EXHIBIT 1.1
▇▇▇▇▇▇▇ REAL ESTATE, INC.
▇▇▇▇▇▇▇ OPERATING LIMITED PARTNERSHIP
MEDIUM-TERM NOTES
DUE NINE MONTHS OR MORE FROM DATE OF ISSUE
DISTRIBUTION AGREEMENT
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September 28, 1998
PaineWebber Incorporated
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
BT Alex. ▇▇▇▇▇ Incorporated
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
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, First Chicago Capital Markets, Inc., NationsBanc ▇▇▇▇▇▇▇▇▇▇
Securities LLC and ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. (each, an "Agent" and collectively,
the "Agents"), with respect to the issue and sale from time to time by the
Operating Partnership of its Medium-Term Notes Due Nine Months or More From Date
of Issue (the "Notes").
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 NOTES. The Operating Partnership proposes to
issue the Notes under an Indenture, dated September 28, 1998 (the "Senior
Indenture"), as supplemented by Supplemental Indenture No. 1 thereto to be dated
September 28, 1998 (the "Supplemental Indenture" and together with the Senior
Indenture, the "Indenture") between the Operating Partnership and U.S. Bank
Trust National Association, as trustee (the "Trustee"). As of the date hereof,
the Operating Partnership has authorized the issuance and sale of up to U.S.
$150,000,000 aggregate initial offering price (or its equivalent, based upon the
applicable exchange rate at the time of issuance, in such foreign or composite
currencies as the Operating Partnership shall designate at the time of issuance)
of Notes to or through the Agents pursuant to the terms of this Distribution
Agreement, as such amount may be reduced by the aggregate initial offering price
of any other debt securities issued by the Operating Partnership, whether within
or without the United States, pursuant to the registration statement referred to
below. It is understood, however, that the Operating Partnership may from time
to time authorize the issuance of additional Notes and that such additional
Notes may be sold to or through the Agents or through or to other agents
pursuant to the terms of this Distribution Agreement, all as though the issuance
of such Notes were authorized as of the date hereof.
This Distribution Agreement provides both for the sale of Notes by the
Operating Partnership to one or more Agents as principal for resale to investors
and other purchasers and for the sale of Notes by the Operating Partnership
directly to investors (as may from time to time be agreed to by the Operating
Partnership and the applicable Agent), in which case the applicable Agent will
act as an agent of the Operating Partnership in soliciting offers for the
purchase of Notes.
The Operating Partnership has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (File No.
333-51675) for the registration of debt securities, including the Notes, under
the Securities Act of 1933, as amended (the "Securities Act"), and the offering
thereof from time to time in accordance with Rule 430A or Rule 415 of the rules
and regulations of the Commission thereunder (the "Securities Act Rules and
Regulations"). Such registration statement has been declared effective by the
Commission. Such registration statement (and any further registration
statements which may be filed by the Operating Partnership for the purpose of
registering additional Notes and in connection with which this Distribution
Agreement is included or incorporated by reference as an exhibit) and the
prospectus constituting a part thereof (including in each case the information,
if any, deemed to be part thereof pursuant to Rule 430A(b) of the Securities Act
Rules and Regulations), and any prospectus supplement and pricing supplement
relating to the Notes, including all documents incorporated therein by
reference, as from time to time amended or supplemented by the filing of
documents
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pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), or the Securities Act or otherwise, is referred to herein as the
"Registration Statement." A prospectus supplement (the "Prospectus Supplement")
setting forth the terms of the offer of the Notes contemplated by this
Distribution Agreement, and additional information concerning the Transaction
Entities has been or will be prepared and will be filed by the Operating
Partnership pursuant to Rule 424(b) of the Securities Act Rules and Regulations,
on or before the second business day after it is first used in connection with
the offer and sale of Notes under this Distribution Agreement (or such earlier
time as may be required by the Securities Act Rules and Regulations). The final
form of prospectus included in the Registration Statement, as supplemented by
the Prospectus Supplement (including any supplement to the Prospectus that sets
forth the purchase price, interest rate or formula, maturity date and other
terms of a particular issue of Notes and all documents incorporated therein by
reference (each, a "Pricing Supplement")), is referred to herein as the
"Prospectus," except that if any revised prospectus, whether or not such revised
prospectus is required to be filed by the Operating Partnership pursuant to Rule
424(b) of the Securities Act Rules and Regulations, shall be provided to the
Agents by the Operating Partnership for use in connection with the offer and
sale of any of the Notes under this Distribution Agreement, the term
"Prospectus" shall refer to such revised prospectus from and after the time such
documents are first provided to the Agents for such use. Any registration
statement (including any supplement thereto or information which is deemed part
thereof) filed by the Operating Partnership under Rule 462(b) of the Securities
Act Rules and Regulations (a "Rule 462(b) Registration Statement") shall be
deemed to be part of the Registration Statement. Any prospectus (including any
amendment or supplement thereto or information which is deemed part thereof)
included in the Rule 462(b) Registration Statement shall be deemed to be part of
the Prospectus.
2. APPOINTMENT AS AGENT.
(a) Appointment. Subject to the terms and conditions stated
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herein and subject to the reservation by the Operating Partnership of the
right to solicit, sell or accept offers for Notes directly on its own
behalf, the Operating Partnership hereby agrees that Notes will be sold
exclusively to or through the Agents except as otherwise described below.
The Operating Partnership may accept offers to purchase Notes through an
agent other than an Agent (and, in connection therewith, may respond to
inquiries and requests for information from any such agents), provided that
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(i) the Operating Partnership shall not have solicited such offers, (ii)
the Operating Partnership and such agent shall have executed an agreement
with respect to such purchases having terms and conditions (including,
without limitation, commission rates) with respect to such purchases
substantially
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the same as the terms and conditions that would apply to such purchases
under this Distribution Agreement if such agent were an Agent (which may be
accomplished by incorporating by reference in such agreement the terms and
conditions of this Distribution Agreement) and (iii) the Operating
Partnership shall provide the Agents with a copy of such agreement promptly
following the execution thereof.
(b) Sale of Notes. The Operating Partnership shall not sell or
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approve the solicitation of offers for the purchase of Notes in excess of
the amount which shall be authorized by the Operating Partnership from time
to time or in excess of the aggregate initial offering price of Notes
registered pursuant to the Registration Statement. The Agents shall have
no responsibility for maintaining records with respect to the aggregate
initial offering price of Notes sold, or of otherwise monitoring the
availability of Notes for sale, under the Registration Statement.
(c) Purchases as Principal. The Agents shall not have any
-----------------------
obligation to purchase Notes from the Operating Partnership as principal,
but one or more Agents may agree from time to time to purchase Notes as
principal for resale to investors and other purchasers determined by such
Agent or Agents. Any such purchase of Notes by an Agent or Agents as
principal shall be made in accordance with Section 4(a) hereof.
(d) Solicitations as Agent. If agreed upon by an Agent and the
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Operating Partnership, such Agent, acting solely as agent for the Operating
Partnership and not as principal, will solicit offers for the purchase of
Notes. Such Agent will communicate to the Operating Partnership, orally,
each offer to purchase Notes solicited by it on an agency basis, other than
those offers rejected by such Agent. Such Agent shall have the right, in
its discretion reasonably exercised, to reject any proposed purchase of
Notes, in whole or in part, and any such rejection shall not be deemed a
breach of its agreement contained herein. The Operating Partnership shall
have the right to withdraw, cancel or modify any offer hereunder without
notice and the sole right to accept offers to purchase the Notes and may
reject any such offer in whole or in part and any such rejection shall not
be deemed a breach of its agreements contained herein. Such Agent shall
make reasonable efforts to assist the Operating Partnership in obtaining
performance by each purchaser whose offer to purchase Notes has been
solicited by it and accepted by the Operating Partnership. Such Agent
shall not have any liability to the Operating Partnership in the event that
any such purchase is not consummated for any reason. If the Operating
Partnership shall default on its obligation to deliver Notes to a purchaser
whose offer it has accepted, the
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Operating Partnership shall (i) hold such Agent harmless against any loss,
claim or damage arising from or as a result of such default by the
Operating Partnership and (ii) notwithstanding such default, pay to such
Agent any commission to which it would otherwise be entitled.
(e) Reliance. The Operating Partnership and the Agents agree
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that any Notes purchased by one or more Agents as principal shall be
purchased, and any Notes the placement of which an Agent arranges as agent
shall be placed by such Agent, in reliance on the representations,
warranties, covenants and agreements of the Operating Partnership contained
herein and on the terms and conditions and in the manner provided herein.
3. REPRESENTATIONS AND WARRANTIES OF THE TRANSACTION ENTITIES. Each
of the Transaction Entities jointly and severally represents and warrants to the
Agents as of the date hereof, as of the date of each acceptance by the Operating
Partnership of an offer for the purchase of Notes (whether to an Agent as
principal or through an Agent as agent), as of the date of each delivery of
Notes (whether to an Agent as principal or through an Agent as agent) (the date
of each such delivery to an Agent as principal being hereafter referred to as a
"Settlement Date"), and as of any time that the Registration Statement or the
Prospectus shall be amended or supplemented as follows:
(a) The Operating Partnership has filed with the Commission a
registration statement on Form S-3 (File No. 333-51675) for the
registration of debt securities, including the Notes, under the Securities
Act, and the offering thereof from time to time in accordance with Rule
430A or Rule 415 of the Securities Act Rules and Regulations. Such
registration statement has been declared effective by the Commission. The
Prospectus Supplement setting forth the terms of the offer of the Notes
contemplated by this Distribution Agreement, and additional information
concerning the Transaction Entities has been or will be prepared and will
be filed by the Operating Partnership pursuant to Rule 424(b) of the
Securities Act Rules and Regulations, on or before the second business day
after it is first used in connection with the offer and sale of Notes under
this Distribution Agreement (or such earlier time as may be required by the
Securities Act Rules and Regulations).
(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 as of the date hereof, conformed
or will conform in all material respects with the requirements of the
Securities Act and the Securities Act
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Rules and Regulations; the Indenture, on the date of filing thereof with
the Commission and as of the date hereof 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 as of the date hereof 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 and (ii) statements in, or omissions from, any such document in
reliance upon, and in conformity with, information concerning the Agents
that was furnished to the Transaction Entities by the Agents specifically
for use in the preparation thereof.
(c) To the best of the Transaction Entities' knowledge, the
accountants who certified the financial statements and supporting schedules
included or incorporated by reference in the Registration Statement and
Prospectus are independent public accountants as required by the Securities
Act and the Securities Act Rules and Regulations.
(d) 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 Securities Act or were or are filed with the Commission
under 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 Act Rules and Regulations, the Exchange Act and the rules and
regulations of the Commission thereunder (the "Exchange Act Rules and
Regulations"), as applicable.
(e) 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 consistently
applied through the periods involved (except as
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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 Securities
Act or the Securities Act Rules and Regulations.
(f) The only subsidiaries (as defined in the Securities Act Rules
and Regulations) of the Transaction Entities are the subsidiaries listed on
Schedule II hereto (the "Subsidiaries"). Each of the Transaction Entities
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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").
(g) All of the partnership interests of the Operating Partnership
have been duly and validly authorized and issued and are fully paid and
approximately 94% of such partnership interests are owned of record and
beneficially by the Company free and clear of all perfected liens, charges
and encumbrances.
(h) The Notes are as of the date hereof duly authorized by the
Transaction Entities for issuance and sale pursuant to this Distribution
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 delivery of the Indenture by the Trustee),
against payment of the consideration therefor, will be valid and legally
binding
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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 execution, 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, of either of the 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 Notes
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
Notes and the Indenture will conform in all material respects to the
statements relating thereto contained in the Prospectus; and the Notes are,
in all material respects, in the form contemplated by the Indenture. Upon
payment of the purchase price and delivery of the Notes in accordance with
this Distribution Agreement, each of the purchasers thereof will receive
good, valid and marketable title to such Notes, free and clear of all
liens, charges and encumbrances.
(i) At the time of each Settlement Date, the Notes will be rated
at least Baa3 by ▇▇▇▇▇'▇ Investors Service, Inc. ("Moody's") and at least
BBB- by Standard & Poor's Ratings Service ("S&P" and, together with
Moody's, the "Rating Agencies"), or such other rating as to which the
Operating Partnership shall have most recently notified the Agents pursuant
to Section 5(b)(iv) hereof.
(j) 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
8
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.
(k) Except as set forth in the Prospectus, there is not pending
or, to the knowledge of the Transaction Entities, 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.
(l) 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 Securities Act or the Exchange Act or by the Securities Act Rules and
Regulations or the Exchange Act Rules and Regulations that have not been so
filed.
(m) This Distribution 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 Distribution 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 Distribution
Agreement and the Indenture in connection with the issuance or sale of the
Notes by the Operating Partnership, except such as may be required under
the
9
Securities Act, the TIA or state securities laws; and the Operating
Partnership has full power and authority to authorize, issue and sell the
Notes as contemplated by this Distribution Agreement and the Indenture,
free of any preemptive or similar rights.
(n) 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 of the Transaction Entities or any
of their properties are bound, the 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, is in default in any material respect thereunder;
and neither of the Transaction Entities is in violation of their
organizational documents.
(o) 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) 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 of
the Properties (as defined in the Prospectus), subject to the exceptions
noted in the general warranty deeds issued in connection with the transfer
of each property to the Operating Partnership; (ii) 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; (iii) 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;
(iv) 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; (v) 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
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Operating Partnership, its Subsidiaries or Related Entities; and (vi) 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.
(p) 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.
(q) 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.
(r) 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,
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 Distribution 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
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condition, financial or otherwise, or the earnings, business affairs or
business prospects of the Transaction Entities taken as a whole.
(s) 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.
(t) 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 material assessments
received by it to the extent that such taxes have become due, other than
taxes and assessments which are being contested in good faith or for which
adequate reserves have been established in accordance with generally
accepted accounting principles.
(u) The Operating Partnership is classified as a partnership (and
is not taxed as a corporation) for federal income tax purposes.
(v) 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.
(w) 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.
(x) Neither Transaction Entity or any of their Subsidiaries, is
an "investment company" within the meaning of the Investment Company Act of
1940, as amended.
(y) Each of the partnership and joint venture agreements to which
either of the Transaction Entities
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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 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.
(z) 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
Distribution Agreement.
(aa) The Operating Partnership satisfies all conditions and
requirements for the use of a Registration Statement on Form S-3 under the
Securities Act and the Securities Act Rules and Regulations.
(bb) At all times from January 1, 1990, through August 6,
1998 Mid-America Realty Investments, Inc. ("Mid-America") qualified as a
"real estate investment trust" under the Code;
4. Purchases as Principal; Solicitations as Agent.
(a) Purchases as Principal. Unless otherwise agreed by an Agent
----------------------
and the Operating Partnership, Notes shall be purchased by such Agent as
principal. Such purchases shall be made in accordance with terms agreed
upon by one or more Agents and the Operating Partnership (which terms,
unless otherwise agreed, shall, to the extent applicable, include those
terms specified in Exhibit A hereto and be agreed upon orally, with written
---------
confirmation prepared by such Agent or Agents and mailed to the Operating
Partnership). An Agent's commitment to purchase Notes as principal shall
be deemed to have been made on the basis of the representations and
warranties of the Operating Partnership herein contained and shall be
subject to the terms and conditions herein set forth. Unless the context
otherwise requires, references herein to "this Distribution Agreement"
shall include the agreement of one or more Agents to purchase Notes from
the Operating Partnership as principal. Each purchase of Notes, unless
otherwise agreed, shall be at a
13
discount from the principal amount of each such Note equivalent to the
applicable commission set forth in Schedule I hereto. The Agents may engage
----------
the services of any other broker or dealer in connection with the resale of
the Notes purchased by them as principal and may allow any portion of the
discount received in connection with such purchases from the Operating
Partnership to such brokers and dealers. At the time of each purchase of
Notes by one or more Agents as principal, the Operating Partnership and
such Agent or Agents shall agree and specify orally, confirmed in writing,
whether any stand-off provision (as referred to in Section 5(q) hereof) or
any officers' certificate, opinion of counsel or comfort letter (as
referred to in Sections 8(b), 8(c) and 8(d) hereof) will be required. If
the Operating Partnership and two or more Agents enter into an agreement
pursuant to which such Agents agree to purchase Notes from the Operating
Partnership as principal and one or more of such Agents shall fail at the
Settlement Date to purchase the Notes which it or they are obligated to
purchase (the "Defaulted Notes"), then the nondefaulting Agents shall have
the right, within 24 hours thereafter, to make arrangements for one of them
or one or more other Agents or underwriters to purchase all, but not less
than all, of the Defaulted Notes in such amounts as may be agreed upon and
upon the terms herein set forth; provided, however, that if such
--------- -------
arrangements shall not have been completed within such 24-hour period,
then:
(i) if the aggregate principal amount of Defaulted Notes
does not exceed 10% of the aggregate principal amount of Notes to be
so purchased by all of such Agents on the Settlement Date, the
nondefaulting Agents shall be obligated, severally and not jointly, to
purchase the full amount thereof in the proportions that their
respective initial underwriting obligations bear to the underwriting
obligations of all nondefaulting Agents; or
(ii) if the aggregate principal amount of Defaulted Notes
exceeds 10% of the aggregate principal amount of Notes to be so
purchased by all of such Agents on the Settlement Date, such agreement
shall terminate without liability on the part of any nondefaulting
Agent.
No action taken pursuant to this paragraph shall relieve any defaulting
Agent from liability in respect of its default. In the event of any such
default which does not result in a termination of such agreement, either
the nondefaulting Agents or the Operating Partnership shall have the right
to postpone the Settlement Date for a period not exceeding seven days in
order to effect any required changes in the Registration
14
Statement or the Prospectus or in any other documents or arrangements.
(b) Solicitations as Agent. On the basis of the representations
----------------------
and warranties herein contained, but subject to the terms and conditions
herein set forth, when agreed by the Operating Partnership and an Agent,
such Agent, as an agent of the Operating Partnership, will use its
reasonable efforts to solicit offers to purchase the Notes upon the terms
and conditions set forth herein and in the Prospectus. The Agents are not
authorized to appoint sub-agents with respect to Notes sold through them as
agents. All Notes sold through an Agent as agent will be sold at 100% of
their principal amount unless otherwise agreed to by the Operating
Partnership and such Agent.
The Operating Partnership reserves the right, in its sole
discretion, to suspend solicitation of offers for the purchase of Notes
through an Agent, as agent, commencing at any time for any period of time
or permanently. Within one business day after receipt of instructions from
the Operating Partnership, such Agent will suspend solicitation of offers
for the purchase of Notes from the Operating Partnership until such time as
the Operating Partnership has advised such Agent that such solicitation may
be resumed. During the period of time that such solicitation is suspended,
the Transaction Entities shall not be required to deliver, or cause to be
delivered, any opinions, letters, or certificates in accordance with
Section 8 hereof, provided that if the Registration Statement or Prospectus
is amended or supplemented during the period of suspension (other than by
an amendment or supplement providing solely for a change in the interest
rates, redemption provisions, amortization schedules or maturities offered
for the Notes or for a change that the Agents deem to be immaterial). No
Agent shall be required to resume soliciting offers to purchase Notes until
the Transaction Entities have delivered, or cause to be delivered, such
opinions, letters and certificates in accordance with Section 8 hereof or
as such Agent may reasonably request.
Upon settlement, the Operating Partnership agrees to pay each
Agent a commission, in the form of a discount from the purchase price of
such Note in an amount equal to the applicable percentage of the principal
amount of each Note sold by the Operating Partnership as a result of a
solicitation made by such Agent as set forth in Schedule I hereto.
----------
(c) Administrative Procedures. The purchase price, interest rate
--------------------------
or formula, maturity date and other terms of the Notes (as applicable)
specified in Exhibit A hereto shall be agreed upon by the Operating
---------
Partnership and
15
the applicable Agent or Agents and specified in a Pricing Supplement to
the Prospectus to be prepared by the Operating Partnership in connection
with each sale of Notes. Except as otherwise specified in the applicable
Pricing Supplement, the Notes will be issued in denominations of U.S.
$1,000 or any larger amount that is an integral multiple of U.S. $1,000.
Administrative procedures with respect to the issuance and sale of Notes
shall be agreed upon from time to time by the Operating Partnership, the
Agents and the Trustee (the "Procedures"), and initially such Procedures
shall be as set forth in Exhibit B hereto. The Agents and the Operating
---------
Partnership agree to perform, and the Operating Partnership agrees to cause
the Trustee to agree to perform, their respective duties and obligations
specifically provided to be performed by them in the Procedures.
5. COVENANTS OF THE TRANSACTION ENTITIES. Each of the Transaction
Entities jointly and severally covenants and agrees with the Agents to:
(a) Cause the Prospectus to be filed pursuant to Rule 424(b) of
the Securities 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
Securities Act Rules and Regulations) (but only if the Agents or your
counsel have not reasonably objected thereto by notice to the Transaction
Entities after having been furnished a copy a reasonable time prior to
filing) and will notify the Agents promptly of such filing. During the
period in which a prospectus relating to the Notes is required to be
delivered under the Securities Act, the Transaction Entities will (i)
notify the Agents 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 Notes, 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 the
Agents 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 Transaction Entity shall
receive notice or obtain knowledge thereof, (i) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement, (ii) of the
16
suspension of the qualification or registration of the Notes for offering
or sale in any jurisdiction, (iii) of the initiation or threatening (in
writing) of any proceeding for any such purpose or (iv) of any change in
the rating assigned by the Rating Agencies or any other nationally
recognized statistical rating organization to any debt securities
(including the Notes) of the Operating Partnership, or the public
announcement by any nationally recognized statistical rating organization
that it has under surveillance or review, with possible negative
implications, its rating of any such debt securities, or the withdrawal by
any nationally recognized statistical rating organization of its rating of
such debt securities; and the Transaction Entities will promptly use their
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
Securities Act, the Securities 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 Notes 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 Securities Act, the Transaction Entities will promptly
notify the Agents 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 the Agents 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 Notes is required to be delivered under the
Securities 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 the Agents may
from time to time reasonably request.
17
(e) Furnish the Agents with copies of filings of the Transaction
Entities under the Securities 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 Securities 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 Securities
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 Securities Act Rules and Regulations that shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 of the
Securities Act Rules and Regulations and will advise the Agents 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 Distribution Agreement are consummated or
this Distribution Agreement is terminated, all costs and expenses incident
to the performance of the obligations of the Transaction Entities under
this Distribution 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 Notes,
(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 Notes by the Agents or by dealers to whom Notes may be sold,
(iv) any registration or qualification of the Notes for offer and sale
under the securities or blue sky laws of such jurisdictions 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 each of the Rating Agencies for the
rating of the Notes at the request of the Operating Partnership, (v)
counsel to the Transaction Entities, (vi) the transfer agent for the Notes,
(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 Notes.
18
(h) Qualify the Notes for offering and sale under the applicable
securities laws and real estate syndication laws of such states and other
jurisdictions of the United States as the Agents may designate as
necessary, and will maintain such qualifications in effect for as long as
may be required for the distribution of the Notes; provided, however, that
-------- -------
the Operating Partnership shall not be obligated to file any general
consent to service of process or to qualify as a foreign corporation in any
jurisdiction in which it is not so qualified. The Operating Partnership
will file such statements and reports as may be required by the laws of
each jurisdiction in which the Notes have been qualified as above provided.
The Operating Partnership will promptly advise the Agents of the receipt by
the Operating Partnership of any notification with respect to the
suspension of the qualification of the Notes for sale in any such state or
jurisdiction or the initiating or threatening of any proceeding for such
purpose.
(i) Not take, at any time, directly or indirectly, other than in
connection with this Distribution 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 Notes.
(j) Take all reasonable action necessary to enable the Rating
Agencies to provide their respective credit ratings of the Notes.
(k) Execute and deliver the Supplemental Indenture designating
the Notes as the debt securities to be offered, and its terms and
provisions in accordance with the provisions of the Indenture.
(l) Apply the net proceeds to the Operating Partnership from the
sale of the Notes by the Operating Partnership as set forth under the
caption "Use of Proceeds" in the Prospectus.
(m) Prepare, with respect to any Notes to be sold to or through
an Agent or Agents pursuant to this Distribution Agreement, a Pricing
Supplement with respect to such Notes in a form previously approved by such
Agent or Agents. The Operating Partnership will deliver such Pricing
Supplement no later than 11:00 a.m., New York City time, on the business
day following the date of the Operating Partnership's acceptance of the
offer for the purchase of such Notes and will file such Pricing Supplement
pursuant to Rule 424(b)(3) under the Securities Act not later than the
close of business of the Commission on the fifth business day after the
date on which such Pricing Supplement is first used.
19
(n) Furnish, within two (2) business days following the date on
which there shall be released to the general public interim financial
statement information related to either of the Transaction Entities with
respect to each of the first three quarters of any fiscal year or
preliminary financial statement information with respect to any fiscal
year, such information to the Agents, and cause the Prospectus to be
amended or supplemented to include or incorporate by reference financial
information with respect thereto and corresponding information for the
comparable period of the preceding fiscal year, as well as such other
information and explanations as shall be necessary for an understanding
thereof and as shall be required by the Securities Act or the Securities
Act Rules and Regulations.
(o) Furnish, within two (2) business days following the date on
which there shall be released to the general public financial information
included in or derived from the audited financial statements of either of
the Transaction Entities for the preceding fiscal year, such information to
the Agents, and cause the Registration Statement and the Prospectus to be
amended, whether by the filing of documents pursuant to the Exchange Act or
the Securities Act or otherwise, to include or incorporate by reference
such audited financial statements and the report or reports, and consent or
consents to such inclusion or incorporation by reference, of the
independent accountants with respect thereto, as well as such other
information and explanations as shall be necessary for an understanding of
such financial statements and as shall be required by the Securities Act or
the Securities Act Rules and Regulations.
(p) Use its best efforts to ensure that the Company meets the
requirements to qualify as a "real estate investment trust" under the Code
for the taxable year in which sales of the Notes are to occur, unless
otherwise specified in the Prospectus.
(q) If requested by any Agent in connection with a purchase by it
of Notes as principal in accordance with Section 4(a) hereof, cause such
transaction to be subject to the terms of such stand-off provision as shall
be agreed by the Operating Partnership and such Agent at the time of such
agreement to purchase Notes as principal.
6. CONDITIONS OF AGENTS' OBLIGATIONS AT THE CLOSING. The obligations
of the Agents to purchase Notes as principal and to solicit offers for the
purchase of Notes as agent of the Operating Partnership, and the obligations of
any purchasers of the Notes sold through an Agent as agent, shall be subject to
the accuracy of the representations and warranties of the Transaction Entities
herein and to accuracy of the statements of the officers of the
20
Company, as general partner of the Operating Partnership, made in any
certificate furnished pursuant to the provisions hereof, to the performance and
observance by each Transaction Entity of all its covenants and agreements
contained herein and to the following additional conditions precedent:
(a) The Agents shall have received the opinion of ▇▇▇▇▇▇▇,
Procter & ▇▇▇▇ LLP, counsel for both of the Transaction Entities, dated the
date hereof, to the effect that:
(i) Each of the Transaction Entities and each of their
Subsidiaries has been duly incorporated or formed, as the case may be,
and is validly existing as a corporation or general or limited
partnership or limited liability company, 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 perfected 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 June 30, 1998; and all of the
outstanding partnership units of the Operating Partnership are validly
issued and paid for in conformity with the applicable provisions of
the Operating Partnership Agreement relating to such units and, to the
knowledge of such counsel, none of them was issued in violation of any
preemptive or other similar right;
(iv) The issuance of the Notes 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
21
due authorization, execution and delivery of the Indenture by the Trustee),
and issued and sold pursuant to this Distribution Agreement, such Notes
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. Upon payment of the
purchase price and delivery of the Notes in accordance with this
Distribution Agreement, each of the purchasers thereof will receive good,
valid and marketable title to such Notes, free and clear of all liens,
charges and encumbrances;
(v) 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 Distribution
Agreement;
(vi) The Registration Statement has become effective under
the Securities Act, the Indenture has been qualified under the TIA,
the Prospectus has been filed as required by Section 5(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 for that purpose has been instituted or
threatened by the Commission;
(vii) 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 as of the date hereof, complied and comply as to form in all
material respects with the requirements of the Securities Act and the
Securities 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
Securities 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 Securities Act or the Exchange Act, as
applicable, and the Securities 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;
22
(viii) 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;
(ix) This Distribution Agreement has been duly and validly
authorized, executed and delivered by each of the Company and the
Operating Partnership and assuming due authorization, execution and
delivery thereof by the Agents, will constitute a valid and legally
binding agreement of each of the Company and the Operating
Partnership, enforceable against each of the Company and the Operating
Partnership in accordance with its terms, subject to the
Enforceability Limitations; the due authorization, execution and
delivery of this Distribution Agreement, the performance of the
obligations set forth herein, and the consummation of the transactions
contemplated hereby by each of the Company and the Operating
Partnership will not conflict with or constitute a breach or violation
by either the Company or the Operating Partnership of, or default
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Transaction Entities or
their Subsidiaries pursuant to any contract, indenture, mortgage, loan
agreement, note, lease, joint venture or partnership agreement or
other instrument or agreement known to such counsel to which either
the Company, the Operating Partnership or any of their Subsidiaries is
a party or by which they, any of their respective properties or other
assets or any property may be bound or subject except for breaches,
violations or defaults which individually or in the aggregate do not
involve a material risk to the business, properties, financial
position or results of operation of the Transaction Entities and their
Subsidiaries taken as a whole; nor will such action conflict with or
constitute a breach or violation by either the Company or the
Operating Partnership of, or default under, (A) the charter, by-laws,
certificate of limited partnership or partnership agreement, as the
case may be, of the Company, the Operating Partnership or any
Subsidiary or (B) any applicable Federal law, Massachusetts law, New
23
York law, the Delaware Revised Uniform Limited Partnership Act, the
Maryland General Corporation Law or any other applicable law, rule,
order, administrative regulation or administrative or court decree
known to such counsel;
(x) 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 due authorization, execution and delivery of the Indenture, the
performance of the obligations set forth therein, and the consummation
of the transactions contemplated thereby by each of the Company and
the Operating Partnership will not conflict with or constitute a
breach or violation by either the Company or the Operating Partnership
of, or default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the
Transaction Entities or their Subsidiaries pursuant to any contract,
indenture, mortgage, loan agreement, note, lease, joint venture or
partnership agreement or other instrument or agreement known to such
counsel to which either the Company, the Operating Partnership or any
of their Subsidiaries is a party or by which they, any of their
respective properties or other assets or any property may be bound or
subject except for breaches, violations or defaults which individually
or in the aggregate do not involve a material risk to the business,
properties, financial position or results of operation of the
Transaction Entities and their Subsidiaries taken as a whole; nor will
such action conflict with or constitute a breach or violation by
either the Company or the Operating Partnership of, or default under,
(A) the charter, by-laws, certificate of limited partnership or
partnership agreement, as the case may be, of the Company, the
Operating Partnership or any Subsidiary or (B) any applicable Federal
law, Massachusetts law, New York law, the Delaware Revised Uniform
Limited Partnership Act, the Maryland General Corporation Law or any
other applicable law, rule, order, administrative regulation or
administrative or court decree; and the Indenture has been duly
qualified under the TIA known to such counsel;
(xi) The Indenture and the Notes conform in all material
respects to the descriptions thereof in the Registration Statement and
the Prospectus
24
under the captions "Description of Debt Securities" and "Description
of Notes", respectively;
(xii) 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;
(xiii) At all times from January 1, 1990, through August 6,
1998 Mid-America qualified as a "real estate investment trust" under
the Code;
(xiv) None of the Transaction Entities or their
subsidiaries is an "investment company" within the meaning of the
Investment Company Act of 1940, as amended;
(xv) The Operating Partnership is classified as a
partnership (and is not taxed as a corporation) for federal income tax
purposes; and
(xvi) The Operating Partnership satisfies all conditions and
requirements for the use of a Registration Statement on Form S-3 under
the Securities Act and the Securities 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 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
either that any part of the Registration Statement, when such part
became effective (or, if an amendment to the Registration Statement or
an annual report of Form 10-K has been filed by either of the
Transaction Entities with the Commission subsequent to the
effectiveness of the Registration Statement, then at the time such
amendment became effective or at the time of the most recent such
filing, as the case may be) or as of the date hereof, 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
25
the Commission or as of the date hereof, included or include an untrue
statement of a material fact or omitted 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; 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,
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
is required to be described in the Prospectus or 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) The Agents shall have received from ▇▇▇▇▇▇ & ▇▇▇▇▇ LLP, your
counsel, such opinion or opinions, dated the date hereof, with respect to the
organization of each of the Transaction Entities, the validity of the Indenture,
the Notes, the Registration Statement, the Prospectus and other related matters
as the Agents reasonably may request, and such counsel shall have received such
documents and information as they request to enable them to pass upon such
matters.
(c) At the date hereof or such other date as may be acceptable to you,
the Agents shall have received a letter from KPMG, dated as of the date hereof,
in form and substance satisfactory to you, to the effect that:
(i) They are independent public accountants with respect to
the Transaction Entities and their Subsidiaries within the meaning of
the Securities Act and the Securities Act Rules and Regulations, and
no information concerning their relationship with or interest in
either of the Transaction Entities is required by Item 10 of the
Registration Statement.
(ii) In their opinion, the financial statements and
supporting schedules examined by them and included or incorporated by
reference in the Registration Statement and Prospectus and audited by
them and covered by their opinions therein comply as to form in all
26
material respects with the applicable accounting requirements of the
Securities Act and the Securities Act Rules and Regulations with
respect to registration statements on Form S-3 and the Exchange Act
and the Exchange Act Rules and Regulations.
(iii) They have performed limited procedures, not
constituting an audit, including a reading of the latest available
unaudited interim consolidated financial statements of the Company and
the Operating Partnership, a reading of the minute books of the
Company, inquiries of certain officials of the Company and the
Operating Partnership who have responsibility for financial and
accounting matters and such other inquiries and procedures as may be
specified in such letter, and on the basis of such limited review and
procedures nothing came to their attention that caused them to believe
that (A) the unaudited financial statements of the Company and the
Operating Partnership included in the Registration Statement, or
incorporated by reference therein, do not comply as to form in all
material respects with the applicable accounting requirements of the
Securities Act and the Securities Act Rules and Regulations and the
Exchange Act and the Exchange Act Rules and Regulations, or material
modifications are required for them to be presented in conformity with
generally accepted accounting principles, (B) the operating data and
balance sheet data included or incorporated by reference in the
Prospectus were not determined on a basis substantially consistent
with that used in determining the corresponding amounts in the audited
financial statements included or incorporated by reference in the
Registration Statement, (C) the pro forma financial information
included or incorporated by reference in the Registration Statement
was not determined on a basis substantially consistent with that of
the audited financial statements included or incorporated by reference
in the Registration Statement or (D) at a specified date not more than
five days prior to the date hereof, there has been any change in the
capital stock or the number of partnership interests of the Company,
the Operating Partnership or their Subsidiaries, as the case may be,
or any increase in the debt of the Company, the Operating Partnership
or their Subsidiaries or any decrease in the net assets of the
Company, the Operating Partnership or their Subsidiaries, as compared
with the amounts shown in the most recent consolidated balance sheet
of the Company, the Operating Partnership and their Subsidiaries,
included in the Registration Statement or incorporated by reference
therein, or, during the period from the date of the most recent
consolidated statement of operations included in
27
the Registration Statement or incorporated by reference therein to a
specified date not more than five days prior to the date hereof, there
were any decreases, as compared with the corresponding period in the
preceding year, in revenues, net income or funds from operations of
the Company, the Operating Partnership and their Subsidiaries, except
in all instances for changes, increases or decreases which the
Registration Statement and the Prospectus disclose have occurred or
may occur.
(iv) In addition to the examination referred to in their
report included in the Registration Statement and the Prospectus and
the limited procedures referred to in clause (iii) above, they have
carried out certain other specified procedures, not constituting an
audit, with respect to certain amounts, percentages and financial
information which are included in the Registration Statement and the
Prospectus and which are specified by the Agents, and have found such
amounts, percentages and financial information to be in agreement with
the relevant accounting, financial and other records of the
Transaction Entities and their Subsidiaries identified in such letter.
(d) The Agents 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 date hereof, to the
effect that, to the best of their knowledge based upon reasonable investigation:
(i) The representations and warranties of the Transaction
Entities in this Distribution Agreement qualified as to materiality
are true and correct in all respects and the representations and
warranties of the Transaction Entities in this Distribution Agreement
that are not so qualified are true and correct in all material
respects, as if made at and as of the date hereof, 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
date hereof;
(ii) 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; 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
28
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 Agents, so
material and adverse as to make it impracticable or inadvisable to proceed
with the public offering or the delivery of the Notes on the terms and in
the manner contemplated in the Prospectus.
(f) On the date hereof and on each Settlement Date, counsel to
the Agents shall have been furnished with such other documents and opinions
as such counsel may reasonably require for the purpose of enabling such
counsel to pass upon the issuance and sale of Notes as herein contemplated
and related proceedings, or in order to evidence the accuracy and
completeness of any of the representations and warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by either of the Transaction Entities in connection with the issuance
and sale of Notes as herein contemplated shall be satisfactory in form and
substance to the Agents and to counsel to the Agents.
(g) The obligations of the Agents to purchase Notes as principal
will be subject to the following further conditions: (i) the rating
assigned by each of the Rating Agencies, or any other nationally recognized
securities rating agency, to any debt securities of either of the
Transaction Entities as of the date of the agreement to purchase Notes as
principal shall not have been lowered and no such rating agency shall have
publicly announced that it has under surveillance or review, with possible
negative implications, its ratings of any debt securities of either of the
Transaction Entities since that date and (ii) there shall
29
not have come to the attention of any Agent any facts that would cause such
Agent to believe that the Prospectus, at the time it was required to be
delivered to a purchaser of the Notes, contained an untrue statement of a
material fact or omitted to state a material fact necessary in order to
make the statements therein, in light of the circumstances existing at such
time, not misleading.
(h) If any condition specified in this Section 6 shall not have
been fulfilled when and as required to be fulfilled, this Distribution
Agreement may be terminated by the Agents by notice to the Transaction
Entities at any time and any such termination shall be without liability of
any party to any other party, except that the covenant regarding provision
of an earnings statement set forth in Section 5(f) hereof, the indemnity
and contribution agreements set forth in Section 9 hereof, the provisions
concerning payment of expenses under Section 10 hereof, the provisions
concerning the representations, warranties and agreements to survive
delivery of Section 11 hereof, the provisions relating to parties set forth
in Section 14 and the provisions relating to governing law set forth in
Section 15 hereof shall remain in effect.
7. DELIVERY OF AND PAYMENT FOR NOTES SOLD THROUGH THE AGENTS.
Delivery of Notes sold through any Agent as agent shall be made by the Operating
Partnership to such Agent for the account of any purchaser only against payment
therefor in immediately available funds. In the event that a purchaser shall
fail either to accept delivery of or to make payment for a Note on the date
fixed for settlement, such Agent shall promptly notify the Operating Partnership
and deliver such Note to the Operating Partnership and, if such Agent has
theretofore paid the Operating Partnership for such Note, the Operating
Partnership will promptly return such funds to such Agent unless the failure
arose from the gross negligence or willful misconduct of such Agent or from a
default by such Agent in the performance of its obligations hereunder. If such
failure occurred for any reason other than the gross negligence or willful
misconduct of such Agent or from a default by such Agent in the performance of
its obligations hereunder, the Operating Partnership will reimburse such Agent
on an equitable basis for its loss of the use of the funds for the period such
funds were credited to the Operating Partnership's account.
8. ADDITIONAL COVENANTS OF THE TRANSACTION ENTITIES. Each of the
Transaction Entities jointly and severally covenants and agrees with the Agents
that:
(a) Reaffirmation of Representations and Warranties. Each
-----------------------------------------------
acceptance by the Operating Partnership of an offer for the purchase of
Notes (whether to an Agent as principal or through an Agent as agent), and
each delivery of Notes (whether to an Agent as
30
principal or through an Agent as agent), shall be deemed to be an
affirmation that the representations and warranties of the Transaction
Entities contained in this Distribution Agreement and in the most recent
certificate (for each type of certificate) theretofore delivered to such
Agent pursuant hereto qualified as to materiality are true and correct in
all respects and the representations and warranties of the Transaction
Entities in this Distribution Agreement that are not so qualified are true
and correct in all material respects at the time of such acceptance or
sale, as the case may be, and an undertaking that such representations and
warranties will be true and correct at the time of delivery to such Agent
or to the purchaser, as the case may be, of the Note or Notes relating to
such acceptance or sale, as the case may be, as though made at and as of
each such time (and it is understood that such representations and
warranties shall relate to the Registration Statement and Prospectus as
amended and supplemented to each such time).
(b) Subsequent Delivery of Certificates. Each time that there is
-----------------------------------
filed with the Commission any Quarterly Report on Form 10-Q or Annual
Report on Form 10-K incorporated by reference into the Prospectus, and
otherwise only (i) as may be required in connection with a sale pursuant to
Section 4(a) or (ii) at such times as may be reasonably requested by an
Agent in the event of a material adverse change to the business, prospects,
properties, financial position or results of operations of the Transaction
Entities taken as a whole, the Transaction Entities shall furnish or cause
to be furnished to the Agents forthwith a certificate dated the date of
filing with the Commission of such document, the date requested by an Agent
or the date of such sale, as the case may be, in form reasonably
satisfactory to such Agent to the effect that the statements contained in
the certificate referred to in Section 6(d) hereof which were last
furnished to such Agent are true and correct at the time of such filing, as
though made at and as of such time (except that such statements shall be
deemed to relate to the Registration Statement and the Prospectus as
amended and supplemented to such time) or, in lieu of such certificate, a
certificate substantially similar to the certificate referred to in Section
6(d) hereof, modified as necessary to relate to the Registration Statement
and the Prospectus as amended and supplemented to the time of delivery of
such certificate.
(c) Subsequent Delivery of Legal Opinions. Each time that there
-------------------------------------
is filed with the Commission any Quarterly Report on Form 10-Q or Annual
Report on Form 10-K incorporated by reference into the Prospectus, and
otherwise only (i) as may be required in connection with a sale pursuant
31
to Section 4(a) or (ii) at such times as may be reasonably requested by an
Agent in the event of a material adverse change to the business, prospects,
properties, financial position or results of operations of the Transaction
Entities taken as a whole, the Transaction Entities shall furnish or cause
to be furnished forthwith, and in any case promptly upon request, to the
Agents and to counsel to the Agents the written opinion of counsel to the
Transaction Entities, dated the date of filing with the Commission of such
document, the date requested by the Agents or the date of such sale, as the
case may be, in form and substance reasonably satisfactory to the Agents,
including such reductions or limitations as shall be reasonably
satisfactory to the Agents, but modified, as necessary, to relate to the
Registration Statement and the Prospectus as amended and supplemented to
the time of delivery of such opinion or, in lieu of such opinion, counsel
last furnishing such opinion to the Agents may furnish the Agents with a
letter substantially to the effect that the Agents may rely on such last
opinion to the same extent as though it were dated the date of such letter
authorizing reliance (except that statements in such last opinion shall be
deemed to relate to the Registration Statement and the Prospectus as
amended and supplemented to the time of delivery of such letter authorizing
reliance).
(d) Subsequent Delivery of Comfort Letters. Each time that there
--------------------------------------
is filed with the Commission any Quarterly Report on Form 10-Q or Annual
Report on Form 10-K incorporated by reference into the Prospectus, and
otherwise only (i) as may be required in connection with a sale pursuant to
Section 4(a) or (ii) at such times as may be reasonably requested by an
Agent in the event of a material adverse change to the business, prospects,
properties, financial position or results of operations of the Transaction
Entities taken as a whole, the Transaction Entities shall cause KPMG, or
other accountants reasonably satisfactory to the Agents, forthwith to
furnish the Agents a letter, dated the date of the filing of such document
with the Commission, the date of such request or the date of such sale, as
the case may be in form reasonably satisfactory to the Agents,
substantially similar to the portions of the letter referred to in clauses
(i) and (ii) of Section 6(c) hereof but modified to relate to the
Registration Statement and Prospectus as amended and supplemented to the
date of such letter, and substantially similar to the portions of the
letter referred to in clauses (iii) and (iv) of said Section 6(c) with such
changes as may be necessary to reflect changes in the financial statements
and other information derived from the accounting records of the
Transaction Entities.
32
9. INDEMNIFICATION AND CONTRIBUTION.
(a) The Transaction Entities jointly and severally will indemnify
and hold harmless the Agents and their directors, officers, employees and
agents and each person, if any, who controls any Agent within the meaning
of Section 15 of the Securities 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 Agent, or any such person, may become subject
under the Securities 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 Notes
under the securities laws thereof or filed with the Commission, (ii) the
omission or alleged omission to state in 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 Agent in connection with, or relating in any manner to, the
Notes 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 Agent 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 Notes
to any person by an Agent 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 Agent furnished in writing to
the Transaction Entities by such Agent expressly for inclusion in the
Registration Statement, any preliminary prospectus or the Prospectus.
33
(b) The Agents 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 Securities 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 Agents, 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 Agent furnished in writing to the
Transaction Entities by such Agent expressly for use in the Registration
Statement or the Prospectus. This indemnity will be in addition to any
liability that an Agent might otherwise have; provided, however, that in no
-------- -------
case shall an Agent be liable or responsible for any amount in excess of
the total discount or commission received by such Agent in connection with
the offering of the Notes that were the subject of the claim for
indemnification.
(c) Any party that proposes to assert the right to be indemnified
under this Section 9 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 9, 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 9 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 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
34
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 9 (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 9(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 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
35
indemnification provided for in the foregoing paragraphs of this Section 9
is applicable in accordance with its terms but for any reason is held to be
unavailable from the Transaction Entities or the Agents, the Transaction
Entities and any applicable Agent 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 an Agent, such as persons who control the
Transaction Entities within the meaning of the Securities 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 any
applicable Agent 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 any applicable Agent on the other. The relative benefits
received by the Transaction Entities on the one hand and any applicable
Agent on the other shall be deemed to be in the same proportion as the
total net proceeds from the offering of any Notes (before deducting
expenses) received by the Transaction Entities bear to the total
commissions received by applicable Agent or Agents. 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 any applicable Agent, 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 an Agent, 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
9(d) shall be deemed to include, for purpose of this Section 9(d), any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 9(d), no Agent shall be
required to contribute any amount in excess of the commissions and other
compensation received by such Agent and no person found guilty of
fraudulent misrepresentation (within the meaning of
36
Section 11(f) of the Securities Act) will be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. For
purposes of this Section 9(d), any person who controls a party to this
Distribution Agreement within the meaning of the Securities 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
9(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 9(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 9 and the representations and warranties of the Transaction
Entities contained in this Distribution Agreement shall remain operative
and in full force and effect regardless of (i) any investigation made by an
Agent or on its behalf, (ii) acceptance of any of the Notes and payment
therefore or (iii) any termination of this Distribution Agreement.
10. REIMBURSEMENT OF AGENTS' EXPENSES. If the Transaction Entities
shall fail to perform any agreement on their part to be performed hereunder, or
if any condition of the Agents' obligations hereunder required to be fulfilled
by the Transaction Entities is not fulfilled, the Transaction Entities will
reimburse any applicable Agent for all reasonable out-of-pocket expenses
(including fees and disbursements of counsel) incurred by such Agent in
connection with this Distribution Agreement, and upon demand the Transaction
Entities shall pay the full amount thereof to such Agent. If this Distribution
Agreement is terminated pursuant to Section 12 by reason of the default of any
Agent, the Transaction Entities shall not be obligated to reimburse such Agent
on account of those expenses.
11. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All
representations, warranties and agreements contained in this Distribution
Agreement or in certificates of officers of the Company submitted pursuant
hereto shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of any Agent or any controlling person of
such Agent, or by or on behalf of either of the Transaction Entities or of any
of
37
their Subsidiaries, and shall survive each delivery of and payment for any of
the Notes.
12. TERMINATION. The Transaction Entities shall have the right to
terminate this Distribution Agreement with respect to any or all of the Agents
at any time by giving notice hereunder to the Agents as hereinafter specified.
The Agents shall have the right by giving notice as hereinafter specified at any
time to terminate this Distribution Agreement if (i) either of the Transaction
Entities shall have failed, refused or been unable, at any time, 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 either of the Rating Agencies to the Company, the Operating Partnership or
the Notes as of or subsequent to the date of this Distribution Agreement shall
have been lowered since that date or if either of the Rating Agencies 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 Notes, (iv) trading in any of the equity securities of the
Company shall have been suspended by the Commission, the NASD, by an exchange
that lists the Shares or by the Nasdaq Stock Market, (v) trading in securities
generally on the New York Stock Exchange or the Nasdaq Stock Market shall have
been suspended or limited or minimum or maximum prices shall have been generally
established on such exchange or over the counter market, or additional material
governmental restrictions, not in force on the date of this Agreement, shall
have been imposed upon trading in securities generally by such exchange or by
order of the Commission or the NASD or any court or other governmental
authority, (vi) a general banking moratorium shall have been declared by either
Federal or New York State authorities, (vii) any material adverse change in the
financial or securities markets in the United States or in political, financial
or economic conditions in the United States or any outbreak or material
escalation of hostilities or declaration by the United States of a national
emergency or war or other calamity or crisis shall have occurred the effect of
any of which is such as to make it, in the sole judgment of the Agents,
impracticable or inadvisable to market the Shares on the terms and in the manner
contemplated by the Prospectus, or (viii) if there shall have come to the
attention of the Agents any facts that would cause them to believe that the
Prospectus, at the time it was required to be delivered to a purchaser of Notes,
included an untrue statement of a material fact or omitted to state a material
fact necessary in order to make the statements therein, in light of the
circumstances existing at the time of such delivery, not misleading. As used in
this Section 12, the term "Prospectus" means the Prospectus in the form first
provided to the Agents for use in confirming sales of the related Notes. In the
event of any such termination, neither party will have any liability to the
other party hereto, except that (i) an Agent shall be entitled to any commission
earned in accordance with the third paragraph of
38
Section 4(b) hereof, (ii) if at the time of termination (a) such Agent shall own
any Notes purchased by it as principal with the intention of reselling them or
(b) an offer to purchase any of the Notes has been accepted by the Operating
Partnership but the time of delivery to the purchaser or his agent of the Note
or Notes relating thereto has not occurred, the covenants set forth in Sections
5 and 8 hereof shall remain in effect until such Notes are so resold or
delivered, as the case may be, and (iii) the covenant set forth in Section 5(f)
hereof, the provisions of Section 10 hereof, the indemnity and contribution
agreements set forth in Section 9 hereof, and the provisions of Sections 11, 14
and 15 hereof shall remain in effect.
13. NOTICES. All notices or communications hereunder shall be in
writing and if sent to the Transaction Entities, 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.
c/o Goodwin, Procter & ▇▇▇▇ LLP
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
phone ▇▇▇-▇▇▇-▇▇▇▇; fax ▇▇▇-▇▇▇-▇▇▇▇;
and if sent to the Agents shall be mailed, delivered, telexed or telecopied and
confirmed to:
PaineWebber Incorporated
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
c/o Real Estate Investment Banking
attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
phone ▇▇▇-▇▇▇-▇▇▇▇; fax ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
c/▇ ▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
phone ▇▇▇-▇▇▇-▇▇▇▇; fax ▇▇▇-▇▇▇-▇▇▇▇
BT Alex. ▇▇▇▇▇ Incorporated
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
attention: ▇▇▇▇▇▇ ▇▇▇▇
phone: ▇▇▇-▇▇▇-▇▇▇▇; fax: ▇▇▇-▇▇▇-▇▇▇▇
39
First Chicago Capital Markets, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
phone: ▇▇▇-▇▇▇-▇▇▇▇; fax: ▇▇▇-▇▇▇-▇▇▇▇
NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
attention: Debt Finance Group
phone: ▇▇▇-▇▇▇-▇▇▇▇; fax: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
attention: Medium Term Note Department
phone: ▇▇▇-▇▇▇-▇▇▇▇; fax: ▇▇▇-▇▇▇-▇▇▇▇
Any party to this Distribution Agreement may change such address for notices by
sending to the other parties to this Distribution Agreement written notice of a
new address for such purpose.
14. PARTIES. This Distribution Agreement shall inure to the benefit
of and be binding upon the Agents and the Transaction Entities and their
respective successors. Nothing expressed or mentioned in this Distribution
Agreement is intended, or shall be construed, to give any person, firm or
corporation, other than the parties hereto and their respective successors and
the controlling persons and officers and directors referred to in Section 9
hereof and their heirs and legal representatives, any legal or equitable right,
remedy or claim under or in respect of this Distribution Agreement or any
provision herein contained. This Distribution Agreement and all conditions and
provisions hereof are intended to be for the sole and exclusive benefit of the
parties hereto and respective successors and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Notes shall be
deemed to be a successor by reason merely of such purchase.
15. GOVERNING LAW. This Distribution Agreement shall be governed by,
and construed in accordance with, the laws of the State of New York without
regard to the conflict of laws principles of such state.
16. COUNTERPARTS. This Distribution Agreement may be executed in one
or more counterparts and, if executed in more than one counterpart, the executed
counterparts hereof shall constitute a single instrument.
17. ENFORCEABILITY. In case any provision of this Distribution
Agreement shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
40
18. WAIVER OF RIGHTS TO TRIAL BY JURY. The Transaction Entities and
the Agents each hereby irrevocably waive any right they may have to a trial by
jury in respect of any claim based upon or arising out of this Distribution
Agreement or the transactions contemplated hereby.
19. AMENDMENTS AND MODIFICATIONS. This Distribution Agreement may
not be amended or otherwise modified or any provision hereof waived except by an
instrument in writing signed by the Agents and the Transaction Entities.
41
Very truly yours,
▇▇▇▇▇▇▇ REAL ESTATE, INC.
By: /s/ ▇▇▇▇▇▇ ▇. D'Arcy
--------------------
Name: ▇▇▇▇▇▇ ▇. D'Arcy
Title: Chief Executive Officer
▇▇▇▇▇▇▇ OPERATING LIMITED PARTNERSHIP
By: ▇▇▇▇▇▇▇ REAL ESTATE, INC.,
its general partner
By: /s/ ▇▇▇▇▇▇ ▇. D'Arcy
--------------------
Name: ▇▇▇▇▇▇ ▇. D'Arcy
Title: Chief Executive
Officer
ACCEPTED as of the date first above
written
By: PAINEWEBBER INCORPORATED
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
By: BT ALEX. ▇▇▇▇▇ INCORPORATED
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Principal
By: FIRST CHICAGO CAPITAL MARKETS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
By: NATIONSBANC ▇▇▇▇▇▇▇▇▇▇ SECURITIES LLC
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Principal
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: First Vice President
42
EXHIBIT A
---------
The following terms, if applicable, shall be agreed to by an Agent or
Agents and the Operating Partnership in connection with each sale of Notes:
Principal Amount: $
(or principal amount of foreign currency or composite currency)
Interest Rate:
Interest Payment Dates:
If Floating Rate Note:
Interest Rate Basis(es):
If LIBOR,
[_] LIBOR Reuters Page:
[_] LIBOR Telerate Page:
Designated LIBOR Currency:
IF CMT Rate,
Designated CMT Telerate Page:
If Telerate Page 7052:
[_] Weekly Average
[_] Monthly Average
Designated CMT Maturity Index:
Index Maturity:
Spread and/or Spread Multiplier, if any:
Initial Interest Rate, if any:
Initial Interest Reset Date:
Interest Reset Dates:
Interest Payment Dates:
Maximum Interest Rate, if any:
Minimum Interest Rate, if any:
Fixed Rate Commencement Date, if any:
Fixed Interest Rate, if any:
Day Count Convention:
Calculation Agent:
Redemption Provisions:
Initial Redemption Date:
Initial Redemption Percentage:
Annual Redemption Percentage Reduction, if any:
Repayment Provisions:
Optional Repayment Date(s):
Original Issue Date:
Stated Maturity Date:
Specified Currency:
Exchange Rate Agent:
Authorized Denomination:
Purchase Price: ___%, plus accrued interest, if any, from _____
Price to Public: ___%, plus accrued interest, if any, from ____
43
Issue Price:
Settlement Date and Time:
Additional/Other Terms:
Also, in connection with the purchase of Notes by an Agent as principal,
agreement as to whether the following will be required:
Officers' Certificate pursuant to Section 8(b) of the Distribution
Agreement.
Legal Opinions pursuant to Section 8(c) of the Distribution Agreement.
Comfort Letter pursuant to Section 8(d) of the Distribution Agreement.
Stand-off Agreement pursuant to Section 5(q) of the Distribution Agreement.
44
EXHIBIT B
---------
ADMINISTRATIVE PROCEDURES AGREEMENT
-----------------------------------
45
▇▇▇▇▇▇▇ OPERATING LIMITED PARTNERSHIP
MEDIUM-TERM NOTE PROGRAM
ADMINISTRATIVE PROCEDURES
The Medium-Term Notes, due nine months or more from their date of issue
(the "Notes") are to be offered on a continuous basis by ▇▇▇▇▇▇▇ Operating
Limited Partnership (the "Issuer"). PaineWebber Incorporated, BT Alex. ▇▇▇▇▇
Incorporated, First Chicago Capital Markets, Inc., NationsBanc ▇▇▇▇▇▇▇▇▇▇
Securities LLC, and ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., as agents (the "Agents"), have
each agreed to use their best efforts to solicit purchases of the Notes. The
Issuer reserves the right to sell Notes directly or indirectly on its own behalf
to investors (other than broker-dealers). The Agents will not be obligated to,
but may from time to time, purchase Notes as principal for their own account.
The Notes are being sold pursuant to a Distribution Agreement dated September
28, 1998 (the "Agency Agreement"), among the Issuer, ▇▇▇▇▇▇▇ Real Estate, Inc.,
a Maryland corporation and the sole general partner and the principal limited
partner of the Issuer (the "Company") and the Agents, and will be issued
pursuant to an indenture dated as of September 28, 1998 and all indentures
supplemental thereto, including, Supplemental Indenture No. 1 dated as of
September 28, 1998 (collectively, the "Indenture") between the Issuer and U.S.
Bank Trust National Association, as Trustee (the "Trustee). Capitalized terms
used herein and not defined herein shall have the meanings ascribed to such
terms in the Agency Agreement. The Notes have been registered under the
Securities Act of 1933 (the "Act").
Each Note will be represented by either a Global Security (as defined in
the Indenture), such Global Security, for purposes hereof either a global note
(a "Global Note") or a master note (a "Master Note"), registered in the name of
a nominee of The Depository Trust Company, as Depositary ("DTC") (a "Book-Entry
Note"), or a certificate issued in definitive form (a "Certificated Note"). It
is currently contemplated that both Notes that bear interest at a fixed rate (a
"Fixed Rate Note") and Notes that bear interest at a variable rate (a "Floating
Rate Note") and that are denominated and payable in U.S. dollars may be issued
as Book-Entry Notes.
Administrative procedures and specific terms of the offering are explained
below. The Issuer will advise the Agents in writing of those persons
handling administrative responsibilities with whom the Agents are to
communicate regarding offers to purchase Notes and the details of their
delivery. Administrative procedures may be modified from time to time as
reflected in the applicable Pricing Supplement (as defined below) or
elsewhere.
B-1
PART I. ADMINISTRATIVE PROCEDURES FOR CERTIFICATED NOTES AND GENERALLY
APPLICABLE ADMINISTRATIVE PROCEDURES
Issue/Authentication Date: Each Note shall be dated as of the date of its
------------------------- authentication by the Trustee or an agent designated
by the Issuer for such purpose (the "Designated
Agent"). Each Note will also bear an original issue
date (the "Issue Date") which, with respect to any
Note (or portion thereof), shall mean the date of
its original issuance (i.e., the settlement date)
and shall be specified therein. The issue date will
remain the same for all Notes subsequently issued
upon transfer, exchange or substitution of an
original Note regardless of their dates of
authentication.
Maturities: Each Note shall mature on a Business Day, selected
---------- by the purchaser and agreed to by the Issuer, which
shall be nine months or more from the date of issue.
Price to Public: Each Note shall be issued at 100% of principal
--------------- amount unless otherwise specified in a supplement to
the Prospectus (a "Pricing Supplement").
Denominations: The denominations of the Notes shall be $1,000 and
------------- integral multiples of $1,000 in excess thereof. (Any
Notes denominated other than in U.S. dollars will be
issuable in denominations as set forth in such
Notes.)
Registration: Notes shall be issued only in fully registered form.
------------
Minimum Purchase: The minimum aggregate amount of Notes denominated
---------------- and payable in U.S. dollars which may be offered to
any purchaser will be $1,000.
Interest: General. Each Note shall bear interest in accordance
-------- -------
with its terms, as described in the Prospectus
Supplement (as defined in the Agency Agreement), as
supplemented by the applicable Pricing Supplement.
Calculation of Interest: Interest on Fixed Rate Notes and interest rates on
----------------------- Floating Rate Notes will be determined as set forth
in the form of Notes. With respect to Floating Rate
Notes, the Calculation Agent shall determine the
interest rate for each Interest Reset Date and
communicate such interest rate to the Issuer, and
the Issuer will promptly notify the Trustee, or the
Designated Agent, and the Paying Agent of each such
determination.
B-2
Payments of Interest and
------------------------
Principal: All interest payments (excluding interest payments
--------- made at maturity) will be made by check mailed to
the person entitled thereto; provided, however, that
if a holder of one or more Notes of like tenor and
terms with an aggregate principal amount equal to or
greater than U.S. $10,000,000 (or the equivalent
thereof in foreign currencies or currency units)
shall designate in writing to the Paying Agent at
its corporate trust office in The City of New York
on or prior to the Regular Record Date relating to
the Interest Payment Date an appropriate account
with a bank, the Paying Agent will, subject to
applicable laws and regulations and until it
receives notice to the contrary, make such payment
and all succeeding payments to such person by wire
transfer to the designated account. If a payment
cannot be made by wire transfer because the
information received by the Paying Agent is
incomplete, a notice will be mailed to the holder at
its registered address requesting such information.
Upon presentation of the relevant Note, the Trustee,
or the Designated Agent, (or any duly appointed
Paying Agent) will pay in immediately available
funds the principal amount of such Note at maturity
and accrued interest, if any, due at maturity;
provided that the Note is presented to the Trustee,
--------
or the Designated Agent, (or any such Paying Agent)
to make payments in accordance with its normal
procedures. The Issuer will provide the Trustee, or
the Designated Agent, (and any such Paying Agent)
with funds available for such purpose. Notes
presented to the Trustee, or the Designated Agent,
at maturity for payment will be canceled and
destroyed by the Trustee, or the Designated Agent,
and a certificate of destruction will be delivered
to the Issuer. On the fifth Business Day (as defined
below) immediately preceding each interest payment
date, the Trustee, or the Designated Agent, will
furnish to the Issuer a statement showing the total
amount of the interest payments to be made on such
interest payment date. The Trustee, or the
Designated Agent, will provide monthly to the Issuer
a list of the principal and interest to be paid on
Notes maturing in the next succeeding six months.
The Trustee, or the Designated Agent, will assume
responsibility for withholding taxes on interest
paid as required by law.
Acceptance of Offers: The Agents will promptly advise the Issuer of each
-------------------- reasonable offer to purchase Notes received by it,
other than those rejected by the Agents. The Agents
may, in their discretion reasonably exercised,
without notice to the Issuer, reject any offer
received by it, in whole or in part. The Issuer will
have the right to
B-3
withdraw, cancel or modify such offer without notice
and will have the sole right to accept offers to
purchase Notes and may reject any such offer, in
whole or in part. If the Issuer rejects an offer,
the Issuer will promptly notify the Agents.
Settlement: All offers accepted by the Issuer will be settled on
---------- the third Business Day next succeeding the date of
acceptance unless otherwise agreed by any purchaser,
the Agents and the Issuer. The settlement date shall
be specified upon receipt of an offer. Prior to 3:00
p.m., New York City time, on the business day prior
to the settlement date, the Issuer will instruct the
Trustee, or the Designated Agent, to authenticate
and deliver the Notes pursuant to the terms
communicated by the Presenting Agent (as defined
below) pursuant to the next succeeding section no
later than 2:15 p.m., New York City time, on that
day.
Details for Settlement: For each offer accepted by the Issuer, the Agent who
---------------------- presented the offer (the "Presenting Agent") shall
communicate to the Issuer, Attention: ▇▇▇▇▇▇ ▇.
D'Arcy, CEO or ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., CFO (Fax No.:
(▇▇▇) ▇▇▇-▇▇▇▇) who will provide a copy to the
Trustee, Attention: ▇▇▇▇▇ ▇▇▇▇ (Fax No.: (312) 228-
9459) and the Designated Agent, if any, by facsimile
transmission or other acceptable means the following
information (the "Purchase Information"):
Exact name in which the Note or Notes are to be
registered ("registered owner").
Exact address of registered owner.
Taxpayer identification number of registered owner.
Principal amount of each Note to be delivered to the
registered owner.
Specified Currency and, if other than U.S. dollar,
denominations.
In the case of a Fixed Rate Note, the interest rate
or, in the case of a Floating Rate Note, the
interest rate formula, the Initial Interest Rate (if
known at such time), Index Maturity, Interest Reset
Period, Interest Reset Dates, Spread or Spread
Multiplier (if any), minimum interest rate (if any)
and maximum interest rate (if any).
B-4
Interest Payment Period and Interest Payment Dates.
Maturity Date of Notes.
Issue Price of Notes.
Settlement date for Notes.
Presenting Agent's commission (to be paid in the
form of a discount from the proceeds remitted to the
Issuer upon settlement).
Redemption provisions, if any.
Repayment provisions, if any.
Original issue discount provisions, if any.
In the case of Currency Indexed Notes, the above-
listed information, as applicable and the Base
Exchange Rate(s), Base Interest Rate and Indexed
Currencies.
In the case of Dual Currency Notes, the above listed
information, as applicable, and the Optional Payment
Currency, Designated Exchange Rate and Option
Election Dates.
The issue date of, and the settlement date for,
Notes will be the same. Before accepting any offer
to purchase Notes to be settled in less than three
days, the Issuer shall verify that the Trustee, or
the Designated Agent, will have adequate time to
prepare and authenticate the Notes. Prior to
preparing the Notes for delivery, the Trustee, or
the Designated Agent, will confirm the Purchase
Information by telephone with the Presenting Agent
and the Issuer.
Confirmation: For each accepted offer, the Presenting Agent will
------------ issue a confirmation, in writing, telephonically or
through any other commonly used method of
communication to the purchaser and a confirmation to
the Issuer, Attention: ▇▇▇▇▇▇ ▇. D'Arcy, CEO or
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., CFO (Fax No.: ▇▇▇-▇▇▇-▇▇▇▇).
Note Deliveries
---------------
and Cash Payment: Upon the receipt of appropriate documentation and
---------------- instructions from the Issuer and verification
thereof, the Trustee, or
B-5
the Designated Agent, will cause the Notes to be
prepared and authenticated and hold the Notes for
delivery against payment.
The Trustee, or the Designated Agent, will deliver
the Notes, in accordance with instructions from the
Issuer, to the Presenting Agent, as the Issuer's
agent, for the benefit of the purchaser only against
payment in immediately available funds in an amount
equal to the face amount of the Notes less the
Presenting Agent's commission plus any premium or
less any discount provided, however, that the
-------- -------
Trustee, or the Designated Agent, may deliver Notes
to the Presenting Agent against receipt therefor
and, later the same day, receipt of such funds in
such amount. Upon receipt of such payment, the
Trustee, or the Designated Agent, shall pay promptly
an amount equal thereto to the Issuer in immediately
available funds by wire transfer to the account of
the Issuer maintained at BankBoston, N.A. (ABA#
▇▇▇▇▇▇▇▇▇, Account No. 526-76237).
The Presenting Agent, as the Issuer's agent, will
deliver the Notes (with the written confirmation
provided for above) to the purchaser thereof against
payment by such purchaser in immediately available
funds. Delivery of any confirmation or Note will be
made in compliance with "Delivery of Prospectus"
below.
Failure of Purchaser: In the event that a purchaser shall fail to accept
-------------------- delivery of and make payment for a Note on the
settlement date, the Presenting Agent will notify
the Trustee or the Designated Agent and the Issuer,
by telephone, confirmed in writing. If the Note has
been delivered to the Presenting Agent, as the
Issuer's agent, the Presenting Agent shall return
such Note to the Trustee, or the Designated Agent.
If funds have been advanced for the purchase of such
Note, the Trustee, or the Designated Agent, will,
immediately upon receipt of such Note contact the
Issuer to the attention of ▇▇▇▇▇▇ ▇. D'Arcy, CEO or
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., CFO (Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇)
advising the Issuer of such failure. At such time,
the Issuer will refund the payment previously made
by the Presenting Agent in immediately available
funds. Such payments will be made on the settlement
date, if possible, and in any event not later than
the business day following the settlement date. If
such failure shall have occurred for any reason
other than the failure of the Presenting Agent to
provide the Purchase Information to the Issuer or to
provide a confirmation to the purchaser, the Issuer
will reimburse the Presenting Agent on an equitable
basis for its loss of the use of funds during the
period when they were credited to the account of the
Issuer.
B-6
Immediately upon receipt of the Note in respect of
which the failure occurred, the Trustee, or the
Designated Agent, will cause the Security Registrar
to make appropriate entries to reflect the fact that
the Note was never issued and will destroy the Note.
Procedure for
-------------
Rate Changes: The Issuer and the Agents will discuss from time to
------------ time the price of, and the rates to be borne by, the
Notes that may be sold as a result of the
solicitation of offers by the Agent. Once an Agent
has recorded any indication of interest in Notes
upon certain terms, and communicated with the
Issuer, if the Issuer plans to accept an offer to
purchase Notes upon such terms, it will prepare a
Pricing Supplement to the Prospectus, as then
amended or supplemented, reflecting the terms of
such Notes and will arrange to transmit such Pricing
Supplement to the Commission for filing in
accordance with and within the time prescribed by
the applicable paragraph of Rule 424(b) under the
Act. The Issuer will supply at least two copies of
the Prospectus as then amended or supplemented, and
bearing such Pricing Supplement, to the Presenting
Agent. The Issuer shall use its reasonable best
efforts to send such Pricing Supplement by telecopy
or overnight express (for delivery by the close of
business on the applicable trade date, but in no
event later than 11:00 a.m. New York City time, on
the Business Day following the applicable trade
date) to the Presenting Agent and the Trustee at the
following applicable address: if to PaineWebber
Incorporated, attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, 1285
Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇, Telecopy Number (▇▇▇) ▇▇▇-▇▇▇▇, if to BT
Alex. ▇▇▇▇▇ Incorporated, to Debt Capital Markets,
attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Telecopy Number
(▇▇▇) ▇▇▇-▇▇▇▇, if to First Chicago Capital Markets,
Inc., to Real Estate Capital Markets, attention: ▇▇▇
▇. ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇, Telecopy Number (▇▇▇) ▇▇▇-▇▇▇▇, if to
NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC, attention:
▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Telecopy Number (▇▇▇) ▇▇▇-▇▇▇▇
and if to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc., to Debt Capital
Markets, attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, 7 World Trade
Center, 42nd Floor, New York, N.Y. 10048 for record
keeping purposes, one copy of such Pricing
Supplement shall also be
B-7
mailed to ▇▇▇▇▇▇ & ▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇, attention: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇,
Telecopy Number (▇▇▇) ▇▇▇-▇▇▇▇, and if to the
Trustee, to U.S. Bank Trust National Association,
attention: ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Telecopy Number (312) 228-
9404 and the Designated Agent, if any. In each
instance that a Pricing Supplement is prepared, the
Presenting Agent will provide a copy of such Pricing
Supplement to each investor or purchaser of the
relevant Notes or its agent. Pursuant to Rule 434 of
the Securities Act of 1933, as amended, the Pricing
Supplement may be delivered separately from the
Prospectus. No settlements with respect to Notes
upon such terms may occur prior to such transmitting
and such Agent will not, prior to such transmitting,
mail confirmations to customers who have offered to
purchase Notes upon such terms. After such
transmitting, sales, mailing of confirmations and
settlements may occur with respect to Notes upon
such terms, subject to the provisions of "Delivery
of Prospectus" below.
Outdated Pricing Supplements and copies of the
Prospectus to which they are attached (other than
those retained for files), will be destroyed.
Suspension of Solicitation;
--------------------------
Amendment or Supplement: As provided in the Agency Agreement, the Issuer may
----------------------- suspend solicitation of purchases at any time and,
upon receipt of notice from the Issuer, the Agents
will, as promptly as practicable, but in no event
later than one business day following such notice,
suspend solicitation until such time as the Issuer
has advised them that solicitation of purchases may
be resumed. If the Agents receive the notice from
the Issuer contemplated by Section 4(b) of the
Agency Agreement, they will promptly suspend
solicitation and will only resume solicitation as
provided in the Agency Agreement. If the Issuer
decides to amend or supplement the Registration
Statement or the Prospectus relating to the Notes,
it will promptly advise the Agents and will furnish
the Agents with the proposed amendment or supplement
in accordance with the terms of the Agency
Agreement. The Issuer will promptly file or mail to
the Commission for filing such amendment or
supplement, provide the Agents with copies of any
such amendment or supplement, confirm to the Agents
that such amendment or supplement has been filed
with the Commission and advise the Agents that
solicitation may be resumed. Any such suspension
shall not affect the Issuer's obligations under the
B-8
Agency Agreement; and in the event that at the time
the Issuer suspends solicitation of purchases there
shall be any offers already accepted by the Issuer
outstanding for settlement, the Issuer will have the
sole responsibility for fulfilling such obligations;
the Agents will make reasonable efforts to assist
the Issuer to fulfill such obligations, but the
Agents will not be obligated to fulfill such
obligations. The Issuer will in addition promptly
advise the Agents and the Trustee, or the Designated
Agent, if such offers are not to be settled and if
copies of the Prospectus as in effect at the time of
the suspension may not be delivered in connection
with the settlement of such offers.
Delivery of Prospectus: A copy of the Prospectus, as most recently amended
---------------------- or supplemented on the date of delivery thereof
(except as provided below), must be delivered to a
purchaser prior to or together with the earlier of
delivery of (i) the written confirmation provided
for above, and (ii) any Note purchased by such
purchaser at the following address: if to
PaineWebber Incorporated, attention: ▇▇▇▇▇ ▇.
▇▇▇▇▇▇, 1285 Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Telecopy Number (▇▇▇) ▇▇▇-▇▇▇▇,
if to BT Alex. ▇▇▇▇▇ Incorporated, to Debt Capital
Markets, attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Telecopy
Number (▇▇▇) ▇▇▇-▇▇▇▇, if to First Chicago Capital
Markets, Inc., to Real Estate Capital Markets,
attention ▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, Telecopy Number (▇▇▇) ▇▇▇-▇▇▇▇, if
to NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC, attention:
▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Telecopy Number (▇▇▇) ▇▇▇-▇▇▇▇
and if to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc., to: Debt
Capital Markets, attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ for
record keeping purposes, one copy of such Pricing
Supplement shall also be mailed to ▇▇▇▇▇▇ & ▇▇▇▇▇
LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇,
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Telecopy Number (212)
878-8375, and if to the Trustee, to: U.S. Bank Trust
National Association, attention: ▇▇▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
Telecopy Number (▇▇▇) ▇▇▇-▇▇▇▇ and the Designated
Agent, if any. The Issuer shall ensure that the
Presenting Agent receives copies of the Prospectus
and each amendment or supplement thereto (including
appropriate Pricing Supplements) in such quantities
and within such time limits as will enable the
Presenting Agent to deliver such confirmation or
Note to a purchaser as contemplated by these
procedures and in compliance with the preceding
sentence. If,
B-9
since the date of acceptance of a purchaser's offer,
the Prospectus shall have been supplemented solely
to reflect any sale of Notes on terms different from
those agreed to between the Issuer and such
purchaser or a change in posted rates not applicable
to such purchaser, such purchaser shall not receive
the Prospectus as supplemented by such new
supplement, but shall receive the Prospectus as
supplemented to reflect the terms of the Notes being
purchased by such purchaser and otherwise as most
recently amended or supplemented on the date of
delivery of the Prospectus.
Authenticity of Signatures: The Issuer will cause the Trustee, or the Designated
-------------------------- Agent, to furnish the Agent from time to time with
the specimen signatures of each of the officers,
employees or agents of the Trustee, or the
Designated Agent, who have been authorized by the
Trustee, or the Designated Agent, respectively, to
authenticate Notes, but the Agent will have no
obligation or liability to the Issuer or the
Trustee, or the Designated Agent, in respect of the
authenticity of the signature of any officer,
employee or agent of the Issuer or the Trustee, or
the Designated Agent, on any Note.
Advertising Cost: The Issuer and the Company will determine with the
---------------- Agent the amount of advertising that may be
appropriate in offering the Notes.
Business Day: "Business Day" means any day (other than a Saturday,
------------ Sunday or legal holiday) on which banking
institutions in The City of New York are open for
business (and, (i) with respect to LIBOR Notes which
is also a day on which dealings in deposits in U.S.
dollars are transacted in the London interbank
market, and (ii) with respect to Notes denominated
in a Specified Currency other than U.S. dollars, on
which banking institutions in the principal
financial center of the country of the Specified
Currency are open for business).
B-10
PART II. ADMINISTRATIVE PROCEDURES FOR GLOBAL NOTE METHOD OF BOOK-ENTRY NOTES
The following explains the administrative procedures for the Global Note
method of the DTC book-entry system. Any reference to "Book-Entry Notes" in
this Part II refers to the Global Note method (for a discussion of the Master
Note method of the DTC book-entry system, see Part III below). Certain
generally applicable administrative procedures are set forth in Part I above
(See "Issue/Authentication Date", "Price to Public", "Minimum Purchase",
"Authenticity of Signatures", "Advertising Cost", and "Business Day"). In
connection with the qualification of the Book-Entry Notes for eligibility in the
book-entry system maintained by DTC, the Trustee will perform the custodial,
document control and administrative functions described below, in accordance
with its respective obligations under a Letter of Representations (the "Letter")
from the Issuer and the Trustee to DTC dated as of the date hereof, and a
Medium-Term Note Certificate Agreement between the Trustee and DTC and its
obligations as a participant in DTC, including DTC's Same-Day Funds Settlement
System ("SDFS"). Both Fixed and Floating Rate Notes denominated and payable in
U.S. dollars may be issued in book-entry form. Single and Multi-Indexed Notes
may also be issued in book-entry form.
Issuance: On any date of settlement (as defined under
-------- "Settlement" below) for one or more Book-Entry
Notes, the Issuer will issue a single global
security in fully registered form without coupons (a
"Global Note") representing up to $150,000,000
principal amount of all such Notes that have the
same Stated Maturity, redemption provisions, if any,
repayment provisions, if any, Interest Payment
Dates, Original Issue Date, original issue discount
provisions, if any, and, in the case of Fixed Rate
Notes, interest rate, or in the case of Floating
Rate Notes, interest rate formula, initial interest
rate, Index Maturity, Interest Reset Period,
Interest Reset Dates, Spread or Spread Multiplier
(if any), minimum interest rate (if any) and maximum
interest rate (if any) and, in the case of Fixed
Rate Notes or Floating Rate Notes that are also
Currency Indexed Notes, Specified Currency, Indexed
Currency, Face Amount and Base Exchange Rate and the
Base Interest Rate, if any, or that are also other
Indexed Notes, the same terms (all of the foregoing
are collectively referred to as the "Terms"). Each
Global Note will be dated and issued as of the date
of its settlement date, which will be (i) with
respect to an original Global Note (or any portion
thereof), its original issue date, and
(ii) following a consolidation of Global Notes, the
most recent Interest Payment Date to which interest
has been paid or duly provided for on the
predecessor Global Notes, regardless of the date of
authentication of such subsequently issued Global
Note. Each Book-Entry Note will be deemed to have
been dated
B-11
and issued as of the settlement date, which date
shall be the Original Issue Date. No Global Note
will represent any Certificated Note.
Identification Numbers: The Issuer has arranged with the CUSIP Service
---------------------- Bureau of Standard & Poor's Ratings Services (the
"CUSIP Service Bureau") for the reservation of a
series of CUSIP numbers consisting of approximately
900 CUSIP numbers relating to Book-Entry Notes. The
Trustee, the Issuer and DTC have obtained from the
CUSIP Service Bureau a written list of such reserved
CUSIP numbers. The Trustee will assign CUSIP numbers
to Global Notes as described below under Settlement
Procedure "B". DTC will notify the CUSIP Service
Bureau periodically of the CUSIP numbers that the
Trustee has assigned to Global Notes. The Trustee
will notify the Issuer at any time when fewer than
100 of the reserved CUSIP numbers remain unassigned
to Global Notes, and, if it deems necessary, the
Issuer will reserve additional CUSIP numbers for
assignment to Global Notes representing Book Entry
Notes. Upon obtaining such additional CUSIP numbers,
the Issuer shall deliver a list of such additional
CUSIP numbers to the Trustee and DTC.
Registration: Each Global Note will be issued only in fully
------------ registered form without coupons. Each Global Note
will be registered in the name of Cede & Co., as
nominee for DTC, on the Securities Register
maintained under the Indenture. The beneficial owner
of a Book-Entry Note (or one or more indirect
participants in DTC designated by such owner) will
designate one or more participants in DTC (with
respect to such Note, the "Participants") to act as
agent or agents for such owner in connection with
the book-entry system maintained by DTC, and DTC
will record in book-entry form, in accordance with
instructions provided by such Participants, a credit
balance with respect to such Note in the account of
such Participants. The ownership interest of such
beneficial owner in such Note will be recorded
through the records of such Participants or through
the separate records of such Participants and one or
more indirect participants in DTC.
Transfers: Transfers of a Book-Entry Note will be accomplished
--------- by book entries made by DTC and, in turn, by
Participants (and, in certain cases, one or more
indirect participants in DTC acting on behalf of
beneficial transferors and transferees of such Note.
B-12
Exchanges: The Trustee may deliver to DTC and the CUSIP Service
--------- Bureau at any time a written notice of consolidation
(a copy of which shall be attached to the Global
Note resulting from such consolidation) specifying
(i) the CUSIP numbers set forth on two or more
outstanding Global Notes that represent Book-Entry
Notes having the same Terms and for which interest
has been paid to the same date, (ii) a date,
occurring at least thirty days after such written
notice is delivered and at least thirty days before
the next Interest Payment Date for such Book-Entry
Notes, on which such Global Notes shall be exchanged
for a single replacement Global Note and (iii) a new
CUSIP number to be assigned to such replacement
Global Note. Upon receipt of such a notice, DTC will
send to its Participants (including the Trustee) a
written reorganization notice to the effect that
such exchange will occur on such date. Prior to the
specified exchange date, the Trustee will deliver to
the CUSIP Service Bureau a written notice setting
forth such exchange date and the new CUSIP number
and stating that, as of such exchange date, the
CUSIP numbers of the Global Notes to be exchanged
will no longer be valid. On the specified exchange
date, the Trustee will exchange such Global Notes
for a single Global Note bearing the new CUSIP
number and a new Original Issue Date and the CUSIP
numbers of the exchanged Global Notes will, in
accordance with CUSIP Service Bureau procedures, be
canceled and not immediately reassigned.
Notwithstanding the foregoing, if the Global Notes
to be exchanged exceed $150,000,000 in aggregate
principal amount, one Global Note will be
authenticated and issued to represent each
$150,000,000 of principal amount of the exchanged
Global Notes and an additional Global Note will be
authenticated and issued to represent any remaining
principal amount of such Global Notes (see
"Denominations" below).
Maturities: Each Book-Entry Note will mature on a Business Day
---------- nine months or more from the settlement date for
such Note.
Notice of
---------
Repayment Terms: With respect to each Book-Entry Note that is
--------------- repayable at the option of the Holder the Trustee
will furnish DTC on the settlement date pertaining
to such Book-Entry Note a notice setting forth the
terms of such repayment option. Such terms shall
include the start date and end dates of the first
exercise period, the purchase date following such
exercise period, the frequency that such exercise
periods occur (i.e., quarterly,
B-13
semiannually, annually, etc.) and if the repayment
option expires before maturity, the same information
(except frequency) concerning the last exercise
period. It is understood that the exercise period
shall be at least 15 calendar days long and that the
purchase date shall be at least seven calendar days
after the last day of the exercise period.
Redemption and Repayment: The Trustee will comply with the terms of the Letter
------------------------ with regard to redemptions and repayments of the
Notes. If a Global Note is to be redeemed or repaid
in part, the Trustee will exchange such Global Note
for two Global Notes, one of which shall represent
the portion of the Global Note being redeemed or
repaid and shall be canceled immediately after
issuance and the other of which shall represent the
remaining portion of such Global Note and shall bear
the CUSIP number of the surrendered Global Note.
Denominations: Book Entry Notes will be issued in principal amounts
------------- of $1,000 or any amount in excess thereof that is an
integral multiple of $1,000. Global Notes will be
denominated in principal amounts not in excess of
$150,000,000. If one or more Book Entry Notes having
an aggregate principal amount in excess of
$150,000,000 would, but not for the preceding
sentence, be represented by a single Global Note,
then one Global Note will be issued to represent
each $150,000,000 principal amount of such Book-
Entry Note or Notes and an additional Global Note
will be issued to represent any remaining principal
amount of such Book-Entry Note or Notes. In such a
case, each of the Global Notes representing such
Book-Entry Note or Notes shall be assigned the same
CUSIP number.
Interest: General. Interest on each Book-Entry Note will begin
-------- to accrue from the Original Issue Date of the Global
Note representing such Note or from the most recent
date to which interest has been paid, as the case
may be, in accordance with the terms of the Note, as
described in the Prospectus Supplement (as defined
in the Agency Agreement), as supplemented by the
applicable Pricing Supplement. Standard & Poor's
Ratings Services will use the information received
in the pending deposit message described under the
Settlement Procedure "C" below in order to include
the amount of any interest payable and certain other
information regarding the related Global Note in the
appropriate weekly bond report published by Standard
& Poor's Ratings Services.
B-14
Notice of Interest Payment
--------------------------
and Regular Record Dates: On the first Business Day of January, April, July
------------------------ and October of each year, the Trustee will deliver
to the Issuer and DTC a written list of Regular
Record Dates and Interest Payment Dates that will
occur with respect to Book-Entry Notes during the
six-month period beginning on such first Business
Day. Promptly after each Interest Determination Date
or Calculation Date, as applicable (as defined in or
pursuant to the applicable Note) for Floating Rate
Notes, the Issuer, upon receiving notice thereof,
will notify Standard & Poor's Ratings Services of
the interest rate determined on such Interest
Determination Date or Calculation Date, as
applicable.
Calculation of Interest: Interest on Fixed Rate Book-Entry Notes (including
----------------------- interest for partial periods) and interest rates on
Floating Rate Book-Entry Notes will be determined as
set forth in the form of Notes. With respect to
Floating Rate Book-Entry Notes, the Calculation
Agent shall determine the interest for each Interest
Reset Date and communicate such interest rate to the
Issuer and the Issuer will promptly notify the
Trustee and the Paying Agent of each such
determination.
Payments of Principal
---------------------
and Interest: Promptly after each Regular Record Date, the Trustee
------------ will deliver to the Issuer and DTC a written notice
specifying by CUSIP number the amount of interest to
be paid on each Global Note on the following
Interest Payment Date (other than an Interest
Payment Date coinciding with maturity) and the total
of such amounts. The Issuer will confirm with the
Trustee the amount payable on each Global Note on
such Interest Payment Date. DTC will confirm the
amount payable on each Global Note on such Interest
Payment Date by reference to the daily or weekly
bond reports published by Standard & Poor's Ratings
Services. The Issuer will pay to the Trustee, as
paying agent, the total amount of interest due on
such Interest Payment Date (other than at maturity),
and the Trustee will pay such amount to DTC at the
times and in the manner set forth below under
"Manner of Payment".
Payments at Maturity: On or about the first Business Day of each month,
-------------------- the Trustee will deliver to the Issuer and DTC a
written list of principal and interest to be paid on
each Global Note maturing either at Stated Maturity
or on a Redemption or Repayment Date in the
following month. The Issuer, the Trustee and DTC
will confirm the
B-15
amounts of such principal and interest payments with
respect to each such Global Note on or about the
fifth Business Day preceding the maturity of such
Global Note. The Issuer will pay to the Trustee, as
paying agent, the principal amount of such Global
Note, together with interest due at such maturity.
The Trustee will pay such amounts to DTC at the
times and in the manner set forth below under
"Manner of Payment". Promptly after payment to DTC
of the principal and interest due at the maturity of
such Global Note, the Trustee will cancel and
destroy such Global Note in accordance with the
terms of the Indenture and deliver a certificate of
destruction to the Issuer.
Manner of Payment: The total amount of any principal and interest due
----------------- on Global Notes on any Interest Payment Date or at
maturity shall be paid by the Issuer to the Trustee
in funds available for use by the Trustee as of 9:30
A.M. (New York City time), or as soon as practicable
thereafter on such date. The Issuer will confirm
instructions regarding payment in writing to the
Trustee. Prior to 10:00 A.M. (New York City time) on
each Maturity Date or as soon as possible
thereafter, following receipt of such funds from the
Issuer, the Trustee will pay by separate wire
transfer (using Fedwire message entry instructions
in a form previously specified by DTC) to an account
at the Federal Reserve Bank of New York previously
specified by DTC, in funds available for immediate
use by DTC, each payment of principal (together with
interest thereon) due on Global Notes on any
Maturity Date. On each Interest Payment Date,
interest payments shall be made to DTC in same-day
funds in accordance with existing arrangements
between the Trustee and DTC. Thereafter, on each
such date, DTC will pay, in accordance with its SDFS
operating procedures then in effect, such amounts in
funds available for immediate use to the respective
Participants in whose names the Book-Entry Notes
represented by such Global Notes are recorded in the
book-entry system maintained by DTC. Neither the
Issuer nor the Trustee shall have any direct
responsibility or liability for the payment by DTC
to such Participants of the principal of and
interest on the Book-Entry Notes.
Withholding Taxes: The amount of any taxes required under applicable
----------------- law to be withheld from any interest payment on a
Book-Entry Note will be determined and withheld by
the Participant, indirect participant in DTC or
other Person responsible for forwarding payments and
materials directly to the beneficial owner of such
Note.
B-16
Acceptance of Offers: Each Agent will promptly advise the Issuer of each
-------------------- reasonable offer to purchase Notes received by it,
other than those rejected by such Agent. Each Agent
may, in its discretion reasonably exercised, without
notice to the Issuer, reject any offer received by
it, in whole or in part. The Issuer will have the
right to withdraw, cancel or modify such offer
without notice and will have the sole right to
accept offers to purchase Notes and may reject any
such offer, in whole or in part. If the Issuer
rejects an offer, the Issuer will promptly notify
such Agent.
Settlement: The receipt by the Issuer of immediately available
---------- funds in payment for a Book-Entry Note and the
authentication and issuance of the Global Note or
Global Notes representing such Note shall constitute
"settlement" with respect to such Note. All orders
accepted by the Issuer will be settled on the third
Business Day from the date of the sale pursuant to
the timetable for settlement set forth below unless
the Issuer and the purchaser agree to settlement on
another day which shall be no earlier than the next
Business Day.
Settlement Procedures: Settlement Procedures with regard to each Book-Entry
--------------------- Note sold by the For Issuer through an Agent as
agent, shall be as follows:
For each offer accepted by the Issuer, the
Presenting Agent shall communicate to the Issuer,
Attention: ▇▇▇▇▇▇ ▇. D'Arcy, CEO or ▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
▇▇., CFO (Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇) who will provide
a copy to the Trustee, Attention: ▇▇▇▇▇ ▇▇▇▇ (Fax
No.: (▇▇▇) ▇▇▇-▇▇▇▇) and the Designated Agent, if
any, by facsimile transmission or other acceptable
means, the information set forth below:
Principal amount.
Maturity Date of Notes.
In the case of a Fixed Rate Book-Entry Note, the
interest rate or, in the case of a Floating Rate
Book-Entry Note, the Interest Rate Formula, the
Initial Interest Rate (if known at such time), Index
Maturity, Interest Reset Period, Interest Reset
Dates, Spread or Spread Multiplier (if any), Minimum
Interest Rate (if any) and Maximum Interest Rate (if
any).
Interest Payment Period and Interest Payment Dates.
B-17
Redemption provisions, if any.
Repayment provisions, if any.
Settlement date (Original Issue Date).
Price to public of the Note (expressed as a percentage).
Agent's commission (to be paid in the form of a discount from the
proceeds remitted to the Issuer upon settlement).
Original issue discount provisions if any.
In the case of Currency Indexed Notes, the above-listed information,
as applicable, and the Base Exchange Rate(s), Base Interest Rate and
Indexed Currencies.
In the case of Dual Currency Notes, the above-listed information, as
applicable, and the Optional Payment Currency, Designated Exchange
Rate and Optional Election Dates.
Net proceeds to the Issuer.
The Trustee will confirm the information set forth in Settlement
Procedure "A" above by telephone with such Agent and the Issuer.
The Trustee will assign a CUSIP number to the Global Note representing
such Note and will telephone the Issuer and advise the Issuer of such
CUSIP number. The Trustee will enter a pending deposit message
through DTC's Participant Terminal System, providing the following
settlement information to DTC (which shall route such information to
Standard & Poor's Ratings Services) and the Presenting Agent:
The applicable information set forth in Settlement Procedure "A".
Identification as a Fixed Rate Book-Entry Note or a Floating Rate
Book-Entry Note.
Initial Interest Payment Date for such Note, number of days by which
such date succeeds the related DTC Record Date (which, in the case of
Floating Rate Notes which reset daily or weekly
B-18
shall be the date five calendar days immediately preceding the
applicable Interest Payment Date and in the case of all other Notes
shall be the Regular Record Date as defined in the Note), the amount
of interest payable on such Interest Payment Date per $1,000 principal
amount of Notes at Maturity, and amount of interest payable per $1,000
principal amount of Notes in the case of Fixed Rate Notes.
CUSIP number of the Global Note representing such Note.
Whether such Global Note will represent any other Book-Entry Note (to
the extent known at such time).
To the extent the Issuer has not already done so, the Issuer will
deliver to the Trustee a Pricing Supplement in a form that has been
approved by the Issuer and the Agents. The Issuer will also deliver
to the Trustee a Global Note representing such Note.
The Trustee will complete and authenticate the Global Note
representing such Note.
DTC will credit such Note to the Trustee's participant account at DTC.
The Trustee will enter an SDFS deliver order through DTC's Participant
Terminal System instructing DTC to (i) debit such Note to the
Trustee's participant account and credit such Note to such Agent's
participant account and (ii) debit such Agent's settlement account and
credit the Trustee's settlement account for an amount equal to the
price of such Note less such Agent's commission. The entry of such a
deliver order shall constitute a representation and warranty by the
Trustee to DTC that (i) the Global Note representing such Book-Entry
Note has been executed, delivered and authenticated and (ii) the
Trustee is holding such Global Note pursuant to the relevant Medium-
Term Note Certificate Agreement between the Trustee and DTC.
An Agent will enter an SDFS deliver order through DTC's Participant
Terminal System instructing DTC (i) to debit such Note to such Agent's
participant account and credit such Note to the participant accounts
of the Participants with respect to such Note and (ii) to debit the
settlement accounts of such Participants and credit the settlement
account of such Agent for an amount equal to the price of such Note.
B-19
Transfers of funds in accordance with SDFS deliver
orders described in Settlement Procedures "G" and
"H" will be settled in accordance with SDFS
operating procedures in effect on the settlement
date.
The Trustee, upon confirming receipt of such funds
in accordance with Settlement Procedure "G", will
wire transfer to the account of the Issuer
maintained at BankBoston, N.A. (ABA# ▇▇▇▇▇▇▇▇▇,
Account No. 526-76237) in funds available for
immediate use, the amount transferred to the Trustee
in accordance with Settlement Procedure "G".
An Agent will confirm the purchase of such Note to
the purchaser either by transmitting to the
Participants with respect to such Note a
confirmation order or orders through DTC's
institutional delivery system or by mailing a
written confirmation to such purchaser.
Settlement Procedure
--------------------
Timetable: For orders of Book-Entry Notes solicited by the
--------- Agent, as agent, and accepted by the Issuer for
settlement on the first Business Day after the sale
date, Settlement Procedures "A" through "K" set
forth above shall be completed as soon as possible
but not later than the respective times (New York
City time) set forth below:
SETTLEMENT
PROCEDURE TIME
A 11:00 a.m. on the sale date
B 12:00 noon on the sale date
C 2:00 p.m. on the sale date
D 3:00 p.m. on the day before
settlement
E 9:00 a.m. on settlement date
F 10:00 a.m. on settlement date
G-H 2:00 p.m. on settlement date
I 4:45 p.m. on settlement date
J-K 5:00 p.m. on settlement date
If a sale is to be settled two Business Days after
the sale date, Settlement Procedures "A", "B" and
"C" shall be completed as soon as practicable but
not later than 11:00 a.m., 12:00 noon and 2:00 p.m.,
as the case may be, on the first Business Day after
the sale date.
B-20
If a sale is to be settled more than two Business
Days after the sale date, Settlement Procedure "A"
shall be completed as soon as practicable but no
later than 11:00 a.m. on the first Business Day
after the sale date and Settlement Procedures "B"
and "C" shall be completed as soon as practicable
but no later than 12:00 noon and 2:00 p.m., as the
case may be, on the second Business Day before the
settlement date. If the initial interest rate for a
Floating Rate Book-Entry Note has not been
determined at the time that Settlement Procedure "A"
is completed, Settlement Procedures "B" and "C"
shall be completed as soon as such rate has been
determined but not later than 12:00 noon and 2:00
p.m., respectively, on the Business Day before the
settlement date. Settlement Procedure "I" is subject
to extension in accordance with any extension of
Fedwire closing deadlines and in the other events
specified in the SDFS operating procedures in effect
on the settlement date.
If settlement of a Book-Entry Note is rescheduled or
canceled, the Trustee, upon receipt of notice from
the Issuer, will deliver to DTC, through DTC's
Participant Terminal System, a cancellation message
to such effect by no later than 2:00 p.m. on the
Business Day immediately preceding the scheduled
settlement date.
Failure to Settle: If an Agent or Trustee fails to enter an SDFS
----------------- deliver order with respect to a Book-Entry Note
pursuant to Settlement Procedure "G", the Trustee
may deliver to DTC, through DTC's Participant
Terminal System, as soon as practicable, a
withdrawal message instructing DTC to debit such
Note to the Trustee's participant account. DTC will
process the withdrawal message, provided that the
Trustee's participant account contains a principal
amount of the Global Note representing such Note
that is at least equal to the principal amount to be
debited. If a withdrawal message is processed with
respect to all the Book-Entry Notes represented by a
Global Note, the Trustee will ▇▇▇▇ such Global Note
"canceled", make appropriate entries in its records
and send such canceled Global Note to the Issuer.
The CUSIP number assigned to such Global Note shall,
in accordance with CUSIP Service Bureau procedures,
be canceled and not immediately reassigned. If a
withdrawal message is processed with respect to one
or more, but not all, of the Book-Entry Notes
represented by a Global Note, the Trustee will
exchange such Global Note for two Global Notes, one
of which shall represent such Book-Entry Note or
Notes and shall be canceled immediately after
issuance and the other of which shall represent the
remaining Book-Entry Notes
B-21
previously represented by the surrendered Global
Note and shall bear the CUSIP number of the
surrendered Global Note.
If the purchase price for any Book-Entry Note is not
timely paid to the Participants with respect to such
Note by the beneficial purchaser thereof (or a
person, including an indirect participant in DTC,
acting on behalf of such purchaser), such
Participants and, in turn, the Presenting Agent may
enter SDFS deliver orders through DTC's Participant
Terminal system reversing the orders entered
pursuant to Settlement Procedures "G" and "H",
respectively. Thereafter, the Trustee will deliver
the withdrawal message and take the applicable
related actions described in the preceding
paragraph. If such failure shall have occurred for
any reason other than the failure of the Presenting
Agent to provide the Purchase Information to the
Issuer or to provide a confirmation to the
purchaser, the Issuer will reimburse the Presenting
Agent on an equitable basis for its loss of the use
of funds during the period when they were credited
to the account of the Issuer.
Notwithstanding the foregoing, upon any failure to
settle with respect to a Book-Entry Note, DTC may
take any actions in accordance with its SDFS
operating procedures then in effect. In the event of
a failure to settle with respect to one or more, but
not all, of the Book-Entry Notes to have been
represented by a Global Note, the Trustee will
provide, in accordance with Settlement Procedures
"D" and "E", for the authentication and issuance of
a Global Note representing the other Book-Entry
Notes to have been represented by such Global Note
and will make appropriate entries in its records.
Procedure for
-------------
Rate Changes: The Issuer and each Agent will discuss from time to
------------ time the price of, and the rates to be borne by, the
Notes that may be sold as a result of the
solicitation of offers by any Agent. Once an Agent
has recorded any indication of interest in Notes
upon certain terms, and communicated with the
Issuer, if the Issuer plans to accept an offer to
purchase Notes upon such terms, it will prepare a
Pricing Supplement to the Prospectus, as then
amended or supplemented, reflecting the terms of
such Notes and will arrange to transmit such Pricing
Supplement to the Commission for filing in
accordance with and within the time prescribed by
the applicable paragraph of Rule 424(b) under the
Act. The Issuer will supply at least two copies of
the Prospectus
B-22
as then amended or supplemented, and bearing such Pricing Supplement,
to the Presenting Agent. The Issuer shall use its reasonable best
efforts to send such Pricing Supplement by telecopy or overnight
express (for delivery by the close of business on the applicable trade
date, but in no event later than 11:00 a.m. New York City time, on the
Business Day following the applicable trade date) to the Presenting
Agent and the Trustee at the following applicable address: if to
PaineWebber Incorporated, attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, 1285 Avenue of
the ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Telecopy Number (212)
713-7948, if to BT Alex. ▇▇▇▇▇ Incorporated, to Debt Capital Markets,
attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇ ▇▇▇▇▇, Telecopy Number (▇▇▇) ▇▇▇-▇▇▇▇, if to First Chicago Capital
Markets, Inc., to: Real Estate Capital Markets, attention: ▇▇▇ ▇.
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, Telecopy Number
(▇▇▇) ▇▇▇-▇▇▇▇, if to NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC,
attention: ▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇, Telecopy Number (▇▇▇) ▇▇▇-▇▇▇▇ and if to ▇▇▇▇▇▇▇ ▇▇▇▇▇
Barney Inc., to: Debt Capital Markets, attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ for record keeping
purposes, one copy of such Pricing Supplement shall also be mailed to
▇▇▇▇▇▇ & ▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇,
attention: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Telecopy Number (▇▇▇) ▇▇▇-▇▇▇▇, and if to
the Trustee, to: U.S. Bank Trust National Association, attention:
▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
Telecopy Number (▇▇▇) ▇▇▇-▇▇▇▇ and the Designated Agent, if any. In
each instance that a Pricing Supplement is prepared, the Presenting
Agent will provide a copy of such Pricing Supplement to each investor
or purchaser of the relevant Notes or its agent. Pursuant to Rule 434
of the Securities Act of 1933, as amended, the Pricing Supplement may
be delivered separately from the Prospectus. No settlements with
respect to Notes upon such terms may occur prior to such transmitting
and such Agent will not, prior to such transmitting, mail
confirmations to customers who have offered to purchase Notes upon
such terms. After such transmitting, sales, mailing of confirmations
and settlements may occur with respect to Notes upon such terms,
subject to the provisions of "Delivery of Prospectus" below. Outdated
Stickers, and copies of the Prospectus to which they are attached
(other than those retained for files), will be destroyed.
B-23
Suspension of Solicitation;
--------------------------
Amendment or Supplement: As provided in the Agency Agreement, the Issuer may
----------------------- suspend solicitation of purchase at any time, and,
upon receipt of notice from the Issuer, the Agents
will as promptly as practicable, but in no event
later than one Business Day following such notice,
suspend solicitation until such time as the Issuer
has advised them that solicitation of purchases may
be resumed.
If the Agents receive the notice from the Issuer
contemplated by Section 4(b) of the Agency
Agreement, they will promptly suspend solicitation
and will only resume solicitation as provided in the
Agency Agreement. If the Issuer decides to amend or
supplement the Registration Statement or the
Prospectus relating to the Notes, it will promptly
advise the Agents and will furnish the Agents with
the proposed amendment or supplement in accordance
with the terms of the Agency Agreement. The Issuer
will promptly file or mail to the Commission for
filing such amendment or supplement, provide the
Agents with copies of any such amendment or
supplement, confirm to the Agents that such
amendment or supplement has been filed with the
Commission and advise the Agents that solicitation
may be resumed. Any such suspension shall not affect
the Issuer's obligations under the Agency Agreement;
and in the event that at the time the Issuer
suspends solicitation of purchases there shall be
any offers already accepted by the Issuer
outstanding for settlement, the Issuer will have the
sole responsibility for fulfilling such obligations;
the Agents will make reasonable efforts to assist
the Issuer to fulfill such obligations, but the
Agents will not be obligated to fulfill such
obligations. The Issuer will in addition promptly
advise the Agents and the Trustee if such offers are
not to be settled and if copies of the Prospectus as
in effect at the time of the suspension may not be
delivered in connection with the settlement of such
offers.
Delivery of Prospectus: A copy of the Prospectus, as most recently amended
---------------------- or supplemented on the date of delivery thereof
(except as provided below), must be delivered to a
purchaser prior to or together with the earlier of
delivery of (i) the written confirmation provided
for above, and (ii) any Note purchased by such
purchaser at the following address: if to
PaineWebber Incorporated, attention: ▇▇▇▇▇ ▇.
▇▇▇▇▇▇, 1285 Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇, Telecopy Number (▇▇▇) ▇▇▇-▇▇▇▇, if
to BT Alex. ▇▇▇▇▇ Incorporated, to Debt Capital
Markets, attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇
B-24
10006, Telecopy Number (▇▇▇) ▇▇▇-▇▇▇▇, if to First
Chicago Capital Markets, Inc., to: Real Estate Capital Markets,
attention: ▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇,
Telecopy Number (▇▇▇) ▇▇▇-▇▇▇▇, if to NationsBanc ▇▇▇▇▇▇▇▇▇▇
Securities LLC, attention: ▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Telecopy Number (▇▇▇) ▇▇▇-▇▇▇▇ and if to
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc., to: Debt Capital Markets, attention: ▇▇▇▇▇
▇. ▇▇▇▇▇▇, ▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ for
record keeping purposes, one copy of such Pricing Supplement shall
also be mailed to ▇▇▇▇▇▇ & ▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇, attention: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Telecopy Number (▇▇▇) ▇▇▇-▇▇▇▇,
and if to the Trustee, to: U.S. Bank Trust National Association,
attention: ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇, Telecopy Number (▇▇▇) ▇▇▇-▇▇▇▇ and the Designated Agent, if
any. The Issuer shall ensure that the Presenting Agent receives
copies of the Prospectus and each amendment or supplement thereto
(including appropriate Pricing Supplements) in such quantities and
within such time limits as will enable the Presenting Agent to deliver
such confirmation or Note to a purchaser as contemplated by these
procedures and in compliance with the preceding sentence. If, since
the date of acceptance of a purchaser's offer, the Prospectus shall
have been supplemented solely to reflect any sale of Notes on terms
different from those agreed to between the Issuer and such purchaser
or a change in posted rates not applicable to such purchaser, such
purchaser shall not receive the Prospectus as supplemented by such new
supplement, but shall receive the Prospectus as supplemented to
reflect the terms of the Notes being purchased by such purchaser and
otherwise as most recently amended or supplemented on the date of
delivery of the Prospectus.
B-25
PART III. ADMINISTRATIVE PROCEDURES FOR MASTER NOTE METHOD OF BOOK-ENTRY NOTES
The following explains the administrative procedures for the Master Note
method of the DTC book-entry system. Any reference to "Book-Entry Notes" in
this Part III refers to the Master Note method (for a discussion of the Global
Note method of the book-entry system, see Part II above). (Certain generally
applicable administrative procedures are set forth in Part I above. See
"Issue/Authentication Date", "Price to Public", "Minimum Purchase",
"Authenticity of Signatures", "Advertising Cost", and "Business Day"). In
connection with the qualification of the Book-Entry Notes for eligibility in the
book-entry system maintained by DTC, the Trustee will perform the custodial,
document control and administrative functions described below, in accordance
with its respective obligations under a Letter of Representations (the "Letter")
from the Issuer and the Trustee to DTC dated as of the date hereof, and a
Medium-Term Note Certificate Agreement between the Trustee and DTC and its
obligations as a participant in DTC, including DTC's Same-Day Funds Settlement
System ("SDFS"). Both Fixed and Floating Rate Notes denominated and payable in
U.S. dollars may be issued in book-entry form. Single and Multi-Indexed Notes
may also be issued in book-entry form.
Issuance: On or before any date of settlement (as defined
-------- under "Settlement" below) for one or more Book-Entry
Notes represented by one or more Master Notes, the
Issuer will deliver one or more Pricing Supplements
(with a Prospectus and a Prospectus Supplement
attached thereto unless previously delivered to the
Trustee) to the Trustee identifying each issue of
Book-Entry Notes that have the same Stated Maturity,
redemption provisions, if any, Interest Payment
Dates, Original Issue Date, original issue discount
provisions, if any, and, in the case of Fixed Rate
Notes, interest rate, or, in case of Floating Rate
Notes, interest rate formula, initial interest rate,
Index Maturity, Interest Reset Period, Interest
Reset Dates, Spread or Spread Multiplier (if any),
minimum interest rate (if any) and maximum interest
rate (if any) and, in the case of Fixed Rate Notes
or Floating Rate Notes that are also Currency
Indexed Notes, Specified Currency, Indexed Currency,
Face Amount and Base Exchange Rate and the Base
Interest Rate, if any, or that are also Other
Indexed Notes, the same terms (all of the foregoing
are collectively referred to as the "Terms"). Each
Pricing Supplement shall be accompanied by a letter
from the Issuer (i) advising the Trustee that as of
the date of such letter, the Issuer has issued Notes
pursuant to the Indenture having the Terms specified
in such Pricing Supplement, (ii) confirming that
such Notes are debt obligations of the Issuer
referred to and evidenced by the Master Note
registered in the name of Cede & Co., as
B-26
nominee for DTC and (iii) requesting the Trustee to
make an appropriate entry identifying such debt
obligations on the records of the Issuer maintained
by the Trustee. Each Book-Entry Note will be deemed
to have been dated and issued as of the settlement
date, which date shall be the Original Issue Date.
No Master Note will represent any Certificated Note.
Identification Numbers: The Issuer has arranged with the CUSIP Service
---------------------- Bureau of Standard & Poor's Ratings Services (the
"CUSIP Service Bureau") for the reservation of a
series of CUSIP numbers, consisting of approximately
900 CUSIP numbers relating to Book-Entry Notes. The
Trustee, the Issuer and DTC have obtained from the
CUSIP Service Bureau a written list of such reserved
CUSIP numbers. The Trustee will assign CUSIP numbers
to each issue of Book-Entry Notes identified by a
Pricing Supplement as described below under
Settlement Procedure "B". DTC will notify the CUSIP
Service Bureau periodically of the CUSIP numbers
that the Trustee has assigned to each issue of Book-
Entry Notes. The Trustee will notify the Issuer at
any time when fewer than 100 of the reserved CUSIP
numbers remain unassigned to issue of Book-Entry
Notes, and, if it deems necessary, the Issuer will
reserve additional CUSIP numbers for assignment to
issues of Book-Entry Notes. Upon obtaining such
additional CUSIP numbers, the Issuer shall deliver a
list of such additional CUSIP numbers to the Trustee
and DTC.
Registration: The Master Note representing the Book-Entry Notes
------------ will be issued only in fully registered form without
coupons. The Master Note will be registered in the
name of Cede & Co., as nominee for DTC, on the
Securities Register maintained under the Indenture.
The beneficial owner of a Book-Entry Note (or one or
more indirect participants in DTC designated by such
owner) will designate one or more direct
participants in DTC (with respect to such Book-Entry
Note, the "Participants") to act as agent or agents
for such owner in connection with the book-entry
system maintained by DTC, and DTC will record in
book-entry form, in accordance with instructions
provided by such Participants, a credit balance with
respect to such Note in the account of such
Participants. The ownership interest of such
beneficial owner in such Book-Entry Note will be
recorded through the records of such Participants or
through the separate records of such Participants
and one or more indirect participants in DTC.
B-27
Transfers: Transfers of a Book-Entry Note will be accomplished
--------- by book entries made by DTC and, in turn, by
Participants (and, in certain cases, one or more
indirect participants in DTC) acting on behalf of
beneficial transferors and transferees of such Note.
Exchanges: The Trustee may deliver to DTC and the CUSIP Service
--------- Bureau at any time a written notice of consolidation
specifying (i) the CUSIP numbers set forth on two or
more Pricing Supplements that identify issues of
Book-Entry Notes having the same Terms and for which
interest has been paid to the same date, (ii) a
date, occurring at least thirty days after such
written notice is delivered and at least thirty days
before the next Interest Payment Date for such
issues of Book-Entry Notes, and (iii) a new CUSIP
number to be assigned to such issues of Book-Entry
Notes having the same terms. Upon receipt of such a
notice, DTC will send to its Participants (including
the Trustee) a written reorganization notice to the
effect that such exchange will occur on such date.
Prior to the specified exchange date, the Trustee
will deliver to the CUSIP Service Bureau a written
notice setting forth such exchange date and the new
CUSIP number and stating that, as of such exchange
date, the CUSIP numbers of the relevant issues of
Book-Entry Notes will no longer be valid. On the
specified exchange date, the CUSIP numbers of the
relevant issues of Book-Entry Notes will, in
accordance with CUSIP Service Bureau procedures, be
canceled and not immediately reassigned.
Maturities: Each Issue of Book-Entry Notes will mature on a
---------- Business Day nine months or more from the settlement
date for such issue of Book-Entry Notes.
Notice of Repayment: With respect to each Book-Entry Note that is
------------------- repayable at the option of the Holder the Trustee
will furnish DTC on the settlement date pertaining
to such Book-Entry Note a notice setting forth the
terms of such repayment option. Such terms shall
include the start date and end dates of the first
exercise period, the purchase date following such
exercise period, the frequency that such exercise
periods occur (i.e., quarterly, semiannually,
---
annually, etc.) and if the repayment option expires
before maturity, the same information (except
frequency) concerning the last exercise period. It
is understood that the exercise period shall be at
least 15 calendar days long and that the purchase
date shall be at least seven calendar days after the
last day of the exercise period.
B-28
Redemption and Repayment: The Trustee will comply with the terms of the Letter
------------------------ with regard to redemptions and repayments of the
Notes. If an issue of Book-Entry Notes is to be
redeemed or repaid in part, the Trustee will make
appropriate entries in its records to reflect the
remaining portion of such issue of Book Entry Notes,
which portion shall bear the same CUSIP number as
prior to the redemption or repayment, as the case
may be.
Denominations: Book-Entry Notes will be issued in principal amounts
------------- of $1,000 or any amount in excess thereof that is an
integral multiple of $1,000.
Interest: General. Interest on each Book-Entry Note will begin
-------- -------
to accrue from the Original Issue Date of an issue
of Book-Entry Notes or from the most recent date to
which interest has been paid, as the case may be,
and will be calculated and paid in the manner
described in the Prospectus Supplement (as defined
in the Agency Agreement), as supplemented by the
applicable Pricing Supplement. Standard & Poor's
Ratings Services will use the information received
in the pending deposit message described under the
Settlement Procedure "C" below in order to include
the amount of any interest payable and certain other
information regarding the related issue of Book-
Entry Notes in the appropriate weekly bond report
published by Standard & Poor's Ratings Services.
Notice of Interest Payment
--------------------------
and Regular Record Dates: On the first Business Day of January, April, July
------------------------ and October of each year, the Trustee will deliver
to the Issuer and DTC a written list of Regular
Record Dates and Interest Payment Dates that will
occur with respect to Book-Entry Notes during the
six-month period beginning on such first Business
Day. Promptly after each Interest Determination Date
or Calculation Date, as applicable (as set forth in
the Prospectus Supplement, as supplemented by the
applicable Pricing Supplement and pursuant to the
applicable Note) for Floating Rate Notes, the
Issuer, upon receiving notice thereof, will notify
Standard & Poor's Ratings Services of the interest
rate determined on such Interest Determination Date
or Calculation Date, as applicable.
Calculation of Interest: Interest on Fixed Rate Book-Entry Notes (including
----------------------- interest for partial periods) and interest rates on
Floating Rate Book-Entry Notes will be determined as
set forth in the Prospectus
B-29
Supplement, as supplemented by the applicable
Pricing Supplement, and pursuant to the applicable
form of Notes. With respect to Floating Rate Book-
Entry Notes, the Calculation Agent shall determine
the interest for each Interest Reset Date and
communicate such interest rate to the Issuer and the
Issuer will promptly notify the Trustee and the
Paying Agent of each such determination.
Payments of Principal and
-------------------------
Payment of Interest
-------------------
Only Interest: Promptly after each Regular Record Date, the Trustee
------------- will deliver to the Issuer and DTC a written notice
specifying by CUSIP number the amount of interest to
be paid on each issue of Book-entry Notes on the
following Interest Payment Date (other than an
Interest Payment Date coinciding with maturity) and
the total of such amounts. The Issuer will confirm
with the Trustee the amount payable on each issue of
Book-Entry Notes on such Interest Payment Date. DTC
will confirm the amount payable on each issue of
Book-Entry Notes on such Interest Payment Date by
reference to the daily or weekly bond reports
published by Standard & Poor's Ratings Services. The
Issuer will pay to the Trustee, as paying agent, the
total amount of interest due on such Interest
Payment Date (other than the maturity), and the
Trustee will pay such amount to DTC at the times and
in the manner set forth below under "Manner of
Payment".
Payments at Maturity. On or about the first Business
--------------------
Day of each month, the Trustee will deliver to the
Issuer and DTC a written list of principal and
interest to be paid on each issue of Book-Entry
Notes represented by a single CUSIP number maturing
either at Stated Maturity or on a Redemption or
Repayment Date in the following month. The Issuer,
the Trustee and DTC will confirm the amounts of such
principal and interest payments with respect to each
such issue of Book-Entry Notes on or about the fifth
Business Day preceding the maturity of such issue of
Book-Entry Notes. The Issuer will pay to the
Trustee, as paying agent, the principal amount of
each issue of Book-Entry Notes identified by a
single CUSIP number, together with interest due at
such maturity. The Trustee will pay such amounts to
DTC at the times and in the manner set forth below
under "Manner of Payment". Promptly after payment to
DTC of the principal and interest due at the
maturity of each issue of Book-Entry Notes, the
Trustee will reduce the principal amount of the
Master Note
B-30
representing the issue of Book-Entry Notes and so
advise the Issuer.
Manner of Payment. The total amount of any
-----------------
principal and interest due on each issue of Book-
Entry Notes identified by a single CUSIP number on
any Interest Payment Date or at maturity shall be
paid by the Issuer to the Trustee in funds available
for use by the Trustee as of 9:30 A.M. (New York
City time), or as soon as practicable thereafter on
such date. The Issuer will confirm instructions
regarding payment in writing to the Trustee. Prior
to 10:00 A.M. (New York City time) on each Maturity
Date or as soon as possible thereafter, following
receipt of such funds from the Issuer, the Trustee
will pay by separate wire transfer (using Fedwire
message entry instructions in a form previously
specified by DTC) to an account at the Federal
Reserve Bank of New York previously specified by
DTC, in funds available for immediate use by DTC,
each payment of principal (together with interest
thereon) due on each issue of Book-Entry Notes on
any Maturity Date. On each Interest Payment Date,
interest payments shall be made to DTC in same-day
funds in accordance with existing arrangements
between the Trustee and DTC. Thereafter, on each
such date, DTC will pay, in accordance with its SDFS
operating procedures then in effect, such amounts in
funds available for immediate use to the respective
Participants in whose names the Book-Entry
represented by the Master Note are recorded in the
book-entry system maintained by DTC. Neither the
Issuer nor the Trustee shall have any direct
responsibility or liability for the payment by DTC
to such Participants of the principal of and
interest on the Book-Entry Notes.
Withholding Taxes. The amount of any taxes required
-----------------
under applicable law to be withheld from any
interest payment on a Book-Entry Note will be
determined and withheld by the Participant, indirect
participant in DTC or other Person responsible for
forwarding payments and materials directly to the
beneficial owner of such Note.
Acceptance of Offers: Each Agent will promptly advise the Issuer of each
-------------------- reasonable offer to purchase Notes received by it,
other than those rejected by the Agent. Such Agent
may, in its discretion reasonably exercised, without
notice to the Issuer, reject any offer received by
it, in whole or in part. The Issuer will have the
sole right to accept offers to purchase Notes and
may reject any such offer, in
whole or in part. If the Issuer rejects an offer,
the Issuer will promptly notify such Agent.
Settlement: The receipt by the Issuer of immediately available
---------- funds in payment for a Book-Entry Note and receipt
by the Trustee of a property completed by the
Trustee of a properly completed Pricing Supplement
shall constitute "settlement" with respect to such
Book-Entry Note. All orders accepted by the Issuer
will be settled on the third Business Day from the
date of the sale pursuant to the timetable for
settlement set forth below unless the Issuer and the
purchaser agree to settlement on another day which
shall be no earlier than the next Business Day.
Settlement Procedures: Settlement Procedures with regard to each Book-Entry
--------------------- Note sold by the Issuer through an Agent as agent,
shall be as follows:
For each offer accepted by the Issuer, the
Presenting Agent shall communicate to the Issuer,
Attention: ▇▇▇▇▇▇ ▇. D'Arcy, CEO or ▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
▇▇., CFO (Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇) who will provide
a copy to the Trustee, Attention: ▇▇▇▇▇ ▇▇▇▇ (Fax
No.: (▇▇▇) ▇▇▇-▇▇▇▇), and the Designated Agent, if
any, by facsimile transmission or other acceptable
means, the information set forth below:
Principal amount.
Maturity Date of Notes.
In the case of a Fixed Rate Book-Entry Note, the
interest rate or, in the case of a Floating Rate
Book-Entry Note, the interest rate formula, the
Initial Interest Rate (if known at such time), Index
Maturity, Interest Reset Period, Interest Reset
Dates, Spread or Spread Multiplier (if any), minimum
interest rate (if any) and maximum interest rate (if
any).
Interest Payment Period and Interest Payment Dates.
Redemption provisions, if any.
Repayment provisions, if any.
Settlement date (Original Issue Date).
Price to public of the Note (expressed as a
percentage).
B-32
Agent's commission (to be paid in the form of a discount from the
proceeds remitted to the Issuer upon settlement).
Original issue discount provisions if any.
In the case of Currency Indexed Notes, the above-listed information,
as applicable, and the Base Exchange Rate(s), Base Interest Rate and
Indexed Currencies.
In the case of Dual Currency Notes, the above-listed information, as
applicable, and the Optional Payment Currency, Designated Exchange
Rate and Optional Election Dates.
Net proceeds to the Issuer.
The Trustee will confirm the information set forth in Settlement
Procedure "A" above by telephone with such Agent and the Issuer.
The Trustee will assign a CUSIP number to the issue of Book-Entry
Notes and will telephone the Issuer and notify the Issuer of such
CUSIP number. The Trustee will enter a pending deposit message
through DTC's Participant Terminal System, providing the following
settlement information to DTC (which shall route such information to
Standard & Poor's Ratings Services) and the Presenting Agent:
The applicable information set forth in Settlement Procedure "A".
Identification as a Fixed Rate Book-Entry Note or a Floating Rate
Book-Entry Note.
Initial Interest Payment Date for each issue of Book-Entry Notes of
days by which such date succeeds the related DTC Record Date (which,
in the case of Floating Rate Notes which reset daily or weekly shall
be the date five calendar days immediately preceding the applicable
Interest Payment Date and in the case of all other Notes shall be the
Regular Record Date as defined in the Prospectus Supplement), the
amount of interest payable on such Interest Payment Date per $1,000
principal amount of Notes at Maturity, and amount of interest payable
per $1,000 principal amount of Notes in the case of Fixed Rate Notes.
B-33
CUSIP number of the such issue of Book-Entry Notes.
Whether such CUSIP number will identify any other issue of Book-Entry
Notes (to the extent known at such time).
To the extent the Issuer has not already done so, the Issuer will
deliver to the Trustee a Pricing Supplement in a form that has been
approved by the Issuer and the Agents and a letter advising of the
relevant Issuance.
DTC will credit such Book-Entry Notes to the Trustee's participant
account at DTC.
The Trustee will enter an SDFS deliver order through DTC's Participant
Terminal System instructing DTC to (i) debit such Book-Entry Notes to
the Trustee's participant account and credit such Book-Entry Notes to
such Agent's participant account and (ii) debit such Agent's
settlement account and credit the Trustee's settlement account for an
amount equal to the price of such Book-Entry Notes less such Agent's
commission. The entry of such a deliver order shall constitute a
representation and warranty by the Trustee to DTC that (i) such Book-
Entry Notes have been executed, delivered and authenticated and (ii)
the Trustee is holding the Master Note representing such Book-Entry
Notes pursuant to the relevant Medium-Term Note Certificate Agreement
between the Trustee and DTC.
An Agent will enter an SDFS deliver order through DTC's Participant
Terminal System instructing DTC (i) to debit such Note to such Agent's
participant account and credit such Note to the participant accounts
of the Participants with respect to such Note and (ii) to debit the
settlement accounts of such Participants and credit the settlement
account of such Agent for an amount equal to the price of such Note.
Transfers of funds in accordance with SDFS deliver orders described in
Settlement Procedures "F" and "G" will be settled in accordance with
SDFS operating procedures in effect on the settlement date.
The Trustee, upon confirming receipt of such funds in accordance with
Settlement Procedure "F", will wire transfer to the account of the
Issuer maintained at BankBoston, N.A. (ABA # ▇▇▇▇▇▇▇▇▇ Account No.
526-76237) in funds available for immediate use,
B-34
the amount transferred to the Trustee in accordance
with Settlement Procedure "F".
An Agent will confirm the purchase of such Note to
the purchaser either by transmitting to the
Participants with respect to such Note a
confirmation order or orders through DTC's
institutional delivery system or by mailing a
written confirmation to such purchaser.
Settlement Procedures
---------------------
Timetable: For orders of Book-Entry Notes solicited by an
--------- Agent, as agent, and accepted by the Issuer for
settlement on the first Business Day after the sale
date, Settlement Procedures "A" through "J" set
forth above shall be completed as soon as possible
but not later than the respective times (New York
City time) set forth below:
SETTLEMENT
PROCEDURE TIME
A 11:00 a.m. on the sale date
B 12:00 noon on the sale date
C 2:00 p.m. on the sale date
D 3:00 p.m. on the day before
settlement
E 9:00 a.m. on settlement date
F-G 2:00 p.m. on settlement date
H 4:45 p.m. on settlement date
I-J 5:00 p.m. on settlement date
If a sale is to be settled two Business Days after
the sale date, Settlement Procedure "A", "B" and "C"
shall be completed as soon as practicable but not
later than 11:00 a.m., 12:00 noon and 2:00 p.m., as
the case may be, on the first Business Day after the
sale date.
If a sale is to be settled more than two Business
Days after the sale date, Settlement Procedure "A"
shall be completed as soon as practicable but no
later than 11:00 a.m. on the first Business Day
after the sale date and Settlement Procedures "B"
and "C" shall be completed as soon as practicable
but no later than 12:00 noon and 2:00 p.m., as the
case may be, on the second Business Day before the
settlement date. If the initial interest rate for a
Floating Rate Book-Entry Note has not been
determined at the time that Settlement Procedure "A"
is completed, Settlement
B-35
Procedures "B" and "C" shall be completed as soon as
such rate has been determined but not later than
12:00 noon and 2:00 p.m., respectively, on the
Business Day before the settlement date. Settlement
Procedure "H" is subject to extension in accordance
with any extension of Fedwire closing deadlines and
in the other events specified in the SDFS operating
procedures in effect on the settlement date.
If settlement of a Book-Entry Note is rescheduled or
canceled, the Trustee, upon receipt of notice from
the Issuer, will deliver to DTC, through DTC's
Participant Terminal System, a cancellation message
to such effect by no later than 2:00 p.m. on the
Business Day immediately preceding the scheduled
settlement date.
Failure to Settle: If an Agent or Trustee fails to enter an SDFS
----------------- deliver order with respect to a Book-Entry Note
pursuant to Settlement Procedure "F", the Trustee
may deliver to DTC, through DTC's Participant
Terminal System, as soon as practicable, a
withdrawal message instructing DTC to debit such
note to the Trustee's participant account. DTC will
process the withdrawal message, provided that the
Trustee's participant account contains a principal
amount of Book-Entry Notes represented by the Master
Note that is at least equal to the principal amount
to be debited. If a withdrawal message is processed
with respect to all the Book-Entry Notes identified
by a single CUSIP number, the Trustee will advise
the Issuer and will make appropriate entries in its
records. The CUSIP number assigned to such issue of
Book-Entry Notes shall, in accordance with CUSIP
Service Bureau procedures, be canceled and not
immediately reassigned. If a withdrawal message is
processed with respect to one or more, but not all,
of the issue of Book-Entry Notes identified by a
single CUSIP number, the Trustee will advise the
Issuer and will make appropriate entries in its
records.
If the purchase price for any Book-Entry Note is not
timely paid to the Participants with respect to such
Note by the beneficial purchaser thereof (or a
person, including an indirect participant in DTC,
acting on behalf of such purchaser), such
Participants and, in turn, the Presenting Agent may
enter SDFS deliver orders through DTC's Participant
Terminal system reversing the orders entered
pursuant to Settlement Procedures "F" and "G",
respectively. Thereafter, the Trustee will deliver
the withdrawal message and take the applicable
related actions described in the preceding
paragraph. If such failure shall have occurred for
any
B-36
reason other than the failure by the Presenting
Agent to provide the Purchase Information to the
Issuer or to provide a confirmation to the
purchaser, the Issuer will reimburse the Presenting
Agent on an equitable basis for its loss of the use
of the funds during the period when they were
credited to the account of the Issuer.
Notwithstanding the foregoing, upon any failure to
settle with respect to a Book-Entry Note, DTC may
take any actions in accordance with its SDFS
operating procedures then in effect.
Periodic Statements
-------------------
from the Trustee: Periodically, the Trustee will send to the Issuer a
---------------- statement setting forth the principal amount of
Book-Entry Notes outstanding as of that date and
setting forth a brief description of any sales of
Book-Entry Notes of which the Issuer has advised the
Trustee but which have not yet been settled.
Procedure for
-------------
Rate Changes: The Issuer and each Agent will discuss from time to
------------ time the price of, and the rates to be borne by, the
Notes that may be sold as a result of the
solicitation of offers by any Agent. Once an Agent
has recorded any indication of interest in Notes
upon certain terms, and communicated with the
Issuer, if the Issuer plans to accept an offer to
purchase Notes upon such terms, it will prepare a
Pricing Supplement to the Prospectus, as then
amended or supplemented, reflecting the terms of
such Notes and will arrange to transmit such Pricing
Supplement to the Commission for filing in
accordance with and within the time prescribed by
the applicable paragraph of Rule 424(b) under the
Act. The Issuer will supply at least two copies of
the Prospectus as then amended or supplemented, and
bearing such Pricing Supplement, to the Presenting
Agent. No settlements with respect to Notes upon
such terms may occur prior to such transmitting and
such Agent will not, prior to such transmitting,
mail confirmations to customers who have offered to
purchase Notes upon such terms. After such
transmitting, sales and mailing of confirmations and
settlements may occur with respect to Notes upon
such terms, subject to the provisions of "Delivery
of Prospectus" below.
Outdated Stickers, and copies of the Prospectus to
which they are attached (other than those retained
for files), will be destroyed.
B-37
Suspension of Solicitation;
---------------------------
Amendment or Supplement: As provided in the Agency Agreement, the Issuer may
----------------------- suspend solicitation of purchase at any time, and,
upon receipt of notice from the Issuer, the Agents
will as promptly as practicable, but in no event
later than one Business Day following such notice,
suspend solicitation until such time as the Issuer
has advised them that solicitation of purchases may
be resumed.
If the Agents receive the notice from the Issuer
contemplated by Section 4(b) of the Agency
Agreement, they will promptly suspend solicitation
and will only resume solicitation as provided in the
Agency Agreement. If the Issuer decides to amend or
supplement the Registration Statement or the
Prospectus relating to the Notes, it will promptly
advise the Agents and will furnish the Agents with
the proposed amendment or supplement in accordance
with the terms of the Agency Agreement. The Issuer
will promptly file or mail to the Commission for
filing such amendment or supplement, provide the
Agents with copies of any such amendment or
supplement, confirm to the Agents that such
amendment or supplement has been filed with the
Commission and advise the Agents that solicitation
may be resumed. Any such suspension shall not affect
the Issuer's obligations under the Agency Agreement;
and in the event that at the time the Issuer
suspends solicitation of purchases there shall be
any offers already accepted by the Issuer
outstanding for settlement, the Issuer will have the
sole responsibility for fulfilling such obligations;
the Agents will make reasonable efforts to assist
the Issuer to fulfill such obligations, but the
Agents will not be obligated to fulfill such
obligations. The Issuer will in addition promptly
advise the Agents and the Trustee if such offers are
not to be settled and if copies of the Prospectus as
in effect at the time of the suspension may not be
delivered in connection with the settlement of such
offers.
Delivery of Prospectus: A copy of the Prospectus, as most recently amended
---------------------- or supplemented on the date of delivery thereof
(except as provided below), must be delivered to a
purchaser prior to or together with the earlier of
delivery of (i) the written confirmation provided
for above, and (ii) any Note purchased by such
purchaser at the following address: if to
PaineWebber Incorporated, attention: ▇▇▇▇▇ ▇.
▇▇▇▇▇▇, 1285 Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇, Telecopy Number (▇▇▇) ▇▇▇-▇▇▇▇, if
to BT Alex. ▇▇▇▇▇ Incorporated, to Debt Capital
Markets, attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇
B-38
10006, Telecopy Number (▇▇▇) ▇▇▇-▇▇▇▇, if to First
Chicago Capital Markets, Inc., to: Real Estate
Capital Markets, attention: ▇▇▇ ▇.▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, Telecopy Number
(▇▇▇) ▇▇▇-▇▇▇▇, if to NationsBanc ▇▇▇▇▇▇▇▇▇▇
Securities LLC, attention: ▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
Telecopy Number (▇▇▇) ▇▇▇-▇▇▇▇ and if to ▇▇▇▇▇▇▇
▇▇▇▇▇ Barney Inc., to Debt Capital Markets,
attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, 7 World Trade Center,
42nd Floor, New York, N.Y. 10048 for record keeping
purposes, one copy of such Pricing Supplement shall
also be mailed to ▇▇▇▇▇▇ & ▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇, attention: ▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇, Telecopy Number (▇▇▇) ▇▇▇-▇▇▇▇, and if to
the Trustee, to: U.S. Bank Trust National
Association, attention: ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Telecopy
Number (▇▇▇) ▇▇▇-▇▇▇▇ and the Designated Agent, if
any. The Issuer shall ensure that the Presenting
Agent receives copies of the Prospectus and each
amendment or supplement thereto (including
appropriate Pricing Supplements) in such quantities
and within such time limits as will enable the
Presenting Agent to deliver such confirmation or
Note to a purchaser as contemplated by these
procedures and in compliance with the preceding
sentence. If, since the date of acceptance of a
purchaser's offer, the Prospectus shall have been
supplemented solely to reflect any sale of Notes on
terms different from those agreed to between the
Issuer and such purchaser or a change in posted
rates not applicable to such purchaser, such
purchaser shall not receive the Prospectus as
supplemented by such new supplement, but shall
receive the Prospectus as supplemented to reflect
the terms of the Notes being purchased by such
purchaser and otherwise as most recently amended or
supplemented on the date of delivery of the
Prospectus.
B-39
SCHEDULE I
----------
As compensation for the services of an Agent hereunder, the Operating
Partnership shall pay such Agent, on a discount basis, a commission for the sale
of each Note equal to the principal amount of such Note multiplied by the
appropriate percentage set forth below:
PERCENT OF
MATURITY RANGES PRINCIPAL AMOUNT
--------------- -----------------
From 9 months to less than 1 year ............... .125%
From 1 year to less than 18 months .............. .150
From 18 months to less than 2 years ............. .200
From 2 years to less than 3 years ............... .250
From 3 years to less than 4 years ............... .350
From 4 years to less than 5 years ............... .450
From 5 years to less than 6 years ............... .500
From 6 years to less than 7 years ............... .550
From 7 years to less than 10 years .............. .600
From 10 years to less than 15 years ............. .625
From 15 years to less than 20 years ............. .700
From 20 years to 30 years ....................... .750
Greater than 30 years ........................... *
------------------
* As agreed to by the Operating Partnership and such Agent at the time of
sale.
SCHEDULE II
-----------
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.
▇▇▇▇▇▇▇ Spring Mall, Inc.
▇▇▇▇▇▇▇ Spring Mall Limited Partnership
▇▇▇▇▇▇▇ Management LLC
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Limited Partnership