EXHIBIT 1.1
▇▇▇▇▇▇▇▇▇▇ REALTY INVESTORS
COMMON SHARES AND PREFERRED SHARES
UNDERWRITING AGREEMENT
May 1, 2001
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co., L.P.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Section 1. From time to time ▇▇▇▇▇▇▇▇▇▇ Realty Investors, a Texas real
estate investment trust (the "Company"), proposes to enter into one or more
Pricing Agreements (each a "Pricing Agreement") in the form of Annex I hereto,
with such additions and deletions as the parties thereto may determine, and,
subject to the terms and conditions stated herein and therein, to issue and sell
to the firms named in Schedule I to the applicable Pricing Agreement (such firms
constituting the "Underwriters" with respect to such Pricing Agreement and the
securities specified therein) certain of its shares of beneficial interest (the
"Shares") specified in Schedule II to such Pricing Agreement (with respect to
such Pricing Agreement, the "Designated Shares"). The Shares may include the
Company's common shares of beneficial interest, par value $.03 per share (the
"Common Shares"), or preferred shares of beneficial interest, par value $.03 per
share (the "Preferred Shares").
The terms and rights of any particular issuance of Designated Shares shall
be as specified in the Pricing Agreement relating thereto and in or pursuant to
the resolutions of the board of trust managers of the Company identified in such
Pricing Agreement.
Particular sales of Designated Shares may be made from time to time to the
Underwriters of such Shares, for whom the firms designated as representatives of
the Underwriters of such Shares in the Pricing Agreement relating thereto will
act as representatives (the "Representatives"). The term "Representatives" also
refers to a single firm acting as sole representative of the Underwriters and to
an Underwriter or Underwriters who act without any firm being designated as its
or their representatives. This Underwriting Agreement shall not be construed as
an obligation of the Company to sell any of the Shares or as an obligation of
any of the Underwriters to purchase the Shares. The obligation of the Company
to issue and sell any of the Shares and the obligation of any of the
Underwriters to purchase any of the Shares shall be evidenced by the Pricing
Agreement with respect to the Designated Shares specified therein. Each Pricing
Agreement shall specify the aggregate number of such Designated Shares, the
initial public offering price of such Designated Shares, the purchase price to
the Underwriters of such Designated Shares, the names of the Underwriters of
such Designated Shares, the names of the Representatives of such Underwriters
and the number of such Designated Shares to be purchased by each Underwriter and
shall set forth the date, time and manner of delivery of such Designated Shares
and payment therefor. The Pricing Agreement shall also specify (to the extent
not set forth in the registration statement and prospectus with respect thereto)
the terms of such Designated Shares. A Pricing Agreement shall be in the form
of an executed writing (which may be in counterparts), and may be evidenced by
an exchange of telegraphic communications or any other rapid transmission device
designed to produce a written record of communications transmitted. The
obligations of the Underwriters under this Agreement and each Pricing Agreement
shall be several and not joint.
Section 2. The Company represents and warrants to, and agrees with,
each of the Underwriters that:
(a) A registration statement on Form S-3 (File No. 333-85967) in
respect of the Shares has been filed with the Securities and Exchange Commission
(the "Commission"); such registration statement and any post-effective amendment
thereto, each in the form heretofore delivered or to be delivered to the
Representatives and to the Representatives for each of the other Underwriters
(copies delivered for such other Underwriters may exclude exhibits to such
registration statement, but must include all documents incorporated by reference
in the prospectus contained therein), have been declared effective by the
Commission in such form; other than a registration statement, if any, increasing
the size of the offering (a "Rule 462(b) Registration Statement") filed pursuant
to Rule 462(b) under the Securities Act of 1933, as amended (the "Act"), which
became effective upon filing, no other document with respect to such
registration statement or document incorporated by reference therein has
heretofore been filed or transmitted for filing with the Commission (other than
prospectuses filed pursuant to Rule 424(b) of the rules and regulations of the
Commission under the Act each in the form heretofore delivered to the
Representatives); and no stop order suspending the effectiveness of such
registration statement, any post-effective amendment thereto or the Rule 462(b)
Registration Statement, if any, has been issued and no proceeding for that
purpose has been initiated or threatened by the Commission (any preliminary
prospectus included in such registration statement or filed with the Commission
pursuant to Rule 424(a) under the Act, is hereinafter called a "Preliminary
Prospectus"; the various parts of such registration statement and Rule 462(b)
Registration Statement, if any, including all exhibits thereto and the documents
incorporated by reference in the prospectus contained in the registration
statement at the time such part of the registration statement became effective,
each as amended at the time such part of the registration statement became
effective (each filing of an annual report pursuant to Sections 13(a) or 15(d)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), shall
be considered an additional time at which the Registration Statement became
effective) or such part of the Rule 462(b) Registration Statement, if any,
became or hereafter becomes effective, are hereinafter collectively called the
"Registration Statement"; the prospectus relating to the Shares, in the form in
which it has most recently been filed, or transmitted for filing, with the
Commission on or prior to the date of this Agreement, is hereinafter called the
"Prospectus"; any reference herein to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the Act, as of the date
of such Preliminary Prospectus or Prospectus, as the case may be; any reference
to any amendment or supplement to any Preliminary Prospectus or the Prospectus
shall be deemed to refer to and include any documents filed after the date of
such Preliminary Prospectus or Prospectus, as the case may be, under the
Exchange Act, and incorporated by reference in such Preliminary Prospectus or
Prospectus, as the case may be; any reference to any amendment to the
Registration Statement shall be deemed to refer to and include any annual report
of the Company filed pursuant to Sections 13(a) or 15(d) of the Exchange Act
after the effective date of the Registration Statement that is incorporated by
reference in the Registration Statement; and any reference to the Prospectus as
amended or supplemented shall be deemed to refer to the Prospectus as amended or
supplemented in relation to the applicable Designated Shares in the form in
which it is filed with the Commission pursuant to Rule 424(b) under the Act in
accordance with Section 5(a) hereof, including any documents incorporated by
reference therein as of the date of such filing and if the Company elects to
rely on Rule 434 under the Act, any reference to the Prospectus shall be deemed
to include, without limitation, the form of prospectus and the abbreviated term
sheet, taken together, provided to the Underwriters by the Company in reliance
on Rule 434 under the Act (the "Rule 434 Prospectus");
(b) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder, and none of such documents 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 in light of the
circumstances under which they were made; and any further documents so filed and
incorporated by reference in the Prospectus or any further amendment or
supplement thereto, when such documents become effective or are filed with the
Commission, as the case may be, will conform in all material respects to the
requirements of the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder and will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with information
furnished in writing to the Company by an Underwriter of Designated Shares
through the Representatives expressly for use in the Prospectus as amended or
supplemented relating to such Shares;
(c) The Registration Statement and the Prospectus conform, and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of the Act
and the rules and regulations of the Commission thereunder and do not and will
not, as of the applicable effective date and Time of Delivery (as defined in
Section 4 hereof) as to the Registration Statement and any amendment thereto and
as of its date of issuance and Time of Delivery (as defined in Section 4 hereof)
as to the Prospectus and any amendment or supplement thereto, 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;
provided, however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with information
furnished in writing to the Company by an Underwriter of Designated Shares
through the Representatives expressly for use in the Prospectus as amended or
supplemented relating to such Shares;
(d) The Company is a real estate investment trust duly formed and
validly existing under the laws of the State of Texas, with full power and
authority to own, lease and operate its properties and to conduct its business
as described in the Prospectus; and the Company is duly qualified to transact
business and is in good standing in each other jurisdiction in which it owns or
leases properties, or conducts any business, so as to require such
qualification, or is subject to no material liability or disability by reason of
the failure to be so qualified in any such jurisdiction, and holds all
authorizations, approvals, orders, licenses, certificates and permits from all
governmental authorities which are material to the conduct of its business;
(e) Each subsidiary of the Company has been duly incorporated (or, with
respect to ▇▇▇▇▇▇▇▇▇▇ Properties Trust, has been duly formed as a real estate
investment trust) and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation or formation or validly
exists as a real estate investment trust, has full power and authority to own,
lease and operate its properties and to conduct its business as described in the
Prospectus and is duly qualified as a foreign corporation or trust to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure to so qualify
would not have a material adverse effect or a prospective material adverse
effect, on the condition, financial or otherwise, or the earnings or business
affairs of the Company and its subsidiaries considered as one enterprise; all of
the issued and outstanding capital stock of each such subsidiary has been duly
authorized and validly issued, is fully paid and non-assessable and is owned by
the Company, directly or through subsidiaries (except for ▇▇▇▇▇▇▇▇▇▇ Properties
Trust, of which the Company owns approximately 77% of the outstanding capital
shares, and ▇▇▇▇▇▇▇▇▇▇/Investments, Inc., of which the Company owns 95% of the
outstanding common stock), free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity;
(f) Neither the Company nor any of its subsidiaries has sustained since
the date of the latest audited financial statements included or incorporated by
reference in the Prospectus any material 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; and,
since the respective dates as of which information is given in the Registration
Statement and the Prospectus, there has not been any change in the consolidated
capital stock of the Company (except for issuances of Common Shares pursuant to
the Company's employee benefit and stock option plans, the Company's Dividend
Reinvestment and Share Purchase Plan, upon conversion or redemption of Preferred
Shares and exchanges of operating partnership units) or any change in the
consolidated debt of the Company or any of its subsidiaries or any decrease in
consolidated net current assets or net assets, except for changes in the
ordinary course of business, or any material adverse change, or any development
involving a prospective material adverse change, in or affecting the general
affairs, management, financial position, shareholders' equity or results of
operations of the Company and its subsidiaries, otherwise than as set forth or
contemplated in the Prospectus, and there has been no material adverse change in
the condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business;
(g) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company have
been duly and validly authorized and issued and are fully paid and
non-assessable;
(h) The Shares have been duly and validly authorized, and, when
Designated Shares are issued and delivered pursuant to this Agreement and the
Pricing Agreement with respect to such Designated Shares, such Designated Shares
will be duly and validly issued and fully paid and non-assessable; and the
Shares conform to the description thereof contained in the Registration
Statement, and the Designated Shares will conform to the description thereof
contained in the Prospectus as amended or supplemented with respect to such
Designated Shares; and the issuance of the Designated Shares to be purchased
from the Company pursuant to this Agreement and any Pricing Agreement is not
subject to preemptive rights;
(i) The issuance and sale of the Shares and the compliance by the
Company with all of the provisions of this Agreement and any Pricing Agreement,
and the consummation of the transactions herein and therein contemplated will
not conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Company or
any of its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the Company
or any of its subsidiaries is subject, nor will such action result in any
violation of the provisions of the Declaration of Trust or By-laws of the
Company or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of its
subsidiaries or any of their respective properties; and no consent, approval,
authorization, order, registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale of the Shares or
the consummation by the Company of the transactions contemplated by this
Agreement or any Pricing Agreement, except such as have been, or will have been
prior to the Time of Delivery (as defined in Section 4 hereof), obtained under
the Act and except for the listing of the Designated Shares on the New York
Stock Exchange, Inc. or other stock exchange and such consents, approvals,
authorizations, registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and distribution of
the Shares by the Underwriters;
(j) The statements set forth in the Prospectus under the captions
"Description of Common Shares," "Description of Preferred Shares," "Description
of Securities Warrants," "Plan of Distribution" and "Underwriting," insofar as
they purport to constitute a summary of the terms of the Shares, or to describe
the provisions of the laws and documents referred to therein, are accurate,
complete and fair;
(k) Neither the Company nor any of its subsidiaries is in violation of
its charter or Bylaws or in default in the performance or observance of any
material obligation, agreement, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement, lease or other agreement or
instrument to which it is a party or by which it or its properties may be bound;
(l) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its subsidiaries
is a party or of which any property of the Company or any of its subsidiaries is
the subject which, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a material adverse
effect on the current or future consolidated financial position, shareholders'
equity or results of operations of the Company and its subsidiaries; and, to the
best of the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(m) The consolidated financial statements together with related notes
and schedules as set forth or incorporated by reference in the Registration
Statement, present fairly the financial position and the results of operations
of the Company and its subsidiaries at the indicated dates and for the indicated
periods. Except as otherwise stated in the Registration Statement, such
financial statements have been prepared in accordance with generally accepted
accounting principles, applied on a consistent basis; and the supporting
schedules included in the Registration Statement present fairly the information
required to be stated therein;
(n) The Company and its subsidiaries have good and indefeasible title
in fee simple to all real property and interests in real property owned by them
and good and indefeasible title to all personal property owned by them, in each
case free and clear of all pledges, liens, encumbrances, claims, security
interests and defects, except as are described in the Prospectus, and except for
property owned in the joint ventures set forth in Annex III hereto or such as do
not materially affect the value of such property and interests in the aggregate
and do not interfere with the use made and proposed to be made of such property
and interests by the Company and its subsidiaries taken as a whole; in the case
of real property and interests in real property, the Company and its
subsidiaries have obtained satisfactory confirmation (consisting of policies of
title insurance or binders therefor or opinions of counsel based upon the
examination of abstracts) confirming, except as is otherwise described in the
Prospectus, (a) that the Company and its subsidiaries have the foregoing title
to such real property and interests in real property; provided, however, that in
those cases in which such information is not current, the Company and its
subsidiaries do not have notice of any material claim of any sort which has been
asserted by anyone adverse to the Company's or its subsidiaries foregoing title
to such real property and interests in real property, and (b) that the
instruments securing the indebtedness of third parties to the Company or its
subsidiaries create valid liens upon the real properties described in such
instruments enjoying the priorities intended, subject only to exceptions to
title which have no materially adverse effect on the value of such real
properties and interests; and any real property and buildings held under lease
by the Company or its subsidiaries or leased by the Company or its subsidiaries
to a third party are held or leased by them under valid, binding and enforceable
leases conforming to the description thereof set forth in the Prospectus, with
such exceptions as are not material and do not interfere with the use made and
proposed to be made of such property and buildings by the Company or its
subsidiaries or such third party;
(o) The Company and its subsidiaries have filed all federal, state,
local and foreign income tax returns which have been required to be filed on or
before the due date (taking into account all extensions of time to file) and
have paid or provided for all taxes indicated by said returns and all
assessments received by it to the extent that taxes have become due;
(p) With respect to all tax periods regarding which the Internal
Revenue Service is or will be entitled to assert any claim, the Company has met
the requirements for qualification as a real estate investment trust under
Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the
"Code"), and the Company's present and contemplated operations, assets and
income continue to meet such requirements;
(q) The Company is not and, after giving effect to the offering and
sale of the Shares, will not be an "investment company" or an entity
"controlled" by an "investment company", as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act");
(r) Deloitte & Touche LLP, who have audited certain financial
statements of the Company and its subsidiaries filed with the Commission as part
of, or incorporated by reference in, the Registration Statement and Prospectus
are independent public accountants as required by the Act and the rules and
regulations of the Commission promulgated thereunder; furthermore, all financial
statements required by Rule 3-14 of Regulation S-X ("Rule 3-14") have been
included or incorporated by reference in the Registration Statement and the
Prospectus and any such financial statements are in conformity with the
requirements of Rule 3-14. No other financial statements are required to be set
forth or to be incorporated by reference in the Registration Statement or the
Prospectus under the Act or the Rules and Regulations thereunder;
(s) Although the Company is aware of the presence of hazardous
substances, hazardous materials, toxic substances or waste materials ("Hazardous
Materials") on certain of its properties, nothing has come to the attention of
the Company which, at this time, would lead the Company to believe that the
presence of such Hazardous Materials, when considered in the aggregate, would
materially adversely affect the financial condition of the Company. In
connection with the construction on or operation and use of the properties owned
or leased by the Company or any of its subsidiaries, the Company represents
that, as of the date of this Agreement, it has no knowledge of any material
failure by the Company or any of its subsidiaries to comply with all applicable
local, state and federal environmental laws, regulations, ordinances and
administrative and judicial orders relating to the generation, recycling, reuse,
sale, storage, handling, transport and disposal of any Hazardous Materials; and
(t) Immediately after any sale of Shares by the Company hereunder or
under any Pricing Agreement, the aggregate amount of the Shares which shall have
been issued and sold by the Company hereunder or under any Pricing Agreement and
of any securities of the Company (other than the Shares) that shall have been
issued and sold pursuant to the Registration Statement will not exceed the
amount of securities registered under the Registration Statement.
Section 3. Upon the execution of the Pricing Agreement applicable to
any Designated Shares and authorization by the Representatives of the release of
such Designated Shares, the several Underwriters propose to offer such
Designated Shares for sale upon the terms and conditions set forth in the
Prospectus as amended or supplemented.
Section 4. Certificates for the Designated Shares to be purchased by
each Underwriter pursuant to the Pricing Agreement relating thereto, in
definitive form, and in such authorized denominations and registered in such
names as the Representatives may request upon at least twenty-four hours' prior
notice to the Company, shall be delivered by or on behalf of the Company to the
Representatives for the account of such Underwriter, against payment by such
Underwriter or on its behalf of the purchase price therefor by certified or
official bank check or checks, payable to the order of the Company in the funds
specified in such Pricing Agreement, all at the place and time and date
specified in such Pricing Agreement or at such other place and time and date as
the Representatives and the Company may agree upon in writing, such time and
date being herein called the "Time of Delivery" for such Shares.
Section 5. The Company agrees with each of the Underwriters of any
Designated Shares:
(a) If the Company does not elect to rely on Rule 434 under the Act,
immediately following execution and delivery of the applicable Pricing
Agreement, to prepare the Prospectus as amended and supplemented in relation to
the applicable Designated Shares in a form approved by the Representatives and
to file such Prospectus pursuant to Rule 424(b) under the Act not later than the
Commission's close of business on the business day following the execution and
delivery of the Pricing Agreement relating to the applicable Designated Shares
or, if applicable, such earlier time as may be required by Rule 424(b), or if
the Company elects to rely on Rule 434 under the Act, immediately following
execution and delivery of the applicable Pricing Agreement, to prepare an
abbreviated term sheet relating to the Designated Shares in a form approved by
the Representatives that complies with the requirements of Rule 434 under the
Act and to file such form of Rule 434 Prospectus complying with Rule 434(c)(2)
of the Act pursuant to Rule 424(b) under the Act not later than the Commission's
close of business on the business day following the execution and delivery of
the Pricing Agreement relating to the applicable Designated Shares or, if
applicable, such earlier time as may be required by Rule 424(b); to make no
further amendment or any supplement to the Registration Statement or Prospectus
as amended or supplemented after the date of the Pricing Agreement relating to
such Shares and prior to the Time of Delivery for such Shares which shall be
disapproved by the Representatives for such Shares promptly after reasonable
notice thereof; to advise the Representatives promptly of any such amendment or
supplement after such Time of Delivery and furnish the Representatives with
copies thereof; to file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act for so long as
the delivery of a prospectus is required in connection with the offering or sale
of such Shares, and during such same period to advise the Representatives,
promptly after it receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or becomes effective or any supplement to
the Prospectus or any amended Prospectus has been filed with the Commission, of
the issuance by the Commission of any stop order or of any order preventing or
suspending the use of any prospectus relating to the Shares, of the suspension
of the qualification of such Shares for offering or sale in any jurisdiction, of
the initiation or threatening of any proceeding for any such purpose, or of any
request by the Commission for the amending or supplementing of the Registration
Statement or Prospectus or for additional information; and, in the event of the
issuance of any such stop order or of any such order preventing or suspending
the use of any prospectus relating to the Shares or suspending any such
qualification, to promptly use every reasonable effort to obtain the withdrawal
of such order;
(b) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify such Shares for offering and
sale under the securities laws of such jurisdictions as the Representatives may
request and to comply with such laws so as to permit the continuance of sales
and dealings therein in such jurisdictions for as long as may be necessary to
complete the distribution of such Shares, provided that in connection therewith
the Company shall not be required to qualify as a foreign corporation or to file
a general consent to service of process in any jurisdiction;
(c) Promptly to furnish the Underwriters with copies of the Prospectus
as amended or supplemented in such quantities and at such location as the
Representatives may reasonably request, and, if the delivery of a prospectus is
required at any time in connection with the offering or sale of the Shares and
if at such time any event shall have occurred as a result of which the
Prospectus as then amended or supplemented would include an untrue statement of
a material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made when such Prospectus is delivered, not misleading, or, if for any other
reason it shall be necessary during such same period to amend or supplement the
Prospectus or to file under the Exchange Act any document incorporated by
reference in the Prospectus in order to comply with the Act or the Exchange Act,
to notify the Representatives and upon their request to file such document and
to prepare and furnish without charge to each Underwriter and to any dealer in
securities as many copies as the Representatives may from time to time
reasonably request of an amended Prospectus or a supplement to the Prospectus
which will correct such statement or omission or effect such compliance;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the effective
date of the Registration Statement (as defined in Rule 158(c) under the Act), an
earnings statement of the Company and its subsidiaries (which need not be
audited) complying with Section 11(a) of the Act and the rules and regulations
of the Commission thereunder (including, at the option of the Company, Rule
158);
(e) During the period beginning from the date of the Pricing Agreement
for such Designated Shares and continuing to and including the later of (i) the
termination of trading restrictions under the Exchange Act for such Designated
Shares, as notified to the Company by the Representatives, (ii) the Time of
Delivery for such Designated Shares, and (iii) such period as may be specified
in a Pricing Supplement, not to offer, grant any option for the sale of, sell,
contract to sell or otherwise issue any shares of beneficial interest of the
Company which are substantially similar to such Designated Shares (except for
Common Shares issued pursuant to employee benefit plans, employee and director
stock option plans, as partial or full payment for properties to be acquired by
the Company, upon conversion or redemption of Preferred Shares or upon exchange
of operating partnership units), without the prior written consent of the
Representatives or enter into any swap or any other agreement or any transaction
that transfers, in whole or in part, directly or indirectly, the economic
consequence of ownership of shares of beneficial interest of the Company which
are substantially similar to such Designated Shares, whether any such swap or
transaction described above is to be settled by delivery of shares of beneficial
interest of the Company which are substantially similar to such Designated
Shares, in cash or otherwise;
(f) To use the net proceeds received by it from the sale of the Shares
in the manner specified in the Prospectus under the caption "Use of Proceeds";
and
(g) To elect to qualify as a "real estate investment trust" under the
Code, and to use its best commercially reasonable efforts to continue to meet
the requirements to qualify as a "real estate investment trust".
Section 6. The Company covenants and agrees with the several
Underwriters that the Company will pay or cause to be paid the following: (i)
the reasonable fees, disbursements and expenses of the Company's counsel and
accountants in connection with the registration of the Shares under the Act and
all other expenses in connection with the preparation, printing and filing of
the Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto (including each abbreviated term sheet
delivered by the Company pursuant to Rule 434 under the Act) and the mailing and
delivering of copies thereof to the Underwriters and dealers; (ii) the cost of
printing or producing any Agreement among Underwriters, this Agreement, any
Pricing Agreement, any blue sky and legal investment surveys and any other
documents in connection with the offering, purchase, sale and delivery of the
Shares; (iii) all expenses in connection with the qualification of the Shares
for offering and sale under state securities laws as provided in Section 5(b)
hereof, including the reasonable fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection with the
blue sky and legal investment surveys; (iv) any fees charged by securities
rating services for rating the Shares; (v) any filing fees incident to any
required review by the National Association of Securities Dealers, Inc. of the
terms of the sale of the Shares; (vi) the cost of preparing certificates for the
Shares (vii) the fees and expenses of any transfer agent or registrar or
dividend disbursing agent; and (viii) all other costs and expenses incident to
the performance of its obligations hereunder which are not otherwise
specifically provided for in this Section. It is understood, however, that,
except as provided in this Section and Sections 8 and 11 hereof, the
Underwriters will pay all of their own costs and expenses, including the fees of
their counsel, transfer taxes on resale of any of the Shares by them, and any
advertising expenses connected with any offers they may make.
Section 7. The obligations of the Underwriters of any Designated Shares
under the Pricing Agreement relating to such Designated Shares shall be subject,
in the discretion of the Representatives, to the condition that all
representations and warranties and other statements of the Company in or
incorporated by reference in the Pricing Agreement relating to such Designated
Shares are, at and as of the Time of Delivery for such Designated Shares, true
and correct, to the condition that the Company shall have performed all of its
obligations hereunder theretofore to be performed, and the following additional
conditions:
(a) The Prospectus as amended or supplemented in relation to the
applicable Designated Shares shall have been filed with the Commission pursuant
to Rule 424(b) within the applicable time period prescribed for such filing by
the rules and regulations under the Act and in accordance with Section 5(a)
hereof; no stop order suspending the effectiveness of the Registration Statement
or any part thereof shall have been issued and no proceeding for that purpose
shall have been initiated or threatened by the Commission; and all requests for
additional information on the part of the Commission shall have been complied
with to the Representatives' reasonable satisfaction.
(b) ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, counsel for the Underwriters, shall have
furnished to the Representatives such opinion or opinions, dated the Time of
Delivery for such Designated Shares, with respect to such matters as the
Representatives may reasonably request, and such counsel shall have received
such papers and information as they may reasonably request to enable them to
pass upon such matters. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ may rely upon the opinion of ▇▇▇▇▇
Liddell & ▇▇▇▇ LLP as to matters of Texas law.
(c) ▇▇▇▇▇ Liddell & ▇▇▇▇ LLP, counsel for the Company, shall have
furnished to the Representatives their written opinion, dated the Time of
Delivery for such Designated Shares, in form and substance satisfactory to the
Representatives, to the effect that under the laws of the State of Texas and
applicable federal laws:
(i) The Company is a real estate investment trust duly formed and
validly existing under the laws of the State of Texas and is entitled to the
benefits of the Texas Real Estate Investment Trust Act.
(ii) The Company has the power and authority to own its properties and
to conduct its business as described in the Prospectus.
(iii) The Company is duly qualified to transact business and is in good
standing in each jurisdiction in which it owns or leases properties, or conducts
any business, so as to require such qualification or is subject to no material
liability, or disability by reason of the failure to be so qualified in any such
jurisdiction.
(iv) Each subsidiary of the Company has been duly incorporated (or,
with respect to ▇▇▇▇▇▇▇▇▇▇ Properties Trust, has been formed as a real estate
investment trust) and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation or formation or is
validly existing as a real estate investment trust, has power and authority
(corporate and other) to own, lease and operate its properties and to conduct
its business as described in the Prospectus and, to the best of their knowledge,
is duly qualified as a foreign corporation or trust to transact business and is
in good standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify would not have a material
adverse effect or a prospective material adverse effect on the condition,
financial or otherwise, or the earnings or business affairs of the Company and
its subsidiaries considered as one enterprise; all of the issued and outstanding
capital stock of each such subsidiary has been duly authorized and validly
issued, is fully paid and non-assessable and is owned by the Company, directly
or through subsidiaries (except for ▇▇▇▇▇▇▇▇▇▇ Properties Trust, of which the
Company owns approximately 77% of the outstanding capital shares, and
▇▇▇▇▇▇▇▇▇▇/Investments, Inc. of which the Company owns 95% of the outstanding
common stock), free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity.
(v) The Company has an authorized capitalization as set forth in the
Prospectus and all of the issued shares of capital stock of the Company
(including the Designated Shares being delivered at such Time of Delivery) have
been duly and validly authorized and issued and are fully paid and
non-assessable.
(vi) To the best of such counsel's knowledge and other than as set
forth in the Prospectus, there are no legal or governmental proceedings pending
to which the Company or any of its subsidiaries is a party or of which any
property of the Company or any its subsidiaries is the subject which, if
determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a material adverse effect on the current
or future consolidated financial position, shareholders' equity or results of
operations of the Company and its subsidiaries; and, to the best of such
counsel's knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others.
(vii) This Agreement and the Pricing Agreement with respect to the
Designated Shares have been duly authorized, executed and delivered by the
Company.
(viii) The Designated Shares conform to the description thereof in the
Prospectus.
(ix) The issue and sale of the Shares and the compliance by the Company
with all of the provisions of this Agreement and any Pricing Agreement, and the
consummation of the transactions herein and therein contemplated will not
conflict with or result in a breach or violation of any of the terms or
provisions of, the Declaration of Trust or Bylaws of the Company or any statute
or any order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Company or any of its subsidiaries or any of their
respective properties, nor to such counsel's knowledge, conflict with or result
in a breach or violation of any terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is subject.
(x) No consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the issue and sale of the Designated Shares or the consummation by
the Company of the transactions contemplated by this Agreement or the Pricing
Agreement, except such as have been, or will have been prior to the Time of
Delivery, obtained under the Act and such consents, approvals, authorizations,
orders, registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and distribution of
the Designated Shares by the Underwriters.
(xi) The information set forth in the Prospectus, under the captions
"Certain Federal Income Tax Considerations," "Description of Common Shares,"
"Description of Preferred Shares" and "Plan of Distribution" to the extent such
information constitutes matters of law, summaries of legal matters, documents or
proceedings, or legal conclusions, and under the caption "Underwriting" to the
extent such information constitutes a summary of this Underwriting Agreement,
has been reviewed by them and is correct .
(xii) Based upon review of such documents, certificates and records as
counsel has deemed necessary to express its opinion, upon its discussions with
management of the Company, independent accountants for the Company and with
certain shareholders of the Company and based upon the facts set forth in the
Registration Statement, certain assumptions and certain representations made to
it by the Company's management and by certain of its shareholders, counsel is of
the view that, as of the date of its opinion the Company's form of organization
and its share ownership is such as to enable the Company to meet the
requirements of the Code for qualifications as a real estate investment trust
thereunder and that its income, assets and method of operations have allowed it
to qualify as a real estate investment trust for its taxable year ended December
31, 1985 and all years thereafter, and its currently contemplated future assets,
income and method of operations should put it in a position to qualify to be
treated as a real estate investment trust for the calendar year 2001.
(xiii) The Company is not and, after giving effect to the offering and
sale of the Designated Shares, will not be an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
Investment Company Act.
(xiv) The documents incorporated by reference in the Prospectus as
amended or supplemented (other than the financial statements and related
schedules therein, as to which such counsel need express no opinion), when they
became effective or were filed with the Commission, as the case may be, complied
as to form in all material respects with the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder; and they have no reason to believe that any of such documents, when
they became effective or were so filed, as the case may be, contained, in the
case of a registration statement which became effective under the Act, 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, and,
in the case of other documents which were filed under the Act or the Exchange
Act with the Commission, an untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made when such documents were
so filed, not misleading.
(xv) The Registration Statement and the Prospectus as amended or
supplemented and any further amendments and supplements thereto made by the
Company prior to the Time of Delivery for the Designated Shares (other than the
financial statements and related schedules therein, as to which such counsel
need express no opinion) comply as to form in all material respects with the
requirements of the Act and the rules and regulations thereunder; although they
do not assume any responsibility for the accuracy, completeness or fairness of
the statements contained in the Registration Statement or the Prospectus, except
for those referred to in the opinion in subsection (xi) of this Section 7(c),
they have no reason to believe that, as of its effective date, the Registration
Statement or any further amendment thereto (other than the financial statements
and related schedules therein, as to which such counsel need express no opinion)
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 as amended or supplemented (other than the
financial statements and related schedules therein, as to which such counsel
need express no opinion), at the time the Prospectus was issued, at the time any
such amended or supplemented prospectus was issued or at the Time of Delivery,
contained or contains an untrue statement of a material fact or omitted or omits
to state a material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
(d) On the date of the Pricing Agreement for such Designated Shares and
at the Time of Delivery for such Designated Shares, the independent public
accountants of the Company who have certified the financial statements of the
Company and its subsidiaries included or incorporated by reference in the
Registration Statement shall have furnished to the Representatives a letter,
dated the date of the Pricing Agreement, and to the effect set forth in Annex II
hereto, and with respect to such other matters as the Representatives may
reasonably request and in form and substance satisfactory to the
Representatives:
(e)(i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus as amended prior to the date of the
Pricing Agreement relating to the Designated Shares any loss or interference
with its business from fire, explosion, flood or other calamity, or from any
labor dispute or court or governmental action, order or decree, or any material
adverse change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary course of
business, otherwise than as set forth or contemplated in the Prospectus as
amended prior to the date of the Pricing Agreement relating to the Designated
Shares, and (ii) since the respective dates as of which information is given in
the Prospectus as amended prior to the date of the Pricing Agreement relating to
the Designated Shares there shall not have been any change in the capital stock
of the Company or any change in the consolidated long-term debt of the Company
and its subsidiaries or any decrease in consolidated net current assets or net
assets or any change, or any development involving a prospective change, in or
affecting the general affairs, management, financial position, shareholders'
equity or results of operations of the Company and its subsidiaries, otherwise
than as set forth or contemplated in the Prospectus as amended prior to the date
of the Pricing Agreement relating to the Designated Shares, the effect of which,
in any such case described in Clause (i) or (ii), is in the judgment of the
Representatives so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Designated Shares on the terms and in the manner contemplated in the Prospectus
as first amended or supplemented relating to the Designated Shares.
(f) On or after the date of the Pricing Agreement relating to the
Designated Shares (i) no downgrading shall have occurred in the rating accorded
the Company's debt securities or preferred shares by any "nationally recognized
statistical rating organization," as that term is defined by the Commission for
purposes of Rule 436(g)(2) under the Act and (ii) no such organization shall
have publicly announced that it has under surveillance or review, with possible
negative implications, its rating of any of the Company's debt securities or
preferred shares;
(g) On or after the date of the Pricing Agreement relating to the
Designated Shares there shall not have occurred any of the following: (i) a
suspension or material limitation in trading in securities generally on the New
York Stock Exchange; (ii) a suspension or material limitation in trading in the
Company's securities on the New York Stock Exchange; (iii) a general moratorium
on commercial banking activities in New York or Texas declared by either
Federal, Texas or New York authorities; or (iv) the outbreak or escalation of
hostilities involving the United States or the declaration by the United States
of a national emergency or war, if the effect of any such event specified in
this Clause (iv) in the judgment of the Representatives makes it impracticable
or inadvisable to proceed with the public offering or the delivery of the
Designated Shares on the terms and in the manner contemplated in the Prospectus
as first amended or supplemented relating to the Designated Shares; and
(h) The Company shall have furnished or caused to be furnished to the
Representatives at the Time of Delivery for the Designated Shares a certificate
or certificates of officers of the Company satisfactory to the Representatives
as to the accuracy of the representations and warranties of the Company herein
at and as of such Time of Delivery, as to the performance by the Company of all
of its obligations hereunder to be performed at or prior to such Time of
Delivery, as to the matters set forth in subsections (a) and (e) of this Section
and as to such other matters as the Representatives may reasonably request.
Section 8. (a) The Company will indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus, any
preliminary prospectus supplement, the Registration Statement, the Prospectus as
amended or supplemented and any other prospectus relating to the Shares, or any
amendment or supplement thereto (including the information deemed to be a part
of the Registration Statement pursuant to Rule 434 under the Act, if
applicable), or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, against any and all loss, liability,
claim, damage and expense whatsoever, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or of
any claim whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission provided that any such settlement is
effected with the written consent of the Company, and will reimburse each
Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such action or
claim as such expenses are incurred; provided, however, that the Company shall
not be liable in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in any Preliminary
Prospectus, any preliminary prospectus supplement, the Registration Statement,
the Prospectus as amended or supplemented and any other prospectus relating to
the Shares, or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
of Designated Shares through the Representatives expressly for use in the
Prospectus as amended or supplemented relating to such Designated Shares.
(b) Each Underwriter will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, any preliminary prospectus supplement,
the Registration Statement, the Prospectus as amended or supplemented and any
other prospectus relating to the Shares, or any amendment or supplement thereto
(including the information deemed to be a part of the Registration Statement
pursuant to Rule 434 under the Act, if applicable), or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in any
Preliminary Prospectus, any preliminary prospectus supplement, the Registration
Statement, the Prospectus as amended or supplemented and any other prospectus
relating to the Shares, or any such amendment or supplement in reliance upon and
in conformity with written information furnished to the Company by such
Underwriter through the Representatives expressly for use therein; and will
reimburse the Company for any legal or other expenses reasonably incurred by the
Company in connection with investigating or defending any such action or claim
as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel (unless separate counsel is required due to conflict of interest)
or any other expenses, in each case subsequently incurred by such indemnified
party, in connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the prior written consent
of the indemnified parties, settle or compromise or consent to the entry of any
judgement with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this subsection (a) or (b) above (whether or not the indemnified parties
are actual or potential parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional release of each indemnified party from all
liability arising out of such litigation, investigation, proceeding or claim and
(ii) does not include a statement as to or an admission of fault, culpability or
a failure to act by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
of the Designated Shares on the other from the offering of the Designated Shares
to which such loss, claim, damage or liability (or action in respect thereof)
relates. If, however, the allocation provided by the immediately preceding
sentence is not permitted by applicable law or if the indemnified party failed
to give the notice required under subsection (c) above, then each indemnifying
party shall contribute to such amount paid or payable by such indemnified party
in such proportion as is appropriate to reflect not only such relative benefits
but also the relative fault of the Company on the one hand and the Underwriters
of the Designated Shares on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and such Underwriters on the other shall be deemed to be in the same proportion
as the total net proceeds from such offering (before deducting expenses)
received by the Company bear to the total underwriting discounts and commissions
received by such Underwriters. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company on the one hand or such
Underwriters on the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and equitable
if contribution pursuant to this subsection (d) were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this subsection (d). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this subsection
(d), no Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the applicable Designated Shares
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
obligations of the Underwriters of Designated Shares in this subsection (d) to
contribute are several in proportion to their respective underwriting
obligations with respect to such Shares and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and trust manager of the Company and to
each person, if any, who controls the Company within the meaning of the Act.
Section 9. (a) If any Underwriter shall default in its obligation to
purchase the Designated Shares which it has agreed to purchase under the Pricing
Agreement relating to such Designated Shares, the Representatives may in their
discretion arrange for themselves or another party or other parties to purchase
such Designated Shares on the terms contained herein. If within thirty-six
hours after such default by any Underwriter the Representatives do not arrange
for the purchase of such Designated Shares, then the Company shall be entitled
to a further period of thirty-six hours within which to procure another party or
other parties satisfactory to the Representatives to purchase such Designated
Shares on such terms. In the event that, within the respective prescribed
period, the Representatives notify the Company that they have so arranged for
the purchase of such Designated Shares, or the Company notifies the
Representatives that it has so arranged for the purchase of such Designated
Shares, the Representatives or the Company shall have the right to postpone the
Time of Delivery for such Designated Shares for a period of not more than seven
days, in order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus as amended or supplemented, or in any
other documents or arrangements, and the Company agrees to file promptly any
amendments or supplements to the Registration Statement or the Prospectus which
in the opinion of the Representatives may thereby be made necessary. The term
"Underwriter" as used in this Agreement shall include any person substituted
under this Section with like effect as if such person had originally been a
party to the Pricing Agreement with respect to such Designated Shares.
(b) If, after giving effect to any arrangements for the purchase of the
Designated Shares of a defaulting Underwriter or Underwriters by the
Representatives and the Company as provided in subsection (a) above, the
aggregate number of such Designated Shares which remains unpurchased does not
exceed one-tenth of the aggregate number of the Designated Shares, then the
Company shall have the right to require each non-defaulting Underwriter to
purchase the number of Designated Shares which such Underwriter agreed to
purchase under the Pricing Agreement relating to such Designated Shares and, in
addition, to require each non-defaulting Underwriter to purchase its pro rata
share (based on the number of Designated Shares which such Underwriter agreed to
purchase under such Pricing Agreement) of the Designated Shares of such
defaulting Underwriter or Underwriters for which such arrangements have not been
made; but nothing herein shall relieve a defaulting Underwriter from liability
for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Designated Shares of a defaulting Underwriter or Underwriters by the
Representatives and the Company as provided in subsection (a) above, the
aggregate number of Designated Shares which remains unpurchased exceeds
one-tenth of the aggregate number of the Designated Shares, as referred to in
subsection (b) above, or if the Company shall not exercise the right described
in subsection (b) above to require non-defaulting Underwriters to purchase
Designated Shares of a defaulting Underwriter or Underwriters, then the Pricing
Agreement relating to such Designated Shares shall thereupon terminate, without
liability on the part of any non-defaulting Underwriter or the Company, except
for the expenses to be borne by the Company and the Underwriters as provided in
Section 6 hereof and the indemnity and contribution agreements in Section 8
hereof; but nothing herein shall relieve a defaulting Underwriter from liability
for its default.
Section 10. The respective indemnities, agreements, representations,
warranties and other statements of the Company and the several Underwriters, as
set forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless of
any investigation (or any statement as to the results thereof) made by or on
behalf of any Underwriter or any controlling person of any Underwriter, or the
Company, or any officer or trust manager or controlling person of the Company,
and shall survive delivery of and payment for the Shares.
Section 11. If any Pricing Agreement shall be terminated pursuant to
Section 9 hereof, the Company shall not then be under any liability to any
Underwriter with respect to the Designated Shares covered by such Pricing
Agreement except as provided in Section 6 and Section 8 hereof. If this
Agreement shall be terminated as a result of any of the conditions set forth in
Section 7 (other than Section 7(g)(i), (iii) or (iv)) hereof not being
satisfied, the Company will reimburse the Underwriters through the
Representatives for all out-of-pocket expenses approved in writing by the
Representatives, including fees and disbursements of counsel, reasonably
incurred by the Underwriters in making preparations for the purchase, sale and
delivery of such Designated Shares, but the Company shall then be under no
further liability to any Underwriter with respect to such Designated Shares
except as provided in Sections 6 and 8 hereof.
Section 12. In all dealings hereunder, the Representatives of the
Underwriters of Designated Shares shall act on behalf of each of such
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by such Representatives jointly or by such of the Representatives, if any,
as may be designated for such purpose in the Pricing Agreement.
Section 13. All statements, requests, notices and agreements hereunder
shall be in writing, and if to the Underwriters shall be delivered or sent by
mail, telex or facsimile transmission to the address of the Representatives as
set forth in the Pricing Agreement; and if to the Company shall be delivered or
sent by mail, telex or facsimile transmission to the address of the Company set
forth in the Registration Statement: Attention: Secretary; provided, however,
that any notice to an Underwriter pursuant to Section 8(c) hereof shall be
delivered or sent by mail, telex or facsimile transmission to such Underwriter
at its address set forth in its Underwriters' Questionnaire, or telex
constituting such Questionnaire, which address will be supplied to the Company
by the Representatives upon request. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.
Section 14. This Agreement and each Pricing Agreement shall be binding
upon, and inure solely to the benefit of, the Underwriters, the Company and, to
the extent provided in Sections 8 and 10 hereof, the officers and trust managers
of the Company and each person who controls the Company or any Underwriter, and
their respective heirs, executors, administrators, successors and assigns, and
no other person shall acquire or have any right under or by virtue of this
Agreement or any such Pricing Agreement. No purchaser of any of the Shares from
any Underwriter shall be deemed a successor or assign by reason merely of such
purchase.
Section 15. Time shall be of the essence of each Pricing Agreement. As
used herein, "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
Section 16. This Agreement and each Pricing Agreement shall be governed
by and construed in accordance with the laws of the State of New York.
Section 17. This Agreement and each Pricing Agreement may be executed
by any one or more of the parties hereto and thereto in any number of
counterparts, each of which shall be deemed to be an original, but all such
respective counterparts shall together constitute one and the same instrument.
If the foregoing is in accordance with your understanding, please sign and
return to us two counterparts hereof.
Very truly yours,
▇▇▇▇▇▇▇▇▇▇ REALTY INVESTORS
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice Chairman
Accepted as of the date hereof:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co., L.P.
By: /s/ T. ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇.
Authorized Signatory
-24-
ANNEX I
PRICING AGREEMENT
_______________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co., L.P.
As Representatives of the several
Underwriters named in Schedule I hereto,
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
_________________, 200__
Dear Sirs:
▇▇▇▇▇▇▇▇▇▇ Realty Investors, a Texas real estate investment trust (the
"Company"), proposes, subject to the terms and conditions stated herein and in
the Underwriting Agreement, dated May 1, 2001 (the "Underwriting Agreement"),
between the Company on the one hand and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co., L.P. on the other
hand, to issue and sell to the Underwriters named in Schedule I hereto (the
"Underwriters") the Shares specified in Schedule II hereto (the "Designated
Shares"). Each of the provisions of the Underwriting Agreement is incorporated
herein by reference in its entirety, and shall be deemed to be a part of this
Agreement to the same extent as if such provisions had been set forth in full
herein; and each of the representations and warranties set forth therein shall
be deemed to have been made at and as of the date of this Pricing Agreement,
except that each representation and warranty which refers to the Prospectus in
Section 2 of the Underwriting Agreement shall be deemed to be a representation
or warranty as of the date of the Underwriting Agreement in relation to the
Prospectus (as therein defined), and also a representation and warranty as of
the date of this Pricing Agreement in relation to the Prospectus as amended or
supplemented relating to the Designated Shares which are the subject of this
Pricing Agreement. Each reference to the Representatives herein and in the
provisions of the Underwriting Agreement so incorporated by reference shall be
deemed to refer to you. Unless otherwise defined herein, terms defined in the
Underwriting Agreement are used herein as therein defined. The Representatives
designated to act on behalf of the Representatives and on behalf of each of the
Underwriters of the Designated Shares pursuant to Section 12 of the Underwriting
Agreement and the address of the Representatives referred to in such Section 12
are set forth at the end of Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the Prospectus,
as the case may be, relating to the Designated Shares, in the form heretofore
delivered to you is now proposed to be filed with the Commission.
Subject to the terms and conditions set forth herein and in the Underwriting
Agreement incorporated herein by reference, the Company agrees to issue and sell
to each of the Underwriters, and each of the Underwriters agrees, severally and
not jointly, to purchase from the Company, at the time and place and at the
purchase price to the Underwriters set forth in Schedule II hereto, the number
of Designated Shares set forth opposite the name of such Underwriter in Schedule
I hereto.
If the foregoing is in accordance with your understanding, please sign and
return to us ____ counterparts hereof, and upon acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof,
including the provisions of the Underwriting Agreement incorporated herein by
reference, shall constitute a binding agreement between each of the Underwriters
and the Company. It is understood that your acceptance of this letter on behalf
of each of the Underwriters is or will be pursuant to the authority set forth in
a form of Agreement among Underwriters, the form of which shall be submitted to
the Company for examination upon request, but without warranty on the part of
the Representatives as to the authority of the signers thereof.
Very truly yours,
▇▇▇▇▇▇▇▇▇▇ Realty Investors
By:__________________________
Name:________________________
Title:________________________
Accepted as of the date hereof:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co., L.P.
By_______________________
On behalf of each of the Underwriters
-2-
SCHEDULE I
Underwriter Number of Designated
Shares to Be Purchased
Total
SCHEDULE II
Title of Designated Shares:
[Date of Board Resolution Establishing Designated Shares:]
Number of Designated Shares:
Over-allotment Option:
Initial Offering Price to Public:
[$ ___ per share] [Formula]
Purchase Price by Underwriters:
[$ ___ per share] [Formula]
[Commission Payable to Underwriters:
$ ___ per share]
Specified Funds for Payment of Purchase Price: [New York] Clearing House
funds
Lock-Up Period pursuant to Section 5(e) of the Underwriting Agreement:
____ Days
Dividend Rate:
[ % per annum]
Dividend Payment Dates:
[months and dates]
Dividend Rights:
[Non-] cumulative, [deferred]
Voting Rights:
Liquidation Rights:
Preemptive and Conversion Rights:
Redemption Provisions:
[No provisions for redemption]
[The Designated Shares may be redeemed, [otherwise than through the
sinking fund,] in whole or in part at the option of the Company, [on
or after __________, at the following redemption prices:
Redemption
Year
Price
___________
and thereafter at $____ per share, together in each case with accrued dividends
to the redemption date.]
[on any dividend payment date falling in or after _____________, ____, at
the election of the Company, at a redemption price equal to the stated amount
thereof, plus accrued dividends to the date of redemption.]
[Other possible redemption provisions, such as mandatory redemption upon
occurrence of certain events or redemption for changes in tax law]
Sinking Fund Provisions:
[None]
[The Designated Shares are entitled to the benefit of a sinking fund to
retire ____ Designated Shares on ____________ in each of the years ______
through ______ at 100% of their stated amount plus accrued dividends] [,
together with [cumulative] [noncumulative] redemptions at the option of the
Company to retire an additional ____ Designated Shares in the years ______
through ______ at 100% of their stated amount plus accrued dividends].
Time of Delivery:
Closing Location for Delivery of Shares:
Names and Addresses of Representatives:
Designated Representatives:
Address for Notices, etc.:
[Other Terms]
_______________
*foot1 A description of particular tax, accounting or other unusual features
(such as the addition of event risk provisions) of the Designated
Shares should be set forth, or referenced to an attached and
accompanying description, if necessary to ensure agreement as to the
terms of the Shares to be purchased and sold. Such a description might
appropriately be in the form in which such features will be described
in the Prospectus Supplement for the offering.
ANNEX II
Pursuant to Section 7(d) of the Underwriting Agreement, the accountants shall
furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect to
the Company and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules audited (and, if applicable, financial
forecasts and/or pro forma financial information) examined by them and included
or incorporated by reference in the Registration Statement or the Prospectus
comply as to form in all material respects with the applicable accounting
requirements of the Act or the Exchange Act, as applicable, and the related
published rules and regulations thereunder; and, if applicable, they have made a
review in accordance with standards established by the American Institute of
Certified Public Accountants of the consolidated interim financial statements,
selected financial data, pro forma financial information, financial forecasts
and/or condensed financial statements derived from audited financial statements
of the Company for the periods specified in such letter, as indicated in their
reports thereon, copies of which have been [separately] furnished to the
representative or representatives of the Underwriters (the Representatives )
such term to include an Underwriter or Underwriters who act without any firm
being designated as its or their representatives [and are attached hereto];
(iii) They have made a review in accordance with standards established
by the American Institute of Certified Public Accountants of the unaudited
condensed consolidated statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the Prospectus and/or included
in the Company's quarterly report on Form 10-Q incorporated by reference into
the Prospectus as indicated in their reports thereon copies of which [have been
separately furnished to the Representatives][are attached hereto]; and on the
basis of specified procedures including inquiries of officials of the Company
who have responsibility for financial and accounting matters regarding whether
the unaudited condensed consolidated financial statements referred to in
paragraph (vi)(A)(i) below comply as to form in all material respects with the
applicable accounting requirements of the [Act and the Exchange] Act and the
related published rules and regulations, nothing came to their attention that
caused them to believe that the unaudited condensed consolidated financial
statements do not comply as to form in all material respects with the applicable
accounting requirements of the [Act and the Exchange] Act and the related
published rules and regulations;
(iv) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company for the
five most recent fiscal years included in the Prospectus and included or
incorporated by reference in Item 6 of the Company's Annual Report on Form 10-K
for the most recent fiscal year agrees with the corresponding amounts (after
restatement where applicable) in the audited consolidated financial statements
for five such fiscal years which were included or incorporated by reference in
the Company's Annual Reports on Form 10-K for such fiscal years;
(v) They have compared the information in the Prospectus under selected
captions with the disclosure requirements of Regulation S-K and on the basis of
limited procedures specified in such letter nothing came to their attention as a
result of the foregoing procedures that caused them to believe that this
information does not conform in all material respects with the disclosure
requirements of Items 301, 302, 402 and 503(d) respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards, consisting
of a reading of the unaudited financial statements and other information
referred to below, a reading of the latest available interim financial
statements of the Company and its subsidiaries, inspection of the minute books
of the Company and its subsidiaries since the date of the latest audited
financial statements included or incorporated by reference in the Prospectus,
inquiries of officials of the Company and its subsidiaries responsible for
financial and accounting matters and such other inquiries and procedures as may
be specified in such letter, nothing came to their attention that caused them to
believe that:
(A) (i) the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows included
in the Prospectus and/or included or incorporated by reference in the Company's
Quarterly Reports on Form 10-Q incorporated by reference in the Prospectus do
not comply as to form in all material respects with the applicable accounting
requirements of the Exchange Act and the related published rules and
regulations, or (ii) any material modifications should be made to the unaudited
condensed consolidated statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the Prospectus or included in
the Company's Quarterly Reports on Form 10-Q incorporated by reference in the
Prospectus for them to be in conformity with generally accepted accounting
principles;
-2-
(B) any other unaudited income statement data and balance sheet items
included in the Prospectus do not agree with the corresponding items in the
unaudited consolidated financial statements from which such data and items were
derived, and any such unaudited data and items were not determined on a basis
substantially consistent with the basis for the corresponding amounts in the
audited consolidated financial statements included or incorporated by reference
in the Company's Annual Report on Form 10-K for the most recent fiscal year;
(C) the unaudited financial statements which were not included in the
Prospectus but from which were derived the unaudited condensed financial
statements referred to in Clause (A) and any unaudited income statement data and
balance sheet items included in the Prospectus and referred to in Clause (B)
were not determined on a basis substantially consistent with the basis for the
audited financial statements included or incorporated by reference in the
Company's Annual Report on Form 10-K for the most recent fiscal year;
(D) any unaudited pro forma consolidated condensed financial statements
included or incorporated by reference in the Prospectus do not comply as to form
in all material respects with the applicable accounting requirements of the Act
and the published rules and regulations thereunder or the pro forma adjustments
have not been properly applied to the historical amounts in the compilation of
those statements;
(E) as of a specified date not more than five days prior to the date of
such letter, there have been any changes in the consolidated capital stock
(other than issuances of capital stock upon exercise of options and stock
appreciation rights, upon earn-outs of performance shares and upon conversions
of convertible securities, in each case which were outstanding on the date of
the latest balance sheet included or incorporated by reference in the
Prospectus) or any increase in the consolidated long-term debt of the Company
and its subsidiaries, or any decreases in consolidated net current assets or net
assets or shareholders' equity or other items specified by the Representatives,
or any increases in any items specified by the Representatives, in each case as
compared with amounts shown in the latest balance sheet included or incorporated
by reference in the Prospectus, except in each case for changes, increases or
decreases which the Prospectus discloses have occurred or may occur or which are
described in such letter; and
-3-
(F) for the period from the date of the latest financial statements
included or incorporated by reference in the Prospectus to the specified date
referred to in Clause (E) there were any decreases in total revenues or net
income or net income per share or other items specified by the Representatives,
or any increases in any items specified by the Representatives, in each case as
compared with the comparable period of the preceding year and with any other
period of corresponding length specified by the Representatives, except in each
case for increases or decreases which the Prospectus discloses have occurred or
may occur or which are described in such letter; and
(vii) In addition to the audit referred to in their report(s) included
or incorporated by reference in the Prospectus and the limited procedures,
inspection of minute books, inquiries and other procedures referred to in
paragraphs (iii) and (vi) above, they have carried out certain specified
procedures, not constituting an audit in accordance with generally accepted
auditing standards, with respect to certain amounts, percentages and financial
information specified by the Representatives which are derived from the general
accounting records of the Company and its subsidiaries, which appear in the
Prospectus (excluding documents incorporated by reference), or in Part II of, or
in exhibits and schedules to, the Registration Statement specified by the
Representatives or in documents incorporated by reference in the Prospectus
specified by the Representatives, and have compared certain of such amounts,
percentages and financial information with the accounting records of the Company
and its subsidiaries and have found them to be in agreement.
All references in this Annex II to the Prospectus shall be deemed to refer
to the Prospectus (including the documents incorporated by reference therein) as
defined in the Underwriting Agreement as of the date of the letter delivered on
the date of the Pricing Agreement for purposes of such letter and to the
Prospectus as amended or supplemented (including the documents incorporated by
reference therein) in relation to the applicable Designated Shares for purposes
of the letter delivered at the Time of Delivery for such Designated Shares.
-4-
ANNEX III
Alabama-Shepherd Shopping Center
AN/WRI Partnership, Ltd.
East Town, Lake ▇▇▇▇▇▇▇ Co.
Eastex Venture
GJR/Weingarten Little York Avenue
GJR/Weingarten River Point Venture
Hospitality Venture
Jacinto City, Ltd.
Lisbon Street Shopping Trust
Main/O.S.T., Ltd.
Markham West Shopping Center, L.P.
NEC Dalrock and SH 66, Ltd.
Northwest Hollister Venture
▇▇▇▇▇▇ Boulevard Venture
▇▇▇▇▇▇▇▇▇, Ltd.
S/W Albuquerque, ▇.▇.
▇▇▇▇▇▇▇ Center, Ltd.
South Loop-Long Wayside Company
SPM/WRI College Station, L.P.
SPM/WRI Overland Park, L.P.
SPM/WRI Rockwall, ▇.▇.
▇▇▇▇▇▇▇▇▇▇/Bridges at Smoky Hills
Weingarten/Finger Venture
Weingarten/▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇/▇▇▇▇▇▇/Englewood
Weingarten/▇▇▇▇▇▇/▇▇▇▇▇ Joint Vent
Weingarten/▇▇▇▇▇▇/Thorncreek Joint
▇▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇, Ltd.
WRI/▇▇▇▇▇▇ Venture
WRI/▇▇▇▇▇▇▇▇▇ Venture