PHILIPS INTERNATIONAL REALTY CORP.
7,200,000 Shares1
Common Stock
UNDERWRITING AGREEMENT
May ____, 1998
PRUDENTIAL SECURITIES INCORPORATED
▇▇▇▇▇▇▇ ▇▇▇▇▇ & ASSOCIATES, INC.
As Representatives of the several Underwriters
c/o Prudential Securities Incorporated
▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Philips International Realty Corp., a Maryland
corporation intending to qualify as a real estate investment trust (the
"Company"), and Philips International Realty, L.P., a Delaware limited
partnership (the "Operating Partnership"), each hereby confirms its
agreement with the several underwriters named in Schedule 1 hereto (the
"Underwriters"), for whom you have been duly authorized to act as
representatives (in such capacities, the "Representatives"), as set forth
below. If you are the only Underwriters, all references herein to the
Representatives shall be deemed to be to the Underwriters.
1. Securities. Subject to the terms and conditions
herein contained, the Company proposes to issue and sell to the several
Underwriters an aggregate of 7,200,000 shares (the "Firm Securities") of
the Company's common stock, par value $.01 per share (the "Common
Stock"). The Company also proposes to issue and sell to the several
Underwriters not more than 1,080,000 additional shares of Common Stock if
requested by the Representatives as provided in Section 3 of this
Agreement. Any and all shares of Common Stock to be purchased by the
Underwriters pursuant to such option are referred to herein as the
"Option Securities," and the Firm Securities and any Option Securities
are collectively referred to herein as the "Securities."
--------
1 Plus an option to purchase from Philips International Realty
Corp. up to 1,080,000 additional shares to cover over-allotments.
2. Representations and Warranties of the Company and
the Operating Partnership. The Company and the Operating Partnership,
jointly and severally, represent and warrant to, and agree with, each of
the several Underwriters that:
(a) A registration statement on Form S-11 (File No.
333-47975) with respect to the Securities, including a prospectus subject
to completion, has been filed by the Company with the Securities and
Exchange Commission (the "Commission") under the Securities Act of 1933,
as amended (the "Act"), and one or more amendments to such registration
statement may have been so filed. After the execution of this Agreement,
the Company will file with the Commission either (i) if such registration
statement, as it may have been amended, has been declared by the
Commission to be effective under the Act, either (A) if the Company
relies on Rule 434 under the Act, a Term Sheet (as hereinafter defined)
relating to the Securities, that shall identify the Preliminary
Prospectus (as hereinafter defined) that it supplements containing such
information as is required or permitted by Rules 434, 430A and 424(b)
under the Act or (B) if the Company does not rely on Rule 434 under the
Act, a prospectus in the form most recently included in an amendment to
such registration statement (or, if no such amendment shall have been
filed, in such registration statement), with such changes or insertions
as are required by Rule 430A under the Act or permitted by Rule 424(b)
under the Act, and in the case of either clause (i)(A) or (i)(B) of this
sentence as have been provided to and approved by the Representatives
prior to the execution of this Agreement, or (ii) if such registration
statement, as it may have been amended, has not been declared by the
Commission to be effective under the Act, an amendment to such
registration statement, including a form of prospectus, a copy of which
amendment has been furnished to and approved by the Representatives prior
to the execution of this Agreement. The Company may also file a related
registration statement with the Commission pursuant to Rule 462(b) under
the Act for the purpose of registering certain additional Securities,
which registration shall be effective upon filing with the Commission. As
used in this Agreement, the term "Original Registration Statement" means
the registration statement initially filed relating to the Securities, as
amended at the time when it was or is declared effective, including all
financial schedules and exhibits thereto and including any information
omitted therefrom pursuant to Rule 430A under the Act and included in the
Prospectus (as hereinafter defined); the term "Rule 462(b) Registration
Statement" means any registration statement filed with the Commission
pursuant to Rule 462(b) under the Act (including the Registration
Statement and any Preliminary Prospectus or Prospectus incorporated
therein at the time such Registration Statement becomes effective); the
term "Registration Statement" includes both the Original Registration
Statement and any Rule 462(b) Registration Statement; the term
"Preliminary Prospectus" means each prospectus subject to completion
filed with such registration statement or any amendment thereto
(including the prospectus subject to completion, if any, included in the
Registration Statement or any amendment or supplement thereto at the time
it was or is declared effective); the term "Prospectus" means:
(A) if the Company relies on Rule 434 under the Act,
the Term Sheet relating to the Securities that is first filed
pursuant to Rule 424(b)(7) under the Act, together with the
Preliminary Prospectus identified therein that such Term Sheet
supplements;
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(B) if the Company does not rely on Rule 434 under the
Act, the prospectus first filed with the Commission pursuant to
Rule 424(b) under the Act; or
(C) if the Company does not rely on Rule 434 under the
Act and if no prospectus is required to be filed pursuant to
Rule 424(b) under the Act, the prospectus included in the
Registration Statement;
and the term "Term Sheet" means any term sheet that satisfies the
requirements of Rule 434 under the Act. Any reference herein to the
"date" of a Prospectus that includes a Term Sheet shall mean the date of
such Term Sheet.
(b) The Commission has not issued any order preventing
or suspending use of any Preliminary Prospectus. When any Preliminary
Prospectus was filed with the Commission it (i) contained all statements
required to be stated therein in accordance with, and complied in all
material respects with the requirements of, the Act and the rules and
regulations of the Commission thereunder and (ii) did not include any
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. When the
Registration Statement or any amendment thereto was or is declared
effective, it (i) contained or will contain all statements required to be
stated therein in accordance with, and complied or will comply in all
material respects with the requirements of, the Act and the rules and
regulations of the Commission thereunder and (ii) did not or will not
include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein not misleading.
When the Prospectus or any Term Sheet that is a part thereof or any
amendment or supplement to the Prospectus is filed with the Commission
pursuant to Rule 424(b) (or, if the Prospectus or part thereof or such
amendment or supplement is not required to be so filed, when the
Registration Statement or the amendment thereto containing such amendment
or supplement to the Prospectus was or is declared effective) and on the
Firm Closing Date and any Option Closing Date (both as hereinafter
defined), the Prospectus, as amended or supplemented at any such time,
(i) contained or will contain all statements required to be stated
therein in accordance with, and complied or will comply in all material
respects with the requirements of, the Act and the rules and regulations
of the Commission thereunder and (ii) did not or will not include any
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The foregoing
provisions of this paragraph (b) do not apply to statements or omissions
made in any Preliminary Prospectus, the Registration Statement or any
amendment thereto or the Prospectus or any amendment or supplement
thereto in reliance upon and in conformity with written information
furnished to the Company by any Underwriter through the Representatives
specifically for use therein.
(c) If the Company has elected to rely on Rule 462(b)
and the Rule 462(b) Registration Statement has not been declared
effective (i) the Company has filed a Rule 462(b) Registration Statement
in compliance with and that is effective upon filing pursuant to Rule
462(b) and has received confirmation of its receipt and (ii) the Company
has given irrevocable instructions for transmission of the applicable
filing fee in connection with the filing of the Rule 462(b)
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Registration Statement, in compliance with Rule 111 promulgated under the
Act or the Commission has received payment of such filing fee.
(d) The Company and each of its subsidiaries (which are
corporations) have been duly organized and are validly existing as
corporations in good standing under the laws of their respective
jurisdictions of incorporation and are duly qualified to transact
business as foreign corporations and are in good standing under the laws
of all other jurisdictions where the ownership or leasing of their
respective properties or the conduct of their respective businesses
requires such qualification, except where the failure to be so qualified
does not amount to a material liability or disability to the Company and
its subsidiaries, taken as a whole. Each of the Company's subsidiaries
(which are partnerships or limited liability companies) have been duly
organized and are validly existing as partnerships or limited liability
companies, as the case may be, in good standing under the laws of their
respective jurisdictions of organization and, as applicable, are duly
qualified to transact business as foreign partnerships or limited
liability companies, as the case may be, and are in good standing under
the laws of all other jurisdictions where the ownership or leasing of
their respective properties or the conduct of their respective businesses
requires such qualification, except where the failure to be so qualified
does not amount to a material liability or disability to the Company and
its subsidiaries, taken as a whole.
(e) The Company and each of its subsidiaries have full
power (corporate or other) to own or lease their respective properties
and conduct their respective businesses as described in the Registration
Statement and the Prospectus or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus; and each of the Company and the
Operating Partnership has full power (corporate or other) to enter into
this Agreement and to carry out all the terms and provisions hereof to be
carried out by it.
(f) The issued shares of capital stock of each of the
Company's subsidiaries (which are corporations) have been duly authorized
and validly issued, are fully paid and nonassessable and, except as
otherwise set forth in the Prospectus or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus, are owned beneficially
by the Company free and clear of any security interests, liens,
encumbrances, equities or claims. The partnership agreements of the
Company's subsidiaries (which are partnerships) have been duly
authorized, executed and delivered by the partners thereof and constitute
the valid and binding obligation of the partners thereof. Such
partnership agreements reflect the Company and/or one or more of the
Company's subsidiaries as the sole beneficial owners of the partnership
interests in such partnerships. The operating agreements of the Company's
subsidiaries (which are limited liability companies) have been duly
authorized, executed and delivered by the members thereof and constitute
the valid and binding obligation of the members. Such operating
agreements reflect the Company and/or one or more of the Company's
subsidiaries as the sole beneficial owners of all the membership
interests in such limited liability companies.
(g) The Operating Partnership has been duly organized
and is validly existing as a limited partnership in good standing under
the laws of its jurisdiction of organization and is duly qualified to
transact business as a foreign limited partnership and is in good
standing under the laws
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of all other jurisdictions where the ownership or leasing of its
properties or the conduct of its business requires such qualification,
except where the failure to be so qualified does not amount to a material
liability or disability to the Operating Partnership or to the Company
and its subsidiaries, taken as a whole. The general partner interests in
the Operating Partnership and all of the limited partnership interests in
the Operating Partnership (the "Units") are validly issued and fully paid
and were issued free and clear of any security interests, liens,
encumbrances, equities or claims. There are, and as of the Firm Closing
Date will be, __________ Units of limited partnership interest issued and
outstanding. The Units conform in all material respects to the
description thereof contained in the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus). The Operating
Partnership has not consented to any transfer of an interest in the
Operating Partnership in accordance with Sections 12.1 or 13.1 of the
Amended and Restated Limited Partnership Agreement of the Operating
Partnership filed as Exhibit 10.1 to the Registration Statement. As of
the Firm Closing Date, the Company will be the sole general partner of
the Operating Partnership with a ___% general partnership interest, which
interest will be validly issued, fully paid and free and clear of any
security interests, liens, encumbrances, equities or claims.
(h) The Company has an authorized, issued and
outstanding capitalization as set forth in the Prospectus or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus.
All of the issued shares of capital stock of the Company have been duly
authorized and validly issued and are fully paid and nonassessable. The
Firm Securities and the Option Securities have been duly authorized and
at the Firm Closing Date or the related Option Closing Date (as the case
may be), after payment therefor in accordance herewith, will be validly
issued, fully paid and nonassessable. No holders of outstanding shares of
capital stock of the Company are entitled as such to any preemptive or
other rights to subscribe for any of the Securities, and no holder of
securities of the Company has any right which has not been fully
exercised or waived to require the Company to register the offer or sale
of any securities owned by such holder under the Act in the public
offering contemplated by this Agreement.
(i) The capital stock of the Company conforms to the
description thereof contained in the Prospectus or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus.
(j) Except as disclosed in the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus),
there are no outstanding (A) securities, equity interests or obligations
of the Company or any of its subsidiaries convertible into or
exchangeable for any capital stock or equity interests (as the case may
be) of the Company or any such subsidiary, (B) warrants, rights or
options to subscribe for or purchase from the Company or any such
subsidiary any such capital stock or equity interests or any such
convertible or exchangeable securities, equity interests or obligations,
or (C) obligations of the Company or any such subsidiary to issue any
shares of capital stock, equity interests or any such convertible or
exchangeable securities, equity interests or obligations, or any such
warrants, rights or options.
(k) The financial statements (including the notes
thereto) of the Company included in the Registration Statement and the
Prospectus (or, if the Prospectus is not in existence,
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the most recent Preliminary Prospectus) fairly present the financial
position, the results of operations and shareholders' equity and cash
flows of the Company at the date and for the period therein specified.
The balance sheet (including the notes thereto) of Philips International
Realty, L.P. included in the Registration Statement and the Prospectus
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus) fairly presents the financial position of Philips
International Realty, L.P. at the date therein specified. The combined
balance sheet (including the notes thereto) of the Property Partnerships
(as defined in the Prospectus) included in the Registration Statement and
the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus) fairly present the financial position of
the Property Partnerships at the date therein specified. The combined
financial statements (including the notes thereto) of The Philips Company
(as defined in the notes thereto) included in the Registration Statement
and the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus) fairly present the financial position, the
results of operations, owners' deficit and cash flows of The Philips
Company, at the date and for the periods therein specified. The combined
statements of revenues and certain expenses (including the notes thereto)
of the ▇▇▇▇▇▇▇ Commons and Mill Basin Plaza Properties (as defined in the
notes thereto) included in the Registration Statement and the Prospectus
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus) fairly present the combined revenues and certain expenses of
the ▇▇▇▇▇▇▇ Commons and Mill Basin Plaza Properties for the periods
therein specified. All of the foregoing financial statements (including
the notes thereto) and the related schedule have been prepared in
accordance with generally accepted accounting principles consistently
applied throughout the periods involved (except as otherwise noted
therein). The selected financial data set forth under the caption
"Selected Financial Data" in the Prospectus (or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus) fairly present, on
the basis stated in the Prospectus (or such Preliminary Prospectus), the
information included therein.
(l) The pro forma condensed financial statements
(including the notes thereto) of the Company included in the Registration
Statement and the Prospectus (or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus) comply in all material respects
with the applicable requirements of Rule 11-02 of Regulation S-X of the
Commission and the pro forma adjustments have been properly applied to
the historical amounts in the compilation of such information and the
assumptions used in the preparation thereof are, in the opinion of the
Company, reasonable. Other than the historical and pro forma financial
statements included therein, no other historical or pro forma financial
statements are required to be included in the Registration Statement or
Prospectus.
(m) Ernst & Young LLP, who have audited certain
financial statements and schedules, and delivered their reports with
respect to the financial statements and schedules, included in the
Registration Statement and the Prospectus (or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus), are independent
public accountants as required by the Act and the applicable rules and
regulations thereunder.
(n) The execution and delivery of this Agreement have
been duly authorized by the Company and the Operating Partnership and
this Agreement has been duly executed and delivered by the Company and
the Operating Partnership, and is the valid and binding agreement of
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each of the Company and the Operating Partnership, enforceable against
the Company and the Operating Partnership in accordance with its terms,
subject to the effect of bankruptcy, insolvency, moratorium, fraudulent
conveyance, reorganization and similar laws relating to creditors' rights
generally and to the application of equitable principles in any
proceeding, whether at law or in equity.
(o) No legal or governmental proceedings are pending to
which the Company or any of its subsidiaries is a party or to which the
property of the Company or any of its subsidiaries is subject that are
required to be described in the Registration Statement or the Prospectus
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus) and are not described therein, and no such proceedings have
been threatened against the Company or any of its subsidiaries or with
respect to any of their respective properties; and no contract or other
document is required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement
that is not described therein (or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus) or filed as required.
(p) The issuance, offering and sale of the Securities
to the Underwriters by the Company pursuant to this Agreement, the
compliance by the Company and the Operating Partnership with the other
provisions of this Agreement and the consummation of the other
transactions herein contemplated do not (i) require the consent,
approval, authorization, registration or qualification of or with any
governmental authority, except such as have been obtained, such as may be
required under state securities or blue sky laws and, if the registration
statement filed with respect to the Securities (as amended) is not
effective under the Act as of the time of execution hereof, such as may
be required (and shall be obtained as provided in this Agreement) under
the Act, or (ii) conflict with or result in a breach or violation of any
of the terms and provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, lease 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 or any of their
respective properties are bound, or the charter documents or by-laws or
certificate of limited partnership or partnership agreement or limited
liability company operating agreement (as the case may be) of the Company
or any of its subsidiaries, or any statute or any judgment, decree,
order, rule or regulation of any court or other governmental authority or
any arbitrator applicable to the Company or any of its subsidiaries.
(q) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus), neither the Company nor any of its subsidiaries has
sustained any material loss or interference with their respective
businesses or properties from fire, flood, hurricane, accident or other
calamity, whether or not covered by insurance, or from any labor dispute
or any legal or governmental proceeding and there has not been any
material adverse change, or any development involving a prospective
material adverse change, in the condition (financial or otherwise),
management, business prospects, net worth, or results of operations of
the Company or any of its subsidiaries, taken as a whole, except in each
case as described in or contemplated by the Registration Statement and
the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus).
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(r) The Company has not, directly or indirectly, (i)
taken any action designed to cause or to result in, or that has
constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Securities or (ii) since the
filing of the Registration Statement (A) sold, bid for, purchased, or
paid anyone any compensation for soliciting purchases of, the Securities
or (B) paid or agreed to pay to any person any compensation for
soliciting another to purchase any other securities of the Company.
(s) The Company has not distributed and, prior to the
later of (i) the Firm Closing Date and (ii) the completion of the
distribution of the Securities, will not distribute any offering material
in connection with the offering and sale of the Securities other than the
Registration Statement or any amendment thereto, any Preliminary
Prospectus or the Prospectus or any amendment or supplement thereto, or
other materials, if any, permitted by the Act.
(t) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus), (i) the Company and its subsidiaries have not incurred any
material liability or obligation, direct or contingent, nor entered into
any material transaction not in the ordinary course of business; (ii) the
Company has not purchased any of its outstanding capital stock, nor
declared, paid or otherwise made any dividend or distribution of any kind
on its capital stock other than the payment of $44,650 on March 3, 1998
as a dividend on the Series A Preferred Stock (as defined in the
Registration Statement and the Prospectus, or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus); and (iii) there
has not been any material change in the capital stock or partnership
interests (as the case may be), short-term debt or long-term debt of the
Company and its subsidiaries, except in each case as described in or
contemplated by the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).
(u) The Company or its subsidiaries have good and
marketable title in fee simple to all items of real property comprising
the Properties (as defined in the Registration Statement and the
Prospectus, or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) and marketable title to all personal property
comprising the Properties, in each case free and clear of any security
interests, liens, encumbrances, equities, claims and other defects,
except such as do not materially and adversely affect the value of such
property and do not interfere with the use made or proposed to be made of
such property by the Company or such subsidiary.
(v) No labor dispute with the employees of the Company
or any of its subsidiaries exists or is threatened or imminent that could
result in a material adverse change in the condition (financial or
otherwise), business prospects, net worth or results of operations of the
Company and its subsidiaries, taken as a whole, except as described in or
contemplated by the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).
(w) The Company and its subsidiaries own or possess all
material patents, patent applications, trademarks, service marks, trade
names, licenses, copyrights and proprietary or other confidential
information currently employed by them in connection with their
respective businesses,
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and neither the Company nor any such subsidiary has received any notice
of infringement of or conflict with asserted rights of any third party
with respect to any of the foregoing which, singly or in the aggregate,
if the subject of an unfavorable decision, ruling or finding, would
result in a material adverse change in the condition (financial or
otherwise), business prospects, net worth or results of operations of the
Company and its subsidiaries, taken as a whole, except as described in or
contemplated by the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).
(x) The Company and each of its subsidiaries own or
possess all contract rights that are material to the businesses operated
by them, taken as a whole, as described in the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus).
All such contracts are in full force and effect, and neither the Company
nor any such subsidiary is aware of any material breach by any party
under any of such contracts.
(y) The Company and each of its subsidiaries is insured
by insurers of recognized financial responsibility against such losses
and risks and in such amounts as are prudent and customary in the
businesses in which they are engaged as described in the Prospectus;
neither the Company nor any such subsidiary has been refused any
insurance coverage sought or applied for; and neither the Company nor any
such subsidiary has any reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage expires
or to obtain similar coverage from similar insurers as may be necessary
to continue its business at a cost that would not materially and
adversely affect the condition (financial or otherwise), business
prospects, net worth or results of operations of the Company and its
subsidiaries, taken as a whole, except as described in or contemplated by
the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus).
(z) No subsidiary of the Company is currently
prohibited, directly or indirectly, from paying any dividends to the
Company, from making any other distribution on such subsidiary's capital
stock, partnership interests or membership interests, from repaying to
the Company any loans or advances to such subsidiary from the Company or
from transferring any of such subsidiary's property or assets to the
Company or any other subsidiary of the Company, except as described in or
contemplated by the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus) and except pursuant to
(i) existing indebtedness as in effect on the date hereof, (ii) the
Credit Facility (as defined in the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus)), (iii)
applicable law and (iv) with respect to prohibitions only against
transferring any of such subsidiary's property or assets to the Company
or any other subsidiary of the Company, (A) customary non-assignment
provisions contained in leases to which the Company or any of its
subsidiaries is a party and (B) security interests, including purchase
money obligations, applicable to any property of the Company or any of
its subsidiaries as of the date hereof.
(aa) The Company and its subsidiaries possess all
certificates, authorizations and permits issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct
their respective businesses, and neither the Company nor any such
subsidiary has received any notice
9
of proceedings relating to the revocation or modification of any such
certificate, authorization or permit which, singly or in the aggregate,
if the subject of any unfavorable decision, ruling or finding, would
result in a material adverse change in the condition (financial or
otherwise), business prospects, net worth or results of operations of the
Company and its subsidiaries, taken as a whole, except as described in or
contemplated by the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).
(bb) The Company is not, and as of the Firm Closing
Date and the Option Closing Date will not be, subject to registration as
an investment company under the under the Investment Company Act of 1940,
as amended and this transaction will not cause the Company to become an
investment company subject to registration under such Act.
(cc) Each of the Company and its subsidiaries has filed
all foreign, federal, state and local tax returns that are required to be
filed or has requested in a timely manner and/or has received extensions
thereof (except in any case in which the failure so to file would not
have a material adverse effect on the Company and its subsidiaries, taken
as a whole) and has paid all taxes required to be paid by it and any
other interest, assessment, fine or penalty levied or assessed against
it, to the extent that any of the foregoing is due and payable and for
which the Company has, to the extent required, adequately provided for on
its financial statements under generally accepted accounting principles,
except for any such interest, assessment, fine or penalty that is
currently being contested in good faith or as described in or
contemplated by the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).
(dd) (i) Except as described in or contemplated by the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus), the Company and its subsidiaries, the Properties
and each business operating at the Properties are in full compliance with
Environmental Laws, and have obtained and are in compliance with all
permits, licenses or other authorizations ("Permits") that are required
under Environmental Laws except where any non-compliance with
Environmental Laws or the failure to obtain or otherwise comply with any
such Permits would not, individually or in the aggregate, result in a
material adverse change in the condition (financial or otherwise),
business prospects, net worth or results of operations of the Company and
its subsidiaries, taken as a whole.
(ii) Except as disclosed in the Phase I
environmental site assessments of the Properties completed
within the last year by independent environmental consultants,
copies of which were delivered to the Underwriters (the
"Environmental Site Assessments"), none of the Properties are
currently or, to the knowledge of the Company and its
subsidiaries, have in the past been used for the generation,
storage, treatment, transportation disposal of Hazardous
Materials except in full compliance with Environmental Laws and
only in reasonable amounts that are customary and necessary for
the businesses located on the Properties.
(iii) Except as disclosed in the Environmental
Site Assessments, there are no Releases of Hazardous Materials
at, from, onto or under any of the Properties nor have
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their been any Releases of Hazardous Substances in the past at,
from, onto or under any of the Properties.
(iv) Except as disclosed in the Environmental
Site Assessments, no Remedial Actions are currently being
performed or, to the best knowledge of the Company, are planned
to be performed at any of the Properties.
(v) Except as disclosed in the Environmental
Site Assessments, none of the Properties have been listed or, to
the best of the Company's knowledge, have been proposed to be
listed on the National Priorities List ("NPL"), the CERCLA
Information System ("CERCLIS") or any similar state list or
inventory of sites which have been potentially contaminated with
Release of Hazardous Materials.
(vi) No Environmental Claims have been
asserted against the Company and its subsidiaries, the
Properties or any of the businesses operating at the Properties
which Environmental Claims, singly or in the aggregate, if the
subject of any unfavorable decision, ruling or finding, would
result in a material adverse change in the condition (financial
or otherwise), business prospects, net worth or results of
operations of the Company and its subsidiaries, taken as a
whole.
(vii) Except as disclosed in the environmental
site assessments, the property condition reports or seismic risk
assessments performed on the Properties, the Company is not
aware of any environmental or engineering conditions at any of
the Properties that would, individually or in the aggregate,
result in a material adverse change in the condition (financial
or otherwise), or business prospects, net worth or results of
operations of the Company and its subsidiaries, taken as a
whole.
As used herein, "Environmental Claims" refers to any
complaint, summons, citation, notice, directive, order, claim,
litigation, investigation, judicial or administrative proceeding,
judgment, letter or other communication from any governmental agency,
department, bureau, office or other authority, or any third party
involving (i) violations of Environmental Laws at the Properties or (ii)
Releases of Hazardous Materials at, from, onto or under any of the
Properties; (iii) Releases of Hazardous Materials migrating from
adjoining properties or businesses onto or under the Properties; or (iv)
Releases of Hazardous Materials migrating from the Properties onto or
under adjoining properties or businesses "Environmental Laws" includes
the Comprehensive Environmental Response, Compensation and Liability Act
("CERCLA"), 42 U.S.C. 9601 et seq., as amended; the Resource Conservation
and Recovery Act ("RCRA"), 42 U.S.C. 6901 et seq., as amended; the Clean
Air Act ("CAA"), 42 U.S.C. 7401 et seq., as amended; the Clean Water Act
("CWA"), 33 U.S.C. 1251 et seq., as amended; the Occupational Safety and
Health Act ("OSHA"), 29 U.S.C. 655 et seq., and any other federal, state,
local or municipal laws, statutes, regulations, rules or ordinances
imposing liability or establishing standards of conduct for protection of
the environment.
11
As used herein, "Environmental Liabilities" means any
monetary obligations, losses, liabilities (including strict liability),
damages, punitive damages, consequential damages, treble damages, costs
and expenses (including all reasonable out-of-pocket fees, disbursements
and expenses of counsel, out-of-pocket expert and consulting fees and
out-of-pocket costs for environmental site assessments, remedial
investigation and feasibility studies), fines, penalties, sanctions and
interest incurred as a result of any Environmental Claim filed by any
Governmental Authority or any third party which relate to any violations
of Environmental Laws, Remedial Actions, Releases or threatened Releases
of Hazardous Materials from or onto (i) any property presently or
formerly owned by the Corporation or any of its Subsidiaries or a
predecessor in interest, or (ii) any facility which received Hazardous
Materials generated by the Corporation or any of its Subsidiaries or a
predecessor in interest.
As used herein, "Hazardous Materials" shall include (a)
any element, compound, or chemical that is defined, listed or otherwise
classified as a contaminants, pollutant, toxic pollutant, toxic or
hazardous substances, extremely hazardous substance or chemical,
hazardous waste, biohazardous or infectious waste, special waste, or
solid waste under Environmental Laws, (b) petroleum, petroleum-based or
petroleum-derived products, (c) polychlorinated biphenyls, (d) any
substance exhibiting a hazardous waste characteristic including but not
limited to corrosivity, ignitibility, toxicity or reactivity as well as
any radioactive or explosive materials, and (e) any asbestos-containing
materials.
As used herein, "Release" means any spilling, leaking,
pumping, emitting, emptying, discharging, injecting, escaping, leaching,
migrating, dumping, or disposing of Hazardous Materials (including the
abandonment or discarding of barrels, containers or other closed
receptacles containing Hazardous Materials) into the environment.
As used herein, "Remedial Action" means all actions
taken to (i) clean up, remove, remediate, contain, treat, monitor,
assess, evaluate or in any other way address Hazardous Materials in the
indoor or outdoor environment, (ii) prevent or minimize a Release or
threatened Release of Hazardous Materials so they do not migrate or
endanger or threaten to endanger public health or welfare or the indoor
or outdoor environment, (iii) perform pre-remedial studies and
investigations and post-remedial operation and maintenance activities, or
(iv) any other actions authorized by 42 U.S.C. 9601.
(ee) Each certificate signed by any officer of the
Company and delivered to the Representatives or counsel for the
Underwriters on the Firm Closing Date or on the Option Closing Date or
which otherwise states that it is being delivered in connection with the
Offering, shall be deemed to be a representation and warranty by the
Company to each Underwriter as to the matters covered thereby.
(ff) Except for the shares of capital stock of, or
partnership or membership interests in (as applicable), each of the
subsidiaries owned by the Company and such subsidiaries, neither the
Company nor any such subsidiary owns any shares of stock or any other
equity securities of any corporation or has any equity interest in any
firm, partnership, limited liability company,
12
association or other entity, except as described in or contemplated by
the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus).
(gg) The Company and each of its subsidiaries maintain
a system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with
management's general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
asset accountability, (iii) access to 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.
(hh) No default exists, and no event has occurred
which, with notice or lapse of time or both, would constitute a default
in the due performance and observance of any term, covenant or condition
of any indenture, mortgage, deed of trust, lease 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 or any of their
respective properties is bound or may be affected in any material adverse
respect with regard to property, business or operations of the Company
and its subsidiaries, taken as a whole, except as described in the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(ii) Except as described in the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus)
or as otherwise described in the supplemental letter provided to the
Commission, dated March 13, 1998, in connection with the filing of the
Registration Statement (the "Supplemental Letter"), since July 1, 1992 no
foreclosures have been instituted and none are currently threatened with
respect to any property or assets directly or indirectly owned (whether
now or in the past) by the Philips Group (as defined in the Prospectus
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus)) or the Company or any of its subsidiaries. The Company has
concluded that the information regarding the bankruptcy and foreclosure
proceedings described in the Supplemental Letter is not material and is
properly excluded from the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus). The Company and its
subsidiaries do not own or operate any real property other than the real
properties comprising the Properties (as defined in the Registration
Statement and the Prospectus (or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus)).
(jj) Except as otherwise described in the Prospectus
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus) or as otherwise described in the Supplemental Letter, (i) no
proceeding or filing of a petition seeking relief under Title 11 of the
United States Code or any other federal, state or foreign bankruptcy,
insolvency, liquidation or similar law has been commenced or instituted
(whether voluntary or involuntary) by or with respect to the Company, any
subsidiary of the Company or any member of the Philips Group, (ii)
neither the Company nor any subsidiary of the Company nor any member of
the Philips Group has applied for or consented to the appointment of a
receiver, trustee, custodian, sequestrator or similar official for any
such persons or for a substantial part of any such persons' property or
assets and (iii) none of the Company, any
13
subsidiary of the Company or any member of the Philips Group has made a
general assignment for the benefit of its creditors.
(kk) No relationship, direct or indirect, exists
between or among the Company or the Operating Partnership on the one
hand, and the directors, officers, shareholders (in the case of the
Company), limited partners (in the case of the Operating Partnership),
tenants, customers or suppliers of the Company or the Operating
Partnership on the other hand, which is required to be described in the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) which is not so described.
(ll) The transfer of interests or other assets pursuant
to the agreements and instruments related to the Formation Transactions
(as defined in the Prospectus (or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus)) (the "Transfer Documents") did
not violate the articles or certificate of incorporation, by-laws,
limited liability company operating agreement, declaration of trust,
certificate of limited partnership, partnership agreement or other
organizational documents, as the case may be, of any member of the
Philips Group. The Transfer Documents were sufficient to effect the
transfer to the Company or its subsidiaries of all direct or indirect
interests in the Properties and other assets specified therein upon
payment of the consideration therefor.
(mm) The Company has been organized in conformity with
the requirements for qualification as a real estate investment trust (a
"REIT") under the Internal Revenue Code of 1986, as amended, and the
rules and regulations thereunder (the "Code"), commencing with its
taxable year ending December 31, 1997, and has and will have no earnings
and profits accumulated in a non-REIT year within the meaning of Section
857(a)(3)(B) of the Code, and the method of operation of the Company and
its subsidiaries enables the Company to meet the requirements for
taxation as a REIT under the Code commencing with its taxable year ending
December 31, 1997 and for its subsequent taxable years except as
described in the Prospectus (or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus). All statements in the Prospectus
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus) regarding the Company's qualification as a REIT are true,
complete and correct in all material respects.
(nn) (i) Each of the Properties complies with all
applicable codes, laws, ordinances and regulations (including, without
limitation, building and zoning codes and laws and regulations relating
to access to the Properties) and deed restrictions or other covenants,
except for such failures to comply that would not materially impair the
value of any of the Properties or would not result in a forfeiture or
reversion of title; (ii) neither the Company nor any of its subsidiaries
has knowledge of any pending or threatened litigation, moratorium,
condemnation proceedings, zoning change, or other similar proceeding or
action that could in any manner affect the size of, use of, improvements
on, construction on, access to or availability of utilities or other
necessary services to, the Properties, except such proceedings or actions
which are not reasonably expected to, singly or in the aggregate, result
in a material adverse change in the condition (financial or otherwise),
business prospects, net worth or results of operations of the Company and
its subsidiaries, taken as a whole; (iii) all liens, charges,
encumbrances, claims, or restrictions on or affecting the properties
14
and assets (including the Properties) of the Company or any of its
subsidiaries that are required to be disclosed in the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary
Prospectus) are disclosed therein; (iv) except as described in the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus), neither the Company, any of its subsidiaries nor
any tenant of any portion of any of the Properties is in default under
any space lease (as lessor or lessee, as the case may be) or other
occupancy or license agreement relating to, or under any of the mortgages
or other security documents or other agreements encumbering or otherwise
recorded against, the Properties and there is no event which, but for the
passage of time or the giving of notice or both, would constitute a
default under any of such documents or agreements, except such defaults
that would not, singly or in the aggregate, result in a material adverse
change in the condition (financial or otherwise), business prospects, net
worth or results of operations of the Company and its subsidiaries, taken
as a whole; and (v) except as described in the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus)
or as specifically identified to the Underwriters, no tenant under any
lease pursuant to which the Company or any of its subsidiaries lease the
Properties has an option or right of first refusal to purchase the
premises leased thereunder or the building of which such premises are a
part.
(oo) Each of the Properties is in substantial
compliance with all presently applicable provisions of the Americans with
Disabilities Act and no failure of the Company or any of its subsidiaries
to comply with all presently applicable provisions of the Americans with
Disabilities Act would result in a material adverse change in the
condition (financial or otherwise), business prospects, net worth or
results of operations of the Company and its subsidiaries.
(pp) The Company or its subsidiaries have title
insurance on each of the Properties which constitute real property in an
amount at least equal to the fair market value of such Property and
without coinsurance provisions.
(qq) None of the environmental consultants which
prepared environmental and asbestos inspection reports with respect to
any of the Properties, the engineering consultants which prepared
engineering inspection reports with respect to any of the Properties or
real estate advisors which prepared regional economic overviews and
market analysis, were employed for such purpose on a contingent basis or
has any substantial interest in the Company or any of its subsidiaries
and none of them or any of their directors, officers or employees is
connected with the Company or any of its subsidiaries as a promoter,
selling agent, voting trustee, director, officer or employee.
(rr) The execution and delivery of the documents listed
in Sections 3 and 10 of the Exhibit Index to the Registration Statement
(the "Operative Agreements") which require execution and delivery by
their terms have been duly authorized by each of the parties thereto, and
the Operative Agreements have been duly executed and delivered by each of
the parties thereto, and are the valid and binding agreements of each of
the parties thereto, enforceable against each of the parties thereto in
accordance with their respective terms, subject to the effect of
bankruptcy, insolvency, moratorium, fraudulent conveyance, reorganization
and similar laws relating to creditors' rights generally and to the
application of equitable principles in any proceeding, whether at law or
in equity.
15
(ss) All of the representations and warranties of the
Company, the Operating Partnership, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, the
property partnerships and partners contained in the Contribution and
Exchange Agreement (as defined in the Prospectus (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus)), as
extended by the Letter Agreement filed as Exhibit 10.18 to the
Registration Statement, are true and correct in all material respects as
of the date when made.
3. Purchase, Sale and Delivery of the Securities. (a)
On the basis of the representations, warranties, agreements and covenants
herein contained and subject to the terms and conditions herein set
forth, the Company agrees to issue and sell to each of the Underwriters,
and each of the Underwriters, severally and not jointly, agrees to
purchase from the Company, at a purchase price of (i) $___ per share, the
number of Reserved Shares (as defined herein) and (ii) $___ per share,
the number of Firm Securities (excluding the Reserved Shares) set forth
opposite the name of such Underwriter in Schedule 1 hereto. One or more
certificates in definitive form for the Firm Securities that the several
Underwriters have agreed to purchase hereunder, and in such denomination
or denominations and registered in such name or names as the
Representatives request upon notice to the Company at least 48 hours
prior to the Firm Closing Date, shall be delivered by or on behalf of the
Company to the Representatives for the respective accounts of the
Underwriters, against payment by or on behalf of the Underwriters of the
purchase price therefor by wire transfer in same-day funds (the "Wired
Funds") to the account of the Company. Such delivery of and payment for
the Firm Securities shall be made at the offices of ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
& ▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ at 9:30 A.M., New
York time, on ____________, 1998, or at such other place, time or date as
the Representatives and the Company may agree upon or as the
Representatives may determine pursuant to Section 9 hereof, such time and
date of delivery against payment being herein referred to as the "Firm
Closing Date." The Company will make such certificate or certificates for
the Firm Securities available for checking and packaging by the
Representatives at the offices in New York, New York of the Company's
transfer agent or registrar or of Prudential Securities Incorporated at
least 24 hours prior to the Firm Closing Date.
(b) For the purpose of covering any over-allotments in
connection with the distribution and sale of the Firm Securities as
contemplated by the Prospectus, the Company hereby grants to the several
Underwriters an option to purchase, severally and not jointly, the Option
Securities. The purchase price to be paid for any Option Securities shall
be $___ per share (the same price per share as the price per share for
the Firm Securities (excluding the Reserved Shares) set forth above in
paragraph (a)(ii) of this Section 3), plus, if the purchase and sale of
any Option Securities takes place after the Firm Closing Date and after
the Firm Securities are trading "ex-dividend," an amount equal to the
dividends payable on such Option Securities. The option granted hereby
may be exercised as to all or any part of the Option Securities from time
to time within thirty days after the date of the Prospectus (or, if such
30th day shall be a Saturday or Sunday or a holiday, on the next business
day thereafter when the New York Stock Exchange is open for trading). The
Underwriters shall not be under any obligation to purchase any of the
Option Securities prior to the exercise of such option. The
Representatives may from time to time exercise the option granted hereby
by giving notice in writing or by telephone (confirmed in writing) to the
Company
16
setting forth the aggregate number of Option Securities as to which the
several Underwriters are then exercising the option and the date and time
for delivery of and payment for such Option Securities. Any such date of
delivery shall be determined by the Representatives but shall not be
earlier than two business days or later than five business days after
such exercise of the option and, in any event, shall not be earlier than
the Firm Closing Date. The time and date set forth in such notice, or
such other time on such other date as the Representatives and Company may
agree upon or as the Representatives may determine pursuant to Section 9
hereof, is herein called the "Option Closing Date" with respect to such
Option Securities. Upon exercise of the option as provided herein, the
Company shall become obligated to sell to each of the several
Underwriters, and, subject to the terms and conditions herein set forth,
each of the Underwriters (severally and not jointly) shall become
obligated to purchase from the Company, the same percentage of the total
number of the Option Securities as to which the several Underwriters are
then exercising the option as such Underwriter is obligated to purchase
of the aggregate number of Firm Securities, as adjusted by the
Representatives in such manner as they deem advisable to avoid fractional
shares. If the option is exercised as to all or any portion of the Option
Securities, one or more certificates in definitive form for such Option
Securities, and payment therefor, shall be delivered on the related
Option Closing Date in the manner, and upon the terms and conditions, set
forth in paragraph (a) of this Section 3, except that reference therein
to the Firm Securities and the Firm Closing Date shall be deemed, for
purposes of this paragraph (b), to refer to such Option Securities and
Option Closing Date, respectively.
(c) The Company hereby acknowledges that the wire
transfer by or on behalf of the Underwriters of the purchase price for
any Securities does not constitute closing of a purchase and sale of the
Securities. Only execution and delivery of a receipt for Securities by
the Underwriters indicates completion of the closing of a purchase of the
Securities from the Company. Furthermore, in the event that the
Underwriters wire funds to the Company prior to the completion of the
closing of a purchase of Securities, the Company hereby acknowledges that
until the Underwriters execute and deliver a receipt for the Securities,
by facsimile or otherwise, the Company will not be entitled to the Wired
Funds and shall return the Wired Funds to the Underwriters as soon as
practicable (by wire transfer of same-day funds) upon demand. In the
event that the closing of a purchase of Securities is not completed and
the Wired Funds are not returned by the Company to the Underwriters on
the same day the Wired Funds were received by the Company, the Company
agrees to pay to the Underwriters in respect of each day the Wired Funds
are not returned by it, in same-day funds, interest on the amount of such
Wired Funds in an amount representing the Underwriters' cost of financing
as reasonably determined by Prudential Securities Incorporated.
(d) It is understood that any of you, individually and
not as one of the Representatives, may (but shall not be obligated to)
make payment on behalf of any Underwriter or Underwriters for any of the
Securities to be purchased by such Underwriter or Underwriters. No such
payment shall relieve such Underwriter or Underwriters from any of its or
their obligations hereunder.
(e) The Underwriters acknowledge and agree that they
have reserved up to [720,000] shares of Common Stock of the Company
constituting the Firm Securities (collectively,
17
the "Reserved Shares") for sale at the public offering price to ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ and certain other directors, officers and employees of the
Company and their business affiliates and related parties who have
expressed an interest in purchasing such shares. Concurrently with the
execution of this Agreement, the Company has advised the Underwriters in
writing that all of the Reserved Shares have been sold to such persons.
The Company covenants and agrees with each of the Underwriters that all
sales of Reserved Shares shall be made in compliance with the National
Association of Securities Dealers, Inc.'s policies on free-riding and
withholding and any applicable laws or regulations in each jurisdiction
of any sale and the Company shall provide the Underwriters with evidence
of such compliance as the Underwriters shall reasonably request together
with a representation of each purchaser that he or she is acquiring such
Reserved Shares for investment purposes only and with no present
intention to resell such shares.
4. Offering by the Underwriters. Upon your
authorization of the release of the Firm Securities, the several
Underwriters propose to offer the Firm Securities for sale to the public
upon the terms set forth in the Prospectus.
5. Covenants of the Company and the Operating
Partnership. Each of the Company and the Operating Partnership covenants
and agrees with each of the Underwriters that:
(a) The Company will use its best efforts to cause the
Registration Statement, if not effective at the time of execution of this
Agreement, and any amendments thereto to become effective as promptly as
possible. If required, the Company will file the Prospectus or any Term
Sheet that constitutes a part thereof and any amendment or supplement
thereto with the Commission in the manner and within the time period
required by Rules 434 and 424(b) under the Act. During any time when a
prospectus relating to the Securities is required to be delivered under
the Act, the Company (i) will comply with all requirements imposed upon
it by the Act and the rules and regulations of the Commission thereunder
to the extent necessary to permit the continuance of sales of or dealings
in the Securities in accordance with the provisions hereof and of the
Prospectus, as then amended or supplemented, and (ii) will not file with
the Commission the Prospectus, Term Sheet or the amendment referred to in
the second sentence of Section 2(a) hereof, any amendment or supplement
to such Prospectus, Term Sheet or any amendment to the Registration
Statement or any Rule 462(b) Registration Statement of which the
Representatives previously have been advised and furnished with a copy
for a reasonable period of time prior to the proposed filing and as to
which filing the Representatives shall not have given their consent. The
Company will prepare and file with the Commission, in accordance with the
rules and regulations of the Commission, promptly upon request by the
Representatives or counsel for the Underwriters, any amendments to the
Registration Statement or amendments or supplements to the Prospectus
that may be necessary or advisable in connection with the distribution of
the Securities by the several Underwriters, and will use its best efforts
to cause any such amendment to the Registration Statement to be declared
effective by the Commission as promptly as possible. The Company will
advise the Representatives, promptly after receiving notice thereof, of
the time when the Registration Statement or any amendment thereto has
been filed or declared effective or the Prospectus or any amendment or
supplement thereto has been filed and will provide evidence satisfactory
to the Representatives of each such filing or effectiveness.
18
(b) The Company will advise the Representatives,
promptly after receiving notice or obtaining knowledge thereof, of (i)
the issuance by the Commission of any stop order suspending the
effectiveness of the Original Registration Statement or any Rule 462(b)
Registration Statement or any amendment thereto or any order preventing
or suspending the use of any Preliminary Prospectus or the Prospectus or
any amendment or supplement thereto, (ii) the suspension of the
qualification of the Securities for offering or sale in any jurisdiction,
(iii) the institution, threatening or contemplation of any proceeding for
any such purpose, or (iv) any request made by the Commission for amending
the Original Registration Statement or any Rule 462(b) Registration
Statement, for amending or supplementing the Prospectus or for additional
information. The Company will use its best efforts to prevent the
issuance of any such stop order and, if any such stop order is issued, to
obtain the withdrawal thereof as promptly as possible.
(c) The Company will arrange for the qualification of
the Securities for offering and sale under the securities or blue sky
laws of such jurisdictions as the Representatives may designate and will
continue such qualifications in effect for as long as may be necessary to
complete the distribution of the Securities, provided, however, that in
connection therewith the Company shall not be required to qualify as a
foreign corporation or to execute a general consent to service of process
in any jurisdiction.
(d) If, at any time prior to the later of (i) the final
date when a prospectus relating to the Securities is required to be
delivered under the Act or (ii) the Option Closing Date, any event occurs
as a result of which the Prospectus, as then amended or supplemented,
would include any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, or
if for any other reason it is necessary at any time to amend or
supplement the Prospectus to comply with the Act or the rules or
regulations of the Commission thereunder, the Company will promptly
notify the Representatives thereof and, subject to Section 5(a) hereof,
will prepare and file with the Commission, at the Company's expense, an
amendment to the Registration Statement or an amendment or supplement to
the Prospectus that corrects such statement or omission or effects such
compliance.
(e) The Company will, without charge, provide (i) to
the Representatives and to counsel for the Underwriters a conformed copy
of the registration statement originally filed with respect to the
Securities and each amendment thereto (in each case including exhibits
thereto) or any Rule 462(b) Registration Statement, certified by the
Secretary or an Assistant Secretary of the Company to be true and
complete copies thereof as filed with the Commission by electronic
transmission, (ii) to each other Underwriter, a conformed copy of such
registration statement or any Rule 462(b) Registration Statement and each
amendment thereto (in each case without exhibits thereto) and (iii) so
long as a prospectus relating to the Securities is required to be
delivered under the Act, as many copies of each Preliminary Prospectus or
the Prospectus or any amendment or supplement thereto as the
Representatives may reasonably request; without limiting the application
of clause (iii) of this sentence, the Company, not later than (A) 6:00
P.M., New York City time, on the date of determination of the public
offering price, if such determination occurred at or prior to 10:00 A.M.,
New York City time, on such date or (B) 2:00 P.M., New York City time, on
the
19
business day following the date of determination of the public offering
price, if such determination occurred after 10:00 A.M., New York City
time, on such date, will deliver to the Underwriters, without charge, as
many copies of the Prospectus and any amendment or supplement thereto as
the Representatives may reasonably request for purposes of confirming
orders that are expected to settle on the Firm Closing Date.
(f) The Company, as soon as practicable, will make
generally available to its securityholders and to the Representatives a
consolidated earnings statement of the Company and its subsidiaries that
satisfies the provisions of Section 11(a) of the Act and Rule 158
thereunder.
(g) The Company will apply the net proceeds from the
sale of the Securities as set forth under "Use of Proceeds" in the
Prospectus.
(h) The Company and the Operating Partnership will not,
directly or indirectly, without the prior written consent of Prudential
Securities Incorporated, on behalf of the Underwriters, offer, sell,
offer to sell, contract to sell, pledge, grant any option to purchase or
otherwise sell or dispose (or announce any offer, sale, offer of sale,
contract of sale, pledge, grant of any option to purchase or other sale
or disposition) of any shares of Common Stock or other capital stock of
the Company or Units or other partnership interests of the Operating
Partnership, or any securities convertible into, or exchangeable or
exercisable for, shares of Common Stock or other capital stock of the
Company or Units or other partnership interests of the Operating
Partnership, for a period of 180 days after the date hereof, except (i)
pursuant to this Agreement, (ii) pursuant to a dividend reinvestment plan
of the Company, (iii) pursuant to the Company's 1997 Stock Option and
Long-Term Incentive Plan, and (iv) in connection with the acquisition by
the Company or the Operating Partnership of real property or interests in
entities holding real property, provided that the recipient or transferee
of such securities or interests agrees in writing to be subject to the
lock-up contained in this Section 5(h) (without giving effect to clauses
(i), (ii), (iii) and (iv)) for a period ending on the date that is 180
days after the date hereof.
(i) The Company will not, directly or indirectly, (i)
take any action designed to cause or to result in, or that has
constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Securities or (ii) (A) sell, bid
for, purchase, or pay anyone any compensation for soliciting purchases
of, the Securities or (B) pay or agree to pay to any person any
compensation for soliciting another to purchase any other securities of
the Company.
(j) The Company will obtain the agreements described in
Section 7(f) hereof prior to the Firm Closing Date.
(k) If at any time during the 25-day period after the
Registration Statement becomes effective or the period prior to the
Option Closing Date, any rumor, publication or event relating to or
affecting the Company shall occur as a result of which in your opinion
the market price of the Common Stock has been or is likely to be
materially affected (regardless of whether such rumor, publication or
event necessitates a supplement to or amendment of the Prospectus), the
20
Company will, after notice from you advising the Company to the effect
set forth above, forthwith prepare, consult with you concerning the
substance of, and disseminate a press release or other public statement,
reasonably satisfactory to you, responding to or commenting on such
rumor, publication or event.
(l) If the Company elects to rely on Rule 462(b), the
Company shall both file a Rule 462(b) Registration Statement with the
Commission in compliance with Rule 462(b) and pay the applicable fees in
accordance with Rule 111 promulgated under the Act by the earlier of (i)
10:00 P.M. Eastern time on the date of this Agreement and (ii) the time
confirmations are sent or given, as specified by Rule 462(b)(2).
(m) The Company will cause the Securities to be duly
authorized for listing by the New York Stock Exchange prior to the Firm
Closing Date, subject to official notice of issuance.
(n) The Company will use its best efforts to meet the
requirements to qualify, commencing with the taxable year ending December
31, 1997, as a REIT under the Code and will file with its United States
federal income tax return for each taxable year commencing with the
taxable year ending December 31, 1997, the election to be a REIT as
described in Section 856(c)(1) of the Code.
(o) The Company will cause the Operating Partnership to
operate as a limited partnership in accordance with the requirements of
Delaware law.
6. Expenses. The Company will pay all costs and
expenses incident to the performance of its and the Operating
Partnership's obligations under this Agreement, whether or not the
transactions contemplated herein are consummated or this Agreement is
terminated pursuant to Section 11 hereof, including all costs and
expenses incident to (i) the printing or other production of documents
with respect to the transactions, including any costs of printing the
registration statement originally filed with respect to the Securities
and any amendment thereto, any Rule 462(b) Registration Statement, any
Preliminary Prospectus and the Prospectus and any amendment or supplement
thereto, this Agreement and any blue sky memoranda, (ii) all arrangements
relating to the delivery to the Underwriters of copies of the foregoing
documents, (iii) the fees and disbursements of the counsel, the
accountants and any other experts or advisors retained by the Company,
(iv) preparation, issuance and delivery to the Underwriters of any
certificates evidencing the Securities, including transfer agent's and
registrar's fees, (v) the qualification of the Securities under state
securities and blue sky laws, including filing fees and fees and
disbursements of counsel for the Underwriters relating thereto, (vi) the
filing fees of the Commission and the National Association of Securities
Dealers, Inc. relating to the Securities and the reasonable fees,
disbursements and expenses of counsel for the Underwriters in connection
with securing of any required review by the National Association of
Securities Dealers, Inc. of the terms of the sale of the Securities,
(vii) any listing of the Securities on the New York Stock Exchange,
(viii) any meetings with prospective investors in the Securities (other
than as shall have been specifically approved by the Representatives to
be paid for by the Underwriters); and (ix) advertising relating to the
offering of the Securities (other than as shall have been specifically
approved by the Representatives to be
21
paid for by the Underwriters). If the sale of the Securities provided for
herein is not consummated because any condition to the obligations of the
Underwriters set forth in Section 7 hereof is not satisfied, because this
Agreement is terminated pursuant to Section 11 hereof or because of any
failure, refusal or inability on the part of the Company or the Operating
Partnership to perform all obligations and satisfy all conditions on its
part to be performed or satisfied hereunder other than by reason of a
default by any of the Underwriters, the Company will reimburse the
Underwriters severally upon demand for all out-of-pocket expenses
(including counsel fees and disbursements) that shall have been incurred
by them in connection with the proposed purchase and sale of the
Securities. The Company shall not in any event be liable to any of the
Underwriters for the loss of anticipated profits from the transactions
covered by this Agreement.
7. Conditions of the Underwriters' Obligations. The
obligations of the several Underwriters to purchase and pay for the Firm
Securities shall be subject, in the Representatives' sole discretion, to
the accuracy of the representations and warranties of the Company and the
Operating Partnership contained herein as of the date hereof and as of
the Firm Closing Date, as if made on and as of the Firm Closing Date, to
the accuracy of the statements of the Company's officers made pursuant to
the provisions hereof, to the performance by the Company and the
Operating Partnership of their respective covenants and agreements
hereunder and to the following additional conditions:
(a) If the Original Registration Statement or any
amendment thereto filed prior to the Firm Closing Date has not been
declared effective as of the time of execution hereof, the Original
Registration Statement or such amendment and, if the Company has elected
to rely upon Rule 462(b), the Rule 462(b) Registration Statement shall
have been declared effective not later than the earlier of (i) 11:00
A.M., New York time, on the date on which the amendment to the
registration statement originally filed with respect to the Securities or
to the Registration Statement, as the case may be, containing information
regarding the initial public offering price of the Securities has been
filed with the Commission and (ii) the time confirmations are sent or
given as specified by Rule 462(b)(2), or with respect to the Original
Registration Statement, or such later time and date as shall have been
consented to by the Representatives; if required, the Prospectus or any
Term Sheet that constitutes a part thereof and any amendment or
supplement thereto shall have been filed with the Commission in the
manner and within the time period required by Rules 434 and 424(b) under
the Act; no stop order suspending the effectiveness of the Registration
Statement or any amendment thereto shall have been issued, and no
proceedings for that purpose shall have been instituted or threatened or,
to the knowledge of the Company or the Representatives, shall be
contemplated by the Commission; and the Company shall have complied with
any request of the Commission for additional information (to be included
in the Registration Statement or the Prospectus or otherwise).
(b) The Representatives shall have received an opinion,
dated the Firm Closing Date, of ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP,
counsel for the Company and its subsidiaries, to the effect that:
(i) the Company and each of its subsidiaries listed in
Exhibit 21.1 to the Registration Statement (the "Subsidiaries")
(which are corporations) have been duly
22
organized and are validly existing as corporations in good
standing under the laws of their respective jurisdictions of
incorporation and are duly qualified to transact business as
foreign corporations and, based solely on certificates from
public officials, are in good standing under the laws of all
other jurisdictions where the ownership or leasing of their
respective properties or the conduct of their respective
businesses requires such qualification, except where the failure
to be so qualified does not amount to a material liability or
disability to the Company and the Subsidiaries, taken as a
whole. Each of the Subsidiaries (which are partnerships or
limited liability companies) have been duly organized and are
validly existing as partnerships or limited liability companies,
as the case may be, in good standing under the laws of their
respective jurisdictions of organization and, as applicable, are
duly qualified to transact business as foreign partnerships and,
based solely on certificates from public officials, are in good
standing under the laws of all other jurisdictions where the
ownership or leasing of their respective properties or the
conduct of their respective businesses requires such
qualification, except where the failure to be so qualified does
not amount to a material liability or disability to the Company
and the Subsidiaries, taken as a whole;
(ii) the Operating Partnership has been duly organized
and is validly existing as a limited partnership in good
standing under the laws of the State of Delaware and is duly
qualified to transact business as a foreign limited partnership
and, based solely on certificates from public officials, is in
good standing under the laws of all other jurisdictions where
the ownership or leasing of its properties or the conduct of its
businesses requires such qualification, except where the failure
to be so qualified does not amount to a material liability or
disability to the Operating Partnership, the Company and the
Subsidiaries, taken as a whole;
(iii) the Company and each of the Subsidiaries have
corporate power or partnership or limited liability company
power (as the case may be) to own or lease their respective
properties and conduct their respective businesses as described
in the Registration Statement and the Prospectus, and each of
the Company and the Operating Partnership has the corporate
power or partnership power (as the case may be) to enter into
this Agreement and to carry out all the terms and provisions
hereof to be carried out by it;
(iv) the issued shares of capital stock of each of the
corporate Subsidiaries have been duly authorized and validly
issued, are fully paid and nonassessable and, except as
otherwise set forth in the Prospectus, are owned of record and,
to the knowledge of such counsel after due inquiry, beneficially
by the Company free and clear of any perfected security
interests or, to the knowledge of such counsel, any other
security interests, liens, encumbrances, equities or claims. The
partnership agreement of the Operating Partnership has been duly
authorized, executed and delivered by the Company, as its
general partner, and constitutes the valid and binding
obligation of the Company, as its general partner. As to each
Property Partnership, the general partnership, limited
partnership and membership interests have been issued in
accordance with the partnership agreement or limited liability
company operating agreement (as applicable);
23
(v) the Company has an authorized, issued and
outstanding capitalization as set forth in the Prospectus; all
of the issued shares of capital stock of the Company have been
duly authorized and validly issued and are fully paid and
nonassessable, have been issued in compliance with the
registration requirements of federal securities laws (or
pursuant to an exemption therefrom) and were not issued in
violation of or subject to, under the Company's charter or
Maryland law or any agreement to which the Company is a party
and which is known to such counsel based on a certificate of the
Company's Chief Executive Officer and its President, any
preemptive rights or other rights to subscribe for or purchase
securities; the Firm Securities have been duly authorized by all
necessary corporate action of the Company and, when issued and
delivered to and paid for by the Underwriters pursuant to this
Agreement, will be validly issued, fully paid and nonassessable;
the Securities have been duly authorized for listing, subject to
official notice of issuance, on the New York Stock Exchange; to
the knowledge of such counsel after due inquiry, no holders of
outstanding shares of capital stock of the Company are entitled
under the Company's charter or Maryland law or any agreement to
which the Company is a party and which is known to such counsel
based on a certificate of the Company's Chief Executive Officer
and its President, as such, to any preemptive or other rights to
subscribe for any of the Securities; and no holders of
securities of the Company are entitled to have such securities
registered under the Registration Statement;
(vi) the Units and general partnership interests issued
in connection with the Formation Transactions, including,
without limitation, the general partnership interests issued to
the Company, were duly authorized for issuance by the Operating
Partnership to the holders thereof and were validly issued. The
terms of the Units conform in all material respects to the
description thereof and all statements related thereto contained
in the Prospectus. The issuances of securities described in
Items 32 and 33 of the Registration Statement were not at the
time of issue, and are not as of the Firm Closing Date, required
to be registered under the Act;
(vii) the Formation Transactions constituted a
transaction in which the securities issued or exchanged were not
required to be and were not registered under the Securities Act
and, therefore, pursuant to the exception provided by Item
901(c)(2)(ii) of Regulation S-K under the Securities Act
("Regulation S-K"), did not constitute a "roll-up transaction"
within the meaning of Item 901(c)(1) of Regulation S-K. For
purposes of this paragraph, "Formation Transactions" shall (a)
be limited to (1) the formation of the Company and, except as
set forth in clause (b), the issuance of shares of the Company's
Common Stock, (2) the formation of the Operating Partnership,
(3) the formation of the Property Partnerships, and (4) the
contribution of the Properties to the Operating Partnership in
exchange for the Units representing limited partnership
interests therein pursuant to the terms and conditions as set
forth in the Contribution and Exchange Agreement, as amended,
and (b) exclude the acquisition of the National Property and
issuance of Common Stock therefor;
(viii) except as disclosed in the Registration
Statement and the Prospectus, to the knowledge of such counsel
after due inquiry, there are no outstanding (A) securities,
equity
24
interests or obligations of the Company or any of the
Subsidiaries convertible into or exchangeable for any capital
stock or equity interests (as the case may be) of the Company or
any such Subsidiary, (B) warrants, rights or options to
subscribe for or purchase from the Company to any such
Subsidiary any such capital stock or equity interests or any
such convertible or exchangeable securities, equity interests or
obligations, or (C) obligations of the Company or any such
Subsidiary to issue any shares of capital stock, equity
interests, any such convertible or exchangeable securities,
equity interests or obligations, or any such warrants, rights or
options;
(ix) the statements set forth under the heading
"Description of Capital Stock" in the Prospectus, insofar as
such statements purport to summarize certain provisions of the
capital stock of the Company, provide a fair summary of such
provisions; and the statements set forth under the headings
"Formation Transactions and Structure of the Company",
"Partnership Agreement of Operating Partnership", "Certain
Relationships and Related Transactions", "Certain Provisions of
Maryland Law and of the Company's Charter and ByLaws", "Shares
Eligible for Future Sale", "Federal Income Tax Considerations",
"ERISA Considerations" and "Legal Matters" in the Prospectus,
insofar as such statements constitute a summary of the legal
matters, documents or proceedings referred to therein, provide a
fair summary of such legal matters, documents and proceedings;
(x) the execution and delivery of this Agreement has
been duly authorized by all necessary corporate or partnership
action (as the case may be) of the Company and the Operating
Partnership, and this Agreement has been duly executed and
delivered by the Company and the Operating Partnership, and is
the valid and binding agreement of the Company and the Operating
Partnership, enforceable against the Company and the Operating
Partnership in accordance with its terms, subject to the effect
of bankruptcy, insolvency, moratorium, fraudulent conveyance,
reorganization and similar laws relating to creditors' rights
generally, to the application of equitable principles in any
proceeding, whether at law or in equity, as limited by the
unenforceability under certain circumstances under law or court
decisions of provisions providing for the indemnification of or
contribution to a party with respect to a liability where such
indemnification or contribution is contrary to public policy and
to the extent that enforceability of such provisions may be
limited due to the existence of an untrue statement of a
material fact in the Prospectus or the Registration Statement or
omission to state a material fact therein necessary to make the
statements in the Prospectus or the Registration Statement,
respectively, not misleading, it being understood that such
counsel need express no view with respect thereto other than as
set forth in the paragraph immediately following clause (xviii)
below;
(xi) the execution and delivery of the Operative
Agreements have been duly authorized by all necessary corporate
or partnership action (as the case may be) of the parties
thereto, and the Operative Agreements have been duly executed
and delivered by the parties thereto, and are the valid and
binding agreements of the parties thereto, enforceable against
the parties thereto in accordance with their respective terms,
subject to the effect of bankruptcy, insolvency, moratorium,
fraudulent conveyance, reorganization and similar laws
25
relating to creditors' rights generally and to the application of
equitable principles in any proceeding, whether at law or in equity;
(xii) to the knowledge of such counsel based on the
representations of the Company contained herein, review of the
letters of attorneys delivered to the Company's auditors with
respect to the existence of contingent liabilities of the
Company and a certificate of the Chief Executive Officer or
President and the principal financial officer or accounting
officer of the Company, (A) no legal or governmental proceedings
are pending to which the Company or any of the Subsidiaries is a
party or to which the property of the Company or any of the
Subsidiaries is subject that are required to be described in the
Registration Statement or the Prospectus and are not described
therein, and no such proceedings have been threatened against
the Company or any of the Subsidiaries or with respect to any of
their respective properties and (B) no contract or other
document is required to be described in the Registration
Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement that is not described therein or filed as
required;
(xiii) the issuance, offering and sale of the
Securities to the Underwriters by the Company pursuant to this
Agreement, the compliance by the Company and the Operating
Partnership with the other provisions of this Agreement and the
consummation of the other transactions herein contemplated do
not (A) require the consent, approval, authorization,
registration or qualification of or with any federal, New York
or Maryland governmental authority, except such as have been
obtained under the Act and such as may be required under state
securities or blue sky laws, or (B) conflict with or result in a
breach or violation of any of the terms and provisions of, or
constitute a default under, any indenture, mortgage, deed of
trust, lease or other agreement or instrument to which the
Company or any of the Subsidiaries is a party or by which the
Company or any of the Subsidiaries or any of their respective
properties are bound identified by the Chief Executive Officer
or President and the principal financial officer or accounting
officer of the Company as material to the Company or any of the
Subsidiaries or filed as an Exhibit to the Registration
Statement, or the charter documents or by-laws or certificate of
limited partnership or partnership agreement or certificate of
formation or limited liability company operating agreement (as
the case may be) of the Company or any of the Subsidiaries, or
any provision of any New York or Maryland statute, rule or
regulation (other than federal or state securities laws, which
are addressed elsewhere herein) or court order specifically
directed to the Company and identified by the Chief Executive
Officer and President and the principal financial officer or
accounting officer of the Company as material to the Company or
any of the Subsidiaries or otherwise known to such counsel;
(xiv) the Company is not, and after giving effect to
the transactions contemplated by this Agreement will not be,
subject to registration as an investment company under the
Investment Company Act of 1940, as amended;
(xv) the Registration Statement is effective under the
Act; any required filing of the Prospectus, or any Term Sheet
that constitutes a part thereof, pursuant to Rules 424(b)
26
and 434 has been made in the manner and within the time period
required by Rules 424(b) and 434; and based upon such counsel's
due inquiry made to the office of the Secretary of the
Commission, no stop order suspending the effectiveness of the
Registration Statement or any amendment thereto has been issued,
and no proceedings for that purpose have been instituted or
threatened or, to the knowledge of such counsel, are
contemplated by the Commission;
(xvi) the Registration Statement originally filed with
respect to the Securities and each amendment thereto, any Rule
462(b) Registration Statement and the Prospectus (in each case,
other than the financial statements, schedules and other
financial and statistical data contained therein, as to which
such counsel need express no opinion) comply as to form in all
material respects with the applicable requirements of the Act
and the rules and regulations of the Commission thereunder;
(xvii) if the Company elects to rely on Rule 434, the
Prospectus is not "materially different," as such term is used
in Rule 434, from the prospectus included in the Registration
Statement at the time of its effectiveness or an effective
post-effective amendment thereto (including such information
that is permitted to be omitted pursuant to Rule 430A); and
(xviii) the Company has been organized in conformity
with the requirements for qualification as a real estate
investment trust under the Code and the method of operation of
the Company and its subsidiaries as described in the
Registration Statement will enable the Company to meet the
requirements for taxation as a real estate investment trust
under the Code commencing with its taxable year ended December
31, 1997. Such opinion may be based on the method of operation
of the Company as described in the Registration Statement, the
Prospectus and a certificate of an authorized officer of the
Company.
Such counsel shall also state that they have
participated in conferences with officers and other representatives of
the Company, representatives of the independent public accountants for
the Company, and representatives of the Underwriters, at which the
contents of the Registration Statement and the Prospectus and related
matters were discussed and, although such counsel is not passing upon,
and does not assume any responsibility for, the accuracy, completeness or
fairness of the statements contained in the Registration Statement and
the Prospectus and has not made any independent check or verification
thereof, during the course of such participation (relying as to
materiality to a large extent upon the statements of officers and other
representatives of the Company) no facts came to the attention of such
counsel that caused such counsel to believe that the Registration
Statement, as of its effective date, contained any untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading or
that the Prospectus, as of its date or the date of such opinion, included
or includes any 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; it being understood that such counsel need express no
belief with respect to the financial statements, schedules and other
financial and statistical data included in the Registration Statement or
Prospectus.
27
In rendering any such opinion, such counsel may rely,
as to matters of fact, to the extent such counsel deems proper, on
certificates of responsible officers of the Company and public officials
and, as to matters involving the application of the laws of any
jurisdiction other than the State of New York, the Delaware General
Corporation Law and the Delaware Revised Limited Partnership Act or the
United States, to the extent satisfactory in form and scope to counsel
for the Underwriters, upon the opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇▇. The foregoing opinion shall also state that the Underwriters
are justified in relying upon such opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ &
Ingersoll as to matters involving the application of the laws of
Maryland, and copies of such opinion shall be delivered to the
Representatives and counsel for the Underwriters.
References to the Registration Statement and the
Prospectus in this paragraph (b) shall include any amendment or
supplement thereto at the date of such opinion.
(c) The Representatives shall have received an opinion,
dated the Firm Closing Date, of ▇▇▇▇, Scholer, Fierman, ▇▇▇▇ & Handler,
LLP, counsel for the Underwriters, with respect to the issuance and sale
of the Firm Securities, the Registration Statement and the Prospectus,
and such other related matters as the Representatives may reasonably
require, and the Company shall have furnished to such counsel such
documents as they may reasonably request for the purpose of enabling them
to pass upon such matters.
In rendering such opinion, such counsel may rely as to
all matters of Maryland law upon the opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇▇ referred to in paragraph (b) above.
(d) The Representatives shall have received from Ernst
& Young LLP a letter or letters dated, respectively, the date hereof and
the Firm Closing Date, in form and substance satisfactory to the
Representatives, to the effect that:
(i) they are independent accountants with respect to
the Company and its subsidiaries, the Operating Partnership, the
Property Partnerships, The Philips Company and the ▇▇▇▇▇▇▇
Commons and Mill Basin Plaza Properties within the meaning of
the Act and the applicable rules and regulations thereunder;
(ii) in their opinion, the audited financial statements
and schedules and pro forma condensed financial statements
examined by them and included in the Registration Statement and
the Prospectus comply in form in all material respects with the
applicable accounting requirements of the Act and the related
published rules and regulations;
(iii) on the basis of a reading of the latest available
interim unaudited financial statements, if any, of the Company,
the Operating Partnership and the Property Partnerships,
carrying out certain specified procedures (which do not
constitute an examination made in accordance with generally
accepted auditing standards) that would not necessarily reveal
matters of significance with respect to the comments set forth
in this paragraph (iii), a reading of the minute books of the
shareholders, the board of directors and any committees thereof
of the Company, or the record of any actions by the partners or
members, as the case
28
may be, of the Operating Partnership and the Property
Partnerships and inquiries of certain officials of the Company,
the Operating Partnership and the Property Partnerships who have
responsibility for financial and accounting matters, nothing
came to their attention that caused them to believe that:
(A) at a specific date (not more than five
business days prior to the date of such letter), there were any
increases in debt or accumulated deficit of the Company, the
Operating Partnership or the Property Partnerships or any
decreases in total assets or shareholders' or owners' equity (as
applicable) of the Company, the Operating Partnership or the
Property Partnerships, in each case as compared with amounts
shown in the December 31, 1997 balance sheet included in the
Registration Statement and the Prospectus, or for the period
from January 1, 1998 to May __, 1998, there were any decreases,
as compared with the corresponding period of the previous year,
in combined total revenues of the Properties, or in rental
revenue, income before extraordinary items, net income, net
income per share of Common Stock, total assets, or shareholders'
or owners' equity (as applicable) of the Company, the Operating
Partnership or the Property Partnerships, except in all
instances for changes, increases or decreases which the
Registration Statement and the Prospectus disclose have occurred
or may occur; and
(B) at a specific date (not more than five
business days prior to the date of such letter), with respect to
the Company, the Operating Partnership and the Property
Partnerships, there were any increases in borrowings as compared
with amounts shown in the December 31, 1997 balance sheet
included in the Registration Statement and the Prospectus,
except in all instances for changes or increases which the
Registration Statement and the Prospectus disclose have occurred
or may occur.
(iv) they have carried out certain specified
procedures, not constituting an audit, with respect to certain
amounts, percentages and financial information identified by the
Representatives that are derived from the general accounting
records of the Company and its subsidiaries and are included in
the Registration Statement and the Prospectus and have compared
such amounts, percentages and financial information with such
records of the Company and its subsidiaries and with information
derived from such records and have found them to be in
agreement, excluding any questions of legal interpretation; and
(v) on the basis of a reading of the unaudited pro
forma condensed financial statements included in the
Registration Statement and the Prospectus, carrying out certain
specified procedures that would not necessarily reveal matters
of significance with respect to the comments set forth in this
paragraph (v), inquiries of certain officials of the Company and
its subsidiaries who have responsibility for financial and
accounting matters and proving the arithmetic accuracy of the
application of the pro forma adjustments to the historical
amounts in the unaudited pro forma condensed financial
statements, nothing came to their attention that caused them to
believe that the unaudited pro forma condensed financial
statements do not comply in form in all material respects with
the applicable accounting
29
requirements of Rule 11-02 of Regulation S-X or that the pro
forma adjustments have not been properly applied to the
historical amounts in the compilation of such statements.
In the event that the letters referred to above set
forth any such changes, decreases or increases, it shall be a further
condition to the obligations of the Underwriters that (A) such letters
shall be accompanied by a written explanation of the Company as to the
significance thereof, unless the Representatives deem such explanation
unnecessary, and (B) such changes, decreases or increases do not, in the
sole judgment of the Representatives, make it impractical or inadvisable
to proceed with the purchase and delivery of the Securities as
contemplated by the Registration Statement, as amended as of the date
hereof.
References to the Registration Statement and the
Prospectus in this paragraph (d) with respect to either letter referred
to above shall include any amendment or supplement thereto at the date of
such letter.
(e) The Representatives shall have received a
certificate, dated the Firm Closing Date, of the Chief Executive Officer
or President and the principal financial or accounting officer of the
Company to the effect that:
(i) the representations and warranties of the Company and the
Operating Partnership in this Agreement are true and correct as if
made on and as of the Firm Closing Date; the Registration Statement,
as amended as of the Firm Closing Date, does not include any untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading, and the
Prospectus, as amended or supplemented as of the Firm Closing
Date, does not include any untrue statement of a material fact
or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under
which they were made, not misleading; and each of the Company
and the Operating Partnership has performed all covenants and
agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to the Firm Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement or any amendment thereto has been issued,
and no proceedings for that purpose have been instituted or threatened
or, to the best of the Company's or the Operating Partnership's
knowledge, are contemplated by the Commission; and
(iii) subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, neither the
Company nor any of its subsidiaries has sustained any material loss or
interference with their respective businesses or properties from
fire, flood, hurricane, accident or other calamity, whether or
not covered by insurance, or from any labor dispute or any legal
or governmental proceeding, and there has not been any material
adverse change, or any development involving a prospective
material adverse change, in the condition (financial or
otherwise), management, business prospects, net worth or results
of operations of the Company or any of its subsidiaries, taken
as a whole, except
30
in each case as described in or contemplated by the Registration
Statement and the Prospectus (exclusive of any amendment or
supplement thereto).
(f) The Representatives shall have received from ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ and the other executive officers and directors of the Company
agreements to the effect that such person will not, directly or
indirectly, without the prior written consent of Prudential Securities
Incorporated, on behalf of the Underwriters, offer, sell, offer to sell,
contract to sell, pledge, grant any option to purchase or otherwise sell
or dispose (or announce any offer, sale, offer of sale, contract of sale,
pledge, grant of an option to purchase or other sale or disposition) of
any shares of Common Stock or other capital stock of the Company or Units
or other partnership interests of the Operating Partnership, or any
securities convertible into, or exchangeable or exercisable for, shares
of Common Stock or other capital stock of the Company or Units or other
partnership interests of the Operating Partnership, for a period of one
year after the Firm Closing Date; provided, however, that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
and ▇▇▇▇▇▇ ▇▇▇▇▇▇ may pledge to the Company Units held by them, either
directly or indirectly, to secure certain indemnification obligations in
favor of the Company in connection with the Formation Transactions
pursuant to the Letter Agreement filed as Exhibit 10.18 to the
Registration Statement.
(g) On or before the Firm Closing Date, the
Representatives and counsel for the Underwriters shall have received such
further certificates, documents or other information as they may have
reasonably requested from the Company.
(h) Prior to the commencement of the offering of the
Securities, the Securities shall have been approved for listing on the
New York Stock Exchange, subject to official notice of issuance.
(i) On or before the Firm Closing Date, the
Representatives and counsel for the Underwriters shall have received a
true and complete copy of each of the Operative Agreements and there
shall have been no amendments, alterations, modifications or waivers of
any of the provisions of any of the Operative Agreements since their date
of execution from the form in which they shall have been delivered.
(j) On or before the Firm Closing Date, the Company and
the Operating Partnership shall have delivered to you with respect to
each of the Properties copies of:
(i) owners' policies of title insurance insuring that
the Property Partnerships own fee simple title to the real
property comprising the Properties and each title insurance
policy is in an amount not less than the fair market value of
the Property being insured. Such policies shall be issued by a
title insurance company acceptable to the Representatives and
shall contain any coinsurance or reinsurance provisions the
Representatives' require. The title insurance policies shall
contain as exceptions to title only those exceptions acceptable
to the Representatives;
31
(ii) all third party consents, waivers, licenses,
permits, authorizations, agreements, certificates and the like
necessary to operate each of the Properties;
(iii) policies or certificates of insurance relating to
each of the Properties evidencing coverages and in amounts as
are prudent and customary in the businesses in which they are or
will be engaged;
(iv) UCC, judgment and tax lien searches confirming
that the real and personal property comprising the Properties is
subject to no liens, charges, encumbrances, claims or
restrictions (other than the mortgages referred to in the
Prospectus); and
(v) a current payoff letter from the holder of any
mortgage that will be repaid in full or in part with the
proceeds of this offering indicating the principal amount
required to satisfy all amounts then secured by such mortgage
and the additional amount required for each day after the date
of such letter necessary to satisfy all obligations secured
thereby.
All opinions, certificates, letters and documents
delivered pursuant to this Agreement will comply with the provisions
hereof only if they are reasonably satisfactory in all material respects
to the Representatives and counsel for the Underwriters. The Company
shall furnish to the Representatives such conformed copies of such
opinions, certificates, letters and documents in such quantities as the
Representatives and counsel for the Underwriters shall reasonably
request.
The respective obligations of the several Underwriters
to purchase and pay for any Option Securities shall be subject, in their
discretion, to each of the foregoing conditions to purchase the Firm
Securities, except that all references to the Firm Securities and the
Firm Closing Date shall be deemed to refer to such Option Securities and
the related Option Closing Date, respectively.
8. Indemnification and Contribution. (a) Each of the
Company and the Operating Partnership, jointly and severally, agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Securities Exchange Act of 1934 (the "Exchange Act"),
against any losses, claims, damages or liabilities, joint or several, to
which such Underwriter or such controlling person may become subject
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based
upon:
(i) any untrue statement or alleged untrue statement
made by the Company or the Operating Partnership in Section 2 of
this Agreement,
(ii) any untrue statement or alleged untrue statement
of any material fact contained in (A) the Registration Statement
or any amendment thereto, any Preliminary Prospectus or the
Prospectus or any amendment or supplement thereto or (B) any
application or other document, or any amendment or supplement
thereto, executed by the Company or based upon written
information furnished by or on behalf of the Company filed in
any jurisdiction in order to qualify the Securities under the
securities or blue sky laws thereof or
32
filed with the Commission or any securities association or securities
exchange (each an "Application"),
(iii) the omission or alleged omission to state in the
Registration Statement or any amendment thereto, any Preliminary
Prospectus or the Prospectus or any amendment or supplement
thereto, or any Application a material fact required to be
stated therein or necessary to make the statements therein not
misleading, or
(iv) any untrue statement or alleged untrue statement
of any material fact contained in any audio or visual materials
used in connection with the marketing of the Securities,
including, without limitation, slides, videos, films and tape
recordings,
and will reimburse, as incurred, each Underwriter and each such
controlling person for any legal or other expenses reasonably incurred by
such Underwriter or such controlling person in connection with
investigating, defending against or appearing as a third-party witness in
connection with any such loss, claim, damage, liability or action;
provided, however, that neither the Company nor the Operating Partnership
will be liable in any such case to the extent that any such loss, claim,
damage or liability arises out of or is based upon any untrue statement
or alleged untrue statement or omission or alleged omission made in such
registration statement or any amendment thereto, any Preliminary
Prospectus, the Prospectus or any amendment or supplement thereto or any
Application in reliance upon and in conformity with written information
furnished to the Company by such Underwriter through the Representatives
specifically for use therein; and provided, further, that neither the
Company nor the Operating Partnership will be liable to any Underwriter
or any person controlling such Underwriter with respect to any such
untrue statement or omission made in any Preliminary Prospectus that is
corrected in the Prospectus (or any amendment or supplement thereto) if
the person asserting any such loss, claim, damage or liability purchased
Securities from such Underwriter but was not sent or given a copy of the
Prospectus (as amended or supplemented) at or prior to the written
confirmation of the sale of such Securities to such person in any case
where such delivery of the Prospectus (as amended or supplemented) is
required by the Act, unless such failure to deliver the Prospectus (as
amended or supplemented) was a result of noncompliance by the Company or
the Operating Partnership with Section 5(d) and (e) of this Agreement.
This indemnity agreement will be in addition to any liability which the
Company or the Operating Partnership may otherwise have. Neither the
Company nor the Operating Partnership will, without the prior written
consent of the Underwriter or Underwriters purchasing, in the aggregate,
more than fifty percent (50%) of the Securities, settle or compromise or
consent to the entry of any judgment in any pending or threatened claim,
action, suit or proceeding in respect of which indemnification may be
sought hereunder (whether or not any such Underwriter or any person who
controls any such Underwriter within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act is a party to such claim, action, suit
or proceeding), unless such settlement, compromise or consent includes an
unconditional release of all of the Underwriters and such controlling
persons from all liability arising out of such claim, action, suit or
proceeding.
(b) Each Underwriter, severally and not jointly, will
indemnify and hold harmless the Company, each of its directors, each of
its officers who signed the Registration Statement and
33
each person, if any, who controls the Company within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act against any
losses, claims, damages or liabilities to which the Company or any such
director, officer or controlling person may become subject under the Act
or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of any material fact contained in
the Registration Statement or any amendment thereto, any Preliminary
Prospectus or the Prospectus or any amendment or supplement thereto, or
any Application or (ii) the omission or the alleged omission to state
therein a material fact required to be stated in the Registration
Statement or any amendment thereto, any Preliminary Prospectus or the
Prospectus or any amendment or supplement thereto, or any Application 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 reliance
upon and in conformity with written information furnished to the Company
by such Underwriter through the Representatives specifically for use
therein; and, subject to the limitation set forth immediately preceding
this clause, will reimburse, as incurred, any legal or other expenses
reasonably incurred by the Company or any such director, officer or
controlling person in connection with investigating or defending any such
loss, claim, damage, liability or any action in respect thereof. This
indemnity agreement will be in addition to any liability which such
Underwriter may otherwise have. No Underwriter will, without the prior
consent of the Company, settle or compromise or consent to the entry of
any judgment in any pending or threatened claim, action, suit or
proceeding in respect of which indemnification may be sought hereunder
(whether or not the Company, any of its directors or officers who signed
the Registration Statement or any person, if any, who controls the
Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act is a party to such claim, action, suit or proceeding),
unless such settlement, compromise or consent includes an unconditional
release of the Company, its officers and directors who signed the
Registration Statement and such controlling persons from all liability
arising out of such claim, action, suit or proceeding.
(c) Promptly after receipt by an indemnified party
under this Section 8 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made
against the indemnifying party under this Section 8, notify the
indemnifying party of the commencement thereof; but the omission so to
notify the indemnifying party will not relieve it from (i) any liability
which it may have to any indemnified party under this Section 8 except to
the extent the indemnifying party has been prejudiced as a result thereof
or (ii) any liability which it may have to any indemnified party
otherwise than under this Section 8. In case any such action is brought
against any indemnified party, and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, jointly with any
other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party; provided,
however, that if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded that there may be one or more legal
defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying
party, the indemnifying party shall not have the right to direct the
defense of such action on behalf of such indemnified party or parties and
such indemnified party or parties shall have the right to
34
select separate counsel to defend such action on behalf of such
indemnified party or parties. After notice from the indemnifying party to
such indemnified party of its election so to assume the defense thereof
and approval by such indemnified party of counsel appointed to defend
such action, the indemnifying party will not be liable to such
indemnified party under this Section 8 for any legal or other expenses,
other than reasonable costs of investigation, subsequently incurred by
such indemnified party in connection with the defense thereof, unless (i)
the indemnified party shall have employed separate counsel in accordance
with the proviso to the next preceding sentence (it being understood,
however, that in connection with such action the indemnifying party shall
not be liable for the expenses of more than one separate counsel (in
addition to local counsel) in any one action or separate but
substantially similar actions in the same jurisdiction arising out of the
same general allegations or circumstances, designated by the
Representatives in the case of paragraph (a) of this Section 8,
representing the indemnified parties under such paragraph (a) who are
parties to such action or actions) or (ii) the indemnifying party does
not promptly retain counsel satisfactory to the indemnified party or
(iii) the indemnifying party has authorized the employment of counsel for
the indemnified party at the expense of the indemnifying party. After
such notice from the indemnifying party to such indemnified party, the
indemnifying party will not be liable for the costs and expenses of any
settlement of such action effected by such indemnified party without the
consent of the indemnifying party.
(d) In circumstances in which the indemnity agreement
provided for in the preceding paragraphs of this Section 8 is unavailable
or insufficient, for any reason, to hold harmless an indemnified party in
respect of any losses, claims, damages or liabilities (or actions in
respect thereof), each indemnifying party, in order to provide for just
and equitable contribution, 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 (i) the relative benefits received by the
indemnifying party or parties on the one hand and the indemnified party
on the other from the offering of the Securities or (ii) if the
allocation provided by the foregoing clause (i) is not permitted by
applicable law, not only such relative benefits but also the relative
fault of the indemnifying party or parties on the one hand and the
indemnified party on the other in connection with the statements or
omissions or alleged statements or omissions that 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 and the Operating Partnership on the one
hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total proceeds from the offering (before deducting
expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Underwriters. The relative
fault of the parties shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company or the Underwriters, the parties'
relative intents, knowledge, access to information and opportunity to
correct or prevent such statement or omission, and any other equitable
considerations appropriate in the circumstances. The Company, the
Operating Partnership and the Underwriters agree that it would not be
equitable if the amount of such contribution were determined by pro rata
or per capita allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation that does
not take into account the equitable considerations referred to above in
this paragraph (d).
35
Notwithstanding any other provision of this paragraph (d), no Underwriter
shall be obligated to make contributions hereunder that in the aggregate
exceed the total public offering price of the Securities purchased by
such Underwriter under this Agreement, less the aggregate amount of any
damages that such Underwriter has otherwise been required to pay in
respect of the same or any substantially similar claim, and no person
guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations to contribute hereunder are several in proportion to their
respective underwriting obligations and not joint, and contributions
among Underwriters shall be governed by the provisions of the Prudential
Securities Incorporated Master Agreement Among Underwriters. For purposes
of this paragraph (d), each person, if any, who controls an Underwriter
within the meaning of Section 15 of the Act or Section 20 of the Exchange
Act shall have the same rights to contribution as such Underwriter, and
the Company and the Operating Partnership shall be deemed one party and
jointly and severally liable for any obligations to contribute hereunder
and each director of the Company, each officer of the Company who signed
the Registration Statement and each person, if any, who controls the
Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, shall have the same rights to contribution as the Company
and the Operating Partnership.
(e) In connection with the reservation and sale of the
Reserved Shares, each of the Company and the Operating Partnership,
jointly and severally, agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act,
against any losses, claims, damages or liabilities, joint or several, to
which such Underwriter or such controlling person may become subject
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based
upon the sale or purchase of the Reserved Shares or the failure of the
purchasers to pay for and accept delivery of the shares of Common Stock
which are subject to a confirmation of sale.
9. Default of Underwriters. If one or more Underwriters
default in their obligations to purchase Firm Securities or Option
Securities hereunder and the aggregate number of such Securities that
such defaulting Underwriter or Underwriters agreed but failed to purchase
is ten percent or less of the aggregate number of Firm Securities or
Option Securities to be purchased by all of the Underwriters at such time
hereunder, the other Underwriters may make arrangements satisfactory to
the Representatives for the purchase of such Securities by other persons
(who may include one or more of the non-defaulting Underwriters,
including the Representatives), but if no such arrangements are made by
the Firm Closing Date or the related Option Closing Date, as the case may
be, the other Underwriters shall be obligated severally in proportion to
their respective commitments hereunder to purchase the Firm Securities or
Option Securities that such defaulting Underwriter or Underwriters agreed
but failed to purchase. If one or more Underwriters so default with
respect to an aggregate number of Securities that is more than ten
percent of the aggregate number of Firm Securities or Option Securities,
as the case may be, to be purchased by all of the Underwriters at such
time hereunder, and if arrangements satisfactory to the Representatives
are not made within 36 hours after such default for the purchase by other
persons (who may include one or more of the non-defaulting Underwriters,
including the Representatives) of the Securities with
36
respect to which such default occurs, this Agreement will terminate
without liability on the part of any non-defaulting Underwriter or the
Company or the Operating Partnership other than as provided in Section 10
hereof. In the event of any default by one or more Underwriters as
described in this Section 9, the Representatives shall have the right to
postpone the Firm Closing Date or the Option Closing Date, as the case
may be, established as provided in Section 3 hereof for not more than
seven business days in order that any necessary changes may be made in
the arrangements or documents for the purchase and delivery of the Firm
Securities or Option Securities, as the case may be. As used in this
Agreement, the term "Underwriter" includes any person substituted for an
Underwriter under this Section 9. Nothing herein shall relieve any
defaulting Underwriter from liability for its default.
10. Survival. The respective representations,
warranties, agreements, covenants, indemnities and other statements of
the Company, its officers, the Operating Partnership and the several
Underwriters set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement shall remain in full force and
effect, regardless of (i) any investigation made by or on behalf of the
Company, any of its officers or directors, the Operating Partnership, any
Underwriter or any controlling person referred to in Section 8 hereof and
(ii) delivery of and payment for the Securities. The respective
agreements, covenants, indemnities and other statements set forth in
Sections 6 and 8 hereof shall remain in full force and effect, regardless
of any termination or cancellation of this Agreement.
11. Termination. (a) This Agreement may be terminated
with respect to the Firm Securities or any Option Securities in the sole
discretion of the Representatives by notice to the Company given prior to
the Firm Closing Date or the related Option Closing Date, respectively,
in the event that the Company or the Operating Partnership shall have
failed, refused or been unable to perform all obligations and satisfy all
conditions on its part to be performed or satisfied hereunder at or prior
thereto or, if at or prior to the Firm Closing Date or such Option
Closing Date, respectively,
(i) the Company or any of its subsidiaries shall have,
in the sole judgment of the Representatives, sustained any
material loss or interference with their respective businesses
or properties from fire, flood, hurricane, accident or other
calamity, whether or not covered by insurance, or from any labor
dispute or any legal or governmental proceeding or there shall
have been any material adverse change, or any development
involving a prospective material adverse change (including
without limitation a change in management or control of the
Company), in the condition (financial or otherwise), business
prospects, net worth or results of operations of the Company and
its subsidiaries, taken as a whole, except in each case as
described in or contemplated by the Registration Statement and
the Prospectus (exclusive of any amendment or supplement
thereto);
(ii) trading in the Common Stock shall have been
suspended by the Commission or the New York Stock Exchange or
trading in securities generally on the New York Stock Exchange
shall have been suspended or minimum or maximum prices shall
have been established on such exchange;
37
(iii) a banking moratorium shall have been declared by
New York or United States authorities; or
(iv) there shall have been (A) an outbreak or
escalation of hostilities between the United States and any
foreign power, (B) an outbreak or escalation of any other
insurrection or armed conflict involving the United States or
(C) any other calamity or crisis or material adverse change in
general economic, political or financial conditions having an
effect on the U.S. financial markets that, in the sole judgment
of the Representatives, makes it impractical or inadvisable to
proceed with the public offering or the delivery of the
Securities as contemplated by the Registration Statement, as
amended as of the date hereof.
(b) Termination of this Agreement pursuant to this
Section 11 shall be without liability of any party to any other party
except as provided in Sections 6 and 10 hereof.
12. Information Supplied by Underwriters. The
statements set forth in the last paragraph on the front cover page and
under the heading "Underwriting" in any Preliminary Prospectus or the
Prospectus (to the extent such statements relate to the Underwriters)
constitute the only information furnished by any Underwriter through the
Representatives to the Company for the purposes of Sections 2(b) and 8
hereof. The Underwriters confirm that such statements (to such extent)
are correct.
13. Notices. All communications hereunder shall be in
writing and, if sent to any of the Underwriters, shall be delivered or
sent by mail, telex or facsimile transmission and confirmed in writing to
Prudential Securities Incorporated, ▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, Attention: Equity Transactions Group; and if sent to the
Company or the Operating Partnership, shall be delivered or sent by mail,
telex or facsimile transmission and confirmed in writing to the Company
at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Chief Executive
Officer.
14. Successors. This Agreement shall inure to the
benefit of and shall be binding upon the several Underwriters, the
Company, the Operating Partnership and their respective successors and
legal representatives, and nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any other person any
legal or equitable right, remedy or claim under or in respect of this
Agreement, or any provisions herein contained, this Agreement and all
conditions and provisions hereof being intended to be and being for the
sole and exclusive benefit of such persons and for the benefit of no
other person except that (i) the indemnities of the Company and the
Operating Partnership contained in Section 8 of this Agreement shall also
be for the benefit of any person or persons who control any Underwriter
within the meaning of Section 15 of the Act or Section 20 of the Exchange
Act and (ii) the indemnities of the Underwriters contained in Section 8
of this Agreement shall also be for the benefit of the directors of the
Company, the officers of the Company who have signed the Registration
Statement and any person or persons who control the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act. No
purchaser of Securities from any Underwriter shall be deemed a successor
because of such purchase.
38
15. Applicable Law. THE VALIDITY AND INTERPRETATION OF
THIS AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN, SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, WITHOUT GIVING EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF
LAWS.
16. Consent to Jurisdiction and Service of Process. All
judicial proceedings arising out of or relating to this Agreement may be
brought in any state or federal court of competent jurisdiction in the
State of New York, and by execution and delivery of this Agreement, each
of the Company and the Operating Partnership accepts for itself and in
connection with its properties, generally and unconditionally, the
nonexclusive jurisdiction of the aforesaid courts and waives any defense
of forum non conveniens and irrevocably agrees to be bound by any
judgment rendered thereby in connection with this Agreement. Each of the
Company and the Operating Partnership designates and appoints ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, and such other persons as may hereafter be selected by each of
the Company and the Operating Partnership irrevocably agreeing in writing
to so serve, as its agent to receive on its behalf service of all process
in any such proceedings in any such court, such service being hereby
acknowledged by each of the Company and the Operating Partnership to be
effective and binding service in every respect. A copy of any such
process so served shall be mailed by registered mail to each of the
Company and the Operating Partnership at its address provided in Section
13 hereof; provided, however, that, unless otherwise provided by
applicable law, any failure to mail such copy shall not affect the
validity of service of such process. If any agent appointed by the
Company or the Operating Partnership refuses to accept service, each of
the Company and the Operating Partnership hereby agrees that service of
process sufficient for personal jurisdiction in any action against the
Company or the Operating Partnership in the State of New York may be made
by registered or certified mail, return receipt requested, to the Company
or the Operating Partnership at its address provided in Section 13
hereof, and each of the Company and the Operating Partnership hereby
acknowledges that such service shall be effective and binding in every
respect. Nothing herein shall affect the right to serve process in any
other manner permitted by law or shall limit the right of any Underwriter
to bring proceedings against the Company and the Operating Partnership in
the courts of any other jurisdiction.
17. Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
39
If the foregoing correctly sets forth our
understanding, please indicate your acceptance thereof in the space
provided below for that purpose, whereupon this letter shall constitute
an agreement binding the Company, the Operating Partnership and each of
the several Underwriters.
Very truly yours,
PHILIPS INTERNATIONAL REALTY CORP.
By: _________________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Chief Executive Officer and
Chairman of the Board
PHILIPS INTERNATIONAL REALTY, L.P.
By: Philips International Realty Corp.,
its General Partner
By: _____________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Chief Executive Officer and
Chairman of the Board
The foregoing Agreement is hereby confirmed and accepted as of the date
first above written.
PRUDENTIAL SECURITIES INCORPORATED
▇▇▇▇▇▇▇ ▇▇▇▇▇ & ASSOCIATES, INC.
By: PRUDENTIAL SECURITIES INCORPORATED
By:__________________________________________
▇▇▇▇-▇▇▇▇▇▇ Canfin
Managing Director
For itself and on behalf of the Representatives.
40
SCHEDULE 1
UNDERWRITERS
Number of
Firm Securities
Underwriter to be Purchased
Prudential Securities Incorporated
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc.
41