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EXHIBIT 1.1
▇▇▇▇▇▇▇▇▇▇ REALTY INVESTORS
$150,000,000
Medium-Term Notes
DISTRIBUTION AGREEMENT
November 15, 1996
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Alex. ▇▇▇▇▇ & Sons Incorporated
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Chase Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Securities Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ Brothers Inc.
Three World Financial Center, 12th Floor
New York, New York 10285
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
World Financial Center
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
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▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
NationsBanc Capital Markets, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
▇▇▇▇▇▇▇▇▇▇ Realty Investors, a Texas real estate investment trust (the
"Company"), proposes to issue and sell from time to time its Medium-Term Notes
(the "Securities") in an aggregate amount of up to $150,000,000, and agrees
with each of you (individually, an "Agent", and collectively, the "Agents") as
set forth in this Agreement.
Subject to the terms and conditions stated herein and to the
reservation by the Company of the right to sell the Securities directly on its
own behalf, the Company hereby (i) appoints each Agent as an agent of the
Company for the purpose of soliciting and receiving offers to purchase the
Securities from the Company pursuant to Section 2(a) hereof and (ii) agrees
that, except as otherwise contemplated hereby, whenever it determines to sell
the Securities directly to any Agent as principal, it will enter into a
separate agreement (each a "Terms Agreement") which, unless otherwise agreed,
shall, to the extent applicable, include those terms specified in Annex I
hereto and be agreed upon orally, with written confirmation prepared by such
Agent and mailed to the Company, relating to such sale in accordance with
Section 2(b) hereof.
The Securities may be issued either as senior debt securities ("Senior
Securities") or as subordinated debt securities ("Subordinated Securities").
The Senior Securities will rank equally with all other unsecured and
unsubordinated indebtedness of the Company, while the Subordinated Securities
will be subordinated to all existing and future senior debt of the Company.
The Senior Securities will be issued under an indenture, dated as of May 1,
1995 (the "Senior Indenture"), between the Company and Texas Commerce Bank
National Association, as Trustee. The Subordinated Securities will be issued
under an indenture, dated as of May 1, 1995 (the "Subordinated Indenture"),
between the Company and Texas Commerce Bank National Association, as Trustee.
The term "Trustee" as used herein shall refer to Texas Commerce Bank National
Association in its capacity as Trustee for the Senior Securities or the
Subordinated Securities, as appropriate. The Senior Indenture and the
Subordinated Indenture sometimes are referred to herein collectively as the
"Indentures", and individually as the "Indenture". The Securities shall have
the maturity ranges, interest rates, if any, redemption provisions and other
terms set forth in the Prospectus referred to below as it may be amended or
supplemented from time to time. The Securities will be issued, and the terms
and rights thereof established, from time to time by the Company in accordance
with the Indentures.
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1. The Company represents and warrants to, and agrees with, each
Agent that:
(a) (i) A registration statement on Form S-3 (File No. 333-12179) in
respect of $226,500,000 aggregate amount of debt securities, preferred
shares, common shares and securities warrants of the Company,
including the Securities, and (ii) a registration statement on Form
S-3 (File No. 33-57659) in respect of $200,000,000 aggregate amount
of debt securities, preferred shares and common shares of the Company,
including the Securities, each as amended, have been filed with the
Securities and Exchange Commission (the "Commission"); such
registration statements and any post-effective amendments thereto,
each in the form heretofore delivered or to be delivered to such
Agent, excluding exhibits to such registration statement, but
including all documents incorporated by reference into the
prospectuses included therein, have been declared effective by the
Commission in such form; no other document with respect to such
registration statements or document incorporated by reference therein
heretofore has been filed or transmitted for filing with the
Commission (other than the prospectuses filed pursuant to Rule 424(b)
of the rules and regulations of the Commission under the Securities
Act of 1933, as amended (the "Securities Act"), each in the form
heretofore delivered to the Agents); and no stop order suspending the
effectiveness of such registration statements has been issued and no
proceeding for that purpose has been initiated or threatened by the
Commission (any preliminary prospectus included in such registration
statements or filed with the Commission pursuant to Rule 424(a) of the
rules and regulations of the Commission under the Securities Act,
hereinafter being referred to as a "Preliminary Prospectus"; the
various parts of such registration statements, including all exhibits
thereto and the documents incorporated by reference into the
prospectuses contained in the registration statements at the time such
part of the registration statements became effective but excluding
Form T-1, each as amended at the time such part of the registration
statements became effective, hereinafter being referred to
collectively as the "Registration Statement"; the prospectus
(including, if applicable, any prospectus supplement) relating to the
Securities, in the form in which it most recently has been filed, or
transmitted for filing, with the Commission on or prior to the date of
this Agreement, hereinafter being referred to as the "Prospectus"; any
reference herein to any Preliminary Prospectus or the Prospectus shall
be deemed to refer to and include the documents incorporated by
reference therein pursuant to the applicable form under the Securities
Act, as of the date of such Preliminary Prospectus or Prospectus, as
the case may be; any reference to any amendment or supplement to any
Preliminary Prospectus or the Prospectus, including any supplement to
the Prospectus that sets forth only the terms of a particular issue of
the Securities (a "Pricing Supplement"), shall be deemed to refer to
and include any documents filed after the date of such Preliminary
Prospectus or Prospectus, as the case may be, under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and
incorporated therein by reference; any reference to any amendment to
the Registration Statement shall be deemed to refer to and include any
annual report of the Company filed pursuant to Section 13(a) or 15(d)
of the Exchange Act after the effective date of the Registration
Statement that is incorporated by reference into the Registration
Statement; and any reference to the Prospectus as amended or
supplemented shall be deemed to refer to and include the Prospectus as
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amended or supplemented (including by the applicable Pricing
Supplement filed in accordance with Section 4(a) hereof) in relation
to the Securities sold pursuant to this Agreement, in the form filed
with the Commission pursuant to Rule 424(b) under the Securities Act
and in accordance with Section 4(a) hereof, including any documents
incorporated by reference therein as of the date of such filing);
(b) The documents incorporated by reference into the Prospectus,
when they became effective or were filed with the Commission, as the
case may be, conformed in all material respects to the requirements of
the Securities Act or the Exchange Act, as applicable, and the rules
and regulations of the Commission thereunder, and none of such
documents contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; and any further documents
so filed and incorporated by reference into the Prospectus, or any
further amendment or supplement thereto, when such documents become
effective or are filed with the Commission, as the case may be, will
conform in all material respects to the requirements of the Securities
Act or the Exchange Act, as applicable, and the rules and regulations
of the Commission thereunder and will not contain an untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the Company
by any Agent expressly for use in the Prospectus as amended or
supplemented to relate to a particular issuance of the Securities;
(c) The Registration Statement and the Prospectus conform, and
any further amendments or supplements to the Registration Statement or
to the Prospectus will conform, in all material respects to the
requirements of the Securities Act and the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"), and the rules and
regulations of the Commission thereunder and do not and will not, as
of the applicable effective date as to the Registration Statement and
any amendment thereto and as of the applicable filing date as to the
Prospectus and any amendment or supplement thereto, contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the Company
by any Agent expressly for use in the Prospectus as amended or
supplemented to relate to a particular issuance of the Securities;
(d) The Company is a real estate investment trust duly formed,
validly existing and in good standing under the laws of the State of
Texas, with the power and authority (corporate and other) to own its
properties and to conduct its business as described in the Prospectus;
and the Company is duly qualified to transact business and is in good
standing in each other jurisdiction in which it owns or leases
properties, or conducts any
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business, so as to require such qualification, or is subject to no
material liability or disability by reason of the failure to be so
qualified in any such jurisdiction, and holds all authorizations,
approvals, orders, licenses, certificates and permits from all
governmental authorities which are material to the conduct of its
business;
(e) Each subsidiary of the Company has been duly incorporated
(or, with respect to ▇▇▇▇▇▇▇▇▇▇ Properties Trust, has been duly formed
as a real estate investment trust) and is validly existing as a
corporation or trust in good standing under the laws of the
jurisdiction of its incorporation or formation, has the power and
authority (corporate and other) to own, lease and operate its
properties and to conduct its business as described in the Prospectus
and is duly qualified as a foreign corporation or trust to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure to so qualify would not have a material adverse effect or a
prospective material adverse effect on the condition, financial or
otherwise, or the earnings or business affairs of the Company and its
subsidiaries considered as one enterprise; all of the issued and
outstanding capital stock of each such subsidiary has been duly
authorized and validly issued, is fully paid and non-assessable and is
owned by the Company, directly or through subsidiaries (except for
▇▇▇▇▇▇▇▇▇▇ Properties Trust, of which the Company owns approximately
77% of the outstanding capital shares), free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity;
(f) Neither the Company nor any of its subsidiaries has
sustained since the date of the latest audited financial statements
included in or incorporated by reference into the Prospectus, as
amended or supplemented, any material loss or interference with its
business from fire, explosion, flood or other calamity, or from any
labor dispute or court or governmental action, order or decree,
otherwise than as set forth in or contemplated by the Prospectus; and,
since the respective dates as of which information is given in the
Registration Statement and in the Prospectus, there has not been any
change in the capital stock or any increase in the consolidated
long-term debt of the Company and its subsidiaries or any decrease in
consolidated net current assets or net assets or any material adverse
change, or any development involving a prospective material adverse
change, in or affecting the general affairs, management, financial
position, shareholders' equity or results of operations of the Company
and its subsidiaries, otherwise than as set forth in or contemplated
by the Prospectus;
(g) The Company has an authorized capitalization as set forth in
the Prospectus, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued and are fully
paid and non-assessable;
(h) The Securities have been duly authorized, and, when issued
and delivered pursuant to this Agreement and any Terms Agreement, will
have been duly executed, authenticated, issued and delivered and will
constitute valid and legally binding
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obligations of the Company entitled to the benefits provided by the
Indentures, which will be substantially in the forms filed as exhibits
to the Registration Statement; each Indenture has been duly authorized
and duly qualified under the Trust Indenture Act and constitutes a
valid and legally binding instrument, enforceable in accordance with
its respective terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and general equitable
principles; and each Indenture conforms, and the Securities of any
particular issuance of the Securities will conform, to the
descriptions thereof contained in the Prospectus as amended or
supplemented to relate to such issuance of the Securities;
(i) The issuance and sale of the Securities, the compliance by
the Company with all of the provisions of the Securities, the
Indentures, this Agreement and any Terms Agreement, and the
consummation of the transactions contemplated hereby and thereby will
not conflict with, or result in a breach or violation of, any of the
terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is a party
or by which the Company or any of its subsidiaries is bound or to
which any of the property or assets of the Company or any of its
subsidiaries is subject, nor will such action result in any violation
of the provisions of the Restated Declaration of Trust, as amended, or
the By- Laws of the Company or any statute or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of
their respective properties; and no consent, approval, authorization,
order, registration or qualification of or with any court or
governmental agency or body is required for the solicitation of offers
to purchase the Securities, the issuance and sale of the Securities or
the consummation by the Company of the other transactions contemplated
by this Agreement, any Terms Agreement or the Indentures, except such
as have been, or will have been prior to the Commencement Date (as
defined in Section 3 hereof), obtained under the Securities Act or the
Trust Indenture Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the solicitation by
such Agent of offers to purchase the Securities from the Company and
with purchases of the Securities by such Agent as principal, as the
case may be, in each case in the manner contemplated hereby;
(j) Other than as set forth in the Prospectus, there are no
legal or governmental proceedings pending to which the Company or any
of its subsidiaries is a party or to which any property of the Company
or any of its subsidiaries is subject, which, if determined adversely
to the Company or any of its subsidiaries would individually or in the
aggregate have a material adverse effect on the current or future
consolidated financial position, shareholders' equity or results of
operations of the Company and its subsidiaries, and, to the best of
the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
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(k) Immediately after any sale of the Securities by the Company
hereunder or under any Terms Agreement, the aggregate amount of the
Securities which shall have been issued and sold by the Company
hereunder or under any Terms Agreement and of any debt securities of
the Company (other than the Securities) that shall have been issued
and sold pursuant to the Registration Statement will not exceed the
amount of debt securities registered under the Registration Statement;
(l) The financial statements set forth in or incorporated by
reference into the Registration Statement present fairly the financial
position and the results of operations of the Company and its
subsidiaries at the indicated dates and for the indicated periods.
Except as otherwise stated in the Registration Statement, such
financial statements have been prepared in accordance with generally
accepted accounting principles, applied on a consistent basis; and the
supporting schedules included in the Registration Statement present
fairly the information required to be stated therein;
(m) The Company and its subsidiaries have good and indefeasible
title in fee simple to all real property and interests in real
property owned by them and good and indefeasible title to all personal
property owned by them, in each case free and clear of all liens,
encumbrances and defects, except as are described in the Prospectus
and except for properties subject to a pledge under the Amended and
Restated Loan Agreement of $80,000,000, executed January 22, 1993,
between the Company and Texas Commerce Bank National Association and
under a Loan Agreement, dated August 6, 1987, between the Company and
the Variable Annuity Life Insurance Company, American General Life
Insurance Company, American General Life Insurance Company of
Delaware, Republic National Life Insurance Company and American
Amicable Life Insurance Company of Texas, as amended, and except for
property owned in the joint ventures set forth in Annex IV hereto or
such as do not materially affect the value of such property and
interests in the aggregate and do not interfere with the use made and
proposed to be made of such property and interests by the Company and
its subsidiaries taken as a whole; in the case of real property and
interests in real property, the Company and its subsidiaries have
obtained satisfactory confirmation (consisting of policies of title
insurance or binders therefor or opinions of counsel based upon the
examination of abstracts) confirming, except as is otherwise described
in the Prospectus, (a) that the Company and its subsidiaries have the
foregoing title to such real property and interests in real property;
provided, however, that in those cases in which such information is
not current, the Company and its subsidiaries do not have notice of
any material claim of any sort which has been asserted by anyone
adverse to the Company's or its subsidiaries foregoing title to such
real property and interests in real property, and (b) that the
instruments securing the indebtedness of third parties to the Company
or its subsidiaries create valid liens upon the real properties
described in such instruments enjoying the priorities intended,
subject only to exceptions to title which have no materially adverse
effect on the value of such real properties and interests; and any
real property and buildings held under lease by the Company or its
subsidiaries or leased by the Company or its subsidiaries to a third
party are held or leased by them under valid, binding and
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enforceable leases conforming to the description thereof set forth in
the Prospectus, with such exceptions as are not material and do not
interfere with the use made and proposed to be made of such property
and buildings by the Company or its subsidiaries or such third party;
(n) The Company has filed all Federal, state and foreign income
tax returns which have been required to be filed on or before the due
date (taking into account all extensions of time to file) and has paid
or provided for all taxes indicated by said returns and all
assessments received by it to the extent that taxes have become due;
(o) Since January 1, 1985, the Company's form of organization,
share ownership and method of operation have satisfied, and the
Company intends to continue to satisfy, for the calendar year 1996 and
subsequent taxable periods, the requirements of the Internal Revenue
Code of 1986, as applicable, as amended (the "Code"), for
qualification of the Company as a "real estate investment trust"; the
Company's management believes that the nature and value of the
Company's assets and the anticipated income of the Company for the
taxable year ending December 31, 1996 will enable the Company to
qualify as a real estate investment trust for that taxable year
(subject to the continuing qualification of the Company's share
ownership and the Company's filing of its Federal income tax return
for that taxable year and electing to be treated as a real estate
investment trust);
(p) The Company is not and, after giving effect to the offering
and sale of the Securities will not be, an "investment company" or an
entity "controlled" by an "investment company", as such terms are
defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act");
(q) Neither the Company nor any of its affiliates does business
with the government of Cuba or with any person or affiliate located in
Cuba within the meaning of Section 517.075, Florida Statutes;
(r) Deloitte & Touche LLP, who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Securities Act and the rules and
regulations of the Commission thereunder;
(s) Although the Company is aware of the presence of hazardous
substances, hazardous materials, toxic substances or waste materials
("Hazardous Materials") on certain of its properties, nothing has come
to the attention of the Company which, at this time, would lead the
Company to believe that the presence of such Hazardous Materials, when
considered in the aggregate, would materially adversely affect the
financial condition of the Company. In connection with the
construction on or operation and use of the properties owned or leased
by the Company or any of its subsidiaries, the Company represents
that, as of the date of this Agreement, it has no knowledge of any
material failure by the Company or any of its subsidiaries to comply
with all applicable
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Federal, state and local environmental laws, regulations, ordinances
and administrative and judicial orders relating to the generation,
recycling, reuse, sale, storage, handling, transport and disposal of
any Hazardous Materials; and
(t) The statements set forth in the Prospectus under the
captions "Description of Debt Securities" and "Description of Notes",
insofar as they purport to constitute a summary of the terms of the
Securities, and under the captions "United States Taxation",
"Description of Common Shares", "Description of Preferred Shares",
"Description of Securities Warrants", "Plan of Distribution" and
"Supplemental Plan of Distribution", insofar as they purport to
describe the provisions of the laws and documents referred to therein,
are accurate, complete and fair.
2. (a) On the basis of the representations and warranties herein
contained, and subject to the terms and conditions herein set forth,
each of the Agents hereby agrees, severally and not jointly, as agent
of the Company, to use its reasonable efforts to solicit and receive
offers to purchase the Securities from the Company upon the terms and
conditions set forth in the Prospectus as amended or supplemented from
time to time. So long as this Agreement shall remain in effect with
respect to any Agent, the Company shall not, without the consent of
such Agent, solicit or accept offers to purchase, or sell, any debt
securities with a maturity at the time of original issuance of 9
months or more except pursuant to this Agreement, any Terms Agreement,
or except pursuant to a private placement not constituting a public
offering under the Securities Act, or except in connection with a firm
commitment underwriting pursuant to an underwriting agreement that
does not provide for a continuous offering of medium-term debt
securities. However, the Company reserves the right to sell, and may
solicit and accept offers to purchase, the Securities directly on its
own behalf, and, in the case of any such sale not resulting from a
solicitation made by any Agent, no commission will be payable with
respect to such sale. Notwithstanding anything to the contrary
contained herein, the Company may authorize any other person,
partnership or corporation (an "Additional Agent") to act as its agent
to solicit offers for the purchase of all or part of the Securities
and/or accept offers to purchase the Securities from any such
Additional Agent, provided that any such Additional Agent shall have
entered into an agreement with the Company upon the same terms and
conditions as set forth in this Agreement (including, but not limited
to, the commission schedule set forth in Section 2(a) hereof). These
provisions shall not limit Section 4(f) hereof or any similar
provision included in any Terms Agreement.
Procedural details relating to the issuance and delivery of the
Securities, the solicitation of offers to purchase the Securities and
the payment in each case therefor shall be as set forth in the
administrative procedure attached hereto as Annex II as it may be
amended from time to time by written agreement between the Agents and
the Company (the "Administrative Procedure"). The provisions of the
Administrative Procedure shall apply to all transactions contemplated
hereunder other than those made pursuant to a Terms Agreement. Each
Agent and the Company agree to perform the
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respective duties and obligations specifically provided to be
performed by each of them in the Administrative Procedure. The
Company will furnish to the Trustee a copy of the Administrative
Procedure as from time to time in effect.
The Company reserves the right, in its sole discretion, to
instruct the Agents to suspend at any time, for any period of time or
permanently, the solicitation of offers to purchase the Securities.
As soon as practicable, but in any event not later than one business
day in New York City, after receipt of notice from the Company, the
Agents will suspend solicitation of offers to purchase Securities from
the Company until such time as the Company has advised the Agents that
such solicitation may be resumed. During such period, the Company
shall not be required to comply with the provisions of Sections 4(h),
4(i), 4(j) and 4(k). Upon advising the Agents that such solicitation
may be resumed, however, the Company simultaneously shall provide the
documents required to be delivered by Sections 4(h), 4(i), 4(j) and
4(k), and the Agents shall have no obligation to solicit offers to
purchase the Securities until such documents have been received by the
Agents. In addition, any failure by the Company to comply with its
obligations hereunder, including without limitation its obligations to
deliver the documents required by Sections 4(h), 4(i), 4(j) and 4(k),
automatically shall terminate the Agents' obligations hereunder,
including without limitation its obligations to solicit offers to
purchase the Securities hereunder as agent or to purchase the
Securities hereunder as principal.
The Company agrees to pay to each Agent a commission, at the time
of settlement of any sale of a Security by the Company as a result of
a solicitation made by such Agent, in an amount equal to the following
applicable percentage of the principal amount of such Security sold:
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COMMISSION
(AS A PERCENTAGE OF THE
AGGREGATE PRINCIPAL AMOUNT OF
RANGE OF MATURITIES THE SECURITIES SOLD)
------------------- --------------------
From 9 months to less than 1 year . . . . . . . . . .125%
From 1 year to less than 18 months . . . . . . . . .150%
From 18 months to less than 2 years . . . . . . . . .200%
From 2 years to less than 3 years . . . . . . . . . .250%
From 3 years to less than 4 years . . . . . . . . . .350%
From 4 years to less than 5 years . . . . . . . . . .450%
From 5 years to less than 6 years . . . . . . . . . .500%
From 6 years to less than 7 years . . . . . . . . . .550%
From 7 years to less than 10 years . . . . . . . . .600%
From 10 years to less than 15 years . . . . . . . . .625%
From 15 years to less than 20 years . . . . . . . . .675%
From 20 years to 30 years . . . . . . . . . . . . . .750%
More than 30 years . . . . . . . . . . . . . . . . to be negotiated
(b) Each sale of the Securities to any Agent as principal shall
be made in accordance with the terms of this Agreement and a Terms
Agreement (which, unless otherwise agreed, shall be agreed upon
orally, with written confirmation prepared by such Agent and mailed to
the Company) which will provide for the sale of such Securities to,
and the purchase thereof by, such Agent. A Terms Agreement also may
specify certain provisions relating to the reoffering of such
Securities by such Agent. The commitment of any Agent to purchase the
Securities as principal, whether pursuant to any Terms Agreement or
otherwise, shall be deemed to have been made on the basis of the
representations and warranties of the Company herein contained and
shall be subject to the terms and conditions herein set forth; each
Terms Agreement shall specify the principal amount of the Securities
to be purchased by any Agent pursuant thereto, the price to be paid to
the Company for such Securities, any provisions relating to rights of,
and default by, underwriters acting together with such Agent in the
reoffering of the Securities and the time and date and place of
delivery of and payment for such Securities; and such Terms Agreement
also shall specify any requirements for opinions of counsel,
accountants' letters and officers' certificates pursuant to Section 4
hereof. Any Agent may engage the services of any other broker or
dealer in connection with the resale of the Securities purchased by
such Agent as principal and may allow any portion of the discount
received in connection with such purchases from the Company to such
brokers and dealers.
For each sale of the Securities to an Agent as principal that is
not made pursuant to a Terms Agreement, the procedural details
relating to the issuance and delivery of such Securities and payment
therefor shall be as set forth in the Administrative Procedure. For
each such sale of the Securities to an Agent as principal that is not
made pursuant
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to a Terms Agreement, the Company agrees to pay to such Agent a
commission (or grant an equivalent discount) as provided in Section
2(a) hereof and in accordance with the schedule set forth therein.
Each time and date of delivery of and payment for the Securities
to be purchased by an Agent as principal, whether set forth in a Terms
Agreement or in accordance with the Administrative Procedure, is
referred to herein as a "Time of Delivery".
(c) Each Agent agrees, with respect to any Security denominated
in a currency other than U.S. dollars, as agent, directly or
indirectly, not to solicit offers to purchase, and as principal under
any Terms Agreement or otherwise, directly or indirectly, not to
offer, sell or deliver, such Security in, or to residents of, the
country issuing such currency, except as permitted by applicable law.
3. The documents required to be delivered pursuant to Section 6
hereof on the Commencement Date (as defined below) shall be delivered to the
Agents at the offices of ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇, at 11:00 a.m., New York City time, on the date of this Agreement, which
date and time of such delivery may be postponed by agreement between the Agents
and the Company but in no event shall be later than the day prior to the date
on which solicitation of offers to purchase Securities is commenced or on which
any Terms Agreement is executed (such time and date being referred to herein as
the "Commencement Date").
4. The Company covenants and agrees with each Agent:
(a) (i) To make no amendment or supplement to the Registration
Statement or to the Prospectus (A) prior to the Commencement Date
which shall be disapproved by any Agent promptly after reasonable
notice thereof or (B) after the date of any Terms Agreement or other
agreement by an Agent to purchase the Securities as principal and
prior to the related Time of Delivery which shall be disapproved by
any Agent party to such Terms Agreement or so purchasing as principal
promptly after reasonable notice thereof; (ii) to prepare, with
respect to any Securities to be sold through or to such Agent pursuant
to this Agreement, a Pricing Supplement with respect to such
Securities in a form previously approved by such Agent and to file
such Pricing Supplement pursuant to Rule 424(b)(3) under the
Securities Act not later than the close of business of the Commission
on the fifth business day after the date on which such Pricing
Supplement first is used; (iii) to make no amendment or supplement to
the Registration Statement or to the Prospectus, other than any
Pricing Supplement, at any time prior to having afforded each Agent a
reasonable opportunity to review and comment thereon; (iv) to file
promptly all reports and any definitive proxy or information
statements required to be filed by the Company with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act for
so long as the delivery of a prospectus is required in connection with
the offering or sale of the Securities, and during such same period to
advise such Agent, promptly after the Company receives notice thereof,
of the time when any
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amendment to the Registration Statement has been filed or has become
effective or any supplement to the Prospectus or any amended
Prospectus (other than any Pricing Supplement that relates to the
Securities not purchased through or by such Agent) has been filed with
the Commission, of the issuance by the Commission of any stop order or
of any order preventing or suspending the use of any prospectus
relating to the Securities, of the suspension of the qualification of
the Securities for offering or sale in any jurisdiction, of the
initiation or threatening of any proceeding for any such purpose, or
of any request by the Commission for the amendment or supplement of
the Registration Statement or the Prospectus or for additional
information; and (v) in the event of the issuance of any such stop
order or of any such order preventing or suspending the use of any
such prospectus or suspending any such qualification, to use promptly
every reasonable effort to obtain its withdrawal;
(b) Promptly from time to time to take such action as such Agent
reasonably may request to qualify the Securities for offering and sale
under the securities laws of such jurisdictions as such Agent may
request and to comply with such laws so as to permit the continuance
of sales and dealings therein for as long as may be necessary to
complete the distribution or sale of the Securities; provided,
however, that in connection therewith the Company shall not be
required to qualify as a foreign corporation or to file a general
consent to service of process in any jurisdiction;
(c) To furnish such Agent with copies of the Registration
Statement and each amendment thereto, with copies of the Prospectus as
each time amended or supplemented, other than any Pricing Supplement
(except as provided in the Administrative Procedure), in the form in
which it is filed with the Commission pursuant to Rule 424 under the
Securities Act, and with copies of the documents incorporated by
reference therein, all in such quantities as such Agent reasonably may
request from time to time; and, if the delivery of a prospectus is
required at any time in connection with the offering or sale of the
Securities (including the Securities purchased from the Company by
such Agent as principal) and if at such time any event shall have
occurred as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made when such Prospectus is delivered, not misleading, or, if
for any other reason it shall be necessary during such same period to
amend or supplement the Prospectus or to file under the Exchange Act
any document incorporated by reference into the Prospectus in order to
comply with the Securities Act, the Exchange Act or the Trust
Indenture Act, to notify such Agent and request such Agent, in its
capacity as agent of the Company, to suspend solicitation of offers to
purchase Securities from the Company (and, if so notified, such Agent
shall cease such solicitations as soon as practicable, but in any
event not later than one business day later); and if the Company shall
decide to amend or supplement the Registration Statement or the
Prospectus as then amended or supplemented, to so advise such Agent
promptly by telephone (with confirmation in writing) and to prepare
and cause to be filed promptly with the Commission an
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amendment or supplement to the Registration Statement or to the
Prospectus as then amended or supplemented that will correct such
statement or omission or effect such compliance; provided, however,
that if during such same period such Agent continues to own the
Securities purchased from the Company by such Agent as principal or
such Agent is otherwise required to deliver a prospectus in respect of
transactions in the Securities, the Company promptly shall prepare and
file with the Commission such an amendment or supplement;
(d) To make generally available to its securityholders as soon
as practicable, but in any event not later than eighteen months after
the effective date of the Registration Statement (as defined in Rule
158(c) under the Securities Act), an earnings statement of the Company
and its subsidiaries (which need not be audited) complying with
Section 11(a) of the Securities Act and the rules and regulations of
the Commission thereunder (including, at the option of the Company,
Rule 158);
(e) So long as any Securities are outstanding, to furnish to
such Agent copies of all reports or other communications (financial or
other) furnished to its shareholders, and deliver to such Agent (i) as
soon as they are available, copies of any reports and financial
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 such Agent from time to time
reasonably may request (such financial statements to be on a
consolidated basis to the extent the accounts of the Company and its
subsidiaries are consolidated in reports furnished to its shareholders
generally or to the Commission);
(f) That, from the date of any Terms Agreement with such Agent
or other agreement by the Agent to purchase the Securities as
principal and continuing to and including the earlier of (i) the
termination of the trading restrictions for the Securities purchased
thereunder, as notified to the Company by such Agent and (ii) the
related Time of Delivery, not to offer, sell, contract to sell or
otherwise dispose of any debt securities of the Company which both
mature more than 9 months after such Time of Delivery and are
substantially similar to the Securities, without the prior written
consent of such Agent;
(g) That each acceptance by the Company of an offer to purchase
the Securities hereunder (including any purchase by such Agent as
principal not pursuant to a Terms Agreement), and each execution and
delivery by the Company of a Terms Agreement with such Agent, shall be
deemed to be an affirmation to such Agent that the representations and
warranties of the Company contained in or made pursuant to this
Agreement are true and correct as of the date of such acceptance or of
such Terms Agreement, as the case may be, as though made at and as of
such date, and an undertaking that such representations and warranties
will be true and correct as of the settlement date for the Securities
relating to such acceptance or as of the Time of Delivery relating to
such sale, as the case may be, as though made at and as of such date
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(except that such representations and warranties shall be deemed to
relate to the Registration Statement and to the Prospectus as amended
and supplemented relating to such Securities);
(h) That reasonably in advance of each time that the
Registration Statement or the Prospectus shall be amended or
supplemented (other than by a Pricing Supplement) and each time that a
document filed under the Securities Act or the Exchange Act is
incorporated by reference into the Prospectus, and each time that the
Company sells the Securities to such Agent as principal pursuant to a
Terms Agreement and such Terms Agreement specifies the delivery of an
opinion or opinions by ▇▇▇▇▇ & WoodLLP, counsel to the Agents, or
other counsel for the Agents, as a condition to the purchase of the
Securities pursuant to such Terms Agreement, the Company shall furnish
to such counsel such papers and information as they reasonably may
request to enable them to furnish to such Agent the opinion or
opinions referred to in Section 6(b) hereof;
(i) That each time that the Registration Statement or the
Prospectus shall be amended or supplemented (other than by a Pricing
Supplement), each time that a document filed under the Securities Act
or the Exchange Act is incorporated by reference into the Prospectus
and each time that the Company sells the Securities to such Agent as
principal pursuant to a Terms Agreement and such Terms Agreement
specifies the delivery of an opinion under this Section 4(i) as a
condition to the purchase of the Securities pursuant to such Terms
Agreement, the Company shall furnish or cause to be furnished
forthwith to such Agent a written opinion of Liddell, Sapp, Zivley,
Hill & ▇▇▇▇▇▇, L.L.P., counsel for the Company, or other counsel for
the Company satisfactory to such Agent, dated the date of such
amendment, supplement, incorporation or Time of Delivery relating to
such sale, as the case may be, in form satisfactory to such Agent, to
the effect that such Agent may rely on the opinion of such counsel
referred to in Section 6(c) hereof which last was furnished to such
Agent to the same extent as though it were dated the date of such
letter authorizing reliance (except that the statements in such last
opinion shall be deemed to relate to the Registration Statement and to
the Prospectus as amended and supplemented to such date) or, in lieu
of such opinion, an opinion of the same tenor as the opinion of such
counsel referred to in Section 6(c) hereof but modified to relate to
the Registration Statement and to the Prospectus as amended and
supplemented to such date;
(j) That each time that the Registration Statement or the
Prospectus shall be amended or supplemented and each time that a
document filed under the Securities Act or the Exchange Act is
incorporated by reference into the Prospectus, in either case to set
forth financial information included in or derived from the Company's
consolidated financial statements or accounting records, and each time
that the Company sells the Securities to such Agent as principal
pursuant to a Terms Agreement and such Terms Agreement specifies the
delivery of a letter under this Section 4(j) as a condition to the
purchase of the Securities pursuant to such Terms Agreement, the
Company shall cause the independent certified public accountants who
have certified the financial statements of the
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Company and its subsidiaries included in or incorporated by reference
into the Registration Statement forthwith to furnish to such Agent a
letter, dated the date of such amendment, supplement, incorporation or
Time of Delivery relating to such sale, as the case may be, in form
satisfactory to such Agent, of the same tenor as the letter referred
to in Section 6(d) hereof but modified to relate to the Registration
Statement and to the Prospectus as amended or supplemented to the date
of such letter, with such changes as may be necessary to reflect
changes in the financial statements and other information derived from
the accounting records of the Company, to the extent such financial
statements and other information are available as of a date not more
than five business days prior to the date of such letter; provided,
however, that with respect to any financial information or other
matter, such letter may reconfirm as true and correct at such date as
though made at and as of such date, rather than repeat, statements
with respect to such financial information or other matter made in the
letter referred to in Section 6(d) hereof which last was furnished to
such Agent;
(k) That each time that the Registration Statement or the
Prospectus shall be amended or supplemented (other than by a Pricing
Supplement), each time that a document filed under the Securities Act
or the Exchange Act is incorporated by reference into the Prospectus,
and each time that the Company sells the Securities to such Agent as
principal and the applicable Terms Agreement specifies the delivery of
a certificate under this Section 4(k) as a condition to the purchase
of the Securities pursuant to such Terms Agreement, the Company shall
furnish or cause to be furnished forthwith to such Agent a
certificate, dated the date of such supplement, amendment,
incorporation or Time of Delivery relating to such sale, as the case
may be, in such form and executed by such officers of the Company as
shall be satisfactory to such Agent, to the effect that the statements
contained in the certificate referred to in Section 6(i) hereof which
last was furnished to such Agent are true and correct at such date as
though made at and as of such date (except that such statements shall
be deemed to relate to the Registration Statement and to the
Prospectus as amended and supplemented to such date) or, in lieu of
such certificate, certificates of the same tenor as the certificates
referred to in said Section 6(i) but modified to relate to the
Registration Statement and to the Prospectus as amended and
supplemented to such date; and
(l) To offer to any person who has agreed to purchase the
Securities as the result of an offer to purchase solicited by such
Agent the right to refuse to purchase and pay for such Securities if,
on the related settlement date fixed pursuant to the Administrative
Procedure, any condition set forth in Section 6(a), 6(e), 6(f), 6(g)
or 6(h) hereof shall not have been satisfied (it being understood that
the judgment of such person with respect to the impracticability or
inadvisability of such purchase of the Securities shall be
substituted, for purposes of this Section 4(l), for the respective
judgments of an Agent with respect to certain matters referred to in
such Sections 6(e) and 6(g), and that such Agent shall have no duty or
obligation whatsoever to exercise the judgment permitted under such
Sections 6(e) and 6(g) on behalf of any such person).
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5. The Company covenants and agrees with each Agent that the Company
will pay or cause to be paid the following: (i) the fees, disbursements and
expenses of the Company's counsel and accountants in connection with the
registration of the Securities under the Securities Act and all other expenses
in connection with the preparation, printing and filing of the Registration
Statement, any Preliminary Prospectus, the Prospectus and any Pricing
Supplements and all other amendments and supplements thereto and the mailing
and delivering of copies thereof to such Agent; (ii) the fees, disbursements
and expenses of counsel for the Agents in connection with the establishment of
the program contemplated hereby, any opinions to be rendered by such counsel
hereunder and under any Terms Agreement and the transactions contemplated
hereunder and under any Terms Agreement; (iii) the cost of printing, producing
or reproducing this Agreement, any Terms Agreement, the Indentures, any blue
sky and legal investment surveys, closing documents (including any compilations
thereof) and any other documents in connection with the offering, purchase,
sale and delivery of the Securities; (iv) all expenses in connection with the
qualification of the Securities for offering and sale under state securities
laws as provided in Section 4(b) hereof, including the fees and disbursements
of counsel for the Agents in connection with such qualification and in
connection with the blue sky and legal investment surveys; (v) any fees charged
by securities rating services for rating the Securities; (vi) any filing fees
incident to, and the fees and disbursements of counsel for the Agents in
connection with, any required review by the National Association of Securities
Dealers, Inc. of the terms of the sale of the Securities; (vii) the cost of
preparing the Securities; (viii) the fees and expenses of the Trustee and any
agent of the Trustee and any transfer or paying agent of the Company and the
fees and disbursements of counsel for the Trustee or such agent in connection
with the Indentures and the Securities; (ix) any advertising expenses connected
with the solicitation of offers to purchase and the sale of the Securities so
long as such advertising expenses have been approved by the Company; and (x)
all other costs and expenses incident to the performance of its obligations
hereunder which are not otherwise specifically provided for in this Section.
Except as provided in Sections 7 and 8 hereof, each Agent shall pay all other
expenses it incurs.
6. The obligation of any Agent, as agent of the Company, at any time
(each a "Solicitation Time") to solicit offers to purchase the Securities and
the obligation of any Agent to purchase the Securities as principal, pursuant
to any Terms Agreement or otherwise, in each case shall be subject, in such
Agent's discretion, to the condition that all representations and warranties
and other statements of the Company herein (and, in the case of an obligation
of an Agent under a Terms Agreement, in or incorporated by reference into such
Terms Agreement) are true and correct at and as of the Commencement Date and
any applicable date referred to in Section 4(k) hereof that is prior to such
Solicitation Time or Time of Delivery, as the case may be, and at and as of
such Solicitation Time or Time of Delivery, as the case may be, the condition
that prior to such Solicitation Time or Time of Delivery, as the case may be,
the Company shall have performed all of its obligations hereunder theretofore
to be performed, and the following additional conditions:
(a) (i) With respect to any Securities sold at or prior to such
Solicitation Time or Time of Delivery, as the case may be, the
Prospectus as amended or supplemented
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(including the Pricing Supplement) with respect to such Securities
shall have been filed with the Commission pursuant to Rule 424(b)
under the Securities Act within the applicable time period prescribed
for such filing by the rules and regulations under the Securities Act
and in accordance with Section 4(a) hereof; (ii) no stop order
suspending the effectiveness of the Registration Statement shall have
been issued and no proceeding for that purpose shall have been
initiated or threatened by the Commission; and (iii) all requests for
additional information on the part of the Commission shall have been
complied with to the reasonable satisfaction of such Agent;
(b) ▇▇▇▇▇ & Wood LLP, counsel to the Agents, shall have
furnished to such Agent (i) such opinion or opinions, dated the
Commencement Date, with respect to the matters covered in paragraphs
(i), (ii), (vii), (viii), (ix), (xii) (other than "United States
Taxation", as to which such counsel need express no opinion) and (xvi)
of subsection (c) below, as well as such other related matters as such
Agent reasonably may request, and (ii) if and to the extent requested
by such Agent, with respect to each applicable date referred to in
Section 4(h) hereof that is on or prior to such Solicitation Time or
Time of Delivery, as the case may be, an opinion or opinions, dated
such applicable date, to the effect that such Agent may rely on the
opinion or opinions which last were furnished to such Agent pursuant
to this Section 6(b) to the same extent as though it or they were
dated the date of such letter authorizing reliance (except that the
statements in such last opinion or opinions shall be deemed to relate
to the Registration Statement and to the Prospectus as amended and
supplemented to such date) or, in any case, in lieu of such an opinion
or opinions, an opinion or opinions of the same tenor as the opinion
or opinions referred to in clause (i) but modified to relate to the
Registration Statement and to the Prospectus as amended and
supplemented to such date; and in each case such counsel shall have
received such papers and information as they may reasonably request to
enable them to pass upon such matters;
(c) Liddell, Sapp, Zivley, Hill & ▇▇▇▇▇▇, L.L.P., counsel for
the Company, or other counsel for the Company satisfactory to such
Agent, shall have furnished to such Agent their written opinion or
opinions, each dated the Commencement Date and each applicable date
referred to in Section 4(i) hereof that is on or prior to such
Solicitation Time or Time of Delivery, as the case may be, in form and
substance satisfactory to such Agent, to the effect that:
(i) The Company is a real estate investment trust duly
formed and validly existing under the laws of the State of
Texas and is entitled to the benefits of the Texas Real Estate
Investment Trust Act;
(ii) The Company has the power and authority (corporate
and other) to own its properties and to conduct its business
as described in the Prospectus as amended or supplemented;
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(iii) The Company is duly qualified to transact business
and is in good standing in each jurisdiction in which it owns
or leases properties, or conducts any business, so as to
require such qualification or is subject to no material
liability, or disability by reason of the failure to be so
qualified in any such jurisdiction;
(iv) Each subsidiary of the Company has been duly
incorporated (or, with respect to ▇▇▇▇▇▇▇▇▇▇ Properties Trust,
has been duly formed as a real estate investment trust) and is
validly existing as a corporation or trust in good standing
under the laws of the jurisdiction of its incorporation or
formation, has the power and authority (corporate and other)
to own, lease and operate its properties and to conduct its
business as described in the Prospectus and, to the best of
such counsel's knowledge and information, is duly qualified as
a foreign corporation or trust to transact business and is in
good standing in each jurisdiction in which such qualification
is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure
to so qualify would not have a material adverse effect or a
prospective material adverse effect on the condition,
financial or otherwise, or the earnings or business affairs of
the Company and its subsidiaries considered as one enterprise;
all of the issued and outstanding capital stock of each such
subsidiary has been duly authorized and validly issued, is
fully paid and non-assessable and is owned by the Company,
directly or through subsidiaries (except for ▇▇▇▇▇▇▇▇▇▇
Properties Trust, of which the Company owns approximately 77%
of the outstanding capital shares), free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim
or equity;
(v) The Company has an authorized capitalization as set
forth in the Prospectus as amended or supplemented, and all of
the issued shares of capital stock of the Company have been
duly and validly authorized and issued and are fully paid and
non-assessable;
(vi) To the best of such counsel's knowledge and other
than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any
of its subsidiaries is a party or to which any property of the
Company or any of its subsidiaries is subject, which, if
determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a
material adverse effect on the current or future consolidated
financial position, shareholders' equity or results of
operations of the Company and its subsidiaries; and to the
best of such counsel's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or
threatened by others;
(vii) This Agreement and any applicable Terms Agreement
have been duly authorized, executed and delivered by the
Company;
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(viii) The Securities have been duly authorized and,
when duly executed, authenticated, issued and delivered by the
Company, will constitute valid and legally binding obligations
of the Company entitled to the benefits provided by the
Indentures; and each Indenture conforms and the Securities
will conform to the descriptions thereof in the Prospectus as
amended or supplemented;
(ix) Each Indenture has been duly authorized, executed
and delivered by the parties thereto and constitutes a valid
and legally binding instrument, enforceable in accordance with
its respective terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors'
rights and general equitable principles; and each Indenture
has been duly qualified under the Trust Indenture Act;
(x) The issuance and sale of the Securities, the
compliance by the Company with all of the provisions of the
Securities, the Indentures, this Agreement and any applicable
Terms Agreement and the consummation of the transactions
hereby and thereby contemplated will not conflict with or
result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument known to such counsel to which the Company or any
of its subsidiaries is a party or by which the Company or any
of its subsidiaries is bound or to which any of the property
or assets of the Company or any of its subsidiaries is
subject, nor will such action result in any violation of the
provisions of the Restated Declaration of Trust, as amended,
of the Company or the By-laws of the Company or any statute or
any order, rule or regulation known to such counsel of any
court or governmental agency or body having jurisdiction over
the Company or any of its subsidiaries or any of their
respective properties;
(xi) No consent, approval, authorization, order,
registration or qualification of or with any court or
governmental agency or body is required for the solicitation
of offers to purchase the Securities, the issuance and sale of
the Securities or the consummation by the Company of the other
transactions contemplated by this Agreement, any applicable
Terms Agreement, or the Indentures, except such as have been
obtained under the Securities Act and the Trust Indenture Act
and such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or
blue sky laws in connection with the solicitation by the
Agents of offers to purchase the Securities from the Company
and with purchases of the Securities by an Agent as principal,
as the case may be, in each case in the manner contemplated
hereby;
(xii) The information set forth in the Prospectus, under
the captions "Description of Debt Securities", "Description of
Notes", "Description of Common Shares", "Description of
Preferred Shares", "Description of Securities
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Warrants" and "United States Taxation", to the extent such
information constitutes matters of law, summaries of legal
matters, documents or proceedings, or legal conclusions, has
been reviewed by them and is correct;
(xiii) Based upon a review of such documents,
certificates and records as such counsel has deemed necessary
to express its opinion, upon its discussions with management
of the Company, independent accountants for the Company and
with certain shareholders of the Company and based upon the
facts set forth in the Registration Statement, certain
assumptions and certain representations made to it by the
Company's management and by certain of its shareholders, such
counsel is of the view that, as of the date of its opinion the
Company's form of organization and its share ownership is such
as to enable the Company to meet the requirements of the Code
for qualifications as a real estate investment trust
thereunder and that its income, assets and method of
operations have allowed it to qualify as a real estate
investment trust for its taxable year ended December 31, 1995
and all years thereafter, and its currently contemplated
future assets, income and method of operations should put it
in a position to qualify to be treated as a real estate
investment trust for the calendar year 1996;
(xiv) The Company is not and, after giving effect to the
offering and sale of the Securities, will not be an
"investment company" or an entity "controlled" by an
"investment company", as such terms are defined in the
Investment Company Act;
(xv) The documents incorporated by reference in the
Prospectus (other than the financial statements and related
schedules therein, as to which such counsel need express no
opinion), when they became effective or were filed with the
Commission, as the case may be, complied as to form in all
material respects with the requirements of the Securities Act
or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder; and they have no
reason to believe that any of such documents, when they became
effective or were so filed, as the case may be, contained, in
the case of a registration statement which became effective
under the Securities Act, an untrue statement of a material
fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading, and, in the case of other documents which were
filed under the Securities Act or the Exchange Act with the
Commission, an untrue statement of a material fact or omitted
to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made when such documents were so filed, not
misleading; and
(xvi) The Registration Statement and the Prospectus as
amended and supplemented and any further amendments and
supplements thereto made by the Company prior to the date of
such opinion (other than the financial statements and
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related schedules therein, as to which such counsel need
express no opinion) comply as to form in all material respects
with the requirements of the Securities Act and the Trust
Indenture Act and the rules and regulations thereunder; and
although they do not assume any responsibility for the
accuracy, completeness or fairness of the statements contained
in the Registration Statement or in the Prospectus, except for
those referred to in the opinion in subsection (xii) of this
Section 6(c), they have no reason to believe that, as of its
effective date, the Registration Statement or any further
amendment or supplement thereto made by the Company prior to
the date of such opinion (other than the financial statements
and related schedules therein, as to which such counsel need
express no opinion) contained an untrue statement of a
material fact or omitted to state a material fact required to
be stated therein or necessary to make the statements therein
not misleading or that, as of the date of such opinion, the
Prospectus as amended or supplemented or any further amendment
or supplement thereto made by the Company prior to the date of
such opinion (other than the financial statements and related
schedules therein, as to which such counsel need express no
opinion) contained an untrue statement of a material fact or
omitted to state a material fact necessary to make the
statements therein, in light of the circumstances in which
they were made, not misleading; and they do not know of any
amendment to the Registration Statement required to be filed
or any contracts or other documents of a character required to
be filed as an exhibit to the Registration Statement or
required to be incorporated by reference into the Prospectus
as amended or supplemented or required to be described in the
Registration Statement or the Prospectus as amended or
supplemented which are not filed or incorporated by reference
or described as required;
(d) Not later than 10:00 a.m., New York City time, on the
Commencement Date and on each applicable date referred to in Section
4(j) hereof that is on or prior to such Solicitation Time or Time of
Delivery, as the case may be, the independent certified public
accountants who have certified the financial statements of the Company
and its subsidiaries included in or incorporated by reference into the
Registration Statement shall have furnished to such Agent a letter,
dated the Commencement Date or such applicable date, as the case may
be, in form and substance satisfactory to such Agent, to the effect
set forth in Annex III hereto;
(e) (i) Neither the Company nor any of its subsidiaries shall
have sustained since the date of the latest audited financial
statements included in or incorporated by reference into the
Prospectus as amended or supplemented prior to the date of the
acceptance of the offer to purchase the Securities to be delivered at
the relevant Time of Delivery any loss or interference with its
business from fire, explosion, flood or other calamity, or from any
labor dispute or court or governmental action, order or decree,
otherwise than as set forth in or contemplated by the Prospectus as
amended or supplemented prior to the date of the acceptance of the
offer to purchase the Securities to be delivered at the relevant Time
of Delivery; and (ii) since the respective dates as of which
information is
22
23
given in the Prospectus as amended or supplemented prior to the date
of the acceptance of the offer to purchase to the Securities to be
delivered at the relevant Time of Delivery there shall not have been
any change in the capital stock or any increase in the consolidated
long-term debt of the Company and its subsidiaries or any decrease in
consolidated net current assets or net assets or any change, or any
development involving a prospective change, in or affecting the
general affairs, management, financial position, shareholders' equity
or results of operations of the Company and its subsidiaries,
otherwise than as set forth in or contemplated by the Prospectus as
amended or supplemented, the effect of which, in any such case
described in clause (i) or (ii), is in the judgment of such Agent so
material and adverse as to make it impracticable or inadvisable to
proceed with the solicitation by such Agent of offers to purchase the
Securities from the Company or the purchase by such Agent of the
Securities from the Company as principal, as the case may be, on the
terms and in the manner contemplated by the Prospectus as amended or
supplemented;
(f) On or after the date hereof (i) no downgrading shall have
occurred in the rating accorded the Company's debt securities by any
"nationally recognized statistical rating organization", as that term
is defined by the Commission for purposes of Rule 436(g)(2) under the
Securities Act, and (ii) no such organization shall have publicly
announced that it has under surveillance or review, with possible
negative implications, its rating of any of the Company's debt
securities;
(g) On or after the date hereof there shall not have occurred
any of the following: (i) a suspension or material limitation in
trading in securities generally on the New York Stock Exchange; (ii) a
suspension or material limitation in trading in the Company's
securities on the New York Stock Exchange; (iii) a general moratorium
on commercial banking activities in New York declared by either
Federal or New York State authorities; or (iv) the outbreak or
escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war, if
the effect of any such event specified in this clause (iv) in the
judgment of such Agent makes it impracticable or inadvisable to
proceed with the solicitation of offers to purchase the Securities or
the purchase of the Securities from the Company as principal pursuant
to the applicable Terms Agreement or otherwise, as the case may be, on
the terms and in the manner contemplated in the Prospectus;
(h) With respect to any Security denominated in a currency other
than the U.S. dollar, more than one currency or a composite currency
or any Security the principal or interest of which is indexed to such
currency, currencies or composite currency, there shall not have
occurred any of the following: (i) a suspension or material limitation
in foreign exchange trading in such currency, currencies or composite
currency by a major international bank; (ii) a general moratorium on
commercial banking activities in the country or countries issuing such
currency, currencies or composite currency; (iii) the outbreak or
escalation of hostilities involving, the occurrence of any material
adverse change in the existing financial, political or economic
conditions of, or the
23
24
declaration of war or a national emergency by, the country or
countries issuing such currency, currencies or composite currency; or
(iv) the imposition or proposal of exchange controls by any
governmental authority in the country or countries issuing such
currency, currencies or composite currency; and
(i) The Company shall have furnished or caused to be furnished
to such Agent certificates of officers of the Company dated the
Commencement Date and each applicable date referred to in Section 4(k)
hereof that is on or prior to such Solicitation Time or Time of
Delivery, as the case may be, in such form and executed by such
officers of the Company as shall be satisfactory to such Agent, as to
the accuracy of the representations and warranties of the Company
herein at and as of the Commencement Date or such applicable date, as
the case may be, as to the performance by the Company of all of its
obligations hereunder to be performed at or prior to the Commencement
Date or such applicable date, as the case may be, as to the matters
set forth in subsections (a) and (e) of this Section 6, and as to such
other matters as such Agent reasonably may request.
7. (a) The Company will indemnify and hold harmless each Agent
against any losses, claims, damages or liabilities, joint or several,
to which such Agent may become subject, under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact contained in
any Preliminary Prospectus, any preliminary prospectus supplement, the
Registration Statement, the Prospectus as amended or supplemented and
any other prospectus relating to the Securities, or any amendment 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, and will reimburse such Agent for any legal or other
expenses reasonably incurred by it in connection with investigating or
defending any such action or claim as such expenses are incurred;
provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in any Preliminary
Prospectus, any preliminary prospectus supplement, the Registration
Statement, the Prospectus as amended or supplemented and any other
prospectus relating to the Securities, or any such amendment or
supplement, in reliance upon and in conformity with written
information furnished to the Company by such Agent expressly for use
therein.
(b) Each Agent will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the
Company may become subject, under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in any
Preliminary Prospectus, any
24
25
preliminary prospectus supplement, the Registration Statement, the
Prospectus as amended or supplemented and any other prospectus
relating to the Securities, or any amendment 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 such untrue statement or
alleged untrue statement or omission or alleged omission was made in
any Preliminary Prospectus, any preliminary prospectus supplement, the
Registration Statement, the Prospectus as amended or supplemented and
any other prospectus relating to the Securities, or any such amendment
or supplement, in reliance upon and in conformity with written
information furnished to the Company by such Agent expressly for use
therein; and will reimburse the Company for any legal or other
expenses reasonably incurred by the Company in connection with
investigating or defending any such action or claim as such expenses
are incurred.
(c) Promptly after the receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any
action, such indemnified party, if a claim in respect thereof is to be
made against the indemnifying party under such subsection, shall
notify the indemnifying party in writing of the commencement thereof;
but the omission so to notify the indemnifying party shall not relieve
it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall
be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party
shall be entitled to participate therein and, to the extent that it
shall wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to
such indemnified party (who shall not, except with the consent of the
indemnified party, be counsel to the indemnifying party), and, after
notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party
shall not be liable to such indemnified party under such subsection
for any legal expenses of other counsel or any other expenses, in each
case subsequently incurred by such indemnified party, in connection
with the defense thereof other than reasonable costs of investigation.
In no event shall the indemnifying parties be liable for fees and
expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in
connection with any one action or separate but similar or related
actions in the same jurisdiction arising out of the same general
allegations or circumstances. No indemnifying party shall, without
the written consent of the indemnified party, effect the settlement or
compromise of, or consent to the entry of any judgment with respect
to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or
not the indemnified party is an actual or potential party to such
action or claim) unless such settlement, compromise or judgment (i)
includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does not
include a statement as to or an admission of fault, culpability or a
failure to act, by or on behalf of any indemnified party.
25
26
(d) If the indemnification provided for in this Section 7 is
unavailable to or insufficient to hold harmless an indemnified party
under subsection (a) or (b) above in respect of any losses, claims,
damages or liabilities (or actions in respect thereof) referred to
therein, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and each Agent on the other from the
offering of the Securities to which such loss, claim, damage or
liability (or action in respect thereof) relates. If, however, the
allocation provided by the immediately preceding sentence is not
permitted by applicable law or if the indemnified party failed to give
the notice required under subsection (c) above, then each indemnifying
party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not
only such relative benefits but also the relative fault of the Company
on the one hand and each Agent on the other in connection with the
statements or omissions which resulted in such losses, claims, damages
or liabilities (or actions in respect thereof), as well as any other
relevant equitable considerations. The relative benefits received by
the Company on the one hand and each Agent on the other shall be
deemed to be in the same proportion as the total net proceeds from the
sale of the Securities (before deducting expenses) received by the
Company bear to the total commissions or discounts received by such
Agent in respect thereof. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to
state a material fact required to be stated in the Registration
Statement or necessary in order to make the statements therein not
misleading relates to information supplied by the Company on the one
hand or by any Agent on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company and each Agent agree that it
would not be just and equitable if contribution pursuant to this
subsection (d) were determined by per capita allocation (even if all
Agents were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable
considerations referred to above in this subsection (d). The amount
paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof)
referred to above in this subsection (d) shall be deemed to include
any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or
claim. Notwithstanding the provisions of this subsection (d), an
Agent shall not be required to contribute any amount in excess of the
amount by which the total public offering price at which the
Securities purchased by or through it were sold exceeds the amount of
any damages which such Agent has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The obligations of each of the Agents
under this subsection (d) to contribute are several in proportion to
the respective purchases made by or through it to
26
27
which such loss, claim, damage or liability (or action in respect
thereof) relates and are not joint.
(e) The obligations of the Company under this Section 7 shall be
in addition to any liability which the Company otherwise may have and
shall extend, upon the same terms and conditions, to each person, if
any, who controls any Agent within the meaning of the Securities Act;
and the obligations of each Agent under this Section 7 shall be in
addition to any liability which such Agent may otherwise have and
shall extend, upon the same terms and conditions, to each officer and
director of the Company and to each person, if any, who controls the
Company within the meaning of the Securities Act.
8. Each Agent, in soliciting offers to purchase the Securities from
the Company and in performing the other obligations of such Agent hereunder
(other than in respect of any purchase by an Agent as principal, pursuant to a
Terms Agreement or otherwise), is acting solely as agent for the Company and
not as principal. Each Agent will make reasonable efforts to assist the
Company in obtaining the performance by each purchaser whose offer to purchase
the Securities from the Company was solicited by such Agent and has been
accepted by the Company, but such Agent shall not have any liability to the
Company in the event such purchase is not consummated for any reason. If the
Company shall default on its obligation to deliver the Securities to a
purchaser whose offer it has accepted, the Company shall (i) hold each Agent
harmless against any loss, claim or damage arising from or as a result of such
default by the Company and (ii) notwithstanding such default, pay to the Agent
that solicited such offer any commission to which it would be entitled in
connection with such sale.
9. The respective indemnities, agreements, representations,
warranties and other statements by any Agent and the Company set forth in or
made pursuant to this Agreement shall remain in full force and effect
regardless of any investigation (or any statement as to the results thereof)
made by or on behalf of any Agent or any controlling person of any Agent, or
the Company, or any officer or trust manager or any controlling person of the
Company, and shall survive each delivery of and payment for any of the
Securities.
10. The provisions of this Agreement relating to the solicitation of
offers to purchase the Securities from the Company may be suspended or
terminated at any time by the Company as to any Agent or by any Agent as to
such Agent upon the giving of written notice of such suspension or termination
to such Agent or the Company, as the case may be. In the event of such
suspension or termination with respect to any Agent, (x) this Agreement shall
remain in full force and effect with respect to any Agent as to which such
suspension or termination has not occurred, (y) this Agreement shall remain in
full force and effect with respect to the rights and obligations of any party
which previously have accrued or which relate to the Securities which already
are issued, agreed to be issued or the subject of a pending offer at the time
of such suspension or termination and (z) in any event, this Agreement shall
remain in full force and effect insofar as the fourth paragraph of Section
2(a), and Sections 4(d), 4(e), 5, 7, 8 and 9 hereof are concerned.
27
28
11. Except as otherwise specifically provided herein or in the
Administrative Procedure, all statements, requests, notices and advices
hereunder shall be in writing, or by telephone if promptly confirmed in
writing, and if to (i) ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. shall be sufficient in all respects
when delivered or sent by facsimile transmission or registered mail to ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Facsimile Transmission No. (▇▇▇) ▇▇▇-▇▇▇▇,
Attention: Credit Department, (ii) Alex. ▇▇▇▇▇ & Sons Incorporated shall be
sufficient in all respects when delivered or sent by facsimile transmission or
registered mail to ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Facsimile Transmission No. (▇▇▇) ▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Principal, (iii) Chase Securities Inc. shall be sufficient in all respects when
delivered or sent by facsimile transmission or registered mail to ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Facsimile Transmission No. (212)
834-6170, Attention: Medium-Term Notes Desk, (iv) ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Securities Corporation shall be sufficient in all respects when delivered or
sent by facsimile transmission or registered mail to ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Facsimile Transmission No. (▇▇▇) ▇▇▇-▇▇▇▇,
Attention: ▇▇▇▇ ▇▇▇▇▇, Senior Vice President, (v) ▇▇▇▇▇▇ Brothers Inc. shall
be sufficient in all respects when delivered or sent by facsimile transmission
or registered mail to Three World ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, Facsimile Transmission No. (▇▇▇) ▇▇▇-▇▇▇▇, Attention: Medium-Term
Note Department, (vi) ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ &
▇▇▇▇▇ Incorporated shall be sufficient in all respects when delivered or sent
by facsimile transmission or registered mail to World Financial Center, ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Facsimile Transmission No.
(▇▇▇) ▇▇▇-▇▇▇▇, Attention: MTN Product Management, (vii) ▇.▇. ▇▇▇▇▇▇
Securities Inc. shall be sufficient in all respects when delivered or sent by
facsimile transmission or registered mail to ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Facsimile Transmission No. (▇▇▇) ▇▇▇-▇▇▇▇, Attention: MTN
Desk, (viii) NationsBanc Capital Markets, Inc. shall be sufficient in all
respects when delivered or sent by facsimile transmission or registered mail to
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Facsimile
Transmission No. (▇▇▇) ▇▇▇-▇▇▇▇, Attention: MTN Product Management or (vi) the
Company shall be sufficient in all respects when delivered or sent by facsimile
transmission or registered mail to ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇, Facsimile Transmission No. (▇▇▇) ▇▇▇-▇▇▇▇, Attention: M. ▇▇▇▇▇▇▇
▇▇▇▇▇▇, Vice President and Secretary.
12. This Agreement and any Terms Agreement shall be binding upon, and
inure solely to the benefit of, each Agent and the Company, and to the extent
provided in Sections 7, 8 and 9 hereof, the officers and trust managers of the
Company and any person who controls any Agent or the Company, and their
respective personal representatives, successors and assigns, and no other
person shall acquire or have any right under or by virtue of this Agreement or
any Terms Agreement. No purchaser of any of the Securities through or from any
Agent hereunder shall be deemed a successor or assign by reason merely of such
purchase.
13. THIS AGREEMENT AND ANY TERMS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
28
29
14. This Agreement and any Terms Agreement may be executed by any one
or more of the parties hereto and thereto in any number of counterparts, each
of which shall be an original, but all of such respective counterparts shall
together constitute one and the same instrument.
If the foregoing is in accordance with your understanding of this
Agreement, please sign and return to us 11 counterparts hereof, whereupon this
letter and the acceptance by you thereof shall constitute a binding agreement
between the Company and you in accordance with its terms.
Very truly yours,
▇▇▇▇▇▇▇▇▇▇ REALTY INVESTORS
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Chairman/Chief Executive Officer
Accepted in New York, New York
as of the date hereof:
/s/ ▇▇▇▇▇▇▇, SACHS & CO.
---------------------------------
(▇▇▇▇▇▇▇, ▇▇▇▇▇ & CO.)
ALEX. ▇▇▇▇▇ & SONS INCORPORATED CHASE SECURITIES INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------- ----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Principal Title: Vice President
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ BROTHERS INC.
SECURITIES CORPORATION
By: /s/ ▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇ ▇ ▇▇▇▇▇▇▇▇
---------------------------- ----------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇ Name:
---------------------------------
Title: Senior Vice President Title:
---------------------------------
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
& ▇▇▇▇▇ INCORPORATED
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------- ----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Authorized Signatory Title: Vice President
NATIONSBANC CAPITAL MARKETS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Director
29
30
ANNEX I
▇▇▇▇▇▇▇▇▇▇ REALTY INVESTORS
Medium-Term Notes
TERMS AGREEMENT
__________, 19__
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Alex. ▇▇▇▇▇ & Sons Incorporated
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Chase Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Securities Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ Brothers Inc.
Three World Financial Center, 12th Floor
New York, New York 10285
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
World Financial Center
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
NationsBanc Capital Markets, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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31
Ladies and Gentlemen:
▇▇▇▇▇▇▇▇▇▇ Realty Investors, a Texas real estate investment trust (the
"Company"), proposes, subject to the terms and conditions stated herein and in
the Distribution Agreement, dated November 15, 1996 (the "Distribution
Agreement"), between the Company on the one hand and ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.,
Alex. ▇▇▇▇▇ & Sons Incorporated, Chase Securities Inc., ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇ Securities Corporation, ▇▇▇▇▇▇ Brothers Inc., ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.,
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, ▇.▇. ▇▇▇▇▇▇ Securities Inc.
and NationsBanc Capital Markets, Inc. (together, the "Agents") on the other, to
issue and sell to the Agents the securities specified in the Schedule hereto
(the "Purchased Securities"). Each of the provisions of the Distribution
Agreement not specifically related to the solicitation by the Agents, as agents
of the Company, of offers to purchase the Securities is incorporated herein by
reference in its entirety, and shall be deemed to be part of this Terms
Agreement to the same extent as if such provision had been set forth in full
herein. Nothing contained herein or in the Distribution Agreement shall make
any party hereto an agent of the Company or make such party subject to the
provisions therein relating to the solicitation of offers to purchase
securities from the Company, solely by virtue of its execution of this Terms
Agreement. Each of the representations and warranties set forth therein shall
be deemed to have been made at and as of the date of this Terms Agreement,
except that each representation and warranty in Section 1 of the Distribution
Agreement which makes reference to the Prospectus shall be deemed to be a
representation and warranty as of the date of the Distribution Agreement in
relation to the Prospectus (as therein defined), and also a representation and
warranty as of the date of this Terms Agreement in relation to the Prospectus
as amended and supplemented to relate to the Purchased Securities.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Purchased Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Distribution Agreement incorporated herein by reference, the Company agrees to
issue and sell to the Agents, and the Agents agree to purchase from the Company
the Purchased Securities, at the time and place, in the principal amount and at
the purchase price set forth in the Schedule hereto.
If the foregoing is in accordance with your understanding, please sign
and return to us a counterpart hereof, and upon acceptance hereof by you this
letter and such acceptance hereof,
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32
including those provisions of the Distribution Agreement incorporated herein by
reference, shall constitute a binding agreement between you and the Company.
▇▇▇▇▇▇▇▇▇▇ REALTY INVESTORS
By:
------------------------------------
Name:
Title:
Accepted:
---------------------------------
(▇▇▇▇▇▇▇, SACHS & CO.)
ALEX. ▇▇▇▇▇ & SONS INCORPORATED CHASE SECURITIES INC.
By: By:
---------------------------- ----------------------------------
Name: Name:
Title: Title:
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ BROTHERS INC.
SECURITIES CORPORATION
By: By:
---------------------------- ----------------------------------
Name: Name:
Title: Title:
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
& ▇▇▇▇▇ INCORPORATED
By: By:
---------------------------- ----------------------------------
Name: Name:
Title: Title:
NATIONSBANC CAPITAL MARKETS, INC.
By:
-----------------------------
Name:
Title:
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SCHEDULE TO ANNEX I
Title of Purchased Securities:
__ % Medium-Term [Senior] [Subordinated] Notes
Aggregate Principal Amount:
$____________
Price to the Public:
$____________
Purchase Price by ▇▇▇▇▇▇▇, Sachs & Co., Alex. ▇▇▇▇▇ & Sons Incorporated, Chase
Securities Inc., ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation, ▇▇▇▇▇▇
Brothers Inc., ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated, ▇.▇. ▇▇▇▇▇▇ Securities Inc. or NationsBanc Capital Markets, Inc.:
___% of the principal amount of the Purchased Securities, plus accrued
interest from _______________ to ___________ and accrued amortization, if any,
from ___________ to __________
Method of, and Specified Funds for, Payment of Purchase Price:
[By certified or official bank check or checks, payable to the order
of the Company, in [New York Clearing House or similar next-day] [Fed Funds or
similar immediately available] funds]
[By wire transfer to a bank account specified by the Company in [New
York Clearing House or similar next-day] [Fed Funds or similar immediately
available] funds]
[Senior] [Subordinated] Indenture:
Indenture, dated as of May 1, 1995, between the Company and Texas
Commerce Bank National Association, as Trustee
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34
Time of Delivery:
Closing Location for Delivery of Securities:
Maturity:
Interest Rate:
_____%
Interest Payment Dates:
Documents to be Delivered:
The following documents referred to in the Distribution Agreement
shall be delivered as a condition to the Closing:
(1) The opinion or opinions of counsel to the Agents referred to
in Section 4(h).
(2) The opinion of counsel to the Company referred to in Section
4(i).
(3) The accountants' letter referred to in Section 4(j).
(4) The officers' certificate referred to in Section 4(k).
Other Provisions (including Syndicate Provisions, if applicable):
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35
ANNEX II
▇▇▇▇▇▇▇▇▇▇ REALTY INVESTORS
ADMINISTRATIVE PROCEDURE
This Administrative Procedure relates to the Securities defined in the
Distribution Agreement, dated November 15, 1996 (the "Distribution Agreement"),
between ▇▇▇▇▇▇▇▇▇▇ Realty Investors (the "Company") and ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.,
Alex. ▇▇▇▇▇ & Sons Incorporated, Chase Securities Inc., ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇ Securities Corporation, ▇▇▇▇▇▇ Brothers Inc., ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.,
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, ▇.▇. ▇▇▇▇▇▇ Securities Inc.
and NationsBanc Capital Markets, Inc. (together, the "Agents"), to which this
Administrative Procedure is attached as Annex II. Defined terms used herein
but not defined herein shall have the respective meanings given such terms in
the Distribution Agreement, the Prospectus as amended or supplemented or the
Indentures.
The procedures to be followed with respect to the settlement of sales
of the Securities directly by the Company to purchasers solicited by an Agent,
as agent, are set forth below. The terms and settlement details related to a
purchase of the Securities by an Agent, as principal, from the Company will be
set forth in a Terms Agreement pursuant to the Distribution Agreement, unless
the Company and such Agent otherwise agree as provided in Section 2(b) of the
Distribution Agreement, in which case the procedures to be followed in respect
of the settlement of such sale will be as set forth below. An Agent, in
relation to a purchase of a Security by a purchaser solicited by such Agent, is
referred to herein as the "Selling Agent" and, in relation to a purchase of a
Security by such Agent as principal other than pursuant to a Terms Agreement,
is referred to herein as the "Purchasing Agent".
The Company will advise each Agent in writing of those persons with
whom such Agent is to communicate regarding offers to purchase the Securities
and the related settlement details.
Each Security will be issued only in fully registered form and will be
represented by either a global security (a "Global Security") delivered to the
Trustee, as agent for The Depository Trust Company (the "Depositary") and
recorded in the book-entry system maintained by the Depositary (a "Book-Entry
Security") or a certificate issued in definitive form (a "Certificated
Security") delivered to a person designated by an Agent, as set forth in the
applicable Pricing Supplement. An owner of a Book-Entry Security will not be
entitled to receive a certificate representing such Security, except as
provided in the Indentures.
Certificated Securities will be issued in accordance with the
Administrative Procedure set forth in Part I hereof, and Book-Entry Securities
will be issued in accordance with the Administrative Procedure set forth in
Part II hereof.
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36
PART I: ADMINISTRATIVE PROCEDURE FOR CERTIFICATED SECURITIES
Posting Rates by the Company:
The Company and the Agents will discuss from time to time the rates of
interest per annum to be borne by and the maturity of Certificated Securities
that may be sold as a result of the solicitation of offers by an Agent. The
Company may establish a fixed set of interest rates and maturities for an
offering period ("posting"). If the Company decides to change already posted
rates, it promptly will advise the Agents to suspend solicitation of offers
until the new posted rates have been established with the Agents.
Acceptance of Offers by the Company:
Each Agent promptly will advise the Company by telephone or other
appropriate means of all reasonable offers to purchase Certificated Securities,
other than those rejected by such Agent. Each Agent, in its discretion
reasonably exercised, may reject any offer received by it in whole or in part.
Each Agent also may make offers to the Company to purchase Certificated
Securities as a Purchasing Agent. The Company will have the sole right to
accept offers to purchase Certificated Securities and may reject any such offer
in whole or in part.
The Company promptly will notify the Selling Agent or the Purchasing
Agent, as the case may be, of its acceptance or rejection of an offer to
purchase Certificated Securities. If the Company accepts an offer to purchase
Certificated Securities, it will confirm such acceptance in writing to the
Selling Agent or the Purchasing Agent, as the case may be, and the Trustee.
Communication of Sale Information to the Company
by the Selling Agent:
After the acceptance of an offer by the Company, the Selling Agent or
the Purchasing Agent, as the case may be, will communicate the following
details of the terms of such offer (the "Sale Information") to the Company by
telephone (confirmed in writing) or by facsimile transmission or other
acceptable written means:
(1) Principal amount of Certificated Securities to be purchased;
(2) If a Fixed Rate Certificated Security, the Interest Rate and the
initial Interest Payment Date;
(3) Maturity Date;
(4) Specified Currency and, if the Specified Currency is other than U.S.
Dollars, the applicable Exchange Rate for such Specified Currency;
(5) Index Currency, the Base Rate and the Exchange Rate Determination
Date, if applicable;
(6) Issue Price;
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37
(7) Selling Agent's commission or Purchasing Agent's discount, as the case
may be;
(8) Net proceeds to the Company;
(9) Settlement Date;
(10) If a redeemable Certificated Security, such of the following as are
applicable:
(i) Redemption Commencement Date,
(ii) Initial Redemption Price (% of par), and
(iii) Amount (% of par) that the Redemption Price shall decline (but
not below par) on each anniversary of the Redemption
Commencement Date;
(11) If a Floating Rate Certificated Security, such of the following as are
applicable:
(i) Interest Rate Basis,
(ii) Index Maturity,
(iii) Spread and/or Spread Multiplier,
(iv) Maximum Rate,
(v) Minimum Rate,
(vi) Initial Interest Rate,
(vii) Interest Reset Dates,
(viii) Calculation Dates,
(ix) Interest Determination Dates,
(x) Interest Payment Dates,
(xi) Regular Record Dates, and
(xii) Calculation Agent;
(12) Name, address and taxpayer identification number of the registered
owner(s);
(13) Denomination of certificates to be delivered at settlement; and
(14) Book-Entry Security or Certificated Security.
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38
Preparation of a Pricing Supplement by the Company:
If the Company accepts an offer to purchase a Certificated Security,
it will prepare a Pricing Supplement. The Company will supply at least one
copy of such Pricing Supplement to the Selling Agent or the Purchasing Agent,
as the case may be, not later than 11:00 a.m., New York City time, on the
business day following the date of acceptance of such offer, or if the Company
and the purchaser agree to settle on the date of such acceptance, not later
than noon, New York City time, on such date, by facsimile or overnight express
to the following applicable address:
(i) if to ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., to ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Facsimile Transmission No. (▇▇▇) ▇▇▇-▇▇▇▇,
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
(ii) if to Alex. ▇▇▇▇▇ & Sons Incorporated, to ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Facsimile Transmission No. (410)
783-3033, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
(iii) if to Chase Securities Inc., to ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Facsimile Transmission No. (▇▇▇) ▇▇▇-▇▇▇▇,
Attention: Medium-Term Notes Desk,
(iv) if to ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation, to ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Facsimile
Transmission No. (▇▇▇) ▇▇▇-▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇▇,
(v) if to ▇▇▇▇▇▇ Brothers Inc., c/o ADP Prospectus Services, ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Facsimile No. (516) 249-
7942, Attention: ▇▇▇▇▇▇▇ ▇▇▇▇,
(vi) if to ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated, to Tritech Services, ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, Facsimile Transmission No. (▇▇▇) ▇▇▇-▇▇▇▇, Attention:
Prospectus Operations/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, with a copy to ▇▇▇▇▇▇▇ ▇▇▇▇▇ &
Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, World
Financial Center, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ 10281-
1310, Facsimile Transmission No. (▇▇▇) ▇▇▇-▇▇▇▇, Attention: MTN
Product Management,
(vii) if to ▇.▇. ▇▇▇▇▇▇ Securities Inc., to ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Facsimile Transmission No. (▇▇▇) ▇▇▇-▇▇▇▇,
Attention: MTN Desk and
(viii) if to NationsBanc Capital Markets, Inc., to ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Facsimile
Transmission No. (▇▇▇) ▇▇▇-▇▇▇▇, Attention: MTN Product Management.
The Company will arrange to have ten Pricing Supplements filed with
the Commission not later than the close of business of the Commission on the
fifth business day following the date on which such Pricing Supplement first is
used.
Delivery of a Confirmation and the Prospectus to a Purchaser
by the Selling Agent:
The Selling Agent will deliver to the purchaser of a Certificated
Security a written confirmation of the sale and delivery and payment
instructions. In addition, the Selling Agent will deliver to such purchaser or
its agent the Prospectus as amended or supplemented (including the Pricing
Supplement) in relation to such Certificated Security prior to or together with
the earlier of the delivery to such purchaser or its agent of (a) the
confirmation of the sale or (b) the Certificated Security.
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Date of Settlement:
All offers solicited by the Selling Agent or made by the Purchasing
Agent and accepted by the Company will be settled on a date (the "Settlement
Date") which is the third business day after the date of acceptance of such
offer, unless the Company and the purchaser agree to settle (a) on any other
business day after the acceptance of such offer or (b) with respect to an offer
accepted by the Company prior to 10:00 a.m., New York City time, on the date of
such acceptance.
Instruction from the Company to the Trustee for Preparation
of Certificated Securities:
After receiving the Sale Information from the Selling Agent or the
Purchasing Agent, as the case may be, the Company will communicate such Sale
Information to the Trustee by telephone (confirmed in writing) or by facsimile
transmission or other acceptable written means.
The Company will instruct the Trustee by facsimile transmission or
other acceptable written means to authenticate and deliver the Certificated
Securities no later than 2:15 p.m., New York City time, on the Settlement Date.
Such instruction will be given by the Company prior to 3:00 p.m., New York City
time, on the business day prior to the Settlement Date unless the Settlement
Date is the date of acceptance by the Company of the offer to purchase
Certificated Securities, in which case such instruction will be given by the
Company by 11:00 a.m., New York City time.
Preparation and Delivery of Certificated Securities by the Trustee and Receipt
of Payment Therefor:
The Trustee will prepare each Certificated Security and appropriate
receipts that will serve as the documentary control of the transaction.
In the case of a sale of Certificated Securities to a purchaser
solicited by an Agent, the Trustee, by 2:15 p.m., New York City time on the
Settlement Date, will deliver the Certificated Securities to the Selling Agent
for the benefit of the purchaser of such Certificated Securities against
delivery by the Selling Agent of a receipt therefor. On the Settlement Date,
the Selling Agent will deliver payment for such Certificated Securities in
immediately available funds to the Company in an amount equal to the issue
price of the Certificated Securities less the Selling Agent's commission;
provided that the Selling Agent reserves the right to withhold payment for
which it has not received funds from the purchaser. The Company shall not use
any proceeds advanced by a Selling Agent to acquire Securities.
In the case of a sale of Certificated Securities to the Purchasing
Agent, the Trustee, by 2:15 p.m., New York City time on the Settlement Date,
will deliver the Certificated Securities to the Purchasing Agent against
delivery of payment for such Certificated Securities in
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40
immediately available funds to the Company in an amount equal to the issue
price of the Certificated Securities less the Purchasing Agent's discount.
In either case, delivery of Certificated Securities shall be made as
follows:
(i) if to ▇▇▇▇▇▇▇, Sachs & Co., to ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Facsimile Transmission No. (▇▇▇) ▇▇▇-▇▇▇▇,
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
(ii) if to Alex. ▇▇▇▇▇ & Sons Incorporated, to ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Facsimile Transmission No. (410)
783-3033, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
(iii) if to Chase Securities Inc., to ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Facsimile Transmission No. (▇▇▇) ▇▇▇-▇▇▇▇,
Attention: ▇▇▇▇▇ ▇▇▇▇▇,
(iv) if to ▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ Securities Corporation, to The
Chase Manhattan Bank, 4 New York Plaza, Ground Floor, New York, New
York 10004, Facsimile Transmission No. (▇▇▇) ▇▇▇-▇▇▇▇, Attention:
Outsourcing Department for the Account of ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Securities Corporation,
(v) if to ▇▇▇▇▇▇ Brothers Inc., to Chemical Bank, 4 New York Plaza,
Ground Floor, Receive Window, FAO ▇▇▇▇▇▇ Brothers, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Facsimile Transmission No. (▇▇▇) ▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇▇▇▇
▇▇▇▇,
(vi) if to ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated, to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Money Markets Clearance, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇.▇.▇.▇. Window, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Facsimile Transmission: (▇▇▇) ▇▇▇-▇▇▇▇, Attention: ▇▇ ▇▇▇▇▇▇▇▇,
(vii) if to ▇.▇. ▇▇▇▇▇▇ Securities Inc., to ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Facsimile Transmission No. (▇▇▇) ▇▇▇-▇▇▇▇,
Attention: MTN Desk and
(viii) if to NationsBanc Capital Markets, Inc., to The Bank of New
York, One ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, Dealers Clearance, ▇▇▇▇▇▇ ▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Facsimile Transmission No. (▇▇▇) ▇▇▇-▇▇▇▇,
Attention: ▇▇▇ ▇▇▇▇▇▇.
Failure of a Purchaser to Pay the Selling Agent:
If a purchaser (other than the Purchasing Agent) fails to make payment
to the Selling Agent for a Certificated Security, the Selling Agent promptly
will notify the Trustee and the Company thereof by telephone (confirmed in
writing) or by facsimile transmission or other acceptable written means. The
Selling Agent immediately will return the Certificated Security to the Trustee.
Immediately upon the receipt of such Certificated Security by the Trustee, the
Company will return to the Selling Agent an amount equal to the amount
previously paid to the Company in respect of such Certificated Security. The
Company will reimburse the Selling Agent on an equitable basis for its loss of
the use of funds during the period when they were credited to the account of
the Company.
The Trustee will cancel the Certificated Security in respect of which
the failure occurred, make appropriate entries in its records and, unless
otherwise instructed by the Company, destroy the Certificated Security.
PART II: ADMINISTRATIVE PROCEDURE FOR BOOK-ENTRY SECURITIES
In connection with the qualification of the Book-Entry Securities for
eligibility in the book-entry system maintained by the Depositary, the Trustee
will perform the custodial,
II-6
41
document control and administrative functions described below, in accordance
with its respective obligations under a Letter of Representation from the
Company and the Trustee to the Depositary, dated the date hereof, and a Medium-
Term Note Certificate Agreement between the Trustee and the Depositary, dated
as of December 2, 1988 (the "Certificate Agreement"), and its obligations as a
participant in the Depositary, including the Depositary's Same-Day Funds
Settlement System ("SDFS").
Posting Rates by the Company:
The Company and the Agents will discuss from time to time the rates of
interest per annum to be borne by and the maturity of Book-Entry Securities
that may be sold as a result of the solicitation of offers by an Agent. The
Company may establish a fixed set of interest rates and maturities for an
offering period ("posting"). If the Company decides to change already posted
rates, it promptly will advise the Agents to suspend solicitation of offers
until the new posted rates have been established with the Agents.
Acceptance of Offers by the Company:
Each Agent promptly will advise the Company by telephone or other
appropriate means of all reasonable offers to purchase the Securities, other
than those rejected by such Agent. Each Agent, in its discretion reasonably
exercised, may reject any offer received by it in whole or in part. Each Agent
also may make offers to the Company to purchase Book-Entry Securities as the
Purchasing Agent. The Company will have the sole right to accept offers to
purchase Book-Entry Securities and may reject any such offer in whole or in
part.
The Company promptly will notify the Selling Agent or the Purchasing
Agent, as the case may be, of its acceptance or rejection of an offer to
purchase Book-Entry Securities. If the Company accepts an offer to purchase
Book-Entry Securities, it will confirm such acceptance in writing to the
Selling Agent or the Purchasing Agent, as the case may be, and the Trustee.
Communication of the Sale Information to the Company
by the Selling Agent and Settlement Procedures:
A. After the acceptance of an offer by the Company, the Selling
Agent or the Purchasing Agent, as the case may be, will communicate promptly,
but in no event later than the time set forth under "Settlement Procedure
Timetable" below, the following details of the terms of such offer (the "Sale
Information") to the Company by telephone (confirmed in writing) or by
facsimile transmission or other acceptable written means:
(1) Principal amount of Book-Entry Securities to be
purchased;
(2) If a Fixed Rate Book-Entry Security, the Interest Rate
and the initial Interest Payment Date;
II-7
42
(3) Maturity Date;
(4) Specified Currency and, if the Specified Currency is
other than U.S. Dollars, the applicable Exchange Rate for
such Specified Currency (it being understood that
currently the Depositary accepts deposits of Global
Securities denominated in U.S. Dollars only);
(5) Index Currency, the Base Rate and the Exchange Rate
Determination Date, if applicable;
(6) Issue Price;
(7) Selling Agent's commission or Purchasing Agent's discount
or commission, as the case may be;
(8) Net Proceeds to the Company;
(9) Settlement Date;
(10) If a redeemable Book-Entry Security, such of the
following as are applicable:
(i) Redemption Commencement Date,
(ii) Initial Redemption Price (% of par), and
(iii) Amount (% of par) that the Redemption Price
shall decline (but not below par) on each
anniversary of the Redemption Commencement
Date.
(11) If a Floating Rate Book-Entry Security, such of the
following as are applicable:
(i) Interest Rate Basis,
(ii) Index Maturity,
(iii) Spread and/or Spread Multiplier,
(iv) Maximum Rate,
(v) Minimum Rate,
(vi) Initial Interest Rate,
(vii) Interest Reset Dates,
(viii) Calculation Dates,
(ix) Interest Determination Dates,
(x) Interest Payment Dates,
(xi) Regular Record Dates, and
(xii) Calculation Agent;
(12) Name, address and taxpayer identification number of the
registered owner(s);
II-8
43
(13) Denomination of certificates to be delivered at
settlement; and
(14) Book-Entry Security or Certificated Security.
B. After receiving the Sale Information from the Selling Agent or
the Purchasing Agent, as the case may be, the Company will communicate the Sale
Information to the Trustee by facsimile transmission or other acceptable
written means. The Trustee will assign a CUSIP number to the Global Security
from a list of CUSIP numbers previously delivered to the Trustee by the Company
representing such Book-Entry Security and then advise the Company and the
Selling Agent or the Purchasing Agent, as the case may be, of such CUSIP
number.
C. The Trustee will enter a pending deposit message through the
Depositary's Participant Terminal System, providing the following settlement
information to the Depositary, and the Depositary shall forward such
information to such Agent and to Standard & Poor's Ratings Group:
(1) The applicable Sale Information;
(2) CUSIP number of the Global Security representing such
Book-Entry Security;
(3) Whether such Global Security will represent any other
Book-Entry Security (to the extent known at such time);
(4) Number of the participant account maintained by the
Depositary on behalf of the Selling Agent or the
Purchasing Agent, as the case may be;
(5) The interest payment period;
(6) Initial Interest Payment Date for such Book-Entry
Security, number of days by which such date succeeds the
record date for the Depositary's purposes (which, in the
case of Floating Rate Securities which reset weekly shall
be the date five calendar days immediately preceding the
applicable Interest Payment Date and in the case of all
other Book-Entry Securities shall be the Regular Record
Date, as defined in the Security) and, if calculable at
that time, the amount of interest payable on such
Interest Payment Date;
D. The Trustee will complete and authenticate the Global Security
previously delivered by the Company representing such Book-Entry Security.
E. The Depositary will credit such Book-Entry Security to the
Trustee's participant account at the Depositary.
F. The Trustee will enter an SDFS deliver order through the
Depositary's Participant Terminal System instructing the Depositary to (i)
debit such Book-Entry Security to the Trustee's participant account and credit
such Book-Entry Security to such Agent's participant account and
II-9
44
(ii) debit such Agent's settlement account and credit the Trustee's settlement
account for an amount equal to the price of such Book-Entry Security less such
Agent's commission. The entry of such a deliver order shall constitute a
representation and warranty by the Trustee to the Depositary that (a) the
Global Security representing such Book-Entry Security has been issued and
authenticated and (b) the Trustee is holding such Global Security pursuant to
the Certificate Agreement.
G. Such Agent will enter an SDFS deliver order through the
Depositary's Participant Terminal System instructing the Depositary (i) to
debit such Book-Entry Security to such Agent's participant account and credit
such Book-Entry Security to the participant accounts of the participants with
respect to such Book-Entry Security and (ii) to debit the settlement accounts
of such participants and credit the settlement account of such Agent for an
amount equal to the price of such Book-Entry Security.
H. Transfers of funds in accordance with SDFS deliver orders
described in Settlement Procedures "F" and "G" will be settled in accordance
with SDFS operating procedures in effect on the settlement date.
I. Upon confirmation of receipt of funds, the Trustee will
transfer to the account of the Company maintained at The Chase Manhattan Bank,
New York, New York, or such other account as the Company previously may have
specified to the Trustee, in funds available for immediate use in the amount
transferred to the Trustee in accordance with Settlement Procedure "F".
J. Upon request, the Trustee will send to the Company a statement
setting forth the principal amount of Book-Entry Securities outstanding as of
that date under the Indentures.
K. Such Agent will confirm the purchase of such Book-Entry
Security to the purchaser either by transmitting to the participants with
respect to such Book-Entry Security a confirmation order or orders through the
Depositary's institutional delivery system or by mailing a written confirmation
to such purchaser.
L. The Depositary, at any time, upon request of the Company or
the Trustee, promptly will furnish to the Company or to the Trustee a list of
the names and addresses of the participants for whom the Depositary has
credited Book-Entry Securities.
Preparation of a Pricing Supplement by the Company:
If the Company accepts an offer to purchase a Book-Entry Security, it
will prepare a Pricing Supplement reflecting the terms of such Book-Entry
Security and arrange to have delivered to the Selling Agent or the Purchasing
Agent, as the case may be, at least one copy of such Pricing Supplement, not
later than 11:00 a.m., New York City time, on the business day following the
receipt of the Sale Information, or if the Company and the purchaser agree to
settle on the business day following the date of acceptance, not later than
noon, New York City
II-10
45
time, on such date, by facsimile or overnight express to the following
applicable address:
(i) if to ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., to ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Facsimile Transmission No. (▇▇▇) ▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇,
(ii) if to Alex. ▇▇▇▇▇ & Sons Incorporated, to ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Facsimile Transmission No. (410)
783-3033, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
(iii) if to Chase Securities Inc., to ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Facsimile Transmission No. (▇▇▇) ▇▇▇-▇▇▇▇,
Attention: ▇▇▇▇▇ ▇▇▇▇▇,
(iv) if to ▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ Securities Corporation, to ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Facsimile
Transmission No. (▇▇▇) ▇▇▇-▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇▇,
(v) if to ▇▇▇▇▇▇ Brothers Inc., c/o ADP Prospectus Services, ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Facsimile No. (516) 249-
7942, Attention: ▇▇▇▇▇▇▇ ▇▇▇▇,
(vi) if to ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated, to Tritech Services, ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, Facsimile Transmission No. (▇▇▇) ▇▇▇-▇▇▇▇, Attention:
Prospectus Operations/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, with a copy to ▇▇▇▇▇▇▇ ▇▇▇▇▇ &
Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, World
Financial Center, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ 10281-
1310, Facsimile Transmission No. (▇▇▇) ▇▇▇-▇▇▇▇, Attention: MTN
Product Management,
(vii) if to ▇.▇. ▇▇▇▇▇▇ Securities Inc., to ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Facsimile Transmission No. (▇▇▇) ▇▇▇-▇▇▇▇,
Attention: MTN Desk and
(viii) if to NationsBanc Capital Markets, Inc., to ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Facsimile
Transmission No. (▇▇▇) ▇▇▇-▇▇▇▇, Attention: MTN Product Management.
The Company will arrange to have ten Pricing Supplements filed with
the Commission not later than the close of business of the Commission on the
fifth business day following the date on which such Pricing Supplement first is
used.
Delivery of a Confirmation and the Prospectus to a Purchaser
by the Selling Agent:
The Selling Agent will deliver to the purchaser of a Book-Entry
Security a written confirmation of the sale and delivery and payment
instructions. In addition, the Selling Agent will deliver to such purchaser or
its agent the Prospectus as amended or supplemented (including the Pricing
Supplement) in relation to such Book-Entry Security prior to or together with
the earlier of the delivery to such purchaser or its agent of (a) the
confirmation of sale or (b) the Book-Entry Security.
Date of Settlement:
The receipt by the Company of immediately available funds in payment
for a Book-Entry Security and the authentication and issuance of the Global
Security representing such Book-Entry Security shall constitute "settlement"
with respect to such Book-Entry Security. All orders accepted by the Company
will be settled on the third business day pursuant to the timetable for
settlement set forth below unless the Company and the purchaser agree to settle
on another day which shall be no earlier than the next business day.
II-11
46
Settlement Procedure Timetable:
For orders of Book-Entry Securities solicited by an Agent, as agent,
and accepted by the Company for settlement on the first business day after the
sale date, Settlement Procedures "A" through "I" set forth above shall be
completed as soon as possible but not later than the respective times (New York
City time) set forth below:
Settlement
Procedure Time
----------- -----
A 5:00 p.m. on the business day following the
acceptance of an offer by the Company or
10:00 a.m. on the business day prior to
the settlement date, whichever is
earlier
B 12:00 noon on the sale date
C 2:00 p.m. on the sale date
D 9:00 a.m. on the settlement date
E 10:00 a.m. on the settlement date
F-G 2:00 p.m. on the settlement date
H 4:45 p.m. on the settlement date
I 5:00 p.m. on the settlement date
If a sale is to be settled more than one business day after the sale
date, Settlement Procedures "B" and "C" shall be completed as soon as
practicable but not later than 2:00 p.m. on the first business day after the
sale date. If the initial interest rate for a Floating Rate Book-Entry
Security has not been determined at the time that Settlement Procedure "A" is
completed, Settlement Procedures "B" and "C" shall be completed as soon as such
rate has been determined but no later than 2:00 p.m. on the second business day
before the settlement date. Settlement Procedure "H" is subject to extension
in accordance with any extension of FedWire closing deadlines and in the other
events specified in the SDFS operating procedures in effect on the settlement
date.
If settlement of a Book-Entry Security is rescheduled or cancelled,
the Trustee, upon obtaining knowledge thereof, will deliver to the Depositary,
through the Depositary's Participation Terminal System a cancellation message
to such effect by no later than 2:00 p.m. on the business day immediately
preceding the scheduled settlement date.
Failure to Settle:
If the Trustee fails to enter an SDFS deliver order with respect to a
Book-Entry Security pursuant to Settlement Procedure "F", the Trustee may
deliver to the Depositary, through the Depositary's Participant Terminal
System, as soon as practicable a withdrawal message instructing the Depositary
to debit such Book-Entry Security to the Trustee's participant account,
provided that the Trustee's participant account contains a principal amount of
the Global Security representing such Book-Entry Security that is at least
equal to the principal amount to be debited. If a withdrawal message is
processed with respect to all the Book-Entry Securities represented by a Global
Security, the Trustee will ▇▇▇▇ such Global Security "cancelled", make
appropriate entries in the Trustee's records and send such cancelled Global
Security to the Company. The CUSIP number assigned to such Global Security, in
accordance with CUSIP Service Bureau procedures, shall be cancelled and not
immediately reassigned. If a withdrawal message is
II-12
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processed with respect to one or more, but not all, of the Book-Entry
Securities represented by a Global Security, the Trustee will exchange such
Global Security for two Global Securities, one of which shall represent such
Book-Entry Security or Securities and shall be cancelled immediately after
issuance and the other of which shall represent the remaining Book-Entry
Securities previously represented by the surrendered Global Security and shall
bear the CUSIP number of the surrendered Global Security.
If the purchase price for any Book-Entry Security is not timely paid
to the participants with respect to such Book-Entry Security by the beneficial
purchaser thereof (or a person, including an indirect participant in the
Depositary, acting on behalf of such purchaser), such participants and, in
turn, the Agent for such Book-Entry Security may enter deliver orders through
the Depositary's Participant Terminal System debiting such Book-Entry Security
to such participant's account and crediting such Book-Entry Security to such
Agent's account and then debiting such Book-Entry Security to such Agent's
participant account and crediting such Book-Entry Security to the Trustee's
participant account and shall notify the Company and the Trustee thereof.
Thereafter, the Trustee will (i) immediately notify the Company of such order
and the Company shall transfer to such Agent funds available for immediate use
in an amount equal to the price of such Book-Entry Security which was credited
to the account of the Company maintained at the Trustee in accordance with
Settlement Procedure 1, and (ii) deliver the withdrawal message and take the
related actions described in the preceding paragraph. If such failure shall
have occurred for any reason other than default by the applicable Agent to
perform its obligations hereunder or under the Distribution Agreement, the
company will reimburse such Agent on an equitable basis for the loss of its use
of funds during the period when the funds were credited to the account of the
Company.
Notwithstanding the foregoing, upon any failure to settle with respect
to a Book-Entry Security, the Depositary may take any actions in accordance
with its SDFS operating procedures then in effect. In the event of a failure
to settle with respect to one or more, but not all, of the Book-Entry
Securities to have been represented by a Global Security, the Trustee will
provide, in accordance with Settlement Procedure "D" for the authentication and
issuance of a Global Security representing the other Book-Entry Securities to
have ben represented by such Global Security and will make appropriate entries
in its records. The Company, from time to time, will furnish the Trustee with
a sufficient quantity of Securities.
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48
ANNEX III
ACCOUNTANTS' LETTER
Pursuant to Section 4(j) and Section 6(d), as the case may be, of the
Distribution Agreement, the Company's independent certified public accountants
shall furnish letters to the effect that:
(i) They are independent certified public accountants with
respect to the Company and its subsidiaries within the meaning of the
Securities Act and the applicable published rules and regulations
thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules (and, if applicable,
financial forecasts and/or pro forma financial information) examined
by them and included in or incorporated by reference in the
Registration Statement or in the Prospectus comply as to form in all
material respects with the applicable accounting requirements of the
Securities Act or the Exchange Act, as applicable, and the related
published rules and regulations thereunder; and, if applicable, they
have made a review in accordance with standards established by the
American Institute of Certified Public Accountants of the consolidated
interim financial statements, selected financial data, pro forma
financial information and/or condensed financial statements derived
from audited financial statements of the Company for the periods
specified in such letter, as indicated in their reports thereon,
copies of which have been furnished separately to the Agents;
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants
of the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus and/or included in the Company's quarterly
report on Form 10-Q incorporated by reference into the Prospectus as
indicated in their reports thereon copies of which have been furnished
separately to the Agents; and on the basis of specified procedures
including inquiries of officials of the Company who have
responsibility for financial and accounting matters regarding whether
the unaudited condensed consolidated financial statements referred to
in paragraph (vi)(A)(i) below comply as to form in all material
respects with the applicable accounting requirements of the Securities
Act and the Exchange Act and the related published rules and
regulations, nothing came to their attention that caused them to
believe that the unaudited condensed consolidated financial statements
do not comply as to form in all material respects with the applicable
accounting requirements of the Securities Act and the Exchange Act and
the related published rules and regulations;
(iv) The unaudited selected financial information with
respect to the consolidated results of operations and the financial
position of the Company for the five most recent fiscal years included
in the Prospectus and included in or incorporated by reference in
III-1
49
Item 6 of the Company's Annual Report on Form 10-K for the most recent
fiscal year agrees with the corresponding amounts (after restatement
where applicable) in the audited consolidated financial statements for
the five such fiscal years which were included in or incorporated by
reference in the Company's Annual Reports on Form 10-K for such fiscal
years;
(v) They have compared the information in the Prospectus
under selected captions with the disclosure requirements of Regulation
S-K under the Securities Act and the Exchange Act and, on the basis of
limited procedures specified in such letter, nothing came to their
attention as a result of the foregoing procedures that caused them to
believe that this information does not conform in all material
respects with the disclosure requirements of Items 301, 302, 402 and
503(d), respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and
other information referred to below, a reading of the latest available
interim financial statements of the Company and its subsidiaries,
inspection of the minute books of the Company and its subsidiaries
since the date of the latest audited financial statements included in
or incorporated by reference in the Prospectus, inquiries of officials
of the Company and its subsidiaries responsible for financial and
accounting matters, and such other inquiries and procedures as may be
specified in such letter, nothing came to their attention that caused
them to believe that:
(A) (i) the unaudited condensed consolidated
statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the
Prospectus and/or incorporated by reference in the Company's
Quarterly Reports on Form 10-Q incorporated by reference in
the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the
Exchange Act as it applies to Form 10-Q and the related
published rules and regulations thereunder or (ii) any
material modifications should be made to the unaudited
condensed consolidated statements of income, consolidated
balance sheets and consolidated statements of cash flows
included in the Prospectus or included in the Company's
Quarterly Reports on Form 10-Q incorporated by reference in
the Prospectus for them to be in conformity with generally
accepted accounting principles;
(B) any other unaudited income statement data and
balance sheet items included in the Prospectus do not agree
with the corresponding items in the unaudited consolidated
financial statements from which such data and items were
derived, and any such unaudited data and items were not
determined on a basis substantially consistent with the basis
for the corresponding amounts in the audited consolidated
financial statements included in or incorporated by reference
in the Company's Annual Report on Form 10-K for the most
recent fiscal year;
(C) the unaudited financial statements which were
not included in the Prospectus but from which were derived the
unaudited condensed financial
III-2
50
statements referred to in clause (A) and any unaudited income
statement data and balance sheet items included in the
Prospectus and referred to in clause (B) were not determined
on a basis substantially consistent with the basis for the
audited financial statements included or incorporated by
reference in the Company's Annual Report on Form 10-K for the
most recent fiscal year;
(D) any unaudited pro forma consolidated condensed
financial statements included in or incorporated by reference
in the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the
Securities Act and the published rules and regulations
thereunder or the pro forma adjustments have not been properly
applied to the historical amounts in the compilation of those
statements;
(E) as of a specified date not more than five days
prior to the date of such letter, there have been any changes
in the consolidated capital stock (other than issuances of
capital stock upon exercise of options and stock appreciation
rights, upon earnouts of performance shares and upon
conversions of convertible securities, in each case which were
outstanding on the date of the latest balance sheet included
in or incorporated by reference in the Prospectus) or any
increase in the consolidated long-term debt of the Company and
its subsidiaries, or any decreases in consolidated net current
assets or net assets or other items specified by the Agents,
or any increases in any items specified by the Agents, in each
case as compared with amounts shown in the latest balance
sheet included in or incorporated by reference in the
Prospectus, except in each case for changes, increases or
decreases which the Prospectus discloses have occurred or may
occur or which are described in such letter; and
(F) for the period from the date of the latest
financial statements included in or incorporated by reference
in the Prospectus to the specified date referred to in clause
(E) there were any decreases in consolidated net revenues or
operating profit or the total or per share amounts of
consolidated net income or other items specified by the
Agents, or any increases in any items specified by the Agents,
in each case as compared with the comparable period of the
preceding year and with any other period of corresponding
length specified by the Agents, except in each case for
increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter;
and
(vii) in addition to the examination referred to in their
report(s) included in or incorporated by reference in the Prospectus
and the limited procedures, inspection of minute books, inquiries and
other procedures referred to in paragraphs (iii) and (iv) above, they
have carried out certain specified procedures, not constituting an
examination in accordance with generally accepted auditing standards,
with respect to certain amounts, percentages and financial information
specified by the Agents which are derived from the general accounting
records of the Company and its subsidiaries, which appear in the
Prospectus (excluding documents incorporated by reference), or in Part
II of, or
III-3
51
in exhibits and schedules to, the Registration Statement specified by
the Agents or in documents incorporated by reference in the Prospectus
specified by the Agents, and have compared certain of such amounts,
percentages and financial information with the accounting records of
the Company and its subsidiaries and have found them to be in
agreement.
All references in this Annex III to the Prospectus shall be deemed to
refer to the prospectus (including the documents incorporated by reference
therein) as defined in the Distribution Agreement as of the Commencement Date
referred to in Section 6(d) thereof and to the prospectus as amended or
supplemented (including the documents incorporated by reference therein) as of
the date of the amendment, supplement, incorporation or the Time of Delivery
relating to the Terms Agreement requiring the delivery of such letter under
Section 4(j) thereof.
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52
ANNEX IV
Alabama-Shepherd Shopping Center
Coronado Center, Ltd.
▇▇▇▇▇▇▇▇ Center Joint Venture
Eastdale Center, Ltd.
Eastex Venture
East Town, Lake ▇▇▇▇▇▇▇ Co.
GJR/▇▇▇▇▇▇▇▇▇▇ Little York Venture
GJR/▇▇▇▇▇▇▇▇▇▇ River Pointe Venture
Jacinto City, Ltd.
Lisbon Street Shopping Trust
Main/O.S.T., Ltd.
Mesquite Center, Ltd.
Northwest Hollister Venture
▇▇▇▇▇▇ Boulevard Venture
▇▇▇▇▇▇▇▇▇, Ltd.
▇▇▇▇▇▇▇ Center, Ltd.
South Loop-Long-Wayside Company
Tempe Valley Plaza, Ltd.
▇▇▇▇▇▇▇▇▇▇/Finger Venture
WRI/▇▇▇▇▇▇ Venture
WRI/▇▇▇▇▇▇▇▇▇ Venture
WRI/Interpak Venture
WRI/Palans Venture
IV-1