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▇▇▇▇▇▇▇ REAL ESTATE, INC.
$100,000,000 OF 7.00% SENIOR NOTES DUE 2004
UNDERWRITING AGREEMENT
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November 20, 1997
PAINEWEBBER INCORPORATED
BT ALEX. ▇▇▇▇▇ INCORPORATED
SALOMON BROTHERS INC
FIRST CHICAGO CAPITAL MARKETS, INC.
c/o PaineWebber Incorporated
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Ladies and Gentlemen:
▇▇▇▇▇▇▇ Real Estate, Inc., a Maryland corporation (the "Company"), and
▇▇▇▇▇▇▇ Operating Limited Partnership, a Delaware limited partnership (the
"Operating Partnership" and together with the Company, the "Transaction
Entities"), confirm their agreement with PaineWebber Incorporated, BT Alex.
▇▇▇▇▇ Incorporated, Salomon Brothers Inc and First Chicago Capital Markets,
Inc., (the "Underwriters," which term shall also include any underwriter
substituted as hereinafter provided in Section 9 of this Underwriting
Agreement), with respect to the sale by the Operating Partnership and the
purchase by the Underwriters, acting severally and not jointly, of $100,000,000
aggregate principal amount of the Operating Partnership's 7.00% Senior Notes due
2004 (the "Securities"), as further described on SCHEDULES A AND C hereto.
Capitalized terms used but not otherwise defined herein shall have the
meanings given to those terms in the Prospectus (as herein defined):
1. DESCRIPTION OF SECURITIES. The Operating Partnership proposes to issue
and sell to the Underwriters the Securities to be issued under an Indenture, to
be dated November 24, 1997 (the "Senior Indenture"), as supplemented by
Supplemental Indenture No. 1 thereto to be dated November 24, 1997 (the
"Supplemental Indenture" and, together with the Senior Indenture, the
"Indenture") between the Operating Partnership and LaSalle National Bank, as
trustee (the "Trustee").
2. REPRESENTATIONS AND WARRANTIES OF THE TRANSACTION ENTITIES. Each of the
Transaction Entities, jointly and severally, represents and warrants to you and
the Underwriters as follows:
(a) A registration statement on Form S-3 (File No. 333-36577) with
respect to debt securities to be offered from time to time in accordance
with Rule 415 of the rules and regulations of
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the Securities and Exchange Commission (the "Commission") under the
Securities Act of 1933, as amended (the "1933 Act") (the "1933 Act Rules
and Regulations") by the Operating Partnership, including a preliminary
prospectus which contains a preliminary base prospectus and a preliminary
prospectus supplement setting forth the terms of the offering, sale and
plan of distribution of the Securities being offered by the Operating
Partnership and additional information concerning the Operating Partnership
and its business, based on the oral advice of the Commission, has been
declared effective. Such registration statement and preliminary prospectus
may have been amended or supplemented prior to the date of this
Underwriting Agreement; any such amendment or supplement was so prepared
and filed, and, based on the oral advice of the Commission, any such
amendment filed after the effective date of such registration statement has
been declared effective. Such registration statement (as amended, if
applicable) and the preliminary 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 1933 Act Rules and Regulations, is
referred to herein as the "Registration Statement" and the "Prospectus,"
respectively, except that if any revised prospectus shall be provided to
the Underwriters by either of the Transaction Entities for use in
connection with the offering of the Securities which differs from the
Prospectuses on file at the Commission at the time the Registration
Statement becomes effective (whether or not such revised prospectus is
required to be filed by the Company pursuant to Rule 424(b) of the 1933 Act
Rules and Regulations), the term "Prospectus" shall refer to each such
revised prospectus from and after the time it is first provided to the
Underwriters for such use. 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 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 (▇▇▇▇▇), and such copy shall be identical to any Prospectus
delivered to you for use in connection with the offering of the Securities
by the Operating Partnership. 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
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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 to
such Registration Statement or such Prospectus, on the date of filing
thereof with the Commission and at the Closing Date (as hereinafter
defined) conformed or will conform in all material respects with the
requirements of the 1933 Act and the 1933 Act Rules and Regulations; the
Indenture, on the date of filing thereof with the Commission and at the
Closing Date conformed or will conform in all material respects with the
requirements of the Trust Indenture Act of 1939, as amended, and the rules
and regulations of the Commission thereunder (the "TIA"); each part of the
Registration Statement, when such part became or becomes effective 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 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 (i) that
part of the Registration Statement which constitutes the Statement of
Eligibility and Qualification under the TIA (the "Form T-1") and (ii)
statements in, or omissions from, any such document in reliance upon, and
in conformity with, information concerning the Underwriters that was
furnished to the Transaction Entities 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 to such
Registration Statement or such Prospectus, when they became or become
effective under the 1933 Act or were or are filed with the Commission under
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 1933 Act, the 1933 Act Rules and Regulations, the
Exchange Act and the rules and regulations of the Commission thereunder
(the "Exchange Act Rules and Regulations"), as applicable.
(d) The financial statements of the Operating Partnership set forth or
incorporated by reference in the Registration Statement and Prospectus
fairly present the financial condition of the Operating Partnership as of
the dates indicated and the results of operations and changes in financial
position for the periods therein specified in conformity with generally
accepted accounting principles
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consistently applied through the periods involved (except as otherwise
stated therein). The summary financial, pro forma 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. No other financial statements are required to be set forth in the
Registration Statement or the Prospectus under the 1933 Act or the 1933 Act
Rules and Regulations.
(e) The only subsidiaries (as defined in the 1933 Act Rules and
Regulations) of the Transaction Entities are the subsidiaries listed on
SCHEDULE B hereto (the "Subsidiaries"). Each of the Transaction Entities
and each of their Subsidiaries has been duly incorporated or formed, as the
case may be, and is an existing corporation or general or limited
partnership, as the case may be, in good standing under the laws of its
jurisdiction of incorporation or formation, as the case may be. Each of the
Transaction Entities and each of its Subsidiaries has full power and
authority (corporate and other) to conduct its business as described in the
Registration Statement and Prospectus, and is duly qualified to do business
in each jurisdiction in which it owns or leases real property or in which
the conduct of its business requires such qualification, except where the
failure to be so qualified, considering all such cases in the aggregate,
does not involve a material risk to the business, properties, financial
position or results of operations of the Transaction Entities taken as a
whole; and, other than the Subsidiaries, the Transaction Entities own no
material amounts of stock or beneficial interest in any corporation,
partnership, joint venture or other business entity and do not own 10% or
more of the outstanding voting stock of any entity separately taxable as a
corporation under the Internal Revenue Code of 1986, as amended (the
"Code").
(f) The Securities have been duly authorized and are, or when issued
as contemplated hereby will be, validly issued, fully paid and
non-assessable by the Operating Partnership and conform, or when so issued
will conform, to the description thereof in the Prospectus. All of the
partnership interests of the Operating Partnership have been duly and
validly authorized and issued and are fully paid and approximately 95% of
such partnership interests are owned of record and beneficially by the
Company free and clear of all liens, encumbrances, equities or claims.
(g) The Securities will be as of the Closing Date duly authorized by
the Operating Partnership for issuance and sale pursuant to this
Underwriting Agreement and the Indenture; and when duly authenticated and
delivered by the Trustee in accordance with the terms of the Indenture
(assuming the due authorization, execution and
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delivery of the Indenture by the Trustee), and delivered to, and paid for
by, the Underwriters pursuant to this Underwriting Agreement, the
Securities will be valid and legally binding obligations of the Operating
Partnership entitled to the benefit of the Indenture and will be
enforceable against the Operating Partnership in accordance with their
terms, except to the extent that enforcement thereof may be limited by (i)
bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights generally and (ii)
general principles of equity (regardless of whether enforceability is
considered in a proceeding at law or in equity) (together, the
"Enforceability Limitations") and the executing, delivery and performance
of any of such agreements did not and will not, at the time of execution
and delivery, and does not and will not constitute a breach of, or a
default under, the charter, bylaws or partnership agreement, as the case
may be, Transaction Entities or any of their Subsidiaries or any material
contract, lease or other instrument to which the Transaction Entities or
any of their Subsidiaries is a party or to which any of their property may
be bound or any law, administrative regulation or administrative or court
decree, except for such breaches or defaults which individually or in the
aggregate do not involve a material risk to the business, properties,
financial position or results of operations of the Transaction Entities
taken as a whole; the Indenture has been duly qualified under the TIA and
prior to the issuance of the Securities will be duly authorized, executed
and delivered by the Operating Partnership, and assuming due authorization,
execution and delivery thereof by the Trustee, will constitute a valid and
legally binding obligation of the Operating Partnership, enforceable
against the Operating Partnership in accordance with its terms, subject to
the Enforceability Limitations; the Securities and the Indenture will
conform in all material respects to the statements relating thereto
contained in the Prospectus; and the Securities are, in all material
respects, in the form contemplated by the Indenture.
(h) Except as contemplated in the Prospectus, subsequent to the
respective dates as of which information is given in the Registration
Statement and the Prospectus, the Transaction Entities have not incurred
any liabilities or obligations, direct or contingent, or entered into any
transactions, not in the ordinary course of business, that are material to
the Transaction Entities on a consolidated basis, and there has not been
any material change in the capital stock, short-term debt or long-term debt
of the Transaction Entities, or any material adverse change, or any
development involving a prospective material adverse change, in the
condition (financial or other), business, prospects, net worth or results
of operations of the Transaction Entities on a consolidated basis.
(i) Except as set forth in the Prospectus, there is not pending or, to
the knowledge of the Transaction Entities,
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threatened any action, suit or proceeding to which any of the Transaction
Entities is a party, before or by any court or governmental agency or body,
that might result in any material adverse change in the condition
(financial or other), business, prospects, net worth or results of
operations of the Transaction Entities, or might materially and adversely
affect the properties or assets thereof.
(j) There are no contracts or documents of the Transaction Entities
that are required to be filed as exhibits to the Registration Statement or
to any of the documents incorporated by reference therein by the 1933 Act
or the Exchange Act or by the 1933 Act Rules and Regulations or the rules
and regulations of the Commission under the Exchange Act (the "Exchange Act
Rules and Regulations") that have not been so filed.
(k) This Underwriting Agreement has been duly executed, delivered and
will be performed by each of the Transaction Entities, and the Indenture
has been duly authorized, executed delivered and performed by the Operating
Partnership. The execution of this Underwriting Agreement and the Indenture
and the consummation of the transactions herein and therein contemplated
will not result in a breach or violation of any of the terms and provisions
of, or constitute a default under, any statute, any agreement or instrument
to which either of the Transaction Entities is a party or by which it is
bound or to which any of the property of either of the Transaction Entities
is subject, the charter, or bylaws or partnership agreement, as the case
may be, of either of the Transaction Entities, or any order, rule or
regulation of any court or governmental agency or body having jurisdiction
over either of the Transaction Entities or any of their properties; no
consent, approval, authorization or order of, or filing with, any court or
governmental agency or body is required for the consummation of the
transactions contemplated by this Underwriting Agreement and the Indenture
in connection with the issuance or sale of the Securities by the Operating
Partnership, except such as may be required under the 1933 Act, the TIA or
state securities laws; and the Operating Partnership has full power and
authority to authorize, issue and sell the Securities as contemplated by
this Underwriting Agreement and the Indenture, free of any preemptive or
similar rights.
(l) The Transaction Entities have complied in all respects with all
laws, regulations and orders applicable to them or their respective
businesses; the Transaction Entities are not in default under any
indenture, mortgage, deed of trust, voting trust agreement, loan agreement,
bond debenture, note agreement or evidence of indebtedness, lease, contract
or other agreement or instrument to which either of the Transaction
Entities is a party or by which either
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of the Transaction Entities or any of their properties are bound, violation
of which would individually or in the aggregate have a material adverse
effect on the Transaction Entities, and no other party under any such
agreement or instrument to which either of the Transaction Entities is a
party, to the knowledge of the Transaction Entities, in default in any
material respect thereunder; and neither of the Transaction Entities is in
violation of their organizational documents.
(m) Except as described in the Prospectus, and except for defects or
exceptions that are not material in relation to the business of the
Transaction Entities, their Subsidiaries and Related Entities (as defined
below), taken as a whole: (i) in accordance with general warranty deeds
issued by the Company (the "Transfer Deeds") with regard to the Properties
that had previously been owned by the Company (the "Transferred
Properties"), substantially all of the Properties (as defined in the
Prospectus) have been transferred from the Company to the Operating
Partnership as of the date hereof; (ii) the Transaction Entities and each
of their Subsidiaries and any partnership or joint venture in which such
party is a participant (a "Related Entity") have good and marketable title
to all such Properties, subject to the exceptions noted in the Transfer
Deeds; (iii) if there are any liens, charges, encumbrances, claims or
restrictions affecting the Properties and the assets of the Operating
Partnership, they are disclosed in the Prospectus or noted in the Transfer
Deeds; (iv) the Operating Partnership, its Subsidiaries and Related
Entities have valid, subsisting and enforceable (subject to the
Enforceability Limitations) leases for the properties described in the
Prospectus as leased by them; (v) no tenant under any of the leases
pursuant to which the Operating Partnership, its Subsidiaries and Related
Entities lease their Properties has an option or right of first refusal to
purchase the premises demised under such lease; (vi) to the knowledge of
the Transaction Entities, the use and occupancy of each of the Properties
of the Operating Partnership, its Subsidiaries and Related Entities
complies in all material respects with all applicable codes and zoning laws
and regulations; (vii) the Operating Partnership, its Subsidiaries and
Related Entities have no knowledge of any pending or threatened
condemnation or zoning change that will in any material respect affect the
size of, use of, improvement of, construction on, or access to any of the
Properties of the Operating Partnership, its Subsidiaries or Related
Entities; (viii) the Operating Partnership, its Subsidiaries and Related
Entities have no knowledge of any pending or threatened proceeding or
action that will in any manner materially affect the size of, use of,
improvements on, construction on, or access to any of the Properties of the
Operating Partnership, its Subsidiaries or Related Entities; and (ix) the
Transfer Deed Certificate (as defined in Section 5(f) of this Underwriting
Agreement) will be true and correct in all material respects.
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(n) Title insurance in favor of the mortgagee, the Transaction
Entities, their Subsidiaries and Related Entities is maintained with
respect to each of the Properties owned by the Transaction Entities, their
Subsidiaries and Related Entities, as shown in the Prospectus, in an amount
at least equal to the greater of (i) the cost of acquisition of such
property and (ii) the cost of construction by the Transaction Entities,
their Subsidiaries or Related Entities of the improvements located on such
property (measured at the time of such construction), except, in each case,
where the failure to maintain such title insurance would not have a
material adverse effect on the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Transaction
Entities, their Subsidiaries and Related Entities taken as a whole.
(o) The mortgages and deeds of trust encumbering the Properties and
assets described in the Prospectus are not convertible, nor do the
Operating Partnership or its Subsidiaries hold a participating interest
therein.
(p) Except as set forth in the Prospectus, none of the Transaction
Entities has any knowledge of (i) the unlawful presence of any hazardous
substances, hazardous materials, toxic substances or waste materials
(collectively, "Hazardous Materials") on any of the properties owned by
each of them, or (ii) any unlawful spills, releases, discharges or disposal
of Hazardous Materials that have occurred or are presently occurring off
such properties as a result of any construction on or operation and use of
such properties, which presence or occurrence would have a material adverse
effect on the condition, financial or otherwise, or the earnings, business
affairs or business prospects of the Transaction Entities taken as whole.
In connection with the construction on or operation and use of the
properties owned by the Transaction Entities, each of the Transaction
Entities represents that, as of the date of this Underwriting Agreement, it
has no knowledge of any failure to comply with all applicable local, state
and federal environmental laws, regulations, ordinances and administrative
and judicial orders relating to the generation, recycling, sale, storage,
handling, transport and disposal of any Hazardous Materials, which failure
would have a material adverse effect on the condition, financial or
otherwise, or the earnings, business affairs or business prospects of the
Transaction Entities taken as a whole.
(q) Property and casualty insurance in favor of each of the
Transaction Entities and each of their Subsidiaries is maintained with
respect to each of the properties owned by each of them in an amount and on
such items as is reasonable and customary for businesses of this type.
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(r) Each Transaction Entity has filed all federal, state and foreign
income tax returns which have been required to be filed and has paid all
taxes indicated by said returns and all assessments received by it to the
extent that such taxes have become due.
(s) The Operating Partnership is classified as a partnership (and is
not taxed as a corporation) for federal income tax purposes.
(t) Each approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or other
governmental body necessary in connection with the execution and delivery
by the Transaction Entities of this Underwriting Agreement and the
consummation of the transactions herein contemplated (except such
additional steps as may be required by the National Association of
Securities Dealers, Inc., or as may be necessary under state securities
laws) has been obtained or made and is in full force and effect.
(u) Each Transaction Entity holds all material licenses, certificates
and permits from governmental authorities which are necessary to the
conduct of its business; and neither of the Transaction Entities have
infringed any patents, patent rights, trade names, trademarks or
copyrights, which infringement is material to the business of the Operating
Partnership as a whole.
(v) For all applicable tax years as to which the Company's tax returns
are subject to audit and the Company is subject to assessment for taxes
reportable therein, the Company has continuously been organized and
operating in conformity with the requirements for qualification as a real
estate investment trust under the Code. The Company's method of operation
will permit it to continue to meet the requirements for taxation as a real
estate investment trust under the Code. The Company has no intention of
changing its operations or engaging in activities which would adversely
affect its ability to qualify, or make economically undesirable its
continued qualification as, a real estate investment trust.
(w) Neither Transaction Entity or any of its subsidiaries, is an
"investment company" within the meaning of the Investment Operating
Partnership Act of 1940, as amended.
(x) Each of the partnership and joint venture agreements to which
either of the Transaction Entities is a party, and which relates to real
property described in the Prospectus, has been duly authorized, executed
and delivered by such applicable party and constitutes the valid agreement
thereof, enforceable in accordance with its terms, subject to the
Enforceability Limitations, and the
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executing, delivery and performance of any of such agreements did not and
will not, at the time of execution and delivery, and does not and will not
constitute a breach of, or a default under, the charter, partnership
agreement or bylaws of either of the Transaction Entities or any material
contract, lease or other instrument to which the Transaction Entities or
any of their Subsidiaries is a party or to which any of their property may
be bound or any law, administrative regulation or administrative or court
decree.
3. PURCHASE, SALE AND DELIVERY OF SECURITIES. On the basis of the
representations, warranties and agreements contained herein, but subject to the
terms and conditions set forth herein, the Operating Partnership agrees to issue
and sell the Securities to the several Underwriters, and each of the
Underwriters, severally and not jointly, agrees to purchase from the Operating
Partnership the respective principal amount of Securities set forth on SCHEDULE
C hereto at the purchase price set forth on SCHEDULE A hereto plus accrued
interest, if any, from the date specified on SCHEDULE A hereto to the date of
payment and delivery.
The Operating Partnership understands that the Underwriters intend (i) to
make a public offering of the Securities and (ii) initially to offer the
Securities upon the terms set forth in the Prospectus.
Payment for the Securities shall be made to the Operating Partnership or to
its order in immediately available funds in the amount, on the date and at the
time and place set forth on SCHEDULE A hereto (or at such other time and place
on the same or such other date, not later than the third Business Day
thereafter, as you and the Operating Partnership may agree in writing). Such
payment will be made upon delivery to you of the Securities registered in such
names and in such denominations as you shall request not less than two full
Business Days prior to the date of delivery, with transfer taxes, if any,
payable in connection with transfer to the Underwriters duly paid by the
Operating Partnership. As used herein, the term "Business Day" means any day
other than a day on which banks are permitted or required to be closed in New
York City. The time and date of such payment and delivery with respect to the
Securities are referred to herein as the "Closing Date." The Securities will be
delivered through the book entry facilities of The Depository Trust Company
("DTC") and will be made available for inspection by you by 1:00 P.M. New York
City time on the Business Day prior to the Closing Date at such place in New
York City as you, DTC and the Operating Partnership shall agree.
4. COVENANTS. Each of the Transaction Entities jointly and severally
covenants and agrees to:
(a) Cause the Prospectus to be filed pursuant to Rule 424(b) of the
1933 Act Rules and Regulations on or before the second business day after
the date hereof (or such earlier time as may be required by the 1933 Act
Rules and Regulations) (but only if you or your counsel have not reasonably
objected thereto by notice to the
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Transaction Entities 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 Securities is required to be
delivered under the 1933 Act, the Transaction Entities will (i) notify you
promptly of the time when any subsequent amendment to the Registration
Statement has become effective or any supplement to the Prospectus has been
filed and of any request by the Commission for any amendment or supplement
to the Registration Statement or Prospectus or for additional information,
(ii) prepare and file with the Commission, promptly upon your request, any
amendments or supplements to the Registration Statement or Prospectus that,
in your opinion, may be necessary or advisable in connection with your
distribution of the Securities, and (iii) file no amendment or supplement
to the Registration Statement or Prospectus (other than any document
required to be filed under the Exchange Act that upon filing is deemed to
be incorporated by reference therein) to which you or your counsel shall
reasonably object by notice to the Transaction Entities after having been
furnished a copy a reasonable time prior to the filing.
(b) Advise you, promptly after either one of them 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 Securities 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) Comply with all requirements imposed upon them by the 1933 Act,
the 1933 Act Rules and Regulations, the Exchange Act, the Exchange Act
Rules and Regulations and the TIA as from time to time in force, so far as
necessary to permit the continuance of sales of, or dealings in, the
Securities as contemplated by the provisions hereof and the Prospectus. If
during such period 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 omit 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
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1933 Act, the Transaction Entities will promptly notify you and will amend
or supplement the Registration Statement or Prospectus (at the expense of
the Transaction Entities) so as to correct such statement or omission or
effect such compliance.
(d) Furnish to you copies of the Registration Statement, the
Prospectus (including all documents incorporated by reference therein) and
all amendments and supplements to the Registration Statement and Prospectus
that are filed with the Commission during the period in which a prospectus
relating to the Securities is required to be delivered under the 1933 Act
(including all documents filed with the Commission during such period that
are deemed to be incorporated by reference therein), in each case as soon
as available and in such quantities as you may from time to time reasonably
request.
(e) Furnish you with copies of filings of the Transaction Entities
under the 1933 Act and Exchange Act and with all other financial statements
and reports it distributes generally to the holders of any class of its
capital stock during the period of five years commencing on the date upon
which the Prospectus Supplement is filed pursuant to Rule 424(b) of the
1933 Act Rules and Regulations.
(f) Make generally available to its security holders as soon as
practicable and in the manner contemplated by Rule 158 of the 1933 Act
Rules and Regulations, but in any event not later than 15 months after the
end of the Transaction Entity's current fiscal quarter, an earning
statement (which need not be audited) covering a 12-month period beginning
after the date upon which the Prospectus is filed pursuant to Rule 424(b)
of the 1933 Act Rules and Regulations that shall satisfy the provisions of
Section 11(a) of the 1933 Act and Rule 158 of the 1933 Act Rules and
Regulations and will advise you in writing when such statement has been
made available.
(g) Pay, or reimburse if paid by you, whether or not the transactions
contemplated by this Underwriting Agreement are consummated or this
Underwriting Agreement is terminated, all costs and expenses incident to
the performance of the obligations of the Transaction Entities under this
Underwriting Agreement, including but not limited to costs and expenses of
or relating to (i) the preparation, printing and filing of the Registration
Statement and exhibits thereto, the Prospectus and any amendment or
supplement to the Registration Statement or the Prospectus, (ii) the word
processing and reproduction of the Indenture and the Securities, (iii) the
costs incurred by the Transaction Entities in furnishing (including costs
of shipping, mailing and courier) such copies of the Registration
Statement, the Prospectus and all amendments and supplements thereto, as
may be requested for use in connection with the offering and sale of the
Securities by you or by dealers to whom Securities may be sold, (iv) any
registration or qualification of the Securities for offer and sale under
the securities or blue sky laws of such jurisdictions
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designated by you, including the reasonable fees, disbursements and other
charges of your counsel in connection therewith, and the preparation of a
blue sky memoranda, (iv) the fees charged by ▇▇▇▇▇'▇ Investors Service,
Inc. ("Moody's") and Standard & Poor's Rating Services ("S&P" and, together
with Moody's, the "Rating Agencies") for the rating of the Securities at
the request of the Operating Partnership, (v) counsel to the Transaction
Entities, (vi) the transfer agent for the Securities, (vii) the costs and
expenses of the Trustee under the Indenture and (viii) KPMG Peat Marwick
LLP ("KPMG") or any other accountants engaged by the Transaction Entities
in connection with the offering of the Securities.
(h) Not take, at any time, directly or indirectly, other than in
connection with this Underwriting Agreement, any action designed to
stabilize, 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 of, the price of the Securities.
(i) Take all reasonable action necessary to enable the Rating Agencies
to provide their respective credit ratings of the Securities.
(j) Execute and deliver the Senior Indenture and the Supplemental
Indenture designating the Securities, as the debt securities to be offered,
and their terms and provisions in accordance with the provisions of the
Senior Indenture.
(k) Apply the net proceeds to the Operating Partnership from the sale
of the Securities by the Operating Partnership as set forth under the
caption "Use of Proceeds" in the Prospectus.
(l) The Company will use its best efforts to meet the requirements to
qualify as a "real estate investment trust" under the Code for the taxable
year in which sales of the Securities are to occur, unless otherwise
specified in the Prospectus.
5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS AT THE CLOSING. The
Underwriters' obligation to purchase and pay for the Securities at the Closing
as provided herein shall be subject to the accuracy of the representations and
warranties of the Transaction Entities herein and to the performance by each
Transaction Entity of its obligations hereunder and to the following additional
conditions:
(a) You shall have received the opinion of ▇▇▇▇▇▇▇, Procter & ▇▇▇▇
LLP, counsel for the Operating Partnership, dated the Closing Date, to the
effect that:
(i) Each of the Transaction Entities and each of their
Subsidiaries has been duly incorporated or formed,
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as the case may be, and is validly existing as a corporation or
general or limited partnership, as the case may be, and in good
standing under the laws of its jurisdiction of incorporation or
formation, as the case may be, has full power and authority to conduct
its business as described in the Registration Statement and
Prospectus, and is duly qualified to do business in each jurisdiction
in which it owns or leases real property or in which the conduct of
its business requires such qualification, except where the failure to
be so qualified, considering all such cases in the aggregate, does not
involve a material risk to the business, properties, financial
position or results of operations of the Transaction Entities taken as
a whole;
(ii) All of the partnership units of the Operating Partnership
(as disclosed in the Prospectus) owned by the Company are owned by the
Company free and clear of all liens, charges and encumbrances;
(iii) The Operating Partnership has the authorized, issued and
outstanding debt, and partnership units as set forth under the caption
"Capitalization" in the Prospectus and in its Quarterly Report on Form
10-Q for the quarter ended September 30, 1997; and all of the
outstanding partnership units of the Operating Partnership are fully
paid and nonassessable and, to the knowledge of such counsel, none of
them was issued in violation of any preemptive or other similar right.
The issuance of the Securities has been duly authorized by the
Operating Partnership and, when duly authenticated and delivered by
the Trustee in accordance with the terms of the Indenture (assuming
the due authorization, execution and delivery of the Indenture by the
Trustee), and delivered to, and paid for by, the Underwriters pursuant
to this Underwriting Agreement, such Securities will constitute valid
and legally binding obligations of the Operating Partnership entitled
to the benefits provided for in the Indenture and will be enforceable
against the Operating Partnership in accordance with their terms,
subject to the Enforceability Limitations. To the knowledge of such
counsel, no holder of any security of the Operating Partnership has
the right to have any security owned by such holder included for
registration in the Registration Statement or to demand registration
of any security owned by such holder during the 180 days after the
date of this Underwriting Agreement;
(iv) The Registration Statement has become effective under the
1933 Act, the Indenture has been qualified under the TIA, the
Prospectus has been filed as required by Section 4(a) hereof and, to
the best knowledge of such counsel, after due inquiry, no stop order
suspending the effectiveness of the Registration Statement has been
issued and no proceeding
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for that purpose has been instituted or threatened by the Commission;
(v) Each part of the Registration Statement, when such part
became effective, and the Prospectus and any amendment or supplement
thereto, on the date of filing thereof with the Commission and at the
Closing Date, complied as to form in all material respects with the
requirements of the 1933 Act and the 1933 Act Rules and Regulations;
and the documents incorporated by reference in the Registration
Statement or Prospectus or any amendment or supplement thereto, when
they became effective under the 1933 Act or were filed with the
Commission under the Exchange Act, as the case may be, complied as to
form in all material respects with the requirements of the 1933 Act or
the Exchange Act, as applicable, and the 1933 Act or Exchange Act
Rules and Regulations, as applicable; it being understood that such
counsel need express no opinion as to the financial statements or
other financial data included in any other documents mentioned in this
clause;
(vi) The descriptions in the Registration Statement and
Prospectus of statutes, legal and governmental proceedings, contracts
and other documents are accurate and fairly present the information
required to be shown; and such counsel does not know of any statutes
or legal or governmental proceedings required to be described in the
Prospectus that are not described as required, or of any contracts or
documents of a character required to be described in the Registration
Statement or Prospectus (or required to be filed under the Exchange
Act if upon such filing they would be incorporated by reference
therein) or to be filed as exhibits to the Registration Statement that
are not described and filed as required;
(vii) This Underwriting Agreement has been duly authorized,
executed and delivered by each of the Company and the Operating
Partnership; the execution, delivery and performance of this
Underwriting Agreement and the consummation of the transactions
contemplated herein will not result in a breach or violation of any of
the terms and provisions of, or constitute a default under, the
charter, bylaws or partnership agreement, as the case may be, of
either of the Company or the Operating Partnership, or any statute
known to such counsel applicable to the Company or the Operating
Partnership; and, to the knowledge of such counsel, no consent,
approval, authorization or order of, or filing with, any court or
governmental agency or body is required for the consummation of the
transactions contemplated by this Underwriting Agreement in connection
with the issuance or sale of the Securities by the Operating
Partnership, except such as have been obtained under the 1933 Act
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and such as may be required under state securities laws in connection
with the purchase and distribution of the Securities by the
Underwriters;
(viii) The Indenture has been duly and validly authorized,
executed and delivered by the Operating Partnership and assuming due
authorization, execution and delivery thereof by the Trustee, will
constitute a valid and legally binding agreement of the Operating
Partnership, enforceable against the Operating Partnership in
accordance with its terms, subject to the Enforceability Limitations;
the execution, delivery and performance of the Indenture and the
consummation of the transactions contemplated therein will not result
in a breach or violation of any of the terms and provisions of, or
constitute a default under, the partnership agreement of the Operating
Partnership or any statute applicable to the Operating Partnership and
known to such counsel; and the Indenture has been duly qualified under
the TIA;
(ix) The Indenture and the Securities conform in all material
respects to the descriptions thereof in the Registration Statement and
the Prospectus under the captions "Description of Debt Securities" and
"Description of Notes;"
(x) For all applicable tax years as to which the Company's tax
returns are subject to audit and the Company is subject to assessment
for taxes reportable therein, the Company has continuously been
organized and operated in conformity with the requirements for
qualification as a "real estate investment trust" under the Code;
(xi) None of the Transaction Entities or their subsidiaries is an
"investment company" within the meaning of the Investment Company Act
of 1940, as amended;
(xii) The Operating Partnership is classified as a partnership
(and is not taxed as a corporation) for federal income tax purposes;
and
(xiii) The Operating Partnership satisfies all conditions and
requirements for the use of a Registration Statement on Form S-3 under
the 1933 Act and the 1933 Act Rules and Regulations.
Such counsel shall also include a statement in such opinion to the effect that:
(i) Such counsel has reviewed the Registration Statement and the
Prospectus and participated in
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conferences with officers and other representatives of the Transaction
Entities at which contents of the Registration Statement and related
matters were discussed and based on such review and participation,
such counsel has no reason to believe that either any part of the
Registration Statement, when such part became effective, contained an
untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus and any amendment or
supplement thereto, on the date of filing thereof with the Commission
and at the Closing Date, included an untrue statement of a material
fact or omitted to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; and
(ii) To the best of such counsel's knowledge
and without such counsel having made any investigation of any
governmental records or court dockets or taken any other similar
action, 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, or to such counsel's knowledge,
threatened against, or involving the assets, properties or
businesses of, either or the Transaction Entities or any of their
Subsidiaries, involving the Transaction Entities' or any of their
Subsidiaries' officers or directors or to which any of the
Transaction Entities' or any of their Subsidiaries' properties or
other assets is subject which would have a material adverse
effect upon the assets or properties, business, results of
operations, prospects or condition (financial or otherwise) of
the Transaction Entities and their Subsidiaries taken as a whole.
(b) You shall have received from ▇▇▇▇▇▇ & ▇▇▇▇▇, your counsel, such
opinion or opinions, dated the Closing Date, with respect to the
organization of each of the Transaction Entities, the validity of the
Securities, the Registration Statement, the Prospectus and other related
matters as you reasonably may request, and such counsel shall have received
such papers and information as they request to enable them to pass upon
such matters.
(c) At the time of execution of this Underwriting Agreement and at the
Closing Date, you shall have received a letter from KPMG, dated at the date
of delivery thereof, to the effect set forth in EXHIBIT I hereto.
(d) You shall have received from the Transaction Entities a
certificate, signed by the president or a vice president and by the
principal financial or accounting officer of the Company, dated the Closing
Date, to the effect that, to the best of their knowledge based upon
reasonable investigation:
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(i) The representations and warranties of the Transaction
Entities in this Underwriting Agreement are true and correct, as if
made at and as of the Closing Date, and the Transaction Entities have
complied with all the agreements and satisfied all the conditions on
its part to be performed or satisfied at or prior to the Closing Date;
(ii) No stop order suspending the effective- ness of the
Registration Statement has been issued, and no proceeding for that
purpose has been instituted or is threatened, by the Commission; and
(iii) 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 so set forth, and there has been no document required to be filed
under the Exchange Act and the Exchange Act Rules and Regulations that
upon such filing would be deemed to be incorporated by reference in
the Prospectus that has not been so filed.
(e) (i) None of the Transaction Entities or their Subsidiaries or any
Property shall have sustained since the date of the latest financial
statements included in the Prospectus any loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in the
Prospectus or (ii) since such date there shall not have been any change in
the capital stock or long-term debt of either Transaction Entity or any
change, or any development involving a prospective change, in or affecting
any Property or the general affairs, management, financial position,
stockholders' or partners' equity, as applicable, or results of operations
of either Transaction Entity, otherwise than as set forth or contemplated
in the Prospectus, the effect of which, in any such case described in
clause (i) or (ii), is, in the reasonable judgment of the Underwriters, so
material and adverse as to make it impracticable or inadvisable to proceed
with the public offering or the delivery of the Securities being delivered
on the Closing Date on the terms and in the manner contemplated in the
Prospectus.
(f) You shall have received from the Transaction Entities a
certificate (the "Transfer Deed Certificate"), signed by the president and
chief executive officer of the Company, dated the Closing Date, including,
as exhibits thereto, both (i) a true, accurate and complete list of
recording information (the "Recording Information List") for the Transfer
Deeds and (ii) true, accurate and complete copies of the Transfer Deeds,
and certifying that the Operating Partnership has not sold any of the
Transferred Properties
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and that, except as noted on the Recording Information List, the Operating
Partnership is the current owner of the Transferred Properties.
(g) 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 you and your counsel. The Operating Partnership
will furnish you with such conformed copies of such opinions, certificates,
letters and other documents as you shall reasonably request and the
Operating Partnership shall furnish to you such further certificates and
documents as you shall have reasonably requested.
6. INDEMNIFICATION AND CONTRIBUTION.
(a) The Transaction Entities jointly and severally will indemnify and
hold harmless each Underwriter and its directors, officers, employees and
agents and each person, if any, who controls each Underwriter within the
meaning of Section 15 of the 1933 Act or Section 20 of the Exchange Act
from and against any and all losses, claims, liabilities, expenses and
damages (including, but not limited to, any and all investigative, legal
and other expenses reasonably incurred in connection with, and any and all
amounts paid in settlement of, any action, suit or proceeding between any
of the indemnified parties and any indemnifying parties or between any
indemnified party and any third party, or otherwise, or any claim
asserted), as and when incurred, to which an Underwriter, or any such
person, may become subject under the 1933 Act, the Exchange Act or other
federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, liabilities, expenses or damages arise out
of or are based on (i) any untrue statement or alleged untrue statement of
a material fact contained in any preliminary prospectus, the Registration
Statement or the Prospectus or any amendment or supplement to the
Registration Statement or the Prospectus or in any documents filed under
the Exchange Act and deemed to be incorporated by reference into the
Prospectus, or in any application or other document executed by or on
behalf of either Transaction Entity or based on written information
furnished by or on behalf of either Transaction Entity filed in any
jurisdiction in order to qualify the Securities under the securities laws
thereof or filed with the Commission, (ii) the omission or alleged omission
to state in
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such document a material fact required to be stated in it or necessary to
make the statements in it not misleading or (iii) any act or failure to act
or any alleged act or failure to act by an Underwriter in connection with,
or relating in any manner to, the Securities or the offering contemplated
hereby, and which is included as part of or referred to in any loss, claim,
liability, expense or damage arising out of or based upon matters covered
by clause (i) or (ii) above (provided that the Transaction Entities shall
not be liable under this clause (iii) to the extent it is finally
judicially determined by a court of competent jurisdiction that such loss,
claim, liability, expense or damage resulted directly from any such acts or
failures to act undertaken or omitted to be taken by an Underwriter through
gross negligence or willful misconduct); provided that the Transaction
Entities will not be liable to the extent that such loss, claim, liability,
expense or damage arises from the sale of the Securities to any person by
an Underwriter and is based on an untrue statement or omission or alleged
untrue statement or omission made in reliance on and in conformity with
information relating to an Underwriter furnished in writing to the
Transaction Entities by an Underwriter expressly for inclusion in the
Registration Statement, any preliminary prospectus or the Prospectus.
(b) The Underwriters will indemnify and hold harmless each Transaction
Entity and each person, if any, who controls each Transaction Entity within
the meaning of Section 15 of the 1933 Act or Section 20 of the Exchange
Act, each partner of the Transaction Entities and each officer or director
of the Transaction Entities who signs the Registration Statement to the
same extent as the foregoing indemnity from the Transaction Entities to the
Underwriters, but only insofar as losses, claims, liabilities, expenses or
damages arise out of or are based on any untrue statement or omission or
alleged untrue statement or omission made in reliance on and in conformity
with information relating to an Underwriter furnished in writing to the
Transaction Entities by such Underwriter expressly for use in the
Registration Statement or the Prospectus. This indemnity will be in
addition to any liability that the Underwriters might otherwise have;
PROVIDED, HOWEVER, that in no case shall the Underwriters be liable or
responsible for any amount in excess of the underwriting discounts and
commissions received by the Underwriters.
(c) Any party that proposes to assert the right to be indemnified
under this Section 6 will, promptly after receipt of notice of commencement
of any action against such party in respect of which a claim is to be made
against an indemnifying party or parties under this Section 6, notify each
such indemnifying party of the commencement of such action, enclosing a
copy of all papers served, but the omission so to notify such indemnifying
party will not relieve it from any liability that it may have to any
indemnified party under the foregoing provisions of this Section 6 unless,
and only to the extent that, such omission results in the forfeiture of
substantive rights or defenses by the indemnifying party. If any such
action is brought against any indemnified party and it notifies the
indemnifying party of its commencement, the indemnifying party will be
entitled to participate in and, to the extent that it elects by delivering
written notice to the indemnified party promptly after receiving notice of
the commencement of the action from the indemnified party, jointly with any
other indemnifying party similarly notified, to assume the defense of the
action, with counsel satisfactory to the indemnified party, and
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after notice from the indemnifying party to the indemnified party of its
election to assume the defense, the indemnifying party will not be liable
to the indemnified party for any legal or other expenses except as provided
below and except for the reasonable costs of investigation subsequently
incurred by the indemnified party in connection with the defense. The
indemnified party will have the right to employ its own counsel in any such
action, but the fees, expenses and other charges of such counsel will be at
the expense of such indemnified party unless (i) the employment of counsel
by the indemnified party has been authorized in writing by the indemnifying
party, (ii) the indemnified party has reasonably concluded (based on advice
of counsel) that there may be legal defenses available to it or other
indemnified parties that are different from or in addition to those
available to the indemnifying party, (iii) a conflict or potential conflict
exists (based on advice of counsel to the indemnified party) between the
indemnified party and the indemnifying party (in which case the
indemnifying party will not have the right to direct the defense of such
action on behalf of the indemnified party) or (iv) the indemnifying party
has not in fact employed counsel to assume the defense of such action
within a reasonable time after receiving notice of the commencement of the
action, in each of which cases the reasonable fees, disbursements and other
charges of counsel will be at the expense of the indemnifying party or
parties. It is understood that the indemnifying party or parties shall not,
in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees, disbursements and other
charges of more than one separate firm admitted to practice in such
jurisdiction at any time for all such indemnified party or parties. All
such fees, disbursements and other charges will be reimbursed by the
indemnifying party promptly as they are incurred. An indemnifying party
will not be liable for any settlement of any action or claim effected
without its written consent (which consent will not be unreasonably
withheld). No indemnifying party shall, without the prior written consent
of each indemnified party, settle or compromise or consent to the entry of
any judgment in any pending or threatened claim, action or proceeding
relating to the matters contemplated by this Section 6 (whether or not any
indemnified party is a party thereto), unless such settlement, compromise
or consent includes a unconditional release of each indemnified party from
all liability arising or that may arise out of such claim, action or
proceeding. Notwithstanding any other provision of this Section 6(c), if at
any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement
effected without its written consent if (i) such settlement is entered into
more than 45 days after receipt by such indemnifying party of the aforesaid
request, (ii) such
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indemnifying party shall have received notice of the terms of such
settlement at least 30 days prior to such settlement being entered into and
(iii) such indemnifying party shall not have reimbursed such indemnified
party in accordance with such request prior to the date of such settlement.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the foregoing
paragraphs of this Section 6 is applicable in accordance with its terms but
for any reason is held to be unavailable from the Transaction Entities or
the Underwriters, the Transaction Entities and the Underwriters will
contribute to the total losses, claims, liabilities, expenses and damages
(including any investigative, legal and other expenses reasonably incurred
in connection with, and any amount paid in settlement of, any action, suit
or proceeding or any claim asserted, but after deducting any contribution
received by the Transaction Entities from persons other than the
Underwriters, such as persons who control the Transaction Entities within
the meaning of the 1933 Act and officers of the Transaction Entities who
signed the Registration Statement, who also may be liable for contribution)
to which the Transaction Entities and the Underwriters may be subject in
such proportion as shall be appropriate to reflect the relative benefits
received by the Transaction Entities on the one hand and the Underwriters
on the other. The relative benefits received by the Transaction Entities on
the one hand and the Underwriters on the other shall be deemed to be in the
same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Transaction Entities bear to the total
underwriting discounts and commissions received by the Underwriters, in
each case as set forth in the table on the cover page of the Prospectus
Supplement. If, but only if, the allocation provided by the foregoing
sentence is not permitted by applicable law, the allocation of contribution
shall be made in such proportion as is appropriate to reflect not only the
relative benefits referred to in the foregoing sentence but also the
relative fault of the Transaction Entities, on the one hand, and the
Underwriters, on the other, with respect to the statements or omissions
which resulted in such loss, claim, liability, expense or damage, or action
in respect thereof, as well as any other relevant equitable considerations
with respect to such offering. Such relative fault shall be determined by
reference to whether the untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to
information supplied by the Transaction Entities or the Underwriters, the
intent of the parties and their relative knowledge, access to information
and opportunity to correct or prevent such statement or omission. The
amount paid or payable by an indemnified party as a result of the loss,
claim, liability, expense or damage, or action in respect thereof, referred
to above in this Section 6(d) shall be deemed to include, for purpose of
this Section 6(d), any legal or
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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 6(d), the Underwriters shall not be required
to contribute any amount in excess of the underwriting discounts,
commissions and other compensation received by the Underwriters and no
person found guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the ▇▇▇▇ ▇▇▇) will be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For
purposes of this Section 6(d), any person who controls a party to this
Underwriting Agreement within the meaning of the 1933 Act will have the
same rights to contribution as that party, and each officer of the
Transaction Entities who signed the Registration Statement will have the
same rights to contribution as the Transaction Entities, subject in each
case to the provisions hereof. Any party entitled to contribution, promptly
after receipt of notice of commencement of any action against such party in
respect of which a claim for contribution may be made under this Section
6(d), will notify any such party or parties from whom contribution may be
sought but the omission so to notify will not relieve the party or parties
from whom contribution may be sought from any other obligation it or they
may have under this Section 6(d). Except for a settlement entered into
pursuant to the last sentence of Section 6(c) hereof, no party will be
liable for contribution with respect to any action or claim settled without
its written consent (which consent will not be unreasonably withheld).
(e) The indemnity and contribution agreements contained in this
Section 6 and the representations and warranties of the Transaction
Entities contained in this Underwriting Agreement shall remain operative
and in full force and effect regardless of (i) any investigation made by
the Underwriters or on their behalf, (ii) acceptance of the Securities and
payment therefore or (iii) any termination of this Underwriting Agreement.
7. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All representations,
warranties and agreements of the Transaction Entities contained herein or in
certificates delivered pursuant hereto, and the Underwriters' agreements
contained in Section 6 hereof, shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of the Underwriters
or any controlling persons, or the Transaction Entities or any of its officers
or any controlling persons, and shall survive delivery of and payment for the
Securities hereunder.
8. DEFAULT BY ONE OR MORE OF THE UNDERWRITERS. If, on the Closing Date, any
Underwriter defaults in the performance of its obligations under this
Underwriting Agreement, the remaining non-defaulting Underwriters shall be
obligated to purchase the Securities that the defaulting Underwriter agreed but
failed to purchase on the Closing Date in the respective proportions which the
principal amount of Securities set
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forth opposite the name of each remaining non-defaulting Underwriter in SCHEDULE
A hereto bears to the total aggregate principal amount of Securities set forth
opposite the names of all the remaining non-defaulting Underwriters in SCHEDULE
A hereto; PROVIDED, HOWEVER, that the remaining non-defaulting Underwriters
shall not be obligated to purchase any of the Securities on the Closing Date if
the total aggregate principal amount of Securities which the defaulting
Underwriter or Underwriters agreed but failed to purchase on such date exceeds
9.09% of the total aggregate principal amount of Securities to be purchased on
the Closing Date, and any remaining non-defaulting Underwriter shall not be
obligated to purchase more than 110% of the aggregate principal amount of
Securities which it agreed to purchase on the Closing Date pursuant to the terms
of Section 3 without the written consent of such Underwriter. If the foregoing
maximums are exceeded, the remaining non-defaulting Underwriters, or those other
underwriters satisfactory to the Underwriters who so agree, shall have the
right, but shall not be obligated, to purchase, in such proportion as may be
agreed upon among them, all the Securities to be purchased on the Closing Date.
If the remaining Underwriters or other underwriters satisfactory to the
Underwriters do not elect to purchase the Securities which the defaulting
Underwriter or Underwriters agreed but failed to purchase on the Closing Date,
this Underwriting Agreement shall terminate without liability on the part of any
non-defaulting Underwriter or the Transaction Entities, except that the
Transaction Entities will continue to be liable for the payment of expenses to
the extent set forth in Sections 4 and 6. As used in this Underwriting
Agreement, the term "Underwriter" includes, for all purposes of this
Underwriting Agreement unless the context requires otherwise, any party not
listed in SCHEDULE A hereto who, pursuant to this Section 9, purchases
Securities which a defaulting Underwriter agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Transaction Entities for damages caused by its
default. If other underwriters are obligated or agree to purchase the Securities
of a defaulting or withdrawing Underwriter, either the Underwriters or the
Company may postpone the Delivery Date for up to seven full business days in
order to effect any changes that in the opinion of counsel for the Operating
Partnership or counsel for the Underwriters may be necessary in the Registration
Statement, the Prospectus or in any other document or arrangement.
9. TERMINATION. You shall have the right by giving notice as hereinafter
specified at any time at or prior to the Closing Date, to terminate this
Underwriting Agreement if (i) either of the Transaction Entities shall have
failed, refused or been unable, at or prior to the Closing Date, to perform any
agreement on its part to be performed hereunder, (ii) any other condition of
your obligations hereunder is not fulfilled when due, (iii) the rating assigned
by any nationally recognized statistical rating organization ("Rating
Organization") to the Company, the Operating Partnership or the Securities of
either of them as of or
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subsequent to the date of this Agreement shall have been lowered since that date
or if such Rating Organization shall have publicly announced that it has under
surveillance or review for the purpose of considering lowering such rating, its
rating of the Company, the Operating Partnership or the Securities, (iv) trading
on the New York Stock Exchange shall have been wholly suspended, (v) a banking
moratorium shall have been declared by federal or New York authorities, or (vi)
an outbreak of major hostilities in which the United States is involved, a
declaration of war by Congress, any other substantial national or international
calamity or any other event or occurrence of a similar character shall have
occurred since the execution of this Underwriting Agreement that, in your
judgment, makes it impractical or inadvisable to proceed with the completion of
the sale of and payment for the Securities. Any such termination shall be
without liability of any party to any other party with respect to Securities not
purchased by reason of such termination except that the provisions of Sections
4(g), 6 and 10 hereof shall at all times be effective. If you elect to terminate
this Underwriting Agreement as provided in this Section 9, each of the
Transaction Entities shall be notified promptly by you by telephone, telex or
telecopy, confirmed by letter.
10. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the Operating Partnership
shall fail to tender the Securities for delivery to the Underwriters by reason
of any failure, refusal or inability on the part of the Transaction Entities to
perform any agreement on their part to be performed, or because any other
condition of the Underwriters' obligations hereunder required to be fulfilled by
the Transaction Entities is not fulfilled, the Transaction Entities will
reimburse the Underwriters for all reasonable out-of-pocket expenses (including
fees and disbursements of counsel) incurred by the Underwriters in connection
with this Underwriting Agreement and the proposed purchase of the Securities,
and upon demand the Transaction Entities shall pay the full amount thereof to
the Underwriters. If this Underwriting Agreement is terminated pursuant to
Section 9 by reason of the default of one or more Underwriters, the Transaction
Entities shall not be obligated to reimburse any defaulting Underwriter on
account of those expenses.
11. NOTICES. All notices or communications hereunder shall be in writing
and if sent to you shall be mailed, delivered, telexed or telecopied and
confirmed to you at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, c/o
Real Estate Investment Banking, attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (phone ▇▇▇-▇▇▇-▇▇▇▇;
fax ▇▇▇-▇▇▇-▇▇▇▇), (with a copy to ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq., c/o Rogers & ▇▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, phone ▇▇▇-▇▇▇-▇▇▇▇; fax
▇▇▇-▇▇▇-▇▇▇▇), or if sent to the Operating Partnership, shall be mailed,
delivered, telexed or telecopied and confirmed to ▇▇▇▇▇▇ ▇. D'Arcy, CEO, or
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., CFO, ▇▇▇▇▇▇▇ Real Estate, Inc., ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (phone ▇▇▇-▇▇▇-▇▇▇▇; fax ▇▇▇-▇▇▇-▇▇▇▇) (with
copy to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, P.C., ▇/▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇; phone ▇▇▇-▇▇▇-▇▇▇▇; fax ▇▇▇-▇▇▇-▇▇▇▇). Any party to this
Underwriting
25
26
Agreement may change such address for notices by sending to the other party to
this Underwriting Agreement written notice of a new address for such purpose.
12. PARTIES. This Underwriting Agreement shall inure to the benefit of, and
be binding upon, the Transaction Entities and the Underwriters and our
respective successors and the controlling persons and officers referred to in
Section 6(a) hereof, and no other person will have any right or obligation
hereunder.
13. APPLICABLE LAW. This Underwriting Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.
27
Very truly yours,
▇▇▇▇▇▇▇ REAL ESTATE, INC.
By: /s/ ▇▇▇▇▇▇ ▇. D'Arcy
-----------------------------------------------
Name: ▇▇▇▇▇▇ ▇. D'Arcy
Title: President and Chief Executive Officer
▇▇▇▇▇▇▇ OPERATING LIMITED PARTNERSHIP
By: ▇▇▇▇▇▇▇ REAL ESTATE, INC.,
its general partner
By: /s/ ▇▇▇▇▇▇ ▇. D'Arcy
-----------------------------------------------
Name: ▇▇▇▇▇▇ ▇. D'Arcy
Title: President and Chief Executive Officer
ACCEPTED as of the date first above
written
PAINEWEBBER INCORPORATED
BT ALEX. ▇▇▇▇▇ INCORPORATED
SALOMON BROTHERS INC
FIRST CHICAGO CAPITAL MARKETS, INC.
c/o PaineWebber Incorporated
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
By: PAINEWEBBER INCORPORATED
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
27
28
EXHIBIT I
FORM OF KPMG COMFORT LETTER
I-1
29
SCHEDULE A
PRINCIPAL AMOUNT
UNDERWRITERS OF 2004 NOTES
------------ ----------------
PaineWebber Incorporated $ 50,050,000
BT Alex. ▇▇▇▇▇ Incorporated 16,650,000
Salomon Brothers Inc 16,650,000
First Chicago Capital Markets, Inc. 16,650,000
------------
Total $100,000,000
------------
▇-▇
▇▇
▇▇▇▇▇▇▇▇ ▇
LIST OF SUBSIDIARIES OF THE
TRANSACTION ENTITIES
▇▇▇▇▇▇▇ Financing Corp.
▇▇▇▇▇▇▇ Financing Partnership
▇▇▇▇▇▇▇ Management Corp.
▇▇▇▇▇▇▇ Management Limited Partnership
▇▇▇▇▇▇▇▇▇▇ Square Associates Limited Partnership
▇▇▇▇▇▇▇ Midwest Management, Inc.
▇▇▇▇▇▇▇ Real Estate Management, Inc.
B-1
31
SCHEDULE C
Senior Notes Due 2004
---------------------
Principal Amount $100,000,000.00
Coupon: 7.00%
Settlement Date: November 24, 1997
Price to Public: 99.780% of par
Price to Public: $ 99,780,000.00
Underwriting Discount: 0.625% of par
Underwriting Discount: $ 625,000.00
Price to Underwriter: 99.155% of par
Proceeds to the Company $ 99,155,000.00
Maturity Date: November 15, 2004
C-1