EXHIBIT 10.1
CRESCENT REAL ESTATE EQUITIES COMPANY
(a Texas real estate investment trust)
PLACEMENT AGENCY AGREEMENT
Dated: April 22, 2002
CRESCENT REAL ESTATE EQUITIES COMPANY
(a Texas real estate investment trust)
PLACEMENT AGENCY AGREEMENT
April 22, 2002
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
4 World Financial Center, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Crescent Real Estate Equities Company, a Texas statutory real estate
investment trust (the "Company"), confirms its agreement with ▇▇▇▇▇▇▇ ▇▇▇▇▇ &
Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇" or the
"Placement Agent"), to act as placement agent for the Company, as set forth in
this agreement (the "Agreement") with respect to the issue and sale by the
Company and the purchase by ▇▇▇▇▇ & Steers Capital Management, Inc., a New York
corporation, on behalf of the client accounts set forth on Schedule A to the
Purchase Agreement (the "Purchase Agreement") between them and the Company dated
as of April 22, 2002 (each a "Purchaser" and collectively the "Purchasers"), of
an aggregate of 2,800,000 shares of the Company's 6 3/4% Series A Convertible
Cumulative Preferred Shares of Beneficial Interest, $.01 par value per share of
the Company (the "Securities").
It is contemplated that the Securities will be issued by the Company
with a purchase price of $18.00 per share and an aggregate purchase price of
$50,400,000. In acting as the Placement Agent, ▇▇▇▇▇▇▇ ▇▇▇▇▇ will seek to place
the securities with the Purchasers on a reasonable best efforts basis, acting as
the Company's agent and not as a principal in the placement of the Securities.
▇▇▇▇▇▇▇ ▇▇▇▇▇ may separately engage, at its own expense and with the prior
approval of the Company, sub-agents as it may deem necessary or appropriate.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-38071) covering the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act"), which registration statement was declared effective by the
Commission in October 1997. Promptly after execution and delivery of this
Agreement, the Company will prepare and file a prospectus supplement in
accordance with the provisions of paragraph (b) of Rule 424 ("Rule 424(b)") of
the rules and regulations of the Commission under the 1933 Act (the "1933 Act
Regulations"). Such registration statement, including the exhibits thereto,
schedules thereto, if any, and the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the 1933 Act, as of the date of this
Agreement, is herein called the "Registration Statement." Any registration
statement filed pursuant to Rule 462(b) of the 1933 Act Regulations is herein
referred to as the "Rule 462(b) Registration Statement," and after such filing
the term "Registration Statement" shall include the Rule 462(b) Registration
Statement. The final prospectus, including the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the 1933 Act, in the
form first furnished to the Placement Agent for use in connection with the
offering is herein called the "Prospectus." For purposes of this Agreement, all
references to the Registration Statement, the Prospectus or any amendment or
supplement to any of the foregoing shall be deemed to include the copy filed
with the Commission pursuant to its Electronic Data Gathering, Analysis and
Retrieval system ("▇▇▇▇▇").
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Registration Statement or the Prospectus (or other references of like import)
shall be deemed to mean and include all such financial statements and schedules
and other information which is incorporated by reference in the Registration
Statement or the Prospectus, as the case may be; and all references in this
Agreement to amendments or supplements to the Registration Statement or the
Prospectus shall be deemed to mean and include the filing of any document under
the Securities Exchange Act of 1934, as amended (the "1934 Act"), which is
incorporated by reference in the Registration Statement or the Prospectus, as
the case may be.
As used herein, (i) the term "Subsidiary" means a corporation, limited
liability company, partnership or other entity a majority of the outstanding
voting stock, partnership or membership interests or other similar interests, as
the case may be, of which is owned or controlled, directly or indirectly, by the
Company, Crescent Real Estate Equities Limited Partnership, a Delaware limited
partnership (the "Operating Partnership"), or by one or more other Subsidiaries
of the Company or the Operating Partnership, and (ii) the term "Significant
Subsidiary" means any Subsidiary meeting the conditions of Rule 1-02(w) of
Regulation S-X under the 1934 Act (excluding CRE Management XI, LLC and Crescent
Real Estate Funding XI, L.P., as a result of the sale of all property owned by
Crescent Real Estate Funding XI, L.P. in late 2001, which are as of the date
hereof no longer significant subsidiaries).
(a) Representations and Warranties by the Company and the Operating
Partnership. Each of the Company and the Operating Partnership represents and
warrants to the Placement Agent as of the date hereof, and as of the Closing
Time referred to in Section 2(b) hereof, and agrees with the Placement Agent, as
follows:
(i) The Registration Statement and the Prospectus, at the time
the Registration Statement became effective and as of the date hereof,
complied, and at the Closing Time will comply, in all material
respects, with the requirements of the 1933 Act and the 1933 Act
Regulations; the Registration Statement, at the time the Registration
Statement became effective and as of the date hereof, did not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading. The Prospectus, as of the date hereof, does
comply, and at the Closing Time will comply, in all material respects
with the requirements of the 1933 Act and the 1933 Act Regulations, and
as of the date hereof does not, and as of the Closing Date will not,
contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that the representations and warranties in this
paragraph shall not apply to statements in or omissions from the
Registration Statement or the Prospectus made in reliance upon and in
conformity with written information furnished to the Company through
you specifically for inclusion in the Registration Statement or the
Prospectus.
(ii) No stop order suspending the effectiveness of the
Registration Statement or any part thereof has been issued, and no
proceeding for that purpose has been instituted or, to the knowledge of
the Company or the Operating Partnership, threatened by the Commission
or by the state securities authority of any jurisdiction. No order
preventing or suspending the use of the Prospectus has been issued, and
no proceeding for that purpose has been instituted or, to the knowledge
of the Company or the Operating Partnership, threatened by the
Commission or by the state securities authority of any jurisdiction.
(iii) To the knowledge of the Company and the Operating
Partnership, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, who has certified certain financial
statements of the Company and its
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consolidated subsidiaries, are independent public accountants with
respect to the Company and its consolidated subsidiaries within the
meaning of Rule 101 of the Code of Professional Conduct of the American
Institute of Certified Public Accountants and its interpretations and
rulings thereunder.
(iv) The financial statements and the related notes thereto
included or incorporated by reference in the Prospectus present fairly
the financial position of the Company and its consolidated subsidiaries
as of the dates indicated and the results of their operations and the
changes in their cash flows for the periods specified; such financial
statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout the
periods covered thereby; the other financial information included or
incorporated by reference in the Prospectus has been derived from the
accounting records of the Company and its consolidated subsidiaries and
presents fairly the information shown thereby except as otherwise noted
therein or in the Prospectus; and the pro forma financial information
and the related notes thereto incorporated by reference in the
Prospectus has been prepared in a manner consistent with generally
accepted accounting principles, and the principal assumptions
underlying such pro forma financial information are reasonable and are
incorporated by reference in the Prospectus.
(v) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as
otherwise stated therein, (A) there has been no material adverse change
in the condition, financial or otherwise, or in the earnings, assets,
business affairs or business prospects of the Company, the Operating
Partnership and the Subsidiaries, considered as one enterprise (a
"Material Adverse Effect"), whether or not arising in the ordinary
course of business, (B) no material casualty loss or material
condemnation or other material adverse event with respect to any real
property or improvements thereon owned or leased by any of the Company,
the Operating Partnership or any of their Subsidiaries, including any
property underlying indebtedness held by the Company (each individually
a "Property" and collectively, the "Properties"), the Operating
Partnership or any of their Subsidiaries, has occurred that is material
to the Company, the Operating Partnership and the Subsidiaries
considered as one enterprise, (C) there have been no acquisitions or
other transactions entered into by the Company, the Operating
Partnership or any Subsidiary other than those in the ordinary course
of business that are material with respect to such entities, considered
as one enterprise, or would result in any inaccuracy in the
representations contained in Section 1(a)(iv) above, (D) except for
regular quarterly dividends or distributions on the common shares of
beneficial interest, $0.01 par value per share of the Company ("Common
Shares"), the preferred shares of beneficial interest, $0.01 par value
per share of the Company ("Preferred Shares"), units of limited
partnership interest of the Operating Partnership ("Units") and
preferred units of limited partnership interest of the Operating
Partnership ("Preferred Units"), there has been no dividend or
distribution of any kind declared, paid or made by the Company, or by
the Operating Partnership with respect to its partnership interests,
and (E) there has been no change in the capital stock of the Company or
its Subsidiaries or the partnership interests of the Operating
Partnership, or any increase in the indebtedness of the Company, the
Operating Partnership or the Subsidiaries that is material to such
entities, considered as one enterprise.
(vi) The Company has been duly formed as a real estate
investment trust under the laws of the State of Texas, is duly
qualified to do business and is in good standing in each jurisdiction
in which its ownership or lease of property or the conduct of its
business requires such qualification, and has all power and authority
necessary to own or hold its properties and to conduct the business in
which it is engaged, except where the failure to be so qualified or
have such power or authority would not, individually or in the
aggregate, have a Material Adverse
3
Effect. According to the County Clerk of Tarrant County, Texas, the
Restated Declaration of Trust of the Company is recorded in Volume
12645, beginning at Page 1811, in the records of the County Clerk, and
the Articles of Amendment to the Restated Declaration of Trust, as
amended, is recorded in Volume 15194, beginning at Page 311, in the
records of the County Clerk (together, the "Declaration of Trust").
(vii) The Subsidiaries, including the Operating Partnership,
have been duly organized and are validly existing and in good standing
under the laws of their respective jurisdictions of organization, are
duly qualified to do business and are in good standing in each
jurisdiction in which their respective ownership or lease of property
or the conduct of their respective businesses requires such
qualification, and have all power and authority necessary to own or
hold their respective properties and to conduct the businesses in which
they are engaged, except where the failure to be so qualified or have
such power or authority would not, individually or in the aggregate,
have a Material Adverse Effect. Except for subsidiaries omitted from
Exhibit 21.01 to the Company's annual report on Form 10-K for the
fiscal year ended December 31, 2001 (including any amendments thereto,
the "Form 10-K") as permitted by the Exchange Act and the rules and
regulations of the Commission thereunder, rules, the only subsidiaries
of the Company are those listed on such Schedule 21.01 and Crescent
Finance Company. The Subsidiaries listed in Schedule 1 to this
Agreement are the only Significant Subsidiaries of the Company and the
Operating Partnership. The Company and the Operating Partnership have
full right, power and authority to execute and deliver this Agreement
and, with respect to the Company only, the Securities, the Statement of
Designation for the 2,800,000 Securities (the "Statement of
Designation") and the Purchase Agreement (collectively, the
"Transaction Documents") and to perform their obligations hereunder and
thereunder.
(viii) The Second Amended and Restated Agreement of Limited
Partnership of the Operating Partnership, as amended (the "Partnership
Agreement"), is a valid and binding agreement enforceable in accordance
with its terms. At Closing Time (as hereinafter defined), Crescent Real
Estate Equities, Ltd., a Delaware corporation ("CGP, Inc."), a wholly
owned subsidiary of the Company, will be the sole general partner of
the Operating Partnership and will be the holder of one percent (1%) of
the interests in the Operating Partnership.
(ix) Each of the partnership agreements, limited liability
company agreements, or other, similar instruments to which the Company
or any of its Subsidiaries is a party has been duly authorized,
executed and delivered by the parties thereto and constitutes the valid
agreement thereof, enforceable in accordance with its terms. All of the
issued and outstanding shares of capital stock of each of the corporate
Subsidiaries have been duly authorized and validly issued and are fully
paid and non-assessable. All of the shares of capital stock or limited
partnership or equity interests, as the case may be, of each of the
Subsidiaries owned by the Company, the Operating Partnership or the
Subsidiaries are free and clear of all liens, charges and encumbrances,
except that (i) the partnership interests in Crescent Real Estate
Funding I, L.P. and Crescent Real Estate Funding II, L.P. are pledged
as collateral under the Fleet I and II Term Loan (as described in the
Form 10-K), and (ii) the partnership interests in Crescent Spectrum
Center, L.P. and the equity interests in its general partners are
pledged as collateral under the Mezzanine portion of the Deutsche Bank
- CMBS Loan (as described in the Form 10-K).
(x) The authorized, issued and outstanding beneficial
interests in the Company are as set forth in the Prospectus (except for
subsequent issuances, if any, pursuant to clauses (A) and (B) below);
and all of such beneficial interests have been duly authorized, are
validly issued, fully paid and non-assessable and have been offered and
sold in compliance with all applicable laws (including, without
limitation, federal securities laws). No shares of capital stock of the
4
Company are reserved for any purpose except in connection with: (A) the
incentive compensation plans of the Company as described in the
Registration Statement, (B) the possible issuance of Common Shares upon
the exchange of Units, including Units to be issued upon exercise of
existing options to acquire Units, pursuant to the Partnership
Agreement, (C) the possible issuance of Common Shares upon exercise of
an existing option to acquire up to 217,530 Common Shares, (D) the
possible issuance of up to 664,294 Common Shares upon the exchange of a
portion of a partnership interest in Desert Mountain Properties Limited
Partnership, for which sufficient Common Shares have been reserved for
possible future issuance, and (E) the possible issuance of Common
Shares upon conversion of the outstanding 6 3/4% Series A Cumulative
Convertible Preferred Shares. Except for (A) Units, (B) Common Shares
issuable upon the exercise of options for Common Shares, (C) Units
issuable upon the exercise of options for Units and Common Shares
issuable upon exchange of Units for Common Shares, (D) Common Shares
issuable upon conversion of the outstanding 6 3/4% Series A Cumulative
Convertible Preferred Shares and (E) up to 664,294 Common Shares upon
the exchange of a portion of a partnership interest in Desert Mountain
Properties Limited Partnership, there are no outstanding securities
convertible into or exchangeable for any beneficial interests in the
Company and no outstanding options, rights (preemptive or otherwise) or
warrants to purchase or to subscribe for such interests or any other
securities of the Company.
(xi) The Securities have been duly authorized for issuance and
sale to the Purchasers and, when issued and delivered by the Company
pursuant to the Purchase Agreement, following filing with the County
Clerk of Tarrant County, Texas of the Statement of Designation and
against payment of the consideration set forth herein, will be validly
issued, fully paid and non-assessable. The Securities will be offered
and sold at Closing Time in compliance with all applicable laws
(including, without limitation, federal securities laws). The terms of
the Securities conform to all statements and descriptions related
thereto contained in the Prospectus. The form of the certificates used
to evidence the Securities are due and proper form and comply with all
applicable legal requirements. The issuance of the Securities is not
subject to any preemptive or other similar rights and, except as
summarized in the Prospectus and set forth in the Declaration of Trust,
the Statement of Designation or the Company's Amended and Restated
Bylaws, as amended (the "Bylaws"), there are no restrictions on the
voting or transfer of the Securities pursuant to the Company's
Declaration of Trust, Statement of Designation or Bylaws or any
agreement or other instrument.
(xii) The Common Shares issuable upon conversion of the
Securities will have been duly authorized and reserved for issuance
upon such conversion and such shares, when issued upon such conversion
or exercise, will be duly authorized, validly issued, fully paid and
non-assessable. The terms of the Common Shares issuable upon conversion
of the Securities conform to all statements and descriptions related
thereto contained in the Prospectus. The form of the certificates used
to evidence the Common Shares issuable upon conversion of the
Securities are due and proper form and comply with all applicable legal
requirements. The issuance of the Common Shares issuable upon
conversion of the Securities is not subject to any preemptive or other
similar rights and, except as summarized in the Prospectus and set
forth in the Declaration of Trust, the Statement of Designation or the
Bylaws, there are no restrictions on the voting or transfer of the
Common Shares issuable upon conversion of the Securities pursuant to
the Company's Declaration of Trust, Statement of Designation or Bylaws
or any agreement or other instrument.
(xiii) The authorized, issued and outstanding Units are as set
forth in the Registration Statement and Prospectus except to the extent
of changes due to the conversion of Units to Common Shares or the
exercise of existing options to acquire Units. All of the Units
outstanding
5
at Closing Time were duly authorized for issuance by the Operating
Partnership and are validly issued and fully paid. The Units were
offered and sold in compliance with all applicable laws (including,
without limitation, federal and state securities laws). Except as
summarized in the Prospectus or set forth in the Partnership Agreement,
there are no preemptive or other rights to subscribe for or to
purchase, nor any restriction upon the voting or transfer of, any Units
pursuant to the Partnership Agreement or any other instrument. The
terms of the Units conform to all statements and descriptions related
thereto contained in the Prospectus.
(xiv) None of the Company, the Operating Partnership or any of
the Subsidiaries is (i) in violation of its charter, by-laws,
partnership agreements, declarations of trust or similar organizational
documents; (ii) in default in any material respect, and no event has
occurred that, with notice or lapse of time or both, would constitute
such a default, in the due performance or observance of any term,
covenant or condition contained in any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the
Company, the Operating Partnership or any of the Subsidiaries is a
party or by which the Company, the Operating Partnership or any of the
Subsidiaries is bound or to which any of the property or assets of the
Company, the Operating Partnership or any of the Subsidiaries is
subject; or (iii) in violation of any law or statute or any judgment,
order or regulation of any court or arbitrator or governmental or
regulatory authority, except, in the case of clauses (ii) and (iii)
above, for any such default or violation that would not, individually
or in the aggregate, have a Material Adverse Effect.
(xv) The execution, delivery and performance by the Company or
the Operating Partnership of each of the Transaction Documents to which
each is a party, the issuance and sale of the Securities and compliance
by the Company and the Operating Partnership with the terms thereof and
the consummation of the transactions contemplated by the Transaction
Documents will not (i) conflict with or result in a breach or violation
of any of the terms or provisions of, or constitute a default under, or
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company, the Operating Partnership
or any of the Subsidiaries pursuant to, any indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument to which the
Company, the Operating Partnership or any of the Subsidiaries is a
party or by which the Company, the Operating Partnership or any of the
Subsidiaries is bound or to which any of the property or assets of the
Company, the Operating Partnership or any of the Subsidiaries is
subject, (ii) result in any violation of the provisions of the charter,
by-laws, partnership agreements, declarations of trust or similar
organizational documents of the Company, the Operating Partnership or
any of the Subsidiaries, except that any violation of the Preferred
Shares Ownership Limit or Common Shares Ownership Limit (as such terms
are defined in the Declaration of Trust) because of the issuance of the
Securities to any Purchaser, has been waived, or will be waived prior
to the Closing Time, by the Company's Board of Trust Managers as
permitted by the Declaration of Trust, or (iii) result in the violation
of any law or statute or any judgment, order or regulation of any court
or arbitrator or governmental or regulatory authority, except, in the
case of clauses (i) and (iii) above, for any such conflict, breach or
violation that would not, individually or in the aggregate, have a
Material Adverse Effect.
(xvi) Except as described in the Prospectus, there are no
legal, governmental or regulatory investigations, actions, suits or
proceedings pending to which the Company, the Operating Partnership or
any of the Subsidiaries is or may be a party or to which any property
of the Company, the Operating Partnership or any of the Subsidiaries is
or may be the subject that, individually or in the aggregate, if
determined adversely to the Company or any of its subsidiaries, could
reasonably be expected to have a Material Adverse Effect; and to the
knowledge of the Company and the Operating Partnership, no such
investigations, actions, suits
6
or proceedings are threatened or contemplated by any governmental or
regulatory authority or threatened by others.
(xvii) The Company qualified as a real estate investment trust
under the Internal Revenue Code of 1986, as amended (the "Code"), with
respect to all of its taxable years commencing with the taxable years
ended December 31, 1994 and is organized in conformity with the
requirements for qualification as a real estate investment trust, and
its manner of operation has enabled it to meet the requirements for
qualification as a real estate investment trust as of the date of the
Prospectus, and its current and proposed manner of operation will
enable it to meet the requirements for qualification and taxation as a
real estate investment trust for its current and future taxable years.
(xviii) None of the Company, the Operating Partnership nor any
of the Subsidiaries is, and after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as
described in Prospectus none of them will be, an "investment company"
or an entity "controlled" by an "investment company" within the meaning
of the Investment Company Act of 1940, as amended, and the rules and
regulations of the Commission thereunder (collectively, the "1940
Act").
(xix) The Company, the Operating Partnership and each of the
Subsidiaries own or possess adequate rights to use all material
patents, patent applications, trademarks, service marks, trade names,
trademark registrations, service ▇▇▇▇ registrations, copyrights,
licenses and know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems or
procedures) necessary for the conduct of their respective businesses;
and the conduct of their respective businesses will not conflict in any
material respect with any such rights of others, and the Company, the
Operating Partnership and the Subsidiaries have not received any notice
of any claim of infringement of or conflict with any such rights of
others.
(xx) No consent, approval, authorization, order, registration
or qualification of or with any court or arbitrator or governmental or
regulatory authority is required for the execution, delivery and
performance by the Company and the Operating Partnership of each of the
Transaction Documents to which each is a party, the issuance and sale
of the Securities and compliance by the Company and the Operating
Partnership with the terms thereof and the consummation of the
transactions contemplated by the Transaction Documents, except as may
be required under the laws of the 1933 Act, the 1933 Act Regulations or
state securities and real estate syndication laws.
(xxi) The Company, the Operating Partnership and each of the
Subsidiaries possess all licenses, certificates, permits and other
authorizations issued by, and have made all declarations and filings
with, the appropriate federal, state, local or foreign governmental or
regulatory authorities that are necessary for the ownership or lease of
their respective properties or the conduct of their respective
businesses as described in the Prospectus, except where the failure to
possess or make the same would not, individually or in the aggregate,
have a Material Adverse Effect; and except as described in the
Prospectus, none of the Company, the Operating Partnership nor any of
the Subsidiaries has received notice of any revocation or modification
of any such license, certificate, permit or authorization or has any
reason to believe that any such license, certificate, permit or
authorization will not be renewed in the ordinary course, except where
such revocation or modification could not reasonably be expected to
have a Material Adverse Effect.
7
(xxii) The documents incorporated or deemed to be incorporated
by reference in the Prospectus, at the time it was or hereafter is
filed with the Commission, complied and will comply in all material
respects with the requirements of the 1934 Act and the rules and
regulations of the Commission under the 1934 Act (the "1934 Act
Regulations"), and, when read together with the other information in
the Prospectus, at the time the Registration Statement became
effective, as of the date hereof or during the period specified in
Section 3(f) hereof, did not and will not include an untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(xxiii) No labor disturbance by or dispute with employees of
the Company, the Operating Partnership or any of the Subsidiaries
exists or, to the knowledge of the Company, is contemplated or
threatened.
(xxiv) Except as otherwise disclosed in the Prospectus, (i)
the Company, the operating Partnership and each of the Subsidiaries
have good and marketable title in fee simple to, or have valid rights
to lease or otherwise use, all Properties that are material to the
respective businesses of the Company, the Operating Partnership and the
Subsidiaries, except those that (a) do not materially and adversely
affect the value of such property and do not materially interfere with
the use made and proposed to be made of such Property by the Company,
the Operating Partnership and the Subsidiaries or (b) could not
reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect, (ii) all liens, pledges, security interests,
claims, defects, imperfections of title or any other encumbrances of
any kind or nature (collectively, "Liens") that are required to be
disclosed in the Form 10-K are disclosed therein, (iii) neither the
Company nor, to the knowledge of the Company, any other party to any
lease relating to any Property is in default under any such lease and
the Company is not aware of any event that, with the giving of notice
or the passage of time, or both, would constitute a default under any
such lease, except in each case such defaults that would not,
individually or in the aggregate, have a Material Adverse Effect; (iv)
each of the leases pursuant to which all or any portion of the
Properties are demised is in full force and effect and, except as set
forth in the Form 10-K, no tenant thereunder has a right of first
refusal to purchase the premises demised thereunder, except in each
case with such exceptions as would not, individually or in the
aggregate, have a Material Adverse Effect, (v) each of the Properties
is in compliance with all applicable codes, laws and regulations
(including, without limitation, building and zoning codes, laws and
regulations), except for such failures to comply that would not,
individually or in the aggregate, have a Material Adverse Effect, (vii)
the Company does not have any knowledge of any pending or threatened
condemnation, zoning change or other proceeding or action that will in
any manner affect the size of, use of, improvements on, construction on
or access to the real properties, except such proceedings or actions
that would not, individually or in the aggregate, have a Material
Adverse Effect, (viii) all Properties and buildings held under lease by
the Company, the Operating Partnership or any of the Subsidiaries and
described in the Form 10-K are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not
interfere in any material respect with the use made and proposed to be
made of such Property and buildings by the Company, the Operating
Partnership or the Subsidiaries, as the case may be; (ix) all real
property is free of material structural defects and all material
building systems contained therein are in good working order subject to
ordinary wear and tear, except in each case as could not reasonably be
expected to have a Material Adverse Effect.
(xxv) Except as disclosed in the Prospectus, (A) each
Property, including, without limitation, the Environment (as defined
below) associated with such Property, is free of any Hazardous
Substance (as defined below), except for Hazardous Substances that
would not have a
8
Material Adverse Effect; (B) none of the Company, the Operating
Partnership or any Subsidiary has caused or suffered to occur any
Release (as defined below) of any Hazardous Substance into the
Environment on, in, under or from any Property, and no condition exists
on, in, under or, to the knowledge of the Company and the Operating
Partnership, adjacent to any Property that is reasonably likely to
result in the incurrence of material liabilities or any material
violations of any Environmental Law (as defined below), give rise to
the imposition of any Lien (as defined below) under any Environmental
Law, or cause or constitute a health, safety or environmental hazard to
any property, person or entity; (C) none of the Company, the Operating
Partnership or any Subsidiary intends to use the properties or assets
described in the Prospectus or any other real property for the purpose
of handling, burying, storing, retaining, refining, transporting,
processing, manufacturing, generating, producing, spilling, seeping,
leaking, escaping, leaching, pumping, pouring, emitting, emptying,
discharging, injecting, dumping, transferring or otherwise disposing of
or dealing with a Hazardous Substance, except for materials utilized in
the ordinary course of business of the properties, provided such use
would not, in the ordinary course of business, give rise to liability
under any Environmental Law; (D) none of the Company, the Operating
Partnership or any Subsidiary has received any notice of a claim under
or pursuant to any Environmental Law or under common law pertaining to
Hazardous Substances on or originating from any Property; (E) none of
the Company, the Operating Partnership or any Subsidiary has received
any notice from any Governmental Authority (as defined below) claiming
any violation of any Environmental Law; (F) no Property is included or,
to the knowledge of the Company and the Operating Partnership, proposed
for inclusion on the National Priorities List issued pursuant to CERCLA
(as defined below) by the United States Environmental Protection Agency
(the "EPA") or on the Comprehensive Environmental Response,
Compensation, and Liability Information System database maintained by
the EPA, and has not otherwise been identified by the EPA as a
potential CERCLA removal, remedial or response site or included or, to
the knowledge of the Company and the Operating Partnership, proposed
for inclusion on, any similar list of potentially contaminated sites
pursuant to any other Environmental Law and (G) there are no
underground storage tanks located on or in any Property except where
the presence thereof would not have a Material Adverse Effect.
As used herein, "Hazardous Substance" shall include, without
limitation, any hazardous substance, hazardous waste, toxic substance,
pollutant, solid waste or similarly designated materials, including,
without limitation, oil, petroleum or any petroleum-derived substance
or waste, asbestos or asbestos-containing materials, PCBs, pesticides,
explosives, radioactive materials, dioxins, urea formaldehyde
insulation or any constituent of any such substance, pollutant or
waste, including any such substance, pollutant or waste identified or
regulated under any Environmental Law (including, without limitation,
materials listed in the United States Department of Transportation
Optional Hazardous Material Table, 49 C.F.R. Section 172.101, as the
same may now or hereafter be amended, or in the EPA's List of Hazardous
Substances and Reportable Quantities, 40 C.F.R. Part 302, as the same
may now or hereafter be amended); "Environment" shall mean any surface
water, drinking water, ground water, land surface, subsurface strata,
river sediment, buildings, structures, and ambient, workplace and
indoor air; "Environmental Law" shall mean the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as
amended (42 U.S.C. Section 9601 et seq.) ("CERCLA"), the Resource
Conservation and Recovery Act of 1976, as amended (42 U.S.C. Section
6901 et seq.), the Clean Air Act, as amended (42 U.S.C. Section 7401 et
seq.), the Clean Water Act, as amended (33 U.S.C. Section 1251 et
seq.), the Toxic Substances Control Act, as amended (15 U.S.C. Section
2601 et seq.), the Occupational Safety and Health Act of 1970, as
amended (29 U.S.C. Section 651 et seq.), the Hazardous Materials
Transportation Act, as amended (49 U.S.C. Section 1801 et seq.), and
all other federal, state and local laws, ordinances, regulations,
rules, orders, decisions and permits relating to the protection of the
environment or of human health from environmental effects;
9
"Governmental Authority" shall mean any federal, state or local
governmental office, agency or authority having the duty or authority
to promulgate, implement or enforce any Environmental Law; "Lien" shall
mean, with respect to any Property, any mortgage, deed of trust,
pledge, security interest, lien, encumbrance, penalty, fine, charge,
assessment, judgment or other liability in, on or affecting such
Property; and "Release" shall mean any spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping,
leaching, dumping, emanating or disposing of any Hazardous Substance
into the Environment, including, without limitation, the abandonment or
discard of barrels, containers, tanks (including, without limitation,
underground storage tanks) or other receptacles containing or
previously containing any Hazardous Substance or any release, emission,
discharge or similar term, as those terms are defined or used in any
Environmental Law.
(xxvi) The Company, the Operating Partnership and each of the
Subsidiaries have timely paid all federal, state, local and foreign
taxes and timely filed all tax returns required to be paid or filed
through the date hereof (except (i) for taxes being contested in good
faith and reserved against to the extent required by generally accepted
accounting principles and (ii) in any case in which the failure to so
file would not, individually or in the aggregate, have a Material
Adverse Effect); and except as otherwise disclosed in the Prospectus,
there is no tax deficiency that has been, or could reasonably be
expected to be, asserted against the Company, the Operating Partnership
or any of the Subsidiaries or any of their respective properties or
assets.
(xxvii) None of the Company, the Subsidiaries, the Residential
Development Corporations or the Operating Partnership, nor any of their
trust managers, directors, officers or controlling persons, has taken
or will take, directly or indirectly, any action resulting in a
violation of Regulation M under the 1934 Act, or designed to cause or
result under the 1934 Act or otherwise in, or which has constituted or
which reasonably might be expected to constitute, the unlawful
stabilization or manipulation of the price of any security of the
Company or facilitation of the sale or resale of the Securities.
(xxviii) Title insurance in favor of the Company, the
Operating Partnership or any of the Subsidiaries is maintained with
respect to each of the Properties owned by the Company, the Operating
Partnership or such Subsidiary in an amount at least equal to the cost
of acquisition of such Property, except, in each case where the failure
to maintain such title insurance would not have a Material Adverse
Effect. Title insurance in favor of the mortgagee is maintained in an
amount equal to the maximum commitment of the related loan.
(xxix) The Company, the Operating Partnership and each of the
Subsidiaries have insurance covering their respective properties,
operations, personnel and businesses, including business interruption,
covering risks and in amounts that are commercially reasonable for the
assets and properties owned by them and that are consistent with the
types and amounts of insurance typically maintained by present owners
of similar types of properties; and none of the Company, the Operating
Partnership nor any of the Subsidiaries has (i) received notice from
any insurer or agent of such insurer that capital improvements or other
expenditures are required or necessary to be made in order to continue
such insurance or (ii) any reason to believe that it will not be able
to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage at reasonable cost from similar
insurers as may be necessary to continue its business.
(xxx) The Company, the Operating Partnership and each of the
Subsidiaries maintain systems of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific
authorizations; (ii)
10
transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain asset accountability; (iii) access to books
and records is permitted only in accordance with management's general
or specific authorization; and (iv) the recorded accountability for
assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(xxxi) None of the Company, the Operating Partnership nor any
of the Subsidiaries nor, to the knowledge of the Company, any trust
manager, director, officer, agent, employee or other person associated
with or acting on behalf of the Company, the Operating Partnership or
any of the Subsidiaries has (i) used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful expense
relating to political activity; (ii) made any direct or indirect
unlawful payment to any foreign or domestic government official or
employee from corporate funds; (iii) violated or is in violation of any
provision of the Foreign Corrupt Practices Act of 1977; or (iv) made
any bribe, rebate, payoff, influence payment, kickback or other
unlawful payment.
(xxxii) On and immediately after the Closing Date, the Company
(after giving effect to the issuance of the Securities and the other
transactions related thereto as described in the Prospectus) will be
Solvent. As used in this paragraph, the term "Solvent" means, with
respect to a particular date, that on such date (i) the present fair
market value (or present fair saleable value) of the assets of the
Company, and its consolidated Subsidiaries is not less than the total
amount required to pay the liabilities of the Company and its
consolidated subsidiaries on its total existing debts and liabilities
(including contingent liabilities) as they become absolute and matured;
(ii) the Company is able to realize upon its assets and pay its debts
and other liabilities, contingent obligations and commitments as they
mature and become due in the normal course of business; (iii) assuming
consummation of the issuance of the Securities as contemplated by this
Agreement and the Prospectus, the Company is not incurring debts or
liabilities beyond its ability to pay as such debts and liabilities
mature; (iv) the Company is not engaged in any business or transaction,
and does not propose to engage in any business or transaction, for
which its property would constitute unreasonably small capital after
giving due consideration to the prevailing practice in the industry in
which the Company is engaged; and (v) none of the Company, the
Operating Partnership nor any of the Subsidiaries is a defendant in any
civil action that would result in a judgment that the Company is or
would become unable to satisfy.
(xxxiii) No forward-looking statement (within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act)
contained in the Prospectus has been made or reaffirmed without a
reasonable basis or has been disclosed other than in good faith.
(xxxiv) Nothing has come to the attention of the Company that
has caused the Company to believe that the statistical and
market-related data included or incorporated by reference in the
Prospectus is not based on or derived from sources that are reliable
and accurate in all material respects.
(xxxv) The Operating Partnership has received from ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ LLP on March 19, 2002 a letter concerning its audit quality
controls in connection with its audits of the financial statements of
the Operating Partnership and its consolidated Subsidiaries, including
representations regarding the continuity of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP's
personnel working on the audit, the availability of national office
consultation and the availability of personnel at foreign affiliates of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP to conduct relevant portions of the audit (the
"Representation Letter") and such letter has not been rescinded and the
Company and the Operating Partnership
11
have no reason to believe that the representations in such letter are
not true and correct in all respects.
(b) Officer's Certificates. Any certificate signed by any officer of
the Company, or any authorized representative of the Operating Partnership or
any of their Subsidiaries delivered to the Placement Agent or to counsel for the
Placement Agent shall be deemed a representation and warranty by such person or
entity, as the case may be, to the Placement Agent as to the matters covered
thereby.
SECTION 2. Placement Agent Fees.
(a) On the basis of the representations and warranties herein contained
and subject to the terms and conditions herein set forth, the Company agrees to
pay ▇▇▇▇▇▇▇ ▇▇▇▇▇ a fee (the "Fee"), based upon the aggregate amount of
Securities sold, as calculated in accordance with the provisions of this Section
for its services pursuant to this Agreement. The Fee will equal to 2.00% of the
purchase price of all Securities sold to the Purchaser.
(b) On the date in which the Purchaser purchases the Securities from
the Company in accordance with this Agreement (the "Closing Time"), the Company
shall pay the Fee to the Placement Agent in cash by wire transfer of immediately
available funds to a bank account designated by the Placement Agent.
SECTION 3. Covenants of the Company. Each of the Company and the
Operating Partnership covenants with the Placement Agent as follows:
(a) Compliance with Securities Regulations and Commission Requests. The
Company will notify the Placement Agent immediately, and confirm the notice in
writing, (i) when any post-effective amendment to the Registration Statement
shall become effective, or any supplement to the Prospectus or any amended
Prospectus shall have been filed, (ii) of the receipt of any comments from the
Commission, (iii) of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or for
additional information, and (iv) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or of any order
preventing or suspending the use of any preliminary prospectus, or of the
suspension of the qualification of the Securities for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings for any of
such purposes. The Company will promptly effect the filings necessary pursuant
to Rule 424(b) and will take such steps as it deems necessary to ascertain
promptly whether the form of prospectus transmitted for filing under Rule 424(b)
was received for filing by the Commission and, in the event that it was not, it
will promptly file such prospectus. The Company will make every reasonable
effort to prevent the issuance of any stop order and, if any stop order is
issued, to obtain the lifting thereof at the earliest possible moment.
(b) Continued Compliance with Securities Laws. The Company will comply
with the 1933 Act and the 1933 Act Regulations and the 1934 Act and the 1934 Act
Regulations so as to permit the completion of the distribution of the Securities
as contemplated in this Agreement and in the Prospectus. If at any time when a
prospectus is required by the 1933 Act to be delivered in connection with sales
of the Securities, any event shall occur or condition shall exist as a result of
which it is necessary, in the opinion of counsel for the Placement Agent or for
the Company, to amend the Registration Statement or amend or supplement the
Prospectus in order that the Prospectus will not include any untrue statements
of a material fact or omit to state a material fact necessary in order to make
the statements therein not misleading in the light of the circumstances existing
at the time it is delivered to a purchaser, or if it shall be necessary, in the
opinion of such counsel, at any such time to amend the Registration Statement or
amend or supplement the Prospectus in order to comply with the requirements of
the 1933 Act or the
12
1933 Act Regulations, the Company will promptly prepare and file with the
Commission such amendment or supplement as may be necessary to correct such
statement or omission or to make the Registration Statement or the Prospectus
comply with such requirements, and the Company will furnish to the Placement
Agent such number of copies of such amendment or supplement as the Placement
Agent may reasonably request.
(c) Blue Sky Qualifications. The Company will use its commercially
reasonable efforts, in cooperation with the Placement Agent, to qualify the
Securities for offering and sale under the applicable securities laws of such
states and other jurisdictions (domestic or foreign) as the Placement Agent may
designate and to maintain such qualifications in effect for a period of not less
than one year from the later of the effective date of the Registration Statement
and any Rule 462(b) Registration Statement; provided, however, that the Company
shall not be obligated to file any general consent to service of process or to
qualify as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject itself to taxation in
respect of doing business in any jurisdiction in which it is not otherwise so
subject. In each jurisdiction in which the Securities have been so qualified,
the Company will file such statements and reports as may be required by the laws
of such jurisdiction to continue such qualification in effect for a period of
not less than one year from the effective date of the Registration Statement and
any Rule 462(b) Registration Statement.
(d) Rule 158. The Company will timely file such reports pursuant to the
1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act.
(e) Reporting Requirements. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will
file all documents required to be filed with the Commission pursuant to the 1934
Act within the time periods required by the 1934 Act and the 1934 Act
Regulations.
(f) Use of Proceeds. The Company will use the net proceeds received by
it from the sale of the Securities in the manner specified in the Prospectus
under "Use of Proceeds."
(g) REIT Qualification. The Company will use its best efforts to
continue to meet the requirements to qualify as a "real estate investment trust"
under the Code for each of its taxable years for so long as the Board of Trust
Managers deems it in the best interests of the Company's shareholders to remain
so qualified.
(h) Listing. The Company will use its best efforts to effect the
listing of the Securities and the Common Shares issuable on conversion of the
Securities on the New York Stock Exchange.
(i) Reservation of Common Shares. The Company will reserve and keep
available at all times, free of preemptive or other similar rights, a sufficient
number of Common Shares for the purpose of enabling the Company to satisfy any
obligations to issue such shares upon conversion of the Securities.
(j) No Manipulation of Market for Securities. Except for the
authorization of actions permitted to be taken by the Placement Agent as
contemplated herein or in the Prospectus, neither the Company nor the Operating
Partnership will (a) take, directly or indirectly, any action designed to cause
or to result in, or that might reasonably be expected to constitute, the
unlawful stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities, and (b) until the
Closing Time, (i) sell, bid for or purchase the Securities or pay any person any
13
compensation for soliciting purchases of the Securities or (ii) pay or agree to
pay to any person any compensation for soliciting another to purchase any other
securities of the Company.
SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay or cause to be paid all expenses
incident to the performance of its obligations under this Agreement, including
(i) the preparation, printing and filing of the Registration Statement
(including financial statements and exhibits) and each amendment thereto, (ii)
the preparation and delivery to the Placement Agent of this Agreement and such
other documents as may be required in connection with the offering, purchase,
sale, issuance or delivery of the Securities, (iii) the fees and disbursements
of the Company's counsel, accountants and other advisors, (iv) the qualification
of the Securities under securities laws in accordance with the provisions of
Section 3(c) hereof, including filing fees and the reasonable fees and
disbursements of counsel for the Placement Agent in connection therewith and in
connection with the preparation of the Blue Sky Survey and any supplement
thereto, (v) the printing and delivery to the Placement Agent of copies of the
Prospectus and any amendments or supplements thereto, (vi) the fees and expenses
of any transfer agent or registrar for the Securities and (vii) the fees and
expenses incurred in connection with the listing of the Securities on the New
York Stock Exchange. It is understood, however, that the Placement Agent will
pay all fees and disbursements of their counsel in connection with this
Agreement.
(b) Termination of Agreement. If this Agreement is terminated by the
Placement Agent in accordance with the provisions of Section 5 or Section 9(a),
the Company shall reimburse the Placement Agent for all of its out-of-pocket
expenses, including the reasonable fees and disbursements of counsel for the
Placement Agent.
SECTION 5. Conditions of Placement Agent's Obligations. The obligations
of the Placement Agent hereunder are subject to the accuracy of the
representations and warranties of the Company and the Operating Partnership
contained in Section 1 hereof or in certificates of any officer or authorized
representative of the Company or the Operating Partnership delivered pursuant to
the provisions hereof, to the performance by the Company or the Operating
Partnership of its covenants and other obligations hereunder, and to the
following further conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, is effective and at
Closing Time no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act or proceedings therefor
initiated or threatened by the Commission, and any request on the part of the
Commission for additional information shall have been complied with to the
reasonable satisfaction of counsel to the Placement Agent. A prospectus
supplement shall have been filed with the Commission in accordance with Rule
424(b).
(b) Legal Opinions. At Closing Time, you shall have received:
(i) The favorable opinion, dated as of Closing Time, of ▇▇▇▇
▇▇▇▇▇▇▇ LLP, counsel for each of the Company, the Operating Partnership
and the Significant Subsidiaries in form and substance reasonably
satisfactory to your counsel, substantially in the form attached hereto
as Annex A.
(ii) The favorable opinion, dated as of Closing Time, of ▇▇▇▇
▇▇▇▇▇▇▇ LLP, counsel for the Company, regarding REIT qualification, in
form and substance reasonably satisfactory to your counsel,
substantially in the form attached hereto as Annex B.
14
(iii) The favorable opinion, dated as of Closing Time, of
▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P., and the favorable 10b-5 letter of ▇▇▇▇▇▇ ▇▇▇▇▇▇
& ▇▇▇▇▇▇▇, your counsel, with respect to such matters as you may
reasonably request, and such counsel shall have received such documents
and information as they may reasonably request to enable them to pass
upon such matters.
(c) Officers' Certificates. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Prospectus, any material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business prospects of the
Company, the Operating Partnership and the Subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, and the
Placement Agent shall have received a certificate of the Chief Executive
Officer, President and Chief Operating Officer, President, Investments and Chief
Investment Officer or a Executive or Senior Vice President and the chief
financial or accounting officer of each of the Company and CGP, Inc., dated as
of Closing Time, to the effect that (i) there has been no such material adverse
change, (ii) the representations and warranties in Section 1(a) hereof are true
and correct with the same force and effect as though expressly made at and as of
Closing Time and (iii) each of the Company and the Operating Partnership has
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to Closing Time, and (iv) no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceedings for that purpose have been instituted or are pending or are
contemplated by the Commission.
(d) Accountant's Comfort Letter. At the Closing Time, the Placement
Agent shall have received from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP a letter dated such date, in
form and substance satisfactory to the Placement Agent, containing statements
and information of the type ordinarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and certain
financial information contained or incorporated by reference in the Registration
Statement and the Prospectus.
(e) Representation Letter. On the Closing Date, the Representation
Letter of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP shall not have been rescinded and the Company and
the Operating Partnership shall have no reason to believe that the
representations in such letter are not true and correct in all respects.
(f) Approval of Listing. At Closing Time, the Securities and the Common
Shares issuable upon conversion of the Securities shall have been approved for
listing on the New York Stock Exchange, subject only to official notice of
issuance.
(g) Filing of Statement of Designation. At or before the Closing Time,
the Company shall have filed the Statement of Designations with the County Clerk
of Tarrant County, Texas.
(h) Waiver of Preferred Shares Ownership Limit and Common Shares
Ownership Limit. At or before the Closing Time, the Board of Trust Managers of
the Company shall have approved a resolution waiving any violation of the
Preferred Shares Ownership Limit and Common Shares Ownership Limit because of
the issuance of the Securities.
(i) Additional Documents. At Closing Time counsel for the Placement
Agent shall have been furnished with such documents as they may reasonably
require for the purpose of enabling them to pass upon the issuance and sale of
the Securities as herein contemplated, or in order to evidence the accuracy of
any of the representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company in
connection with the issuance and sale of the Securities as herein contemplated
shall be reasonably satisfactory in form and substance to the Placement Agent
and counsel for the Placement Agent.
15
(j) Termination of Agreement. If any condition specified in this
Section 5 shall not have been fulfilled when and as required to be fulfilled,
this Agreement may be terminated by the Placement Agent by notice to the Company
at any time at or prior to Closing Time and such termination shall be without
liability of any party to any other party except as provided in Section 4 and
except that Sections 1, 6, 7, 8 and 12 shall survive any such termination and
remain in full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of Placement Agent. Each of the Company and the
Operating Partnership agrees, jointly and severally, to indemnify and hold
harmless the Placement Agent and each person, if any, who controls the Placement
Agent within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934
Act, and any director, officer, employee or affiliate thereof as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), or the omission or
alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading or
arising out of any untrue statement or alleged untrue statement of a
material fact included in any preliminary prospectus or the Prospectus
(or any amendment or supplement thereto), or the omission or alleged
omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading.
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; provided
any such settlement is effected with the written consent of the Company
and the Operating Partnership; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by the
Placement Agent), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by the
Placement Agent expressly for use in the Registration Statement (or any
amendment thereto) or the Prospectus (or any amendment or supplement thereto).
(b) Indemnification of Company, Operating Partnership, Trust Managers,
Directors and Officers. The Placement Agent severally agrees to indemnify and
hold harmless the Company and the Operating Partnership, each person, if any,
who controls the Company and the Operating Partnership within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act, and any officer,
director, trust manager, employee or affiliate thereof, against any and all
loss, liability, claim, damage and expense described in the indemnity contained
in subsection (a) of this Section, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto) or the Prospectus (or any
amendment or supplement thereto) in
16
reliance upon and in conformity with written information furnished to the
Company by the Placement Agent expressly for use in the Registration Statement
(or any amendment thereto) or the Prospectus (or any amendment or supplement
thereto).
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by the Placement Agent,
and, in the case of parties indemnified pursuant to Section 6(b) above, counsel
to the indemnified parties shall be selected by the Company. An indemnifying
party may participate at its own expense in the defense of any such action;
provided, however, that counsel to the indemnifying party shall not (except with
the consent of the indemnified party) also be counsel to the indemnified party.
In no event shall the indemnifying parties be liable for fees and expenses of
more than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
SECTION 7. Contribution. If the indemnification provided for in Section
6 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Operating Partnership on the one hand and the Placement Agent on the other hand
from the offering of the Securities pursuant to this Agreement or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company and the
Operating Partnership on the one hand and of the Placement Agent on the other
hand in connection with the statements or omissions which resulted in such
losses, liabilities, claims, damages or expenses, 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 Placement Agent on the other hand in
connection with the offering of the Securities pursuant to this Agreement shall
be deemed to be in the same respective proportions as the total net proceeds
from the offering of the Securities pursuant to this Agreement (before deducting
expenses) received by the Company and the Fee received by the Placement Agent.
The relative fault of the Company and the Operating Partnership on the
one hand and the Placement Agent on the other hand shall be determined by
reference to, among other things, whether any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company or the Operating Partnership
or by the
17
Placement Agent and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, the Operating Partnership and the Placement Agent agree
that it would not be just and equitable if contribution pursuant to this Section
7 were determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to above in
this Section 7. The aggregate amount of losses, liabilities, claims, damages and
expenses incurred by an indemnified party and referred to above in this Section
7 shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, the Placement Agent
shall not be required to contribute any amount in excess of the amount by which
the total price at which the Securities placed by it exceeds the amount of any
damages which the Placement Agent has otherwise been required to pay by reason
of any such untrue or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls the
Placement Agent within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act shall have the same rights to contribution as the Placement
Agent, and each trust manager 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 1933 Act or Section 20 of the
1934 Act shall have the same rights to contribution as the Company. For purposes
of this Section 7, the Company and the Operating Partnership shall be deemed one
party, jointly and severally liable for any obligations hereunder.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or CGP, Inc., as general
partner of the Operating Partnership submitted pursuant hereto, shall remain
operative and in full force and effect, regardless of any investigation made by
or on behalf of the Placement Agent or controlling person, or by or on behalf of
the Company or the Operating Partnership, and shall survive delivery of the
Securities to the Purchasers.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Placement Agent may terminate this
Agreement, by notice to the Company, at any time at or prior to Closing Time (i)
if there has been, since the time of execution of this Agreement or since the
respective dates as of which information is given in the Prospectus, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company, the Operating
Partnership and any of the Subsidiaries considered as one enterprise, whether or
not arising in the ordinary course of business, or (ii) if there has occurred
any material adverse change in the financial markets in the United States, any
outbreak of hostilities or escalation thereof or other calamity or crisis or any
change or development involving a prospective change in national or
international political, financial or economic conditions, in each case the
effect of which is such as to make it, in the judgment of the Placement Agent,
impracticable or inadvisable to market the Securities or to enforce contracts
for the sale of the Securities, or (iii) if trading in any securities of the
Company has been suspended or materially limited by the Commission or the New
York
18
Stock Exchange, or if trading generally on the American Stock Exchange or the
New York Stock Exchange or in the Nasdaq National Market has been suspended or
materially limited, or minimum or maximum prices for trading have been fixed, or
maximum ranges for prices have been required, by any of said exchanges or by
such system or by order of the Commission, the National Association of
Securities Dealers, Inc. or any other governmental authority, or a material
disruption has occurred in commercial banking or securities settlement or
clearance services in the United States, or (iv) if a banking moratorium has
been declared by either Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6, 7, 8 and 12 shall survive such termination and remain in full force and
effect.
SECTION 10. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the Placement
Agent shall be directed to ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co. at 4 World Financial Center, ▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, attention of ▇▇▇▇ ▇▇▇▇; notices to the Company
and the Operating Partnership shall be directed to it at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇, attention of ▇▇▇▇ ▇. ▇▇▇▇, Chief Executive
Officer.
SECTION 11. Parties. This Agreement shall each inure to the benefit of
and be binding upon the Placement Agent, the Company and the Operating
Partnership and their respective successors. Nothing expressed or mentioned in
this Agreement is intended or shall be construed to give any person, firm or
corporation, other than the Placement Agent, the Company and the Operating
Partnership and their respective successors and the controlling persons and
officers, trust managers and directors referred to in Sections 6 and 7 and their
heirs and legal representatives, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision herein contained. This
Agreement and all conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the Placement Agent, the Company, the Operating
Partnership and their respective successors, and said controlling persons and
officers, trust managers and directors and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation. No
purchaser of Securities from any Placement Agent shall be deemed to be a
successor by reason merely of such purchase.
SECTION 12. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED IN SAID STATE. UNLESS OTHERWISE EXPLICITLY
PROVIDED, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 13. Effect of Headings. The Article and Section headings herein
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
19
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
among the Placement Agent, the Company and the Operating Partnership in
accordance with its terms.
Very truly yours,
CRESCENT REAL ESTATE EQUITIES COMPANY
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
---------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
Title: Senior Vice President and Chief
Financial Officer
CRESCENT REAL ESTATE EQUITIES LIMITED
PARTNERSHIP
By: Crescent Real Estate Equities, Ltd.,
its General Partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
---------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
Title: Senior Vice President and Chief
Financial Officer
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By: /s/ ▇▇▇▇ ▇▇▇▇
---------------------------------------
Authorized Signatory
20
SCHEDULE 1
SIGNIFICANT SUBSIDIARIES
Name Jurisdiction of Organization
---- ----------------------------
CRE Management I Corp. Delaware
CRE Management II Corp. Delaware
CRE Management III Corp. Delaware
CRE Management VIII, LLC Delaware
CRE Management IX, LLC Delaware
Crescent Real Estate Equities Limited Partnership Delaware
Crescent Real Estate Equities, Ltd. Delaware
Crescent Real Estate Funding I, L.P. Delaware
Crescent Real Estate Funding II, L.P. Delaware
Crescent Real Estate Funding III, L.P. Delaware
Crescent Real Estate Funding VIII, L.P. Delaware
Crescent Real Estate Funding IX, L.P. Delaware
21
[Annexes Intentionally Omitted]