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EXHIBIT 1.01
CRESCENT REAL ESTATE EQUITIES LIMITED PARTNERSHIP
(a Delaware limited partnership)
$150,000,000 6 5/8% Notes due 2002
$250,000,000 7 1/8% Notes due 2007
PURCHASE AGREEMENT
September 19, 1997
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxxxx Xxxxx World Headquarters
World Financial Center
North Tower
New York, New York 10281-1209
SALOMON BROTHERS INC.
0 Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Crescent Real Estate Equities Limited Partnership, a Delaware limited
partnership (the "OPERATING PARTNERSHIP"), proposes to issue and sell to you, as
the initial purchasers (the "INITIAL PURCHASERS"), up to $150,000,000 aggregate
principal amount of 6 5/8% Notes due October 1, 2002 (the "2002 NOTES") and up
to $250,000,000 aggregate principal amount of 7 1/8% Notes due October 1, 2007
(the "2007 NOTES") (collectively, the "SECURITIES"). The Securities will be
issued pursuant to an indenture to be dated as of September 22, 1997, between
the Operating Partnership and State Street Bank and Trust Company of Missouri,
N.A., as trustee (such indenture, as supplemented, the "INDENTURE"). Securities
issued in book-entry form will be issued to Cede & Co. as nominee of The
Depository Trust Company ("DTC") pursuant to a letter agreement, to be dated as
of the Closing Date (as defined in Section 2(c)) (the "DTC AGREEMENT"), among
the Operating Partnership, State Street Bank and Trust Company of Missouri, N.A.
(the "TRUSTEE") and DTC. Unless the context otherwise requires, as used herein,
"you" and "your" shall mean the parties to whom this Purchase Agreement (this
"AGREEMENT") is addressed. Capitalized terms used herein without definition
shall have the meanings assigned to such terms in the Offering Memorandum (as
defined below) relating to the Securities.
The Securities will be offered and sold to you without being registered
under the Securities Act of 1933, as amended (the "SECURITIES ACT"), in reliance
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upon an exemption from the registration requirements thereof. The Operating
Partnership has prepared a preliminary offering memorandum, dated September 11,
1997 (the "PRELIMINARY OFFERING MEMORANDUM"), and will prepare a final offering
memorandum dated the date hereof (the "FINAL OFFERING MEMORANDUM" and, together
with the Preliminary Offering Memorandum, the "OFFERING MEMORANDUM"), setting
forth or including a description of the terms of the Securities, the terms of
the offering, a description of the Operating Partnership and any material
developments relating to the Operating Partnership occurring after the date of
the most recent financial statements included therein. Any references herein to
the Preliminary Offering Memorandum, the Final Offering Memorandum and the
Offering Memorandum shall be deemed to include all amendments and supplements
thereto. The Operating Partnership hereby confirms that it has authorized the
use of the Offering Memorandum and any amendments and supplements thereto, in
connection with the Exempt Resales (as defined below) by the Initial Purchasers.
The "COMPANY" shall mean Crescent Real Estate Equities Company, a Texas real
estate investment trust which owns 100% of the outstanding capital stock of the
general partner of the Operating Partnership.
You have advised the Issuers that you will offer (the "EXEMPT RESALES") the
Securities purchased by you hereunder on the terms set forth in the Offering
Memorandum solely to (i) persons (each, a "144A PURCHASER") who you reasonably
believe to be "qualified institutional buyers" as defined in Rule 144A ("Rule
144A") under the Securities Act ("QIBS") and (ii) a limited number of other
institutional "accredited investors," as defined in Rule 501(a) (1), (2), (3)
and (7) under the Act, that made certain representations and agreements to the
Issuers (each, an "ACCREDITED INSTITUTION") (such persons specified in clauses
(i) and (ii) being referred to herein as the "ELIGIBLE PURCHASERS"). Pursuant to
the terms of the Securities and the Indenture, investors that acquire Securities
may only resell or otherwise transfer such Securities if such Securities are
hereafter registered under the Securities Act or if an exemption from the
registration requirements of the Securities Act is available (including the
exemption afforded by Rule 144A of the rules and regulations promulgated under
the Securities Act by the Securities and Exchange Commission (the
"Commission")). You will offer the Securities to Eligible Purchasers initially
at a price equal to 99.564% of the principal amount thereof in the case of the
2002 Notes and 99.819% of the principal amount thereof in the case of the 2007
Notes. Such price may be changed at any time without notice.
Holders (including subsequent transferees) of the Securities will have the
registration rights set forth in the registration rights agreement (the
"REGISTRATION RIGHTS AGREEMENT"), to be dated the Closing Date, for so long as
such Securities constitute "Registrable Securities" as defined in the
Registration Rights Agreement. Pursuant to the Registration Rights Agreement,
the Operating Partnership will agree to file with the Commission under the
circumstances set forth therein, (i) a registration statement under the
Securities Act (the "EXCHANGE OFFER REGISTRATION STATEMENT") relating to notes
of the Operating Partnership
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with terms identical in all material respects to the Securities (the "EXCHANGE
OFFER NOTES") to be offered in exchange for the Securities (such offer to
exchange being referred to as the "REGISTERED EXCHANGE OFFER") or under certain
circumstances, (ii) a shelf registration statement pursuant to Rule 415 under
the Securities Act (the "SHELF REGISTRATION STATEMENT") relating to the resale
of the Securities by certain holders, and in either case, to use its reasonable
efforts to cause such Exchange Offer Registration Statement or Shelf
Registration Statement to be declared effective.
SECTION 1. REPRESENTATIONS AND WARRANTIES OF THE OPERATING PARTNERSHIP.
(a) The Operating Partnership represents and warrants to you, as of the
date hereof and as of the Closing Date (as defined below), as follows:
(1) The Offering Memorandum. The Offering Memorandum, as of its date
and at the Closing Date (as defined below), did not and will not contain
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to
statements in or omissions from any such document in reliance upon, and in
conformity with, written information furnished to the Operating Partnership
by you, specifically for use therein.
(2) No Other Sales of Securities; No General Solicitation. Neither the
Operating Partnership nor any affiliate (as defined in Rule 501(b) of
Regulation D under the Securities Act ("REGULATION D")) of the Operating
Partnership has directly, or through any agent (provided that no
representation is made as to the Initial Purchasers or any person acting on
their behalf), (A) sold, offered for sale, solicited offers to buy or
otherwise negotiated in respect of, any security (as defined in the
Securities Act) which is or will be integrated with the sale of the
Securities in a manner that would require the registration of the
Securities under the Securities Act or (B) engaged in any form of general
solicitation or general advertising (within the meaning of Regulation D) in
connection with the offering of the Securities.
(3) No Registration or Qualification. It is not necessary in
connection with the offer, sale and delivery of the Securities to the
Initial Purchasers and to each subsequent purchaser in the manner
contemplated by this Agreement to register the Securities under the
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Securities Act or to qualify the Indenture under the Trust Indenture Act of
1939, as amended (the "TRUST INDENTURE ACT").
(4) Rule 144A Eligibility. The Securities are eligible for resale
pursuant to Rule 144A and satisfy the requirements set forth in Rule
144A(d)(3) under the Securities Act.
(5) Independent Accountants. Each of Xxxxxx Xxxxxxxx LLP, the
accounting firm whose report on the financial statements and is included in
the Offering Memorandum, and any other accounting firm whose report on
financial statements is included in the Offering Memorandum, is an
independent public accountant as required by the Securities Act and the
applicable rules and regulations thereunder (the "SECURITIES ACT
REGULATIONS").
(6) Financial Statements. The consolidated financial statements of the
Operating Partnership and its consolidated subsidiaries (including the
notes thereto) included in the Offering Memorandum were prepared in
accordance with generally accepted accounting principles ("GAAP")
consistently applied throughout the periods involved except as otherwise
noted therein and present fairly the financial condition of the Operating
Partnership and its consolidated subsidiaries at the respective dates
indicated and the results of operations for the respective periods
specified. The financial information and data included in the Offering
Memorandum present fairly the information included therein and have been
prepared on a basis consistent with that of the financial statements
included in the Offering Memorandum and books and records of the respective
entities presented therein. The pro forma financial information included in
the Offering Memorandum (a) includes all adjustments necessary to present
fairly the pro forma financial position of the Operating Partnership and
its Subsidiaries presented therein at the respective dates indicated and
the results of their operations for the respective periods specified, and
(b) except for the pro forma adjustment relating to anticipated capital
contributions from the Company to be derived from future equity offerings
by the Company, which adjustment is based on the Operating Partnership's
reasonable expectations, have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial
information. Except as reflected or disclosed in the financial statements
included in the Offering Memorandum, none of the Operating Partnership, any
of its Subsidiaries or the Residential Development Corporations (as such
terms are hereinafter defined) is subject to any material indebtedness,
obligation, or liability, contingent or otherwise.
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(7) No Material Adverse Change in Business. Since the respective dates
as of which information is given in the Offering Memorandum, except as
otherwise stated therein, (A) there has been no material adverse change in
the condition, financial or otherwise, or in the earnings, assets, business
affairs or business prospects of the Operating Partnership, the
Subsidiaries and the Residential Development Corporations, considered as
one enterprise, whether or not arising in the ordinary course of business,
(B) no material casualty loss or material condemnation or other material
adverse event with respect to any real property or improvements thereon
owned or leased by any of the Operating Partnership, any of its
Subsidiaries or any of the Residential Development Corporations, including
any property underlying indebtedness held by the Operating Partnership, any
of the Subsidiaries or any of the Residential Development Corporations
(each, individually a "PROPERTY" and collectively, the "PROPERTIES"), has
occurred that is material to the Operating Partnership, the Subsidiaries
and the Residential Development Corporations considered as one enterprise,
(C) there have been no acquisitions or other transactions entered into by
the Operating Partnership, any Subsidiary or any Residential Development
Corporation other than those in the ordinary course of business that are
material with respect to such entities, considered as one enterprise, or
would result in any inaccuracy in the representations contained in Section
1(a)(6) above, (D) except as described in the Offering Memorandum and
except for regular quarterly distributions on the partnership interests of
the Operating Partnership, there has been no distribution of any kind
declared, paid or made by the Operating Partnership with respect to its
partnership interests, and (E) there has been no change in the partnership
interests of the Operating Partnership or the capital stock of its
Subsidiaries or the Residential Development Corporations, or any increase
in the indebtedness of the Operating Partnership, the Subsidiaries or the
Residential Development Corporations that is material to such entities,
considered as one enterprise.
(8) Good Standing of the Operating Partnership. The Operating
Partnership has been duly formed and is validly existing as a limited
partnership in good standing under the Delaware Revised Uniform Limited
Partnership Act (the "DELAWARE ACT") with partnership power and authority
to own, lease and operate its properties, to conduct the business in which
it is engaged or proposes to engage as described in the Offering Memorandum
and to enter into and perform its obligations under this Agreement. The
Operating Partnership is duly qualified or registered as a foreign
partnership and is in good standing in each jurisdiction in which such
qualification or registration is required, whether by reason of the
ownership or leasing
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of property or the conduct of business, except where the failure to so
qualify or register would not have a material adverse effect on the
condition, financial or otherwise, on the earnings, assets, business
affairs or business prospects of the Operating Partnership, the
Subsidiaries and the Residential Development Corporations considered as one
enterprise. The First Amended and Restated Agreement of Limited Partnership
of the Operating Partnership, as amended (the "PARTNERSHIP AGREEMENT"), is
a valid and binding agreement enforceable in accordance with its terms.
Crescent Real Estate Equities, Ltd., a Delaware corporation ("CGP, INC."),
a wholly owned subsidiary of the Company, is the sole general partner of
the Operating Partnership and is the holder of a one percent (1%) general
partner interest in the Operating Partnership. Entities in which the
Operating Partnership directly or indirectly has at least a 50% ownership
interest are hereinafter referred to as the "SUBSIDIARIES," and each,
individually, as a "SUBSIDIARY." Houston Area Development Corp., a Texas
corporation, Mira Vista Development Corp., a Texas corporation, Crescent
Development Management Corp., a Delaware corporation, Desert Mountain
Development Corporation, a Delaware corporation, and Woodlands Land
Company, Inc., a Texas corporation, are referred to herein collectively as
the "RESIDENTIAL DEVELOPMENT CORPORATIONS."
(9) Good Standing of the Subsidiaries and Residential Development
Corporations. Each of the Subsidiaries and the Residential Development
Corporations has been duly organized and is validly existing as a
corporation, limited partnership, or limited liability company, as the case
may be, in good standing under the laws of its respective state of
organization, with full power and authority to own, lease and operate its
properties, to conduct the business in which it is engaged or proposes to
engage as described in the Offering Memorandum. Each of the Subsidiaries
and the Residential Development Corporations is duly qualified as a foreign
corporation, limited partnership, or limited liability company, as the case
may be, to transact business and is in good standing in each jurisdiction
in which such qualification is required, whether by reason of the ownership
or leasing of property or the conduct of business, except where the failure
to so qualify would not have a material adverse effect on the condition,
financial or otherwise, or the earnings, assets, business affairs or
business prospects of the Operating Partnership, the Subsidiaries and the
Residential Development Corporations considered as one enterprise. Each of
the partnership agreements, limited liability company agreements, or other,
similar instruments to which the Operating Partnership or any of its
Subsidiaries is a party has been duly authorized, executed and delivered by
the parties
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thereto and constitutes the valid agreement thereof, enforceable in
accordance with its terms. All of the issued and outstanding shares of
capital stock of each of the corporate Subsidiaries and the Residential
Development Corporations have been duly authorized and validly issued and
are fully paid and nonassessable. The ownership by the Operating
Partnership or the Subsidiaries of the shares of capital stock or limited
partnership or equity interests, as the case may be, of each of the
Subsidiaries and the Residential Development Corporations is as described
in the Offering Memorandum and all of such shares or limited partnership or
equity interests, or other, similar instruments owned by the Operating
Partnership or the Subsidiaries are free and clear of all liens, charges
and encumbrances.
(10) Capitalization of Operating Partnership. The capitalization of
the Operating Partnership is as set forth in the Offering Memorandum as of
the date referenced in the Offering Memorandum. All of the partnership
interests outstanding at the Closing Date were duly authorized for issuance
by the Operating Partnership and are validly issued and fully paid. The
partnership interests were offered and sold in compliance with all
applicable laws (including, without limitation, federal and state
securities laws). Except as summarized in the Offering Memorandum or set
forth in the Partnership Agreement, there are no preemptive or other rights
to subscribe for or to purchase, nor any restriction upon the voting or
transfer of, any partnership interests pursuant to the Partnership
Agreement or any other instrument. The terms of the partnership interests
conform to all statements and descriptions related thereto contained in the
Offering Memorandum.
(11) Valid Authorization of the Indenture. The Indenture (A) has been
duly and validly authorized, and when executed and delivered by the
Operating Partnership, and assuming due authorization, execution and
delivery by the Trustee, will constitute a valid and binding obligation of
the Operating Partnership, enforceable against the Operating Partnership in
accordance with its terms, except as (i) the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting creditors' rights generally and (ii) rights of acceleration
and the availability of equitable remedies may be limited by equitable
principles of general applicability; and (B) conforms in all material
respects to the description thereof in the Offering Memorandum.
(12) Authorization of the Securities. The Securities have been duly
authorized by the Operating Partnership for issuance and sale pursuant to
this Agreement and such Securities, when executed,
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authenticated, issued and delivered in the manner provided for in this
Agreement and the Indenture against payment of the consideration therefor
specified in this Agreement, will constitute valid and legally binding
obligations of the Operating Partnership, entitled to the benefits of the
Indenture enforceable against the Operating Partnership in accordance with
their terms, except as (A) the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting creditors' rights generally and (B) rights of
acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability. Such Securities will be in
the form contemplated by, and each registered holder thereof is entitled to
the benefits of, the Indenture. Upon payment of the purchase price and
delivery of such Securities in accordance herewith, the Initial Purchasers
will receive good, valid and marketable title to such Securities, free and
clear of all security interests, mortgages, pledges, liens, encumbrances,
claims and equities. The terms of such Securities conform in all material
respects to all statements and descriptions related thereto contained in
the Offering Memorandum. Such Securities rank and will rank pari passu with
all unsecured and unsubordinated indebtedness of the Operating Partnership
that is outstanding on the Closing Date or that may be incurred thereafter,
except that such Securities will be effectively subordinated to (Y) the
claims of each secured mortgage lender to the extent of the value of the
property securing such indebtedness and (Z) all existing and future
third-party indebtedness and other liabilities of the Subsidiaries.
(13) Authorization of Exchange Offer Notes. The Exchange Offer Notes
have been duly authorized by the Operating Partnership for issuance and
sale pursuant to the Indenture, the Registration Rights Agreement and such
Exchange Offer Notes when executed, authenticated, issued and delivered in
the manner provided for in the Registration Rights Agreement and the
Indenture against payment of consideration therefor in the form of the
Securities, will constitute valid and legally binding obligations of the
Operating Partnership, entitled to the benefits of the Indenture
enforceable against the Operating Partnership in accordance with their
terms, except as (A) the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting creditors' rights generally and (B) rights of
acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability. Such Securities will be in
the form contemplated by, and each registered holder thereof is entitled to
the benefits of, the Indenture.
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(14) Absence of Defaults. None of Operating Partnership, any
Subsidiary or any Residential Development Corporation is in violation of
its charter, by-laws, certificate of limited partnership, partnership
agreement, or limited liability company agreement, as the case may be, and
none of the Operating Partnership, any Subsidiary or any Residential
Development Corporation is in default in the performance or observance of
any obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other instrument to
which such entity is a party or by which such entity may be bound, or to
which any of the property or assets of such entity is subject, except where
a default thereunder would not have a material adverse effect on the
condition, financial or otherwise, or the earnings, assets, business
affairs or business prospects of the Operating Partnership, the
Subsidiaries and the Residential Development Corporations considered as one
enterprise.
(15) Absence of Conflicts. The execution and delivery of this
Agreement, the Registration Rights Agreement and the Indenture, the
performance of the obligations set forth herein or therein, and the
consummation of the transactions contemplated hereby or thereby or in the
Offering Memorandum, including the issuance and sale of the Securities to
the Initial Purchasers, by the Operating Partnership and its Subsidiaries,
as applicable, will not result in the creation of any lien, charge or
encumbrance upon the Properties or conflict with or constitute a breach or
violation by the Operating Partnership or any Subsidiary, or default under,
(A) any material contract, indenture, mortgage, loan agreement, note,
lease, joint venture or partnership agreement or other instrument or
agreement to which such entity is a party or by which they, any of them,
any of their respective assets or any Property may be bound or subject; (B)
the charter, by-laws, certificate of limited partnership, partnership
agreement, or limited liability company agreement, as the case may be, of
such entity; or (C) any applicable law, rule, order, administrative
regulation or administrative or court decree.
(16) Authorization of Agreement. The Operating Partnership has full
right, power and authority under its organizational documents to enter into
this Agreement and this Agreement has been duly authorized, executed and
delivered by the Operating Partnership.
(17) Absence of Proceedings. There is no action, suit or proceeding
before or by any court or governmental agency or body, domestic or foreign,
now pending, or, to the knowledge of the Operating Partnership, threatened
against or affecting the Operating Partnership, any Subsidiary, any
Residential Development Corporation, any Property, any of the Subsidiaries
or any of the Residential Development Corporations, or any officer or
director of CGP, Inc. that is required to be disclosed in the Offering
Memorandum (other than as disclosed therein) or that, if determined
adversely to the Operating Partnership, any Subsidiary, any Residential
Development
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Corporation, any Property, including any property underlying indebtedness
held by the Operating Partnership, any of the Subsidiaries and any of the
Residential Development Corporations, or any officer or director of CGP,
Inc., might (A) result in any material adverse change in the condition,
financial or otherwise, or in the earnings, assets, business affairs or
business prospects of the Operating Partnership, the Subsidiaries and the
Residential Development Corporations considered as one enterprise or (B)
materially and adversely affect the consummation of the transactions
contemplated by this Agreement. There is no pending legal or governmental
proceeding to which the Operating Partnership, any Subsidiary or any
Residential Development Corporation is a party or of which any of their
respective properties or assets or any Property, including any property
underlying indebtedness held by, the Operating Partnership, any of the
Subsidiaries or any of the Residential Development Corporations, is the
subject, including ordinary routine litigation incidental to the business,
that is, considered in the aggregate, material to the condition, financial
or otherwise, or the earnings, assets, business affairs or business
prospects of the Operating Partnership, the Subsidiaries and the
Residential Development Corporations considered as one enterprise.
(18) Investment Company Act. None of the Operating Partnership, any
Subsidiary or any Residential Development Corporation is, or at the Closing
Date will be, required to be registered under the Investment Company Act of
1940, as amended (the "1940 ACT").
(19) Possession of Intellectual Property. None of the Operating
Partnership, any Subsidiary or any Residential Development Corporation is
required to own or possess any trademarks, service marks, trade names or
copyrights (collectively, "PROPRIETARY RIGHTS") not now lawfully owned or
possessed in order to conduct the business now operated by such entity or
as proposed to be operated by it as described in the Offering Memorandum
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.
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(20) Absence of Further Requirements. All authorizations, approvals
and consents of any court or governmental authority or agency that are
necessary in connection with the offering, issuance or sale of the
Securities hereunder or the consummation of the other transactions
contemplated by this Agreement, the Registration Rights Agreement or the
Indenture have been obtained, except such as may be required under the
Securities Act and the Trust Indenture Act with respect to registration of
the Exchange Notes pursuant to the Registration Rights Agreement, and the
securities, Blue Sky or real estate syndication laws of various states in
connection with the offer and sale of the Securities..
(21) Possession of Licenses and Permits. Each of the Operating
Partnership, the Subsidiaries and the Residential Development Corporations
possesses such certificates, authorizations or permits issued by the
appropriate state, federal or foreign regulatory agencies or bodies
necessary to conduct the business now conducted by it, or proposed to be
conducted by it, as described in the Offering Memorandum, and none of the
Operating Partnership, any Subsidiary or any Residential Development
Corporation has received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization or permit
which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would materially and adversely affect the
condition, financial or otherwise, or the earnings, assets, business
affairs or business prospects of the Operating Partnership, the
Subsidiaries and the Residential Development Corporations considered as one
enterprise.
(22) Absence of Labor Disputes. No labor dispute with the employees of
the Operating Partnership, any Subsidiary or any Residential Development
Corporation exists or, to the knowledge of the Operating Partnership, is
imminent.
(23) Title to Property. Except as otherwise described in the Offering
Memorandum, (A) each of the Operating Partnership, the Subsidiaries, and
each Residential Development Corporation, as the case may be, has good and
marketable title in fee simple to all real property owned by such entity
and good and marketable title to the improvements, if any, thereon and all
other assets that are required for the effective operation of such real
property in the manner in which they currently are operated except where
the failure to own real property or improvements thereon in fee simple
would not have a material adverse effect on the condition, financial or
otherwise, or on the earnings, assets, business affairs or business
prospects of or with respect to the Operating Partnership, the Subsidiaries
and the
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Residential Development Corporations considered as one enterprise; (B) any
real property and buildings held under lease by the Operating Partnership,
any Subsidiary or any Residential Development Corporation are in full force
and effect, and such entity is not in default in respect of any of the
terms or provisions of such leases and such entity has not received notice
of the assertion of any claim by anyone adverse to the Operating
Partnership's rights as lessee under such leases, or affecting or
questioning the Operating Partnership's right to the continued possession
or use of the real property and buildings held under such leases or of a
default under such leases, in each case with such exceptions as would not
have a material adverse impact on the condition, financial or otherwise, or
on the earnings, assets, business affairs or business prospects of or with
respect to the Operating Partnership, the Subsidiaries and the Residential
Development Corporations considered as one enterprise; (C) all liens,
charges, encumbrances, claims, or restrictions on or affecting any of the
Properties, including any property underlying indebtedness held by the
Operating Partnership, any of the Subsidiaries or any of the Residential
Development Corporations, and the assets of the Operating Partnership, any
Subsidiary or any Residential Development Corporation which are material to
the Operating Partnership, its Subsidiaries or the Residential Development
Corporations, as the case may be, are disclosed in the Offering Memorandum;
(D) none of the Operating Partnership, any of the Subsidiaries, any of the
Residential Development Corporations or any tenant of any of the Properties
is in default under any of the leases pursuant to which the Operating
Partnership, as lessor, leases its Property (nor does the Operating
Partnership know of any event which, but for the passage of time or the
giving of notice, or both, would constitute a default under any of such
leases) other than such defaults that would not have a material adverse
effect on the condition, financial or otherwise, or on the earnings,
assets, business affairs or business prospects of or with respect to the
Operating Partnership, any Subsidiary or any Residential Development
Corporation or any Property; (E) except as described in the Offering
Memorandum, no person has an option or right of first refusal to purchase
all or part of any Property or any interest therein, other than such
options or rights of first refusal which would not have a material adverse
effect on the condition, financial or otherwise, or on the earnings,
assets, business affairs or business prospects of or with respect to the
Operating Partnership, the Subsidiaries and the Residential Development
Corporations, considered as one enterprise; (F) each of the Properties
complies with all applicable codes, laws and regulations (including,
without limitation, building and zoning codes, laws and regulations and
laws relating to access to the Properties),
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except if and to the extent disclosed in the Offering Memorandum and except
for such failures to comply that would not individually or in the aggregate
have a material adverse impact on the condition, financial or otherwise, or
on the earnings, assets, business affairs or business prospects of such
Property or the Operating Partnership; (G) there are in effect for the
Properties, including, to the knowledge of the Operating Partnership, any
property underlying indebtedness held by the Operating Partnership, any of
the Subsidiaries and any of the Residential Development Corporations, and
the other assets of the Operating Partnership, the Subsidiaries and the
Residential Development Corporations, insurance policies by financially
sound and reputable insurance companies covering risks and in amounts that
are commercially reasonable for the assets owned by them and that are
consistent with the types and amounts of insurance typically maintained by
present owners of similar types of properties; and (H) the Operating
Partnership has no knowledge of any pending or threatened condemnation
proceedings, zoning change, or other proceeding or action that will in any
manner affect the size of, use of, improvements on, construction on or
access to the Properties, including any property underlying indebtedness
held by the Operating Partnership, any of the Subsidiaries or any
Residential Development Corporation, except such proceedings or actions
that would not have a material adverse effect on the condition, financial
or otherwise, or on the earnings, assets, business affairs or business
prospects of the Operating Partnership or with respect to such Property,
including any property underlying indebtedness held by the Operating
Partnership, any of the Subsidiaries or any Residential Development
Corporation.
(24) Environmental Laws. Except as disclosed in the Offering
Memorandum, (A) each Property, including, without limitation, the
Environment (as defined below) associated with such Property, is free of
any Hazardous Substance (as defined below), except for Hazardous Substances
that would not have a material adverse effect on the condition, financial
or otherwise, or on the earnings, assets, business affairs or business
prospects of or with respect to the Operating Partnership, the Subsidiaries
and the Residential Development Corporations considered as one enterprise;
(B) none of the Operating Partnership, any Subsidiary or any Residential
Development Corporation has caused or suffered to occur any Release (as
defined below) of any Hazardous Substance into the Environment on, in,
under or from any Property, and no condition exists on, in, under or, to
the knowledge of the Operating Partnership, adjacent to any Property that
is reasonably likely to result in the incurrence of material liabilities or
any material violations of any Environmental Law (as defined below), give
rise to the imposition of any Lien (as defined below) under any
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Environmental Law, or cause or constitute a health, safety or environmental
hazard to any property, person or entity; (C) none of the Operating
Partnership, any Subsidiary or any Residential Development Corporation
intends to use the properties or assets described in the Offering
Memorandum or any other real property for the purpose of handling, burying,
storing, retaining, refining, transporting, processing, manufacturing,
generating, producing, spilling, seeping, leaking, escaping, leaching,
pumping, pouring, emitting, emptying, discharging, injecting, dumping,
transferring or otherwise disposing of or dealing with a Hazardous
Substance, except for materials utilized in the ordinary course of business
of the properties, provided such use would not, in the ordinary course of
business, give rise to liability under any Environmental Law; (D) none of
the Operating Partnership, any Subsidiary or any Residential Development
Corporation has received any notice of a claim under or pursuant to any
Environmental Law or under common law pertaining to Hazardous Substances on
or originating from any Property; (E) none of the Operating Partnership,
any Subsidiary or any Residential Development Corporation has received any
notice from any Governmental Authority (as defined below) claiming any
violation of any Environmental Law; (F) no Property is included or, to the
knowledge of the Operating Partnership, proposed for inclusion on the
National Priorities List issued pursuant to CERCLA (as defined below) by
the United States Environmental Protection Agency (the "EPA") or on the
Comprehensive Environmental Response, Compensation, and Liability
Information System database maintained by the EPA, and has not otherwise
been identified by the EPA as a potential CERCLA removal, remedial or
response site or included or, to the knowledge of the Operating
Partnership, proposed for inclusion on, any similar list of potentially
contaminated sites pursuant to any other Environmental Law; and (G) there
are no underground storage tanks located on or in any Property except where
the presence thereof would not have a material adverse effect on the
condition, financial or otherwise, or the earnings, assets or business
affairs or business prospects of the Operating Partnership, the
Subsidiaries and the Residential Development Corporations considered as one
enterprise.
As used herein, "HAZARDOUS SUBSTANCE" shall include, without
limitation, any hazardous substance, hazardous waste, toxic substance,
pollutant, solid waste or similarly designated materials, including,
without limitation, oil, petroleum or any petroleum-derived substance or
waste, asbestos or asbestos-containing materials, PCBs, pesticides,
explosives, radioactive materials, dioxins, urea formaldehyde insulation or
any constituent of any such substance, pollutant or waste, including any
such substance, pollutant or waste
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identified or regulated under any Environmental Law (including, without
limitation, materials listed in the United States Department of
Transportation Optional Hazardous Material Table, 49 C.F.R. ss. 172.101, as
the same may now or hereafter be amended, or in the EPA's List of Hazardous
Substances and Reportable Quantities, 40 C.F.R. Part 302, as the same may
now or hereafter be amended); "ENVIRONMENT" shall mean any surface water,
drinking water, ground water, land surface, subsurface strata, river
sediment, buildings, structures, and ambient, workplace and indoor air;
"ENVIRONMENTAL LAW" shall mean the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended (42 U.S.C. ss. 9601 et
seq.) ("CERCLA"), the Resource Conservation and Recovery Act of 1976, as
amended (42 U.S.C. ss. 6901 et seq.), the Clean Air Act, as amended (42
U.S.C. ss. 7401 et seq.), the Clean Water Act, as amended (33 U.S.C. ss.
1251 et seq.), the Toxic Substances Control Act, as amended (15 U.S.C. ss.
2601 et seq.), the Occupational Safety and Health Act of 1970, as amended
(29 U.S.C. ss. 651 et seq.), the Hazardous Materials Transportation Act, as
amended (49 U.S.C. ss. 1801 et seq.), and all other federal, state and
local laws, ordinances, regulations, rules, orders, decisions and permits
relating to the protection of the environment or of human health from
environmental effects; "GOVERNMENTAL AUTHORITY" shall mean any federal,
state or local governmental office, agency or authority having the duty or
authority to promulgate, implement or enforce any Environmental Law; "LIEN"
shall mean, with respect to any Property, any mortgage, deed of trust,
pledge, security interest, lien, encumbrance, penalty, fine, charge,
assessment, judgment or other liability in, on or affecting such Property;
and "RELEASE" shall mean any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, emanating or
disposing of any Hazardous Substance into the Environment, including,
without limitation, the abandonment or discard of barrels, containers,
tanks (including, without limitation, underground storage tanks) or other
receptacles containing or previously containing any Hazardous Substance or
any release, emission, discharge or similar term, as those terms are
defined or used in any Environmental Law.
(25) Tax Compliance. Each of the Operating Partnership, the
Subsidiaries and the Residential Development Corporations has filed all
federal, state, local and foreign income tax returns which have been
required to be filed (except in any case in which the failure to so file
would not have a material adverse effect on the condition, financial or
otherwise, or the earnings, assets, business affairs or business prospects
of such entities considered as one enterprise) and has paid all taxes
required to be paid and any other assessment, fine or penalty
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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.
(26) No Price Manipulation. None of the Subsidiaries, the Residential
Development Corporations or the Operating Partnership, nor any of their
directors, officers or controlling persons, has taken or will take,
directly or indirectly, any action resulting in a violation of Regulation M
under the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"),
or designed to cause or result under the Exchange Act or otherwise in, or
which has constituted or which reasonably might be expected to constitute,
the unlawful stabilization or manipulation of the price of any security of
the Operating Partnership or facilitation of the sale or resale of the
Securities.
(27) Registration Rights Agreement. The execution and delivery of the
Registration Rights Agreement have been duly authorized by all necessary
partnership action of the Operating Partnership and, when duly executed and
delivered by the Operating Partnership and the other parties thereto, will
be a valid and binding agreement of the Operating Partnership, enforceable
against the Operating Partnership in accordance with its terms. The
Registration Rights Agreement will conform in all material respects to the
description thereof contained in the Offering Memorandum.
(28) Plan Assets. The assets of the Operating Partnership, its
Subsidiaries and the Residential Development Corporations do not constitute
"plan assets" under the Employee Retirement Security Act of 1974, as
amended.
(29) Regulations G, T, U and X. None of the transactions contemplated
by this Agreement (including, without limitation, the use of the proceeds
from the sale of the Securities) will violate or result in a violation of
Section 7 of the Exchange Act, or any regulation promulgated thereunder,
including, without limitation, Regulations G, T, U and X of the Board of
Governors of the Federal Reserve System.
(30) Partnership Classification. The Operating Partnership and each of
the Subsidiaries that are partnerships are properly classified as
partnerships, and not as corporations or as associations taxable as
corporations, for Federal income tax purposes throughout the period from
May 5, 1994 through the date hereof, or, in the case of any Subsidiary
partnerships that have terminated, through the date of termination of such
Subsidiary partnerships.
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(31) Cross Defaults. The mortgages and deeds of trust encumbering the
properties and assets described in general in the Offering Memorandum are
not convertible and are not cross-defaulted or cross-collateralized to any
property not owned by the Operating Partnership or any of its Subsidiaries;
except as disclosed in the Offering Memorandum, none of the Operating
Partnership or any of its Subsidiaries holds participating interests in
such mortgages and deeds of trust.
(b) Any certificate signed by any officer of the Operating Partnership, the
Company, the Subsidiaries or the Residential Development Corporations and
delivered to you or to counsel for the Initial Purchasers shall be deemed a
representation and warranty by such entity to each Initial Purchaser as to the
matters covered thereby.
SECTION 2. SALE AND DELIVERY TO INITIAL PURCHASERS; CLOSING.
(a) The commitment of the Initial Purchasers to purchase the Securities
pursuant to this 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 set forth herein.
(b) The Operating Partnership agrees to issue and sell the Securities to
each of the Initial Purchasers, and each of the Initial Purchasers, severally
and not jointly, agrees to purchase from the Operating Partnership, at a
purchase price (the "PURCHASE PRICE") of 99.25% of the principal amount thereof
in the case of the 2002 Notes and 99% of the principal amount thereof in the
case of the 2007 Notes, the principal amount of Securities set forth opposite
the name of such Initial Purchaser in Schedule I hereto.
(c) Payment of the purchase price for, and delivery of, the Securities
shall be made at the offices of Xxxxx & Xxxxxxx L.L.P., Columbia Square, 000
Xxxxxxxxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000-1109, or at such other place as
shall be agreed upon by you and the Operating Partnership, at 9:00 A.M., New
York City time, on the first (1st) business day following the date of this
Agreement, or at such other date and time as shall be agreed upon by you and the
Operating Partnership (such time and date being referred to as the "CLOSING
DATE"). Payment shall be made to the Operating Partnership by wire transfer or
by certified or official bank check or checks in federal or similar same-day
funds payable to the order of the Operating Partnership against delivery to you
for your respective accounts of the Securities to be purchased by you. Subject
to Section 6 below, the Securities shall be in such authorized denominations and
registered in such names as you may request in writing on the last business day
prior to the
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Closing Date. The certificates representing the Securities shall be registered
in the name of Cede & Co. pursuant to the DTC Agreement and shall be made
available for examination and packaging by the Initial Purchasers in The City of
New York not later than 10:00 a.m. on the last business day prior to the Closing
Date.
SECTION 3. COVENANTS OF THE OPERATING PARTNERSHIP.
The Operating Partnership covenants with you as follows:
(a) At any time prior to the completion of the distribution of the
Securities by the Initial Purchasers to purchasers who are not affiliates
thereof, the Operating Partnership will give the Initial Purchasers notice of
its intention to prepare any supplement or amendment to the Offering Memorandum,
will furnish the Initial Purchasers with copies of any such amendment,
supplement or other document a reasonable amount of time prior to such proposed
use, and will not use any such amendment or supplement to which the Initial
Purchasers or counsel for the Initial Purchasers shall reasonably object.
(b) The Operating Partnership has furnished or will furnish to the Initial
Purchasers such number of copies of the Offering Memorandum (as amended or
supplemented) as the Initial Purchaser may reasonably request.
(c) At any time prior to the completion of the distribution of the
Securities by the Initial Purchasers to purchasers who are not affiliates
thereof, if any event shall occur as a result of which it is necessary, in the
reasonable opinion of counsel for the Initial Purchasers or counsel for the
Operating Partnership, to amend or supplement the Offering Memorandum in order
to make the Offering Memorandum not misleading, in light of the circumstances
existing at the time it is delivered to a purchaser, the Operating Partnership
will forthwith amend or supplement the Offering Memorandum (in form and
substance reasonably satisfactory to counsel for the Initial Purchasers) so
that, as so amended or supplemented, the Offering Memorandum will not include an
untrue statement of a material fact or omit to state a material affect necessary
in order to make the statements therein, in light of the circumstances existing
at the time it is delivered to a purchaser, not misleading, and the Operating
Partnership will furnish to the Initial Purchasers a reasonable number of copies
of such amendment or supplement.
(d) The Operating Partnership will endeavor, in cooperation with the
Initial Purchasers, (i) to qualify the Securities for sale under the laws,
including real estate syndication laws, of such jurisdictions as the Initial
Purchaser may reasonably designate, (ii) to maintain such qualifications in
effect so long as required for the sale of the Securities and (iii) to arrange
for the determination of the legality of the Securities for purchase by
institutional investors under the laws
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of such jurisdictions as the Initial Purchaser may reasonably request. The
Operating Partnership will promptly advise the Initial Purchasers of the receipt
by the Operating Partnership of any notification with respect to the suspension
of the qualification of the Securities for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose. Notwithstanding
the foregoing, the Operating Partnership shall not be obligated to qualify as a
foreign corporation in any jurisdiction in which it is not so qualified or to
file a general consent to service of process in any jurisdiction.
(e) Neither the Operating Partnership nor any affiliate (as defined in Rule
501(b) of Regulation D) of the Operating Partnership will solicit any offer to
buy or offer or sell the Securities by means of any form of general solicitation
or general advertising (within the meaning of Regulation D).
(f) The Operating Partnership shall, during any period in the two years
after the Closing Date (or any shorter period provided for in Rule 144(k) under
the Securities Act or any successor provision thereto) in which the Operating
Partnership is not subject to Section 13 or 15(d) of the Exchange Act, make
available, upon request, to any holder of such Securities in connection with any
sale thereof and any prospective purchaser of Securities from such holder the
information ("RULE 144A INFORMATION") specified in Rule 144A(d)(4) under the
Act.
(g) Neither the Operating Partnership nor any affiliate (as defined in Rule
501(b) of Regulation D) will sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in the Securities
Act) the offering of which security will be integrated with the sale of the
Securities in a manner which would require the registration of the Securities
under the Securities Act.
(h) The Operating Partnership shall use its best efforts in cooperation
with the Initial Purchasers to permit the Securities to be eligible for
clearance and settlement through DTC.
(i) The Operating Partnership will not, for a period of 90 days following
the date and time that this Agreement is executed and delivered by the parties
hereto (the "EXECUTION TIME"), without your prior written consent, offer, sell
or contract to sell, or otherwise dispose of, directly or indirectly, or
announce the offering of, any debt securities issued or guaranteed by the
Operating Partnership (other than the securities offered pursuant to an Exchange
Offer Registration Statement for the Securities).
(j) The Operating Partnership will use its best efforts to enable Standard
& Poor's Ratings Services ("S&P") and Xxxxx'x Investors Service, Inc.
("Xxxxx'x") or any other nationally recognized statistical rating organization
to provide their respective credit ratings of any Securities, if applicable.
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(k) The Operating Partnership will use the net proceeds received by it from
the sale of the Securities in the manner specified in the Offering Memorandum
under "Use of Proceeds."
(l) If requested by the Initial Purchasers, the Operating Partnership will
use its best efforts to cause the Securities to be designated by the National
Association of Securities Dealers, Inc. PORTAL Market ("PORTAL") as
PORTAL-eligible securities in accordance with the rules and regulations of the
National Association of Securities Dealers, Inc.
(m) The Operating Partnership will furnish to holders of the Securities as
soon as practicable after the end of each fiscal year an annual report
(including a balance sheet and statements of income, holders' equity and cash
flows of the Operating Partnership and its consolidated subsidiaries certified
by independent public accountants) and, as soon as practicable after the end of
each of the first three quarters of each fiscal year (beginning with the first
fiscal quarter ending after the date of the Offering Memorandum), consolidated
summary financial information of the Operating Partnership and its consolidated
subsidiaries of such quarter in reasonable detail.
(n) The Operating Partnership will not take any action prohibited by
Regulation M under the Exchange Act, in connection with the distribution of the
Securities contemplated hereby.
(o) The Operating Partnership will comply with all of the terms and
conditions of the Registration Rights Agreement.
(p) Prior to any registration of the Exchange Offer Notes pursuant to the
Registration Rights Agreement, or at such earlier time as may be so required,
the Operating Partnership will qualify the Indenture under the Trust Indenture
Act, and enter into any necessary supplemental indentures in connection
therewith.
SECTION 4. PAYMENT OF EXPENSES.
The Operating Partnership will pay all expenses incident to the performance
of its obligations under this Agreement, including (i) the preparation and
printing of the Offering Memorandum (including financial statements and
exhibits) and of each amendment and supplement thereto, (ii) the preparation and
delivery to the Initial Purchasers of this Agreement, the Indenture, the
Registration Rights Agreement and such other documents as may be required in
connection with the offering, purchase, sale and delivery of the Securities to
the Initial Purchasers, including any global securities, (iii) the preparation,
issuance and delivery of the Securities, including any global securities, (iv)
the fees and disbursements of the Operating Partnership's counsel, accountants
and other advisors or agents (including transfer agents and registrars), as well
as the fees and disbursements
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of the Trustees, and their respective counsel, (v) the qualification of the
Securities under state securities laws and real estate syndication laws in
accordance with the provisions of Section 3(d) hereof, including fees and
disbursements of counsel for the Initial Purchasers in connection therewith and
in connection with the preparation, and delivery of a blue sky memorandum (the
"Blue Sky Memorandum") and any amendment thereto, (vi) the delivery to the
Initial Purchasers of copies of the Offering Memorandum and any amendments or
supplements thereto, (vii) any fees charged by nationally recognized statistical
rating organizations for the rating of the Securities, (viii) the fees and
expenses of the Trustee, including the reasonable fees and disbursements of
counsel for the Trustee, in connection with the Indenture and the Securities,
and (ix) all expenses and listing fees incurred in connection with the
application for quotation of the Securities on the PORTAL market.
If this Agreement is terminated by the Initial Purchasers in accordance
with the provisions of Section 5 or Section 10 hereof, the Operating Partnership
shall reimburse the Initial Purchasers for all of their out-of-pocket expenses,
including the reasonable fees and disbursements of counsel for the Initial
Purchasers.
SECTION 5. CONDITIONS OF INITIAL PURCHASERS' OBLIGATIONS.
The several obligations of the Initial Purchasers' are subject to the
accuracy as of the date hereof and as of the Closing Date of the representations
and warranties of the Operating Partnership contained herein, to the accuracy of
the statements of officers of the Operating Partnership or any Subsidiary made
in any certificate delivered pursuant to the provisions hereof, to the
performance by the Operating Partnership of all of its covenants and other
obligations hereunder, and to the following further conditions:
(a) (i) The Initial Purchasers shall not have discovered and disclosed to
the Operating Partnership on or prior to the Closing Date that the Offering
Memorandum or any amendment or supplement thereto contains an untrue statement
of a fact which, in the reasonable opinion of counsel for the Initial
Purchasers, is material or omits to state a fact which, in the reasonable
opinion of such counsel, is material and is required to be stated therein or is
necessary to make the statements therein not misleading.
(ii) All consents, waivers and approvals (including, but not limited
to, the consents, waivers and approvals referenced below) necessary for the
transactions contemplated by this Agreement, the Indenture and the
Registration Rights Agreement, except as may be required under the
Securities Act or the Trust Indenture Act, shall have been obtained and
shall be in full force and effect at the Closing Date.
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(iii) All corporate proceedings and other legal matters incident to
the authorization, form and validity of each of this Agreement, the
Registration Rights Agreement, the Securities and the Offering Memorandum,
and other legal matters relating thereto and the transactions contemplated
thereby shall be satisfactory in all respects to counsel for the Initial
Purchasers, and the Operating Partnership shall have furnished to such
counsel all documents and information that they may reasonably request to
enable them to pass upon such matters.
(b) At the Closing Date, the Initial Purchasers shall have received the
opinion, dated as of the applicable Closing Date, of Xxxx, Pittman, Xxxxx &
Xxxxxxxxxx, counsel for the Operating Partnership and the Subsidiaries in form
and substance satisfactory to counsel for the Initial Purchasers, together with
signed or reproduced copies of such letter for each of the other Initial
Purchasers, to the effect that:
(i) The Operating Partnership has been duly formed and is validly
existing as a limited partnership in good standing under the Delaware Act.
The Operating Partnership has full partnership power and authority to own,
lease and operate its properties, to conduct the business in which it is
engaged or proposes to engage as described in the Offering Memorandum and
to enter into and perform its obligations under this Agreement, the
Partnership Agreement, the Indenture and the Registration Rights Agreement
(collectively, the "Listed Agreements"), and the Securities. The Operating
Partnership is duly qualified or registered as a foreign partnership and is
in good standing in Texas, Colorado, Arizona, New Mexico, Louisiana,
Nebraska and each other jurisdiction in which such qualification or
registration is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure to so qualify
or register would not have a material adverse effect on the condition,
financial or otherwise, or the earnings, assets, business affairs or
business prospects of the Operating Partnership, the Subsidiaries and the
Residential Development Corporations considered as one enterprise. CGP,
Inc., a wholly owned subsidiary of the Company, is the sole general partner
of the Operating Partnership.
(ii) Each of Crescent Real Estate Funding I, L.P., Crescent Real
Estate Funding II, L.P., Crescent Real Estate Funding III, L.P., Crescent
Real Estate Funding IV, L.P., Crescent Real Estate Funding V, L.P.,
Crescent Real Estate Funding VI, L.P., Crescent Real Estate Funding VII and
any other Subsidiary that would be considered a "Significant Subsidiary" as
defined in Article 1, Rule 1--02 of Regulation S-X promulgated pursuant to
the Securities Act (collectively, the "SIGNIFICANT SUBSIDIARIES") has been
organized and is validly existing as a corporation, limited partnership or
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limited liability company, as the case may be, in good standing under the
laws of its respective state of organization, with full corporate,
partnership or limited liability company (as the case may be) power and
authority to own, lease and operate its properties, to conduct the business
in which it is engaged or proposes to engage as described in the Offering
Memorandum, and to enter into and perform its obligations under any Listed
Agreements to which it is a party. Each of the Significant Subsidiaries and
the Residential Development Corporations is duly qualified as a foreign
corporation, limited partnership or limited liability company, as the case
may be, to transact business and is in good standing in each jurisdiction
in which such qualification is required, whether by reason of the ownership
or leasing of property or the conduct of business, except where the failure
to so qualify would not have a material adverse effect on the condition,
financial or otherwise, or the earnings, assets, business affairs or
business prospects of the Operating Partnership, the Significant
Subsidiaries and the Residential Development Corporations considered as one
enterprise. All of the issued and outstanding shares of capital stock of
each of the corporate Significant Subsidiaries have been duly authorized
and validly issued and are fully paid and nonassessable. The ownership by
the Operating Partnership and the Significant Subsidiaries of the shares of
capital stock or limited partnership or equity interests, as the case may
be, of each of the Significant Subsidiaries is free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or equity.
(iii) The Securities are in the form contemplated in the Indenture and
have been duly and validly authorized by all necessary action and, when
executed, authenticated and delivered in accordance with the Indenture and
against payment therefor as specified in this Agreement, will be entitled
to the benefits of the Indenture and will be valid and legally binding
obligations of the Operating Partnership enforceable against the Operating
Partnership in accordance with their terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer, or
similar laws affecting creditors' rights generally from time to time in
effect and general principles of equity (regardless of whether such
enforceability is considered in a proceeding at law or in equity) and
except that a waiver of rights under any usury law may be unenforceable.
Such Securities rank and will rank pari passu with all unsecured and
unsubordinated indebtedness of the Operating Partnership that is
outstanding on the Closing Date or that may be incurred thereafter, except
that such Securities will be effectively subordinated to the claims of each
secured mortgage lender to the extent of the value of the property securing
such indebtedness and all existing and future third-party indebtedness and
other liabilities of the Subsidiaries.
(iv) None of the Operating Partnership or any Significant Subsidiary
is in violation of its charter, by-laws, certificate of limited
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partnership, partnership agreement, limited liability company agreement or
similar instrument, as the case may be, and, to the knowledge of counsel,
none of the Operating Partnership or any Significant Subsidiary is in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any material contract, indenture,
mortgage, loan agreement, note, lease or other instrument to which such
entity is a party or by which such entity is bound, or to which any of the
property or assets of such entity is subject, except where a default
thereunder would not have a material adverse effect on the condition,
financial or otherwise, or the earnings, assets, business affairs or
business prospects of the Operating Partnership, the Subsidiaries and the
Residential Development Corporations considered as one enterprise.
(v) Each of this Agreement, the Indenture and the Registration Rights
Agreement was duly and validly authorized, executed and delivered by the
Operating Partnership and, assuming due authorization, execution and
delivery by any other party thereto, is a valid and binding agreement of
such party, enforceable against such party in accordance with its terms,
except as such enforceability may be (1) limited by bankruptcy, insolvency,
reorganization, liquidation, moratorium and other similar laws affecting
the rights and remedies of creditors generally, (2) subject to general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law), and (3) pertaining to
indemnity and contribution, limited under applicable securities laws and
public policy.
(vi) The execution and delivery of this Agreement, the Indenture, the
Securities, the DTC Agreement and the Registration Rights Agreement, the
performance of the obligations set forth herein and therein, and the
consummation of the transactions contemplated thereby or in the Offering
Memorandum by the Operating Partnership and the Significant Subsidiaries,
as applicable, will not conflict with or constitute a breach or violation
of, or default under: (A) to the knowledge of counsel, any material
contract, indenture, mortgage, loan agreement, note, lease, joint venture
or partnership agreement or other instrument or agreement to which the
Operating Partnership or any Significant Subsidiary is a party or by which
they or any of them or any of their respective properties or other assets
or any Property may be bound or subject; (B) the charter, by-laws,
certificate of limited partnership, partnership agreement, or limited
liability company agreement, or similar instrument, as the case may be, of
the Operating Partnership or any Significant Subsidiary; or (C) any federal
or Delaware law.
(vii) To the knowledge of counsel, there is no action, suit or
proceeding before or by any court or governmental agency or body, domestic
or foreign, now pending or threatened against or affecting the Operating
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Partnership or any Significant Subsidiary, any Property, any property
underlying indebtedness held by the Operating Partnership or any of the
Significant Subsidiaries that, if determined adversely to the Operating
Partnership, any Significant Subsidiary, any Property, including any
property underlying indebtedness held by the Operating Partnership, or any
of the Significant Subsidiaries would reasonably be expected to (1) result
in any material adverse change in the condition, financial or otherwise, or
in the earnings, assets, business affairs or business prospects of the
Operating Partnership, the Subsidiaries and the Residential Development
Corporations, considered as one enterprise, or (2) materially and adversely
affect the consummation of the transactions contemplated by this Agreement.
To the knowledge of counsel, there is no pending legal or governmental
proceeding to which the Operating Partnership or any Significant Subsidiary
is a party or of which any of their respective properties or assets or any
Property, including any property underlying indebtedness held by the
Operating Partnership, or any of the Significant Subsidiaries is the
subject, including ordinary routine litigation incidental to the business,
that is, considered in the aggregate, material to the condition, financial
or otherwise, or the earnings, assets, business affairs or business
prospects of the Operating Partnership, the Subsidiaries and the
Residential Development Corporations, considered as one enterprise.
(viii) None of the Operating Partnership, nor any Subsidiary is, or at
the Closing Time will be, required to be registered under the 1940 Act.
(ix) All filings have been made and all authorizations, approvals,
consents, licenses, order registrations or qualification of decrees of any
court or governmental authority or agency that are necessary in connection
with the offering, issuance or sale of the Securities under this Agreement
have been obtained, except such as may be required under (A) the Securities
Act and the Securities Act Regulations and the Trust Indenture Act with
respect to the registration of the Exchange Offer Notes pursuant to the
Registration Rights Agreement and (B) state securities or real estate
syndication laws.
(x) The Securities and the Listed Agreements conform in all material
respects to the descriptions thereof, if any, in the Offering Memorandum.
(xi) Except as contemplated in the Registration Rights Agreement to
the knowledge of such counsel, there are no persons with registration or
other similar rights to have any securities registered under the Exchange
Offer Registration Statement or the Shelf Registration Statement, or
require the Operating Partnership to file any other registration statement,
as a result of the offer and sale of the Exchange Notes.
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(xii) The information in the Offering Memorandum under the headings
"Description of the Notes," "Plan of Distribution" and "Notice to
Investors" to the extent that it constitutes matters of law or legal
conclusions has been reviewed by such counsel, is correct and presents
fairly the information required to be disclosed therein.
(xiii) The Operating Partnership and each of the Significant
Subsidiaries that are partnerships are properly classified as partnerships,
and not as corporations or as associations taxable as corporations, for
Federal income tax purposes throughout the period from May 5, 1994 through
the date hereof, or, in the case of any Significant Subsidiary partnerships
that have terminated, through the date of termination of such Significant
Subsidiary Partnerships.
(xiv) Based on the representations, warranties and agreements of each
of the Initial Purchasers in Section 6 of this Agreement and on the truth
and accuracy of the representations and agreements deemed to be made by
purchasers of the Securities contained in the Offering Memorandum, it is
not necessary in connection with the offer, sale and delivery of the
Securities to the Initial Purchasers under this Agreement or in connection
with the initial resale of such Securities by the Initial Purchasers in
accordance with Section 6 of this Agreement to register the Securities
under the Securities Act or to qualify the Indenture under the Trust
Indenture Act; provided, however that such counsel need not express any
opinion with respect to the conditions under which the Securities may be
further resold.
(c) At the Closing Date, you shall have received the favorable opinion,
dated as of the applicable Closing Time, of Xxxxx & Xxxxxxx L.L.P., counsel for
the Initial Purchasers, with respect to the matters set forth in (i) (first
sentence only), (iii), (v), (vi), (x) (solely as to the Securities) and (xiv) of
Section 5(b) above.
(d) In giving the opinions required by Sections 5(b) and (c), respectively,
Xxxx, Xxxxxxx, Xxxxx & Xxxxxxxxxx and Xxxxx & Xxxxxxx L.L.P. shall additionally
state (which shall not constitute an opinion) that nothing has come to the
attention of such counsel which cause them to believe that the Offering
Memorandum or any amendment thereto (except for financial statements and
supporting schedules and other financial information and data included therein
or omitted therefrom, as to which such counsel need not express any view), as of
the date of this Agreement or at the Closing Time, contained an untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. In giving their belief
required in this Section 5(d), such counsel may state that their belief is based
upon their
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participation in the preparation of the Offering Memorandum and any amendments
and supplements thereto and review and discussion of the contents thereof.
(e) In giving their opinions required by Section 5(b) and 5(c), such
counsel (i) may rely as to all matters of fact, upon certificates and written
statements of officers and employees of and accountants for the Operating
Partnership and the Significant Subsidiaries and (ii) may rely as to the
qualification and good standing of each of the Operating Partnership or any of
the Significant Subsidiaries to do business in any state or jurisdiction, upon
certificates of appropriate government officials or opinions of counsel in such
jurisdictions.
(f) At Closing Time, there shall not have been, since the respective dates
as of which information is given in the Offering Memorandum, any material
adverse change in the condition, financial or otherwise on the earnings, assets,
business affairs or business prospects of the Operating Partnerships, the
Subsidiaries and the Residential Development Corporations considered as one
enterprise, whether or not arising in the ordinary course of business, and you
shall have received a certificate of the President or a Vice President of the
General Partner of the Operating Partnership, and the chief financial officer or
chief accounting officer of the General Partner of the Operating Partnership,
dated as of the Closing Date, to the effect that (i) there has been no such
material adverse change in the condition, financial or otherwise on the
earnings, assets, business affairs or business prospects of the Operating
Partnerships, the Subsidiaries and the Residential Development Corporations
considered as one enterprise, (ii) the representations and warranties in Section
1 are accurate as though expressly made at and as of the Closing Date, and (iii)
all conditions, precedent set forth in this Section 5 have been satisfied or
waived.
(g) At the time of the execution of this Agreement, you shall have received
from Xxxxxx Xxxxxxxx LLP a letter dated such date, in form and substance
satisfactory to you to the effect that: (i) they are independent accountants
with respect to the Operating Partnership and its Subsidiaries within the
meaning of Rule 101 of the AICPA's Code of Professional Conduct; (ii) it is
their opinion that the consolidated financial statements and supporting
schedules included or incorporated by reference in the Offering Memorandum and
covered by their opinions therein comply in form in all material respects with
Rule 101 of the AICPA's Code of Professional Conduct; (iii) based upon limited
procedures set forth in detail in such letter (which shall include, without
limitation, the procedures specified by the American Institute of Certified
Public Accountants for a review of interim financial information as described in
SAS No. 71, Interim Financial Information, with respect to the unaudited
financial statements of the Operating Partnership included or incorporated by
reference in the Offering Memorandum), nothing has come to their attention which
causes them to believe that, (A) any material modifications should be made to
the unaudited condensed financial statements included or incorporated by
reference in the Offering Memorandum for
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them to be in conformity with GAAP or (B) the unaudited condensed financial
statements included or incorporated by reference in the Offering Memorandum do
not comply as to form in all material respects with GAAP or (C) at a specified
date not more than five days prior to the date of this Agreement, there has been
any change in the partnership interests in the Operating Partnership or in the
consolidated long term debt of the Operating Partnership or any decrease in the
net assets of the Company, as compared with the amounts shown in the most recent
consolidated balance sheet included in the Offering Memorandum or, during the
period from the date of the most recent consolidated statement of operations
included in the Offering Memorandum to a specified date not more than five days
prior to the date of this Agreement, there were any decreases, as compared with
the corresponding period in the preceding year, in consolidated revenues, or
decrease in net income the Operating Partnership, as applicable, except in all
instances for changes, increases or decreases which the Offering Memorandum
discloses have occurred or may occur; (iv) 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 all significant assumptions regarding pending and
completed acquisitions and the October 1996 Offering, the April 1997 Offering,
UBS Offering, and this Offering had been reflected in the pro forma adjustments
and (v) in addition to the audit referred to in their opinions and the limited
procedures referred to in clause (iii) above, they have carried out certain
specified procedures with respect to certain amounts, percentages and financial
and statistical information which are included in the Offering Memorandum and
which are specified by you, and have found such amounts, percentages and
financial and statistical information to be in agreement with relevant
accounting, financial and other records of the Operating Partnership and its
Subsidiaries identified in such letter.
(h) On the Closing Date, you shall have received from Xxxxxx Xxxxxxxx LLP a
letter, dated as of the Closing Date, to the effect that they reaffirm the
statements made in the letter furnished pursuant to subsection (g) of this
Section 5, except that the specified date referred to shall be a date not more
than three business days prior to the applicable Closing Time.
(i) On the Closing Date, counsel for the Initial Purchasers shall have been
furnished with such documents and opinions as they may reasonably require for
the purpose of enabling them to pass upon the issuance and sale of the
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
conditions, herein contained; and all proceedings taken by the Operating
Partnership in connection with the issuance and sale of the Securities as herein
contemplated shall be satisfactory in form and substance to you and counsel for
the Initial Purchasers.
(j) On the Closing Date, the Securities shall be rated Baa3 by Xxxxx'x
Investor's Service Inc. and the Operating Partnership shall have delivered
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to the Initial Purchasers a letter dated the Closing Date from such rating
agency, or other evidence satisfactory to the Initial Purchasers, confirming
that the Securities have such ratings; and since the date of this Agreement,
there shall not have occurred a downgrading in the rating assigned to the
Securities by any "nationally recognized statistical rating agency" as that term
is defined by the Commission for purposes of Rule 436(g)(2) under the Securities
Act, and no such securities rating agency shall have publicly announced that it
has under surveillance or review, with possible negative implications, its
rating of the Securities.
(k) If any condition specified in this Section 5 shall not have been
fulfilled when and as required to be fulfilled, the Agreement may be terminated
by you by notice to the Operating Partnership at any time at or prior to the
Closing Date and such termination shall be without liability of any party to any
other party except that Section 4 shall survive any such termination and remain
in full force and effect.
SECTION 6. SUBSEQUENT OFFERS AND RESALES OF THE SECURITIES.
Each of the Initial Purchasers and the Operating Partnership hereby
establishes and agrees to observe the following procedures in connection with
the offer and sale by the Initial Purchasers of the Securities:
(a) Offers and sales of the Securities will be made by the Initial
Purchasers only (i) to institutional investors that are reasonably believed to
qualify as accredited investors (as defined in Rule 510(a) under the Securities
Act) (each such institutional investor being hereinafter referred to as an
"INSTITUTIONAL ACCREDITED INVESTOR") or, (ii) in the case of Securities resold
or otherwise transferred pursuant to Rule 144A, to institutional investors that
are reasonably believed to qualify as qualified institutional buyers as defined
in Rule 144A.
(b) Neither of the Initial Purchasers nor any affiliate thereof (as defined
in Rule 501(b) of Regulation D) may solicit any offer to buy or offer or sell
the Securities by means of any form of general solicitation or general
advertising (within the meaning of Regulation D).
(c) In the case of a non-bank purchaser of a Security acting as a fiduciary
for one or more third parties, in connection with an offer and sale to such
purchaser pursuant to clause (a) above, each third party shall, in the judgment
of the applicable Initial Purchaser, be an accredited institutional investor.
(d) No sale of the Securities to any one purchaser will be for less than
$100,000 principal amount, and no Security will be issued in a smaller principal
amount. If the purchaser is a non-bank fiduciary acting on behalf of
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others, each person for whom it is acting must purchase at least $100,000
principal amount of the Securities.
(e) The transfer restrictions and the other provisions set forth in the
Indenture, including the legend required thereby, shall apply to the Securities
except as otherwise agreed by the Operating Partnership and the Initial
Purchasers. Following the sale of the Securities by the Initial Purchasers to
subsequent purchasers pursuant to the terms hereof, the Initial Purchaser shall
not be liable or responsible to the Operating Partnership for any losses,
damages or liabilities suffered or incurred by the Operating Partnership,
including any losses, damages or liabilities under the Securities Act, arising
from or relating to any resale or transfer of any Security.
(f) Each Initial Purchaser will deliver to each purchaser of the Securities
from such Initial Purchaser, in connection with its original distribution of the
Securities, a copy of the Offering Memorandum as amended and supplemented at the
date of such delivery.
(g) In connection with its original distribution of the Securities, the
Operating Partnership agrees that, prior to any offer or resale of the
Securities by the Initial Purchasers, the Initial Purchasers and counsel for the
Initial Purchasers shall have the right to make reasonable due diligence
inquiries into the business of the Operating Partnership and its Subsidiaries.
The Operating Partnership also agrees to provide answers to each prospective
subsequent purchaser of Securities who so requests concerning the Operating
Partnership and its Subsidiaries (to the extent that such information is
available to prospective subsequent purchasers without unreasonable effort or
expense and to the extent the provision thereof is not prohibited by applicable
law) and the terms and conditions of the offering of the Securities, as provided
in the Offering Memorandum.
(h) Each Initial Purchaser will take reasonable steps to inform persons
acquiring Securities from such Initial Purchaser, as the case may be, in the
United States that the Securities (i) have not been and will not be registered
under the Securities Act, (ii) are being sold to them without registration under
the Securities Act in reliance on Rule 144A or in accordance with another
exemption from registration under the Securities Act, as the case may be, and
(iii) may not be offered, sold or otherwise transferred except (A) to the
Operating Partnership, (B) in accordance with (1) Rule 144A to a person whom the
seller reasonably believes is a QIB that is purchasing such Securities for its
own account or for the account of a QIB to whom notice is given that the offer,
sale or transfer is being made in reliance on Rule 144A or (2) pursuant to
another available exemption from registration under the Securities Act.
(i) Until the expiration of two years after the original issuance of the
Securities, the Operating Partnership will not, and will cause its Affiliates
not
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to purchase or agree to purchase or otherwise acquire any Securities which are
"restricted securities" (as such term is defined under Rule 144(a)(3) under the
Securities Act), whether as beneficial owner or otherwise (except as agent
acting as a securities broker on behalf of and for the account of customers in
the ordinary course of business in unsolicited broker's transactions) unless,
immediately upon any such purchase, the Operating Partnership or any affiliate
shall submit such Securities to the Trustee for cancellation.
SECTION 7. INDEMNIFICATION.
(a) The Operating Partnership agrees to indemnify and hold harmless each
Initial Purchaser and each person, if any, who controls any Initial Purchaser
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, and any director, officer, employee or affiliate thereof, 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 Offering Memorandum
(or any amendment thereto) 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;
(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 for which indemnification is provided under subsection (1)
above; provided that (subject to Section 7(d) below) any such settlement is
effected with the written consent of the Operating Partnership; and
(3) against any and all expense whatsoever (including, without
limitation, the fees and other charges of counsel chosen by the Initial
Purchasers), 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 for which indemnification is provided under subsection (i)
above, to the extent that any such expense is not paid under (i) or (ii)
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 Operating
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Partnership by any Initial Purchasers through you expressly for use in the
Offering Memorandum (or any amendment thereto).
(b) The Initial Purchasers agree to indemnify and hold harmless the
Operating Partnership, its directors, officers, employees and affiliates and
each person, if any, who controls the Operating Partnership within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act against
any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section 7, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in the Offering Memorandum (or any amendment thereto), in
reliance upon and in conformity with written information furnished to the
Operating Partnership by the Initial Purchasers expressly for use in the
Offering Memorandum (or any amendment thereto).
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
hereunder to the extent it is not materially prejudiced as a result thereof and
in any event shall not relieve it from any liability which it may have otherwise
than on account of this indemnity agreement. In the case of parties indemnified
pursuant to Section 7(a) above, counsel to the indemnified parties shall be
selected by the Initial Purchasers, and, in the case of parties indemnified
pursuant to Section 7(b) above, counsel to the indemnified parties shall be
selected by the Operating Partnership. 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 7 or Section 8 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.
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(d) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 7(a)(ii) effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
SECTION 8. CONTRIBUTION.
If the indemnification provided for in Section 7 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 Operating Partnership on the one hand, and the
Initial Purchasers, on the other hand, from the offering of the Securities
pursuant to this 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 Operating Partnership, on the one hand, and of the Initial
Purchasers, 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 Operating Partnership, on the one
hand, and the Initial Purchasers, on the other hand, in connection with the
offering of the Securities pursuant to this Agreement shall be deemed to be in
the same respective proportions as the total net proceeds from the offering of
such Securities (before deducting expenses) received by the Operating
Partnership, and the total discount received by the Initial Purchasers, in each
case as set forth on the cover of the Offering Memorandum.
The relative fault of the Operating Partnership, on the one hand, and the
Initial Purchasers, 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 Operating Partnership or by the Initial Purchasers
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
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The Operating Partnership and the Initial Purchasers agree that it would
not be just and equitable if contribution pursuant to this Section 8 were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to above in this
Section 8. The aggregate amount of losses, liabilities, claims, damages and
expenses incurred by an indemnified party and referred to above in this Section
8 shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 8, no Initial Purchaser
shall be required to contribute any amount in excess of the amount by which the
total price at which the Securities purchased by it were offered exceeds the
amount of any damages which such Initial Purchaser 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 Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 8, each person, if any, who controls an
Initial Purchaser within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act shall have the same rights to contribution as
such Initial Purchaser, and each person, if any, who controls the Operating
Partnership within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act shall have the same rights to contribution as the Operating
Partnership. The Initial Purchasers' respective obligations to contribute
pursuant to this Section 8 are several in proportion to the aggregate principal
amount of Securities set forth opposite their respective names in Schedule I
hereto and not joint.
SECTION 9. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY.
All representations, warranties and agreements contained in this Agreement
or in certificates of officers of CGP, Inc., as general partner of the Operating
Partnership or 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 the Initial Purchasers or any controlling
person, or by or on behalf of the Operating Partnership or any controlling
person, and shall survive delivery of and payment for the Securities.
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SECTION 10. TERMINATION OF AGREEMENT.
(a) The Initial Purchasers may terminate this Agreement, by notice to the
Operating Partnership, at any time at or prior to the Closing Time, (i) if there
has been, since the date of this Agreement or since the respective dates as of
which information is given in the Offering Memorandum, any material adverse
change in the condition, financial or otherwise, or in the earnings, assets,
business affairs or business prospects of the Operating Partnership, the
Subsidiaries and the Residential Development Corporations considered as one
enterprise, whether or not arising in the ordinary course of business, (ii) if
there has occurred any material adverse change in the financial markets in the
United States or any outbreak of hostilities or 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 Initial Purchasers
reasonable judgment, impracticable to market the Securities or enforce contracts
for the sale of the Securities, or (iii) if a banking moratorium has been
declared by either federal, New York or Texas authorities.
(b) If this Agreement is terminated pursuant to this Section 10, 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 4, 7, 8, 9, and
14 hereof shall survive such termination and remain in full force and effect.
SECTION 11. DEFAULT BY AN INITIAL PURCHASER.
If one or more of the Initial Purchasers shall fail at the Closing Date to
purchase the Securities which it or they are obligated to purchase under this
Agreement (the "DEFAULTED SECURITIES"), the non-defaulting Initial Purchaser
shall have the right, within 24 hours thereafter, to make arrangements for any
other Initial Purchasers 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, the non-defaulting Initial Purchaser 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
aggregate principal amount of the Securities to be purchased hereunder, the
non-defaulting Initial Purchaser shall be obligated, severally and not jointly,
to purchase the full amount thereof in the proportions that their respective
underwriting obligations hereunder bear to the underwriting obligations of all
non-defaulting Initial Purchasers, or
(b) If the number of Defaulted Securities exceeds 10% of the aggregate
principal amount of the Securities to be purchased hereunder, this Agreement
shall terminate without liability on the part of the non-defaulting Initial
Purchaser.
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No action taken pursuant to this Section 11 shall relieve the defaulting
Initial Purchaser from liability in respect to its default.
In the event of any such default which does not result in a termination of
this Agreement, either the non-defaulting Initial Purchasers or the Operating
Partnership shall have the right to postpone the Closing Date for a period not
exceeding seven days in order to effect any required changes in the Offering
Memorandum or in any other documents or arrangements. As used herein, the term
"Initial Purchaser" includes any person substituted for an Initial Purchaser
under this Section 11.
SECTION 12. NOTICES.
All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed or transmitted by any standard
form of telecommunication. Notices to the Initial Purchasers shall be directed
to Xxxxxxx Xxxxx at Xxxxxxx Xxxxx World Headquarters, World Financial Center,
North Tower, New York, New York 10281- 1201, attention of Xxxxxxx X. Xxxxxxxxx,
Managing Director, and notices to the Operating Partnership shall be directed to
000 Xxxx Xxxxxx, Xxxxx 0000, Xxxx Xxxxx, XX 00000 attention of Xxxxxx X.
Xxxxxxx, Chief Executive Officer of CGP, Inc.
SECTION 13. PARTIES.
This Agreement shall each inure to the benefit of and be binding upon you
and the Operating Partnership, and your respective successors. Nothing expressed
or mentioned in this Agreement is intended or shall be construed to give any
person, firm or corporation, other than the Initial Purchasers and the Operating
Partnership and their respective successors and the controlling persons and
officers and directors referred to in Sections 7 and 8 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the parties 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 Securities from the Initial Purchasers shall be deemed to be a
successor by reason merely of such purchase.
SECTION 14. GOVERNING LAW AND TIME.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY
TIME.
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SECTION 15. COUNTERPARTS.
This Agreement may be executed in one or more counterparts, and if executed
in more than one counterpart the executed counterparts shall contribute a single
instrument.
SECTION 16. EFFECT OF HEADINGS.
The Article and Section headings herein are for convenience only and shall
not affect the construction hereof.
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Operating Partnership a counterpart hereof,
whereupon this Agreement, along with all counterparts, will become a binding
agreement between you and the Operating Partnership in accordance with its
terms.
Very truly yours,
CRESCENT REAL ESTATE EQUITIES
LIMITED PARTNERSHIP
By: CRESCENT REAL ESTATE EQUITIES LTD.,
its general partner
By:
---------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED
as of the date first
above written:
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
By:
-----------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Director
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