Exhibit 1.1
RECKSON OPERATING PARTNERSHIP, L.P.
UNDERWRITING AGREEMENT
TABLE OF CONTENTS
Page
SECTION 1. Representations and Warranties...............................................................3
(a) Representations and Warranties by the Operating Partnership..................................3
(1) Compliance with Registration Requirements.............................................3
(2) Incorporated Documents................................................................4
(3) Independent Accountants...............................................................5
(4) Financial Statements..................................................................5
(5) No Material Adverse Change in Business................................................5
(6) Good Standing of the Company..........................................................6
(7) Good Standing of the Operating Partnership............................................6
(8) Good Standing of the Subsidiaries.....................................................6
(9) Capitalization of Operating Partnership...............................................7
(10) Authorization of Debt Securities and Indenture........................................7
(11) Descriptions of the Underwritten Securities and the Indenture.........................7
(12) Authorization of this Underwriting Agreement and Terms Agreement......................7
(13) Absence of Defaults and Conflicts.....................................................8
(14) Absence of Labor Dispute..............................................................8
(15) Absence of Proceedings................................................................9
(16) Accuracy of Exhibits..................................................................9
(17) REIT Qualification....................................................................9
(18) Investment Company Act................................................................9
(19) Intellectual Property.................................................................9
(20) Absence of Further Requirements......................................................10
(21) Possession of Licenses and Permits...................................................10
(22) Title to Property....................................................................10
(23) Environmental Laws...................................................................11
(24) Tax Returns..........................................................................12
(25) Environmental Consultants............................................................12
(26) Title Insurance......................................................................12
(27) Absence of Regulation M Violation....................................................12
(b) Officers' Certificates......................................................................12
SECTION 2. Sale and Delivery to Underwriters; Closing..................................................13
(a) Underwritten Securities.....................................................................13
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TABLE OF CONTENTS
(continued)
Page
(b) Option Underwritten Securities..............................................................13
(c) Payment.....................................................................................13
(d) Denominations; Registration.................................................................14
SECTION 3. Covenants of the Operating Partnership......................................................14
(a) Compliance with Securities Regulations and Commission Requests..............................14
(b) Filing of Amendments........................................................................15
(c) Delivery of Registration Statements.........................................................15
(d) Delivery of Prospectuses....................................................................15
(e) Continued Compliance with Securities Laws...................................................15
(f) Blue Sky Qualifications.....................................................................16
(g) Earnings Statement..........................................................................16
(h) Reporting Requirements......................................................................16
(i) Restriction on Sale of Securities...........................................................16
(j) REIT Qualification..........................................................................17
(k) Use of Proceeds.............................................................................17
(l) No Manipulation of Market for Securities....................................................17
SECTION 4. Payment of Expenses.........................................................................17
(a) Expenses....................................................................................17
(b) Termination of Agreement....................................................................18
SECTION 5. Conditions of Underwriters' Obligations.....................................................18
(a) Effectiveness of Registration Statement.....................................................18
(b) Opinion of Counsel for the Operating Partnership............................................18
(c) Opinion of Counsel for Underwriters.........................................................19
(d) Officers' Certificate.......................................................................19
(e) Accountant's Comfort Letter.................................................................20
(g) Ratings.....................................................................................20
(h) Over-Allotment Option.......................................................................20
(i) Additional Documents........................................................................21
(j) Termination of Terms Agreement..............................................................21
SECTION 6. Indemnification.............................................................................21
(a) Indemnification of Underwriters.............................................................21
(b) Indemnification of the Operating Partnership................................................22
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TABLE OF CONTENTS
(continued)
Page
(c) Actions against Parties; Notification; Settlement without Consent if Failure to Reimburse...22
SECTION 7. Contribution................................................................................23
SECTION 8. Representations, Warranties and Agreements to Survive Delivery..............................24
SECTION 9. Termination.................................................................................24
(a) Underwriting Agreement......................................................................24
(b) Terms Agreement.............................................................................24
(c) Liabilities.................................................................................25
SECTION 10. Default by One or More of the Underwriters..................................................25
SECTION 11. Notices.....................................................................................26
SECTION 12. Parties.....................................................................................26
SECTION 13. Governing Law and Time......................................................................26
SECTION 14. Effect of Headings..........................................................................27
SECTION 15. Counterparts................................................................................27
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RECKSON OPERATING PARTNERSHIP, L.P.
(a Delaware limited partnership)
Debt Securities
UNDERWRITING AGREEMENT
August 10, 2004
Citigroup Global Markets Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
UBS Securities LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Reckson Operating Partnership, L.P., a Delaware limited partnership
(the "Operating Partnership"), proposes to issue and sell up to $150,000,000
aggregate initial public offering price of its debt securities ("Debt
Securities") from time to time, in or pursuant to one or more offerings on terms
to be determined at the time of sale.
The terms and rights of any particular issuance of Debt Securities
shall be as specified in the Terms Agreement (as defined below) relating thereto
and in or pursuant to the indenture and any supplements or amendments thereto
(the "Indenture") identified in such Terms Agreement.
Whenever the Operating Partnership determines to make an offering of
Debt Securities through the Representatives or through an underwriting syndicate
managed by the Representatives, the Operating Partnership will enter into an
agreement (each, a "Terms Agreement") providing for the sale of such Debt
Securities to, and the purchase and offering thereof by, the Representatives and
such other underwriters, if any, selected by the Representatives as have
authorized the Representatives to enter into such Terms Agreement on their
behalf (the "Underwriters," which term shall include the Representatives whether
acting alone in the sale of the Underwritten Securities or as a member of an
underwriting syndicate or any Underwriter substituted pursuant to Section 10
hereof); provided, that, the Operating Partnership is not obligated, and shall
have complete and absolute discretion to determine if and when, to make any
offering, to make any offering through the Representatives or any other person,
or to enter into any Terms Agreement. Prior to execution of a Terms Agreement,
this Underwriting Agreement shall not be construed as an obligation of the
Operating Partnership to
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sell any Debt Securities or as an obligation of any of the Underwriters to
purchase Debt Securities. The obligation of the Operating Partnership to issue
and sell any Debt Securities and the obligation of any of the Underwriters to
purchase any Debt Securities shall be evidenced by the Terms Agreement with
respect to the Underwritten Securities (as defined below) specified therein.
The Terms Agreement relating to the offering of Debt Securities shall specify
the aggregate principal amount of Debt Securities to be initially issued (the
"Initial Underwritten Securities"), the name of each Underwriter participating
in such offering (subject to substitution as provided in Section 10 hereof),
the aggregate principal amount of Initial Underwritten Securities which each
such Underwriter severally agrees to purchase, whether such offering is on a
fixed or variable price basis and, if on a fixed price basis, the initial
offering price, the price at which the Initial Underwritten Securities are to
be purchased by the Underwriters, the form, time, date and place of delivery
and payment of the Initial Underwritten Securities and any other material
variable terms of the Initial Underwritten Securities. In addition, if
applicable, such Terms Agreement shall specify whether the Operating
Partnership has agreed to grant to the Underwriters an option to purchase
additional Debt Securities to cover over-allotments, if any, and aggregate
principal amount of Debt Securities subject to such option (the "Option
Underwritten Securities"). As used herein, the term "Underwritten Securities"
shall include the Initial Underwritten Securities and all or any portion of
any Option Underwritten Securities. 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 the
Operating Partnership and the Representatives, acting for themselves and, if
applicable, as representatives of any other Underwriters. Each offering of
Underwritten Securities will be governed by this Underwriting Agreement, as
supplemented by the applicable Terms Agreement.
Reckson Associates Realty Corp., a Maryland corporation (the "Company")
and the Operating Partnership have filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (No.
333-115997), for the registration of certain securities, including the Debt
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 the Company and the Operating Partnership have filed such
post-effective amendments thereto as may be required prior to the execution of
the applicable Terms Agreement. Such registration statement (as so amended, if
applicable) has been declared effective by the Commission. Such registration
statement (as so amended, if applicable), including the information, if any,
deemed to be a part thereof pursuant to Rule 430A(b) of the 1933 Act Regulations
(the "Rule 430A Information") or Rule 434(d) of the 1933 Act Regulations (the
"Rule 434 Information"), is referred to herein as the "Registration Statement";
and the final prospectus constituting a part thereof and the applicable
prospectus supplement relating to the offering of the Underwritten Securities,
in the form first furnished to the Underwriters by the Operating Partnership for
use in connection with the offering of the Underwritten Securities, are
collectively referred to herein as the "Prospectus"; provided, however, that all
references to the "Registration Statement" and the "Prospectus" shall be deemed
to include all documents incorporated therein by reference pursuant to the
Securities Exchange Act of 1934, as amended (the "1934 Act"), prior to the
execution of the applicable Terms Agreement; provided, further, that if the
Operating Partnership files a registration statement with the Commission
pursuant to Section 462(b) of the 1933 Act Regulations (the "Rule 462(b)
Registration Statement"), then, after such filing, all references to
"Registration Statement" shall be deemed to include the Rule 462(b) Registration
Statement;
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provided, however, that a prospectus supplement shall be deemed to
have supplemented the Prospectus only with respect to the offering of the
Underwritten Securities to which it relates, and provided, further, that if the
Operating Partnership elects to rely upon Rule 434 of the 1933 Act Regulations,
then all references to "Prospectus" shall be deemed to include the final or
preliminary prospectus and the applicable term sheet or abbreviated term sheet
(the "Term Sheet"), as the case may be, in the form first furnished to the
Underwriters by the Operating Partnership in reliance upon Rule 434 of the 1933
Act Regulations, and all references in this Underwriting Agreement to the date
of the Prospectus shall mean the date of the Term Sheet. A "preliminary
prospectus" shall be deemed to refer to any prospectus used before the
registration statement became effective and any prospectus that omitted, as
applicable, the Rule 430A Information, the Rule 434 Information or other
information to be included upon pricing in a form of prospectus filed with the
Commission pursuant to Rule 424(b) of the 1933 Act Regulations, that was used
after such effectiveness and prior to the execution and delivery of the
applicable Terms Agreement. For purposes of this Underwriting Agreement, 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 the copy filed with the Commission pursuant to its Electronic
Data Gathering, Analysis and Retrieval system ("▇▇▇▇▇"). Capitalized terms used
but not otherwise defined herein shall have the meanings given to those terms in
the Prospectus.
All references in this Underwriting Agreement to financial statements
and schedules and other information which is "contained," "included" or "stated"
(or other references of like import) in the Registration Statement, Prospectus
or preliminary prospectus shall be deemed to mean and include all such financial
statements and schedules and other information which is or deemed to be
incorporated by reference in the Registration Statement, Prospectus or
preliminary prospectus, as the case may be; and all references in this
Underwriting Agreement to amendments or supplements to the Registration
Statement, Prospectus or preliminary 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, Prospectus or
preliminary prospectus, as the case may be.
The term "Subsidiary" means a corporation or a partnership a majority
of the outstanding voting stock, partnership or membership interests, as the
case may be, of which is owned or controlled, directly or indirectly, by the
Operating Partnership or by one or more other Subsidiaries of the Operating
Partnership.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Operating Partnership. The
Operating Partnership represents and warrants to the Representatives, as of
the date hereof, and to the Representatives and each other Underwriter named
in the applicable Terms Agreement, as of the date thereof, as of the Closing
Time (as defined below) and, if applicable, as of each Date of Delivery (as
defined below) (in each case, a "Representation Date"), as follows:
(1) Compliance with Registration Requirements. The Operating
Partnership meets the requirements for use of Form S-3 under the
1933 Act. Each of the Registration Statement and any Rule 462(b)
Registration Statement has become effective under the
3
1933 Act and no stop order suspending the effectiveness of the
Registration Statement or any Rule 462(b) Registration Statement has
been issued under the 1933 Act and no proceedings for that purpose
have been instituted or are pending or, to the knowledge of the
Operating Partnership, are contemplated by the Commission or the
state securities authority of any jurisdiction, and any request on
the part of the Commission for additional information has been
complied with. No order preventing or suspending the use of the
Prospectus has been issued and no proceeding for that purpose has
been instituted or, to the knowledge of the Operating Partnership,
threatened by the Commission or the state securities authority of
any jurisdiction.
At the respective times the Registration Statement,
any Rule 462(b) Registration Statement and any post-effective
amendments thereto (including the filing of the Operating Partnership's
most recent Annual Report on Form 10-K with the Commission (the "Annual
Report on Form 10-K")) became effective and at each Representation
Date, the Registration Statement, any Rule 462(b) Registration
Statement and any amendments and supplements thereto complied and will
comply in all material respects with the requirements of the 1933 Act
and the 1933 Act Regulations and the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"), and the rules and regulations of
the Commission under the Trust Indenture Act (the "1939 Act
Regulations") and did not and 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. At
the date of the Prospectus, and at each Representation Date, the
Prospectus, and any amendments and supplements thereto did not and 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.
If the Operating Partnership elects to rely upon Rule 434 of the 1933
Act Regulations, the Operating Partnership will comply with the
requirements of Rule 434. Notwithstanding the foregoing, the
representations and warranties in this subsection shall not apply to
statements in or omissions from the Registration Statement or the
Prospectus made in reliance upon and in conformity with information
furnished to the Operating Partnership in writing by any Underwriter
through the Representatives expressly for use in the Registration
Statement or the Prospectus.
Each preliminary prospectus and Prospectus filed as
part of the Registration Statement as originally filed or as part of
any amendment or supplement thereto, or filed pursuant to Rule 424
under the 1933 Act, complied when so filed in all material respects
with the 1933 Act and the 1933 Act Regulations and, if applicable, each
preliminary prospectus and the Prospectus delivered to the Underwriters
for use in connection with the offering of Underwritten Securities
will, at the time of such delivery, be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to ▇▇▇▇▇,
except to the extent permitted by Regulation S-T.
If a Rule 462(b) Registration Statement is required
in connection with the offering and sale of the Securities, the
Operating Partnership has complied or will comply with the requirements
of Rule 111 under the 1933 Act Regulations relating to the payment of
filing fees therefor.
4
(2) Incorporated Documents. The documents incorporated or deemed
to be incorporated by reference in the Registration Statement and the
Prospectus, 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 1934 Act and the rules and regulations of the
Commission thereunder (the "1934 Act Regulations") and, when read
together with the other information in the Prospectus, at the date of
the Prospectus and at each Representation Date, or during the period
specified in Section 3(e), did not and will not include an untrue
statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
(3) Independent Accountants. The accountants who certified the
financial statements and supporting schedules included in, or
incorporated by reference into, the Registration Statement and the
Prospectus are independent public accountants as required by the 1933
Act and the 1933 Act Regulations.
(4) Financial Statements. The financial statements of the
Operating Partnership included, or incorporated by reference, in the
Registration Statement and the Prospectus, together with the related
schedules and notes, as well as those financial statements, schedules
and notes of any other entity acquired or to be acquired by the
Operating Partnership included therein, present fairly the financial
position of the respective entity or entities or group presented
therein at the respective dates indicated and the statement of
operations, stockholders' equity and cash flows data of such entity,
as the case may be, for the periods specified. Such financial
statements have been prepared in conformity with generally accepted
accounting principles ("GAAP") applied on a consistent basis
throughout the periods involved. The supporting schedules, if any,
included or incorporated by reference in the Registration Statement
and the Prospectus present fairly, in accordance with GAAP, the
information required to be stated therein. In addition, any pro forma
financial information and the related notes thereto included or
incorporated by reference in the Registration Statement and the
Prospectus present fairly the information shown therein, have been
prepared in accordance with the Commission's rules and guidelines of
the Public Company Accounting Oversight Board ("PCAOB") with respect
to pro forma information and have been properly compiled on the bases
described therein, and the assumptions used in the preparation
thereof were then reasonable and the adjustments used therein were
then appropriate to give effect to the transactions and circumstances
referred to therein. All historical financial statements and
information and all pro forma financial statements and information
relating to the Operating Partnership or any entity acquired or to be
acquired by the Operating Partnership required by the 1933 Act, the
1933 Act Regulations, the 1934 Act and the 1934 Act Regulations are
included, or incorporated by reference, in the Registration Statement
and the Prospectus.
(5) No Material Adverse Change in Business. Since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, except as otherwise stated therein, (A)
there has been no material adverse change in the condition, financial
or otherwise, or in the earnings, assets, business affairs or
business prospects of the Operating Partnership and the Subsidiaries
considered as one enterprise whether or not arising in the ordinary
course of business, which would be material to the Operating
5
Partnership, taken as a whole (anything which would be material to
the Operating Partnership taken as a whole, being hereinafter
referred to as "Material," and such a material adverse change, a
"Material Adverse Effect"), (B) no casualty loss or condemnation or
other adverse event with respect to any of the interests held
directly or indirectly in any of the real properties or real property
interests, including without limitation, any interest or
participation, direct or indirect, in any mortgage obligation owned,
directly or indirectly, by the Operating Partnership or any
Subsidiary (the "Properties") has occurred which would be Material,
(C) there have been no transactions or acquisitions entered into by
the Operating Partnership or any Subsidiary, other than those in the
ordinary course of business, which would be Material, (D) except for
regular quarterly distributions on units of the Operating Partnership
(the "Units"), there has been no dividend or distribution of any kind
declared, paid or made by the Operating Partnership with respect to
its Units, and (E) there has been no increase in the long term debt
or decrease in the capital of the Operating Partnership or any
Subsidiary.
(6) Good Standing of the Company. The Company has been duly
organized and is validly existing as a corporation in good standing
under the laws of the State of Maryland and has corporate 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, or as contemplated under this Underwriting
Agreement and the applicable Terms Agreement. The Company is duly
qualified or registered as a foreign corporation to transact business
and is in good standing in each other jurisdiction in which such
qualification or registration is required, whether by reason of the
ownership or leasing of property or the conduct of business, except
where the failure to so qualify or register or be in good standing
would not result in a Material Adverse Effect.
(7) Good Standing of the Operating Partnership. The Operating
Partnership is duly organized and validly existing as a limited
partnership in good standing under the laws of the State of Delaware,
with partnership power and authority to own, lease and operate its
properties, to conduct the business in which it is engaged and
proposes to engage as described in the Prospectus and to enter into
and perform its obligations under this Underwriting Agreement and the
applicable Terms Agreement. The Operating Partnership is duly
qualified or registered as a foreign partnership and is in good
standing in each jurisdiction in which such qualification or
registration is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure to so qualify or register would not have a Material Adverse
Effect. The Company is the sole general partner of the Operating
Partnership and holds such number and/or percentage of Units as
disclosed in the Prospectus as of the dates set forth therein. The
Amended and Restated Agreement of Limited Partnership of the
Operating Partnership, dated June 2, 1995, as amended through
December 6, 1995 (the "Operating Partnership Agreement"), is in full
force and effect.
(8) Good Standing of the Subsidiaries. Each Subsidiary that is
a "significant subsidiary" as such term is defined in Section 1-02 of
Regulation S-X (each a "Significant Subsidiary," and collectively,
the "Significant Subsidiaries") is listed on Exhibit B hereto and has
been duly organized and is validly existing as a corporation, limited
partnership, limited liability company or other legal entity, as the
case may be, in
6
good standing under the laws of the state of its jurisdiction
of incorporation or organization, as the case may be, with the
requisite power and authority to own, lease and operate its
properties, and to conduct the business in which it is engaged or
proposes to engage as described in the Prospectus. Each such entity
is duly qualified or registered as a foreign corporation, limited
partnership or limited liability company or other legal entity, as
the case may be, to transact business and is in good standing in each
jurisdiction in which such qualification or registration is required,
whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure to so qualify or
register would not have a Material Adverse Effect. Except as
otherwise stated in the Registration Statement and the Prospectus,
all of the issued and outstanding capital stock or other equity
interests of each such entity has been duly authorized and validly
issued and is fully paid and non-assessable, has been offered and
sold in compliance with all applicable laws (including, without
limitation, federal or state securities laws) and are owned, directly
or indirectly, by the Operating Partnership, in each case free and
clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity (collectively, "Liens"). No shares of capital stock
or other equity interests of such entities are reserved for any
purpose, and there are no outstanding securities convertible into or
exchangeable for any capital stock or other equity interests of such
entities and no outstanding options, rights (preemptive or otherwise)
or warrants to purchase or to subscribe for shares of such capital
stock or other equity interests or any other securities of such
entities, except as disclosed in the Prospectus.
(9) Capitalization of Operating Partnership. The capitalization
of the Operating Partnership is as set forth in the Prospectus as of
the date referenced therein. All the issued and outstanding Units
have been duly authorized and are validly issued, fully paid and
non-assessable and have been offered and sold or exchanged in
compliance with all applicable laws (including, without limitation,
federal and state securities laws). There are no Units reserved for
any purpose and there are no outstanding securities convertible into
or exchangeable for any Units and no outstanding options, rights
(preemptive or otherwise) or warrants to purchase or to subscribe for
Units, except for rights granted to the partners in Omni Partners,
L.P. (the "Omni Partnership") and the rights of holders of Class C
common Units and Series A, B, C, D and F preferred Units.
(10) Authorization of Debt Securities and Indenture. The
Underwritten Securities have been duly authorized by the Operating
Partnership, and, when issued and delivered pursuant to this
Underwriting Agreement and the applicable Terms Agreement against
payment of the requisite consideration therefor, such Underwritten
Securities will have been duly executed, authenticated, issued and
delivered and will constitute valid and legally binding obligations
of the Operating Partnership entitled to the benefits provided by the
Indenture, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles; the
Indenture has been duly qualified under the Trust Indenture Act and
has been duly authorized by the Operating Partnership and, at the
Closing Time and each Date of Delivery for such Underwritten
Securities, will constitute a valid and legally binding agreement,
enforceable in accordance with its terms, subject, as to enforcement,
to bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to
general equity principles.
7
(11) Descriptions of the Underwritten Securities and the
Indenture. The Underwritten Securities being sold pursuant to the
applicable Terms Agreement and the Indenture will conform in all
material respects to the statements relating thereto contained in the
Prospectus and will be in substantially the form filed or
incorporated by reference, as the case may be, as an exhibit to the
Registration Statement. The form of debt security to be used to
evidence the Underwritten Securities will be in due and proper form
and will comply with all applicable legal requirements.
(12) Authorization of this Underwriting Agreement and Terms
Agreement. This Underwriting Agreement has been, and the applicable
Terms Agreement as of the date thereof will have been, duly
authorized, executed and delivered by the Operating Partnership.
(13) Absence of Defaults and Conflicts. Neither the Operating
Partnership nor any Subsidiary is (A) in violation of its charter,
by-laws, certificate of limited partnership or partnership agreement
or other organizational document, as the case may be, or (B) in
default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note,
lease or other agreement or instrument to which any such entity is a
party or by which any of them may be bound, or to which any of its
property or assets may be bound or subject (collectively, "Agreements
and Instruments"), except (with respect to clause (B) only) for such
defaults that would not result in a Material Adverse Effect. The
execution, delivery and performance of this Underwriting Agreement,
the applicable Terms Agreement, the Indenture and any other agreement
or instrument entered into or issued or to be entered into or issued
by the Operating Partnership in connection with the transactions
contemplated hereby or thereby or in the Registration Statement and
the Prospectus and the consummation of the transactions contemplated
herein and in the Registration Statement and the Prospectus
(including the issuance and sale of the Underwritten Securities and
the use of the proceeds from the sale of the Underwritten Securities
as described under the caption "Use of Proceeds") and compliance by
the Operating Partnership with its obligations hereunder and
thereunder have been duly authorized by all necessary partnership
action and do not and will not, whether with or without the giving of
notice or passage of time or both, conflict with or constitute a
breach of, or default or Repayment Event (as defined below) under, or
result in the creation or imposition of any lien, charge or
encumbrance upon any assets, properties or operations of the
Operating Partnership or any Subsidiary pursuant to, any Agreements
and Instruments, except for such conflicts, breaches, defaults,
Repayment Events (as defined below) or liens, charges or encumbrances
that would not result in a Material Adverse Effect, nor will such
action result in any violation of the provisions of (A) the charter,
by-laws or the organizational documents of the Operating Partnership
or any Subsidiary or (B) any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, having
jurisdiction over the Operating Partnership or any Subsidiary or any
of their assets, properties or operations, except (with respect to
clause (B) only) for such violations that would not have a Material
Adverse Effect. As used herein, a "Repayment Event" means any event
or condition which gives the holder of any note, debenture or other
evidence of indebtedness (or any person acting on such holder's
behalf) the right to
8
require the repurchase, redemption or repayment of all or a
material portion of such indebtedness by the Operating Partnership or
any Subsidiary.
(14) Absence of Labor Dispute. No labor dispute with the
employees of the Operating Partnership or any Subsidiary exists or,
to the knowledge of the Operating Partnership, is imminent, and the
Operating Partnership is not aware of any existing or imminent labor
disturbance by the employees of any of its or any Subsidiary's
principal suppliers, manufacturers, customers or contractors, which
dispute or disturbance, in either case, may reasonably be expected to
result in a Material Adverse Effect.
(15) Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation before or by any court or
governmental agency or body, domestic or foreign, now pending, or to
the knowledge of the Operating Partnership threatened against or
affecting the Operating Partnership or any Subsidiary or any of their
respective assets, properties or operations or any officer or
director of the Company which is required to be disclosed in the
Registration Statement and the Prospectus (other than as stated
therein), or which might reasonably be expected to result in a
Material Adverse Effect, or which might reasonably be expected to
materially and adversely affect the consummation of this Underwriting
Agreement, the applicable Terms Agreement, the Indenture or the
transactions contemplated herein or therein. The aggregate of all
pending legal or governmental proceedings to which the Operating
Partnership or any Subsidiary is a party or of which any of their
respective assets, properties or operations is the subject that are
not described in the Registration Statement and the Prospectus,
including ordinary routine litigation incidental to the business,
could not reasonably be expected to result in a Material Adverse
Effect.
(16) Accuracy of Exhibits. There are no contracts or documents
which are required to be described in the Registration Statement, the
Prospectus or the documents incorporated by reference therein or to
be filed as exhibits thereto which have not been so described and/or
filed as required and the descriptions thereof or references thereto
are correct in all Material respects.
(17) REIT Qualification. At all times since January 1, 1995 the
Company has been, and upon the sale of the applicable Underwritten
Securities, the Company will continue to be, organized and operated
in conformity with the requirements for qualification as a real
estate investment trust under the Internal Revenue Code of 1986, as
amended (the "Code"), and its proposed method of operation will
enable it to continue to meet the requirements for qualification as a
real estate investment trust under the Code, and no actions have been
taken (or not taken which are required to be taken) which would cause
such qualification to be lost.
(18) Investment Company Act. Each of the Company, the Operating
Partnership and any Significant Subsidiary is not, and upon the
issuance and sale of the Underwritten Securities as herein
contemplated and the application of the net proceeds therefrom as
described in the Prospectus will not be, an "investment company"
within the meaning of the Investment Company Act of 1940, as amended
(the "1940 Act").
9
(19) Intellectual Property. To the knowledge of the Operating
Partnership, neither the Operating Partnership nor any Subsidiary is
required to own, possess or obtain the consent of any holder of any
trademarks, service marks, trade names or copyrights not now lawfully
owned, possessed or licensed in order to conduct the business now
operated by such entity, and none of the Operating Partnership or any
Subsidiary has received any notice or is otherwise aware of any
infringement of or conflict with asserted rights of others with
respect to any such proprietary rights, which infringement or
conflict (if the subject of any unfavorable decisions, ruling or
finding) singly or in the aggregate would result in any Material
Adverse Effect.
(20) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency or any other entity or person is necessary or required for the
performance by the Operating Partnership of its obligations under
this Underwriting Agreement, the applicable Terms Agreement, the
Indenture or in connection with the transactions contemplated under
this Underwriting Agreement, such Terms Agreement or the Indenture,
except such as have been already obtained or as may be required under
state securities laws or under the by-laws and rules of the National
Association of Securities Dealers, Inc. (the "NASD") or under state
securities or real estate syndication laws.
(21) Possession of Licenses and Permits. Each of the Operating
Partnership and the Subsidiaries possesses such certificates,
permits, licenses, approvals, consents and other authorizations
(collectively, "Governmental Licenses") issued by the appropriate
federal, state, local or foreign regulatory agencies or bodies
necessary to conduct the business now operated by them except for
such Governmental Licenses, the failure to obtain would not, singly
or in the aggregate, result in a Material Adverse Effect. The
Operating Partnership and the Subsidiaries are in compliance with the
terms and conditions of all such Governmental Licenses, except where
the failure so to comply would not, singly or in the aggregate,
result in a Material Adverse Effect. 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. Neither the Operating Partnership nor any
Subsidiary has received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which,
singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would result in a Material Adverse
Effect.
(22) Title to Property. The Operating Partnership, the
Subsidiaries or any joint venture partnership in which the Operating
Partnership owns an interest, as the case may be, have good and
marketable fee simple title or leasehold title, as the case may be,
to all real property and related improvements and other assets owned
or leased, or represented to be owned or leased, as applicable, by
the Operating Partnership or the Subsidiaries, and good title to all
other properties owned by them, and any improvements thereon and all
other assets that are required for the effective operation of such
properties in the manner in which they currently are operated, free
and clear of all liens, encumbrances, claims, security interests and
defects, except such as are Permitted Encumbrances (as
10
defined below). All liens, charges, encumbrances, claims or
restrictions on or affecting any of the Properties and the assets of
any of the Operating Partnership, the Subsidiaries or any joint
venture partnership in which the Operating Partnership owns an
interest that are required to be disclosed in the Prospectus are
disclosed therein. Each of the Properties comply with all applicable
codes, laws and regulations and (including, without limitation,
building and zoning codes, laws and regulations and laws relating to
access to the Properties), except if and to the extent disclosed in
the Prospectus and except for such failures to comply that would not
in the aggregate have a Material Adverse Effect. There are in effect
for the assets of each of the Operating Partnership, the Subsidiaries
or any joint venture partnership in which the Operating Partnership
owns an interest, insurance policies covering the risks and in
amounts that are commercially reasonable for the types of assets
owned by them and that are consistent with the types and amounts of
insurance typically maintained by prudent owners of properties
similar to such assets in the markets in which such assets are
located, and none of the Operating Partnership, the Subsidiaries or
any joint venture partnership in which the Operating Partnership owns
an interest has received from any insurance company notice of any
material defects or deficiencies affecting the insurability of any
such assets or any notices of cancellation or intent to cancel any
such policies. The Operating Partnership has no knowledge of any
pending or threatened litigation, moratorium, condemnation
proceedings, zoning change, or other similar proceeding or action
that could in any manner affect the size of, use of, improvements on,
construction on, access to or availability of utilities or other
necessary services to the Properties, except such proceedings or
actions that would not have a Material Adverse Effect. All of the
leases and subleases material to the business of the Operating
Partnership and the Subsidiaries considered as one enterprise, and
under which the Operating Partnership or any Subsidiary holds
Properties described in the Prospectus, are in full force and effect,
and neither the Operating Partnership nor any Subsidiary has received
any notice of any material claim of any sort that has been asserted
by anyone adverse to the rights of the Operating Partnership or any
Subsidiary under any of the leases or subleases mentioned above, or
affecting or questioning the rights of the Operating Partnership or
any Subsidiary of the continued possession of the leased or subleased
premises under any such lease or sublease. "Permitted Encumbrance"
shall mean (a) liens on certain Properties securing any of the
Operating Partnership, any Subsidiary or joint venture partnership
obligations, (b) other liens which are expressly described in, or
which are incorporated by reference into, the Prospectus and (c)
customary easements and encumbrances and other exceptions to title
which do not impair the operation, development or use of the
Properties for the purposes intended therefor as contemplated in the
Prospectus.
(23) Environmental Laws. Except as otherwise stated in the
Registration Statement and the Prospectus and except such violations
as would not, singly or in the aggregate, result in a Material
Adverse Effect, to the knowledge of the Operating Partnership and any
Subsidiary, as the case may be, after due inquiry, (A) neither the
Operating Partnership nor any Subsidiary is in violation of any
federal, state, local or foreign statute, law, rule, regulation,
ordinance or code, policy or rule of common law and any judicial or
administrative interpretation thereof including any judicial or
administrative order, consent, or decree of judgment relating to
pollution or protection of human health, the environment (including,
without limitation, ambient air, surface water,
11
groundwater, land surface or subsurface strata) 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) the Operating Partnership and any
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 pursuant to any Environmental Law
against the Operating Partnership or any 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 the Operating Partnership, any
Subsidiary or any of their assets relating to any Hazardous Materials
or the violation of any Environmental Laws.
(24) Tax Returns. Each of the Operating Partnership and any
Subsidiary has filed all federal, state, local and foreign income tax
returns which have been required to be filed (except in any case in
which an extension has been granted or the failure to so file would
not have a Material Adverse Effect) 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.
(25) Environmental Consultants. None of the environmental
consultants which prepared environmental and asbestos inspection
reports with respect to certain of the Properties was employed for
such purpose on a contingent basis or has any substantial interest in
the Company, the Operating Partnership or any Subsidiary and none of
them or any of their directors, officers or employees is connected
with the Company, the Operating Partnership or any Subsidiary as a
promoter, selling agent, voting trustee, director, officer or
employee.
(26) Title Insurance. The Operating Partnership and any
Subsidiary, as the case may be, have obtained title insurance on the
fee interests and leasehold interests in each of the Properties in an
amount at least equal to the greater of (A) the mortgage indebtedness
on each such Property and (B) the purchase price paid for each such
Property (in the case of any Property having been acquired by the
Operating Partnership via an exchange of Units for partnership
interests in the entity holding such property, the "purchase price"
of such Property being deemed to be the sum of (i) the per-share
price of the Common Stock of the Company on the date such Property
was exchanged for Units multiplied by the number of Units exchanged
for such Property or interests in the entity holding such Property
and (ii) the amount of any assumed indebtedness secured by such
Property), except that Omni Partnership has obtained title insurance
insuring Omni Partnership's interest in its real property assets in
an amount not less than $48 million.
12
(27) Absence of Regulation M Violation. None of the Company,
the Operating Partnership, the Subsidiaries, nor any of their
respective directors, officers, members or controlling persons, has
taken or will take, directly or indirectly, any action resulting in a
violation of Regulation M under the 1934 Act, or designed to cause or
result in, or that has constituted or that reasonably might be
expected to constitute, the stabilization or manipulation of the
price of any security of the Operating Partnership to facilitate the
sale or resale of the Securities.
(b) Officers' Certificates. Any certificate signed by any
authorized representative of the Operating Partnership and delivered to any
Underwriter or to counsel for the Underwriters in connection with the offering
of the Underwritten Securities shall be deemed a representation and warranty
by such entity or person, as the case may be, to each Underwriter as to the
matters covered thereby on the date of such certificate and, unless
subsequently amended or supplemented, at each Representation Date subsequent
thereto.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Underwritten Securities. 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 herein set forth.
(b) Option Underwritten Securities. If so provided in the applicable
Terms Agreement and subject to the terms and conditions set forth therein, the
Operating Partnership may grant an option to the Underwriters, severally and
not jointly, to purchase up to the aggregate principal amount of the Option
Underwritten Securities set forth therein at a price per Option Underwritten
Security equal to the price per Initial Underwritten Security, less an amount
equal to any interest paid or payable on the Initial Underwritten Securities
but not payable on the Option Underwritten Securities. Such option, if
granted, will expire 30 days after the date of such Terms Agreement, 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 the
Representatives to the Operating Partnership setting forth the aggregate
principal amount of Option Underwritten Securities as to which the several
Underwriters are then exercising the option and the time, date and place of
payment and delivery for such Option Underwritten Securities. Any such time
and date of payment and delivery (each, a "Date of Delivery") shall be
determined by the Representatives, but shall not be later than seven full
business days after the exercise of said option, nor in any event prior to the
Closing Time, unless otherwise agreed upon by the Representatives and the
Operating Partnership. If the option is exercised as to all or any portion of
the Option Underwritten Securities, each of the Underwriters, severally and
not jointly, will purchase that proportion of the total aggregate principal
amount of Option Underwritten Securities then being purchased which the
aggregate principal amount of Initial Underwritten Securities each such
Underwriter has severally agreed to purchase as set forth in such Terms
Agreement bears to the total aggregate principal amount of Initial
Underwritten Securities, subject to such adjustments as the Representatives in
their discretion shall make to eliminate any sales or purchases of a
fractional aggregate principal amount of Option Underwritten Securities.
13
(c) Payment. Payment of the purchase price for, and delivery of, the
Initial Underwritten Securities shall be made at the office of Sidley ▇▇▇▇▇▇
▇▇▇▇▇ & ▇▇▇▇ LLP, or at such other place as shall be agreed upon by the
Representatives and the Operating Partnership, at 10:00 a.m. (Eastern time) on
the third (fourth, if the pricing occurs after 4:30 p.m. (Eastern time) on any
given day) business day after the date of the applicable Terms Agreement
(unless postponed in accordance with the provisions of Section 10 hereof), or
such other time not later than ten business days after such date as shall be
agreed upon by the Representatives and the Operating Partnership (such time
and date of payment and delivery being herein called "Closing Time"). In
addition, in the event that the Underwriters have exercised their option, if
any, to purchase any or all of the Option Underwritten Securities, payment of
the purchase price for, and delivery of such Option Underwritten Securities,
shall be made at the above-mentioned offices of Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇
LLP, or at such other place as shall be agreed upon by the Representatives and
the Operating Partnership on the relevant Date of Delivery as specified in the
notice from the Representatives to the Operating Partnership.
Payment shall be made to the Operating Partnership by wire
transfer of Federal funds or similar same day funds payable to the order of the
Operating Partnership against delivery to the Representatives for the respective
accounts of the Underwriters of the Underwritten Securities to be purchased by
them. It is understood that each Underwriter has authorized the Representatives,
for their account, to accept delivery of, receipt for, and make payment of the
purchase price for, the Underwritten Securities which it has severally agreed to
purchase. The Representatives, each individually and not as representatives of
the Underwriters, may (but shall not be obligated to) make payment of the
purchase price for the Underwritten Securities to be purchased by any
Underwriter whose check has not been received by the Closing Time or the
relevant Date of Delivery, as the case may be, but such payment shall not
relieve such Underwriter from its obligations hereunder.
(d) Denominations; Registration. The Underwritten Securities shall be
in such denominations and registered in such names as the Representatives may
request in writing at least one full business day prior to the Closing Time or
the relevant Date of Delivery, as the case may be. The Underwritten Securities
will be made available for examination and packaging by the Representatives in
The City of New York not later than 10:00 a.m. (Eastern time) on the business
day prior to the Closing Time or the relevant Date of Delivery, as the case
may be.
SECTION 3. Covenants of the Operating Partnership.
The Operating Partnership covenants with the Representatives and with
each Underwriter participating in the offering of Underwritten Securities, as
follows:
(a) Compliance with Securities Regulations and Commission Requests.
The Operating Partnership, subject to Section 3(b), will comply with the
requirements of the 1933 Act Regulations, including Rule 430A and Rule 434,
and will notify the Representatives immediately, and confirm the notice in
writing, of (i) the effectiveness of any post-effective amendment to the
Registration Statement or the filing of any supplement or amendment to the
Prospectus, (ii) the receipt of any comments from the Commission, (iii) 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 (iv) the issuance by the Commission of any
14
stop order suspending the effectiveness of the Registration Statement
or of any order preventing or suspending the use of any preliminary
prospectus, or of the suspension of the qualification of the Underwritten
Securities for offering or sale in any jurisdiction, or of the initiation or
threatening of any proceedings for any of such purposes. The Operating
Partnership will promptly effect the filings necessary pursuant to Rule 424
and will take such steps as it deems necessary to ascertain promptly whether
the Prospectus transmitted for filing under Rule 424 was received for filing
by the Commission and, in the event that it was not, it will promptly file the
Prospectus. The Operating Partnership will make every reasonable effort to
prevent the issuance of any stop order and, if any stop order is issued, to
obtain the lifting thereof at the earliest possible moment.
(b) Filing of Amendments. 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, the Operating Partnership will give the
Representatives 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, supplement or revision to
either the prospectus included in the Registration Statement at the time it
became effective or to the Prospectus, whether pursuant to the 1933 Act, the
1934 Act or otherwise, will furnish the Representatives with copies of any
such documents a reasonable amount of time prior to such proposed filing or
use, as the case may be, and will not file or use any such document to which
the Representatives or counsel for the Underwriters shall reasonably object.
(c) Delivery of Registration Statements. The Operating Partnership
has furnished or will deliver to the Representatives and counsel for the
Underwriters, without charge, a signed copy of the Registration Statement as
originally filed and of each amendment thereto (including exhibits filed
therewith or incorporated by reference therein and documents incorporated or
deemed to be incorporated by reference therein) and signed copies of all
consents and certificates of experts, and will also deliver to the
Representatives and counsel for the Underwriters, without charge, conformed
copies of the Registration Statement as originally filed and of each amendment
thereto for each of the Underwriters. If applicable, the copies of the
Registration Statement and each amendment thereto furnished to the
Underwriters will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to ▇▇▇▇▇, except to the extent
permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Operating Partnership will deliver
to each Underwriter, without charge, as many copies of each preliminary
prospectus as such Underwriter may reasonably request, and the Operating
Partnership hereby consents to the use of such copies for purposes permitted
by the 1933 Act. The Operating Partnership will furnish to each Underwriter,
without charge, during the period when the Prospectus is required to be
delivered under the 1933 Act or the 1934 Act and prior to 4:00 p.m. New York
City time on the New York business day next succeeding the date of the
applicable Terms Agreement, such number of copies of the Prospectus as such
Underwriter may reasonably request. If applicable, the Prospectus and any
amendments or supplements thereto furnished to the Underwriters will be
identical to the electronically transmitted copies thereof filed with the
Commission pursuant to ▇▇▇▇▇, except to the extent permitted by Regulation
S-T.
15
(e) Continued Compliance with Securities Laws. The Operating
Partnership 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 this
Underwriting Agreement and the applicable Terms Agreement and in the
Registration Statement and the Prospectus. If at any time when the applicable
preliminary prospectus or Prospectus is required by the 1933 Act or the 1934
Act to be delivered in connection with sales of the Securities, any event
shall occur or condition shall exist as a result of which it is necessary, in
the opinion of counsel for the Underwriters or for the Operating Partnership,
to amend the Registration Statement in order that the Registration Statement
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 or to amend or supplement the applicable
preliminary prospectus or Prospectus in order that the applicable preliminary
prospectus or Prospectus 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 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 such counsel, at any such time to amend the Registration
Statement or amend or supplement the applicable preliminary prospectus or
Prospectus in order to comply with the requirements of the 1933 Act or the
1933 Act Regulations, the Operating Partnership will promptly prepare and file
with the Commission, subject to Section 3(b), such amendment or supplement as
may be necessary to correct such statement or omission or to make the
Registration Statement, applicable preliminary prospectus or the Prospectus
comply with such requirements, and the Operating Partnership will furnish to
the Underwriters and counsel for the Underwriters, without charge, such number
of copies of such amendment or supplement as the Underwriters may reasonably
request.
(f) Blue Sky Qualifications. The Operating Partnership will use its
best efforts, in cooperation with the Underwriters, to qualify the
Underwritten Securities for offering and sale under the applicable securities
laws of such states and other jurisdictions (domestic or foreign) as the
Representatives may designate and to maintain such qualifications in effect
for a period of not less than one year from the date of the applicable Terms
Agreement; provided, however, that the Operating Partnership shall not be
obligated to file any general consent to service of process or to qualify or
register as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or registered, or to subject
itself to taxation in respect of doing business in any jurisdiction in which
it is not otherwise so subject. In each jurisdiction in which the Underwritten
Securities have been so qualified or registered, the Operating Partnership
will file such statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for a period of not less
than one year from the date of such Terms Agreement.
(g) Earnings Statement. The Operating Partnership will timely file
such reports pursuant to the 1934 Act as are necessary in order to make
generally available to its security holders as soon as practicable an earnings
statement (in form complying with Rule 158 of the 1933 Act Regulations) for
the purposes of, and to provide the benefits contemplated by, the last
paragraph of Section 11(a) of the 1933 Act.
(h) Reporting Requirements. The Operating Partnership, during the
period when the Prospectus is required to be delivered under the 1933 Act or
the 1934 Act, will file all documents
16
required to be filed with the Commission pursuant to the 1934 Act within the
time periods required by the 1934 Act and the 1934 Act Regulations.
(i) Restriction on Sale of Securities. Between the date of the
applicable Terms Agreement and the Closing Time and/or such other date
specified in such Terms Agreement, the Operating Partnership and any other
entity or person named in the applicable Terms Agreement will not, without the
prior written consent of the Representatives, directly or indirectly, issue,
sell, offer to sell, grant any option for the sale of, or otherwise dispose
of, the securities specified in such Terms Agreement subject to any conditions
listed therein.
(j) REIT Qualification. The Company will use its best efforts to
continue to meet the requirement to qualify as a "real estate investment
trust" under the Code for each of its taxable years.
(k) Use of Proceeds. The Operating Partnership will use the net
proceeds received by it from the sale of the Underwritten Securities in the
manner specified in the Prospectus under "Use of Proceeds."
(l) Exchange Act Filings. During the period from each Closing Time
until March 31, 2006, the Operating Partnership will deliver to the
Representatives, (i) promptly upon their becoming available, copies of all
current, regular and periodic reports of the Operating Partnership mailed to
its unitholders that are not filed with any securities exchange or with the
Commission or any governmental authority succeeding to any of the Commission's
functions, and (ii) such other information concerning the Operating
Partnership as the Representatives may reasonably request.
(m) No Manipulation of Market for Securities. Except for the
authorization of actions permitted to be taken by the Underwriters as
contemplated herein or in the Prospectus, the Operating Partnership will not
(a) 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 the Operating Partnership to
facilitate the sale or resale of the Underwritten Securities, and (b) until
the Closing Date, or the Date of Delivery, if any, (i) sell, bid for or
purchase the Underwritten Securities or pay any person any compensation for
soliciting purchases of the Underwritten Securities or (ii) pay or agree to
pay to any person any compensation for soliciting another to purchase any
other securities of the Operating Partnership.
(p) Rule 462(b) Registration Statement. If the Operating Partnership
elects to rely upon Rule 462(b), the Operating Partnership shall file a Rule
462(b) Registration Statement with the Commission in compliance with Rule 462(b)
by 10:00 p.m., New York City time, on the date of this Agreement, and the
Company shall at the time of filing either pay to the Commission the filing fee
for the Rule 462(b) Registration Statement or give irrevocable instructions for
the payment of such fee pursuant to Rule 111(b) under the 1933 Act.
SECTION 4. Payment of Expenses.
(a) Expenses. The Operating Partnership will pay all expenses
incident to the performance of its obligations under this Underwriting
Agreement and each applicable Terms Agreement, including (i) the preparation,
printing and filing of the Registration Statement
17
(including financial statements and exhibits) as originally filed and
of each amendment thereto, (ii) the printing and delivery to the Underwriters
of this Underwriting Agreement, any Terms Agreement, any Agreement among
Underwriters, the Indenture and such other documents as may be required in
connection with the offering, purchase, sale and delivery of the Underwritten
Securities, (iii) the preparation, issuance and delivery of the Underwritten
Securities to the Underwriters, (iv) the fees and disbursements of the
Operating Partnership's counsel, accountants and other advisors or agents
(including transfer agents and registrars), as well as the fees and
disbursements of any trustee or its agents under any Indenture and their
respective counsel, (v) the qualification of the Underwritten Securities under
state securities and real estate syndication laws in accordance with the
provisions of Section 3(f) hereof, including filing fees and the reasonable
fees and disbursements of counsel for the Underwriters in connection therewith
and in connection with the preparation, printing and delivery of the Blue Sky
Survey, (vi) the printing and delivery to the Underwriters of copies of each
preliminary prospectus, any Term Sheet, the Registration Statement (including
financial statements and exhibits) as originally filed and of each amendment
thereto and the Prospectus and any amendments or supplements thereto, (vii)
the fees charged by nationally recognized statistical rating organizations for
the rating of the Underwritten Securities, (viii) the fees and expenses
incurred with respect to the listing of the Underwritten Securities, (ix) the
fees and expenses of any Underwriter acting in the capacity of a "qualified
independent underwriter" (as defined in Rule 2720(a)(15) of the Conduct Rules
of the NASD), if applicable, and (x) all other costs and expenses incident to
the performance of its obligations hereunder which are not otherwise
specifically provided for in this Section.
(b) Termination of Agreement. If the applicable Terms Agreement is
terminated by the Representatives in accordance with the provisions of Section
5 or Section 9(b) hereof, the Operating Partnership shall reimburse the
Underwriters 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 obligations of the Underwriters to purchase and pay for the
Underwritten Securities pursuant to the applicable Terms Agreement are subject
to the accuracy of the representations and warranties of the Operating
Partnership contained in Section 1 hereof or in certificates of any officer or
authorized representative of the Operating Partnership delivered pursuant to the
provisions hereof, to the performance by the Operating Partnership of its
covenants and other obligations hereunder, and to the following further
conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement has become effective under the 1933 Act (and in the case of a Rule
462(b) Registration Statement such Registration Statement shall have become
effective by 10:00 p.m. New York City time on the date of this Agreement) and
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 or the state securities authority of any
jurisdiction, and any request on the part of the Commission or the state
securities authority of any jurisdiction for additional information shall have
been complied with to the reasonable satisfaction of counsel to the
Underwriters. A prospectus containing information relating to the description
of the Underwritten Securities, the specific method of distribution and
similar matters shall have been
18
filed with the Commission in accordance with Rule 424(b)(1), (2), (3), (4)
or (5), as applicable (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 the Operating
Partnership has elected to rely upon Rule 434 of the 1933 Act Regulations, a
Term Sheet including the Rule 434 Information shall have been filed with the
Commission in accordance with Rule 424(b)(7).
(b) Opinion of Counsel for the Operating Partnership. (i) At Closing
Time, the Representatives shall have received the favorable opinion, dated as
of Closing Time, of Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for the Operating
Partnership, in form and substance satisfactory to counsel for the
Underwriters, together with signed or reproduced copies of such letter for
each of the other Underwriters, such opinion shall address such of the items
set forth in Exhibit C hereto as may be relevant to the particular offering
contemplated or to such further effect as counsel to the Underwriters may
reasonably request.
(ii) At Closing Time, the Representatives shall have received the
favorable opinion, dated as of Closing Time, of Solomon and ▇▇▇▇▇▇▇▇ LLP,
special tax counsel for the Operating Partnership, to the effect that:
(A) at all times since January 1, 2000, the Company has been organized
and operated in conformity with the requirements for qualification as a real
estate investment trust under the Code and the proposed method of operation of
the Company will enable the Company to continue to meet the requirements for
qualification as a real estate investment trust under the Code; and
(B) the information in the Prospectus Supplement under "Certain Federal
Income Tax Considerations" and in the Prospectus under "Federal Income Tax
Considerations" has been reviewed by such counsel and is correct in all material
respects.
(c) Opinion of Counsel for Underwriters. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of Closing
Time, of ▇▇▇▇▇▇▇▇ Chance US LLP, counsel for the Underwriters, or such other
counsel as may be designated by the Representatives together with signed or
reproduced copies of such letter for each of the other Underwriters, with
respect to the matters set forth in (1) (with respect to the first clause of
the first sentence only), (2) (with respect to the first clause of the first
sentence only), (5), (6), (7), (8), (9) (with respect to the Prospectus
Supplement only and not inclusive of any tax disclosure), and (16) of Exhibit
C hereto and the last two paragraphs of Exhibit C hereto. In giving such
opinion, such counsel may rely, as to all matters governed by the laws of
jurisdictions other than the law of the State of New York, the federal law of
the United States and the General Corporation Law of the State of Delaware,
upon the opinions of counsel satisfactory to the Representatives. Such counsel
may also state that, insofar as such opinion involves factual matters, they
have relied, to the extent they deem proper, upon certificates of authorized
representatives of the Operating Partnership and certificates of public
officials.
(d) Officers' Certificate. At 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
19
earnings, business affairs or business prospects of the Operating
Partnership or any Subsidiary considered as one enterprise, whether or not
arising in the ordinary course of business, and the Representatives shall have
received a certificate of the President or a Vice President of the Company, as
general partner of the Operating Partnership, and of the chief financial
officer or chief accounting officer of the Company, as general partner of the
Operating Partnership, dated as of Closing Time, 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, in all material respects, with
the same force and effect as though expressly made at and as of the Closing
Time, (iii) the Operating Partnership has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied at or prior
to the 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 or by the state securities
authority of any jurisdiction.
(e) Accountant's Comfort Letter. At the Closing Time, the
Representatives shall have received from Ernst & Young LLP a letter, dated
such date, in form and substance satisfactory to the Representatives and
counsel to the Underwriters, together with signed or reproduced copies of such
letter for each of the other Underwriters, containing statements and
information of the type ordinarily included in accountants' "comfort letters"
as set forth in the PCAOB's Statement on Auditing Standards 72 to underwriters
with respect to the financial statements and certain financial information
contained in the Registration Statement and the Prospectus.
(f) Bring-down Comfort Letter. At Closing Time, the Representatives
shall have received from Ernst & Young LLP a letter, dated as of Closing Time,
to the effect that they reaffirm the statements made in the letter furnished
pursuant to subsection (e) of this Section 5, except that the specified date
referred to shall be a date not more than three business days prior to the
Closing Time.
(g) Ratings. The Underwritten Securities shall be rated at least Ba1
by ▇▇▇▇▇'▇ Investors Service, Inc. and BBB- by Standard & Poor's Rating
Service, and as soon as practicable after the Closing Time, the Operating
Partnership shall have delivered to the Underwriters a letter from each such
rating agency, or other evidence satisfactory to the Representatives,
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
the Operating Partnership's other securities by any such rating organization,
and no such rating organization shall have publicly announced that it has
under surveillance or review, with possible negative implications, its rating
of the Underwritten Securities or any of the Operating Partnership's other
securities.
(h) Over-Allotment Option. In the event that the Underwriters are
granted an over-allotment option by the Operating Partnership in the
applicable Terms Agreement and the Underwriters exercise their option to
purchase all or any portion of the Option Underwritten Securities, the
representations and warranties of the Operating Partnership contained herein
and the statements in any certificates furnished by the Operating Partnership
hereunder shall be true and correct as of each Date of Delivery, and, at the
relevant Date of Delivery, the Representatives shall have received:
20
(1) A certificate dated such Date of Delivery, of the President
or a Vice President of the Company, as general partner of the
Operating Partnership, and the chief financial officer or chief
accounting officer of the Company, as general partner of the
Operating Partnership, confirming that the certificate delivered at
the Closing Time pursuant to Section 5(d) hereof remains true and
correct as of such Date of Delivery.
(2) The favorable opinion of Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP,
counsel for the Operating Partnership, in form and substance
satisfactory to counsel for the Underwriters, dated such Date of
Delivery, relating to the Option Underwritten Securities and
otherwise to the same effect as the opinion required by Section
5(b)(i) hereof.
(3) The favorable opinion of ▇▇▇▇▇▇▇▇ Chance US LLP, counsel
for the Underwriters, dated such Date of Delivery, relating to the
Option Underwritten Securities and otherwise to the same effect as
the opinion required by Section 5(c) hereof.
(4) A letter from Ernst & Young LLP, in form and substance
satisfactory to the Representatives and dated such Date of Delivery,
to the effect that they reaffirm the statements made in the letter
furnished pursuant to Subsection (e) of this Section 5, except that
the "specified date" on the letter furnished pursuant to this
paragraph shall be a date not more than three business days prior to
such Date of Delivery.
(5) The favorable opinion of Solomon and ▇▇▇▇▇▇▇▇ LLP, special
tax counsel for the Operating Partnership, in form and substance
satisfactory to counsel for the Underwriters, dated such Date of
Delivery, relating to the Option Underwritten Securities and
otherwise to the same effect as the opinion required by Section
5(b)(ii) hereof.
(i) Additional Documents. At Closing Time and at each Date of
Delivery, counsel for the Underwriters shall have been furnished with such
documents and opinions as they may require for the purpose of enabling them to
pass upon the issuance and sale of the Underwritten Securities as herein
contemplated, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the conditions,
herein contained.
(j) Termination of Terms Agreement. If any condition specified in
this Section 5 shall not have been fulfilled when and as required to be
fulfilled, the applicable Terms Agreement (or, with respect to the
Underwriters' exercise of any applicable over-allotment option for the
purchase of Option Underwritten Securities on a Date of Delivery after the
Closing Time, the obligations of the Underwriters to purchase the Option
Underwritten Securities on such Date of Delivery) may be terminated by the
Representatives by notice to the Operating Partnership at any time at or prior
to the Closing Time (or such Date of Delivery, as applicable), and such
termination shall be without liability of any party to any other party except
as provided in Section 4, and except that Sections 1, 6 and 7 shall survive
any such termination and remain in full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of Underwriters. The Operating Partnership agrees
to indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within
21
the meaning of Section 15 of the 1933 Act, and any director, officer, employee
or affiliate thereof, as follows:
(1) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the
information deemed to be part of the Registration Statement pursuant
to Rule 430A(b) of the 1933 Act Regulations, if applicable, 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 any preliminary prospectus
or 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;
(2) against any and all loss, liability, claim, damage and
expenses 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 for which indemnification is
provided under subsection (1) above, if such settlement is effected
with the written consent of the indemnifying party, which consent
shall not be unreasonably withheld; and
(3) against any and all expense whatsoever (including without
limitation, the fees and disbursements of counsel chosen by the
Representatives) reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceedings
by any governmental agency or body, commenced or threatened, or any
claim whatsoever for which indemnification is provided under
subsection (1) above, to the extent that any such expense is not paid
under subsection (1) or (2) above; provided, however, that the
indemnity agreement provided for in this Section 6(a) shall not apply
to any loss, liability, claim, damage or expense to the extent
arising out of any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with
written information furnished to the Operating Partnership by any
Underwriter through the Representatives expressly for use in the
Registration Statement (or any amendment thereto) or any preliminary
prospectus or the Prospectus (or any amendment or supplement
thereto); provided, however, that neither the Company nor the
Operating Partnership shall be required to indemnify any Underwriter
with respect to any preliminary prospectus to the extent that any
loss, claim, damage or expense of such Underwriter results solely
from an untrue statement of a material fact contained in, or the
omission of a material fact from, such preliminary prospectus which
untrue statement or omission was corrected in the Prospectus and
identified to such Underwriter in writing and which corrected
Prospectus was furnished by the Company to such Underwriter pursuant
to Section 3(d) hereof but it shall be established that such
Prospectus was not sent or given by such Underwriter to the purchaser
of the Underwritten Securities at or prior to the written
confirmation of such sale and such correction would have cured the
defect giving rise to such loss, claim, damage or expense.
22
(b) Indemnification of the Operating Partnership. Each Underwriter
severally and not jointly agrees to indemnify and hold harmless the Operating
Partnership, and each person, if any, who controls the Operating Partnership
within the meaning of Section 15 of the 1933 Act, and any 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 any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Operating Partnership by such Underwriter
through the Representatives expressly for use in the Registration Statement
(or any amendment thereto) or any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto).
(c) Actions against Parties; Notification; Settlement without Consent
if Failure to Reimburse. 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
so to notify an indemnifying party shall not relieve such indemnifying party
from any liability which it may have otherwise than on account of this
indemnity agreement. An indemnifying party may participate at its own expense
in the defense of such action. If it so elects within a reasonable time after
receipt of such notice, an indemnifying party, jointly with any other
indemnifying parties receiving such notice, may assume the defense of such
action with counsel chosen by it and reasonably approved by the other
indemnifying parties defendant in such action and reasonably approved by the
indemnified party (who shall not, except with the consent of the indemnified
party, be counsel to an indemnifying party), unless such other indemnifying
parties or an indemnified party reasonably object to such assumption on the
ground that the named parties to any such action (including any impleaded
parties) include both such indemnified party and an indemnifying party, and
such indemnified party reasonably believes that there may be legal defenses
available to it which are different from or in addition to those available to
such indemnifying party. If an indemnifying party assumes the defense of such
action, the indemnifying parties shall not be liable for any fees and expenses
of counsel for the indemnified parties incurred thereafter in connection with
such action. 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 written consent of the indemnified party, effect the
settlement or compromise of, or consent to the entry of any judgment with
respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgement (i) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any indemnified party.
SECTION 7. Contribution.
In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in Section 6 hereof
is for any reason unavailable to or
23
insufficient to hold harmless an indemnified party in respect of any
losses, liabilities, claims, damages or expenses referred to therein, the
Operating Partnership, on the one hand, and the Underwriters, on the other,
shall contribute to the aggregate losses, liabilities claims, damages and
expenses of the nature contemplated by said indemnity agreement incurred by
the Operating Partnership and the Underwriters, as incurred, in such
proportions that the Underwriters are responsible for that portion represented
by the percentage that the underwriting discount appearing on the cover page
of the Prospectus bears to the initial public offering price appearing thereon
and the Operating Partnership are responsible for the balance. If, however,
the allocation provided by the immediately preceding sentence is not permitted
by applicable law or if the indemnified party failed to give the notice
required under Section 6(c) above, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits
allocation referred to in the first sentence of this Section 7 but also the
relative fault of the Operating Partnership, on the one hand, and the
Underwriters on the other, in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable considerations. The
relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Operating Partnership, on the one hand, or such Underwriters,
on the other, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Operating Partnership 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
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to
above in this Section shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 7, no Underwriter shall be required to contribute any amount in excess
of the amount by which the total price at which the applicable 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 such untrue or alleged untrue
statement or omission or alleged omission. Notwithstanding the foregoing, no
person guilty of fraudulent misrepresentation (within the meaning of section
11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. For purposes of this
Section, each person, if any, who controls an Underwriter within the meaning
of Section 15 of the 1933 Act shall have the same rights to contribution as
such Underwriter, and each employee or affiliate of the Operating Partnership
and each person, if any, who controls the Operating Partnership within the
meaning of Section 15 of the 1933 Act shall have the same rights to
contribution as the Operating Partnership.
The Underwriters' obligations to contribute pursuant to this Section 7
are several in proportion to their respective underwriting commitments and not
joint.
24
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery.
All representations, warranties and agreements contained in this
Underwriting Agreement or the applicable Terms Agreement or in certificates of
authorized representatives of the Operating Partnership submitted pursuant
hereto or thereto shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter or
controlling person, or by or on behalf of the Operating Partnership, and shall
survive delivery of and payment for the Underwritten Securities.
SECTION 9. Termination.
(a) Underwriting Agreement. This Underwriting Agreement (excluding
the applicable Terms Agreement) may be terminated for any reason at any time
by the Operating Partnership or by the Representatives upon the giving of 30
days' prior written notice of such termination to the other party hereto.
(b) Terms Agreement. The Representatives may terminate the applicable
Terms Agreement, by notice to the Operating Partnership, at any time at or
prior to the Closing Time or any relevant Date of Delivery, if (i) there has
been, since the time of execution of such 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, business affairs or business prospects of the Operating Partnership
and any Subsidiaries considered as one enterprise, whether or not arising in
the ordinary course of business, in each case the effect of which is such as
to make it, in the judgment of the Representatives, impracticable or
inadvisable to market the Underwritten Securities, or (ii) there has occurred
any material adverse change in the financial markets in the United States or
internationally or any outbreak or escalation of hostilities or acts of
terrorism involving the United States or there is a declaration by the United
States of a national emergency or war or escalation thereof or other calamity
or crisis, or any change or development involving a prospective change in
national or international political, financial, or economic conditions, in
each case the effect of which is such as to make it, in the sole judgment of
the Representatives, impracticable or inadvisable to proceed with the offering
or delivery of the Underwritten Securities or to enforce contracts for the
sale of the Underwritten Securities, or (iii) trading in any securities of the
Company or the Operating Partnership has been suspended or limited by the
Commission or the New York Stock Exchange, or if trading in securities
generally on the New York Stock Exchange or the American Stock Exchange or in
the over-the-counter market has been suspended or limited, or minimum or
maximum prices for trading have been fixed, or maximum ranges for prices 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) a
banking moratorium has been declared by either federal or New York state
authorities, or a material disruption in clearance or settlement systems has
occurred.
(c) Liabilities. If this Underwriting Agreement or the applicable
Terms Agreement is terminated pursuant to this Section 9, such termination
shall be without liability of any party to any other party except as provided
in Section 4 hereof; provided that Sections 1, 6, 7, 8 and 13 hereof shall
survive such termination and remain in full force and effect.
25
SECTION 10. Default by One or More of the Underwriters.
If one or more of the Underwriters shall fail at the 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 the
Representatives shall have the 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, the Representatives shall not have completed such
arrangements within such 24-hour period, then:
(a) if the aggregate principal amount of Defaulted Securities
does not exceed 10% of the aggregate principal amount of
Underwritten Securities to be purchased on such date pursuant to
such Terms Agreement, the non-defaulting Underwriters named in such
Terms Agreement shall be obligated, severally and not jointly, to
purchase the full amount thereof in the proportions that their
respective underwriting obligations under such Terms Agreement bear
to the underwriting obligations of all non-defaulting Underwriters,
or
(b) if the aggregate principal amount of Defaulted Securities
exceeds 10% of the aggregate principal amount of Underwritten
Securities to be purchased pursuant to such Terms Agreement, such
Terms Agreement (or, with respect to the Underwriters' exercise of
any applicable over-allotment option for the purchase of Option
Underwritten Securities on a Date of Delivery after the Closing
Time, the obligations of the Underwriters to purchase, and the
Operating Partnership to sell, such Option Underwritten Securities
on such Date of Delivery) shall terminate without liability on the
part of any non-defaulting Underwriter except as provided by Section
9(c).
No action taken pursuant to this Section 10 shall relieve any
defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in (i) a
termination of the applicable Terms Agreement or (ii) in the case of a Date of
Delivery after the Closing Time, a termination of the obligations of the
Underwriters and the Operating Partnership with respect to the related Option
Underwritten Securities, as the case may be, either the Representatives or the
Operating Partnership shall have the right to postpone the Closing Time or the
relevant Date of Delivery, as the case may be, 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 or transmitted by any standard form of
telecommunication. Notices to the Underwriters shall be directed as provided in
a Terms Agreement, and notices to the Operating Partnership shall be directed to
them at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, attention of ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, Chief Executive Officer and President.
26
SECTION 12. Parties.
This Underwriting Agreement and the applicable Terms Agreement shall
each inure to the benefit of and be binding upon the parties hereto and, upon
execution of such Terms Agreement, any other Underwriters and their respective
successors. Nothing expressed or mentioned in this Underwriting Agreement or
such Terms Agreement is intended or shall be construed to give any person, firm
or corporation, other than the Underwriters, the Operating Partnership and their
respective successors and the controlling persons and officers and directors
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 this
Underwriting Agreement or such Terms Agreement or any provision herein or
therein contained. This Underwriting Agreement and such Terms Agreement and all
conditions and provisions hereof and 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.
THIS UNDERWRITING AGREEMENT AND ANY 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. Effect of Headings.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 15. Counterparts.
This Underwriting Agreement and the applicable Terms Agreements may be
executed in one or more counterparts, and if executed in more than one
counterpart, the executed counterparts shall constitute a single instrument.
[The remainder of the page has been left blank intentionally.]
27
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Operating Partnership an executed
counterpart of the applicable Terms Agreement, whereupon this Underwriting
Agreement, along with the applicable Terms Agreement, will become a binding
agreement among the Underwriters and the Operating Partnership in accordance
with their terms.
Very truly yours,
RECKSON OPERATING PARTNERSHIP, L.P.
By: Reckson Associates Realty Corp.
its General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Executive Vice President
and Chief Financial
Officer
CONFIRMED AND ACCEPTED,
as of the date first
above written:
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
CITIGROUP GLOBAL MARKETS INC.
By: /s/ ▇▇▇▇ ▇▇▇
--------------------------
Name: ▇▇▇▇ ▇▇▇
Title: Vice President
UBS SECURITIES LLC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Director
-------------------------------
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
Exhibit A
---------
RECKSON OPERATING PARTNERSHIP, L.P.
(a Delaware limited partnership)
Debt Securities
TERMS AGREEMENT
__________ __, 200_
To: Reckson Operating Partnership, L.P.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
We understand that Reckson Operating Partnership, L.P. (the "Operating
Partnership") proposes to issue and sell $_______ in aggregate principal
amount of its ______debt securities (the "Notes") ([securities also being
hereinafter referred to as] the "Initial Underwritten Securities"). Subject to
the terms and conditions set forth or incorporated by reference herein, the
underwriters named below (the "Underwriters") offer to purchase, severally and
not jointly, the respective aggregate principal amount of Initial Underwritten
Securities set forth below opposite their names at the purchase price set forth
below, and a proportionate share of Option Underwritten Securities (as defined
in the Underwriting Agreement referred to below) set forth below, to the extent
any are purchased.
Aggregate Principal Amount of
Initial Underwritten Securities
-------------------------------
Total [$]
A-1
The Underwritten Securities shall have the following terms:
Title:
Aggregate Principal Amount: $
Aggregate Principal Amount of Option
Underwritten Securities: $
Initial public offering price: $
Purchase price: $
Interest rate:
Interest Payment Date:
Maturity Date:
Redemption provisions:
Sinking Fund requirements:
Conversion provisions:
Other terms and conditions:
Closing date and location:
All of the provisions contained in the document attached as Annex I
hereto entitled "RECKSON OPERATING PARTNERSHIP, L.P. -- Debt Securities --
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.
A-2
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,
[ ]
[address for Notice]
By: ________________________________
Name:
Title:
Acting on behalf of itself and as Representative[s] for the other
named Underwriters.
Accepted:
RECKSON OPERATING PARTNERSHIP, L.P.
By: RECKSON ASSOCIATES REALTY CORP., its sole general partner
By: ___________________________
Name:
Title:
A-3
Exhibit B
---------
SIGNIFICANT SUBSIDIARIES
Reckson 1185 Avenue of the Americas LLC
Reckson MEZZ 1185 Avenue of the Americas LLC
Reckson Tri-State Member LLC
RT Tri-State LLC
Metropolitan Partners LLC
Metropolitan Operating Partnership, L.P.
Metropolitan ▇▇▇ ▇▇▇ ▇▇▇▇▇▇ LLC
Metropolitan 919 Manager LLC
919 JV LLC
B-1
Exhibit C
---------
FORM OF OPINION OF THE COMPANY'S AND THE
OPERATING PARTNERSHIP'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)(i)
(1) The Company has been duly incorporated and is validly existing as a
corporation and is in good standing with the State Department of Assessment and
Taxation of Maryland. The Company has the corporate 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, or as
contemplated under, the Underwriting Agreement and the applicable Terms
Agreement and is duly qualified or registered as a foreign corporation to
transact business and is in good standing in the jurisdictions indicated on
Schedule I hereto.
(2) The Operating Partnership has been duly organized and is validly
existing as a limited partnership and is in good standing with the Secretary of
State of the State of Delaware. The Operating Partnership has the partnership
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, or as contemplated under, the Underwriting Agreement and the
applicable Terms Agreement and is duly qualified or registered as a foreign
partnership to transact business and is in good standing in the jurisdictions
indicated on Schedule I hereto.
(3) All the outstanding Units have been duly authorized for issuance by
the Operating Partnership to the holders of Units and, assuming that the holders
of Units, as limited partners of the Operating Partnership do not participate in
the control of the business of the Operating Partnership, the Units will
represent valid and, subject to the qualifications set forth herein, fully paid
and non-assessable limited partner interests in the Operating Partnership, as to
which the holders of Units, in their capacity as limited partners of the
Operating Partnership, will have no liability in excess of their obligations to
make contributions to the Operating Partnership, their obligations to make other
payments provided for in the Operating Partnership Agreement and their share of
the Operating Partnership's assets and undistributed profits (subject to the
obligation of a limited partner of the Operating Partnership to repay any funds
wrongfully distributed to it). No Units are reserved for any purpose and except
for the "put rights" accorded to Odyssey Partners, L.P., under Section 12.4 of
the Second Amended and Restated Agreement of Limited Partnership of the Omni
Partnership, and the rights of the holders of the Class C common units, Series
A, B, C, D and F preferred units of limited partner interest in the Operating
Partnership, and except as otherwise described in the Prospectus, to our
knowledge, there are no outstanding securities convertible into or exchangeable
for any Units and no outstanding preemptive or other similar rights to purchase
or subscribe for Units or any other securities of the Operating Partnership
arising under the Delaware Revised Uniform Limited Partnership Act or under the
Operating Partnership Agreement or any contracts to which the Operating
Partnership is a party of which we are aware.
C-1
(4) Each Significant Subsidiary has been duly organized and is validly
existing as a limited partnership or limited liability company, as the case may
be, in good standing under the laws of the jurisdiction of its organization, as
the case may be, and has the partnership or limited liability company power and
authority to own, lease and operate its properties and to conduct the business
in which it is engaged or proposes to engage as described in the Prospectus and
is duly qualified or registered as a foreign limited partnership or foreign
limited liability company, as the case may be, to transact business and is in
good standing in the jurisdictions indicated on Schedule I hereto. Except as
otherwise stated in the Registration Statement and the Prospectus, all of the
issued and outstanding capital stock or other equity interests, as the case may
be, of each Significant Subsidiary has been duly authorized and is validly
issued, and except with regard to Metropolitan Operating Partnership, L.P.,
fully paid and non-assessable.
(5) The Underwriting Agreement and the applicable Terms Agreement have
been duly authorized, executed and delivered by the Operating Partnership.
(6) The Indenture has been duly authorized, executed and delivered by
the Operating Partnership and constitutes a valid and legally binding agreement,
enforceable in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity principles; and
the Indenture has been duly qualified under the Trust Indenture Act.
(7) The Underwritten Securities have been duly authorized by the
Operating Partnership and, when issued and delivered pursuant to the Indenture,
the Underwriting Agreement and the applicable Terms Agreement against payment of
the requisite consideration therefor, such Underwritten Securities will have
been duly executed and delivered by the Operating Partnership and will
constitute valid and legally binding obligations of the Operating Partnership
entitled to the benefits provided by the Indenture, subject, as to enforcement,
to bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights generally and to
general equity principles.
(8) The Underwritten Securities being sold pursuant to the applicable
Terms Agreement and the Indenture conform, in all material respects, to the
statements relating thereto contained in the Prospectus and are in substantially
the form filed or incorporated by reference, as the case may be, as an exhibit
to the Registration Statement.
(9) The information in the Prospectus under "Description of Debt
Securities" and "Description of Notes," and such other information in the
Prospectus Supplement or in any Annual Report on Form 10-K of the Company as may
be agreed upon from time to time by the Company and the Representatives, to the
extent that it constitutes matters of law, descriptions of statutes, rules or
regulations, summaries of legal matters, the Operating Partnership's legal
proceedings, or legal conclusions, has been reviewed by us and is correct in all
material respects and fairly summarizes the information required to be disclosed
therein.
(10) (A) To our knowledge, none of the Company, the Operating
Partnership or any of the Significant Subsidiaries is in violation of its
charter, by-laws, partnership agreement, or other organizational document, as
the case may be, and (B) to our knowledge, no default by the Operating
Partnership or any Significant Subsidiary exists in the due performance or
observance
C-2
of any obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other agreement or
instrument that is filed or incorporated by reference as an exhibit to the
Registration Statement to which the Operating Partnership or any Significant
Subsidiary is a party or by which any of them may be bound, except for such
defaults that would not have a Material Adverse Effect, and except that we
express no opinion concerning whether there has been a default under any such
contract, indenture, mortgage, loan agreement, note, lease or other agreement or
instrument with regard to financial covenants or insurance coverage for acts of
terrorism.
(11) The execution, delivery and performance of the Underwriting
Agreement, the applicable Terms Agreement and the Indenture and consummation of
the transactions contemplated in the Underwriting Agreement and such Terms
Agreement and in the Registration Statement and the Prospectus (including the
issuance and sale of the Underwritten Securities) and compliance by the
Operating Partnership or any Significant Subsidiary with its obligations
thereunder do not and will not, whether with or without the giving of notice or
passage of time or both, conflict with or constitute a breach of, or default or
Repayment Event under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Operating Partnership
or any Significant Subsidiary pursuant to, any contract, indenture, mortgage,
deed of trust, loan or credit agreement, note, lease or any other agreement or
instrument, filed or incorporated by reference as an exhibit to the Registration
Statement to which the Operating Partnership or any Significant Subsidiary is a
party or by which it or any of them may be bound, or to which any of the assets,
properties or operations of the Operating Partnership or any Significant
Subsidiary is subject, except for such conflicts, breaches, defaults, events or
liens, charges or encumbrances that would not result in a Material Adverse
Effect, nor will such action result in any violation of the provisions of the
charter, by-laws, or agreement of limited partnership, as applicable, of the
Operating Partnership or any Significant Subsidiary or any applicable Delaware
Revised Uniform Limited Partnership Act, Maryland, New York or U.S. federal
laws, statute, rule, regulations, or any judgment, order, writ or decree, known
to us, of any Delaware, Maryland, New York or U.S. federal government,
government instrumentality or court, domestic or foreign, having jurisdiction
over the Operating Partnership or any Significant Subsidiary or any of their
assets, properties or operations.
(12) To our knowledge, except as disclosed in the Prospectus, there are
no pending or threatened actions, suits or proceedings against or affecting any
of the Operating Partnership or any Subsidiary or any of their respective
properties or other assets that, if determined adversely to any such entity
would individually or in the aggregate have a Material Adverse Effect or would
materially adversely affect the ability of the Operating Partnership to perform
its obligations under the Underwriting Agreement and the applicable Terms
Agreement.
(13) The descriptions in the Registration Statement of the $150,000,000
5.875% Notes due 2014 to be issued pursuant to the Indenture, dated as of March
26, 1999 between the Company, Reckson Associates Realty Corp. and The Bank of
New York as well as contracts and other documents filed as exhibits to the
Operating Partnership's Annual Report on Form 10-K, the Operating Partnership's
Quarterly Report on Form 10-Q for the first quarter of 2004, and Reckson
Associates Realty Corp.'s Quarterly Reports on Form 10-Q for the first and
second quarters of 2004, to which the Operating Partnership or any Subsidiary is
a party, are accurate in all material respects. To our knowledge, there are no
franchises, contracts, indentures,
C-3
mortgages, loan agreements, notes, leases or other instruments required to be
described or referred to in the Registration Statement or to be filed as
exhibits thereto other than those described or referred to therein or filed or
incorporated by reference as exhibits thereto.
(14) The Registration Statement has been declared effective under the
1933 Act. Any required filing of the Prospectus pursuant to Rule 424(b) has been
made in the manner and within the time period required by Rule 424(b). To our
knowledge, no stop order suspending the effectiveness of the Registration
Statement has been issued under the 1933 Act or proceedings therefor initiated
or threatened by the Commission.
(15) The Registration Statement, the Prospectus, excluding the
documents incorporated by reference therein, and each amendment or supplement to
the Registration Statement and the Prospectus, excluding the documents
incorporated by reference therein, as of their respective effective or issue
dates (other than the financial statements (including notes and supporting
schedules thereto) and other financial data included or incorporated by
reference therein or omitted therefrom or the Trustee's Statement of Eligibility
on Form T-1, and for statistical information derived from such financial
statements, schedules, or other financial data, as to which we express no
opinion), complied as to form in all material respects with the requirements of
the 1933 Act and the 1933 Act Regulations and the Trust Indenture Act and 1939
Act Regulations.
(16) The documents incorporated by reference in the Prospectus (other
than the financial statements (including notes and supporting schedules thereto)
and other financial data included or incorporated by reference therein or
omitted therefrom, and for statistical information derived from such financial
statements, schedules, or other financial data, as to which we express no
opinion), when they were filed with the Commission, (or, if later, upon the
filing of an amendment thereto), complied as to form in all material respects
with the requirements of the 1934 Act and the rules and regulations of the
Commission thereunder.
(17) No filing with, or authorization, approval, consent, license,
order registration, qualification or decree of, any Delaware, Maryland, New York
or U.S. federal court or governmental authority or agency is necessary or
required for the performance by the Operating Partnership of its obligations
under the Underwriting Agreement or the applicable Terms Agreement or in
connection with the transactions contemplated under the Underwriting Agreement
or such Terms Agreement other than under the 1933 Act, the 1933 Act Regulations,
the Trust Indenture Act or the 1939 Act Regulations, which have been obtained,
or as may be required under the by-laws and rules of the NASD, state securities
or blue sky laws or real estate syndication laws.
(18) The Operating Partnership is not an "investment company" within
the meaning of the Investment Company Act of 1940, as amended (the "1940 Act").
No fact has come to our attention that has caused us to believe that
the Registration Statement (other than the financial statements (including notes
and supporting schedules thereto) and other financial data included or
incorporated by reference therein or omitted therefrom and for statistical
information derived from such financial statements, schedules or other financial
data or the Trustee's Statement of Eligibility of Form T-1, as to which we have
not been
C-4
requested to comment), at the time the Registration Statement or any
post-effective amendment thereto (including the filing of the Operating
Partnership'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 (other than the financial
statements (including notes and supporting schedules thereto) and other
financial data included or incorporated by reference therein or omitted
therefrom and for statistical information derived from such financial
statements, schedules or other financial data, as to which we have not been
requested to comment), at the time the Prospectus was issued, at the time any
such amended or supplemented prospectus was issued or at the Closing Time,
included or includes an untrue statement of a material fact or omitted or omits
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.
In rendering such opinion, such counsel may rely, as to matters of fact
(but not as to legal conclusions), to the extent they deem proper, on
certificates of authorized representatives of the Operating Partnership and
public officials. Such opinion shall not state that it is to be governed or
qualified by, or that it is otherwise subject to, any treatise, written policy
or other document relating to legal opinions, including, without limitation, the
Legal Opinion Accord of the ABA Section of Business Law (1991).
C-5
Schedule I
----------
1. Reckson Associates Realty Corp.
o New York
o New Jersey
o Connecticut
2. Reckson Operating Partnership, L.P.
o New York
o New Jersey
o Connecticut
3. Metropolitan Partners LLC
o New York
4. Metropolitan Operating Partnership, L.P.
o New York
S-1
Annex I
-------
[FORM OF ACCOUNTANTS' COMFORT LETTER PURSUANT TO SECTION 5(e)]
We are independent public accountants with respect to the Company within the
meaning of the 1933 Act and the applicable published 1933 Act Regulations.
(i) in our opinion, the audited financial statements and the
related financial statement schedules included or incorporated by
reference in the Registration Statement and the Prospectus comply as to
form in all material respects with the applicable accounting
requirements of the 1933 Act and the published rules and regulations
thereunder;
(ii) on the basis of procedures (but not an examination in
accordance with generally accepted auditing standards) consisting of a
reading of the unaudited interim [consolidated] financial statements of
the Company for the [three month periods ended __________, ____, and
__________, ____, the three and six month periods ended __________,
____, and __________, ____, and the three and nine month periods ended
__________, ____, and __________, ____, included or incorporated by
reference in the Registration Statement and the Prospectus
(collectively, the "10-Q Financials")](1) [, a reading of the unaudited
interim [consolidated] financial statements of the Company for the
_____-month periods ended __________, ____, and __________, ____,
included in the Registration Statement and the Prospectus (the
"_____-month financials")](2) [, a reading of the latest available
unaudited interim [consolidated] financial statements of the Company],
(3) a reading of the minutes of all meetings of the stockholders and
directors of the Company [and its subsidiaries] and the Committees of
the Company's Board of Directors [and any subsidiary committees] since
[day after end of last audited period], inquiries of certain officials
of the Company [and its subsidiaries] responsible for financial and
accounting matters, a review of interim financial information in
accordance with standards established by the American Institute of
Certified Public Accountants in Statement on Auditing Standards No. 71,
Interim Financial Information ("SAS 71"),(4)
--------------------------
1 Include the appropriate dates of the 10-Q Financials.
2 Include if non-10-Q interim financial statements are included in the
Registration Statement and the Prospectus.
3 Include if the most recent unaudited financial statements are not included
in the Registration Statement and the Prospectus.
4 Note that a review in accordance with Statements on Auditing Standards
("SAS") No. 71 is required for an accountant to give negative assurance on
interim financial information. A review in accordance with SAS No. 71 will only
be performed at the request of the Company and the accountant's report, if any,
related to that review will be addressed only to the Company. Many companies
have a SAS No. 71 review performed in connection with the preparation of their
10-Q financial statements. See Codification of Statements on Auditing Standards,
AU ss. 722 for a description of the procedures that constitute such a review.
The comfort letter itself should recite that the review was performed and a copy
of the report, if any, should be attached to the comfort letter. Any report
issued pursuant to SAS No. 71
A-1
with respect to the [description of relevant periods](5) and such other
inquiries and procedures as may be specified in such letter, nothing came to
our attention that caused us to believe that:
[(A) the 10-Q Financials incorporated by reference in
the Registration Statement and the Prospectus do not comply as
to form in all material respects with the applicable
accounting requirements of the 1934 Act and the 1934 Act
Regulations applicable to unaudited financial statements
included in Form 10-Q or any material modifications should be
made to the 10-Q Financials incorporated by reference in the
Registration Statement and the Prospectus for them to be in
conformity with generally accepted accounting principles;](6)
[( ) the _____-month financials included in the
Registration Statement and the Prospectus do not comply as to
form in all material respects with the applicable accounting
requirements of the 1933 Act and the 1933 Act Regulations
applicable to unaudited interim financial statements included
in registration statements or any material modifications
should be made to the _____-month financials included in the
Registration Statement and the Prospectus for them to be in
conformity with generally accepted accounting principles;](7)
( ) at [____________, ____ and at](8) a specified
date not more than five days9 prior to the date of the
applicable Terms Agreement, there was any change in the
__________ of the Company [and its subsidiaries] or any
decrease in the _________ of the Company [and its
subsidiaries] or any increase in the
------------------------
that is mentioned in the Registration Statement should also be included in the
Registration Statement as an exhibit. If a review in accordance with SAS
No. 71 has not and will not be performed by the accountants, they should be
prepared to perform certain agreed-upon procedures on the interim financial
information and to report their findings thereon in the comfort letter. See
Codification of Statements on Auditing Standards, AU ss. 622 for a discussion
of reports related to the accountant's performance of agreed-upon procedures.
Any question as to whether a review in accordance with SAS No. 71 will be
performed by the accountants should be resolved early.
5 The relevant periods include all interim unaudited condensed consolidation
financial statements included or incorporated by reference in the Registration
Statement and the Prospectus.
6 Include if the 10-Q Financials are incorporated by reference in the
Registration Statement and the Prospectus.
7 Include if unaudited financial statements, not just selected unaudited
data, are included in the Registration Statement and the Prospectus.
8 Include, and insert the date of most recent balance sheet of the Company,
if those statements are more recent than the unaudited financial statements
included in the Registration Statement and the Prospectus.
9 According to Example A of SAS No. 72, the specified date should be five
calendar days prior to the date of the applicable Terms Agreement. However, in
unusual circumstances, five business days may be used.
A-2
___________ of the Company [and its subsidiaries,](10) in
each case as compared with amounts shown in the latest
balance sheet included in the Registration Statement and the
Prospectus, except in each case for changes, decreases or
increases that the Registration Statement and the
Prospectus disclose have occurred or may occur; or
( ) [for the period from ___________, ____ to
___________, ____ and](11) for the period from _________, ___
to a specified date not more than five days prior to the date
of the applicable Terms Agreement, there was any decrease in
__________, ___________ or ___________,(12) in each case as
compared with the comparable period in the preceding year,
except in each case for any decreases that the Registration
Statement and the Prospectus discloses have occurred or may
occur;
(iii) based upon the procedures set forth in clause (ii) above
and a reading of the [Selected Financial Data] included in the
Registration Statement and the Prospectus [and a reading of the
financial statements from which such data were derived,](13) nothing
came to our attention that caused us to believe that the [Selected
Financial Data] included in the Registration Statement and the
Prospectus do not comply as to form in all material respects with the
disclosure requirements of Item 301 of Regulation S-K of the 1933
Act [, that the amounts included in the [Selected Financial Data] are
not in agreement with the corresponding amounts in the audited
[consolidated] financial statements for the respective periods or that
the financial statements not included in the Registration Statement
and the Prospectus from which certain of such data were derived are
not in conformity with generally accepted accounting principles];(14)
----------------------
10 The blanks should be filled in with significant balance sheet items,
selected by the banker and tailored to the issuer's industry in general and
operations in particular. While the ultimate decision of which items should be
included rests with the banker, comfort is routinely requested for certain
balance sheet items, including long-term debt, stockholders' equity, capital
stock and net current assets.
11 Include, and insert dates to describe the period from the date of the most
recent financial statements in the Registration Statement and the Prospectus to
the date of the most recent unaudited financial statements of the Company, if
those dates are different. Regardless of whether this language is inserted or
not, the period including five days prior to the date of the applicable Terms
Agreement should run from the date of the last financial statement included in
the Registration Statement and the Prospectus, not from the later one that is
not included in the Registration Statement and the Prospectus.
12 The blanks should be filled in with significant income statements items,
selected by the banker and tailored to the issuer's industry in general and
operations in particular. While the ultimate decision of which items should be
included rests with the banker, comfort is routinely requested for certain
income statement items, including net sales, total and per share amounts of
income before extraordinary items and of net income.
13 Include only if there are selected financial data that have been derived
from financial statements not included in the Registration Statement and the
Prospectus.
14 In unusual circumstances, the accountants may report on "Selected Financial
Data" as described in SAS No. 42, Reporting on Condensed Financial Statements
and Selected Financial Data, and include
A-3
(iv) we have compared the information in the Registration
Statement and the Prospectus under selected captions with the
disclosure requirements of Regulation S-K of the 1933 Act and on the
basis of limited procedures specified herein. Nothing came to our
attention that caused us to believe that this information does not
comply as to form in all material respects with the disclosure
requirements of Items 302, 402 and 503(d), respectively, of Regulation
S-K;
[(v) based upon the procedures set forth in clause (ii) above,
a reading of the unaudited financial statements of the Company for [the
most recent period] that have not been included in the Registration
Statement and the Prospectus and a review of such financial statements
in accordance with SAS 71, nothing came to our attention that caused us
to believe that the unaudited amounts for __________________ for the
[most recent period] do not agree with the amounts set forth in the
unaudited consolidated financial statements for those periods or that
such unaudited amounts were not determined on a basis substantially
consistent with that of the corresponding amounts in the audited
[consolidated] financial statements;](15)
[(vi)] we are unable to and do not express any opinion on the
[Pro Forma Combining Statement of Operations] (the "Pro Forma
Statement") included in the Registration Statement and the Prospectus
or on the pro forma adjustments applied to the historical amounts
included in the Pro Forma Statement; however, for purposes of this
letter we have:
(A) read the Pro Forma Statement;
(B) performed [an audit] [a review in
accordance with SAS 71] of the financial statements
to which the pro forma adjustments were applied;
(C) made inquiries of certain officials of
the Company who have responsibility for financial and
accounting matters about the basis for their
determination of the pro forma adjustments and
whether the Pro Forma Statement complies as to form
in all material respects with the applicable
accounting requirements of Rule 11-02 of Regulation
S-X; and
-------------------------------------
in their report in the Registration Statement and the Prospectus the paragraph
contemplated by SAS No. 42.9. This situation may arise only if the Selected
Financial Data do not include interim period data and the five-year selected
data are derived entirely from financial statements audited by the auditors
whose report is included in the Registration Statement and the Prospectus. If
the guidelines set forth in SAS No. 42 are followed and the accountant's report
as included in the Registration Statement and the Prospectus includes the
additional language prescribed by SAS No. 42.9, the bracketed language may be
eliminated.
15 This language should be included when the Registration Statement and the
Prospectus include earnings or other data for a period after the date of the
latest financial statements in the Registration Statement and the Prospectus,
but the unaudited interim financial statements from which the earnings or other
data is derived is not included in the Registration Statement and the
Prospectus. The blank should be filled in with a description of the financial
statement item(s) included.
A-4
(D) proved the arithmetic accuracy of the
application of the pro forma adjustments to the
historical amounts in the Pro Forma Statement; and
on the basis of such procedures and such other inquiries and
procedures as specified herein, nothing came to our attention
that caused us to believe that the Pro Forma Statement
included in the Registration Statement does not comply as to
form in all material respects with the applicable requirements
of Rule 11-02 of Regulation S-X or that the pro forma
adjustments have not been properly applied to the historical
amounts in the compilation of those statements;(16) and
[(vii)] in addition to the procedures referred to in clause
(ii) above, we have performed other procedures, not constituting an
audit, with respect to certain amounts, percentages, numerical data and
financial information appearing in the Registration Statement and the
Prospectus, which are specified herein, and have compared certain of
such items with, and have found such items to be in agreement with, the
accounting and financial records of the Company;(17) and
[(viii) in addition, we [comfort on a financial forecast that
is included in the Registration Statement and the Prospectus.(18)]
________________
16 If an audit or a review in accordance with SAS No. 71 has not been
performed by the accountants with respect to the underlying historical financial
statements, or if negative assurance on the Company's pro forma financial
statements is not otherwise available, the accountants should be requested to
perform certain other procedures with respect to such pro forma financial
statements. See Example O of SAS No. 72.
17 This language is intended to encompass all other financial/numerical
information appearing in the Registration Statement and the Prospectus for which
comfort may be given, including (but not limited to) amounts appearing in the
Registration Statement and the Prospectus narrative and other summary financial
data appearing in tabular form (e.g., the capitalization table).
18 Accountants' services with respect to a financial forecast may be in one of
three forms: an examination of the forecast, a compilation of the forecast or
the application of agreed-upon procedures to the forecast. If the accountant is
to perform an examination of the forecast included in the Registration Statement
and the Prospectus, delivery of the related report should be treated separately
in Section 5(f) as follows (remember to change subsequent letters accordingly):
(f) At the time that the applicable Terms Agreement is executed by the
Company, you shall have received from _________________ a report, dated such
date, in form and substance satisfactory to you, together with signed or
reproduced copies of such report for each of the other Underwriters, stating
that, in their opinion, the forecasted financial statements for the [relevant
period or periods] included in the Registration Statement and the Prospectus are
presented in conformity with guidelines for presentation of a forecast
established by the PCAOB, and that the underlying assumptions provide a
reasonable basis for management's forecast.
If the accountant is to perform a compilation of the forecasted financial
statements included in the Registration Statement and the Prospectus, delivery
of the related report should be treated separately in Section 5(e) as follows:
A-5
___________
(f) At the time that the applicable Terms Agreement is executed by the
Company, you shall have received from _________________ a report, dated such
date, in form and substance satisfactory to you, together with signed or
reproduced copies of such report of each of the other Underwriters, stating that
they have compiled the forecasted financial statements for the [relevant period
or periods] included in the Registration Statement and the Prospectus in
accordance with the guidelines established by the PCAOB.
Finally, if the accountant is to perform agreed-upon procedures on a forecast
included in the Registration Statement and the Prospectus, SAS No. 72 requires
that the accountant first prepare a compilation report with respect to the
forecast and attach that report to the comfort letter. The accountant may then
report on specific procedures performed and findings obtained.
A-6
