1
Draft of 10/29/96
MERIDIAN INDUSTRIAL TRUST, INC.
3,000,000 Shares*
Common Stock
UNDERWRITING AGREEMENT
November ___, 1996
PRUDENTIAL SECURITIES INCORPORATED
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ SECURITIES CORPORATION
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & COMPANY LLC
As Representatives of the several Underwriters
c/o Prudential Securities Incorporated
▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
Meridian Industrial Trust, Inc., a Maryland corporation qualified as a
real estate investment trust (the "Company"), hereby confirms its agreement with
the several underwriters named in Schedule 1 hereto (the "Underwriters"), for
whom you have been duly authorized to act as representatives (in such
capacities, the "Representatives"), as set forth below. If you are the only
Underwriters, all references herein to the Representatives shall be deemed to be
to the Underwriters.
1. Securities. Subject to the terms and conditions herein contained,
the Company proposes to issue and sell to the several Underwriters an aggregate
of 3,000,000 shares (the "Firm Securities") of the Company's Common Stock, par
value $.001 per share (the "Common Stock"). The Company also proposes to issue
and sell to the several Underwriters not more than 450,000 additional shares of
Common Stock if requested by the Representatives as provided in Section 3 of
this Agreement. Any and all shares of Common Stock to be purchased by the
Underwriters pursuant to such option are referred to herein as
--------
* Plus an option to purchase from Meridian Industrial Trust, Inc. up to
450,000 additional shares to cover over-allotments.
2
the "Option Securities", and the Firm Securities and any Option Securities are
collectively referred to herein as the "Securities".
2. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, each of the several Underwriters
that:
(a) A registration statement on Form S-11 (File No. 333-14987) with
respect to the Securities, including a prospectus subject to completion, has
been filed by the Company with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"), and one
or more amendments to such registration statement may have been so filed. After
the execution of this Agreement, the Company will file with the Commission
either (i) if such registration statement, as it may have been amended, has been
declared by the Commission to be effective under the Act, either (A) if the
Company relies on Rule 434 under the Act, a Term Sheet (as hereinafter defined)
relating to the Securities, that shall identify the Preliminary Prospectus (as
hereinafter defined) that it supplements containing such information as is
required or permitted by Rules 434, 430A and 424(b) under the Act or (B) if the
Company does not rely on Rule 434 under the Act, a prospectus in the form most
recently included in an amendment to such registration statement (or, if no such
amendment shall have been filed, in such registration statement), with such
changes or insertions as are required by Rule 430A under the Act or permitted by
Rule 424(b) under the Act, and in the case of either clause (i)(a) or (i)(b) of
this sentence, as have been provided to and approved by the Representatives
prior to the execution of this Agreement, or (ii) if such registration
statement, as it may have been amended, has not been declared by the Commission
to be effective under the Act, an amendment to such registration statement,
including a form of prospectus, a copy of which amendment has been furnished to
and approved by the Representatives prior to the execution of this Agreement.
The Company may also file a related registration statement with the Commission
pursuant to Rule 462(b) under the Act for the purpose of registering certain
additional Securities, which registration shall be effective upon filing with
the Commission. As used in this Agreement, the term "Original Registration
Statement" means the registration statement initially filed relating to the
Securities, as amended at the time when it was or is declared effective,
including all financial schedules and exhibits thereto and including any
information omitted therefrom pursuant to Rule 430A under the Act and included
in the Prospectus (as hereinafter defined); the term "Rule 462(b) Registration
Statement" means any registration statement filed with the Commission pursuant
to Rule 462(b) under the Act (including the Registration Statement and any
Preliminary Prospectus or Prospectus incorporated therein at the time such
Registration Statement becomes effective); the term "Registration
2
3
Statement" includes both the Original Registration Statement and any Rule 462(b)
Registration Statement; the term "Preliminary Prospectus" means each prospectus
subject to completion filed with such registration statement or any amendment
thereto (including the prospectus subject to completion, if any, included in the
Registration Statement or any amendment thereto at the time it was or is
declared effective); the term "Prospectus" means: (A) if the Company relies on
Rule 434 under the Act, the Term Sheet relating to the Securities that is first
filed pursuant to Rule 424(b)(7) under the Act, together with the Preliminary
Prospectus identified therein that such Term Sheet supplements; (B) if the
Company does not rely on Rule 434 under the Act, the prospectus first filed with
the Commission pursuant to Rule 424(b) under the Act; or (C) if the Company does
not rely on Rule 434 under the Act and if no prospectus is required to be filed
pursuant to Rule 424(b) under the Act, the prospectus included in the
Registration Statement; and the term "Term Sheet" means any term sheet that
satisfies the requirements of Rule 434 under the Act. Any reference herein to
the "date" of a Prospectus that includes a Term Sheet shall mean the date of
such Term Sheet.
(b) The Commission has not issued any order preventing or suspending
the use of any Preliminary Prospectus. When any Preliminary Prospectus was filed
with the Commission it (i) contained all statements required to be stated
therein in accordance with, and complied in all material respects with the
requirements of, the Act and the rules and regulations of the Commission
thereunder and (ii) did not include any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. When the Registration Statement or any amendment thereto was or is
declared effective, it (i) contained or will contain all statements required to
be stated therein in accordance with, and complied or will comply in all
material respects with the requirements of, the Act and the rules and
regulations of the Commission thereunder and (ii) did not or will not include
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading. When the Prospectus or
any Term Sheet that is a part thereof, or any amendment or supplement to the
Prospectus is filed with the Commission pursuant to Rule 424(b) (or, if the
Prospectus or part thereof, or such amendment or supplement is not required to
be so filed, when the Registration Statement or the amendment thereto containing
such amendment or supplement to the Prospectus was or is declared effective) and
on the Firm Closing Date and any Option Closing Date (both as hereinafter
defined), the Prospectus, as amended or supplemented at any such time, (i)
contained or will contain all statements required to be stated therein in
accordance with, and complied or will comply in all material respects with the
requirements of, the Act and the rules
3
4
and regulations of the Commission thereunder and (ii) did not or will not
include any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The foregoing
provisions of this paragraph (b) do not apply to statements or omissions made in
any Preliminary Prospectus, the Registration Statement or any amendment thereto
or the Prospectus or any amendment or supplement thereto in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
through the Representatives specifically for use therein.
(c) If the Company has elected to rely on Rule 462(b) under the Act and
the Rule 462(b) Registration Statement has not been declared effective (i) the
Company has filed a Rule 462(b) Registration Statement in compliance with and
that is effective upon filing pursuant to Rule 462(b) and has received
confirmation of its receipt and (ii) the Company has given irrevocable
instructions for transmission of the applicable filing fee in connection with
the filing of the Rule 462(b) Registration Statement, in compliance with Rule
111 promulgated under the Act or the Commission has received payment of such
filing fee.
(d) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Maryland and is duly
qualified to transact business and is in good standing under the laws of all
other jurisdictions where the ownership or leasing of its properties or the
conduct of its business requires such qualification, except where the failure to
be so qualified does not amount to a material liability or disability to the
Company and its subsidiaries, taken as a whole.
(e) Each of the subsidiaries of the Company listed in Schedule 2 hereto
(the "Subsidiaries") has been duly organized and is validly existing as a
general or limited partnership or corporation in good standing under the laws of
the jurisdiction of its organization, and is duly qualified to transact business
and is in good standing under the laws of all other jurisdictions where the
ownership or leasing of its properties or the conduct of its business requires
such qualification, except where the failure to be so qualified does not amount
to a material liability or disability to the Company and its subsidiaries, taken
as a whole. The issued shares of capital stock of each of the Subsidiaries that
is a corporation are duly authorized, validly issued, fully paid and
nonassessable, and all of the partnership interests in each Subsidiary that is a
partnership are validly issued and fully paid. Except as described in the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus), all of such shares and interests in the Subsidiaries
owned by the Company are owned beneficially by the Company or another Subsidiary
free and clear of any
4
5
security interests, mortgages, pledges, grants, liens, encumbrances, equities or
claims.
(f) The Company and each of its Subsidiaries have full power (corporate
or other) to own or lease their respective properties and conduct their
respective businesses as described in the Registration Statement and the
Prospectus or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus; and the Company has full power (corporate and other) to
enter into this Agreement and to carry out all the terms and provisions hereof
to be carried out by it.
(g) The Company has an authorized, issued and outstanding
capitalization as set forth in the Prospectus or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus. All of the issued shares of
capital stock of the Company have been duly authorized and validly issued and
are fully paid and nonassessable. The Firm Securities and the Option Securities
have been duly authorized and at the Firm Closing Date or the related Option
Closing Date (as the case may be), after payment therefor in accordance
herewith, will be validly issued, fully paid and nonassessable. No holders of
outstanding shares of capital stock of the Company are entitled as such to any
preemptive or other rights to subscribe for any of the Securities, and no holder
of securities of the Company has any right which has not been fully exercised or
waived to require the Company to register the offer or sale of any securities
owned by such holder under the Act in the public offering contemplated by this
Agreement.
(h) The capital stock of the Company conforms to the description
thereof contained in the Prospectus or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus.
(i) Except as disclosed in the Prospectus (or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus), there are no outstanding
(A) securities or obligations of the Company or any of its Subsidiaries
convertible into or exchangeable for any capital stock of the Company or any
such Subsidiary, (B) warrants, rights or options to subscribe for or purchase
from the Company or any such Subsidiary any such capital stock or any such
convertible or exchangeable securities or obligations, or (C) obligations of the
Company or any such Subsidiary to issue any shares of capital stock, any such
convertible or exchangeable securities or obligations, or any such warrants,
rights or options.
(j) The historical financial statements of the Company included in the
Registration Statement and the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus) fairly present the financial
position of the Company
5
6
and the results of operations and changes in financial condition as of the dates
and periods therein specified. The combined historical financial statements and
schedules of the Merged Trusts (as defined in the Registration Statement)
included in the Registration Statement and the Prospectus (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus) fairly present the
financial position of the Merged Trusts and the results of operations and
changes in financial condition as of the dates and periods therein specified.
The combined statements of revenue and certain expenses of the Trust 83
Properties (as defined in the Registration Statement) included in the
Registration Statement and the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus) fairly present the results of
operations for the periods therein specified. The combined statements of revenue
and certain expenses of the Three Acquired Properties (as defined in the
Registration Statement) included in the Registration Statement and the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) fairly present the results of operations for the periods
therein specified. Such financial statements and schedules have been prepared in
accordance with generally accepted accounting principles consistently applied
throughout the periods involved (except as otherwise noted therein). The
selected financial data set forth under the caption "Selected Financial Data" in
the Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) fairly present, on the basis stated in the Prospectus
(or such Preliminary Prospectus), the information included therein. Each of the
historical as adjusted and the pro forma financial statements (together, the
"Pro Forma Financial Statements") included in the Registration Statement and the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) complies in all material respects with the applicable
requirements of Rule 11-02 of Regulation S-X of the Commission. The pro forma
adjustments have been properly applied to the historical amounts in the
compilation of each of such Pro Forma Financial Statements and the assumptions
used in the preparation thereof are, in the opinion of the Company, reasonable.
No other financial statements (or schedules) of the Company, its Subsidiaries or
any predecessor of the Company are required to be included in the Registration
Statement or Prospectus.
(k) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, who have certified certain financial
statements of the Company, the Merged Trusts, the Trust 83 Properties and the
Three Acquired Properties and delivered their reports with respect to the
audited combined financial statements and schedules included in the Registration
Statement and the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus), are independent public accountants as
required by the Act and the applicable rules and regulations thereunder.
6
7
(l) The execution and delivery of this Agreement have been duly
authorized by the Company and this Agreement has been duly executed and
delivered by the Company, and is the valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms; except to the
extent that rights to contribution and indemnity hereunder may be limited by
federal or state securities laws or the public policy underlying such laws and
except for the effect of bankruptcy, insolvency, reorganization, moratorium and
other similar laws relating to or affecting creditors rights generally.
(m) No legal or governmental proceedings are pending to which the
Company or any of its Subsidiaries is a party or to which the property of the
Company or any of its Subsidiaries is subject that are required to be described
in the Registration Statement or the Prospectus and are not described therein
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus), and, to the knowledge of the Company, no such proceedings have been
threatened against the Company or any of its subsidiaries or with respect to any
of their respective properties; and no contract or other document is required to
be described in the Registration Statement or the Prospectus or to be filed as
an exhibit to the Registration Statement that is not described therein (or, if
the Prospectus is not in existence, the most recent Preliminary Prospectus) or
filed as required.
(n) The issuance, offering and sale of the Securities to the
Underwriters by the Company pursuant to this Agreement, the compliance by the
Company with the other provisions of this Agreement and the consummation of the
other transactions herein contemplated do not (i) require the consent, approval,
authorization, registration or qualification of or with any governmental
authority, except such as have been obtained, such as may be required under
state securities or blue sky laws and, if the registration statement filed with
respect to the Securities (as amended) is not effective under the Act as of the
time of execution hereof, such as may be required (and shall be obtained as
provided in this Agreement) under the Act, or (ii) conflict with or result in a
breach or violation of any of the terms and provisions of, or constitute a
default under, or result in the creation or imposition of any lien, charge or
encumbrance upon any of the properties owned by the Company or its Subsidiaries
(the "Properties") or any other properties or assets of the Company or any of
its Subsidiaries pursuant to any indenture, mortgage, deed of trust, lease or
other agreement or instrument to which the Company or any of its Subsidiaries is
a party or by which the Company or any of its Subsidiaries or any of their
respective properties are bound, or the charter documents or by-laws of the
Company or any of its Subsidiaries, or any statute or any judgment, decree,
order, rule or regulation of any court or other governmental authority or any
arbitrator applicable to the Company or any of its Subsidiaries or any of
7
8
the Properties or, to the knowledge of the Company and its Subsidiaries, any of
the properties proposed to be acquired or developed by the Company, as described
in the Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) under the heading "Recent Investments and Dispositions"
(the "Pending Acquisitions").
(o) Subsequent to the respective dates as of which information is given
in the Registration Statement and the Prospectus (or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus), neither the Company nor
any of its Subsidiaries has sustained any material loss or interference with
their respective businesses or properties from fire, flood, hurricane, accident
or other calamity, whether or not covered by insurance, or from any labor
dispute or any legal or governmental proceeding and there has not been any
material adverse change, or any development involving a prospective material
adverse change, in the condition (financial or otherwise), management, business
prospects, net worth, or results of operations of the Company and its
Subsidiaries, taken as a whole, except in each case as described in or
contemplated by the Prospectus or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus.
(p) Subsequent to the respective dates as of which information is given
in the Registration Statement and the Prospectus (or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus), (i) the Company and its
Subsidiaries have not incurred any material liability or obligation, direct or
contingent, nor entered into any material transaction not in the ordinary course
of business, (ii) the Company has not purchased any of its outstanding capital
stock, nor declared, paid or otherwise made any dividend or distribution of any
kind on its capital stock, and (iii) there has not been any material change in
the capital stock, short-term debt or long-term debt of the Company and its
consolidated subsidiaries, except in each case as described in or contemplated
by the Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(q) The Company has not, directly or indirectly, (i) taken any action
designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Securities or (ii) since the filing of the Registration Statement (A) sold, bid
for, purchased, or paid anyone any compensation for soliciting purchases of, the
Securities or (B) paid or agreed to pay to any person any compensation for
soliciting another to purchase any other securities of the Company.
8
9
(r) The Company and the Subsidiaries have good and marketable title in
fee simple to all of the Properties and marketable title to all other property
owned by each of them, in each case free and clear of any security interest,
lien, mortgage, pledge, encumbrance, equity, claim and other defect, except
liens pursuant to or otherwise permitted by the Mortgage Loan (as defined in the
Prospectus) and such as do not materially and adversely affect the value of such
property and will not interfere in any material respect with the use made or
proposed to be made of such property by the Company or such Subsidiary.
(s) No labor dispute with the employees of the Company or any of the
Subsidiaries exists or is threatened or imminent that could result in a material
adverse change in the condition (financial or otherwise), business prospects,
net worth or results of operations of the Company and its Subsidiaries, taken as
a whole, except as described in or contemplated by the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus).
(t) The Company and each of the Subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which they will be
engaged; neither the Company nor any of the Subsidiaries has been refused any
insurance coverage sought or applied for; and neither the Company nor any of the
Subsidiaries has any reason to believe that any of them will not be able to
renew its existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary to continue
its business at a cost that would not have material adverse effect on the
condition (financial or otherwise), business prospects, net worth or results of
operations of the Company and its Subsidiaries, taken as a whole, except as
described in or contemplated by the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).
(u) None of the Subsidiaries is currently prohibited, directly or
indirectly, from paying any dividends to the Company, from making any other
distribution on such subsidiary's capital stock or other equity interest, from
repaying to the Company any loans or advances to such Subsidiary from the
Company or from transferring any of such Subsidiary's property or assets to the
Company or any of the other Subsidiaries, except as described in or contemplated
by the Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(v) The Company and each of the Subsidiaries has complied with all
laws, regulations and orders applicable to it or its respective business and
properties except where the failure to so comply would not result in a material
adverse change in the condition (financial or otherwise), business prospectus,
net
9
10
worth or results of operations of the Company and its Subsidiaries, taken as a
whole; the Company and the Subsidiaries possess all certificates, authorizations
and permits issued by the appropriate federal, state, municipal or foreign
regulatory authorities necessary to conduct their respective businesses except
where the failure to possess the same would not result in a material adverse
change in the condition (financial or otherwise), business prospects, net worth
or results of operations of the Company and its Subsidiaries, taken as a whole;
and neither the Company nor any of the Subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such certificate,
authorization or permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a material adverse
change in the condition (financial or otherwise), business prospects, net worth
or results of operations of the Company and its Subsidiaries, taken as a whole,
except as described in or contemplated by the Prospectus (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus).
(w) The Company will conduct its operations in a manner that will not
subject it to registration as an investment company under the Investment Company
Act of 1940, as amended, and the transactions contemplated by this Agreement
will not cause the Company to become an investment company subject to
registration under such Act.
(x) The Company and each of the Subsidiaries has filed all federal,
state and local tax returns that are required to be filed or have requested
extensions thereof (except in any case in which the failure so to file would not
have a material adverse effect on the condition (financial or otherwise),
business prospects, net worth or results of operations of the Company and its
Subsidiaries, taken as a whole) and has paid all taxes required to be paid by it
and any other assessment, fine or penalty levied against it, to the extent that
any of the foregoing is due and payable, except for any such assessment, fine or
penalty that is currently being contested in good faith or as described in or
contemplated by the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary prospectus). Commencing with the Company's taxable year
ended December 31, 1995, the Company has been organized in conformity with the
requirements for qualification as a real estate investment trust (a "REIT")
under the Internal Revenue Code of 1986, as amended (the "Code"), has had no
earnings and profits accumulated in a non-REIT year within the meaning of
Section 857(a)(3)(B) of the Code and its present and contemplated method of
operation does and will enable it to meet the requirements for taxation as a
REIT under the Code.
10
11
(y) Neither the Company nor any of the Subsidiaries is in violation of
any federal or state law or regulation relating to occupational safety and
health and the Company and the Subsidiaries have received all permits, licenses
or other approvals required of them under applicable federal and state
occupational safety and health and environmental laws and regulations to conduct
their respective businesses, and the Company and each of the Subsidiaries is in
compliance with all terms and conditions of any such permit, license or
approval, except any such violation of law or regulation, failure to receive
required permits, licenses or other approvals or failure to comply with the
terms and conditions of such permits, licenses or approvals which would not,
singly or in the aggregate, result in a material adverse change in the condition
(financial or otherwise), business prospects, net worth or results of operations
of the Company and its Subsidiaries, taken as a whole, except as described in or
contemplated by the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus).
(z) Except for the shares of capital stock of each of the Subsidiaries
owned by the Company or another Subsidiary and except for other shares of stock
or other equity securities owned by the Company or a Subsidiary the aggregate
value of which does not exceed $100,000, neither the Company nor any of the
Subsidiaries owns any shares of stock or any other equity securities of any
corporation or has any equity interest in any firm, partnership, association or
other entity, except as described in or contemplated by the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary Prospectus).
(aa) The Company and the Subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(ab) Neither the Company nor any of the Subsidiaries is in violation of
any term or provision of its articles of incorporation, bylaws, partnership
agreements or other organizational documents, as the case may be; no default
exists, and no event has occurred which, with notice or lapse of time or both,
would constitute a default in the due performance and observance of any term,
covenant or condition of any indenture,
11
12
mortgage, deed of trust, lease or other agreement or instrument to which the
Company or any Subsidiary is a party or by which the Company, the Subsidiaries
or the Properties or any of their respective other properties or, to the
knowledge of the Company and its Subsidiaries, the Pending Acquisitions is bound
or may be affected in any material adverse respect with regard to the property,
business or operations of the Company and its Subsidiaries.
(ac) The Company has not distributed and, prior to the later of (i) the
Closing Date and (ii) the completion of the distribution of the Securities, will
not distribute any offering material in connection with the offering and sale of
the Securities other than the Registration Statement or any amendment thereto,
any Preliminary Prospectus or the Prospectus or any amendment or supplement
thereto, or other materials, if any, permitted by the Act.
(ad) The Securities have been approved for listing on the New York
Stock Exchange, subject to official notice of issuance.
(ae) Except as described in or contemplated by the Prospectus (or if
the Prospectus is not in existence, the most recent Preliminary Prospectus), (A)
Neither the Company nor any Subsidiary knows of any violation of any municipal,
state or federal law, rule or regulation (including those pertaining to
environmental matters) concerning the Properties or the Pending Acquisitions or
any part thereof which would have a material adverse effect in the condition
(financial or otherwise), business prospects, net worth or results of operations
of the Company and its Subsidiaries, taken as a whole; (B) each of the
Properties and, to the knowledge of the Company and its Subsidiaries, the
Pending Acquisitions complies with all applicable zoning laws, ordinances,
regulations and deed restrictions or other covenants in all material respects
and, if and to the extent there is a failure to comply, such failure does not
materially impair the value of any of the Properties or the Pending Acquisitions
and will not result in a forfeiture or reversion of title; (C) neither the
Company nor any Subsidiary has received from any governmental authority any
written notice of any condemnation of or zoning change affecting the Properties
or the Pending Acquisitions or any part thereof, and neither the Company nor any
Subsidiary knows of any such condemnation or zoning change which is threatened
and which if consummated would have a material adverse effect on the condition
(financial or otherwise), business prospects, net worth or results of operations
of the company and its Subsidiaries, taken as a whole; (D) all liens, charges,
encumbrances, claims, or restrictions on or affecting the properties and assets
(including the Properties and, to the knowledge of the Company and its
Subsidiaries, the Pending Acquisitions) of the Company or any of the
Subsidiaries that are required to be disclosed in the Prospectus (or, if the
12
13
Prospectus is not in existence, the most recent Preliminary Prospectus) are
disclosed therein; (E) no lessee of any portion of any of the Properties or, to
the knowledge of the Company and its Subsidiaries, the Pending Acquisitions, is
in default under any of the leases governing such properties and there is no
event which, but for the passage of time or the giving of notice or both would
constitute a default under any of such leases, except such defaults that would
not have a material adverse effect in the condition (financial or otherwise),
business prospects, net worth or results of operations of the Company and its
Subsidiaries, taken as a whole; and (F) except as provided by law, no tenant
under any lease pursuant to which the Company or any of the Subsidiaries leases
the Properties or, to the knowledge of the Company and its Subsidiaries, will
lease the Pending Acquisitions, has or will have an option or right of first
refusal to purchase the premises leased thereunder or the building of which such
premises are a part.
(af) Except as otherwise disclosed in the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus), (i)
neither the Company, any of the Subsidiaries nor, to the knowledge of the
Company, any other owners of the property at any time or any other party has at
any time, handled, stored, treated, transported, manufactured, spilled, leaked,
or discharged, dumped, transferred or otherwise disposed of or dealt with,
Hazardous Materials (as hereinafter defined) on, to or from the Properties or
the Pending Acquisitions, other than by any such action taken in compliance with
all applicable Environmental Statutes (as hereinafter defined) or by the
Company, any of the Subsidiaries or any other party in connection with the
ordinary use of residential, retail or commercial properties owned by the
Company; (ii) the Company does not intend to use the Properties or the Pending
Acquisitions or any subsequently acquired properties for the purpose of
handling, storing, treating, transporting, manufacturing, spilling, leaking,
discharging, dumping, transferring or otherwise disposing of or dealing with
Hazardous Materials; (iii) neither the Company nor any of the Subsidiaries knows
of any seepage, leak, discharge, release, emission, spill, or dumping of
Hazardous Materials into waters on or adjacent to the Properties or the Pending
Acquisitions or any other real property owned or occupied by any such party, or
onto lands from which Hazardous Materials might seep, flow or drain into such
waters; (iv) neither the Company nor any of the Subsidiaries has received any
notice of, or has any knowledge of any occurrence or circumstance which, with
notice or passage of time or both, would give rise to a claim under or pursuant
to any federal, state or local environmental statute or regulation or under
common law, pertaining to Hazardous Materials on or originating from any of the
Properties or the Pending Acquisitions or any assets described in the Prospectus
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus) or any other real property owned or occupied by any
13
14
such party or arising out of the conduct of any such party, including without
limitation a claim under or pursuant to any Environmental Statute (hereinafter
defined); (v) neither the Properties nor the Pending Acquisitions nor any other
land owned by the Company or any of the Subsidiaries is included or, to the best
of the Company's knowledge, proposed for inclusion on the National Priorities
List issued pursuant to CERCLA (as hereinafter defined) by the United States
Environmental Protection Agency (the "EPA") or, to the best of the Company's
knowledge, proposed for inclusion on any similar list or inventory issued
pursuant to any other Environmental Statute or issued by any other Governmental
Authority (as hereinafter defined).
As used herein, "Hazardous Material" shall include, without limitation
any flammable explosives, radioactive materials, hazardous materials, hazardous
wastes, toxic substances, or related materials, asbestos or any hazardous
material as defined by any federal, state or local environmental law, ordinance,
rule or regulation including without limitation the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C.
Sections 9601-9675 ("CERCLA"), the Hazardous Materials Transportation Act, as
amended, 49 U.S.C. Sections 1801-1819, the Resource Conservation and Recovery
Act, as amended, 42 U.S.C. Sections 6901-6992K, the Emergency Planning and
Community Right-to-Know Act of 1986, 42 U.S.C. Sections 11001-11050, the Toxic
Substances Control Act, 15 U.S.C. Sections 2601-2671, the Federal Insecticide,
Fungicide and Rodenticide Act, 7 U.S.C. Sections 136-136y, the Clear Air Act, 42
U.S.C. Sections 7401-7642, the Clean Water Act (Federal Water Pollution Control
Act), 33 U.S.C. Sections 1251-1387, the Safe Drinking Water Act, 42 U.S.C.
Sections 300f-300j-26, and the Occupational Safety and Health Act, 29 U.S.C.
Sections 651-678, as any of the above statutes may be amended from time to time,
and in the regulations promulgated pursuant to each of the foregoing
(individually, an "Environmental Statute") or by any federal, state or local
governmental authority having or claiming jurisdiction over the properties and
assets described in the Prospectus (a "Governmental Authority").
(ag) The agreements pursuant to which the Company has contracted to
acquire or develop [the Crowfarn Drive Property, the Mission Oaks Boulevard
Property, the ▇▇▇▇▇▇ Avenue Property, the ▇▇▇▇▇▇▇▇▇ Avenue Property, the Water's
Ridge Drive Property, the ▇▇▇▇▇ ▇▇▇▇ Parkway Property and the Boulder Avenue
Property] (each as described in the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus) under the heading "Recent
Investments and Dispositions") have been duly and validly authorized, executed
and delivered by the Company and are valid and binding agreements of the
Company, enforceable in accordance with their terms, except as enforceability
may be limited by bankruptcy, insolvency, reorganization or other
14
15
similar laws relating to or affecting creditor's rights generally and by general
principles of equity.
(ah) The Company has complied and will comply with all the provisions
of Florida H.B. 1771, codified as Section 517.075 of the Florida Statutes, as
contemplated by the regulations promulgated thereunder relating to issuers doing
business with Cuba.
(ai) Each certificate signed by any officer of the Company and
delivered to the Representatives or counsel for the Underwriters shall be deemed
to be a representation and warranty by the Company to each Underwriter as to the
matters covered thereby.
3. Purchase, Sale and Delivery of the Securities. (a) On the basis of
the representations, warranties, agreements and covenants herein contained and
subject to the terms and conditions herein set forth, the Company agrees to
issue and sell to each of the Underwriters, and each of the Underwriters,
severally and not jointly, agrees to purchase from the Company, at a purchase
price of $_________ per share, the number of Firm Securities set forth opposite
the name of such Underwriter in Schedule 1 hereto. One or more certificates in
definitive form for the Firm Securities that the several Underwriters have
agreed to purchase hereunder, and in such denomination or denominations and
registered in such name or names as the Representatives request upon notice to
the Company at least 48 hours prior to the Firm Closing Date, shall be delivered
by or on behalf of the Company to the Representatives for the respective
accounts of the Underwriters, against payment by or on behalf of the
Underwriters of the purchase price therefor by wire transfer of Federal or
similar same day funds (the "wired funds") to an account or accounts designated
by the Company. Such delivery of the Firm Securities shall be made at the
offices of ▇▇▇▇▇ & ▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ at
9:30 A.M., New York time, on November __, 1996 or at such other place, time or
date as the Representatives and the Company may agree upon or as the
Representatives may determine pursuant to Section 9 hereof, such time and date
of delivery against payment being herein referred to as the "Firm Closing Date".
The Company will make such certificate or certificates for the Firm Securities
available for checking and packaging by the Representatives at the offices in
New York, New York of the Company's transfer agent or registrar or of Prudential
Securities Incorporated at least 24 hours prior to the Firm Closing Date.
(b) The Company hereby acknowledges that the wire transfer by or on
behalf of the Underwriters of the purchase price for any Securities does not
constitute closing of a purchase and sale of the Securities. Only execution and
delivery of a receipt for Securities by the Underwriters indicates completion of
the
15
16
closing of a purchase of the Securities from the Company. Furthermore, in the
event that the Underwriters wire funds to the Company prior to the completion of
the closing of a purchase of Securities, the Company hereby acknowledges that
until the Underwriters execute and deliver a receipt for the Securities, by
facsimile or otherwise, the Company will not be entitled to the wired funds and
shall return the wired funds to the Underwriters as soon as practicable (by wire
transfer of same-day funds) upon demand. In the event that the closing of a
purchase of Securities is not completed and the wired funds are not returned by
the Company to the Underwriters on the same day the wired funds were received by
the Company, the Company agrees to pay to the Underwriters in respect of each
day the wired funds are not returned by it, in same-day funds, interest on the
amount of such wired funds in an amount representing the Underwriters' cost of
financing as reasonably determined by Prudential Securities Incorporated.
(c) For the purpose of covering any over-allotments in connection with
the distribution and sale of the Firm Securities as contemplated by the
Prospectus, the Company hereby grants to the several Underwriters an option to
purchase, severally and not jointly, the Option Securities. The purchase price
to be paid for any Option Securities shall be the same price per share as the
price per share for the Firm Securities set forth above in paragraph (a) of this
Section 3, plus, if the purchase and sale of any Option Securities takes place
after the Firm Closing Date and after the Firm Securities are trading
"ex-dividend", an amount equal to the dividends payable on such Option
Securities. The option granted hereby may be exercised as to all or any part of
the Option Securities from time to time within thirty days after the date of the
Prospectus (or, if such 30th day shall be a Saturday or Sunday or a holiday, on
the next business day thereafter when the New York Stock Exchange is open for
trading). The Underwriters shall not be under any obligation to purchase any of
the Option Securities prior to the exercise of such option. The Representatives
may from time to time exercise the option granted hereby by giving notice in
writing or by telephone (confirmed in writing) to the Company setting forth the
aggregate number of Option Securities as to which the several Underwriters are
then exercising the option and the date and time for delivery of and payment for
such Option Securities. Any such date of delivery shall be determined by the
Representatives but shall not be earlier than two business days or later than
three business days after such exercise of the option and, in any event, shall
not be earlier than the Firm Closing Date. The time and date set forth in such
notice, or such other time on such other date as the Representatives and the
Company may agree upon or as the Representatives may determine pursuant to
Section 9 hereof, is herein called the "Option Closing Date". With respect to
such Options Securities. Upon exercise of the option as provided herein, the
Company shall become obligated to sell to each of the
16
17
several Underwriters, and, subject to the terms and conditions herein set forth,
each of the Underwriters (severally and not jointly) shall become obligated to
purchase from the Company, the same percentage of the total number of the Option
Securities as to which the several Underwriters are then exercising the option
as such Underwriter is obligated to purchase of the aggregate number of Firm
Securities, as adjusted by the Representatives in such manner as they deem
advisable to avoid fractional shares. If the option is exercised as to al or any
portion of the Option Securities, one or more certificates in definitive form
for such Option Securities, and payment therefor, shall be delivered on the
related Option Closing Date in the manner, and upon the terms and conditions,
set forth in paragraph (a) of this Section 3, except that reference therein to
the Firm Securities and the Firm Closing Date shall be deemed, for purposes of
this paragraph (b), to refer to such Option Securities and Option Closing Date,
respectively.
(d) It is understood that either of you, individually and not as one of
the Representatives, may (but shall not be obligated to) make payment on behalf
of any Underwriter or Underwriters for any of the Securities to be purchased by
such Underwriter or Underwriters. No such payment shall relieve such Underwriter
or Underwriters from any of its or their obligations hereunder.
4. Offering by the Underwriters. Upon your authorization of the release
of the Firm Securities, the several Underwriters propose to offer the Firm
Securities for sale to the public upon the terms set forth in the Prospectus.
5. Covenants of the Company. The Company covenants and agrees with each
of the Underwriters that:
(a) The Company will use its best efforts to cause the Registration
Statement, if not effective at the time of execution of this Agreement, and any
amendments thereto to become effective as promptly as possible. If required, the
Company will file the Prospectus or any Term Sheet that constitutes a part
thereof and any amendment or supplement thereto with the Commission in the
manner and within the time period required by Rules 434 and 424(b) under the
Act. During any time when a prospectus relating to the Securities is required to
be delivered under the Act, the Company (i) will comply with all requirements
imposed upon it by the Act and the rules and regulations of the Commission
thereunder to the extent necessary to permit the continuance of sales of or
dealings in the Securities in accordance with the provisions hereof and of the
Prospectus, as then amended or supplemented, and (ii) will not file with the
Commission the Prospectus, Term Sheet or the amendment referred to in the second
sentence of Section 2(a) hereof, any amendment or supplement to such Prospectus,
Term Sheet or any amendment to the Registration
17
18
Statement or any Rule 462(b) Registration Statement of which the Representatives
shall not previously have been advised and furnished with a copy for a
reasonable period of time prior to the proposed filing and as to which filing
the Representatives shall not have given their consent. The Company will prepare
and file with the Commission, in accordance with the rules and regulations of
the Commission, promptly upon request by the Representatives or counsel for the
Underwriters, any amendments to the Registration Statement or amendments or
supplements to the Prospectus that may be necessary or advisable in connection
with the distribution of the Securities by the several Underwriters, and will
use its best efforts to cause any such amendment to the Registration Statement
to be declared effective by the Commission as promptly as possible. The Company
will advise the Representatives, promptly after receiving notice thereof, of the
time when the Registration Statement or any amendment thereto has been filed or
declared effective or the Prospectus or any amendment or supplement thereto has
been filed and will provide evidence satisfactory to the Representatives of each
such filing or effectiveness.
(b) The Company will advise the Representatives, promptly after
receiving notice or obtaining knowledge thereof, of (i) the issuance by the
Commission of any stop order suspending the effectiveness of the Original
Registration Statement or any Rule 462(b) Registration Statement or any
amendment thereto or any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or any amendment or supplement thereto,
(ii) the suspension of the qualification of the Securities for offering or sale
in any jurisdiction, (iii) the institution, threatening or contemplation of any
proceeding for any such purpose or (iv) any request made by the Commission for
amending the Original Registration Statement or any Rule 462(b) Registration
Statement, for amending or supplementing the Prospectus or for additional
information. The Company will use its best efforts to prevent the issuance of
any such stop order and, if any such stop order is issued, to obtain the
withdrawal thereof as promptly as possible.
(c) The Company will arrange for the qualification of the Securities
for offering and sale under the securities or blue sky laws of such
jurisdictions as the Representatives may designate and will continue such
qualifications in effect for as long as may be necessary to complete the
distribution of the Securities, provided, however, that in connection therewith
the Company shall not be required to qualify as a foreign corporation or to
execute a general consent to service of process in any jurisdiction.
(d) If, at any time prior to the later of (i) the final date when a
prospectus relating to the Securities is required to be delivered under the Act
or (ii) the Option Closing Date, any event occurs as a result of which the
Prospectus, as then amended
18
19
or supplemented, would include any untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading, or if
for any other reason it is necessary at any time to amend or supplement the
Prospectus to comply with the Act or the rules or regulations of the Commission
thereunder, the Company will promptly notify the Representatives thereof and,
subject to Section 5(a) hereof, will prepare and file with the Commission, at
the Company's expense, an amendment to the Registration Statement or an
amendment or supplement to the Prospectus that corrects such statement or
omission or effects such compliance.
(e) The Company will, without charge, provide (i) to the
Representatives and to counsel for the Underwriters a signed copy of the
registration statement originally filed with respect to the Securities and each
amendment thereto and any Rule 462(b) Registration Statement (in each case
including exhibits thereto), (ii) to each other Underwriter, a conformed copy of
such registration statement or Rule 462(b) Registration Statement and each
amendment thereto (in each case without exhibits thereto) and (iii) so long as a
prospectus relating to the Securities is required to be delivered under the Act,
as many copies of each Preliminary Prospectus or the Prospectus or any amendment
or supplement thereto as the Representatives may reasonably request; without
limiting the application of clause (iii) of this sentence, the Company, not
later than (A) 6:00 P.M., New York City time, on the date of determination of
the public offering price, if such determination occurred at or prior to 10:00
A.M., New York City time, on such date or (B) 12:00 Noon, New York City time, on
the business day following the date of determination of the public offering
price, if such determination occurred after 10:00 A.M., New York City time, on
such date, will deliver to the Underwriters, without charge, as many copies of
the Prospectus and any amendment or supplement thereto as the Representatives
may reasonably request for purposes of confirming orders that are expected to
settle on the Firm Closing Date.
(f) If the Company elects to rely on Rule 462(b) under the Act, the
Company shall both file a Rule 462(b) Registration Statement with the Commission
in compliance with Rule 462(b) under the Act and pay the applicable fees in
accordance with Rule 111 promulgated under the Act by the earlier of (i) 10:00
P.M. Eastern time on the date of this Agreement and (ii) the time confirmations
are sent or given, as specified by Rule 462(b)(2) under the Act.
(g) The Company, as soon as practicable, will make generally available
to its security holders and to the Representatives a consolidated earnings
statement of the Company and its subsidiaries that satisfies the provisions of
Section 11 (a) of the Act and Rule 158 thereunder.
19
20
(h) The Company will apply the net proceeds from the sale of the
Securities as set forth under "Use of Proceeds" in the Prospectus.
(i) The Company will not, directly or indirectly, without the prior
written consent of Prudential Securities Incorporated, on behalf of the
Underwriters, offer, sell, offer to sell, contract to sell, pledge, grant any
option to purchase or otherwise dispose or transfer (or announce any offer,
sale, offer of sale, contract of sale, pledge, grant of any option to purchase
or other disposition or transfer) of any shares of Common Stock or any
securities convertible into, or exchangeable or exercisable for, shares of
Common Stock for a period of 90 days after the date hereof, except pursuant to
this Agreement other than (a) any options or other securities issued pursuant to
the Company's Amended and Restated Employee and Director Stock Plan or any
similar plan adopted by the board of directors of the Company, (b) any
securities issued upon the exercise of any existing options or warrants, (c) any
securities issued upon the conversion of any outstanding securities of the
Company, (d) the private placement of Series B Preferred Stock (as defined and
described in the Prospectus) in an aggregate amount not to exceed $30 million,
and (e) any shares of Common Stock issuable upon the exercise of that certain
Option Agreement by and between the Company and USAA Real Estate Company dated
as of November 21, 1995.
(j) The Company will not, directly or indirectly, (i) take any action
designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Securities or (ii) (A) sell, bid for, purchase, or pay anyone any compensation
for soliciting purchases of, the Securities or (B) pay or agree to pay to any
person any compensation for soliciting another to purchase any other securities
of the Company.
(k) The Company will obtain the agreements described in Section 7(g)
hereof prior to the Firm Closing Date.
(l) If at any time during the 25-day period after the Registration
Statement becomes effective or the period prior to the Option Closing Date, any
rumor, publication or event relating to or affecting the Company shall occur as
a result of which the market price of the Common Stock has been or in the
Company's opinion is likely to be materially affected (regardless of whether
such rumor, publication or event necessitates a supplement to or amendment of
the Prospectus), the Company will consult with you concerning the substance of
and the advisability of disseminating a press release or other public statement
responding to or commenting on such rumor, publication or event.
20
21
(m) The Company will cause the Securities to be duly listed on the New
York Stock Exchange.
(n) The Company will continue to use its best efforts to meet the
requirements to qualify as a REIT under the Code.
6. Expenses. The Company will pay all costs and expenses incident to
the performance of its obligations under this Agreement, whether or not the
transactions contemplated herein are consummated or this Agreement is terminated
pursuant to Section 11 hereof, including all costs and expenses incident to (i)
the printing or other production of documents with respect to the transactions,
including any costs of printing the registration statement originally filed with
respect to the Securities and any amendment thereto, any Rule 462(b)
Registration Statement, any Preliminary Prospectus and the Prospectus and any
amendment or supplement thereto, this Agreement and any blue sky memoranda, (ii)
all arrangements relating to the delivery to the Underwriters of copies of the
foregoing documents, (iii) the fees and disbursements of the counsel, the
accountants and any other experts or advisors retained by the Company, (iv)
preparation, issuance and delivery to the Underwriters of any certificates
evidencing the Securities, including transfer agent's and registrar's fees, (v)
the qualification of the Securities under state securities and blue sky laws,
including filing fees and fees and disbursements of counsel for the Underwriters
relating thereto, (vi) the filing fees of the Commission and the National
Association of Securities Dealers, Inc. relating to the Securities, (vii) any
listing of the Securities on the New York Stock Exchange, (viii) any meetings
with prospective investors in the Securities (other than as shall have been
specifically approved by the Representatives to be paid for by the Underwriters)
and (ix) advertising relating to the offering of the Securities (other than as
shall have been specifically approved by the Representatives to be paid for by
the Underwriters). If the sale of the Securities provided for herein is not
consummated because any condition to the obligations of the Underwriters set
forth in Section 7 hereof is not satisfied, because this Agreement is terminated
pursuant to Section 11 hereof or because of any failure, refusal or inability on
the part of the Company to perform all obligations and satisfy all conditions on
its part to be performed or satisfied hereunder other than by reason of a
default by any of the Underwriters, the Company will reimburse the Underwriters
severally upon demand for all out-of-pocket expenses (including counsel fees and
disbursements) that shall have been incurred by them in connection with the
proposed purchase and sale of the Securities. The Company shall not in any event
be liable to any of the Underwriters for the loss of anticipated profits from
the transactions covered by this Agreement.
21
22
7. Conditions of the Underwriters' Obligations. The obligations of the
several Underwriters to purchase and pay for the Firm Securities shall be
subject, in the Representatives' sole discretion, to the accuracy of the
representations and warranties of the Company contained herein as of the date
hereof and as of the Firm Closing Date, as if made on and as of the Firm Closing
Date, to the accuracy of the statements of the Company's officers made pursuant
to the provisions hereof, to the performance by the Company of its covenants and
agreements hereunder and to the following additional conditions:
(a) If the Original Registration Statement or any amendment thereto
filed prior to the Firm Closing Date has not been declared effective as of the
time of execution hereof, the Original Registration Statement or such amendment
and, if the Company has elected to rely upon Rule 462(b) under the Act, the Rule
462(b) Registration Statement, shall have been declared effective not later than
the earlier of (i) 11:00 A.M., New York time, on the date on which the amendment
to the registration statement originally filed with respect to the Securities or
to the Registration Statement, as the case may be, containing information
regarding the initial public offering price of the Securities has been filed
with the Commission and (ii) the time confirmations are sent or given as
specified by Rule 462(b) under the Act, or, with respect to the Original
Registration Statement, such later time and date as shall have been consented to
by the Representatives; if required, the Prospectus or any Term Sheet that
constitutes a part thereof and any amendment or supplement thereto shall have
been filed with the Commission in the manner and within the time period required
by Rules 434 and 424(b) under the Act; no stop order suspending the
effectiveness of the Registration Statement or any amendment thereto shall have
been issued, and no proceedings for that purpose shall have been instituted or
threatened or, to the knowledge of the Company or the Representatives, shall be
contemplated by the Commission; and the Company shall have complied with any
request of the Commission for additional information (to be included in the
Registration Statement or the Prospectus or otherwise).
(b) The Representatives shall have received an opinion, dated the Firm
Closing Date, of ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P., counsel for the Company, to the effect
that:
(i) the Company has been duly organized and is validly
existing as a corporation under the laws of the State of Maryland, is
in good standing with the State Department of Assessments and Taxation
of Maryland and is duly qualified to transact business and is in good
standing under the laws of all other jurisdictions where the ownership
or leasing of its properties or the conduct of its business requires
such qualification, except where the failure to be so qualified
22
23
does not amount to a material liability or disability to the Company
and the Subsidiaries, taken as a whole;
(ii) each of the Subsidiaries has been duly organized and is
validly existing as a general or limited partnership or corporation in
good standing under the laws of the jurisdiction of its organization,
and is duly qualified to transact business and is in good standing
under the laws of all other jurisdictions where the ownership or
leasing of its properties or the conduct of its business requires such
qualification, except where the failure to be so qualified does not
amount to a material liability or disability to the Company and the
Subsidiaries, taken as a whole;
(iii) the Company and each of the Subsidiaries have full
power, corporate or other, to own or lease their respective properties
and conduct their respective businesses as described in the
Registration Statement and the Prospectus, and the Company has full
corporate power to enter into this Agreement and to carry out all the
terms and provisions hereof to be carried out by it;
(iv) the issued shares of capital stock of each of the
Subsidiaries that is a corporation are duly authorized, validly issued,
fully paid and nonassessable, and all of the partnership interests in
each Subsidiary that is a partnership are validly issued and fully paid
and all of such shares and interests owned by the Company or another
Subsidiary are owned beneficially by the Company or such Subsidiary
free and clear of any security interest, mortgage, pledge, lien,
encumbrance, equity or claim;
(v) the Company has an authorized, issued and outstanding
capitalization as set forth in the Prospectus under the heading
"Capitalization"; all of the issued shares of stock of the Company have
been duly authorized and validly issued and are fully paid and
nonassessable, have been issued in compliance with all applicable
federal and state securities laws and were not issued in violation of
or subject to any preemptive or other similar rights arising by
operation of law; the Securities have been duly authorized by all
necessary corporate action of the Company and, when issued and
delivered to and paid for by the Underwriters pursuant to this
Agreement, will be validly issued, fully paid and nonassessable; no
holders of outstanding shares of stock of the Company are entitled as
such to any preemptive or other similar rights arising by operation of
law to subscribe for any of the Securities; and no holder of securities
of the Company has any right which has not been waived to require the
Company to register the offer or sale of any securities owned by such
holder under the Act in the public offering contemplated by this
Agreement;
23
24
(vi) the statements set forth under the heading "Description
of Stock" in the Prospectus, insofar as such statements purport to
summarize certain provisions of the stock of the Company, provide a
fair summary of such provisions; and the statements set forth under the
headings "Risk Factors," "The Company," "Price Range of Common Stock,"
"Distribution Policy," "Business and Properties," "Management," "The
Consolidation Transactions," "Certain Relationships and Related Party
Transactions," "Certain Provisions of Maryland Law and of the Charter
and ByLaws," "Shares Available for Future Sale" and "Underwriting" in
the Prospectus, insofar as such statements constitute matters of law or
legal conclusions, have been reviewed by such counsel and are correct
in all material respects;
(vii) the execution and delivery of this Agreement have been duly
authorized by all necessary corporate action of the Company and this
Agreement has been duly executed and delivered by the Company;
(viii) (A) no legal or governmental proceedings are pending to which
the Company or any of the Subsidiaries is a party or to which the
Properties or any other property of the Company or any of the
Subsidiaries is subject that are required to be described in the
Registration Statement or the Prospectus and are not described therein,
and, to the best knowledge of such counsel, no such proceedings have
been threatened against the Company or any of the Subsidiaries, or any
of their respective directors, officers or general partners in their
capacity as such, or with respect to any of their respective other
properties and (B) no contract or other document is required to be
described in the Registration Statement or the Prospectus or to be
filed as an exhibit to the Registration Statement that is not described
therein or filed as required;
(ix) the issuance, offering and sale of the Securities to the
Underwriters by the Company pursuant to this Agreement, the compliance
by the Company with the other provisions of this Agreement and the
consummation of the other transactions herein contemplated do not (A)
require the consent, approval, authorization, registration or
qualification of or with any governmental authority, except such as
have been obtained and such as may be required under state securities
or blue sky laws, or (B) conflict with or result in a breach or
violation of any of the terms and provisions of, or constitute a
default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any of the Properties or any other
properties or assets of the Company or any of the Subsidiaries pursuant
to any indenture, mortgage, deed of trust, lease or other agreement or
instrument, known to such
24
25
counsel, to which the Company or any of the Subsidiaries is a party or
by which the Company or any of the Subsidiaries or any of the
Properties or any other of their respective properties are bound, or
the Articles of Incorporation, by-laws or other organizational
documents, as the case may be, of the Company or any of the
Subsidiaries, or any statute or any judgment, decree, order, rule or
regulation of any court or other governmental authority or any
arbitrator known to such counsel and applicable to the Company or any
of the Subsidiaries or any of the Properties, in each case except for
conflicts, breaches, violations or defaults that would not result in a
material adverse change in the condition (financial or otherwise),
business prospects, net worth or results of operations of the Company
and its Subsidiaries, taken as a whole;
(x) The agreements pursuant to which the Company has contracted to
acquire or develop [the Crowfarn Drive Property, the Mission Oaks
Boulevard Property, the ▇▇▇▇▇▇ Avenue Property, the ▇▇▇▇▇▇▇▇▇ Avenue
Property, the Water's Ridge Drive Property, the ▇▇▇▇▇ ▇▇▇▇ Parkway
Property and the Boulder Avenue Property] (each as described in the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) under the heading "Recent Investments and
Dispositions") have been duly and validly authorized, executed and
delivered by the Company and, assuming due authorization, execution and
delivery by the other parties thereto, are valid and binding
agreements, enforceable in accordance with their terms, except to the
extent such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization or other similar laws relating to or
affecting creditor's rights generally and by general principles of
equity;
(xi) none of the Subsidiaries is currently contractually
prohibited, directly or indirectly, from paying any dividends to the
Company, from making any other distribution on such subsidiary's
capital stock or other equity interests, from repaying to the Company
any loans or advances to such Subsidiary from the Company or from
transferring any of such Subsidiary's property or assets to the Company
or any of the other Subsidiaries, except as described in or
contemplated by the Prospectus;
(xii) neither the Company nor any of the Subsidiaries is subject to
registration as an investment company under the Investment Company Act
of 1940, as amended;
(xiii) the Securities have been approved for listing on the New York
Stock Exchange, subject to official notice of issuance;
25
26
(xiv) the Registration Statement is effective under the Act; any
required filing of the Prospectus, or any Term Sheet that constitutes a
part thereof, pursuant to Rules 434 and 424(b) has been made in the
manner and within the time period required by Rules 434 and 424(b); and
no stop order suspending the effectiveness of the Registration
Statement or any amendment thereto has been issued, and no proceedings
for that purpose have been instituted or threatened or, to the best
knowledge of such counsel, are contemplated by the Commission;
(xv) the registration statement originally filed with respect to the
Securities and each amendment thereto, any Rule 462(b) Registration
Statement, and the Prospectus (in each case, other than the financial
statements and other financial information contained therein, as to
which such counsel need express no opinion) comply as to form in all
material respects with the applicable requirements of the Act and the
rules and regulations of the Commission thereunder; and
(xvi) if the Company elects to rely on Rule 434 under the Act,
the Prospectus is not "materially different", as such term is used in
Rule 434 under the Act, from the prospectus included in the
Registration Statement at the time of its effectiveness or an effective
post-effective amendment thereto (including such information that is
permitted to be omitted pursuant to Rule 430A under the Act).
Such counsel shall also state that they have no reason to believe that
the Registration Statement, as of its effective date, contained any untrue
statement of a material fact or omitted to state any material fact required to
be stated therein or necessary to make the statements therein not misleading or
that the Prospectus, as of its date or the date of such opinion, included or
includes any untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
Such counsel shall also reaffirm as of this date its opinions filed as
Exhibits 5 and 8 to the Registration Statement.
In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Company and public officials and, as to matters involving the
application of laws of any jurisdiction other than the State of Texas or the
United States, to the extent satisfactory in form and scope to counsel for the
Underwriters, upon the opinion of local counsel and, as to matters involving the
application of the laws of the State of
26
27
Maryland, upon the opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ and Ingersoll. The foregoing
opinion shall also state that the Underwriters are justified in relying upon
such opinion of local counsel, and copies of such opinion shall be delivered to
the Representatives and counsel for the Underwriters.
References to the Registration Statement and the Prospectus in this
paragraph (b) shall include any amendment or supplement thereto at the date of
such opinion.
(c) The Representatives shall have received an opinion, dated the Firm
Closing Date, of ▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for the Underwriters, with respect to
the issuance and sale of the Firm Securities, the Registration Statement and the
Prospectus, and such other related matters as the Representatives may reasonably
require, and the Company shall have furnished to such counsel such documents as
they may reasonably request for the purpose of enabling them to pass upon such
matters. In rendering such opinion, such counsel may rely as to all matters of
Maryland law upon the opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & Ingersoll referred to
in paragraph (b) above.
(d) The Representatives shall have received from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP a
letter or letters dated, respectively, the date hereof and the Firm Closing
Date, in form and substance satisfactory to the Representatives, to the effect
that:
(i) they are independent accountants with respect to the
Company, the Merged Trusts, the Trust 83 Properties and the Three
Acquired Properties within the meaning of the Act and the applicable
rules and regulations thereunder;
(ii) in their opinion, the audited financial statements and
schedules examined by them and included in the Registration Statement
and the Prospectus comply in form in all material respects with the
applicable accounting requirements of the Act and the related published
rules and regulations;
(iii) on the basis of a reading of the latest available interim
unaudited consolidated condensed financial statements of the Company
and its consolidated subsidiaries, carrying out certain specified
procedures (which do not constitute an examination made in accordance
with generally accepted auditing standards) that would not necessarily
reveal matters of significance with respect to the comments set forth
in this paragraph (iii), a reading of the minute books of the
stockholders, the board of directors and any committees thereof of the
Company and each of its consolidated subsidiaries, and inquiries of
certain officials of the Company and its consolidated subsidiaries who
have responsibility for financial and accounting
27
28
matters, nothing came to their attention that caused them to believe
that:
(A) the unaudited consolidated condensed financial
statements of the Company and its consolidated subsidiaries
included in the Registration Statement and the Prospectus do
not comply in form in all material respects with the
applicable accounting requirements of the Act, the Exchange
Act and the related published rules and regulations
thereunder, or are not in conformity with generally accepted
accounting principles applied on a basis substantially
consistent with that of the audited financial statements
included in the Registration Statement and the Prospectus;
(B) at a specific date not more than three business
days prior to the date of such letter, there were any changes
in the capital stock or long-term debt of the Company and its
consolidated subsidiaries or any decreases in net current
assets or stockholders' equity of the Company and its
consolidated subsidiaries, in each case compared with amounts
shown on the September 30, 1996 unaudited consolidated
condensed balance sheet included in the Registration Statement
and the Prospectus, or for the period from October 1, 1996 to
such specified date there were any decreases, as compared with
the corresponding period in the preceding year, in total
revenue, or total or per share amounts of net income of the
Company and its consolidated subsidiaries, except in all
instances for changes, decreases or increases set forth in
such letter; and
(iv) they have carried out certain specified procedures, not
constituting an audit, with respect to certain amounts, percentages and
financial information that are derived from the general accounting
records of the Company and its consolidated subsidiaries and are
included in the Registration Statement and the Prospectus and specified
by the Representatives, and have compared such amounts, percentages and
financial information with such records of the Company and its
consolidated subsidiaries and with information derived from such
records and have found them to be in agreement, excluding any questions
of legal interpretation; and
(v) on the basis of a reading of the Pro Forma Financial
Statements included in the Registration Statement and the Prospectus,
carrying out certain specified procedures that would not necessarily
reveal matters of significance with respect to the comments set forth
in this paragraph (v), inquiries of certain officials of the Company
28
29
and its consolidated subsidiaries who have responsibility for financial
and accounting matters and proving the arithmetic accuracy of the
application of the pro forma adjustments to the historical amounts in
the Pro Forma Financial Statements, nothing came to their attention
that caused them to believe that either of the Pro Forma Financial
Statements do not comply in form in all material respects with the
applicable accounting requirements of Rule 11-02 of Regulation S-X or
that the pro forma adjustments have not been properly applied to the
historical amounts in the compilation of either of such statements.
In the event that the letters referred to above set forth any such
changes, decreases or increases, it shall be a further condition to the
obligations of the Underwriters that (A) such letters shall be accompanied by a
written explanation of the Company as to the significance thereof, unless the
Representatives deem such explanation unnecessary, and (B) such changes,
decreases or increases do not, in the sole judgment of the Representatives, make
it impractical or inadvisable to proceed with the purchase and delivery of the
Securities as contemplated by the Registration Statement, as amended as of the
date hereof.
References to the Registration Statement and the Prospectus in this
paragraph (e) with respect to either letter referred to above shall include any
amendment or supplement thereto at the date of such letter.
(e) The Representatives shall have received a certificate, dated the
Firm Closing Date, of the Chief Executive Officer and the Chief Financial
Officer of the Company to the effect that:
(i) the representations and warranties of the Company in this
Agreement are true and correct as if made on and as of the Firm Closing
Date; the Registration Statement, as amended as of the Firm Closing
Date, does not include any untrue statement of a material fact or omit
to state any material fact necessary to make the statements therein not
misleading, and the Prospectus, as amended or supplemented as of the
Firm Closing Date, does not include any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; and the Company has performed all covenants
and agreements and satisfied all conditions on its part to be performed
or satisfied at or prior to the Firm Closing Date;
(ii) no stop order suspending the effectiveness of the Registration
Statement or any amendment thereto has been issued, and no proceedings
for that purpose have been
29
30
instituted or threatened or, to the best of the Company's
knowledge, are contemplated by the Commission; and
(iii) subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, neither the
Company nor any of its subsidiaries has sustained any material loss or
interference with their respective businesses or properties from fire,
flood, hurricane, accident or other calamity, whether or not covered by
insurance, or from any labor dispute or any legal or governmental
proceeding, and there has not been any material adverse change, or any
development involving a prospective material adverse change, in the
condition (financial or otherwise), management, business prospects, net
worth or results of operations of the Company or any of its
subsidiaries, except in each case as described in or contemplated by
the Prospectus (exclusive of any amendment or supplement thereto).
(f) The Representatives shall have received from each person who is a
director or officer of the Company and from each of ▇▇▇▇, USAA, Ameritech and
OTR (each as defined in the Prospectus) an agreement (subject to certain
exceptions) to the effect that such person will not, directly or indirectly,
without the prior written consent of Prudential Securities Incorporated, on
behalf of the Underwriters, offer, sell, offer to sell, contract to sell,
pledge, grant any option to purchase or otherwise dispose or transfer (or
announce any offer, sale, offer of sale, contract of sale, pledge, grant of any
option to purchase or other disposition or transfer) of any shares of Common
Stock or any securities convertible into, or exchangeable or exercisable for,
shares of Common Stock for a period of 90 days after the date of this Agreement.
(g) On or before the Firm Closing Date, the Representatives and counsel
for the Underwriters shall have received such further certificates, documents or
other information as they may have reasonably requested from the Company.
(h) Prior to the commencement of the offering of the Securities, the
Securities shall have been approved for listing on the New York Stock Exchange,
subject to official notice of issuance.
All opinions, certificates, letters and documents delivered pursuant to
this Agreement will comply with the provisions hereof only if they are
reasonably satisfactory in all material respects to the Representatives and
counsel for the Underwriters. The Company shall furnish to the Representatives
such conformed copies of such opinions, certificates, letters and documents in
such quantities as the Representatives and counsel for the Underwriters shall
reasonably request.
30
31
The respective obligations of the several Underwriters to purchase and
pay for any Option Securities shall be subject, in their discretion, to each of
the foregoing conditions to purchase the Firm Securities, except that all
references to the Firm Securities and the Firm Closing Date shall be deemed to
refer to such Option Securities and the related Option Closing Date,
respectively.
8. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the Act or Section
20 of the Securities Exchange Act of 1934 (the "Exchange Act"), against any
losses, claims, damages or liabilities, joint or several, to which such
Underwriter or such controlling person may become subject under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement
made by the Company in Section 2 of this Agreement,
(ii) any untrue statement or alleged untrue statement of any
material fact contained in (A) the Registration Statement or any
amendment thereto, any Preliminary Prospectus or the Prospectus or any
amendment or supplement thereto or (B) any application or other
document, or any amendment or supplement thereto, executed by the
Company or based upon written information furnished by or on behalf of
the Company filed in any jurisdiction in order to qualify the
Securities under the securities or blue sky laws thereof or filed with
the Commission or any securities association or securities exchange
(each an "Application"),
(iii) the omission or alleged omission to state in the Registration
Statement or any amendment thereto, any Preliminary Prospectus or the
Prospectus or any amendment or supplement thereto, or any Application a
material fact required to be stated therein or necessary to make the
statements therein not misleading, or
(iv) any untrue statement or alleged untrue statement of any
material fact contained in any audio or visual materials used in
connection with the marketing of the Securities, including without
limitation, slides, videos, films, tape recordings,
and will reimburse, as incurred, each Underwriter and each such controlling
person for any legal or other expenses reasonably incurred by such Underwriter
or such controlling person in connection with investigating, defending against
or appearing as a third-party witness in connection with any such loss, claim,
31
32
damage, liability or action; provided, however, that the Company 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 untrue statement or alleged untrue
statement or omission or alleged omission made in such registration statement or
any amendment thereto, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto or any Application in reliance upon and in
conformity with written information furnished to the Company by such Underwriter
through the Representatives specifically for use therein; and provided, further,
that the Company will not be liable to any Underwriter or any person controlling
such Underwriter with respect to any such untrue statement or omission made in
any Preliminary Prospectus that is corrected in the Prospectus (or any amendment
or supplement thereto) if the person asserting any such loss, claim, damage or
liability purchased Securities from such Underwriter but was not sent or given a
copy of the Prospectus (as amended or supplemented) at or prior to the written
confirmation of the sale of such Securities to such person in any case where
such delivery of the Prospectus (as amended or supplemented) is required by the
Act, unless such failure to deliver the Prospectus (as amended or supplemented)
was a result of noncompliance by the Company with Section 5(d) and (e) of this
Agreement. This indemnity agreement will be in addition to any liability which
the Company may otherwise have. The Company will not, without the prior written
consent of the Underwriter or Underwriters purchasing, in the aggregate, more
than fifty percent (50%) of the Securities, settle or compromise or consent to
the entry of any judgment in any pending or threatened claim, action, suit or
proceeding in respect of which indemnification may be sought hereunder (whether
or not any such Underwriter or any person who controls any such Underwriter
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act is
a party to such claim, action, suit or proceeding), unless such settlement,
compromise or consent includes an unconditional release of all of the
Underwriters and such controlling persons from all liability arising out of such
claim, action, suit or proceeding.
(b) Each Underwriter, severally and not jointly, will indemnify and
hold harmless the Company, each of its directors, each of its officers who
signed the Registration Statement and each person, if any, who controls the
Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act against any losses, claims, damages or liabilities to which the
Company or any such director, officer or controlling person may become subject
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon (i)
any untrue statement or alleged untrue statement of any material fact contained
in the Registration Statement or any amendment thereto, any Preliminary
Prospectus or the Prospectus or any amendment or supplement
32
33
thereto, or any Application or (ii) the omission or the alleged omission to
state therein a material fact required to be stated in the Registration
Statement or any amendment thereto, any Preliminary Prospectus or the Prospectus
or any amendment or supplement thereto, or any Application or necessary to make
the statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through the
Representatives specifically for use therein; and, subject to the limitation set
forth immediately preceding this clause, will reimburse, as incurred, any legal
or other expenses reasonably incurred by the Company or any such director,
officer or controlling person in connection with investigating or defending any
such loss, claim, damage, liability or any action in respect thereof. This
indemnity agreement will be in addition to any liability which such Underwriter
may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section 8
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party otherwise than under this
Section 8. In case any such action is brought against any indemnified party, and
it notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel satisfactory to such indemnified party;
provided, however, that if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be one or more legal defenses available
to it and/or other indemnified parties which are different from or additional to
those available to the indemnifying party, the indemnifying party shall not have
the right to direct the defense of such action on behalf of such indemnified
party or parties and such indemnified party or parties shall have the right to
select separate counsel to defend such action on behalf of such indemnified
party or parties. After notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof and approval by such
indemnified party of counsel appointed to defend such action, the indemnifying
party will not be liable to such indemnified party under this Section 8 for any
legal or other expenses, other than reasonable costs of investigation,
subsequently incurred by such indemnified party in connection with the defense
thereof, unless (i) the indemnified party shall have employed separate counsel
in accordance with the proviso to
33
34
the next preceding sentence (it being understood, however, that in connection
with such action the indemnifying party shall not be liable for the expenses of
more than one separate counsel (in addition to local counsel) in any one action
or separate but substantially similar actions in the same jurisdiction arising
out of the same general allegations or circumstances, designated by the
Representatives in the case of paragraph (a) of this Section 8, representing the
indemnified parties under such paragraph (a) who are parties to such action or
actions) or (ii) the indemnifying party does not promptly retain counsel
satisfactory to the indemnified party (it being understood, however, that in
connection with such action the indemnifying party shall not be liable for the
expenses of more than one separate counsel (in addition to local counsel)) or
(iii) the indemnifying party has authorized the employment of counsel for the
indemnified party at the expense of the indemnifying party. After such notice
from the indemnifying party to such indemnified party, the indemnifying party
will not be liable for the costs and expenses of any settlement of such action
effected by such indemnified party without the consent of the indemnifying
party.
(d) In circumstances in which the indemnity agreement provided for in
the preceding paragraphs of this Section 8 is unavailable or insufficient, for
any reason, to hold harmless an indemnified party in respect of any losses,
claims, damages or liabilities (or actions in respect thereof), each
indemnifying party, in order to provide for just and equitable contribution,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect (i) the relative
benefits received by the indemnifying party or parties on the one hand and the
indemnified party on the other from the offering of the Securities or (ii) if
the allocation provided by the foregoing clause (i) is not permitted by
applicable law, not only such relative benefits but also the relative fault of
the indemnifying party or parties on the one hand and the indemnified party on
the other in connection with the statements or omissions or alleged statements
or omissions that resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriters on the other shall be deemed to be in the same proportion
as the total proceeds from the offering (before deducting expenses) received by
the Company bear to the total underwriting discounts and commissions received by
the Underwriters. The relative fault of the parties shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Underwriters, the parties'
relative intents, knowledge, access to information and
34
35
opportunity to correct or prevent such statement or omission, and any other
equitable considerations appropriate in the circumstances. The Company and the
Underwriters agree that it would not be equitable if the amount of such
contribution were determined by pro rata or per capita allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other method
of allocation that does not take into account the equitable considerations
referred to above in this paragraph (d). Notwithstanding any other provision of
this paragraph (d), no Underwriter shall be obligated to make contributions
hereunder that in the aggregate exceed the total public offering price of the
Securities purchased by such Underwriter under this Agreement, less the
aggregate amount of any damages that such Underwriter has otherwise been
required to pay in respect of the same or any substantially similar claim, and
no person guilty of fraudulent misrepresentation (within the meaning of Section
11 (f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
contribute hereunder are several in proportion to their respective underwriting
obligations and not joint, and contributions among Underwriters shall be
governed by the provisions of the Prudential Securities Incorporated Master
Agreement Among Underwriters. For purposes of this paragraph (d), each person,
if any, who controls an Underwriter within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act shall have the same rights to contribution as
such Underwriter, and each director of the Company, each officer of the Company
who signed the Registration Statement and each person, if any, who controls the
Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, shall have the same rights to contribution as the Company.
9. Default of Underwriters. If one or more Underwriters default in
their obligations to purchase Firm Securities or Option Securities hereunder and
the aggregate number of such Securities that such defaulting Underwriter or
Underwriters agreed but failed to purchase is ten percent or less of the
aggregate number of Firm Securities or Option Securities to be purchased by all
of the Underwriters at such time hereunder, the other Underwriters may make
arrangements satisfactory to the Representatives for the purchase of such
Securities by other persons (who may include one or more of the non-defaulting
Underwriters, including the Representatives), but if no such arrangements are
made by the Firm Closing Date or the related Option Closing Date, as the case
may be, the other Underwriters shall be obligated severally in proportion to
their respective commitments hereunder to purchase the Firm Securities or Option
Securities that such defaulting Underwriter or Underwriters agreed but failed to
purchase. If one or more Underwriters so default with respect to an aggregate
number of Firm Securities or Option Securities that is more than ten percent of
the aggregate number of Firm Securities or Option Securities, as the case may
35
36
be, to be purchased by all of the Underwriters at such time hereunder, and if
arrangements satisfactory to the Representatives are not made within 36 hours
after such default for the purchase by other persons (who may include one or
more of the non-defaulting Underwriters, including the Representatives) of the
Securities with respect to which such default occurs, this Agreement will
terminate without liability on the part of any non-defaulting Underwriter or the
Company other than as provided in Section 10 hereof. In the event of any default
by one or more Underwriters as described in this Section 9, the Representatives
shall have the right to postpone the Firm Closing Date or the Option Closing
Date, as the case may be, established as provided in Section 3 hereof for not
more than seven business days in order that any necessary changes may be made in
the arrangements or documents for the purchase and delivery of the Firm
Securities or Option Securities, as the case may be. As used in this Agreement,
the term "Underwriter" includes any person substituted for an Underwriter under
this Section 9. Nothing herein shall relieve any defaulting Underwriter from
liability for its default.
10. Survival. The respective representations, warranties, agreements,
covenants, indemnities and other statements of the Company, its officers and the
several Underwriters set forth in this Agreement or made by or on behalf of
them, respectively, pursuant to this Agreement shall remain in full force and
effect, regardless of (i) any investigation made by or on behalf of the Company,
any of its officers or directors, any Underwriter or any controlling person
referred to in Section 8 hereof and (ii) delivery of and payment for the
Securities. The respective agreements, covenants, indemnities and other
statements set forth in Sections 6 and 8 hereof shall remain in full force and
effect, regardless of any termination or cancellation of this Agreement.
11. Termination. (a) This Agreement may be terminated with respect to
the Firm Securities or any Option Securities in the sole discretion of the
Representatives by notice to the Company given prior to the Firm Closing Date or
the related Option Closing Date, respectively, in the event that the Company
shall have failed, refused or been unable to perform all obligations and satisfy
all conditions on its part to be performed or satisfied hereunder at or prior
thereto or, if at or prior to the Firm Closing Date or such Option Closing Date,
respectively,
(i) the Company or any of its subsidiaries shall have, in the
sole judgment of the Representatives, sustained any material loss or
interference with their respective businesses or properties from fire,
flood, hurricane, accident or other calamity, whether or not covered by
insurance, or from any labor dispute or any legal or governmental
proceeding or there shall have been any
36
37
material adverse change, or any development involving a prospective
material adverse change (including without limitation a change in
management or control of the Company), in the condition (financial or
otherwise), business prospects, net worth or results of operations of
the Company and its subsidiaries, except in each case as described in
or contemplated by the Prospectus (exclusive of any amendment or
supplement thereto);
(ii) trading in the Common Stock shall have been suspended by the
Commission or the New York Stock Exchange or trading in securities
generally on the New York or American Stock Exchange or Nasdaq National
Market shall have been suspended or minimum or maximum prices shall
have been established on either such exchange or market system;
(iii) a banking moratorium shall have been declared by
California, New York or United States authorities; or
(iv) there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power, (B) an
outbreak or escalation of any other insurrection or armed conflict
involving the United States or (C) any other calamity or crisis or
material adverse change in general economic, political or financial
conditions having an effect on the U.S. financial markets that, in the
sole judgment of the Representatives, makes it impractical or
inadvisable to proceed with the public offering or the delivery of the
Securities as contemplated by the Registration Statement, as amended as
of the date hereof.
(b) Termination of this Agreement pursuant to this Section 11 shall be
without liability of any party to any other party except as provided in Section
10 hereof.
12. Information Supplied by Underwriters. The statements set forth in
the last paragraph on the front cover page and under the heading "Underwriting"
in any Preliminary Prospectus or the Prospectus (to the extent such statements
relate to the Underwriters) constitute the only information furnished by any
Underwriter through the Representatives to the Company for the purposes of
Sections 2(b) and 8 hereof. The Underwriters confirm that such statements (to
such extent) are correct.
13. Notices. All communications hereunder shall be in writing and, if
sent to any of the Underwriters, shall be delivered or sent by mail, telex or
facsimile transmission and confirmed in writing to Prudential Securities
Incorporated, ▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Equity
Transactions Group; and if sent to the Company, shall be delivered or sent by
mail, telex or facsimile transmission and
37
38
confirmed in writing to the Company at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, Chairman.
14. Successors. This Agreement shall inure to the benefit of and shall be
binding upon the several Underwriters, the Company and their respective
successors and legal representatives, and nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any other person any legal
or equitable right, remedy or claim under or in respect of this Agreement, or
any provisions herein contained, this Agreement and all conditions and
provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person except that (i)
the indemnities of the Company contained in Section 8 of this Agreement shall
also be for the benefit of any person or persons who control any Underwriter
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act
and (ii) the indemnities of the Underwriters contained in Section 8 of this
Agreement shall also be for the benefit of the directors of the Company, the
officers of the Company who have signed the Registration Statement and any
person or persons who control the Company within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act. No purchaser of Securities from any
Underwriter shall be deemed a successor because of such purchase.
15. Applicable Law. The validity and interpretation of this Agreement, and
the terms and conditions set forth herein, shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to any
provisions relating to conflicts of laws.
16. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
38
39
If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this letter shall constitute an agreement binding the Company and each
of the several Underwriters.
Very truly yours,
MERIDIAN INDUSTRIAL TRUST, INC.
By
------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Chairman and Chief Executive Officer
The foregoing Agreement is hereby confirmed and accepted as of the date
first above written.
PRUDENTIAL SECURITIES INCORPORATED
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ SECURITIES CORPORATION
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & COMPANY LLC
By PRUDENTIAL SECURITIES INCORPORATED
By
--------------------------
▇▇▇▇-▇▇▇▇▇▇ Canfin
Director
For itself and on behalf of the Representatives.
39
40
SCHEDULE 1
UNDERWRITERS
Number of Firm
Securities to
Underwriter be Purchased
----------- ------------
Prudential Securities Incorporated .................................
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Securities Corporation.............................................
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Company LLC...................................
Total............................................................... 3,000,000
=========
40
41
SCHEDULE 2
SUBSIDIARIES
Jurisdiction of
Name Organization
---- ------------
Metroplex Co. California
Pro-Sierra Corporation California
DFW Nine California
Progress Center/Alabama Limited Partnership California
41
