Exhibit 10.1
HOME PROPERTIES OF NEW YORK, INC.
PLACEMENT AGENCY AGREEMENT
February 25, 2002
Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
Home Properties of New York, Inc., a Maryland corporation (the "Company"),
and Home Properties of New York, L.P., a New York limited partnership subsidiary
of the Company (the "Operating Partnership"), confirm their agreement with
Xxxxxxx Xxxxx & Co. and Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
(together "Xxxxxxx Xxxxx" or the "Placement Agent"), for Xxxxxxx Xxxxx to act as
exclusive placement agent for the Company with respect to the issue and sale by
the Company to, and the purchase by, Xxxxx & Steers Quality Income Realty Fund,
Inc., a Maryland corporation (the "Fund"), of 306,372 shares (the "Shares") of
common stock, par value $0.01 per share (the "Common Stock"), of the Company.
Pursuant to the Purchase Agreement between the Company and the Fund, the
Shares will be issued by the Company to the Fund for an aggregate purchase price
of $9,999,982.08 (the "Purchase Price"). In acting as the placement agent,
Xxxxxxx Xxxxx will place the Shares with the Fund on a reasonable best efforts
basis, acting as the Company's agent and not as a principal in the placement of
the Shares. Xxxxxxx Xxxxx may separately engage, at its own expense and with the
prior approval of the Company, sub-agents as it may deem necessary or
appropriate.
1. Representations and Warranties of the Company and the Operating
Partnership. The Company and the Operating Partnership represent and warrant to
the Placement Agent as of the date hereof, and as of the Closing Time referred
to in Section 2(b) hereof, and agrees with the Placement Agent, as follows:
(a) A registration statement on Form S-3 (File No. 333-52601),
with respect to the Shares, including a prospectus, has been prepared
by the Company and the Operating Partnership in conformity with the
requirements of the Securities Act of 1933, as amended (the
"Securities Act"), and the rules and regulations (the "Securities Act
Rules and Regulations") of the Securities and Exchange Commission (the
"Commission") thereunder, has been filed with the Commission and has
been declared effective. The registration statement and prospectus may
have been amended or supplemented prior to the date of this Agreement;
any such amendment or supplement was prepared and filed, and any such
amendment filed after the effective date of such registration
statement has been declared effective. No stop order suspending the
effectiveness of the registration statement has been issued, and no
proceeding for that purpose has been instituted or threatened by the
Commission. A prospectus supplement (the "Prospectus Supplement")
setting forth the terms of the offering, sale and plan of distribution
of the Shares and additional information concerning the Company and
its business has been or will be prepared and, together with the
prospectus included in the registration statement, will be filed
pursuant to Rule 424(b) of the Securities Act Rules and Regulations on
or before the second business day after the date
hereof (or such earlier time as may be required by the Securities Act
Rules and Regulations). The registration statement, as it may have
heretofore been amended, is referred to herein as the "Registration
Statement," and the final form of prospectus included in the
Registration Statement, as supplemented by the Prospectus Supplement,
in the form filed by the Company with the Commission pursuant to Rule
424(b) under the Securities Act Rules and Regulations, is referred to
herein as the "Prospectus." Copies of the Registration Statement and
the Prospectus, any amendments or supplements thereto and all
documents incorporated by reference therein that were filed with the
Commission on or prior to the date of this Agreement (including one
fully executed copy of the Registration Statement and of each
amendment thereto) have been delivered to the Placement Agent and its
counsel. Any reference herein to the Registration Statement, the
Prospectus or any amendment or supplement thereto shall be deemed to
refer to and include the documents incorporated by reference therein,
and any reference herein to the terms "amend," "amendment" or
"supplement" with respect to the Registration Statement or the
Prospectus shall be deemed to refer to and include the filing after
the execution hereof of any document with the Commission deemed to be
incorporated by reference therein. For purposes of this Agreement, all
references to the Registration Statement, the Prospectus or to any
amendment or supplement thereto shall be deemed to include any copy
filed with the Commission pursuant to its Electronic Data Gathering
Analysis and Retrieval System ("XXXXX"), and such copy shall be
identical in content to any Prospectus delivered to the Placement
Agent and furnished to the Fund for use in connection with the
offering of the Shares to the Fund.
(b) Each part of the Registration Statement, when such part
became or becomes effective, and the Prospectus and any amendment or
supplement thereto, on the date of filing thereof with the Commission
and at the Closing Date (as hereinafter defined), conformed or will
conform in all material respects with the requirements of the
Securities Act and the Securities Act Rules and Regulations; each part
of the Registration Statement, when such part became or becomes
effective, or when such part was filed with the Commission, did not or
will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading; the Prospectus and any
amendment or supplement thereto, on the date of filing thereof with
the Commission and at the Closing Date, did not or will not include an
untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; except that
the foregoing shall not apply to statements in, or omissions from, any
such document in reliance upon, and in conformity with, written
information concerning the Placement Agent that was furnished to the
Company by the Placement Agent specifically for use in the preparation
thereof.
(c) The documents incorporated by reference in the Registration
Statement, the Prospectus or any amendment or supplement thereto, when
they became or become effective under the Securities Act or were or
are filed with the Commission under the Securities Act or the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), as
the case may be, conformed or will conform in all material respects
with the requirements of the Securities Act, the Securities Act Rules
and Regulations, the Exchange Act and/or the rules and regulations of
the Commission under the Exchange Act (the "Exchange Act Rules and
Regulations"), as applicable.
(d) The consolidated financial statements of the Company,
together with the related schedules and notes thereto, in the
Registration Statement and Prospectus fairly present the financial
condition of the Company and its consolidated subsidiaries as of the
dates indicated and the results of operations, changes in financial
position, stockholders' equity and cash flows for the periods therein
specified, in conformity with generally accepted accounting principles
consistently applied throughout the periods involved (except as
otherwise stated therein). The
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selected financial and statistical data in the Registration Statement
and the Prospectus present fairly the information shown therein and,
to the extent based upon or derived from the financial statements,
have been compiled on a basis consistent with the financial statements
presented therein. In addition, to the extent applicable, the pro
forma financial statements of the Company, and the related notes
thereto, in the Registration Statement and the Prospectus present
fairly the information shown therein, have been prepared in accordance
with the Commission's rules and guidelines with respect to pro forma
financial statements and have been properly compiled on the basis
described therein, and the assumptions used in the preparation thereof
are reasonable and the adjustments used therein are appropriate to
give effect to the transactions and circumstances referred to therein.
No other financial statements are required to be set forth or to be
incorporated by reference in the Registration Statement or the
Prospectus under the Securities Act or the Securities Act Rules and
Regulations.
(e) To the best of the Company's and the Operating Partnership's
knowledge, PricewaterhouseCoopers LLP, whose reports are incorporated
by reference in the Registration Statement, are and, during the
periods covered by their reports, were independent public accountants
as required by the Securities Act and the Securities Act Rules and
Regulations.
(f) The Company has been duly formed and is validly existing as a
corporation in good standing under the laws of the State of Maryland,
is duly qualified to do business and is in good standing in each
jurisdiction in which its ownership or lease of property or the
conduct of its business requires such qualification (except where the
failure to be so qualified would not have a material adverse effect on
the earnings, assets, properties, business, results of operations, or
condition (financial or otherwise) of the Company, the Subsidiaries
(as hereinafter defined) and the GP Entities (as hereinafter defined),
taken as a whole (a "Material Adverse Effect")), and has full
corporate power and authority necessary to own or hold its properties,
assets and interests in its subsidiaries, to conduct the business in
which it is engaged and to enter into and perform its obligations
under this Agreement. Except as disclosed in the Prospectus, the
Company owns no direct or indirect material equity or other beneficial
interest in any corporation, partnership, joint venture or other
business entity.
(g) The Operating Partnership has been duly formed and is validly
existing as a limited partnership under the laws of the State of New
York, is duly qualified to do business as a foreign limited
partnership in each jurisdiction in which its ownership or lease of
property or the conduct of its business requires such qualification
(except where the failure to be so qualified would not have a Material
Adverse Effect), and has all partnership power and authority necessary
to own or hold its properties, assets and interests in its
subsidiaries, to conduct the business in which it is engaged and to
enter into and perform its obligations under this Agreement. The
Company is the sole general partner of the Operating Partnership. The
Second Restated and Amended Agreement of Limited Partnership of the
Operating Partnership, as amended (the "Operating Partnership
Agreement"), is in full force and effect, and the aggregate percentage
interests of the Company, Home Properties Trust, a wholly-owned
Maryland real estate trust and qualified REIT subsidiary of the
Company (the "QRS"), and the other third-party limited partners in the
Operating Partnership are approximately 1%, 62% and 37%, respectively.
To the extent the Shares are issued in accordance with this Agreement,
(i) the percentage interest of the partners in the Operating
Partnership will be adjusted accordingly and (ii) the Company will
contribute the proceeds from the sale of the Shares to the QRS, which
in turn will contribute such proceeds to the Operating Partnership in
exchange for a number of units of limited partner interest equal to
the number of Shares issued.
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(h) The QRS has been duly formed and is validly existing as a
real estate trust under the laws of the State of Maryland, is duly
qualified to do business in each jurisdiction in which its ownership
or lease of property or the conduct of its business requires such
qualification (except where the failure to be so qualified would not
have a Material Adverse Effect), and has all power and authority
necessary to own or hold its assets and to conduct the business in
which it is engaged.
(i) Each of the consolidated subsidiaries of the Company,
including the Operating Partnership and the QRS, are listed on
Schedule A hereto (collectively, the "Subsidiaries"). Each of the
Subsidiaries has been duly incorporated or formed, as the case may be,
and is an existing corporation, general or limited partnership, or
other legal entity, as the case may be, in good standing (to the
extent such concept is applicable) under the laws of its jurisdiction
of incorporation or formation, as the case may be. Each of the
Subsidiaries has full power (corporate and other) and authority to own
or hold its properties and to conduct the business in which it is
engaged, and is duly qualified or registered to do business in each
jurisdiction in which it owns or leases real property or in which the
conduct of its business requires such qualification or registration,
except where the failure to be so qualified or registered, considering
all such cases in the aggregate, would not have a Material Adverse
Effect.
(j) The Company and the Subsidiaries hold general partner or
other controlling interests in an aggregate of 168 general or limited
partnerships or other entities owning apartment communities and/or
other real estate assets (the "GP Entities"). Each of the GP Entities
has been duly incorporated or formed, as the case may be, and, to the
knowledge of the Company, is an existing corporation, general or
limited partnership, or other legal entity, as the case may be, in
good standing under the laws of its jurisdiction of incorporation or
formation, as the case may be. Each of the GP Entities has full power
(corporate and other) and authority to own or hold its properties and
to conduct the business in which it is engaged, except where the
failure to have such power or authority would not have a Material
Adverse Effect.
(k) All of the issued and outstanding capital stock or ownership
interests of each Subsidiary have been duly authorized and are validly
issued, fully paid and nonassessable and, except as specified on
Schedule B hereto, are wholly-owned by the Company, directly or
through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity.
(l) As of the date hereof, the Company has authorized capital
stock consisting of 80 million shares of Common Stock, 10 million
shares of preferred stock, par value $0.01 per share, and 10 million
shares of excess stock, par value $0.01 per share, of which 24,968,808
shares of Common Stock (excluding any shares of Common Stock to be
issued and sold to The Equity Focus Trusts - REIT Portfolio Series,
2002-A (the "Equity Focus Shares") on or about the date hereof) and
2,150,000 shares of preferred stock are issued and outstanding. All of
the issued and outstanding shares of capital stock of the Company have
been duly authorized and are validly issued, fully paid and
nonassessable, conform to the description thereof in the Registration
Statement and the Prospectus and have been offered and sold or
exchanged by the Company in compliance with all applicable laws
(including, without limitation, federal and state securities laws).
None of the outstanding shares of capital stock of the Company were
issued in violation of the preemptive or other similar rights of any
securityholder of the Company. The stockholders of the Company and the
holders of interests in the Operating Partnership have no preemptive
rights with respect to the issuance of the Shares.
(m) The Shares will be, as of the Closing Date, duly authorized
by the Company for issuance and sale pursuant to this Agreement and,
when issued and delivered by the Company
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pursuant to this Agreement against payment of the consideration
therefor specified herein, will be validly issued, fully paid and
nonassessable. The Shares conform to the description thereof in the
Registration Statement and the Prospectus.
(n) Since the respective dates as of which information is given
in the Registration Statement and the Prospectus, except as otherwise
stated therein, (A) there has been no change in the earnings, assets,
properties, business, results of operations, or condition (financial
or otherwise) of the Company, the Subsidiaries and the GP Entities,
taken as a whole, which has had or would reasonably be expected to
have a Material Adverse Effect, (B) there has been no casualty, loss,
condemnation or other adverse event with respect to any property or
interest therein owned, directly or indirectly, by the Company or any
Subsidiary which has had or would reasonably be expected to have a
Material Adverse Effect, (C) there have been no transactions entered
into by the Company or any Subsidiary, other than those in the
ordinary course of business, which are material with respect to the
Company and the Subsidiaries, taken as a whole, (D) except for regular
quarterly distributions on the Common Stock which have been publicly
announced through the date of this Agreement, regular quarterly
distributions on the Company's preferred stock and regular quarterly
distributions on the common and preferred units of the Operating
Partnership, there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital
stock or any distribution by the Operating Partnership with respect to
its common or preferred units, and (E) there has been no material
increase in long-term debt or decrease in the capital of the Company,
the Subsidiaries or the GP Entities, taken as a whole, other than in
the ordinary course of their businesses.
(o) Except as set forth in the Prospectus, there is not pending
or, to the knowledge of the Company, threatened any litigation,
action, suit or proceeding to which the Company or any of the
Subsidiaries or any of their officers or directors is a party, or that
any of their properties or other assets is the subject of, before or
by any court or governmental agency or body, that is reasonably likely
to have a Material Adverse Effect.
(p) During the period of at least the last 24 calendar months
prior to the date of this Agreement, the Company has timely filed with
the Commission all documents and other material required to be filed
pursuant to Sections 13, 14 and 15(d) under the Exchange Act. During
the period of at least the last 36 calendar months preceding the
filing of the Registration Statement, the Company has filed all
reports required to be filed pursuant to Sections 13, 14 and 15(d)
under the Exchange Act. Immediately preceding the filing of the
Registration Statement, the aggregate market value of the Company's
voting stock held by nonaffiliates of the Company was equal to or
greater than $150 million.
(q) There are no contracts or documents of the Company that are
required to be filed as exhibits to the Registration Statement or to
any of the documents incorporated by reference therein by the
Securities Act or the Exchange Act or by the Securities Act Rules and
Regulations and the Exchange Act Rules and Regulations that have not
been so filed. All of the contracts to which any of the Company or the
Subsidiaries is a party and which are material to the business and
operations of the Company and the Subsidiaries, taken as a whole, (i)
have been duly authorized, executed and delivered by such entity,
constitute valid and binding agreements of such entity and are
enforceable against such entity in accordance with the terms thereof,
except as such enforcement may be limited by (A) bankruptcy,
insolvency, reorganization or similar other laws affecting creditors'
rights generally and (B) general equity principles and limitations on
the availability of equitable relief, or (ii) in the case of any
contract to be executed on or before the Closing Date, will on the
Closing Date be duly authorized, executed and delivered by the Company
and/or a Subsidiary, and constitute valid and binding agreements of
such entity
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enforceable against each entity in accordance with the terms thereof,
except as such enforcement may be limited by (A) bankruptcy,
insolvency, reorganization or similar other laws affecting creditors'
rights generally and (B) general equity principles and limitations on
the availability of equitable relief.
(r) The Company and the Operating Partnership have full power and
authority, corporate or otherwise, to enter into this Agreement. This
Agreement has been duly authorized, executed and delivered by the
Company and the Operating Partnership.
(s) The execution and performance of this Agreement and the
consummation of the transactions contemplated herein, including the
issuance of the Shares, will not result in a breach or violation of
any of the terms and provisions of, or constitute a default under, (i)
any agreement or instrument to which the Company or the Subsidiaries
is a party or by which they are bound or to which any of the property
or other assets of the Company or the Subsidiaries is subject, except
where such breach, violation or default would not have a Material
Adverse Effect, (ii) the articles of incorporation, charter, by-laws,
certificate of general or limited partnership, partnership agreement
or other organizational document, as applicable, of the Company or the
Subsidiaries or (iii) any statute, order, rule or regulation of any
court or governmental agency or body having jurisdiction over the
Company or the Subsidiaries or any of their properties or other
assets. No consent, approval, authorization or order of, filing with,
or notice to any court or governmental agency or body is required for
the consummation of the transactions contemplated by this Agreement in
connection with the issuance or sale of the Shares by the Company,
except such as may be required under the Securities Act and applicable
state securities, blue sky, or real estate syndication laws, if any,
or pursuant to the listing requirements of the New York Stock Exchange
("NYSE"). The Company has full power and authority to authorize, issue
and sell the Shares as contemplated by this Agreement.
(t) The Company, the Subsidiaries and the GP Entities have
complied in all material respects with all laws, regulations and
orders applicable to them or their respective businesses. The Company,
the Subsidiaries and the GP Entities are not in default under any
indenture, mortgage, deed of trust, voting trust agreement, loan
agreement, bond, debenture, note agreement or evidence of
indebtedness, lease, contract or other agreement or instrument to
which they are a party or by which they or any of their properties or
other assets are bound, violation of which would individually or in
the aggregate have a Material Adverse Effect, and no other party under
any such agreement or instrument to which the Company, the
Subsidiaries or the GP Entities are a party is, to the knowledge of
the Company, in default in any material respect thereunder. The
Company, the Subsidiaries and the GP Entities are not in violation of
their respective articles of incorporation, charter, by-laws,
certificate of general or limited partnership, partnership agreement
or other organizational documents, as the case may be. To the
knowledge of the Company, no liability (financial or otherwise) exists
for the Company or the Subsidiaries with respect to any GP Entity,
except for those liabilities which would not have a Material Adverse
Effect.
(u) The Company and each of the Subsidiaries and the GP Entities
have good and marketable title to all properties and assets owned by
them, free and clear of all liens, charges, encumbrances, claims,
restrictions or defects, except such as are (i) described in the
Prospectus, (ii) not material in relation to the business or
operations of the Company, the Subsidiaries and the GP Entities, taken
as a whole, or (iii) with respect to the GP Entities, related to, or a
consequence of, any commercially reasonable mortgage indebtedness on
the properties or assets of such GP Entities. The Company, the
Subsidiaries and the GP Entities have valid, subsisting and
enforceable leases for the properties listed on Schedule C hereto as
leased to the
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Company, the Subsidiaries and the GP Entities, with such exceptions as
are not material and do not interfere with the use made and proposed
to be made of such properties by the Company, the Subsidiaries and the
GP Entities. All liens, charges, encumbrances, claims or restrictions
on or affecting any of the properties or the assets of the Company,
the Subsidiaries and the GP Entities which are required to be
disclosed in the Prospectus are disclosed therein. No tenant under any
of the leases pursuant to which the Company, the Subsidiaries or the
GP Entities lease apartment units at their properties has an option or
right of first refusal to purchase the premises demised under such
lease; the use and occupancy of each of the properties of the Company,
the Subsidiaries and, to the knowledge of the Company, the GP Entities
comply in all material respects with all applicable codes and zoning
laws and regulations. The Company and the Subsidiaries have no
knowledge of any pending or threatened condemnation or zoning change
that will in any material respect affect the size of, use of,
improvement of, construction on, or access to any of the properties of
the Company, the Subsidiaries and the GP Entities. The Company and the
Subsidiaries have no knowledge of any pending or threatened proceeding
or action that will in any manner materially affect the size of, use
of, improvements or construction on, or access to any of the
properties of the Company, the Subsidiaries or the GP Entities.
(v) Except for those properties listed on Schedule D hereto,
title insurance in favor of the Company and the Subsidiaries is
maintained with respect to each of the properties described in the
Prospectus in an amount at least equal to the cost of acquisition of
such property.
(w) Except as disclosed in the Registration Statement, the
Prospectus and any amendment or supplement thereto, there are no
mortgages or deeds of trust encumbering any of the properties. The
mortgages encumbering the properties are not convertible into any
equity securities of the Company or the Operating Partnership, nor
does the Company or any of the Subsidiaries or the GP Entities hold a
participating interest therein and, except as disclosed in the
Registration Statement, the Prospectus and any amendment or supplement
thereto, such mortgages are not cross-defaulted or
cross-collateralized to any party other than the Company and the
Subsidiaries.
(x) Except as would not, singularly or in the aggregate, have a
Material Adverse Effect, (i) there does not exist on any of the
properties described in the Prospectus or in any document incorporated
therein by reference any Hazardous Materials (as hereinafter defined)
in unlawful quantities, (ii) there has not occurred on or off such
properties any unlawful spills, releases, discharges or disposal of
Hazardous Materials, and (iii) the Company, the Subsidiaries and the
GP Entities have not failed to comply with all applicable local, state
and Federal environmental laws, regulations, ordinances and
administrative and judicial orders relating to the generation,
recycling, sale, storage, handling, transport and disposal of any
Hazardous Materials.
As used herein, "Hazardous Material" shall include, without
limitation, any flammable explosives, radioactive materials, oil,
petroleum, petroleum products, hazardous materials, hazardous wastes,
hazardous or toxic substances, asbestos or any material as defined by
any environmental laws, including, without limitation, the
Comprehensive Environmental Response, Compensation, and Liability Act
of 1980, as amended (42 U.S.C. Section 9601, et seq.) (CERCLA), the
Hazardous Materials Transportation Act, as amended (49 U.S.C. Section
1801, et seq.), the Resource Conservation and Recovery Act, as amended
(42 U.S C. Section 6901, et seq.), and in the regulations adopted
pursuant to each of the foregoing or by any Federal, state or local
governmental authority having jurisdiction over the properties as
described in the Prospectus.
Except for three wholly owned properties, all of the properties
of the Company and the Subsidiaries have been, and it is contemplated
that all future acquisitions will be,
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subjected to a Phase I or similar environmental assessment (which
generally includes a site inspection, interviews and a records review,
but no subsurface sampling). These assessments and follow-up
investigations, if any, of the properties (including, as appropriate,
asbestos, radon and lead surveys, additional public record review,
subsurface sampling and other testing), of the properties have not
revealed any environmental liability that the Company believes would
have a Material Adverse Effect.
(y) The Company has and maintains property and casualty insurance
in favor of the Company and the Subsidiaries with respect to such
entities and each of the properties owned, directly or indirectly, by
the Company, in an amount and on such terms as is reasonable and
customary for businesses of the type proposed to be conducted by the
Company and the Subsidiaries. Neither the Company nor any of the
Subsidiaries or the GP Entities has received from any insurance
company written notice of any material defects or deficiencies
affecting the insurability of any such properties.
(z) No holder of outstanding shares of capital stock or
securities in any Subsidiary, including units in the Operating
Partnership, representing rights to acquire shares of capital stock of
the Company has any rights to the registration of shares of capital
stock of the Company which would or could require such securities to
be included in the Registration Statement.
(aa) The Company has filed all Federal, state and foreign income
and franchise tax returns required to be filed on or prior to the date
hereof and has paid taxes shown as due thereon (or otherwise due and
payable), other than taxes which are being contested in good faith and
for which adequate reserves have been established in accordance with
generally accepted accounting principles; and the Company has no
knowledge, after due inquiry, of any tax deficiency which has been
asserted or threatened against the Company (except as otherwise
described in the Prospectus). To the knowledge of the Company, there
are no tax returns of the Company or any of the Subsidiaries or the GP
Entities that are currently being audited by state, local or Federal
taxing authorities or agencies which would have Material Adverse
Effect.
(bb) Each approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or
other governmental body necessary in connection with the execution and
delivery by the Company and the Operating Partnership of this
Agreement and the consummation of the transactions herein contemplated
has been obtained or made and is in full force and effect.
(cc) No material labor dispute with the employees of the Company
or any of the Subsidiaries exists or, to the knowledge of the Company,
is imminent or threatened.
(dd) The Company and the Subsidiaries own, or are licensed or
otherwise have the right to use, the material patents, patent rights,
licenses, inventions, copyrights, know-how (including trade secrets
and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, service marks and
trade names (collectively, "proprietary rights") presently employed by
them or which are necessary in connection with the conduct of the
business now operated by them, and neither the Company nor any of the
Subsidiaries has received any written notice or otherwise has actual
knowledge after due inquiry of any infringement of rights of others or
any other claims with respect to any material proprietary rights. The
Company and the Subsidiaries hold all material permits from
governmental authorities which are necessary to conduct their
businesses and are in compliance with the terms and conditions of such
permits.
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(ee) No transaction has occurred between or among the Company and
any of its officers or directors or any affiliate or affiliates of any
such officer or director that is required to be described in and is
not described or incorporated by reference into the Registration
Statement and the Prospectus.
(ff) None of the Company or the Operating Partnership, nor any of
their respective trustees, directors, officers, members or controlling
persons, has taken or will take, directly or indirectly, any action
resulting in a violation of Regulation M under the 1934 Act, or
designed to cause or result in, or which has constituted or that
reasonably might be expected to constitute, the stabilization or
manipulation of the price of any security of the Company to facilitate
the sale or resale of the Shares.
(gg) Commencing with the Company's taxable year ended December
31, 1994, the Company has been, and upon the sale of the Shares will
continue to be, organized and operated in conformity with the
requirements for qualification and taxation as a "real estate
investment trust" (a "REIT") under Sections 856 through 860 of the
Internal Revenue Code of 1986, as amended (the "Code"). The proposed
method of operation of the Company as described in the Prospectus will
enable the Company to continue to meet the requirements for
qualification and taxation as a REIT under the Code. The Company
intends to continue to operate in a manner which would permit it to
qualify as a REIT under the Code. The Company has no present intention
of changing its operations or engaging in activities which would cause
it to fail to qualify, or make economically undesirable its continued
qualification, as a REIT.
(hh) Each of the Company and the Subsidiaries is not, and upon
the issuance and sale of the Shares as herein contemplated and the
application of the net proceeds therefrom as described in the
Prospectus will not be, an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in
the 1940 Act.
(ii) The Shares have been approved for listing on the NYSE,
subject to official notice of issuance.
(jj) The Company and the Subsidiaries maintain a system of
internal accounting controls which the Company believes is sufficient
to provide reasonable assurance that (i) transactions are executed in
accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit the preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (iii) access to
financial assets is permitted only in accordance with management's
general or specific authorization; and (iv) the recorded
accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to
any differences.
(kk) Neither the Company nor any of the Subsidiaries, nor to the
knowledge of the Company, any employee or agent of the Company or any
Subsidiary, has made any payment of funds of the Company or any
Subsidiary or received or retained any funds in violation of any law,
rule or regulation or of a character required to be disclosed in the
Prospectus.
(ll) The Company has not distributed and, prior to the Closing
Date, will not distribute any offering material in connection with the
offering and sale of the Shares other than the Registration Statement,
the Prospectus or other materials, if any, permitted by the Securities
Act.
2. Placement Agent Fees.
9
(a) On the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth,
the Company agrees to pay Xxxxxxx Xxxxx a fee (the "Fee"), based upon
the aggregate amount of the Shares sold, as calculated in accordance
with the provisions of this Section for its services pursuant to this
Agreement. The Fee will equal to 5.125% of the Purchase Price.
(b) On the date in which the Fund purchases the Shares from the
Company in accordance with this Agreement (the "Closing Time"), the
Company shall pay the Fee to Xxxxxxx Xxxxx in cash by wire transfer of
immediately available funds to a bank account designated by Xxxxxxx
Xxxxx.
3. Covenants. The Company and the Operating Partnership, as the case may
be, covenant and agree with the Placement Agent as follows:
(a) The Company will cause the Prospectus Supplement to be filed
as required by Section 1(a) hereof (but only if the Placement Agent or
its counsel have not reasonably objected thereto by notice to the
Company after having been furnished a copy a reasonable time prior to
filing) and will notify the Placement Agent promptly of such filing.
During the period in which a prospectus relating to the Shares is
required to be delivered under the Securities Act or such date which
is 90 days after the Closing Date, whichever is later, the Company
will notify the Placement Agent promptly of the time when any
subsequent amendment to the Registration Statement has become
effective or any subsequent supplement to the Prospectus has been
filed, or of any request by the Commission for any amendment or
supplement to the Registration Statement or the Prospectus or for
additional information; the Company will prepare and file with the
Commission, promptly upon the Placement Agent's request, any
amendments or supplements to the Registration Statement or the
Prospectus that, in the Placement Agent's opinion, may be necessary or
advisable in connection with the Placement Agent's distribution of the
Shares; and the Company will file no amendment or supplement to the
Registration Statement or the Prospectus (other than any prospectus
supplement relating to the offering of other securities registered
under the Registration Statement or any document required to be filed
under the Exchange Act that upon filing is deemed to be incorporated
by reference therein) to which the Placement Agent or its counsel
shall reasonably object by notice to the Company after having been
furnished a copy a reasonable time prior to the filing; provided,
however, the Placement Agent and its counsel hereby waive any
objection to the filing of a prospectus supplement relating to the
Equity Focus Shares.
(b) The Company will advise the Placement Agent, promptly after
it shall receive notice or obtain knowledge thereof, of the issuance
by the Commission of any stop order suspending the effectiveness of
the Registration Statement, of the suspension of the qualification or
registration of the Shares for offering or sale in any jurisdiction,
or of the initiation or threatening of any proceeding for any such
purpose; and it will promptly use its best efforts to prevent the
issuance of any stop order or to obtain its withdrawal if such a stop
order should be issued.
(c) The Company will comply with all requirements imposed upon it
by the Securities Act, the Securities Act Rules and Regulations, the
Exchange Act and the Exchange Act Rules and Regulations as from time
to time in force, so far as necessary to permit the continuance of
sales of, or dealings in, the Shares as contemplated by the provisions
hereof and the Prospectus. If during such period where a prospectus
relating to the Shares is required to be delivered under the
Securities Act, any event occurs as a result of which, in the opinion
of the Placement Agent's counsel, the Registration Statement contains
an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the
10
statements therein not misleading or the Prospectus as then amended or
supplemented contains an untrue statement of a material fact or omits
to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading, or if during such period it is necessary to amend or
supplement the Registration Statement or the Prospectus to comply with
the Securities Act, the Company will promptly notify the Placement
Agent and will amend or supplement the Registration Statement or the
Prospectus (at the expense of the Company) so as to correct such
statement or omission or effect such compliance.
(d) The Company will furnish to the Placement Agent copies of the
Registration Statement, the Prospectus (including all documents
incorporated by reference therein) and all amendments and supplements
to the Registration Statement and the Prospectus that are filed with
the Commission during the period in which a prospectus relating to the
Shares is required to be delivered under the Securities Act or such
date which is 90 days after the Closing Date, whichever is later
(including all documents filed with the Commission during such period
that are deemed to be incorporated by reference therein), in each case
as soon as available and in such quantities as the Placement Agent may
from time to time reasonably request.
(e) During the period of five years commencing on the date upon
which the Prospectus Supplement is filed pursuant to Rule 424(b) under
the Securities Act, the Company will furnish the Placement Agent with
copies of filings of the Company under the Securities Act and the
Exchange Act and with all other financial statements and periodic and
special reports it distributes generally to the holders of any class
of its capital stock.
(f) The Company will make generally available to its stockholders
as soon as practicable, and in the manner contemplated by Rule 158 of
the Securities Act Rules and Regulations but in any event not later
than 15 months after the end of the Company's current fiscal quarter,
an earning statement (which need not be audited) covering a 12-month
period beginning after the date upon which the Prospectus Supplement
is filed pursuant to Rule 424(b) under the Securities Act that shall
satisfy the provisions of Section 11(a) of the Securities Act and Rule
158 of the Securities Act Rules and Regulations.
(g) The Company will not at any time, directly or indirectly,
take any action designed to, or which might reasonably be expected to,
cause or result in, or which has constituted or which might reasonably
be expected to constitute, a violation of Regulation M under the 1934
Act, or the stabilization of the price of its capital stock to
facilitate the sale or resale of any of the Shares.
(h) The Company will use its best efforts to continue to meet the
requirement to qualify as a REIT under the Code for each of its
taxable years for so long as the board of directors deems it in the
best interests of the Company's stockholders to remain so qualified.
(i) The Company will use its best efforts to effect the listing
of the Shares on the New York Stock Exchange.
(j) The Company will not be or become, at any time prior to the
expiration of three years after the date of the Agreement, an
"investment company," as such term is defined in the 1940 Act.
(k) The Company and the Operating Partnership will apply the net
proceeds from the sale of the Shares as set forth under the caption
"Use of Proceeds" in the Prospectus Supplement.
11
4. Payment of Expenses. The Company will pay or cause to be paid all
expenses incident to the performance of its obligations under this Agreement,
including (i) the preparation, printing and filing of the Registration Statement
(including financial statements and exhibits) and each amendment thereto, (ii)
the preparation and delivery to Xxxxxxx Xxxxx of this Agreement and such other
documents as may be required in connection with the offering, purchase, sale,
issuance or delivery of the Shares, (iii) the fees and disbursements of the
Company's counsel, accountants and other advisors, (iv) the qualification, if
required, of the Shares under securities or blue sky laws of such jurisdictions
designated by Xxxxxxx Xxxxx or the notification with respect thereto required by
any such jurisdiction including filing fees and the reasonable fees and
disbursements of counsel for Xxxxxxx Xxxxx in connection therewith and in
connection with the preparation of a blue sky survey and any supplement thereto,
(v) the printing and delivery to Xxxxxxx Xxxxx of copies of the Prospectus and
any amendments or supplements thereto, (vi) the fees and expenses of any
transfer agent or registrar for the Shares and (vii) the fees and expenses
incurred in connection with the listing of the Shares on the NYSE.
If this Agreement is terminated by Xxxxxxx Xxxxx in accordance with the
provisions of Section 5 or Section 9, the Company shall reimburse Xxxxxxx Xxxxx
for all of its out-of-pocket expenses, including the reasonable fees and
disbursements of counsel for Xxxxxxx Xxxxx.
5. Conditions of Placement Agent's Obligations. The Placement Agent's
obligation to purchase and pay for the Shares as provided herein shall be
subject to the accuracy, as of the date hereof and the Closing Time (as if made
at the Closing Time), of the representations and warranties of the Company
herein, to the performance by the Company of its obligations hereunder and to
the following additional conditions:
(a) The Registration Statement shall have been declared effective
under the Securities Act; the Prospectus shall have been filed as
required by Section 2(a) hereof; and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and
no proceeding for that purpose shall have been instituted or, to the
Placement Agent's knowledge or the knowledge of the Company,
threatened by the Commission, nor has any state securities authority
suspended the qualification or registration of the Shares for offering
or sale in any jurisdiction and any request of the Commission for
additional information (to be included in the Registration Statement
or the Prospectus or otherwise) shall have been complied with to the
satisfaction of the Placement Agent and the Placement Agent's counsel.
(b) The Placement Agent shall not have advised the Company that
the Registration Statement or any amendment thereto contains an untrue
statement of fact that in the opinion of the Placement Agent or the
Placement Agent's counsel is material or omits to state a fact that in
the opinion of the Placement Agent or its counsel is material and is
required to be stated therein or is necessary to make the statements
therein not misleading, or that the Prospectus, or any amendment or
supplement thereto, contains an untrue statement of fact that in the
opinion of the Placement Agent or the Placement Agent's counsel is
material or omits to state a fact that in the opinion of the Placement
Agent or the Placement Agent's counsel is material and is necessary,
in the light of the circumstances under which they were made, to make
the statements therein not misleading.
(c) Except as contemplated in the Prospectus Supplement,
subsequent to the respective dates as of which information is included
or incorporated by reference into the Registration Statement and the
Prospectus, there shall not have been any change, on a consolidated
basis, in the equity capitalization (except in connection with the
issuance of the Equity Focus Shares), short-term debt or long-term
debt of the Company, or any Material Adverse Effect, or any
development involving a prospective Material Adverse Effect or any
adverse change in the rating assigned to any securities of the
Company, that, in the Placement
12
Agent's judgment, makes it impractical or inadvisable (a) to commence
or continue the offering of the common shares in the Fund to the
public or (b) to enforce contracts for the sale of common shares in
the Fund.
(d) Xxxxx Peabody LLP, counsel for the Company, shall have
furnished to the Placement Agent its written opinion, as counsel to
the Company, addressed to the Placement Agent and dated the Closing
Date, as to which for matters of Maryland law Xxxxxxxx Chance Xxxxxx &
Xxxxx LLP may rely upon, in form and substance satisfactory to the
Placement Agent, to the effect that:
(i) Each of the Company, the Operating Partnership and the
QRS has been duly incorporated or formed, as the case may be, and
is validly existing as a corporation, general or limited
partnership, or other legal entity, as the case may be, in good
standing (to the extent such concept is applicable) under the
laws of its jurisdiction of incorporation or formation, as the
case may be, and has full power (corporate or other) and
authority to own, lease and operate its properties and to conduct
its business as described in the Registration Statement and the
Prospectus, and to enter into and perform its obligations under
this Agreement and is duly qualified or registered to do business
in each jurisdiction in which it owns or leases real property or
in which the conduct of its business requires such qualification
or registration, except where the failure to be so qualified or
registered would not result in a Material Adverse Effect;
(ii) The Company has authorized capital stock as set forth
in or incorporated by reference into the Prospectus. The Shares
have been duly authorized by the Company for issuance and sale
and when issued and sold pursuant to this Agreement will be duly
and validly issued, fully paid and nonassessable and none of them
will have been issued in violation of any preemptive or other
similar right under the charter documents of the Company or the
laws of the State of Maryland, as the case may be. The issued and
outstanding capital stock of the Company and the Shares conform,
or will conform, in all material respects to the descriptions
thereof contained in, or incorporated by reference into, the
Registration Statement and the Prospectus. The form of
certificate used to evidence the Shares is in due and proper form
and complies with all applicable statutory requirements, with any
applicable requirements of the Company's organizational documents
and with the requirements of the NYSE;
(iii) The Registration Statement has become effective under
the Securities Act, the Prospectus Supplement has been filed as
required by Section 2(a) hereof and, to the best knowledge of
such counsel, after due inquiry, no stop order suspending the
effectiveness of the Registration Statement has been issued and
no proceeding for that purpose has been instituted or threatened
by the Commission;
(iv) Each part of the Registration Statement, when such part
became effective, and the Prospectus and any amendment or
supplement thereto, on the date of filing thereof with the
Commission and at the Closing Date, complied as to form in all
material respects with the requirements of the Securities Act and
the Securities Act Rules and Regulations; it being understood
that such counsel need express no opinion as to the financial
statements, financial schedules or other financial or statistical
data included in, or incorporated by reference into, the
Registration Statement or the Prospectus;
(v) The descriptions in the Registration Statement and the
Prospectus of statutes, legal and governmental proceedings,
contracts and other documents are accurate and fairly present the
information required to be shown in all
13
material respects; and such counsel does not know of any statutes
or legal or governmental proceedings required to be described in
the Prospectus that are not described as required, or of any
contracts or documents of a character required to be described
that are not described as required, in the Registration Statement
or Prospectus;
(vi) This Agreement has been duly authorized, executed and
delivered by the Company and the Operating Partnership and
constitutes the legal, valid and binding obligations of the
Company and the Operating Partnership enforceable against them in
accordance with its terms, except as the enforceability thereof
may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and by general
equitable principles; the execution, delivery and performance of
this Agreement and the consummation of the transactions
contemplated herein will not result in a breach or violation of
any of the terms and provisions of, or constitute a default
under, (a) any statute or any indenture, mortgage, deed of trust,
voting trust agreement, loan agreement, bond, debenture, note
agreement or evidence of indebtedness, lease, contract or other
agreement or instrument filed as an exhibit to the Registration
Statement or any filing under the Exchange Act incorporated
therein by reference, except where such breach, violation or
default would not have a Material Adverse Effect, (b) the
articles of incorporation, by-laws, certificate of general or
limited partnership, partnership agreement, or other
organizational document of the Company, the Operating Partnership
or the QRS, as applicable, or (c) any order, rule or regulation
known to such counsel of any court or governmental agency or body
having jurisdiction over the Company, the Operating Partnership
or the QRS or any of their properties or other assets; and except
as may be required under any securities or blue sky laws, no
consent, approval, authorization, notice to, order of, or filing
with, any court or governmental agency or body is required for
the consummation of the transactions contemplated by this
Agreement in connection with the issuance or sale of the Shares
by the Company, except such as have been obtained (or, with
respect to filings, made) under the Securities Act or from the
NYSE;
(vii) The disclosure contained in the Prospectus under the
captions "Description of Capital Stock," "Certain Other
Provisions of Maryland Law and Our Articles of Incorporation" and
"Federal Income Tax Considerations," to the extent such
information constitutes matters of law, summaries of legal
matters or legal conclusions, has been reviewed by such counsel
and are accurate in all material respects.
(viii) Commencing with the Company's taxable year ending
December 31, 1994, the Company has been organized and operated in
conformity with the requirements for qualification as a REIT
under the Code, and its method of operation through the date of
this letter and its proposed method of operation, will continue
to enable it to meet the requirements for qualification and
taxation as a REIT.
(ix) To such counsel's knowledge, there is no litigation or
governmental or other proceeding or investigation, before any
court or before or by any public body or board pending or
threatened against, or involving the assets, properties or
businesses of, the Company or any of the Subsidiaries, involving
the Company's or any of its Subsidiaries' officers or directors
or to which any of the Company's or any of its Subsidiaries'
properties or other assets are subject which might reasonably be
expected to have a Material Adverse Effect or to affect the
consummation of the transactions contemplated herein or the
performance by the Company of its obligations hereunder.
14
(x) Neither the Company nor any of its Subsidiaries is an
"investment company" or an entity "controlled" by an "investment
company" within the meaning of the 1940 Act and the rules and
regulations thereunder.
Such counsel shall also include a statement to the effect that such counsel
has participated in the preparation of the Registration Statement and the
Prospectus and participated in discussions with certain officers, trustees and
employees of the Company, representatives of the independent accountants who
examined the financial statements of the Company included or incorporated by
reference in the Registration Statement and the Prospectus, and you and your
representatives and such counsel has reviewed certain Company and Operating
Partnership records and documents. While such counsel has not independently
verified and is not passing upon, and does not assume any responsibility for,
the accuracy, completeness or fairness of the information contained in the
Registration Statement and the Prospectus (including any of the documents
incorporated by reference therein except as set forth in opinion (vii) above),
on the basis of such participation and review, nothing has come to such
counsel's attention that would lead it to believe that the Registration
Statement (except for financial statements, supporting schedules and other
financial data included or incorporated by reference therein or omitted
therefrom and for statistical information derived from such financial
statements, supporting schedules or other financial data, as to which such
counsel need not express any belief), at the time such Registration Statement
became effective, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus (except for financial
statements, supporting schedules and other financial data included or
incorporated by reference therein or omitted therefrom and for statistical
information derived from such financial statements, supporting schedules or
other financial data, as to which such counsel need not express any belief), at
the time the Prospectus was issued, or at the Closing Date, included or includes
an untrue statement of a material fact or omitted or omits to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(e) Xxx X. XxXxxxxxx, Esq., General Counsel of the Company, shall
have furnished to the Placement Agent her written opinion addressed to
the Placement Agent and dated such Closing Date, in form and substance
satisfactory to the Placement Agent, to the effect that:
(i) Each of the Subsidiaries (other than the Operating
Partnership and the QRS) and the GP Entities has been duly
incorporated or formed, as the case may be, and is an existing
corporation, general or limited partnership, or other legal
entity, as the case may be, in good standing under the laws of
its jurisdiction of incorporation or formation, as the case may
be, and has full power (corporate and other) and authority to own
or hold its properties and to conduct the business in which it is
engaged, and is duly qualified or registered to do business in
each jurisdiction in which it owns or leases real property or in
which the conduct of its business requires such qualification or
registration, except where the failure to be so qualified or
registered, considering all such cases in the aggregate, would
not have a Material Adverse Effect;
(ii) The Company has authorized, issued and outstanding
capital stock as set forth in the Prospectus. All of the issued
and outstanding shares of capital stock of the Company have been
duly and validly authorized and issued, and all of the issued and
outstanding shares of capital stock of the Company are fully paid
and nonassessable and none of them was issued in violation of any
preemptive or other similar right under the charter documents of
the Company, the laws of the State of Maryland or any contract to
which the Company is a party, as the case may be. The Shares will
not have been issued in violation of any preemptive or other
similar right under any contract to which the Company is a party.
Except as disclosed in the
15
Registration Statement and the Prospectus, there is no
outstanding option, warrant or other right calling for the
issuance of, and no commitment, plan or arrangement to issue, any
shares of capital stock of the Company (except in connection with
the Equity Focus Shares), or any security convertible into,
exercisable for, or exchangeable for shares of capital stock of
the Company. No holder of any security of the Company has the
right to have any security owned by such holder included for
registration in the Registration Statement or otherwise
registered by the Company under the Securities Act in connection
with the issuance and sale of the Shares. All of the issued and
outstanding capital stock or ownership interests of each of the
Subsidiaries has been duly authorized and are validly issued,
fully paid and nonassessable and, except as specified on Schedule
A hereto, are wholly owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity;
(iii) The documents incorporated by reference in the
Registration Statement and the Prospectus or any amendment or
supplement thereto, when they became effective under the
Securities Act or were filed with the Commission under the
Securities Act or Exchange Act, as the case may be, complied as
to form, in all material respects, with the requirements of the
Securities Act or the Exchange Act, as applicable, and the rules
and regulations of the Commission thereunder;
(iv) There are no contracts or documents of a character (1)
to be filed under the Exchange Act if upon such filing they would
be incorporated by reference in the Registration Statement or the
Prospectus or (2) to be filed as exhibits to the Registration
Statement, that are not described and filed as required;
(v) The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated
herein will not result in a breach or violation of any of the
terms and provisions of, or constitute a default under, (a) any
statute, indenture, mortgage, deed of trust, voting trust
agreement, loan agreement, bond, debenture, note agreement or
evidence of indebtedness, lease, contract or other agreement or
instrument to which the Company, the Subsidiaries or the GP
Entities are a party or by which they are bound or to which any
of the property or other assets of the Company, the Subsidiaries
or the GP Entities is subject, except where such breach,
violation or default would not have a Material Adverse Effect,
(b) the articles of incorporation, by-laws, certificate of
general or limited partnership, partnership agreement, or other
organizational document of the Subsidiaries (other than the
Operating Partnership or the QRS) or the GP Entities, as
applicable, or (c) any order, rule or regulation known to such
counsel of any court or governmental agency or body having
jurisdiction over the Subsidiaries (other than the Operating
Partnership or the QRS) or the GP Entities or any of their
properties or other assets;
(vi) Neither the Company nor any of the Subsidiaries or the
GP Entities is in violation of any term or provision of their
respective articles of incorporation, charter, by-laws,
certificate of general or limited partnership, partnership
agreement or other organizational document, as applicable, or in
violation of or default under any indenture, mortgage, deed of
trust, voting trust agreement, loan agreement, bond, debenture,
note agreement or evidence of indebtedness, lease, contract,
permit, judgment, decree, order, statute, rule or regulation;
where such violation or default would have a Material Adverse
Effect; and
(vii) There is no litigation or governmental or other
proceeding or investigation, before any court or before or by any
public body or board pending or
16
threatened against, or involving the assets, properties or
businesses of, the GP Entities, involving the Company's or any of
its Subsidiaries' officers or directors or to which any of the
Company's or any of its Subsidiaries' properties or other assets
are subject which might reasonably be expected to have a Material
Adverse Effect or to affect the consummation of the transactions
contemplated herein or the performance by the Company of its
obligations hereunder.
(f) The Placement Agent shall have received from Xxxxxxxx Chance
Xxxxxx & Xxxxx LLP, the counsel to the Placement Agent, such opinion
or opinions, dated the Closing Date, with respect to the validity of
the Shares, the Registration Statement, the Prospectus and other
related matters as the Placement Agent reasonably may request, and
such counsel shall have received such papers and information as they
request to enable them to pass upon such matters.
(g) At the Closing Date, the Placement Agent shall have received
a letter, dated the date of delivery thereof, from
PricewaterhouseCoopers LLP, the independent public accountants of the
Company, in the form previously agreed to by the Placement Agent.
(h) The Placement Agent shall have received from the Company a
certificate, signed by the Chairman, the President, either of the
Co-Chief Executive Officers, the Executive Vice President or a Senior
Vice President and by the principal financial or accounting officer of
the Company, dated the Closing Date, to the effect that, to the best
of their knowledge based upon reasonable investigation:
(i) The representations and warranties of the Company in
this Agreement are true and correct, as if made at and as of the
Closing Date, and the Company has complied with all the
agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing Date;
(ii) No stop order suspending the effectiveness of the
Registration Statement have been issued, and no proceeding for
that purpose has been instituted or, to such officer's knowledge,
is threatened by the Commission nor has any state securities
authority suspended the qualification or registration of the
Shares for offering or sale in any jurisdiction;
(iii) Since the effective date of the Registration
Statement, there has occurred no event required to be set forth
in an amendment or supplement to the Registration Statement or
Prospectus that has not been so set forth, and there has been no
document required to be filed under the Exchange Act and the
Exchange Act Rules and Regulations of the Commission thereunder
that upon such filing would be deemed to be incorporated by
reference in the Prospectus that has not been so filed;
(iv) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, (a) there
has not been, and no development has occurred which could
reasonably be expected to result in, a Material Adverse Effect,
whether or not arising from transactions in the ordinary course
of business, in each case other than as set forth in or
contemplated by the Registration Statement and the Prospectus and
(b) neither the Company nor any of the Subsidiaries or the GP
Entities has sustained any material loss or interference with its
business or properties from fire, explosion, flood or other
casualty, whether or not covered by insurance, or from any labor
dispute or any court or legislative or other governmental action,
order or decree, which is not set forth in the Registration
Statement and the Prospectus; and
17
(v) such other matters as the Placement Agent or its counsel
may reasonably request.
(i) Prior to the Closing Date, the Shares shall have been duly
authorized for listing by the NYSE, subject to official notice of
issuance.
(j) All such opinions, certificates, letters and other documents
will be in compliance with the provisions hereof only if they are
satisfactory in form and substance to the Placement Agent or its
counsel. The Company will furnish the Placement Agent with such
conformed copies of such opinions, certificates, letters and other
documents as the Placement Agent shall reasonably request and the
Company shall furnish to the Placement Agent such further certificates
and documents as the Placement Agent shall have reasonably requested.
(k) Subsequent to the execution and delivery of this Agreement
(i) no downgrading or adverse change shall have occurred in the rating
accorded any security of the Company by any "nationally recognized
statistical rating organization," as that term is defined by the
Commission for purposes of Rule 436(g)(2) of the Securities Act Rules
and Regulations and (ii) no such organization shall have publicly
announced that it has under surveillance or review, with possible
negative implications, its rating of any security of the Company,
that, in either event, makes it impractical or inadvisable, in the
Placement Agent's judgment, (a) to commence or continue the offering
of the common shares in the Fund to the public or (b) to enforce
contracts for the sale of common shares in the Fund.
6. Indemnification.
(a) Indemnification of Placement Agent. Each of the Company and
the Operating Partnership agrees, jointly and severally, to indemnify
and hold harmless Xxxxxxx Xxxxx and each person, if any, who controls
Xxxxxxx Xxxxx within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act, and any director, officer, employee
or affiliate thereof, as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue
statement or alleged untrue statement of a material fact
contained in the Registration Statement (or any amendment
thereto) or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make
the statements therein not misleading or arising out of any
untrue statement or alleged untrue statement of a material fact
included in any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto), or the omission or alleged
omission therefrom of a material fact necessary in order to make
the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that
neither the Company nor the Operating Partnership shall be
required under this subsection (a) (i) to indemnify Xxxxxxx Xxxxx
with respect to any preliminary prospectus to the extent that any
loss, claim, damage or expense of Xxxxxxx Xxxxx results solely
from an untrue statement of a material fact contained in, or the
omission of a material fact from, such preliminary prospectus
which untrue statement or omission was corrected in the
Prospectus and which corrected Prospectus was furnished by the
Company to Xxxxxxx Xxxxx but was not sent or given by Xxxxxxx
Xxxxx to the purchaser of the Shares at or prior to the written
confirmation of such sale;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or any investigation
or proceeding by any governmental agency or body,
18
commenced or threatened, or of any claim whatsoever based upon
any such untrue statement or omission, or any such alleged untrue
statement or omission; provided any such settlement is effected
with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by
Xxxxxxx Xxxxx), reasonably incurred in investigating, preparing
or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under
(i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to
any loss, liability, claim, damage or expense to the extent arising
out of any untrue statement or omission or alleged untrue statement or
omission made in reliance upon and in conformity with written
information furnished to the Company by Xxxxxxx Xxxxx expressly for
use in the Registration Statement (or any amendment thereto) or any
preliminary prospectus or the Prospectus (or any amendment or
supplement thereto).
(b) Indemnification of Company, Directors and Officers. The
Placement Agent severally agrees to indemnify and hold harmless the
Company and the Operating Partnership, each person, if any, who
controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, and any officer,
director, trustee, employee or affiliate thereof, against any and all
loss, liability, claim, damage and expense described in the indemnity
contained in subsection (a) of this Section, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue
statements or omissions, made in the Registration Statement (or any
amendment thereto) or any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by
Xxxxxxx Xxxxx expressly for use in the Registration Statement (or any
amendment thereto) or such preliminary prospectus or the Prospectus
(or any amendment or supplement thereto).
(c) Actions against Parties; Notification. Each indemnified party
shall give notice as promptly as reasonably practicable to each
indemnifying party of any action commenced against it in respect of
which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any
liability hereunder to the extent it is not materially prejudiced as a
result thereof and in any event shall not relieve it from any
liability which it may have otherwise than on account of this
indemnity agreement. In the case of parties indemnified pursuant to
Section 6(a) above, counsel to the indemnified parties shall be
selected by Xxxxxxx Xxxxx, and, in the case of parties indemnified
pursuant to Section 6(b) above, counsel to the indemnified parties
shall be selected by the Company. An indemnifying party may
participate at its own expense in the defense of any such action;
provided, however, that counsel to the indemnifying party shall not
(except with the consent of the indemnified party) also be counsel to
the indemnified party. In no event shall the indemnifying parties be
liable for fees and expenses of more than one counsel (in addition to
any local counsel) separate from their own counsel for all indemnified
parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same
general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle
or compromise or consent to the entry of any judgment with respect to
any litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever in
respect of which indemnification or
19
contribution could be sought under this Section 6 or Section 7 hereof
(whether or not the indemnified parties are actual or potential
parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all
liability arising out of such litigation, investigation, proceeding or
claim and (ii) does not include a statement as to or an admission of
fault, culpability or a failure to act by or on behalf of any
indemnified party.
7. Contribution. If the indemnification provided for in Section 6 hereof is
for any reason unavailable to or insufficient to hold harmless an indemnified
party in respect of any losses, liabilities, claims, damages or expenses
referred to therein, then each indemnifying party shall contribute to the
aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Operating Partnership on the one hand and Xxxxxxx Xxxxx on the other hand from
the offering of the Shares pursuant to this Agreement or (ii) if the allocation
provided by clause (i) is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company and the Operating
Partnership on the one hand and of Xxxxxxx Xxxxx on the other hand in connection
with the statements or omissions which resulted in such losses, liabilities,
claims, damages or expenses, as well as any other relevant equitable
considerations.
The relative benefits received by the Company and the Operating Partnership
on the one hand and Xxxxxxx Xxxxx on the other hand in connection with the
offering of the Shares pursuant to this Agreement shall be deemed to be in the
same respective proportions as the total net proceeds from the offering of the
Shares pursuant to this Agreement (before deducting expenses) received by the
Company and the Fee received by Xxxxxxx Xxxxx.
The relative fault of the Company and the Operating Partnership on the one
hand and Xxxxxxx Xxxxx on the other hand shall be determined by reference to,
among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company or the Operating Partnership or by
Xxxxxxx Xxxxx and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Company, the Operating Partnership and Xxxxxxx Xxxxx agree that it
would not be just and equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to above in this
Section 7. The aggregate amount of losses, liabilities, claims, damages and
expenses incurred by an indemnified party and referred to above in this Section
7 shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, Xxxxxxx Xxxxx shall not
be required to contribute any amount in excess of the amount by which the total
price at which the Shares placed by it exceeds the amount of any damages which
Xxxxxxx Xxxxx has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
20
For purposes of this Section 7, each person, if any, who controls Xxxxxxx
Xxxxx within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act shall have the same rights to contribution as Xxxxxxx Xxxxx,
and each director of the Company and each officer of the Company and the
Operating Partnership who signed the Registration Statement, and each person, if
any, who controls the Company and the Operating Partnership within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act shall have
the same rights to contribution as the Company. For purposes of this Section 7,
the Company and the Operating Partnership shall be deemed one party, jointly and
severally liable for any obligations hereunder.
8. Representations, Warranties and Agreements to Survive Delivery. All
representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company or the Operating Partnership submitted
pursuant hereto, shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of Xxxxxxx Xxxxx or controlling
person, or by or on behalf of the Company or the Operating Partnership, and
shall survive delivery of the Shares to the Fund.
9. Termination of Agreement. The Placement Agent may terminate this
Agreement, by notice to the Company, at any time at or prior to Closing Time (i)
if there has been, since the time of execution of this Agreement or since the
respective dates as of which information is given in the Prospectus, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company, the Operating
Partnership and any of the Subsidiaries considered as one enterprise, whether or
not arising in the ordinary course of business, or (ii) if there has occurred
any material adverse change in the financial markets in the United States, any
outbreak of hostilities or escalation thereof or other calamity or crisis or any
change or development involving a prospective change in national or
international political, financial or economic conditions, in each case the
effect of which is such as to make it, in the judgment of Xxxxxxx Xxxxx,
impracticable or inadvisable to market the Shares or to enforce contracts for
the sale of the Shares, or (iii) if trading in any securities of the Company has
been suspended or materially limited by the Commission or the NYSE, or if
trading generally on the NYSE or the American Stock Exchange or in the Nasdaq
National Market has been suspended or materially limited, or minimum or maximum
prices for trading have been fixed, or maximum ranges for prices have been
required, by any of said exchanges or by such system or by order of the
Commission, the National Association of the Securities Dealers, Inc. or any
other governmental or industry authority, or a material disruption has occurred
in commercial banking or securities settlement or clearance services in the
United States, or (iv) if a banking moratorium has been declared by either
Federal or New York authorities.
(a) Liabilities. If this Agreement is terminated pursuant to this Section,
such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof, and provided further that Sections 1, 6,
8, and 12 shall survive such termination and remain in full force and effect.
10. Notices. All notices or communications hereunder shall be in writing
and if sent to the Placement Agent shall be mailed, delivered, telexed or
telecopied and confirmed to the Placement Agent in care of Xxxxxxx Xxxxx at
North Tower, 0 Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention: Xxxxxx Xxxxx
(with copy to Xxxxxxx X. Xxxxx, Esq., c/o Clifford Chance Xxxxxx & Xxxxx LLP,
000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 10166), or if sent to the Company, shall be
mailed, delivered, telexed or telecopied and confirmed to Xxx X. XxXxxxxxx,
Esq., c/o the Company at 000 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx 00000 (with
copy, which shall not constitute notice, to Xxxxxxx XxXxxx Xxxxx, Esq., c/o
Nixon Peabody LLP, 0000 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx 00000). Any party to
this Agreement may change such address for notices by sending to the other party
to this Agreement written notice of a new address for such purpose.
21
11. Parties. This Agreement shall inure to the benefit of, and be binding
upon, the Company and the Placement Agent and their respective successors and
the controlling persons, officers, directors, employees and representatives
referred to in Section 6 hereof, and no other person will have any right or
obligation hereunder.
12. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED IN SAID STATE. UNLESS OTHERWISE EXPLICITLY
PROVIDED, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
22
If the foregoing correctly sets forth the understanding among the Company,
the Operating Partnership and the Placement Agent, please so indicate in the
space provided below for that purpose, whereupon this letter shall constitute a
binding agreement between the Company, the Operating Partnership and the
Placement Agent.
Very truly yours,
HOME PROPERTIES OF NEW YORK, INC.
By:/s/Xxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: SVP and CFO
HOME PROPERTIES OF NEW YORK, L.P.
By: Home Properties of New York, Inc.,
its general partner
By:/s/Xxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: SVP and CFO
ACCEPTED as of the date first above
written:
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By:/s/Xxxxx Xxxxx
----------------------------------------
Name: Xxxxx Xxxxx
Title: Vice President
23
SCHEDULE A
----------
SUBSIDIARIES
Home Properties of New York, L.P. New York limited partnership 1% owned
by Home Properties of New York, Inc.
("HME"); 62% owned by Home Properties
Trust
Home Properties Trust Maryland real estate trust 100% owned
by HME
Home Properties Management, Inc. Maryland Corp. Home Properties of New
York, L.P. ("OP") owns the non-voting
shares (95% of total shares)/Xxxxxx
and Xxxxxx Xxxxxxxxx own the voting
shares (5% of total shares)
Home Properties Resident Services, Inc. Maryland Corp. OP owns the non-voting
shares (99% of total shares)/Xxxxxx
Xxxxxxxxx and Xxxxxx Xxxxxxxxx own the
voting shares (1% of total shares)
NOTE: The operations of Home Properties Management, Inc. and Home Properties
Resident Services, Inc. are not consolidated with those of the Company.
Home Properties Blackhawk, L.P. New York
Valley Park South Partnership New York
HME/Fairways at Village Green New York
P-K Partnership Pennsylvania
Xxxxxx Xxxx Associates New York
Home Properties/Fairways at Village Green New York
Home Properties Canterbury No. 1 Limited Partnership Maryland
Home Properties Canterbury No. 2 Limited Partnership Maryland
Home Properties Canterbury No. 3 Limited Partnership Maryland
Home Properties Gateway Village Limited Partnership Maryland
Home Properties of Newark Limited Partnership Maryland
Home Properties Xxxxxx Run Limited Partnership Maryland
Home Properties Xxxxxx Run 2 Limited Partnership Maryland
Home Properties Shakespeare Park Limited Partnership Maryland
Home Properties/Olde Mill New York
Home Properties Southern Xxxxxxx, Inc. New York
Perinton Development Corp. New York
LIMITED LIABILITY COMPANIES:
Carriage Hill Venture, LLC Michigan
Carriage Park Associates, LLC Michigan
Century Investors, LLC New York
Cherry Hill Village Venture, LLC Michigan
24
The Colony of Home Properties, LLC New York
Curren Terrace, LLC New York
Deerfield Xxxxx Home Properties LLC Michigan
Home Properties Bayberry Place, LLC New York
Home Properties Xxxxxx Xxxxx LLC Maryland
Home Properties Broadlawn, LLC New York
Home Properties Canterbury No. 4, LLC Maryland
Home Properties Carriage Hill, LLC Virginia
Home Properties Carriage House LLC Maryland
Home Properties Castle Club, LLC New York
Home Properties Colonies, LLC New York
Home Properties Country Village LLC Maryland
Home Properties Courtyard Village, LLC New York
Home Properties Cypress Place LLC New York
Home Properties of Devon, LLC New York
Home Properties Elmwood Terrace, LLC Maryland
Home Properties Falcon Crest Townhouses, LLC Maryland
Home Properties Golf Club, LLC New York
Home Properties Hampton Court, LLC New York
Home Properties Hauppauge, LLC New York
Home Properties Lake Grove, LLC New York
Home Properties Manor, LLC New York
Home Properties Mansion House, LLC New York
Home Properties Maple Lane I, LLC New York
Home Properties Maple Lane II, LLC New York
Home Properties Maryland, LLC Maryland
Home Properties Maryland II, LLC Maryland
Home Properties Maryland III, LLC Maryland
Home Properties Maryland IV, LLC Maryland
Home Properties Xxxxxxx, LLC New York
Home Properties Michigan Management, LLC Michigan
Home Properties Morningside Heights LLC Maryland
Home Properties Morningside North, LLC Maryland
Home Properties Morningside Six, LLC Maryland
Home Properties Orleans Village, LLC New York
Home Properties Parkview Gardens, LLC New York
Home Properties Pavilion, LLC Maryland
Home Properties Pines of Perinton, LLC New York
Home Properties Racquet Club East, LLC New York
Home Properties Rolling Park, LLC Maryland
Home Properties Sandalwood, LLC New York
Home Properties Seminary Hills, LLC Virginia
Home Properties Seminary Towers, LLC Virginia
Home Properties Selford Townhouses, LLC Maryland
Home Properties Sherwood Gardens, LLC New York
Home Properties South Bay Manor, LLC New York
Home Properties Southern Xxxxxxx, LLC New York
Home Properties Tamarron, LLC Maryland
Home Properties Timbercroft I, LLC Maryland
Home Properties Timbercroft III, LLC Maryland
Home Properties Xxxxxxx Park, LLC New York
25
Home Properties Virginia Village, LLC New York
Home Properties Wellington, LLC New York
Home Properties Xxxxxxx Xxxxx, LLC New York
Home Properties Xxxxxxx Xxxxx XX, LLC New York
Home Properties Xxxxxxx Xxxxx III, LLC New York
Home Properties WMF I, LLC New York
Home Properties Woodholme Manor, LLC New York
Macomb Apartments Home Properties, LLC Michigan
Royal Gardens Associates, LLC New York
Woodgate Place Associates, LLC New York
26
SCHEDULE B
----------
Home Properties Management, Inc. Xxxxxx and Xxxxxx Xxxxxxxxx each own
five voting shares (or 2.5% each).
Home Properties Resident Services, Inc. Xxxxxx Xxxxxxxxx and Xxxxxx Xxxxxxxxx
each own 24 voting shares (or 0.5%
each).
27
SCHEDULE C
----------
Raintree Island Apartments Buffalo, New York
<
28
SCHEDULE D
----------
Northgate Manor, Rochester, New York 000 Xxxxx
Xxxxxxxxxx Xxxxx, Xxxxxxxx, Xxx Xxxx 000 Xxxxx
Xxxxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxx 448 Units
Westminster, Syracuse, New York 000 Xxxxx
Xxxxxxx Xxxxxx, Xxxxxxx, Xxx Xxxx 00 Xxxxx
Xxxxxxxx Xxxx xx Xxxxxxxx, Xxxxxxx, Xxx Xxxx 324 Units
0000 Xxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx 000 Xxxxx
Xxxxxxxx Xxxxx, Xxxxxxxxx, Xxx Xxxx 120 Units
29
