Exhibit 1.1
[ ] SHARES OF COMMON STOCK
(Par Value $0.01 Per Share)
XXXXXXX PROPERTIES, INC.
(a Maryland Corporation)
FORM OF UNDERWRITING AGREEMENT
June [ ], 2003
CREDIT SUISSE FIRST BOSTON LLC
CITIGROUP GLOBAL MARKETS INC.
DEUTSCHE BANK SECURITIES INC.
BANC OF AMERICA SECURITIES LLC
UBS SECURITIES LLC
WACHOVIA SECURITIES, LLC
XXXX XXXXX XXXX XXXXXX, INCORPORATED
X.X. XXXXXXX & SONS, INC.
XXXXXXX XXXXX & ASSOCIATES, INC.
As Representatives of the Several Underwriters
c/o Credit Suisse First Boston LLC
Eleven Madison Avenue
New York, N.Y. 10010-3629
Dear Sirs:
1. Introductory. Xxxxxxx Properties, Inc., a Maryland corporation (the
"COMPANY"), Xxxxxxx Properties, L.P., a Maryland limited partnership (the
"OPERATING PARTNERSHIP"), Xxxxxxx Properties Services, Inc., a Maryland
corporation (the "SERVICES COMPANY," and together with the Company and the
Operating Partnership, the "TRANSACTION ENTITIES"), each confirms its agreement
with Credit Suisse First Boston LLC ("CSFB"), Citigroup Global Markets Inc.
("CITIGROUP") and each of the other underwriters named in SCHEDULE A hereto (the
"UNDERWRITERS") for whom CSFB and Citigroup are acting as representatives (the
"REPRESENTATIVES") with respect to the issue and sale by the Company and the
purchase by the Underwriters, acting severally and not jointly, of [ ] shares
(the "FIRM SECURITIES") of the Company's common stock, par value $0.01 per share
(the "COMMON STOCK") and with respect to the grant by the Company to the
Underwriters, acting severally and not jointly, of an option to purchase an
aggregate of not more than [ ] additional shares of Common Stock (the "OPTIONAL
SECURITIES"), subject to the terms and conditions set forth below. The Firm
Securities and the Optional Securities are herein collectively called the
"OFFERED SECURITIES."
On or prior to the First Closing Date (as hereinafter defined),
the Company will complete a series of transactions (the "FORMATION
TRANSACTIONS") described in the Prospectus (as hereinafter defined) under the
captions "Structure and Formation of the Company" and "Certain Relationships and
Related Transactions." As part of the Formation Transactions, (i) certain
entities (the "PROPERTY PARTNERSHIPS") will contribute properties or interests
therein to the Operating Partnership or its designee, or will merge into the
Operating Partnership or its designee, in exchange for units of limited
partnership of the Operating Partnership ("OP UNITS") or cash, (ii) certain
persons will contribute their direct and
indirect interests in certain Property Partnerships to the Operating Partnership
or its designee in exchange for OP Units or cash, (iii) certain entities and
individuals will contribute a portion of a third-party management business to
the Services Company in exchange for OP Units, (iv) the Company will contribute
the net proceeds from the public offering of the Offered Securities to the
Operating Partnership in exchange for OP Units and (v) the Operating Partnership
will purchase certain properties or interests therein from third parties for
cash.
2. Representations and Warranties of the Transaction Entities. Each of the
Transaction Entities, jointly and severally, represents and warrants to, and
agrees with, the several Underwriters, that:
(a) A registration statement on Form S-11 (No. 333-101170) relating to the
Offered Securities, including a form of prospectus, has been filed with the
Securities and Exchange Commission (the "COMMISSION") and either (i) has been
declared effective under the Securities Act of 1933, as amended (the "ACT") and
is not proposed to be amended or (ii) is proposed to be amended by amendment or
post-effective amendment. If such registration statement ("INITIAL REGISTRATION
STATEMENT") has been declared effective, either (i) an additional registration
statement ("ADDITIONAL REGISTRATION STATEMENT") relating to the Offered
Securities may have been filed with the Commission pursuant to Rule 462(b)
("RULE 462(B)") under the Act and, if so filed, has become effective upon filing
pursuant to such rule and the Offered Securities all have been duly registered
under the Act pursuant to the initial registration statement and, if applicable,
the additional registration statement or (ii) such additional registration
statement is proposed to be filed with the Commission pursuant to Rule 462(b)
and will become effective upon filing pursuant to such rule and upon such filing
the Offered Securities will all have been duly registered under the Act pursuant
to the initial registration statement and such additional registration
statement. If the Company does not propose to amend the initial registration
statement or if an additional registration statement has been filed and the
Company does not propose to amend it, and if any post-effective amendment to
either such registration statement has been filed with the Commission prior to
the execution and delivery of this Agreement, the most recent amendment (if any)
to each such registration statement has been declared effective by the
Commission or has become effective upon filing pursuant to Rule 462(c) ("RULE
462(C)") under the Act or, in the case of the additional registration statement,
Rule 462(b). For purposes of this Agreement, the "EFFECTIVE TIME" with respect
to the initial registration statement or, if filed prior to the execution and
delivery of this Agreement, the additional registration statement means: (i) if
the Company has advised the Representatives that it does not propose to amend
such registration statement, the date and time as of which such registration
statement, or the most recent post-effective amendment thereto (if any) filed
prior to the execution and delivery of this Agreement, was declared effective by
the Commission or has become effective upon filing pursuant to Rule 462(c); or
(ii) if the Company has advised the Representatives that it proposes to file an
amendment or post-effective amendment to such registration statement, the date
and time as of which such registration statement, as amended by such amendment
or post-effective amendment, as the case may be, is declared effective by the
Commission. If an additional registration statement has not been filed prior to
the execution and delivery of this Agreement but the Company has advised the
Representatives that it proposes to file one, "EFFECTIVE TIME" with respect to
such additional registration statement means the date and time as of which such
registration statement is filed and becomes effective pursuant to Rule 462(b).
"EFFECTIVE DATE" with respect to the initial registration statement or the
additional registration statement (if any) means the date of the Effective Time
thereof. The initial registration statement, as amended at its Effective Time,
including all information contained in the additional registration statement (if
any) and deemed to be a part of the initial registration statement as of the
Effective Time of the additional registration statement pursuant to the General
Instructions of the Form on which it is filed and including all information (if
any) deemed to be a part of the initial registration statement as of its
Effective Time pursuant to Rule 430A(b) ("RULE 430A(B)") under the Act, is
hereinafter referred to as the "INITIAL REGISTRATION STATEMENT." The additional
registration statement, as amended at its Effective Time, including the contents
of the initial registration statement incorporated by reference therein and
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including all information (if any) deemed to be a part of the additional
registration statement as of its Effective Time pursuant to Rule 430A(b), is
hereinafter referred to as the "ADDITIONAL REGISTRATION STATEMENT." The Initial
Registration Statement and the Additional Registration Statement are herein
referred to collectively as the "REGISTRATION STATEMENTS" and individually as a
"REGISTRATION STATEMENT." The form of prospectus relating to the Offered
Securities, as first filed with the Commission pursuant to and in accordance
with Rule 424(b) ("RULE 424(B)") under the Act or (if no such filing is
required) as included in a Registration Statement, is hereinafter referred to as
the "PROSPECTUS." No document has been or will be prepared or distributed in
reliance on Rule 434 under the Act. For purposes of this Agreement (other than
in connection with any opinion given by counsel in Section 6 hereof, which
hereby expressly excludes any copy filed via Electronic Data Gathering, Analysis
and Retrieval System ("XXXXX")), all references to the Registration Statement,
the Prospectus, any preliminary Prospectus, or any amendment or supplement to
any of the foregoing shall be deemed to include the copy filed with the
Commission pursuant to XXXXX.
(b) If the Effective Time of the Initial Registration Statement is prior
to the execution and delivery of this Agreement: (i) on the Effective Date of
the Initial Registration Statement, the Initial Registration Statement conformed
in all material respects to the requirements of the Act and the rules and
regulations of the Commission ("RULES AND REGULATIONS") and did not include any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not misleading;
(ii) on the Effective Date of the Additional Registration Statement (if any)
each Registration Statement conformed, or will conform, in all material respects
to the requirements of the Act and the Rules and Regulations and did not
include, or will not include, any untrue statement of a material fact and did
not omit, or will not omit, to state any material fact required to be stated
therein or necessary to make the statements therein not misleading; and (iii) on
the date of this Agreement, the Initial Registration Statement and, if the
Effective Time of the Additional Registration Statement is prior to the
execution and delivery of this Agreement, the Additional Registration Statement
each conforms, and at the time of filing of the Prospectus pursuant to Rule
424(b) or (if no such filing is required) at the Effective Date of the
Additional Registration Statement in which the Prospectus is included, each of
the Registration Statement and the Prospectus conformed, or will conform, in all
respects to the requirements of the Act and the Rules and Regulations, and
neither of such documents includes, or will include, any untrue statement of a
material fact or omits, or will omit, to state any material fact required to be
stated therein or necessary to make the statements therein (with respect to the
Prospectus only, in light of the circumstances under which they were made) not
misleading. If the Effective Time of the Initial Registration Statement is
subsequent to the execution and delivery of this Agreement, then on the
Effective Date of the Initial Registration Statement, the Initial Registration
Statement and the Prospectus will conform in all respects to the requirements of
the Act and the Rules and Regulations, neither of such documents will include
any untrue statement of a material fact or will omit to state any material fact
required to be stated therein or necessary to make the statements therein (with
respect to the Prospectus only in light of the circumstances under which they
were made) not misleading, and no Additional Registration Statement has been or
will be filed. The two preceding sentences do not apply to statements in or
omissions from a Registration Statement or the Prospectus based upon written
information furnished to the Company by any Underwriter through the
Representatives specifically for use therein, it being understood and agreed
that the only such information is that described as such in Section 7(b) hereof.
Each Prospectus and preliminary Prospectus delivered to the Underwriters and
used in connection with this offering was identical to the electronically
transmitted copies thereof filed with the Commission pursuant to XXXXX, except
to the extent permitted by Regulation S-T.
(c) No stop order suspending the effectiveness of a Registration Statement
or any part thereof has been issued and no proceeding for that purpose has been
instituted or, to the knowledge of any of the Transaction Entities, threatened
by the Commission or by the state securities authority of any
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jurisdiction. No order preventing or suspending the use of the Prospectus has
been issued and no proceeding for that purpose has been instituted or, to the
knowledge of any of the Transaction Entities, threatened by the Commission or by
the state securities authority of any jurisdiction.
(d) The Company has been duly formed 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 Prospectus and to enter into and perform its
obligations under this Agreement and as general partner of the Operating
Partnership to cause the Operating Partnership to enter into and perform the
Operating Partnership's obligations under this Agreement, and under each of the
Operating Partnership Agreement (as hereinafter defined), the Contribution
Agreements (as hereinafter defined), the Option Agreements (as hereinafter
defined), the Employment Agreements (as hereinafter defined) and the
Noncompetition Agreements (as hereinafter defined)(together, the "FORMATION
TRANSACTION AGREEMENTS"); and the Company is duly qualified to do business as a
foreign corporation in good standing in all other jurisdictions in which its
ownership or lease of property or the conduct of its business requires such
qualification, except where the failure to so qualify would not reasonably be
expected to have, individually or in the aggregate, a material adverse effect on
the condition (financial or other), business, earnings, properties, assets,
results of operations or prospects of the Transaction Entities and their
subsidiaries taken as a whole, whether or not in the ordinary course ("MATERIAL
ADVERSE EFFECT").
(e) The Operating Partnership has been duly formed and is validly existing
as a limited partnership in good standing under the laws of the State of
Maryland, is duly qualified to do business and is in good standing as a foreign
limited partnership in each jurisdiction in which its ownership or lease of
property or the conduct of its business requires such qualification, except
where the failure to so qualify would not reasonably be expected to have a
Material Adverse Effect, and has all power and authority necessary to own its
properties and conduct its business as described in the Prospectus and to enter
into and perform its obligations under this Agreement and the Formation
Transaction Agreements to which it is a party. The Company is the sole general
partner of the Operating Partnership. At the First Closing Date, the Amended and
Restated Agreement of Limited Partnership of the Operating Partnership, as
amended (the "OPERATING PARTNERSHIP AGREEMENT"), and the aggregate percentage
interests of the Company and the limited partners in the Operating Partnership
will be as set forth in the Prospectus; provided, that to the extent any portion
of the over-allotment option described in Section 3 hereof is exercised at the
First Closing Date, the percentage interest of the Company and of such limited
partners in the Operating Partnership will be adjusted accordingly.
Additionally, to the extent any portion of such over-allotment option is
exercised subsequent to the First Closing Date, the Company will contribute the
proceeds from the sale of the Optional Securities to the Operating Partnership
in exchange for a number of OP Units equal to the number of Optional Securities
issued.
(f) The Services Company and each direct or indirect subsidiary listed on
Schedule B hereto (the "MATERIAL SUBSIDIARIES") of the Company has been duly
formed and is validly existing as a corporation, limited partnership or limited
liability company, as the case may be, in good standing under the laws of the
jurisdiction of its organization, with power and authority (corporate and other)
to own its assets and conduct its business as described in the Prospectus and to
enter into and to perform its obligations under this Agreement and the Formation
Transaction Agreements to which it is a party; and is duly qualified to do
business as a foreign corporation in good standing in all other jurisdictions in
which its ownership or lease of property or the conduct of its business requires
such qualification, except where the failure to so qualify would not reasonably
be expected to have a Material Adverse Effect; all of its issued and outstanding
capital stock or other ownership interests have been duly authorized and validly
issued and are fully paid and non-assessable; and except as described in the
Prospectus, at the First Closing Date its capital stock or other ownership
interests will be owned by the Company, directly or
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through subsidiaries, free and clear of any security interests, liens,
mortgages, encumbrances, pledges, claims, defects or other restrictions of any
kind (collectively, "LIENS"), except where such Liens would not reasonably be
expected to have a Material Adverse Effect. None of such equity interests were
issued in violation of the preemptive or other similar rights of any
securityholder of each Material Subsidiary. There are no outstanding options,
rights (preemptive or otherwise) or warrants to purchase or subscribe for equity
interests or other securities of the Services Company or any Material Subsidiary
of the Company. Schedule C hereto lists all direct and indirect subsidiaries of
the Company.
(g) The authorized capital stock of the Company conforms in all material
respects to the description thereof contained in the Prospectus under the
caption "Description of Securities" and the issued and outstanding capital stock
of the Company, as of the First Closing Date, will be, in all material respects,
as set forth in the Prospectus under the caption "Capitalization." None of the
outstanding shares of capital stock of the Company was issued in violation of
the preemptive or other similar rights of any securityholder of the Company.
Except as disclosed in the Prospectus: (i) except for shares of common stock
reserved for issuance upon exchange or redemption of the OP Units or in
connection with the Company's equity incentive plan described in the Prospectus
(the "EQUITY INCENTIVE PLAN"), no shares of Common Stock are to be reserved for
any purpose; (ii) except for the OP Units and options to purchase common stock
under the Equity Incentive Plan, there are no outstanding securities convertible
into or exchangeable for any shares of Common Stock; and (iii) except for
options to purchase common stock under the Equity Incentive Plan, there are no
outstanding options, rights (preemptive or otherwise) or warrants to purchase or
subscribe for shares of Common Stock or any other securities of the Company.
(h) The Offered Securities and all other outstanding shares of capital
stock of the Company have been duly authorized; all outstanding shares of
capital stock of the Company are, and, when the Offered Securities have been
delivered and paid for in accordance with this Agreement on each Closing Date,
such Offered Securities will have been, validly issued, fully paid and
non-assessable, have been, or will be, offered and sold in compliance with all
applicable federal and state securities laws and will conform, in all material
respects, to the description thereof contained in the Prospectus. Upon payment
of the purchase price and delivery of the Offered Securities in accordance
herewith, the Underwriters will receive good, valid and marketable title to the
Offered Securities, free and clear of all Liens. The form of the certificates to
be used to evidence the Offered Securities will, at the First Closing Date, be
in due and proper form and will comply with all applicable legal requirements,
the requirements of the charter and bylaws of the Company and the requirements
of the New York Stock Exchange, Inc. (the "NYSE").
(i) The OP Units issued or to be issued in connection with the Formation
Transactions, including, without limitation, the OP Units to be issued to the
Company, have been duly authorized for issuance by the Operating Partnership to
the holders or prospective holders thereof, and at the First Closing Date will
be validly issued and fully paid. The OP Units will be exempt from registration
or qualification under the Act and applicable state securities laws. None of OP
Units will be issued in violation of the preemptive or other similar rights of
any securityholder of the Operating Partnership. Except for OP Units to be
issued in the Formation Transactions, there are no outstanding options, rights
(preemptive or otherwise) or warrants to purchase or subscribe for OP Units or
other securities of the Operating Partnership other than the Option Agreements.
(j) Except as disclosed in the Prospectus, and except for compensation
payable under employment, consulting and other contracts listed on Schedule D
hereto, there are no contracts, agreements or understandings between the
Transaction Entities and any person that would give rise to a valid claim
against the Transaction Entities or any Underwriter for a brokerage commission,
finder's fee or other like payment in connection with this offering or the
Formation Transactions.
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(k) Except for the Registration Rights Agreements to be entered into on
the Closing Date between the Company and certain contributors and optionors in
the Formation Transactions (the "REGISTRATION RIGHTS AGREEMENTS"), there are no
contracts, agreements or understandings between the Transaction Entities and any
person granting such person the right to require the Transaction Entities to
file a registration statement under the Act with respect to any securities of
the Transaction Entities owned or to be owned by such person or to require the
Transaction Entities to include such securities in the securities registered
pursuant to the Registration Statement or in any securities being registered
pursuant to any other registration statement filed by the Transaction Entities
under the Act.
(l) The issuance and sale by the Company of shares of Common Stock (other
than the Offered Securities) and options to purchase Common Stock at or prior to
the First Closing Date are exempt from the registration requirements of the Act
and applicable state securities laws.
(m) None of the Transaction Entities (i) is in violation of its charter or
by-laws or other similar organization documents or (ii) is in default (whether
with or without the giving of notice or passage of time or both) in the
performance or observance of any obligation, agreement, term, covenant or
condition contained in a contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, lease (under which such Transaction Entity or a
subsidiary is landlord or otherwise), ground lease or air space lease (under
which such Transaction Entity or a subsidiary is tenant), development agreement,
reciprocal easement agreement, deed restriction, hotel management agreement,
parking management agreements, or other agreement or instrument to which it is a
party or by which it or any of them is a party or may be bound, or to which any
of the Properties (as hereinafter defined) or any of its property or assets of
such Transaction Entity is subject (collectively, "AGREEMENTS AND INSTRUMENTS"),
(iii) is in violation of any law, ordinance, governmental rule, regulation or
court decree to which it or the Properties or any of its other properties or
assets may be subject, except for such defaults or violations that would not
reasonably be expected to have a Material Adverse Effect.
(n) No consent, approval, authorization, or order of, or filing or
registration with, any governmental agency or body or any court or any third
party is required for the consummation of the transactions contemplated by this
Agreement or the Formation Transaction Agreements, except as have been obtained
or made under the Act and as may be required under state securities laws, or
such consents, approvals, authorizations, orders, filings or registrations that
will be obtained or completed by the First Closing Date, or that the absence of
which, individually or in the aggregate would not reasonably be expected to have
a Material Adverse Effect.
(o) Except as disclosed in the Prospectus, the execution, delivery and
performance of this Agreement by the Company and the Operating Partnership and
the consummation of the transactions contemplated hereby, including the
Formation Transactions, do not and will not (whether with or without the giving
of notice or passage of time or both) conflict with or result in a breach or
violation of any of the terms and provisions of, or constitute a default (or
give rise to any right of termination, acceleration, cancellation, repurchase or
redemption) or Repayment Event (as hereinafter defined) under, or result in the
creation or imposition of a Lien upon any property or assets of the Transaction
Entities or any subsidiary thereof pursuant to, (i) any statute, any rule,
regulation or order of any governmental agency or body or any court, domestic or
foreign, having jurisdiction over the Transaction Entities or any of their
subsidiaries or any of their properties, assets or business to be owned by them
following completion of the Formation Transactions; (ii) any term, condition or
provision of any Agreements or Instruments; or (iii) the charters, by-laws or
other organizational documents, as applicable, of the Transaction Entities or
any of the Material Subsidiaries (except for such conflicts, breaches,
violations or defaults that (with response to subclauses (i) and (ii) above) (1)
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect or (2) relate to mortgage indebtedness to be repaid in
full or
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equity interests to be purchased in full, with a portion of the net proceeds
from the sale of the Offered Securities, or in connection with the Refinancing
Transactions (as described in the Prospectus) or in connection with the
Formation Transactions, as reflected in the "Use of Proceeds" section of the
Prospectus; provided, however, that the parties hereto acknowledge that Disney
Enterprises has "piggyback" rights in connection with the Company's purchase of
the 70% interest in Glendale Center not currently held by affiliates of the
Transaction Entities. As used herein, "REPAYMENT EVENT" means any event or
condition which, without regard to compliance with any notice or other
procedural requirements, gives the holder of any note, debenture or other
evidence of indebtedness (or any person acting on such holder's behalf) the
right to require the repurchase, redemption or repayment of all or a portion of
such indebtedness by the Company or any subsidiary.
(p) (1) Each of this Agreement, the Management Agreements, the Lock-Up
Agreements (as defined below) and the Formation Transaction Agreements has been
duly and validly authorized, executed and delivered by each of the Transaction
Entities party thereto (and, to the knowledge of the Transaction Entities, by
each other party thereto with respect to the Noncompetition Agreements,
Employment Agreements and Lock-Up Agreements) and, each of the Management
Agreements, Contribution Agreements, Option Agreements and the Operating
Partnership Agreement is a valid and binding agreement of each of the
Transaction Entities that are parties thereto, enforceable against such
Transaction Entity (and, to the knowledge of the Transaction Entities, against
each other party thereto with respect to the Noncompetition Agreements,
Employment Agreements and Lock-Up Agreements) in accordance with its terms,
except (i) to the extent that such enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent transfer, moratorium, reorganization or other
similar laws now or hereafter in effect relating to or affecting creditors'
rights, (ii) as limited by the effect of general principles of equity, whether
enforcement is considered in a proceeding in equity or at law (including the
possible unavailability of specific performance or injunctive relief), concepts
of materiality, reasonableness, good faith and fair dealing, and the discretion
of the court before which any proceeding therefore may be brought; (iii) the
unenforceability under certain circumstances under law or court decisions of
provisions providing for the indemnification of or contribution to a party with
respect to a liability where such indemnification or contribution is contrary to
public policy; and (iv) the unenforceability of any provision requiring the
payment of attorney's fees, except to the extent that a court determines such
fees to be reasonable. For purposes of this Agreement, (i) "CONTRIBUTION
AGREEMENTS" shall mean the contribution, option, purchase and other agreements
by and among the Operating Partnership and the various contributing individuals
and entities named therein providing for the contribution of the Properties or
interests therein and certain other assets (as hereinafter defined) to the
Operating Partnership or its subsidiaries; (ii) "MANAGEMENT AGREEMENTS" shall
mean the management and related agreements listed on Schedule E by and between
the Operating Partnership or Services Company, as applicable, and the Company,
the Operating Partnership or any Material Subsidiary thereof; (iii) "EMPLOYMENT
AGREEMENTS" shall mean the employment agreements between the Operating
Partnership and each of Xxxxxx X. Xxxxxxx III, Xxxxxxx Xxxxxxxxx, Xxxxxx Xxxxx,
Xxxx Lammas and Xxxx Xxxxxxx (collectively, the "KEY OFFICERS"); (iv)
"NONCOMPETITION AGREEMENTS" shall mean the noncompetition agreements between the
Company and each of Xxxxxx X. Xxxxxxx III and Xxxxxxx Xxxxxxxxx; (v) "OPTION
AGREEMENTS" shall mean the agreements pursuant to which the Company may acquire
the properties identified in the Prospectus as Option Properties (the "OPTION
PROPERTIES") and (vi) "LOCK UP AGREEMENTS" shall mean at the First Closing Date,
the lock up agreements by each of the Operating Partnership and the Key
Officers. The Formation Transaction Agreements are sufficient to effect the
transfer to the Company or Operating Partnership of all direct or indirect
interests in the Properties and other assets specified therein and as described
in the Prospectus upon payment of the consideration therefor.
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(q) The Transaction Entities and the Material Subsidiaries possess
adequate certificates, authorities, licenses, consents, approvals, permits and
other authorizations ("LICENSES") issued by appropriate governmental agencies or
bodies or third parties necessary to conduct the business now operated by them
and have not received any notice of proceedings relating to the revocation or
modification of any such Licenses that, if determined adversely to the
Transaction Entities or any of the Material Subsidiaries, would individually or
in the aggregate would reasonably be expected to have a Material Adverse Effect.
The Transaction Entities and the Material Subsidiaries are in material
compliance with the terms and conditions of all such Licenses except as would
not reasonably be expected to have a Material Adverse Effect.
(r) The financial statements included in the Registration Statement and
the Prospectus, together with the related schedules and notes, present fairly
the financial position of the Company and its consolidated subsidiaries
(including any predecessor entities) at the dates indicated, and the results of
operations, owners' equity and cash flows of the Company and its consolidated
subsidiaries (including any predecessor entities) for the periods specified;
said financial statements have been prepared in conformity with generally
accepted accounting principles ("GAAP") applied on a consistent basis throughout
the periods involved; said financial statements have been prepared on a
consistent basis with the books and records of the Company and its consolidated
subsidiaries (including any predecessor entities). The supporting schedules
included in the Registration Statement present fairly in accordance with GAAP
the information required to be stated therein. The unaudited pro forma condensed
consolidated financial statements and the related notes thereto included in the
Registration Statement and the Prospectus have been prepared in accordance with
the applicable requirements of Rules 11-01 and 11-02 of Regulation S-X under the
Act, and, in the opinion of the Company, the assumptions used in the preparation
thereof are reasonable and provide a reasonable basis for presenting the
significant effects directly attributable to the transactions or events
described therein, and the related adjustments used therein give appropriate
effect to the transactions and circumstances referred to therein and the pro
forma columns therein reflect the proper application of these adjustments to the
corresponding historical financial statement amounts. Other than the historical
and pro forma financial statements (and schedules) included in the Registration
Statement and Prospectus, no other historical or pro forma financial statements
(or schedules) are required by the Act or the Rules and Regulations to be
included therein.
(s) The accountants who certified the financial statements and supporting
schedules included in the Registration Statement and delivered the initial
letter referred to in Section 6(a) hereof, are independent public accountants as
required by the Act and the Rules and Regulations.
(t) Commencing with the taxable year ending December 31, 2003, the Company
will be organized and operated in conformity with the requirements for
qualification and taxation as a real estate investment trust (a "REIT") under
the Internal Revenue Code 1986, as amended (the "CODE"), and its proposed method
of operation will enable it to meet the requirements for qualification and
taxation as a REIT under the Code.
(u) The Transaction Entities and each of the Material Subsidiaries
(including any predecessor entities) have filed all foreign, federal, state and
local tax returns that are required to be filed or have requested extensions
thereof (except in any case in which the failure so to file would not, upon
consummation of the Formation Transactions, reasonably be expected to have a
Material Adverse Effect) and have paid all taxes required to be paid by them and
any other assessment, fine or penalty levied against them, to the extent that
any of the foregoing is due and payable, except for any such assessment, fine or
penalty that (i) is currently being contested in good faith, (ii) would not
individually or
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in the aggregate reasonably be expected to have a Material Adverse Effect or
(iii) as described in or contemplated by the Prospectus.
(v) Except as disclosed in the Prospectus, to the knowledge of the
Transaction Entities, there is no pending or threatened special assessment, tax
reduction proceeding or other action which could increase or decrease the real
property taxes or assessments of any Property, which, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
(w) The Transaction Entities, Property Partnerships and each of their
subsidiaries (including any predecessor entities) have not distributed, and
prior to the later of the First Closing Date and the completion of the
distribution of the Offered Securities, will not distribute, any offering
material in connection with the offering or sale of the Offered Securities other
than the Registration Statement, the Prospectus or any other materials, if any,
permitted by the Act (which were disclosed to the Representatives and their
counsel).
(x) Each Transaction Entity is in compliance, in all material respects,
with all presently applicable provisions of the Employee Retirement Income
Security Act of 1974, as amended, including the regulations and published
interpretations thereunder ("ERISA"); no "reportable event" (as defined in ERISA
other than an event for which the notice requirements have been waived by
regulations) has occurred with respect to any "pension plan" (as defined in
ERISA) for which any Transaction Entity would have any liability; no Transaction
Entity has incurred or expects to incur liability under (i) Title IV of ERISA
with respect to termination of, or withdrawal from, any "pension plan" or (ii)
Sections 412 or 4971 of the Code including the regulations and published
interpretations thereunder; and each "pension plan" for which any Transaction
Entity would have any liability that is intended to be qualified under Section
401(a) of the Code has received a favorable determination letter from the
Internal Revenue Service that such plan is so qualified in all material respects
and, except to the knowledge of the Transaction Entities, nothing has occurred,
whether by action or by failure to act, which would cause the loss of such
qualification, except where such non-compliance, reportable events, liabilities
or failure to be so qualified would not reasonably be expected to have a
Material Adverse Effect.
(y) The assets of the Transactions Entities and their subsidiaries do not
constitute "plan assets" of an ERISA regulated employee benefit plan.
(z) At the First Closing Date, the Company will be a "real estate
operating company" as such term is defined in paragraph (e) of the plan assets
regulation in 29 C.F.R. Section 2510.3-101, or will be an "operating company" as
defined in the first sentence of paragraph (c) thereof.
(aa) (1) Upon consummation of the Formation Transactions: (x) except with
respect to the 70% interest in Glendale Center, which the Operating Partnership
has a contract to acquire and which is expected to be consummated shortly after
the First Closing Date, the Transaction Entities or their subsidiaries will have
fee simple title (or in the case of Plaza Las Xxxxxxx and Cerritos Corporate
Center, Phase I and II, a leasehold interest) to all of the properties described
in the Prospectus as owned or leased by them (the "PROPERTIES"), in each case,
free and clear of all Liens except such as (i) are set forth in the Title
Reports listed on Schedule F hereto (the "TITLE REPORTS"); (ii) are disclosed in
the Prospectus, (iii) would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect; (y) Xxxxxxx Partners - Glendale, LLC
will own 30% of the member interests of Xxxxxxx Partners - Glendale Center, LLC;
(z) Xxxxxxx Partners - Glendale LLC has entered into a letter of intent with
BankAmerica Realty Services, Inc. to acquire all of the remaining member
interests in Xxxxxxx Partners - Glendale Center, LLC on or before July 15, 2003
(or as may be extended pursuant to the terms thereof); (2) none of the
Transaction Entities nor any Material Subsidiary has received from any
governmental authority any written notice of any condemnation of or zoning
change affecting the Properties or any part thereof, and
9
none of the Transaction Entities nor any Material Subsidiary knows of any such
condemnation or zoning change which is threatened and which if consummated would
reasonably be expected to have a Material Adverse Effect; (3) true, correct and
complete copies of the leases, exhibits, schedules or other documents that
comprise the leases described in the "Business and Properties" section of the
Prospectus where the tenant has been specifically identified (the "MAJOR
LEASES") have been provided to the Underwriters or their counsel; (4) there are
no other material agreements between any Transaction Entity and a tenant under a
Major Lease relating to any of the Properties; (5) except as described in the
Prospectus, reflected in the Pro Forma Financial Statements or as disclosed in
any tenant estoppel certificates: (i) to the knowledge of the Transaction
Entities, none of the Major Leases has been assigned; (ii) no brokerage fees,
commissions or any similar payments are owed or payable by the lessor under any
of the Major Leases to any third party in connection with the existence or
execution thereof, or in connection with any renewal, expansion or extension of
any Major Leases which has occurred prior to, or may occur after, Closing Date,
except as will be reserved for from proceeds as reflected in "Use of Proceeds"
section of the Prospectus; (iii) to the knowledge of the Transaction Entities,
all of the Major Leases, and, all guaranties related thereto, if any, are in
full force and effect; (iv) no rentals or other amounts due under the Major
Leases have been paid more than one (1) month in advance; (v) no tenant has
asserted in writing any defense or set-off against the payment of rent in
connection with the Major Leases nor has any tenant contested any tax, operating
cost or other escalation payment or occupancy charge, or any other amounts
payable under its Major Leases; (vi) to the knowledge of the Transaction
Entities, all tenants, licensees, franchisees or other parties under the Major
Leases are in possession of their respective premises; (vii) to the knowledge of
the Transaction Entities, except for the mortgage loans encumbering the
Properties and described in the Prospectus, none of the Major Leases has been
assigned, mortgaged, pledged, sublet, hypothecated or otherwise encumbered;
(viii) no Transaction Entity has waived in writing any material provision under
any Major Lease; (ix) to the knowledge of the Transaction Entities, there are no
uncured events of default, or events that with the giving of notice or passage
of time, or both, would constitute an event of default, by any tenant under any
of the terms and provisions of the Major Leases; (x) no tenant under any of the
leases at the Properties has a right of first refusal to purchase the premises
demised under such lease.
(bb) To the knowledge of the Transaction Entities, water, stormwater,
sanitary sewer, electricity and telephone service are all available at the
property lines of each Property over duly dedicated streets or perpetual
easements of record benefiting the applicable Property.
(cc) Except as set forth in the Registration Statement and the Prospectus,
the mortgages and deeds of trust encumbering the Properties and assets described
in the Prospectus are not convertible and neither the Transaction Entities, any
of their subsidiaries, nor any person affiliated therewith holds a participating
interest therein, and such mortgages and deeds of trust are not cross-defaulted
or cross-collateralized to any property not owned directly or indirectly by the
Transaction Entities or any of their subsidiaries. None of the Transaction
Entities or any of their subsidiaries hold participating interests in such
mortgages or deeds of trust.
(dd) Except as described or referred to in the Prospectus, at the First
Closing Date, the Operating Partnership and any Material Subsidiary that owns,
or leases under ground leases, real property will have obtained title insurance
on the fee interests (or leasehold interests in the case of Plaza Las Xxxxxxx
and Cerritos Corporate Center, Phases I and II) in each of the Properties
covering such risks and in amounts that are commercially reasonable for the
assets owned by them, and in each case such title insurance is in full force and
effect. Neither the Transaction Entities nor any of the Material Subsidiaries
has any reason to believe that any of them will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business.
10
(ee) Except as otherwise disclosed in the Prospectus or in the
environmental reports previously delivered to the Representatives or their
counsel and listed on SCHEDULE G hereto (the "ENVIRONMENTAL REPORTS"), (i) to
the best knowledge of the Transaction Entities, the Transaction Entities and
their subsidiaries have been and are in material compliance with, and neither
the Transaction Entities nor their subsidiaries have any material liability
under, applicable Environmental Laws (as hereinafter defined); (ii) neither the
Transaction Entities, any of their subsidiaries, nor, to the best knowledge of
the Transaction Entities, any prior owners or occupants of the property at any
time or any other party has at any time released (as such term is defined in
Section 101 (22) of CERCLA (as hereinafter defined)) or otherwise disposed of or
dealt with, Hazardous Materials (as hereinafter defined) on, to or from the
Properties or other assets owned by the Transaction Entities or their
subsidiaries, except for such releases as would not be reasonably likely to
cause the Transaction Entities to incur material liability; (iii) the
Transaction Entities do not intend to use the Properties or other assets owned
by the Transaction Entities or their subsidiaries other than in compliance with
applicable Environmental Laws, (iv) neither the Transaction Entities nor any of
their subsidiaries know of any seepage, leak, discharge, release, emission,
spill, or dumping of Hazardous Materials into waters (including, but not limited
to, groundwater and surface water) on, beneath or adjacent to the Properties or
onto lands or other assets owned by the Transaction Entities or their
subsidiaries from which Hazardous Materials might seep, flow or drain into such
waters; (v) neither the Transaction Entities nor any of their subsidiaries has
received any written notice of, or has any knowledge of any occurrence or
circumstance which, with notice or passage of time or both, would give rise to a
claim under or pursuant to any Environmental Law by any governmental or
quasi-governmental body or any third party with respect to the Properties or the
assets described in the Prospectus or arising out of the conduct of the
Transaction Entities or their subsidiaries, except for such claims that would
not be reasonably likely to cause the Transaction Entities to incur material
liability and that would not require disclosure pursuant to Environmental Laws
or federal or state laws regulating the issuance of securities; (vi) to the best
knowledge of the Transaction Entities, none of the Properties are included or
proposed for inclusion on the National Priorities List issued pursuant to CERCLA
by the United States Environmental Protection Agency (the "EPA") or to the best
of the Transaction Entities' knowledge, proposed for inclusion on any similar
list or inventory issued pursuant to any other Environmental Law or issued by
any other federal, state or local governmental authority having or claiming
jurisdiction over the Properties and other assets described in the Prospectus.
Except as otherwise disclosed in the Prospectus or in the Environmental Reports,
to the knowledge of the Transaction Entities, there have been no and are no (i)
aboveground or underground storage tanks; (ii) polychlorinated biphenyls
("PCBS") or PCB-containing equipment; (iii) asbestos or asbestos containing
materials; (iv) lead based paints; or (v) dry-cleaning facilities in, on, under,
or about any Property owned by the Transaction Entities or their subsidiaries.
As used herein, "Hazardous Material" shall include, without limitation,
any flammable explosives, radioactive materials, hazardous materials, hazardous
wastes, toxic substances, asbestos or any hazardous material as defined by any
federal, state or local environmental law, ordinance, rule or regulation
including, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, 42 U.S.C. (S) (S) 9601-9675
("CERCLA"), the Hazardous Materials Transportation Act, as amended, 49 U.S.C.
(S) (S) 1801-1819, the Resource Conservation and Recovery Act, as amended, 42
U.S.C. (S) (S) 6901-K, the Emergency Planning and Community Right-to-Know Act of
1986, 42 U.S.C. (S) (S) 11001-11050, the Toxic Substances Control Act, 15 U.S.C.
(S) (S) 2601-2671, the Federal Insecticide, Fungicide and Rodenticide Act, 7
U.S.C. (S) (S) 136-136y, the Clean Air Act, 42 U.S.C. (S) (S) 7401-7642, the
Clean Water Act (Federal Water Pollution Control Act), 33 U.S.C. (S) (S)
1251-1387, and the Safe Drinking Water Act, 42 U.S.C. (S) (S) 300f-300j-26, as
any of the above statutes may be amended from time to time, and in the
regulations promulgated pursuant to any of the foregoing (individually, an
"ENVIRONMENTAL LAW" and collectively "ENVIRONMENTAL LAWS").
11
(ff) None of the environmental consultants that prepared the Environmental
Reports with respect to any of the Properties was employed for such purpose on a
contingent basis or has any substantial interest in the Transaction Entities or
any of their subsidiaries, and none of them nor any of their directors, officers
or employees is connected with the Transaction Entities or any of their
subsidiaries as a promoter, selling agent, voting trustee, director, officer or
employee.
(gg) The Offered Securities have been approved for listing on The New York
Stock Exchange subject to official notice of issuance.
(hh) No labor dispute with the employees of the Transaction Entities or
any subsidiary exists or, to the knowledge of the Company, is imminent that
might reasonably be expected to have a Material Adverse Effect.
(ii) The Transaction Entities and their subsidiaries own, possess or can
acquire on reasonable terms, adequate trademarks, trade names and other rights
to inventions, know-how, patents, copyrights, confidential information and other
intellectual property (collectively, "INTELLECTUAL PROPERTY RIGHTS") necessary
to conduct the business now operated by them, or presently employed by them, and
have not received any notice of infringement of or conflict with asserted rights
of others with respect to any Intellectual Property Rights that, if determined
adversely to the Transaction Entities or any of their subsidiaries, would
reasonably be expected to have a Material Adverse Effect.
(jj) Except as disclosed in the Prospectus, there are no pending actions,
suits or proceedings against or affecting the Transaction Entities, any of the
Material Subsidiaries or any of the Properties or other assets that, if
determined adversely to the Transaction Entities or any of the Material
Subsidiaries, would reasonably be expected to have a Material Adverse Effect, or
would materially and adversely affect the ability of the Transaction Entities to
perform their obligations under this Agreement, the Formation Transaction
Agreements or the transactions contemplated therein; and no such actions, suits
or proceedings are threatened or, to the Transaction Entities' knowledge,
contemplated.
(kk) Except as disclosed in the Prospectus, since the date of the latest
audited financial statements included in the Prospectus (1) there has been no
material adverse change, nor any development or event involving a prospective
material adverse change, individually or in the aggregate, in the condition
(financial or other), business, properties, earnings, results of operations or
prospects of the Company and its subsidiaries taken as a whole whether or not in
the ordinary course; or (2) there have been no transaction entered into by the
Company or any of its subsidiaries which are material with respect to the
Company and its subsidiaries considered as one entity.
(ll) No Transaction Entity is and, after giving effect to the offering and
sale of the Offered Securities and the application of the proceeds thereof as
described in the Prospectus, no Transaction Entity will be, an "investment
company" as defined in the Investment Company Act of 1940, as amended.
(mm) There are no contracts or documents which are required to be
described in the Registration Statement or the Prospectus or to be filed as
exhibits thereto which have not been so described and filed as required.
(nn) No relationship, direct or indirect, exists between or among any of
the Transaction Entities on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Transaction Entities on the other
hand, which is required to be described in the Prospectus which is not so
described.
12
(oo) Each Transaction Entity (i) makes and keeps books and records that
are accurate in all material respects and (ii) maintains internal accounting
controls which provide reasonable assurance that (A) transactions are executed
in accordance with management's authorization, (B) transactions are recorded as
necessary to permit preparation of its financial statements and to maintain
accountability for its assets, (C) access to its assets is permitted only in
accordance with management's authorization and (D) the reported accountability
for its assets is compared with existing assets at reasonable intervals.
(pp) Except as stated in this Agreement and in the Prospectus, none of the
Transaction Entities nor any of their respective officers, directors, members or
controlling persons has taken, or will take, directly or indirectly, any action
designed to or that might reasonably be expected to result in a violation of
Regulation M under the Exchange Act or cause or result in stabilization or
manipulation of the price of the Common Stock to facilitate the sale or resale
of the Offered Securities.
(qq) The Company intends to apply the net proceeds from the sale of the
Offered Securities being sold by the Company in accordance with the description
set forth in the Prospectus under the heading "Use of Proceeds."
(rr) Each of the Operating Partnership and any other Material Subsidiary
that is a partnership or a limited liability company has been properly
classified either as a partnership or as an entity disregarded as separate from
the Company for Federal income tax purposes throughout the period from its
formation through the date hereof.
(ss) There are no contracts, letters of intent, term sheets, agreements,
arrangements or understandings with respect to the direct or indirect
acquisition or disposition by the Company of interests in assets or real
property that is required to be described in the Prospectus that is not already
so described.
3. Purchase, Sale and Delivery of Offered Securities. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to sell to the
Underwriters, and the Underwriters agree, severally and not jointly, to purchase
from the Company, at a purchase price of $[ ] per share, the respective numbers
of shares of Firm Securities set forth opposite the names of the Underwriters in
SCHEDULE A hereto.
The Company will deliver the Firm Securities to the Representatives for
the accounts of the Underwriters, against payment of the purchase price in
Federal (same day) funds by official bank check or checks or wire transfer to an
account at a bank acceptable to CSFB and Citigroup drawn to the order of Xxxxxxx
Properties, Inc. at the office of Xxxxxx & Xxxxxxx LLP, 000 X. Xxxxx Xxxxxx,
Xxxxx 0000, Xxx Xxxxxxx, XX 00000, at 11:00 a.m., New York time, on June [ ],
2003, or at such other time not later than seven full business days thereafter
as CSFB, Citigroup and the Company determine, such time being herein referred to
as the "FIRST CLOSING DATE." For purposes of Rule 15c6-1 under the Exchange Act,
the First Closing Date (if later than the otherwise applicable settlement date)
shall be the settlement date for payment of funds and delivery of securities for
all the Offered Securities sold pursuant to the offering. The certificates for
the Firm Securities so to be delivered will be in definitive form, in such
denominations and registered in such names as CSFB and Citigroup request and
will be made available for checking and packaging at the above office of
Xxxxxxxx Chance US LLP at least 24 hours prior to the First Closing Date.
In addition, upon written notice from CSFB and Citigroup given to the
Company from time to time not more than 30 days subsequent to the date of the
Prospectus, the Underwriters may purchase all or less than all of the Optional
Securities at the purchase price per share to be paid for the Firm Securities.
The Company agrees to sell to the Underwriters the number of Optional Securities
specified in such notice and the Underwriters agree, severally and not jointly,
to purchase such Optional Securities. Such
13
Optional Securities shall be purchased for the account of each Underwriter in
the same proportion as the number of shares of Firm Securities set forth
opposite such Underwriter's name bears to the total number of shares of Firm
Securities (subject to adjustment by CSFB and Citigroup to eliminate fractions)
and may be purchased by the Underwriters only for the purpose of covering
over-allotments made in connection with the sale of the Firm Securities. No
Optional Securities shall be sold or delivered unless the Firm Securities
previously have been, or simultaneously are, sold and delivered. The right to
purchase the Optional Securities or any portion thereof may be exercised from
time to time and to the extent not previously exercised may be surrendered and
terminated at any time upon notice by CSFB and Citigroup to the Company.
Each time for the delivery of and payment for the Optional Securities,
being herein referred to as an "OPTIONAL CLOSING DATE," which may be the First
Closing Date (the First Closing Date and each Optional Closing Date, if any,
being sometimes referred to as a "CLOSING DATE"), shall be determined by CSFB
and Citigroup but shall be not later than five full business days after written
notice of election to purchase Optional Securities is given. The Company will
deliver the Optional Securities being purchased on each Optional Closing Date to
the Representatives for the accounts of the several Underwriters, against
payment of the purchase price therefor in Federal (same day) funds by official
bank check or checks or wire transfer to an account at a bank acceptable to CSFB
and Citigroup drawn to the order of Xxxxxxx Properties, Inc., at the office of
Xxxxxx & Xxxxxxx LLP. The certificates for the Optional Securities being
purchased on each Optional Closing Date will be in definitive form, in such
denominations and registered in such names as CSFB and Citigroup requests upon
reasonable notice prior to such Optional Closing Date and will be made available
for checking and packaging at the office of Xxxxxx & Xxxxxxx LLP at a reasonable
time in advance of such Optional Closing Date.
4. Offering by Underwriters. It is understood that the several Underwriters
propose to offer the Offered Securities for sale to the public as set forth in
the Prospectus.
5. Certain Agreements of the Company. The Company agrees with the several
Underwriters that:
(a) If the Effective Time of the Initial Registration Statement is prior
to the execution and delivery of this Agreement, the Company will file the
Prospectus with the Commission pursuant to and in accordance with 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.
The Company will advise CSFB and Citigroup promptly of any such filing
pursuant to Rule 424(b). If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement and an
additional registration statement is necessary to register a portion of the
Offered Securities under the Act but the Effective Time thereof has not occurred
as of such execution and delivery, the Company will file the additional
registration statement or, if filed, will file a post-effective amendment
thereto with the Commission pursuant to and in accordance with Rule 462(b) on or
prior to 10:00 p.m., New York time, on the date of this Agreement or, if
earlier, on or prior to the time the Prospectus is printed and distributed to
any Underwriter, or will make such filing at such later date as shall have been
consented to by CSFB and Citigroup.
(b) The Company will advise CSFB and Citigroup promptly of any proposal to
amend or supplement the initial or any additional registration statement as
filed or the related prospectus or the Initial Registration Statement, the
Additional Registration Statement (if any), the Prospectus or any preliminary
Prospectus and will not effect such amendment or supplementation without CSFB
and Citigroup's consent; and the Company will also advise CSFB and Citigroup
promptly of the effectiveness of each Registration Statement (if its Effective
Time is subsequent to the execution and delivery of this Agreement) and of any
amendment or supplementation of a Registration Statement or the Prospectus and
14
of the institution by the Commission of any stop order proceedings in respect of
a Registration Statement and will use its best efforts to prevent the issuance
of any such stop order and to obtain as soon as possible its lifting, if issued.
(c) If, at any time when a prospectus relating to the Offered Securities
is required to be delivered under the Act in connection with sales by any
Underwriter or dealer, any event occurs as a result of which the Prospectus as
then amended or supplemented would include an untrue statement of a material
fact or omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, or if it is necessary at any time to amend the Prospectus to comply
with the Act, the Company will promptly notify CSFB and Citigroup of such event
and will promptly prepare and file with the Commission, at its own expense, an
amendment or supplement which will correct such statement or omission or an
amendment which will effect such compliance. Neither CSFB and Citigroup's
consent to, nor the Underwriters' delivery of, any such amendment or supplement
shall constitute a waiver of any of the conditions set forth in Section 6.
(d) As soon as practicable, but not later than the Availability Date (as
hereinafter defined), the Company will make generally available to its
securityholders an earnings statement covering a period of at least 12 months
beginning after the Effective Date of the Initial Registration Statement (or, if
later, the Effective Date of the Additional Registration Statement) which will
satisfy the provisions of Section 11(a) of the Act. For the purpose of the
preceding sentence, "AVAILABILITY DATE" means the 45th day after the end of the
fourth fiscal quarter following the fiscal quarter that includes such Effective
Date, except that, if such fourth fiscal quarter is the last quarter of the
Company's fiscal year, "AVAILABILITY DATE" means the 90th day after the end of
such fourth fiscal quarter.
(e) The Company will furnish to the Representatives copies of each
Registration Statement (three of which will be signed and will include all
exhibits), each related preliminary Prospectus, and, so long as a prospectus
relating to the Offered Securities is required to be delivered under the Act in
connection with sales by any Underwriter or dealer, the Prospectus and all
amendments and supplements to such documents, in each case in such quantities as
CSFB and Citigroup request. The Prospectus shall be so furnished on or prior to
3:00 p.m., New York time, on the business day following the later of the
execution and delivery of this Agreement or the Effective Time of the Initial
Registration Statement. All other documents shall be so furnished as soon as
available. The Company will pay the expenses of printing and distributing to the
Underwriters all such documents. The aforementioned documents furnished to the
Underwriters or to any dealer shall be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to XXXXX, except
to the extent permitted by Regulation S-T.
(f) During the period of five years hereafter, the Company will furnish to
the Representatives and, upon request, to each of the other Underwriters, as
soon as practicable after the end of each fiscal year, a copy of its annual
report to stockholders for such year; and the Company will furnish to the
Representatives (i) as soon as available, a copy of each report and any
definitive proxy statement of the Company filed with the Commission under the
Exchange Act or mailed to stockholders, and (ii) from time to time, such other
information concerning the Company as the Representatives may reasonably
request.
(g) The Company will arrange for the qualification of the Offered
Securities for sale under the laws of such jurisdictions as CSFB and Citigroup
designate and will continue such qualifications in effect so long as required
for the distribution.
(h) The Company will pay all expenses incident to the performance of its
obligations under this Agreement, for any filing fees and other expenses
(including fees and disbursements of accountants, printers and counsel) incurred
in connection with (1) the registration of the Offered Securities; (2) the
15
qualification of the Offered Securities for sale under the laws of such
jurisdictions as CSFB and Citigroup designates and the printing of memoranda
relating thereto (including any fees of Underwriters' counsel (in an amount not
to exceed $10,000)); (3) for the filing fee incident to the review by the
National Association of Securities Dealers, Inc. (the "NASD") of the Offered
Securities; (4) for any travel expenses of the Company's officers and employees
and any other expenses of the Company in connection with attending or hosting
meetings with prospective purchasers of the Offered Securities; (5) for the
preparation, issuance and delivery of the Offered Securities to the
Underwriters, including any stock or other transfer, taxes and any stamp or
other duties payable upon the sale, issuance or delivery of the Offered
Securities to the Underwriters; (6) the fees and expenses (x) of any transfer
agent or registrar and (y) incurred in connection with the listings of the
Offered Securities on the NYSE and; (7) for expenses incurred in preparing,
printing, filing and distributing preliminary prospectuses and the Prospectus
(including any amendments and supplements thereto) to the Underwriters. To the
extent that the Company has paid for legal fees and expenses of the
Representatives prior the date hereof, such amounts will be a credit against
amounts owing by the Company to the Underwriters under this Agreement.
(i) For a period of one year after the date of the initial public offering
of the Offered Securities, the Company will not offer, sell, contract to sell,
pledge or otherwise dispose of, directly or indirectly, or file with the
Commission a registration statement (except a registration statement on Form S-8
relating to the Amended and Restated 2003 Incentive Award Plan or S-4 relating
to an acquisition or another entity) under the Act relating to, any additional
shares of its Offered Securities or securities convertible into or exchangeable
or exercisable for any shares of its Offered Securities, or publicly disclose
the intention to make any such offer, sale, pledge, disposition or filing,
without the prior written consent of CSFB and Citigroup, other than (1) grants
of stock options or restricted stock to employees, consultants or directors
pursuant to the terms of a plan in effect on the date hereof, (2) issuances of
Offered Securities pursuant to the exercise of such options or the exercise of
any other employee stock options outstanding on the date hereof, (3) issuances
of Offered Securities pursuant to the Company's dividend reinvestment plan (if
any) or (4) issuances of Offered Securities in connection with other
acquisitions of real property or real property companies.
(j) The Company will use its best efforts to meet the requirements to
qualify, for the taxable year ending December 31, 2003, for taxation as a REIT
under the Code.
(k) The Company will use its best efforts to effect the listing of the
Common Stock (including the Offered Securities) on the NYSE.
(l) During the period when the Prospectus is required to be delivered
under the Act or the Exchange Act, the Company will (1) comply with all
provisions of the Act and the Rules and Regulations and (2) file all documents
required to be filed with the Commission pursuant to the Exchange Act within the
time periods required by the Exchange Act and the rules and regulations of the
Commission thereunder.
(m) The Company will take such steps as shall be necessary to ensure that
neither the Company nor the Operating Partnership shall become an "investment
company" within the meaning of such term under the Investment Company Act of
1940, as amended, and the rules and regulations of the Commission thereunder.
(n) The Company will file with the Commission such reports as may be
required pursuant to Rule 463 of the Rules and Regulations.
(o) Except for the authorization of actions permitted to be taken by the
Underwriters as contemplated herein or in the Prospectus, neither the Company
nor the Operating Partnership will
16
(1) take, directly or indirectly, any action designated to cause or to result
in, or that might reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Offered Securities; (2) until the Closing Date, (2) sell, bid
for or purchase the Offered Securities or pay any person any compensation for
soliciting purchases of the Offered Securities; or (3) pay or agree to pay to
any person any compensation for soliciting another to purchase any other
securities of the Company.
6. Conditions of the Obligations of the Underwriters. The obligations of the
several Underwriters to purchase and pay for the Firm Securities on the First
Closing Date and the Optional Securities to be purchased on each Optional
Closing Date will be subject to the accuracy of the representations and
warranties on the part of the Transaction Entities herein, to the accuracy of
the statements of Company officers made pursuant to the provisions hereof, to
the performance by the Company of its obligations hereunder and to the following
additional conditions precedent:
(a) The Representatives shall have received a letter, dated the date of
delivery thereof (which, if the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement, shall be on
or prior to the date of this Agreement or, if the Effective Time of the Initial
Registration Statement is subsequent to the execution and delivery of this
Agreement, shall be prior to the filing of the amendment or post-effective
amendment to the registration statement to be filed shortly prior to such
Effective Time), of KPMG LLP ("KPMG") confirming that they are independent
public accountants within the meaning of the Act and the applicable Rules and
Regulations and stating to the effect that:
(i) in their opinion the financial statements examined by them and
included in the Registration Statements comply as to form in all material
respects with the applicable accounting requirements of the Act and the related
Rules and Regulations;
(ii) they have performed the procedures specified by the American
Institute of Certified Public Accountants for a review of interim financial
information as described in Statement of Auditing Standards No. 100, Interim
Financial Information, on the unaudited financial statements included in the
Registration Statements (as hereinafter defined);
(iii) on the basis of the review referred to in clause (ii) above, a
reading of the latest available interim financial statements of the Xxxxxxx
Predecesser (as such term is defined in the Registration Statement), inquiries
of officials of the Xxxxxxx Predecesser who have responsibility for financial
and accounting matters and other specified procedures, nothing came to their
attention that caused them to believe that:
(A) the unaudited financial statements, included in the
Registration Statements do not comply as to form in all material respects with
the applicable accounting requirements of the Act and the related Rules and
Regulations or any material modifications should be made to such unaudited
financial statements and summary of earnings for them to be in conformity with
generally accepted accounting principles;
(B) at the date of the latest available balance sheet read by
such accountants, or at a subsequent specified date not more than three business
days prior to the date of this Agreement, there was any change in the capital
stock or any increase in short-term indebtedness or long-term debt of the
Xxxxxxx Predecesser and its consolidated subsidiaries or, at the date of the
latest available balance sheet read by such accountants, there was any decrease
in combined net assets, as compared with amounts shown on the latest balance
sheet included in the Prospectus; or
17
(C) for the period from the closing date of the latest income
statement included in the Prospectus to the closing date of the latest available
income statement read by such accountants there were any decreases, as compared
with the corresponding period of the previous year and with the period of
corresponding length ended the date of the latest income statement included in
the Prospectus, in combined total revenues or combined net income.
except in all cases set forth in one of the above clauses for changes, increases
or decreases which the Prospectus discloses have occurred or may occur or which
are described in such letter; and
(iv) they have compared specified dollar amounts (or percentages
derived from such dollar amounts) and other financial information contained in
the Registration Statements (in each case to the extent that such dollar
amounts, percentages and other financial information are derived from the
general accounting records of the Xxxxxxx Predecesser and its subsidiaries
subject to the internal controls of the Xxxxxxx Predecesser's accounting system
or are derived directly from such records by analysis or computation) with the
results obtained from inquiries, a reading of such general accounting records
and other procedures specified in such letter and have found such dollar
amounts, percentages and other financial information to be in agreement with
such results, except as otherwise specified in such letter.
For purposes of this subsection, (i) if the Effective Time of the Initial
Registration Statement is subsequent to the execution and delivery of this
Agreement, "REGISTRATION STATEMENTS" shall mean the initial registration
statement as proposed to be amended by the amendment or post-effective amendment
to be filed shortly prior to its Effective Time, (ii) if the Effective Time of
the Initial Registration Statement is prior to the execution and delivery of
this Agreement but the Effective Time of the Additional Registration is
subsequent to such execution and delivery, "REGISTRATION STATEMENTS" shall mean
the Initial Registration Statement and the additional registration statement as
proposed to be filed or as proposed to be amended by the post-effective
amendment to be filed shortly prior to its Effective Time, and (iii)
"PROSPECTUS" shall mean the prospectus included in the Registration Statements.
(b) If the Effective Time of the Initial Registration Statement is not
prior to the execution and delivery of this Agreement, such Effective Time shall
have occurred not later than 10:00 p.m., New York time, on the date of this
Agreement or such later date as shall have been consented to by CSFB and
Citigroup. If the Effective Time of the Additional Registration Statement (if
any) is not prior to the execution and delivery of this Agreement, such
Effective Time shall have occurred not later than 10:00 p.m., New York time, on
the date of this Agreement or, if earlier, the time the Prospectus is printed
and distributed to any Underwriter, or shall have occurred at such later date as
shall have been consented to by CSFB and Citigroup. If the Effective Time of the
Initial Registration Statement is prior to the execution and delivery of this
Agreement, the Prospectus shall have been filed with the Commission in
accordance with the Rules and Regulations and Section 5(a) of this Agreement.
Prior to such Closing Date, no stop order suspending the effectiveness of a
Registration Statement shall have been issued and no proceedings for that
purpose shall have been instituted or, to the knowledge of the Company or the
Representatives, shall be contemplated by the Commission.
(c) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred: (i) any change, or any development or event involving a
prospective change, in the condition (financial or other), business, properties,
earnings, results of operations or prospects of the Company and its subsidiaries
taken as one enterprise, whether or not in the ordinary course, which,
individually or in the aggregate, in the judgment of the Representatives, is
material and adverse and makes it impractical or inadvisable to proceed with
completion of the public offering or the sale of and payment for the Offered
Securities; (ii) any downgrading in the rating of any debt securities of the
Company by any "nationally recognized statistical rating organization" (as
defined for purposes of Rule 436(g) under the Act), or any public announcement
that any such organization has under surveillance or review its rating of any
debt
18
securities of the Company (other than an announcement with positive implications
of a possible upgrading, and no implication of a possible downgrading, of such
rating); (iii) any change in U.S. or international financial, political or
economic conditions or currency exchange rates or exchange controls as would, in
the judgment of the Representatives, be likely to prejudice materially the
success of the proposed issue, sale or distribution of the Offered Securities,
whether in the primary market or in respect of dealings in the secondary market;
(iv) any suspension or limitation of trading in securities generally on the New
York Stock Exchange, or any setting of minimum prices for trading on such
exchange, (v) any suspension of trading of any securities of the Company on any
exchange or in the over-the-counter market; (vi) any banking moratorium declared
by U.S. Federal or New York authorities; (vii) any major disruption of
settlements of securities or clearance services in the United States; or (viii)
any attack on, outbreak or escalation of hostilities or act of terrorism
involving the United States, any declaration of war by Congress or any other
national or international calamity, crisis or emergency if, in the sole judgment
of the Representatives, the effect of any such attack, outbreak, escalation,
act, declaration, calamity, crisis or emergency makes it impractical or
inadvisable to proceed with completion of the public offering or the sale of and
payment for the Offered Securities.
(d) The Representatives shall have received an opinion, dated such Closing
Date, of Xxxxxx & Xxxxxxx LLP, special securities law counsel for the Company,
to the effect that:
(i) Based on certificates from public officials, such counsel
confirms that the Company is qualified to do business in California;
(ii) Based on certificates from public officials, such counsel
confirms that the Operating Partnership is qualified to do business in
California;
(iii) Based on certificates from public officials, such counsel
confirms that the Services Company is qualified to do business in California;
(iv) Each Material Subsidiary is a limited liability company with
power and authority to own its assets and to conduct its business as described
in the Registration Statement and the Prospectus. Based on certificates from
public officials, such counsel confirms that each Material Subsidiary is in good
standing under the laws of the State of Delaware and is qualified to do business
in California. Each of the operating agreements of the Material Subsidiaries is
in full force and effect;
(v) No registration of the shares of Common Stock or options to
purchase shares of Common Stock under the Act or the California Corporate
Securities Laws of 1968 is required for the issuance of the Common Stock and
options to certain executive officers and directors of the Company in the manner
contemplated by the Employment Agreements. No registration of the OP Units under
the Act or the California Corporate Securities Laws of 1968 is required for the
issuance of the OP Units in the manner contemplated by the Contribution
Agreements and the Option Agreements;
(vi) With the consent of the Representatives based solely on a
certificate of an officer of the Company and the Operating Partnership as to
factual matters, each of the Company and the Operating Partnership is not, and
immediately after giving effect to the sale of the Offered Securities in
accordance with the Underwriting Agreement and the application of the proceeds
as described in the Prospectus under the caption "USE OF PROCEEDS" will not be
required to be registered as, an "investment company" within the meaning of the
Investment Company Act of 1940, as amended;
(vii) The execution and delivery of the Underwriting Agreement by
the Transaction Entities, the issuance and sale of the Offered Securities by the
Company to the Underwriters pursuant to the Underwriting Agreement on the date
hereof, and the execution and delivery by each Transaction
19
Entity which is a party thereto of, and the consummation of the transactions
contemplated by, the Contribution Agreements, Option Agreements and Management
Agreements by each Transaction Entity which is a party thereto, do not:
(A) conflict with, result in the breach or violation of or
constitute a default under any of the agreements filed as exhibits to the
Registration Statement or the documents listed on Schedule H hereto;
(B) violate any federal or California statute, rule or
regulation applicable to any such Transaction Entities;
(C) violate the provisions of the operating agreements of the
Material Subsidiaries; or
(D) require any consents, approvals or authorizations to be
obtained by any such Transaction Entities, or any registrations, declarations or
filings to be made by such Transaction Entities, in each case, under any federal
or California statute, rule or regulation applicable to the Transaction Entities
that have not been obtained or made;
(viii) The Registration Statement has become effective under the
Act. With the consent of the Representatives, based solely on telephonic
confirmation by a member of the Staff of the Commission on the date of such
opinion, no stop order suspending the effectiveness of the Registration
Statement has been issued under the Act and no proceedings therefor have been
initiated by the Commission. Any required filing of the Prospectus pursuant to
Rule 424 under the Act has been made in accordance with Rule 424 under the Act;
(ix) To the best knowledge of such counsel, there are no contracts,
documents, statutes or regulations of a character required to be described in
the Registration Statement or Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed. Based solely on the
procedures stated therein to which the Representatives have consented, there are
no or legal or governmental proceedings of a character required to be described
in the Registration Statement or Prospectus that are not described;
(x) The Registration Statement, as of the date it was declared
effective, and the Prospectus, as of its date, complied as to form in all
material respects with the requirements for registration statements on Form S-11
under the Act and the rules and regulations of the Commission thereunder; it
being understood, however, that such counsel need express no opinion with
respect to Regulation S-T or the financial statements, schedules, or other
financial data, included in, or omitted from, the Registration Statement or
Prospectus. In passing upon the compliance as to form of the Registration
Statement and the Prospectus, we have assumed that the statements made therein
are correct and complete;
(xi) Each Contribution Agreement, Management Agreement and Option
Agreement constitutes a legally valid and binding obligation of each Transaction
Entity which is a party thereto, enforceable against such Transaction Entity
which is a party thereto in accordance with its terms;
(xii) The statements in the Prospectus under the captions
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources -- Material Provisions of
Consolidated Secured Indebtedness to be Outstanding After this Offering,"
"Management -- Non-Competition Agreements," "Certain Relationships and Related
Policies -- Description of Contribution Agreements, Sales Limitations and Debt
Guarantees" and " -- Option
20
Agreements," "Shares Eligible for Future Sale," "Legal Proceedings" and "ERISA
Considerations," insofar as they purport to describe or summarize certain
provisions of the agreements, statutes, regulations or the subject legal
proceedings referred to therein, are accurate descriptions or summaries in all
material respects;
(xiii) Except for the Registration Rights Agreements, to the best
knowledge of such counsel no Transaction Entity is a party to any agreement that
would (a) require the inclusion in the Registration Statement of shares of
Common Stock of the Company owned by any person or entity other than the Company
or (b) entitle such person to require the Company to file a registration
statement under the Act with respect to any securities of the Company; and
In rendering such opinions, such counsel may limit its opinions to the
federal laws of the United States of America and the laws of the State of
California, and matters specifically governed thereby. In rendering such
opinions, such counsel may also rely, as to matters of fact (but not as to legal
conclusions), to the extent they deem proper, on certificates of responsible
officers of the Company and public officials.
In addition, such counsel shall state that:
The primary purpose of our professional engagement was not to
establish or confirm factual matters or financial or quantitative information.
Therefore, we are not passing upon and do not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus, (except to the extent expressly set
forth in the numbered paragraph [ ] of our opinion letter to you of even date),
and have not made an independent check or verification thereof (except as
aforesaid). However, in the course of acting as counsel to the Company in
connection with the preparation by the Company of the Registration Statement and
Prospectus, we reviewed the Registration Statement, and the Prospectus, and
participated in conferences and telephone conversations with officers and other
representatives of the Company, the independent public accountants for the
Company, your representatives, and your counsel, during which conferences and
conversations the contents of the Registration Statement and the Prospectus and
related matters were discussed. We also reviewed and relied upon certain
corporate records and documents, and oral and written statements of officers and
other representatives of the Company and others as to the existence and
consequence of certain factual and other matters.
Based on our participation, review and reliance as described above,
we advise you that no facts came to our attention that caused us to believe that
the Registration Statement, at the time it became effective, contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
that the Prospectus, as of its date, 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; it being understood that we express no belief with respect to the
financial statements, schedules, or other financial data included in, or omitted
from, the Registration Statement or the Prospectus. In addition, in rendering
such negative assurance letter, counsel may assume the accuracy of the opinion
of Xxxxxx, Xxxx & Xxxxxxxx LLP, special environmental counsel of the Company,
dated as of the Closing Date, with respect to environmental matters.
(e) The Representatives shall have received an opinion, dated such Closing
Date, of Xxxxxx & Xxxxxxx LLP, special tax counsel for the Company, to the
effect that:
(i) The statements in the Prospectus under the caption "Federal
Income Tax Considerations" and "Restrictions on Ownership of Stock" insofar as
they purport to describe or
21
summarize certain provisions of the agreements, statutes, regulations and other
legal matters referred to therein, are accurate descriptions or summaries in all
material respects;
(ii) Commencing with its taxable year ending December 31, 2003, the
Company will be organized in conformity with the requirements for qualification
and taxation as a real estate investment trust (a "REIT") under the Internal
Revenue Code 1986, as amended (the "CODE"), and its proposed method of operation
will enable it to meet the requirements for qualification and taxation as a REIT
under the Code; and
(iii) The Operating Partnership is classified as a partnership for
United States federal income tax purposes and not as (a) an association taxable
as a corporation or (b) a "publicly traded partnership" taxable as a corporation
under Section 7704 (a) of the Code.
In rendering such opinion, such counsel may rely, as to matters of fact
(but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials. In
addition, in rendering such opinion, counsel may rely on and assume the accuracy
of an opinion of Venable, Baejter and Xxxxxx, LLP ("Venable"), special Maryland
counsel of the Company, dated as of the Closing Date, with respect to certain
matters of Maryland law.
(f) Opinion of General Maryland Counsel of Company. The Representatives
shall have received an opinion, dated such Closing Date, of Venable, special
Maryland counsel of the Company, to the effect that:
(i) The Company is a corporation duly incorporated and existing
under and by virtue of the laws of the State of Maryland and is in good standing
with the SDAT. The Company has the corporate power to own its properties and to
conduct its business in all material respects as described in the Prospectus
under the caption "Business and Properties", and to enter into and perform its
obligations under the Underwriting Agreement and the Formation Transaction
Agreements.
(ii) The Operating Partnership is a limited partnership duly formed
and existing under and by virtue of the laws of the State of Maryland and is in
good standing with the SDAT. The Operating Partnership has the limited
partnership power to own its properties and to conduct its business in all
material respects as described in the Prospectus under the caption "Business and
Properties," and to enter into and perform its obligations under the
Underwriting Agreement and the Formation Transaction Agreements to which it is a
party. The Company is the sole general partner of the Operating Partnership, and
the aggregate percentage interests of the Company and the limited partners in
the Operating Partnership will be as set forth in the Prospectus.
(iii) The Services Company is a corporation duly incorporated and
existing under and by virtue of the laws of the State of Maryland and is in good
standing with the SDAT. The Services Company has the corporate power to own its
assets and to conduct its business in all material respects as described in the
Prospectus under the caption "Business and Properties," and to enter into and
perform its obligations under the Underwriting Agreement and the Formation
Transaction Agreements to which it is a party. As of the date hereof,
immediately prior to the issuance of the Shares, the issued and outstanding
shares of stock of the Services Company (the "Services Company Outstanding
Shares") have been duly authorized and validly issued and are fully paid and
non-assessable. The Operating Partnership is the sole stockholder of record of
the Services Company Outstanding Shares. The issuance of the Services Company
Outstanding Shares by the Services Company is not subject to preemptive or other
similar rights arising under the Maryland General Corporation Law (the "MGCL"),
the Services Company Charter or the Services Company Bylaws or, based solely on
the Officers Certificate (as defined in such counsel's opinion) and upon any
facts otherwise known to such counsel, any agreement or other
22
instrument to which the Services Company is a party known to such counsel. Based
solely on the Officers Certificate (as defined in such counsel's opinion) and
upon any facts otherwise known to such counsel, there are no outstanding
options, rights (preemptive or otherwise) or warrants to purchase or subscribe
for securities of such subsidiary.
(iv) The Company has an authorized capitalization as set forth in
the Prospectus under the captions "Prospectus Summary-This Offering" and
"Capitalization," and the issued and outstanding shares of Common Stock (other
than the Shares) (the "Company Outstanding Shares") have been duly authorized
and validly issued and are fully paid and non-assessable. The terms of the
Common Stock conform, in all material respects, to the statements and
descriptions related thereto contained in the Prospectus. The issuance of the
Company Outstanding Shares by the Company is not subject to preemptive or other
similar rights arising under the MGCL, the Company Charter or the Company Bylaws
or, based solely on the Officers Certificate (as defined in such counsel's
opinion) and upon any facts otherwise known to such counsel, any agreement or
other instrument to which the Company is a party known to such counsel. The
Common Stock Certificate complies in all material respects with the applicable
requirements of the MGCL, the Company Charter and the Company Bylaws. Except as
disclosed in the Prospectus and based solely on the Officers Certificate (as
defined in such counsel's opinion) and upon any facts otherwise known to such
counsel: (a) no shares of Common Stock are reserved for any purpose; (b) except
for the OP Units, there are no outstanding securities convertible into or
exchangeable for any shares of Common Stock; and (c) no outstanding options,
rights (preemptive or otherwise) or warrants to purchase or subscribe for shares
of Common Stock or any other securities of the Company.
(v) The Company has the full power and authority to authorize, issue
and sell the Shares as contemplated by the Underwriting Agreement. The issuance
of the Shares has been duly authorized and, when issued and delivered by the
Company pursuant to the Resolutions (as defined in such opinion) and the
Underwriting Agreement against payment of the consideration set forth therein,
the Shares will be validly issued, fully paid and non-assessable and will
conform, in all material respects, to the description thereof contained in the
Prospectus. The issuance of the Shares by the Company is not subject to
preemptive or other similar rights arising under the MGCL, the Company Charter
or the Company Bylaws or, based solely on the Officers Certificate (as defined
in such counsel's opinion) and upon any facts otherwise known to such counsel,
any agreement or other instrument to which the Company is a party known to such
counsel. The form of certificate used to evidence the Shares is in due and
proper form and complies with all applicable statutory requirements under the
laws of the State of Maryland and the Company Charter and the Company Bylaws.
(vi) The OP Units issued in connection with the Formation
Transactions, including, without limitation, the OP Units to be issued to the
Company, have been duly authorized and validly issued and are fully paid and
non-assessable and are owned in the percentage amounts set forth in the
Prospectus by the Company and by the entities or persons described in the
Prospectus. The issuance of the OP Units by the Operating Partnership is not
subject to preemptive or other similar rights arising under the Maryland Revised
Uniform Limited Partnership Act or the Operating Partnership Agreement or, based
solely on the Officers Certificate (as defined in such counsel's opinion) and
upon any facts otherwise known to such counsel, any agreement or other
instrument to which the Company is a party known to such counsel. The terms of
the OP Units conform, in all material respects, to the description thereof
contained in the Prospectus. Based solely on the Officers Certificate (as
defined in such counsel's opinion) and upon any facts otherwise known to such
counsel, there are no outstanding options, rights (preemptive or otherwise) or
warrants to purchase or subscribe of the Operating Partnership.
23
(vii) The execution, delivery and performance of the Underwriting
Agreement, the Formation Transaction Agreements and the transactions
contemplated thereby and the sale and issuance of the Shares do not conflict
with or result in a breach or violation of, or constitute a default under, (a)
any Maryland law, or any decree, rule or regulation of any Maryland governmental
authority applicable to the Transaction Entities or (b) the Company Charter, the
Company Bylaws, the Services Company Charter, the Services Company Bylaws or the
Operating Partnership Agreement.
(viii) The execution and delivery of the Underwriting Agreement, the
Management Agreements and the Formation Transaction Agreements have been duly
authorized by all necessary corporate or limited partnership action, as
applicable, of each Transaction Entity which is a party thereto. The
Underwriting Agreement, the Management Agreements and the Formation Transaction
Agreements have been executed and, so far as is known to us, delivered by each
Transaction Entity which is a party thereto. The Operating Partnership Agreement
constitutes the legal, valid and binding obligation of each Transaction Entity
which is a party thereto, enforceable against each Transaction Entity which is a
party thereto in accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally, and subject, as to
enforceability, to general principles of equity and, with respect to equitable
relief, the discretion of the court before which any proceeding therefor may be
brought (regardless of whether enforcement is sought in a proceeding at law or
in equity).
(ix) The information in the Prospectus under the captions "Risk
Factors-Risks Related to Our Organization and Structure," "Policies with Respect
to Certain Activities-Conflict of Interest Policies," "Policies with Respect to
Certain Activities-Interested Director and Officer Transactions," "Description
of Securities," "Material Provisions of Maryland Law and of Our Charter and
Bylaws" and "Description of the Partnership Agreement of Xxxxxxx Properties,
L.P.," as of the date of the Prospectus, insofar as such information relates to
provisions of Maryland law or the Company's or the Operating Partnership's
organizational documents, fairly summarizes such provisions of Maryland law or
the Company's or the Operating Partnership's organizational documents, in all
material respects.
(x) The execution, delivery and performance of the Underwriting
Agreement, the Management Agreements and the Formation Transaction Agreements
and the transactions contemplated thereby and the sale and issuance of the
Shares do not require any consents, approvals, authorizations or orders to be
obtained by any such Transaction Entities, or any registrations, declarations or
filings to be made by such Transaction Entities, in each case, under any
federal, Maryland statute, rule or regulation applicable to the Transaction
Entities that have not been obtained or made;
In rendering such opinions, such counsel may limit its opinions to the
laws of the State of Maryland, and matters specifically governed thereby. In
rendering such opinion, such counsel may rely, as to matters of fact (but not as
to legal conclusions), to the extent they deem proper, on certificates of
responsible officers of the Company and public officials.
(g) Opinion of Special Counsel of Company. The Representatives shall have
received an opinion, dated such Closing Date, of Xxxxxx, Xxxx & Xxxxxxxx LLP,
special environmental counsel of the Company, to the effect that the following
sections of the Prospectus: "Risk Factors - Risks Related to Our Properties and
Our Business - We could incur significant costs related to government regulation
and private litigation over environmental matters," "Risk Factors - Risks
Related to Our Properties and Business - Existing Conditions at some of our
properties may expose us to liability related to environmental matters," "Risk
Factors - Risks Related to Our Properties and Business - Potential environmental
liabilities may exceed our environmental insurance coverage limits," "Business
and Properties - Description of Existing Portfolio - Land Parcel (2nd paragraph
only)," "Business and Properties - Description of Option Properties - Playa
Vista - Water's Edge," "Business and Properties -
24
Regulation - Environmental Matters" (the "Reviewed Portions"), insofar as those
statements are descriptions of contracts, agreements or other legal documents or
insofar as they describe federal environmental statutes, rules or regulations
provide an accurate summary in all material respects of such contracts,
agreements, documents, statutes, rules or regulations.
In rendering such opinions, such counsel may limit its opinions to the
federal laws of the United States of America and the laws of the State of
California, and matters specifically governed thereby. In rendering such
opinions, such counsel may also rely, as to matters of fact (but not as to legal
conclusions), to the extent they deem proper, on certificates of responsible
officers of the Company and public officials.
In addition, such counsel shall state that such counsel assisted in the
preparation of the Reviewed Portions of the Prospectus, have reviewed the
Reviewed Documents (as such term is defined in such counsel's opinion), and have
participated in certain telephone conversations with officers of the Company and
the respective representatives of the Company and the Underwriters. However,
such counsel shall not have participated in conferences at which the contents of
the Registration Statement and the Prospectus and related matters were discussed
with officers and other representatives of the Company, representatives of the
Underwriters and representatives of the independent certified public accountants
of the Company. Since such counsel shall not have undertaken to determine
independently the accuracy, completeness or fairness of the statements contained
in the Registration Statement or Prospectus, and because of the limitations
inherent in the examination made by such counsel and knowledge available to it
and the nature and extent of such counsel's review of the Reviewed Documents,
such counsel is unable to assume, explicitly or implicitly, and does not assume,
any responsibility for the accuracy, completeness or fairness of such
statements, and such counsel can give no assurance that such examination,
knowledge and review of the Reviewed Documents would necessarily reveal matters
of significance with respect to the items discussed in the remainder of this
paragraph. However, based solely upon such counsel's review of the Reviewed
Documents and information revealed to such counsel as a result of such counsel's
participation in the preparation of the Reviewed Portions of the Prospectus, no
facts have come to such counsel's attention that cause such counsel to believe
that the statements contained in the Reviewed Portions of the Prospectus as of
its date, or at the First Closing Date (except with respect to any financial
statements and related notes and schedules and other financial data derived
therefrom included therein or omitted therefrom, as to which such counsel makes
no comment), contained or contains any untrue statement of a material fact or
omitted or omits to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
(h) On any Closing Date other than the First Closing Date, the
Representatives shall have received from Xxxxxxxx Chance US LLP, counsel for the
Underwriters, such opinion or opinions, dated such Closing Date, with respect to
the incorporation of the Company, the validity of the Offered Securities
delivered on such Closing Date, the Registration Statements, the Prospectus and
other related matters as the Representatives may require, and the Company shall
have furnished to such counsel such documents as they request for the purpose of
enabling them to pass upon such matters. In rendering such opinion, Xxxxxxxx
Chance US LLP may rely as to the organization or incorporation of the
Transaction Entities and all other matters governed by Maryland law upon the
opinion of Xxxxxxx, referred to above.
(i) Each Transaction Entity shall have furnished the Representatives a
certificate, dated such Closing Date, of its, or its general partner's or
managing member's chief executive officer(s) and the chief financial officer in
which such officers, to the best of their knowledge after reasonable
investigation, shall state that: (i) the representations and warranties of the
Transaction Entities in this Agreement are true and correct; (ii) the
Transaction Entities have complied with all agreements and satisfied all
conditions on their part to be performed or satisfied hereunder at or prior to
such Closing Date; (iii) no stop order suspending the effectiveness of any
Registration Statement has been issued and no proceedings for that
25
purpose have been instituted or are contemplated by the Commission; and (iv) the
Additional Registration Statement (if any) satisfying the requirements of
subparagraphs (1) and (3) of Rule 462(b) was filed pursuant to Rule 462(b),
including payment of the applicable filing fee in accordance with Rule 111(a) or
(b) under the Act, prior to the time the Prospectus was printed and distributed
to any Underwriter.
(j) The Representatives shall have received a letter, dated such Closing
Date, of KPMG LLP which meets the requirements of subsection (a) of this
Section, except that the specified date referred to in such subsection will be a
date not more than three days prior to such Closing Date for the purposes of
this subsection.
(k) On or prior to the date of this Agreement, the Representatives shall
have received lockup letters from each of the executive officers and directors
of the Company.
(l) The NASD shall have confirmed that it has not raised any objection
with respect to the fairness and reasonableness of the underwriting terms and
arrangements.
(m) At the Closing Date, the Offered Securities shall have been approved
for listing on the NYSE, subject only to official notice of issuance.
(n) On the Closing Date, counsel for the Underwriters shall have been
furnished with such other documents as they may reasonably require for the
purpose of enabling them to pass upon the issuance and sale of the Offered
Securities as herein contemplated and related proceedings, or in order to
evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Transaction Entities in connection with the issuance and sale of
the Offered Securities as herein contemplated shall be satisfactory in form and
substance to the Underwriters and counsel for the Underwriters.
(o) LandAmerica shall be prepared and irrevocably committed to issue its
ALTA Owner's Extended Coverage Policy for each of the Properties in the form of
the pro formas attached hereto as Exhibit I with all endorsements attached,
dated as of the Closing Date.
(p) First American Title Insurance Company shall be prepared and
irrevocably committed to issue its Eagle 9 UCC Insurance Policy for Buyers for
each of the Property Partnerships in the form of the pro formas attached hereto
as Exhibit J with all endorsements attached, dated as of the Closing Date.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
The Company will furnish the Representatives with such conformed copies of
such opinions, certificates, letters and documents as the Representatives
reasonably request. CSFB and Citigroup may in their sole discretion waive on
behalf of the Underwriters compliance with any conditions to the obligations of
the Underwriters hereunder, whether in respect of an Optional Closing Date or
otherwise.
7. Indemnification and Contribution.
(a) The Transaction Entities, jointly and severally, will indemnify and
hold harmless each Underwriter, its partners, members, directors, officers,
employees and agents and each person, if any, who controls such Underwriter
within the meaning of the Act or the Exchange Act, against any losses, claims,
damages, liabilities or expenses, joint or several, to which any of them may
become subject under the Act, the Exchange Act or other Federal state statutory
law or regulation or at common law, insofar as such
26
losses, claims, damages, liabilities or expenses (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in any Registration Statement, the Prospectus, or
any amendment or supplement thereto, or any related preliminary prospectus, 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 indemnified party for
any legal or other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such loss, claim, damage,
liability, action or expense as such expenses are incurred; provided, however,
that the Transaction Entities will not be liable in any such case to the extent
that any such loss, claim, damage, liability or expense arises out of or is
based upon an untrue statement or alleged untrue statement in or omission or
alleged omission from any of such documents in reliance upon and in conformity
with written information furnished to the Company by any Underwriter through the
Representatives specifically for use therein, it being understood and agreed
that the only such information furnished by any Underwriter consists of the
information described as such in subsection (b) below; provided further that
with respect to any untrue statement or omission of material fact made in any
Preliminary Prospectus, the indemnity agreement contained in this Section 7(a)
shall not inure to the benefit of any Underwriter from whom the person asserting
any such loss, claim, damage or liability purchased the Offered Securities
concerned, to the extent that any such loss, claim, damage or liability of such
Underwriter occurs under the circumstances where it shall have been determined
by a court of competent jurisdiction by final and non-appealable judgment that
(w) the Company had previously furnished copies of the Prospectus to the
Representatives, (x) delivery of the Prospectus was required by the Act to be
made to such person, (y) the untrue statement or omission of a material fact
contained in the Preliminary Prospectus was corrected in the Prospectus and (z)
there was not sent or given to such person, at or prior to the written
confirmation of the sale of such Offered Securities to such person, a copy of
the Prospectus.
(b) Each Underwriter severally and not jointly will indemnify and hold
harmless each Transaction Entity, each of its directors and officers who signs
the Registration Statement and each person, if any who controls the Company
within the meaning of the Act or the Exchange Act, against any losses, claims,
damages, liabilities or expenses to which any of them may become subject, under
the Act to which they may become subject under the Act, the Exchange Act or
other Federal state statutory law or regulation or at common law or otherwise,
insofar as such losses, claims, damages, liabilities or expenses (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any Registration Statement,
the Prospectus, or any amendment or supplement thereto, or any related
preliminary prospectus, or arise out of or are based upon the omission or the
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 reliance upon and in
conformity with written information furnished to the Company by such Underwriter
through the Representatives specifically for use therein, and will reimburse any
legal or other expenses reasonably incurred by each indemnified party in
connection with investigating or defending any such loss, claim, damage,
liability, action or expense as such expenses are incurred, it being understood
and agreed that the only such information furnished on behalf of each
Underwriter consists of the following information: the list of Underwriters and
their respective participation in the sale of the Offered Securities, the
concession and reallowance sentences and the paragraph related to stabilization,
syndicate covering transactions and penalty bids appearing under the caption
"Underwriting" in the Prospectus.
(c) Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify, in writing, the indemnifying party of the
commencement thereof; but the omission to so notify the indemnifying party will
not relieve
27
it from any liability which it may have to any indemnified party
otherwise than under subsection (a) or (b) above unless and to the extent it did
not otherwise learn of such action and such failure results in the forfeiture by
the indemnifying party of substantial rights and defenses. In case any such
action is brought against any indemnified party and it notifies the indemnifying
party of the commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may 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 will not be
liable to such indemnified party under this Section for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation. Notwithstanding
anything contained herein to the contrary, if indemnity may be sought pursuant
to the last paragraph in Section 7(a) hereof in respect to such action or
proceeding, then, the indemnifying party shall be liable for the reasonable fees
and expenses of not more than one separate firm (in addition to any local
counsel) for the indemnified parties. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened action in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party unless such settlement (i) includes an unconditional release
of such indemnified party from all liability on any claims that are the subject
matter of such action 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 an
indemnified party.
(d) If the indemnification provided for in this Section is unavailable or
insufficient to hold harmless an indemnified party under subsection (a) or (b)
above for any reason, then each indemnifying party (with respect to the
Transaction Entities, jointly and severally) shall contribute to the amount paid
or payable by such indemnified party as a result of the losses, claims, damages,
liabilities or expenses referred to in subsection (a) or (b) above (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Transaction Entities on the one hand and one or more of the Underwriters on the
other from the offering of the Offered Securities or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Transaction Entities
on the one hand and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses as well as any other relevant equitable considerations.
The relative benefits received by the Transaction Entities 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 (before deducting expenses) received by
the Transaction Entities bear to the total underwriting discounts and
commissions received by the Underwriters. The relative fault shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Transaction Entities or the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission. The
amount paid by an indemnified party as a result of the losses, claims, damages,
liabilities or expenses referred to in the first sentence of this subsection (d)
shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any action
or claim which is the subject of this subsection (d). Notwithstanding the
provisions of this subsection (d), no Underwriter (except as may be provided in
any agreement among underwriters relating to the offering of the Offered
Securities) shall be required to contribute any amount in excess of the
underwriting discount commission applicable to the Offered Securities purchased
by such Underwriter hereunder 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. The
28
Transaction Entities and the Underwriters agree that it would not be just and
equitable if contribution were determined by pro rata allocation or another
method of allocation with does not take account of the equitable considerations
referred to above.
(e) The obligations of the Transaction Entities under this Section shall
be in addition to any liability which the Transaction Entities may otherwise
have and shall extend, upon the same terms and conditions, to each partner,
member, director, officer, employee or agent of any Underwriter and any person,
if any, who controls any Underwriter or the QIU (as hereinafter defined) within
the meaning of the Act or the Exchange Act; and the obligations of the
Underwriters under this Section 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 director of the Transaction Entities, to each officer of
the Transaction Entities who has signed a Registration Statement and to each
person, if any, who controls the Transaction Entities within the meaning of the
Act.
8. Default of Underwriters. If any Underwriter or Underwriters default in their
obligations to purchase Offered Securities hereunder on either the First or any
Optional Closing Date and the aggregate number of shares of Offered Securities
that such defaulting Underwriter or Underwriters agreed but failed to purchase
does not exceed 10% of the total number of shares of Offered Securities that the
Underwriters are obligated to purchase on such Closing Date, CSFB and Citigroup
may make arrangements satisfactory to the Company for the purchase of such
Offered Securities by other persons, including any of the Underwriters, but if
no such arrangements are made by such Closing Date, the non-defaulting
Underwriters shall be obligated severally, in proportion to their respective
commitments hereunder, to purchase the Offered Securities that such defaulting
Underwriters agreed but failed to purchase on such Closing Date. If any
Underwriter or Underwriters so default and the aggregate number of shares of
Offered Securities with respect to which such default or defaults occur exceeds
10% of the total number of shares of Offered Securities that the Underwriters
are obligated to purchase on such Closing Date and arrangements satisfactory to
CSFB and Citigroup and the Company for the purchase of such Offered Securities
by other persons are not made within 36 hours after such default, this Agreement
will terminate without liability on the part of any non-defaulting Underwriter
or the Company, except as provided in Section 9 (provided that if such default
occurs with respect to Optional Securities after the First Closing Date, this
Agreement will not terminate as to the Firm Securities or any Optional
Securities purchased prior to such termination). As used in this Agreement, the
term "Underwriter" includes any person substituted for an Underwriter under this
Section. Nothing herein will relieve a defaulting Underwriter from liability for
its default.
9. Qualified Independent Underwriter. The Transaction Entities hereby confirm
that at their request Xxxxxxx Xxxxx & Associates, Inc. has acted as "qualified
independent underwriter" (in such capacity, the "QIU") within the meaning of
Rule 2720 of the Conduct Rules of the National Association of Securities
Dealers, Inc. in connection with the offering of the Offered Securities. The
Transaction Entities, jointly and severally, will indemnify and hold harmless
the QIU, its directors, officers, employees and agents and each person who
controls the QIU within the meaning of the Act, against any losses, claims,
damages or liabilities, joint or several, to which the QIU 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 the
QIU's acting (or alleged failing to act) as such "qualified independent
underwriter" and will reimburse the QIU for any legal or other expenses
reasonably incurred by the QIU in connection with investigating or defending any
such loss, claim, damage, liability or action as such expenses are incurred.
10. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Transaction Entities or its respective officers and
29
of the several Underwriters set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation, or statement
as to the results thereof, made by or on behalf of any Underwriter, the
Transaction Entities or any of their respective representatives, officers or
directors or any controlling person, and will survive delivery of and payment
for the Offered Securities. If this Agreement is terminated pursuant to Section
8 or if for any reason the purchase of the Offered Securities by the
Underwriters is not consummated, the Company shall remain responsible for the
expenses to be paid or reimbursed by it pursuant to Section 5 and the respective
obligations of the Transaction Entities and the Underwriters pursuant to Section
7 and the obligations of the Transaction Entities pursuant to Section 9 shall
remain in effect, and if any Offered Securities have been purchased hereunder
the representations and warranties in Section 2 and all obligations under
Section 5 shall also remain in effect. If the purchase of the Offered Securities
by the Underwriters is not consummated for any reason other than solely because
of the termination of this Agreement pursuant to Section 8 or the occurrence of
any event specified in clause (iii), (iv), (vi), (vii) or (viii) of Section
6(c), the Company will reimburse the Underwriters for all out-of-pocket expenses
(including fees and disbursements of counsel) reasonably incurred by them in
connection with the offering of the Offered Securities.
11. Notices. All communications hereunder will be in writing and, if sent to the
Underwriters, will be mailed, delivered or telegraphed and confirmed to the
Representatives, c/o Credit Suisse First Boston LLC, Eleven Madison Avenue, New
York, N.Y. 10010-3629, Attention: Transactions Advisory Group and c/o Citigroup
Xxxxx Xxxxxx Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX, 00000, Attention:
Transaction Structuring Group with a copy to Xxxxxxxx Chance US LLP, Attention:
Xxxxx X. Xxxxxxxxx or, if sent to the Transaction Entity, will be mailed,
delivered or telegraphed and confirmed to the Company, Attention: General
Counsel with a copy to Xxxxxx & Xxxxxxx LLP, Attention: Julian T.H. Xxxxxxxxxxx;
provided, however, that any notice to an Underwriter pursuant to Section 7 will
be mailed, delivered or telegraphed and confirmed to such Underwriter.
12. Successors. This Agreement will inure to the benefit of and be binding upon
the parties hereto and their respective successors and the officers and
directors and controlling persons referred to in Section 7, and no other person
will have any right or obligation hereunder.
13. Representation of Underwriters. The Representatives will act for the several
Underwriters in connection with this financing, and any action under this
Agreement taken by the Representatives jointly or by CSFB and Citigroup will be
binding upon all the Underwriters.
14. Counterparts. This Agreement may be executed 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 Agreement.
15. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAWS.
The Company hereby submits to the non-exclusive jurisdiction of the
Federal and state courts in the Borough of Manhattan in The City of New York in
any suit or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.
30
If the foregoing is in accordance with the Representatives' understanding
of our agreement, kindly sign and return to the Company one of the counterparts
hereof, whereupon it will become a binding agreement between the Company and the
several Underwriters in accordance with its terms.
Very truly yours,
XXXXXXX PROPERTIES, INC.
By:
--------------------------------
Name:
Title:
XXXXXXX PROPERTIES, L.P.
By: Xxxxxxx Properties, Inc., its
general partner
By:
--------------------------------
Name:
Title:
XXXXXXX PROPERTIES SERVICES, INC.
By:
--------------------------------
Name:
Title:
The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.
CREDIT SUISSE FIRST BOSTON LLC
By:
--------------------------------
Name:
Title:
CITIGROUP GLOBAL MARKETS INC.
By:
--------------------------------
Name:
Title:
Acting on behalf of themselves and as
the Representatives of the several
Underwriters
SCHEDULE A
NUMBER OF
UNDERWRITER FIRM SECURITIES
Credit Suisse First Boston LLC.......................
Citigroup Global Markets Inc.........................
Deutsche Bank Securities Inc. .......................
Banc Of America Securities LLC
UBS Securities LLC
Wachovia Securities, LLC
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated
X.X. Xxxxxxx & Sons, Inc.
Xxxxxxx Xxxxx & Associates, Inc.
----------
Total...................
==========
SCHEDULE B
MATERIAL SUBSIDIARIES
Name Jurisdiction of Formation /
Incorporation
Library Square Associates, LLC Delaware
Xxxxxxx Properties-555 W. Fifth, LLC Delaware
Xxxxxxx Properties-808 S. Olive, LLC Delaware
North Tower, LLC Delaware
Xxxxxxx Partners-355 S. Grand, LLC Delaware
Xxxxxxx Partners-611 N. Brand, LLC Delaware
Xxxxxxx Partners-Glendale II, LLC Delaware
Xxxxxxx/Cerritos I, LLC Delaware
Xxxxxxx Partners - Plaza Las Xxxxxxx, LLC Delaware
SCHEDULE C
Direct and indirect subsidiaries of Xxxxxxx Properties, Inc.
Name Jurisdiction of Formation /
Incorporation
Xxxxxxx Properties, L.P. Maryland
Xxxxxxx Properties Services, Inc. Maryland
Xxxxxxx Properties-Solana Services, L.P. Texas
MP-Solana Services GP, LLC California
MP-Solana Services LP, LLC California
New BHE, LLC Delaware
Bunker Hill Junior Mezzanine, LLC Delaware
Bunker Hill Senior Mezzanine, LLC Delaware
Library Square Associates, LLC Delaware
Xxxxxxx Properties-555 W. Fifth Mezzanine, LLC Delaware
Xxxxxxx Properties-555 W. Fifth, LLC Delaware
Xxxxxxx Properties-808 S. Olive Mezzanine, LLC Delaware
Xxxxxxx Properties-808 S. Olive, LLC Delaware
North Tower Manager, LLC Delaware
North Tower Member, LLC Delaware
North Tower, LLC Delaware
MP-355 S. Grand Mezzanine, LLC Delaware
Xxxxxxx Partners-355 S. Grand, LLC Delaware
Xxxxxxx Partners-Glendale, LLC California
Xxxxxxx Partners - Glendale Center, LLC California
Xxxxxxx Partners-611 N. Brand, LLC Delaware
Xxxxxxx Partners-Glendale II, LLC Delaware
Xxxxxxx/Cerritos I, LLC Delaware
Xxxxxxx Partners - Plaza Las Xxxxxxx, LLC Delaware
SCHEDULE D
CONTRACTS, AGREEMENTS OR UNDERSTANDINGS IN CONNECTION WITH THE OFFERING
1. Deutsche Bank AG New York Branch - letter with Deutsche Bank AG New York
Branch entered into in connection with the refinancing of the KPMG Tower.
2. Secured Capital Corp. -- the refinancing of the US Bank Xxxxx, Xxxxx Fargo
Tower, AT&T Wireless and Gas Company Tower.
3. Xxxxxxx X. Xxxxxxxx - pursuant to the employment agreement with Xxxxxxx X.
Xxxxxxxx, he has compensation based on the success of the Public Offering.
4. Realty Capital International Inc. - pursuant to letter agreement dated
June 3, 2002.
5. Xxxxx Lang LaSalle - letter of intent between BankAmerica Realty Services,
Inc. ("BARSI"), and Xxxxxxx Partners -- Glendale, LLC in connection with
the purchase of BARSI's interest membership interests dated May 12, 2003.
6. Engagement letter dated February 19, 2002 among Xxxxxxx Partners
Development Ltd. and its affiliates and successors, Credit Suisse First
Boston Corporation and Xxxxxxx Xxxxx Barney Inc., and all amendments
thereto.
SCHEDULE E
MANAGEMENT AGREEMENTS
1. Management and Leasing Agreement between Xxxxxxx Properties, L.P. and
certain included and option and excluded properties.
2. Management and Leasing Agreement (Solana) between Xxxxxxx
Properties-Solana Services, L.P. and Xxxxxxx Partners Solana Limited
Partnership
3. Management and Leasing Agreement (Solana Land) between Xxxxxxx
Properties-Solana Services, L.P. and Xxxxxxx Partners-Solana Land, L.P.
4. Services Agreement by and between Xxxxxxx Properties, L.P. and Xxxxxxx
Partners -- 000 Xxxxx Xxxxxx, L.P.
5. Right of First Offer between Xxxxxxx Properties, L.P., Xxxxxxx
Partners-Solana Limited Partnership and Xxxxxxx Partners-Solana Land, L.P.
6. Services Agreement by and between Xxxxxxx Properties, L.P. and Xxxxxxx
Partners Solana, L.P.
7. Services Agreement by and between Xxxxxxx Properties, L.P. and Xxxxxxx
Xxxxxx Partners-17th & Grand Ltd.
SCHEDULE F
PRELIMINARY TITLE REPORTS
1. US Bank Tower - Amended and Updated Preliminary Report Amendment No. 1
issued by Commonwealth Land Title Insurance Company, Order No. 1108727-27,
dated March 6, 2003, as supplemented by that certain Supplemental Report
dated March 18, 2003 and that certain Supplemental Report dated May 9,
2003.
2. Gas Company Tower - Updated and Amended Preliminary Report Amendment No. 1
issued by Commonwealth Land Title Insurance Company, Order No. 1108728-27,
dated February 14, 2003, as supplemented by that certain Supplemental
Report dated May 8, 2003.
3. 000 Xxxxx Xxxxx - Updated and Amended Preliminary Report Amendment No. 1
issued by Commonwealth Land Title Insurance Company, Order No. 1204647-27,
dated February 14, 2003, as supplemented by that certain Supplemental
Report dated May 5, 2003.
4. Xxxxx Fargo Tower (North Tower) - Updated Preliminary Report issued by
Commonwealth Land Title Insurance Company, Order No. 1105646-20, dated
August 14, 2002, as supplemented by that certain Supplemental Report dated
May 6, 2003.
5. KPMG Tower (South Tower) - Interim Binder Form A issued by Commonwealth
Land Title Insurance Company, Order No. 1105647-20, dated September 16,
2002, as supplemented by that certain Supplemental Report dated May 6,
2003.
6. Plaza Las Xxxxxxx - Amended and Updated Preliminary Report issued by
Commonwealth Land Title Insurance Company, Order No. 1108729-27, dated
March 6, 2003, as supplemented by that certain Supplemental Report dated
May 8, 2003.
7. Glendale Center I - Updated Preliminary Report issued by Commonwealth Land
Title Insurance Company, Order No. 1105648-20, dated December 2, 2002, as
supplemented by that certain Supplemental Report dated May 6, 2003.
8. Glendale Center II - Updated Preliminary Report issued by Commonwealth
Land Title Insurance Company, Order No. 1203958-20, dated December 2,
2002, as supplemented by that certain Supplemental Report dated May 5,
2003.
9. Cerritos - Amended Preliminary Report issued by Commonwealth Land Title
Insurance Company, Order No. 5008606-20, dated May 19, 2003.
SCHEDULE G
ENVIRONMENTAL REPORTS
1. Phase I Environmental Site Assessment Update, Library Tower and Westlawn
Parking Garage, 000 Xxxx 0xx Xxxxxx, Xxx Xxxxxxx, XX 00000, prepared by
Certified Environments Inc. ("CEI"), 3/25/02
2. Phase I Environmental Assessment, Library Tower, 000 Xxxx 0xx Xxxxxx, Xxx
Xxxxxxx, XX 00000, prepared by CEI, 7/28/00
3. Phase I Environmental Assessment, Library Tower, 633 West 5th Street, Los
Angeles, Los Angeles County, California, prepared by Xxxxxxx Consultants
Inc., 9/29/97
4. Phase I Environmental Site Assessment Update, Gas Company Tower, 000 Xxxx
Xxxxx Xxxxxx, Xxx Xxxxxxx, XX 00000, prepared by CEI, 8/1/02
5. Phase I Environmental Site Assessment, Gas Company Tower, 000 Xxxx Xxxxx
Xxxxxx, Xxx Xxxxxxx, XX 00000, prepared by CEI, 10/26/00
6. Phase I Environmental Site Assessment, The Gas Company Tower and the 000
Xxxxx Xxxxxx Garage, 000 Xxxxx Xxxxxx, Xxx Xxxxxxx, Xxx Xxxxxxx Xxxxxx,
Xxxxxxxxxx 00000, prepared by EMG, 3/22/00
7. Phase I Environmental Site Assessment, Xxxxx Fargo Tower (North Tower),
000 Xxxxx Xxxxx Xxxxxx, 000 Xxxxx Xxxx Xxxxxx, Xxx Xxxxxxx, XX 00000,
prepared by CEI, 9/11/02
8. Phase I Environmental Assessment, Xxxxx Fargo Tower, 000 Xxxxx Xxxxx
Xxxxxx, Xxx Xxxxxxx, Xxx Xxxxxxx Xxxxxx, Xxxxxxxxxx, prepared by Xxxxxxx
Consultants, Inc., 2/7/97
9. Phase I Environmental Site Assessment, KPMG Tower, (South Tower), 000
Xxxxx Xxxxx Xxxxxx, Xxx Xxxxxxx, XX, 00000, prepared by CEI, 4/18/02
10. Phase I Environmental Site Assessment Update, Glendale Center, 000 Xxxxx
Xxxxx Xxxxxxxxx, Xxxxxxxx, XX 00000, prepared by XXX, 0/0/00
00. Xxxxx I Environmental Site Assessment, Glendale Center, 000 Xxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx, XX 00000, prepared by CEI, 12/18/00
12. Phase I Environmental Site Assessment Update, Plaza Las Xxxxxxx, 99, 111,
135, and 000 Xxxxx Xxx Xxxxxx Xxxxxx, Xxxxxxxx, XX 00000, prepared by CEI
8/1/02
13. Phase I Environmental Site Assessment, Plaza Las Xxxxxxx, 99, 111, 135,
and 000 Xxxxx Xxx Xxxxxx Xxxxxx, Xxxxxxxx, XX 00000, prepared by CEI,
7/28/00
14. Phase I Environmental Site Assessment, Plaza Las Xxxxxxx, 111, 135, and
000 Xxxxx Xxx Xxxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxxxxx Xxxxxx, Xxxxxxxxxx,
prepared by Xxxxxxx Consultants Inc., 6/23/99
15. Phase I Environmental Site Assessment, AT&T Headquarters, 00000 Xxxx Xxxxx
Xxxxx & 00000 000xx Xxxxxx, Xxxxxxxx, XX 00000, prepared by CEI, 5/27/03
16. Phase I Environmental Site Assessment, Vacant Parcel, Cerritos,
California, Job No. 00000-000-000, prepared by Dames & Xxxxx, 1/15/98
17. Phase I Environmental Site Assessment Update, South Olive Street Parking
Garage, 000 Xxxxx Xxxxx Xxxxxx, Xxx Xxxxxxx, XX 00000, prepared by XXX,
0/0/00
00. Xxxxx I Environmental Site Assessment, South Olive Street Parking Garage,
000 Xxxxx Xxxxx Xxxxxx, Xxx Xxxxxxx, XX 00000, prepared by CEI, 10/26/00
19. Phase I Environmental Site Assessment, X-2 Parking Garage, 000 Xxxxx Xxxx
Xxxxxx, Xxx Xxxxxxx, XX, 00000, prepared by CEI, 4/17/02
20. Closure Report, Underground Storage Tank Removal Activities, Cerritos
Corporate Center - Phase II, 000xx Xxxxxx xxx Xxxx Xxxxxx Xxxxx, Xxxxxxxx,
Xxxxxxxxxx 00000, prepared by URS Corporation, 7/19/01
21. Underground Tank Closure Report, Xxxxx Fargo Center Facility, 000 Xxxxx
Xxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx, prepared by Ami Adini & Associates,
Inc., 8/19/99
SCHEDULE H
LEASES
1) Sempra Energy
2) Southern California Gas Company
3) Xxxxx Fargo Bank
OTHER DOCUMENTS
1) Deed of Trust Note dated December 12, 2000 between Credit Suisse First Boston
Mortgage Capital LLC and Xxxxxxx Partners - 611 N. Brand LLC in the original
principal amount of $37,000,000.
2) Pledge Agreement dated ______, 2003 between Xxxxxx X. Xxxxxxx III, his
affiliates and Xxxxxxx Properties, L.P., a Maryland limited partnership.
SCHEDULE I
PRO FORMAS OF ALTA OWNER'S EXTENDED COVERAGE
SCHEDULE J
PRO FORMAS OF EAGLE 9 UCC INSURANCE POLICY FOR BUYERS
