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EXHIBIT 1.01
CRESCENT REAL ESTATE EQUITIES COMPANY
(a Texas real estate investment trust)
Preferred Shares of Beneficial Interest,
Common Shares of Beneficial Interest,
and Common Share Warrants
U.S. PURCHASE AGREEMENT
April 22, 1997
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇▇▇ ▇▇▇▇▇ World Headquarters
World Financial Center
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
Crescent Real Estate Equities Company, a Texas real estate investment
trust (the "COMPANY"), proposes to issue and sell its preferred shares of
beneficial interest, $.01 par value per share ("PREFERRED SHARES"), common
shares of beneficial interest, $.01 par value per share ("COMMON SHARES"), and
warrants for the purchase of Common Shares ("WARRANTS"), from time to time in
one or more offerings on terms to be determined at the time of sale. Each
series of Preferred Shares may vary as to the specific number of shares in the
series, title, stated value, liquidation preference, issuance price, ranking,
dividend rate or rates (or method of calculation), dividend payment dates, any
redemption or sinking fund requirements, any conversion provisions and any
other variable terms as set forth in the Company's Restated Declaration of
Trust (the "DECLARATION OF TRUST") or any articles supplementary to the
Company's Declaration of Trust establishing the preferences and rights of such
series of Preferred Shares. Each series of Warrants also may vary as to the
exercise time and price and other variable terms as set forth in the applicable
Warrant Agreement. As used herein, "you" and "your," unless the context
otherwise requires, means the parties to whom this Purchase Agreement (the
"AGREEMENT") is addressed together with the other parties, if any, identified
in the applicable U.S. Terms Agreement (as hereinafter defined) as additional
co-managers with respect to U.S. Underwritten Securities (as hereinafter
defined) purchased pursuant hereto.
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At such time, if any, as the Company determines to make an offering of
Preferred Shares, Common Shares or Warrants through you or through an
underwriting syndicate managed by you, the Company will enter into an agreement
(the "U.S. TERMS AGREEMENT") substantially in the form of Exhibit A hereto
providing for the sale of such securities (the "U.S. UNDERWRITTEN SECURITIES")
to, and the purchase and offering thereof by, you and such other underwriters,
if any, as are selected by you that have authorized you to enter into such U.S.
Terms Agreement on their behalf (the "U.S. UNDERWRITERS," which term shall
include you, whether acting alone in the sale of the U.S. Underwritten
Securities or as a member of an underwriting syndicate, and any U.S.
Underwriter substituted pursuant to Section 10 hereof). The U.S. Terms
Agreement relating to an offering of U.S. Underwritten Securities shall specify
the number of U.S. Underwritten Securities of each class or series to be
initially issued (the "INITIAL U.S. SECURITIES"), the names of the U.S.
Underwriters participating in the offering (subject to substitution as provided
in Section 10 hereof), the number of Initial U.S. Securities that each U.S.
Underwriter severally agrees to purchase, the names of the U.S. Underwriters
acting as co-managers, if any, in connection with the offering, the price at
which the Initial U.S. Securities are to be purchased by the U.S. Underwriters
from the Company, the initial public offering price, if any, of the Initial
U.S. Securities, the time and place of delivery and payment, any delayed
delivery arrangements and any other variable terms of the Initial U.S.
Securities (including, but not limited to, current ratings, designations,
liquidation preferences, conversion, exchange or exercise provisions,
redemption provisions, sinking fund requirements and exercise prices and
dates). In addition, each U.S. Terms Agreement shall specify whether the
Company has agreed to grant to the U.S. Underwriters an option to purchase
additional U.S. Underwritten Securities to cover over-allotments, if any, and
the number of U.S. Underwritten Securities subject to such option (the "U.S.
OPTION SECURITIES"). As used herein, the term "U.S. UNDERWRITTEN SECURITIES"
includes the Initial U.S. Securities and any U.S. Option Securities agreed to
be purchased by the U.S. Underwriters as provided in the applicable U.S. Terms
Agreement. The U.S. Terms Agreement shall be substantially in the form of
Exhibit A hereto, but may take the form of an exchange of any standard form of
written communication between you and the Company. Each offering of U.S.
Underwritten Securities through you or through an underwriting syndicate
managed by you will be governed by this Agreement, as supplemented by the
applicable U.S. Terms Agreement, and such U.S. Terms Agreement shall inure to
the benefit of and be binding upon each U.S. Underwriter participating in the
offering of such U.S. Underwritten Securities.
It is understood that the Company is concurrently entering into an
agreement dated the date hereof (the "INTERNATIONAL PURCHASE AGREEMENT")
providing for the sale by the Company of Securities (the "INTERNATIONAL
SECURITIES") through arrangements with certain underwriters outside the United
States (the "INTERNATIONAL UNDERWRITERS") for whom ▇▇▇▇▇▇▇ ▇▇▇▇▇ International
("MLI") and such other parties, if any, as are identified in the applicable
International Terms Agreement (as hereinafter defined) as additional
co-managers
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with respect to the International Securities are acting as lead managers, and
the grant by the Company to the International Underwriters of an option to
purchase additional International Securities (the "INTERNATIONAL OPTION
SECURITIES") solely to cover over-allotments. The initial public offering price
and the purchase price with respect to the International Securities to be
initially issued (the "INITIAL INTERNATIONAL SECURITIES") are to be set forth
in a separate instrument (the "INTERNATIONAL TERMS AGREEMENT"), the form of
which is to be attached to the International Purchase Agreement. It is
understood that the Company is not obligated to sell, and the U.S. Underwriters
are not obligated to purchase, any Initial U.S. Securities unless all of the
Initial International Securities are contemporaneously purchased by the
International Underwriters.
The U.S. Underwriters and the International Underwriters are
hereinafter collectively referred to as the "UNDERWRITERS." The Initial U.S.
Securities and the Initial International Securities are hereinafter
collectively referred to as the "INITIAL SECURITIES." The U.S. Option
Securities and the International Option Securities are hereinafter collectively
referred to as the "OPTION SECURITIES." The U.S. Underwritten Securities and
the International Securities are hereinafter collectively referred to as the
"SECURITIES."
The Company understands that the U.S. Underwriters and the
International Underwriters will enter into an Intersyndicate Agreement (the
"INTERSYNDICATE AGREEMENT") providing for the coordination of certain
transactions among the U.S. Underwriters and the International Underwriters
under the direction of ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated with
respect to any concurrent offering of U.S. Underwritten Securities and
International Securities. The Company further understands that, except as
otherwise may be agreed by the U.S. Underwriters and the International
Underwriters in connection with any particular offering of Securities, it is
understood that the U.S. Underwriters may offer and sell Securities pursuant to
a U.S. Terms Agreement outside of the United States and Canada.
The Company has filed with the U.S. Securities and Exchange Commission
(the "COMMISSION") a registration statement on Form S-3 (No. 333-21905) for the
registration of certain Preferred Shares, Common Shares and Warrants
(collectively, the "REGISTERED SECURITIES") under the Securities Act of 1933,
as amended (the "1933 ACT"), and the offering thereof from time to time in
accordance with Rule 415 of the rules and regulations of the Commission under
the 1933 Act (the "1933 ACT REGULATIONS"), and the Company has filed such
amendment or amendments thereto as may have been required prior to the
execution of the applicable U.S. Terms Agreement. Such registration statement,
as amended, has been declared effective by the Commission. Two prospectuses
are to be used in connection with the offering and sale of the Registered
Securities, one relating to the U.S. Underwritten Securities (the "U.S.
PROSPECTUS") and one relating to the International Securities (the
"INTERNATIONAL PROSPECTUS"). Such registration statement and the two
prospectuses constituting parts thereof
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(including, in each case, any information deemed to be a part thereof pursuant
to Rule 430A(b) of the 1933 Act Regulations and any prospectus supplement
relating to the offering of the Registered Securities pursuant to Rule 415 of
the 1933 Act regulations (a "PROSPECTUS SUPPLEMENT")), as from time to time
amended or supplemented pursuant to the 1933 Act or otherwise, are hereinafter
referred to as the "REGISTRATION STATEMENT," the "U.S. PROSPECTUS" and the
"INTERNATIONAL PROSPECTUS," respectively, and the U.S. Prospectus and
International Prospectus are hereinafter collectively referred to as the
"PROSPECTUSES," and each individually as a "PROSPECTUS," except that if any
revised prospectus shall be provided to the U.S. Underwriters or the
International Underwriters by the Company for use in connection with the
offering of Registered Securities that differs from the Prospectus on file at
the Commission at the time the Registration Statement became effective (whether
or not such revised prospectus is required to be filed by the Company pursuant
to Rule 424(b) of the 1933 Act Regulations), the terms "U.S. PROSPECTUS" and
"INTERNATIONAL PROSPECTUS" shall refer to each such revised prospectus from and
after the time it is first provided to the U.S. Underwriters or the
International Underwriters, as the case may be, for such use; and except
further that a Prospectus Supplement shall be deemed to have supplemented a
Prospectus only with respect to the offering of Registered Securities to which
it relates. All references in this Agreement to financial statements and
schedules and other information that are "contained," "included" or "stated" in
the Registration Statement or a Prospectus (and all other references of like
import) shall be deemed to mean and include all such financial statements and
schedules and other information that are or are deemed to be 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 a Prospectus shall be deemed to mean and include the
filing of any document under the 1934 Act that is or is deemed to be
incorporated by reference in the Registration Statement or the Prospectus, as
the case may be. If the Company elects to rely on Rule 434 under the 1933 Act
Regulations, all references to a Prospectus shall be deemed to include, without
limitation, the form of prospectus and the abbreviated term sheet, taken
together, provided to the U.S. Underwriters or the International Underwriters
by the Company in reliance on Rule 434 under the 1933 Act (the "RULE 434
PROSPECTUS"). If the Company files a registration statement to register a
portion of its Common Shares issuable upon exercise of Warrants (the "WARRANT
SHARES") and relies on Rule 462(b) for such registration to become effective
upon filing with the Commission (the "RULE 462 REGISTRATION STATEMENT"), then
any reference to "Registration Statement" herein shall be deemed to be to both
the registration statement referred to above (No. 333-21905) and the Rule 462
Registration Statement, as each such registration statement may be amended
pursuant to the 1933 Act.
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SECTION 1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE
OPERATING PARTNERSHIP.
(a) The Company and Crescent Real Estate Equities Limited
Partnership, a Delaware limited partnership (the "OPERATING PARTNERSHIP"),
jointly and severally, represent and warrant to you as of the date hereof and
to you and each of the other U.S. Underwriters named in the applicable U.S.
Terms Agreement as of the date thereof (in each case, a "U.S. REPRESENTATION
DATE"), as follows:
(i) The Registration Statement and the U.S. Prospectus,
at the time the Registration Statement became effective, complied, and
at each U.S. Representation Date 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, did not, and as of each U.S.
Representation Date will not, contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
The U.S. Prospectus, as of the date hereof does, and as of each U.S.
Representation Date (unless the term "Prospectus" refers to a
prospectus that has been provided to the U.S. Underwriters by the
Company for use in connection with the offering of Registered
Securities that differs from a Prospectus on file at the Commission at
the time the Registration Statement became effective, in which case at
the time it is first provided to the U.S. Underwriters for such use)
and at Closing Time and each Date of Delivery referred to in Sections
2(b) and 2(c) hereof, 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 each U.S. Representation 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 U.S. 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 U.S. 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 U.S. 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.
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(iii) Each of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, the accounting firm
whose report on the financial statements and supporting schedule of
the Company is included in the Registration Statement, and any other
accounting firm whose report on financial statements is included in
the Registration Statement, is an independent public accountant as
required by the 1933 Act and the 1933 Act Regulations.
(iv) The financial statements (including the notes
thereto) included in the Registration Statement and the U.S.
Prospectus present fairly the financial position of the respective
entity or entities presented therein at the respective dates indicated
and the results of their operations for the respective periods
specified, and except as otherwise stated in the Registration
Statement, said financial statements have been prepared in conformity
with generally accepted accounting principles applied on a consistent
basis. The supporting schedule included in the Registration Statement
presents fairly the information required to be stated therein. The
financial information and data included in the Registration Statement
and the U.S. Prospectus present fairly the information included
therein and have been prepared on a basis consistent with that of the
financial statements included in the Registration Statement and the
U.S. Prospectus and the books and records of the respective entities
presented therein. The pro forma financial information included in
the U.S. Prospectus has been prepared in accordance with the
applicable requirements of Rules 11-01 and 11-02 of Regulation S-X
under the 1933 Act and other 1933 Act Regulations and American
Institute of Certified Public Accountants ("AICPA") guidelines with
respect to pro forma financial information and includes all
adjustments necessary to present fairly the pro forma financial
position of the respective entity or entities presented therein at the
respective dates indicated and the results of their operations for the
respective periods specified. Other than the historical and pro forma
financial statements (and schedule) included therein, no other
historical or pro forma financial statements (or schedules) are
required by the 1933 Act or the 1933 Act Regulations to be included in
the Registration Statement. Except as reflected or disclosed in the
financial statements included in the Registration Statement or
otherwise set forth in the Prospectus, none of the Company, the
Operating Partnership, any of the Subsidiaries or the Residential
Development Corporations (as such terms are hereinafter defined) is
subject to any material indebtedness, obligation, or liability,
contingent or otherwise.
(v) Since the respective dates as of which information is
given in the Registration Statement and the U.S. 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, the Subsidiaries and the Residential
Development Corporations, considered as one enterprise, whether or not
arising in the ordinary course of business,
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(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, any of its Subsidiaries or any of the
Residential Development Corporations, including any property
underlying indebtedness held by the Company (each individually a
"PROPERTY" and collectively, the "PROPERTIES"), the Operating
Partnership, any of the Subsidiaries or any of the Residential
Development Corporations, has occurred that is material to the
Company, the Operating Partnership, the Subsidiaries and the
Residential Development Corporations considered as one enterprise, (C)
there have been no acquisitions or other transactions entered into by
the Company, the Operating Partnership, any Subsidiary or any
Residential Development Corporation 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 as
described in the U. S. Prospectus and except for regular quarterly
dividends or distributions on the Common Shares, 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 Residential
Development Corporations or the partnership interests of the Operating
Partnership, or any increase in the indebtedness of the Company, the
Operating Partnership, the Subsidiaries or the Residential Development
Corporations 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 with power and
authority to own, lease and operate its properties, to conduct the
business in which it is engaged or proposes to engage as described in
the U.S. Prospectus and to enter into and perform its obligations
under this Agreement. 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. The Restated Declaration of Trust is in effect, and
no dissolution, revocation or forfeiture proceedings regarding the
Company have been commenced. The Company is duly qualified as a
foreign organization to transact business and is in good standing in
each jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify would not have a
material adverse effect on the condition, financial or otherwise, or
the earnings, assets, business affairs or business prospects of the
Company, the Operating Partnership, the Subsidiaries and the
Residential Development Corporations considered as one enterprise.
(vii) The Operating Partnership has been duly formed and is
validly existing as a limited partnership in good standing under the
Delaware Revised Uniform Limited Partnership Act (the "DELAWARE ACT")
with
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partnership power and authority to own, lease and operate its
properties, to conduct the business in which it is engaged or proposes
to engage as described in the Prospectus and to enter into and perform
its obligations under this Agreement. The Operating Partnership is
duly qualified or registered as a foreign partnership and is in good
standing in each jurisdiction in which such qualification or
registration is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure to so qualify or register would not have a material adverse
effect on the condition, financial or otherwise, or the earnings,
assets, business affairs or business prospects of the Company, the
Operating Partnership, the Subsidiaries and the Residential
Development Corporations considered as one enterprise. The First
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. Entities in which the Company
directly or indirectly has a majority ownership interest are
hereinafter referred to as the "SUBSIDIARIES," and each, individually,
as a "SUBSIDIARY." Houston Area Development Corp., a Texas
corporation, Mira Vista Development Corp., a Texas corporation, and
Crescent Development Management Corp., a Delaware corporation, in
which the Company owns no voting securities, and as to which the
Company does not have the right to exercise control, are referred to
herein collectively as the "RESIDENTIAL DEVELOPMENT CORPORATIONS."
(viii) Each of the Subsidiaries and the Residential
Development Corporations has been duly organized and is validly
existing as a corporation, limited partnership, or limited liability
company, as the case may be, in good standing under the laws of its
respective state of organization, with full power and authority to
own, lease and operate its properties, to conduct the business in
which it is engaged or proposes to engage as described in the U.S.
Prospectus. Each of the Subsidiaries and the Residential Development
Corporations is duly qualified as a foreign corporation, limited
partnership, or limited liability company, as the case may be, to
transact business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except
where the failure to so qualify would not have a material adverse
effect on the condition, financial or otherwise, or the earnings,
assets, business affairs or business prospects of the Company, the
Operating Partnership, the Subsidiaries and the Residential
Development Corporations considered as one enterprise. 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,
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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 and the Residential Development
Corporations have been duly authorized and validly issued and are
fully paid and non-assessable. The ownership by the Company, the
Operating Partnership or the Subsidiaries of the shares of capital
stock or limited partnership or equity interests, as the case may be,
of each of the Subsidiaries and the Residential Development
Corporations is as described in the Prospectus and all of such shares
or limited partnership or equity interests, or other, similar
instruments owned by the Company, the Operating Partnership or the
Subsidiaries are free and clear of all liens, charges and
encumbrances.
(ix) The authorized, issued and outstanding beneficial
interests in the Company are as set forth in the Prospectus (except
for subsequent issuances, if any, pursuant to clauses (A) and (B)
below); and all of such beneficial interests have been duly
authorized, are validly issued, fully paid and non-assessable and have
been offered and sold in compliance with all applicable laws
(including, without limitation, federal securities laws). No shares
of capital stock of the Company are reserved for any purpose except in
connection with: (A) the incentive compensation plans of the Company
as described in the Prospectus and (B) the possible issuance of Common
Shares upon the exchange of units of ownership interest in the
Operating Partnership (the "UNITS") pursuant to the Partnership
Agreement, for which sufficient Common Shares have been reserved for
possible future issuance. Except for Units and Common Shares issuable
upon the exercise of options as described in the Prospectus, 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.
(x) The U.S. Underwritten Securities have been duly
authorized for issuance and sale to the U.S. Underwriters pursuant to
this Agreement and the applicable U.S. Terms Agreement and, when
issued and delivered by the Company pursuant to such Agreements
against payment of the consideration set forth in the U.S. Terms
Agreement will be validly issued, fully paid and non-assessable. Upon
payment of the purchase price and delivery of the U.S. Underwritten
Securities in accordance with this Agreement and the applicable U.S.
Terms Agreement, each of the U.S. Underwriters will receive good,
valid and marketable title to the U.S. Underwritten Securities, free
and clear of all security interests, mortgages, pledges, liens,
encumbrances and claims. The U.S. Underwritten Securities will be
offered and sold at Closing Time, or the Date of Delivery, as the case
may be, in compliance with all applicable laws (including, without
limitation, federal securities laws). The terms of the Common Shares
conform to all statements and descriptions
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related thereto contained in the Prospectuses. The form of the
certificate used to evidence any Common Shares, Preferred Shares, and
Warrants included in the U.S. Underwritten Securities is in due and
proper form and complies with all applicable legal requirements. The
issuance of the U.S. Underwritten Securities is not subject to any
preemptive or other similar rights and, except as summarized in the
U.S. Prospectus and set forth in the Company's Declaration of Trust or
Bylaws, there are no restrictions on the voting or transfer of the
Common Shares pursuant to the Company's Declaration of Trust or Bylaws
or any agreement or other instrument.
(xi) If applicable, the Warrants have been duly authorized
and, when issued and delivered pursuant to this Agreement and
countersigned by the Warrant Agent as provided in the Warrant
Agreement, will have been duly executed, countersigned, issued and
delivered and will constitute valid and legally binding obligations of
the Company entitled to the benefits provided by the Warrant Agreement
under which they are to be issued; the issuance of the Warrant Shares
upon exercise of the Warrants will not be subject to preemptive or
other similar rights; and the Warrants conform in all material
respects to all statements relating thereto contained in the U.S.
Prospectus.
(xii) If applicable, the Common Shares issuable upon
conversion of the Preferred Shares or the Common Shares issuable upon
exercise of the Warrants will have been duly and validly authorized
and reserved for issuance upon such conversion or exercise by all
necessary corporate action and such shares, when issued upon such
conversion or exercise, will be duly authorized and validly issued and
will be fully paid and non- assessable, and the issuance of such
shares upon conversion or exercise will not be subject to preemptive
or other similar rights; the Common Shares issuable upon conversion of
the Preferred Shares or the Common Shares issuable upon exercise of
the Warrants conform in all material respects to all statements
relating thereto contained in the U.S. Prospectus.
(xiii) If applicable, the Warrant Agreement will have been
duly authorized, executed and delivered by the Company prior to the
issuance of the Warrants, and each Warrant Agreement constitutes a
valid and legally binding agreement of the Company enforceable in
accordance with its terms, except as enforcement thereof may be
limited by bankruptcy, insolvency or other similar laws relating to or
affecting creditors' rights generally and by general equity principles
(regardless of whether enforcement is considered in a proceeding in
equity or at law); and the Warrant Agreement conforms in all material
respects to all statements relating thereto contained in the U.S.
Prospectus.
(xiv) The authorized, issued and outstanding Units are as
set forth in the U.S. Prospectus except to the extent of changes due
to the conversion of
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Units to Common Shares or the exercise of existing options to acquire
Units. All of the Units outstanding 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 U.S. 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 U.S.
Prospectus.
(xv) None of the Company, the Operating Partnership, any
Subsidiary or any Residential Development Corporation is in violation
of its declaration of trust, charter, by-laws, certificate of limited
partnership, partnership agreement, or limited liability company
agreement, as the case may be, and none of the Company, the Operating
Partnership, any Subsidiary or any Residential Development Corporation
is in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract, indenture,
mortgage, loan agreement, note, lease or other instrument to which
such entity is a party or by which such entity may be bound, or to
which any of the property or assets of such entity is subject, except
where a default thereunder would not have a material adverse effect on
the condition, financial or otherwise, or the earnings, assets,
business affairs or business prospects of the Company, the Operating
Partnership, the Subsidiaries and the Residential Development
Corporations considered as one enterprise.
(xvi) The execution and delivery of this Agreement, the
applicable U.S. Terms Agreement or any applicable Warrant Agreement,
the performance of the obligations set forth herein or therein, and
the consummation of the transactions contemplated hereby or thereby or
in the U.S. Prospectus by the Company, the Operating Partnership, the
Subsidiaries and the Residential Development Corporations, as
applicable, will not conflict with or constitute a breach or violation
by such party of, or default under, (A) any material contract,
indenture, mortgage, loan agreement, note, lease, joint venture or
partnership agreement or other instrument or agreement to which the
Company, the Operating Partnership, any Subsidiary or any Residential
Development Corporation is a party or by which they, any of them, any
of their respective assets or any Property may be bound or subject;
(B) the declaration of trust, charter, by-laws, certificate of limited
partnership, partnership agreement, or limited liability company
agreement, as the case may be, of the Company, the Operating
Partnership, any Subsidiary or any Residential Development
Corporation; or (C) any applicable law, rule, order, administrative
regulation or administrative or court decree.
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(xvii) The Company has full right, power and authority under
its organizational documents to enter into this Agreement, the
applicable U.S. Terms Agreement and any Delayed Delivery Contracts (as
hereinafter defined), and this Agreement has been, and as of each
Representative Date, the applicable U.S. Terms Agreement and the
Delayed Delivery Contracts, if any, will have been duly authorized,
executed and delivered by the Company
(xviii) The Operating Partnership has full right, power and
authority under its organizational documents to enter into this
Agreement and this Agreement has been duly authorized, executed and
delivered by the Operating Partnership.
(xix) There is no action, suit or proceeding before or by
any court or governmental agency or body, domestic or foreign, now
pending, or, to the knowledge of the Company or the Operating
Partnership, threatened against or affecting the Company, the
Operating Partnership, any Subsidiary, any Residential Development
Corporation, any Property, or any property underlying indebtedness
held by the Company, the Operating Partnership, any of the
Subsidiaries or any of the Residential Development Corporations, or
any officer or trust manager of the Company that is required to be
disclosed in the Registration Statement (other than as disclosed
therein) or that, if determined adversely to the Company, the
Operating Partnership, any Subsidiary, any Residential Development
Corporation, any Property, including any property underlying
indebtedness held by the Company, the Operating Partnership, any of
the Subsidiaries and any of the Residential Development Corporations,
or any such officer or trust manager, might (A) result in any 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, the Subsidiaries and the
Residential Development Corporations considered as one enterprise or
(B) materially and adversely affect the consummation of the
transactions contemplated by this Agreement. There is no pending
legal or governmental proceeding to which the Company, the Operating
Partnership, any Subsidiary or any Residential Development Corporation
is a party or of which any of their respective properties or assets or
any Property, including any property underlying indebtedness held by
the Company, the Operating Partnership, any of the Subsidiaries or any
of the Residential Development Corporations, is the subject, including
ordinary routine litigation incidental to the business, that is,
considered in the aggregate, material to the condition, financial or
otherwise, or the earnings, assets, business affairs or business
prospects of the Company, the Operating Partnership, the Subsidiaries
and the Residential Development Corporations considered as one
enterprise. There are no contracts or documents that are required to
be filed as exhibits to the Registration Statement by the 1933 Act or
by the 1933 Act Regulations which have not been filed as exhibits to
the Registration Statement or to a document incorporated therein by
reference.
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(xx) The Company qualified as a real estate investment
trust under the Internal Revenue Code of 1986, as amended (the
"CODE"), with respect to its taxable years ended December 31, 1994,
December 31, 1995 and December 31, 1996 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 U.S. Prospectus, and its proposed manner of operation
will enable it to meet the requirements for qualification as a real
estate investment trust in the future.
(xxi) None of the Company, the Operating Partnership, any
Subsidiary or any Residential Development Corporation is, or at
Closing Time will be, required to be registered under the Investment
Company Act of 1940, as amended (the "1940 ACT").
(xxii) None of the Company, the Operating Partnership, any
Subsidiary or any Residential Development Corporation is required to
own or possess any trademarks, service marks, trade names or
copyrights (collectively, "PROPRIETARY RIGHTS") not now lawfully owned
or possessed in order to conduct the business now operated by such
entity or as proposed to be operated by it as described in the U.S.
Prospectus and no such entity has received any notice or is otherwise
aware of any infringement of or conflict with asserted rights of
others with respect to any proprietary rights.
(xxiii) All authorizations, approvals and consents of any
court or governmental authority or agency that are necessary in
connection with the offering, issuance or sale of the U.S.
Underwritten Securities hereunder have been obtained, except such as
may be required under the 1933 Act or the 1933 Act Regulations or
state securities or real estate syndication laws.
(xxiv) Each of the Company, the Operating Partnership, the
Subsidiaries and the Residential Development Corporations possesses
such certificates, authorizations or permits issued by the appropriate
state, federal or foreign regulatory agencies or bodies necessary to
conduct the business now conducted by it, or proposed to be conducted
by it, as described in the U.S. Prospectus, and none of the Company,
the Operating Partnership, any Subsidiary or any Residential
Development Corporation has received any notice 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 an unfavorable decision, ruling or finding, would
materially and adversely affect the condition, financial or otherwise,
or the earnings, assets, business affairs or business prospects of the
Company, the Operating Partnership, the Subsidiaries and the
Residential Development Corporations considered as one enterprise.
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(xxv) The documents incorporated or deemed to be
incorporated by reference in the U.S. 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 U. S. Prospectus, at the time the Registration Statement became
effective and as of each U.S. Representation Date 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.
(xxvi) No labor dispute with the employees of the Company,
the Operating Partnership, any Subsidiary or any Residential
Development Corporation exists or, to the knowledge of the Company or
the Operating Partnership, is imminent.
(xxvii) Except as otherwise described in the U. S.
Prospectus, (A) each of the Company, the Operating Partnership, the
Subsidiaries, and each Residential Development Corporation, as the
case may be, has good and marketable title in fee simple to all real
property owned by such entity and good and marketable title to the
improvements, if any, thereon and all other assets that are required
for the effective operation of such real property in the manner in
which they currently are operated except where the failure to own real
property or improvements thereon in fee simple would not have a
material adverse effect on the condition, financial or otherwise, or
on the earnings, assets, business affairs or business prospects of or
with respect to the Company, the Operating Partnership, the
Subsidiaries and the Residential Development Corporations considered
as one enterprise; (B) any real property and buildings held under
lease by the Company, the Operating Partnership, any Subsidiary or any
Residential Development Corporation are in full force and effect, and
such entity is not in default in respect of any of the terms or
provisions of such leases and such entity has not received notice of
the assertion of any claim by anyone adverse to the Operating
Partnership's rights as lessee under such leases, or affecting or
questioning the Operating Partnership's right to the continued
possession or use of the real property and buildings held under such
leases or of a default under such leases, in each case with such
exceptions as would not have a material adverse impact on the
condition, financial or otherwise, or on the earnings, assets,
business affairs or business prospects of or with respect to the
Company, the Operating Partnership, the Subsidiaries and the
Residential Development Corporations considered as one enterprise; (C)
all liens, charges, encumbrances, claims, or restrictions on or
affecting any of the Properties, including any property underlying
indebtedness held by the Company, the Operating Partnership, any of
the Subsidiaries or any of the
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Residential Development Corporations, and the assets of the Company,
the Operating Partnership, any Subsidiary or any Residential
Development Corporation which are required to be disclosed in the U.S.
Prospectus are disclosed therein; (D) none of the Company, the
Operating Partnership, any of the Subsidiaries, any of the Residential
Development Corporations or any tenant of any of the Properties is in
default under any of the leases pursuant to which the Operating
Partnership, as lessor, leases its Property (and neither the Company
nor the Operating Partnership knows of any event which, but for the
passage of time or the giving of notice, or both, would constitute a
default under any of such leases) other than such defaults that would
not have a material adverse effect on the condition, financial or
otherwise, or on the earnings, assets, business affairs or business
prospects of or with respect to the Operating Partnership, any
Subsidiary or any Residential Development Corporation or any Property;
(E) except as described in the U. S Prospectus, no person has an
option or right of first refusal to purchase all or part of any
Property or any interest therein, other than such options or rights of
first refusal which would not have a material adverse effect on the
condition, financial or otherwise, or on the earnings, assets,
business affairs or business prospects of or with respect to the
Company, the Operating Partnership, the Subsidiaries and the
Residential Development Corporations, considered as one enterprise;
(F) each of the Properties complies with all applicable codes, laws
and regulations (including, without limitation, building and zoning
codes, laws and regulations and laws relating to access to the
Properties), except if and to the extent disclosed in the U. S.
Prospectus and except for such failures to comply that would not
individually or in the aggregate have a material adverse impact on the
condition, financial or otherwise, or on the earnings, assets,
business affairs or business prospects of such Property or the
Operating Partnership; (G) there are in effect for the Properties,
including, to the knowledge of the Company, any property underlying
indebtedness held by the Company, the Operating Partnership, any of
the Subsidiaries and any of the Residential Development Corporations,
and the other assets of the Company, the Operating Partnership, the
Subsidiaries and the Residential Development Corporations, insurance
policies covering risks and in amounts that are commercially
reasonable for the assets 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 (H) neither the Company nor
the Operating Partnership has knowledge of any pending or threatened
condemnation proceedings, 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 Properties, including any property
underlying indebtedness held by the Company, the Operating
Partnership, any of the Subsidiaries or any Residential Development
Corporation, except such proceedings or actions that would not have a
material adverse effect on the condition, financial or otherwise, or
on the earnings, assets, business affairs or business prospects of the
Operating Partnership or with respect to such
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Property, including any property underlying indebtedness held by the
Company, the Operating Partnership, any of the Subsidiaries or any
Residential Development Corporation.
(xxviii) Except as disclosed in the U.S. Prospectus,
(A) each Property, including, without limitation, the Environment (as
defined below) associated with such Property, is free of any Hazardous
Substance (as defined below), except for Hazardous Substances that
would not have a material adverse effect on the condition, financial
or otherwise, or on the earnings, assets, business affairs or business
prospects of or with respect to the Company, the Operating
Partnership, the Subsidiaries and the Residential Development
Corporations considered as one enterprise; (B) none of the Company,
the Operating Partnership, any Subsidiary or any Residential
Development Corporation 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,
any Subsidiary or any Residential Development Corporation intends to
use the properties or assets described in the U.S. 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,
any Subsidiary or any Residential Development Corporation 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,
any Subsidiary or any Residential Development Corporation 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
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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 on the
condition, financial or otherwise, or the earnings, assets or business
affairs or business prospects of the Company, the Operating
Partnership, the Subsidiaries and the Residential Development
Corporations considered as one enterprise.
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; "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
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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.
(xxix) Each of the Company, the Operating Partnership, the
Subsidiaries and the Residential Development Corporations has filed
all federal, state, local and foreign income tax returns which have
been required to be filed (except in any case in which the failure to
so file would not have a material adverse effect on the condition,
financial or otherwise, or the earnings, assets, business affairs or
business prospects of such entities considered as one enterprise) and
has paid all taxes required to be paid and any other assessment, fine
or penalty levied against it, to the extent that any of the foregoing
is due and payable, except, in all cases, for any such tax,
assessment, fine or penalty that is being contested in good faith.
(xxx) 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 U.S. Underwritten Securities.
(b) Any certificate signed by any officer of the Company
or the Operating Partnership and delivered to you or to counsel for the U.S.
Underwriters shall be deemed a representation and warranty by such entity to
each U.S. Underwriter as to the matters covered thereby.
SECTION 2. PURCHASE AND SALE.
(a) (a) The several commitments of the U.S.
Underwriters to purchase the U.S. Underwritten Securities pursuant to the
applicable U.S. Terms Agreement shall be deemed to have been made on the basis
of the representations and warranties herein contained and shall be subject to
the terms and conditions set forth herein or in the applicable U.S. Terms
Agreement.
(b) In addition, on the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company may grant, if so provided in the applicable U.S. Terms
Agreement relating to the Initial U.S. Securities, an option to the U.S.
Underwriters named in such U.S. Terms Agreement, severally and not jointly, to
purchase up to the number of U.S. Option Securities set forth therein at the
same price per Option Security as is applicable to the Initial U.S. Securities.
Such option, if granted, will
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expire 30 days or such lesser number of days as may be specified in the
applicable U.S. Terms Agreement after the U.S. Representation Date relating to
the Initial U.S. Securities, and may be exercised in whole or in part from time
to time only for the purpose of covering over-allotments which may be made in
connection with the offering and distribution of the Initial U.S. Securities
upon notice by you to the Company setting forth the number of U.S. Option
Securities as to which the several U.S. Underwriters are then exercising the
option and the time and date of payment and delivery for such U.S. Option
Securities. Any such time and date of delivery (a "DATE OF DELIVERY") shall be
determined by you, but shall not be later than seven full business days and not
be earlier than two full business days after the exercise of said option,
unless otherwise agreed upon by you and the Company. If the option is
exercised as to all or any portion of the U.S. Option Securities, each of the
U.S. Underwriters, acting severally and not jointly, will purchase that
proportion of the total number of U.S. Option Securities then being purchased
which the number of Initial U.S. Securities each such Underwriter has agreed
to purchase as set forth in the applicable U.S. Terms Agreement bears to the
total number of Initial U.S. Securities, subject to such adjustments as you in
your discretion shall make to eliminate any sales or purchases of fractional
Initial U.S. Securities.
(c) Payment of the purchase price for, and delivery of, the U.S.
Underwritten Securities to be purchased by the U.S. Underwriters shall be made
at the offices of ▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P., Columbia Square, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇-▇▇▇▇, or at such other place as shall be
agreed upon by you and the Company, at 9:00 A.M., New York City time, on the
third business day (unless postponed in accordance with the provisions of
Section 10 hereof) following the date of the applicable U.S. Terms Agreement
or, if pricing takes place after 4:30 P.M. New York City time on the date of
the applicable U.S. Terms Agreement, on the fourth business day (unless
postponed in accordance with the provisions of Section 10 hereof) following the
date of the applicable U.S. Terms Agreement, or at such other time as shall be
agreed upon by you and the Company (each such time and date being referred to
as a "CLOSING TIME"). In addition, if any or all of the U.S. Option Securities
are purchased by the U.S. Underwriters, payment of the purchase price for, and
delivery of certificates representing, such U.S. Option Securities, shall be
made at the above-mentioned offices of ▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P., or at such other
place as shall be agreed upon by you and the Company, on each Date of Delivery
as specified in the notice from you to the Company. Unless otherwise specified
in the applicable U.S. Terms Agreement, payment shall be made to the Company by
wire transfer or by certified or official bank check or checks in federal or
similar same-day funds payable to the order of the Company against delivery to
you for the respective accounts of the U.S. Underwriters of the U.S.
Underwritten Securities to be purchased by them. The U.S. Underwritten
Securities shall be in such authorized denominations and registered in such
names as you may request in writing at least two business days prior to the
applicable Closing Time or Date of Delivery, as the case may be. The U.S.
Underwritten Securities, which may be in temporary form, will be made
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available for examination and packaging by you on or before the first business
day prior to the applicable Closing Time or Date of Delivery, as the case may
be.
If authorized by the applicable U.S. Terms Agreement, the U.S.
Underwriters named therein may solicit offers to purchase U.S. Underwritten
Securities from the Company pursuant to delayed delivery contracts ("DELAYED
DELIVERY CONTRACTS") substantially in the form of Exhibit B hereto with such
changes therein as the Company may approve. As compensation for arranging
Delayed Delivery Contracts, the Company will pay to you at Closing Time, for
the respective accounts of the U.S. Underwriters, a fee specified in the
applicable U.S. Terms Agreement for each of the U.S. Underwritten Securities
for which Delayed Delivery Contracts are made at the applicable Closing Time as
is specified in the applicable U.S. Terms Agreement. Any Delayed Delivery
Contracts are to be with institutional investors of the types described in the
Prospectus. At the applicable Closing Time, the Company will enter into
Delayed Delivery Contracts (for not less than the minimum number of U.S.
Underwritten Securities per Delayed Delivery Contract specified in the
applicable U.S. Terms Agreement) with all purchasers proposed by the U.S.
Underwriters and previously approved by the Company as provided below, but not
for an aggregate number of U.S. Underwritten Securities in excess of that
specified in the applicable U.S. Terms Agreement. The U.S. Underwriters will
not have any responsibility for the validity or performance of Delayed Delivery
Contracts.
You shall submit to the Company, at least three business days prior
to the applicable Closing Time, the names of any institutional investors with
which it is proposed that the Company will enter into Delayed Delivery
Contracts and the number of U.S. Underwritten Securities to be purchased by
each of them, and the Company will advise you, at least two business days prior
to the applicable Closing Time, of the names of the institutional investors
with which the making of Delayed Delivery Contracts is approved by the Company
and the number of U.S. Underwritten Securities to be covered by each such
Delayed Delivery Contract.
The number of U.S. Underwritten Securities agreed to be purchased by
the several U.S. Underwriters pursuant to the applicable U.S. Terms Agreement
shall be reduced by the number of U.S. Underwritten Securities covered by
Delayed Delivery Contracts, as to each Underwriter as set forth in a written
notice delivered by you to the Company; provided, however, that the total
number of U.S. Underwritten Securities to be purchased by all U.S. Underwriters
shall be the total number of U.S. Underwritten Securities covered by the
applicable U.S. Terms Agreement, less the number of U.S. Underwritten
Securities covered by Delayed Delivery Contracts.
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SECTION 3. COVENANTS OF THE COMPANY AND THE OPERATING PARTNERSHIP.
Each of the Company and the Operating Partnership covenants with each
U.S. Underwriter as follows:
(a) (a) Immediately following the execution of the applicable
U.S. Terms Agreement, the Company will prepare a Prospectus Supplement setting
forth the number of U.S. Underwritten Securities covered thereby and their
terms not otherwise specified in the Prospectus pursuant to which the U.S.
Underwritten Securities are being issued, the names of the U.S. Underwriters
participating in the offering and the number of U.S. Underwritten Securities
which each severally has agreed to purchase, the names of the U.S. Underwriters
acting as co-managers in connection with the offering, the price at which the
U.S. Underwritten Securities are to be purchased by the U.S. Underwriters from
the Company, the initial public offering price, if any, the selling concession
and reallowance, if any, any delayed delivery arrangements, and such other
information as you and the Company deem appropriate in connection with the
offering of the U.S. Underwritten Securities; and the Company will promptly
transmit copies of the Prospectus Supplement to the Commission for filing
pursuant to Rule 424(b) of the 1933 Act Regulations within the time period
required by such Rule and will furnish to the U.S. Underwriters named therein
as many copies of the Prospectus and such Prospectus Supplement as you shall
reasonably request. If the Company elects to rely on Rule 434 under the 1933
Act Regulations, the Company will prepare an abbreviated term sheet that
complies with the requirements of Rule 434 under the 1933 Act Regulations and
will provide the U.S. Underwriters with copies of the form of Rule 434
Prospectus, in such number as the U.S. Underwriters may reasonably request,
and file or transmit for filing with the Commission the form of Prospectus
complying with Rule 434(c)(2) of the 1933 Act Regulations in accordance with
Rule 424(b) of the 1933 Act Regulations by the close of business in New York on
the business day immediately succeeding the date of the applicable U.S. Terms
Agreement.
(b) The Company will notify you immediately, and confirm such
notice in writing, of (i) the effectiveness of any amendment to the
Registration Statement relating to or affecting the offering of the U.S.
Underwritten Securities, (ii) the transmittal to the Commission for filing of
any Prospectus Supplement or other supplement or amendment to the Prospectus or
any document to be filed pursuant to the 1934 Act relating to or affecting the
offering of the U.S. Underwritten Securities, (iii) the receipt of any comments
from the Commission relating to or affecting the offering of the U.S.
Underwritten Securities, (iv) any request by the Commission for any amendment
to the Registration Statement or any amendment or supplement to the U.S.
Prospectus or for additional information relating to or affecting the offering
of the U.S. Underwritten Securities, and (v) the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement
relating to or affecting the offering of the U.S. Underwritten Securities or
the initiation of any proceedings for that purpose; and the Company
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will make every reasonable effort to prevent the issuance of any such stop
order and, if any stop order is issued, to obtain the lifting thereof at the
earliest possible moment.
(c) At any time when the U.S. Prospectus is required to be
delivered under the 1933 Act or the 1934 Act in connection with sales of the
U.S. Underwritten Securities, the Company will give you notice of its intention
to file or prepare any amendment to the Registration Statement or any amendment
or supplement to the U.S. Prospectus (including any revised prospectus which
the Company proposes for use by you in connection with the offering of U.S.
Underwritten Securities which differs from the prospectus on file at the
Commission at the time the Registration Statement became effective, whether or
not such revised prospectus is required to be filed pursuant to Rule 424(b) of
the 1933 Act Regulations), whether pursuant to the 1933 Act, 1934 Act or
otherwise, and will furnish you with copies of any such amendment or supplement
a reasonable amount of time prior to such proposed filing or preparation, as
the case may be, and will not file or prepare any such amendment or supplement
or other documents in a form to which you or counsel for the U.S. Underwriters
shall reasonably object.
(d) The Company will deliver to each U.S. Underwriter, as soon as
available, as many signed and conformed copies of the Registration Statement as
originally filed and of each amendment thereto (including exhibits filed
therewith or incorporated by reference therein) as the U.S. Underwriters may
reasonably request.
(e) The Company will furnish to each U.S. Underwriter, from time
to time during the period when the U.S. Prospectus is required to be delivered
under the 1933 Act or the Exchange Act, such number of copies of the U.S.
Prospectus (as amended or supplemented) as such U.S. Underwriter may reasonably
request for the purposes contemplated by the 1933 Act or the 1934 Act or the
respective applicable rules and regulations of the Commission thereunder.
(f) If any event shall occur as a result of which it is necessary,
in the opinion of counsel for the U.S. Underwriters or counsel for the
Company, to amend or supplement the U.S. Prospectus in order to make the U.S.
Prospectus not contain 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 existing at the time it is delivered to a purchaser, not
misleading, or if it shall be necessary, in the opinion of either such counsel,
at any such time to amend or supplement the Registration Statement or the U.S.
Prospectus in order to comply with the 1933 Act or the 1934 Act, the Company
will forthwith prepare an amendment of or supplement to the Registration
Statement or the U.S. Prospectus (in form and substance satisfactory to counsel
for the U.S. Underwriters), whether by filing documents pursuant to the 1933
Act, the 1934 Act or otherwise, which will amend or supplement the U.S.
Prospectus so that it will not contain an untrue
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23
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
existing at the time it is delivered to a purchaser, not misleading, or to make
the Registration Statement and U.S. Prospectus comply with such requirements,
and the Company will furnish to the U.S. Underwriters a reasonable number of
copies of such amendment or supplement.
(g) The Company will endeavor, in cooperation with the U.S.
Underwriters, to qualify the U.S. Underwritten Securities, the Warrant Shares,
if any, and any securities issuable upon conversion of the Preferred Shares for
offering and sale under the applicable securities laws and real estate
syndication laws of such states and other jurisdictions of the United States as
the U.S. Underwriters may designate. In each jurisdiction in which the U.S.
Underwritten Securities, the Warrant Shares, if any, and the securities
issuable upon conversion of the Preferred Shares 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.
(h) With respect to each sale of U.S. Underwritten Securities, the
Company will make generally available to its security holders as soon as
practicable, but not later than 90 days after the close of the period covered
thereby, an earnings statement (in form complying with the provisions of Rule
158 of the 1933 Act Regulations) covering a 12- month period beginning not
later than the first day of the Company's fiscal quarter next following the
"effective date of the registration statement" (as defined in such Rule 158).
(i) The Company, during the period when the U.S. Prospectus is
required to be delivered under the 1933 Act or the 1934 Act in connection with
sales of the U.S. Underwritten Securities, will file all documents required to
be filed with the Commission pursuant to Section 13, 14 or 15 of the 1934 Act
within the time periods prescribed by the 1934 Act and the 1934 Act
Regulations.
(j) If applicable, the Company will use the net proceeds received
by it from the sale of the U.S. Underwritten Securities in the manner
specified in the Prospectus under the caption "Use of Proceeds."
(k) If requested by you, the Company will use its best efforts to
effect the listing of the U.S. Underwritten Securities on the New York Stock
Exchange or such other national securities exchange on which securities of the
Company are then listed.
(l) During the period from the date of the applicable U.S. Terms
Agreement until 90 days after Closing Time, the Company and the Operating
Partnership will not, without your prior written consent, directly or
indirectly, sell, offer to sell, grant any option for the sale of, or otherwise
dispose of, any Common Shares or Units or any other security convertible into
or exchangeable into or
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exercisable for the Common Shares, otherwise than in accordance with this
Agreement or as contemplated in the Prospectus except for (i) options granted
under the incentive plans of the Company, (ii) Common Shares issued in exchange
for Units and (iii) Common Shares or Units issued in connection with the
acquisition of real property or interests therein.
(m) The Company will use its best efforts to meet the requirements
to continue to qualify as a "real estate investment trust" under the Code.
(n) If requested by you, the Company and the Operating Partnership
will cause, or have caused, the officers and trust managers of the Company to
enter into lock-up agreements in form and substance reasonably satisfactory to
you and each of the Company and the Operating Partnership acknowledges that the
U.S. Underwriters are or will be intended third party beneficiaries of such
agreements.
(o) If any Preferred Shares or Warrants included in the U.S.
Underwritten Securities are convertible into or exercisable for, as applicable,
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 such Preferred Shares, or upon exercise of such
Warrants.
(p) If any Preferred Shares or Warrants included in the U.S.
Underwritten Securities are convertible into or exercisable for, as applicable,
Common Shares, the Company will use its best efforts to list the Common Shares
issuable on conversion of such Preferred Shares or upon exercise of such
Warrants on the New York Stock Exchange or such other national securities
exchange on which the Common Shares are then listed.
(q) Except for the authorization of actions permitted to be taken
by the Underwriters as contemplated herein or in the Prospectuses, neither the
Company nor the Operating Partnership will (i) take, directly or indirectly,
any action designed to cause or to result in, or that 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 U.S.
Underwritten Securities, (ii) sell, bid for or purchase the U.S. Underwritten
Securities or pay any person any compensation for soliciting purchases of the
U.S. Underwritten Securities or (iii) pay or agree to pay to any person any
compensation for soliciting another to purchase any other securities of the
Company.
(r) During the period from Closing Time until five years after
Closing Time, the Company will deliver to you, (i) promptly upon their becoming
available, copies of all current, regular and periodic reports of the Company
mailed to its stockholders or filed with any securities exchange or with the
Commission or any governmental authority succeeding to any of the Commission's
functions, and (ii) such other information concerning the Company, the
Operating Partnership,
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any Subsidiary or any Residential Development Corporation as you may reasonably
request.
(s) Prior to Closing Time and if not described in the U.S.
Prospectus, the Company and the Operating Partnership will notify you in
writing immediately if any event occurs that renders any of the
representations and warranties of the Company and the Operating Partnership
contained herein inaccurate or incomplete in any respect.
(t) If at any time during the 25-day period after any amendment to
the Registration Statement becomes effective or during the period prior to the
final Date of Delivery, 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 U.S. Underwritten Securities has been or is likely to be
materially affected (regardless of whether such rumor, publication or event
necessitates supplements to or amendments of the Prospectuses), the Company
will, after written notice from you advising the Company to that effect,
promptly 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.
(u) From the date hereof until notice of termination pursuant to
Section 9(a) hereof is received by you, the Company shall furnish to you and
your counsel, within two days after filing, copies of any document filed with
the Commission pursuant to Section 13, 14 or 15 of the 1934 Act.
SECTION 4. PAYMENT OF FEES AND EXPENSES.
The Company will pay all expenses incident to the performance of its
obligations under this Agreement and the applicable U.S. Terms Agreement,
including (i) the printing and filing of the Registration Statement as
originally filed and of each amendment thereto, (ii) the printing of this
Agreement and the applicable U.S. Terms Agreement and other documents related
hereto, (iii) the preparation, issuance and delivery of the certificates for
the U.S. Underwritten Securities to the U.S. Underwriters, (iv) the fees and
other charges of the Company's counsel and accountants, (v) the qualification
of the U.S. Underwritten Securities and the Warrant Shares and securities
issuable upon conversion of the Preferred Shares, if any, under securities laws
and real estate syndication laws in accordance with the provisions of Section
3(g) hereof, including filing fees and the fees and other charges of counsel
for the U.S. Underwriters in connection therewith and in connection with the
preparation of a blue sky memorandum (the "BLUE SKY MEMORANDUM"), (vi) the
printing and delivery to the U.S. Underwriters of copies of the Registration
Statement as originally filed and of each amendment thereto, of the preliminary
prospectus, and of the U.S. Prospectus and any amendments or supplements
thereto, (vii) the printing (and reproduction) and delivery to the U.S.
Underwriters of copies of the Blue Sky Memorandum, (viii) the printing and
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delivery to the U.S. Underwriters of copies of the Warrant Agreement, if any,
(ix) any fees charged by nationally recognized statistical rating organizations
for the rating of the U.S. Underwritten Securities, (x) the fees and expenses,
if any, incurred with respect to the listing of the U.S. Underwritten
Securities, the Warrant Shares or the securities issuable on conversion of the
Preferred Shares, if any, on any national securities exchange, and (xi) the fee
of the National Association of Securities Dealers, Inc. (the "NASD"), including
the fees and other charges of counsel for the U.S. Underwriters in connection
with the NASD's review of the proposed public offering of the U.S. Underwritten
Securities.
If the applicable U.S. Terms Agreement is canceled or terminated by
you in accordance with the provisions of Section 5 or Section 9 hereof, the
Company also shall reimburse the U.S. Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and other charges of
counsel for the U.S. Underwriters.
SECTION 5. CONDITIONS OF U.S. UNDERWRITERS' OBLIGATIONS.
The obligations of the U.S. Underwriters hereunder and under the
applicable U.S. Terms Agreement are subject to the accuracy, as of the date
hereof and at Closing Time, of the representations and warranties of the
Company and the Operating Partnership herein contained, to the performance by
the Company and the Operating Partnership of their respective obligations
hereunder, and to the following further conditions:
(a) At the applicable Closing Time (i) 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,
(ii) the rating assigned by any nationally recognized statistical rating
organization to any Preferred Shares of the Company and any indebtedness of the
Company or the Operating Partnership as of the date of the applicable U.S.
Terms Agreement shall not have been lowered since such date nor shall any such
rating organization have publicly announced that it has placed any Preferred
Shares of the Company and any indebtedness of the Company or the Operating
Partnership on what is commonly termed a "watch list" for possible downgrading,
and (iii) there shall not have come to your attention any facts that would
cause you to believe that the U.S. Prospectus, together with the applicable
Prospectus Supplement, at the time it was required to be delivered to
purchasers of the U.S. Underwritten Securities, included an untrue statement of
a material fact or omitted to state a material fact necessary in order to make
the statements therein, in light of the circumstances existing at such time,
not misleading.
(b) At Closing Time, you shall have received:
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(i) The favorable opinions, dated as of Closing
Time, of Shaw, Pittman, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇, counsel for each of the
Company, the Operating Partnership, the Subsidiaries and the
Residential Development Corporations, and ▇▇▇▇▇ ▇▇▇▇▇▇▇ Rain ▇▇▇▇▇▇▇
(A Professional Corporation), special Texas tax counsel for the
Subsidiaries that are Texas entities (collectively with the
Residential Development Corporations, the "TEXAS ENTITIES"), each in
form and substance satisfactory to counsel for the U.S. Underwriters,
to the effect that:
(A) The Company has been duly formed as a real
estate investment trust under the laws of the State of Texas.
The Company has power and authority to own, lease and operate
its properties, to conduct the business in which it is engaged
or proposes to engage as described in the U.S. Prospectus, and
to enter into and perform its obligations under this
Agreement, the Partnership Agreement, the applicable U.S.
Terms Agreement and the Warrant Agreement, if any
(collectively, the "LISTED AGREEMENTS"). 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. The Restated Declaration of Trust is in effect, and no
dissolution, revocation or forfeiture proceedings regarding
the Company have been commenced. The Company is duly
qualified as a foreign organization to transact business and
is in good standing in New York and each other jurisdiction in
which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business,
except where the failure to so qualify would not have a
material adverse effect on the condition, financial or
otherwise, or the earnings, assets, business affairs or
business prospects of the Company, the Operating Partnership,
the Subsidiaries and the Residential Development Corporations
considered as one enterprise.
(B) The Operating Partnership has been duly
formed and is validly existing as a limited partnership in
good standing under the Delaware Act. The Operating
Partnership has full partnership power and authority to own,
lease and operate its properties, to conduct the business in
which it is engaged or proposes to engage as described in the
U.S. Prospectus and to enter into and perform its obligations
under this Agreement and the Listed Agreements to which it is
a party. The Operating Partnership is duly qualified or
registered as a foreign partnership and is in good standing in
Texas, Colorado, Arizona, New Mexico, Louisiana, Nebraska and
each other jurisdiction in which such qualification or
registration is required, whether by reason of the ownership
or leasing of property or the conduct of business, except
where the failure to so qualify or register would not have a
material adverse effect on the condition, financial or
otherwise, or the earnings,
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assets, business affairs or business prospects of the Company,
the Operating Partnership, the Subsidiaries and the
Residential Development Corporations considered as one
enterprise. CGP, Inc., a wholly owned subsidiary of the
Company, is the sole general partner of the Operating
Partnership.
(C) Each of Crescent Real Estate Funding I, L.P.,
Crescent Real Estate Funding II, L.P., Crescent Real Estate
Funding III, L.P., Crescent Real Estate Funding IV, L.P.,
Crescent Real Estate Funding V, L.P., Crescent Real Estate
Funding VI, L.P. and any other Subsidiary that would be
considered a "Significant Subsidiary" as defined in Article 1,
Rule 1--02 of Regulation S-X promulgated pursuant to the 1933
Act (collectively, the "Significant Subsidiaries") has been
organized and is validly existing as a corporation, limited
partnership or limited liability company, as the case may be,
in good standing under the laws of its respective state of
organization, with full corporate, partnership or limited
liability company (as the case may be) power and authority to
own, lease and operate its properties, to conduct the business
in which it is engaged or proposes to engage as described in
the U.S. Prospectus, and to enter into and perform its
obligations under any Listed Agreements to which it is a
party. Each of the Significant Subsidiaries and the
Residential Development Corporations is duly qualified as a
foreign corporation, limited partnership or limited liability
company, as the case may be, to transact business and is in
good standing in each jurisdiction in which such qualification
is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure
to so qualify would not have a material adverse effect on the
condition, financial or otherwise, or the earnings, assets,
business affairs or business prospects of the Company, the
Operating Partnership, the Significant Subsidiaries and the
Residential Development Corporations considered as one
enterprise. All of the issued and outstanding shares of
capital stock of each of the corporate Significant
Subsidiaries have been duly authorized and validly issued and
are fully paid and non-assessable. The ownership by the
Company, the Operating Partnership and the Significant
Subsidiaries of the shares of capital stock or limited
partnership or equity interests, as the case may be, of each
of the Significant Subsidiaries is as described in the U.S.
Prospectus and such ownership is free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim
or equity.
(D) The authorized, issued and outstanding shares
of beneficial interest of the Company are as set forth in the
U.S. Prospectus. All of such shares of beneficial interest
are validly issued, fully paid and non-assessable and have
been offered and sold in compliance with all applicable laws
(including, without limitation,
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federal securities laws). No shares of beneficial interest of
the Company are reserved for any purpose except in connection
with (i) the option plans of the Company as described in the
U.S. Prospectus and (ii) the possible issuance of Common
Shares upon the exchange of Units pursuant to the Partnership
Agreement. Except for Units, Common Shares issuable upon the
exercise of options and Units issuable upon the exercise of
options, there are no outstanding securities convertible into
or exchangeable for any shares of beneficial interest of the
Company and no outstanding options, rights (preemptive or
otherwise) or warrants to purchase or to subscribe for shares
of beneficial interest or any other securities of the Company.
(E) The U.S. Securities have been duly authorized
for issuance and sale to the U.S. Underwriters pursuant to
this Agreement and, when issued and delivered by the Company
pursuant thereto and pursuant to the applicable U.S. Terms
Agreement against payment of the consideration set forth
therein and any applicable Delayed Delivery Contract, will be
validly issued, fully paid and non- assessable. Upon payment
of the purchase price and delivery of the U.S. Securities in
accordance herewith and with the International Purchase
Agreement, each of the Underwriters is receiving good, valid
and marketable title to the U.S. Securities, free and clear of
all security interests, mortgages, pledges, liens,
encumbrances and claims. The U.S. Securities will be offered
and sold at Closing Time, or the Date of Delivery, as the case
may be, in compliance with all applicable laws (including,
without limitation, federal securities laws). The terms of
the U.S. Securities and the Common Shares, Preferred Shares
and Warrants conform to all statements and descriptions
related thereto contained in the U.S. Prospectus. The form of
stock certificate evidencing Common Shares, Preferred Shares
and Warrants, as applicable, is in due and proper form and
complies with all applicable legal requirements. The issuance
of the U.S. Securities is not subject to any preemptive or
other similar rights and, except as set forth in the U.S.
Prospectus, there are no restrictions on the voting or
transfer of Common Shares, Preferred Shares or Warrants, as
applicable, pursuant to the Company's Declaration of Trust or
Bylaws or any agreement or other instrument known to such
counsel.
(F) If applicable, the Warrants have been duly
authorized and, when issued and delivered pursuant to this
Agreement and the International Purchase Agreement and
countersigned by the Warrant Agent as provided in the Warrant
Agreement, will have been duly executed, countersigned, issued
and delivered and will constitute valid and legally binding
obligations of the Company entitled to the benefits provided
by the Warrant Agreement under which they are to be issued.
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(G) If applicable, the securities issuable upon
conversion of the Preferred Shares and the securities issuable
upon exercise of the Warrants have been duly and validly
authorized and reserved for issuance upon such conversion or
exercise by all necessary action on the part of the Company
and such shares, when issued upon such conversion or exercise
in accordance with the Declaration of Trust, the Warrant
Agreement, or the Delayed Delivery Contract, as the case may
be, will be duly authorized, validly issued, fully paid and
non-assessable, and the issuance of such securities upon such
conversion or exercise will not be subject to preemptive or
other similar rights arising by operation of law or otherwise.
(H) Any applicable Warrant Agreement has been
duly authorized, executed and delivered by the Company and,
assuming due authorization, execution and delivery by the
Warrant Agent, constitutes a valid and legally binding
agreement of the Company enforceable in accordance with its
terms; and the Warrant Agreement, if any, conforms in all
material respects to all statements relating thereto contained
in the Prospectuses.
(I) If applicable, the relative rights,
preferences, interests and powers of the Preferred Shares, as
the case may be, are as set forth in a statement of
designation filed for record with the County Clerk of Tarrant
County, Texas and all such provisions are valid under Texas
law.
(J) At Closing Time, the number of authorized,
issued and outstanding Units will be as set forth in the U.S.
Prospectus, except to the extent of changes due to either the
conversion of Units to Common Shares or the exercise of
existing options to acquire Units. All of the Units
outstanding at Closing Time were duly authorized for issuance
by the Operating Partnership and are validly issued and fully
paid. To our knowledge, the Units were offered and sold in
compliance with all applicable laws (including, without
limitation, federal securities laws). Except as summarized in
the U.S. Prospectus or as set forth in the Partnership
Agreement, there are no preemptive or other rights to
subscribe for or to purchase, or any restriction upon the
voting or transfer of, any Units pursuant to the Partnership
Agreement or any other instrument known to such counsel. The
terms of the Units conform to all statements and descriptions
related thereto contained in the U.S. Prospectus.
(K) Each of this Agreement, the applicable U.S.
Terms Agreement, and any Delayed Delivery Contract has been
duly authorized, executed and delivered by each of the Company
and the Operating Partnership, as applicable.
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(L) None of the Company, the Operating
Partnership or any Significant Subsidiary is in violation of
its declaration of trust, charter, by-laws, certificate of
limited partnership, partnership agreement, limited liability
company agreement or similar instrument, as the case may be,
and, to the knowledge of counsel, none of the Company, the
Operating Partnership or any Significant Subsidiary is in
default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other
instrument filed as an exhibit to the Registration Statement
or any document incorporated therein by reference or as
otherwise identified by the Company as material in an
officer's certificate to which such entity is a party or by
which such entity is bound, or to which any of the property or
assets of such entity is subject, except where a default
thereunder would not have a material adverse effect on the
condition, financial or otherwise, or the earnings, assets,
business affairs or business prospects of the Company, the
Operating Partnership, the Subsidiaries and the Residential
Development Corporations considered as one enterprise.
(M) Each of the Listed Agreements was duly and
validly authorized, executed and delivered by the Company and
the Operating Partnership, as applicable, and, assuming due
authorization, execution and delivery by any other party
thereto, is a valid and binding agreement, enforceable in
accordance with its terms, except as such enforceability may
be (1) limited by bankruptcy, insolvency, reorganization,
liquidation, moratorium and other similar laws affecting the
rights and remedies of creditors generally and (2) subject to
general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at
law).
(N) The execution and delivery of the Listed
Agreements, the performance of the obligations set forth in
each of the Listed Agreements, and the consummation of the
transactions contemplated thereby or in the U.S. Prospectus by
the Company, the Operating Partnership and the Significant
Subsidiaries as applicable, will not conflict with or
constitute a breach or violation of, or default under: (1) to
the knowledge of counsel, any material contract, indenture,
mortgage, loan agreement, note, lease, joint venture or
partnership agreement or other instrument or agreement filed
as an exhibit to the Registration Statement or any document
incorporated therein by reference or as otherwise identified
by the Company as material in an officer's certificate to
which the Company, the Operating Partnership or any
Significant Subsidiary is a party or by which they or any of
them or any of their respective properties or other assets or
any Property may be bound or subject; (2) the declaration of
trust, charter, by-laws, certificate of limited partnership,
partnership agreement, or
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limited liability company agreement, or similar instrument, as
the case may be, of the Company, the Operating Partnership or
any Significant Subsidiary; or (3) any federal or Texas law.
The descriptions of the Listed Agreements, if any, contained
in the U.S. Prospectus are correct and complete in all
material respects.
(O) To the knowledge of counsel, there is no
action, suit or proceeding before or by any court or
governmental agency or body, domestic or foreign, now pending
or threatened against or affecting the Company, the Operating
Partnership or any Significant Subsidiary, any Property, any
property underlying indebtedness held by the Company, the
Operating Partnership or any of the Significant Subsidiaries
or any officer or trust manager of the Company that is
required to be disclosed in the Registration Statement (other
than as disclosed therein) or that, if determined adversely to
the Company, the Operating Partnership, any Significant
Subsidiary, any Property, including any property underlying
indebtedness held by the Company, the Operating Partnership,
any of the Significant Subsidiaries or any such officer or
trust manager, would reasonably be expected to (1) result in
any 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,
the Subsidiaries and the Residential Development Corporations,
considered as one enterprise, or (2) materially and adversely
affect the consummation of the transactions contemplated by
this Agreement. To the knowledge of counsel, there is no
pending legal or governmental proceeding to which the Company,
the Operating Partnership or any Significant Subsidiary is a
party or of which any of their respective properties or assets
or any Property, including any property underlying
indebtedness held by the Company, the Operating Partnership,
or any of the Significant Subsidiaries is the subject,
including ordinary routine litigation incidental to the
business, that is, considered in the aggregate, material to
the condition, financial or otherwise, or the earnings,
assets, business affairs or business prospects of the Company,
the Operating Partnership, the Subsidiaries and the
Residential Development Corporations, considered as one
enterprise. To the knowledge of counsel, there are no
contracts or documents of the Company, the Operating
Partnership, or the Significant Subsidiaries which are
required to be filed as exhibits to the Registration Statement
by the 1933 Act or by the 1933 Act Regulations which have not
been filed or incorporated by reference as exhibits to the
Registration Statement.
(P) The Company qualified as a real estate
investment trust under the Code with respect to its taxable
years ending on or before December 31, 1996 and is organized
in conformity with the
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requirements for qualification as a real estate investment
trust, 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 Supplement, and its
proposed manner of operation will enable it to meet the
requirements for qualification as a real estate investment
trust in the future. In connection therewith, you are
entitled to rely on the opinions of Shaw, Pittman, ▇▇▇▇▇ &
▇▇▇▇▇▇▇▇▇▇ filed as Exhibit 8.01 to the Registration
Statement, the opinions attached to such opinions as exhibits
thereto, and any other opinions rendered to the Company with
respect to tax matters and described in the U.S. Prospectus,
all as if rendered to you on the date of Closing.
(Q) None of the Company, the Operating
Partnership or any Significant Subsidiary is required to be
registered under the 1940 Act.
(R) All authorizations, approvals and consents of
any court or governmental authority or agency that are
necessary in connection with the offering, issuance or sale of
the U.S. Securities under this Agreement have been obtained,
except such as may be required under the 1933 Act or the 1933
Act Regulations or the securities and real estate syndication
laws of any U.S. state or other jurisdiction with respect to
the Securities.
(S) The Registration Statement has been declared
effective under the 1933 Act and, to the knowledge of counsel,
no stop order suspending the effectiveness of the Registration
Statement has been issued under the 1933 Act or proceedings
therefor initiated or threatened by the Commission.
(T) The Registration Statement and the U.S.
Prospectus (other than the financial statements and supporting
schedules included therein, as to which no opinion need be
rendered) as of their respective effective or issue dates at
the U.S. Representation Date complied as to form in all
material respects with the requirements of the 1933 Act and
the 1933 Act Regulations. Each document filed pursuant to the
1934 Act (other than the financial statements and supporting
schedules, included therein as to which no opinion need be
rendered) and incorporated or deemed to be incorporated by
reference in the U.S. Prospectus complied when so filed or
incorporated or deemed to be incorporated as to form in all
material respects with the 1934 Act and the 1934 Act
Regulations.
(U) The information in the Registration Statement
under the captions "Description of Preferred Shares,"
"Description of Common Shares," "Description of Common Share
Warrants," "Certain Provisions of the Declaration of Trust,
Bylaws and Texas Law" and
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"ERISA Considerations," to the extent applicable to the
offering of the U.S. Underwritten Securities and to the extent
that it constitutes matters of law or legal conclusions, has
been reviewed by such counsel, is correct and presents fairly
the information required to be disclosed therein.
(V) The information in the Prospectus Supplement
under the caption "Federal Income Tax Considerations" and in
the U.S. Prospectus under the caption "Risks Relating to
Qualification and Operation as a REIT" fairly summarizes the
federal income tax considerations that are likely to be
material to a holder of U.S. Underwritten Securities and, to
the extent that they constitute matters of law or legal
conclusions, they have been reviewed by such counsel, they are
correct and present fairly the information required to be
disclosed therein.
In giving the opinions required by this Section
5(b)(i), such counsel shall in addition provide the opinions
referenced in the Prospectus Supplement under the caption
"Federal Income Tax Consequences."
In giving the opinions required by this Section
5(b)(i), such counsel shall additionally state (which shall
not constitute an opinion) that nothing has come to the
attention of such counsel that causes it to believe that the
Registration Statement or any post-effective amendment thereto
(except for financial statements and schedules and other
financial data included therein or omitted therefrom, as to
which counsel need make no statement), at the time such
Registration Statement became effective under the 1933 Act or
at the time an Annual Report on Form 10 K or the latest
Quarterly Report on Form 10 Q was filed by the Company with
the Commission (whichever is later) or at the date of the
applicable U.S. Terms Agreement, at the U.S. Representation
Date or as of the date such opinions are given, contained an
untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to
make the statements therein not misleading, or the U.S.
Prospectus or any Prospectus Supplement (except for financial
statements and schedules and other financial data included
therein, as to which counsel need make no statement), as of
the date of the applicable U.S. Terms Agreement, at the U.S.
Representation Date or as of the date of such opinion,
included an untrue statement of a material fact or omitted to
state a material fact necessary in order to make the
statements therein, in light of the circumstances under which
they were made, not misleading.
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In giving the opinions required by this Section
5(b)(i), Shaw, Pittman, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇
Rain ▇▇▇▇▇▇▇ (A Professional Corporation) may rely, (A) as to
all matters of fact, upon certificates and written statements
of officers and employees of and accountants for each of the
Company, the Operating Partnership, the Subsidiaries or the
Residential Development Corporations; (B) as to the continued
existence of the Company, upon a certificate of an officer of
the Company, and as to the qualification and good standing of
each of the Operating Partnership or a Significant Subsidiary
to do business in any jurisdiction, upon certificates of
appropriate government officials or opinions of counsel in
such jurisdictions; and (C) as to all Texas franchise tax
matters, upon the opinion, dated as of Closing Time, of ▇▇▇▇▇
▇▇▇▇▇▇▇ Rain ▇▇▇▇▇▇▇ (A Professional Corporation).
The opinion of ▇▇▇▇▇ ▇▇▇▇▇▇▇ Rain ▇▇▇▇▇▇▇ (A
Professional Corporation) shall be limited to the laws of the
State of Texas.
(ii) The favorable opinion, dated as of Closing
Time, of ▇▇▇▇▇ ▇▇▇▇▇▇▇ Rain ▇▇▇▇▇▇▇ (A Professional Corporation),
counsel to each of the Company and the Operating Partnership, that it
has reviewed the discussion in the Prospectus Supplement under the
caption "Federal Income Tax Considerations - State and Local Taxes"
with respect to Texas franchise matters and is of the opinion that it
accurately summarizes the Texas franchise tax matters expressly
described therein.
(iii) The favorable opinion, dated as of Closing
Time, of ▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P., counsel for the U.S. Underwriters,
with respect to the matters set forth in (A) (first sentence only),
(B) (first sentence only), (E) (first and fourth sentences only), (F),
(G), (H), (I), (K) (with respect to this Agreement and the U.S. Terms
Agreement only), (S) and (T) (first sentence only) of Section 5(b)(i)
and a statement (which shall not constitute an opinion) similar to the
statement referred to in the third to last paragraph of Section
5(b)(i) above. In giving its opinion, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P. may
rely, (A) as to all matters of fact, upon certificates and written
statements of officers and employees of and accountants for each of
the Company, the Operating Partnership, the Subsidiaries or the
Residential Development Corporations, (B) as to the qualification and
good standing of each of the Company, the Operating Partnership, or
the Significant Subsidiaries to do business in any state or
jurisdiction, upon certificates of appropriate government officials or
opinions of counsel in such jurisdictions, which opinions shall be in
form and substance satisfactory to counsel for the U.S. Underwriters,
and (C) as to certain matters of law, upon the opinion of Shaw,
Pittman, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇ given pursuant to Section 5(b)(i) above.
(c) At Closing Time, (i) there shall not have been, since
the respective dates as of which information is given in the Registration
Statement and
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the U.S. Prospectus, any 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, the Subsidiaries, the Residential
Development Corporations and the Properties considered as one enterprise,
whether or not arising in the ordinary course of business, (ii) no proceedings
shall be pending or, to the knowledge of the Company or the Operating
Partnership, threatened against such entity before or by any federal, state or
other commission, board or administrative agency wherein an unfavorable
decision, ruling or finding might result in a 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, the
Subsidiaries, the Residential Development Corporations and the Properties
considered as one enterprise other than as set forth in the U.S. Prospectus,
(iii) no stop order suspending the effectiveness of the Registration Statement
or any part thereof shall have been issued and no proceedings for that purpose
shall have 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, and (iv) you shall have received, at Closing Time, a
Certificate of the Chief Executive Officer of the Company and the Operating
Partnership, and the chief financial or chief accounting officer of each such
entity, dated as of Closing Time, evidencing compliance with the provisions of
this subsection (c), stating that the representations and warranties set forth
in Section 1(a) hereof are accurate as though expressly made at and as of
Closing Time, and stating that the conditions precedent set forth in this
Section 5 have been satisfied or waived. As used in this Section 5(c), the
term "U.S. Prospectus" means the U.S. Prospectus in the form first used to
confirm sales of the U.S. Underwritten Securities.
(d) At the time of execution of the applicable U.S. Terms
Agreement, you shall have received from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP a letter dated such
date, in form and substance satisfactory to you, to the effect that: (i) they
are independent public accountants with respect to the Company and the
Rainwater Property Group (as defined in the financial statements included in
the Registration Statement) as required by the 1933 Act and the 1933 Act
Regulations; (ii) it is their opinion that the financial statements and
supporting schedule included in the Registration Statement and covered by their
opinions therein comply as to form in all material respects with the applicable
accounting requirements of the 1933 Act and the 1933 Act Regulations; (iii)
they have performed limited procedures, not constituting an audit, including a
reading of the latest available consolidated interim financial statements of
the Company, a reading of the minute books of the Company, inquiries of
officials of the Company responsible for financial and accounting matters and
such other inquiries and procedures as may be specified in such letter, and on
the basis of such limited review and procedures nothing came to their attention
that caused them to believe that (A) the unaudited financial statements and
supporting schedules of the Rainwater Property Group included in the
Registration Statement do not comply as to form in all material respects with
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the applicable accounting requirements of the 1933 Act and the 1933 Act
Regulations or are not in conformity with generally accepted accounting
principles applied on a basis substantially consistent with that of the audited
financial statements included in the Registration Statement, (B) the unaudited
operating data and balance sheet data of the Company set forth in the
Prospectuses under the caption "Selected Financial Information" were not
determined on a basis substantially consistent with that used in determining
the corresponding amounts in the audited financial statements included in the
Registration Statement (C) the pro forma financial information included in the
Registration Statement was not prepared in accordance with the applicable
accounting requirements of the 1933 Act and the 1933 Act Regulations with
respect to pro forma financial information or was not determined on a basis
substantially consistent with that of the audited financial statements included
in the Registration Statement or (D) at a specified date not more than three
days prior to the date of the applicable U.S. Terms Agreement, there has been
any change in the shareholders' equity or debt of the Company or any increase
in the debt of the Company or any decrease in the net assets of the Company, as
compared with the amounts shown in the most recent consolidated balance sheet
of the Company included in the Registration Statement or, during the period
from most recent consolidated statement of operations included in the
Registration Statement to a specified date not more than three days prior to
the date of the applicable U.S. Terms Agreement, there were any decreases, as
compared with the corresponding period in the preceding year, in revenues, net
income or funds from operations of the Company, except in all instances for
changes, increases or decreases which the Registration Statement and the
Prospectus disclose have occurred or may occur; and (iv) in addition to the
examination referred to in their opinions and the limited procedures referred
to in clause (iii) above, they have carried out certain specified procedures,
not constituting an audit, with respect to certain amounts, percentages and
financial and statistical information which are included in the Registration
Statement and U.S. Prospectus and which are specified by you, and have found
such amounts, percentages and financial and statistical information to be in
agreement with the relevant accounting, financial and other records of the
Company identified in such letter.
(e) At Closing Time, you shall have received from ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ LLP a letter dated as of Closing Time to the effect that they reaffirm
the statements made in the letter furnished pursuant to subsection (d) of this
Section 5, except that the "specified date" referred to shall be a date not
more than three days prior to Closing Time and, if the Company has elected to
rely upon Rule 430A of the 1933 Act Regulations, to the further effect that
they have carried out procedures as specified in clause (iv) of subsection (d)
of this Section 5 with respect to certain amounts, percentages and financial
information specified by you and deemed to be a part of the Registration
Statement pursuant to Rule 430A(b) and have found such amounts, percentages and
financial information to be in agreement with the records specified in such
clause (iv).
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(f) At Closing Time, counsel for the U.S. Underwriters
shall have been furnished with such documents and opinions as they may
reasonably require for the purpose of enabling them to pass upon the issuance
and sale of the U.S. Securities as herein contemplated and related proceedings,
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 U.S. Underwritten Securities as contemplated in the applicable U.S.
Terms Agreement shall be satisfactory in form and substance to you and counsel
for the U.S. Underwriters.
(g) In the event the U.S. Underwriters exercise their
option provided in a U.S. Terms Agreement as set forth in Section 2(b) hereof
to purchase all or any portion of the U.S. Option Securities, the
representations and warranties of the Company and the Operating Partnership
contained herein and the statements in any certificates furnished by the
Company and the Operating Partnership hereunder shall be true and correct as of
each Date of Delivery, and you shall have received:
(i) A certificate of the Chief Executive Officer
or the President and Chief Operating Officer, of the Company and the
Operating Partnership and the chief financial or chief accounting
officer of each such entity, dated such Date of Delivery, confirming
that the certificate delivered at Closing Time pursuant to Section
5(c) hereof remains true and correct as of such Date of Delivery.
(ii) The favorable opinions of Shaw, Pittman,
▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇, counsel for each of the Company, the Operating
Partnership and the Significant Subsidiaries and ▇▇▇▇▇ ▇▇▇▇▇▇▇ Rain
▇▇▇▇▇▇▇ (A Professional Corporation), special counsel for the Texas
Entities, each in form and substance satisfactory to counsel for the
U.S. Underwriters, dated such Date of Delivery, relating to the U.S.
Option Securities and otherwise to the same effect as the opinion and
statement required by Section 5(b)(i) hereof.
(iii) The favorable opinion of ▇▇▇▇▇ ▇▇▇▇▇▇▇ Rain
▇▇▇▇▇▇▇ (A Professional Corporation), counsel to each of the Company
and the Operating Partnership, dated such Date of Delivery, with
respect to all Texas franchise tax matters and otherwise to the same
effect as the opinion required by Section 5(b)(ii) hereof.
(iv) The favorable opinion of ▇▇▇▇▇ & ▇▇▇▇▇▇▇
L.L.P., counsel for the U.S. Underwriters, dated such Date of
Delivery, relating to the U.S. Option Securities and otherwise to the
same effect as the opinion and statement required by Section 5(b)(iii)
hereof.
(v) A letter from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, in form
and substance satisfactory to you, dated such Date of Delivery,
substantially the
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same in scope and substance as the letter furnished to you pursuant to
Section 5(e) hereof, except that the "specified date" in the letter
furnished pursuant to this Section 5(g)(iv) shall be a date not more
than three days prior to such Date of Delivery.
If any condition specified in this Section 5 shall not have
been fulfilled when and as required to be fulfilled, the applicable U.S. Terms
Agreement may be terminated by you 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 or Date of Delivery, as the case may be, except as
provided in Section 4 hereof.
SECTION 6. INDEMNIFICATION.
(a) Each of the Company and the Operating Partnership
agrees, jointly and severally, to indemnify and hold harmless each Underwriter
and each person, if any, who controls any Underwriter within the meaning of
section 15 of the 1933 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), including the
information deemed to be part of the Registration Statement pursuant
to Rule 430A(b) of the 1933 Act Regulations, if applicable, 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 contained in any preliminary prospectus
or the U.S. Prospectus 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; provided, however, that neither the Company nor the
Operating Partnership shall be required under this subsection (i) to
indemnify any Underwriter with respect to any loss, liability, claim,
damage or expense to the extent such loss, liability, claim, damage or
expense arises 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 you specifically
for inclusion in the Registration Statement or the U.S. Prospectus;
(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 of any
investigation or proceeding by any governmental agency or body,
commenced or threatened, or of any claim whatsoever for which
indemnification is provided under subsection (i) above,
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if such settlement is effected with the written consent of the Company
and the Operating Partnership; and
(iii) against any and all expense whatsoever
(including, without limitation, the fees and other charges of counsel
chosen by you) reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceedings
by any governmental agency or body, commenced or threatened, or any
claim whatsoever for which indemnification is provided under
subsection (i) above, to the extent that any such expense is not paid
under subsection (i) or (ii) above.
(b) Each U.S. Underwriter severally agrees to indemnify
and hold harmless the Company and the Operating Partnership, and each person,
if any, who controls the Company or the Operating Partnership within the
meaning of Section 15 of the 1933 Act, and any trust manager, director,
officer, 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 6, 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 any preliminary prospectus
or the U.S. Prospectus (or any amendment or supplement thereto) in reliance
upon and in conformity with written information furnished to the Company by you
specifically for inclusion in the Registration Statement or the U.S.
Prospectus.
(c) 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. An
indemnifying party may participate at its own expense in the defense of such
action. If it so elects within a reasonable time after receipt of such notice,
an indemnifying party, jointly with any other indemnifying parties receiving
such notice, may assume the defense of such action with counsel chosen by it
and approved by the indemnified parties defendant in such action, unless such
indemnified parties reasonably object to such assumption on the ground that the
named parties to any such action (including any impleaded parties) include both
such indemnified parties and an indemnifying party, and such indemnified
parties reasonably believe that there may be legal defenses available to them
which are different from or in addition to those available to such indemnifying
party. If an indemnifying party assumes the defense of such action, the
indemnifying parties shall not be liable for any fees and expenses of counsel
for the indemnified parties incurred thereafter in connection with such action.
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
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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.
(d) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 6(a)(ii) effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement
at least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
SECTION 7. CONTRIBUTION.
If the indemnification provided for in Section 6 hereof is for any
reasons 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, on the one hand, and the
U.S. Underwriters, on the other hand, from the offering of the U.S.
Underwritten Securities pursuant to the applicable U.S. Terms 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, on
the one hand, and of the U.S. Underwriters, 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, on the one hand, and
the U.S. Underwriters, on the other hand, in connection with the offering of
the U.S. Underwritten Securities pursuant to the applicable U.S. Terms
Agreement
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shall be deemed to be in the same respective proportions as the total net
proceeds from the offering of such U.S. Underwritten Securities (before
deducting expenses) received by the Company and the total underwriting discount
received by the U.S. Underwriters, in each case as set forth on the cover of
the U.S. Prospectus, or, if Rule 434 is used, the corresponding location on the
U.S. Term Sheet bear to the aggregate initial public offering price of such
U.S. Underwritten Securities as set forth on such cover.
The relative fault of the Company, on the one hand, and the U.S.
Underwriters, on the other hand, shall be determined by reference to, among
other things, whether any such untrue statement of a material fact or omission
or alleged omission to state a material fact relates to information and
opportunity to correct or prevent such statement or omission.
The Company and the U.S. Underwriters agree that it would not be just
and equitable if contribution pursuant to this Section 7 were determined by pro
rata allocation (even if the U.S. Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to above in this Section 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, no U.S. Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the U.S. Underwritten Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such U.S. Underwriter 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 a
U.S. Underwriter 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 such U.S.
Underwriter, 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 1933 Act or Section 20 of the
1934 Act shall have the same rights to contribution as the Company. The U.S.
Underwriters' respective
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obligations to contribute pursuant to this Section 7 are several in proportion
to the number or aggregate principal amount, as the case may be, of Initial
U.S. Underwritten Securities set forth opposite their respective names in the
applicable U.S. Terms Agreement, and not joint.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY.
All representations, warranties and agreements contained in this
Agreement and the U.S. Terms Agreement, or contained in certificates of
officers of the Company or 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 any U.S. Underwriter or any controlling
person, or by or on behalf of the Company or the Operating Partnership or any
controlling persons, and shall survive delivery of the U.S. Underwritten
Securities to the U.S. Underwriters.
SECTION 9. TERMINATION OF AGREEMENT.
(a) This Agreement (excluding the applicable U.S. Terms
Agreement) may be terminated for any reason at any time by the Company or by
you upon the giving of 30 days' written notice of such termination to the other
party hereto, provided that the continued effectiveness of this Agreement shall
not in any way limit or prohibit the Company's right to offer any or all of the
Securities through any other underwriter or pursuant to any other selling
arrangement.
(b) You may also terminate the applicable U.S. Terms
Agreement, by notice to the Company, at any time at or prior to Closing Time,
(i) if there has been, since the date of such U.S. Terms Agreement or since the
respective dates as of which information is given in the U.S. Prospectus, any
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, the Subsidiaries and the Residential Development
Corporations considered as one enterprise, whether or not arising in the
ordinary course of business, (ii) if there has occurred any material adverse
change in the financial markets in the United States or any outbreak of
hostilities or other calamity or crisis or escalation of any existing
hostilities, 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 your judgment, impracticable
to market the U.S. Underwritten Securities or enforce contracts for the sale of
the U.S. Underwritten Securities, (iii) if trading in any of the securities of
the Company has been suspended or limited by the Commission or on any exchange
or any over-the-counter market, or if trading generally on either the New York
Stock Exchange or the American Stock Exchange or in the NASDAQ Stock Market's
National Market
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has been suspended or limited, or minimum or maximum prices for trading have
been fixed, or maximum ranges for prices for securities have been required, by
either of said exchanges or by order of the Commission or any other
governmental authority, or if a banking moratorium has been declared by federal
or New York authorities, (iv) if the rating assigned by any nationally
recognized statistical rating organization to any Preferred Shares of the
Company or any indebtedness of the Company or the Operating Partnership as of
the date of the applicable U.S. Terms Agreement shall have been lowered since
such date or if any such rating organization shall have publicly announced that
it has placed any Preferred Shares of the Company or any indebtedness of the
Company or the Operating Partnership on what is commonly termed a "watch list"
for possible downgrading, (v) a banking moratorium has been declared by either
Federal or New York authorities, or (vi) pursuant to Section 10(b) below. As
used in this Section 9(b), the term "Prospectus" means the Prospectus in the
form first used to confirm sales of the U.S. Underwritten Securities.
(c) In the event of any such termination, (x) the
covenants set forth in Section 3 hereof with respect to any offering of U.S.
Underwritten Securities shall remain in effect so long as any Underwriter owns
any such U.S. Underwritten Securities purchased from the Company pursuant to
the applicable U.S. Terms Agreement and (y) the covenant set forth in Section
3(h) hereof, the provisions of Section 4 hereof, the indemnity and contribution
agreements set forth in Sections 6 and 7 hereof, and the provisions of Sections
8 and 13 hereof shall remain in effect.
SECTION 10. DEFAULT BY ONE OR MORE OF THE U.S. UNDERWRITERS.
If one or more of the U.S. Underwriters shall fail at Closing Time to
purchase the U.S. Underwritten Securities which it or they are obligated to
purchase under the applicable U.S. Terms Agreement (the "DEFAULTED SHARES"),
then you shall have the right, within 24 hours thereafter, to make arrangements
for one or more of the non-defaulting U.S. Underwriters, or any other U.S.
Underwriters, to purchase all, but not less than all, of the Defaulted Shares
in such amounts as may be agreed upon and upon the terms herein set forth; if,
however, you shall not have completed such arrangements within such 24-hour
period, then:
(a) if the number of Defaulted Shares does not exceed ten
percent (10%) of the Initial U.S. Securities to be purchased pursuant to the
U.S. Terms Agreement, the non-defaulting U.S. Underwriters named in such U.S.
Terms Agreement shall be obligated to purchase the full amount thereof in the
proportions that their respective underwriting obligations hereunder bear to
the underwriting obligations of all non-defaulting U.S. Underwriters; or
(b) if the number of Defaulted Shares exceeds ten percent
(10%) of the Initial U.S. Securities to be purchased pursuant to the U.S. Terms
Agreement,
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45
the applicable U.S. Terms Agreement shall terminate without liability on the
part of any non-defaulting Underwriter.
No action taken pursuant to this Section 10 shall relieve any
defaulting U.S. Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement, you and the Company each shall have the right to
postpone Closing Time for a period not exceeding seven days in order to effect
any required changes in the Registration Statement or Prospectuses or in any
other documents or arrangements.
SECTION 11. 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 U.S. Underwriters shall be
directed c/o Merrill ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated, at ▇▇▇▇▇▇▇ ▇▇▇▇▇ World Headquarters, North Tower, World Financial
Center, New York, New York 10281-1305, attention of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇,
Managing Director; notices to either the Company or the Operating Partnership
shall be directed to each of them, c/o the Operating Partnership at ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇, attention of ▇▇▇▇ ▇. ▇▇▇▇, Chief
Executive Officer of the Operating Partnership.
SECTION 12. PARTIES.
This Agreement and the applicable U.S. Terms Agreement shall each
inure to the benefit of and be binding upon the parties hereto and thereto and
their respective successors. Nothing expressed or mentioned in this Agreement
or the applicable U.S. Terms Agreement is intended or shall be construed to
give any person, firm or corporation, other than those referred to in Sections
6 and 7 hereof and their successors, heirs and legal representatives, any legal
or equitable right, remedy or claim under or in respect of this Agreement or
the applicable U.S. Terms Agreement or any provision herein or therein
contained. This Agreement and the applicable U.S. Terms Agreement and all
conditions and provisions hereof and thereof are intended to be for the sole
and exclusive benefit of the parties hereto and thereto and their respective
successors and said controlling persons and officers, directors and trust
managers and their heirs and legal representatives, and for the benefit of no
other person, firm or corporation. No purchaser of U.S. Underwritten
Securities from any U.S. Underwriter shall be deemed to be a successor by
reason merely of such purchase.
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46
SECTION 13. GOVERNING LAW AND TIME.
This Agreement and the applicable U.S. Terms 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. Specified
times of day refer to New York City time.
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47
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 U.S. Underwriters, the Company and the Operating Partnership in
accordance with its terms.
Very truly yours,
CRESCENT REAL ESTATE EQUITIES COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
CRESCENT REAL ESTATE EQUITIES LIMITED
PARTNERSHIP
By: Crescent Real Estate Equities, Ltd.
General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By: ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Managing Director
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48
CRESCENT REAL ESTATE EQUITIES COMPANY
(a Texas real estate investment trust)
[Title of Securities]
FORM OF U.S. TERMS AGREEMENT
Dated: ____________ __, 1997
To: CRESCENT REAL ESTATE EQUITIES COMPANY
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention:
Ladies and Gentlemen:
We (the "Representatives") understand that Crescent Real Estate
Equities Company ("the Company") proposes to issue and sell the number of its
[Preferred Shares of Beneficial Interest, $.01 par value per share (the
"Preferred Shares")] [Common Shares of Beneficial Interest, $.01 par value per
share (the "Common Shares")] [Warrants to purchase Common Shares of the Company
(the "Warrants")] (such [Preferred Shares] [Common Shares] [Warrants] being
collectively hereinafter referred to as the "U.S. Underwritten Securities").
Subject to the terms and conditions set forth or incorporated by reference
herein, the U.S. Underwriters named below (the "U.S. Underwriters") offer to
purchase, severally and not jointly, the respective numbers of Initial U.S.
Securities (as defined in the U.S. Purchase Agreement referred to below) set
forth below opposite their respective names, and a proportionate share of U.S.
Option Securities (as defined in the U.S. Purchase Agreement referred to below)
to the extent any are purchased, at the purchase price set forth below.
Number of Shares of Initial
Underwriter U.S. Underwritten Securities
----------- ----------------------------------
-------------------
Total $
==================
49
The U.S. Underwritten Securities shall have the following terms:
[Preferred Shares] [Common Shares] [Warrants]
Title of Securities:
Number of Shares:
[Current Ratings:]
[Dividend Rate: [$ ] [ %], Payable:]
[Stated Value:]
[Liquidation Preference:]
[Ranking:]
Public offering price per share: $ [, plus accumulated dividends, if any,
from , 19 .]
Purchase price per share: $ [, plus accumulated dividends, if any, from
, 19 .]
[Conversion provisions:]
[Redemption provisions:]
[Sinking fund requirements:]
Number of U.S. Option Securities, if any, that may be purchased by the U.S.
Underwriters:
Delayed Delivery Contracts: [authorized] [not authorized]
[Date of Delivery:
Minimum Contract:
Maximum number of Shares:
Fee:
Additional co-managers, if any:
Other terms:
Closing date and location:
[Warrants]
Number of Warrants to be issued:
Warrant Agent:
Issuable jointly with Common Shares [yes] [no]
[Number of Warrants issued with each Common Share of beneficial
interest:]
[Detachable data:]
Date from which Warrants are exercisable:
Date on which Warrants expire:
Exercise Price(s) of Warrants:
Initial public offering price: $
Purchase price: $
Title of Warrant Securities:
Principal amount purchasable upon exercise of one Warrant:
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50
Interest rate: Payable:
Date of maturity:
Redemption provisions:
Sinking fund requirements:
[Delayed Delivery Contracts: [authorized] [not authorized]
[Date of delivery:
Minimum contract:
Maximum aggregate principal amount:
Fee: %]
Other terms:
[Closing date and location:]
All the provisions contained in the document attached as Annex
A hereto entitled "Crescent Real Estate Equities Company--Preferred Shares of
Beneficial Interest, Common Shares of Beneficial Interest, and Common Share
Warrants--Purchase Agreement" are hereby incorporated by reference in their
entirety herein and shall be deemed to be a part of this U.S. Terms Agreement
to the same extent as if such provisions had been set forth in full herein.
Terms defined in such document are used herein as therein defined.
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51
Please accept this offer no later than ________ o'clock P.M. (New York City
time) on ______________ by signing a copy of this U.S. Terms Agreement in the
space set forth below and returning the signed copy to us.
Very truly yours
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By:
-------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Managing Director
Acting on behalf of itself and the other
named U.S. Underwriters.
Accepted:
By: CRESCENT REAL ESTATE EQUITIES COMPANY
By:
---------------------------------------
Name:
Title:
-▇-
▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ EQUITIES COMPANY
(a Texas real estate investment trust)
[Title of Securities]
DELAYED DELIVERY CONTRACT
Dated: ____________ __, 1997
To: CRESCENT REAL ESTATE EQUITIES COMPANY
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ___________________
Ladies and Gentlemen:
The undersigned hereby agrees to purchase from Crescent Real Estate
Equities, Inc. ("the Company"), and the Company agrees to sell to the
undersigned on ___________ ___, 19__ (the "Delivery Date"),
_____________________________ of the Company's [insert title of security] (the
"Securities"), offered by the Company's Prospectus dated ____________ ___,
19__, as supplemented by its Prospectus Supplement dated ___________ _____,
19__, receipt of which is hereby acknowledged, at a purchase price of [$
_________] to the Delivery Date and on the further terms and conditions set
forth in this contract.
Payment for the Securities which the undersigned has agreed to
purchase on the Delivery Date shall be made to the Company or its order by
[certified or official bank check in New York Clearing House] [same day] funds
at the office of ____________________________________________________, on the
Delivery Date, upon delivery to the undersigned of the Securities to be
purchased by the undersigned in definitive form and in such denominations and
registered in such names as the undersigned may designate by written or
telegraphic communication addressed to the Company not less than five full
business days prior to the Delivery Date.
The obligation of the undersigned to take delivery of and make payment
for Securities on the Delivery Date shall be subject only to the conditions
that (1) the purchase of Securities to be made by the undersigned shall not on
the Delivery Date be prohibited under the laws of the jurisdiction to which the
undersigned is subject and (2) the Company, on or before _________ __, 19__,
shall have sold to the U.S. Underwriters of the Securities (the "U.S.
Underwriters") such
53
principal amount of the Securities as is to be sold to them pursuant to the
U.S. Terms Agreement dated ____________, 19__ between the Company and the U.S.
Underwriters. The obligation of the undersigned to take delivery of and make
payment for Securities shall not be affected by the failure of any purchaser to
take delivery of and make payments for Securities pursuant to other contracts
similar to this contract. The undersigned represents and warrants to you that
its investment in the Securities is not, as of the date hereof, prohibited
under the laws of any jurisdiction to which the undersigned is subject and
which govern such investment.
Promptly after completion of the sale to the U.S. Underwriters, the
Company will mail or deliver to the undersigned at its address set forth below
notice to such effect, accompanied by a copy of the opinions of counsel for the
Company delivered to the U.S. Underwriters in connection therewith.
By the execution hereof, the undersigned represents and warrants to
the Company that all necessary corporate action for the due execution and
delivery of this contract and the payment for and purchase of the Securities
has been taken by it and no further authorization or approval of any
governmental or other regulatory authority is required for such execution,
delivery, payment or purchase, and that, upon acceptance hereof by the Company
and mailing or delivery of a copy as provided below, this contract will
constitute a valid and binding agreement of the undersigned in accordance with
its terms.
This contract will inure to the benefit of and be binding upon the
parties hereto and their respective successors, but will not be assignable by
either party hereto without the written consent of the other.
It is understood that the Company will not accept Delayed Delivery
Contracts for a number of Securities in excess of ______ and that the
acceptance of any Delayed Delivery Contract is in the Company's sole discretion
and, without limiting the foregoing, need not be on a first-come, first-served
basis. If this contract is acceptable to the Company, it is requested that the
Company sign the form of acceptance on a copy hereof and mail or deliver a
signed copy hereof to the undersigned at its address set forth below. This
will become a binding contract between the Company and the undersigned when
such copy is so mailed or delivered.
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54
This Agreement shall be governed by the laws of the State of New York.
Yours very truly,
---------------------------------------------------
(Name of Purchaser)
By:
------------------------------------------------
Title:
---------------------------------------------
---------------------------------------------------
---------------------------------------------------
(Address)
Accepted as of the date first above written.
Crescent Real Estate Equities Company
By:
-----------------------------------
Name:
Title:
PURCHASER--PLEASE COMPLETE AT TIME OF SIGNING
The name and telephone number of the representative of the Purchaser with
whom details of delivery on the Delivery Date may be discussed are as follows:
(Please print.)
Telephone No.
Name (including Area Code)
---- ---------------------
-------------------- -------------------------------
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