EXHIBIT 1.1
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3,000,000 Shares
AMLI RESIDENTIAL PROPERTIES TRUST
COMMON SHARES OF BENEFICIAL INTEREST,
PAR VALUE $0.01 PER SHARE
UNDERWRITING AGREEMENT
March 16, 2004
March 16, 2004
▇▇▇▇▇▇ Brothers Inc.
As Representative of the Several Underwriters
c/▇ ▇▇▇▇▇▇ Brothers Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs and Mesdames:
Amli Residential Properties Trust, a real estate investment trust
under the laws of the State of Maryland (the "Company"), proposes to issue
and sell to the several Underwriters named on Schedule I hereto (the
"Underwriters") 3,000,000 shares of its common shares of beneficial
interest, par value $0.01 per share (the "Firm Shares"). The Company also
proposes to issue and sell to the several Underwriters not more than an
additional 450,000 common shares of beneficial interest, par value $0.01
per share (the "Additional Shares"), if and to the extent that you, as
representative of the Underwriters, shall have determined to exercise, on
behalf of the Underwriters, the right to purchase such common shares of
beneficial interest granted to the Underwriters in Section 2 hereof. The
Firm Shares and the Additional Shares are hereinafter collectively referred
to as the "Shares." The common shares of beneficial interest, par value
$0.01 per share, of the Company to be outstanding after giving effect to
the sales contemplated hereby are hereinafter referred to as the "Common
Shares."
The Company has filed with the Securities and Exchange Commission
(the "Commission") registration statements (File Nos. 033-93120 and 333-
110669), including a prospectus, relating to the Shares. The term
"Registration Statement" means such registration statements, including the
exhibits thereto, as amended to the date of this Agreement. The term "Base
Prospectus" means the prospectus included in the Registration Statement.
If the Company has filed or files an abbreviated registration statement to
register additional shares of Common Shares pursuant to Rule 462(b) (the
"Rule 462 Registration Statement") under the Securities Act of 1933, as
amended (the "Securities Act"), then any reference herein to the term
"Registration Statement" shall be deemed to include such Rule 462
Registration Statement.
The Company has filed with, or transmitted for filing to, or shall
promptly hereafter file with or transmit for filing to, the Commission a
prospectus supplement (the "Prospectus Supplement") specifically relating
to the Shares, pursuant to Rule 424 under the Securities Act.
The term "Prospectus" means the Prospectus Supplement together with
the Base Prospectus. The term "Preliminary Prospectus" means a preliminary
prospectus supplement specifically relating to the Shares together with the
Base Prospectus. As used herein, the terms "Base Prospectus,"
"Prospectus," "preliminary prospectus" and "Registration Statement" shall
include all amendments and supplements thereto and in each case the
documents, if any, incorporated or deemed to be incorporated by reference
therein (it being understood that any statement contained in a document
incorporated or deemed to be incorporated by reference in the Base
Prospectus, preliminary prospectus, Prospectus or Registration Statement
shall not be deemed to constitute a part thereof to the extent modified or
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superseded by a statement contained in any subsequently filed document
which also is or is deemed to be incorporated by reference therein). The
terms "supplement" and "amendment" or "amend" as used in this Agreement
shall include all documents filed subsequent to the date of the Base
Prospectus, as the case may be, by the Company with the Commission pursuant
to the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
that are deemed to be incorporated by reference in the Prospectus. As
described in the Prospectus, the Company owns partnership interests in Amli
Residential Properties, L.P., a Delaware limited partnership (the
"Operating Partnership"). The term "Service Companies" includes Amli
Management Company (the "Management Company"), Amli Institutional Advisors,
Inc. ("AIA") and Amli Residential Construction, LLC ("Amrescon").
Capitalized terms used herein but not otherwise defined shall have the
respective meanings ascribed to such terms in the Prospectus.
1. REPRESENTATIONS AND WARRANTIES. Each of the Company and the
Operating Partnership jointly and severally represents and warrants to and
agrees with each of the Underwriters that:
(a) The Company meets the requirements for the use of
Form S-3 under the Securities Act; the Registration Statement has
become effective; no stop order suspending the effectiveness of the
Registration Statement is in effect, and no proceedings for such
purpose are pending before or, to the knowledge of the Company,
threatened by the Commission.
(b) (i) Each document, if any, filed or to be filed pursuant
to the Exchange Act and incorporated by reference in the Prospectus
complied or will comply when so filed in all material respects with
the Exchange Act and the applicable rules and regulations of the
Commission thereunder and none of such documents contained or will
contain any untrue statement of a material fact or omitted or will
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, (ii) the
Registration Statement, when it became effective, did not contain
and, as amended or supplemented, if applicable, will not contain any
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, (iii) the Registration Statement and the
Prospectus comply and, as amended or supplemented, if applicable,
will comply in all material respects with the Securities Act and the
applicable rules and regulations of the Commission thereunder and
(iv) the Prospectus does not contain and, as amended or supplemented,
if applicable, will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading, except that the representations and
warranties set forth in this paragraph do not apply to statements or
omissions in the Registration Statement or the Prospectus based upon
information relating to the Underwriters furnished to the Company in
writing by the Underwriters through you expressly for use therein.
(c) (i) As described in the Prospectus, as of the date hereof
and as of the Closing Date or any Option Closing Date (as hereinafter
defined), the Company is and will be the sole general partner of, and
does and will (assuming no conversion of outstanding units in the
Operating Partnership (the "Units") for Common Shares or exercises of
outstanding convertible securities of the Company or the Operating
Partnership prior to the Closing Date, and subject to adjustment to
reflect the issuance of the Firm Shares as of any Option Closing
Date) own an approximately 94% partnership interest in, the Operating
Partnership, (ii) except as described in the Prospectus, the
Operating Partnership does and will directly, indirectly or through
co-investment joint ventures own each of the 76 multi-family
apartment communities (the "Properties") defined in the Company's
Annual Report on Form 10-K for the year ended December 31, 2003 and
incorporated by reference into the Prospectus as "The Communities,"
(except for Downtown Austin which is subject to a ground lease (the
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"Ground Lease")) (iii) the Operating Partnership is and will be the
sole general partner (except in the case of co-investment joint
ventures which constitute general partnerships) or managing member of
each of the co-investment joint ventures (the "Co-Investment Joint
Ventures") which own the Co-Investment Communities as described in
the Company's Annual Report on Form 10-K for the year ended
December 31, 2003 and incorporated by reference into the Prospectus,
(iv) the Operating Partnership does and will own (A) 100% of the
capital stock of AIA, (B) 100% of the preferred stock of the
Management Company and (C) 1,000 of the 1,056 outstanding shares of
common stock of the Management Company, and the Management Company
does own and will own 100% of the membership interests in Amrescon
and (v) the Operating Partnership does and will own certain parcels
of land described in the Prospectus upon which it intends to commence
development (the "Land Parcels"). For purposes of this Agreement,
the Service Companies and the Co-Investment Joint Ventures are
collectively referred to as the "Subsidiaries."
(d) The Company has been duly organized, is validly existing
as a real estate investment trust in good standing under the laws of
the jurisdiction of its organization, has the power and authority to
own its property and to conduct its business as described in the
Prospectus and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or
its ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be in
good standing would not have a material adverse effect on the
Company, the Operating Partnership and the Subsidiaries, taken as a
whole.
(e) Each of the Service Companies has been duly incorporated,
is validly existing as a corporation or limited liability company in
good standing under the laws of the jurisdiction of its
incorporation, has the corporate or limited liability company power
and authority to own its property and to conduct its business as
described in the Prospectus and is duly qualified to transact
business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to
be so qualified or be in good standing would not have a material
adverse effect on the Company, the Operating Partnership and the
Subsidiaries, taken as a whole. All of the issued shares of capital
stock of each of AIA and the Management Company have been duly and
validly authorized and issued, are fully paid and non-assessable,
free and clear of all liens, encumbrances, equities or claims.
(f) The Operating Partnership has been duly formed and is
validly existing as a limited partnership in good standing under the
laws of the jurisdiction of its formation, has the partnership power
and authority to own its property and to conduct its business as
described in the Prospectus and is duly qualified to transact
business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to
be so qualified or be in good standing would not have a material
adverse effect on the Company, the Operating Partnership and the
Subsidiaries, taken as a whole. The Operating Partnership and the
other subsidiaries identified in the Registration Statement are the
only subsidiaries of the Company required to be identified as such in
the Company's Annual Report on Form 10-K pursuant to Item 601 of
Regulation S-K.
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(g) Each Co-Investment Joint Venture has been duly formed and
is validly existing as a limited or general partnership or limited
liability company, as the case may be, in good standing (in the case
of each limited partnership or limited liability company) under the
laws of the jurisdiction of its formation, has the partnership power
and authority to own its property and to conduct its business as
described in the Prospectus and is duly qualified to transact
business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to
be so qualified or be in good standing would not have a material
adverse effect on the Company, the Operating Partnership and the
Subsidiaries, taken as a whole. As of the Closing Date or any Option
Closing Date, as applicable, all of the partnership or limited
liability company interests of each Co-Investment Joint Venture will
be duly authorized for issuance and validly issued and fully paid, in
each case free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity. Each partnership agreement
relating to a Co-Investment Joint Venture is in full force and
effect.
(h) This Agreement has been duly authorized, executed and
delivered by the Company and the Operating Partnership.
(i) The authorized shares of beneficial interest of the
Company conform as to legal matters to the description thereof
contained in the Prospectus.
(j) The Common Shares outstanding prior to the issuance of
the Shares have been duly authorized and are validly issued, fully
paid and non-assessable; and the Company has duly reserved a
sufficient number of Common Shares for issuance upon exchange of
outstanding Units.
(k) The Shares have been duly authorized and, when issued and
delivered in accordance with the terms of this Agreement and in the
manner described in the Prospectus, will be validly issued, fully
paid and non-assessable, and the issuance of such Shares will not be
subject to any preemptive or similar rights.
(l) The execution and delivery by the Company and the
Operating Partnership of, and the performance by each of the Company
and the Operating Partnership of its obligations under, this
Agreement will not contravene any provision of applicable law or the
declaration of trust or by-laws of the Company or the partnership
agreement of the Operating Partnership or any agreement or other
instrument binding upon the Company, the Operating Partnership and
the Subsidiaries that is material to the Company, the Operating
Partnership and the Subsidiaries, taken as a whole, or any judgment,
order or decree of any governmental body, agency or court having
jurisdiction over the Company, the Operating Partnership or any
Subsidiary, and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for
the performance by either of the Company or the Operating Partnership
of its obligations under this Agreement, except such as may be
required by the securities or Blue Sky laws of the various states in
connection with the offer and sale of the Shares.
(m) There has not occurred any material adverse change, or
any development involving a prospective material adverse change, in
the condition, financial or otherwise, or in the earnings, business
or operations of the Company, the Operating Partnership and the
Subsidiaries, taken as a whole, from that set forth in the
Prospectus.
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(n) Since the respective dates as of which information is
given in the Prospectus, except as otherwise stated therein, (A)
there have been no transactions entered into by the Company, the
Operating Partnership or any of the Subsidiaries, other than those in
the ordinary course of business, which are material with respect to
the Properties (taken as a whole) or to the Company, (B) there has
been no casualty loss or condemnation or other adverse event with
respect to any Property that is material with respect to the
Properties (taken as a whole), (C) there has been no dividend or
distribution of any kind declared, paid or made by the Company or the
Service Companies on any class of their capital stock or shares of
beneficial interest or by the Operating Partnership or any Co-
Investment Joint Venture with respect to their partnership interests,
and (D) there has been no change in the capital stock or shares of
beneficial interest of the Company or the Service Companies or in the
partnership interests of the Operating Partnership or any Co-
Investment Joint Venture, or any material increase in the
indebtedness of the Company, the Operating Partnership or any of the
Subsidiaries, taken as a whole.
(o) There are no legal or governmental proceedings pending
or, to the knowledge of the Company, threatened to which the Company
or any of its subsidiaries is a party or to which any of the
properties of the Company or any of its subsidiaries is subject that
are required to be described in the Registration Statement or the
Prospectus and are not so described or any statutes, regulations,
contracts or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits
to the Registration Statement that are not described or filed as
required.
(p) Each preliminary prospectus filed as part of the
Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the Securities
Act, complied when so filed in all material respects with the
Securities Act and the applicable rules and regulations of the
Commission thereunder.
(q) Neither the Company nor the Operating Partnership is, and
after giving effect to the offering and sale of the Shares and the
application of the proceeds thereof as described in the Prospectus
will not be, required to register as an "investment company" as such
term is defined in the Investment Company Act of 1940, as amended.
(r) The Company, the Operating Partnership and the
Subsidiaries own or have a royalty-free license to use all of the
trademarks, service marks and trade names (collectively, the
"Proprietary Rights") presently employed by them in connection with
the business now engaged by them or proposed to be engaged by them as
described in the Prospectus, and neither the Company, the Operating
Partnership nor the Subsidiaries have received any notice or are
otherwise aware of any infringement of or conflict with asserted
rights of others with respect to any Proprietary Rights, or of any
facts which would render any of the Proprietary Rights invalid or
inadequate to protect the interest of the Company, the Operating
Partnership or any of the Subsidiaries therein, and which
infringement or conflict (if the subject of any unfavorable decision,
ruling or finding) or invalidity or inadequacy, individually or in
the aggregate, would have a material adverse effect on the Company,
the Operating Partnership and the Subsidiaries, taken as a whole.
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(s) Each of the Company, the Operating Partnership and the
Subsidiaries possesses such certificates, authorizations or permits
issued by the appropriate state, Federal or foreign regulatory
agencies or bodies necessary to conduct the business now operated by
them or proposed to be operated by them as described in the
Prospectus, and none of such entities has received any notice of
proceedings relating to the revocation or modification of any such
certificate, authorization or permit which, individually or in the
aggregate, if the subject of an unfavorable decision, ruling or
finding, would have a material adverse effect on the Company, the
Operating Partnership and the Subsidiaries, taken as a whole.
(t) Each of the Company, the Operating Partnership and the
Subsidiaries (i) are in compliance with any and all applicable
foreign, Federal, state and local laws and regulations relating to
the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (ii) have received all permits, licenses or
other approvals required of them under applicable Environmental Laws
to conduct their respective businesses and (iii) are in compliance
with all terms and conditions of any such permit, license or
approval, except where such noncompliance with Environmental Laws,
failure to receive required permits, licenses or other approvals or
failure to comply with the terms and conditions of such permits,
licenses or approvals would not, singly or in the aggregate, have a
material adverse effect on the Company, the Operating Partnership and
the Subsidiaries, taken as a whole.
(u) Neither the Company nor the Operating Partnership has
knowledge of (a) the presence of any hazardous substances, hazardous
materials, toxic substances or waste materials (collectively,
"Hazardous Materials") on any of the properties owned by it or any
Subsidiaries in violation of law or in excess of regulatory action
levels or (b) any unlawful spills, releases, discharges or disposal
of Hazardous Materials that have occurred or are presently occurring
on or off such properties as a result of any construction on or
operation and use of such properties, which presence or occurrence
would have a materially adverse effect on the Company, the Operating
Partnership and the Subsidiaries, taken as a whole; and in connection
with the construction on or operation and use of the properties owned
by the Company, the Operating Partnership or the Subsidiaries, none
has any knowledge of any material failure to comply with all
applicable local, state and Federal environmental laws, regulations,
agency requirements, ordinances and administrative and judicial
orders.
(v) There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties
or compliance with Environmental Laws or any permit, license or
approval, any related constraints on operating activities and any
potential liabilities to third parties) which would, singly or in the
aggregate, have a material adverse effect on the Company, the
Operating Partnership and the Subsidiaries, taken as a whole.
(w) There are no contracts, agreements or understandings
between the Company and any person granting such person the right to
require the Company to file a registration statement under the
Securities Act with respect to any securities of the Company or to
require the Company to include such securities with the Shares
registered pursuant to the Registration Statement.
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(x) Except as disclosed in the Prospectus, or except to the
extent that the inaccuracy of any of the following, either
individually or in the aggregate, would not have a material adverse
effect on the Company, the Operating Partnership and the
Subsidiaries, taken as a whole: (A) At the Closing Date and any
Option Closing Date, as applicable, the Operating Partnership or the
Co-Investment Joint Ventures (other than with respect to the Ground
Lease) will have good and marketable fee simple title (or, with
respect to Properties located in Texas, good and indefeasible title)
to the land underlying each of the Properties and good and marketable
title to the improvements thereon (in each case with title insurance
thereon in full force and effect and which is adequate in accordance
with industry standards) and all other assets that are required for
the effective operation of such Properties in the manner in which
they currently are operated subject only to Permitted Exceptions (as
hereinafter defined); (B) at the Closing Date and any Option Closing
Date, as applicable, the leases under which the Company, the
Operating Partnership or the Subsidiaries will lease any property as
lessee will be in full force and effect, and neither the Company, the
Operating Partnership nor any Subsidiary will be in default in any
material respect of any of the terms or provisions of any of such
leases and no claim has been asserted by anyone adverse to any such
entity's rights as lessee under any of such leases, or affecting or
questioning any such entity's right to the continued possession or
use of the properties under any such leases or asserting a default
under any such leases; (C) all liens, charges or encumbrances on or
affecting any of the Properties or the other property and assets of
the Company, the Operating Partnership or any of the Subsidiaries
which are required to be disclosed in the Prospectus are disclosed
therein; (D) neither the Company, the Operating Partnership, any Co-
Investment Joint Venture nor, to the knowledge of the Company, the
Operating Partnership or the Subsidiaries, any tenant of any of the
Properties is in default under any of the leases pursuant to which
the Operating Partnership or any Co-Investment Joint Venture, as
lessor, will lease its Property as of the Closing Date and any Option
Closing Date, as applicable, and none of the Company, the Operating
Partnership or any of the Subsidiaries knows of any event which, but
for the passage of time or the giving of notice, or both, would
constitute a default under any of such leases; (E) at the Closing
Date and any Option Closing Date, as applicable, the Operating
Partnership or the Co-Investment Joint Ventures (or the Management
Company as agent for the Co-Investment Joint Ventures or the
Operating Partnership) will be the lessor of all tenant leases at
each of the Properties; (F) each of the Properties complies with all
applicable Federal, state and local codes, laws and regulations
(including, without limitation, building and zoning codes, laws and
regulations and laws relating to handicapped access to the
Properties); (G) none of the Company, the Operating Partnership or
any of the Subsidiaries has knowledge of any pending or threatened
condemnation proceedings, zoning change, or other proceeding or
action that will in any manner adversely affect the size of, use of,
improvements on, construction on or access to the Properties; and (H)
neither the Company, the Operating Partnership nor any of the
Subsidiaries has received from any governmental authority notice of
any violation of any municipal, state or Federal law, rule or
regulation (including relating to environmental matters) concerning
the Properties or any part thereof which has not heretofore been
cured. As used in this Agreement, "Permitted Exceptions" means: (i)
real estate taxes and assessments not yet delinquent; (ii) covenants,
restrictions, easements and other similar agreements, provided that
the same are not violated by existing improvements or the current use
and operation of a Property; (iii) zoning laws, ordinances and
regulations, building codes, rules and other governmental laws,
regulations, rules and orders affecting each Property, provided that
the same are not violated by existing improvements or the current use
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and operation of a Property; (iv) any state of facts disclosed by the
surveys relating to the Properties; (v) any minor imperfection of
title which does not affect the current use, operation or enjoyment
of a Property and does not render title to such Property unmarketable
or uninsurable and does not impair the value of such Property; and
(vi) mortgage financing as described in the Prospectus.
(y) (A) As of the Closing Date and any Option Closing Date,
as applicable, except as set forth in the Prospectus, no person or
entity will have an option or right of first refusal (except for buy
sell or similar provisions, in the case of the Co-Investment Joint
Ventures, as set forth in the partnership or limited liability
company agreements of the partnerships or limited liability companies
that own the Co-Investment Joint Ventures) to purchase all or any
part of any Property or any interest therein; and (B) there is in
effect for the Properties and other assets of the Company, the
Operating Partnership and the Subsidiaries insurance coverages
(including title insurance) that are commercially reasonable and
adequate for the types of assets and properties owned, operated or
managed by them, and neither the Company, the Operating Partnership,
nor any Subsidiary has received from any insurance company notice of
any material defects or deficiencies affecting the insurability of
any of the Properties or such other assets.
(z) The statements set forth in the Registration Statement
under the captions "Description of Common Shares", "Description of
Preferred Shares", " Description of Securities Warrants",
"Description of Provisions of Maryland Law and Our Declaration of
Trust and Bylaws" and "Underwriting" are, and the statements made in
the Prospectus as amended or supplemented under corresponding or
similar captions to the extent made are, insofar as such statements
constitute a summary of the terms of the Securities and the laws and
documents referred to therein, are accurate and complete in all
material respects.
(aa) KPMG LLP, who have certified certain financial statements
of the Company and its subsidiaries, are independent public
accountants are required by the Securities Act and the rules and
regulations of the Commission thereunder.
(bb) Commencing with its taxable year ended December 31, 1994,
the Company has been, and upon the sale of the Shares, the Company
will continue to be, organized and operated in conformity with the
requirements for qualification and taxation as a real estate
investment trust (a "REIT") under the Internal Revenue Code of 1986,
as amended (the "Code"), and the Company's proposed method of
operation as described in the Prospectus will enable it to continue
to meet the requirements for qualification and taxation as a REIT
under the Code, and no actions have been taken (or not taken which
are required to be taken) which would cause such qualification to be
lost.
(cc) The financial statements of the Company (including all
notes and schedules thereto) included or incorporated by reference in
the Registration Statement and Prospectus present fairly the
financial position, the results of operations, the statements of cash
flows and the statements of stockholders' equity and the other
information purported to be shown therein of the Company at the
respective dates and for the respective periods to which they apply.
Such financial statements and related schedules and notes have been
prepared in conformity with United States generally accepted
accounting principles, consistently applied throughout the periods
involved, and all adjustments necessary for a fair presentation of
the results for such periods have been made.
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(dd) Neither the Company, nor to its knowledge, any of its
officers, directors or affiliates has taken, or will take, directly
or indirectly, any action designed to or which might reasonably be
expected to cause or result in, or which has constituted or which
might reasonably be expected to constitute, the stabilization or
manipulation of the price of the Common Shares or any security
convertible into or exchangeable for Common Shares to facilitate the
sale or resale of any of the Shares.
(ee) The Company, the Operating Partnership, and each of the
Subsidiaries have timely and duly filed all material Tax Returns
required to be filed by them, and all such Tax Returns are true,
correct and complete in all material respects. The Company, the
Operating Partnership, and each of the Subsidiaries have timely and
duly paid in full all material Taxes required to be paid by them
(whether or not such amounts are shown as due on any Tax Return).
There are no Federal, state, or other Tax audits or deficiency
assessments proposed or pending with respect to the Company, the
Operating Partnership or any of the Subsidiaries, and no such audits
or assessments are threatened. As used herein, the terms "Tax" or
"Taxes" mean (i) all Federal, state, local, and foreign taxes, and
other assessments of a similar nature (whether imposed directly or
through withholding), including any interest, additions to tax, or
penalties applicable thereto, imposed by any governmental authority,
and (ii) all liabilities in respect of such amounts arising as a
result of being a member of any affiliated, consolidated, combined,
unitary or similar group, as a successor to another person or by
contract. As used herein, the term "Tax Returns" means all Federal,
state, local, and foreign Tax returns, declarations, statements,
reports, schedules, forms, and information returns and any amendments
thereto filed or required to be filed with any governmental
authority.
(ff) There are no rulemaking or similar proceedings before the
United States Internal Revenue Service or comparable Federal, state,
local or foreign government bodies which involve or affect the
Company or any subsidiary, which, if the subject of an action
unfavorable to the Company or any subsidiary, could result in a
material adverse effect on the Company, the Operating Partnership and
the Subsidiaries, taken as a whole.
(gg) The Common Shares are registered pursuant to Section
12(b) of the Exchange Act. The Shares have been approved for listing
on the New York Stock Exchange ("NYSE"), subject to notice of
issuance. A registration statement has been filed on Form 8-A
pursuant to Section 12 of the Exchange Act, which registration
statement complies in all material respects with the Exchange Act.
The Company has taken no action designed to, or likely to have the
effect of, terminating the registration of the Common Shares under
the Exchange Act or the listing of the Common Shares on the NYSE, nor
has the Company received any notification that the Commission or the
NYSE is contemplating terminating such registration or listing.
(hh) The books, records and accounts of the Company and its
subsidiaries accurately and fairly reflect, in reasonable detail, the
transactions in, and dispositions of, the assets of, and the results
of operations of, the Company and its subsidiaries. The Company and
each of its subsidiaries maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or
specific authorizations, (ii) transactions are recorded as necessary
to permit preparation of financial statements in accordance with
United States generally accepted accounting principles and to
maintain asset accountability, (iii) access to assets is permitted
only in accordance with management's general or specific
authorization and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
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(ii) No material labor dispute with the employees of the
Company, the Operating Partnership or any of the Subsidiaries exists
or, to the knowledge of the Company, is threatened, which disputes
would reasonably be expected to have a material adverse effect on the
Company, the Operating Partnership and the Subsidiaries taken as a
whole; and none of the Company, the Operating Partnership and the
Subsidiaries are aware of any existing, threatened or imminent labor
disturbance by the employees of any of the principal suppliers,
manufacturers or collaborators of the Company or its subsidiaries
that could have a material adverse effect on the Company, the
Operating Partnership and the Subsidiaries, taken as a whole.
(jj) The Company, the Operating Partnership and the
Subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts in
all material respects as are customary in the businesses in which
they are engaged or propose to engage after giving effect to the
transactions described in the Prospectus including but not limited
to, real or personal property owned or leased against theft, damage,
destruction, act of vandalism and all other risks customarily insured
against. All policies of insurance and fidelity or surety bonds
insuring the Company, the Operating Partnership or any of the
Subsidiaries or the Company's, the Operating Partnership's or
Subsidiaries' respective businesses, assets, employees, officers and
directors are in full force and effect. The Company, the Operating
Partnership and each of the subsidiaries are in compliance with the
terms of such policies and instruments in all material respects.
Neither the Company, the Operating Partnership nor any Subsidiary has
reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to
continue its business at a cost that would not have a material
adverse effect on the Company, the Operating Partnership and the
Subsidiaries, taken as a whole. Within the past twelve months,
neither the Company, the Operating Partnership nor any Subsidiary has
been denied any insurance coverage which it has sought or for which
it has applied.
(kk) The Company, the Operating Partnership and the
Subsidiaries or any person acting on behalf of the Company, the
Operating Partnership and the Subsidiaries including, without
limitation, any director, officer, agent or employee of the Company
or its subsidiaries has not, directly or indirectly, while acting on
behalf of the Company, the Operating Partnership and the Subsidiaries
(i) used any corporate funds for unlawful contributions, gifts,
entertainment or other unlawful expenses relating to political
activity; (ii) made any unlawful payment to foreign or domestic
government officials or employees or to foreign or domestic political
parties or campaigns from corporate funds; (iii) violated any
provision of the Foreign Corrupt Practices Act of 1977, as amended;
or (iv) made any other unlawful payment.
(ll) Each description of a contract, document or other
agreement in the Prospectus fairly reflects in all respects the
material terms of the underlying document, contract or agreement.
Each agreement described in the Prospectus or listed in the exhibits
to the Registration Statement or incorporated by reference is in full
force and effect and is valid and enforceable by and against the
Company, the Operating Partnership or any Subsidiary, as the case may
be, in accordance with its terms.
10
(mm) None of the Company, the Operating Partnership or the
Subsidiaries is (i) in violation of its declaration of trust,
charter, by-laws, certificate of limited partnership, partnership
agreement or other governing document or (ii) in default in any
material respect, and no event has occurred which, with notice or
lapse of time or both, would constitute such a default, in the due
performance or observance of any term, covenant or condition
contained in any indenture, mortgage, deed of trust, credit agreement
or other agreement or instrument to which it is a party or by which
it is bound or to which any of its property or assets is subject,
except for any default described in clause (ii) which would not have
a material adverse effect on the Company, the Operating Partnership
and the Subsidiaries, taken as a whole.
2. AGREEMENTS TO SELL AND PURCHASE. The Company hereby agrees to
sell to the several Underwriters, and each Underwriter, upon the basis of
the representations and warranties herein contained, but subject to the
conditions hereinafter stated, agrees, severally and not jointly, to
purchase from the Company the respective numbers of Firm Shares set forth
in Schedule I hereto opposite its name at $27.45 a share (the "Purchase
Price").
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to
sell to the Underwriters the Additional Shares, and the Underwriters shall
have the right to purchase, severally and not jointly, up to 450,000
Additional Shares at the Purchase Price. You may exercise this right on
behalf of the Underwriters in whole or from time to time in part by giving
written notice of each election to exercise the option not later than 30
days after the date of this Agreement. Any exercise notice shall specify
the number of Additional Shares to be purchased by the Underwriters and the
date on which such shares are to be purchased. Each purchase date must be
at least two business days after the written notice is given and may not be
earlier than the closing date for the Firm Shares nor later than ten
business days after the date of such notice. Additional Shares may be
purchased as provided in Section 4 hereof solely for the purpose of
covering over-allotments made in connection with the offering of the Firm
Shares. On each day, if any, that Additional Shares are to be purchased
(an "Option Closing Date"), each Underwriter agrees, severally and not
jointly, to purchase the number of Additional Shares (subject to such
adjustments to eliminate fractional shares as you may determine) that bears
the same proportion to the total number of Additional Shares to be
purchased on such Option Closing Date as the number of Firm Shares set
forth in Schedule I hereto opposite the name of such Underwriter bears to
the total number of Firm Shares.
The Company hereby agrees that, without the prior written consent of
▇▇▇▇▇▇ Brothers Inc. on behalf of the Underwriters, it will not, during the
period ending 90 days after the date of the Prospectus, (i) offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase
any option or contract to sell, grant any option, right or warrant to
purchase, lend, or otherwise transfer or dispose of, directly or
indirectly, any Common Shares or any securities convertible into or
exercisable or exchangeable for Common Shares or (ii) enter into any swap
or other arrangement that transfers to another, in whole or in part, any of
the economic consequences of ownership of the Common Shares, whether any
such transaction described in clause (i) or (ii) above is to be settled by
delivery of Common Shares or such other securities, in cash or otherwise.
The foregoing sentence shall not apply to (A) the Shares to be sold
hereunder, (B) the issuance by the Company of Common Shares upon the
exercise of an option or warrant or the conversion of a security
outstanding on the date hereof which are described in the Prospectus, (C)
the grant of options to purchase Common Shares pursuant to the Company's,
the Operating Partnership's and the Service Companies' existing employee,
trustee or director benefit plans or (D) the issuance of Units in
connection with the acquisition of property, directly or indirectly, by the
Operating Partnership, notice of which shall be provided to the
Underwriters promptly following any such issuance.
11
3. TERMS OF PUBLIC OFFERING. The Company is advised by you that
the Underwriters propose to make a public offering of the Shares as soon
after the Registration Statement and this Agreement have become effective
as in your judgment is advisable. The Company is further advised by you
that the Shares are to be offered to the public initially at $27.80 a
share.
4. PAYMENT AND DELIVERY. Payment for the Firm Shares shall be
made to the Company in Federal or other funds immediately available in New
York City against delivery of such Firm Shares for the respective accounts
of the several Underwriters at 10:00 a.m., New York City time, on March 19,
2004, or at such other time on the same or such other date, not later than
March 19, 2004, as shall be designated in writing by you.
Payment for any Additional Shares shall be made to the Company in
Federal or other funds immediately available in New York City against
delivery of such Additional Shares for the respective accounts of the
several Underwriters at 10:00 a.m., New York City time, on the date
specified in the corresponding notice described in Section 2 or at such
other time on the same or on such other date, in any event not later than
April 15, 2004, as shall be designated in writing by you.
The Firm Shares and Additional Shares shall be registered in such
names and in such denominations as you shall request in writing not later
than one full business day prior to the Closing Date or the applicable
Option Closing Date, as the case may be. The Firm Shares and Additional
Shares shall be delivered to you on the Closing Date or an Option Closing
Date, as the case may be, for the respective accounts of the several
Underwriters, with any transfer taxes payable in connection with the
transfer of the Shares to the Underwriters duly paid, against payment of
the Purchase Price therefor.
5. CONDITIONS TO THE UNDERWRITERS OBLIGATIONS. The obligations of
the Underwriters are subject to the following further conditions:
(a) Subsequent to the execution and delivery of this
Agreement and prior to the Closing Date:
(i) there shall not have occurred any downgrading, nor
shall any notice have been given of any intended or potential
downgrading or of any review for a possible change that does
not indicate the direction of the possible change, in the
rating accorded any of the Company's securities by any
"nationally recognized statistical rating organization," as
such term is defined for purposes of Rule 436(g)(2) under the
Securities Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or
operations of the Company, the Operating Partnership and the
Subsidiaries, taken as a whole, from that set forth in the
Prospectus (exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement) that, in your
judgment, is material and adverse and that makes it, in the
your judgment, impracticable to market the Shares on the terms
and in the manner contemplated in the Prospectus.
(b) The Underwriters shall have received on the Closing Date
a certificate, dated the Closing Date and signed by the Company's (i)
Chairman of the Board, Vice Chairman of the Board, President or a
Vice President and (ii) chief financial officer, in their capacities
as officers of the Company and as officers of the general partner of
the Operating Partnership to the effect:
(i) as set forth in Section 5(a) above;
12
(ii) that the representations and warranties of the
Company and the Operating Partnership contained in this
Agreement are true and correct as of the Closing Date and that
each of the Company and the Operating Partnership has complied
with all of the agreements and satisfied all of the conditions
on its part to be performed or satisfied hereunder on or before
the Closing Date;
(iii) that no stop order suspending the effectiveness of
the Registration Statement has been issued and, to the best of
each such officers' knowledge, no proceeding for that purpose
is pending or threatened by the Commission; and
(iv) that all filings required by Rule 424(b) under the
Securities Act have been made.
The officer signing and delivering such certificate may rely
upon the best of his or her knowledge as to proceedings
threatened.
(c) The Underwriters shall have received on the Closing Date
an opinion of ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ & Maw LLP, outside counsel for the
Company, dated the Closing Date, to the effect that:
(i) the Company has been duly organized, is validly
existing as a real estate investment trust in good standing
under the laws of the jurisdiction of its organization, has the
power and authority to own its property and to conduct its
business as described in the Prospectus and is duly qualified
to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be
in good standing would not have a material adverse effect on
the Company, the Operating Partnership and the Subsidiaries,
taken as a whole;
(ii) each of the Service Companies has been duly formed,
is validly existing as a corporation or limited liability
company, as applicable, in good standing under the laws of the
jurisdiction of its formation, has the corporate or limited
liability company power and authority to own its property and
to conduct its business as described in the Prospectus and is
duly qualified to transact business and is in good standing in
each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be
in good standing would not have a material adverse effect on
the Company, the Operating Partnership and the Subsidiaries,
taken as a whole. To such counsel's knowledge after due
inquiry, the Operating Partnership and the other subsidiaries
identified in the Registration Statement are the only
subsidiaries of the Company required to be identified as such
in the Company's Annual Report on Form 10-K pursuant to Item
601 of Regulation S-K;
13
(iii) the Operating Partnership has been duly formed is
validly existing as a limited partnership in good standing
under the laws of the jurisdiction of its organization, has the
power and authority to own its property and to conduct its
business as described in the Prospectus and is duly qualified
to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be
in good standing would not have a material adverse effect on
the Company, the Operating Partnership and the Subsidiaries,
taken as a whole. The Company is the sole general partner of
the Operating Partnership and is the holder of record of ______
Units, or approximately ____% of the _______ issued and
outstanding Units (such counsel to supply the appropriate
numbers and percentages as of the Closing Date or any Option
Closing Date, as applicable);
(iv) the shares of beneficial interest outstanding prior
to the issuance of the Shares have been duly authorized and are
validly issued, fully paid and non-assessable;
(v) all of the issued shares of capital stock of AIA
have been duly and validly authorized and issued, are fully
paid and non-assessable and are owned directly by the Operating
Partnership, free and clear of all liens, encumbrances equities
or claims; all of the issued shares of capital stock of the
Management Company have been duly and validly authorized and
issued, are fully paid and non-assessable and the Operating
Partnership directly owns all of the shares of preferred stock
of the Management Company free and clear of all liens,
encumbrances equities or claims and 1,000 of the 1,056
outstanding shares of common stock of the Management Company
free and clear of all liens, encumbrances, equities or claims;
(vi) the Shares have been duly authorized and, when
issued and delivered in accordance with the terms of this
Agreement and in the manner described in the Prospectus, will
be validly issued, fully paid and non-assessable, and the
issuance of such Shares will not be subject to any preemptive
or similar rights;
(vii) this Agreement has been duly authorized, executed
and delivered by the Company and the Operating Partnership;
(viii) the execution and delivery by each of the Company
and the Operating Partnership of, and the performance by each
of the Company and the Operating Partnership of its obligations
under, this Agreement will not contravene any provision of
applicable law or the declaration of trust, charter, by-laws,
certificate of limited partnership, partnership agreement or
other governing document of the Company, the Operating
Partnership or any of the Subsidiaries or, to the best of such
counsel's knowledge, any agreement or other instrument binding
upon the Company, the Operating Partnership or any of the
Subsidiaries that is material to the Company, the Operating
Partnership and the Subsidiaries, taken as a whole, or, to the
best of such counsel's knowledge, any judgment, order or decree
of any governmental body, agency or court having jurisdiction
over the Company, the Operating Partnership or any of the
Subsidiaries, and no consent, approval, authorization or order
of, or qualification with, any governmental body or agency is
required for the performance by either of the Company or the
Operating Partnership of its obligations under this Agreement,
except such as may be required by the securities or Blue Sky
laws of the various states in connection with the offer and
sale of the Shares;
14
(ix) the statements relating to legal matters, documents
or proceedings included in (A) the Prospectus under the
captions "Description of Common Shares", "Description of
Preferred Shares", " Description of Securities Warrants",
"Description of Provisions of Maryland Law and Our Declaration
of Trust and Bylaws" and "Underwriting" and (B) the
Registration Statement in Item 15, in each case fairly
summarize in all material respects such matters, documents or
proceedings;
(x) the information in the Prospectus under the heading
"Federal Income Tax Considerations" to the extent that such
information constitutes matters of law or legal conclusions, is
accurate and complete in all material respects;
(xi) beginning with the Company's taxable year ending
December 31, 1994, (A) the Company has been organized in
conformity with the requirements for qualification as a REIT
under the Code, and (B) the Company's actual and proposed
method of operation has enabled it and will continue to enable
it to satisfy the requirements for qualification and taxation
as a REIT;
(xii) the Operating Partnership will be treated for
Federal income tax purposes as a partnership, and not as an
association taxable as a corporation;
(xiii) after due inquiry, such counsel does not know of
any legal or governmental proceedings pending or threatened to
which the Company, the Operating Partnership or any of the
Subsidiaries is a party or to which any of the properties of
the Company, the Operating Partnership or any of the
Subsidiaries is subject that are required to be described in
the Registration Statement or the Prospectus and are not so
described or of any statutes, regulations, contracts or other
documents that are required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as
required;
(xiv) the Registration Statement has been declared
effective under the Securities Act, and to such counsel's
knowledge after due inquiry, no stop order suspending the
effectiveness of the Registration Statement has been issued
under the Securities Act or proceedings therefor initiated or
threatened by the Commission;
(xv) except as disclosed in the Prospectus, to the
knowledge of such counsel, none of the Company, the Operating
Partnership or any of the Subsidiaries is in violation of its
declaration of trust, charter, by-laws, certificate of limited
partnership, partnership agreement or other governing document,
as the case may be, and none of such entities is in default in
the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture,
mortgage, loan agreement, note, lease or other instrument to
which such entity is or was a party or by which such entity may
be bound or affected, or to which any of the property or assets
of such entity is subject, except to the extent that any of the
foregoing, either individually or in the aggregate, would not
have a material adverse effect on the Company, the Operating
Partnership or the Subsidiaries, taken as a whole;
(xvi) to such counsel's knowledge after due inquiry,
there are no persons with registration or other similar rights
to have any securities of the Company, the Operating
Partnership or the Subsidiaries registered pursuant to the
Registration Statement;
15
(xvii) neither the Company, the Operating Partnership nor
any Subsidiary is, and after giving effect to the offering and
sale of the Shares and the application of the proceeds thereof
as described in the Prospectus will not be, required to
register as an "investment company" as such term is defined in
the Investment Company Act of 1940, as amended; and
(xviii) nothing has come to the attention of such counsel
that causes such counsel to believe that (A) any document filed
pursuant to the Exchange Act and incorporated by reference in
the Registration Statement and the Prospectus (except for the
financial statements and financial schedules and other
financial and statistical data included therein, as to which
such counsel need not express any belief) did not comply when
so filed as to form in all material respects with the
requirements of the Securities Act and the applicable rules and
regulations of the Commission thereunder; (B) the Registration
Statement or the Prospectus (except for the financial
statements and financial schedules and other financial and
statistical data included therein, as to which such counsel
need not express any belief) do not comply as to form in all
material respects with the requirements of the Securities Act
and the applicable rules and regulations of the Commission
thereunder, (C) the Registration Statement or the prospectus
included therein (except for the financial statements and
financial schedules and other financial and statistical data
included therein, as to which such counsel need not express any
belief) at the time the Registration Statement became effective
contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or
necessary to make the statements therein not misleading or (D)
the Prospectus (except for the financial statements and
financial schedules and other financial and statistical data
included therein, as to which such counsel need not express any
belief) as of its date or as of the Closing Date contained or
contains an untrue statement of a material fact or omitted or
omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading.
(d) The Underwriters shall have received on the Closing Date
an opinion of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for
the Underwriters, dated the Closing Date, covering the matters
referred to in Sections 5(c)(vi), 5(c)(vii), 5(c)(x) (but only as to
the statements in the Prospectus under "Underwriters") and clauses
(C) and (D) of Section 5(c)(xviii) above.
With respect to Section 5(c)(xviii) above, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ &
Maw LLP and Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP may state
that their beliefs are based upon their participation in the
preparation of the Registration Statement and Prospectus and
any amendments or supplements thereto and documents
incorporated by reference and review and discussion of the
contents, thereof, and review and discussion of the contents
thereof, but are without independent check or verification,
except as specified. With respect to clauses (C) and (D) of
Section 5(c)(viii), Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
may state that their beliefs are based upon their participation
in the preparation of the Registration Statement and Prospectus
and any amendments or supplements thereto (other than documents
incorporated by reference) and upon review and discussion of
the contents thereof (including documents incorporated by
reference), but are without independent check or verification
except as specified.
The opinion of ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ & Maw LLP described in Section
5(c) above shall be rendered to the Underwriters at the request
of the Company and shall so state therein.
16
(e) The Underwriters shall have received, on each of the date
hereof and the Closing Date, a letter dated the date hereof or the
Closing Date, as the case may be, in form and substance satisfactory
to the Underwriters, from KPMG LLP, independent public accountants,
containing statements and information of the type ordinarily included
in accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in
or incorporated by reference into the Registration Statement and the
Prospectus; PROVIDED that the letter delivered on the Closing Date
shall use a "cut-off date" not earlier than the date hereof.
(f) The "lock-up" agreements, each substantially in the form
of Exhibit A hereto (except as you may agree in writing as to any
particular officer or trustee), between you and certain shareholders,
officers and trustees of the Company relating to sales and certain
other dispositions of Common Shares or certain other securities,
delivered to you on or before the date hereof, shall be in full force
and effect on the Closing Date.
(g) The Prospectus shall have been timely filed with the
Commission in accordance with Section 5(a); no stop order suspending
the effectiveness of the Registration Statement or any part thereof
shall have been issued and no proceeding for that purpose shall have
been initiated or threatened by the Commission; and any request of
the Commission for inclusion of additional information in the
Registration Statement or the Prospectus or otherwise shall have been
complied with.
(h) The Underwriters shall not have discovered and disclosed
to the Company on or prior to the Closing Date and any Option Closing
Date that the Registration Statement or the Prospectus or any
amendment or supplement thereto contains an untrue statement of a
fact which, in the opinion of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇
LLP, counsel for the Underwriters, is material or omits to state a
fact which, in the opinion of such counsel, is material and is
required to be stated therein or is necessary to make the statements
therein not misleading.
(i) All corporate proceedings and other legal matters
incident to the authorization, form and validity of this Agreement,
the Shares, the Registration Statement and the Prospectus, and all
other legal matters relating to this Agreement and the transactions
contemplated hereby shall be reasonably satisfactory in all material
respects to counsel for the Underwriters and the Company shall have
furnished to such counsel all documents and information that they may
reasonably request to enable them to pass upon such matters.
(j) The New York Stock Exchange, Inc. shall have approved the
Shares for listing, subject only to official notice of issuance.
The several obligations of the Underwriters to purchase Additional
Shares hereunder are subject to the delivery to you on the applicable
Option Closing Date of such documents as you may reasonably request with
respect to the good standing of the Company, the due authorization and
issuance of the Additional Shares to be sold on such Option Closing Date
and other matters related to the issuance of such Additional Shares.
17
6. COVENANTS OF THE COMPANY. In further consideration of the
agreements of the Underwriters herein contained, the Company covenants with
each Underwriter as follows:
(a) To make no further amendment or any supplement to the
Registration Statement or to the Prospectus except as contemplated
herein; to advise the Underwriters, promptly after it receives notice
thereof, of the time when any amendment to the Registration Statement
has been filed or becomes effective or any supplement to the
Prospectus or any amended Prospectus has been filed and to furnish
the Underwriters with copies thereof; to advise the Underwriters,
promptly after it receives notice thereof, of the issuance by the
Commission of any stop order or of any order preventing or suspending
the use of any Preliminary Prospectus or the Prospectus, of the
suspension of the qualification of the Shares for offering or sale in
any jurisdiction, of the initiation or threatening of any proceeding
for any such purpose, or of any request by the Commission for the
amending or supplementing of the Registration Statement or the
Prospectus or for additional information; and, in the event of the
issuance of any stop order or of any order preventing or suspending
the use of any Preliminary Prospectus or the Prospectus or suspending
any such qualification, to use promptly its best efforts to obtain
its withdrawal.
(b) To furnish to the Underwriters, without charge, 3 signed
copies of the Registration Statement (including exhibits thereto and
documents incorporated by reference) and to furnish to you in New
York City, without charge, on Thursday March 18, 2004 and during the
period mentioned in Section 6(d) below, as many copies of the
Prospectus, any documents incorporated by reference, and any
supplements and amendments thereto or to the Registration Statement
as you may reasonably request.
(c) Before amending or supplementing the Registration
Statement or the Prospectus, to furnish to you a copy of each such
proposed amendment or supplement and not to file any such proposed
amendment or supplement to which you reasonably object, and to file
with the Commission within the applicable period specified in Rule
424(b) under the Securities Act any prospectus required to be filed
pursuant to such Rule.
(d) If, during such period after the first date of the public
offering of the Shares as in the reasonable opinion of counsel for
the Underwriters the Prospectus is required by law to be delivered in
connection with sales by an underwriter or dealer, any event shall
occur or condition exist as a result of which it is necessary to
amend or supplement the Prospectus in order to make the statements
therein, in the light of the circumstances when the Prospectus is
delivered to a purchaser, not misleading, or if, in the reasonable
opinion of counsel for the Underwriters, it is necessary to amend or
supplement the Prospectus to comply with applicable law, forthwith to
prepare, file with the Commission and furnish, at its own expense, to
the Underwriters and to the dealers (whose names and addresses you
will furnish to the Company) to which Shares may have been sold by
you on behalf of the Underwriters and to any other dealers upon
request, either amendments or supplements to the Prospectus so that
the statements in the Prospectus as so amended or supplemented will
not, in the light of the circumstances when the Prospectus is
delivered to a purchaser, be misleading or so that the Prospectus, as
amended or supplemented, will comply with law.
(e) To endeavor to qualify the Shares for offer and sale
under the securities or Blue Sky laws of such jurisdictions as you
shall reasonably request.
18
(f) 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 Shares.
(g) To use its reasonable best efforts to meet the
requirements to qualify, effective for the fiscal year ending
December 31, 2004, as a REIT under the Code.
(h) To apply the net proceeds from the sale of the Shares
being sold by the Company as set forth in the Prospectus.
(i) To take such steps as shall be necessary to ensure that
neither the Company nor any subsidiary shall become an "investment
company" within the meaning of such term under the 1940 Act and the
rules and regulations of the Commission thereunder.
(j) To make generally available to the Company's security
holders and to you as soon as practicable an earning statement
covering the twelve-month period ending March 31, 2005 that satisfies
the provisions of Section 11(a) of the Securities Act and the rules
and regulations of the Commission thereunder.
(k) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or
cause to be paid all expenses incident to the performance of its
obligations under this Agreement, including: (i) the fees,
disbursements and expenses of the Company's counsel and the Company's
accountants in connection with the registration and delivery of the
Shares under the Securities Act and all other fees or expenses in
connection with the preparation and filing of the Registration
Statement, any preliminary prospectus, the Prospectus and amendments
and supplements to any of the foregoing, including all printing costs
associated therewith, and the mailing and delivering of copies
thereof to the Underwriters and dealers, in the quantities
hereinabove specified, (ii) all costs and expenses related to the
transfer and delivery of the Shares to the Underwriters, including
any transfer or other taxes payable thereon, (iii) the cost of
printing or producing any Blue Sky or Legal Investment memorandum in
connection with the offer and sale of the Shares under state
securities laws and all expenses in connection with the qualification
of the Shares for offer and sale under state securities laws as
provided in Section 6(e) hereof, including filing fees and the
reasonable fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue
Sky or Legal Investment memorandum, (iv) all filing fees and the
reasonable fees and disbursements of counsel to the Underwriters
incurred in connection with the review and qualification of the
offering of the Shares by the National Association of Securities
Dealers, Inc. if any such review is required, (v) all costs and
expenses incident to listing the Shares on the NYSE, (vi) the cost of
printing certificates representing the Shares, (vii) the costs and
charges of any transfer agent, registrar or depositary, (viii) the
costs and expenses of the Company relating to investor presentations
on any "road show" undertaken in connection with the marketing of the
offering of the Shares, including, without limitation, expenses
associated with the production of road show slides and graphics, fees
and expenses of any consultants engaged in connection with the road
show presentations with the prior approval of the Company, travel and
lodging expenses of the representatives and officers of the Company
and any such consultants, and the cost of any aircraft chartered in
connection with the road show, (ix) the document production charges
19
and expenses associated with printing this Agreement and (x) all
other costs and expenses incident to the performance of the
obligations of the Company hereunder for which provision is not
otherwise made in this Section. It is understood, however, that
except as provided in this Section, Section 7 entitled "Indemnity and
Contribution", and the last paragraph of Section 9 below, the
Underwriters will pay all of their costs and expenses, including fees
and disbursements of their counsel, stock transfer taxes payable on
resale of any of the Shares by them and any advertising expenses
connected with any offers they may make.
7. INDEMNITY AND CONTRIBUTION. (a) The Company agrees to
indemnify and hold harmless each Underwriter, each person, if any, who
controls any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, and each affiliate of any
Underwriter within the meaning of Rule 405 under the Securities Act, from
and against any and all losses, claims, damages and liabilities (including,
without limitation, any legal or other expenses reasonably incurred in
connection with defending or investigating any such action or claim) caused
by any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or any amendment thereof, any
preliminary prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or
caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein
not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information relating to any
Underwriter furnished to the Company in writing by such Underwriter through
you expressly for use therein.
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who
sign the Registration Statement and each person, if any, who controls the
Company within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act to the same extent as the foregoing
indemnity from the Company to such Underwriter, but only with reference to
information relating to such Underwriter furnished to the Company in
writing by such Underwriter through you expressly for use in the
Registration Statement, any preliminary prospectus, the Prospectus or any
amendments or supplements thereto.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to Section 7(a) or 7(b), such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate in
such proceeding and shall pay the fees and disbursements of such counsel
related to such proceeding; provided, however, that the failure to notify
the indemnifying party shall not relieve it from any liability which it may
have under this Section 7 except to the extent it has been materially
prejudiced by such failure and, provided, further, that the failure to
notify the indemnifying party shall not relieve it from any liability which
it may have to an indemnified party otherwise than under this Section 7. In
any such proceeding, any indemnified party shall have the right to retain
its own counsel, but the fees and expenses of such counsel shall be at the
expense of such indemnified party unless (i) the indemnifying party and the
indemnified party shall have mutually agreed to the retention of such
counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified
party and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them.
It is understood that the indemnifying party shall not, in respect of the
legal expenses of any indemnified party in connection with any proceeding
or related proceedings in the same jurisdiction, be liable for the fees and
20
expenses of more than one separate firm (in addition to any local counsel)
for all such indemnified parties and that all such fees and expenses shall
be reimbursed as they are incurred. Such firm shall be designated in
writing by ▇▇▇▇▇▇ Brothers Inc., in the case of parties indemnified
pursuant to Section 7(a), and by the Company, in the case of parties
indemnified pursuant to Section 7(b). The indemnifying party shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment
for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as
contemplated by the second and third sentences of this paragraph, the
indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of
the aforesaid request and (ii) such indemnifying party shall not have
reimbursed the indemnified party in accordance with such request prior to
the date of such settlement. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party
is or could have been a party and indemnity could have been sought
hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on
claims that are the subject matter of such proceeding.
(d) To the extent the indemnification provided for in Section 7(a)
or 7(b) is unavailable to an indemnified party or insufficient in respect
of any losses, claims, damages or liabilities referred to therein, then
each indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand and the
Underwriters on the other hand from the offering of the Shares or (ii) if
the allocation provided by clause 7(d)(i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only
the relative benefits referred to in clause 7(d)(i) above but also the
relative fault of the Company on the one hand and of the Underwriters on
the other hand in connection with the statements or omissions that resulted
in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriters on the other hand in
connection with the offering of the Shares shall be deemed to be in the
same respective proportions as the net proceeds from the offering of the
Shares (before deducting expenses) received by the Company and the total
underwriting discounts and commissions received by the Underwriters, in
each case as set forth in the table on the cover of the Prospectus, bear to
the aggregate Public Offering Price of the Shares. The relative fault of
the Company on the one hand and the Underwriters on the other hand shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company or by the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement
or omission. The Underwriters' respective obligations to contribute
pursuant to this Section 7 are several in proportion to the respective
number of Shares they have purchased hereunder, and not joint.
21
(e) The Company and the Underwriters agree that it would not be
just or equitable if contribution pursuant to this Section 7 were
determined by PRO RATA allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation that does
not take account of the equitable considerations referred to in Section
7(d). The amount paid or payable by an indemnified party as a result of the
losses, claims, damages and liabilities referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations
set forth above, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 7, no
Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Shares underwritten by it and
distributed to the public were offered to the public exceeds the amount of
any damages that such Underwriters 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 remedies provided for in this Section 7 are not
exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained in this
Section 7 and the representations, warranties and other statements of the
Company contained in this Agreement shall remain operative and in full
force and effect regardless of (i) any termination of this Agreement, (ii)
any investigation made by or on behalf of any Underwriter, any person
controlling any Underwriter or any affiliate of any Underwriter or by or on
behalf of the Company, its officers or directors or any person controlling
the Company and (iii) acceptance of and payment for any of the Shares.
8. TERMINATION. The Underwriters may terminate this Agreement by
notice given by you to the Company, if after the execution and delivery of
this Agreement and prior to the Closing Date or the Option Closing Date (i)
trading generally shall have been suspended or materially limited on, or
by, as the case may be, any of the New York Stock Exchange, the American
Stock Exchange, the Nasdaq National Market, the Chicago Board of Options
Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade,
(ii) trading of any securities of the Company shall have been suspended on
any exchange or in any over-the-counter market, (iii) a material disruption
in securities settlement, payment or clearance services in the United
States shall have occurred, (iv) any moratorium on commercial banking
activities shall have been declared by Federal or New York State
authorities or (v) there shall have occurred any outbreak or escalation of
hostilities, or any change in financial markets or any calamity or crisis
that, in your judgment, is material and adverse and which, singly or
together with any other event specified in this clause (v), makes it, in
your judgment, impracticable or inadvisable to proceed with the offer, sale
or delivery of the Shares on the terms and in the manner contemplated in
the Prospectus.
9. EFFECTIVENESS. This Agreement shall become effective upon the
execution and delivery hereof by the parties hereto.
If, on the Closing Date or an Option Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase
Shares that it has or they have agreed to purchase hereunder on such date,
and the aggregate number of Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase is not more than
one-tenth of the aggregate number of the Shares to be purchased on such
date, the other Underwriters shall be obligated severally in the
proportions that the number of Firm Shares set forth opposite their
respective names in Schedule I bears to the aggregate number of Firm Shares
22
set forth opposite the names of all such non-defaulting Underwriters, or in
such other proportions as you may specify, to purchase the Shares which
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase on such date; PROVIDED that in no event shall the number of Shares
that any Underwriter has agreed to purchase pursuant to this Agreement be
increased pursuant to this Section 9 by an amount in excess of one-ninth of
such number of Shares without the written consent of such Underwriter. If,
on the Closing Date, any Underwriter or Underwriters shall fail or refuse
to purchase Firm Shares and the aggregate number of Firm Shares with
respect to which such default occurs is more than one-tenth of the
aggregate number of Firm Shares to be purchased, and arrangements
satisfactory to you and the Company for the purchase of such Firm Shares
are not made within 36 hours after such default, this Agreement shall
terminate without liability on the part of any non-defaulting Underwriter
or the Company. In any such case either you or the Company shall have the
right to postpone the Closing Date, but in no event for longer than seven
days, in order that the required changes, if any, in the Registration
Statement and in the Prospectus or in any other documents or arrangements
may be effected. If, on an Option Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase Additional Shares and the
aggregate number of Additional Shares with respect to which such default
occurs is more than one-tenth of the aggregate number of Additional Shares
to be purchased on such Option Closing Date, the non-defaulting
Underwriters shall have the option to (i) terminate their obligation
hereunder to purchase the Additional Shares to be sold on such Option
Closing Date or (ii) purchase not less than the number of Additional Shares
that such non-defaulting Underwriters would have been obligated to purchase
in the absence of such default. Any action taken under this paragraph shall
not relieve any defaulting Underwriter from liability in respect of any
default of such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Company to
comply with the terms or to fulfill any of the conditions of this
Agreement, or if for any reason the Company shall be unable to perform its
obligations under this Agreement, the Company will reimburse the
Underwriters or such Underwriters as have so terminated this Agreement with
respect to themselves severally, for all out-of-pocket expenses (including
the fees and disbursements of their counsel) reasonably incurred by such
Underwriters in connection with this Agreement or the offering contemplated
hereunder.
10. COUNTERPARTS. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as
if the signatures thereto and hereto were upon the same instrument.
11. APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.
12. LIMITATION OF LIABILITY OF SHAREHOLDERS AND OFFICERS OF THE
COMPANY. No obligation or liability of the company which may arise at any
time under this Agreement or any obligation or liability which may be
incurred by it pursuant to any other instrument, transaction or undertaking
contemplated hereby shall be personally binding upon, nor shall resort for
the enforcement thereof be had to, the property of the Company's
shareholders, trustees, officers, employees or agents solely as a result of
their status as, and solely in their capacities as, shareholders, trustees,
officers, employees or agents, as the case may be, regardless of whether
such obligation or liability is in the nature of contract, tort or
otherwise.
13. HEADINGS. The headings of the sections of this Agreement have
been inserted for convenience of reference only and shall not be deemed a
part of this Agreement.
23
Very truly yours,
AMLI RESIDENTIAL PROPERTIES TRUST
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
AMLI RESIDENTIAL PROPERTIES, L.P.
By: AMLI RESIDENTIAL PROPERTIES
TRUST, General Partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
Accepted as of the date hereof
▇▇▇▇▇▇ Brothers Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Managing Director
24
SCHEDULE I
Number of
Firm Shares
Underwriter to be Purchased
----------- ---------------
▇▇▇▇▇▇ Brothers Inc. . . . . . . . . . . . . 2,750,000
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Company,
Incorporated . . . . . . . . . . . . . . . 250,000
---------
Total:. . . . . . . . . . . . . . . . . 3,000,000
EXHIBIT A
[FORM OF LOCK-UP LETTER]
__________ __, 2004
▇▇▇▇▇▇ Brothers Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs and Mesdames:
The undersigned understands that ▇▇▇▇▇▇ Brothers Inc. ("▇▇▇▇▇▇" or
the "Representative") proposes to enter into an Underwriting Agreement (the
"Underwriting Agreement") with Amli Residential Properties Trust, a real
estate investment trust under the laws of the State of Maryland (the
"Company"), providing for the public offering (the "Public Offering") by
the several Underwriters named in Schedule I thereto, including the
Representative (the "Underwriters"), of the Common Shares of Beneficial
Interest, par value $0.01 per share, of the Company (the "Common Shares").
To induce the Underwriters that may participate in the Public
Offering to continue their efforts in connection with the Public Offering,
the undersigned hereby agrees that, without the prior written consent of
▇▇▇▇▇▇ on behalf of the Underwriters, it will not, during the period
commencing on the date hereof and ending 90 days after the date of the
final prospectus relating to the Public Offering (the Prospectus"), (1)
offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right
or warrant to purchase, lend, or otherwise transfer or dispose of, directly
or indirectly, any shares of Common Shares or any securities convertible
into or exercisable or exchangeable for Common Shares or (2) enter into any
swap or other arrangement that transfers to another, in whole or in part,
any of the economic consequences of ownership of Common Shares, whether any
such transaction described in clause (1) or (2) above is to be settled by
delivery of Common Shares or such other securities, in cash or otherwise.
The foregoing sentence shall not apply to (a) the sale of any Shares to the
Underwriters pursuant to the Underwriting Agreement; (b) transactions
relating to shares of Common Shares or other securities acquired in open
market transactions after the completion of the Public Offering; or
(c) exercise of options issued to employees under the AMLI Residential
Properties Option Plan pursuant to the cashless exercise feature of such
plan; provided, that shares of Common Shares acquired pursuant to such
exercise continue to be subject to the terms hereof. In addition, the
undersigned agrees that, without the prior written consent of ▇▇▇▇▇▇ on
behalf of the Underwriters, it will not, during the period commencing on
the date hereof and ending 90 days after the date of the Prospectus, make
any demand for or exercise any right with respect to, the registration of
any shares of Common Shares or any security convertible into or exercisable
or exchangeable for Common Shares. The undersigned also agrees and
consents to the entry of stop transfer instructions with the Company's
transfer agent and registrar against the transfer of the undersigned's
shares of Common Shares except in compliance with the foregoing
restrictions.
1
The undersigned understands that the Underwriters are relying upon
this Lock-Up Agreement in proceeding toward consummation of the Public
Offering. The undersigned further understands that this Lock-Up Agreement
is irrevocable and shall be binding upon the undersigned's heirs, legal
representatives, successors and assigns.
Whether or not the Public Offering actually occurs depends on a
number of factors, including market conditions. Any Public Offering will
only be made pursuant to an Underwriting Agreement, the terms of which are
subject to negotiation between the Company and the Underwriters. If the
Underwriting Agreement is not executed within 10 days hereof or terminates
without a Public Offering, this Lock-Up Letter shall become void and of no
effect.
Very truly yours,
------------------------------
(Name)
------------------------------
(Address)
2