EQUITY RESIDENTIAL PROPERTIES TRUST
(a Maryland real estate investment trust)
Depositary Shares Each Representing 1/10 of a 8.60% Series D Cumulative
Redeemable Preferred Share of Beneficial Interest (Par Value $.01 Per Share)
(Liquidation Preference Equivalent to $25.00 Per Depositary Share)
TERMS AGREEMENT
---------------
Dated: May 16, 1997
To: Equity Residential Properties Trust
ERP Operating Limited Partnership
Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
We (the "Representatives") understand that Equity Residential Properties
Trust ("EQR" or the "Company") proposes to issue and sell interests in 8.60%
Series D Cumulative Redeemable Preferred Shares of Beneficial Interest ("Series
D Preferred Shares") in the form of depositary shares (the "Depositary Shares")
represented by depositary receipts (the "Depositary Receipts") (the Depositary
Shares and Depositary Receipts collectively hereinafter referred to as the
"Underwritten Securities"). Subject to the terms and conditions set forth or
incorporated by reference herein, the underwriters named below (the
"Underwriters") offer to purchase, severally and not jointly, the respective
numbers of Initial Underwritten Securities (as defined in the Underwriting
Agreement referred to below) set forth below opposite their respective names,
and a proportionate share of Option Securities (as defined in the Underwriting
Agreement referred to below) to the extent any are purchased, at the purchase
price per Depositary Share set forth below.
Number of Shares of Initial
Underwriter Underwritten Securities
----------- ---------------------------
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated 1,610,000
Xxxxx Xxxxxx Inc. 1,610,000
PaineWebber Incorporated 1,610,000
Prudential Securities Incorporated 1,610,000
Xxxxxx, Read & Co. Inc. 70,000
X.X. Xxxxxxx & Sons, Inc. 70,000
EVEREN Securities, Inc. 70,000
Xxxxxxxxxxx & Co., Inc. 70,000
Xxxxx Xxxxxxx Inc. 70,000
Xxxxxxx Xxxxx & Associates, Inc. 70,000
The Xxxxxxxx-Xxxxxxxx Company, Inc. 70,000
US Clearing Corp. 70,000
---------
Total 7,000,000
=========
The Underwritten Securities shall have the following terms:
Depositary Shares
Title of Securities: Depositary Shares
Number of Shares: 7,000,000
Fractional amount of Preferred Shares represented by each Depositary Share:
1/10 of a Series D Preferred Share deposited with The First National Bank of
Boston, as Depositary, entitling the holder to all proportional rights and
preferences of the Series D Preferred Shares (including distribution, voting,
redemption and liquidation rights and preferences).
Current Ratings: Xxxxx'x "Baa3," S&P "BBB-," and Duff & Xxxxxx "BBB."
Distribution Rate: $2.15 per annum, (representing 8.60% of the public offering
price per Depositary Share) payable quarterly on or about the 15th day of
January, April, July and October of each year, commencing on July 15, 1997.
Par Value: $.01 per Series D Preferred Share.
Liquidation Preference: $250 per Series D Preferred Share (equivalent to $25
per Depositary Share), plus accrued and unpaid distributions.
Ranking: With respect to the payment of distributions and amounts upon
liquidation, the Series D Preferred Shares will rank pari passu with any other
preferred shares and will rank senior to the Common Shares and any other shares
of beneficial interest of the Company ranking junior to the Series D Preferred
Shares.
Public offering price per Depositary Share: $25, plus accumulated
distributions, if any, from May 21, 1997.
Purchase price per Depositary Share: $24.2125, plus accumulated distributions,
if any, from May 21, 1997.
Conversion provisions: Not convertible into or exchangeable for any other
property or securities of the Company.
Redemption provisions: The Series D Preferred Shares are not redeemable prior
to July 15, 2007; on or after July 15, 2007, they are redeemable for cash at the
option of the Company, in whole or in part, at $250.00 per share, plus
distributions accrued and unpaid to the redemption date. The redemption price
(other than the portion thereof consisting of accrued and unpaid distributions)
is payable solely out of the sale proceeds of other shares of beneficial
interest of the Company which may include series of preferred shares, and from
no other source. However, the Company may redeem Series D Preferred Shares in
certain circumstances relating to the maintenance of its ability to qualify as a
REIT for Federal income tax purposes.
Number of Option Securities, if any, that may be purchased by the Underwriters:
1,050,000.
Delayed Delivery Contracts: not authorized
Additional co-managers, if any: Xxxxx Xxxxxx Inc., PaineWebber Incorporated and
Prudential Securities Incorporated.
Other terms: Voting Rights: If distributions on the Series D Preferred Shares
are in arrears for six or more quarterly periods, holders of the Depositary
Shares, voting separately as a class with all other series of preferred shares
upon which like voting rights have been conferred and are exercisable, will be
entitled to vote for the election of two additional Trustees to serve on the
Board of Trustees of the Company until all distribution arrearages are
eliminated.
Closing date and location: May 21, 1997, Xxxxxxxxx & Xxxxxxxxxxx, P.C., Xxx
Xxxxx Xxxxxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000.
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All the provisions contained in the document attached as Annex A hereto
entitled "Equity Residential Properties Trust (a Maryland real estate investment
trust) -- Common Shares of Beneficial Interest, Preferred Shares of Beneficial
Interest and Depositary Shares -- Standard Underwriting Provisions" (the
"Underwriting Agreement") are hereby incorporated by reference in their entirety
herein and shall be deemed to be a part of this Terms Agreement to the same
extent as if such provisions had been set forth in full herein. Terms defined in
such document are used herein as therein defined.
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Please accept this offer no later than 4:30 P.M. (New York City time) on
May 16, 1997 by signing a copy of this Terms Agreement in the space set forth
below and returning the signed copy to us.
Very truly yours,
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
XXXXX XXXXXX INC.
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
For themselves and as Representatives of the
several Underwriters named above
By: XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By: /s/ Xxxxxxx Xxxxxx
----------------------
Name: Xxxxxxx Xxxxxx
Title: Director
Accepted:
By: EQUITY RESIDENTIAL PROPERTIES TRUST,
for itself and as the general partner of ERP Operating
Limited Partnership
By: /s/ Xxxxx X. Xxxxxxxxxx
-----------------------------
Name: Xxxxx X. Xxxxxxxxxx
Title: Executive Vice President and
Chief Financial Officer
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EQUITY RESIDENTIAL PROPERTIES TRUST
(a Maryland real estate investment trust)
Common Shares of Beneficial Interest,
Preferred Shares of Beneficial Interest and Depositary Shares
STANDARD UNDERWRITING PROVISIONS
--------------------------------
May 16, 1997
Equity Residential Properties Trust, a Maryland real estate investment
trust ("EQR") may from time to time issue and sell Common Shares of Beneficial
Interest, $.01 par value (the "Common Shares"), or one or more series of its
Preferred Shares of Beneficial Interest, $.01 par value (the "Preferred
Shares"), or Preferred Shares represented by depositary shares (the "Depositary
Shares") represented by depositary receipts (the "Depositary Receipts"), in one
or more offerings on terms to be determined at the time of sale (the Common
Shares, the Preferred Shares, the Depositary Shares and the Depositary Receipts
are collectively referred to herein as the "Securities"). Each series of
Preferred Shares may vary, as to the specific number of shares, title, stated
value, liquidation preference, issuance price, ranking, dividend rate or rates
(or method of calculation), dividend payment dates, any redemption or sinking
fund requirements, any conversion provisions and any other variable terms as set
forth in the applicable articles supplementary to EQR's Declaration of Trust
(the "Articles Supplementary") relating to such Preferred Shares and filed with
the State Department of Assessments and Taxation of Maryland ("SDAT") pursuant
to Title 8 of the Corporations and Associations Article of the Annotated Code of
Maryland (the "Maryland REIT Statute"). As used herein, "you" and "your,"
unless the context otherwise requires, shall mean the parties to whom the
applicable Terms Agreement (as hereinafter defined) is addressed as co-managers
with respect to Underwritten Securities (as hereinafter defined) purchased
pursuant thereto.
Whenever EQR determines to make an offering of Securities through you
or through an underwriting syndicate managed by you, EQR will enter into an
agreement (the "Terms Agreement") providing for the sale of such Securities (the
"Underwritten Securities") to, and the purchase and offering thereof by, you and
such other underwriters, if any, selected by you as have authorized you to enter
into such Terms Agreement on their behalf (the "Underwriters," which term shall
include you whether acting alone in the sale of the Underwritten Securities or
as a member or members of an underwriting syndicate and any Underwriter
substituted pursuant to Section 10 hereof). The Terms Agreement relating to the
offering of
Underwritten Securities shall specify the number of Underwritten
Securities of each class or series to be initially issued (the "Initial
Underwritten Securities"), whether the Initial Underwritten Securities shall be
in the form of Depositary Shares and if so the fractional amount of Preferred
Shares represented by each such Depositary Share, the names of the Underwriters
participating in such offering (subject to substitution as provided in Section
10 hereof), the number of Initial Underwritten Securities which each such
Underwriter severally agrees to purchase, the names of Underwriters acting as
co-managers, if any, in connection with such offering, the price at which the
Initial Underwritten Securities are to be purchased by the Underwriters from
EQR, the initial public offering price, if any, of the Initial Underwritten
Securities, the time and place of delivery and payment, any delayed delivery
arrangements and any other variable terms of the Initial Underwritten Securities
(including, but not limited to, current ratings (in the case of Preferred Shares
and Depositary Shares only), designations, liquidation preferences, conversion
provisions, redemption provisions, and sinking fund requirements applicable to
the Initial Underwritten Securities). In addition, each Terms Agreement shall
specify whether EQR has agreed to grant to the Underwriters an option to
purchase additional Underwritten Securities to cover over-allotments, if any,
and the number of Underwritten Securities subject to such option (the "Option
Securities"). As used herein, the term "Underwritten Securities" shall include
the Initial Underwritten Securities and all or any portion of the Option
Securities agreed to be purchased by the Underwriters as provided herein, if
any. The Terms Agreement, which shall be substantially in the form of Exhibit A
hereto, may take the form of an exchange of any standard form of written
telecommunication between you and EQR. Each offering of Underwritten Securities
through you or through an underwriting syndicate managed by you will be governed
by these Standard Underwriting Provisions as incorporated by reference into, and
supplemented by, the applicable Terms Agreement, and such Terms Agreement shall
inure to the benefit of and be binding upon each Underwriter participating in
the offering of such Underwritten Securities.
If the applicable Terms Agreement so provides, the Preferred Shares
will be deposited by EQR against delivery of Depositary Receipts to be issued by
the depositary (the "Depositary") named in a deposit agreement (the "Deposit
Agreement"), to be entered into by and among EQR, the Depositary and the holders
from time to time of the Depositary Receipts issued thereunder and evidencing
Depositary Shares. If the Preferred Shares are not represented by Depositary
Receipts, then all references herein to Depositary Receipts and Depositary
Shares of any kind, to the Deposit Agreement or the Depositary, and to any
agreements, instruments or persons related thereto shall be disregarded and all
representations, conditions, opinions and other documents relating to the
foregoing shall not apply to this Agreement for purposes of the applicable Terms
Agreement.
EQR has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-
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12211) for the registration of the Securities under the Securities Act of
1933, as amended (the "1933 Act"), and the offering thereof from time to time in
accordance with Rule 415 of the rules and regulations of the Commission under
the 1933 Act (the "1933 Act Regulations"), and EQR has filed such amendments
thereto as may have been required prior to the execution of the applicable Terms
Agreement. Such registration statements (as amended, if applicable) have been
declared effective by the Commission. Such registration statements and the
prospectuses constituting parts thereof (including each prospectus supplement
relating to the offering of Underwritten Securities pursuant to Rule 415 of the
1933 Act Regulations (the "Prospectus Supplement")), including all documents
incorporated therein by reference, as from time to time amended or supplemented
pursuant to the 1933 Act, the Securities Exchange Act of 1934, as amended (the
"1934 Act"), or otherwise, are referred to herein as the "Registration
Statement" and the "Prospectus," respectively; provided, that if any revised
prospectus shall be provided to you by EQR for use in connection with the
offering of Underwritten Securities which differs from the Prospectus on file at
the Commission at the time the Registration Statement became effective (whether
or not such revised prospectus is required to be filed by EQR pursuant to Rule
424(b) of the 1933 Act Regulations), the term "Prospectus" shall refer to each
such revised prospectus from and after the time it is first provided to you for
such use; provided, further, that a Prospectus Supplement shall be deemed to
have supplemented the Prospectus only with respect to the offering of
Underwritten Securities to which it relates. If EQR files a registration
statement with the Commission pursuant to Rule 462(b) of the 1933 Act
Regulations (the "Rule 462 Registration Statement"), then, after such filing,
all references to "Registration Statement" shall also be deemed to include the
Rule 462 Registration Statement. If EQR elects to rely upon Rule 434 of the
1933 Act Regulations, then all references to "Prospectus" shall also be deemed
to include the preliminary or final prospectus and the applicable term sheet or
abbreviated term sheet (the "Term Sheet"), as the case may be, in the form first
furnished to you by EQR in reliance upon Rule 434 of the 1933 Act Regulations,
and all references to the date of the Prospectus shall mean the date of the Term
Sheet. All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Registration Statement or the Prospectus (and all other references of like
import) shall be deemed to mean and include all such financial statements and
schedules and other information which is or is deemed to be incorporated by
reference in the Registration Statement or the Prospectus, as the case may be;
and all references in this Agreement to amendments or supplements to the
Registration Statement or the Prospectus shall be deemed to mean and include the
filing of any document under the 1934 Act which is or is deemed to be
incorporated by reference in the Registration Statement or the Prospectus, as
the case may be.
For purposes hereof, all references to the Registration Statement,
Prospectus, Term Sheet or preliminary prospectus or to any amendment or
supplement to any of the foregoing shall be deemed to include any copy filed
with the Commission
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pursuant to its Electronic Data Gathering, Analysis and Retrieval system
("XXXXX").
EQR is the sole general partner of ERP Operating Limited Partnership,
a limited partnership organized under the laws of the State of Illinois ("ERP"),
and owns the percentage of ERP's partnership interests specified in the most
recent Prospectus. ERP owns all of the issued and outstanding shares of
preferred stock of Equity Residential Properties Management Corp., a Delaware
corporation, Equity Residential Properties Management Corp. II, a Delaware
corporation, and Equity Residential Properties Management Corp. III, a Delaware
corporation (collectively, the "Management Corporations"). The term
"subsidiary" or "subsidiaries," when used with respect to EQR, shall include (i)
ERP, (ii) the Management Corporations, and (iii) any entity the operations of
which are included in the consolidated financial statements for EQR for the most
recent fiscal period included in the Prospectus.
Section 1. Representations and Warranties.
-------------------------------
(a) EQR and ERP, jointly and severally, represent and warrant to you
and each other Underwriter named in the applicable Terms Agreement, as of the
date thereof ("Representation Date"), as follows:
(i) The Registration Statement and the Prospectus, at the time
the Registration Statement and any post-effective amendment thereto
(including the filing of EQR's most recent Annual Report on Form 10-K
with the Commission (the "Form 10-K)) became effective, complied, and
as of each Representation Date will comply, in all material respects
with the requirements of the 1933 Act and 1933 Act Regulations; the
Registration Statement, at the time the Registration Statement became
effective, did not, and as of each Representation Date, will not,
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; the Prospectus, as of each
Representation Date and Closing Time (as hereinafter defined), will
not include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; provided, however, that the representations and warranties
in this subsection shall not apply to statements in or omissions from
the Registration Statement or Prospectus made in reliance upon and in
conformity with information furnished to EQR in writing by any
Underwriter concerning such Underwriter through you expressly for use
in the Registration Statement or Prospectus. If EQR elects to rely
upon Rule 434 of the 1933 Act Regulations, EQR will comply with the
requirements of Rule 434.
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(ii) Each preliminary prospectus, preliminary prospectus
supplement and Prospectus Supplement filed as part of the Registration
Statement as originally filed or as part of any amendment thereto, or
filed pursuant to Rule 424 under the 1933 Act, complied or will comply
when so filed in all material respects with the 1933 Act and the 1933
Act Regulations.
(iii) No stop order suspending the effectiveness of the
Registration Statement or any part thereof has been issued and no
proceedings for that purpose have been instituted or, to the knowledge
of EQR, threatened by the Commission or by the state securities
authority of any jurisdiction. No order preventing or suspending the
use of the Prospectus has been issued and no proceedings for that
purpose have been instituted or, to the knowledge of EQR or ERP,
threatened by the Commission or by the state securities authority of
any jurisdiction. Any request on the part of the Commission for
additional information has been complied with.
(iv) The accountants who certified the financial statements and
supporting schedules included or incorporated by reference in the
Registration Statement and the Prospectus are independent public
accountants as required by the 1933 Act and the 1933 Act Regulations.
(v) The consolidated financial statements and related notes
included or incorporated by reference in the Registration Statement
and the Prospectus present fairly the financial position of EQR and
its consolidated subsidiaries as at the dates indicated and the
results of their operations specified, and except as may otherwise be
stated in the Registration Statement and Prospectus, have been
prepared in accordance with generally accepted accounting principles
applied on a consistent basis throughout such periods. The supporting
schedules included or incorporated by reference in the Registration
Statement present fairly in accordance with GAAP the information
required to be stated therein. The financial information and
statistical data included in the Registration Statement and the
Prospectus present fairly the information included therein and have
been prepared on a basis consistent with that of the financial
statements included in the Registration Statement and the Prospectus.
The pro forma financial statements included in the Registration
Statement and Prospectus comply in all material respects with the
applicable requirements of Rule 11-02 of Regulation S-X of the
Commission and the pro forma adjustments have been properly applied to
the historical amounts in the compilation of such statements and the
assumptions used in the preparation thereof are, in the opinion of
EQR, reasonable.
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(vi) Since the respective dates as of which information is given
in the Registration Statement and the Prospectus, except as otherwise
stated or contemplated therein, (A) there has been no material adverse
change in the condition, financial or otherwise, or in the earnings,
assets or business affairs of EQR and its subsidiaries, considered as
a single enterprise, whether or not arising in the ordinary course of
business (a "Material Adverse Change"), (B) there have been no
material transactions entered into by EQR or any of its subsidiaries,
other than transactions in the ordinary course of business, which are
material with respect to EQR and its subsidiaries considered as a
single enterprise, (C) neither EQR nor any of its subsidiaries has
incurred any material obligation or liability, direct, contingent or
otherwise and (D) except for (i) regular quarterly distributions on
EQR's common shares of beneficial interest, $.01 par value, and
preferred shares of beneficial interest, $.01 par value and (ii) as
disclosed in the Prospectus, there has been no dividend or
distribution of any kind declared, paid or made by EQR on any class of
its shares of beneficial interest.
(vii) EQR has been duly formed and is validly existing as a real
estate investment trust in good standing under the laws of the State
of Maryland with power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectus
and to enter into and perform its obligations under the applicable
Terms Agreement.
(viii) EQR is duly qualified or registered as a foreign
organization to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by the
nature of its business or its ownership or leasing of property, except
where the failure to so qualify would not have a material adverse
effect on the condition, financial or otherwise, or the earnings,
assets or business affairs of EQR and its subsidiaries considered as a
single enterprise (a "Material Adverse Effect").
(ix) Each subsidiary of EQR has been duly formed and is validly
existing and in good standing as a partnership, corporation or limited
liability company ("LLC") under the laws of its jurisdiction of
organization, with partnership, corporation or LLC power and authority
to carry on its business and to own or lease its properties as
described in the Prospectus and is duly qualified or registered as a
foreign partnership, corporation or LLC in good standing and
authorized to do business in each jurisdiction in which such
qualification is required whether by the nature of its business or its
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ownership or leasing of property, except where the failure to so
qualify would not have a Material Adverse Effect.
(x) The Common Shares have been duly authorized for issuance and
sale to the Underwriters pursuant hereto and, when issued and
delivered as provided herein and in the applicable Terms Agreement,
the Common Shares will be validly issued, fully paid and non-
assessable; the Preferred Shares have been duly authorized and
classified for issuance and sale to the Underwriters pursuant hereto
and when Articles Supplementary setting the terms of the Preferred
Shares are duly executed and filed for record with the SDAT and the
Preferred Shares are duly paid for, sold and issued, and certificates
therefor are duly executed, countersigned and delivered as provided
herein and in the applicable Terms Agreement or any Delayed Delivery
Contract, the Preferred Shares will be validly issued, fully paid and
non-assessable; when Depositary Receipts evidencing any Depositary
Shares are issued and delivered against deposit of Preferred Shares
and against payment for the Depositary Shares pursuant hereto, the
Terms Agreement relating to the Depositary Shares and the Deposit
Agreement, the Preferred Shares will be validly issued, fully paid and
non-assessable, and the Depositary Receipts will be legally issued and
will entitle the holders thereof to the rights specified in the
Depositary Receipts and the Deposit Agreement; the Preferred Shares,
if applicable, conform to the Articles Supplementary; the Underwritten
Securities being sold pursuant to the applicable Terms Agreement
conform, in all material respects, to the descriptions thereof
contained in the Prospectus; and the issuance of the Underwritten
Securities is not subject to preemptive or similar rights.
(xi) If applicable, the Deposit Agreement conforms in all
material respects to all statements relating thereto contained in the
Prospectus. Before the Closing Time for any Depositary Shares, the
Deposit Agreement will be duly authorized and executed by EQR, and
assuming due authorization, execution and delivery by the Depositary,
the Deposit Agreement will constitute a valid and legally binding
instrument of EQR enforceable against EQR in accordance with its
terms, except as (A) the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally, (B) the availability of
equitable remedies may be limited by equitable principles of general
applicability, and (C) rights to indemnity and contribution thereunder
may be limited by state or federal securities laws or the public
policy underlying such laws.
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(xii) If applicable, the Common Shares issuable upon conversion
of any of the Preferred Shares or the Depositary Shares have been duly
and validly authorized and reserved for issuance upon such conversion
by all necessary action and such shares, when issued upon such
conversion, will be duly and validly issued and will be fully paid and
non-assessable, and the issuance of such shares upon such conversion
will not be subject to preemptive or other similar rights; the Common
Shares issuable upon conversion of any of the Preferred Shares or the
Depositary Shares will conform in all material respects to the
descriptions thereof in the Prospectus.
(xiii) The authorized, issued and outstanding shares of
beneficial interest of EQR are as set forth in the Prospectus (except
for subsequent issuances, if any, pursuant to reservations,
agreements, employee benefit plans, dividend reinvestment plans,
employee and trustee share option plans or the exercise of convertible
securities referred to in the Registration Statement); the issued and
outstanding Common Shares and the Preferred Shares have been duly
authorized and validly issued and are fully paid and non-assessable;
and none of such shares of beneficial interest were issued in
violation of preemptive or other similar rights of any securityholder
of EQR.
(xiv) Except for transactions described in the Prospectus, there
are no outstanding rights, warrants or options to acquire, or
instruments convertible into or exchangeable for, or agreements or
understandings with respect to the sale or issuance (except for
subsequent issuances, if any, pursuant to reservations, agreements,
employee benefit plans, dividend reinvestment plans, employee and
trustee share option plans or the exercise of convertible securities
referred to in the Registration Statement) or registration under the
1933 Act of, any shares of beneficial interest or capital stock of, or
partnership or other equity interest in, EQR or any subsidiary of EQR
except for multifamily property acquisition agreements with respect to
the sale or issuance of Common Shares or OP Units or registration of
Common Shares or Common Shares underlying OP Units which are not
material in amount.
(xv) All of the issued and outstanding shares of beneficial
interest or capital stock and partnership interests, as the case may
be, of each subsidiary have been validly issued and fully paid and are
owned by EQR, and/or a subsidiary as described in the Registration
Statement, and/or certain affiliated entities, in each case free and
clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity. EQR owns no direct or indirect equity interest in
any entity other than its subsidiaries, except for such interests as,
in the
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aggregate, are not material to the condition, financial or otherwise,
or the earnings, assets or business affairs of EQR and its
subsidiaries considered as a single enterprise.
(xvi) Each of EQR and ERP has full power and authority to enter
into and to perform its obligations under the applicable Terms
Agreement, the Deposit Agreement, if applicable, and the Delayed
Delivery Contracts (as defined in Section 2 hereof), if any, and as of
each Representation Date, the applicable Terms Agreement, Deposit
Agreement, if applicable, and the Delayed Delivery Contracts, if any,
will have been, duly authorized, executed and delivered by each of EQR
and ERP, and each is or will be a valid and binding obligation of EQR
and ERP, enforceable against EQR and ERP in accordance with its terms,
except as (A) the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally, (B) the availability of equitable
remedies may be limited by equitable principles of general
applicability and (C) rights to indemnity and contribution hereunder
may be limited by state or federal securities laws or the public
policy underlying such laws.
(xvii) There is no action, suit or proceeding before or by any
court or governmental agency or body now pending, or, to the knowledge
of EQR or ERP, threatened, against or affecting EQR or any of its
subsidiaries which is required to be disclosed in the Prospectus
(other than as disclosed therein) or which might result in any
Material Adverse Change or which might materially and adversely affect
the properties or assets thereof or which might materially and
adversely affect the consummation of the applicable Terms Agreement or
any Deposit Agreement or the Delayed Delivery Contracts or the
transactions contemplated herein or therein; all pending legal or
governmental proceedings to which EQR or any of its subsidiaries is a
party or of which any of their properties or assets is the subject
which are not described in the Prospectus, including ordinary routine
litigation incidental to the business, could not, considered in the
aggregate, reasonably be expected to result in a Material Adverse
Effect; and there are no contracts or documents of EQR or any of its
subsidiaries which would be required to be filed as exhibits to the
Registration Statement by the 1933 Act or the 1933 Act Regulations
which have not been filed as exhibits to the Registration Statement,
except for Articles Supplementary, as applicable, which will be filed
on Form 8-K as soon as practicable after the applicable Representation
Date.
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(xviii) None of EQR or any of its subsidiaries is required to
own or possess any trademarks, service marks, trade names or
copyrights to conduct the business operated by it as of any
Representation Date, other than those the failure to possess or own
would not have a Material Adverse Effect; and none of EQR or any of
its subsidiaries has received any notice or is otherwise aware of any
infringement of or conflict with asserted rights of others with
respect to any trademarks, service marks, trade names or copyrights or
of any facts or circumstances which would render any trademarks,
service marks, trade names or copyrights invalid or inadequate to
protect the interest of EQR or any of its subsidiaries therein, and
which infringement or conflict (if the subject of any unfavorable
decision, ruling or finding) or invalidity or inadequacy, singly or in
the aggregate, would result in a Material Adverse Effect.
(xix) No authorization, approval or consent of any court or
governmental authority or agency is required that has not been
obtained in connection with the consummation by EQR of the
transactions contemplated hereby, the applicable Terms Agreement or
any Deposit Agreement, except such as may be required under the 1933
Act, the 1933 Act Regulations or state securities law.
(xx) Each of EQR and its subsidiaries has all consents,
authorizations, approvals, orders, certificates and permits
(collectively, "Governmental Licenses") of and from, and has made all
declarations and filings with, all federal, state, local and other
governmental authorities, all self-regulatory organizations and all
courts and other tribunals required for it to own, lease, license and
use its properties and assets and to conduct its business in the
manner described in the Registration Statement and the Prospectus,
except to the extent that the failure to obtain or file would not have
a Material Adverse Effect; and all of the Governmental Licenses are
valid and in full force and effect, except where the invalidity of
such Governmental Licenses or the failure of such Governmental
Licenses to be in full force and effect would not result in a Material
Adverse Effect; and none of EQR or any of its subsidiaries has
received any written notice of proceedings relating to the revocation
or modification of any such consent, authorization, approval, order,
certificate or permit which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would result in
a Material Adverse Effect.
(xxi) The documents incorporated or deemed to be incorporated by
reference in the Prospectus, when they became effective or at the time
they were or hereafter are filed with the Commission, complied and
will comply in all material respects with the requirements of the
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1934 Act and the rules and regulations of the Commission under the
1934 Act (the "1934 Act Regulations"), and, when read together with
the other information in the Prospectus, at the date of the
Prospectus, as of each Representation Date, at the time the
Registration Statement became effective, and at the Closing Time or
during the period specified in Section 3(f), did not and will not
include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading.
(xxii) Each of EQR and its subsidiaries is insured by insurers
of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses in
which they are engaged; and neither EQR nor ERP has any reason to
believe that EQR or any of its subsidiaries 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 businesses at a cost that would not have a Material
Adverse Effect, except as described in or contemplated by the
Registration Statement and the Prospectus.
(xxiii) None of EQR or any of its subsidiaries is in violation
of its charter documents, bylaws, LLC agreements or partnership
agreements, or in default in the performance of any material
obligation, agreement or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other instrument
to which it or any of them is a party or by which it or any of them
may be bound, or to which any of their properties or assets is
subject, which default in performance would result in a Material
Adverse Effect; and the execution, delivery and performance of the
applicable Terms Agreement or any Deposit Agreement and any other
agreement or instrument entered into or issued or to be entered into
or issued by EQR in connection with the transactions contemplated
herein or therein and the consummation of the transactions
contemplated hereby or thereby, including the issuance, sale and
delivery of the Underwritten Securities and the use of proceeds
described in the Prospectus, have been duly authorized by all
necessary action and do not and will not conflict with or constitute a
breach of, or default under, or result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets of EQR
or any of its subsidiaries, pursuant to any contract, indenture,
mortgage, loan agreement, note, lease or other instrument to which EQR
or any of its subsidiaries is a party or by which it or any of them
may be bound or affected, or to which any of their properties or
assets is subject, nor will
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such action result in any violation of the provisions of the
partnership agreement, LLC agreement or charter or bylaws of EQR or
any of its subsidiaries, or any applicable law, regulation, ruling,
order, judgment, administrative regulation or administrative or court
decree.
(xxiv) Neither EQR nor ERP has taken or will take, directly or
indirectly, any action prohibited by Regulation M.
(xxv) The assets of EQR do not constitute "plan assets" under
the Employee Retirement Income Security Act of 1974, as amended.
(xxvi) Except as otherwise described in the Prospectus, each of
EQR and its subsidiaries has good and marketable title in fee simple
to all real property and good title to all personal property
(including mortgage investments) owned by it which is material to the
business of EQR and its subsidiaries, considered as a single
enterprise, in each case free and clear of all liens, claims,
encumbrances and defects except such as are described in general in
the Prospectus or such as do not materially affect the value of such
property and do not interfere with the use made and proposed to be
made of such property by EQR or any of its subsidiaries; and any real
property and buildings held under lease by EQR or any of its
subsidiaries are held by it under valid, subsisting and enforceable
leases with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such property and
buildings by EQR or such subsidiaries, in each case except as
described in or contemplated by the Registration Statement and the
Prospectus.
(xxvii) Each of EQR and its subsidiaries has obtained title
insurance on all of the properties owned by each of them covering
risks and in amounts that are commercially reasonable for the assets
owned by them and that are consistent with the types and amounts of
insurance typically maintained by current owners of similar
properties, and in each case such title insurance is in full force and
effect.
(xxviii) The mortgages and deeds of trust encumbering the
properties and assets described in general in the Prospectus are not
convertible and are not cross-defaulted or cross-collateralized to any
property not owned by EQR or any of its subsidiaries; except as
disclosed in the Prospectus, none of EQR or any of its subsidiaries
holds participating interests in such mortgages and deeds of trust.
(xxix) Each of the partnership agreements and LLC agreements to
which EQR or any of its subsidiaries is a party has been duly
authorized, executed and delivered by such party and constitutes the
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valid agreement thereof, enforceable in accordance with its terms,
except as (A) the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally and (B) the availability of equitable
remedies may be limited by equitable principles of general
applicability; and the execution, delivery and performance of any of
such agreements did not, at the time of execution and delivery, and
does not constitute a breach of, or default under, the partnership
agreement, charter, bylaws or other governing documents of such party
or any material contract, lease or other instrument to which such
party is a party or by which its properties may be bound or any law,
administrative regulation or administrative or court decree.
(xxx) Except as otherwise stated in the Registration Statement
and the Prospectus or as would not, singly or in the aggregate, result
in a Material Adverse Effect, (A) neither EQR nor any of its
subsidiaries is in violation of any federal, state, local or foreign
statute, law, rule, regulation, ordinance, code, policy or rule of
common law or any judicial or administrative interpretation thereof
including any judicial or administrative order, consent, decree or
judgment, relating to pollution or protection of human health, the
environment (including, without limitation, ambient air, surface
water, groundwater, land surface or subsurface strata) or wildlife,
including, without limitation, laws and regulations relating to the
release or threatened release of chemicals, pollutants, contaminants,
wastes, toxic substances, hazardous substances, petroleum or petroleum
products (collectively, "Hazardous Materials") or to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport
or handling of Hazardous Materials (collectively, "Environmental
Laws"), (B) EQR and its subsidiaries have all permits, authorizations
and approvals required under any applicable Environmental Laws and are
each in compliance with their requirements, (C) there are no pending
or threatened administrative, regulatory or judicial actions, suits,
demands, demand letters, claims, liens, notices of noncompliance or
violation, investigation or proceedings relating to any Environmental
Law against EQR or any of its subsidiaries and (D) there are no events
or circumstances that might reasonably be expected to form the basis
of an order for clean-up or remediation, or an action, suit or
proceeding by any private party or governmental body or agency,
against or affecting EQR or any of its subsidiaries relating to
Hazardous Materials or any Environmental Laws.
(xxxi) EQR has operated and intends to continue to operate in
such a manner as to qualify to be taxed as a "real estate investment
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trust" under the Internal Revenue Code of 1986, as amended (the
"Code").
(xxxii) Each of EQR and its subsidiaries has filed all federal,
state, local and foreign income tax returns which have been required
to be filed and has paid all taxes required to be paid and any other
assessment, fine or penalty levied against it, to the extent that any
of the foregoing is due and payable, except in all cases for any such
tax, assessment, fine or penalty that is being contested in good faith
and except in any case in which the failure to file or pay such taxes
would not have a Material Adverse Effect.
(xxxiii) Neither EQR nor any subsidiary is, or as a result of
the transactions contemplated by the Prospectus would be, required to
make any filing or to register under the Investment Company Act of
1940, as amended, or is or will become a "holding company" or a
"subsidiary company" of a "registered holding company," as defined in
the Public Utility Holding Company Act of 1935, as amended.
(xxxiv) No labor dispute with the employees of EQR, or any of
EQR's subsidiaries exists, or to the knowledge of EQR or ERP, is
imminent.
(b) Any certificate signed by any officer of EQR or of any subsidiary
and delivered to you or to counsel for the Underwriters shall be deemed a
representation and warranty by EQR or such subsidiary to each Underwriter
participating in such offering as to the matters covered thereby on the date of
such certificate.
Section 2. Purchase and Sale.
------------------
(a) The several commitments of the Underwriters to purchase the
Underwritten Securities pursuant to the applicable Terms Agreement shall be
deemed to have been made on the basis of the representations and warranties
herein contained and shall be subject to the terms and conditions set forth
herein or in the applicable Terms Agreement.
(b) In addition, on the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, EQR
may grant, if so provided in the applicable Terms Agreement relating to the
Initial Underwritten Securities, an option to the Underwriters named in such
Terms Agreement, severally and not jointly, to purchase up to the number of
Option Securities set forth therein at the same price per Option Security as is
applicable to the Initial Underwritten Securities. Such option, if granted,
will expire 30 days or such lesser number of days as may be specified in the
applicable Terms Agreement
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after the Representation Date relating to the Initial Underwritten Securities,
and may be exercised in whole or in part from time to time only for the purpose
of covering over-allotments which may be made in connection with the offering
and distribution of the Initial Underwritten Securities upon notice by you to
EQR setting forth the number of Option Securities as to which the several
Underwriters are then exercising the option and the time and date of payment and
delivery for such Option Securities. Any such time and date of delivery (a "Date
of Delivery") shall be determined by you, but shall not be later than seven full
business days and not be earlier than two full business days after the exercise
of said option, unless otherwise agreed upon by you and EQR. If the option is
exercised as to all or any portion of the Option Securities, each of the
Underwriters, acting severally and not jointly, will purchase that proportion of
the total number of Option Securities then being purchased which the number of
Initial Underwritten Securities each such Underwriter has agreed to purchase as
set forth in the applicable Terms Agreement bears to the total number of Initial
Underwritten Securities, subject to such adjustments as you in your discretion
shall make to eliminate any sales or purchases of fractional Option Securities.
(c) Payment of the purchase price for, and delivery of, the
Underwritten Securities to be purchased by the Underwriters shall be made at
such place as shall be agreed upon by you and EQR, at 10:00 A.M., New York City
time, no later than the third (fourth, if the pricing occurs after 4:30 p.m.
(New York City time) on any given business day) business day (unless postponed
in accordance with the provisions of Section 10 hereof) following the date of
the applicable Terms Agreement or at such other time as shall be agreed upon by
you and EQR (each such time and date being referred to as a "Closing Time"). In
addition, if any or all of the Option Securities are purchased by the
Underwriters, payment of the purchase price for, and delivery of certificates
representing, such Option Securities, shall be made at such place as shall be
agreed upon by you and EQR on each Date of Delivery as specified in the notice
from you to EQR. Unless otherwise specified in the applicable Terms Agreement,
payment shall be made to EQR by wire transfer to accounts designated by EQR of
immediately available funds payable to the order of EQR or ERP against delivery
to you for the respective accounts of the Underwriters of the Underwritten
Securities to be purchased by them. The Underwritten Securities or, if
applicable, Depositary Receipts evidencing the Depositary Shares, shall be in
such authorized denominations and registered in such names as you may request in
writing at least two business days prior to the applicable Closing Time or Date
of Delivery, as the case may be. The Underwritten Securities, which may be in
temporary form, will be made available for examination and packaging by you on
or before the first business day prior to the applicable Closing Time or Date of
Delivery, as the case may be.
If authorized by the applicable Terms Agreement, the Underwriters
named therein may solicit offers to purchase Underwritten Securities from EQR
pursuant to delayed delivery contracts ("Delayed Delivery Contracts")
substantially
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in the form of Exhibit B hereto with such changes therein as EQR
may approve. As compensation for arranging Delayed Delivery Contracts, EQR will
pay to you at Closing Time, for the respective accounts of the Underwriters, a
fee specified in the applicable Terms Agreement for each of the Underwritten
Securities for which Delayed Delivery Contracts are made at the applicable
Closing Time as is specified in the applicable Terms Agreement. Any Delayed
Delivery Contracts are to be with institutional investors of the types described
in the Prospectus. At the applicable Closing Time, EQR will enter into Delayed
Delivery Contracts (for not less than the minimum number of Underwritten
Securities per Delayed Delivery Contract specified in the applicable Terms
Agreement) with all purchasers proposed by the Underwriters and previously
approved by EQR as provided below, but not for an aggregate number of
Underwritten Securities in excess of that specified in the applicable Terms
Agreement. The Underwriters will not have any responsibility for the validity
or performance of Delayed Delivery Contracts.
You shall submit to EQR, at least three business days prior to the
applicable Closing Time, the names of any institutional investors with which it
is proposed that EQR will enter into Delayed Delivery Contracts and the number
of Underwritten Securities to be purchased by each of them, and EQR will advise
you, at least two business days prior to the applicable Closing Time, of the
names of the institutions with which the making of Delayed Delivery Contracts is
approved by EQR and the number of Underwritten Securities to be covered by each
such Delayed Delivery Contract.
The number of Underwritten Securities agreed to be purchased by the
several Underwriters pursuant to the applicable Terms Agreement shall be reduced
by the number of Underwritten Securities covered by Delayed Delivery Contracts,
as to each Underwriter as set forth in a written notice delivered by you to EQR;
provided, however, that the total number of Underwritten Securities to be
purchased by all Underwriters shall be the total number of Underwritten
Securities covered by the applicable Terms Agreement, less the number of
Underwritten Securities covered by Delayed Delivery Contracts.
Section 3. Covenants.
----------
Each of EQR and ERP covenants with you, and with each Underwriter
participating in the offering of Underwritten Securities, as follows.
(a) Immediately following the execution of the applicable Terms
Agreement, EQR will prepare a Prospectus Supplement setting forth the number of
Underwritten Securities covered thereby and their terms not otherwise specified
in the Prospectus pursuant to which the Underwritten Securities are being
issued, the names of the Underwriters participating in the offering and the
number of Underwritten Securities which each severally has agreed to purchase,
the names of the Underwriters acting as co-managers in connection with the
offering, the price at
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which the Underwritten Securities are to be purchased by the Underwriters from
EQR, the initial public offering price, if any, the selling concession and
reallowance, if any, any delayed delivery arrangements, and such other
information as you and EQR deem appropriate in connection with the offering of
the Underwritten Securities; and EQR will promptly transmit copies of the
Prospectus Supplement to the Commission for filing pursuant to Rule 424(b) of
the 1933 Act Regulations within the time period required by such Rule and will
furnish to the Underwriters named therein as many copies of the Prospectus and
such Prospectus Supplement as you shall reasonably request and the Prospectus
and any Prospectus Supplement shall be identical to any electronically
transmitted copies thereof filed with the Commission pursuant to XXXXX, except
to the extent permitted by Regulation S-T.
(b) EQR will notify you immediately, and confirm such notice in
writing, of (i) the effectiveness of any amendment to the Registration
Statement, (ii) the transmittal to the Commission for filing of any Prospectus
Supplement or other supplement or amendment to the Prospectus or any document to
be filed pursuant to the 1934 Act, (iii) the receipt of any comments from the
Commission, (iv) any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or for
additional information, and (v) the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of any order
preventing or suspending the use of the Prospectus or the initiation of any
proceedings for any of such purposes; and EQR will make every reasonable effort
to prevent the issuance of any such stop order and, if any stop order is issued,
to obtain the lifting thereof at the earliest possible moment.
(c) At any time when the Prospectus is required to be delivered under
the 1933 Act or the 1934 Act in connection with sales of the Underwritten
Securities, EQR will give you notice of its intention to file or prepare any
amendment to the Registration Statement (including any filing under Rule 462(b)
of the 1933 Act Regulations), any Term Sheet or any amendment or supplement to
the Prospectus (including any revised prospectus which EQR proposes for use by
you in connection with the offering of Underwritten Securities which differs
from the prospectus on file at the Commission at the time the Registration
Statement became effective, whether or not such revised prospectus is required
to be filed pursuant to Rule 424(b) of the 1933 Act Regulations), whether
pursuant to the 1933 Act, 1934 Act or otherwise, and will furnish you with
copies of any such amendment or supplement a reasonable amount of time prior to
such proposed filing or preparation, as the case may be, and will not file or
prepare any such amendment or supplement or other documents in a form to which
you or counsel for the Underwriters shall reasonably object.
(d) EQR will deliver to you as many conformed copies of the
Registration Statement as originally filed and of each amendment thereto
(including exhibits filed therewith or incorporated by reference therein and
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documents incorporated or deemed to be incorporated by reference therein) as you
reasonably request.
(e) EQR will furnish to each Underwriter, from time to time during the
period when the Prospectus is required to be delivered under the 1933 Act or
the 1934 Act in connection with sales of the Underwritten Securities, such
number of copies of the Prospectus (as amended or supplemented) as such
Underwriter may reasonably request for the purposes contemplated by the 1933
Act, the 1933 Act Regulations, the 1934 Act or the 1934 Act Regulations.
(f) EQR will comply with the 1933 Act and the 1933 Act Regulations and
the 1934 Act and the 1934 Act Regulations so as to permit the completion of the
distribution of the Underwritten Securities as contemplated in the applicable
Terms Agreement and in the Registration Statement and the Prospectus. If at any
time when the Prospectus is required to be delivered under the 1933 Act or the
1934 Act in connection with sales of the Underwritten Securities any event shall
occur or condition exist as a result of which it is necessary, in the opinion of
counsel for the Underwriters or counsel for EQR, to amend or supplement the
Prospectus in order that the Prospectus will not include an untrue statement of
a material fact or omit to state any material fact necessary in order to make
the statements therein not misleading in the light of the circumstances existing
at the time it is delivered to a purchaser, or if it shall be necessary, in the
opinion of either such counsel, at any such time to amend or supplement the
Registration Statement or the Prospectus in order to comply with the
requirements of the 1933 Act or the 1933 Act Regulations, then EQR will promptly
prepare and file with the Commission such amendment or supplement in form and
substance reasonably satisfactory to counsel for the Underwriters, whether by
filing documents pursuant to the 1933 Act, the 1934 Act or otherwise, as may be
necessary to correct such untrue statement or omission or to make the
Registration Statement and Prospectus comply with such requirements.
(g) EQR will endeavor, in cooperation with the Underwriters, to
qualify the Underwritten Securities and the Common Shares issuable upon
conversion of the Preferred Shares or the Depositary Shares, if any, for
offering and sale under the applicable securities laws and real estate
syndication laws of such states and other jurisdictions of the United States as
you may designate; provided, however, that EQR shall not be obligated to (i)
qualify as a foreign corporation in any jurisdiction where it is not so
qualified, (ii) file any general consent to service of process or (iii) take any
action that would subject it to income taxation in any such jurisdiction. In
each jurisdiction in which the Underwritten Securities or the Common Shares
issuable upon conversion of the Preferred Shares or the Depositary Shares, if
any, have been so qualified, EQR will file such statements and reports as may be
required by the laws of such jurisdiction to continue such qualification in
effect for so long as may be required for the distribution of the Underwritten
Securities.
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(h) With respect to each sale of Underwritten Securities, EQR will
make generally available to its security holders as soon as practicable, but not
later than 90 days after the close of the period covered thereby, an earning
statement (in form complying with the provisions of Rule 158 of the 1933 Act
Regulations) covering a 12-month period beginning not later than the first day
of EQR's fiscal quarter next following the "effective date" (as defined in such
Rule 158) of the Registration Statement.
(i) EQR, during the period when the Prospectus is required to be
delivered under the 1933 Act or the 1934 Act in connection with sales of the
Underwritten Securities, will file all documents required to be filed with the
Commission pursuant to Section 13, 14 or 15 of the 1934 Act within the time
periods prescribed by the 1934 Act and the 1934 Act Regulations.
(j) EQR will not, between the date of the applicable Terms Agreement
and the termination of any trading restrictions or the applicable Closing Time,
whichever is later, with respect to the Underwritten Securities covered thereby,
without your prior written consent, offer or sell, grant any option for the sale
of, or enter into any agreement to sell, any securities of the same class or
series or ranking on a parity with such Underwritten Securities (other than the
Underwritten Securities which are to be sold pursuant to such Terms Agreement)
or, if such Terms Agreement relates to Underwritten Securities that are
convertible into Common Shares, any Common Shares or any security convertible
into Common Shares (except for Common Shares issued pursuant to reservations,
multifamily property acquisition agreements, employee benefit plans, dividend
reinvestment plans, or employee and trustee share options plans), except as may
otherwise be provided in the applicable Terms Agreement.
(k) EQR will reserve and keep available at all times, free of
preemptive rights, Common Shares for the purpose of enabling EQR to satisfy any
obligations to issue such shares upon conversion of the Preferred Shares or the
Depositary Shares, as the case may be.
(l) If requested by you, EQR will use its reasonable best efforts to
list the Underwritten Securities and the Common Shares issuable upon conversion
of the Underwritten Securities, if any, on the New York Stock Exchange or such
other national exchange on which the Underwritten Securities or Common Shares,
as the case may be, are then listed.
(m) On or prior to the Closing Time, EQR will cause Articles
Supplementary relating to the Preferred Shares or Preferred Shares represented
by Depositary Shares, if any, to be filed for record with the SDAT in accordance
with the Maryland REIT Statute.
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(n) EQR will use its reasonable best efforts to meet the requirements
to qualify as a "real estate investment trust" under the Code.
(o) If requested by you, EQR will cause, or have caused, the officers
of EQR to enter into lock-up agreements in form and substance satisfactory to
the Underwriters.
(p) Except for the authorization of actions permitted to be taken by
the Underwriters as contemplated herein or in the Prospectus, EQR will not (i)
take, directly or indirectly, any action designed 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 EQR to facilitate the sale or
resale of the Underwritten Securities, (ii) sell, bid for or purchase the
Underwritten Securities or pay any person any compensation for soliciting
purchases of the Underwritten Securities or (iii) pay or agree to pay to any
person any compensation for soliciting another to purchase any other securities
of EQR.
Section 4. Payment of Expenses.
--------------------
EQR will pay all expenses incident to the performance of its
obligations under the applicable Terms Agreement or any Deposit Agreement,
including (i) the printing and filing of the Registration Statement as
originally filed and of each amendment thereto, (ii) the filing of these
Standard Underwriting Provisions and the applicable Terms Agreement, (iii) the
preparation, issuance and delivery of the Underwritten Securities to the
Underwriters, (iv) to the extent applicable, the fees and disbursements of EQR's
counsel and accountants, (v) the qualification of the Underwritten Securities
and the Common Shares issuable upon conversion of the Preferred Shares or the
Depositary Shares, if any, under securities laws and real estate syndication
laws in accordance with the provisions of Section 3(g), including filing fees
and the fees and disbursements of counsel for the Underwriters in connection
therewith and in connection with the preparation of the Blue Sky Survey, (vi)
the printing and delivery to the Underwriters of copies of the Registration
Statement as originally filed and of each amendment thereto, and of the
Prospectus and any amendments or supplements thereto, (vii) the printing and
delivery to the Underwriters of copies of the applicable Deposit Agreement, if
any, (viii) any fees charged by nationally recognized statistical rating
organizations for the rating of the Underwritten Securities, (ix) the fees and
expenses, if any, incurred with respect to the listing of the Underwritten
Securities and the Common Shares issuable upon conversion of the Preferred
Shares or the Depositary Shares, if any, on any national securities exchange or
quotation system, (x) the fees and expenses, if any, incurred with respect to
any filing with the National Association of Securities Dealers, Inc. ( including
fees and disbursements of counsel for the Underwriters in connection therewith),
(xi) the costs and expenses of the deposit of Preferred Shares under any Deposit
Agreement in exchange for Depositary Receipts, including the charges of the
Depositary in connection therewith; (xii) the
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fees and expenses of the Depositary, including the fees and disbursements of
counsel for the Depositary, and (xiii) the costs and charges of any transfer
agent or registrar.
If the applicable Terms Agreement is terminated by you in accordance
with the provisions of Section 5 or Section 9(a)(i) or 9(a)(iv), EQR shall
reimburse the Underwriters named in such Terms Agreement for all of their out-
of-pocket expenses, including the reasonable fees and disbursements of counsel
for the Underwriters.
SECTION 5. Conditions Of Underwriters' Obligations.
----------------------------------------
The several obligations of the Underwriters to purchase Underwritten
Securities pursuant to the applicable Terms Agreement are subject to the
accuracy of the representations and warranties of EQR and ERP herein contained,
to the accuracy of the statements of officers of EQR and ERP made in any
certificate pursuant to the provisions hereof, to the performance by EQR and ERP
of all of its covenants and other obligations hereunder, and to the following
further conditions:
(a) At the applicable Closing Time, (i) no stop order suspending the
effectiveness of the Registration Statement shall have been issued under the
1933 Act or proceedings therefor initiated or threatened by the Commission, (ii)
any request on the part of the Commission for additional information shall have
been complied with to the reasonable satisfaction of counsel for the
Underwriters, (iii) the rating assigned by any nationally recognized statistical
rating organization to any Preferred Shares of EQR or debt securities of ERP as
of the date of the applicable Terms Agreement shall not have been lowered since
such date nor shall any such rating organization have publicly announced that it
has placed any Preferred Shares of EQR or debt securities of ERP on what is
commonly termed a "watch list" for possible downgrading, and (iv) there shall
not have come to your attention any facts that would cause you to believe that
the Prospectus, together with the applicable Prospectus Supplement, at the time
it was required to be delivered to purchasers of the Underwritten Securities,
included an untrue statement of a material fact or omitted to state a material
fact necessary in order to make the statements therein, in light of the
circumstances existing at such time, not misleading. A prospectus containing
information relating to the description of the Underwritten Securities and the
Common Shares issuable upon conversion of the Preferred Shares or the Depositary
Shares, if any, the specific method of distribution and similar matters shall
have been filed with the Commission in accordance with Rule 424 (or any required
post-effective amendment providing such information shall have been filed and
declared effective in accordance with the requirements of Rule 430A), or, if EQR
has elected to rely upon Rule 434 of the 1933 Act Regulations, a Term Sheet
shall have been filed with the Commission in accordance with Rule 424(b)(7).
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(b) At the applicable Closing Time, you shall have received:
(1) The favorable opinion, dated as of the applicable Closing
Time, of Xxxxxxxxx & Xxxxxxxxxxx, P.C., counsel for EQR and its subsidiaries, in
form and substance satisfactory to counsel for the Underwriters, to the effect
that:
(i) EQR is a real estate investment trust duly formed and
existing under and by virtue of the laws of the State of Maryland and
is in good standing with the SDAT; EQR has the power and authority to
own, lease and operate its properties and conduct its business as
described in the Prospectus; and, to counsel's knowledge, is duly
qualified and in good standing and authorized to transact business in
any jurisdiction in which the conduct of its business or its ownership
or leasing of property requires such qualification, except where the
failure to be so qualified or in good standing will not have a
Material Adverse Effect.
(ii) Each of EQR's subsidiaries has been duly formed and is
validly existing and in good standing under the laws of the
jurisdiction of its formation, has the power and authority to own,
lease and operate its properties and to conduct its business as
described in the Prospectus, and, to counsel's knowledge, is duly
qualified and in good standing and authorized to transact business in
any jurisdiction in which the conduct of its business or its ownership
or leasing of property requires such qualification, except where the
failure to be so qualified or in good standing will not have a
material adverse effect on such subsidiary's condition, financial or
otherwise, earnings, assets, business affairs or business prospects;
all of the issued and outstanding shares of beneficial interest,
capital stock, LLC interests and partnership interests of each
subsidiary have been duly authorized and validly issued, are fully
paid and with respect to the shares of capital stock, LLC interests
and partnership interests owned by EQR, are owned by EQR or another
subsidiary, to such counsel's knowledge, directly, free and clear of
any security interest, mortgage, pledge, lien, encumbrance, claim or
equity.
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(iii) The authorized, issued and outstanding shares of
beneficial interest of EQR are as set forth in the Prospectus (except
for subsequent issuances, if any, pursuant to reservations,
agreements, employee benefit plans, dividend reinvestment plans,
employee and trustee share option plans or the exercise of convertible
securities referred to in the Registration Statement) and such shares
of beneficial interest are duly authorized validly issued, fully paid
and non-assessable.
(iv) The Underwritten Securities and, if applicable, the
deposit of the Preferred Shares in accordance with the provisions of a
Deposit Agreement, have been duly authorized for issuance and sale
pursuant to the applicable Terms Agreement and such Underwritten
Securities, when issued and delivered by EQR pursuant to this
Agreement against payment of the consideration set forth in the
applicable Terms Agreement or the Delayed Delivery Contracts, if any,
will be validly issued, fully paid and non-assessable; the terms of
the Underwritten Securities being sold pursuant to the applicable
Terms Agreement conform in all material respects to the description of
the Underwritten Securities set forth under "Description of Shares of
Beneficial Interest" in the Prospectus and under "Description of
Common Shares of Beneficial Interest," "Description of Preferred
Shares of Beneficial Interest" or "Description of Depositary Shares,"
or other similar caption, as the case may be, in the Prospectus
Supplement; and the issuance of the Underwritten Securities is not
subject to any statutory preemptive rights or, to counsel's knowledge,
any contractual rights to subscribe for more shares. If applicable,
the form of certificate used to evidence the Underwritten Securities
complies with all applicable statutory requirements.
-23-
(v) If applicable, the Common Shares issuable upon
conversion of any of the Preferred Shares or Depositary Shares
have been duly authorized and reserved for issuance upon such
conversion by all necessary action and such shares, when issued upon
such conversion will be validly issued and will be fully paid and non-
assessable, and the issuance of such shares upon such conversion will
not be subject to any statutory preemptive rights or, to counsel's
knowledge, any contractual rights to subscribe for more shares; and
the Common Shares issuable upon conversion of the Preferred Shares or
the Depositary Shares conform in all material respects to the
descriptions thereof in the Prospectus.
(vi) The applicable Deposit Agreement, if any, has been
duly authorized, executed and delivered by EQR and (assuming due
authorization, execution and delivery of the Deposit Agreement by the
Depositary) constitutes a valid and binding obligation of EQR
enforceable in accordance with its terms except as (A) the
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally, (B) the availability of equitable remedies may be limited
by equitable principles of general applicability, and (C) rights to
indemnity and contribution thereunder may be limited by state or
federal securities laws or the public policy underlying such laws; and
the Deposit Agreement, if any, conforms in all material respects to
all statements relating thereto contained in the Prospectus.
(vii) Each of the applicable Terms Agreement and the
Delayed Delivery Contracts, if any, has been duly authorized, executed
and delivered by EQR and ERP, and each of EQR and ERP has the power
and authority to perform its obligations hereunder and thereunder.
(viii) The execution and delivery of the applicable Terms
Agreement by each of EQR and ERP, and the performance by each of EQR
and ERP of its obligations thereunder and the consummation of the
transactions contemplated hereby and thereby, do not result in a
violation of any provision of the Declaration of Trust, bylaws or
partnership agreement of EQR or ERP or of the Maryland REIT statute
or, to counsel's knowledge, any other applicable law, administrative
regulation or administrative or court decree, and will not, to
counsel's knowledge, conflict with or constitute a breach of, or
default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of EQR or any of its
subsidiaries pursuant to any agreement or other instrument that is
binding upon EQR or any subsidiary, or to which any of their
properties or assets is subject.
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(ix) The Registration Statement is effective under the 1933
Act and, to counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued under the
1933 Act and no proceedings for that purpose have been initiated or
threatened by the Commission.
(x) No consent, approval, authorization or order of, or
qualification with, any governmental body or agency and no consent,
approval, or authorization of any person other than EQR and ERP is
required for the performance by each of EQR and ERP of its obligations
under the applicable Terms Agreement, except such as may be required
under the federal securities laws and the securities or Blue Sky laws
of various states in connection with the offer and sale of the
Underwritten Securities.
(xi) There are no (A) legal or governmental proceedings
pending or, to the knowledge of such counsel, threatened which are
required to be disclosed in the Registration Statement, other than
those disclosed therein, and all pending legal or governmental
proceedings to which EQR or any of its subsidiaries is a party or to
which any of their property is subject which are not described in the
Registration Statement, including ordinary routine litigation
incidental to the business, are, considered in the aggregate, not
material or (B) to counsel's knowledge, statutes, regulations,
contracts, indentures, mortgages, loan agreements, notes, leases,
instruments or other documents that are required to be described in
the Prospectus or to be filed as exhibits to the Registration
Statement that are not described or filed as required, except for the
Articles Supplementary which will be filed on Form 8-K as soon as
practicable after the applicable Representation Date.
(xii) None of EQR or any of its subsidiaries is required to
be registered under the 1940 Act.
-25-
(xiii) The information (A) in the Prospectus under the
heading "Description of Shares of Beneficial Interest" and (B) in
EQR's Annual Report on Form 10-K for the most recent fiscal year then
ended under the caption "Legal Proceedings," to the extent that it
constitutes matters of law, summaries of legal matters, documents or
proceedings, or legal conclusions, has been reviewed by such counsel
and is correct in all material respects.
(xiv) The Registration Statement and Prospectus (except for
financial statements and schedules included therein, as to which such
counsel need not express any opinion), excluding the documents
incorporated by reference therein, as of their respective effective or
issue dates comply as to form in all material respects with the
requirements for registration statements on Form S-3 under the 1933
Act and the 1933 Act Regulations.
(xv) To their knowledge, EQR and each of its subsidiaries
has consents, authorizations, approvals, orders, certificates and
permits of and from, and has made all declarations and filings with ,
all federal, state, local, and other governmental authorities, all
self-regulatory organizations, and all courts and other tribunals,
necessary to own, lease, license and use its properties and assets and
to conduct its business in the manner described in the Registration
Statement and the Prospectus, except to the extent that the failure to
obtain or file would not have a Material Adverse Effect.
-26-
(xvi) To their knowledge, except as described in the
Prospectus, there are no outstanding rights, warrants or options to
acquire, or instruments convertible into or exchangeable for, or
agreements or understandings with respect to the sale or issuance of
any shares of beneficial interest or capital stock of or other equity
interest in EQR or any subsidiary of EQR except for multifamily
property acquisition agreements with respect to the sale or issuance
of Common Shares or OP Units which are not material in amount.
(xvii) Each document filed pursuant to the 1934 Act (other
than the financial statements, schedules and other financial and
statistical data, as to which no opinion need be rendered) and
incorporated or deemed to be incorporated by reference in the
Prospectus complied when so filed as to form in all material respects
with the 1934 Act and the 1934 Act Regulations.
(xviii) The Articles Supplementary relating to the
Preferred Shares and the Depositary Shares, if any, have been filed
for record with the SDAT pursuant to the Maryland REIT Statute and the
number of Preferred Shares and the title, par value, liquidation
preference, ranking, dividend rate or rates (or method of
calculation), dividend payment dates, redemption or sinking fund
requirements, conversion provisions and other terms of the Preferred
Shares have been set forth therein.
-27-
(2) The favorable opinion, dated as of the applicable Closing
Time, of Xxxxx & Xxxxxxx L.L.P., counsel for the Underwriters and Maryland and
special tax counsel to EQR, substantially to the effect specified in
subparagraphs (i) first two clauses only, as to applicable Maryland law, (iv),
(v), (vi), (vii), (viii), as to applicable Maryland law and administrative
regulations (other than Maryland securities laws and regulations), (ix), (x) as
to any Maryland governmental body or agency, (xiv), and (xviii) of Section
5(b)(1), and to the effect that (A) EQR was organized and has operated in
conformity with the requirements for qualification and taxation as a real estate
investment trust under the Internal Revenue Code of 1986, as amended, for each
of its taxable years ended since December 31, 1993, and EQR's current
organization and method of operations should enable it to continue to meet the
requirements for qualification and taxation as a real estate investment trust
and (B) the discussion in the Prospectus under the heading "Federal Income Tax
Considerations" and in the Prospectus Supplement under the heading "Taxation of
Holders of Common Shares of Beneficial Interest," or "Taxation of Holders of
Preferred Shares of Beneficial Interest," or "Taxation of Holders of Depositary
Shares," or other similar caption, as the case may be, to the extent that it
constitutes matters of federal income tax law or legal conclusions related
thereto, is correct in all material respects.
(3) In rendering their opinions required by subsections (b)(1)
and (b)(2), respectively, of this Xxxxxxx 0, Xxxxxxxxx & Xxxxxxxxxxx, X.X. and
Xxxxx & Xxxxxxx L.L.P. shall each additionally state (which shall not constitute
an opinion) that no facts have come to the attention of such counsel which cause
them to believe that the Registration Statement or any post-effective amendment
thereto (except for financial statements and supporting schedules and other
financial information and data included therein or omitted therefrom, as to
which such counsel need not express any view), at the time the Registration
Statement or any post-effective amendment thereto (including the filing of EQR's
Annual Report on Form 10-K with the Commission) became effective or at the date
of the applicable Terms Agreement, 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
or any amendment or supplement thereto (except as aforesaid) as of the date of
the applicable Terms Agreement or at the applicable Closing Time, contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
-28-
In giving their opinions required by this Section 5(b), such counsel
(A) may rely as to all matters of fact, upon certificates and written statements
of officers and employees of and accountants for EQR and (B) may rely as to the
qualification and good standing of each of EQR or any of its subsidiaries to do
business in any state or jurisdiction, upon certificates of appropriate
government officials or opinions of counsel in such jurisdictions, which
opinions shall be in form and substance satisfactory to counsel for the
Underwriters. In giving their belief required in Section 5(b)(3), such counsel
may state that their belief is based upon their participation in the preparation
of the Registration Statement and Prospectus and any amendments and supplements
thereto and review and discussion of the contents thereof, but are without
independent check or verification except as specified.
(c) At the applicable Closing Time, there shall not have been, since
the date of the applicable Terms Agreement or since the respective dates as of
which information is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, assets, business affairs
or business prospects of EQR and its subsidiaries considered as a single
enterprise, whether or not arising in the ordinary course of business; and you
shall have received a certificate of the Chief Executive Officer, the President
or the Chief Financial Officer of EQR, dated as of such Closing Time, on behalf
of EQR and ERP, to the effect that (i) there has been no such material adverse
change, (ii) the representations and warranties in Section 1 are true and
correct with the same force and effect as though such Closing Time were a
Representation Date, (iii) EQR has complied with all agreements and satisfied
all conditions on its part to be performed or satisfied at or prior to Closing
Time and (iv) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
initiated or threatened by the Commission. As used in this Section 5(c), the
term "Prospectus" means the Prospectus in the form first used to confirm sales
of the Underwritten Securities.
(d) At the time of execution of the applicable Terms Agreement, you
shall have received from EQR's independent public accountants, a letter dated
such date, in form and substance satisfactory to you, to the effect that (i)
they are independent accountants with respect to EQR and its subsidiaries within
the meaning of the 1933 Act and the 1933 Act Regulations; (ii) it is their
opinion that the consolidated financial statements and supporting schedules
included or incorporated by reference in the Registration Statement and the
Prospectus and covered by their opinions therein comply in form in all material
respects with the applicable accounting requirements of the 1933 Act and the
1933 Act Regulations; (iii) based upon limited procedures set forth in detail in
such letter, and except as otherwise set forth in such letter, nothing has come
to their attention which causes them to believe that at a specified date not
more than five days prior to the date of the applicable Terms Agreement, there
has been any change in the shares of beneficial interest of EQR or in the
consolidated long term debt of EQR or any decrease in the net assets of EQR, as
compared with the amounts shown in the most recent consolidated balance sheet
included or incorporated by reference in the
-29-
Registration Statement and the Prospectus or, during the period from the date of
the most recent consolidated statement of operations included or incorporated by
reference in the Registration Statement and the Prospectus to a specified date
not more than five days prior to the date of the applicable Terms Agreement,
there were any decreases, as compared with the corresponding period in the
preceding year, in consolidated revenues, or decrease in net income or net
income per share of beneficial interest of EQR, except in all instances for
changes, increases or decreases which the Registration Statement and the
Prospectus disclose have occurred or may occur; and (iv) in addition to the
audit referred to in their opinions and the limited procedures referred to in
clause (iii) above, they have carried out certain specified procedures with
respect to certain amounts, percentages and financial information which are
included in the Registration Statement and the Prospectus and which are
specified by you, and have found such amounts, percentages and financial
information to be in agreement with relevant accounting, financial and other
records of EQR and its subsidiaries identified in such letter.
(e) At the applicable Closing Time, you shall have received from EQR's
independent public accountants, a letter dated as of the applicable Closing Time
to the effect that they reaffirm the statements made in the letter furnished
pursuant to subsection (d) of this Section, except that the "specified date"
referred to shall be a date not more than five days prior to the applicable
Closing Time.
(f) At the applicable Closing Time, counsel for the Underwriters shall
have been furnished with such documents and opinions as they may reasonably
require for the purpose of enabling them to pass upon the issuance and sale of
the Underwritten 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 EQR in connection with the issuance and sale of the
Underwritten Securities as herein contemplated shall be reasonably satisfactory
in form and substance to you and counsel for the Underwriters.
(g) At Closing Time and at any relevant Date of Delivery, the
Underwritten Securities shall have the ratings accorded by any "nationally
recognized statistical rating organization", as defined by the Commission for
purposes of Rule 436(g)(2) of the 1933 Act Regulations, if and as specified in
the applicable Terms Agreement, and EQR shall have delivered to you a letter,
dated as of such date, from each such rating organization, or other evidence
satisfactory to you, confirming that the Underwritten Securities have such
ratings. Since the time of execution of such Terms Agreement, there shall not
have occurred a downgrading in the rating assigned to the Underwritten
Securities or any of EQR's other securities by any such rating organization, and
no such rating organization shall have publicly announced that it has under
surveillance or review its rating of the Underwritten Securities or any of EQR's
other securities.
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(h) At Closing Time, the Underwritten Securities shall have been
approved for listing, subject only to official notice of issuance, if and as
specified in the applicable Terms Agreement.
(i) On the date of the applicable Terms Agreement, you shall have
received, in form and substance satisfactory to it, each lock-up agreement, if
any, specified in such Terms Agreement as being required to be delivered by the
persons listed therein.
(j) If the Underwriters exercise their option provided in a Terms
Agreement as set forth in Section 2(b) hereof to purchase all or any portion of
the Option Securities, the representations and warranties of EQR and ERP
contained herein and the statements in any certificates furnished by EQR or ERP
hereunder shall be true and correct as of each Date of Delivery, and you shall
have received:
(1) A certificate, dated such Date of Delivery, of the Chief
Executive Officer, the President or the Chief Financial Officer of EQR, in their
capacities as such, on behalf of EQR and ERP, confirming that the certificate
delivered at Closing Time pursuant to Section 5(c) hereof remains true and
correct as of such Date of Delivery.
(2) The favorable opinion of Xxxxxxxxx & Xxxxxxxxxxx, P.C.,
counsel for EQR, in form and substance satisfactory to counsel for the
Underwriters, dated such Date of Delivery, relating to the Option Securities and
otherwise substantially to the same effect as the opinions required of them by
Section 5(b)(1) and the belief required by Section 5(b)(3) hereof.
(3) The favorable opinion of Xxxxx & Xxxxxxx L.L.P., counsel for
the Underwriters and Maryland and special tax counsel for EQR, dated such Date
of Delivery, relating to the Option Securities and otherwise to the same effect
as the opinion required by Section 5(b)(2) and the belief required by Section
5(b)(3) hereof.
(4) A letter from EQR's independent public accountants, in form
and substance satisfactory to you and dated such Date of Delivery, substantially
the same in scope and substance as the letter furnished to you pursuant to
Section 5(d) hereof, except that the "specified date" in the letter furnished
pursuant to this Section 5(j)(4) shall be a date not more than five days prior
to such Date of Delivery.
If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, the applicable Terms Agreement
may be terminated by you by notice to EQR at any time at or prior to the
applicable Closing Time, and such termination shall be without liability of any
party to any
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other party except as provided in Section 4 hereof and except that
Sections 1, 6, 7 and 8 shall survive any such termination and remain in full
force and effect.
Section 6. Indemnification.
----------------
(a) Each of EQR and ERP hereby agrees, jointly and severally, to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act, and any director, officer, employee or affiliate
thereof, as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), or the omission or
alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading or
arising out of any untrue statement or alleged untrue statement of a
material fact contained in the Prospectus (or any amendment or
supplement thereto), or the omission, or alleged omission therefrom of
a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation or of any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission, provided that (subject to Section 6(d) below), any such
settlement is effected with the written consent of EQR and ERP; and
(iii) against any and all expense whatsoever as incurred
(including, without limitation, the fees and other charges of counsel
chosen by you) reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding
by any governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue statement or omission, or
any such alleged untrue statement or omission, to the extent that any
such expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent such loss, liability, claim,
damage or expense arises out of any untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with
written
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information furnished to EQR by any Underwriter concerning such Underwriter
through you expressly for use in the Registration Statement (or any amendment
thereto) and the Prospectus (or any amendment or supplement thereto).
(b) Each Underwriter severally agrees to indemnify and hold harmless
EQR and ERP, and each person, if any, who controls EQR or ERP within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act, and any trustee,
officer, employee or affiliate thereof, against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection (a)
of this Section 6, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto) or the Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
furnished to EQR by any Underwriter concerning such Underwriter through you
expressly for use in the Registration Statement (or any amendment thereto) and
the Prospectus (or any amendment or supplement thereto).
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
hereunder to the extent it is not materially prejudiced as a result thereof and
in any event shall not relieve it from any liability which it may have otherwise
than on account of this indemnity agreement. In the case of parties indemnified
pursuant to Section 6(a) above, counsel to the indemnified parties shall be
selected by you, and, in the case of parties indemnified pursuant to Section
6(b) above, counsel to the indemnified parties shall be selected by EQR. An
indemnifying party may participate at its own expense in the defense of any such
action; provided, however, that counsel to the indemnifying party shall not
(except with the consent of the indemnified party) also be counsel to the
indemnified party. In no event shall the indemnifying parties be liable for
fees and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever in
respect of which indemnification or contribution could be sought under this
Section 6 or Section 7 hereof (whether or not the indemnified parties are actual
or potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party.
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(d) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 6(a)(ii) effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
Section 7. Contribution.
-------------
If the indemnification provided for in Section 6 hereof is for any
reason unavailable to or insufficient to hold harmless an indemnified party in
respect of any losses, liabilities, claims, damages or expenses referred to
therein, then each indemnifying party shall contribute to the aggregate amount
of such losses, liabilities, claims, damages and expenses incurred by such
indemnified party, as incurred, (i) in such proportion as is appropriate to
reflect benefits received by EQR, on the one hand, and the Underwriters, on the
other hand, from the offering of the Underwritten Securities pursuant to the
applicable Terms Agreement or (ii) if the allocation provided by clause (i) is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of EQR, on the one hand, and of the Underwriters, on the other
hand, in connection with the statements or omissions which resulted in such
losses, liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by EQR, on the one hand, and the
Underwriters, on the other hand, in connection with the offering of the
Underwritten Securities pursuant to the applicable Terms Agreement shall be
deemed to be in the same respective proportions as the total net proceeds from
the offering of such Underwritten Securities (before deducting expenses)
received by EQR and the total underwriting discount received by the
Underwriters, in each case as set forth on the cover of the Prospectus, or, if
Rule 434 is used, the corresponding location on the Term Sheet, bear to the
aggregate initial public offering price of such Underwritten Securities as set
forth on such cover.
The relative fault of EQR, on the one hand, and the Underwriters, on
the other hand, shall be determined by reference to, among other things, whether
any such untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by EQR
or by the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
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EQR and the Underwriters agree that it would not be just and equitable
if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the Underwritten Securities underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages which
such Underwriter has otherwise been required to pay by reason of any such untrue
or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each trustee of EQR, each officer of EQR who signed the Registration Statement,
and each person, if any, who controls EQR within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act shall have the same rights to
contribution as EQR. The Underwriters' respective obligations to contribute
pursuant to this Section 7 are several in proportion to the number of Initial
Underwritten Securities set forth opposite their respective names in the
applicable Terms Agreement, and not joint.
Section 8. Representations, Warranties and Agreements to Survive
-----------------------------------------------------
Delivery.
--------
All representations, warranties and agreements included in the
applicable Terms Agreement, or included in certificates of officers of EQR or
ERP submitted pursuant thereto, shall remain operative and in full force and
effect, regardless of any termination of the applicable Terms Agreement or
investigation made by or on behalf of any Underwriter or any controlling person,
or by or on behalf of EQR or ERP, and shall survive delivery of and payment for
the
-35-
Underwritten Securities until the obligations relating to all Underwritten
Securities have been fully satisfied in accordance with their terms.
Section 9. Termination of Terms Agreement.
-------------------------------
(a) You may terminate the applicable Terms Agreement, by notice to
EQR, at any time at or prior to the applicable Closing Time if (i) there has
been, since the date of such Terms Agreement or since the respective dates as of
which information is given in the Prospectus, any Material Adverse Change, or
(ii) there has occurred any material adverse change in the financial markets in
the United States or any outbreak of hostilities or other calamity or crisis or
escalation of any existing hostilities or any change or development involving a
prospective change in national political, financial or economic conditions, in
each case, the effect of which is such as to make it, in your judgment,
impracticable to market the Underwritten Securities or enforce contracts for the
sale of the Underwritten Securities, or (iii) trading in any of the securities
of EQR has been suspended by the Commission or any exchange or any over-the-
counter market, or if trading generally on either the New York Stock Exchange,
the American Stock Exchange or in the Nasdaq National Market has been suspended
or limited, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices for securities have been required, by either of said exchanges
or by such system or by order of the Commission, the NASD, or any other
governmental authority, or (iv) if a banking moratorium has been declared by
Federal or New York authorities, or (v) the rating assigned by any nationally
recognized statistical rating organization to any Preferred Shares of EQR as of
the date of the applicable Terms Agreement shall have been lowered since such
date or if any such rating organization shall have publicly announced that it
has placed any Preferred Shares of EQR on what is commonly termed a "watch list"
for possible downgrading. As used in this Section 9(a), the term "Prospectus"
means the Prospectus in the form first used to confirm sales of the Underwritten
Securities.
(b) In the event of any such termination, (x) the covenants set forth
in Section 3 with respect to any offering of Underwritten Securities shall
remain in effect so long as any Underwriter owns any such Underwritten
Securities purchased from EQR pursuant to the applicable Terms Agreement and (y)
the covenant set forth in Section 3(h) hereof, the provisions of Section 4
hereof, the indemnity and contribution agreements set forth in Section 6 and 7
hereof, and the provisions of Sections 8 and 13 hereof shall remain in effect.
Section 10. Default by One or More of the Underwriters.
-------------------------------------------
If one or more of the Underwriters shall fail at the applicable
Closing Time or the relevant Date of Delivery, as the case may be, to purchase
the Underwritten Securities which it or they are obligated to purchase under the
applicable Terms Agreement (the "Defaulted Securities"), then you shall have the
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right, within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting Underwriters, or any other underwriters, to purchase all, but not
less than all, of the Defaulted Securities in such amounts as may be agreed upon
and upon the terms herein set forth; if, however, you shall not have completed
such arrangements within such 24-hour period, then:
(a) If the total number of Defaulted Securities does not exceed 10% of
the total number of Underwritten Securities to be purchased pursuant to such
Terms Agreement, the non-defaulting Underwriters named in such Terms Agreement
shall be obligated to purchase the full amount thereof in the proportions that
their respective underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting Underwriters, or
(b) If the total number of Defaulted Securities exceeds 10% of the
total number of Underwritten Securities to be purchased pursuant to such Terms
Agreement, the applicable Terms Agreement (or, with respect to the Underwriters'
exercise of any applicable over-allotment option for the purchase of Option
Securities on a Date of Delivery after the Closing Time, the obligations of the
Underwriters to purchase, and EQR to sell, such Option Securities on such Date
of Delivery) shall terminate without liability on the part of any non-defaulting
Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default under this Agreement and
the applicable Terms Agreement.
In the event of any such default which does not result in a
termination of the applicable Terms Agreement, either you or EQR shall have the
right to postpone the applicable Closing Time for a period not exceeding seven
days in order to effect any required changes in the Registration Statement or
the Prospectus or in any other documents or arrangements.
Section 11. Notices.
--------
All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed or transmitted by any standard
form of telecommunication. Notices to the Underwriters shall be directed as set
forth in the applicable Terms Agreement; notices to EQR and ERP shall be
directed to them at Xxx Xxxxx Xxxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxx
00000, attention of Xxxxxxx Xxxxxxx XX, with a copy to Xxxx Xxxxxxx Xxxxxx,
Esq., Xxxxxxxxx & Xxxxxxxxxxx, P.C., Xxx Xxxxx Xxxxxxxxx Xxxxx, Xxxxx 0000,
Xxxxxxx, Xxxxxxxx 00000.
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Section 12. Parties.
-------
The applicable Terms Agreement shall inure to the benefit of and be
binding upon you and EQR and ERP and any Underwriter who becomes a party to such
Terms Agreement, and their respective successors. Nothing expressed or
mentioned in the applicable Terms Agreement is intended or shall be construed to
give any person, firm or corporation, other than those referred to in Sections 6
and 7 and their heirs and legal representatives, any legal or equitable right,
remedy or claim under or in respect of such Terms Agreement or any provision
therein contained. The applicable Terms Agreement and all conditions and
provisions thereof are intended to be for the sole and exclusive benefit of the
parties hereto and thereto and their respective successors and said controlling
persons and officers and directors and their heirs and legal representatives,
and for the benefit of no other person, firm or corporation. No purchaser of
Underwritten Securities from any Underwriter shall be deemed to be a successor
by reason merely of such purchase.
Section 13. Governing Law and Time.
----------------------
The applicable Terms Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to agreements made
and to be performed in said State. Specified times of day refer to New York
City time.
Section 14. Counterparts.
------------
The applicable Terms Agreement may be executed in one or more
counterparts, and if executed in more than one counterpart the executed
counterparts shall constitute a single instrument.
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Exhibit A
EQUITY RESIDENTIAL PROPERTIES TRUST
(a Maryland real estate investment trust)
Common Shares of Beneficial Interest, Preferred Shares of Beneficial Interest
and Depositary Shares
TERMS AGREEMENT
To: Equity Residential Properties Trust
Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
We understand that Equity Residential Properties Trust, a Maryland
real estate investment trust (the "Company"), proposes to issue and sell [_____
Common Shares of Beneficial Interest, par value $.01 per share (the "Common
Shares")] [_____ Preferred Shares of Beneficial Interest, par value $.01 per
share (the "Preferred Shares")] [in the form of _____ depositary shares (the
"Depositary Shares") each representing ____ of a Preferred Share] (such
securities also being hereinafter referred to as the "Initial Underwritten
Securities"). Subject to the terms and conditions set forth or incorporated by
reference herein, we [the underwriters named below (the "Underwriters")] offer
to purchase, severally and not jointly, the number of Underwritten Securities
[opposite their names set forth below at the purchase price set forth below, and
a proportionate share of Option Underwritten Securities set forth below, to the
extent any are purchased.
Number
Underwriter of Initial Underwritten Securities
Total [$]
The Underwritten Securities shall have the following terms:
[Common Shares]
Title:
Number of shares:
Number of Option Underwritten Securities:
Initial public offering price per share: $
Purchase price per share: $
Listing requirements:
Black-out provisions:
Lock-up provisions:
Other terms and conditions:
Closing date and location:
[Preferred Shares]
Title:
Rank:
Ratings:
Number of shares:
Number of Option Underwritten Securities:
Dividend rate (or formula) per share: $
Dividend payment dates:
Stated value: $
Liquidation preference per share: $
Redemption provisions:
Sinking fund requirements:
Conversion provisions:
Listing requirements:
Black-out provisions:
Initial public offering price per share: $____ plus accumulated dividends, if
any, from _____
Purchase price per share: $____ plus accumulated dividends, if any, from _____
Other terms and conditions:
Closing date and location:
[Depositary Shares]
Title:
Fractional Amount of Preferred Shares represented by each Depositary Share:
Ratings:
Rank:
Number of shares:
Number of Option Underwritten Securities:
Dividend rate (or formula) per share:
Dividend payment dates:
Liquidation preference per share:
Redemption provisions:
Sinking fund requirements:
Conversion provisions:
Listing requirements:
Black-out provisions:
Initial public offering price per share: $____ plus accumulated dividends, if
any, from _____
Purchase price per share: $____ plus accumulated dividends, if any, from _____
Other terms and conditions:
Closing date and location:
All of the provisions contained in the document attached as Annex I
entitled "EQUITY RESIDENTIAL PROPERTIES TRUST -- Common Shares of Beneficial
Interest, Preferred Shares of Beneficial Interest and Depositary Shares--
Standard Underwriting Provisions" are hereby incorporated by reference in their
entirety herein and shall be deemed to be a part of this Terms Agreement to the
same extent as if such provisions had been set forth in full herein. Terms
defined in such document are used herein as therein defined.
Please accept this offer no later than _____ o'clock P.M. (New York
City time) on _____________ by signing a copy of this Terms Agreement in the
space set forth below and returning the signed copy to us.
Very truly yours,
By:
----------------------------------
Authorized Signatory
[Acting on behalf of itself and the other named
Underwriters.]
Accepted:
EQUITY RESIDENTIAL PROPERTIES TRUST
By:
--------------------------------
Name:
Title:
Exhibit B
EQUITY RESIDENTIAL PROPERTIES TRUST
(a Maryland real estate investment trust)
[Title of Securities]
DELAYED DELIVERY CONTRACT
_______________ __, 1997
Equity Residential Properties Trust
Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention:
Ladies and Gentlemen:
The undersigned hereby agrees to purchase from Equity Residential
Properties Trust. (the "Company"), and the Company agrees to sell to the
undersigned on ______________ __, 19__ (the "Delivery Date"),
________________________ [principal amount] shares of the Company's [insert
title of security] (the "Securities"), offered by the Company's Prospectus dated
________________ __, 19__, as supplemented by its Prospectus Supplement dated
______________ __, 19__, receipt of which is hereby acknowledged, at a purchase
price of [$_____ per share] [__% of the principal amount thereof, plus accrued
interest from ____________ __, 19__,] to the Delivery Date, and on further terms
and conditions set forth in this contract.
Payment for the Securities which the undersigned has agreed to
purchase on the Delivery Date shall be made to the Company or its order by
[certified or official bank check in New York Clearing House] [same day] funds
at the office of __________________________________________, on the Delivery
Date, upon delivery to the undersigned of the Securities to be purchased by the
undersigned in definitive form and in such denominations and registered in such
names as the undersigned may designate in written or telegraphic communication
addressed to the Company not less than five full business days prior to the
Delivery Date.
The obligation of the undersigned to take delivery of and make payment
for the Securities on the Delivery Date shall be subject only to the conditions
that (1) the purchase of the Securities to be made by the undersigned shall not
on the Delivery Date be prohibited under the laws of the jurisdiction to which
the undersigned is subject and (2) the Company, on or before _________________
__, 19__, shall have sold to the Underwriters of the Securities (the
"Underwriters") such principal amount of the Securities as is sold to them
pursuant to the Terms Agreement dated _______________ __, 19__ between the
Company and the Underwriters. The obligation of the undersigned to take
delivery of and make payment for the Securities shall not be affected by the
failure of any purchaser to take delivery of and make payments for the
Securities pursuant to other contracts similar to this contract. The
undersigned represents and warrants to you that its investment in the Securities
is not, as of the date hereof, prohibited under the laws of any jurisdiction to
which the undersigned is subject and which govern such investment.
Promptly after completion of the sale to the Underwriters, the Company
will mail or deliver to the undersigned at its address set forth below notice to
such effect, accompanied by a copy of the opinions of counsel for the Company
delivered to the Underwriters in connection therewith.
By the execution hereof, the undersigned represents and warrants to
the Company that all necessary corporate action for the due execution and
delivery of this contract and the payment for and purchase of the Securities has
been taken by it and no further authorization or approval of any governmental or
other regulatory authority is required for such execution, delivery, payment or
purchase, and that, upon acceptance hereof by the Company and mailing or
delivery of a copy as provided below, this contract will constitute a valid and
binding agreement of the undersigned in accordance with its terms.
This contract will inure to the benefit of and be binding upon the
parties hereto and their respective successors, but will not be assignable by
either party hereto without the written consent of the other.
It is understood that the Company will not accept Delayed Delivery
Contracts for an aggregate principal amount of Securities in excess of $________
and that the acceptance of any Delayed Delivery Contract is in the Company's
sole discretion and, without limiting the foregoing, need not be on a first-
come, first-served basis. If this contract is acceptable to the Company, it is
requested that the Company sign the form of acceptance on a copy hereof and mail
or deliver a signed copy hereof to the undersigned at its address set forth
below. This will become a binding contract between the Company and the
undersigned when such copy is so mailed or delivered.
This Delayed Delivery Contract shall be governed by the laws of the
State of New York.
Yours very truly,
___________________________________
(Name of Purchaser)
By:________________________________
(Title)
___________________________________
___________________________________
(Address)
Accepted as of the date first above written.
EQUITY RESIDENTIAL PROPERTIES TRUST
By:________________________________
Name:
Title:
PURCHASER - PLEASE COMPLETE AT TIME OF SIGNING
The name and telephone number of the representative of the
Purchaser with whom details of delivery on the Delivery Date may be discussed
are as follows: (Please print.)
Telephone No.
Name (including Area Code)
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