S&C Draft of October 9, 1996
SECURITY CAPITAL ATLANTIC INCORPORATED
____________
COMMON STOCK
(PAR VALUE $0.01 PER SHARE)
UNDERWRITING AGREEMENT
October 14, 1996
Xxxxxxx, Xxxxx & Co.,
Xxxx Xxxxxx Xxxxxxxx Inc.,
X.X. Xxxxxx Securities Inc.,
Prudential Securities Incorporated,
As representatives of the several Underwriters
named in Schedule I hereto,
c/o Goldman, Sachs & Co.,
00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000.
Dear Sirs:
Security Capital Atlantic Incorporated, a corporation organized under the
laws of the State of Maryland (the "Company"), proposes, subject to the terms
and conditions stated herein, to issue and sell to the Underwriters named in
Schedule I hereto (the "Underwriters") an aggregate of 3,933,334 Shares (the
"Firm Shares") of common stock, par value $0.01 per share, of the Company (the
"Common Stock") and, at the election of the Underwriters, up to 590,000
additional Shares of Common Stock (the "Optional Shares") (the Firm Shares and
the Optional Shares which the Underwriters elect to purchase pursuant to Section
2 hereof being collectively called the "Shares").
It is understood and agreed to by all parties that Security Capital Group
Incorporated ("Security Capital Group") has agreed to purchase 416,666 Shares of
Common Stock (the "Security Capital Group Shares") at the initial public
offering price specified in the Atlantic Prospectus (as defined herein) directly
from the Company concurrently with the offering contemplated by this Agreement
pursuant to a Purchase Agreement, dated the date hereof, between the Company and
Security Capital Group (the "Security Capital Group Agreement").
It is further understood and agreed that, following the issuance and sale
of the Shares pursuant hereto, the Company intends to pay a dividend of shares
of common stock, par value $0.01 per share (the "Homestead Common Stock"), of
Homestead Village Incorporated ("Homestead"), a corporation organized under the
laws of the State of Maryland, and warrants (the "Homestead Warrants" and,
collectively with the Homestead Common Stock, the
"Homestead Securities") to purchase shares of Homestead Common Stock to holders
of the Common Stock, including the Shares, on the record date which will be set
by the Company for such dividend.
1. (A) The Company represents and warrants to, and agrees with, each of
the Underwriters that:
(a) A registration statement on Form S-11 (File No. 333-07071) (the
"Initial Registration Statement") in respect of the Shares and Security
Capital Group Shares has been filed with the Securities and Exchange
Commission (the "Commission"); the Initial Registration Statement and any
post-effective amendments thereto, each in the form heretofore delivered to
you and, excluding exhibits thereto, to you for each of the other
Underwriters, have been declared effective by the Commission in such form;
no other document (other than a registration statement, if any, increasing
the size of the offering (a "Rule 462(b) Registration Statement"), filed
pursuant to Rule 462(b) under the Securities Act of 1933, as amended (the
"Act"), which became effective upon filing) with respect to the offering of
Shares pursuant to the Initial Registration Statement has heretofore been
filed with the Commission; and no stop order suspending the effectiveness
of the Initial Registration Statement or the Rule 462(b) Registration
Statement has been issued and no proceeding for that purpose has been
initiated or threatened by the Commission (any preliminary prospectus
included in the Initial Registration Statement (an "Atlantic Preliminary
Prospectus") or the Homestead Registration Statement (as defined below) (a
"Homestead Preliminary Prospectus") or filed with the Commission pursuant
to Rule 424(a) of the rules and regulations of the Commission under the
Act, is hereinafter called a "Preliminary Prospectus"; the various parts of
the Initial Registration Statement and the Homestead Registration
Statement, including all exhibits thereto and including the information
contained in the form of final prospectus filed with the Commission
pursuant to Rule 424(b) under the Act in accordance with Section 5(A)(a) or
5(B)(a) hereof and deemed by virtue of Rule 430A under the Act to be part
of the Initial Registration Statement or the Homestead Registration
Statement, as the case may be, at the time it was declared effective or
such part of any Rule 462(b) Registration Statement that became or
hereafter becomes effective, each as amended at the time such part of a
registration statement became effective, is hereinafter collectively called
a "Registration Statement"; and each such final prospectus (the "Atlantic
Prospectus" and the "Homestead Prospectus", respectively), in the form
first filed pursuant to Rule 424(b) under the Act, is hereinafter called a
"Prospectus";
(b) No order preventing or suspending the use of any Atlantic
Preliminary Prospectus has been issued by the Commission, and each Atlantic
Preliminary Prospectus, at the time of filing thereof, conformed in all
material respects to the requirements of the Act and the rules and
regulations of the Commission thereunder, and did not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter through
Xxxxxxx, Xxxxx & Co. expressly for use therein;
(c) The Initial Registration Statement and any Rule 462(b)
Registration Statement conform, and the Atlantic Prospectus and any further
amendments or
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supplements to the Initial Registration Statement and any Rule 462(b)
Registration Statement and the Atlantic Prospectus will conform, in all
material respects to the requirements of the Act and the rules and
regulations of the Commission thereunder and do not and will not, as of the
applicable effective date as to the Initial Registration Statement and any
Rule 462(b) Registration Statement and any amendment thereto, and as of the
applicable filing date as to the Atlantic Prospectus and any amendment or
supplement thereto, contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make
the statements therein not misleading; provided, however, that this
representation and warranty shall not apply to any statements or omissions
made in reliance upon and in conformity with information furnished in
writing to the Company by an Underwriter through Xxxxxxx, Sachs & Co.
expressly for use therein;
(d) Neither the Company nor any of its subsidiaries has sustained
since the date of the latest audited financial statements included in the
Atlantic Prospectus any material loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action, order
or decree, otherwise than as set forth or contemplated in the Atlantic
Prospectus; and, since the respective dates as of which information is
given in the Initial Registration Statement and any Rule 462(b)
Registration Statement and the Atlantic Prospectus, there has not been any
change in the capital stock or long-term debt of the Company or any of its
subsidiaries or any material adverse change, or any development involving a
prospective material adverse change, in or affecting the general affairs,
management, financial position, shareholders' equity or results of
operations of the Company and its subsidiaries taken as a whole, otherwise
than as set forth or contemplated in the Atlantic Prospectus (as used
herein, "subsidiaries" shall include any entities in which the Company or
Homestead (as the case may be) owns, directly or indirectly, any
controlling or general partnership interest or a majority of the economic
interest);
(e) The Company and its subsidiaries have good and marketable title
in fee simple to all real property described in the Atlantic Prospectus as
owned by them, and good and marketable title to all personal property
(including interests in partnerships or other entities) owned by them, in
each case free and clear of all liens, encumbrances and defects except such
as are described in the Atlantic Prospectus or such as do not materially
affect the value of such property and do not interfere with the use made
and proposed to be made of such property by the Company and its
subsidiaries; and any real property and buildings held under lease by the
Company and its subsidiaries and described in the Atlantic Prospectus are
held by them under valid, subsisting and enforceable leases with such
exceptions as are not material and do not interfere with the use made and
proposed to be made of such property and buildings by the Company and its
subsidiaries;
(f) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Maryland,
with power and authority (corporate and other) to own its properties and
conduct its business as described in the Atlantic Prospectus, and has been
duly qualified for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties, or conducts any business, so as to require such qualification,
or is subject to no material liability or disability by reason of the
failure to be so qualified in any such jurisdiction; and each subsidiary of
the Company has been duly organized and is validly existing, with respect
to subsidiaries that are corporations
-3-
or limited partnerships, in good standing under the laws of its
jurisdiction of organization;
(g) The Company has an authorized capitalization as set forth in the
Atlantic Prospectus, and all of the issued Common Stock of the Company has
been duly and validly authorized and issued, is fully paid and
nonassessable and conforms to the description of the Common Stock contained
in the Atlantic Prospectus; and all of the issued shares of capital stock
of each subsidiary of the Company have been duly and validly authorized and
issued, are fully paid and, with respect to subsidiaries that are
corporations, nonassessable and (except for directors' qualifying shares
and except as set forth in the Atlantic Prospectus) are owned directly or
indirectly by the Company, free and clear of all liens, encumbrances,
equities or claims;
(h) The unissued Shares to be issued and sold by the Company to the
Underwriters hereunder and to Security Capital Group under the Security
Capital Group Agreement have been duly and validly authorized and, when
issued and delivered against payment therefor as provided herein and
therein, will be duly and validly issued and fully paid and nonassessable
and will conform to the descriptions thereof contained in the Atlantic
Prospectus;
(i) The issue and sale of the Shares and the Security Capital Group
Shares by the Company, the distribution by the Company to its shareholders
of the Homestead Securities as contemplated in the Atlantic Prospectus and
the compliance by the Company with all of the provisions of this Agreement,
the Security Capital Group Agreement and the Merger Agreement (as defined
in the Atlantic Prospectus) and the consummation of the transactions herein
and therein contemplated will not (i) conflict with or result in a breach
or violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or any of its subsidiaries is
a party or by which the Company or any of its subsidiaries is bound or to
which any of the property or assets of the Company or any of its
subsidiaries is subject, other than such breaches or violations which, if
determined adversely to the Company or any of its subsidiaries, would not
individually or in the aggregate have a material adverse effect on the
current or future consolidated financial position, shareholders' equity or
results of operations of the Company and its subsidiaries taken as a whole,
(ii) result in any violation of the provisions of the Charter of the
Company (the "Charter") or Bylaws of the Company, or (iii) result in any
violation of any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of
its subsidiaries or any of their properties, other than violations which,
if determined adversely to the Company or any of its subsidiaries would not
individually or in the aggregate have a material adverse effect on the
current or future consolidated financial position, shareholders' equity or
results of operations of the Company and its subsidiaries taken as a whole;
no consent, approval, authorization, order, registration or qualification
of or with any such court or governmental agency or body is required for
the consummation by the Company of the transactions contemplated by the
Merger Agreement, except the filing and acceptance of the Articles of
Merger relating to the Merger Agreement and except for any consent,
approval, authorization, order, registration or qualification that if not
obtained would not individually or in the aggregate have a material adverse
effect on the current or future consolidated financial position,
shareholders' equity or results of operations of the Company and its
subsidiaries taken as a whole; and no consent, approval, authorization,
order, registration or qualification of or with any such court or
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governmental agency or body is required for the issue and sale of the
Shares or the consummation by the Company of the transactions contemplated
by this Agreement and the Security Capital Group Agreement, except (A) the
registration under the Act of the Shares, the Security Capital Group Shares
and the Homestead Securities, (B) such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities
or Blue Sky laws in connection with the purchase and distribution of the
Shares by the Underwriters and the distribution of the Homestead
Securities, and (C) such additional steps as may be required by the
National Association of Securities Dealers, Inc. (the "NASD");
(j) Neither the Company nor any of its subsidiaries is in violation
of its declaration of trust, charter, certificate or articles of
incorporation, partnership agreement or bylaws, as applicable, or in
default in the performance or observance of any material obligation,
covenant or condition contained in any indenture, mortgage, deed of trust,
loan agreement, lease or any other agreement or instrument to which it is a
party or by which it or its properties may be bound;
(k) The statements set forth in the Atlantic Prospectus under the
caption "Description of Capital Stock", insofar as they purport to
constitute a summary of the terms of the Common Stock, and under the
caption "Federal Income Tax Considerations", insofar as they purport to
describe factual matters and the provisions of the laws and the documents
referred to therein are accurate and complete in all material respects;
(l) Other than as set forth in the Atlantic Prospectus, there are no
legal or governmental proceedings pending to which the Company or any of
its subsidiaries is a party or of which any property of the Company or any
of its subsidiaries is the subject which, if determined adversely to the
Company or any of its subsidiaries would individually or in the aggregate
have a material adverse effect on the current or future consolidated
financial position, shareholders' equity or results of operations of the
Company and its subsidiaries taken as a whole; and, to the best of the
Company's knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(m) Ernst & Young LLP, who have certified the financial statements
filed with the Commission as part of the Initial Registration Statement and
any Rule 462(b) Registration Statement and the Atlantic Prospectus, are
independent public accountants with respect to the Company and its
subsidiaries as required by the Act and the rules and regulations of the
Commission thereunder;
(n) With respect to its taxable year ending December 31, 1995, the
Company has met the requirements for qualification as a real estate
investment trust under Sections 856 through 860 of the Internal Revenue
Code, as amended, and the Company's present and contemplated organization,
ownership, operations, assets and income will enable the Company to
continue to meet such requirements; and the Company is not an open-end
investment company, unit investment trust, closed-end investment company or
face-amount certificate company that is or is required to be registered
under Section 8 of the Investment Company Act of 1940, as amended (the
"Investment Company Act");
(o) The Company has no knowledge of (a) the presence of any hazardous
substances, hazardous materials, toxic substances or waste materials
(collectively,
-5-
"Hazardous Materials") on any of the properties owned by it in violation of
law or in excess of regulatory action levels, or (b) any unlawful spills,
releases, discharges or disposal of Hazardous Materials that have occurred
or are presently occurring on or off such properties as a result of any
construction on or operation and use of such properties, which presence or
occurrence would materially adversely affect the condition, financial or
otherwise, or the earnings, business affairs or business prospects of the
Company. In connection with the construction on or operation and use of the
properties owned by the Company, the Company represents that, as of the
date of this Agreement, it has no knowledge of any material failure to
comply with all applicable local, state and federal environmental laws,
regulations, agency requirements, ordinances and administrative and
judicial orders;
(p) The REIT management agreement (the "REIT Management Agreement")
described in the Atlantic Prospectus has been duly authorized, executed and
delivered by the Company and Security Capital (Atlantic) Incorporated (the
"REIT Manager") and constitutes a legal, valid and binding agreement
enforceable in accordance with its terms, subject as to enforcement to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors'
rights and the effect of general principles of equity, whether enforcement
is considered in a proceeding in equity or at law, and the discretion of
the court before which any proceeding therefor may be brought and, with
respect to indemnification obligations thereunder, to federal and state
securities laws; and the execution and delivery of such agreement and the
performance thereof by the Company and the REIT Manager are within the
power and authority of the Company and the REIT Manager, do not violate any
provision of or constitute a default under any agreement or instrument to
which the Company or the REIT Manager is a party or by which the Company or
the REIT Manager is bound, and do not require the consent, approval,
authorization or order of any court or governmental agency or body; and
(q) The Merger Agreement has been duly authorized, executed and
delivered by the Company and constitutes a legal, valid and binding
agreement enforceable in accordance with its terms, subject as to
enforcement to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and the effect of general principles of equity,
whether enforcement is considered in a proceeding in equity or at law, and
the discretion of the court before which any proceeding therefor may be
brought and, with respect to indemnification obligations thereunder, to
federal and state securities laws; and the execution and delivery of such
agreement and the performance thereof by the Company are within the power
and authority of the Company, do not violate any provision of or constitute
a default under any agreement or instrument to which the Company is a party
or by which the Company is bound, and do not require the consent, approval,
authorization or order of any court or governmental agency or body.
(B) The Company and Homestead each represents and warrants to, and agrees
with, each of the Underwriters that:
(a) A registration statement on Form S-1 (File No. 333-04455) (the
"Homestead Registration Statement") in respect of the Homestead Securities
has been filed with the Commission; the Homestead Registration Statement
and any post-effective amendments thereto, each in the form heretofore
delivered to you and, excluding exhibits thereto, to you for each of the
other Underwriters, have been declared effective by the Commission in such
form; no other document with respect to the
-6-
offering of the Homestead Securities pursuant to the Homestead Registration
Statement has heretofore been filed with the Commission; and no stop order
suspending the effectiveness of the Homestead Registration Statement has
been issued and no proceeding for that purpose has been initiated or
threatened by the Commission;
(b) No order preventing or suspending the use of any Homestead
Preliminary Prospectus has been issued by the Commission, and each
Homestead Preliminary Prospectus, at the time of filing thereof, conformed
in all material respects to the requirements of the Act and the rules and
regulations of the Commission thereunder, and did not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter through
Xxxxxxx, Xxxxx & Co. expressly for use therein;
(c) The Homestead Registration Statement conforms, and the Homestead
Prospectus and any further amendments or supplements to the Homestead
Registration Statement and the Homestead Prospectus will conform, in all
material respects to the requirements of the Act and the rules and
regulations of the Commission thereunder and do not and will not, as of the
applicable effective date as to the Homestead Registration Statement and
any amendment thereto, and as of the applicable filing date as to the
Homestead Prospectus and any amendment or supplement thereto, contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter through Xxxxxxx, Sachs & Co. expressly for use therein;
(d) Neither Homestead nor any of its subsidiaries has sustained since
the date of the latest audited financial statements included in the
Homestead Prospectus any material loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action, order
or decree, otherwise than as set forth or contemplated in the Homestead
Prospectus; and, since the respective dates as of which information is
given in the Homestead Registration Statement and the Homestead Prospectus,
there has not been any change in the capital stock or long-term debt of
Homestead or any of its subsidiaries or any material adverse change, or any
development involving a prospective material adverse change, in or
affecting the general affairs, management, financial position,
shareholders' equity or results of operations of Homestead and its
subsidiaries taken as a whole, otherwise than as set forth or contemplated
in the Homestead Prospectus;
(e) Homestead and its subsidiaries have good and marketable title in
fee simple to all real property described in the Homestead Prospectus as
owned by them, and good and marketable title to all personal property
(including interests in partnerships or other entities) owned by them, in
each case free and clear of all liens, encumbrances and defects except such
as are described in the Homestead Prospectus or such as do not materially
affect the value of such property and do not interfere with the use made
-7-
and proposed to be made of such property by Homestead and its subsidiaries;
and any real property and buildings held under lease by Homestead and its
subsidiaries and described in the Homestead Prospectus are held by them
under valid, subsisting and enforceable leases with such exceptions as are
not material and do not interfere with the use made and proposed to be made
of such property and buildings by Homestead and its subsidiaries;
(f) Homestead has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Maryland, with
power and authority (corporate and other) to own its properties and conduct
its business as described in the Homestead Prospectus, and has been duly
qualified for the transaction of business and is in good standing under the
laws of each other jurisdiction in which it owns or leases properties, or
conducts any business, so as to require such qualification, or is subject
to no material liability or disability by reason of the failure to be so
qualified in any such jurisdiction; and each subsidiary of Homestead has
been duly organized and is validly existing, with respect to subsidiaries
that are corporations or limited partnerships, in good standing under the
laws of its jurisdiction of organization;
(g) Homestead has an authorized capitalization as set forth in the
Homestead Prospectus, and all of the issued Homestead Securities have been
duly and validly authorized and issued, are fully paid and nonassessable
and conform to the description of the Homestead Securities contained in the
Homestead Prospectus; and all of the issued shares of capital stock of each
subsidiary of Homestead have been duly and validly authorized and issued,
are fully paid and, with respect to subsidiaries that are corporations,
nonassessable and (except for directors' qualifying shares and except as
set forth in the Homestead Prospectus) are owned directly or indirectly by
Homestead, free and clear of all liens, encumbrances, equities or claims;
(h) The unissued Homestead Securities to be issued to the Company in
the Homestead Transaction (as defined in the Atlantic Prospectus) have been
duly and validly authorized and, when issued and delivered as provided in
the Merger Agreement, will be duly and validly issued and fully paid and
nonassessable and will conform to the description thereof contained in the
Homestead Prospectus;
(i) The issue of the Homestead Securities by Homestead to the Company
in the Homestead Transaction and the compliance by Homestead with all of
the provisions of this Agreement and the Merger Agreement and the
consummation of the transactions herein and therein contemplated will not
(i) conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument to which
Homestead or any of its subsidiaries is a party or by which Homestead or
any of its subsidiaries is bound or to which any of the property or assets
of Homestead or any of its subsidiaries is subject, other than such
breaches or violations which, if determined adversely to Homestead or any
of its subsidiaries would not individually or in the aggregate have a
material adverse effect on the current or future consolidated financial
position, shareholders' equity or results of operations of Homestead and
its subsidiaries taken as a whole, (ii) result in any violation of the
provisions of the Charter of Homestead (the "Homestead Charter") or Bylaws
of Homestead, or (iii) result in any violation of any statute or any order,
rule or regulation of any court or governmental agency or body having
jurisdiction over Homestead or any of its subsidiaries or any of their
properties, other than such violations which, if determined adversely to
-8-
Homestead or any of its subsidiaries would not individually or in the
aggregate have a material adverse effect on the current or future
consolidated financial position, shareholders' equity or results of
operations of Homestead and its subsidiaries taken as a whole; and no
consent, approval, authorization, order, registration or qualification of
or with any such court or governmental agency or body is required for the
consummation by Homestead of the transactions contemplated by the Merger
Agreement, except the filing and acceptance of Articles of Merger relating
to the Merger Agreement and except for any consent, approval,
authorization, order, registration or qualification that if not obtained
would not individually or in the aggregate have a material adverse effect
on the current or future consolidated financial position, shareholders'
equity or results of operations of Homestead and its subsidiaries taken as
a whole; and no consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the issue of the Homestead Securities or the consummation by
Homestead of the transactions contemplated by this Agreement, except (A)
the registration under the Act of the Homestead Securities, (B) such
consents, approvals, authorizations, registrations or qualifications as may
be required under state securities or Blue Sky laws in connection with the
issuance of the Homestead Securities, and (C) such additional steps as may
be required by the NASD;
(j) Neither Homestead nor any of its subsidiaries is in violation of
its declaration of trust, charter, certificate or articles of
incorporation, partnership agreement or bylaws, as applicable, or in
default in the performance or observance of any material obligation,
covenant or condition contained in any indenture, mortgage, deed of trust,
loan agreement, lease or any other agreement or instrument to which it is a
party or by which it or its properties may be bound;
(k) The statements set forth in the Homestead Prospectus under the
caption "Description of Capital Stock", insofar as they purport to
constitute a summary of the terms of the Homestead Securities, and under
the caption "Federal Income Tax Considerations", insofar as they purport to
describe factual matters and the provisions of the laws and the documents
referred to therein are accurate and complete in all material respects;
(l) Other than as set forth in the Homestead Prospectus, there are no
legal or governmental proceedings pending to which Homestead or any of its
subsidiaries is a party or of which any property of Homestead or any of its
subsidiaries is the subject which, if determined adversely to Homestead or
any of its subsidiaries would individually or in the aggregate have a
material adverse effect on the current or future consolidated financial
position, shareholders' equity or results of operations of Homestead and
its subsidiaries taken as a whole; and, to the best of Homestead's
knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(m) Ernst & Young LLP, who have certified the financial statements
filed with the Commission as part of the Homestead Registration Statement
and the Homestead Prospectus, are independent public accountants with
respect to Homestead and its subsidiaries as required by the Act and the
rules and regulations of the Commission thereunder;
(n) Homestead has no knowledge of (a) the presence of any hazardous
substances, hazardous materials, toxic substances or waste materials
(collectively,
-9-
"Hazardous Materials") on any of the properties owned by it in violation of
law or in excess of regulatory action levels, or (b) any unlawful spills,
releases, discharges or disposal of Hazardous Materials that have occurred
or are presently occurring on or off such properties as a result of any
construction on or operation and use of such properties, which presence or
occurrence would materially adversely affect the condition, financial or
otherwise, or the earnings, business affairs or business prospects of
Homestead. In connection with the construction on or operation and use of
the properties owned by Homestead, Homestead represents that, as of the
date of this Agreement, it has no knowledge of any material failure to
comply with all applicable local, state and federal environmental laws,
regulations, agency requirements, ordinances and administrative and
judicial orders; and
(o) The Merger Agreement has been duly authorized, executed and
delivered by Homestead and constitutes a legal, valid and binding agreement
enforceable in accordance with its terms, subject as to enforcement to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors'
rights and the effect of general principles of equity, whether enforcement
is considered in a proceeding in equity or at law, and the discretion of
the court before which any proceeding therefor may be brought and, with
respect to indemnification obligations thereunder, to federal and state
securities laws; and the execution and delivery of such agreement and the
performance thereof by Homestead are within the power and authority of
Homestead, do not violate any provision of or constitute a default under
any agreement or instrument to which Homestead is a party or by which
Homestead is bound, and do not require the consent, approval, authorization
or order of any court or governmental agency or body.
2. Subject to the terms and conditions herein set forth, (a) the Company
agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company, at
a purchase price per Share of $_____, the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule I hereto and (b) in the event
and to the extent that the Underwriters shall exercise the election to purchase
Optional Shares as provided below, the Company agrees to issue and sell to each
of the Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase from the Company, at the purchase price per Share set forth
in clause (a) of this Section 2, that portion of the number of Optional Shares
as to which such election shall have been exercised (to be adjusted by you so as
to eliminate fractional Shares) determined by multiplying such number of
Optional Shares by a fraction, the numerator of which is the maximum number of
Optional Shares which such Underwriter is entitled to purchase as set forth
opposite the name of such Underwriter in Schedule I hereto and the denominator
of which is the maximum number of Optional Shares that all of the Underwriters
are entitled to purchase hereunder.
The Company hereby grants to the Underwriters the right to purchase at
their election up to 590,000 Optional Shares, at the purchase price per Share
set forth in the immediately preceding paragraph, for the sole purpose of
covering overallotments in the sale of the Firm Shares. Any such election to
purchase Optional Shares may be exercised only by written notice from you to the
Company, given within a period of 30 calendar days after the date of this
Agreement, setting forth the aggregate number of Optional Shares to be purchased
and the date on which such Optional Shares are to be delivered, as determined by
you but in no event earlier than the First Time of Delivery (as defined in
Section 4 hereof) or, unless you and the Company otherwise agree in writing,
earlier than two or later than ten business days after the date of such notice.
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3. Upon the authorization by you of the release of the Firm Shares, the
several Underwriters propose to offer the Firm Shares for sale upon the terms
and conditions set forth in the Atlantic Prospectus.
4. (a) The Shares to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in such
names as Xxxxxxx, Xxxxx & Co. may request upon at least forty-eight hours' prior
notice to the Company shall be delivered by or on behalf of the Company to
Xxxxxxx, Sachs & Co., for the account of such Underwriter, against payment by or
on behalf of such Underwriter of the purchase price therefor by wire transfer of
immediately available funds. The Company will cause the certificates
representing the Shares to be made available for checking and packaging at least
twenty-four hours prior to the Time of Delivery (as defined below) with respect
thereto at the office of Xxxxxxx, Xxxxx & Co., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 (the "Designated Office"). The time and date of such delivery and
payment shall be, with respect to the Firm Shares, 9:30 a.m., New York City
time, on October 18, 1996, or such other time and date as Xxxxxxx, Sachs & Co.
and the Company may agree upon in writing, and, with respect to the Optional
Shares, 9:30 a.m., New York City time, on the date specified by Xxxxxxx, Xxxxx &
Co. in the written notice given by Xxxxxxx, Sachs & Co. of the Underwriters'
election to purchase such Optional Shares, or such other time and date as
Xxxxxxx, Xxxxx & Co. and the Company may agree upon in writing. Such time and
date for delivery of the Firm Shares is herein called the "First Time of
Delivery," such time and date for delivery of the Optional Shares, if not the
First Time of Delivery, is herein called the "Second Time of Delivery," and each
such time and date for delivery is herein called a "Time of Delivery."
(b) The documents to be delivered at each Time of Delivery by or on behalf
of the parties hereto pursuant to Section 7 hereof, including the cross receipt
for the Shares and any additional documents requested by the Underwriters
pursuant to Section 7(i) hereof, will be delivered at the offices of Xxxxxxxx &
Xxxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Closing Location"),
and the Shares will be delivered at the Designated Office, all at such Time of
Delivery. A meeting will be held at the Closing Location at 2:00 p.m., New York
City time, on the New York Business Day next preceding such Time of Delivery, at
which meeting the final drafts of the documents to be delivered pursuant to the
preceding sentence will be available for review by the parties hereto. For the
purposes of this Section 4, "New York Business Day" shall mean each Monday,
Tuesday, Wednesday, Thursday and Friday which is not a day on which banking
institutions in New York are generally authorized or obligated by law or
executive order to close.
5. (A) The Company agrees with each of the Underwriters:
(a) To prepare the Atlantic Prospectus in a form approved by you and
to file such Prospectus pursuant to Rule 424(b) under the Act not later
than the Commission's close of business on the second business day
following the execution and delivery of this Agreement, or, if applicable,
such earlier time as may be required by Rule 430A(a)(3) under the Act; to
make no further amendment or any supplement to the Initial Registration
Statement or any Rule 462(b) Registration Statement or the Atlantic
Prospectus prior to the last Time of Delivery which shall be reasonably
disapproved by you promptly after reasonable notice thereof; to advise you,
promptly after it receives notice thereof, of the time when any amendment
to the Initial Registration Statement or any Rule 462(b) Registration
Statement has been filed or becomes effective or any supplement to the
Atlantic Prospectus or any amended Atlantic Prospectus has been filed and
to furnish you with copies thereof; to advise you, promptly after it
receives notice thereof, of the issuance by the Commission of any
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stop order or of any order preventing or suspending the use of any Atlantic
Preliminary Prospectus or the Atlantic Prospectus, of the suspension of the
qualification of the Shares for offering or sale in any jurisdiction, of
the initiation or threatening of any proceeding for any such purpose, or of
any request by the Commission for the amending or supplementing of the
Initial Registration Statement or any Rule 462(b) Registration Statement or
the Atlantic Prospectus or for additional information; and, in the event of
the issuance of any stop order or of any order preventing or suspending the
use of any Atlantic Preliminary Prospectus or the Atlantic Prospectus or
suspending any such qualification, promptly to use its best efforts to
obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Shares for offering and sale under the
securities laws of such jurisdictions as you may request and to comply with
such laws so as to permit the continuance of sales and dealings therein in
such jurisdictions for as long as may be necessary to complete the
distribution of the Shares, provided that in connection therewith the
Company shall not be required to qualify as a foreign corporation or to
file a general consent to service of process in any jurisdiction;
(c) To furnish the Underwriters with copies of the Atlantic
Prospectus in New York City in such quantities as you may from time to time
reasonably request, and, if the delivery of a prospectus is required at any
time prior to the expiration of nine months after the time of issue of the
Atlantic Prospectus in connection with the offering or sale of the Shares
and if at such time any event shall have occurred as a result of which such
Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances
under which they were made when such Prospectus is delivered, not
misleading, or, if for any other reason it shall be necessary during such
period to amend or supplement the Atlantic Prospectus in order to comply
with the Act, to notify you and upon your request to prepare and furnish
without charge to each Underwriter and to any dealer in securities as many
copies as you may from time to time reasonably request of an amended
Prospectus or a supplement to such Prospectus which will correct such
statement or omission or effect such compliance, and in case any
Underwriter is required to deliver a prospectus in connection with sales of
any of the Shares at any time nine months or more after the time of issue
of the Atlantic Prospectus, upon your request but at the expense of such
Underwriter, to prepare and deliver to such Underwriter as many copies as
you may reasonably request of an amended or supplemented Prospectus
complying with Section 10(a)(3) of the Act;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)
under the Act), an earning statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Act and the
rules and regulations thereunder (including at the option of the Company
Rule 158);
(e) During the period beginning from the date hereof and continuing
to and including the date 90 days after the last Time of Delivery, (i) not
to offer, sell, contract to sell or otherwise dispose of any securities of
the Company (other than pursuant to employee or director stock option plans
existing, or on the conversion or exchange of convertible or exchangeable
securities outstanding, on the date of the Atlantic
-12-
Prospectus and except pursuant to rights offerings to existing shareholders
(which may include sales of unsubscribed and additional shares of Common
Stock to third parties) and except for the issuance of limited partnership
interests (which partnership interests may be exchangeable for shares of
Common Stock after such 90-day period)) which are substantially similar to
the Shares, without the prior written consent of Xxxxxxx, Sachs & Co. and
(ii) to obtain prior to the Time of Delivery substantially similar written
agreements from Security Capital Group Incorporated and each senior officer
and director of the Company who owns shares of Common Stock;
(f) To furnish to its shareholders as soon as practicable after the
end of each fiscal year an annual report (including a balance sheet and
statements of income, shareholders' equity and cash flows of the Company
and its consolidated subsidiaries certified by independent public
accountants) and, as soon as practicable after the end of each of the first
three quarters of each fiscal year (beginning with the fiscal quarter
ending after the effective date of the Initial Registration Statement),
consolidated summary financial information of the Company and its
subsidiaries for such quarter in reasonable detail;
(g) During a period of five years from the effective date of the
Initial Registration Statement, to furnish to you copies of all reports or
other communications (financial or other) furnished to shareholders, and
deliver to you (i) as soon as they are available, copies of any reports and
financial statements furnished to or filed with the Commission or any
national securities exchange on which any class of securities of the
Company is listed; and (ii) such additional information concerning the
business and financial condition of the Company as you may from time to
time reasonably request (such financial statements to be on a consolidated
basis to the extent the accounts of the Company and its subsidiaries are
consolidated in reports furnished to its shareholders generally or to the
Commission);
(h) To use the net proceeds received by it from the sale of the
Shares pursuant to this Agreement in the manner specified in the Atlantic
Prospectus under the caption "Use of Proceeds";
(i) To use its best efforts to list, subject to notice of issuance,
the Shares on the New York Stock Exchange;
(j) To continue to elect to qualify as a "real estate investment
trust" under the Internal Revenue Code of 1986, as amended, and to use its
best efforts to continue to meet the requirements to qualify as a "real
estate investment trust";
(k) Not to be or become, at any time prior to the expiration of three
years after the last Time of Delivery, an open-end investment trust, unit
investment trust, closed-end investment company or face-amount certificate
company that is or is required to be registered under Section 8 of the
Investment Company Act; and
(l) If the Company elects to rely upon Rule 462(b), the Company shall
file a Rule 462(b) Registration Statement with the Commission in compliance
with Rule 462(b) by 10:00 P.M., Washington, D.C. time, on the date of this
Agreement, and the Company shall at the time of filing either pay to the
Commission the filing fee for the Rule 462(b) Registration Statement or
give irrevocable instructions for the payment of such fee pursuant to Rule
111(b) under the Act.
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(B) The Company and Homestead agree with each of the Underwriters:
(a) To prepare the Homestead Prospectus in a form approved by you and
to file such Prospectus pursuant to Rule 424(b) under the Act not later
than the Commission's close of business on the second business day
following the execution and delivery of this Agreement, or, if applicable,
such earlier time as may be required by Rule 430A(a)(3) under the Act; to
make no further amendment or any supplement to the Homestead Registration
Statement or the Homestead Prospectus prior to the last Time of Delivery
which shall be reasonably disapproved by you promptly after reasonable
notice thereof; to advise you, promptly after it receives notice thereof,
of the time when any amendment to the Homestead Registration Statement has
been filed or becomes effective or any supplement to the Homestead
Prospectus or any amended Homestead Prospectus has been filed and to
furnish you with copies thereof; to advise you, promptly after it receives
notice thereof, of the issuance by the Commission of any stop order or of
any order preventing or suspending the use of any Homestead Preliminary
Prospectus or the Homestead Prospectus, of the suspension of the
qualification of the Homestead Securities for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for any
such purpose, or of any request by the Commission for the amending or
supplementing of the Homestead Registration Statement or the Homestead
Prospectus or for additional information; and, in the event of the issuance
of any stop order or of any order preventing or suspending the use of any
Homestead Preliminary Prospectus or the Homestead Prospectus or suspending
any such qualification, promptly to use its best efforts to obtain the
withdrawal of such order;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Homestead Securities for offering and
sale under the securities laws of such jurisdictions as you may request and
to comply with such laws so as to permit the continuance of sales and
dealings therein in such jurisdictions for as long as may be necessary to
complete the distribution of the Homestead Securities, provided that in
connection therewith Homestead shall not be required to qualify as a
foreign corporation or to file a general consent to service of process in
any jurisdiction;
(c) To furnish the Underwriters with copies of the Homestead
Prospectus in New York City in such quantities as you may from time to time
reasonably request, and, if the delivery of a prospectus is required at any
time prior to the expiration of nine months after the time of issue of the
Homestead Prospectus in connection with the offering of the Homestead
Securities if at such time any event shall have occurred as a result of
which such Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such Prospectus is delivered,
not misleading, or, if for any other reason it shall be necessary during
such period to amend or supplement the Homestead Prospectus in order to
comply with the Act, to notify you and upon your request to prepare and
furnish without charge to each Underwriter and to any dealer in securities
as many copies as you may from time to time reasonably request of an
amended Prospectus or a supplement to such Prospectus which will correct
such statement or omission or effect such compliance, and in case any
Underwriter is required to deliver a prospectus in connection with the
distribution of any Homestead Securities at any time nine months or more
after the time of issue of such Prospectus, upon your request but at the
expense of such Underwriter, to prepare and deliver to such Underwriter as
-14-
many copies as you may reasonably request of an amended or supplemented
Prospectus complying with Section 10(a)(3) of the Act; and
(d) To use its best efforts to list, subject to notice of issuance,
the Homestead Securities on the American Stock Exchange.
(C) Homestead agrees with each of the Underwriters:
(a) To furnish to its shareholders as soon as practicable after the
end of each fiscal year an annual report (including a balance sheet and
statements of income, shareholders' equity and cash flows of Homestead and
its consolidated subsidiaries certified by independent public accountants)
and, as soon as practicable after the end of each of the first three
quarters of each fiscal year (beginning with the fiscal quarter ending
after the effective date of the Homestead Registration Statement),
consolidated summary financial information of Homestead and its
subsidiaries for such quarter in reasonable detail;
(b) During a period of five years from the effective date of the
Homestead Registration Statement, to furnish to you copies of all reports
or other communications (financial or other) furnished to shareholders, and
deliver to you (i) as soon as they are available, copies of any reports and
financial statements furnished to or filed with the Commission or any
national securities exchange on which any class of securities of Homestead
is listed; and (ii) such additional information concerning the business and
financial condition of Homestead as you may from time to time reasonably
request (such financial statements to be on a consolidated basis to the
extent the accounts of Homestead and its subsidiaries are consolidated in
reports furnished to its shareholders generally or to the Commission); and
(c) Not to be or become, at any time prior to the expiration of three
years after the last Time of Delivery, an open-end investment trust, unit
investment trust, closed-end investment company or face-amount certificate
company that is or is required to be registered under Section 8 of the
Investment Company Act.
6. The Company and Homestead covenant and agree with the several
Underwriters that the Company or Homestead will pay or cause to be paid the
following: (i) the fees, disbursements and expenses of the Company's and
Homestead's counsel and accountants in connection with the registration of the
Shares under the Act and the distribution of the Homestead Securities and all
other expenses in connection with the preparation, printing and filing of each
Registration Statement, any Preliminary Prospectus and each Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or producing
any Agreement among Underwriters, this Agreement, the Blue Sky Memoranda and any
other documents in connection with the offering, purchase, sale and delivery of
the Shares and the distribution of the Homestead Securities; (iii) all expenses
in connection with the qualification of the Shares and the Homestead Securities
for offering and sale under state securities laws as provided in Sections
5(A)(b) and 5(B)(b) hereof, including the fees and disbursements of counsel for
the Underwriters in connection with such qualification and in connection with
the Blue Sky and legal investment surveys; (iv) all fees and expenses in
connection with the listing of the Shares on the New York Stock Exchange and the
Homestead Securities on the American Stock Exchange and the filing fees incident
to securing any required review by the NASD of the terms of the sale of the
Shares and the distribution of the Homestead Securities; (v) the cost of
preparing stock certificates; (vi) the cost and charges of any transfer agent or
registrar; and
-15-
(vii) all other costs and expenses incident to the performance of its
obligations hereunder which are not otherwise specifically provided for in this
Section. It is understood, however, that, except as provided in this Section,
and in Sections 8 and 11 hereof, the Underwriters will pay all of their own
costs and expenses, including the fees of their counsel, stock transfer taxes on
resale of any of the Shares or Homestead Securities by them and any advertising
expenses connected with any offers they may make.
7. The obligations of the Underwriters hereunder, as to the Shares to be
delivered at each Time of Delivery, shall be subject, in their discretion, to
the condition that all representations and warranties and other statements of
the Company herein are, at and as of such Time of Delivery, true and correct,
the condition that the Company shall have performed all of its obligations
hereunder theretofore to be performed, and the following additional conditions:
(a) Each Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed for
such filing by the rules and regulations under the Act and in accordance
with Sections 5(A)(a) and 5(B)(a) hereof; if the Company has elected to
rely upon Rule 462(b), the Rule 462(b) Registration Statement shall have
become effective by 10:00 P.M., Washington D.C. time, on the date of this
Agreement; no stop order suspending the effectiveness of any Registration
Statement or any part thereof shall have been issued and no proceeding for
that purpose shall have been initiated or threatened by the Commission; and
all requests for additional information on the part of the Commission shall
have been complied with to your reasonable satisfaction;
(b) Xxxxxxxx & Xxxxxxxx, counsel for the Underwriters, shall have
furnished to the Underwriters through Xxxxxxx, Sachs & Co. such opinion or
opinions, dated such Time of Delivery, with respect to the matters covered
in paragraphs (i), (vii), (xi) and (xiv) of subsection (c) below as well as
such other matters as the Underwriters through Xxxxxxx, Xxxxx & Co. may
reasonably request, and such counsel shall have received such papers and
information as they may reasonably request to enable them to pass upon such
matters; in rendering such opinion, Xxxxxxxx & Xxxxxxxx may rely as to
matters governed by the laws of the State of Maryland on Xxxxxxx Xxxxx
Xxxxxxx & Ingersoll;
(c) Xxxxx, Xxxxx & Xxxxx, counsel for the Company and Homestead,
shall have furnished to you their written opinion, dated such Time of
Delivery, in form and substance satisfactory to you, to the effect that:
(i) Each of the Company and Homestead has an authorized
capitalization as set forth in the applicable Prospectus; and the
Shares, the Security Capital Group Shares and the Homestead Securities
conform to the respective descriptions thereof contained in the
applicable Prospectus;
(ii) Each of the Company and Homestead has been duly qualified
for the transaction of business and is in good standing under the laws
of each other jurisdiction in which it owns or leases properties, or
conducts any business, so as to require such qualification, or is
subject to no material liability or disability by reason of failure to
be so qualified in any such jurisdiction (such counsel being entitled
to rely in respect of the opinion in this clause upon opinions of
local counsel and in respect of matters of fact upon certificates of
public officials or officers of the Company and Homestead, provided
that such
-16-
counsel shall state that they believe that both you and they are
justified in relying upon such opinions and certificates);
(iii) Each subsidiary of the Company or Homestead set forth on
Exhibit A hereto has been duly organized and is validly existing in
good standing under the laws of its jurisdiction of organization; and
all of the issued shares of capital stock of each such subsidiary have
been duly and validly authorized and issued, are fully paid and, with
respect to subsidiaries that are corporations, nonassessable, and
(except for directors' qualifying shares and except as otherwise set
forth in the applicable Prospectus) are owned directly or indirectly
by the Company or Homestead, free and clear of all liens,
encumbrances, equities or claims (such counsel being entitled to rely
in respect of the opinion in this clause upon opinions of local
counsel and in respect of matters of fact upon certificates of public
officials or officers of the Company or Homestead or any of their
respective subsidiaries, provided that such counsel shall state that
they believe that both you and they are justified in relying upon such
opinions and certificates);
(iv) To the best of such counsel's knowledge and other than as
set forth in the applicable Prospectus, there are no legal or
governmental proceedings pending to which the Company or Homestead or
any of their respective subsidiaries is a party or of which any
property of the Company or Homestead or any of their respective
subsidiaries is the subject which, if determined adversely to the
Company or any of its subsidiaries or Homestead or any of its
subsidiaries, would individually or in the aggregate have a material
adverse effect on the consolidated financial position, shareholders'
equity or results of operations of the Company and its subsidiaries or
Homestead and its subsidiaries taken as a whole, as applicable; and,
to the best of such counsel's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened
by others;
(v) The REIT Manager has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation and has corporate power to conduct
its business as described in the Atlantic Prospectus;
(vi) Each of the REIT Management Agreement and the Merger
Agreement has been duly authorized, executed and delivered by the
parties thereto and constitutes a valid and legally binding agreement,
enforceable in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting
creditors' rights and the effect of general principles of equity,
whether enforcement is considered in a proceeding in equity or at law,
and the discretion of the court before which any proceeding therefrom
may be brought and, with respect to indemnification obligations
thereunder, to federal and state securities laws;
(vii) This Agreement has been duly authorized, executed and
delivered by the Company and Homestead;
(viii) The issue and sale of the Shares and the Security Capital
Group Shares being delivered at such Time of Delivery by the Company
and the
-17-
distribution of the Homestead Securities and the compliance by the
Company and Homestead with all of the provisions of this Agreement and
the Merger Agreement and the consummation of the transactions herein
and therein contemplated will not (i) conflict with or result in a
breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other material agreement or instrument known to such
counsel to which the Company, Homestead or any of their respective
subsidiaries is a party or by which the Company, Homestead or any of
their respective subsidiaries is bound or to which any of the property
or assets of the Company, Homestead or any of their respective
subsidiaries is subject, the conflict, breach, violation or default of
which is of material significance in respect of the business or
financial condition of the Company or Homestead, as applicable, (ii)
result in any violation of the provisions of the Charter or Bylaws or
Homestead Charter or Bylaws, (iii) result in the violation of any
statute or any order, rule or regulation known to such counsel of any
court or governmental agency or body having jurisdiction over the
Company, Homestead or any of their respective subsidiaries or any of
their properties, the violation of which is of material significance
in respect of the business or financial condition of the Company or
Homestead, as applicable;
(ix) No consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body
is required for the consummation by the Company or Homestead of the
transactions contemplated by the Merger Agreement, except the filing
and acceptance of the Articles of Merger relating to the Merger
Agreement and except for any consent, approval, authorization, order,
registration or qualification that if not obtained would not
individually or in the aggregate have a material adverse effect on the
current or future consolidated financial position, shareholders'
equity or results of operations of the Company and its subsidiaries
taken as a whole or Homestead and its subsidiaries taken as a whole,
as applicable; and no consent, approval, authorization, order,
registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale of the
Shares, the distribution of the Homestead Securities or the
consummation by the Company or Homestead of the transactions
contemplated by this Agreement and the Security Capital Group
Agreement, except the registration under the Act of the Shares, the
Security Capital Group Shares and the Homestead Securities, such
consents, approvals, authorizations, registrations or qualifications
as may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the Shares by the
Underwriters and the issuance of the Homestead Securities and such
additional steps as may be required by the NASD;
(x) None of the Company, Homestead or any of their respective
subsidiaries is in violation of its declaration of trust, charter,
certificate or articles of incorporation, partnership agreement or
bylaws, as applicable, or in default in the performance or observance
of any material obligation, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement, lease or any other
agreement or instrument known to such counsel to which it is a party
or by which it or its properties may be bound;
(xi) The statements under the captions "Description of Capital
Stock" and "Federal Income Tax Considerations" in the Atlantic
Prospectus and under
-18-
the captions "Description of Capital Stock" and "Federal Income Tax
Considerations" in the Homestead Prospectus, to the extent such
statements relate to matters of law or regulation or constitute
summaries of documents described therein, are accurate and complete in
all material respects;
(xii) The Company has qualified to be taxed as a real estate
investment trust pursuant to Sections 856 through 860 of the Internal
Revenue Code, as amended, for its taxable year ended December 31,
1995, and the Company's present and contemplated organization,
ownership, method of operation, assets and income are such that the
Company is in a position under present law to so qualify for the
fiscal year ending December 31, 1996 and in the future; and neither
the Company nor Homestead is an open-end investment company, unit
investment trust, closed-end investment company or face-amount
certificate company that is or is required to be registered under
Section 8 of the Investment Company Act; and
(xiii) Each Registration Statement and each Prospectus and any
further amendments and supplements thereto made by the Company or
Homestead prior to such Time of Delivery (other than the financial
statements and related schedules therein, as to which such counsel
need express no opinion) comply as to form in all material respects
with the requirements of the Act and the rules and regulations
thereunder; they have no reason to believe that, as of its effective
date, any Registration Statement or any further amendments thereto
made by the Company or Homestead prior to such Time of Delivery (other
than the financial statements and related schedules therein, as to
which such counsel need express no opinion) contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading or that, as of its date, any Prospectus or any
further amendments or supplement thereto made by the Company or
Homestead prior to such Time of Delivery (other than the financial
statements and related schedules therein, as to which such counsel
need express no opinion) contained an untrue statement of a material
fact or omitted to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading or that, as of such Time of Delivery, any
Registration Statement or Prospectus or any further amendments or
supplements thereto made by the Company or Homestead prior to such
Time of Delivery (other than the financial statements and related
schedules therein, as to which such counsel need express no opinion)
contains an untrue statement of a material fact or omits to state a
material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; and
they do not know of any amendment to any Registration Statement
required to be filed or of any contracts or other documents of a
character required to be filed as an exhibit to any Registration
Statement or required to be described in any Registration Statement or
Prospectus which are not filed or described as required.
In rendering such opinion, Xxxxx, Xxxxx & Xxxxx may rely as to matters
governed by the laws of the State of Maryland on Xxxxxxx Xxxxx Xxxxxxx &
Ingersoll and as to matters governed by the laws of states other than
Illinois, Maryland, New York or Federal laws on local counsel in such
jurisdictions, provided that in each case Xxxxx, Xxxxx & Xxxxx shall state
that they believe that they and the Underwriters are
-19-
reasonably justified in relying on such other counsel. In rendering the
opinions contained in paragraphs (xi) (insofar as said opinion refers to
information in the Atlantic Prospectus under the caption "Federal Income
Tax Considerations" or information in the Homestead Prospectus under the
caption "Federal Income Tax Considerations") and (xii), such opinions may
be based upon (a) the Internal Revenue Code, as amended, and the rules and
regulations promulgated thereunder and the interpretations of the Code and
such regulations by the courts and the Internal Revenue Service, all as
they are in effect and exist at the time of this opinion, (b) Maryland and
Delaware law existing and applicable to the Company and Homestead, (c)
facts and other matters set forth in the Prospectuses, (d) the provisions
of the Charter, the Homestead Charter, the agreements relating to the
properties owned by the Company, the REIT Management Agreement, the
Security Capital Group Agreement and the Merger Agreement, and (e) certain
statements and representations as to factual matters made by the Company
and Homestead to Xxxxx, Xxxxx & Xxxxx as set forth in an attachment
thereto;
(d) Xxxxxxx Xxxxx Xxxxxxx & Ingersoll, special Maryland counsel for
the Company and Homestead, shall have furnished to you their written
opinion, dated such Time of Delivery, in form and substance satisfactory to
you, to the effect that:
(i) Each of the Company and Homestead is a corporation duly
organized and existing under and by virtue of the laws of the State of
Maryland, and is in good standing with the Maryland State Department
of Assessments and Taxation with corporate power and authority to own
its current properties and conduct its current business as described
in the applicable Prospectus;
(ii) Each of the Company and Homestead has an authorized
capitalization as set forth in the applicable Prospectus, and all of
the issued shares of Common Stock of the Company (including the Shares
being delivered at such Time of Delivery) and all of the issued
Homestead Securities have been duly authorized and validly issued and
are fully paid and nonassessable; the Shares and the Homestead
Securities conform in all material respects to the respective
descriptions thereof contained in the applicable Prospectus; and no
preemptive rights of stockholders exist under the Maryland General
Corporation Law with respect to any of the Shares or the Homestead
Securities or the issue and sale or distribution thereof; and
(iii) Each subsidiary of the Company or Homestead identified on
Exhibit A hereto as a Maryland corporation or partnership is a
corporation or partnership duly organized and existing under and by
virtue of the laws of the State of Maryland, and is in good standing
with the Maryland State Department of Assessments and Taxation; and
all of the issued shares of capital stock of each such subsidiary have
been duly and validly authorized and issued, are fully paid and, with
respect to subsidiaries that are corporations, nonassessable.
(e) On the date of any Prospectus at a time prior to the execution of
this Agreement, at 9:30 a.m., New York City time, on the effective date of
any post-effective amendment to any Registration Statement filed subsequent
to the date of this Agreement and also at each Time of Delivery, Ernst &
Young LLP shall have furnished to you a letter or letters, dated the
respective dates of delivery thereof, in form and substance satisfactory to
you, to the effect set forth in Annex I hereto (the executed copy of the
letter delivered prior to the execution of this Agreement is attached as
-20-
Annex 1(a) hereto and a draft of the form of the letter to be delivered on
the effective date of any post-effective amendment to any Registration
Statement and as of each Time of Delivery is attached as Annex 1(b)
hereto);
(f) (i) None of the Company, Homestead or any of their respective
subsidiaries shall have sustained since the date of the latest audited
financial statements included in the applicable Prospectus any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, other than as set forth or
contemplated in the applicable Prospectus, and (ii) since the respective
dates as of which information is given in the applicable Prospectus there
shall not have been any change in the capital stock or long-term debt of
the Company, Homestead or any of their respective subsidiaries or any
change, or any development involving a prospective change, in or affecting
the general affairs, management, financial position, shareholders' equity
or results of operations of the Company and its subsidiaries or Homestead
and its subsidiaries, otherwise than as set forth or contemplated in the
applicable Prospectus, the effect of which, in any such case described in
Clause (i) or (ii), is in the judgment of Xxxxxxx, Xxxxx & Co. so material
and adverse as to make it impracticable or inadvisable to proceed with the
public offering or the delivery of the Shares being delivered at such Time
of Delivery on the terms and in the manner contemplated in the Atlantic
Prospectus;
(g) On or after the date hereof there shall not have occurred any of
the following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange; (ii) a suspension or
material limitation in trading in the Company's securities on the New York
Stock Exchange or Homestead's securities on the American Stock Exchange;
(iii) a general moratorium on commercial banking activities declared by
either Federal or New York State authorities; or (iv) the outbreak or
escalation of hostilities involving the United States or the declaration by
the United States of a national emergency or war, if the effect of any such
event specified in this Clause (iv) in the judgment of Xxxxxxx, Sachs & Co.
makes it impracticable or inadvisable to proceed with the public offering
or the delivery of the Shares being delivered at such Time of Delivery on
the terms and in the manner contemplated in the Atlantic Prospectus;
(h) The Shares to be sold by the Company at such Time of Delivery
shall have been duly listed, subject to notice of issuance, on the New York
Stock Exchange and the Homestead Securities shall have been accepted for
listing, subject to official notice of issuance, on the American Stock
Exchange;
(i) The Company and Homestead shall have furnished or caused to be
furnished to you at such Time of Delivery certificates of officers of the
Company and Homestead satisfactory to you as to the accuracy of the
representations and warranties of the Company and Homestead herein at and
as of such Time of Delivery, as to the performance by the Company and
Homestead of all of their respective obligations hereunder to be performed
at or prior to such Time of Delivery, as to the matters set forth in
subsections (a) and (f) of this Section and as to such other matters as you
may reasonably request;
(j) The sale by the Company of the Security Capital Group Shares to
Security Capital Group pursuant to the Security Capital Group Agreement
shall have been consummated; and
-21-
(k) The transactions contemplated by the Merger Agreement shall have been
consummated.
8. (a) (i) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Atlantic Preliminary Prospectus, either of the
Initial Registration Statement or the 462(b) Registration Statement or the
Atlantic Prospectus, or any amendment or supplement thereto, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse each Underwriter for any legal or other expenses
reasonably incurred by such Underwriter in connection with investigating or
defending any such action or claim as such expenses are incurred; provided,
however, that the Company shall not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in any Atlantic Preliminary Prospectus, either of the Initial Registration
Statement or the 462(b) Registration Statement or the Atlantic Prospectus or any
such amendment or supplement in reliance upon and in conformity with written
information furnished to the Company or Homestead by any Underwriter through
Xxxxxxx, Xxxxx & Co. expressly for use therein.
(ii) The Company and Homestead, jointly and severally, will indemnify and
hold harmless each Underwriter against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Homestead Preliminary Prospectus, the Homestead Registration Statement or the
Homestead Prospectus, or any amendment or supplement thereto, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse each Underwriter for any legal or other expenses
reasonably incurred by such Underwriter in connection with investigating or
defending any such action or claim as such expenses are incurred; provided,
however, that the Company and Homestead shall not be liable in any such case to
the extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Homestead Preliminary Prospectus, the Homestead
Registration Statement or the Homestead Prospectus or any such amendment or
supplement in reliance upon and in conformity with written information furnished
to the Company or Homestead by any Underwriter through Xxxxxxx, Sachs & Co.
expressly for use therein.
(b) Each Underwriter will indemnify and hold harmless the Company and
Homestead against any losses, claims, damages or liabilities to which the
Company or Homestead may become subject, under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in any Preliminary Prospectus, Registration
Statement or Prospectus, or any amendment or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission was
made in any Preliminary Prospectus, Registration Statement or Prospectus or any
such amendment or supplement in reliance upon and in
-22-
conformity with written information furnished to the Company or Homestead by
such Underwriter through Xxxxxxx, Xxxxx & Co. expressly for use therein; and
will reimburse the Company or Homestead for any legal or other expenses
reasonably incurred by the Company or Homestead in connection with investigating
or defending any such action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
other than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying or indemnified party shall, without the
written consent of the other party, effect the settlement or compromise of, or
consent to the entry of any judgment with respect to, any pending or threatened
action or claim in respect of which indemnification or contribution may be
sought hereunder (whether or not the other party is an actual or potential party
to such action or claim) unless such settlement, compromise or judgment (i)
includes an unconditional release of the other party from all liability arising
out of such action or claim and (ii) does not include a statement as to or an
admission of fault, culpability or a failure to act, by or on behalf of the
other party.
(d) If the indemnification provided for in this Section 8 is unavailable
to or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits received
by the Company and Homestead on the one hand and the Underwriters on the other
from the offering of the Shares. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law or if the
indemnified party failed to give the notice required under subsection (c) above,
then each indemnifying party shall contribute to such amount paid or payable by
such indemnified party in such proportion as is appropriate to reflect not only
such relative benefits but also the relative fault of the Company and Homestead
on the one hand and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company and
Homestead on the one hand and the Underwriters on the other shall be deemed to
be in the same proportion as the total net proceeds from the offering of the
Shares purchased under this Agreement (before deducting expenses) received by
the Company bear to the total underwriting discounts and commissions received by
the Underwriters with respect to the Shares purchased under this Agreement, in
each case as set forth in the table on the cover page of the Atlantic
Prospectus. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission
-23-
or alleged omission to state a material fact relates to information supplied by
the Company or Homestead on the one hand or the Underwriters on the other and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The Company, Homestead and the
Underwriters agree that it would not be just and equitable if contributions
pursuant to this subsection (d) were determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to above in this subsection (d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this subsection (d), no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Shares underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this subsection
(d) to contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Company and Homestead under this Section 8
shall be in addition to any liability which the Company or Homestead may
otherwise have and shall extend, upon the same terms and conditions, to each
person, if any, who controls any Underwriter within the meaning of the Act; and
the obligations of the Underwriters under this Section 8 shall be in addition to
any liability which the respective Underwriters may otherwise have and shall
extend, upon the same terms and conditions, to each officer and director of the
Company or Homestead and to each person, if any, who controls the Company or
Homestead within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase the
Shares which it has agreed to purchase hereunder at a Time of Delivery, you may
in your discretion arrange for you or another party or other parties to purchase
such Shares on the terms contained herein. If within thirty-six hours after such
default by any Underwriter you do not arrange for the purchase of such Shares,
then the Company shall be entitled to a further period of thirty-six hours
within which to procure another party or other parties reasonably satisfactory
to you to purchase such Shares on such terms. In the event that, within the
respective prescribed periods, you notify the Company that you have so arranged
for the purchase of such Shares, or the Company notifies you that it has so
arranged for the purchase of such Shares, you or the Company shall have the
right to postpone such Time of Delivery for a period of not more than seven
days, in order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus, or in any other documents or
arrangements, and the Company agrees to file promptly any amendments to the
Registration Statement or the Prospectus which in your opinion may thereby be
made reasonably necessary. The term "Underwriter" as used in this Agreement
shall include any person substituted under this Section with like effect as if
such person had originally been a party to this Agreement with respect to such
Shares.
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company as
provided in subsection (a) above, the aggregate number of such Shares which
remains unpurchased does not exceed one-eleventh of the aggregate number of all
the Shares to be purchased at such Time of Delivery,
-24-
then the Company shall have the right to require each non-defaulting Underwriter
to purchase the number of Shares which such Underwriter agreed to purchase
hereunder at such Time of Delivery and, in addition, to require each non-
defaulting Underwriter to purchase its pro rata share (based on the number of
Shares which such Underwriter agreed to purchase hereunder) of the Shares of
such defaulting Underwriter or Underwriters for which such arrangements have not
been made; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company as
provided in subsection (a) above, the aggregate number of such Shares which
remains unpurchased exceeds one-eleventh of the aggregate number of all the
Shares to be purchased at such Time of Delivery, or if the Company shall not
exercise the right described in subsection (b) above to require non-defaulting
Underwriters to purchase Shares of a defaulting Underwriter or Underwriters,
then this Agreement (or, with respect to the Second Time of Delivery, the
obligations of the Underwriters to purchase and of the Company to sell the
Optional Shares) shall thereupon terminate, without liability on the part of any
non-defaulting Underwriter or the Company, except for the expenses to be borne
by the Company and the Underwriters as provided in Section 6 hereof and the
indemnity and contribution agreements in Section 8 hereof; but nothing herein
shall relieve a defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company, Homestead and the several Underwriters, as
set forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless of
any investigation (or any statement as to the results thereof) made by or on
behalf of any Underwriter or any controlling person of any Underwriter, or the
Company or Homestead, or any officer or director or controlling person of the
Company or Homestead, and shall survive delivery of and payment for the Shares.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
the Company and Homestead shall not then be under any liability to any
Underwriter except as provided in Section 6 and Section 8 hereof; but, if for
any other reason, any Shares are not delivered by or on behalf of the Company as
provided herein, the Company will reimburse the Underwriters through Xxxxxxx,
Xxxxx & Co. for all out-of-pocket expenses approved in writing by Xxxxxxx, Sachs
& Co., including fees and disbursements of counsel, reasonably incurred by the
Underwriters in making preparations for the purchase, sale and delivery of the
Shares not so delivered, but the Company and Homestead shall then be under no
further liability to any Underwriter in respect of the Shares not so delivered
except as provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, Xxxxxxx, Xxxxx & Co. shall act on behalf of
each of the Underwriters, and the parties hereto shall be entitled to act and
rely upon any statement, request, notice or agreement on behalf of any
Underwriter made or given by you jointly or by Xxxxxxx, Sachs & Co. on behalf of
you as the representatives of the Underwriters.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the representatives in care of Xxxxxxx, Xxxxx &
Co., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Registration
Department; and if to the Company or Homestead shall be delivered or sent by
mail, telex or facsimile transmission to the address of the Company or Homestead
set forth in the applicable Registration Statement, Attention: Secretary;
provided, however, that any notice to an Underwriter pursuant to Section 8(c)
hereof shall be delivered
-25-
or sent by mail, telex or facsimile transmission to such Underwriter at its
address set forth in its Underwriters' Questionnaire, or telex constituting such
Questionnaire, which address will be supplied to the Company and Homestead by
Xxxxxxx, Sachs & Co. upon request. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters, the Company, Homestead and, to the extent provided in
Sections 8 and 10 hereof, the officers and directors of the Company, Homestead
and each person who controls the Company, Homestead or any Underwriter, and
their respective heirs, executors, administrators, successors and assigns, and
no other person shall acquire or have any right under or by virtue of this
Agreement. No purchaser of any of the Shares from any Underwriter shall be
deemed a successor or assign by reason merely of such purchase.
14. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
-26-
If the foregoing is in accordance with your understanding, please sign and
return to us eight counterparts hereof, and upon the acceptance hereof by you,
on behalf of each of the Underwriters, this letter and such acceptance hereof
shall constitute a binding agreement between each of the Underwriters, the
Company and Homestead. It is understood that your acceptance of this letter on
behalf of each of the Underwriters is pursuant to the authority set forth in a
form of Agreement among Underwriters, the form of which shall be submitted to
the Company or Homestead for examination upon request, but without warranty on
your part as to the authority of the signers thereof.
Very truly yours,
Security Capital Atlantic Incorporated
By:______________________________________
Name:
Title:
Homestead Village Incorporated
By:______________________________________
Name:
Title:
Accepted as of the date hereof:
Xxxxxxx, Xxxxx & Co.
Xxxx Xxxxxx Xxxxxxxx Inc.
X.X. Xxxxxx Securities Inc.
Prudential Securities Incorporated
By:________________________________________
(Xxxxxxx, Sachs & Co.)
On behalf of each of the Underwriters
-27-
SCHEDULE I
NUMBER OF
SHARES TO BE
TOTAL NUMBER OF PURCHASED IF
FIRM SHARES MAXIMUM OPTION
UNDERWRITER TO BE PURCHASED EXERCISED
----------- --------------- --------------
Xxxxxxx, Xxxxx & Co.................
Xxxx Xxxxxx Xxxxxxxx Inc............
X.X. Xxxxxx Securities Inc..........
Prudential Securities Incorporated..
[Names of Underwriters].............
_________ _______
Total............................... 3,933,334 590,000
-28-
EXHIBIT A
Jurisdiction
Name of Subsidiary of Organization
------------------ ---------------
SCA Florida Holdings (1) Incorporated........................ Florida
Atlantic - Alabama (1) Incorporated.......................... Maryland
Atlantic - Alabama (2) Incorporated.......................... Maryland
Atlantic - Alabama (3) Incorporated.......................... Delaware
Atlantic - Alabama (4) Incorporated.......................... Delaware
Atlantic - Alabama (5) Incorporated.......................... Maryland
Atlantic - Alabama (6) Incorporated.......................... Maryland
Security Capital Alabama Multifamily Trust................... Alabama
Atlantic Alabama Multifamily Trust........................... Alabama
SCA - Alabama Multifamily Trust.............................. Alabama
SCA - South Carolina (1) Incorporated........................ Maryland
SCA - South Carolina (2) Incorporated........................ Maryland
SCA - NC/T (1) Incorporated.................................. Maryland
SCA - NC/T (2) Incorporated.................................. Maryland
SCA - NC/T Limited Partnership............................... Delaware
SCA - North Carolina (1) Incorporated........................ Maryland
SCA - North Carolina (2) Incorporated........................ Maryland
SCA North Carolina Limited Partnership....................... Delaware
SCA - Tennessee Limited Partnership.......................... Delaware
SCA - Tennessee (1) Incorporated............................. Maryland
SCA - Tennessee (2) Incorporated............................. Maryland
Security Capital Atlantic Multifamily Incorporated........... Delaware
Atlantic Homestead Village Incorporated...................... Maryland
Atlantic Homestead Village Limited Partnership............... Delaware
Atlantic Homestead Village (1) Incorporated.................. Maryland
Atlantic Homestead Village (2) Incorporated.................. Maryland
Alabama Homestead Incorporated............................... Alabama
Missouri Homestead Village Incorporated...................... Maryland
KC Homestead Village Redevelopment Corporation............... Missouri
PTR Homestead Village (1) Incorporated....................... Maryland
PTR Homestead Village Limited Partnership.................... Delaware
-29-
ANNEX I
Pursuant to Section 7(e) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect
to the Company and its subsidiaries and Homestead and its subsidiaries
within the meaning of the Act and the applicable published rules and
regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules (and, if applicable,
financial forecasts and/or pro forma financial information) examined by
them and included in either Prospectus or either Registration Statement
comply as to form in all material respects with the applicable accounting
requirements of the Act and the related published rules and regulations
thereunder; and they have made a review in accordance with standards
established by the American Institute of Certified Public Accountants of
the unaudited consolidated interim financial statements of the Company and
Homestead for the periods specified in such letter, as indicated in their
reports thereon, copies of which have been furnished to the representatives
of the Underwriters (the "Representatives") and are attached hereto;
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants of
the unaudited condensed consolidated statements of income, consolidated
balance sheets and consolidated statements of cash flows included in the
applicable Prospectus as indicated in their reports thereon, copies of
which have been separately furnished to the Representatives and are
attached hereto, and on the basis of specified procedures including
inquiries of officials of the Company and Homestead who have responsibility
for financial and accounting matters regarding whether the unaudited
condensed consolidated financial statements referred to in paragraph
(vi)(A)(i) below comply as to form in all material respects with the
applicable accounting requirements of the Act and the related published
rules and regulations, nothing came to their attention that caused them to
believe that the unaudited condensed consolidated financial statements do
not comply as to form in all material respects with the applicable
accounting requirements of the Act and the related published rules and
regulations;
(iv) The unaudited selected financial information with respect to
the consolidated results of operations and financial position of the
Company and Homestead for the three most recent fiscal years included in
the applicable Prospectus agrees with the corresponding amounts (after
restatements where applicable) in the audited consolidated financial
statements for such three fiscal years;
(v) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available interim
financial statements of the Company and its subsidiaries and Homestead and
its subsidiaries, inspection of the minute books of the Company and its
subsidiaries and Homestead and its subsidiaries since the date of the
latest audited financial statements included in the applicable Prospectus,
inquiries of officials of the Company and its subsidiaries and Homestead
and its subsidiaries responsible for financial and accounting matters and
such other inquiries and procedures as may be specified in such letter,
nothing came to their attention that caused them to believe that:
(A) (i) the unaudited consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the applicable Prospectus do not comply as to form in all
material respects with the applicable accounting requirements of the
Act and the related published rules and regulations
-30-
or (ii) any material modifications should be made to the unaudited
condensed consolidated statements of income, consolidated balance
sheets and consolidated statements of cash flows included in the
applicable Prospectus for them to be in conformity with generally
accepted accounting principles;
(B) any other unaudited income statement data and balance
sheet items included in the applicable Prospectus do not agree with
the corresponding items in the unaudited consolidated financial
statements from which such data and items were derived, and any such
unaudited data and items were not determined on a basis substantially
consistent with the basis for the corresponding amounts in the audited
consolidated financial statements included in the applicable
Prospectus;
(C) the unaudited financial statements which were not
included in the applicable Prospectus but from which were derived any
unaudited condensed financial statements referred to in Clause (A) and
any unaudited income statement data and balance sheet items included
in the applicable Prospectus and referred to in Clause (B) were not
determined on a basis substantially consistent with the basis for the
audited consolidated financial statements included in the applicable
Prospectus;
(D) any unaudited pro forma consolidated condensed
financial statements included in the applicable Prospectus do not
comply as to form in all material respects with the applicable
accounting requirements of the Act and the published rules and
regulations thereunder or the pro forma adjustments have not been
properly applied to the historical amounts in the compilation of those
statements;
(E) as of a specified date not more than five days prior to
the date of such letter, there have been any changes in the
consolidated capital stock (other than issuances of capital stock upon
exercise of options and stock appreciation rights, upon earn-outs of
performance shares and upon conversions of convertible securities, in
each case which were outstanding on the date of the latest financial
statements included in the applicable Prospectus) or any increase in
the consolidated long-term debt of the Company and its subsidiaries or
Homestead and its subsidiaries, or any decreases in consolidated net
current assets or stockholders' equity or other items specified by the
Representatives, or any increases in any items specified by the
Representatives, in each case as compared with amounts shown in the
latest balance sheet included in the applicable Prospectus, except in
each case for changes, increases or decreases which the applicable
Prospectus discloses have occurred or may occur or which are described
in such letter; and
(F) for the period from the date of the latest financial
statements included in the Prospectus to the specified date referred
to in Clause (E) there were any decreases in consolidated net revenues
or operating profit or the total or per share amounts of consolidated
net income or other items specified by the Representatives, or any
increases in any items specified by the Representatives, in each case
as compared with the comparable period of the preceding year and with
any other period of corresponding length specified by the
Representatives, except in each case for decreases or increases which
the applicable Prospectus discloses have occurred or may occur or
which are described in such letter; and
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(vi) In addition to the examination referred to in their report(s)
included in the applicable Prospectus and the limited procedures,
inspection of minute books, inquiries and other procedures referred to in
paragraphs (iii) and (vi) above, they have carried out certain specified
procedures, not constituting an examination in accordance with generally
accepted auditing standards, with respect to certain amounts, percentages
and financial information specified by the Representatives, which are
derived from the general accounting records of the Company and its
subsidiaries or Homestead and its subsidiaries, which appear in the
applicable Prospectus, or in Part II of, or in exhibits and schedules to,
the applicable Registration Statement specified by the Representatives, and
have compared certain of such amounts, percentages and financial
information with the accounting records of the Company and its subsidiaries
or Homestead and its subsidiaries, as the case may be, and have found them
to be in agreement.
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