Form of Underwriting Agreement
2,800,000 Shares
XXXXXX-XXXXX PROPERTIES, INC.
Common Stock
UNDERWRITING AGREEMENT
----------------------
December ___, 1997
CIBC Oppenheimer Corp.
X.X. Xxxxxxxx & Co.
Interstate/Xxxxxxx Lane Corporation
Xxxxxxxxx & Company LLC
c/o CIBC Oppenheimer Corp.
CIBC Xxxxxxxxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Xxxxxx-Xxxxx Properties, Inc., a Maryland corporation (the
"Company"), proposes to sell to you (the "Underwriters") an aggregate of
2,800,000 shares (the "Firm Shares") of the Company's common stock, $0.01 par
value (the "Common Stock"). In addition, the Company proposes to grant to the
Underwriters an option to purchase up to an additional 420,000 shares (the
"Option Shares") of Common Stock for the purpose of covering over-allotments in
connection with the sale of the Firm Shares. The Firm Shares and the Option
Shares are together called the "Shares."
1. Sale and Purchase of the Shares. On the basis of the
representations, warranties and agreements contained in, and subject to the
terms and conditions of, this Agreement:
(a) The Company agrees to sell to each of the Underwriters,
and each of the Underwriters agrees, severally and not jointly, to
purchase from the Company, at $_________ per share (the "Initial
Price"), the number of Firm Shares set forth opposite the name of such
Underwriter on Schedule I to this Agreement.
(b) The Company grants to the Underwriters an option to
purchase, severally and not jointly, all or any part of the Option
Shares at the Initial Price. The number of Option
Shares to be purchased by each Underwriter shall be the same percentage
(adjusted to eliminate fractions) of the total number of Option Shares
to be purchased by the Underwriters as such Underwriter is purchasing
of the Firm Shares. Such option may be exercised only to cover
over-allotments in the sales of the Firm Shares by the Underwriters and
may be exercised in whole or in part at any time on or before 12:00
noon, New York City time, on the business day before the Firm Shares
Closing Date (as defined below), and from time to time thereafter
within 30 days after the date of this Agreement, in each case upon
written notice (which may be facsimile), or verbal or telephonic notice
confirmed by written notice (which may be facsimile), setting forth the
number of Option Shares to be purchased and the time and date (if other
than the Firm Shares Closing Date) of such purchase which shall be not
more than three business days following the date of exercise of the
option.
2. Delivery and Payment. Delivery by the Company of the Firm
Shares to the Underwriters for their respective accounts, and payment of the
purchase price therefor by wire transfer of same day funds to the Company at the
bank account designated in writing by the Company at least one business day
prior to the Firm Shares Closing Date, shall take place at the offices of Xxxxxx
& Xxxxx at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 10:00 a.m., New York
City time, on the third business day following the date of this Agreement;
provided, however, that if the Firm Shares sold hereunder are priced after 4:30
p.m., New York City time, on any business day, payment and delivery in respect
of the Firm Shares shall take place on the fourth business day following the
date of this Agreement; and further, if it is determined that settlement within
the foregoing time frame is not feasible, then payment and delivery in respect
of the Firm Shares shall occur at such time on such other date, not later than
ten business days after the date of this Agreement, as shall be agreed upon by
the Company and the Underwriters (such time and date of delivery and payment are
called the "Firm Shares Closing Date").
In the event the option with respect to all or any part of the
Option Shares is exercised, delivery by the Company of the Option Shares to the
Underwriters for their respective accounts, and payment of the purchase price
therefor by wire transfer of same day funds to the Company at the bank account
designated in writing by the Company at least one business day prior to the
Option Shares Closing Date (as defined below), shall take place at the offices
of Xxxxxx & Xxxxx specified above at the time and on the date (which may be the
same date as, but in no event shall be earlier than, the Firm Shares Closing
Date) specified in the notice referred to in Section 1(b) (such time and date of
delivery and payment with respect to each exercise of the option are called an
"Option Shares Closing Date"). The Firm Shares Closing Date and each Option
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Shares Closing Date are called, individually, a "Closing Date" and,
collectively, the "Closing Dates."
Unless otherwise indicated, certificates evidencing the Shares
shall be registered in such names and shall be in such denominations as the
Underwriters shall request at least two full business days before the Firm
Shares Closing Date or, in the case of Option Shares, on the day of notice of
exercise of the option as described in Section 1(b) and shall be made available
to the Underwriters for checking and packaging, at such place as is designated
by the Underwriters, at least one full business day before the Firm Shares
Closing Date (or the Option Shares Closing Date in the case of the Option
Shares).
3. Representations and Warranties of the Company. The Company
hereby represents and warrants to each Underwriter as follows:
(a) A registration statement on Form S-2 (File No. 333-
39803), with respect to the Shares, including a preliminary prospectus,
has been carefully prepared by the Company in conformity with the
requirements of the Securities Act of 1933, as amended (the "Securities
Act"), and the rules and regulations (the "Securities Rules") of the
Securities and Exchange Commission (the "Commission") thereunder, filed
with the Commission and declared effective. Such registration statement
may have been amended or supplemented prior to the date of this
Underwriting Agreement; any such amendment of such registration
statement or supplement was so prepared and filed, and any such
amendment filed after the effective time of such registration statement
(the "Effective Time") has been declared effective. Such registration
statement (as amended, if applicable) and the prospectus constituting a
part thereof including, in each case, the information, if any, deemed
to be a part thereof pursuant to Rule 430A under the Securities Rules,
is referred to herein as the "Registration Statement." A prospectus
will be prepared and will be filed pursuant to Rule 424(b) of the
Securities Rules on or before the second business day after the date
hereof (or such earlier time as may be required by the Securities
Rules). The term "Prospectus" shall refer to such final prospectus in
the form first filed with the Commission pursuant to Rule 424(b) of the
Securities Rules. Any reference herein to the Registration Statement,
the Prospectus, any preliminary prospectus or any amendment or
supplement thereto shall be deemed to refer to and include the
documents incorporated by reference therein, and any reference herein
to the terms "amend," "amendment" or "supplement" with respect to the
Registration Statement, the Prospectus or any preliminary prospectus
shall be deemed to refer to and include the filing after the execution
hereof of any document with the Commission deemed to be incorporated by
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reference therein. For purposes of this Underwriting Agreement, all
references to the Registration Statement, the Prospectus, any
preliminary prospectus or any amendment or supplement thereto shall be
deemed to include any copy filed with the Commission pursuant to its
Electronic Data Gathering Analysis and Retrieval System (XXXXX), and
such copy shall be identical to any Prospectus delivered to you for use
in connection with the offering of the Securities by the Company. No
stop order suspending the effectiveness of the Registration Statement
has been issued, and no proceeding for that purpose has been instituted
or threatened by the Commission. Copies of the Registration Statement
and Prospectus, any such amendments or supplements and all documents
incorporated by reference therein that were filed with the Commission
on or prior to the date of this Underwriting Agreement have been
delivered or made available to you and your counsel.
(b) Each part of the Registration Statement, when such part
became or becomes effective and the Prospectus and any amendment or
supplement thereto, on the date of filing thereof with the Commission
and at the Firm Shares Closing Date and, if later, at an Option Shares
Closing Date, conformed or will conform in all material respects with
the requirements of the Securities Act and the Securities Rules; each
part of the Registration Statement, when such part became or becomes
effective, or when such part was filed with the Commission, did not or
will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading; the Prospectus and any
amendment or supplement thereto, on the date of filing thereof with the
Commission and at the Firm Shares Closing Date and, if later, at an
Option Shares Closing Date, did not or 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; except that the foregoing shall
not apply to statements in, or omissions from, any such document in
reliance upon, and in conformity with, written information concerning
the Underwriters that was furnished to the Company by the Underwriters
specifically for use in the preparation thereof.
(c) The documents incorporated by reference in the
Registration Statement, the Prospectus, and any amendment or supplement
thereto, when they became or become effective under the Securities Act
or were or are filed with the Commission under the Securities Act or
the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
as the case may be, conformed or will conform in all material respects
with the requirements of the Securities Act, the Securities Rules, the
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Exchange Act and/or the rules and regulations of the Commission
thereunder (the "Exchange Rules"), as applicable.
(d) The financial statements of the Company together with the
related schedules and notes thereto, set forth or included or
incorporated by reference in the Registration Statement and Prospectus
fairly present the financial condition of the Company as of the dates
indicated and the results of operations, changes in financial position,
stockholders' equity and cash flows for the periods therein specified,
in conformity with generally accepted accounting principles
consistently applied throughout the periods involved (except as
otherwise stated therein). The summary and selected financial and
statistical data included or incorporated by reference in the
Registration Statement and the Prospectus present fairly the
information shown therein and, to the extent based upon or derived from
the financial statements, have been compiled on a basis consistent with
the financial statements presented therein. In addition, the pro forma
financial statements of the Company 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 with
respect to pro forma financial statements and have been properly
compiled on the basis described therein, and the assumptions used in
the preparation thereof are reasonable and the adjustments used therein
are appropriate to give effect to the transactions and circumstances
referred to therein. Furthermore, all financial statements required by
Rule 3-14 of Regulation S-X ("Rule 3- 14"), if any, have been included
or incorporated by reference in the Registration Statement and the
Prospectus and any such financial statements are in conformity with the
requirements of Rule 3-14. No other financial statements are required
to be set forth or incorporated by reference in the Registration
Statement or the Prospectus under the Securities Act or the Securities
Rules.
(e) Ernst & Young LLP, whose reports are incorporated by
reference in the Registration Statement, are and, during the periods
covered by their reports, were independent public accountants as
required by the Securities Act and the Securities Rules.
(f) Xxxxxx Xxxxxxxx LLP, whose reports are included in the
Registration Statement, during the periods covered by their reports,
were independent public accountants as required by the Securities Act
and the Securities Rules.
(g) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the
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laws of the State of Maryland. The Company is duly qualified and in
good standing as a foreign corporation in each jurisdiction in which
the character or location of its assets or properties (owned, leased or
licensed) or the nature of its business makes such qualification
necessary (including every jurisdiction in which it owns or leases
property), except for such jurisdictions where the failure to so
qualify would not have a material adverse effect on the assets or
properties, business, results of operations, prospects or condition
(financial or otherwise) of the Company. Except as disclosed or
incorporated by reference in the Registration Statement and the
Prospectus, the Company does not own, lease or license any asset or
property or conduct any business outside the United States of America.
The Company has all requisite corporate power and authority, and all
necessary authorizations, approvals, consents, orders, licenses,
certificates and permits of and from all governmental or regulatory
bodies or any other person or entity, to own, lease, license and
operate its assets and properties and conduct its business as now being
conducted and as described or incorporated by reference in the
Registration Statement and the Prospectus; except for such
authorizations, approvals, consents, orders, licenses, certificates and
permits the absence of which would not have a material adverse effect
upon the assets or properties, business, results of operations,
prospects or condition (financial or otherwise) of the Company; and no
such authorization, approval, consent, order, license, certificate or
permit contains a materially burdensome restriction other than as
disclosed or incorporated by reference in the Registration Statement
and the Prospectus.
(h) Xxxxxx-Xxxxx Properties Limited Partnership (the
"Operating Partnership") has been duly formed and is validly existing
as a limited partnership in good standing under the laws of the State
of Delaware. The Company is the sole general partner of the Operating
Partnership. The Operating Partnership is duly qualified and in good
standing as a foreign partnership in each jurisdiction in which the
character or location of its assets or properties (owned, leased or
licensed) or the nature of its business makes such qualification
necessary (including every jurisdiction where it owns or leases
property), except for such jurisdictions where the failure to so
qualify would not have a material adverse effect on assets or
properties, business, results of operations, prospects or condition
(financial or otherwise) of the Operating Partnership. Except as
disclosed or incorporated by reference in the Registration Statement
and the Prospectus, the Operating Partnership does not own, lease or
license any asset or property or conduct any business outside the
United States of America. The Operating Partnership has all the
requisite power and authority, and all
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necessary authorizations, approvals, consents, orders, licenses,
certificates and permits of and from all governmental or regulatory
bodies or any other person or entity, to own, lease, license and
operate its assets and properties and conduct its business as now being
conducted and as described or incorporated by reference in the
Registration Statement and the Prospectus; except for such
authorizations, approvals, consents, orders, licenses, certificates and
permits the absence of which would not have a material adverse effect
upon the assets or properties, business, results of operations,
prospects or condition (financial or otherwise) of the Operating
Partnership; and no such authorization, approval, consent, order,
license, certificate or permits contains a materially burdensome
restriction other than as disclosed or incorporated by reference in the
Registration Statement and the Prospectus. The agreement of limited
partnership of the Operating Partnership (the "Operating Partnership
Agreement") is in full force and effect in the form in which it was
included as an exhibit to the Registration Statement.
(i) The Company owns or possesses adequate and enforceable
rights to use all trademarks, trademark applications, trade names,
service marks, copyrights, copyright applications, licenses, know-how
and other similar rights (collectively, the "Intangibles") necessary
for the conduct of its business as now being conducted and as described
or incorporated by reference in the Registration Statement and the
Prospectus. The Company has not infringed, is not infringing, and has
not received any notice on infringement of, any Intangible of any other
person, that will have a material adverse effect upon the assets or
properties, business, results of operations, prospects or condition
(financial or otherwise) of the Company and the Company does not know
of any basis therefor.
(j) The Company has good title to each of the items of
personal property which are reflected in the financial statements
referred to in Section 4(d) or are referred to in the Registration
Statement and the Prospectus or any document incorporated by reference
therein as being owned by the Company and valid and enforceable
leasehold interests in each of the items of real and personal property
which are referred to in the Registration Statement and the Prospectus
or any document incorporated by reference therein as being leased by
the Company, in each case free and clear of all liens, encumbrances,
claims, security interests and defects, other than those described in
the Registration Statement and the Prospectus and those which do not
and will not have a material adverse effect upon the assets or
properties, business,
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results of operations, prospects or condition (financial or
otherwise) of the Company.
(k) The Operating Partnership has good and marketable title to
all properties, including properties acquired pursuant the acquisition
agreement between the Company and Xxxx and Xxxxx Xxxxxxxx and certain
of their affiliates, dated September 22, 1997 (the "Properties") and
assets (including, without limitation, mortgaged assets), as described
in the Registration Statement and the Prospectus or any document
incorporated by reference therein, free and clear of all liens,
charges, encumbrances or restrictions, except such as are described in
the Registration Statement and the Prospectus or any document
incorporated by reference therein, or are not material in relation to
the business of the Company and the Operating Partnership; no lessee
under any of the leases pursuant to which the Operating Partnership
leases properties has an option or right of first refusal to purchase
the premises demised under such lease, except with respect to the
Master Lease Agreement dated December ___, 1995 between the Company and
Xxxxxx-Xxxxx Enterprises, Inc. ("Enterprises") whereby Enterprises has
a right of first refusal to purchase the restaurant properties subject
to such agreement on the same terms and conditions as may be offered by
a third party purchaser; the use and occupancy of each of the
Properties complies in all material respects with all applicable codes
and zoning laws and regulations; the Company has no knowledge of any
pending or threatened condemnation or zoning change that will in any
material manner affect the size of, use of, improvements on,
construction on, or access to any of the Properties, which would have a
material adverse effect upon the proposed use of such Property; and the
Company has no knowledge of any pending or threatened proceeding or
action that will in any material respect affect the size of, use of,
improvement of, construction on, or access to any of the Properties.
(l) Title insurance in favor of the mortgagee and the Company
and/or the Operating Partnership is maintained with respect to each of
the Properties in an amount at least equal to the greater of (i) the
cost of acquisition of such property or (ii) the cost of construction
of the improvements located on such property (measured at the time of
such construction).
(m) The mortgages and deeds of trust encumbering the
Properties and assets described or incorporated by reference in the
Registration Statement and the Prospectus are not convertible into
shares of Common Stock or other equity interest in the Company and/or
the Operating Partnership nor does the Company or the Operating
Partnership hold a participating interest therein.
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(n) There is no litigation or governmental or other proceeding
or investigation before any court or before or by any public body or
board pending or, to the Company's best knowledge, threatened (and the
Company knows of no basis therefor) against, or involving the assets,
properties or businesses of the Company which would materially
adversely affect the value or the operation of any such assets or
properties or the business, results of operations, prospects or
condition (financial or otherwise) of the Company.
(o) Except as disclosed in the Registration Statement or the
Prospectus or any document incorporated by reference therein, (i) there
is not present on any of the Properties any hazardous substances,
hazardous materials, toxic substances, asbestos or waste materials
(collectively, "Hazardous Materials"), (ii) there has not occurred or
is not presently occurring from any of such Properties any unlawful
spills, releases, discharges or disposal of Hazardous Materials, and
(iii) all such Properties are in compliance with all applicable local,
state and federal environmental laws, regulations, ordinances and
administrative and judicial orders relating to the generation,
recycling, reuse, sale, storage, handling, transport and disposal of
any Hazardous Materials, which failure would have a material adverse
effect on the earnings, business, results of operations, prospects or
condition (financial or otherwise) of the Company. Except as disclosed
in the Prospectus, the Company has caused Phase I Environmental Surveys
to be completed with respect to each of the Properties and has
delivered copies of all such Environmental Surveys to the Underwriters.
(p) Property and casualty insurance in favor of the Company
and/or the Operating Partnership is maintained with respect to each of
the Properties, in an amount and on such terms as are reasonable and
customary for businesses of this type.
(q) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, except as
described therein, (i) there has not been any material adverse change
in the assets or properties, business, results of operations, prospects
or condition (financial or otherwise) of the Company, whether or not
arising from transactions in the ordinary course of business; (ii) the
Company has not sustained any material loss or interference with its
assets, businesses or properties (whether owned or leased) from fire,
explosion, earthquake, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or any court or legislative or
other governmental action, order or decree; and (iii) since the date of
the latest balance sheet, included or incorporated by
9
reference in the Registration Statement and the Prospectus, except as
reflected therein, the Company has not undertaken any liability or
obligation, direct or contingent, except such liabilities or
obligations undertaken in the ordinary course of business.
(r) There is no document or contract of a character required
to be described in the Registration Statement or the Prospectus or to
be filed as an exhibit to the Registration Statement which is not
described or filed as required. The Operating Partnership Agreement and
each mortgage, line of credit agreement, loan agreement, guarantee,
employee leasing agreement, property management agreement, franchise
agreement, cost reimbursement agreement, employment contract, stock
option agreement, warrant agreement, registration rights agreement,
leasing agreement, construction contract, purchase agreement and all
other agreements of the Company described in the Registration Statement
or the Prospectus or incorporated by reference therein or listed as
exhibits to the Registration Statement are in full force and effect and
are valid and enforceable by and against the Company, in accordance
with their terms, assuming the due authorization, execution and
delivery thereof by each of the other parties thereto. Neither the
Company nor any other party, to the best of the Company's knowledge, is
in default in the observance or performance of any term or obligation
to be performed by it under any such agreement, and no event has
occurred which with notice or lapse of time or both would constitute
such a default, which default or event would have a material adverse
effect on the assets or properties, business, results of operations,
prospects or condition (financial or otherwise) of the Company. No
default exists, and no event has occurred which with notice or lapse of
time or both would constitute a default, in the due performance and
observance of any term, covenant or condition, by the Company, of any
other agreement or instrument to which the Company is a party or by
which it or its properties or businesses may be bound or affected,
which default or event would have a material adverse effect on the
assets or properties, business, results of operations, prospects or
condition (financial or otherwise) of the Company.
(s) The Company is not in violation of any term or provision
of its charter or by-laws, the Operating Partnership Agreement, or of
any franchise, license, permit, judgment, decree, order, statute, rule
or regulation, where the consequences of such violation would have a
material adverse effect on the assets or properties, business, results
of operations, prospects or condition (financial or otherwise) of the
Company.
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(t) Neither the execution, delivery and performance of this
Agreement by the Company, nor the consummation of any of the
transactions contemplated hereby (including, without limitation, the
issuance and sale by the Company of the Shares) will give rise to a
right to terminate or accelerate the due date of any payment due under,
or conflict with or result in the breach of any term or provision of,
or constitute a default (or an event which with notice or lapse of time
or both would constitute a default) under, or require any consent or
waiver under, or result in the execution or imposition of any lien,
charge or encumbrance upon any properties or assets of the Company
pursuant to the terms of, any indenture, mortgage, deed of trust or
other agreement or instrument to which the Company is a party or by
which it is bound, or any other properties or businesses are bound, or
any franchise, license, permit, judgment, decree, order, statute, rule
or regulation applicable to the Company or violate any provision of the
charter or by-laws of the Company, except for such consents or waivers
which have already been obtained and are in full force and effect.
(u) All the issued and outstanding Units of the Operating
Partnership (the "Units") have been duly authorized and validly issued
and are fully paid and non-assessable and none of them was issued in
violation of any preemptive or other similar right. Except as disclosed
in the Registration Statement and the Prospectus, there is no
outstanding option, warrant or other right calling for the issuance of,
and there is no commitment, plan or arrangement to issue, any Units or
any security convertible into or exercisable or exchangeable for, such
Units. The Units conform in all material respects to all statements
relating thereto contained in the Registration Statement and the
Prospectus.
(v) The Company has authorized, issued and outstanding capital
stock as set forth under the caption "Capitalization" in the
Prospectus. All of the outstanding shares of Common Stock have been
duly authorized and validly issued and are fully paid and nonassessable
and none of them was issued in violation of any preemptive or other
similar right. The Shares, when issued and sold pursuant to this
Agreement, will be duly authorized and validly issued, fully paid and
nonassessable and none of them will be issued in violation of any
preemptive or other similar right. Except as disclosed in the
Registration Statement and the Prospectus, there is no outstanding
option, warrant or other right calling for the issuance of, and there
is no commitment, plan or arrangement to issue, any share of stock of
the Company or any security convertible into or exercisable or
exchangeable for, such capital stock. The Common Stock and the Shares
conform in all
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material respects to all statements relating thereto contained
in the Registration Statement and the Prospectus.
(w) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, except as
described or referred to therein, the Company has not (i) issued any
securities or incurred any liability or obligation, direct or
contingent, except such liabilities or obligations incurred in the
ordinary course of business including, without limitation, debt
financing to acquire properties (ii) entered into any transaction not
in the ordinary course of business or (iii) declared or paid any
dividend or made any distribution on any shares of its capital stock or
redeemed, purchased or otherwise acquired or agreed to redeem, purchase
or otherwise acquire any shares of its capital stock.
(x) No holder of any security of the Company has the right
which has not been waived to have any security owned by such holder
included in the Registration Statement or any right to demand
registration of any security owned by such holder during the period
ending 45 days after the date of this Agreement. The Company and each
of its executive officers and directors have delivered to the
Underwriters their enforceable written agreement (the "Lock-up
Agreements") that for a period of at least 180 days after the date of
this Agreement, each such party will not, except for sales by the
Company of Common Stock pursuant to the exercise of outstanding
employee and director stock options, warrants and SAR's previously
granted, Common Stock pursuant to the Company's dividend reinvestment
and stock purchase plan, and Units exchangeable into shares of Common
Stock in connection with the acquisition of a property, without the
prior written consent of CIBC Xxxxxxxxxxx Corp., offer for sale, sell,
distribute, pledge, grant any option for the sale of, or otherwise
dispose of, directly or indirectly, or encumber, or exercise any
registration rights with respect to, any shares of Common Stock (or any
securities convertible into, exercisable for or exchangeable for any
shares of Common Stock or any rights to purchase or acquire shares of
Common Stock) owned by them.
(y) All necessary corporate action has been duly and validly
taken by the Company to authorize the execution, delivery and
performance of this Agreement and the issuance and sale of the Shares
by the Company. This Agreement has been duly and validly authorized,
executed and delivered by the Company and constitutes and will
constitute the legal, valid and binding obligations of the Company
enforceable against the Company in accordance with its terms. Each
approval, consent, order, authorization, designation, declaration or
filing by or with any regulatory,
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administrative or other governmental body necessary in connection with
the execution and delivery by the Company of this Agreement and the
issuance and sale of the Shares by the Company (except such as may be
required under the Securities Act or such additional steps as may be
required by the National Association of Securities Dealers, Inc. (the
"NASD") or the American Stock Exchange ("AMEX"), if any) has been
obtained or made and is in full force and effect. The Shares have been
approved for listing on the AMEX, subject only to official notice of
issuance.
(z) The Company is not involved in any labor dispute nor, to
the knowledge of the Company, is any such dispute threatened, which
dispute would have a material adverse effect on the assets or
properties, business, results of operations, prospects or condition
(financial or otherwise) of the Company.
(aa) The Company is conducting its business in compliance with
all applicable laws, rules and regulations of the jurisdictions in
which it is conducting business, including, without limitation, the
Americans with Disabilities Act of 1990 and all applicable local, state
and federal employment, truth-in-advertising, franchising and
immigration laws and regulations, except where the failure to be so in
compliance would not have a material adverse effect on the assets or
properties, business, results of operations, prospects or condition
(financial or otherwise) of the Company.
(bb) No transaction has occurred between or among the Company
and any of its officers or directors or any affiliate or affiliates of
any such officer or director that is required to be described in and is
not described in the Registration Statement and the Prospectus.
(cc) The Company has not taken, and will not take, directly or
indirectly, any action designed to or which might reasonably be
expected to cause or result in, or which has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation
of the price of the Common Stock to facilitate the sale or resale of
any of the Shares.
(dd) The Company has filed all federal, state, local and
foreign tax returns which are required to be filed through the date
hereof (and will file all such tax returns when and as required to be
filed after the date hereof, or have received extensions thereof, and
have paid all taxes shown on such returns to be due on or prior to the
date hereof (and will pay all taxes shown on such returns to be due
after the date
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hereof) and all assessments received by it to the extent that the same
are material and have become due.
(ee) The Company has met the qualification requirements for a
"real estate investment trust" during its taxable years ending on or
after December 31, 1987 and its proposed method of operations will
enable it to continue to meet the requirements for qualification and
taxation as a "real estate investment trust" under the Internal Revenue
Code of 1986, as amended (the "Code"), assuming no change in the
applicable underlying law. The Company does not know of any event which
would cause or is likely to cause the Company to fail to qualify as a
"real estate investment trust" at any time.
(ff) The Company is not an "investment company" within
the meaning of the Investment Company Act of 1940, as amended.
4. Conditions of the Underwriters' Obligations. The
obligations of the Underwriters under this Agreement are several and not joint.
The respective obligations of the Underwriters to purchase the Shares are
subject to each of the following terms and conditions:
(a) The Prospectus shall have been timely filed with the
Commission in accordance with Section 5(a) of this Agreement.
(b) No order preventing or suspending the use of the
Prospectus shall have been or shall be in effect and no order
suspending the effectiveness of the Registration Statement shall be in
effect and no proceedings for such purpose shall be pending before or
threatened by the Commission, and any requests for additional
information on the part of the Commission (to be included in the
Registration Statement or the Prospectus or otherwise) shall have been
complied with to the satisfaction of you and your counsel.
(c) The representations and warranties of the Company
contained in this Agreement shall be true and correct when made and on
and as of each Closing Date as if made on such date and the Company
shall have performed all covenants and agreements and satisfied all the
conditions contained in this Agreement required to be performed or
satisfied by it at or before such Closing Date.
(d) The Underwriters shall have received on each Closing Date
a certificate, addressed to the Underwriters and dated such Closing
Date, of the chief executive officer or the chief financial officer of
the Company, to the effect that such person has carefully examined the
Registration Statement, the Prospectus and this Agreement and that the
representations and warranties of the Company in this Agreement are
true and
14
correct on and as of such Closing Date with the same effect as if made
on such Closing Date and the Company has performed all covenants and
agreements and satisfied all conditions contained in this Agreement
required to be performed or satisfied by it at or prior to such Closing
Date.
(e) The Underwriters shall have received at the time this
Agreement is executed and on each Closing Date, a letter or letters
signed by Ernst & Young LLP, addressed to the Underwriters and dated,
respectively, the date of this Agreement and each such Closing Date, in
form and substance satisfactory to the Underwriters, as to their status
as independent accountants within the meaning of the Securities Act and
the Securities Rules and matters relating to the financial statements
and other financial and statistical information included or
incorporated by reference in the Registration Statement and the
Prospectus.
(f) The Underwriters shall have received at the time this
Agreement is executed and on each Closing Date, a letter or letters
signed by Xxxxxx Xxxxxxxx LLP, addressed to the Underwriters and dated,
respectively, the date of this Agreement and each such Closing Date, in
form and substance satisfactory to the Underwriters, as to their status
as independent accountants within the meaning of the Securities Act and
the Securities Rules and matters relating to the financial statements
and other financial and statistical information included or
incorporated by reference in the Registration Statement and the
Prospectus.
(g) The Underwriters shall have received on each Closing Date
from Xxxxxx & Bird LLP, counsel for the Company, an opinion, addressed
to the Underwriters and dated such Closing Date, and stating in effect
that:
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Maryland; the Company is duly qualified
and in good standing as a foreign corporation in each
jurisdiction in which the character or location of its assets
or properties (owned, leased or licensed) or by the nature of
its business makes such qualification necessary (including
every jurisdiction in which it owns or leases property),
except for such jurisdictions where the failure to so qualify
would not have a material adverse effect on the assets or
properties, business, results of operations, prospects or
condition (financial or otherwise) of the Company; to the best
of such counsel's knowledge, and except for the Operating
Partnership, the Company has no subsidiary or subsidiaries and
does not control, directly or
15
indirectly, any corporation, partnership, joint venture,
association or other business organization; and the Company
has all requisite corporate power and authority to own, lease,
license and operate its assets and properties and conduct its
business as now being conducted and as described in the
Registration Statement and the Prospectus or any document
incorporated by reference therein.
(ii) The Operating Partnership has been duly formed
and is validly existing as a limited partnership in good
standing under the laws of the State of Delaware; the
Operating Partnership is duly qualified and in good standing
as a foreign limited partnership in each jurisdiction in which
the character or location of its assets or properties (owned,
leased or licensed) or by the nature of its business makes
such qualification necessary, except for such jurisdictions
where the failure to so qualify would not have a material
adverse effect on the assets or properties, business, results
of operations, prospects or condition (financial or otherwise)
of the Operating Partnership; to the best of such counsel's
knowledge, the Operating Partnership has no subsidiary or
subsidiaries and does not control, directly or indirectly, any
corporation, partnership, joint venture, association or other
business organization; and the Operating Partnership has all
requisite power and authority to own, lease, license and
operate its assets and properties and conduct its business as
now being conducted and as described in the Registration
Statement and the Prospectus or any document incorporated by
reference therein.
(iii) The Company owns Units as set forth under the
caption _____________ in the Prospectus; all the issued and
outstanding Units have been duly authorized and validly
issued; and all of the outstanding Units are fully paid and
non-assessable and none of them was issued in violation of any
preemptive or other similar right. Except as disclosed in the
Registration Statement and the Prospectus, there is no
outstanding option, warrant or other right calling for the
issuance of, and, to the knowledge of such counsel, there is
no commitment, plan or arrangement to issue, any share of
capital stock, of the Company or any security convertible into
or exercisable or exchangeable for, Units. The Units conform
in all material respects to all statements relating thereto
contained in the Registration Statement and the Prospectus.
16
(iv) The Company has authorized, issued and
outstanding capital stock as set forth under the caption
"Description of Capital Stock" in the Prospectus; the
certificates evidencing the Shares are in due and proper legal
form and have been duly authorized for issuance by the
Company; all of the outstanding shares of Common Stock have
been duly authorized and validly issued; and all of the
outstanding shares of Common Stock are fully paid and
nonassessable and none of them was issued in violation of any
preemptive or other similar right. The Shares, when issued and
sold pursuant to this Agreement, will be duly and validly
issued, fully paid and nonassessable and none of them will
have been issued in violation of any preemptive or other
similar right. Except as disclosed in the Registration
Statement and the Prospectus, there is no outstanding option,
warrant or other right calling for the issuance of, and, to
the knowledge of such counsel, there is no commitment, plan or
arrangement to issue, any share of capital stock, of the
Company or any security convertible into or exercisable or
exchangeable for, capital stock of the Company. The Common
Stock and the Shares conform in all material respects to all
statements relating thereto contained in the Registration
Statement and the Prospectus.
(v) The information set forth under the captions
"Articles of Incorporation and Bylaw Provisions,"
"Restrictions on Transfer" and "Common Stock" in the
Prospectus to the extent that it constitutes matters of law,
summaries of legal matters, documents, or legal conclusions,
has been reviewed by such counsel and is correct in all
material respects.
(vi) The descriptions contained or incorporated by
reference in the Registration Statement and the Prospectus of
statutes, legal and governmental proceedings, contracts and
other documents are accurate, and insofar as such statements
constitute a summary of documents referred to therein, matters
of law or legal conclusions, are fair summaries of the
material provisions thereof and accurately present the
information required with respect to such documents and
matters. All statutes, legal or governmental proceedings, and
all agreements and other documents required to be described in
the Registration Statement (or incorporated by reference
therein) have been so described. All agreements and other
documents known to such counsel to be required to be filed as
exhibits to the Registration Statement have been so filed or
incorporated by reference therein.
17
(vii) All necessary corporate action has been duly
and validly taken by the Company to authorize the execution,
delivery and performance of this Agreement and the issuance
and sale of the Shares by the Company. This Agreement has been
duly and validly executed and delivered by the Company.
(viii) Neither the execution, delivery and
performance of this Agreement by the Company nor the
consummation of any of the transactions contemplated hereby
(including, without limitation, the issuance and sale by the
Company of the Shares) will give rise to a right to terminate
or accelerate the due date of any payment due under, or
conflict with or result in the breach of any term or provision
of, or constitute a default (or any event which with notice or
lapse of time, or both, would constitute a default) under, or
require consent or waiver under, or result in the execution or
imposition of any lien, charge or encumbrance upon any
properties or assets of the Company pursuant to the terms of,
any indenture, mortgage, deed of trust, note, franchise,
license, permit or other agreement or instrument known to such
counsel and to which the Company or the Operating Partnership
is a party or by which either of them or any of their
properties or businesses are bound, or violate any judgment,
decree, order, statute, rule or regulation or any provision of
the charter or by-laws of the Company or the partnership
agreement of the Operating Partnership.
(ix) To the best of such counsel's knowledge, no
default exists, and no event has occurred which with notice or
lapse of time, or both, would constitute a default, in the due
performance and observance by the Company and/or the Operating
Partnership of any term, covenant or condition of any
agreement, instrument or other document to which the Company
or the Operating Partnership is a party or by which their
assets or properties or businesses are bound or affected.
(x) To the best of such counsel's knowledge, the
Company is not in violation of any term or provision of its
charter or by-laws, and the Company is not in violation of any
term or provision of any franchise, license, permit, judgment,
decree, order, statute, rule or regulation. Furthermore, to
the best of such counsel's knowledge, the Operating
Partnership is not in violation of any term or provision of
its partnership agreement, and the Operating Partnership is
not in violation of any term or provision of any franchise,
18
license, permit, judgment, decree, order, statute, rule
or regulation.
(xi) No consent, approval, authorization or order of
any court or governmental agency or body is required for the
performance by the Company of this Agreement or the
consummation of the transactions contemplated hereby, except
such as have been obtained under the Securities Act.
(xii) To the best of such counsel's knowledge, there
is no litigation or governmental or other proceeding or
investigation before any court or before or by any public body
or board pending or threatened against, or involving the
assets, properties or businesses of, the Company which is
reasonably likely to have a material adverse effect upon the
properties, business, results of operations, prospects or
condition (financial or otherwise) of the Company.
(xiii) The Registration Statement, the Prospectus,
each of the documents incorporated by reference in the
Registration Statement and the Prospectus and each amendment
or supplement thereto (except for the financial statements and
notes and schedules and other financial and statistical
information included therein, as to which such counsel
expresses no opinion) comply as to form in all material
respects with the requirements of the Securities Act and the
Securities Rules and the Exchange Act and the Exchange Rules,
as the case may be.
(xiv) The Registration Statement has become effective
under the Securities Act, and, to the best of such counsel's
knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for
that purpose have been instituted or are threatened or
pending. The Shares have been approved for quotation on the
AMEX.
(xv) The Company has met the qualification
requirements for a "real estate investment trust" during its
taxable years ending on or after December 31, 1987 and its
proposed method of operation will enable it to continue to
meet the requirements for qualification and taxation as a
"real estate investment trust" under the Code, assuming no
change in the applicable underlying law. The discussion in the
Prospectus under the caption "Federal Income Tax
Considerations" is accurate and complete.
19
(xvi) The Company is not an "investment company"
within the meaning of the Investment Company Act of 1940, as
amended.
To the extent deemed advisable by such counsel, they may rely
as to matters of fact on certificates of responsible officers of the
Company and public officials, and with respect to matters of Maryland
law, they may rely upon the opinion of
---------------.
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of
the Company, representatives of the Underwriters and representatives of
the independent certified public accountants of the Company, at which
conferences the contents of the Registration Statement and the
Prospectus and related matters were discussed and, although such
counsel is not passing upon and does not assume any responsibility for
the accuracy, completeness or fairness of the statements contained or
incorporated by reference in the Registration Statement and the
Prospectus (except as specified in the foregoing opinion), on the basis
of the foregoing no facts have come to the attention of such counsel
which have caused such counsel to believe that the Registration
Statement at the time it became effective and at each Closing Date
contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus as of its
date and at each Closing Date contained any untrue statement of a
material fact or omitted 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 (it being understood that such
counsel need not express any belief with respect to the financial
statements and schedules and other financial information included or
incorporated by reference in the Registration Statement or the
Prospectus).
(h) All proceedings taken in connection with the sale of the
Firm Shares and the Option Shares as herein contemplated shall be
reasonably satisfactory in form and substance to the Underwriters and
their counsel and the Underwriters shall have received from Xxxxxx &
Xxxxx a favorable opinion, addressed to the Underwriters and dated such
Closing Date, with respect to the Shares, the Registration Statement
and the Prospectus, and such other related matters, as the Underwriters
may reasonably request, and the Company shall have furnished to Xxxxxx
& Xxxxx such documents as they may reasonably request for the purpose
of enabling them to pass upon such matters.
20
(i) The Underwriters shall have received on each Closing Date
a certificate, including exhibits thereto, addressed to the
Underwriters and dated such Closing Date, of the Secretary or an
Assistant Secretary of the Company, signed in such capacity, as to the
(i) certificate of incorporation and by-laws of the Company; (ii)
resolutions authorizing the execution and delivery of the Registration
Statement, this Agreement and the performance of the transactions
contemplated by this Agreement, the Registration Statement and the
Prospectus and (iii) incumbency of the person or persons authorized to
execute and deliver the Registration Statement, this Agreement and any
other documents contemplated by the offering of the Shares. In
addition, such certificate shall state that: (x) no stop order
suspending the effectiveness of the Registration Statement has been
issued, and no proceeding for that purpose has been instituted or is
threatened by the Commission; (y) since the effective date of the
Registration Statement, there has occurred no event required to be set
forth in an amendment or supplement to the Registration Statement or
Prospectus that has not been set forth, and there has been no document
required to be filed under the Exchange Act and the Exchange Rules that
upon such filing would be deemed to be incorporated by reference in the
Prospectus, that has not been so filed.
(j) The Underwriters shall have received on each Closing Date
certificates of the Secretaries of State (or comparable officials)
where the Company is incorporated and/or doing business as to the good
standing of the Company, listing all charter documents on file,
qualification of the Company to do business as a foreign corporation,
payment of taxes and filing of annual reports. In addition, the
Underwriters shall have received copies of charter documents of the
Company certified by the Secretary of State of the State of Maryland.
(k) The Underwriters shall have received on each Closing Date
certificates of the Secretaries of State (or comparable officials)
where the Operating Partnership is organized as a limited partnership
and/or doing business as to the good standing of the Operating
Partnership, listing all partnership documents on file, qualification
of the Company to do business as a foreign corporation, payment of
taxes and filing of annual reports. In addition, the Underwriters shall
have received copies of the Operating Partnership Agreement certified
by the Secretary of State of the State of Delaware.
(l) The Company shall have furnished to you such further
certificates and documents as you shall have reasonably requested.
21
All such opinions, certificates, letters and other documents
will be in compliance with the provisions hereof only if they are satisfactory
in form and substance to the Underwriters. The Company will furnish the
Underwrites with such conformed copies of such opinions, certificates, letters
and other documents as the Underwriters shall reasonably request.
5. Covenants of the Company. The Company covenants and agrees
as follows:
(a) The Company will cause the Prospectus to be filed as
required by Section 3(a) hereof (but only if the Underwriters or their
counsel have not reasonably objected thereto by notice to the Company
after having been furnished a copy a reasonable time prior to filing)
and will notify you promptly of such filing. During the period in which
a prospectus relating to the Shares is required to be delivered under
the Securities Act or such date which is 90 days after the Closing
Date, whichever is later, the Company will notify the Underwriters
promptly of the time when any subsequent amendment to the Registration
Statement has become effective or any subsequent supplement to the
Prospectus has been filed, of any request by the Commission for any
amendment or supplement to the Registration Statement or Prospectus or
for additional information; the Company will prepare and file with the
Commission, promptly upon the request of the Underwriters, any
amendments or supplements to the Registration Statement or Prospectus
that, in their or their counsel's opinion, may be necessary or
advisable in connection with your distribution of the Shares; and the
Company will file no amendment or supplement to the Registration
Statement or Prospectus to which the Underwriters or their counsel
shall reasonably object by notice to the Company after having been
furnished a copy a reasonable time prior to the filing.
(b) The Company will advise the Underwriters, promptly after
it shall receive notice or obtain knowledge thereof, of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement, of the suspension of the qualification or
registration of the Shares for offering or sale in any jurisdiction, or
of the initiation or threatening of any proceeding for any such
purpose; and it will promptly use its best efforts to prevent the
issuance of any stop order or to obtain its withdrawal if such a stop
order should be issued.
(c) The Company will comply with all requirements imposed upon
it by the Securities Act, the Securities Rules, the Exchange Act and
the Exchange Rules as from time to time in force, so far as necessary
to permit the continuance of sales of, or dealings in, the Shares as
contemplated by the
22
provisions hereof and the Prospectus. If during such period where a
prospectus relating to the Shares is required to be delivered under the
Securities Act any event occurs as a result of which, in the opinion of
your counsel, the Registration Statement contains an untrue statement
of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading or the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omits to state a
material fact necessary to make the statements therein, in the light of
the circumstances then existing, not misleading, or if during such
period it is necessary to amend or supplement the Registration
Statement or Prospectus to comply with the Securities Act, the Company
will promptly notify you and will amend or supplement the Registration
Statement or Prospectus (at the expense of the Company) so as to
correct such statement or omission or effect such compliance.
(d) The Company shall make generally available to its security
holders and to the Underwriters as soon as practicable, but not later
than 45 days after the end of the 12-month period beginning at the end
of the fiscal quarter of the Company during which the Effective Time
occurs (or 90 days if such 12-month period coincides with the Company's
fiscal year), an earning statement (which need not be audited) of the
Company, covering such 12-month period, which shall satisfy the
provisions of Section 11(a) of the Securities Act or Rule 158 of the
Securities Rules.
(e) The Company shall furnish to the Underwriters and their
counsel, without charge, signed copies of the Registration Statement
(including all exhibits thereto and amendments thereof) and all
amendments thereof and, so long as delivery of a prospectus by an
Underwriter or dealer may be required by the Securities Act or the
Securities Rules, as many copies of the Prospectus and any amendments
thereof and supplements thereto as the Underwriters may reasonably
request.
(f) For a period of five years after the date of this
Agreement, the Company shall supply to the Underwriters, copies of such
financial statements and other periodic and special reports as the
Company may from time to time distribute generally to the holders of
any class of its capital stock and furnish to the Underwriters a copy
of each annual or other report it shall be required to file with the
Commission.
(g) Without the prior written consent of the Underwriters for
a period of 180 days after the date of this
23
Agreement, the Company shall not, directly or indirectly, issue, offer,
sell or register with the Commission, or otherwise encumber or dispose
of, directly or indirectly, any equity securities of the Company (or
any securities convertible into or exercisable or exchangeable for
equity securities of the Company or any rights to purchase or acquire
equity securities of the Company), except for (i) the issuance of the
Shares pursuant to the Registration Statement; (ii) the issuance of
shares of Common Stock pursuant to (a) the exercise of outstanding
employee and director options or the grant or issuance of options under
the Company's existing stock option plans, (b) the Company's dividend
reinvestment and stock purchase plan or (c) warrants and SAR's
previously granted; and (iii) sales by the Company of Units
exchangeable into shares of Common Stock, in connection with the
acquisition of a property.
(h) On or before the Firm Shares Closing Date, the Company
shall make all filings required under applicable securities laws and by
the AMEX (including any required registration under the Exchange Act).
On or before the date of this Agreement, the Shares shall be listed on
the AMEX.
(i) The Company will continue to elect to qualify as a "real
estate investment trust" and will use its best efforts to continue to
meet the requirement to qualify as a "real estate investment trust."
(j) The Company agrees to pay, or reimburse if paid by the
Underwriters, whether or not the transactions contemplated hereby are
consummated or this Agreement is terminated, all costs and expenses
incident to the performance of the obligations of the Company under
this Agreement including those relating to: (i) the preparation,
printing, filing and distribution of the Registration Statement
including all exhibits thereto, the Prospectus, all amendments and
supplements to the Registration Statement and the Prospectus, and the
printing, filing and distribution of this Agreement; (ii) the
preparation and delivery of certificates for the Shares to the
Underwriters; (iii) if applicable, the registration or qualification of
the Shares for offer and sale under the securities laws of the various
jurisdictions, including the reasonable fees and disbursements of
counsel for the Underwriters in connection with any such registration
and qualification; (iv) the furnishing (including cost of shipping and
mailing) to the Underwriters of copies of the Prospectus and all
amendments or supplements to the Prospectus, and of the several
documents required by this Section to be so furnished, as may be
reasonable requested for use in connection with the offering and the
sale of the Shares by the Underwriters or by dealers to whom Shares may
be sold; (v) the
24
filing fees of the NASD in connection with its review of the terms of
the transactions contemplated hereby; (vi) the furnishing (including
costs of shipping and mailing) to the Underwriters of copies of all
reports and information required by 5(f); (vii) listing of the Shares
on the AMEX; and (viii) all transfer taxes, if any, with respect to the
sale and delivery of the Shares by the Company to the Underwriters.
Subject to the provisions of Section 8, the Underwriters agree to pay,
whether or not the transactions contemplated hereby are consummated or
this Agreement is terminated, all costs and expenses incident to the
performance of the obligations of the Underwriters under this Agreement
not payable by the Company pursuant to the preceding sentence,
including, without limitation, the fees and disbursements of counsel
for the Underwriters.
6. Indemnification.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter
within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act against any and all losses, claims, damages and
liabilities, joint or several (including any reasonable investigation,
legal and other expenses incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or any claim
asserted), to which they, or any of them, may become subject under the
Securities Act, the Exchange Act or other federal or state law or
regulation, at common law or otherwise, insofar as such losses, claims,
damages or liabilities arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in
the Registration Statement or the Prospectus or any amendment thereof
or supplement thereto, or arise out of or are based upon any omission
or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading; provided, however, that such indemnity shall not inure to
the benefit of any Underwriter (or any person controlling such
Underwriter) on account of any losses, claims, damages or liabilities
arising from the sale of the Shares to any person by such Underwriter
if such untrue statement or omission or alleged untrue statement or
omission was made in the Registration Statement or the Prospectus, or
such amendment or supplement, in reliance upon and in conformity with
information concerning the Underwriters furnished in writing to the
Company by the Underwriters specifically for use therein. This
indemnity agreement will be in addition to any liability which the
Company may otherwise have.
25
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, each person, if any, who
controls the Company within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act, each director of the Company and
each officer of the Company who signs the Registration Statement, to
the same extent as the foregoing indemnity from the Company to each
Underwriter, but only insofar as such losses, claims, damages or
liabilities arise out of or are based upon any untrue statement or
omission or alleged untrue statement or omission which was made in the
Registration Statement or the Prospectus, or any amendment thereof or
supplement thereto, concerning the Underwriters furnished in writing to
the Company by the Underwriters specifically for use therein; provided,
however, that the obligation of each Underwriter to indemnify the
Company (including any controlling person, director or officer thereof)
shall be limited to the underwriting discounts and commissions received
by such Underwriter.
(c) Any party that proposes to assert the right to be
indemnified under this Section will, promptly after receipt of notice
of commencement of any action, suit or proceeding against such party in
respect of which a claim is to be made against an indemnifying party or
parties under this Section, notify each such indemnifying party of the
commencement of such action, suit or proceeding, enclosing a copy of
all papers served. No indemnification provided for in Section 6(a) or
6(b) shall be available to any party who shall fail to give notice as
provided in this Section 6(c) if the party to whom notice was not given
was unaware of the proceeding to which such notice would have related
and was prejudiced by the failure to give such notice but the omission
so to notify such indemnifying party of any such action, suit or
proceeding shall not relieve it from any liability that it may have to
any indemnified party for contribution or otherwise than under this
Section. In case any such action, suit or proceeding shall be brought
against any indemnified party and it shall notify the indemnifying
party of the commencement thereof, the indemnifying party shall be
entitled to participate in, and, to the extent that it shall wish,
jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof and
the approval by the indemnified party of such counsel, the indemnifying
party shall not be liable to such indemnified party for any legal or
other expenses, except as provided below and except for the reasonable
costs of investigation subsequently incurred by such indemnified party
in connection with the defense thereof. The indemnified party shall
have the right to employ its counsel in any such action,
26
but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the employment of counsel by such
indemnified party has been authorized in writing by the indemnifying
parties, (ii) the indemnified party shall have reasonably concluded
that there may be a conflict of interest between the indemnifying
parties and the indemnified party in the conduct of the defense of such
action (in which case the indemnifying parties shall not have the right
to direct the defense of such action on behalf of the indemnified
party) or (iii) the indemnifying parties shall not have employed
counsel to assume the defense of such action within a reasonable time
after notice of the commencement thereof, in each of which cases the
fees and expenses of counsel shall be at the expense of the
indemnifying parties. An indemnifying party shall not be liable for any
settlement of any action, suit, proceeding or claim effected without
its written consent.
7. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in
Section 6 is due in accordance with its terms but for any reason is held to be
unavailable from the Company or the Underwriters, the Company and the
Underwriters shall contribute to the aggregate losses, claims, damages and
liabilities (including any investigation, legal and other expenses reasonably
incurred in connection with, and any amount paid in settlement of, any action,
suit or proceeding or any claims asserted, but after deducting any contribution
received by the Company from persons other than the Underwriters, such as
persons who control the Company within the meaning of the Securities Act,
officers of the Company who signed the Registration Statement and directors of
the Company who may also be liable for contribution) to which the Company and
one or more of the Underwriters may be subject in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Underwriters on the other from the transactions contemplated hereby
or, if such allocation is not permitted by applicable law or indemnification is
not available as a result of the indemnifying party not having received notice
as provided in Section 6 hereof, in such proportion as is appropriate to reflect
not only the relative benefits referred to above but also the relative fault of
the Company on the one hand and the Underwriter on the other in connection with
the statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Underwriters shall be
deemed to be in the same proportion as (i) the total proceeds from the offering
of the Shares (net of underwriting discounts but before deducting expenses)
received by the Company, as set forth in the table on the cover page of the
Prospectus, bear to (ii) the underwriting discounts and commissions received by
the Underwriters, as set
27
forth in the table on the cover page of the Prospectus. The relative fault of
the Company or the Underwriter shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact
related to information supplied by the Company or the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company 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.
Notwithstanding the provisions of this Section 7, in no case shall any
Underwriter be liable or responsible for any amount in excess of the
underwriting discount and commission applicable to the Shares purchased by such
Underwriter hereunder; provided, however, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 7, each person, if
any, who controls an Underwriter within the meaning of Section 15 of the
Securities Act or Section 20(a) of the Exchange Act shall have the same rights
to contribution as such Underwriter, and each person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act or Section 20(a)
of the Exchange Act, each officer of the Company who shall have signed the
Registration Statement and each director of the Company shall have the same
rights to contribution as the Company, subject in each case to the immediately
preceding sentence of this Section 7. Any party entitled to contribution will,
promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for contribution may
be made against another party or parties under this Section, notify such party
or parties from whom contribution may be sought, but the omission so to notify
such party or parties from whom contribution may be sought shall not relieve the
party or parties from whom contribution may be sought from any other obligation
it or they may have hereunder or otherwise than under this Section. No party
shall be liable for contribution with respect to any action, suit, proceeding or
claim settled without its written consent. The Underwriters' obligations to
contribute pursuant to this Section 7 are several in proportion to their
respective underwriting commitments and not joint.
8. Termination. This Agreement may be terminated with
respect to the Shares to be purchased on a Closing Date by the
Underwriters by notifying the Company at any time:
(a) in the absolute discretion of the Underwriters at or
before any Closing Date: (i) if on or prior to such date, any
28
domestic or international event or act or occurrence has materially
disrupted, or in the opinion of the Underwriters will in the future
materially disrupt, the securities markets; (ii) if there has occurred
any new outbreak or material escalation of hostilities or other
calamity or crisis the effect of which on the financial markets of the
United States is such as to make it, in the judgment of the
Underwriters, inadvisable to proceed with the transactions contemplated
hereby; (iii) if there shall be such a material adverse change in
general financial, political or economic conditions or the effect of
international conditions on the financial markets in the United States
is such as to make it, in the judgment of the Underwriters, inadvisable
or impracticable to market the Shares; (iv) if trading in the Shares
has been suspended by the Commission or trading generally on the New
York Stock Exchange, Inc. or on the AMEX has been suspended or limited,
or minimum or maximum ranges for prices for securities shall have been
fixed, or maximum ranges for prices for securities have been required,
by said exchanges or by order of the Commission, the NASD, or any other
governmental or regulatory authority; or (v) if a banking moratorium
has been declared by any state or federal authority, or
(b) at or before any Closing Date, that any of the conditions
specified in Section 4 shall not have been fulfilled when and as
required by this Agreement.
If this Agreement is terminated pursuant to any of its
provisions, the Company shall not be under any liability to any Underwriter, and
no Underwriter shall be under any liability to the Company, except that (i) if
this Agreement is terminated by the Underwriters or the Underwriters because of
any failure, refusal or inability on the part of the Company to comply with the
terms or to fulfill any of the conditions of this Agreement, the Company will
reimburse the Underwriters for all out-of-pocket expenses (including the fees
and disbursements of their counsel) incurred by them in connection with the
proposed purchase and sale of the Shares or in contemplation of performing their
obligations hereunder and (ii) no Underwriter who shall have failed or refused
to purchase the Shares agreed to be purchased by it under this Agreement,
without some reason sufficient hereunder to justify cancellation or termination
of its obligations under this Agreement, shall be relieved of liability to the
Company or to the other Underwriters for damages occasioned by its failure or
refusal.
9. Substitution of Underwriters. If one or more of the
Underwriters shall fail (other than for a reason sufficient to justify the
cancellation or termination of this Agreement under Section 8) to purchase on
any Closing Date the Shares agreed to be purchased on such Closing Date by such
Underwriter or Underwriters,
29
the Underwriters may find one or more substitute underwriters to purchase such
Shares or make such other arrangements as the Underwriters may deem advisable or
the remaining Underwriter may agree to purchase all of the Shares, in each case
upon this Agreement. If no such arrangements have been made by the close of
business on the business day following such Closing Date:
(a) if the number of Shares to be purchased by the defaulting
Underwriter on such Closing Date shall not exceed 10% of the Shares
that all the Underwriters are obligated to purchase on such Closing
Date, then the nondefaulting Underwriter shall be obligated to purchase
such Shares on the terms herein set forth in proportion to their
respective obligations hereunder; provided, however, that in no event
shall the maximum number of Shares that any Underwriter has agreed to
purchase pursuant to Section 1 be increased pursuant to this Section 9
by more than one-ninth of such number of Shares without the written
consent of such Underwriter, or
(b) if the number of Shares to be purchased by the defaulting
Underwriter on such Closing Date shall exceed 10% of the Shares that
all the Underwriters are obligated to purchase on such Closing Date,
then the Company shall be entitled to an additional business day within
which it may, but is not obligated to, find one or more substitute
underwriters reasonably satisfactory to the Underwriters to purchase
such Shares upon the terms set forth in this Agreement.
In any such case, either the Underwriters or the Company shall
have the right to postpone the applicable Closing Date for a period of not more
than five business days in order that necessary changes and arrangements
(including any necessary amendments or supplements to the Registration Statement
or the Prospectus) may be effected by the Underwriters and the Company. If the
number of Shares to be purchased on such Closing Date by such defaulting
Underwriter shall exceed 10% of the Shares that all the Underwriters are
obligated to purchase on such Closing Date, and the nondefaulting Underwriter or
the Company shall make arrangements pursuant to this Section within the period
stated for the purchase of the Shares that the defaulting Underwriter agreed to
purchase, this Agreement shall terminate with respect to the Shares to be
purchased on such Closing Date without liability on the part of the
nondefaulting Underwriter to the Company and without liability on the part of
the Company, except in both cases as provided in Sections 5(j), 6, 7, 8 and 9.
The provisions of this Section shall not in any way affect the liability of any
defaulting Underwriter to the Company or the nondefaulting Underwriter arising
out of such default. A substitute underwriter hereunder shall become an
Underwriter for all purposes of this Agreement.
30
10. Miscellaneous. The respective agreements, representations,
warranties, indemnities and other statements of the Company or its officers and
of the Underwriters set forth in or made pursuant to this Agreement shall remain
in full force and effect, regardless of any investigation made by or on behalf
of any Underwriter or the Company or any of the officers, directors or
controlling persons referred to in Sections 6 and 7 hereof, and shall survive
delivery of and payment for the Shares. The provisions of Sections 5(j), 6, 7, 8
and 9 shall survive the termination or cancellation of this Agreement.
This Agreement has been and is made for the benefit of the
Underwriters and the Company and their respective successors and assigns, and,
to the extent expressed herein, for the benefit of persons controlling any of
the Underwriters, or the Company, and directors and officers of the Company, and
their respective successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. The term "successors and
assigns" shall not include any purchaser of Shares from any Underwriter merely
because of such purchase.
All notices and communications hereunder shall be in writing
and mailed or delivered or by telephone or telegraph if subsequently confirmed
in writing, (a) if to the Underwriters, c/o CIBC Xxxxxxxxxxx Corp., CIBC
Xxxxxxxxxxx Xxxxx, Xxxxx Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xxxxxxx X. Xxxxx, with a copy to Xxx Xxxxxxxxx, Esq., Xxxxxx & Xxxxx, 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 and (b) if to the Company, to its agent for
service as such agent's address appears on the cover page of the Registration
Statement, with a copy to Xxxx X. Xxxxxxx, Esq., Xxxxxx & Bird LLP, 0000
Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxx Xxxxxxxx 00000.
This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without regard to principles
of conflict of laws.
31
Please confirm that the foregoing correctly sets forth the
agreement among us.
Very truly yours,
XXXXXX-XXXXX PROPERTIES, INC.
By:
Name: D. Xxxxx Xxxxxxxxx
Title: President and Chief
Executive Officer
XXXXXX-XXXXX PROPERTIES LIMITED
PARTNERSHIP
By: Xxxxxx-Xxxxx Properties, Inc.,
its sole general partner
By:
Name: D. Xxxxx Xxxxxxxxx
Title: President and Chief
Executive Officer
CONFIRMED AND ACCEPTED
as of the date first
above written
CIBC XXXXXXXXXXX CORP.
By:
Name:
Title:
32
SCHEDULE I
Number of Firm
Shares to
Name Be Purchased
1. CIBC Xxxxxxxxxxx Corp.
2. X.X. Xxxxxxxx & Co.
3. Interstate/Xxxxxxx Xxxx Corporation
4. Xxxxxxxxx & Company LLC
TOTAL 2,800,000
