," "Management's Discussion and
Analysis of Financial Condition and Results of Operation," "Properties,"
"Financial Statement and Supplementary Data," and "Financial Statements" and
have found such dollar amounts, percentages, and financial information to be in
agreement with the general accounting records of the Company.
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