Exhibit 1
FORM OF UNDERWRITING AGREEMENT
1,200,000 SHARES
G & L REALTY CORP.
____ % SERIES B CUMULATIVE PREFERRED STOCK
(Par Value $ 0.01 Per Share)
UNDERWRITING AGREEMENT
----------------------
November __, 1997
Sutro & Co. Incorporated
XxXxxxxx & Company Securities, Inc.
Xxxxxx Xxxxxxx Incorporated
c/o Sutro & Co. Incorporated
000 Xxxxxxxxxx Xxxxxx
Attention: Equity Syndication Department
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Dear Sirs:
1. INTRODUCTION. G & L Realty Corp., a Maryland corporation (the
"Company"), proposes to issue and sell to Sutro & Co. Incorporated, XxXxxxxx &
Company Securities, Inc. and Xxxxxx Xxxxxxx Incorporated (the "Underwriters") an
aggregate of 1,200,000 shares of the Company's ____ % Series B Cumulative
Preferred Stock, par value $0.01 per share (the "Preferred Stock"). The
1,200,000 shares of Preferred Stock to be sold by the Company are referred to
herein as the "Firm Shares." The Company also proposes to issue and sell to the
Underwriters an aggregate of not more than 180,000 additional shares of
Preferred Stock (the "Additional Shares"), if requested by the Underwriters in
accordance with Section 9 hereof. The Firm Shares and the Additional Shares are
collectively referred to herein as the "Shares." The words "you" and "your"
refer to the Underwriters.
The Company hereby agrees with the Underwriters as follows:
2. REPRESENTATIONS AND WARRANTIES.
(a) The Company represents, warrants and agrees with each of the
Underwriters that:
(i) A registration statement on Form S-11 (File No. 333-38843)
under the Securities Act of 1933, as amended (the "Act"), with respect to
the Shares, including a form of prospectus subject to completion, has been
prepared by the Company in conformity with the requirements of the Act and
the rules and regulations of the Securities and Exchange Commission (the
"Commission") thereunder (the "Rules and Regulations"). Such registration
statement has been filed with the Commission under the Act, and one or more
amendments to such registration
statement may also have been so filed. After the execution of this
Agreement, the Company shall file with the Commission either (A) if such
registration statement, as it may have been amended, has been declared by
the Commission to be effective under the Act, a prospectus in the form most
recently included in an amendment to such registration statement filed with
the Commission (or, if no such amendment shall have been filed, in such
registration statement), with such insertions and changes as are required
by Rule 430A under the Act or permitted by Rule 424(b) under the Act as
shall have been provided to and approved by the Underwriters prior to the
filing thereof, or (B) 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 Underwriters prior to the filing thereof. As used in this Agreement,
the term "Registration Statement" means such registration statement, as
amended at the time when it was or is declared effective, including all
financial schedules and exhibits thereto; the Registration Statement shall
be deemed to include 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 or post-effective amendment filed under the Act pursuant to Rule
462(b) of the Rules and Regulations, and after such filing the term
"Registration Statement" shall include the 462(b) Registration Statement;
the term "Preliminary Prospectus" means each prospectus subject to
completion contained in such registration statement or any amendment
thereto (including the prospectus subject to completion, if any, included
in the Registration Statement or any amendment thereto or filed pursuant to
Rule 424(a) under the Act at the time it was or is declared effective); and
the term "Prospectus" means the prospectus first filed with the Commission
pursuant to Rule 424(b) under the Act or, if no prospectus is required to
be filed pursuant to said Rule 424(b), such term means the prospectus
included in the Registration Statement.
(ii) The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus and has not instituted or
threatened to institute any proceedings with respect to such an order.
When any Preliminary Prospectus was filed with the Commission it (A)
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 and (B) 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 (A) 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 and (B) 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 and when any amendment or supplement thereto is filed with the
Commission pursuant to Rule 424(b) (or, if the Prospectus or such amendment
or supplement is not required to be so filed, when the Registration
Statement and when any amendment thereto containing such amendment or
supplement to the Prospectus was or is declared effective) and at all times
subsequent thereto up to and including the Closing Date (as defined in
Section 3 hereof) and the Option Closing Date (as defined in Section 9
hereof), the Prospectus, as amended or supplemented at any such time, (A)
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 and (B) 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
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under which they were made, not misleading. The foregoing provisions of
this paragraph (ii) shall 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, information contained in the last paragraph of the
outside front cover page, the last paragraph of the inside front cover page
and the section under the heading "Underwriting," all of which was
furnished in writing to the Company by or on behalf of the Underwriters
through the Underwriters expressly for use therein.
(iii) Each of the Company and its Subsidiaries (as hereinafter
defined) (A) is duly organized and validly existing in good standing under
the laws of its jurisdiction of organization, with full power and authority
(corporate and other) to own or lease its properties and to conduct its
business as described in the Registration Statement and the Prospectus (or,
if the Prospectus is not in existence, the most recent Preliminary
Prospectus); and (B) is duly qualified to do business as a foreign
corporation or partnership and is in good standing in each jurisdiction (x)
in which the conduct of its respective business requires such qualification
(except for those jurisdictions in which the failure so to qualify has not
had and will not have a Material Adverse Effect (as hereinafter defined))
and (y) in which the Company or respective Subsidiaries owns or leases
property. "Material Adverse Effect" means, when used in connection with
the Company or its Subsidiaries, any development, change or effect that is
materially adverse to the business, properties, assets, net worth,
condition (financial or other), results of operations or prospects of the
Company and its Subsidiaries taken as a whole. "Subsidiaries" means the
entities listed on Schedule II hereto, and except as set forth on Schedule
II hereto the Company has no other subsidiaries, whether corporate or
partnership or otherwise, and no interest in any other entity.
(iv) The Company has the duly authorized and validly outstanding
capitalization set forth under the caption "Capitalization" in the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) and will have the adjusted capitalization set forth
therein on the Closing Date and on the Option Closing Date, based on the
assumptions set forth therein. The securities of the Company conform to
the descriptions thereof contained in the Prospectus (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus). The
outstanding shares of the Company's Common Stock, par value $.01 per share
(the "Common Stock"), have been duly authorized and validly issued by the
Company and are fully paid and nonassessable. The outstanding shares of
the Company's 10.25% Series B Cumulative Preferred Stock, par value $0.01
per share, have been duly authorized and validly issued by the Company and
are fully paid and nonassessable. Except as created hereby or referred to
in the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus), or granted pursuant to the Company's 1993
Stock Incentive Plan, there are no outstanding options, warrants, rights or
other arrangements requiring the Company or any Subsidiary at any time to
issue any capital stock. 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 Shares and neither the filing of the registration
statement nor the offering or sale of the Shares as contemplated by this
Agreement gives rise to any rights, other than those which have been waived
or satisfied, for or relating to, the registration of any securities of the
Company. The Shares have been duly authorized; on the Closing Date or the
Option Closing Date (as the case may be), after payment therefor in
accordance with the terms of this Agreement, (A) the Firm Shares and the
Additional Shares to be sold by the Company hereunder will be validly
issued, fully paid and nonassessable, and (B) good and marketable title to
the Shares will pass to the Underwriters on the Closing Date or the Option
Closing Date (as the case may be) free and clear
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of any lien, encumbrance, security interest, claim or other restriction
whatsoever. All the outstanding shares of capital stock of each Subsidiary
organized as a corporation have been duly authorized and validly issued,
and all of the outstanding partnership units of each Subsidiary organized
as a Partnership have been duly created, validly issued and are enforceable
in accordance with their terms. The Company has received, subject to notice
of issuance, approval to have the Shares listed on The New York Stock
Exchange and the Company knows of no reason or set of facts which is likely
to adversely affect such approval.
(v) The consolidated financial statements and the related notes
and schedules thereto included in the Registration Statement and the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) fairly present the consolidated financial
condition, results of operations, stockholders' equity and cash flows of
the Company and its consolidated Subsidiaries at the dates and for the
periods specified therein. Such financial statements and the related notes
and schedules thereto have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the periods
involved (except as otherwise noted therein) and such financial statements
as are audited have been examined by Deloitte & Touche LLP, who are
independent public accountants within the meaning of the Act and the Rules
and Regulations, as indicated in their reports filed therewith. The
selected financial information and statistical data set forth under the
captions "Summary Consolidated Financial Data" and "Selected Consolidated
Financial and Operating Data" in the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus) have been
prepared on a basis consistent with the financial statements of the Company
and its consolidated Subsidiaries. The pro forma financial data set forth
in the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus), under the captions "Summary Consolidated
Financial Data" and "Selected Consolidated Financial and Operating Data"
have been prepared in conformity with the requirements of the Act and the
Rules and Regulations.
(vi) Statistical data that appears in the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus)
under the heading "Business and Properties" concerning the operation of the
Company's properties have been prepared based upon the Company's books and
records, all of which were prepared in the ordinary course of business, and
the tabular or other presentations of the statistical data have been made
in conformity with the requirements of the Act and the Rules and
Regulations and present fairly the information shown therein, and these
presentations do 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.
(vii) The Company (i) has filed when due all material federal,
state and local returns for "Taxes" (as hereinafter defined) that are
required to be filed by it for all taxable periods through and including
December 31, 1996; all such returns were prepared in the manner required by
applicable law and were true, correct and complete in all material
respects; and the Company has paid all Taxes reported as due in such
returns, and has paid any other material taxes for which it may be liable;
and (ii) is not in material default in respect of the payment of Taxes
levied or assessed against it or any of its assets for all taxable periods
through the date hereof, and there are no material liens or claims for
Taxes outstanding upon or against or threatened upon or against it or any
of its assets (other than liens for Taxes which are not yet due and
payable). No audit, inquiry, investigation or similar proceeding with
respect to Taxes is currently pending or threatened against the Company or
any of its assets with respect to which it
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may be liable for the payment of Taxes, an adverse outcome of which would
have a Material Adverse Effect. As used in the above paragraph, the term
"Tax" or "Taxes" shall include all United States federal, state, local and
foreign taxes, assessments or other governmental charges (whether imposed
directly or through withholding), including any interest, penalties and
additions to taxes applicable thereto.
(viii) The Company and each of its Subsidiaries maintain
insurance with insurance companies that the Company has no reason to
believe are not financially sound and reputable, of the types and in
amounts which they reasonably believe to be adequate for their business in
such amounts and with such deductibles as is customary for companies in the
same or similar business, all of which insurance is in full force and
effect.
(ix) Except as disclosed in the Prospectus (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus), there is no
pending action, suit, proceeding or investigation or, to the knowledge of
the Company, any threatened action, suit, proceeding or investigation
before or by any court, regulatory body or administrative agency or any
other governmental agency or body, domestic or foreign, which (A) questions
the validity of the capital stock of the Company or this Agreement or of
any action taken or to be taken by the Company pursuant to or in connection
with this Agreement, (B) is required to be disclosed in the Registration
Statement which is not so disclosed (and such proceedings, if any, as are
summarized in the Registration Statement have been properly described as
required by the Act and the Rules and Regulations in all material
respects), or (C) may have a Material Adverse Effect.
(x) The Company has full legal right, power and authority to
enter into this Agreement and to consummate the transactions provided for
herein. This Agreement has been duly authorized, executed and delivered by
the Company and, assuming it is a binding agreement of yours, constitutes a
legal, valid and binding agreement of the Company enforceable against the
Company in accordance with its terms (except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other laws of general application relating to or affecting the enforcement
of creditors' rights and the application of equitable principles relating
to the availability of remedies and except as rights to indemnity or
contribution may be limited by federal or state securities laws and the
public policy underlying such laws), and none of the Company's execution or
delivery of this Agreement, its performance hereunder, its consummation of
the transactions contemplated herein, its application of the net proceeds
of the offering of the Firm Shares in the manner set forth under the
caption "Use of Proceeds" or the conduct of its business as described in
the Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus), conflicts or will conflict with or results or will
result in any breach or violation of any of the terms or provisions of, or
constitutes or will constitute a default under, causes or will cause (or
permits or will permit) the maturation or acceleration of any liability or
obligation or the termination of any right under, or result in the creation
or imposition of any lien, charge, or encumbrance upon, any property or
assets of the Company or any of its Subsidiaries pursuant to the terms of
(A) the certificate of incorporation or by-laws of the Company or any of
its Subsidiaries, (B) any indenture, mortgage, deed of trust, voting trust
agreement, stockholders' agreement, note agreement or other agreement or
instrument to which the Company or any of its Subsidiaries is a party or by
which any of them are or may be bound or to which any of their respective
property is or may be subject or (C) any statute, judgment, decree, order,
rule or regulation applicable to the Company or any of its Subsidiaries of
any government, arbitrator, court, regulatory body or administrative agency
or
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other governmental agency or body, domestic or foreign, having jurisdiction
over the Company, any of its Subsidiaries or any of their respective
activities or properties.
(xi) All executed agreements or copies of executed agreements
filed or incorporated by reference as exhibits to the Registration
Statement to which the Company or any of its Subsidiaries is a party or by
which any of them are or may be bound or to which any of their assets,
properties or businesses is or may be subject have been duly and validly
authorized, executed and delivered by the Company or such Subsidiaries, as
the case may be, and constitute the legal, valid and binding agreements of
the Company or such Subsidiaries, as the case may be, enforceable against
each of them in accordance with their respective material terms (except as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws relating to enforcement of creditors'
rights generally, and general equitable principles relating to the
availability of remedies, and except as rights to indemnity or contribution
may be limited by federal or state securities laws and the public policy
underlying such laws). The descriptions in the Registration Statement of
contracts and other documents are accurate and fairly present the
information required to be shown with respect thereto by the Act and the
Rules and Regulations, and there are no contracts or other documents which
are required by the Act or the Rules and Regulations to be described in the
Registration Statement or filed as exhibits to the Registration Statement
which are not described or filed as required or incorporated therein by
reference, and the exhibits which have been filed are complete and correct
copies of the documents of which they purport to be copies.
(xii) Subsequent to the most recent respective dates as of which
information is given in the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus), and except as expressly
contemplated therein, neither the Company nor any of its Subsidiaries has
incurred, other than in the ordinary course of its business, any material
liabilities or obligations, direct or contingent, purchased any of its
outstanding capital stock, paid or declared any dividends or other
distributions on its capital stock or entered into any material
transactions not in the ordinary course of business, and there has been no
material change in capital stock or debt or a change that has resulted in a
Material Adverse Effect. Neither the Company nor any of its Subsidiaries
(or the manner in which any of them conducts its business) is in breach or
violation of, or in default under, any term or provision of (A) its
certificate of incorporation or bylaws, (B) any indenture, mortgage, deed
of trust, voting trust agreement, stockholders' agreement, note agreement
or other agreement or instrument to which it is a party or by which it is
or may be bound or to which any of its property is or may be subject, or
any indebtedness, the effect of which breach or default singly or in the
aggregate may have a Material Adverse Effect, or (C) any statute, judgment,
decree, order, rule or regulation applicable to the Company or any of its
Subsidiaries or of any arbitrator, court, regulatory body, administrative
agency or any other governmental agency or body, domestic or foreign,
having jurisdiction over the Company or any of its Subsidiaries or any of
their respective activities or properties and the effect of which breach or
default singly or in the aggregate may have a Material Adverse Effect.
(xiii) No labor disturbance by the employees of the Company or
any of its Subsidiaries exists or, to the Company's knowledge, is imminent
which may have a Material Adverse Effect.
(xiv) Since its inception, the Company has not incurred any
material liability arising under or as a result of the application of the
provisions of the Act.
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(xv) No consent, approval, authorization or order of or filing
with any court, regulatory body, administrative agency or any other
governmental agency or body, domestic or foreign, is required for the
performance of this Agreement or the consummation of the transactions
contemplated hereby, except such as have been or may be obtained under the
Act, such additional steps as may be required by the Commission, the
National Association of Securities Dealers, Inc. or the New York Stock
Exchange, or that may be required under state securities or Blue Sky laws
in connection with the Underwriters' purchase and distribution of the
Shares.
(xvi) There are no contracts, agreements or understandings
between the Company and any person granting such person the right to
require the Company to file a registration statement under the Act with
respect to any securities of the Company owned or to be owned by such
person or to require the Company to include such securities under the
Registration Statement (other than those that have been disclosed in the
Prospectus or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus), that have not been waived with respect to the
Registration Statement.
(xvii) Neither the Company nor any of its officers, directors or
affiliates (within the meaning of the Rules and Regulations) has taken,
directly or indirectly, any action designed to stabilize or manipulate the
price of any security of the Company, or which has constituted or which
might in the future reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the Company,
to facilitate the sale or resale of the Shares or otherwise.
(xviii) Each of the Company and its Subsidiaries has good and
marketable title to, or valid and enforceable leasehold interests in, all
properties and assets owned or leased by it, free and clear of all liens,
encumbrances, security interests, claims, restrictions, equities, claims
and defects, except (A) such as are described in the Registration Statement
and Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus), or such as do not materially adversely affect the
value of any of such properties or assets taken as a whole and do not
materially interfere with the use made and proposed to be made of any of
such properties or assets, and (B) liens for taxes not yet due and payable
as to which appropriate reserves have been established and reflected in the
financial statements included in the Registration Statement. The
properties and business of the Company and its Subsidiaries conform in all
material respects to the descriptions thereof contained in the Registration
Statement and the Prospectus (or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus). Except for leases disclosed on
the rent rolls maintained by the Company in the ordinary course of
business, there are no leases from the Company or any of its Subsidiaries
affecting any the Company or its Subsidiaries property. The aggregate
amount of rents collected more than one month in advance by the Company and
by each of its Subsidiaries under any lease has not exceeded a total of
$50,000. All rent due to date under each such lease has been collected in
the ordinary course of business and no concession has been granted to any
lessee in the form of a waiver, release, reduction, discount or other
alteration of rent due or to become due, other than in the ordinary course
of business. Except as described in the Registration Statement and
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) the interest of the lessee under each such lease is
as lessee only, with no options to purchase or rights of first refusal. No
condemnation proceeding involving any property owned or leased by the
Company or its Subsidiaries or any portion thereof or parking facility used
in connection therewith has been commenced or, to the knowledge of the
Company, is contemplated by any governmental
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authority, nor has any portion of any property or any parking facility used
in connection therewith been materially damaged due to fire or other
casualty which would materially impair the use of the property. None of the
properties owned or leased by the Company or any of its Subsidiaries is
being operated in violation of any law, rule or regulation or determination
of any court or other governmental authority (a "Requirement of Law") or
any building permits, restrictions of record, or any agreement affecting
any such property or part thereof, or any judgment, decree or order
applicable to such property which would materially impair the use of the
property. All governmental permits (including, without limitation, building
permits and certificates of occupancy) necessary under applicable
Requirements of Law to lawfully construct, own, lease, occupy, use and
operate each property owned or leased by the Company or any of its
Subsidiaries and the improvements thereon, including, but not limited to,
all applicable zoning laws, ordinances and regulations, have been obtained.
Each property owned or leased by the Company or any of its Subsidiaries has
adequate water, gas, telephone, electrical supply, storm and sanitary
sewerage facilities and means of access to and from public streets or
highways for the purposes for which it is intended to be used.
(xix) Except as disclosed in the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus) (i)
the operations and properties of the Company and its Subsidiaries comply in
all respects with all Environmental Laws (as defined below), except for
such non-compliance as would not (if enforced in accordance with
Environmental Laws) result in liability that would have a Material Adverse
Effect, (ii) the Company and its Subsidiaries have obtained and maintained
all licenses, permits, authorizations and registrations required under any
Environmental Law ("Environmental Permits") and all such Environmental
Permits are in good standing, and each of the Company and its Subsidiaries
is in compliance with all terms and conditions thereof, except to the
extent that any failure to obtain, maintain or comply with Environmental
Permits would not result in a liability that would have a Material Adverse
Effect, (iii) there are no outstanding written orders from or agreements
with any governmental authority nor any judicial or docketed administrative
proceedings respecting any Environmental Law, Environmental Claim (as
defined below) or Hazardous Material (as defined below) to which the
Company or any Subsidiary or any of such person's properties or operations,
is subject, and (iv) there are no Hazardous Materials or other conditions
or circumstances existing with respect to any Property (as such term is
defined in the Prospectus) that would reasonably be expected to give rise
to material Environmental Claims for any such condition, circumstance or
property. In addition, (A) there are not located on the any of properties
owned or leased by the Company or its Subsidiaries underground storage
tanks (x) that are not properly registered or permitted under applicable
Environmental Laws, or (y) that are leaking or emitting Hazardous Materials
whether on- or off-site, and (B) the Company and each Subsidiary have
notified all of their employees of the existence of material health
hazards, if any, arising from the conditions of their employment to the
extent required under any Environmental Laws and have met all material
notification requirements under Title III of CERCLA and all other
Environmental Laws. "Environmental Laws" means all federal, state or local
------------------
laws, statutes, common law duties, rules, regulations, ordinances and
codes, together with all administrative orders, administrative or
regulatory requirements, licenses, authorizations and permits of, and
agreements with, any governmental authorities, in each case relating to
environmental, health, safety and land use matters. "Environmental Claims"
--------------------
means all claims, however asserted, by any governmental authority or other
person alleging potential liability or responsibility for violation of any
Environmental Law or for release or injury to the environment or threat to
public health, personal injury (including sickness, disease or death),
property damage, natural resources damage, or otherwise alleging liability
or responsibility for damages (punitive or otherwise),
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cleanup, removal, remedial or response costs, restitution, civil or
criminal penalties, injunctive relief, or other type of relief, resulting
from or based upon (a) the presence, placement, discharge, emission or
release (including intentional and unintentional, negligent and non-
negligent, sudden or non-sudden, accidental or non-accidental placement,
spills, leaks, discharges, emissions or releases) of any Hazardous Material
at, in, or from property, whether or not owned by the Company, or (b) any
other circumstances forming the basis of any violation, or alleged
violation, of any Environmental Law. "Hazardous Materials" means (i) all
-------------------
those substances which are regulated by, or which may form the basis of
liability under, any Environmental Law, including all substances identified
under any Environmental Law as a pollutant, contaminant, hazardous waste,
hazardous constituent, special waste, hazardous substance, hazardous
material, toxic substance, or petroleum or petroleum-derived substance or
waste, (ii) any other materials or pollutants that (a) pose a hazard to any
property of the Company or any Subsidiary or to persons on or about such
property or (b) cause such property to be in violation of any Environmental
Laws, (iii) asbestos in any form which is or could become friable, urea
formaldehyde foam insulation, electrical equipment which contains any oil
or dielectric fluid containing levels of polychlorinated biphenyls in
excess of fifty parts per million, and (iv) any other chemical, material,
substance, or waste, exposure to which is prohibited, limited, or regulated
by any governmental authority or may or could pose a hazard to the health
and safety of the owners, occupants, or any persons surrounding the
relevant property.
(xx) Neither the Company nor any Subsidiary has violated any
applicable safety, health or similar law applicable to the business of the
Company, nor any federal or state law relating to discrimination in the
hiring, promotion, or pay of employees, nor any applicable federal or state
wages and hours law, nor any provisions of the Employee Retirement Income
Security Act of 1974 ("ERISA") or the rules and regulations promulgated
thereunder, the consequences of which violation may have a Material Adverse
Effect.
(xxi) Each of the Company and its Subsidiaries holds all
franchises, licenses, permits, approvals, certificates and other
authorizations from federal, state and other governmental or regulatory
authorities necessary to the ownership, leasing and operation of its
properties or required for the present conduct of its business, and such
franchises, licenses, permits, approvals, certificates and other
governmental authorizations are in full force and effect and the Company
and its Subsidiaries are in compliance therewith in all material respects
except where the failure so to obtain, maintain or comply with would not
have a Material Adverse Effect.
(xxii) No Subsidiary of the Company is currently prohibited,
directly or indirectly, from paying any dividends to the Company, from
making any other distribution on such Subsidiaries' capital stock, from
repaying to the Company any loans or advances to such Subsidiaries from the
Company or from transferring any of such Subsidiary's property or assets to
the Company or any other Subsidiaries of the Company, except as described
in or contemplated by the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).
(xxiii) The Company has been organized and operated 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"), for its taxable years ended December 31, 1994,
December 31, 1995 and December 31, 1996, and the Company's present and
proposed
9
method of operation will enable it to continue to meet the requirements for
qualification as a REIT under the Code.
3. PURCHASE, SALE AND DELIVERY OF THE SHARES. On the basis of the
representations, warranties, covenants and agreements herein contained, but
subject to the terms and conditions herein set forth, (A) the Company agrees to
sell to each Underwriter and each Underwriter, severally but not jointly, agrees
to purchase from the Company at a purchase price of $24 per Share, the number of
Firm Shares set forth opposite the name of such Underwriter in Column (1) of
Schedule I hereto.
Delivery of certificates, and payment of the purchase price, for the Firm
Shares shall be made at the offices of Xxxxxx, Xxxx & Xxxxxxxx LLP, Los Angeles,
California, or such other location as shall be agreed upon by the Company and
the Underwriters. Such delivery and payment shall be made at 8:00 a.m., Pacific
Daylight Time, on November __,, 1997 or at such other time and date not more
than ten business days thereafter as shall be agreed upon by the Underwriters
and the Company. Payment for the Firm Shares shall be made to the Company by
same-day wire transfer in immediately available United States funds payable to
the order of the Company. The time and date of such delivery and payment are
herein called the "Closing Date." Delivery of the certificates for the Firm
Shares shall be made to the Underwriters for the respective accounts of the
Underwriters against payment by the Underwriters through the Underwriters of the
purchase price for the Firm Shares. The certificates for the Shares to be so
delivered will be in definitive, fully registered form, will bear no restrictive
legends and will be in such denominations and registered in such names as the
Underwriters shall request, not less than two full business days prior to the
Closing Date, provided, however, that in the event the Company is unable to
-----------------
deliver definitive certificates at such time, the Company may deliver temporary
certificates in lieu thereof, which shall be replaced with definitive
certificates as soon as reasonably practicable thereafter. The certificates for
the Firm Shares will be made available to the Underwriters at such office or
such other place as the Underwriters may designate for inspection, checking and
packaging not later than 9:30 a.m. Pacific Daylight Time on the business day
prior to the Closing Date.
4. PUBLIC OFFERING OF THE SHARES. It is understood that the Underwriters
propose to make a public offering of the Shares at the price and upon the other
terms set forth in the Prospectus.
5. COVENANTS OF THE COMPANY.
(a) The Company covenants and agrees with each of the Underwriters
that:
(i) 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
practicable. If required, the Company will file the Prospectus and any
amendment or supplement thereto with the Commission in the manner and
within the time period required by Rule 424(b) under the Act. During any
time when a prospectus relating to the Shares is required to be delivered
under the Act, the Company (A) will comply with all requirements imposed
upon it by the Act and the Rules and Regulations to the extent necessary to
permit the continuance of sales of or dealings in the Shares in accordance
with the provisions hereof and of the Prospectus, as then amended or
supplemented, and (B) will not file with the Commission the prospectus or
the amendment referred to in the third sentence of Section 2 (a) (i)
hereof, any amendment or supplement to such prospectus or any amendment to
the Registration Statement of which the Underwriters shall not previously
have been advised and furnished with a copy a reasonable period of time
prior to the proposed filing and as to which filing the Underwriters shall
not have given their consent.
10
(ii) As soon as the Company is advised or obtains knowledge
thereof, the Company will advise the Underwriters (A) when the Registration
Statement, as amended, has become effective; if the provisions of Rule 430A
promulgated under the Act will be relied upon, when the Prospectus has been
filed in accordance with said Rule 430A and when any post-effective
amendment to the Registration Statement becomes effective; (B) of any
request made by the Commission for amending the Registration Statement, for
supplementing any Preliminary Prospectus or the Prospectus or for
additional information, or (C) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or
any post-effective amendment thereto or any order preventing or suspending
the use of any Preliminary Prospectus or the Prospectus or any amendment or
supplement thereto or the institution or threat of any investigation or
proceeding for that purpose, and will use its best efforts to prevent the
issuance of any such order and, if issued, to obtain the lifting thereof as
soon as possible.
(iii) The Company will (A) use its best efforts to arrange for
the qualification of the Shares for offer and sale under the state
securities or blue sky laws of such jurisdictions as the Underwriters may
designate, (B) continue such qualifications in effect for as long as may be
necessary to complete the distribution of the Shares, and (C) make such
applications, file such documents and furnish such information as may be
required for the purposes set forth in clauses (A) and (B); provided,
--------
however, that the Company shall not be required to qualify as a foreign
-------
corporation or file a general or unlimited consent to service of process in
any such jurisdiction.
(iv) The Company consents to the use of the Prospectus (and any
amendment or supplement thereto) by the Underwriters and all dealers to
whom the Shares may be sold, in connection with the offering or sale of the
Shares and for such period of time thereafter as the Prospectus is required
by law to be delivered in connection therewith. If, at any time when a
prospectus relating to the Shares is required to be delivered under the
Act, any event occurs as a result of which the Prospectus, as then amended
or supplemented, would include any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein not
misleading, or if it becomes necessary at any time to amend or supplement
the Prospectus to comply with the Act or the Rules and Regulations, the
Company promptly will so notify the Underwriters and, subject to section 5
(a) (i) hereof, will prepare and file with the Commission an amendment to
the Registration Statement or an amendment or supplement to the Prospectus
which will correct such statement or omission or effect such compliance,
each such amendment or supplement to be reasonably satisfactory to counsel
to the Underwriters.
(v) As soon as practicable, but in any event not later than 45
days after the end of the 12-month period beginning on the day after the
end of the fiscal quarter of the Company during which the effective date of
the Registration Statement occurs (90 days in the event that the end of
such fiscal quarter is the end of the Company's fiscal year), the Company
will make generally available to its security holders, in the manner
specified in Rule 158(b) of the Rules and Regulations, and to the
Underwriters, an earnings statement which will be in the detail required
by, and will otherwise comply with, the provisions of Section 11(a) of the
Act and Rule 158(a) of the Rules and Regulations, which statement need not
be audited unless required by the Act or the Rules and Regulations,
covering a period of at least 12 consecutive months after the effective
date of the Registration Statement.
11
(vi) During a period of five years after the date hereof, the
Company will furnish to its stockholders, as soon as practicable, annual
reports (including financial statements audited by independent public
accountants) and unaudited quarterly reports of earnings, and will deliver
to the Underwriters:
(A) concurrently with furnishing such quarterly reports to its
stockholders, statements of income of the Company for each quarter in the
form furnished to the Company's stockholders and certified by the
Company's principal financial or accounting officer;
(B) concurrently with furnishing such annual reports to its
stockholders, a balance sheet of the Company as at the end of the
preceding fiscal year, together with statements of operations,
stockholders' equity, and cash flows of the Company for such fiscal year,
accompanied by a copy of the report thereon of independent public
accountants;
(C) as soon as they are available, copies of all information
(financial or other) mailed to stockholders;
(D) as soon as they are available, copies of all reports and
financial statements furnished to or filed with the Commission or any
securities exchange;
(E) every press release and every material news item or article
of interest to the financial community in respect of the Company or its
affairs which was released or prepared by the Company; and
(F) any additional information of a public nature concerning the
Company or its business which the Underwriters may reasonably request.
During such five-year period, if the Company has active
subsidiaries (whether corporate or partnership or otherwise), the foregoing
financial statements will be on a consolidated basis to the extent that the
accounts of the Company and such subsidiaries (corporate or partnership or
otherwise) are consolidated, and will be accompanied by similar financial
statements for any significant subsidiary (corporate or partnership or
otherwise) which is not so consolidated.
(vii) The Company will maintain a transfer agent and, if
necessary under the jurisdiction of incorporation of the Company, a
registrar (which may be the same entity as the transfer agent) for its
Preferred Stock.
(viii) The Company will furnish, without charge, to the
Underwriters or on the Underwriters' order, at such place as the
Underwriters may designate, copies of the Preliminary Prospectus, the
Registration Statement and any pre-effective or post-effective amendments
thereto (two copies of which will be signed and will include all financial
statements and exhibits) and the Prospectus, and all amendments and
supplements thereto, in each case as soon as available and in such
quantities as the Underwriters may reasonably request.
(ix) The Company will not, directly or indirectly, without the
prior written consent of the Underwriters, issue, offer, sell, grant any
option to purchase or otherwise dispose
12
(or announce any issuance, offer, sale, grant of any option to purchase or
other disposition) of any shares of Preferred Stock or any securities
convertible into, or exchangeable or exercisable for, shares of Preferred
Stock for a period of 180 days after the date hereof, except pursuant to
this Agreement and except as contemplated by the Prospectus.
(x) The Company will use its best efforts to cause the Shares to
be duly authorized for listing on The New York Stock Exchange prior to the
Closing Date.
(xi) Neither the Company nor any of its officers or directors,
nor affiliates of any of them (within the meaning of the Rules and
Regulations) will take, directly or indirectly, any action designed to, or
which might in the future reasonably be expected to cause or result in,
stabilization or manipulation of the price of any securities of the
Company.
(xii) The Company will apply the net proceeds of the offering
received by it in the manner set forth under the caption "Use of Proceeds"
in the Prospectus.
(xiii) The Company will timely file all such reports, forms or
other documents as may be required from time to time, under the Act, the
Rules and Regulations, the Exchange Act, and the rules and regulations
thereunder, and all such reports, forms and documents filed will comply as
to form and substance with the applicable requirements under the Act, the
Rules and Regulations, the Exchange Act and the rules and regulations
thereunder.
(xiv) The Company, so long as consistent with the best interests
of its shareholders, will use its best efforts to continue to meet the
requirements to qualify as a REIT under the Code.
6. EXPENSES.
(a) Regardless of whether the transactions contemplated in this
Agreement are consummated, and regardless of whether for any reason this
Agreement is terminated, the Company will pay, and hereby agrees to indemnify,
each Underwriter against all fees and expenses incident to the performance of
the obligations of the Company under this Agreement, including, but not limited
to, (i) fees and expenses of accountants and counsel for the Company, (ii) all
costs and expenses incurred by the Company in connection with the preparation,
duplication, printing, filing, delivery and shipping of copies of the
Registration Statement and any pre-effective or post-effective amendments
thereto, any Preliminary Prospectus and the Prospectus and any amendments or
supplements thereto (including postage costs related to the delivery by the
Underwriters of any Preliminary Prospectus or Prospectus, or any amendment or
supplement thereto), this Agreement, the Agreement Among Underwriters, any
Selected Dealer Agreement, Underwriters' Questionnaire, Underwriters' Power of
Attorney, and all other documents in connection with the transactions
contemplated herein, including the cost of all copies thereof, (iii) fees and
expenses relating to qualification of the Shares under state securities or blue
sky laws, including the cost of preparing and mailing the preliminary and final
blue sky memoranda and filing fees and disbursements and fees of counsel and
other related expenses, if any, in connection therewith, (iv) filing fees of the
Commission and the NASD relating to the Shares, (v) any fees and expenses in
connection with the listing of the Shares on the New York Stock Exchange, and
(vi) costs and expenses incident to the preparation, issuance and delivery to
the Underwriters of any certificates evidencing the Shares, including transfer
agent's and registrar's fees and any applicable transfer taxes incurred in
connection with the delivery to the Underwriters of the Shares to be sold by the
Company pursuant to this Agreement, (vii) costs and expenses incident to any
meetings with prospective investors in the Shares
13
(other than as shall have been specifically approved by the Underwriters) and
(viii) costs and expenses of advertising relating to the offering of the Shares
(other than as shall have been specifically approved by the Underwriters).
(b) If the purchase of the Shares as herein contemplated is not
consummated for any reason other than the Underwriters' default under this
Agreement or other than by reason of Sections 11(a), (b)(iii), (b)(iv) and
(b)(v)(A), the Company shall reimburse the Underwriters for their out-of-pocket
expenses (including reasonable counsel fees and disbursements) in connection
with any investigation made by them, and any preparation made by them in respect
of marketing of the Shares or in contemplation of the performance by them of
their obligations hereunder, but the Company shall not in any event be liable to
any of the Underwriters for damages on account of loss of anticipated profits
from the sale by them of the Shares.
7. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The obligation of each
Underwriter to purchase and pay for the Shares set forth opposite the name of
such Underwriter in Schedule I is subject to the continuing accuracy in all
material respects of the representations and warranties of the Company herein as
of the date hereof and as of the Closing Date as if they had been made on and as
of the Closing Date; the accuracy on and as of the Closing Date of the
statements of officers of the Company made pursuant to the provisions hereof;
the performance by the Company on and as of the Closing Date of its covenants
and agreements hereunder; and the following additional conditions:
(a) If the Company has elected to rely on Rule 430A under the Act, the
Registration Statement shall have been declared effective, and the Prospectus
(containing the information omitted pursuant to Rule 430A) shall have been filed
with the Commission not later than the Commission's close of business on the
second business day following the date hereof or such later time and date to
which the Underwriters shall have consented; if the Company does not elect to
rely on Rule 430A, the Registration Statement shall have been declared effective
not later than 11:00 a.m., New York time, on the date hereof or such later time
and date to which the Underwriters shall have consented; if required, in the
case of any changes in or amendments or supplements to the Prospectus in
addition to those contemplated above, the Company shall have filed such
Prospectus as amended or supplemented with the Commission in the manner and
within the time period required by Rule 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
Underwriters, 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 Underwriters, in the reasonable exercise of their judgment,
shall not have advised the Company that the Registration Statement, or any
amendment thereto, contains an untrue statement of fact which, in the
Underwriters' reasonable opinion, is material, or omits to state a fact which,
in the Underwriters' reasonable opinion, 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 supplement thereto, contains an untrue statement of
fact which, in the Underwriters' reasonable opinion, is material, or omits to
state a fact which, in the Underwriters' reasonable opinion, is material and is
required to be stated therein or is necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
(c) On or prior to the Closing Date, the Underwriters shall have
received from counsel to the Underwriters, such opinion or opinions with respect
to the issuance and sale of the Firm
14
Shares, the Registration Statement and the Prospectus and such other related
matters as the Underwriters reasonably may request and such counsel shall have
received such documents and other information as they request to enable 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 Piper & Marbury L.L.P.
(d) If the issuance and sale of the Firm Shares to Underwriters will
result in the Underwriters individually or in the aggregate exceeding the
Ownership Limit (as defined in the Prospectus) with respect to the Company's
capital stock, then, on or prior to the Closing Date, the Underwriters shall
have received from the Company's Board of Directors a resolution determining
that the Underwriters are exempt from the Ownership Limit set forth in
subsection 7 of Article IV of the Articles of Amendment and Restatement of the
Charter with respect to the issuance and sale of the Firm Shares, in form and
substance reasonably satisfactory to the Underwriters.
(e) On the Closing Date the Underwriters shall have received the
opinion, dated the Closing Date, of Xxxxxx, Xxxx & Xxxxxxxx LLP, counsel to the
Company ("Company Counsel"), to the effect set forth below:
(i) Each of the Company's Subsidiaries (provided, however, that
the term "Subsidiaries," for purposes of this Section 7(e), shall not
include GLN Capital Co., LLC, a Delaware limited liability company) is a
duly incorporated and validly existing corporation or partnership in good
standing under the laws of its jurisdiction of incorporation with full
power and authority (corporate and other) to own or lease its properties
and to conduct its business as described in the Prospectus. Each of the
Company and its Subsidiaries is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction in which the
conduct of its business requires such qualification (except for those
jurisdictions in which the failure so to qualify can be cured without
having a Material Adverse Effect).
(ii) The Shares have been duly authorized for listing, subject to
official notice of issuance, on The New York Stock Exchange;
(iii) The ____ % Series B Cumulative Preferred Units to be
issued by G & L Realty Partnership, L.P. (the "Operating Partnership") to
the Company under the terms of the Second Addendum to Agreement of Limited
Partnership of the Operating Partnership (the "Addendum") have been duly
authorized, executed and delivered and are enforceable according to their
terms and binding upon the Operating Partnership, establish the priority of
interest relative to the Partnership Units of the Operating Partnership
that the Addendum purports to establish, and establish the parity of
interest with the 10.25% Series A Cumulative Preferred Units of the
Operating Partnership that the Addendum purports to establish.
(iv) The Registration Statement has been declared effective under
the Act; any required filing of the Prospectus pursuant to Rule 424(b) has
been made in the manner and within the time period required by Rule 424(b);
and to such counsel's knowledge, no stop order suspending the effectiveness
of the Registration Statement or any amendment thereto has been issued and,
to the knowledge of such counsel, no proceedings for that purpose have been
instituted or are pending or are threatened or contemplated under the Act;
the registration statement originally filed with respect to the Shares and
each amendment thereto and the Prospectus and, if any, each amendment and
supplement thereto (except for the financial statements, schedules and
other statistics and financial data included therein, as to which such
counsel need not express any opinion), complied as to form in all material
respects with the
15
requirements of the Act and the Rules and Regulations; to the knowledge of
such counsel, there are no contracts or documents which are required by the
Act to be described in the Registration Statement or the Prospectus or to
be filed as exhibits to the Registration Statement which are not described
or filed as required by the Act and the Rules and Regulations; to the
knowledge of such counsel, there is not pending or threatened against the
Company any action, suit, proceeding or investigation before or by any
court, regulatory body, or administrative agency or any other governmental
agency or body, domestic or foreign, of a character required to be
disclosed in the Registration Statement or the Prospectus which is not so
disclosed therein; and the statements set forth under the headings "The
Company -- Legal Proceedings," "Business and Properties -- Government
Regulation," "The Company -- Tax Status" and "Federal Income Tax
Considerations" in the Prospectus, insofar as such statements constitute a
summary of the law or documents referred to therein, provide an accurate
summary of such law or documents.
(v) This Agreement has been duly authorized, executed and
delivered by the Company. None of the Company's execution or delivery of
this Agreement, its performance hereof, its consummation of the
transactions contemplated herein or its application of the net proceeds of
the offering in the manner set forth in the Prospectus under the caption
"Use of Proceeds" materially conflicts or will materially conflict with or
results or will result in any material breach or violation of any of the
terms or provisions of, or constitute a material default under, or result
in the creation or imposition of any material lien, charge or encumbrance
upon any property or assets of the Company or any of its Subsidiaries
pursuant to the terms of the certificate of incorporation, by-laws or other
organizational documents of the Company's Subsidiaries; the terms of any
agreement or instrument listed as an exhibit in the Registration Statement;
any statute, rule or regulation of any regulatory body or administrative
agency or other governmental agency or body, domestic or foreign, having
jurisdiction over the Company or any of its Subsidiaries or any of their
respective activities or properties; or any judgment, decree or order,
known to such counsel, of any government, arbitrator, court, regulatory
body or administrative agency or other governmental agency or body,
domestic or foreign, having such jurisdiction; and no consent, approval,
authorization or order of any court, regulatory body or administrative
agency or other governmental agency or body, domestic or foreign, has been
or is required for the Company's performance of this Agreement or the
consummation of the transactions contemplated hereby, except such as have
been obtained under the Act or may be required under state securities or
blue sky laws in connection with the purchase and distribution by the
Underwriters of the Shares;
(vi) To such counsel's knowledge, the conduct of the businesses
of the Company and its Subsidiaries is not in violation of any federal,
state or local statute, administrative regulation or other law, which
violation is likely to have a Material Adverse Effect; and, to such
counsel's knowledge, each of the Company and its Subsidiaries has obtained
all licenses, permits, franchises, certificates and other authorizations
from state, federal and other regulatory authorities as are necessary or
required for the ownership, leasing and operation of its properties and the
conduct of its business as currently conducted and as contemplated in the
Prospectus, except for licenses, permits, franchises, certificates and
other authorizations the failure of which to obtain would not have a
Material Adverse Effect; and
(vii) The issued shares of capital stock or partnership
interests of each of the Subsidiaries have been duly authorized and validly
issued, are fully paid and nonassessable and, except and as otherwise set
forth in the Prospectus, are owned by the Company or the Operating
Partnership free and clear of any perfected security interests or, to the
knowledge of such
16
counsel, any other liens, encumbrances, claims or security interests; to
such counsel's knowledge no Subsidiary of the Company is currently
prohibited, directly or indirectly, by any material agreement listed in the
Registration Statement or by its certificate of organization, bylaws or
organizational documents, from paying any dividends to the Company, from
making any other distribution on such Subsidiaries' capital stock, from
repaying to the Company any loans or advances to such Subsidiaries from the
Company or from transferring any of such Subsidiaries' property or assets
to the Company or any other Subsidiaries of the Company, except as
described in the Prospectus.
In addition, such counsel shall state that in the course of the
preparation of the Registration Statement and the Prospectus, such counsel
has participated in conferences with officers and representatives of the
Company and with the Company's independent public accountants, at which
conferences such counsel made inquiries of such officers, representatives
and accountants and discussed the contents of the Registration Statement
and the Prospectus and (without taking any further action to verify
independently the statements made in the Registration Statement and the
Prospectus and, except as stated in the foregoing opinion, without assuming
responsibility for the accuracy, completeness or fairness of such
statements) nothing has come to such counsel's attention that causes such
counsel to believe that either the Registration Statement as of the date it
is declared effective and as of the Closing Date or the Prospectus as of
the date thereof and as of the Closing Date contained or contains any
untrue statement of a material fact or omitted or omits to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading (it being understood that such counsel need not
express any opinion with respect to the financial statements and notes
thereto, schedules and other financial or statistical data included in the
Registration Statement or the Prospectus).
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.
References to the Registration Statement and the Prospectus in this
paragraph (d) shall include any amendment or supplement thereto at the date
of such opinion.
(f) On the Closing Date the Underwriters shall have received the
opinion, dated the Closing Date, of Piper & Marbury L.L.P., counsel to the
Company ("Maryland Company Counsel"), to the effect set forth below:
(i) The Company is a duly incorporated and validly existing
corporation in good standing under the laws of Maryland with full corporate
power and authority to own or lease its properties and to conduct its
business as described in the Prospectus;
(ii) The Company has authorized capital stock as set forth in the
Prospectus; the securities of the Company conform in all material respects
to the description thereof contained in the Prospectus; the outstanding
shares of Common Stock have been duly authorized and validly issued by the
Company, are fully paid and nonassessable, and are free of any preemptive
or other rights to subscribe for any of the Shares; the outstanding shares
of the Company's 10.25% Series B Cumulative Preferred Stock, par value
$0.01 per share, have been duly authorized and validly issued by the
Company and are fully paid and nonassessable; the Company has duly
authorized the issuance and sale of the Shares to be sold by it hereunder;
such Shares, when issued by the Company and paid for in accordance with the
terms hereof, will be
17
validly issued, fully paid and nonassessable and will conform in all
material respects to the description thereof contained in the Prospectus
and will not be subject to any preemptive, subscription or other similar
rights;
(iii) The Company has full legal right, power, and authority to
enter into this Agreement and to consummate the transactions provided for
herein, and this Agreement has been duly authorized, executed and delivered
by the Company; and
(iv) None of the Company's execution or delivery of this
Agreement, its performance hereof, its consummation of the transactions
contemplated herein or its application of the net proceeds of the offering
in the manner set forth under the caption "Use of Proceeds" materially
conflicts or will materially conflict with or results or will result in any
material breach or violation of any of the terms or provisions of, or
constitute a material default under, or result in the creation or
imposition of any material lien, charge or encumbrance upon, any property
or assets of the Company or any of its subsidiaries pursuant to the terms
of the certificate of incorporation, by-laws or other organizational
documents of the Company.
References to the Registration Statement and Prospectus in this
paragraph (e) shall include any amendment or supplement thereto at the date
of such opinion.
(g) On or prior to the Closing Date, counsel to the Underwriters shall
have been furnished such documents, certificates and opinions as they may
reasonably require in order to evidence the accuracy, completeness or
satisfaction of any of the representations or warranties of the Company, or
conditions herein contained.
(h) At the time that this Agreement is executed by the Company, the
Underwriters shall have received from Deloitte & Touche LLP a "comfort" letter
as of the date this Agreement is executed by the Company in form and substance
satisfactory to you (the "Original Letter"), and on the Closing Date the
Underwriters shall have received from such firm a letter dated the Closing Date
stating that, as of a specified date not earlier than five (5) days prior to the
Closing Date, nothing has come to the attention of such firm to suggest that the
statements made in the Original Letter are not true and correct.
(i) On the Closing Date, the Underwriters shall have received a
certificate, dated the Closing Date, of the principal executive officer and the
principal financial or accounting officer of the Company to the effect that each
of such persons has carefully examined the Registration Statement and the
Prospectus and any amendments or supplements thereto and this Agreement, and
that:
(i) The representations and warranties of the Company in this
Agreement are true and correct in all material respects, as if made on and
as of the Closing Date, and the Company has complied with all agreements
and covenants and satisfied all conditions contained in this Agreement 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 has been issued, and no proceedings for that purpose
have been instituted or are pending or, to the best knowledge of each of
such persons are contemplated or threatened under the Act and any and all
filings required by Rule 424 and Rule 430A have been timely made;
(iii) The Registration Statement and Prospectus and, if any,
each amendment and each supplement thereto, contain all statements and
information required to be included
18
therein, and neither the Registration Statement nor any amendment thereto
includes any untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading and neither the Prospectus (or any
supplement thereto) or any Preliminary Prospectus includes or included any
untrue statement of a material fact or omits or omitted to state any
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading; and
(iv) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus up to and
including the Closing Date, neither the Company nor any of the Subsidiaries
has incurred, other than in the ordinary course of its business, any
material liabilities or obligations, direct or contingent; neither the
Company nor any of the Subsidiaries has purchased any of its outstanding
capital stock or paid or declared any dividends or other distributions on
its capital stock; neither the Company nor any of the Subsidiaries has
entered into any transactions not in the ordinary course of business; and
there has not been any change in the capital stock or debt or a change that
has resulted in a Material Adverse Effect; nor has any portion of any
property of the Company or of any of the Subsidiaries or any parking
facility used in connection therewith been materially damaged due to fire
or other casualty which would materially impair the use of the property;
there is no litigation which is pending or threatened against the Company
or any of its Subsidiaries which is required under the Act or the Rules and
Regulations to be set forth in an amended or supplemented Prospectus which
has not been set forth; and there has not occurred any event required to be
set forth in an amended or supplemented Prospectus which has not been set
forth.
References to the Registration Statement and the Prospectus in this
paragraph (h) are to such documents as amended and supplemented at the date
of the certificate.
(j) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus up to and including the
Closing Date there has not been (i) any change or decrease specified in the
letter or letters referred to in paragraph (g) of this Section 7 or (ii) any
change, or any development involving a prospective change, in the business or
properties of the Company or its Subsidiaries which change or decrease in the
case of clause (i) makes it impractical or inadvisable in the Underwriters'
reasonable judgment to proceed with the public offering or the delivery of the
Shares as contemplated by the Prospectus.
(k) No order suspending the sale of the Shares in any jurisdiction
designated by you pursuant to Section 5(a)(iii)(A) hereof has been issued on or
prior to the Closing Date and no proceedings for that purpose have been
instituted or, to your knowledge or that of the Company, have been or are
contemplated.
(l) The Underwriters shall have received from Messrs. Xxxxxx X.
Xxxxxxxx and Xxxxxx X. Xxxxxxxx an agreement to the effect that each of them
will not, directly or indirectly, without the prior written consent of the
Underwriters, offer, sell, grant any option to purchase or otherwise dispose (or
announce any offer, sale, grant of an option to purchase or other disposition)
of any shares of Common Stock or any securities convertible into, or
exchangeable or exercisable for, shares of Common Stock for a period of 180 days
after the date of this Agreement.
(m) The Company shall have furnished the Underwriters with such
further opinions, letters, certificates or documents as you or counsel for the
Underwriters may reasonably request. All
19
opinions, certificates, letters and documents to be furnished by the Company
will comply with the provisions hereof only if they are reasonably satisfactory
in all material respects to the Underwriters and to counsel for the
Underwriters. The Company shall furnish the Underwriters with conformed copies
of such opinions, certificates, letters and documents in such quantities as you
reasonably request. The certificates delivered under this Section 7 shall
constitute representations, warranties and agreements of the Company, as to all
matters set forth therein as fully and effectively as if such matters had been
set forth in Section 2 of this Agreement.
(n) The Shares shall have been duly authorized for listing, subject to
official notice of issuance, on The New York Stock Exchange.
8. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless each Underwriter
and each person, if any, who controls such Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, against any and all
losses, claims, damages or liabilities, joint or several (and actions in respect
thereof), to which such Underwriter or such controlling person may become
subject, under the Act or other federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, damages, liabilities or
actions arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement or the
Prospectus or any Preliminary Prospectus, or any amendment or supplement
thereto, or any blue sky application or other document executed by the Company
specifically for the purpose of qualifying, or based upon written information
furnished by the Company filed in any state or other jurisdiction in order to
qualify, any or all of the Shares under the securities or blue sky laws thereof
(any such application, document or information being hereinafter called a "Blue
Sky Application"), or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading and will reimburse, as incurred, such
Underwriter or such controlling persons for any legal or other expenses incurred
by such Underwriter or such controlling persons in connection with
investigating, defending or appearing as a third party witness in connection
with any such loss, claim, 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, liability or action arises out of or is based upon any
untrue statement or alleged untrue statement or omission or alleged omission
made in any of such documents in reliance upon and in conformity with
information contained in the last paragraph of the outside front cover page, the
last paragraph of the inside front cover page and the section under the heading
"Underwriting," all of which was furnished in writing to the Company on behalf
of such Underwriter through the Underwriters expressly for use therein, and
provided, further, that such indemnity with respect to any Preliminary
-------- -------
Prospectus shall not inure to the benefit of any Underwriter (or to the benefit
of any person controlling such Underwriter) from whom the person asserting any
such loss, claim, damage, liability or action purchased Shares which are the
subject thereof to the extent that any such loss, claim, damage, liability or
action (i) results from the fact that such Underwriter failed to send or give a
copy of the Prospectus (as amended or supplemented) to such person at or prior
to the confirmation of the sale of such Shares to such person in any case where
such delivery is required by the Act and (ii) arises out of or is based upon an
untrue statement or omission of a material fact contained in such Preliminary
Prospectus that was corrected in the Prospectus (as amended and supplemented),
unless such failure resulted from non-compliance by the Company with Section 5
(a) (viii) hereof.
The indemnity agreement in this paragraph 8(a) shall be in addition to any
liability which the Company may otherwise have.
20
(b) Each of the Underwriters agrees severally, but not jointly, to
indemnify and hold harmless the Company, each of its directors, each of its
officers who has 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 and all losses, claims, damages or liabilities
(and actions in respect thereof) to which the Company, or any director, officer,
or controlling person may become subject, under the Act or other federal or
state statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages, liabilities or actions arise out of or are based upon
any untrue statement or alleged untrue statement of any material fact contained
in the Registration Statement or the Prospectus or any Preliminary Prospectus,
or any amendment or supplement thereto or in any Blue Sky Application, or arise
out of or are based upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
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 information furnished in writing by
that Underwriter through the Underwriters to the Company expressly for use
therein; and will reimburse, as incurred, all legal or other expenses reasonably
incurred by the Company or any director, officer, or controlling person in
connection with investigating or defending any such loss, claim, damage,
liability or action. The Company acknowledges that the statements with respect
to the public offering of the Shares set forth under the heading "Underwriting"
and the stabilization legend and the last paragraph of the outside front cover
page in the Prospectus have been furnished by the Underwriters to the Company
expressly for use therein and constitute the only information furnished in
writing by or on behalf of the Underwriters for inclusion in the Prospectus.
The indemnity agreement contained in this subsection (b) shall be in addition to
any liability which the Underwriters 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 one or more indemnifying parties
under this Section 8, notify such indemnifying party or parties of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under subsection (a) or (b) of this Section 8 or to the extent
that the indemnifying party was not adversely affected by such omission. In
case any such action is brought against an indemnified party and it notifies an
indemnifying party or parties of the commencement thereof, the indemnifying
party or parties against which a claim is to be made will be entitled to
participate therein and, to the extent that it or they may wish, to assume the
defense thereof, with counsel reasonably 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 has
reasonably concluded that there may be legal defenses available to it and/or
other indemnified parties which conflict with those available to the
indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assume such legal defenses and otherwise to
participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such indemnified
party of its election so to assume the defense of such action and approval by
the indemnified party of counsel, the indemnifying party will not be liable to
such indemnified party under this Section 8 for any legal or other expenses
(other than the reasonable costs of investigation) subsequently incurred by such
indemnified party in connection with the defense thereof unless (i) the
indemnified party has employed such counsel in connection with the assumption of
such conflicting legal defenses in accordance with the proviso to the
immediately preceding sentence, (ii) the indemnifying party has not employed
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of commencement of the
action, or (iii) the indemnifying party has authorized in writing the employment
of counsel for the indemnified party at the expense of the indemnifying party.
21
(d) If the indemnification provided for in this Section 8 is
unavailable or insufficient to hold harmless an indemnified party under
paragraph (a) or (b) above in respect of any losses, claims, damages, expenses
or liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party 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) (i) in such proportion as is appropriate to reflect
the relative benefits received by each of the contributing parties, on the one
hand, and the party to be indemnified, on the other hand, from the offering of
the Shares or (ii) if the allocation provided by clause (i) above 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 each of the contributing parties, on the one hand, and the party to be
indemnified, on the other hand in connection with the statements or omissions
that resulted in such losses, claims, damages or liabilities, 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 net proceeds from the offering of the
Shares (before deducting expenses) bear to the total underwriting discounts
received by the Underwriters hereunder, in each case as set forth in the table
on the cover page of the Prospectus. Relative fault shall be determined by
reference to, among other things, whether the 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 by the Underwriters, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The amount paid or
payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above in this paragraph
(d) shall be deemed to include any legal or other expenses reasonable incurred
by such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this paragraph (d), the
Underwriters shall not be required to contribute any amount in excess of the
underwriting discount applicable to the Shares purchased by the Underwriters
hereunder. The Underwriters' obligations to contribute pursuant to this
paragraph (d) are several in proportion to their respective underwriting
obligations, and not joint. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this paragraph (d), (i) 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 (ii) each director of the Company, each officer of the
Company who has 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,
subject in each case to this paragraph (d). Any party entitled to contribution
will, promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect to which a claim for contribution may
be made against another party or parties under this paragraph (d), notify such
party or parties from whom contribution may be sought, but the omission so to
notify such party or parties shall not relieve the party or parties from whom
contribution may be sought from any other obligation (x) it or they may have
hereunder or otherwise than under this paragraph (d) or (y) to the extent that
such party or parties were not adversely affected by such omission. The
contribution agreement set forth above shall be in addition to any liabilities
which any indemnifying party may otherwise have.
9. ADDITIONAL SHARES. At any time during a period of 30 days from
the date of the Prospectus, the Underwriters, by no less than two business days'
prior notice to the Company, may designate a closing (which may be concurrent
with, and part of, the closing on the Closing Date with respect to the Firm
Shares or may be a second closing held on a date subsequent to the Closing Date,
in either case such date shall be referred to herein as the "Option Closing
Date") at which the Underwriters
22
may purchase all or less than all of the Additional Shares in accordance with
the provisions of this Section 9 at the purchase price per share to be paid for
the Firm Shares. In no event shall the Option Closing Date be later than 10
business days after written notice of election to purchase Additional Shares is
given.
The Company agrees to sell to the Underwriters on the Option Closing
Date the number of Additional Shares specified in such notice and the
Underwriters agree severally but not jointly, to purchase such Additional Shares
on the Option Closing Date. Such Additional Shares shall be purchased for the
account of each Underwriter in the same proportion as the number of Firm Shares
set forth opposite the name of such Underwriter in Column (3) of Schedule I
bears to the total number of Firm Shares (subject to adjustment by you to
eliminate fractions) and may be purchased by the Underwriters only for the
purpose of covering over-allotments made in connection with the sale of the Firm
Shares.
No Additional Shares shall be sold or delivered unless the Firm Shares
previously have been, or simultaneously are, sold and delivered. The right to
purchase the Additional Shares or any portion thereof may be surrendered and
terminated at any time upon notice by you to the Company.
Except to the extent modified by this Section 9, all provisions of
this Agreement relating to the transactions contemplated to occur on the Closing
Date for the sale of the Firm Shares shall apply, mutatis mutandis, to the
Option Closing Date for the sale of the Additional Shares.
10. REPRESENTATIONS, ETC. TO SURVIVE DELIVERY.. The respective
representations, warranties, agreements, covenants, indemnities and statements
of, and on behalf of, the Company and its officers, and the Underwriters,
respectively, set forth in or made pursuant to this Agreement will remain in
full force and effect, regardless of any investigation made by or on behalf of
the Underwriters, and will survive delivery of and payment for the Shares. Any
successors to the Underwriters shall be entitled to the indemnity, contribution
and reimbursement agreements contained in this Agreement.
11. EFFECTIVE DATE AND TERMINATION.
(a) This Agreement shall become effective at 11:00 a.m., New York time
on the first business day following the date hereof, or at such earlier time
after the Registration Statement becomes effective as the Underwriters, in their
sole discretion, shall release the Shares for the sale to the public unless
prior to such time the Underwriters shall have received written notice from the
Company that it elects that this Agreement shall not become effective, or the
Underwriters on behalf of the Underwriters elect that this Agreement shall not
become effective; provided, however, that the provisions of this Section and of
-------- -------
Section 5 and Section 8 hereof shall at all times be effective. For purposes of
this Section 11(a), the Shares to be purchased hereunder shall be deemed to have
been so released upon the earlier of notification by the Underwriters to
securities dealers releasing such Shares for offering or the release by the
Underwriters for publication of the first newspaper advertisement which is
subsequently published relating to the Shares.
(b) This Agreement (except for the provisions of Sections 5 and 8
hereof) may be terminated by the Underwriters by notice to the Company in the
event that the Company has failed to comply in any material respect with any of
the provisions of this Agreement required on its part to be performed at or
prior to the Closing Date or the Option Closing Date, or if any of the
representations or warranties of the Company is not accurate in any material
respect or if the covenants, agreements or conditions of, or applicable to the
Company herein contained have not been complied with in any
23
material respect or satisfied within the time specified on the Closing Date or
the Option Closing Date, respectively, or if prior to the Closing Date or the
Option Closing Date:
(i) the Company or any of its Subsidiaries shall have sustained a
loss by strike, fire, flood, accident or other calamity of such a character
as to interfere materially with the conduct of the business and operations
of the Company and its Subsidiaries taken as a whole regardless of whether
or not such loss was insured;
(ii) trading in the Preferred Stock or Common Stock shall have
been suspended by the Commission or The New York Stock Exchange or trading
in securities generally on the New York Stock Exchange shall have been
suspended or a material limitation on such trading shall have been imposed
or minimum or maximum prices shall have been established on any such
exchange;
(iii) a banking moratorium shall have been declared by New York
or United States authorities;
(iv) there shall have been an outbreak or escalation of
hostilities between the United States and any foreign power or an outbreak
or escalation of any other insurrection or armed conflict involving the
United States; or
(v) there shall have been (A) a material adverse change in
general economic, political or financial conditions, or (B) a Material
Adverse Effect on the present or prospective business or condition
(financial or other) of the Company and its Subsidiaries taken as a whole,
that, in each case, in the Underwriters' reasonable judgment makes it
impracticable or inadvisable to make or consummate the public offering,
sale or delivery of the Company's Shares on the terms and in the manner
contemplated in the Prospectus and the Registration Statement.
(c) Termination of this Agreement under this Section 11 or Section 12
after the Firm Shares have been purchased by the Underwriters hereunder shall be
applicable only to the Additional Shares. Termination of this Agreement shall
be without liability of any party to any other party other than as provided in
Sections 5 and 8 hereof.
12. SUBSTITUTION OF UNDERWRITERS. If one or more of the Underwriters
shall fail or refuse (otherwise than for a reason sufficient to justify the
termination of this Agreement under the provisions of Section 7 or 11 hereof) to
purchase and pay for (a) in the case of the Closing Date, the number of Firm
Shares agreed to be purchased by such Underwriter or Underwriters upon tender to
you of such Firm Shares in accordance with the terms hereof or (b) in the case
of the Option Closing Date, the number of Additional Shares agreed to be
purchased by such Underwriter or Underwriters upon tender to you of such
Additional Shares in accordance with the terms hereof, and the number of such
Shares shall not exceed 10% of the Firm Shares or Additional Shares required to
be purchased on the Closing Date or the Option Closing Date, as the case may be,
then each of the non-defaulting Underwriters shall purchase and pay for (in
addition to the number of such Shares which it has severally agreed to purchase
hereunder) that proportion of the number of Shares which the defaulting
Underwriter or Underwriters shall have so failed or refused to purchase on such
Closing Date or Option Closing Date, as the case may be, which the number of
Shares agreed to be purchased by such non-defaulting Underwriter bears to the
aggregate number of Shares so agreed to be purchased by all such non-defaulting
Underwriters on such Closing Date or Option Closing Date, as the case may be.
In such case, you shall have the right to postpone the Closing Date or the
Option Closing Date, as the case may be, to a date not exceeding seven full
business
24
days after the date originally fixed as such Closing Date or the Option Closing
Date, as the case may be, pursuant to the terms hereof in order that any
necessary changes in the Registration Statement, the Prospectus or any other
documents or arrangements may be made.
If one or more of the Underwriters shall fail or refuse (otherwise than for
a reason sufficient to justify the termination of this Agreement under the
provisions of Section 7 or 11 hereof) to purchase and pay for (a) in the case of
the Closing Date, the number of Firm Shares agreed to be purchased by such
Underwriter or Underwriters upon tender to you of such Firm Shares in accordance
with the terms hereof or (b) in the case of the Option Closing Date, the number
of Additional Shares agreed to be purchased by such Underwriter or Underwriters
upon tender to you of such Additional Shares in accordance with the terms
hereof, and the number of such Shares shall exceed 10% of the Firm Shares or
Additional Shares required to be purchased by all the Underwriters on the
Closing Date or the Option Closing Date, as the case may be, then (unless within
48 hours after such default arrangements to your satisfaction shall have been
made for the purchase of the defaulted Shares by an Underwriter or Underwriters)
and subject to the provisions of Section 11(b) hereof, this Agreement will
terminate without liability on the part of any non-defaulting Underwriter or on
the part of the Company except as otherwise provided in Sections 5 and 8 hereof.
As used in this Agreement, the term "Underwriter" includes any person
substituted for an Underwriter under this paragraph. Nothing in this Section
12, and no action taken hereunder, shall relieve any defaulting Underwriter from
liability in respect of any default of such Underwriter under this Agreement.
13. NOTICES. All communications hereunder shall be in writing and if sent
to the Underwriters shall be mailed or delivered or telegraphed and confirmed by
letter or telecopied and confirmed by letter to c/o Sutro & Co. Incorporated,
00000 Xxxxx Xxxxxx Xxxxxxxxx, Xxxxx 000, Xxx Xxxxxxx, Xxxxxxxxxx 00000,
Attention: Syndicate Department or, if sent to the Company, shall be mailed or
delivered or telegraphed and confirmed by letter or telecopied and confirmed by
letter to G & L Realty Corp., 000 X. Xxxxxxx Xxxxx, Xxxxxxx Xxxxx, Xxxxxxxxxx
00000, Attention: Xxxxxx X. Xxxxxxxx.
14. SUCCESSORS. This Agreement shall inure to the benefit of and be
binding upon the Company, and, to the extent so provided, any person controlling
the Company or any of the Underwriters, the directors of the Company and its
officers who signed the Registration Statement, each Underwriter, and each of
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 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 the
representations, warranties, indemnities and contribution agreements of the
Company contained in this Agreement shall also be for the benefit of any person
or persons, if any, who control any Underwriter within the meaning of Section 15
of the Act or Section 20 of the Exchange Act, and except that the Underwriters'
indemnity and contribution agreements 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, if any, who control the
Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act. No purchaser of Shares from the Underwriters will be deemed a
successor because of such purchase.
15. APPLICABLE LAW; JURISDICTION. This Agreement shall be governed by and
construed in accordance with the laws of the State of California, without giving
effect to the choice of law or conflict of law principles thereof. Each party
hereto consents to the jurisdiction of each court in which any action
25
is commenced seeking indemnity or contribution pursuant to Section 8 above and
agrees to accept, either directly or through an agent, service of process of
each such court.
16. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, and all of which
together shall be deemed to be one and the same instrument.
26
If the foregoing correctly sets forth our understanding, please indicate
the Underwriters' acceptance thereof in the space provided below for that
purpose, whereupon this letter shall constitute a binding agreement between us.
Very truly yours,
G & L REALTY CORP.
By: ________________________________
Xxxxxx X. Xxxxxxxx
Chief Executive Officer,
Co-Chairman of the Board and Director
Accepted as of the date first above written:
SUTRO & CO. INCORPORATED
By: _______________________________
Xxxxxx X. Xxxxxxxxxx
Executive Vice President
XXXXXXXX & COMPANY SECURITIES, INC.
By: _______________________________
Xxxxxx X. Xxxx, Xx.
Senior Vice President
XXXXXX XXXXXXX INCORPORATED
By: _______________________________
Xxxxx X. Xxxx.
Executive Vice President
27
SCHEDULE I
UNDERWRITERS
Underwriting Agreement dated November __, 1997
Number of
Firm Shares Option Amount
----------- -------------
Name and Address
----------------
Sutro & Co. Incorporated.........................540,000..............81,000
000 Xxxxxxxxxx Xxxxxx
Attention: Equity Syndication Department
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
XxXxxxxx & Company Securities, Inc...............480,000..............72,000
XxXxxxxx Investment Center
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Xxxxxx Xxxxxxx Incorporated......................180,000..............27,000
Xxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
--------- -------
Total..........................................1,200,000.............180,000
28
SCHEDULE II
AV Medical Associates, LLC, a California limited liability company
G & L Hampden, LLC, a Delaware limited liability company
G & L Realty Partnership, L.P., a Delaware limited partnership
G & L Realty Financing II, Inc., a Delaware corporation
G & L Realty Financing Partnership II, L.P., a Delaware limited partnership
G & L Medical, Inc., a Delaware corporation
G & L Gardens, LLC, an Arizona limited liability company
G & L Management Delaware Corp., a Delaware corporation
G & L Senior Care, Inc. a Delaware corporation
G & L Medical Partnership, L.P., a Delaware limited partnership
GLN Capital Co., LLC, a Delaware limited liability company
GL/PHP, LLC a Delaware limited liability company
Valley Convalescent, LLC, a California limited liability company
000 X. Xxxxxxx Xxxxx, Ltd., a California limited partnership
29
