Exhibit 1
398,230 Shares
HOME PROPERTIES OF NEW YORK, INC.
Common Stock
$0.01 Par Value
UNDERWRITING AGREEMENT
February 25, 2002
XXXXXXX XXXXX XXXXXX INC.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Ladies and Gentlemen:
Home Properties of New York, Inc., a Maryland corporation (the "Company"),
and Home Properties of New York, L.P., a New York limited partnership subsidiary
of the Company (the "Operating Partnership"), confirm their agreement with
Xxxxxxx Xxxxx Barney Inc. (the "Underwriter"), as follows:
1. Description of Shares.
(a) The Company proposes to issue and sell to the Underwriter
398,230 shares of common stock, par value $0.01 per share (the "Common
Stock"). Such shares of Common Stock to be issued and sold by the
Company are hereinafter referred to as the "Firm Shares."
(b) In addition, the Company is granting to the Underwriter an
option to purchase up to an additional 59,735 shares of Common Stock
on the terms and for the purposes set forth in Section 12 hereof (the
"Option Shares" and, together with the Firm Shares, the "Shares").
(c) The Underwriter intends to deposit the Shares offered hereby
with the trustee of The Equity Focus Trusts-REIT Portfolio Series,
2002-A (the "Trust"), a newly-formed unit investment trust registered
under the Investment Company Act of 1940, as amended (the "1940 Act"),
in exchange for units in the Trust.
2. Representations and Warranties of the Company and the Operating
Partnership. The Company and the Operating Partnership represent and warrant to
and agree with the Underwriter that:
(a) A registration statement on Form S-3 (File No. 333-52601),
with respect to the Shares, including a prospectus, has been prepared
by the Company and the Operating Partnership in conformity with the
requirements of the Securities Act of 1933, as amended (the
"Securities Act"), and the rules and regulations (the "Securities Act
Rules and Regulations") of the Securities and Exchange Commission (the
"Commission") thereunder, has been filed with the
Commission and has been declared effective. The registration statement
and prospectus may have been amended or supplemented prior to the date
of this Agreement; any such amendment or supplement was prepared and
filed, and any such amendment filed after the effective date of such
registration statement has been declared effective. No stop order
suspending the effectiveness of the registration statement has been
issued, and no proceeding for that purpose has been instituted or
threatened by the Commission. A prospectus supplement (the "Prospectus
Supplement") setting forth the terms of the offering, sale and plan of
distribution of the Shares and additional information concerning the
Company and its business has been or will be prepared and, together
with the prospectus included in the registration statement, will be
filed pursuant to Rule 424(b) of the Securities Act Rules and
Regulations on or before the second business day after the date hereof
(or such earlier time as may be required by the Securities Act Rules
and Regulations). The registration statement, as it may have
heretofore been amended, is referred to herein as the "Registration
Statement," and the final form of prospectus included in the
Registration Statement, as supplemented by the Prospectus Supplement,
in the form filed by the Company with the Commission pursuant to Rule
424(b) under the Securities Act Rules and Regulations, is referred to
herein as the "Prospectus." Copies of the Registration Statement and
the Prospectus, any amendments or supplements thereto and all
documents incorporated by reference therein that were filed with the
Commission on or prior to the date of this Agreement (including one
fully executed copy of the Registration Statement and of each
amendment thereto) have been delivered to the Underwriter and its
counsel. Any reference herein to the Registration Statement, the
Prospectus or any amendment or supplement thereto shall be deemed to
refer to and include the documents incorporated by reference therein,
and any reference herein to the terms "amend," "amendment" or
"supplement" with respect to the Registration Statement or the
Prospectus shall be deemed to refer to and include the filing after
the execution hereof of any document with the Commission deemed to be
incorporated by reference therein. For purposes of this Agreement, all
references to the Registration Statement, the Prospectus or to any
amendment or supplement thereto shall be deemed to include any copy
filed with the Commission pursuant to its Electronic Data Gathering
Analysis and Retrieval System (XXXXX), and such copy shall be
identical in content to any Prospectus delivered to the Underwriter
for use in connection with the offering of the Shares to the Trust.
(b) Each part of the Registration Statement, when such part
became or becomes effective, and the Prospectus and any amendment or
supplement thereto, on the date of filing thereof with the Commission
and at the Closing Date (as hereinafter defined), conformed or will
conform in all material respects with the requirements of the
Securities Act and the Securities Act Rules and Regulations; each part
of the Registration Statement, when such part became or becomes
effective, or when such part was filed with the Commission, did not or
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 Prospectus and any
amendment or supplement thereto, on the date of filing thereof with
the Commission and at the Closing Date, did not or will not include an
untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; except that
the foregoing shall not apply to statements in, or omissions from, any
such document in reliance upon, and in conformity with, written
information concerning the Underwriter that was furnished to the
Company by the Underwriter specifically for use in the preparation
thereof.
(c) The documents incorporated by reference in the Registration
Statement, the Prospectus or any amendment or supplement thereto, when
they became or become effective under the Securities Act or were or
are filed with the Commission under the Securities Act or the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), as
the case may be,
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conformed or will conform in all material respects with the
requirements of the Securities Act, the Securities Act Rules and
Regulations, the Exchange Act and/or the rules and regulations of the
Commission under the Exchange Act (the "Exchange Act Rules and
Regulations"), as applicable.
(d) The consolidated financial statements of the Company,
together with the related schedules and notes thereto, in the
Registration Statement and Prospectus fairly present the financial
condition of the Company and its consolidated subsidiaries as of the
dates indicated and the results of operations, changes in financial
position, stockholders' equity and cash flows for the periods therein
specified, in conformity with generally accepted accounting principles
consistently applied throughout the periods involved (except as
otherwise stated therein). The selected financial and statistical data
in the Registration Statement and the Prospectus present fairly the
information shown therein and, to the extent based upon or derived
from the financial statements, have been compiled on a basis
consistent with the financial statements presented therein. In
addition, to the extent applicable, the pro forma financial statements
of the Company, and the related notes thereto, in the Registration
Statement and the Prospectus present fairly the information shown
therein, have been prepared in accordance with the Commission's rules
and guidelines with respect to pro forma financial statements and have
been properly compiled on the basis described therein, and the
assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the
transactions and circumstances referred to therein. No other financial
statements are required to be set forth or to be incorporated by
reference in the Registration Statement or the Prospectus under the
Securities Act or the Securities Act Rules and Regulations.
(e) To the best of the Company's and the Operating Partnership's
knowledge, PricewaterhouseCoopers LLP, whose reports are incorporated
by reference in the Registration Statement, are and, during the
periods covered by their reports, were independent public accountants
as required by the Securities Act and the Securities Act Rules and
Regulations.
(f) The Company has been duly formed and is validly existing as a
corporation in good standing under the laws of the State of Maryland,
is duly qualified to do business and is in good standing in each
jurisdiction in which its ownership or lease of property or the
conduct of its business requires such qualification (except where the
failure to be so qualified would not have a material adverse effect on
the earnings, assets, properties, business, results of operations, or
condition (financial or otherwise) of the Company, the Subsidiaries
(as hereinafter defined) and the GP Entities (as hereinafter defined),
taken as a whole (a "Material Adverse Effect")), and has full
corporate power and authority necessary to own or hold its properties,
assets and interests in its subsidiaries, to conduct the business in
which it is engaged and to enter into and perform its obligations
under this Agreement. Except as disclosed in the Prospectus, the
Company owns no direct or indirect material equity or other beneficial
interest in any corporation, partnership, joint venture or other
business entity.
(g) The Operating Partnership has been duly formed and is validly
existing as a limited partnership under the laws of the State of New
York, is duly qualified to do business as a foreign limited
partnership in each jurisdiction in which its ownership or lease of
property or the conduct of its business requires such qualification
(except where the failure to be so qualified would not have a Material
Adverse Effect), and has all partnership power and authority necessary
to own or hold its properties, assets and interests in its
subsidiaries, to conduct the business in which it is engaged and to
enter into and perform its obligations under this Agreement. The
Company is the sole general partner of the Operating Partnership. The
Second Restated and Amended Agreement of Limited Partnership of the
Operating Partnership, as amended (the
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"Operating Partnership Agreement"), is in full force and effect, and
the aggregate percentage interests of the Company, Home Properties
Trust, a wholly-owned Maryland real estate trust and qualified REIT
subsidiary of the Company (the "QRS"), and the other third-party
limited partners in the Operating Partnership are approximately 1%,
62% and 37%, respectively. To the extent the Shares are issued in
accordance with this Agreement, (i) the percentage interest of the
partners in the Operating Partnership will be adjusted accordingly and
(ii) the Company will contribute the proceeds from the sale of the
Shares to the QRS, which in turn will contribute such proceeds to the
Operating Partnership in exchange for a number of units of limited
partner interest equal to the number of Shares issued.
(h) The QRS has been duly formed and is validly existing as a
real estate trust under the laws of the State of Maryland, is duly
qualified to do business in each jurisdiction in which its ownership
or lease of property or the conduct of its business requires such
qualification (except where the failure to be so qualified would not
have a Material Adverse Effect), and has all power and authority
necessary to own or hold its assets and to conduct the business in
which it is engaged.
(i) Each of the consolidated subsidiaries of the Company,
including the Operating Partnership and the QRS, are listed on
Schedule A hereto (collectively, the "Subsidiaries"). Each of the
Subsidiaries has been duly incorporated or formed, as the case may be,
and is an existing corporation, general or limited partnership, or
other legal entity, as the case may be, in good standing (to the
extent such concept is applicable) under the laws of its jurisdiction
of incorporation or formation, as the case may be. Each of the
Subsidiaries has full power (corporate and other) and authority to own
or hold its properties and to conduct the business in which it is
engaged, and is duly qualified or registered to do business in each
jurisdiction in which it owns or leases real property or in which the
conduct of its business requires such qualification or registration,
except where the failure to be so qualified or registered, considering
all such cases in the aggregate, would not have a Material Adverse
Effect.
(j) The Company and the Subsidiaries hold general partner or
other controlling interests in an aggregate of 168 general or limited
partnerships or other entities owning apartment communities and/or
other real estate assets (the "GP Entities"). Each of the GP Entities
has been duly incorporated or formed, as the case may be, and, to the
knowledge of the Company, is an existing corporation, general or
limited partnership, or other legal entity, as the case may be, in
good standing under the laws of its jurisdiction of incorporation or
formation, as the case may be. Each of the GP Entities has full power
(corporate and other) and authority to own or hold its properties and
to conduct the business in which it is engaged, except where the
failure to have such power or authority would not have a Material
Adverse Effect.
(k) All of the issued and outstanding capital stock or ownership
interests of each Subsidiary have been duly authorized and are validly
issued, fully paid and nonassessable and, except as specified on
Schedule B hereto, are wholly-owned by the Company, directly or
through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity.
(l) As of the date hereof, the Company has authorized capital
stock consisting of 80 million shares of Common Stock, 10 million
shares of preferred stock, par value $0.01 per share, and 10 million
shares of excess stock, par value $0.01 per share, of which 24,968,808
shares of Common Stock (excluding any shares of Common Stock to be
issued and sold to Xxxxx & Steers Quality Income Realty Funds, Inc.
(the "C&S Shares") on or about the date hereof) and 2,150,000 shares
of preferred stock are issued and outstanding. All of the issued and
outstanding shares of capital stock of the Company have been duly
authorized and are validly
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issued, fully paid and nonassessable, conform to the description
thereof in the Registration Statement and the Prospectus and have been
offered and sold or exchanged by the Company in compliance with all
applicable laws (including, without limitation, federal and state
securities laws). None of the outstanding shares of capital stock of
the Company were issued in violation of the preemptive or other
similar rights of any securityholder of the Company. The stockholders
of the Company and the holders of interests in the Operating
Partnership have no preemptive rights with respect to the issuance of
the Shares.
(m) The Shares will be, as of the Closing Date, duly authorized
by the Company for issuance and sale pursuant to this Agreement and,
when issued and delivered by the Company pursuant to this Agreement
against payment of the consideration therefor specified herein, will
be validly issued, fully paid and nonassessable. The Shares conform to
the description thereof in the Registration Statement and the
Prospectus.
(n) Since the respective dates as of which information is given
in the Registration Statement and the Prospectus, except as otherwise
stated therein, (A) there has been no change in the earnings, assets,
properties, business, results of operations, or condition (financial
or otherwise) of the Company, the Subsidiaries and the GP Entities,
taken as a whole, which has had or would reasonably be expected to
have a Material Adverse Effect, (B) there has been no casualty, loss,
condemnation or other adverse event with respect to any property or
interest therein owned, directly or indirectly, by the Company or any
Subsidiary which has had or would reasonably be expected to have a
Material Adverse Effect, (C) there have been no transactions entered
into by the Company or any Subsidiary, other than those in the
ordinary course of business, which are material with respect to the
Company and the Subsidiaries, taken as a whole, (D) except for regular
quarterly distributions on the Common Stock which have been publicly
announced through the date of this Agreement, regular quarterly
distributions on the Company's preferred stock and regular quarterly
distributions on the common and preferred units of the Operating
Partnership, there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital
stock or any distribution by the Operating Partnership with respect to
its common or preferred units, and (E) there has been no material
increase in long-term debt or decrease in the capital of the Company,
the Subsidiaries or the GP Entities, taken as a whole, other than in
the ordinary course of their businesses.
(o) Except as set forth in the Prospectus, there is not pending
or, to the knowledge of the Company, threatened any litigation,
action, suit or proceeding to which the Company or any of the
Subsidiaries or any of their officers or directors is a party, or that
any of their properties or other assets is the subject of, before or
by any court or governmental agency or body, that is reasonably likely
to have a Material Adverse Effect.
(p) During the period of at least the last 24 calendar months
prior to the date of this Agreement, the Company has timely filed with
the Commission all documents and other material required to be filed
pursuant to Sections 13, 14 and 15(d) under the Exchange Act. During
the period of at least the last 36 calendar months preceding the
filing of the Registration Statement, the Company has filed all
reports required to be filed pursuant to Sections 13, 14 and 15(d)
under the Exchange Act. Immediately preceding the filing of the
Registration Statement, the aggregate market value of the Company's
voting stock held by nonaffiliates of the Company was equal to or
greater than $150 million.
(q) There are no contracts or documents of the Company that are
required to be filed as exhibits to the Registration Statement or to
any of the documents incorporated by reference therein by the
Securities Act or the Exchange Act or by the Securities Act Rules and
Regulations and the Exchange Act Rules and Regulations that have not
been so filed. All of the
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contracts to which any of the Company or the Subsidiaries is a party
and which are material to the business and operations of the Company
and the Subsidiaries, taken as a whole, (i) have been duly authorized,
executed and delivered by such entity, constitute valid and binding
agreements of such entity and are enforceable against such entity in
accordance with the terms thereof, except as such enforcement may be
limited by (A) bankruptcy, insolvency, reorganization or similar other
laws affecting creditors' rights generally and (B) general equity
principles and limitations on the availability of equitable relief, or
(ii) in the case of any contract to be executed on or before the
Closing Date, will on the Closing Date be duly authorized, executed
and delivered by the Company and/or a Subsidiary, and constitute valid
and binding agreements of such entity enforceable against each entity
in accordance with the terms thereof, except as such enforcement may
be limited by (A) bankruptcy, insolvency, reorganization or similar
other laws affecting creditors' rights generally and (B) general
equity principles and limitations on the availability of equitable
relief.
(r) The Company and the Operating Partnership have full power and
authority, corporate or otherwise, to enter into this Agreement. This
Agreement has been duly authorized, executed and delivered by the
Company and the Operating Partnership.
(s) The execution and performance of this Agreement and the
consummation of the transactions contemplated herein, including the
issuance of the Shares, will not result in a breach or violation of
any of the terms and provisions of, or constitute a default under, (i)
any agreement or instrument to which the Company or the Subsidiaries
is a party or by which they are bound or to which any of the property
or other assets of the Company or the Subsidiaries is subject, except
where such breach, violation or default would not have a Material
Adverse Effect, (ii) the articles of incorporation, charter, by-laws,
certificate of general or limited partnership, partnership agreement
or other organizational document, as applicable, of the Company or the
Subsidiaries or (iii) any statute, order, rule or regulation of any
court or governmental agency or body having jurisdiction over the
Company or the Subsidiaries or any of their properties or other
assets. No consent, approval, authorization or order of, filing with,
or notice to any court or governmental agency or body is required for
the consummation of the transactions contemplated by this Agreement in
connection with the issuance or sale of the Shares by the Company,
except such as may be required under the Securities Act and applicable
state securities, blue sky, or real estate syndication laws, if any,
or pursuant to the listing requirements of the New York Stock Exchange
("NYSE"). The Company has full power and authority to authorize, issue
and sell the Shares as contemplated by this Agreement.
(t) The Company, the Subsidiaries and the GP Entities have
complied in all material respects with all laws, regulations and
orders applicable to them or their respective businesses. The Company,
the Subsidiaries and the GP Entities are not in default under any
indenture, mortgage, deed of trust, voting trust agreement, loan
agreement, bond, debenture, note agreement or evidence of
indebtedness, lease, contract or other agreement or instrument to
which they are a party or by which they or any of their properties or
other assets are bound, violation of which would individually or in
the aggregate have a Material Adverse Effect, and no other party under
any such agreement or instrument to which the Company, the
Subsidiaries or the GP Entities are a party is, to the knowledge of
the Company, in default in any material respect thereunder. The
Company, the Subsidiaries and the GP Entities are not in violation of
their respective articles of incorporation, charter, by-laws,
certificate of general or limited partnership, partnership agreement
or other organizational documents, as the case may be. To the
knowledge of the Company, no liability (financial or otherwise) exists
for the Company or the Subsidiaries with respect to any GP Entity,
except for those liabilities which would not have a Material Adverse
Effect.
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(u) The Company and each of the Subsidiaries and the GP Entities
have good and marketable title to all properties and assets owned by
them, free and clear of all liens, charges, encumbrances, claims,
restrictions or defects, except such as are (i) described in the
Prospectus, (ii) not material in relation to the business or
operations of the Company, the Subsidiaries and the GP Entities, taken
as a whole, or (iii) with respect to the GP Entities, related to, or a
consequence of, any commercially reasonable mortgage indebtedness on
the properties or assets of such GP Entities. The Company, the
Subsidiaries and the GP Entities have valid, subsisting and
enforceable leases for the properties listed on Schedule C hereto as
leased to the Company, the Subsidiaries and the GP Entities, with such
exceptions as are not material and do not interfere with the use made
and proposed to be made of such properties by the Company, the
Subsidiaries and the GP Entities. All liens, charges, encumbrances,
claims or restrictions on or affecting any of the properties or the
assets of the Company, the Subsidiaries and the GP Entities which are
required to be disclosed in the Prospectus are disclosed therein. No
tenant under any of the leases pursuant to which the Company, the
Subsidiaries or the GP Entities lease apartment units at their
properties has an option or right of first refusal to purchase the
premises demised under such lease; the use and occupancy of each of
the properties of the Company, the Subsidiaries and, to the knowledge
of the Company, the GP Entities comply in all material respects with
all applicable codes and zoning laws and regulations. The Company and
the Subsidiaries have no knowledge of any pending or threatened
condemnation or zoning change that will in any material respect affect
the size of, use of, improvement of, construction on, or access to any
of the properties of the Company, the Subsidiaries and the GP
Entities. The Company and the Subsidiaries have no knowledge of any
pending or threatened proceeding or action that will in any manner
materially affect the size of, use of, improvements or construction
on, or access to any of the properties of the Company, the
Subsidiaries or the GP Entities.
(v) Except for those properties listed on Schedule D hereto,
title insurance in favor of the Company and the Subsidiaries is
maintained with respect to each of the properties described in the
Prospectus in an amount at least equal to the cost of acquisition of
such property.
(w) Except as disclosed in the Registration Statement, the
Prospectus and any amendment or supplement thereto, there are no
mortgages or deeds of trust encumbering any of the properties. The
mortgages encumbering the properties are not convertible into any
equity securities of the Company or the Operating Partnership, nor
does the Company or any of the Subsidiaries or the GP Entities hold a
participating interest therein and, except as disclosed in the
Registration Statement, the Prospectus and any amendment or supplement
thereto, such mortgages are not cross-defaulted or
cross-collateralized to any party other than the Company and the
Subsidiaries.
(x) Except as would not, singularly or in the aggregate, have a
Material Adverse Effect, (i) there does not exist on any of the
properties described in the Prospectus or in any document incorporated
therein by reference any Hazardous Materials (as hereinafter defined)
in unlawful quantities, (ii) there has not occurred on or off such
properties any unlawful spills, releases, discharges or disposal of
Hazardous Materials, and (iii) the Company, the Subsidiaries and the
GP Entities have not failed to comply with all applicable local, state
and Federal environmental laws, regulations, ordinances and
administrative and judicial orders relating to the generation,
recycling, sale, storage, handling, transport and disposal of any
Hazardous Materials.
As used herein, "Hazardous Material" shall include, without
limitation, any flammable explosives, radioactive materials, oil,
petroleum, petroleum products, hazardous materials, hazardous wastes,
hazardous or toxic substances, asbestos or any material as defined by
any environmental laws, including, without limitation, the
Comprehensive Environmental
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Response, Compensation, and Liability Act of 1980, as amended (42
U.S.C. Section 9601, et seq.) (CERCLA), the Hazardous Materials
Transportation Act, as amended (49 U.S.C. Section 1801, et seq.), the
Resource Conservation and Recovery Act, as amended (42 U.S C. Section
6901, et seq.), and in the regulations adopted pursuant to each of the
foregoing or by any Federal, state or local governmental authority
having jurisdiction over the properties as described in the
Prospectus.
Except for three wholly owned properties, all of the properties
of the Company and the Subsidiaries have been, and it is contemplated
that all future acquisitions will be, subjected to a Phase I or
similar environmental assessment (which generally includes a site
inspection, interviews and a records review, but no subsurface
sampling). These assessments and follow-up investigations, if any, of
the properties (including, as appropriate, asbestos, radon and lead
surveys, additional public record review, subsurface sampling and
other testing), of the properties have not revealed any environmental
liability that the Company believes would have a Material Adverse
Effect.
(y) The Company has and maintains property and casualty insurance
in favor of the Company and the Subsidiaries with respect to such
entities and each of the properties owned, directly or indirectly, by
the Company, in an amount and on such terms as is reasonable and
customary for businesses of the type proposed to be conducted by the
Company and the Subsidiaries. Neither the Company nor any of the
Subsidiaries or the GP Entities has received from any insurance
company written notice of any material defects or deficiencies
affecting the insurability of any such properties.
(z) No holder of outstanding shares of capital stock or
securities in any Subsidiary, including units in the Operating
Partnership, representing rights to acquire shares of capital stock of
the Company has any rights to the registration of shares of capital
stock of the Company which would or could require such securities to
be included in the Registration Statement.
(aa) The Company has filed all Federal, state and foreign income
and franchise tax returns required to be filed on or prior to the date
hereof and has paid taxes shown as due thereon (or otherwise due and
payable), other than taxes which are being contested in good faith and
for which adequate reserves have been established in accordance with
generally accepted accounting principles; and the Company has no
knowledge, after due inquiry, of any tax deficiency which has been
asserted or threatened against the Company (except as otherwise
described in the Prospectus). To the knowledge of the Company, there
are no tax returns of the Company or any of the Subsidiaries or the GP
Entities that are currently being audited by state, local or Federal
taxing authorities or agencies which would have Material Adverse
Effect.
(bb) Each approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or
other governmental body necessary in connection with the execution and
delivery by the Company and the Operating Partnership of this
Agreement and the consummation of the transactions herein contemplated
has been obtained or made and is in full force and effect.
(cc) No material labor dispute with the employees of the Company
or any of the Subsidiaries exists or, to the knowledge of the Company,
is imminent or threatened.
(dd) The Company and the Subsidiaries own, or are licensed or
otherwise have the right to use, the material patents, patent rights,
licenses, inventions, copyrights, know-how (including trade secrets
and other unpatented and/or unpatentable proprietary or confidential
8
information, systems or procedures), trademarks, service marks and
trade names (collectively, "proprietary rights") presently employed by
them or which are necessary in connection with the conduct of the
business now operated by them, and neither the Company nor any of the
Subsidiaries has received any written notice or otherwise has actual
knowledge after due inquiry of any infringement of rights of others or
any other claims with respect to any material proprietary rights. The
Company and the Subsidiaries hold all material permits from
governmental authorities which are necessary to conduct their
businesses and are in compliance with the terms and conditions of such
permits.
(ee) No transaction has occurred between or among the Company and
any of its officers or directors or any affiliate or affiliates of any
such officer or director that is required to be described in and is
not described or incorporated by reference into the Registration
Statement and the Prospectus.
(ff) None of the Company or the Operating Partnership, nor any of
their respective trustees, directors, officers, members 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 in, or which has constituted or that
reasonably might 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 Shares.
(gg) Commencing with the Company's taxable year ended December
31, 1994, the Company has been, and upon the sale of the Shares will
continue to be, organized and operated in conformity with the
requirements for qualification and taxation as a "real estate
investment trust" (a "REIT") under Sections 856 through 860 of the
Internal Revenue Code of 1986, as amended (the "Code"). The proposed
method of operation of the Company as described in the Prospectus will
enable the Company to continue to meet the requirements for
qualification and taxation as a REIT under the Code. The Company
intends to continue to operate in a manner which would permit it to
qualify as a REIT under the Code. The Company has no present intention
of changing its operations or engaging in activities which would cause
it to fail to qualify, or make economically undesirable its continued
qualification, as a REIT.
(hh) Each of the Company and the Subsidiaries is not, and upon
the issuance and sale of the Shares as herein contemplated and the
application of the net proceeds therefrom as described in the
Prospectus will not be, an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in
the 1940 Act.
(ii) The Shares have been approved for listing on the NYSE,
subject to official notice of issuance.
(jj) The Company and the Subsidiaries maintain a system of
internal accounting controls which the Company believes is sufficient
to provide reasonable assurance that (i) transactions are executed in
accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit the preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (iii) access to
financial assets is permitted only in accordance with management's
general or specific authorization; and (iv) the recorded
accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to
any differences.
(kk) Neither the Company nor any of the Subsidiaries, nor to the
knowledge of the Company, any employee or agent of the Company or any
Subsidiary, has made any
9
payment of funds of the Company or any Subsidiary or received or
retained any funds in violation of any law, rule or regulation or of a
character required to be disclosed in the Prospectus.
(ll) The Company has not distributed and, prior to the Closing
Date, will not distribute any offering material in connection with the
offering and sale of the Shares other than the Registration Statement,
the Prospectus or other materials, if any, permitted by the Securities
Act.
3. Purchase, Sale and Delivery of the Firm Shares. On the basis of the
representations, warranties and agreements contained herein, but subject to the
terms and conditions set forth herein, the Company agrees to issue and sell the
Firm Shares to the Underwriter, and the Underwriter agrees to purchase from the
Company, the Firm Shares at a purchase price of $31.01 per share. The Company
understands that the Underwriter intends to deposit the Firm Shares with the
trustee of the Trust in exchange for units in the Trust. The Underwriter is
acting as sponsor and depositor of the Trust and is therefore considered an
affiliate of the Trust.
The Firm Shares to be purchased by the Underwriter will be delivered by the
Company to the office of the Underwriter at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, in accordance with the terms of this Agreement and against payment
of an aggregate purchase price of $12,349,112.30 therefor by wire transfer of
same day funds payable to the order of the Company at the bank account
designated in writing by the Company at least one business day prior to the
Closing Date, at 10:00 a.m., New York City time, on February 28, 2002 (or if the
NYSE or commercial banks in the City of New York are not open on such day, the
next day on which such exchanges and banks are open) (any such day being a
"Business Day"), or at such other time not later than eight full business days
thereafter as the Underwriter and the Company mutually agree, such time being
herein referred to as the "Closing Date." If requested by the Underwriter, the
Firm Shares will be prepared in definitive form and in such authorized
denominations and registered in such names as the Underwriter may request upon
at least two Business Days' prior notice to the Company and will be made
available for checking and packaging at the office of the Underwriter at least
one Business Day prior to the Closing Date.
4. Covenants. The Company and the Operating Partnership, as the case may
be, covenant and agree with the Underwriter that:
(a) The Company will cause the Prospectus Supplement to be filed
as required by Section 2(a) hereof (but only if the Underwriter or its
counsel have not reasonably objected thereto by notice to the Company
after having been furnished a copy a reasonable time prior to filing)
and will notify the Underwriter promptly of such filing. During the
period in which a prospectus relating to the Shares is required to be
delivered under the Securities Act or such date which is 90 days after
the Closing Date, whichever is later, the Company will notify the
Underwriter promptly of the time when any subsequent amendment to the
Registration Statement has become effective or any subsequent
supplement to the Prospectus has been filed, or of any request by the
Commission for any amendment or supplement to the Registration
Statement or the Prospectus or for additional information; the Company
will prepare and file with the Commission, promptly upon the
Underwriter's request, any amendments or supplements to the
Registration Statement or the Prospectus that, in the Underwriter's
opinion, may be necessary or advisable in connection with the
Underwriter's distribution of the Shares; and the Company will file no
amendment or supplement to the Registration Statement or the
Prospectus (other than any prospectus supplement relating to the
offering of other securities registered under the Registration
Statement or any document required to be filed under the Exchange Act
that upon filing is deemed to be incorporated by reference therein) to
which the Underwriter or its counsel shall reasonably object by notice
to the Company after having been furnished a copy a reasonable time
10
prior to the filing; provided, however, the Underwriter and its
counsel hereby waive any objection to the filing of a prospectus
supplement relating to the C&S Shares.
(b) The Company will advise the Underwriter, promptly after it
shall receive notice or obtain knowledge thereof, of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement, of the suspension of the qualification or
registration of the Shares for offering or sale in any jurisdiction,
or of the initiation or threatening of any proceeding for any such
purpose; and it will promptly use its best efforts to prevent the
issuance of any stop order or to obtain its withdrawal if such a stop
order should be issued.
(c) The Company will comply with all requirements imposed upon it
by the Securities Act, the Securities Act Rules and Regulations, the
Exchange Act and the Exchange Act Rules and Regulations as from time
to time in force, so far as necessary to permit the continuance of
sales of, or dealings in, the Shares as contemplated by the provisions
hereof and the Prospectus. If during such period where a prospectus
relating to the Shares is required to be delivered under the
Securities Act, any event occurs as a result of which, in the opinion
of the Underwriter's counsel, the Registration Statement contains an
untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading or the Prospectus as then amended or
supplemented contains an untrue statement of a material fact or omits
to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading, or if during such period it is necessary to amend or
supplement the Registration Statement or the Prospectus to comply with
the Securities Act, the Company will promptly notify the Underwriter
and will amend or supplement the Registration Statement or the
Prospectus (at the expense of the Company) so as to correct such
statement or omission or effect such compliance.
(d) The Company will furnish to the Underwriter copies of the
Registration Statement, the Prospectus (including all documents
incorporated by reference therein) and all amendments and supplements
to the Registration Statement and the Prospectus that are filed with
the Commission during the period in which a prospectus relating to the
Shares is required to be delivered under the Securities Act or such
date which is 90 days after the Closing Date, whichever is later
(including all documents filed with the Commission during such period
that are deemed to be incorporated by reference therein), in each case
as soon as available and in such quantities as the Underwriter may
from time to time reasonably request.
(e) During the period of five years commencing on the date upon
which the Prospectus Supplement is filed pursuant to Rule 424(b) under
the Securities Act, the Company will furnish the Underwriter with
copies of filings of the Company under the Securities Act and the
Exchange Act and with all other financial statements and periodic and
special reports it distributes generally to the holders of any class
of its capital stock.
(f) The Company will make generally available to its stockholders
as soon as practicable, and in the manner contemplated by Rule 158 of
the Securities Act Rules and Regulations but in any event not later
than 15 months after the end of the Company's current fiscal quarter,
an earning statement (which need not be audited) covering a 12-month
period beginning after the date upon which the Prospectus Supplement
is filed pursuant to Rule 424(b) under the Securities Act that shall
satisfy the provisions of Section 11(a) of the Securities Act and Rule
158 of the Securities Act Rules and Regulations.
(g) Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, the Company
will pay, or reimburse if paid by the
11
Underwriter, all costs and expenses incident to the performance of the
obligations of the Company under this Agreement, including but not
limited to costs and expenses of or relating to (i) the preparation,
printing and filing of the Registration Statement and exhibits
thereto, the Prospectus and any amendment or supplement to the
Registration Statement or the Prospectus, (ii) the preparation and
delivery of certificates representing the Shares, (iii) the printing
and reproduction of this Agreement, (iv) the costs incurred by the
Company in furnishing (including costs of shipping, mailing and
courier) such copies of the Registration Statement, the Prospectus,
and all amendments and supplements thereto, as may be requested for
use in connection with the offering and sale of the Shares by the
Underwriter, (v) the listing of the Shares on the NYSE, (vi) if and to
the extent required, the registration or qualification of the Shares
for offer and sale under the securities or blue sky laws of such
jurisdictions designated by the Underwriter or the notification with
respect thereto required by any such jurisdiction, including the fees,
disbursements and other charges of the Underwriter's counsel in
connection therewith, and the preparation and printing of blue sky
memoranda; provided, however, that no such registration or
qualification would subject the Company to service of process or
require it to qualify to do business in any such jurisdiction, (vii)
counsel to the Company, (viii) the transfer agent for the Shares, and
(ix) the accountants of the Company.
(h) If this Agreement shall be terminated pursuant to Section 8
hereof or if for any reason the Company shall be unable to perform its
obligations hereunder, the Company will reimburse the Underwriter for
all out-of-pocket expenses (including the fees, disbursements and
other charges of the Underwriter's counsel) reasonably incurred by the
Underwriter in connection herewith.
(i) The Company will not at any time, directly or indirectly,
take any action designed to, or which might reasonably be expected to,
cause or result in, or which has constituted or which might reasonably
be expected to constitute, a violation of Regulation M under the 1934
Act, or the stabilization of the price of its capital stock to
facilitate the sale or resale of any of the Shares.
(j) The Company will use its best efforts to continue to meet the
requirement to qualify as a REIT under the Code for each of its
taxable years for so long as the board of directors deems it in the
best interests of the Company's stockholders to remain so qualified.
(k) The Company will use its best efforts to effect the listing
of the Shares on the New York Stock Exchange.
(l) The Company will not be or become, at any time prior to the
expiration of three years after the date of the Agreement, an
"investment company," as such term is defined in the 1940 Act.
(m) The Company and the Operating Partnership will apply the net
proceeds from the sale of the Shares as set forth under the caption
"Use of Proceeds" in the Prospectus Supplement.
5. Conditions of Underwriter's Obligations. The Underwriter's obligation to
purchase and pay for the Shares as provided herein shall be subject to the
accuracy, as of the date hereof and the Closing Date (as if made at the Closing
Date), of the representations and warranties of the Company herein, to the
performance by the Company of its obligations hereunder and to the following
additional conditions:
12
(a) The Registration Statement shall have been declared effective
under the Securities Act; the Prospectus shall have been filed as
required by Section 2(a) hereof; and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and
no proceeding for that purpose shall have been instituted or, to the
Underwriter's knowledge or the knowledge of the Company, threatened by
the Commission, nor has any state securities authority suspended the
qualification or registration of the Shares for offering or sale in
any jurisdiction and any request of the Commission for additional
information (to be included in the Registration Statement or the
Prospectus or otherwise) shall have been complied with to the
satisfaction of the Underwriter and the Underwriter's counsel.
(b) The Underwriter shall not have advised the Company that the
Registration Statement or any amendment thereto contains an untrue
statement of fact that in the opinion of the Underwriter or the
Underwriter's counsel is material or omits to state a fact that in the
opinion of the Underwriter or its counsel is material and is required
to be stated therein or is necessary to make the statements therein
not misleading, or that the Prospectus, or any amendment or supplement
thereto, contains an untrue statement of fact that in the opinion of
the Underwriter or the Underwriter's counsel is material or omits to
state a fact that in the opinion of the Underwriter or the
Underwriter's counsel is material and is necessary, in the light of
the circumstances under which they were made, to make the statements
therein not misleading.
(c) Except as contemplated in the Prospectus Supplement,
subsequent to the respective dates as of which information is included
or incorporated by reference into the Registration Statement and the
Prospectus, there shall not have been any change, on a consolidated
basis, in the equity capitalization (except in connection with the
issuance of the C&S Shares), short-term debt or long-term debt of the
Company, or any Material Adverse Effect, or any development involving
a prospective Material Adverse Effect or any adverse change in the
rating assigned to any securities of the Company, that, in the
Underwriter's judgment, makes it impractical or inadvisable (a) to
commence or continue the offering of the units in the Trust to the
public or (b) to enforce contracts for the sale of Units in the Trust.
(d) Xxxxx Xxxxxxx LLP, counsel for the Company, shall have
furnished to the Underwriter its written opinion, as counsel to the
Company, addressed to the Underwriter and dated the Closing Date, as
to which for matters of Maryland law Xxxxxxxx Chance Xxxxxx & Xxxxx
LLP may rely upon, in form and substance satisfactory to the
Underwriter, to the effect that:
(i) Each of the Company, the Operating Partnership and the
QRS has been duly incorporated or formed, as the case may be, and
is validly existing as a corporation, general or limited
partnership, or other legal entity, as the case may be, in good
standing (to the extent such concept is applicable) under the
laws of its jurisdiction of incorporation or formation, as the
case may be, and has full power (corporate or other) and
authority to own, lease and operate its properties and to conduct
its business as described in the Registration Statement and the
Prospectus, and to enter into and perform its obligations under
this Agreement and is duly qualified or registered to do business
in each jurisdiction in which it owns or leases real property or
in which the conduct of its business requires such qualification
or registration, except where the failure to be so qualified or
registered would not result in a Material Adverse Effect;
(ii) The Company has authorized capital stock as set forth
in or incorporated by reference into the Prospectus. The Shares
have been duly authorized by the Company for issuance and sale
and when issued and sold pursuant to this Agreement will be duly
and validly issued, fully paid and nonassessable and none of them
will have
13
been issued in violation of any preemptive or other similar right
under the charter documents of the Company or the laws of the
State of Maryland, as the case may be. The issued and outstanding
capital stock of the Company and the Shares conform, or will
conform, in all material respects to the descriptions thereof
contained in, or incorporated by reference into, the Registration
Statement and the Prospectus. The form of certificate used to
evidence the Shares is in due and proper form and complies with
all applicable statutory requirements, with any applicable
requirements of the Company's organizational documents and with
the requirements of the NYSE;
(iii) The Registration Statement has become effective under
the Securities Act, the Prospectus Supplement has been filed as
required by Section 2(a) hereof and, to the best knowledge of
such counsel, after due inquiry, no stop order suspending the
effectiveness of the Registration Statement has been issued and
no proceeding for that purpose has been instituted or threatened
by the Commission;
(iv) Each part of the Registration Statement, when such part
became effective, and the Prospectus and any amendment or
supplement thereto, on the date of filing thereof with the
Commission and at the Closing Date, complied as to form in all
material respects with the requirements of the Securities Act and
the Securities Act Rules and Regulations; it being understood
that such counsel need express no opinion as to the financial
statements, financial schedules or other financial or statistical
data included in, or incorporated by reference into, the
Registration Statement or the Prospectus;
(v) The descriptions in the Registration Statement and the
Prospectus of statutes, legal and governmental proceedings,
contracts and other documents are accurate and fairly present the
information required to be shown in all material respects; and
such counsel does not know of any statutes or legal or
governmental proceedings required to be described in the
Prospectus that are not described as required, or of any
contracts or documents of a character required to be described
that are not described as required, in the Registration Statement
or Prospectus;
(vi) This Agreement has been duly authorized, executed and
delivered by the Company and the Operating Partnership and
constitutes the legal, valid and binding obligations of the
Company and the Operating Partnership enforceable against them in
accordance with its terms, except as the enforceability thereof
may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and by general
equitable principles; the execution, delivery and performance of
this Agreement and the consummation of the transactions
contemplated herein will not result in a breach or violation of
any of the terms and provisions of, or constitute a default
under, (a) any statute or any indenture, mortgage, deed of trust,
voting trust agreement, loan agreement, bond, debenture, note
agreement or evidence of indebtedness, lease, contract or other
agreement or instrument filed as an exhibit to the Registration
Statement or any filing under the Exchange Act incorporated
therein by reference, except where such breach, violation or
default would not have a Material Adverse Effect, (b) the
articles of incorporation, by-laws, certificate of general or
limited partnership, partnership agreement, or other
organizational document of the Company, the Operating Partnership
or the QRS, as applicable, or (c) any order, rule or regulation
known to such counsel of any court or governmental agency or body
having jurisdiction over the Company, the Operating Partnership
or the QRS or any of their properties or other assets; and except
as may be required under any securities or blue sky laws, no
consent, approval,
14
authorization, notice to, order of, or filing with, any court or
governmental agency or body is required for the consummation of
the transactions contemplated by this Agreement in connection
with the issuance or sale of the Shares by the Company, except
such as have been obtained (or, with respect to filings, made)
under the Securities Act or from the NYSE;
(vii) The disclosure contained in the Prospectus under the
captions "Description of Capital Stock," "Certain Other
Provisions of Maryland Law and Our Articles of Incorporation" and
"Federal Income Tax Considerations," to the extent such
information constitutes matters of law, summaries of legal
matters or legal conclusions, has been reviewed by such counsel
and are accurate in all material respects.
(viii) Commencing with the Company's taxable year ending
December 31, 1994, the Company has been organized and operated in
conformity with the requirements for qualification as a REIT
under the Code, and its method of operation through the date of
this letter and its proposed method of operation, will continue
to enable it to meet the requirements for qualification and
taxation as a REIT.
(ix) To such counsel's knowledge, there is no litigation or
governmental or other proceeding or investigation, before any
court or before or by any public body or board pending or
threatened against, or involving the assets, properties or
businesses of, the Company or any of the Subsidiaries, involving
the Company's or any of its Subsidiaries' officers or directors
or to which any of the Company's or any of its Subsidiaries'
properties or other assets are subject which might reasonably be
expected to have a Material Adverse Effect or to affect the
consummation of the transactions contemplated herein or the
performance by the Company of its obligations hereunder.
(x) Neither the Company nor any of its Subsidiaries is an
"investment company" or an entity "controlled" by an "investment
company" within the meaning of the 1940 Act and the rules and
regulations thereunder.
Such counsel shall also include a statement to the effect that such counsel
has participated in the preparation of the Registration Statement and the
Prospectus and participated in discussions with certain officers, trustees and
employees of the Company, representatives of the independent accountants who
examined the financial statements of the Company included or incorporated by
reference in the Registration Statement and the Prospectus, and you and your
representatives and such counsel has reviewed certain Company and Operating
Partnership records and documents. While such counsel has independently verified
and is not passing upon, and does not assume any responsibility for, the
accuracy, completeness or fairness of the information contained in the
Registration Statement and the Prospectus (including any of the documents
incorporated by reference therein except as set forth in opinion (vii) above),
on the basis of such participation and review, nothing has come to such
counsel's attention that would lead it to believe that the Registration
Statement (except for financial statements, supporting schedules and other
financial data included or incorporated by reference therein or omitted
therefrom and for statistical information derived from such financial
statements, supporting schedules or other financial data, as to which such
counsel need not express any belief), at the time such Registration Statement
became effective, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus (except for financial
statements, supporting schedules and other financial data included or
incorporated by reference therein or omitted therefrom and for statistical
information derived from such financial statements, supporting schedules or
other financial data, as to which such counsel need not express any belief), at
the time the Prospectus was issued, or at the Closing Date, included or includes
an
15
untrue statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(e) Xxx X. XxXxxxxxx, Esq., General Counsel of the Company, shall
have furnished to the Underwriter her written opinion addressed to the
Underwriter and dated such Closing Date, in form and substance
satisfactory to the Underwriter, to the effect that:
(i) Each of the Subsidiaries (other than the Operating
Partnership and the QRS) and the GP Entities has been duly
incorporated or formed, as the case may be, and is an existing
corporation, general or limited partnership, or other legal
entity, as the case may be, in good standing under the laws of
its jurisdiction of incorporation or formation, as the case may
be, and has full power (corporate and other) and authority to own
or hold its properties and to conduct the business in which it is
engaged, and is duly qualified or registered to do business in
each jurisdiction in which it owns or leases real property or in
which the conduct of its business requires such qualification or
registration, except where the failure to be so qualified or
registered, considering all such cases in the aggregate, would
not have a Material Adverse Effect;
(ii) The Company has authorized, issued and outstanding
capital stock as set forth in the Prospectus. All of the issued
and outstanding shares of capital stock of the Company have been
duly and validly authorized and issued, and all of the issued and
outstanding shares of capital stock of the Company are fully paid
and nonassessable and none of them was issued in violation of any
preemptive or other similar right under the charter documents of
the Company, the laws of the State of Maryland or any contract to
which the Company is a party, as the case may be. The Shares will
not have been issued in violation of any preemptive or other
similar right under any contract to which the Company is a party.
Except as disclosed in the Registration Statement and the
Prospectus, there is no outstanding option, warrant or other
right calling for the issuance of, and no commitment, plan or
arrangement to issue, any shares of capital stock of the Company
(except in connection with the C&S Shares), or any security
convertible into, exercisable for, or exchangeable for shares of
capital stock of the Company. No holder of any security of the
Company has the right to have any security owned by such holder
included for registration in the Registration Statement or
otherwise registered by the Company under the Securities Act in
connection with the issuance and sale of the Shares. All of the
issued and outstanding capital stock or ownership interests of
each of the Subsidiaries has been duly authorized and are validly
issued, fully paid and nonassessable and, except as specified on
Schedule A hereto, are wholly owned by the Company, directly or
through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity;
(iii) The documents incorporated by reference in the
Registration Statement and the Prospectus or any amendment or
supplement thereto, when they became effective under the
Securities Act or were filed with the Commission under the
Securities Act or Exchange Act, as the case may be, complied as
to form, in all material respects, with the requirements of the
Securities Act or the Exchange Act, as applicable, and the rules
and regulations of the Commission thereunder;
(iv) There are no contracts or documents of a character (1)
to be filed under the Exchange Act if upon such filing they would
be incorporated by reference in the Registration Statement or the
Prospectus or (2) to be filed as exhibits to the Registration
Statement, that are not described and filed as required;
16
(v) The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated
herein will not result in a breach or violation of any of the
terms and provisions of, or constitute a default under, (a) any
statute, indenture, mortgage, deed of trust, voting trust
agreement, loan agreement, bond, debenture, note agreement or
evidence of indebtedness, lease, contract or other agreement or
instrument to which the Company, the Subsidiaries or the GP
Entities are a party or by which they are bound or to which any
of the property or other assets of the Company, the Subsidiaries
or the GP Entities is subject, except where such breach,
violation or default would not have a Material Adverse Effect,
(b) the articles of incorporation, by-laws, certificate of
general or limited partnership, partnership agreement, or other
organizational document of the Subsidiaries (other than the
Operating Partnership or the QRS) or the GP Entities, as
applicable, or (c) any order, rule or regulation known to such
counsel of any court or governmental agency or body having
jurisdiction over the Subsidiaries (other than the Operating
Partnership or the QRS) or the GP Entities or any of their
properties or other assets;
(vi) Neither the Company nor any of the Subsidiaries or the
GP Entities is in violation of any term or provision of their
respective articles of incorporation, charter, by-laws,
certificate of general or limited partnership, partnership
agreement or other organizational document, as applicable, or in
violation of or default under any indenture, mortgage, deed of
trust, voting trust agreement, loan agreement, bond, debenture,
note agreement or evidence of indebtedness, lease, contract,
permit, judgment, decree, order, statute, rule or regulation;
where such violation or default would have a Material Adverse
Effect; and
(vii) There is no litigation or governmental or other
proceeding or investigation, before any court or before or by any
public body or board pending or threatened against, or involving
the assets, properties or businesses of, the GP Entities,
involving the Company's or any of its Subsidiaries' officers or
directors or to which any of the Company's or any of its
Subsidiaries' properties or other assets are subject which might
reasonably be expected to have a Material Adverse Effect or to
affect the consummation of the transactions contemplated herein
or the performance by the Company of its obligations hereunder.
(f) The Underwriter shall have received from Xxxxxxxx Chance
Xxxxxx & Xxxxx LLP, the counsel to the Underwriter, such opinion or
opinions, dated the Closing Date, with respect to the validity of the
Shares, the Registration Statement, the Prospectus and other related
matters as the Underwriter reasonably may request, and such counsel
shall have received such papers and information as they request to
enable them to pass upon such matters.
(g) At the Closing Date, the Underwriter shall have received a
letter, dated the date of delivery thereof, from
PricewaterhouseCoopers LLP, the independent public accountants of the
Company, in the form previously agreed to by the Underwriter.
(h) The Underwriter shall have received from the Company a
certificate, signed by the Chairman, the President, either of the
Co-Chief Executive Officers, the Executive Vice President or a Senior
Vice President and by the principal financial or accounting officer of
the Company, dated the Closing Date, to the effect that, to the best
of their knowledge based upon reasonable investigation:
(i) The representations and warranties of the Company in
this Agreement are true and correct, as if made at and as of the
Closing Date, and the
17
Company has complied with all the agreements and satisfied all
the conditions on its part to be performed or satisfied at or
prior to the Closing Date;
(ii) No stop order suspending the effectiveness of the
Registration Statement have been issued, and no proceeding for
that purpose has been instituted or, to such officer's knowledge,
is threatened by the Commission nor has any state securities
authority suspended the qualification or registration of the
Shares for offering or sale in any jurisdiction;
(iii) Since the effective date of the Registration
Statement, there has occurred no event required to be set forth
in an amendment or supplement to the Registration Statement or
Prospectus that has not been so set forth, and there has been no
document required to be filed under the Exchange Act and the
Exchange Act Rules and Regulations of the Commission thereunder
that upon such filing would be deemed to be incorporated by
reference in the Prospectus that has not been so filed;
(iv) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, (a) there
has not been, and no development has occurred which could
reasonably be expected to result in, a Material Adverse Effect,
whether or not arising from transactions in the ordinary course
of business, in each case other than as set forth in or
contemplated by the Registration Statement and the Prospectus and
(b) neither the Company nor any of the Subsidiaries or the GP
Entities has sustained any material loss or interference with its
business or properties from fire, explosion, flood or other
casualty, whether or not covered by insurance, or from any labor
dispute or any court or legislative or other governmental action,
order or decree, which is not set forth in the Registration
Statement and the Prospectus; and
(v) such other matters as the Underwriter or its counsel may
reasonably request.
(i) Prior to the Closing Date, the Shares shall have been duly
authorized for listing by the NYSE, subject to official notice of
issuance.
(j) All such opinions, certificates, letters and other documents
will be in compliance with the provisions hereof only if they are
satisfactory in form and substance to the Underwriter or its counsel.
The Company will furnish the Underwriter with such conformed copies of
such opinions, certificates, letters and other documents as the
Underwriter shall reasonably request and the Company shall furnish to
the Underwriter such further certificates and documents as the
Underwriter shall have reasonably requested.
(k) Subsequent to the execution and delivery of this Agreement
(i) no downgrading or adverse change shall have occurred in the rating
accorded any security of the Company by any "nationally recognized
statistical rating organization," as that term is defined by the
Commission for purposes of Rule 436(g)(2) of the Securities Act Rules
and Regulations and (ii) no such organization shall have publicly
announced that it has under surveillance or review, with possible
negative implications, its rating of any security of the Company,
that, in either event, makes it impractical or inadvisable, in the
Underwriter's judgment, (a) to commence or continue the offering of
the units in the Trust to the public or (b) to enforce contracts for
the sale of units in the Trust.
18
6. Indemnification and Contribution.
(a) The Company and the Operating Partnership agree to indemnify
and hold harmless the Underwriter, the directors, officers, employees
and agents of the Underwriter and each person who controls the
Underwriter within the meaning of either the Securities Act or the
Exchange Act against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become
subject under the Securities Act, the Exchange Act or other Federal or
state statutory law or regulation, at common law or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement as originally filed or in any amendment
thereof, or in the Prospectus, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, and agrees to reimburse each such indemnified party, as
incurred, for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the Company and
the Operating Partnership will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or
is based upon any such untrue statement or alleged untrue statement or
omission or alleged omission made therein in reliance upon and in
conformity with written information furnished to the Company by or on
behalf of the Underwriter specifically for inclusion therein. This
indemnity agreement will be in addition to any liability which the
Company or the Operating Partnership may otherwise have.
(b) The Underwriter agrees to indemnify and hold harmless the
Company and the Operating Partnership, each of their directors, each
of their officers who sign the Registration Statement, and each person
who controls the Company or the Operating Partnership within the
meaning of either the Securities Act or the Exchange Act, to the same
extent as the foregoing indemnity from the Company and the Operating
Partnership to the Underwriter, but only with reference to written
information relating to the Underwriter furnished to the Company by or
on behalf of the Underwriter specifically for inclusion in the
documents referred to in the foregoing indemnity. This indemnity
agreement will be in addition to any liability which the Underwriter
may otherwise have. The Company and the Operating Partnership
acknowledge that (i) the name of the Underwriter contained on the
front cover page and back cover page of the Prospectus Supplement,
(ii) the third to last paragraph on the front cover page of the
Prospectus Supplement and (iii) the second paragraph contained in the
Prospectus under the caption "Underwriting," constitute the only
information furnished in writing by or on behalf of the Underwriter
for inclusion in the Prospectus.
(c) Promptly after receipt by an indemnified party under this
Section 6 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made
against the indemnifying party under this Section 6, notify the
indemnifying party in writing of the commencement thereof; but the
failure so to notify the indemnifying party (i) will not relieve it
from liability under paragraph (a) or (b) above unless and to the
extent it did not otherwise learn of such action and such failure
results in the forfeiture by the indemnifying party of substantial
rights and defenses and (ii) will not, in any event, relieve the
indemnifying party from any obligations to any indemnified party other
than the indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to appoint counsel of
the indemnifying party's choice at the indemnifying party's expense to
represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall
not thereafter be responsible for the fees and expenses of any
separate counsel retained by the indemnified party or parties except
as set forth below); provided,
19
however, that such counsel shall be reasonably satisfactory to the
indemnified party. Notwithstanding the indemnifying party's election
to appoint counsel to represent the indemnified party in an action,
the indemnified party shall have the right to employ separate counsel
(including local counsel), and the indemnifying party shall bear the
reasonable fees, costs and expenses of such separate counsel if (i)
the use of counsel chosen by the indemnifying party to represent the
indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of,
any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably
concluded (based on advice of counsel) that there may be legal
defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying
party, (iii) the indemnifying party shall not have employed counsel
reasonably satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of the
institution of such action or (iv) the indemnifying party shall
authorize the indemnified party to employ separate counsel at the
expense of the indemnifying party. It is understood that the
indemnifying party or parties shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable
for the reasonable fees, disbursements and other charges of more than
one additional firm admitted to practice in such jurisdiction at any
one time for all such indemnified parties. An indemnifying party will
not, without the prior written consent of the indemnified parties,
settle or compromise or consent to the entry of any judgment with
respect to any pending or threatened claim, action, suit or proceeding
in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement,
compromise or consent includes an unconditional release of each
indemnified party from all liability arising out of such claim,
action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or
(b) of this Section 6 is unavailable to or insufficient to hold
harmless an indemnified party for any reason, the Company, the
Operating Partnership and the Underwriter agree to contribute to the
aggregate losses, claims, damages and liabilities (including legal or
other expenses reasonably incurred in connection with investigating or
defending same) (collectively "Losses") to which the Company, the
Operating Partnership and the Underwriter may be subject in such
proportion as is appropriate to reflect the relative benefits received
by the Company and the Operating Partnership on the one hand and by
the Underwriter on the other from the offering of the Shares;
provided, however, that in no case shall the Underwriter (except as
may be provided in any agreement among underwriters relating to the
offering of the Shares) be responsible for any amount in excess of the
underwriting discount or commission applicable to the Shares purchased
by the Underwriter hereunder. If the allocation provided by the
immediately preceding sentence is unavailable for any reason, the
Company, the Operating Partnership and the Underwriter shall
contribute in such proportion as is appropriate to reflect not only
such relative benefits but also the relative fault of the Company and
the Operating Partnership on the one hand and of the Underwriter on
the other in connection with the statements or omissions which
resulted in such Losses as well as any other relevant equitable
considerations. Benefits received by the Company and the Operating
Partnership shall be deemed to be equal to the total net proceeds from
the offering (before deducting expenses) received by it, and benefits
received by the Underwriter shall be deemed to be equal to the total
underwriting discounts and commissions, in each case as set forth on
the cover page or elsewhere in the Prospectus. Relative fault shall be
determined by reference to, among other things, whether any untrue or
any alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information
provided by the Company or the Operating Partnership on the one hand
or the Underwriter on the other, the intent of the parties and their
relative knowledge, access to information and opportunity to correct
or
20
prevent such untrue statement or omission. The Company, the Operating
Partnership and the Underwriter agree that it would not be just and
equitable if contribution were determined by pro rata allocation or
any other method of allocation which does not take account of the
equitable considerations referred to above. Notwithstanding the
provisions of this paragraph (d), no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. For purposes of this Section 6,
each person who controls the Underwriter within the meaning of either
the Securities Act or the Exchange Act and each director, officer,
employee and agent of the Underwriter shall have the same rights to
contribution as the Underwriter, and each person who controls the
Company or the Operating Partnership within the meaning of either the
Securities Act or the Exchange Act, each officer of the Company or the
Operating Partnership who shall have signed the Registration Statement
and each director of the Company shall have the same rights to
contribution as the Company and the Operating Partnership, subject in
each case to the applicable terms and conditions of this paragraph
(d).
(e) The indemnity and contribution agreements contained in this
Section 6 and the representations and warranties of the Company and
the Operating Partnership contained in this Agreement shall remain
operative and in full force and effect regardless of (i) any
investigation made by or on behalf of the Underwriter, (ii) acceptance
of the Shares and payment therefor or (iii) any termination of this
Agreement.
7. Representations and Agreements to Survive Delivery. All representations,
warranties and agreements of the Company and the Operating Partnership contained
herein or in certificates delivered pursuant hereto, and the Underwriter's
agreements contained in Sections 4(g) and 6 hereof, shall remain operative and
in full force and effect regardless of any investigation made by or on behalf of
the Underwriter or any of its controlling persons, or the Company or any of its
officers, directors or any controlling persons, and shall survive delivery of
and payment for the Shares hereunder.
8. Termination. The Underwriter shall have the right by giving notice as
hereinafter specified at any time at or prior to the Closing Date, to terminate
this Agreement if (i) the Company shall have failed, refused or been unable, at
or prior to the Closing Date, to perform any material agreement on its part to
be performed hereunder, (ii) any condition of the Underwriter's obligations
specified in Section 5 hereof is not fulfilled when due, (iii) trading on the
NYSE shall have been wholly suspended, (iv) minimum or maximum prices for
trading shall have been fixed, or maximum ranges for prices for the Common Stock
shall have been required, on the NYSE by the NYSE or by order of the Commission
or any other governmental authority having jurisdiction, (v) a banking
moratorium shall have been declared by Federal or New York authorities or if
there has occurred a material disruption in commercial banking in the United
States, or (vi) an outbreak or escalation of major hostilities in which the
United States is involved, a declaration of national emergency or war by the
United States, any other substantial national or international calamity or any
other event or occurrence of a similar character shall have occurred since the
execution of this Agreement that, in the Underwriter's sole judgment, makes it
impractical or inadvisable (a) to commence or continue the offering of the units
in the Trust to the public or (b) to enforce contracts for the sale of units in
the Trust. Any such termination shall be without liability of any party to any
other party with respect to Shares not purchased by reason of such termination
except that the provisions of Sections 4(g), 4(h) and 6 hereof shall at all
times be effective. If the Underwriter elects to terminate this Agreement as
provided in this Section 8, the Company shall be notified promptly by the
Underwriter by telephone, telex or telecopy, confirmed by letter.
9. Notices. All notices or communications hereunder shall be in writing and
if sent to the Underwriter shall be mailed, delivered, telexed or telecopied and
confirmed to the Underwriter in care of Xxxxxxx Xxxxx Xxxxxx Inc. at 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX 00000, c/o Real Estate and
21
Lodging Group (with copy to Xxxxxxx X. Xxxxx, Esq., c/o Clifford Chance Xxxxxx &
Xxxxx LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 10166), or if sent to the
Company, shall be mailed, delivered, telexed or telecopied and confirmed to Xxx
X. XxXxxxxxx, Esq., c/o the Company at 000 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx
00000 (with copy, which shall not constitute notice, to Xxxxxxx XxXxxx Xxxxx,
Esq., c/o Nixon Peabody LLP, 0000 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx 00000).
Any party to this Agreement may change such address for notices by sending to
the other party to this Agreement written notice of a new address for such
purpose.
10. Parties. This Agreement shall inure to the benefit of, and be binding
upon, the Company and the Underwriter and their respective successors and the
controlling persons, officers, directors, employees and representatives referred
to in Section 6 hereof, and no other person will have any right or obligation
hereunder.
11. Applicable Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
12. Option Shares.
(a) Upon written notice from the Underwriter given to the Company
not later than February 27, 2002, the Underwriter may purchase all or
less than all of the Option Shares at the purchase price per share to
be paid for the Firm Shares. No Option Shares shall be sold or
delivered unless the Firm Shares previously have been, or
simultaneously are, sold and delivered. The right to purchase the
Option Shares or any portion thereof may be surrendered and terminated
at any time upon notice by the Underwriter to the Company. The date of
delivery of, and payment for, the Option Shares shall be no later than
the Closing Date. The preparation, registration, checking and delivery
of, and payment for, the Option Shares shall occur or be made in the
same manner as provided in Section 3 hereof for the Firm Shares,
except as the Underwriter and the Company may otherwise agree. The
Company understands that the Underwriter intends to deposit the Option
Shares with the trustee of the Trust in exchange for units in the
Trust.
(b) The conditions to the Underwriter's obligations set forth in
Section 5 shall be deemed to be conditions to the Underwriter's
obligation to purchase and pay for the Firm Shares and the Option
Shares to be purchased on the Closing Date and references to the
"Shares" in Section 5 hereof shall be deemed to be references to the
Firm Shares and the Option Shares to be purchased on the Closing Date.
A termination of this Agreement as to the Option Shares after the
Closing Date will not terminate this Agreement as to the Firm Shares.
22
If the foregoing correctly sets forth the understanding among the Company,
the Operating Partnership and the Underwriter, please so indicate in the space
provided below for that purpose, whereupon this letter shall constitute a
binding agreement between the Company, the Operating Partnership and the
Underwriter.
Very truly yours,
HOME PROPERTIES OF NEW YORK, INC.
By:/s/Xxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxx
Title: SVP and CFO
HOME PROPERTIES OF NEW YORK, L.P.
By: Home Properties of New York, Inc.,
its general partner
By: /s/Xxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxx
Title: SVP and CFO
ACCEPTED as of the date first above written:
XXXXXXX XXXXX XXXXXX INC.
By: /s/Xxxxxxx Xxxxxxxx
----------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Managing Director
23
SCHEDULE A
----------
SUBSIDIARIES
Home Properties of New York, L.P. New York limited partnership 1% owned
by Home Properties of New York, Inc.
("HME"); 62% owned by Home Properties
Trust
Home Properties Trust Maryland real estate trust 100% owned
by HME
Home Properties Management, Inc. Maryland Corp. Home Properties of New
York, L.P. ("OP") owns the non-voting
shares (95% of total shares)/Xxxxxx
and Xxxxxx Xxxxxxxxx own the voting
shares (5% of total shares)
Home Properties Resident Services, Inc. Maryland Corp. OP owns the non-voting
shares (99% of total shares)/Xxxxxx
Xxxxxxxxx and Xxxxxx Xxxxxxxxx own the
voting shares (1% of total shares)
NOTE: The operations of Home Properties Management, Inc. and Home Properties
Resident Services, Inc. are not consolidated with those of the Company.
Home Properties Blackhawk, L.P. New York
Valley Park South Partnership New York
HME/Fairways at Village Green New York
P-K Partnership Pennsylvania
Xxxxxx Xxxx Associates New York
Home Properties/Fairways at Village Green New York
Home Properties Canterbury No. 1 Limited Partnership Maryland
Home Properties Canterbury No. 2 Limited Partnership Maryland
Home Properties Canterbury No. 3 Limited Partnership Maryland
Home Properties Gateway Village Limited Partnership Maryland
Home Properties of Newark Limited Partnership Maryland
Home Properties Xxxxxx Run Limited Partnership Maryland
Home Properties Xxxxxx Run 2 Limited Partnership Maryland
Home Properties Shakespeare Park Limited Partnership Maryland
Home Properties/Olde Mill New York
Home Properties Southern Xxxxxxx, Inc. New York
Perinton Development Corp. New York
LIMITED LIABILITY COMPANIES:
Carriage Hill Venture, LLC Michigan
Carriage Park Associates, LLC Michigan
Century Investors, LLC New York
Cherry Hill Village Venture, LLC Michigan
The Colony of Home Properties, LLC New York
Curren Terrace, LLC New York
Deerfield Xxxxx Home Properties LLC Michigan
Home Properties Bayberry Place, LLC New York
Home Properties Xxxxxx Xxxxx LLC Maryland
Home Properties Broadlawn, LLC New York
Home Properties Canterbury No. 4, LLC Maryland
Home Properties Carriage Hill, LLC Virginia
Home Properties Carriage House LLC Maryland
Home Properties Castle Club, LLC New York
Home Properties Colonies, LLC New York
Home Properties Country Village LLC Maryland
Home Properties Courtyard Village, LLC New York
Home Properties Cypress Place LLC New York
Home Properties of Devon, LLC New York
Home Properties Elmwood Terrace, LLC Maryland
Home Properties Falcon Crest Townhouses, LLC Maryland
Home Properties Golf Club, LLC New York
Home Properties Hampton Court, LLC New York
Home Properties Hauppauge, LLC New York
Home Properties Lake Grove, LLC New York
Home Properties Manor, LLC New York
Home Properties Mansion House, LLC New York
Home Properties Maple Lane I, LLC New York
Home Properties Maple Lane II, LLC New York
Home Properties Maryland, LLC Maryland
Home Properties Maryland II, LLC Maryland
Home Properties Maryland III, LLC Maryland
Home Properties Maryland IV, LLC Maryland
Home Properties Xxxxxxx, LLC New York
Home Properties Michigan Management, LLC Michigan
Home Properties Morningside Heights LLC Maryland
Home Properties Morningside North, LLC Maryland
Home Properties Morningside Six, LLC Maryland
Home Properties Orleans Village, LLC New York
Home Properties Parkview Gardens, LLC New York
Home Properties Pavilion, LLC Maryland
Home Properties Pines of Perinton, LLC New York
Home Properties Racquet Club East, LLC New York
Home Properties Rolling Park, LLC Maryland
Home Properties Sandalwood, LLC New York
Home Properties Seminary Hills, LLC Virginia
Home Properties Seminary Towers, LLC Virginia
Home Properties Selford Townhouses, LLC Maryland
Home Properties Sherwood Gardens, LLC New York
Home Properties South Bay Manor, LLC New York
Home Properties Southern Xxxxxxx, LLC New York
Home Properties Tamarron, LLC Maryland
Home Properties Timbercroft I, LLC Maryland
Home Properties Timbercroft III, LLC Maryland
25
Home Properties Xxxxxxx Park, LLC New York
Home Properties Virginia Village, LLC New York
Home Properties Wellington, LLC New York
Home Properties Xxxxxxx Xxxxx, LLC New York
Home Properties Xxxxxxx Xxxxx XX, LLC New York
Home Properties Xxxxxxx Xxxxx III, LLC New York
Home Properties WMF I, LLC New York
Home Properties Woodholme Manor, LLC New York
Macomb Apartments Home Properties, LLC Michigan
Royal Gardens Associates, LLC New York
Woodgate Place Associates, LLC New York
26
SCHEDULE B
----------
Home Properties Management, Inc. Xxxxxx and Xxxxxx Xxxxxxxxx each own
five voting shares (or 2.5% each).
Home Properties Resident Services, Inc. Xxxxxx Xxxxxxxxx and Xxxxxx Xxxxxxxxx
each own 24 voting shares (or 0.5%
each).
27
SCHEDULE C
-----------
Raintree Island Apartments Buffalo, New York
28
SCHEDULE D
----------
Northgate Manor, Rochester, New York 000 Xxxxx
Xxxxxxxxxx Xxxxx, Xxxxxxxx, Xxx Xxxx 000 Xxxxx
Xxxxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxx 448 Units
Westminster, Syracuse, New York 000 Xxxxx
Xxxxxxx Xxxxxx, Xxxxxxx, Xxx Xxxx 00 Xxxxx
Xxxxxxxx Xxxx xx Xxxxxxxx, Xxxxxxx, Xxx Xxxx 324 Units
0000 Xxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx 000 Xxxxx
Xxxxxxxx Xxxxx, Xxxxxxxxx, Xxx Xxxx 120 Units
29
