EXHIBIT 1.1
3,000,000 9.50% Series B Cumulative Redeemable Preferred Shares
CRESCENT REAL ESTATE EQUITIES COMPANY
UNDERWRITING AGREEMENT
May 10, 2002
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
BB&T CAPITAL MARKETS
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & CO. INCORPORATED
as Representatives of the
several Underwriters named in
Schedule I attached hereto
c/o Bear, ▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies/Gentlemen:
Crescent Real Estate Equities Company, a real estate
investment trust organized and existing under the laws of Texas (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to the several underwriters named in Schedule I hereto (the "Underwriters") an
aggregate of 3,000,000 of its 9.50% Series B Cumulative Redeemable Preferred
Shares of beneficial interest (the "Firm Shares") par value $.01 per share (the
"Preferred Shares") and, for the sole purpose of covering over-allotments in
connection with the sale of the Firm Shares, at the option of the Underwriters,
up to an additional 450,000 (the "Additional Shares") Preferred Shares. The Firm
Shares and any Additional Shares purchased by the Underwriters are referred to
herein as the "Shares". The Shares are more fully described in the Registration
Statement referred to below. Bear, ▇▇▇▇▇▇▇ & Co. Inc. ("Bear ▇▇▇▇▇▇▇") is acting
as lead manager in connection with the offering and sale of the Shares (the
"Offering").
As used herein, (i) the term "Subsidiary" means a corporation,
limited liability company, partnership or other entity, a majority of the
outstanding voting stock, partnership or membership interests or other similar
interests, as the case may be, of which is owned or controlled, directly or
indirectly through one or more intermediaries, or is otherwise controlled,
directly or indirectly through one or more intermediaries, by the Company,
Crescent Real Estate Equities Limited Partnership, a Delaware limited
partnership (the "Operating Partnership"), or by one or more other Subsidiaries
of the Company or the Operating Partnership, and (ii) the term "Significant
Subsidiary" means any Subsidiary meeting the conditions of Rule 1-02(w) of
Regulation S-X under the Exchange Act (excluding CRE Management XI, LLC and
Crescent Real Estate Funding XI, L.P., as a result of the sale of all property
owned by Crescent Real Estate Funding XI, L.P. in late 2001, which are as of the
date hereof no longer significant subsidiaries).
1. Representations and Warranties of the Company and the
Operating Partnership. The Company and the Operating Partnership represent and
warrant to, and agree with, each of the Underwriters as of the date hereof and
as of the Closing Date and each Additional Closing Date (each as defined in
Section 2 below) that:
(a) The Company has filed with the Securities and
Exchange Commission (the "Commission") a registration statement on Form S-3 (No.
333-38071), and amendments thereto, and related preliminary prospectuses for the
registration under the Securities Act of 1933, as amended (the "Securities
Act"), of the Shares which registration statement, as so amended, has been
declared effective by the Commission and copies of which have heretofore been
delivered to the Underwriters. The registration statement, as amended at the
time it became effective, including the exhibits and information (if any) deemed
to be part of the registration statement at the time of effectiveness pursuant
to Rule 430A or 434(d) under the rules and regulations promulgated under the
Securities Act, is hereinafter referred to as the "Registration Statement." If
the Company has filed or is required pursuant to the terms hereof to file a
registration statement pursuant to Rule 462(b) under the Securities Act or the
Rules and Regulations increasing the size of the Offering by registering
additional shares of Common Stock (a "Rule 462(b) Registration Statement"),
then, unless otherwise specified, any reference herein to the term "Registration
Statement" shall be deemed to include such Rule 462(b) Registration Statement.
Other than a Rule 462(b) Registration Statement, which, if filed, became
effective upon filing, no other document with respect to the Registration
Statement has heretofore been filed with the Commission. All of the Shares have
been registered under the Securities Act pursuant to the Registration Statement
or, if any Rule 462(b) Registration Statement is filed, will be duly registered
under the Securities Act with the filing of such Rule 462(b) Registration
Statement. No stop order suspending the effectiveness of either the Registration
Statement or the Rule 462(b) Registration Statement, if any, has been issued
and, to the knowledge of the Company and the Operating Partnership, no
proceeding for that purpose has been initiated or threatened by the Commission.
The Company, if required by the rules and regulations of the Commission
(together, the "Rules and Regulations") or by the Securities Act, proposes to
file the Prospectus with the Commission pursuant to Rule 424(b) under the
Securities Act ("Rule 424(b)"). The prospectus, in the form in which it is to be
filed with the Commission pursuant to Rule 424(b), or, if the prospectus is not
to be filed with the Commission pursuant to Rule 424(b), the prospectus in the
form included as part of the Registration Statement at the time the Registration
Statement became effective, is hereinafter referred to as the "Prospectus,"
except that if any revised prospectus or prospectus supplement shall be provided
to the Underwriters by the Company for use in connection with the Offering which
differs from the Prospectus (whether or not such revised prospectus or
prospectus supplement is required to be filed by the Company pursuant to Rule
424(b)), the term "Prospectus" shall refer to such revised prospectus or
prospectus supplement, as the case may be, from and after the time it is first
provided to the Underwriters for such use. Any preliminary prospectus or
prospectus subject to completion included in the Registration Statement or filed
with the Commission pursuant to Rule 424 under the Securities Act is hereafter
called a "Preliminary Prospectus." Any reference herein to the Registration
Statement, 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 which were filed under the Securities Exchange Act of 1934, as
amended (the "Exchange Act") on or before the effective date of the Registration
Statement, the date of such Preliminary Prospectus or the date of the
Prospectus, as the case may be, and any reference herein to the
2
terms "amend", "amendment" or "supplement" with respect to the Registration
Statement, any Preliminary Prospectus or the Prospectus shall be deemed to refer
to and include (i) the filing of any document under the Exchange Act after the
effective date of the Registration Statement, the date of such Preliminary
Prospectus or the date of the Prospectus, as the case may be, which is
incorporated therein by reference and (ii) any such document so filed. All
references in this Agreement to the Registration Statement, the Rule 462(b)
Registration Statement, a Preliminary Prospectus and the Prospectus, or any
amendments or supplements to any of the foregoing shall be deemed to include any
copy thereof filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval System.
(b) The Registration Statement and the Prospectus, at
the time the Registration Statement became effective and as of the date hereof,
complied, and at the Closing Time will comply, in all material respects, with
the requirements of the Securities Act and the Rules and Regulations; the
Registration Statement, at the time the Registration Statement became effective
and as of the date hereof, did 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, as of the date
hereof, does comply, and at the Closing Time will comply, in all material
respects with the requirements of the Securities Act and the Rules and
Regulations, and as of the date hereof does not, and as of the Closing Date will
not, contain an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however,
that the representations and warranties in this paragraph shall not apply to
statements in or omissions from the Registration Statement or the Prospectus
made in reliance upon and in conformity with written information furnished to
the Company through you specifically for inclusion in the Registration Statement
or the Prospectus. No representation and warranty is made in this subsection
(b), however, with respect to any information contained in or omitted from the
Registration Statement or the Prospectus or any related Preliminary Prospectus
or any amendment thereof or supplement thereto in reliance upon and in
conformity with information furnished in writing to the Company by or on behalf
of any Underwriter through you specifically for use therein. The parties
acknowledge and agree that such information provided on or on behalf of any
Underwriter consists solely of the material included in paragraphs 6, 9, 10 and
11 under the caption "Underwriting" in the Prospectus.
(c) No stop order suspending the effectiveness of the
Registration Statement or any part thereof has been issued, and no proceeding
for that purpose has been instituted or, to the knowledge of the Company or the
Operating Partnership, threatened by the Commission or by the state securities
authority of any jurisdiction. No order preventing or suspending the use of the
Prospectus has been issued, and no proceeding for that purpose has been
instituted or, to the knowledge of the Company or the Operating Partnership,
threatened by the Commission or by the state securities authority of any
jurisdiction.
(d) To the knowledge of the Company and the Operating
Partnership, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, who has certified certain financial statements
of the Company and its consolidated subsidiaries, are independent public
accountants with respect to the Company and its consolidated subsidiaries within
the meaning of Rule 101 of the Code of Professional Conduct of the American
Institute of Certified Public Accountants and its interpretations and rulings
thereunder.
3
(e) The financial statements and the related notes
thereto included or incorporated by reference in the Prospectus present fairly
the financial position of the Company and its consolidated subsidiaries as of
the dates indicated and the results of their operations and the changes in their
cash flows for the periods specified; such financial statements have been
prepared in conformity with generally accepted accounting principles applied on
a consistent basis throughout the periods covered thereby; the other financial
information included or incorporated by reference in the Prospectus has been
derived from the accounting records of the Company and its consolidated
subsidiaries and presents fairly the information shown thereby except as
otherwise noted therein or in the Prospectus. The pro forma and as adjusted
financial information included in the Registration Statement and the Prospectus
has been properly compiled, and prepared in accordance with the applicable
requirements of the Securities Act, the Exchange Act and the Rules and
Regulations and includes all adjustments necessary to present fairly the pro
forma financial position of the respective entity or entities presented therein
at the respective dates indicated and the results of their operations for the
respective periods specified.
(f) Since the respective dates as of which
information is given in the Registration Statement and the Prospectus, except as
otherwise stated therein, (A) there has been no material adverse change in the
condition, financial or otherwise, or in the earnings, assets, business affairs
or business prospects of the Company, the Operating Partnership and the
Subsidiaries, considered as one enterprise (a "Material Adverse Effect"),
whether or not arising in the ordinary course of business, (B) no material
casualty loss or material condemnation or other material adverse event with
respect to any real property or improvements thereon owned or leased by any of
the Company, the Operating Partnership or any of their Subsidiaries, including
any property underlying indebtedness held by the Company (each individually a
"Property" and collectively, the "Properties"), the Operating Partnership or any
of their Subsidiaries, has occurred that is material to the Company, the
Operating Partnership and the Subsidiaries considered as one enterprise, (C)
there have been no acquisitions or other transactions entered into by the
Company, the Operating Partnership or any Subsidiary other than those in the
ordinary course of business that are material with respect to such entities,
considered as one enterprise, or would result in any inaccuracy in the
representations contained in Section 1(a)(iv) above, (D) except for regular
quarterly dividends or distributions on the common shares of beneficial
interest, $0.01 par value per share of the Company ("Common Shares"), the
preferred shares of beneficial interest, $0.01 par value per share of the
Company ("Preferred Shares"), units of limited partnership interest of the
Operating Partnership ("Units") and preferred units of limited partnership
interest of the Operating Partnership ("Preferred Units"), there has been no
dividend or distribution of any kind declared, paid or made by the Company, or
by the Operating Partnership with respect to its partnership interests, and (E)
except for the issuance of 2,800,000 6 3/4% Series A Preferred Units by the
Operating Partnership to the Company as of April 26, 2002, there has been no
change in the capital stock of the Company or its Subsidiaries or the
partnership interests of the Operating Partnership, or any increase in the
indebtedness of the Company, the Operating Partnership or the Subsidiaries that
is material to such entities, considered as one enterprise.
(g) The Company has been duly formed as a real estate
investment trust under the laws of the State of Texas, is duly qualified to do
business and is in good standing in each jurisdiction in which its ownership or
lease of property or the conduct of its business requires such qualification,
and has all power and authority necessary to own or hold its
4
properties and to conduct the business in which it is engaged, except where the
failure to be so qualified or have such power or authority would not,
individually or in the aggregate, have a Material Adverse Effect. According to
the County Clerk of Tarrant County, Texas, the Restated Declaration of Trust of
the Company is recorded in Volume 12645, beginning at Page 1811, in the records
of the County Clerk, and the Articles of Amendment to the Restated Declaration
of Trust, as amended, is recorded in Volume 15194, beginning at Page 311, in the
records of the County Clerk (together, the "Declaration of Trust").
(h) The Subsidiaries, including the Operating
Partnership, have been duly organized and are validly existing and in good
standing under the laws of their respective jurisdictions of organization, are
duly qualified to do business and are in good standing in each jurisdiction in
which their respective ownership or lease of property or the conduct of their
respective businesses requires such qualification, and have all power and
authority necessary to own or hold their respective properties and to conduct
the businesses in which they are engaged, except where the failure to be so
qualified or have such power or authority would not, individually or in the
aggregate, have a Material Adverse Effect. Except for subsidiaries omitted from
Exhibit 21.01 to the Company's annual report on Form 10-K for the fiscal year
ended December 31, 2001 (including any amendments thereto, the "Form 10-K") as
permitted by the Exchange Act and the rules and regulations of the Commission
thereunder, rules, the only subsidiaries of the Company are those listed on such
Schedule 21.01 and Crescent Finance Company. The Subsidiaries listed in Schedule
II to this Agreement are the only Significant Subsidiaries of the Company and
the Operating Partnership. The Company and the Operating Partnership have full
right, power and authority to execute and deliver this Agreement and, with
respect to the Company only, the Securities, the Statement of Designation for
the 3,450,000] Shares (the "Statement of Designation") and this Agreement
(collectively, the "Transaction Documents") and to perform their obligations
hereunder and thereunder.
(i) The Second Amended and Restated Agreement of
Limited Partnership of the Operating Partnership, as amended (the "Partnership
Agreement"), is a valid and binding agreement enforceable in accordance with its
terms. At Closing Time (as hereinafter defined), Crescent Real Estate Equities,
Ltd., a Delaware corporation ("CGP, Inc."), a wholly owned subsidiary of the
Company, will be the sole general partner of the Operating Partnership and will
be the holder of one percent (1%) of the interests in the Operating Partnership.
(j) Each of the partnership agreements, limited
liability company agreements, or other, similar instruments to which the Company
or any of its Subsidiaries is a party has been duly authorized, executed and
delivered by the parties thereto and constitutes the valid agreement thereof,
enforceable in accordance with its terms. All of the issued and outstanding
shares of capital stock of each of the corporate Subsidiaries have been duly
authorized and validly issued and are fully paid and non-assessable. All of the
shares of capital stock or limited partnership or equity interests, as the case
may be, of each of the Subsidiaries owned by the Company, the Operating
Partnership or the Subsidiaries are free and clear of all liens, charges and
encumbrances, except that (i) the partnership interests in Crescent Real Estate
Funding I, L.P. and Crescent Real Estate Funding II, L.P. are pledged as
5
collateral under the Fleet I and II Term Loan (as described in the Form 10-K),
and (ii) the partnership interests in Crescent Spectrum Center, L.P. and the
equity interests in its general partners are pledged as collateral under the
Mezzanine portion of the Deutsche Bank - CMBS Loan (as described in the Form
10-K).
(k) The authorized, issued and outstanding beneficial
interests in the Company are as set forth in the Prospectus (except for
subsequent issuances, if any, pursuant to clauses (A) and (B) below); and all of
such beneficial interests have been duly authorized, are validly issued, fully
paid and non-assessable and have been offered and sold in compliance with all
applicable laws (including, without limitation, federal securities laws). No
shares of capital stock of the Company are reserved for any purpose except in
connection with: (A) the incentive compensation plans of the Company as
described in the Registration Statement, (B) the possible issuance of Common
Shares upon the exchange of Units, including Units to be issued upon exercise of
existing options to acquire Units, pursuant to the Partnership Agreement, (C)
the possible issuance of Common Shares upon exercise of an existing option to
acquire up to 217,530 Common Shares, (D) the possible issuance of up to 664,294
Common Shares upon the exchange of a portion of a partnership interest in Desert
Mountain Properties Limited Partnership, for which sufficient Common Shares have
been reserved for possible future issuance, and (E) the possible issuance of
Common Shares upon conversion of the outstanding 6 3/4% Series A Cumulative
Convertible Preferred Shares. Except for (A) Units, (B) Common Shares issuable
upon the exercise of options for Common Shares, (C) Units issuable upon the
exercise of options for Units and Common Shares issuable upon exchange of Units
for Common Shares, (D) Common Shares issuable upon conversion of the outstanding
6 3/4% Series A Cumulative Convertible Preferred Shares and (E) up to 664,294
Common Shares upon the exchange of a portion of a partnership interest in Desert
Mountain Properties Limited Partnership, there are no outstanding securities
convertible into or exchangeable for any beneficial interests in the Company and
no outstanding options, rights (preemptive or otherwise) or warrants to purchase
or to subscribe for such interests or any other securities of the Company.
(l) The Shares have been duly authorized for issuance
and sale to the Underwriters and, when issued and delivered by the Company
pursuant to this Purchase Agreement, following filing with the County Clerk of
Tarrant County, Texas of the Statement of Designation and against payment of the
consideration set forth herein, will be validly issued, fully paid and
non-assessable. The Shares will be offered and sold at Closing Time in
compliance with all applicable laws (including, without limitation, federal
securities laws). The terms of the Shares conform to all statements and
descriptions related thereto contained in the Prospectus. The form of the
certificates used to evidence the Shares are due and proper form and comply with
all applicable legal requirements. The issuance of the Shares is not subject to
any preemptive or other similar rights and, except as summarized in the
Prospectus and set forth in the Declaration of Trust, the Statement of
Designation or the Company's Amended and Restated Bylaws, as amended (the
"Bylaws"), there are no restrictions on the voting or transfer of the Shares
pursuant to the Company's Declaration of Trust, Statement of Designation or
Bylaws or any agreement or other instrument.
(m) The authorized, issued and outstanding Units are
as set forth in the Registration Statement and Prospectus except to the extent
of changes due to (A) the conversion of Units to Common Shares, (B) the exercise
of existing options to acquire Units or (C) the issuance of 2,800,000 6 3/4%
Series A Preferred Units by the Operating Partnership to the Company as of April
26, 2002. All of the Units outstanding at Closing Time were duly
6
authorized for issuance by the Operating Partnership and are validly issued and
fully paid. The Units were offered and sold in compliance with all applicable
laws (including, without limitation, federal and state securities laws). Except
as summarized in the Prospectus or set forth in the Partnership Agreement, there
are no preemptive or other rights to subscribe for or to purchase, nor any
restriction upon the voting or transfer of, any Units pursuant to the
Partnership Agreement or any other instrument. The terms of the Units conform to
all statements and descriptions related thereto contained in the Prospectus.
(n) None of the Company, the Operating Partnership or
any of the Subsidiaries is (i) in violation of its charter, by-laws, partnership
agreements, declarations of trust or similar organizational documents; (ii) in
default in any material respect, and no event has occurred that, with notice or
lapse of time or both, would constitute such a default, in the due performance
or observance of any term, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Company, the Operating Partnership or any of the Subsidiaries is a
party or by which the Company, the Operating Partnership or any of the
Subsidiaries is bound or to which any of the property or assets of the Company,
the Operating Partnership or any of the Subsidiaries is subject; or (iii) in
violation of any law or statute or any judgment, order or regulation of any
court or arbitrator or governmental or regulatory authority, except, in the case
of clauses (ii) and (iii) above, for any such default or violation that would
not, individually or in the aggregate, have a Material Adverse Effect.
(o) The execution, delivery and performance by the
Company or the Operating Partnership of each of the Transaction Documents to
which each is a party, the issuance and sale of the Shares and compliance by the
Company and the Operating Partnership with the terms thereof and the
consummation of the transactions contemplated by the Transaction Documents will
not (i) conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Company, the Operating Partnership or any of the Subsidiaries pursuant to, any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company, the Operating Partnership or any of the
Subsidiaries is a party or by which the Company, the Operating Partnership or
any of the Subsidiaries is bound or to which any of the property or assets of
the Company, the Operating Partnership or any of the Subsidiaries is subject,
(ii) result in any violation of the provisions of the charter, by-laws,
partnership agreements, declarations of trust or similar organizational
documents of the Company, the Operating Partnership or any of the Subsidiaries,
except that any violation of the Preferred Shares Ownership Limit (as such term
is defined in the Declaration of Trust) resulting from the issuance of the
Shares to any person has been waived, or will be waived prior to the Closing
Time, by the Company's Board of Trust Managers as permitted by and in accordance
with the Declaration of Trust, or (iii) result in the violation of any law or
statute or any judgment, order or regulation of any court or arbitrator or
governmental or regulatory authority, except, in the case of clauses (i) and
(iii) above, for any such conflict, breach or violation that would not,
individually or in the aggregate, have a Material Adverse Effect.
(p) Except as described in the Prospectus, there are
no legal, governmental or regulatory investigations, actions, suits or
proceedings pending to which the
7
Company, the Operating Partnership or any of the Subsidiaries is or may be a
party or to which any property of the Company, the Operating Partnership or any
of the Subsidiaries is or may be the subject that, individually or in the
aggregate, if determined adversely to the Company or any of its subsidiaries,
could reasonably be expected to have a Material Adverse Effect; and to the
knowledge of the Company and the Operating Partnership, no such investigations,
actions, suits or proceedings are threatened or contemplated by any governmental
or regulatory authority or threatened by others.
(q) The Company qualified as a real estate investment
trust under the Internal Revenue Code of 1986, as amended (the "Code"), with
respect to all of its taxable years commencing with the taxable years ended
December 31, 1994 and is organized in conformity with the requirements for
qualification as a real estate investment trust, and its manner of operation has
enabled it to meet the requirements for qualification as a real estate
investment trust as of the date of the Prospectus, and its current and proposed
manner of operation will enable it to meet the requirements for qualification
and taxation as a real estate investment trust for its current and future
taxable years.
(r) None of the Company, the Operating Partnership
nor any of the Subsidiaries is, and after giving effect to the offering and sale
of the Securities and the application of the proceeds thereof as described in
Prospectus none of them will be, an "investment company" or an entity
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended, and the rules and regulations of the Commission
thereunder (collectively, the "1940 Act").
(s) The Company, the Operating Partnership and each
of the Subsidiaries own or possess adequate rights to use all material patents,
patent applications, trademarks, service marks, trade names, trademark
registrations, service ▇▇▇▇ registrations, copyrights, licenses and know-how
(including trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures) necessary for the conduct of
their respective businesses; and the conduct of their respective businesses will
not conflict in any material respect with any such rights of others, and the
Company, the Operating Partnership and the Subsidiaries have not received any
notice of any claim of infringement of or conflict with any such rights of
others.
(t) No consent, approval, authorization, order,
registration or qualification of or with any court or arbitrator or governmental
or regulatory authority is required for the execution, delivery and performance
by the Company and the Operating Partnership of each of the Transaction
Documents to which each is a party, the issuance and sale of the Shares and
compliance by the Company and the Operating Partnership with the terms thereof
and the consummation of the transactions contemplated by the Transaction
Documents, except as may be required under the laws of the Securities Act, the
Rules and Regulations or state securities and real estate syndication laws.
(u) The Company, the Operating Partnership and each
of the Subsidiaries possess all licenses, certificates, permits and other
authorizations issued by, and have made all declarations and filings with, the
appropriate federal, state, local or foreign governmental or regulatory
authorities that are necessary for the ownership or lease of their
8
respective properties or the conduct of their respective businesses as described
in the Prospectus, except where the failure to possess or make the same would
not, individually or in the aggregate, have a Material Adverse Effect; and
except as described in the Prospectus, none of the Company, the Operating
Partnership nor any of the Subsidiaries has received notice of any revocation or
modification of any such license, certificate, permit or authorization or has
any reason to believe that any such license, certificate, permit or
authorization will not be renewed in the ordinary course, except where such
revocation or modification could not reasonably be expected to have a Material
Adverse Effect.
(v) The documents incorporated or deemed to be
incorporated by reference in the Prospectus, at the time it was or hereafter is
filed with the Commission, complied and will comply in all material respects
with the requirements of the Exchange Act and the Rules and Regulations, and,
when read together with the other information in the Prospectus, at the time the
Registration Statement became effective, as of the date hereof or during the
period between the date hereof, through and including the Closing Date, did not
and will not include 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, in the light of the circumstances under which they were made, not
misleading.
(w) No labor disturbance by or dispute with employees
of the Company, the Operating Partnership or any of the Subsidiaries exists or,
to the knowledge of the Company, is contemplated or threatened.
(x) Except as otherwise disclosed in the Prospectus,
(i) the Company, the operating Partnership and each of the Subsidiaries have
good and marketable title in fee simple to, or have valid rights to lease or
otherwise use, all Properties that are material to the respective businesses of
the Company, the Operating Partnership and the Subsidiaries, except those that
(a) do not materially and adversely affect the value of such property and do not
materially interfere with the use made and proposed to be made of such Property
by the Company, the Operating Partnership and the Subsidiaries or (b) could not
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect, (ii) all liens, pledges, security interests, claims, defects,
imperfections of title or any other encumbrances of any kind or nature
(collectively, "Liens") that are required to be disclosed in the Form 10-K are
disclosed therein, (iii) neither the Company nor, to the knowledge of the
Company, any other party to any lease relating to any Property is in default
under any such lease and the Company is not aware of any event that, with the
giving of notice or the passage of time, or both, would constitute a default
under any such lease, except in each case such defaults that would not,
individually or in the aggregate, have a Material Adverse Effect; (iv) each of
the leases pursuant to which all or any portion of the Properties are demised is
in full force and effect and, except as set forth in the Form 10-K, no tenant
thereunder has a right of first refusal to purchase the premises demised
thereunder, except in each case with such exceptions as would not, individually
or in the aggregate, have a Material Adverse Effect, (v) each of the Properties
is in compliance with all applicable codes, laws and regulations (including,
without limitation, building and zoning codes, laws and regulations), except for
such failures to comply that would not, individually or in the aggregate, have a
Material Adverse Effect, (vii) the Company does not have any knowledge of any
pending or threatened condemnation, zoning change or other proceeding or action
that will in any manner affect the size of, use of, improvements on,
9
construction on or access to the real properties, except such proceedings or
actions that would not, individually or in the aggregate, have a Material
Adverse Effect, (viii) all Properties and buildings held under lease by the
Company, the Operating Partnership or any of the Subsidiaries and described in
the Form 10-K are held by them under valid, subsisting and enforceable leases
with such exceptions as are not material and do not interfere in any material
respect with the use made and proposed to be made of such Property and buildings
by the Company, the Operating Partnership or the Subsidiaries, as the case may
be; (ix) all real property is free of material structural defects and all
material building systems contained therein are in good working order subject to
ordinary wear and tear, except in each case as could not reasonably be expected
to have a Material Adverse Effect.
(y) Except as disclosed in the Prospectus, (A) each
Property, including, without limitation, the Environment (as defined below)
associated with such Property, is free of any Hazardous Substance (as defined
below), except for Hazardous Substances that would not have a Material Adverse
Effect; (B) none of the Company, the Operating Partnership or any Subsidiary has
caused or suffered to occur any Release (as defined below) of any Hazardous
Substance into the Environment on, in, under or from any Property, and no
condition exists on, in, under or, to the knowledge of the Company and the
Operating Partnership, adjacent to any Property that is reasonably likely to
result in the incurrence of material liabilities or any material violations of
any Environmental Law (as defined below), give rise to the imposition of any
Lien (as defined below) under any Environmental Law, or cause or constitute a
health, safety or environmental hazard to any property, person or entity; (C)
none of the Company, the Operating Partnership or any Subsidiary intends to use
the properties or assets described in the Prospectus or any other real property
for the purpose of handling, burying, storing, retaining, refining,
transporting, processing, manufacturing, generating, producing, spilling,
seeping, leaking, escaping, leaching, pumping, pouring, emitting, emptying,
discharging, injecting, dumping, transferring or otherwise disposing of or
dealing with a Hazardous Substance, except for materials utilized in the
ordinary course of business of the properties, provided such use would not, in
the ordinary course of business, give rise to liability under any Environmental
Law; (D) none of the Company, the Operating Partnership or any Subsidiary has
received any notice of a claim under or pursuant to any Environmental Law or
under common law pertaining to Hazardous Substances on or originating from any
Property; (E) none of the Company, the Operating Partnership or any Subsidiary
has received any notice from any Governmental Authority (as defined below)
claiming any violation of any Environmental Law; (F) no Property is included or,
to the knowledge of the Company and the Operating Partnership, proposed for
inclusion on the National Priorities List issued pursuant to CERCLA (as defined
below) by the United States Environmental Protection Agency (the "EPA") or on
the Comprehensive Environmental Response, Compensation, and Liability
Information System database maintained by the EPA, and has not otherwise been
identified by the EPA as a potential CERCLA removal, remedial or response site
or included or, to the knowledge of the Company and the Operating Partnership,
proposed for inclusion on, any similar list of potentially contaminated sites
pursuant to any other Environmental Law and (G) there are no underground storage
tanks located on or in any Property except where the presence thereof would not
have a Material Adverse Effect.
As used herein, "Hazardous Substance" shall include, without
limitation, any hazardous substance, hazardous waste, toxic substance,
pollutant, solid waste or similarly designated materials, including, without
limitation, oil, petroleum or any petroleum-derived substance or
10
waste, asbestos or asbestos-containing materials, PCBs, pesticides, explosives,
radioactive materials, dioxins, urea formaldehyde insulation or any constituent
of any such substance, pollutant or waste, including any such substance,
pollutant or waste identified or regulated under any Environmental Law
(including, without limitation, materials listed in the United States Department
of Transportation Optional Hazardous Material Table, 49 C.F.R. Section 172.101,
as the same may now or hereafter be amended, or in the EPA's List of Hazardous
Substances and Reportable Quantities, 40 C.F.R. Part 302, as the same may now or
hereafter be amended); "Environment" shall mean any surface water, drinking
water, ground water, land surface, subsurface strata, river sediment, buildings,
structures, and ambient, workplace and indoor air; "Environmental Law" shall
mean the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended (42 U.S.C. Section 9601 et seq.) ("CERCLA"), the Resource
Conservation and Recovery Act of 1976, as amended (42 U.S.C. Section 6901 et
seq.), the Clean Air Act, as amended (42 U.S.C. Section 7401 et seq.), the Clean
Water Act, as amended (33 U.S.C. Section 1251 et seq.), the Toxic Substances
Control Act, as amended (15 U.S.C. Section 2601 et seq.), the Occupational
Safety and Health Act of 1970, as amended (29 U.S.C. Section 651 et seq.), the
Hazardous Materials Transportation Act, as amended (49 U.S.C. Section 1801 et
seq.), and all other federal, state and local laws, ordinances, regulations,
rules, orders, decisions and permits relating to the protection of the
environment or of human health from environmental effects; "Governmental
Authority" shall mean any federal, state or local governmental office, agency or
authority having the duty or authority to promulgate, implement or enforce any
Environmental Law; "Lien" shall mean, with respect to any Property, any
mortgage, deed of trust, pledge, security interest, lien, encumbrance, penalty,
fine, charge, assessment, judgment or other liability in, on or affecting such
Property; and "Release" shall mean any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping,
emanating or disposing of any Hazardous Substance into the Environment,
including, without limitation, the abandonment or discard of barrels,
containers, tanks (including, without limitation, underground storage tanks) or
other receptacles containing or previously containing any Hazardous Substance or
any release, emission, discharge or similar term, as those terms are defined or
used in any Environmental Law.
(z) The Company, the Operating Partnership and each
of the Subsidiaries have timely paid all federal, state, local and foreign taxes
and timely filed all tax returns required to be paid or filed through the date
hereof (except (i) for taxes being contested in good faith and reserved against
to the extent required by generally accepted accounting principles and (ii) in
any case in which the failure to so file would not, individually or in the
aggregate, have a Material Adverse Effect); and except as otherwise disclosed in
the Prospectus, there is no tax deficiency that has been, or could reasonably be
expected to be, asserted against the Company, the Operating Partnership or any
of the Subsidiaries or any of their respective properties or assets.
(aa) None of the Company, the Subsidiaries or the
Operating Partnership, nor any of their trust managers, directors, officers or
controlling persons, has taken or will take, directly or indirectly, any action
resulting in a violation of Regulation M under the Exchange Act, or designed to
cause or result under the Exchange Act or otherwise in, or which has constituted
or which reasonably might be expected to constitute, the unlawful stabilization
or manipulation of the price of any security of the Company or facilitation of
the sale or resale of the Securities.
11
(bb) Title insurance in favor of the Company, the
Operating Partnership or any of the Subsidiaries is maintained with respect to
each of the Properties owned by the Company, the Operating Partnership or such
Subsidiary in an amount at least equal to the cost of acquisition of such
Property, except, in each case where the failure to maintain such title
insurance would not have a Material Adverse Effect. Title insurance in favor of
the mortgagee is maintained in an amount equal to the maximum commitment of the
related loan.
(cc) The Company, the Operating Partnership and each
of the Subsidiaries have insurance covering their respective properties,
operations, personnel and businesses, including business interruption, covering
risks and in amounts that are commercially reasonable for the assets and
properties owned by them and that are consistent with the types and amounts of
insurance typically maintained by present owners of similar types of properties;
and none of the Company, the Operating Partnership nor any of the Subsidiaries
has (i) received notice from any insurer or agent of such insurer that capital
improvements or other expenditures are required or necessary to be made in order
to continue such insurance or (ii) any reason to believe that it will not be
able to renew its existing insurance coverage as and when such coverage expires
or to obtain similar coverage at reasonable cost from similar insurers as may be
necessary to continue its business.
(dd) The Company, the Operating Partnership and each
of the Subsidiaries maintain systems of internal accounting controls sufficient
to provide reasonable assurance that (i) transactions are executed in accordance
with management's general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain asset
accountability; (iii) access to books and records is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(ee) None of the Company, the Operating Partnership
nor any of the Subsidiaries nor, to the knowledge of the Company, any trust
manager, director, officer, agent, employee or other person associated with or
acting on behalf of the Company, the Operating Partnership or any of the
Subsidiaries has (i) used any corporate funds for any unlawful contribution,
gift, entertainment or other unlawful expense relating to political activity;
(ii) made any direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds; (iii) violated or is in
violation of any provision of the Foreign Corrupt Practices Act of 1977; or (iv)
made any bribe, rebate, payoff, influence payment, kickback or other unlawful
payment.
(ff) On and immediately after the Closing Date, the
Company (after giving effect to the issuance of the Securities and the other
transactions related thereto as described in the Prospectus) will be Solvent. As
used in this paragraph, the term "Solvent" means, with respect to a particular
date, that on such date (i) the present fair market value (or present fair
saleable value) of the assets of the Company, and its consolidated Subsidiaries
is not less than the total amount required to pay the liabilities of the Company
and its consolidated subsidiaries on its total existing debts and liabilities
(including contingent liabilities) as they become absolute and matured; (ii) the
Company is able to realize upon its assets and pay its
12
debts and other liabilities, contingent obligations and commitments as they
mature and become due in the normal course of business; (iii) assuming
consummation of the issuance of the Securities as contemplated by this Agreement
and the Prospectus, the Company is not incurring debts or liabilities beyond its
ability to pay as such debts and liabilities mature; (iv) the Company is not
engaged in any business or transaction, and does not propose to engage in any
business or transaction, for which its property would constitute unreasonably
small capital after giving due consideration to the prevailing practice in the
industry in which the Company is engaged; and (v) none of the Company, the
Operating Partnership nor any of the Subsidiaries is a defendant in any civil
action that would result in a judgment that the Company is or would become
unable to satisfy.
(gg) No forward-looking statement (within the meaning
of Section 27A of the Securities Act and Section 21E of the Exchange Act)
contained in the Prospectus has been made or reaffirmed without a reasonable
basis or has been disclosed other than in good faith.
(hh) Nothing has come to the attention of the Company
that has caused the Company to believe that the statistical and market-related
data included or incorporated by reference in the Prospectus is not based on or
derived from sources that are reliable and accurate in all material respects.
(ii) The Operating Partnership has received from
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP on March 19, 2002 a letter concerning its audit quality
controls in connection with its audits of the financial statements of the
Operating Partnership and its consolidated Subsidiaries, including
representations regarding the continuity of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP's personnel
working on the audit, the availability of national office consultation and the
availability of personnel at foreign affiliates of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP to
conduct relevant portions of the audit (the "Representation Letter") and such
letter has not been rescinded and the Company and the Operating Partnership have
no reason to believe that the representations in such letter are not true and
correct in all respects.
(jj) The Company has not prior to the date hereof
offered or sold any securities which would be "integrated" with the offer and
sale of the Shares pursuant to the Registration Statement. Except as described
in the Registration Statement and the Prospectus, the Company has not sold or
issued any equity security during the six-month period preceding the date of the
Prospectus, including but not limited to any sales pursuant to Rule 144A or
Regulation D or S under the Securities Act, other than (i) Common Shares issued
upon exercise of options for Common Shares issued pursuant to the incentive
compensation plans of the Company or (ii) Common Shares issued upon the exchange
of Units.
(kk) No relationship, direct or indirect, exists
between or among any of the Company or any affiliate of the Company, on the one
hand, and any trust manager, officer, shareholder holding of record or
beneficially owning in excess of 5% of the outstanding common shares of the
Company or any affiliate of the Company, on the other hand, which is required by
the Securities Act, the Exchange Act or the Rules and Regulations to be
described in the Registration Statement or the Prospectus which is not so
described.
13
(ll) The conditions for use of Form S-3, as set forth
in the General Instructions thereto, have been satisfied.
Any certificate signed by or on behalf of the Company and
delivered to the Representatives or to counsel for the Underwriters' shall be
deemed to be a representation and warranty by the Company to each Underwriter as
to the matters covered thereby.
2. Purchase, Sale and Delivery of the Shares.
(a) On the basis of the representations, warranties,
covenants and agreements herein contained, but subject to the terms and
conditions herein set forth, the Company agrees to sell to each Underwriter and
each Underwriter, severally and not jointly, agrees to purchase from the
Company, at a purchase price per share of $24.2125, the number of Firm Shares
set forth opposite the respective names of on Schedule I hereto together with
any additional number of Shares which such Underwriter may become obligated to
purchase pursuant to the provisions of Section 9 hereof.
(b) Payment of the purchase price for, and delivery
of certificates representing, the Firm Shares shall be made at the office of
▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
("Underwriters' Counsel"), or at such other place as shall be agreed upon by
Bear ▇▇▇▇▇▇▇ and the Company, at 10:00 A.M., New York City time, on the third or
fourth business day (as permitted under Rule 15c6-1 under the Exchange Act)
(unless postponed in accordance with the provisions of Section 9 hereof)
following the date of the effectiveness of the Registration Statement (or, if
the Company has elected to rely upon Rule 430A under the Securities Act, the
third, fourth or fifth business day (as permitted under Rule 15c6-1 under the
Exchange Act) after the determination of the public offering price of the
Shares), or such other time not later than ten business days after such date as
shall be agreed upon by Bear ▇▇▇▇▇▇▇ and the Company (such time and date of
payment and delivery being herein called the "Closing Date").
Payment of the purchase price for the Firm Shares shall be
made by wire transfer in same day funds to the Company upon delivery of
certificates for the Firm Shares to Bear ▇▇▇▇▇▇▇ through the facilities of The
Depository Trust Company for the respective accounts of the several
Underwriters. Certificates for the Firm Shares shall be registered in such name
or names and shall be in such denominations as Bear ▇▇▇▇▇▇▇ may request at least
two business days before the Closing Date. The Company will permit Bear ▇▇▇▇▇▇▇
to examine and package such certificates for delivery at least one full business
day prior to the Closing Date.
(c) In addition, on the basis of the representations,
warranties, covenants and agreements herein contained, but subject to the terms
and conditions herein set forth, the Company hereby grants to the Underwriters,
acting severally and not jointly, the option to purchase up to 450,000
Additional Shares at the same purchase price per share to be paid by the
Underwriters for the Firm Shares as set forth in this Section 2, for the sole
purpose of covering over-allotments in the sale of Firm Shares by the
Underwriters. This option may be exercised at any time and from time to time, in
whole or in part on one or more occasions, on or before the thirtieth day
following the date of the Prospectus, by written notice by Bear ▇▇▇▇▇▇▇ to the
Company. Such notice shall set forth the aggregate number of Additional Shares
as to which
14
the option is being exercised and the date and time, as reasonably determined by
Bear ▇▇▇▇▇▇▇, when the Additional Shares are to be delivered (any such date and
time being herein sometimes referred to as the "Additional Closing Date");
provided, however, that the Additional Closing Date shall not be earlier than
the Closing Date or earlier than the second full business day after the date on
which the option shall have been exercised nor later than the eighth full
business day after the date on which the option shall have been exercised
(unless such time and date are postponed in accordance with the provisions of
Section 9 hereof). Upon any exercise of the option as to all or any portion of
the Additional Shares, each Underwriter, acting severally and not jointly, will
purchase that proportion of the total number of Additional Shares then being
purchased which the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule I hereto (or such number increased as set forth in
Section 9 hereof) bears to the total number of Firm Shares that the Underwriters
have agreed to purchased hereunder, subject, however, to such adjustments to
eliminate any fractional shares as Bear, ▇▇▇▇▇▇▇ & Co. Inc. in its sole
discretion shall make.
(d) Payment of the purchase price for, and delivery
of certificates representing, the Additional Shares shall be made at the office
of Underwriters' Counsel, or at such other place as shall be agreed upon by Bear
▇▇▇▇▇▇▇ and the Company, at 10:00 A.M., New York City time, on the Additional
Closing Date, or such other time as shall be agreed upon by Bear ▇▇▇▇▇▇▇ and the
Company.
Payment of the purchase price for the Additional Shares shall
be made by wire transfer in same day funds to the Company upon delivery of
certificates for the Additional Shares to Bear ▇▇▇▇▇▇▇ through the facilities of
The Depository Trust Company for the respective accounts of the several
Underwriters. Certificates for the Additional Shares shall be registered in such
name or names and shall be in such denominations as Bear ▇▇▇▇▇▇▇ may request at
least two business days before the Additional Closing Date. The Company will
permit Bear ▇▇▇▇▇▇▇ to examine and package such certificates for delivery at
least one full business day prior to the Additional Closing Date.
3. Offering. Upon authorization of the release of the Firm
Shares by Bear ▇▇▇▇▇▇▇, the Underwriters propose to offer the Shares for sale to
the public upon the terms and conditions set forth in the Prospectus.
4. Covenants of the Company and the Operating Partnership. The
Company covenant and agree with the Underwriters that:
(a) The Registration Statement and any amendments
thereto have been declared effective, and if Rule 430A is used or the filing of
the Prospectus is otherwise required under Rule 424(b) or Rule 434, the Company
will file the Prospectus (properly completed if Rule 430A has been used)
pursuant to Rule 424(b) within the prescribed time period and will provide
evidence satisfactory to Bear ▇▇▇▇▇▇▇ of such timely filing. If the Company
elects to rely on Rule 434, the Company will prepare and file a term sheet that
complies with the requirements of Rule 434.
The Company will notify you immediately (and, if requested by
Bear ▇▇▇▇▇▇▇, will confirm such notice in writing) (i) when the Registration
Statement and any amendments thereto
15
become effective, (ii) of any request by the Commission for any amendment of or
supplement to the Registration Statement or the Prospectus or for any additional
information, (iii) of the Company's intention to file or prepare any supplement,
revision or amendment to the Registration Statement or the Prospectus, (iv) of
the mailing or the delivery to the Commission for filing of any amendment of or
supplement to the Registration Statement or the Prospectus, including but not
limited to Rule 462(b) under the Securities Act, (v) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment thereto or of the initiation, or the
threatening, of any proceedings therefor, it being understood that the Company
shall make every effort to avoid the issuance of any such stop order, (vi) of
the receipt of any comments from the Commission, and (vii) of the receipt by the
Company of any notification with respect to the suspension of the qualification
of the Shares for sale in any jurisdiction or the initiation or threatening of
any proceeding for that purpose. If the Commission shall propose or enter a stop
order at any time, the Company will make every reasonable effort to prevent the
issuance of any such stop order and, if issued, to obtain the lifting of such
order as soon as possible. Prior to 10:00 A.M., New York time, on the business
day next succeeding the date of this Agreement and from time to time thereafter
during the period when the Prospectus is required to be delivered under the
Securities Act, the Exchange Act or the Rules and Regulations in connection with
the offer and sale of the Shares, the Company will not file any amendment to the
Registration Statement or any amendment of or supplement to the Prospectus
(including the prospectus required to be filed pursuant to Rule 424(b) or Rule
434) that differs from the prospectus on file at the time of the effectiveness
of the Registration Statement to which Bear ▇▇▇▇▇▇▇ shall object in writing
after being timely furnished in advance a copy thereof. The Company will provide
Bear ▇▇▇▇▇▇▇ with copies of all such amendments, filings and other documents a
sufficient time prior to any filing or other publication thereof to permit Bear
▇▇▇▇▇▇▇ a reasonable opportunity to review and comment thereon.
(b) The Company and the Operating Partnership shall
comply with the Securities Act and the Exchange Act to permit completion of the
distribution as contemplated in this Agreement, the Registration Statement and
the Prospectus. If at any time when a prospectus relating to the Shares is
required to be delivered under the Securities Act or the Exchange Act in
connection with the sales of Shares, any event shall have occurred as a result
of which the Prospectus as then amended or supplemented would, in the judgment
of the Underwriters or the Company, include an untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
existing at the time of delivery to the purchaser, not misleading, or if to
comply with the Securities Act, the Exchange Act or the Rules and Regulations it
shall be necessary at any time to amend or supplement the Prospectus or
Registration Statement, or to file any document incorporated by reference in the
Registration Statement or the Prospectus or in any amendment thereof or
supplement thereto, the Company will notify you promptly and prepare and file
with the Commission, subject to the second paragraph of Section 5(a) hereof, an
appropriate amendment or supplement (in form and substance satisfactory to Bear
▇▇▇▇▇▇▇) which will correct such statement or omission or which will effect such
compliance and will use its best efforts to have any amendment to the
Registration Statement declared effective as soon as possible.
(c) Upon your request, the Company will promptly
deliver to each of you and Underwriters' Counsel a signed copy of the
Registration Statement, as initially filed and
16
all amendments thereto, including all consents and exhibits filed therewith, and
will maintain in the Company's files manually signed copies of such documents
for at least five years after the date of filing. The Company will promptly
deliver to each of the Underwriters such number of copies of any Preliminary
Prospectus, the Prospectus, the Registration Statement, and all amendments of
and supplements to such documents, if any, and all documents incorporated by
reference in the Registration Statement and Prospectus or any amendment thereof
or supplement thereto, as you may reasonably request. Prior to 10:00 A.M., New
York time, on the business day next succeeding the date of this Agreement and
from time to time thereafter during the period when the Prospectus is required
to be delivered under the Securities Act, the Exchange Act or the Rules and
Regulations, the Company will furnish the Underwriters with copies of the
Prospectus in New York City in such quantities as you may reasonably request.
(d) The Company consents to the use and delivery of
the Preliminary Prospectus by the Underwriters in accordance with Rule 430 and
Section 5(b) of the Securities Act.
(e) The Company will use its best efforts, in
cooperation with Bear ▇▇▇▇▇▇▇, at or prior to the time of effectiveness of the
Registration Statement, to qualify the Shares for offering and sale under the
securities laws relating to the offering or sale of the Shares of such
jurisdictions, domestic or foreign, as Bear ▇▇▇▇▇▇▇ may designate and to
maintain such qualification in effect for so long as required for the
distribution thereof; except that in no event shall the Company be obligated in
connection therewith to qualify as a foreign corporation or to execute a general
consent to service of process.
(f) The Company will make generally available to its
security holders and to the Underwriters as soon as practicable, but in any
event not later than twelve months after the effective date of the Registration
Statement (as defined in Rule 158(c) under the Securities Act), an earnings
statement of the Company and the Subsidiaries (which need not be audited)
complying with Section 11(a) of the Securities Act and the Rules and Regulations
(including, at the option of the Company, Rule 158).
(g) During the period of five years from the
effective date of the Registration Statement, the Company will furnish to you
copies of all reports or other communications (financial or other) furnished to
security holders or from time to time published or publicly disseminated by the
Company, and will deliver to you (i) as soon as they are available, copies of
any reports, financial statements and proxy or information statements furnished
to or filed with the Commission or any national securities exchange on which any
class of securities of the Company is listed; and (ii) such additional
information concerning the business and financial condition of the Company as
you may from time to time reasonably request (such financial information to be
on a consolidated basis to the extent the accounts of the Company and the
Subsidiaries are consolidated in reports furnished to its security holders
generally or to the Commission).
(h) The Company will apply the net proceeds from the
sale of the Shares as set forth under the caption "Use of Proceeds" in the
Prospectus.
17
(i) The Company will use its best efforts to list the
Shares, subject to notice of issuance, on the New York Stock Exchange (the
"Exchange") and maintain the listing of the Shares on the Exchange.
(j) The Company, during the period when the
Prospectus is required to be delivered under the Securities Act or the Exchange
Act, will file all documents required to be filed with the Commission pursuant
to the Securities Act, the Exchange Act and the Rules and Regulations within the
time periods required thereby.
(k) The Company and the Operating Partnership will
use their best efforts to do and perform all things required to be done or
performed under this Agreement by the Company and the Operating Partnership
prior to the Closing Date or the Additional Date, as the case may be, and to
satisfy all conditions precedent to the delivery of the Firm Shares and the
Additional Shares.
(l) The Company will use its best efforts to continue
to meet the requirements to qualify as a "real estate investment trust" under
the Code for each of its taxable years for so long as the Board of Trust
Managers deems it in the best interests of the Company's shareholders to remain
so qualified.
(m) Except for the authorization of actions permitted
to be taken by the Underwriters as contemplated herein or in the Prospectus,
neither the Company nor the Operating Partnership will (a) take, directly or
indirectly, any action designed to cause or to result in, or that might
reasonably be expected to constitute, the unlawful stabilization or manipulation
of the price of any security of the Company to facilitate the sale or resale of
the Securities, and (b) until the Closing Time, (i) sell, bid for or purchase
the Securities or pay any person any compensation for soliciting purchases of
the Securities or (ii) pay or agree to pay to any person any compensation for
soliciting another to purchase any other securities of the Company.
5. Payment of Expenses. Whether or not the transactions
contemplated by this Agreement, the Registration Statement and the Prospectus
are consummated or this Agreement is terminated, the Company hereby agrees to
pay all costs and expenses incident to the performance of its obligations
hereunder, including the following: (i) all expenses in connection with the
preparation, printing and filing of the Registration Statement, any Preliminary
Prospectus and the Prospectus and any and all amendments and supplements thereto
and the mailing and delivering of copies thereof to the Underwriters and
dealers; (ii) the fees, disbursements and expenses of the Company's counsel and
accountants in connection with the registration of the Shares under the
Securities Act and the Offering; (iii) the cost of producing this Agreement and
any agreement among Underwriters, blue sky survey, closing documents and other
instruments, agreements or documents (including any compilations thereof) in
connection with the Offering; (iv) all expenses in connection with the
qualification of the Shares for offering and sale under state securities laws as
provided in Section 4(e) hereof, including the fees and disbursements of counsel
for the Underwriters in connection with such qualification and in connection
with any blue sky survey; (v) the filing fees incident to and the fees and
18
disbursements of counsel for the Underwriters in connection with, securing any
required review by the NASD of the terms of the Offering; (vi) all fees and
expenses in connection with listing the Shares on the Exchange; (vii) all travel
expenses of the Company's officers and employees and any other expense of the
Company incurred in connection with attending or hosting meetings with
prospective purchasers of the Shares; and (viii) any stock transfer taxes
incurred in connection with this Agreement or the Offering. The Company also
will pay or cause to be paid: (x) the cost of preparing stock certificates
representing the Shares; (y) the cost and charges of any transfer agent or
registrar for the Shares; and (z) all other costs and expenses incident to the
performance of its obligations hereunder which are not otherwise specifically
provided for in this Section 5. It is understood, however, that except as
provided in this Section, and Sections 7, 8 and 11 hereof, the Underwriters will
pay all of their own costs and expenses, including the fees of their counsel and
stock transfer taxes on resale of any of the Shares by them.
6. Conditions of Underwriters' Obligations. The obligations of
the Underwriters to purchase and pay for the Firm Shares and the Additional
Shares, as provided herein, shall be subject to the accuracy of the
representations and warranties of the Company herein contained, as of the date
hereof and as of the Closing Date (for purposes of this Section 6 "Closing Date"
shall refer to the Closing Date for the Firm Shares and any Additional Closing
Date, if different, for the Additional Shares), to the absence from any
certificates, opinions, written statements or letters furnished to you or to
Underwriters' Counsel pursuant to this Section 6 of any misstatement or
omission, to the performance by the Company of its obligations hereunder, and to
each of the following additional conditions:
(a) The Registration Statement shall have become
effective and all necessary regulatory or stock exchange approvals shall have
been received not later than 5:30 P.M., New York time, on the date of this
Agreement, or at such later time and date as shall have been consented to in
writing by Bear ▇▇▇▇▇▇▇; if the Company shall have elected to rely upon Rule
430A or Rule 434 under the Securities Act, the Prospectus shall have been filed
with the Commission in a timely fashion in accordance with Section 4(a) hereof
and a form of the Prospectus containing information relating to the description
of the Shares and the method of distribution and similar matters shall have been
filed with the Commission pursuant to Rule 424(b) within the applicable time
period; and, at or prior to the Closing Date no stop order suspending the
effectiveness of the Registration Statement or any post-effective amendment
thereof shall have been issued and no proceedings therefor shall have been
initiated or threatened by the Commission.
(b) At the Closing Date you shall have received the
favorable written opinions of ▇▇▇▇ ▇▇▇▇▇▇▇ LLP, counsel for the Company, dated
the Closing Date addressed to the Underwriters in the forms attached hereto as
Annexes I and II.
(c) All proceedings taken in connection with the sale
of the Firm Shares and the Additional Shares as herein contemplated shall be
reasonably satisfactory in form and substance to Bear ▇▇▇▇▇▇▇ and to
Underwriters' Counsel, and the Underwriters shall have received from
Underwriters' Counsel a favorable written opinion, dated as of the Closing Date,
with respect to the issuance and sale of the Shares, the Registration Statement
and the Prospectus and such other related matters as Bear ▇▇▇▇▇▇▇ may require,
and the Company shall have
19
furnished to Underwriters' Counsel such documents as they may reasonably request
for the purpose of enabling them to pass upon such matters.
(d) At the Closing Date you shall have received a
certificate of the Chief Executive Officer or President and Chief Operating
Officer, and Chief Financial Officer of each of the Company and CGP, Inc., on
behalf of the Operating Partnership, dated the Closing Date to the effect that
(i) the condition set forth in subsection (a) of this Section 6 has been
satisfied, (ii) as of the date hereof and as of the Closing Date, the
representations and warranties of the Company set forth in Section 1 hereof are
accurate, (iii) as of the Closing Date all agreements, conditions and
obligations of each of the Company and the Operating Partnership to be performed
or complied with hereunder on or prior thereto have been duly performed or
complied with, (iv) the Company, the Operating Partnership and the Subsidiaries
have not sustained any material loss or interference with their respective
businesses or properties from fire, flood, hurricane, accident or other
calamity, whether or not covered by insurance, or from any labor dispute or any
legal or governmental proceeding, (v) no stop order suspending the effectiveness
of the Registration Statement or any post-effective amendment thereof has been
issued and no proceedings therefor have been initiated or threatened by the
Commission and (vi) subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus there has not been any
material adverse change or any development involving a prospective material
adverse change, whether or not arising from transactions in the ordinary course
of business, in or affecting (x) the business, condition (financial or
otherwise), results of operations, stockholders' equity, properties, affairs or
prospects of the Company, the Operating Partnership and the Subsidiaries, taken
as a whole; (y) the long-term debt or capital stock of the Company, the
Operating Partnership or any of its Subsidiaries; or (z) the Offering or
consummation of any of the other transactions contemplated by this Agreement,
the Registration Statement and the Prospectus.
(e) At the time this Agreement is executed and at the
Closing Date, you shall have received a comfort letter, from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
LLP, independent public accountants for the Company, dated, respectively, as of
the date of this Agreement and as of the Closing Date addressed to the
Underwriters and in form and substance satisfactory to the Underwriters and
Underwriters' Counsel.
(f) At the time this Agreement is executed and at the
Closing Date, if ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP is unable to deliver either of such comfort
letters, respectively, you shall have received a certificate of the Chief
Financial Officer of the Company dated, respectively, as of the date of this
Agreement and/or as of the Closing Date addressed to the Underwriters
substantially in the form attached hereto as Annex III.
(g) Since the respective dates as of which
information is given in the Registration Statement (exclusive of any amendment
thereof) and the Prospectus (exclusive of any supplement thereto), there shall
not have been any change in the capital stock or long-term debt of the Company
or any of the Subsidiaries or any change or development involving a change,
whether or not arising from transactions in the ordinary course of business, in
the business, condition (financial or otherwise), results of operations,
stockholders' equity, properties, affairs or prospects of the Company, the
Operating Partnership and the Subsidiaries, taken as a whole, including but not
limited to the occurrence of any fire, flood, explosion or other
20
calamity at any of the properties owned or leased by the Company or any of its
Subsidiaries, the effect of which, in any such case described above, is, in the
judgment of Bear ▇▇▇▇▇▇▇, so material and adverse as to make it impracticable or
inadvisable to proceed with the Offering on the terms and in the manner
contemplated in the Prospectus (exclusive of any supplement).
(h) At the Closing Date, the Shares shall have been
approved for listing upon notice of issuance on the Exchange.
(i) The Company shall have furnished the Underwriters
and Underwriters' Counsel with such other certificates, opinions or other
documents as they may have reasonably requested.
(j) At or before the Closing Time, the Company shall
have filed the Statement of Designations with the County Clerk of Tarrant
County, Texas.
If any of the conditions specified in this Section 6 shall not
have been fulfilled when and as required by this Agreement, or if any of the
certificates, opinions, written statements or letters furnished to you or to
Underwriters' Counsel pursuant to this Section 6 shall not be satisfactory in
form and substance to Bear ▇▇▇▇▇▇▇ and to Underwriters' Counsel, all obligations
of the Underwriters hereunder may be cancelled by Bear ▇▇▇▇▇▇▇ at, or at any
time prior to, the Closing Date and the obligations of the Underwriters to
purchase the Additional Shares may be terminated by Bear ▇▇▇▇▇▇▇ at, or at any
time prior to, the Additional Closing Date. Notice of such termination shall be
given to the Company in writing, or by telephone. Any such telephone notice
shall be confirmed promptly thereafter in writing.
7. Indemnification.
(a) The Company and the Operating Partnership shall
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act, against any and all losses, liabilities,
claims, damages and expenses whatsoever as incurred (including but not limited
to attorneys' fees and any and all expenses whatsoever incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever, and any and all amounts paid in settlement
of any claim or litigation), joint or several, to which they or any of them may
become subject under the Securities Act, the Exchange Act or otherwise, insofar
as such losses, liabilities, claims, damages or expenses (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, as
originally filed or any amendment thereof, or any related Preliminary Prospectus
or the Prospectus, or in any supplement thereto or amendment thereof, 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; provided, however, that the Company and the Operating
Partnership will not be liable in any such case to the extent but only to the
extent that any such loss, liability, claim, damage or expense arises out of or
is based upon any such untrue statement or alleged untrue statement or omission
or alleged omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Underwriter through
Bear ▇▇▇▇▇▇▇ expressly for use therein. The parties agree that such
21
information provided by or on behalf of any Underwriter through Bear ▇▇▇▇▇▇▇
consists solely of the material referred to in the last sentence of Section 1
(b) hereof. This indemnity agreement will be in addition to any liability which
the Company may otherwise have, including but not limited to other liability
under this Agreement.
(b) Each Underwriter, severally and not jointly,
shall indemnify and hold harmless the Company, the Operating Partnership, each
of the trust managers of the Company, the sole director of the general partner
of the Operating Partnership, each of the officers of the Company who shall have
signed the Registration Statement, and each other person, if any, who controls
the Company or the Operating Partnership within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, against any losses,
liabilities, claims, damages and expenses whatsoever as incurred (including but
not limited to attorneys' fees and any and all expenses whatsoever incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever, and any and all amounts paid in settlement
of any claim or litigation), joint or several, to which they or any of them may
become subject under the Securities Act, the Exchange Act or otherwise, insofar
as such losses, liabilities, claims, damages or expenses (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, as
originally filed or any amendment thereof, or any related Preliminary Prospectus
or the Prospectus, or in any amendment thereof or supplement thereto, 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
any such loss, liability, claim, damage or expense arises out of or is based
upon any such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of any
Underwriter through Bear ▇▇▇▇▇▇▇ specifically for use therein; provided,
however, that in no case shall any Underwriter be liable or responsible for any
amount in excess of the underwriting discount applicable to the Shares to be
purchased by such Underwriter hereunder. This indemnity will be in addition to
any liability which any Underwriter may otherwise have, including but not
limited to other liability under this Agreement. The parties agree that such
information provided by or on behalf of any Underwriter through Bear ▇▇▇▇▇▇▇
consists solely of the material referred to in the last sentence of Section 1
(b) hereof.
(c) Promptly after receipt by an indemnified party
under subsection (a) or (b) above of notice of any claims or 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 each party
against whom indemnification is to be sought in writing of the claim or the
commencement thereof (but the failure so to notify an indemnifying party shall
not relieve the indemnifying party from any liability which it may have under
this Section 7 to the extent that it is not materially prejudiced as a result
thereof and in any event shall not relieve it from any liability that such
indemnifying party may have otherwise than on account of the indemnity agreement
hereunder). In case any such claim or action is brought against any indemnified
party, and it notifies an indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate, at its own expense in the
defense of such action, and to the extent it may elect by written notice
delivered to the indemnified party promptly after receiving the aforesaid notice
from such indemnified party, to assume the defense
22
thereof with counsel satisfactory to such indemnified party; provided however,
that counsel to the indemnifying party shall not (except with the written
consent of the indemnified party) also be counsel to the indemnified party.
Notwithstanding the foregoing, the indemnified party or parties shall have the
right to employ its or their own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of such indemnified party or
parties unless (i) the employment of such counsel shall have been authorized in
writing by one of the indemnifying parties in connection with the defense of
such action, (ii) the indemnifying parties shall not have employed counsel to
have charge of the defense of such action within a reasonable time after notice
of commencement of the action, (iii) the indemnifying party does not diligently
defend the action after assumption of the defense, or (iv) such indemnified
party or parties shall have reasonably concluded that there may be defenses
available to it or them which are different from or additional to those
available to one or all of the indemnifying parties (in which case the
indemnifying parties shall not have the right to direct the defense of such
action on behalf of the indemnified party or parties), in any of which events
such fees and expenses shall be borne by the indemnifying parties. No
indemnifying party shall, without the prior written consent of the indemnified
parties, effect any settlement or compromise of, or consent to the entry of
judgment with respect to, any pending or threatened claim, investigation, action
or proceeding in respect of which indemnity or contribution may be or could have
been sought by an indemnified party under this Section 7 or Section 8 hereof
(whether or not the indemnified party is an actual or potential party thereto),
unless (x) such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such claim,
investigation, action or proceeding and (ii) does not include a statement as to
or an admission of fault, culpability or any failure to act, by or on behalf of
the indemnified party, and (y) the indemnifying party confirms in writing its
indemnification obligations hereunder with respect to such settlement,
compromise or judgment.
8. Contribution. In order to provide for contribution in
circumstances in which the indemnification provided for in Section 7 hereof is
for any reason held to be unavailable from any indemnifying party or is
insufficient to hold harmless a party indemnified thereunder, the Company or the
Operating Partnership and the Underwriters shall contribute to the aggregate
losses, claims, damages, liabilities and expenses of the nature contemplated by
such indemnification provision (including any investigation, legal and other
expenses incurred in connection with, and any amount paid in settlement of, any
action, suit or proceeding or any claims asserted, but after deducting in the
case of losses, claims, damages, liabilities and expenses suffered by the
Company or the Operating Partnership any contribution received by the Company or
the Operating Partnership from persons, other than the Underwriters, who may
also be liable for contribution, including persons who control the Company or
the Operating Partnership within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act, officers of the Company who signed the
Registration Statement and trust managers of the Company) as incurred to which
the Company or the Operating Partnership and one or more of the Underwriters may
be subject, in such proportions as is appropriate to reflect the relative
benefits received by the Company and the Underwriters from the Offering or, if
such allocation is not permitted by applicable law, in such proportion as are
appropriate to reflect not only the relative benefits referred to above but also
the relative fault of the Company and the Underwriters in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Underwriters shall be
deemed to be in the
23
same proportion as (x) the total proceeds from the Offering (net of underwriting
discounts and commissions but before deducting expenses) received by the Company
bears to (y) the underwriting discount or commissions received by Underwriters,
in each case as set forth in the table on the cover page of the Prospectus. The
relative fault of the Company and the Operating Partnership and of the
Underwriters 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 or the Underwriters and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
The Company, the Operating Partnership and the Underwriters agree that it would
not be just and equitable if contribution pursuant to this Section 8 were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this Section
8. The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 8 shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 8, (i) no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the 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 and (ii) no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 8,
each person, if any, who controls an Underwriter within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act shall have the same
rights to contribution as such Underwriter, and each person, if any, who
controls the Company or the Operating Partnership within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act, each officer of the
Company who shall have signed the Registration Statement and each trust manager
of the Company shall have the same rights to contribution as the Company and the
Operating Partnership, subject in each case to clauses (i) and (ii) of the
immediately preceding sentence. Any party entitled to contribution will,
promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for contribution may
be made against another party or parties, notify each party or parties from whom
contribution may be sought, but the omission to so notify such party or parties
shall not relieve the party or parties from whom contribution may be sought from
any obligation it or they may have under this Section 8 or otherwise. The
obligations of the Underwriters to contribute pursuant to this Section 8 are
several in proportion to the respective number of Shares to be purchased by each
of the Underwriters hereunder and not joint.
9. Default by an Underwriter.
(a) If any Underwriter or Underwriters shall default
in its or their obligation to purchase Firm Shares or Additional Shares
hereunder, and if the Firm Shares or Additional Shares with respect to which
such default relates do not (after giving effect to
24
arrangements, if any, made by Bear ▇▇▇▇▇▇▇ pursuant to subsection (b) below)
exceed in the aggregate 10% of the number of Firm Shares or Additional Shares,
the Firm Shares or Additional Shares to which the default relates shall be
purchased by the non-defaulting Underwriters in proportion to the respective
proportions which the numbers of Firm Shares set forth opposite their respective
names in Schedule I hereto bear to the aggregate number of Firm Shares set forth
opposite the names of the non-defaulting Underwriters.
(b) In the event that such default relates to more
than 10% of the Firm Shares or Additional Shares, as the case may be, Bear
▇▇▇▇▇▇▇ may in its discretion arrange for itself or for another party or parties
(including any non-defaulting Underwriter or Underwriters who so agree) to
purchase such Firm Shares or Additional Shares, as the case may be, to which
such default relates on the terms contained herein. In the event that within
five calendar days after such a default Bear ▇▇▇▇▇▇▇ does not arrange for the
purchase of the Firm Shares or Additional Shares, as the case may be, to which
such default relates as provided in this Section 9, this Agreement or, in the
case of a default with respect to the Additional Shares, the obligations of the
Underwriters to purchase and of the Company to sell the Additional Shares shall
thereupon terminate, without liability on the part of the Company with respect
thereto (except in each case as provided in Sections 5, 7(a) and 8 hereof) or
the Underwriters, but nothing in this Agreement shall relieve a defaulting
Underwriter or Underwriters of its or their liability, if any, to the other
Underwriters and the Company for damages occasioned by its or their default
hereunder.
(c) In the event that the Firm Shares or Additional
Shares to which the default relates are to be purchased by the non-defaulting
Underwriters, or are to be purchased by another party or parties as aforesaid,
Bear ▇▇▇▇▇▇▇ or the Company shall have the right to postpone the Closing Date or
Additional Closing Date, as the case may be for a period, not exceeding five
business days, in order to effect whatever changes may thereby be made necessary
in the Registration Statement or the Prospectus or in any other documents and
arrangements, and the Company agrees to file promptly any amendment or
supplement to the Registration Statement or the Prospectus which, in the opinion
of Underwriters' Counsel, may thereby be made necessary or advisable. The term
"Underwriter" as used in this Agreement shall include any party substituted
under this Section 9 with like effect as if it had originally been a party to
this Agreement with respect to such Firm Shares and Additional Shares.
25
10. Survival of Representations and Agreements. All
representations and warranties, covenants and agreements of the Underwriters the
Company and the Operating Partnership contained in this Agreement or in
certificates of officers of the Company or any Subsidiary submitted pursuant
hereto, including the agreements contained in Section 5, the indemnity
agreements contained in Section 7 and the contribution agreements contained in
Section 8, shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any Underwriter or any controlling person
thereof or by or on behalf of the Company or the Operating Partnership, any of
its officers and directors or any controlling person thereof, and shall survive
delivery of and payment for the Shares to and by the Underwriters. The
representations contained in Section 1 and the agreements contained in Sections
5, 7, 8, 10 and 11(d) hereof shall survive any termination of this Agreement,
including termination pursuant to Section 9 or 11 hereof.
11. Effective Date of Agreement; Termination.
(a) This Agreement shall become effective upon the
execution of this Agreement. If either the public offering price or the purchase
price per Share has not been agreed upon prior to 5:00 P.M., New York City time,
on the fifth full business day after the Registration Statement shall have
become effective, this Agreement shall thereupon terminate without liability to
the Company or the Underwriters except as herein expressly provided. Until this
Agreement becomes effective as aforesaid, it may be terminated by the Company by
notifying you or by Bear ▇▇▇▇▇▇▇ notifying the Company. Notwithstanding any
termination of this Agreement, the provisions of this Section 11 and of Sections
1, 5, 7, 8 and 12 through 17, inclusive, shall be in full force and effect at
all times after the execution hereof.
(b) Bear ▇▇▇▇▇▇▇ shall have the right to terminate
this Agreement at any time prior to the Closing Date or to terminate the
obligations of the Underwriters to purchase the Additional Shares at any time
prior to the Additional Closing Date, as the case may be, if (A) any domestic or
international event or act or occurrence has materially disrupted, or in the
opinion of Bear ▇▇▇▇▇▇▇ will in the immediate future materially disrupt, the
market for the Company's securities or securities in general; or (B) if trading
on the Exchange or The NASDAQ National Market (the "NASDAQ") shall have been
suspended or been made subject to material limitations, or minimum or maximum
prices for trading shall have been fixed, or maximum ranges for prices for
securities shall have been required, on the Exchange or the NASDAQ or by order
of the Commission or any other governmental authority having jurisdiction; or
(C) if a banking moratorium has been declared by any state or federal authority
or if any material disruption in commercial banking or securities settlement or
clearance services shall have occurred; or (D) any downgrading shall have
occurred in the Company's or the Operating Partnership's corporate credit rating
or the rating accorded the Company's or the Operating Partnership's debt
securities or preferred stock by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the Securities Act)
or if any 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 or the Operating Partnership's debt securities; or (E) (i) if
there shall have occurred any outbreak or escalation of hostilities or acts of
terrorism involving the United States or there is a declaration of a national
emergency or war by the United States or (ii) if there shall have been any other
calamity or crisis or any change in political, financial or economic conditions
if the effect of any such event in (i)
26
or (ii), in the judgment of Bear ▇▇▇▇▇▇▇, makes it impracticable or inadvisable
to proceed with the offering, sale and delivery of the Firm Shares or the
Additional Shares, as the case may be, on the terms and in the manner
contemplated by the Prospectus.
(c) Any notice of termination pursuant to this
Section 11 shall be in writing.
(d) If this Agreement shall be terminated pursuant to
any of the provisions hereof (other than pursuant to (i) notification by Bear
▇▇▇▇▇▇▇ as provided in Section 11(a) hereof or (ii) Section 9(b) hereof), or if
the sale of the Shares provided for herein is not consummated because any
condition to the obligations of the Underwriters set forth herein is not
satisfied or because of any refusal, inability or failure on the part of the
Company to perform any agreement herein or comply with any provision hereof, the
Company will, subject to demand by Bear ▇▇▇▇▇▇▇, reimburse the Underwriters for
all out-of-pocket expenses (including the reasonable fees and expenses of their
counsel), incurred by the Underwriters in connection herewith.
12. Notices. All communications hereunder, except as may be
otherwise specifically provided herein, shall be in writing, and:
(a) if sent to any Underwriter, shall be mailed,
delivered, or faxed and confirmed in writing, to such Underwriter c/o Bear,
▇▇▇▇▇▇▇ & Co. Inc., ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
Debt Capital Markets, with a copy to Underwriter's Counsel at ▇▇▇▇▇ & ▇▇▇▇▇▇▇
L.L.P., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, Attention: J. ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇.;
(b) if sent to the Company or the Operating
Partnership, shall be mailed, delivered, or faxed and confirmed in writing to
the Company and its counsel at the addresses set forth in the Registration
Statement, Attention: ▇▇▇▇ ▇. ▇▇▇▇, Chief Executive Officer;
provided, however, that any notice to an Underwriter pursuant to Section 7 shall
be delivered or sent by mail or facsimile transmission to such Underwriter at
its address set forth in its acceptance facsimile to Bear ▇▇▇▇▇▇▇, which address
will be supplied to any other party hereto by Bear ▇▇▇▇▇▇▇ upon request. Any
such notices and other communications shall take effect at the time of receipt
thereof.
13. Parties. This Agreement shall insure solely to the benefit
of, and shall be binding upon, the Underwriters and the Company and the
controlling persons, directors, officers, employees and agents referred to in
Sections 7 and 8 hereof, and their respective successors and assigns, and no
other person shall have or be construed to have any legal or equitable right,
remedy or claim under or in respect of or by virtue of this Agreement or any
provision herein contained. This Agreement and all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of the parties
hereto and said controlling persons and their respective successors, officers,
directors, heirs and legal representatives, and it is not for the benefit of any
other person, firm or corporation. The term "successors and assigns" shall not
include a purchaser, in its capacity as such, of Shares from any of the
Underwriters.
27
14. Governing Law and Jurisdiction; Waiver of Jury Trial. THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK. The Company and the Operating Partnership irrevocably (a)
submit to the jurisdiction of any court of the State of New York or the United
State District Court for the Southern District of the State of New York for the
purpose of any suit, action, or other proceeding arising out of this Agreement,
or any of the agreements or transactions contemplated by this Agreement, the
Registration Statement and the Prospectus (each, a "Proceeding"), (b) agree that
all claims in respect of any Proceeding may be heard and determined in any such
court, (c) waive, to the fullest extent permitted by law, any immunity from
jurisdiction of any such court or from any legal process therein, (d) agree not
to commence any Proceeding other than in such courts, and (e) waive, to the
fullest extent permitted by law, any claim that such Proceeding is brought in an
inconvenient forum. THE COMPANY AND THE OPERATING PARTNERSHIP (ON BEHALF OF
THEMSELVES AND, TO THE FULLEST EXTENT PERMITTED BY LAW, ON BEHALF OF THEIR
RESPECTIVE EQUITY HOLDERS AND CREDITORS) HEREBY WAIVE ANY RIGHT THEY MAY HAVE TO
A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED UPON, ARISING OUT OF OR IN
CONNECTION WITH THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT, THE REGISTRATION STATEMENT AND THE PROSPECTUS.
15. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same instrument. Delivery of
a signed counterpart of this Agreement by facsimile transmission shall
constitute valid and sufficient delivery thereof.
16. Headings. The headings herein are inserted for convenience
of reference only and are not intended to be part of, or to affect the meaning
or interpretation of, this Agreement.
17. Time is of the Essence. Time shall be of the essence of
this Agreement. As used herein, the term "business day" shall mean any day when
the Commission's office in Washington, D.C. is open for business.
[signature page follows]
28
If the foregoing correctly sets forth your understanding,
please so indicate in the space provided below for that purpose, whereupon this
letter shall constitute a binding agreement among us.
Very truly yours,
CRESCENT REAL ESTATE EQUITIES COMPANY
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Chief Executive Officer
CRESCENT REAL ESTATE EQUITIES LIMITED
PARTNERSHIP
By: Crescent Real Estate Equities, Ltd.,
its General Partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Chief Executive Officer
Accepted as of the date first above written
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Senior Managing Director
On behalf of itself and the other Underwriters
named in Schedule I hereto.
SCHEDULE I
Number of Additional
Total Number of Firm Shares to be Purchased if
Name of Underwriter Shares to be Purchased Option is Fully Exercised
------------------- ---------------------- -------------------------
Bear, ▇▇▇▇▇▇▇ & Co. Inc. 1,500,000 225,000
BB&T Capital Markets, a division of ▇▇▇▇▇ &
▇▇▇▇▇▇▇▇▇▇▇▇, Inc. 750,000 112,500
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Co., Incorporated 750,000 112,500
Total............. 3,000,000 450,000
SCHEDULE II
SIGNIFICANT SUBSIDIARIES
Name Jurisdiction of Organization
---- ----------------------------
CRE Management I Corp. Delaware
CRE Management II Corp. Delaware
CRE Management III Corp. Delaware
Crescent TRS Holding Corp. Delaware
CRE Management VIII, LLC Delaware
CRE Management IX, LLC Delaware
Crescent Real Estate Equities Limited Partnership Delaware
Crescent Real Estate Equities, Ltd. Delaware
Crescent Real Estate Funding I, L.P. Delaware
Crescent Real Estate Funding II, L.P. Delaware
Crescent Real Estate Funding III, L.P. Delaware
Crescent Real Estate Funding VIII, L.P. Delaware
Crescent Real Estate Funding IX, L.P. Delaware
[Annexes Intentionally Omitted]