EXHIBIT 1.1
18,847,500 SHARES
ARDEN REALTY GROUP, INC.
(A MARYLAND CORPORATION)
COMMON STOCK, $.01 PAR VALUE PER SHARE
UNDERWRITING AGREEMENT
October __, 1996
XXXXXX BROTHERS INC.
ALEX. XXXXX & SONS INCORPORATED
XXXX XXXXXX XXXXXXXX INC.
X.X. XXXXXXX & SONS, INC.
XXXXX XXXXXX INC.
EVEREN SECURITIES, INC.
XXXX XXXXX XXXX XXXXXX INCORPORATED
XXXXXXX XXXXX & ASSOCIATES, INC.
As Representatives of the several
Underwriters named in Schedule 1,
c/x Xxxxxx Brothers Inc.
Three World Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Arden Realty Group, Inc., a Maryland corporation (the "Company"), proposes
to sell 18,847,500 shares (the "Firm Stock") of the Company's Common Stock (the
"Common Stock") par value $.01 per share. In addition, the Company proposes to
grant to the Underwriters named in Schedule 1 hereto (the "Underwriters") an
option to purchase up to an additional 2,827,000 shares of the Common Stock on
the terms and for the purposes set forth in Section 2 (the "Option Stock"). The
Firm Stock and the Option Stock, if purchased, are hereinafter collectively
called the "Stock." This is to confirm the agreement concerning the purchase of
the Stock from the Company by the Underwriters.
At or prior to the First Delivery Date (as hereinafter defined), the
Company and Arden Realty Group Limited Partnership, a Maryland limited
partnership (the "Operating Partnership"), will complete a series of
transactions described in each of the Preliminary Prospectus and the Prospectus
(as hereinafter defined) under the heading "Structure and Formation of the
Company -- The Formation Transactions." As part of these transactions, among
other things, the Operating Partnership will acquire direct or indirect
interests in 24 office properties located in Los Angeles County, California,
Orange County, California and San Diego, California (collectively, the
"Properties") and third-party management contracts relating to four office
properties (collectively, the "Managed Properties"). As used herein, the term
"Formation Transactions" shall mean
the occurrence of all the events described in the Prospectus under the heading
"Structure and Formation of the Company -- The Formation Transactions" and the
other transactions related thereto, and the term "Formation Documents" shall
mean all the material contracts, agreements and other documents executed in
connection with the Formation Transactions set forth in Schedule 2 hereto.
As used in this Agreement, "Effective Time" shall mean the date and
the time as of which the registration statement, or the most recent post-
effective amendment thereto, if any, was declared effective by the Securities
and Exchange Commission (the "Commission"); "Effective Date" shall mean the date
of the Effective Time; "Preliminary Prospectus" shall mean each prospectus
included in such registration statement, or amendments thereof, before it became
effective under the Securities Act of 1933, as amended (the "Securities Act")
and any prospectus filed with the Commission by the Company with the consent of
the representatives ("Representatives") pursuant to Rule 424(a) of the rules and
regulations of the Commission thereunder (the "Rules and Regulations");
"Registration Statement" shall mean such registration statement, as amended at
the Effective Time, including all information contained in the final prospectus
filed with the Commission pursuant to Rule 424(b) of the Rules and Regulations
in accordance with Section 6(a) hereof and deemed to be a part of the
registration statement as of the Effective Time pursuant to paragraph (b) of
Rule 430A of the Rules and Regulations; and "Prospectus" shall mean such final
prospectus, as first filed with the Commission pursuant to paragraph (1) or (4)
of Rule 424(b) of the Rules and Regulations. Any registration statement
(including any amendment or supplement thereto or information which is deemed
part thereof) filed by the Company to register additional shares of Common Stock
of the Company under rule 462(b) of the Rules and Regulations ("Rule 462(b)
Registration Statement") shall be deemed a part of the Registration Statement.
Any prospectus (including any amendment or supplement thereto or information
which is deemed to be a part thereof) included in a Rule 462(b) Registration
Statement and any term sheet as contemplated by Rule 434 of the Rules and
Regulations (a "Term Sheet") shall be deemed to be part of the Prospectus.
1. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY AND THE
OPERATING PARTNERSHIP. The Company and the Operating Partnership, jointly and
severally, represent, warrant and agree as follows:
(a) A registration statement on Form S-11 (File No. 333-8163)
and certain amendments thereto, with respect to the Stock has (i) been
prepared by the Company in conformity with the requirements of the
Securities Act and the Rules and Regulations of the Commission, (ii)
been filed with the Commission under the Securities Act and (iii)
become effective under the Securities Act. Copies of such
registration statement and each amendment thereto have been delivered
by the Company to you as the Representatives of the Underwriters. The
Commission has not issued any order preventing or suspending the use
of any Preliminary Prospectus.
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(b) The Registration Statement conforms, and the Prospectus and
any further amendments or supplements to the Registration Statement or
the Prospectus will, when they become effective or are filed with the
Commission, as the case may be, conform in all material respects to
the requirements of the Securities Act and the Rules and Regulations
and do not and will not, as of the applicable effective date (as to
the Registration Statement and any amendment thereto) contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and as of the applicable filing date (as to
the Prospectus and any amendment or supplement thereto) contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; PROVIDED that no representation or warranty is made as to
information contained in or omitted from the Registration Statement or
the Prospectus in reliance upon and in conformity with written
information furnished to the Company through the Representatives by or
on behalf of any Underwriter specifically for inclusion therein.
(c) The Company is a corporation duly incorporated and existing
under and by virtue of the laws of the State of Maryland and is in
good standing with the State Department of Assessments and Taxation of
Maryland (the "SDAT") with corporate power to own, lease and operate
its properties, to conduct the business in which it is engaged or
proposes to engage as described in the Prospectus and to enter into
and perform its obligations under this Agreement and the other
Formation Documents to which it is a party. The Company is duly
qualified or registered as a foreign corporation and is in good
standing in California and is in good standing in each other
jurisdiction in which such qualification or registration is required,
whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or be
registered or to be in good standing in such other jurisdiction would
not result in a material adverse effect on the consolidated financial
position, results of operations, business or prospects of the Company
and the Operating Partnership taken as a whole (a "Material Adverse
Effect"). The Company has no subsidiaries other than the Operating
Partnership.
(d) The Operating Partnership is a limited partnership duly
formed and existing under and by virtue of the laws of the State of
Maryland and is in good standing with the SDAT with partnership power
to own, lease and operate its properties, to conduct the business in
which it is engaged or proposes to engage as described in the
Prospectus and to enter into and perform its obligations under this
Agreement and the other Formation Documents to which it is a party.
The Operating Partnership is
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duly qualified or registered as a foreign partnership and is in good
standing in California and is in good standing in each other
jurisdiction in which such qualification or registration is required,
whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or be
registered or to be in good standing in such other jurisdiction would
not result in a Material Adverse Effect. The Company is the sole
general partner of the Operating Partnership and, immediately after
the First Delivery Date will be the sole general partner of the
Operating Partnership and will own approximately 86.71% of all
outstanding partnership interests in the Operating Partnership. The
Operating Partnership has no subsidiaries.
(e) Each of the corporations, limited partnerships or limited
liability companies listed on Schedule 3 hereto (collectively, the
"Predecessor Entities") has been duly incorporated or formed and is
validly existing as a corporation, limited partnership or limited
liability company in good standing under the laws of its state of
formation, with power and authority to own, lease and operate its
properties, and to conduct the business in which it is engaged. Each
Predecessor Entity is duly qualified or registered as a foreign
corporation, partnership, limited partnership or limited liability
company, as applicable, to transact business in each jurisdiction in
which such qualification or registration is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except where the failure so to qualify or be registered
would not result in a Material Adverse Effect.
(f) The transfer of interests or other assets pursuant to the
Formation Documents does not violate the charter, limited liability
agreement or limited partnership agreement, as the case may be, of any
Predecessor Entity. The Formation Documents are sufficient to effect
the transfer to the Company or Operating Partnership of all direct or
indirect interests in the Properties and other assets specified
therein upon payment of the consideration therefor.
(g) Pursuant to the Formation Documents, the Company or the
Operating Partnership will acquire, as of the First Delivery Date (as
defined herein), all of the direct and indirect interests of each of
the Contributors or Optionors named therein in each of the Predecessor
Entities in which such Contributors or Optionors owned an interest, in
each case free and clear of any liens, restrictions, encumbrances or
security interests (a) set forth in the limited liability company
agreement or limited partnership agreement, as the case may be,
governing such Predecessor Entities, or (b) reflected on the books or
limited liability company or limited partnership registry of any
Predecessor Entity. None of the interests held by any person in any
Predecessor Entity and being acquired by the Company or the Operating
Partnership are evidenced by certificates and no such interests
constitute "certificated" securities under
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the Uniform Commercial Code.
(h) The Company has an authorized capitalization as set forth in
the Prospectus, and all of the issued shares of stock of the Company
have been duly and validly authorized and issued, are fully paid and
non-assessable and conform in all material respects to the description
thereof contained in the Prospectus; and all of the issued partnership
interests of the Operating Partnership (the "Partnership Interests")
have been duly and validly authorized and issued and are fully paid
and, with respect to the Partnership Interests owned by the Company
are owned directly by the Company, free and clear of all liens,
encumbrances, equities or claims.
(i) The shares of the Stock to be issued and sold by the Company
to the Underwriters hereunder have been duly and validly authorized
and, when issued and delivered against payment therefor as provided
herein will be duly and validly issued, fully paid and non-assessable;
and the Stock will conform in all material respects to the description
thereof contained in the Prospectus.
(j) The limited partnership interests in the Operating
Partnership (the "Units") to be issued in connection with the
Formation Transactions and the Partnership Interests to be issued to
the Company, have been duly authorized for issuance by the Operating
Partnership to the holders or prospective holders thereof, and at each
Delivery Date will be validly issued and fully paid. Immediately
after the First Delivery Date, [__________] Units will be issued and
outstanding. The Units have been and will be offered and sold on or
prior to the First Delivery Date in compliance with all applicable
laws (including, without limitation, federal and state securities
laws).
(k) None of the Company or the Operating Partnership is in
violation of its charter, by-laws, certificate of limited partnership,
articles of organization, operating agreement or partnership
agreement, as the case may be, and none of the Company or the
Operating Partnership is in default in the performance or observance
of any obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which such entity is a party or by which such entity may
be bound, or to which any of the property or assets of such entity is
subject, except for such defaults that would not have a Material
Adverse Effect.
(l) This Agreement has been duly authorized, executed and
delivered by the Company and the Operating Partnership.
(m) The execution, delivery and performance of this Agreement by
the Company and the Operating Partnership and the consummation of
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the transactions contemplated hereby including the Formation
Transactions will not conflict with or result in a breach or violation
of any of the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or the Operating
Partnership is a party or by which the Company or the Operating
Partnership is bound or to which any of the property or assets of the
Company, the Operating Partnership or any of their subsidiaries is
subject, (except for such conflicts, breaches, violations or defaults
that (i) would not have a Material Adverse Effect, (ii) relate to
mortgage indebtedness to be repaid in full with a portion of the net
proceeds from the sale of the Stock and the Mortgage Financing as
reflected in the "Use of Proceeds" section of the Prospectus, or (iii)
relate to agreements or instruments that are terminable at will or
upon 30 days notice); nor will such actions result in any violation of
the provisions of the charter, by-laws or partnership agreement of the
Company or the Operating Partnership or any statute or any order, rule
or regulation of any court or governmental agency or body having
jurisdiction over the Company or the Operating Partnership or any of
the properties, assets or business to be owned by them following
completion of the Formation Transactions; and except for (a) the
registration of the Stock under the Securities Act and such consents,
approvals, authorizations, registrations or qualifications as may be
required under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and applicable state and foreign securities laws in
connection with the purchase and distribution of the Stock by the
Underwriters, (b) consents, approvals, authorizations, orders, filings
or registrations that will be completed prior to the Closing Date and
(c) such consents, approvals, authorizations, orders, filings or
registrations, the absence of which, individually or in the aggregate
would not have a Material Adverse Effect, no consent, approval,
authorization or order of, or filing or registration with, any such
court or governmental agency or body or any other person is required
for the execution, delivery and performance of this Agreement by the
Company and the Operating Partnership and the consummation of the
transactions contemplated hereby, including the Formation
Transactions.
(n) Except as disclosed in the Prospectus, 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 Securities 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 in the securities
registered pursuant to the Registration Statement or in any securities
being registered pursuant to any other registration statement filed by
the Company under the Securities Act.
(o) Except as described in the Prospectus and 100 shares
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(which will be repurchased at the closing) issued to Xx. Xxxxx, the
Company has not sold or issued any shares of Common Stock during the
six-month period preceding the date of the Prospectus, including any
sales pursuant to Rule 144A under, or Regulations D or S of, the
Securities Act.
(p) Since the date of the latest audited financial statements
included in the Prospectus, (i) there has been no material adverse
change in the financial condition, results of operation or business of
the Company or the Operating Partnership or any Predecessor Entity,
whether or not arising in the ordinary course of business, (ii) no
material casualty loss or material condemnation or other material
adverse event with respect to any Property has occurred, (iii) there
have been no transactions or acquisitions entered into by the Company
or the Operating Partnership other than those in the ordinary course
of business, which are material with respect to such entity, except in
connection with the Formation Transactions, (iv) there has been no
dividend or distribution of any kind declared, paid or made by the
Company on any class of its stock or by the Operating Partnership with
respect to its partnership interests and (v) there has been no change
in the stock of the Company or the partnership interests of the
Operating Partnership, or any increase in the indebtedness of the
Company or the Operating Partnership, except in connection with the
Formation Transactions.
(q) The financial statements and pro forma financial information
(including all necessary pro forma adjustments and including the
related notes and supporting schedules) filed as part of the
Registration Statement or included in the Prospectus present fairly
the financial condition and results of operations of the entities
purported to be shown thereby, at the dates and for the periods
indicated, and have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis
throughout the periods involved and all adjustments necessary for a
fair presentation of results for such periods have been made. The
financial information set forth in the Prospectus presents fairly the
information shown therein and has been prepared on an accounting basis
consistent with such financial statements and the books and records of
the respective entities presented therein. The pro forma financial
statements and other information included in the Prospectus have been
prepared in accordance with the applicable requirements of Rules 11-01
and 11-02 of Regulation S-X under the Securities Act, and the
necessary pro forma adjustments have been properly applied to the
historical amounts in the compilation of such information. Other than
the historical and pro forma financial statements (and schedules)
included therein, no other historical or pro forma financial
statements (or schedules) are required by the Securities Act or the
Rules and Regulations to be included in the Registration Statement.
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(r) Ernst & Young LLP, who have certified certain financial
statements included in the Registration Statement, whose report
appears in the Prospectus and who have delivered the initial letter
referred to in Section 8(g) hereof, are independent public accountants
as required by the Securities Act and the Rules and Regulations during
the periods covered by the financial statements on which they reported
contained in the Prospectus.
(s) (i) The Company and the Operating Partnership, upon
consummation of the Formation Transactions, will have good and
marketable title in fee simple to all real property and will own all
personal property in each case owned by or as contemplated in the
Prospectus to be owned by them on the First Delivery Date, in each
case free and clear of all liens, encumbrances and defects except such
as are described in the Prospectus or such as do not materially affect
the value of such property and do not materially interfere with the
use made and proposed to be made of such property by the Company and
the Operating Partnership (except for such real property, buildings
and personal property as are described in subparagraph (ii) below);
and (ii) all real property, buildings and personal property held under
lease by the Company and the Operating Partnership are held by them
under valid, existing and enforceable leases in each case free and
clear of all liens, encumbrances and defects except such as are
described in the Prospectus, and such exceptions as are not material
and do not materially interfere with the use made and proposed to be
made of such property and buildings by the Company and the Operating
Partnership.
(t) Except as described in the Prospectus, the Company and the
Operating Partnership carry, or are covered by, insurance in such
amounts and covering such risks as is adequate for the conduct of
their respective businesses and the value of Properties held or
contemplated in the Prospectus to be held by them following the
Formation Transactions and as is customary for companies engaged in
similar businesses in similar industries.
(u) The Company and the Operating Partnership own, possess or
can acquire on reasonable terms, adequate rights to use all material
patents, patent applications, trademarks, service marks, trade names,
trademark registrations, service xxxx registrations, copyrights and
licenses necessary for the conduct of their respective businesses and
have no reason to believe that the conduct of their respective
businesses will conflict with, and have not received any notice of any
claim of conflict with, any such rights of others, which conflict (if
the subject of any unfavorable decision, ruling or finding) would
result in a Material Adverse Effect.
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(v) Except as described in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or the Operating
Partnership is a party or of which any property or assets of the
Company or the Operating Partnership or any of the property, assets or
business contemplated in the Prospectus to be owned by them after the
Formation Transactions is the subject which, if determined adversely
to the Company or the Operating Partnership, would have a Material
Adverse Effect; and to the best of the Company's knowledge, no such
proceedings are threatened or contemplated by governmental authorities
or threatened by others.
(w) Upon completion of the Formation Transactions and the sale
of Stock hereunder, the Company will be organized in conformity with
the requirements for qualification as a real estate investment trust
under the Internal Revenue Code of 1986, as amended (the "Code"), and
its proposed method of operation will enable it to meet the
requirements for taxation as a real estate investment trust under the
Code for its taxable periods beginning or otherwise including the
period after the Effective Date. All statements in the Prospectus
regarding the Company's qualification as a REIT are true, complete and
correct in all material respects.
(x) There are no contracts or other documents which are required
to be described in the Prospectus or filed as exhibits to the
Registration Statement by the Securities Act or by the Rules and
Regulations which have not been described in the Prospectus or filed
as exhibits to the Registration Statement or incorporated therein by
reference as permitted by the Rules and Regulations.
(y) No relationship, direct or indirect, exists between or among
the Company or the Operating Partnership on the one hand, and the
directors, officers, stockholders (in the case of the Company),
limited partners (in the case of the Operating Partnership), customers
or suppliers of the Company or the Operating Partnership on the other
hand, which is required to be described in the Prospectus which is not
so described.
(z) There is (i) no material unfair labor practice complaint
pending against the Company, the Operating Partnership or any
Predecessor Entity nor, to the best knowledge of the Company,
threatened against any of them before the National Labor Relations
Board or any state or local labor relations board, and no significant
grievance or significant arbitration proceeding arising out of or
under any collective bargaining agreement is so pending against the
Company, the Operating Partnership or any Predecessor Entity or, to
the best knowledge of the
9
Company, threatened against any of them, (ii) no material strike,
labor dispute, slowdown or stoppage pending against the Company, the
Operating Partnership or any Predecessor Entity nor, to the best
knowledge of the Company, threatened against the Company, the
Operating Partnership or any Predecessor Entity which in any case
would have a Material Adverse Effect.
(aa) The Company and the Operating Partnership are in compliance
in all material respects with all presently applicable provisions of
the Employee Retirement Income Security Act of 1974, as amended,
including the regulations and published interpretations thereunder
("ERISA"); no "reportable event" (as defined in ERISA) has occurred
with respect to any "pension plan" (as defined in ERISA) for which the
Company or the Operating Partnership would have any liability; the
Company or the Operating Partnership has not incurred and does not
expect to incur liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any "pension plan" or (ii)
Sections 412 or 4971 of the Code including the regulations and
published interpretations thereunder; and each "pension plan" for
which the Company or the Operating Partnership would have any
liability that is intended to be qualified under Section 401(a) of the
Code is so qualified in all material respects and nothing has
occurred, whether by action or by failure to act, which would cause
the loss of such qualification, except for such noncompliance,
reportable events, liabilities, or failures to qualify that would not
result in a Material Adverse Effect.
(ab) The Company, the Operating Partnership and each Predecessor
Entity have filed all federal, state and local income and franchise
tax returns required to be filed through the date hereof and have paid
all taxes due thereon, and no tax deficiency has been determined
adversely to the Company or the Operating Partnership which has had
(nor does the Company have any knowledge of any tax deficiency which,
if determined adversely to the Company or the Operating Partnership
would have) a Material Adverse Effect.
(ac) Since the date as of which information is given in the
Prospectus through the date hereof, and except as may otherwise be
disclosed in the Prospectus, the Company and the Operating Partnership
have not (i) issued or granted any securities, (ii) incurred any
material liability or obligation, direct or contingent, other than
liabilities and obligations which were incurred in the ordinary course
of business, (iii) entered into any transaction not in the ordinary
course of business which is material to the Company and the Operating
Partnership, taken as a whole or (iv) declared or paid any dividend on
their stock.
(ad) The Company and the Operating Partnership and the
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Predecessor Entities (i) make and keep books and records which are
accurate in all material respects and (ii) maintain internal
accounting controls which provide reasonable assurance that (A)
transactions are executed in accordance with management's
authorization, (B) transactions are recorded as necessary to permit
preparation of their financial statements and to maintain
accountability for their assets, (C) access to their assets is
permitted only in accordance with management's authorization and (D)
the reported accountability for their assets is compared with existing
assets at reasonable intervals.
(ae) Neither the Company nor the Operating Partnership is, or
will be following consummation of the Formation Transactions, (i) in
violation of its charter, partnership agreement, by-laws or other
similar documents, (ii) in default in any material respect, and no
event has occurred which, with notice or lapse of time or both, would
constitute such a default, in the due performance or observance of any
term, covenant or condition contained in any material indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which it is a party or by which it is bound or to which
any of its properties or assets is subject or (iii) in violation in
any material respect of any law, ordinance, governmental rule, permit,
license, regulation or court decree to which it or its property or
assets may be subject or has failed to obtain any material license,
permit, certificate, franchise or other governmental authorization or
permit necessary to the ownership of its property or to the conduct of
its business.
(af) Neither the Company nor the Operating Partnership, nor any
director, officer, agent, employee or other person associated with or
acting on behalf of the Company or the Operating Partnership, has used
any corporate funds for any unlawful contribution, gift, entertainment
or other unlawful expense relating to political activity; made any
direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds; violated or is
in violation of any provision of the Foreign Corrupt Practices Act of
1977; or made any bribe, rebate, payoff, influence payment, kickback
or other unlawful payment.
(ag) Except as disclosed in the Prospectus, there has been no
storage, disposal, generation, manufacture, refinement,
transportation, handling or treatment of toxic wastes, medical wastes,
hazardous wastes or hazardous substances by the Company, the Operating
Partnership, any Predecessor Entity or any of their subsidiaries (or,
to the knowledge of the Company, any of their predecessors in interest
or any other person) at, upon or from any of the property now or
previously owned or leased by the Company, the Operating Partnership,
any Predecessor Entity or any of their subsidiaries in violation of
any applicable law, ordinance, rule, regulation, order, judgment,
decree or permit or which would require any
11
removal, remedial or other response action under any applicable law,
ordinance, rule, regulation, order, judgment, decree or permit, except
for any violation or response action which would not have singularly
or in the aggregate with all such violations and response actions, a
Material Adverse Effect; there also has been no storage, disposal,
generation, manufacture, refinement, transportation, handling or
treatment of toxic wastes, medical wastes, hazardous wastes or
hazardous substances by the Company, the Operating Partnership, any
Predecessor Entity or any of their subsidiaries (or, to the knowledge
of the Company, any of their predecessors in interest) at or upon any
property owned by anyone else in violation of any applicable law,
ordinance, rule, regulation, order, judgment, decree or permit or
which would require any removal, remedial or other response action
under any applicable law, ordinance, rule, regulation, order,
judgment, decree or permit, except for any violation or response
action which would not have singularly or in the aggregate with all
such violations and response actions, a Material Adverse Effect; there
has been no material spill, discharge, leak, emission, injection,
escape, placement, dumping or release of any kind onto such property
or into the environment surrounding such property of any toxic wastes,
medical wastes, solid wastes, hazardous wastes or hazardous substances
due to or caused by the Company, the Operating Partnership, any
Predecessor Entity or any of their subsidiaries or with respect to
which the Company, the Operating Partnership, any Predecessor Entity
or any of their subsidiaries have knowledge, except for any such
spill, discharge, leak, emission, injection, escape, placement,
dumping or release which would not have singularly or in the aggregate
with all such spills, discharges, leaks, emissions, injections,
escapes, placements, dumpings and releases, a Material Adverse Effect;
and the terms "hazardous wastes," "toxic wastes," "hazardous
substances" and "medical wastes" shall have the meanings specified in
any applicable local, state, federal and foreign laws or regulations
with respect to environmental protection. There are no underground
storage tanks located on or in the Properties except such tanks the
existence of which would not have a Material Adverse Effect. None of
the Predecessor Entities (other than NAMIZ, Inc.) owns or operates, or
has owned or operated, any real property other than the Properties.
(ah) Neither the Company, the Operating Partnership nor any of
their subsidiaries is an "investment company" within the meaning of
such term under the Investment Company Act of 1940, as amended, and
the rules and regulations of the Commission thereunder.
(ai) The Stock has been approved for listing on the New York
Stock Exchange, Inc. subject to official notice of issuance.
(aj) Neither of the Company nor the Operating Partnership, nor
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any of their directors, officers or controlling persons, has taken or
will take, directly or indirectly, any action resulting in a violation
of Rule 10b-6 under the Exchange Act, or designed to cause or result
in, or that has constituted or that reasonably might be expected to
constitute, the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Stock.
(ak) All of the representations and warranties of the Company and
the Operating Partnership contained in the Formation Documents set
forth on Schedule 2 hereof are true and correct in all material
respects.
(al) No real estate transfer or similar taxes are or will become
due and payable by the Company, the Operating Partnership or any
Predecessor Entity as a result of the acquisition by the Operating
Partnership or any affiliate thereof of any direct or indirect
interest in any of the Properties or any Predecessor Entity in
connection with the Formation Transactions, except for such taxes
which, in the aggregate, will not exceed $125,000.
(am) Except as described in the Prospectus, the Operating
Partnership is not currently prohibited, directly or indirectly, from
paying any dividends or distributions to the Company to the extent
permitted by applicable law, from making any other distribution on the
Operating Partnership's partnership interests, from repaying to the
Company any loans or advances to the Operating Partnership from the
Company or from transferring any of the Operating Partnership's
property or assets to the Company.
(an) The Company, the Operating Partnership and any Predecessor
Entity are currently in substantial compliance with all presently
applicable provisions of the Americans with Disabilities Act and no
failure of the Company, the Operating Partnership or any Predecessor
Entity to comply with all presently applicable provisions of the
Americans with Disabilities Act would result in a Material Adverse
Effect.
(ao) On the First Delivery Date, each of the Formation Documents
will have been duly and validly authorized, executed and delivered by
the Company and the Operating Partnership and will be a valid and
binding agreement, enforceable in accordance with its terms.
2. PURCHASE OF THE STOCK BY THE UNDERWRITERS. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell 18,847,500 shares of
the Firm Stock to the several Underwriters and each of the Underwriters,
severally and not jointly, agrees to purchase the number of shares of the Firm
Stock set forth opposite that Underwriter's name in Schedule 1 hereto. The
respective purchase obligations of the Underwriters
13
with respect to the Firm Stock shall be rounded among the Underwriters to avoid
fractional shares, as the Representatives may determine.
In addition, the Company grants to the Underwriters an option to
purchase up to 2,827,000 shares of Option Stock. Such option is granted solely
for the purpose of covering over-allotments in the sale of Firm Stock and is
exercisable as provided in Section 5 hereof. Shares of Option Stock shall be
purchased severally for the account of the Underwriters in proportion to the
number of shares of Firm Stock set forth opposite the name of such Underwriters
in Schedule 1 hereto. The respective purchase obligations of each Underwriter
with respect to the Option Stock shall be adjusted by the Representatives so
that no Underwriter shall be obligated to purchase Option Stock other than in
100 share amounts. The price of both the Firm Stock and any Option Stock shall
be $_____ per share.
The Company shall not be obligated to deliver any of the Stock to be
delivered on the First Delivery Date or the Second Delivery Date (as hereinafter
defined), as the case may be, except upon payment for all the Stock to be
purchased on such Delivery Date as provided herein.
3. RETENTION OF QUALIFIED INDEPENDENT UNDERWRITERS. The Company
hereby confirms its engagement of Xxxx Xxxxxx Xxxxxxxx Inc. as, and Xxxx Xxxxxx
Xxxxxxxx Inc. hereby confirms its agreement with the Company to render services
as, "qualified independent underwriter" within the meaning of Rule 2710(c)(8) of
the Conduct Rules of the National Association of Securities Dealers, Inc. with
respect to the offering and sale of Stock. Xxxx Xxxxxx Xxxxxxxx Inc., solely in
its capacity as qualified independent underwriter and not otherwise, is referred
to herein as the "Independent Underwriter."
4. OFFERING OF STOCK BY THE UNDERWRITERS. Upon authorization by the
Representatives of the release of the Firm Stock, the several Underwriters
propose to offer the Firm Stock for sale upon the terms and conditions set forth
in the Prospectus.
It is understood that 500,000 shares of the Firm Stock will initially
be reserved by the several Underwriters for offer and sale upon the terms and
conditions set forth in the Prospectus and in accordance with the rules and
regulations of the National Association of Securities Dealers, Inc. to employees
and persons having business relationships with the Company, the Operating
Partnership and their subsidiaries who have heretofore delivered to the
Representatives offers or indications of interest to purchase shares of Firm
Stock in form satisfactory to the Representatives, and that any allocation of
such Firm Stock among such persons will be made in accordance with timely
directions received by the Representatives from the Company; PROVIDED, that
under no circumstances will the Representatives or any Underwriter be liable to
the Company or to any such person for any action taken or omitted in good faith
in connection with such offering to employees and persons having business
relationships with the Company, the Operating Partnership and their
subsidiaries. It is further understood that any shares of such Firm Stock which
are not purchased by such
14
persons will be offered by the Underwriters to the public upon the terms and
conditions set forth in the Prospectus.
5. DELIVERY OF AND PAYMENT FOR THE STOCK. Delivery of and payment
for the Firm Stock shall be made at the office of Xxxxxx Brothers Inc., Three
World Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 10:00 A.M., New York City
time, on the fourth full business day following the date of this Agreement or at
such other date or place as shall be determined by agreement between the
Representatives and the Company. This date and time are sometimes referred to
as the "First Delivery Date." On the First Delivery Date, the Company shall
deliver or cause to be delivered certificates representing the Firm Stock to the
Representatives for the account of each Underwriter against payment to or upon
the order of the Company of the purchase price by wire transfer of federal same-
day funds to an account or accounts previously designated in writing to Xxxxxx
Brothers Inc. by the Company. Time shall be of the essence, and delivery at the
time and place specified pursuant to this Agreement is a further condition of
the obligation of each Underwriter hereunder. Upon delivery, the Firm Stock
shall be registered in such names and in such denominations as the
Representatives shall request in writing not less than two full business days
prior to the First Delivery Date. For the purpose of expediting the checking
and packaging of the certificates for the Firm Stock, the Company shall make the
certificates representing the Firm Stock available for inspection by the
Representatives in New York, New York, not later than 2:00 P.M., New York City
time, on the business day prior to the First Delivery Date.
At any time on or before the thirtieth day after the date of this
Agreement, the option granted in Section 2 may be exercised by written notice
being given to the Company by the Representatives. Such notice shall set forth
the aggregate number of shares of Option Stock as to which the option is being
exercised, the names in which the shares of Option Stock are to be registered,
the denominations in which the shares of Option Stock are to be issued and the
date and time, as determined by the Representatives, when the shares of Option
Stock are to be delivered; PROVIDED, HOWEVER, that this date and time shall not
be earlier than the First Delivery Date nor earlier than the second business day
after the date on which the option shall have been exercised nor later than the
fourth business day after the date on which the option shall have been
exercised. The date and time the shares of Option Stock are delivered are
sometimes referred to as the "Second Delivery Date" and the First Delivery Date
and the Second Delivery Date are sometimes each referred to as a "Delivery
Date."
Delivery of and payment for the Option Stock shall be made at the
place specified in the first sentence of the first paragraph of this Section 5
(or at such other place as shall be determined by agreement between the
Representatives and the Company) at 10:00 A.M., New York City time, on the
Second Delivery Date. On the Second Delivery Date, the Company shall deliver or
cause to be delivered the certificates representing the Option Stock to the
Representatives for the account of each Underwriter against payment to or upon
the order of the Company of the purchase price by wire transfer of federal same-
day funds to an account or accounts previously
15
designated to Xxxxxx Brothers Inc. in writing by the Company. Time shall be of
the essence, and delivery at the time and place specified pursuant to this
Agreement is a further condition of the obligation of each Underwriter
hereunder. Upon delivery, the Option Stock shall be registered in such names
and in such denominations as the Representatives shall request in the aforesaid
written notice. For the purpose of expediting the checking and packaging of the
certificates for the Option Stock, the Company shall make the certificates
representing the Option Stock available for inspection by the Representatives in
New York, New York, not later than 2:00 P.M., New York City time, on the
business day prior to the Second Delivery Date.
6. FURTHER AGREEMENTS OF THE COMPANY. The Company agrees:
(a) To prepare the Prospectus in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b)
under the Securities Act not later than the Commission's close of
business on the second business day following the execution and
delivery of this Agreement or, if applicable, such earlier time as may
be required by Rule 430A(a)(3) under the Securities Act; to make no
further amendment or any supplement to the Registration Statement or
to the Prospectus except as permitted herein; to advise the
Representatives, promptly after it receives notice thereof, of the
time when any amendment to the Registration Statement has been filed
or becomes effective or any supplement to the Prospectus or any
amended Prospectus has been filed and to furnish the Representatives
with copies thereof; to advise the Representatives, promptly after it
receives notice thereof, of the issuance by the Commission of any stop
order or of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus, of the suspension of the
qualification of the Stock for offering or sale in any jurisdiction,
of the initiation or threatening of any proceeding for any such
purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or the Prospectus or for
additional information; and, in the event of the issuance of any stop
order or of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or suspending any such
qualification, to use promptly its best efforts to obtain its
withdrawal.
(b) To furnish promptly to each of the Representatives and to
counsel for the Underwriters a signed copy of the Registration
Statement as originally filed with the Commission, and each amendment
thereto filed with the Commission, including all consents and exhibits
filed therewith.
(c) To deliver promptly to the Representatives such number of
the following documents as the Representatives shall reasonably
request: (i) conformed copies of the Registration Statement as
originally filed with the Commission and each amendment thereto (in
each case excluding
16
exhibits other than this Agreement) and (ii) each of the Preliminary
Prospectus, the Prospectus and any amended or supplemented Prospectus;
and, if the delivery of a prospectus is required at any time after the
Effective Time in connection with the offering or sale of the Stock or
any other securities relating thereto and if at such time any events
shall have occurred as a result of which the Prospectus as then
amended or supplemented would include an 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 when such Prospectus is delivered, not
misleading, or, if for any other reason it shall be necessary to amend
or supplement the Prospectus in order to comply with the Securities
Act, to notify the Representatives and, upon their request, to prepare
and furnish without charge to each Underwriter and to any dealer in
securities as many copies as the Representatives may from time to time
reasonably request of an amended or supplemented Prospectus which will
correct such statement or omission or effect such compliance, and in
case any Underwriter is required to deliver a prospectus in connection
with sales of any of the Stock at any time nine months or more after
the Effective Time, upon request of the Representatives but at the
expense of such Underwriter, to prepare and deliver to such
Underwriter as many copies as the Representatives may reasonably
request of an amended or supplemented prospectus complying with
Section 10(a)(3) of the Securities Act.
(d) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the
Prospectus that may, in the reasonable judgment of the Company or the
Representatives, be required by the Securities Act or requested by the
Commission.
(e) Prior to filing with the Commission any amendment to the
Registration Statement or supplement to the Prospectus or any
Prospectus pursuant to Rule 424 of the Rules and Regulations, to
furnish a copy thereof to the Representatives and counsel for the
Underwriters and obtain the consent of the Representatives to the
filing.
(f) As soon as practicable after the Effective Date but in any
event not later than 45 days after the end of the Company's fiscal
quarter in which the first anniversary date of the Effective Date
occurs, to make generally available to the Company's security holders
and to deliver to the Representatives an earning statement of the
Company and its subsidiaries (which need not be audited) complying
with Section 11(a) of the Securities Act and the Rules and Regulations
(including, at the option of the Company, Rule 158).
(g) For a period of five years following the Effective Date, to
17
furnish to the Representatives copies of all materials furnished by
the Company to its security holders and all public reports and all
reports and financial statements furnished by the Company to the
principal national securities exchange upon which the Common Stock may
be listed pursuant to requirements of or agreements with such exchange
or to the Commission pursuant to the Exchange Act or any rule or
regulation of the Commission thereunder.
(h) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the Stock for
offering and sale under the securities laws of such jurisdictions as
the Representatives may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the
distribution of the Stock; PROVIDED, that in connection therewith the
Company shall not be required to take any action that would subject it
to income taxation in such jurisdictions, qualify as a foreign
corporation or to file a general consent to service of process in any
jurisdiction.
(i) For a period of 180 days from the date of the Prospectus,
not to, directly or indirectly, offer for sale, sell or otherwise
dispose of (or enter into any transaction or device which is designed
to, or could be expected to, result in the disposition by any person
at any time in the future of) any shares of Common Stock (other than
the Stock offered hereby and shares issued pursuant to the Stock
Incentive Plan existing on the date hereof), or sell or grant options,
rights or warrants with respect to any shares of Common Stock (other
than the grant of options pursuant to the Stock Incentive Plan
existing on the date hereof), without the prior written consent of
Xxxxxx Brothers Inc.
(j) Prior to the Effective Date, to apply for the listing of the
Stock on the New York Stock Exchange, and to use its best efforts to
complete that listing, subject only to official notice of issuance,
prior to the First Delivery Date.
(k) Prior to filing with the Commission any reports on Form SR
pursuant to Rule 463 of the Rules and Regulations, to furnish a copy
thereof to the counsel for the Underwriters and receive and consider
its comments thereon, and to deliver promptly to the Representatives a
signed copy of each report on Form SR filed by it with the Commission.
(l) To apply the net proceeds from the sale of the Stock being
sold by the Company as set forth in the Prospectus.
(m) To take such steps as shall be necessary to ensure that
neither the Company, the Operating Partnership nor any subsidiary
shall
18
become an "investment company" within the meaning of such term under
the Investment Company Act of 1940, as amended, and the rules and
regulations of the Commission thereunder.
7. EXPENSES. The Company agrees to pay (a) the costs incident to
the authorization, issuance, sale and delivery of the Stock and any taxes
payable in that connection; (b) the costs incident to the preparation, printing
and filing under the Securities Act of the Registration Statement and any
amendments and exhibits thereto; (c) the costs of distributing the Registration
Statement as originally filed and each amendment thereto and any post-effective
amendments thereof (including, in each case, exhibits), any Preliminary
Prospectus, the Prospectus and any amendment or supplement to the Prospectus,
all as provided in this Agreement; (d) the costs of printing, photocopying and
distributing this Agreement and any other related documents in connection with
the offering, purchase, sale and delivery of the Stock; (e) the fees and
expenses (including reasonable attorneys' fees) incident to securing any
required review by the National Association of Securities Dealers, Inc. of the
terms of sale of the Stock; (f) any applicable listing or other fees; (g) the
fees and expenses of qualifying the Stock under the securities laws of the
several jurisdictions as provided in Section 6(h) and of preparing, printing and
distributing a Blue Sky Memorandum (including related fees and expenses of
counsel to the Underwriters); (h) all costs and expenses of the Underwriters,
including fees and disbursements of counsel for the Underwriters, incident to
the offer and sale of shares of the Stock by the Underwriters to employees and
persons having business relationships with the Company, the Operating
Partnership and their subsidiaries as described in Section 4; and (i) all other
costs and expenses incident to the performance of the obligations of the Company
under this Agreement; PROVIDED that, except as provided in this Section 7 and in
Section 12 the Underwriters shall pay their own costs and expenses, including
the costs and expenses of their counsel, any transfer taxes on the Stock which
they may sell and the expenses of advertising any offering of the Stock made by
the Underwriters.
8. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The respective
obligations of the Underwriters hereunder are subject to the accuracy, when made
and on each Delivery Date, of the representations and warranties of the Company
and the Operating Partnership contained herein, to the performance by the
Company of its obligations hereunder, and to each of the following additional
terms and conditions:
(a) The Registration Statement shall have become effective and
the Representatives shall have received notice thereof, not later than
the first full business day next following the date of this Agreement
or such later date as shall be consented to in writing by the
Representatives. The Prospectus shall have been timely filed with the
Commission in accordance with Section 6(a); no stop order suspending
the effectiveness of the Registration Statement or any part thereof
shall have been issued and no proceeding for that purpose shall have
been initiated or threatened by the Commission; and any request of the
Commission for inclusion of additional information in the Registration
Statement or the Prospectus or
19
otherwise shall have been complied with.
(b) No Underwriter shall have discovered and disclosed to the
Company on or prior to such Delivery Date that the Registration
Statement or any amendment thereto contains an untrue statement of a
fact which, in the opinion of Xxxxx & Xxxxxxx L.L.P., counsel for the
Underwriters, is material or omits to state a fact which, in the
opinion of such counsel, is material and is required to be stated
therein or is necessary to make the statements therein not misleading
or that the Prospectus and any amendment or supplement thereto
contains an untrue statement of a fact which, in the opinion of Xxxxx
& Xxxxxxx L.L.P., counsel for the Underwriters, is material or omits
to state a fact which, in the opinion of such counsel, is material and
is required to be stated therein or is necessary to make the
statements, in light of the circumstances under which they were made,
not misleading.
(c) All corporate proceedings and other legal matters incident
to the authorization, form and validity of this Agreement, the
Formation Documents, the Stock, the Registration Statement and the
Prospectus, and all other legal matters and agreements relating to
this Agreement and the transactions contemplated hereby shall be
reasonably satisfactory in all material respects to counsel for the
Underwriters, and the Company shall have furnished to such counsel all
documents and information that they may reasonably request to enable
them to pass upon such matters.
(d) Xxxxxx & Xxxxxxx shall have furnished to the Representatives
its written opinion, as counsel to the Company, addressed to the
Underwriters and dated such Delivery Date, in form and substance
reasonably satisfactory to the Representatives, to the effect that:
(i) The Company is a corporation duly incorporated and
existing under and by virtue of the laws of the State of Maryland
and is in good standing with the SDAT. The Company has full
corporate power to conduct its business as described in the
Prospectus. Based solely on certificates from public officials,
the Company is duly qualified as a foreign corporation to
transact business and is in good standing in the State of
California;
(ii) The Operating Partnership is a limited partnership duly
formed and existing under and by virtue of the laws of the State
of Maryland and is in good standing with the SDAT. The Operating
Partnership has full power as a limited partnership to conduct
its business as described in the Prospectus. Based solely on
certificates from public officials, the Operating Partnership is
duly qualified as a foreign limited partnership to transact
business and is
20
in good standing in the State of California;
(iii) The Company has an authorized capitalization
as set forth in the line items "Preferred Stock" and "Common
Stock" under the caption "Capitalization" in the Prospectus, and
all of the issued shares of stock of the Company (including the
shares of Stock being delivered on such Delivery Date) have been
duly and validly authorized and, assuming receipt of
consideration therefor as provided in the resolutions authorizing
issuance thereof of the board of directors of the Company, are
validly issued, are fully paid and non-assessable and conform in
all material respects to the description thereof contained in the
Prospectus under the caption "Capital Stock"; and all of the
issued stock or Partnership Interests of the Operating
Partnership and of each subsidiary of the Company have been duly
and validly authorized, assuming receipt of consideration
therefor as provided in the resolutions authorizing issuance
thereof of the board of directors of the Company, as general
partner of the Operating Partnership, or by the board of
directors of such subsidiary, are fully paid and (except as set
forth in the Prospectus) are owned of record by the Company; and
to the knowledge of such counsel, based solely on an officer's
certificate, are owned free and clear of all liens, encumbrances,
equities or claims;
(iv) Except as set forth in the Prospectus, there are
no preemptive or other rights to subscribe for or to purchase,
nor any restriction upon the voting or transfer of, any shares of
the Stock pursuant to the Company's charter or by-laws or any
agreement or other instrument to which the Company is a party
known to such counsel;
(v) Except as set forth in the Prospectus, there are
no preemptive or other rights to subscribe for or to purchase,
nor any restriction upon the voting or transfer of, any Units
pursuant to the Operating Partnership Agreement or any agreement
or other instrument to which the Operating Partnership is a party
known to such counsel;
(vi) To such counsel's knowledge based solely on an
officer's certificate and review of attorney letters furnished to
the Company's independent public accountants in connection with
their audit of financial statements, and other than as set forth
in the Prospectus, there are no legal or governmental proceedings
pending to which the Company or the Operating Partnership is a
party or of which any property or assets of the Company or the
Operating Partnership is the subject which, if determined
adversely
21
to the Company or the Operating Partnership, would have a
Material Adverse Eeffect; and, to such counsel's knowledge, based
solely on an officer's certificate, no such proceedings are
threatened or contemplated by governmental authorities or
threatened by others.
(vii) The Registration Statement was declared
effective under the Securities Act as of the date and time
specified in such opinion, the Prospectus was filed with the
Commission pursuant to the subparagraph of Rule 424(b) of the
Rules and Regulations specified in such opinion on the date
specified therein and no stop order suspending the effectiveness
of the Registration Statement has been issued and, to the
knowledge of such counsel, no proceeding for that purpose is
pending or threatened by the Commission;
(viii) The Registration Statement at the date it
became effective and at the date of any amendment thereto made by
the Company prior to such Delivery Date (other than the financial
statements and related schedules and other financial and
statistical information and data (collectively, "Financial Data")
included therein, as to which such counsel need express no
opinion) complied, and the Prospectus as of its date and at the
date of any supplement thereto made by the Company prior to such
Delivery Date (other than the Financial Data, as to which counsel
need express no opinion) complied as to form in all material
respects with the requirements of the Securities Act and the
Rules and Regulations;
(ix) The statements contained in the Prospectus under
the caption "FEDERAL INCOME TAX CONSEQUENCES" AND "RISK FACTORS -
- ADVERSE CONSEQUENCES OF FAILURE TO QUALIFY AS A REIT; OTHER TAX
LIABILITIES," insofar as they describe federal statutes, rules
and regulations, constitute a fair summary thereof and the
opinion of such counsel filed as Exhibit 8.1 to the Registration
Statement is confirmed and the Underwriters may rely upon such
opinion as if it were addressed to them. The information in the
Prospectus under the captions "CAPITAL STOCK" and "SHARES
AVAILABLE FOR FUTURE SALE," to the extent that it constitutes
matters of law or legal conclusions, has been reviewed by such
counsel and is correct in all material respects. The statements
contained in the Prospectus under the heading "CERTAIN PROVISIONS
OF MARYLAND LAW AND THE COMPANY'S CHARTER AND BYLAWS," insofar as
they describe Maryland statutory law are correct in all material
respects;
(x) To such counsel's knowledge, there are no
contracts or
22
other documents which are required to be described in the
Prospectus or filed as exhibits to the Registration Statement by
the Securities Act or by the Rules and Regulations which have not
been described or filed as exhibits to the Registration
Statement;
(xi) This Agreement has been duly authorized, executed and
delivered by the Company and the Operating Partnership;
(xii) The issuance and sale of the shares of Stock being
delivered on such Delivery Date by the Company and the compliance by
the Company and the Operating Partnership with all of the provisions
of this Agreement and the consummation of the Formation Transactions
by the Company and the Operating Partnership will not conflict with or
result in a breach or violation of any of the terms or provisions of,
or constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument filed as an exhibit to
the Registration Statement, any Formation Document or any management
contract related to a Managed Property, except for such conflicts,
breaches, violations or defaults that (i) would not have a Material
Adverse Effect, (ii) relate to mortgage indebtedness to be repaid in
full with a portion of the net proceeds from the sale of the Stock and
the Mortgage Financing as reflected in the "Use of Proceeds" section
of the Prospectus, or (iii) relate to agreements or instruments that
are terminable at will or upon 30 days notice, nor will such actions
result in any violation of the provisions of the charter or by-laws of
the Company or the Agreement of Limited Partnership of the Operating
Partnership or any statute or any order, rule or regulation known to
such counsel of any court or governmental agency or body having
jurisdiction over the Company or the Operating Partnership or any of
their properties or assets; and, except for (a) the registration of
the Stock under the Securities Act, such consents, approvals,
authorizations, registrations or qualifications as may be required
under the Exchange Act and applicable state and foreign securities
laws in connection with the purchase and distribution of the Stock by
the Underwriters, (b) consents, approvals, authorizations, orders,
filings or registrations that will be completed prior to the Closing
Date and (c) such consents, approvals, authorizations, orders, filing
or registrations, the absence of which, individually or in the
aggregate would not have a Material Adverse Effect, no consent,
approval, authorization or order of, or filing or registration with,
any such court or governmental agency or body or any other person is
required for the execution, delivery and performance of this Agreement
by the Company and the Operating Partnership, and the consummation of
the Formation Transactions;
23
(xiii) To such counsel's knowledge based solely on a
certificate from a officer of the Company, other than as
disclosed in the Prospectus, 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 Securities 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 in the
securities registered pursuant to the Registration Statement or
in any securities being registered pursuant to any other
registration statement filed by the Company under the Securities
Act;
(xiv) Neither the Company, the Operating Partnership nor
any of their subsidiaries is, after giving effect to the
Formation Transactions, an "investment company" as such term is
defined in the Investment Company Act of 1940, as amended;
(xv) The issuances of securities described in Items 31 and
32 of the Registration Statement were not at the time of issue,
and are not as of the Delivery Date, required to be registered
under the Securities Act;
(xvi) The transfer of interests pursuant to the Formation
Documents does not violate the limited liability agreement or
limited partnership agreement, as the case may be, of any
Predecessor Entity.
(xvii) The offer and sale of the Units on or prior to the
First Delivery Date did not result in any violation of any
statute or any order, rule or regulation (including, without
limitation, federal and state securities laws) known to such
counsel of any court or governmental body having jurisdiction
over the Company or the Operating Partnership or any of their
properties or assets. The terms of the Units conform in all
material respects to all statements and descriptions related
thereto contained in the Prospectus.
In rendering such opinion, such counsel may (i) state that its
opinion, as applicable, is limited to matters governed by the Federal
securities and tax laws of the United States of America, the corporate
and partnership laws of the State of California and the State of
Maryland and that such counsel is not admitted in the State of
Maryland; and (ii) rely (to the extent such counsel deems proper and
specifies in its opinion), as to matters involving the application of
the laws of the State of Maryland upon the opinion of Xxxxxxx Xxxxx
Xxxxxxx & Ingersoll, Baltimore, Maryland, PROVIDED that such Maryland
counsel furnishes a copy of its opinion to the
24
Representatives. Such counsel shall also have furnished to the
Representatives a written statement, addressed to the Underwriters and
dated such Delivery Date, in form and substance satisfactory to the
Representatives, to the effect that (x) such counsel has acted as
counsel to the Company in connection with the preparation of the
Registration Statement and participated in conferences with certain
officers and representatives of the Company and the Operating
Partnership, representatives of Ernst & Young LLP and representatives
of the Underwriters at which the Registration Statement and the
Prospectus and related matters were discussed and (y) during the
course of such counsel's participation (relying as to factual matters
as to materiality to a large extent upon the statements of officers
and other representatives of the Company), no facts have come to the
attention of such counsel which led it to believe that (i) the
Registration Statement (other than the Financial Data and data from
the C&W Market Study, as to which such counsel need make no
statement), as of the Effective Date, contained any untrue statement
of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein
not misleading, or (ii) the Prospectus as of the Delivery Date (other
than the Financial Data and data from the C&W Market Study, as to
which such counsel need make no statement) contains any untrue
statement of a material fact or omits to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they
were made, not misleading. The foregoing opinion and statement may be
qualified by a statement to the effect that such counsel does not
assume any responsibility for the accuracy, completeness or fairness
of the statements contained in the Registration Statement or the
Prospectus and has not made any independent judgment, check or
verification thereof except to the extent set forth in paragraph (ix)
above.
(e) The Representatives shall have received from Xxxxx & Xxxxxxx
L.L.P., counsel for the Underwriters, such opinion or opinions, dated
such Delivery Date, with respect to the issuance and sale of the
Stock, the Registration Statement, the Prospectus and other related
matters as the Representatives may reasonably require, and the Company
shall have furnished to such counsel such documents as they reasonably
request for the purpose of enabling them to pass upon such matters.
(f) At the time of execution of this Agreement, the
Representatives shall have received from Ernst & Young LLP a letter,
in form and substance satisfactory to the Representatives, addressed
to the Underwriters and dated the date hereof (i) confirming that they
are independent public accountants within the meaning of the
Securities Act and are in compliance with the applicable requirements
relating to the
25
qualification of accountants under Rule 2-01 of Regulation S-X of the
Commission and (ii) stating, as of the date hereof (or, with respect
to matters involving changes or developments since the respective
dates as of which specified financial information is given in the
Prospectus, as of a date not more than five days prior to the date
hereof), the conclusions and findings of such firm with respect to the
financial information and other matters ordinarily covered by
accountants' "comfort letters" to underwriters in connection with
registered public offerings.
(g) With respect to the letter of Ernst & Young LLP referred to
in the preceding paragraph and delivered to the Representatives
concurrently with the execution of this Agreement (the "initial
letter"), the Company shall have furnished to the Representatives a
letter (the "bring-down letter") of such accountants, addressed to the
Underwriters and dated such Delivery Date (i) confirming that they are
independent public accountants within the meaning of the Securities
Act and are in compliance with the applicable requirements relating to
the qualification of accountants under Rule 2-01 of Regulation S-X of
the Commission, (ii) stating, as of the date of the bring-down letter
(or, with respect to matters involving changes or developments since
the respective dates as of which specified financial information is
given in the Prospectus, as of a date not more than five days prior to
the date of the bring-down letter), the conclusions and findings of
such firm with respect to the financial information and other matters
covered by the initial letter and (iii) confirming in all material
respects the conclusions and findings set forth in the initial letter.
(h) The Company shall have furnished to the Representatives a
letter of Xxxxxxx & Xxxxxxxxx of California, Inc., addressed to the
Underwriters and dated such Delivery Date (i) confirming that they are
independent real estate service experts retained by the Company, and
(ii) confirming the conclusions and findings of such firm with respect
to the information and other matters contained in the Prospectus
attributed to them.
(i) The Company shall have furnished to the Representatives a
certificate, dated such Delivery Date, of its Chairman of the Board,
its President or a Vice President and its chief financial officer
stating on behalf of the Company that:
(i) The representations, warranties and agreements of
the Company in Section 1 are true and correct as of such Delivery
Date; the Company has complied with all its agreements contained
herein; and the conditions set forth in Sections 8(a) and 8(l)
have been fulfilled; and
26
(ii) They have carefully examined the Registration
Statement and the Prospectus and, in their opinion (A) as of the
Effective Date, the Registration Statement did not include any
untrue statement of a material fact and did not omit to state a
material fact required to be stated therein or necessary to make
the statements therein not misleading, (B) the Prospectus as of
the Delivery Date did not include any untrue statement of a
material fact and did not omit to state 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 (C) since the Effective Date no event has occurred
which should have been set forth in a supplement or amendment to
the Registration Statement or the Prospectus.
(j) (i) Neither the Company, the Operating Partnership nor any
of their subsidiaries shall have sustained since the date of the
latest audited financial statements included in the Prospectus any
loss or interference with their business from fire, explosion, flood
or other calamity, whether or not covered by insurance, or from any
labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Prospectus or (ii)
since such date there shall not have been any change in the stock,
partnership interests or long-term debt of the Company, the Operating
Partnership or any of their subsidiaries or any change, or any
development involving a prospective change in, or affecting the
general affairs, management, financial position, stockholders' equity,
partners' equity or results of operations of the Company, the
Operating Partnership and their subsidiaries, taken as a whole,
otherwise than as set forth or contemplated in the Prospectus, the
effect of which, in any such case described in clause (i) or (ii), is,
in the judgment of the Representatives, so material and adverse as to
make it impracticable or inadvisable to proceed with the public
offering or the delivery of the Stock being delivered on such Delivery
Date on the terms and in the manner contemplated in the Prospectus.
(k) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in
securities generally on the New York Stock Exchange, Inc. or the
American Stock Exchange, Inc. or on the Nasdaq Stock Market, Inc., or
trading in any securities of the Company on any exchange or on the
Nasdaq Stock Market, Inc., shall have been suspended or minimum prices
shall have been established on any such exchange or such market by the
Commission, by such exchange or by any other regulatory body or
governmental authority having jurisdiction, (ii) a banking moratorium
shall have been declared by Federal, New York or California
authorities, (iii) the United States shall have become engaged in
hostilities, there shall have been an escalation in hostilities
involving the United States or there shall
27
have been a declaration of a national emergency or war by the United
States or (iv) there shall have occurred such a material adverse
change in general economic, political or financial conditions (or the
effect of international conditions on the financial markets in the
United States shall be such) as to make it, in the judgment of a
majority in interest of the several Underwriters, impracticable or
inadvisable to proceed with the public offering or delivery of the
Stock being delivered on such Delivery Date on the terms and in the
manner contemplated in the Prospectus.
(l) The New York Stock Exchange, Inc. shall have approved the
Stock for listing, subject only to official notice of issuance and
evidence of satisfactory distribution.
(m) All of the Formation Transactions shall have occurred prior
to, or shall occur simultaneously with, the First Delivery Date.
(n) All of the representations and warranties contained in the
agreements set forth on Schedule 2 shall be true and correct in all
material respects, and all of the conditions to closing contained in
the agreements set forth on Schedule 2 shall have been satisfied or
waived, with the waiver of such conditions having been approved by the
Underwriters.
(o) The Company shall have delivered to the Underwriters under
separate cover at or prior to the Delivery Date any and all officers'
and other certificates delivered by the Company, the Operating
Partnership, their subsidiaries or its affiliates to Xxxxxx & Xxxxxxx,
Xxxxxxx Xxxxx Xxxxxxx & Ingersoll and Ernst & Young LLP on which such
firms relied in rendering opinions or in preparing financial
statements in connection with the Formation Transactions, including
the offering of Stock.
(p) Each of Messrs. Xxxxx and Xxxxxxx and NAMIZ, Inc. shall have
delivered lock-up agreements to Xxxxxx Brothers Inc., pursuant to
which each such person shall agree not to, directly or indirectly,
offer for sale, sell or otherwise dispose of (or enter into any
transaction or device which is designed to, or could be expected to,
result in the disposition by any person at any time in the future of)
any shares of Common Stock or Units for a period of two (2) years from
the date of the Prospectus, without the prior written consent of
Xxxxxx Brothers Inc.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably
satisfactory to counsel for the Underwriters.
28
9. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company and the Operating Partnership, jointly and
severally, shall indemnify and hold harmless each Underwriter, its officers and
employees and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
from and against any loss, claim, damage or liability, joint or several, or any
action in respect thereof (including, but not limited to, any loss, claim,
damage, liability or action relating to purchases and sales of Stock), to which
that Underwriter, officer, employee or controlling person may become subject,
under the Securities Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained (A) in any Preliminary
Prospectus, the Registration Statement or the Prospectus or in any amendment or
supplement thereto or (B) in any blue sky application or other document prepared
or executed by the Company (or based upon any written information furnished by
the Company) specifically for the purpose of qualifying any or all of the Stock
under the securities laws of any state or other jurisdiction (any such
application, document or information being hereinafter called a "Blue Sky
Application"), (ii) the omission or alleged omission to state in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or in any amendment or
supplement thereto, or in any Blue Sky Application any material fact required to
be stated therein or necessary to make the statements therein not misleading or
(iii) any act or failure to act or any alleged act or failure to act by any
Underwriter in connection with, or relating in any manner to, the Stock or the
offering contemplated hereby, and which is included as part of or referred to in
any loss, claim, damage, liability or action arising out of or based upon
matters covered by clause (i) or (ii) above (PROVIDED that the Company and the
Operating Partnership shall not be liable under this clause (iii) to the extent
that is determined in a final judgment by a court of competent jurisdiction that
such loss, claim, damage, liability or action resulted directly from any such
acts or failures to act undertaken or omitted to be taken by such Underwriter
through its gross negligence or willful misconduct) and shall reimburse each
Underwriter and each such officer, employee or controlling person promptly upon
demand for any legal or other expenses reasonably incurred by that Underwriter,
officer, employee or controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action as such expenses are incurred; PROVIDED, HOWEVER, that the Company and
the Operating Partnership shall 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 Preliminary Prospectus, the Registration Statement
or the Prospectus, or in any such amendment or supplement, or in any Blue Sky
Application, in reliance upon and in conformity with written information
specified in Section 9(e) furnished to the Company through the Representatives
by or on behalf of any Underwriter specifically for inclusion therein; PROVIDED
FURTHER, that the foregoing indemnity with respect to any Preliminary Prospectus
shall not inure to the benefit of any Underwriter from whom the person asserting
any such loss, claim, damage or liability purchased the Stock which is the
subject thereof if such person did not receive a copy of the Prospectus (or the
29
Prospectus as supplemented) at or prior to the confirmation of the sale of such
Stock to such person in any case where such delivery is required by the
Securities Act and the untrue statement or omission of a material fact contained
in such Preliminary Prospectus was corrected in the Prospectus (or the
Prospectus as supplemented). The foregoing indemnity agreement is in addition
to any liability which the Company or the Operating Partnership may otherwise
have to any Underwriter or to any officer, employee or controlling person of
that Underwriter.
The Company and the Operating Partnership, jointly and severally, also
will indemnify and hold harmless the Independent Underwriter, its officers and
employees and each person, if any, who controls the Independent Underwriter
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act, from and against any and all losses, claims, damages,
liabilities and judgments incurred as a result of the Independent Underwriter's
participation as a "qualified independent underwriter" within the meaning of
Rule 2720 of the Conduct Rules of the National Association of Securities
Dealers, Inc. in connection with the offering of the Stock, except for any
losses, claims, damages, liabilities and judgments resulting form the
Independent Underwriter's or such controlling person's willful misconduct or
gross negligence.
(b) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless the Company, the Operating Partnership, each of their respective
officers and employees, each of the Company's directors (including any person
who, with his or her consent, is named in the Registration Statement as about to
become a director of the Company), and each person, if any, who controls the
Company within the meaning of the Securities Act, from and against any loss,
claim, damage or liability, joint or several, or any action in respect thereof,
to which the Company or any such director, officer, employee or controlling
person may become subject, under the Securities Act or otherwise, insofar as
such loss, claim, damage, liability or action arises out of, or is based upon,
(i) any untrue statement or alleged untrue statement of a material fact
contained (A) in any Preliminary Prospectus, the Registration Statement or the
Prospectus or in any amendment or supplement thereto, or (B) in any Blue Sky
Application or (ii) the omission or alleged omission to state in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or in any amendment or
supplement thereto, or in any Blue Sky Application any material fact required to
be stated therein or necessary to make the statements therein not misleading,
but in each case only to the extent that the untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information specified in Section 9(e) furnished to the
Company through the Representatives by or on behalf of that Underwriter
specifically for inclusion therein, and shall reimburse the Company and any such
director, officer, employee or controlling person for any legal or other
expenses reasonably incurred by the Company or any such director, officer,
employee or controlling person in connection with investigating or defending or
preparing to defend against any such loss, claim, damage, liability or action as
such expenses are incurred. The foregoing indemnity agreement is in addition to
any liability which any Underwriter may otherwise have to the Company or any
such director, officer, employee or controlling person.
(c) Promptly after receipt by an indemnified party under this Section
9 of notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 9, notify the indemnifying party in
writing of the claim or the commencement of that action; PROVIDED, HOWEVER, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 9 except to the extent it has
been materially prejudiced by such failure and, PROVIDED FURTHER, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this Section 9.
If any such claim or action shall be brought against an indemnified party, and
it shall notify the indemnifying party
30
thereof, the indemnifying party shall be entitled to participate therein and, to
the extent that it wishes, jointly with any other similarly notified
indemnifying party, to assume the defense thereof with counsel reasonably
satisfactory to the indemnified party. After notice from the indemnifying party
to the indemnified party of its election to assume the defense of such claim or
action, the indemnifying party shall not be liable to the indemnified party
under this Section 9 for any legal or other expenses subsequently incurred by
the indemnified party in connection with the defense thereof other than
reasonable costs of investigation; PROVIDED, HOWEVER, that the Representatives
shall have the right to employ a single counsel to represent jointly the
Representatives and those other Underwriters and their respective officers,
employees and controlling persons who may be subject to liability arising out of
any claim in respect of which indemnity may be sought by the Underwriters
against the Company or the Operating Partnership under this Section 9 if, in the
reasonable judgment of the Representatives, it is advisable for the
Representatives and those Underwriters, officers, employees and controlling
persons to be jointly represented by separate counsel, and in that event the
fees and expenses of such separate counsel shall be paid by the Company or the
Operating Partnership; PROVIDED FURTHER, that, if indemnity is sought pursuant
to the second paragraph of Section 9(a), then, in addition to such counsel for
the indemnified parties, the indemnifying party shall be liable for the
reasonable fees and expenses of not more than one separate counsel (in addition
to any necessary local counsel) for the Independent Underwriter in its capacity
as a "qualified independent underwriter," its officers and employees and all
persons, if any, who control the Independent Underwriter within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, if, in the
reasonable judgment of the Independent Underwriter there may exist a conflict of
interest between the Independent Underwriter and the other indemnified parties.
In the case of any such separate counsel for the Independent Underwriter and
such control persons of the Independent Underwriter, such counsel shall be
designated in writing by the Independent Underwriter. No indemnifying party
shall (i) without the prior written consent of the indemnified parties (which
consent shall not be unreasonably withheld or delayed), settle or compromise or
consent to the entry of any judgment with respect to any pending or threatened
claim, action, suit or proceeding in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified parties are
actual or potential parties to such claim or action) unless such settlement,
compromise or consent includes an unconditional release of each indemnified
party from all liability arising out of such claim, action, suit or proceeding,
or (ii) be liable for any settlement of any such action effected without its
written consent (which consent shall not be unreasonably withheld or delayed),
but if settled with the consent of the indemnifying party or if there be a final
judgment of the plaintiff in any such action, the indemnifying party agrees to
indemnify and hold harmless any indemnified party from and against any loss or
liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 9 shall for
any reason be unavailable to or insufficient to hold harmless an indemnified
party under Section 9(a) in respect of any loss, claim, damage or liability, or
any action in respect thereof, referred to therein, then each indemnifying party
shall, in lieu of indemnifying such indemnified party, contribute to the amount
paid or payable by such indemnified party as a result of such loss, claim,
damage or liability, or action in respect thereof, (i)
31
in such proportion as shall be appropriate to reflect the relative benefits
received by the Company and the Operating Partnership on the one hand and the
Underwriters on the other hand from the offering of the Stock 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 the Company and
the Operating Partnership on the one hand and the Underwriters on the other hand
with respect to the statements or omissions which resulted in such loss, claim,
damage or liability, or action in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Operating Partnership on the one hand and the Underwriters on the other hand
with respect to such offering shall be deemed to be in the same proportion as
the total net proceeds from the offering of the Stock purchased under this
Agreement (before deducting expenses) received by the Company and the Operating
Partnership, on the one hand, and the total underwriting discounts and
commissions received by the Underwriters with respect to the shares of the Stock
purchased under this Agreement and any financial advisory fees received by any
Underwriter, on the other hand, bear to the total gross proceeds from the
offering of the shares of the Stock under this Agreement, in each case as set
forth in the table on the cover page of the Prospectus. The relative fault
shall be determined by reference to 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 and the Operating
Partnership or the Underwriters, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
statement or omission. For purposes of the preceding two sentences, the net
proceeds deemed to be received by the Company shall be deemed to be also for the
benefit of the Operating Partnership and information supplied by the Company
shall also be deemed to have been supplied by the Operating Partnership. The
Company and the Underwriters agree that Xxxx Xxxxxx Xxxxxxxx Inc. will not
receive any additional benefits hereunder for serving as the Independent
Underwriter in connection with the offering and sale of the Stock. The Company,
the Operating Partnership and the Underwriters agree that it would not be just
and equitable if contributions pursuant to this Section 9(d) were to be
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take into account the equitable considerations referred to herein. The amount
paid or payable by an indemnified party as a result of the loss, claim, damage
or liability, or action in respect thereof, referred to above in this Section
9(d) shall be deemed to include, for purposes of this Section 9(d), any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 9(d), no Underwriter shall be required to contribute
any amount in excess of the amount by which the total price at which the Stock
underwritten by it and distributed to the public was offered to the public
exceeds the amount of any damages which such Underwriter has otherwise paid or
become liable to pay by reason of any untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute as provided in
this Section 9(d) are several in proportion to their respective underwriting
obligations and not joint.
32
(e) The Underwriters severally confirm and the Company and the
Operating Partnership acknowledge that the statements with respect to the public
offering of the Stock by the Underwriters set forth on the cover page of, the
legend concerning over-allotments on the inside front cover page of, under the
caption "Underwriting" in and concerning the affiliation of Xxxxxx Brothers
Holdings, Inc. with Xxxxxx Brothers Inc. in the Prospectus are correct and
constitute the only information concerning such Underwriters furnished in
writing to the Company and the Operating Partnership by or on behalf of the
Underwriters specifically for inclusion in the Registration Statement and the
Prospectus.
10. DEFAULTING UNDERWRITERS.
If, on either Delivery Date, any Underwriter defaults in the
performance of its obligations under this Agreement, the remaining non-
defaulting Underwriters shall be obligated to purchase the Stock which the
defaulting Underwriter agreed but failed to purchase on such Delivery Date in
the respective proportions which the number of shares of the Firm Stock set
forth opposite the name of each remaining non-defaulting Underwriter in Schedule
1 hereto bears to the total number of shares of the Firm Stock set forth
opposite the names of all the remaining non-defaulting Underwriters in Schedule
1 hereto; PROVIDED, HOWEVER, that the remaining non-defaulting Underwriters
shall not be obligated to purchase any of the Stock on such Delivery Date if the
total number of shares of the Stock which the defaulting Underwriter or
Underwriters agreed but failed to purchase on such date exceeds 9.09% of the
total number of shares of the Stock to be purchased on such Delivery Date, and
any remaining non-defaulting Underwriter shall not be obligated to purchase more
than 110% of the number of shares of the Stock which it agreed to purchase on
such Delivery Date pursuant to the terms of Section 2. If the foregoing
maximums are exceeded, the remaining non-defaulting Underwriters, or those other
underwriters satisfactory to the Representatives who so agree, shall have the
right, but shall not be obligated, to purchase, in such proportion as may be
agreed upon among them, all the Stock to be purchased on such Delivery Date. If
the remaining Underwriters or other underwriters satisfactory to the
Representatives do not elect to purchase the shares which the defaulting
Underwriter or Underwriters agreed but failed to purchase on such Delivery Date,
this Agreement (or, with respect to the Second Delivery Date, the obligation of
the Underwriters to purchase, and of the Company to sell, the Option Stock)
shall terminate without liability on the part of any non-defaulting Underwriter
or the Company, except that the Company will continue to be liable for the
payment of expenses to the extent set forth in Sections 7 and 12. As used in
this Agreement, the term "Underwriter" includes, for all purposes of this
Agreement unless the context requires otherwise, any party not listed in
Schedule 1 hereto who, pursuant to this Section 10, purchases Firm Stock which a
defaulting Underwriter agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Company for damages caused by its default. If
other underwriters are obligated or agree to purchase the Stock of a defaulting
or withdrawing Underwriter, either the Representatives or the Company may
postpone the Delivery Date for up to seven full business days in order to effect
any changes that in the opinion of counsel for the Company or counsel for the
Underwriters may be necessary in the Registration Statement, the Prospectus or
in any other document or arrangement.
11. TERMINATION. The obligations of the Underwriters hereunder may
be terminated by the Representatives by notice given to and received by the
Company prior to delivery of and payment for the Firm Stock if, prior to that
time, any of the events described in Sections 8(j) or 8(k), shall have occurred
or if the Underwriters shall decline to purchase the Stock for any reason
permitted under this Agreement.
12. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the Company shall
fail to tender the Stock for delivery to the Underwriters by reason of any
failure, refusal
33
or inability on the part of the Company or the Operating Partnership to perform
any agreement on its part to be performed, or because any other condition of the
Underwriters' obligations hereunder required to be fulfilled by the Company or
the Operating Partnership is not fulfilled (other than the conditions set forth
in Section 8(k)), the Company and the Operating Partnership will reimburse the
Underwriters for all reasonable out-of-pocket expenses (including fees and
disbursements of counsel) incurred by the Underwriters in connection with this
Agreement and the proposed purchase of the Stock, and upon demand the Company
and the Operating Partnership shall pay the full amount thereof to the
Representatives. If this Agreement is terminated pursuant to Section 10 by
reason of the default of one or more Underwriters, neither the Company nor the
Operating Partnership shall be obligated to reimburse any defaulting Underwriter
on account of those expenses.
13. NOTICES, ETC. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail,
telex or facsimile transmission to Xxxxxx Brothers Inc., Three World
Financial Center, New York, New York 10285, Attention: Syndicate
Department (Fax: 000-000-0000), with a copy, in the case of any notice
pursuant to Section 9(d), to the Director of Litigation, Office of the
General Counsel, Xxxxxx Brothers Inc., Three World Financial Xxxxxx,
00xx Xxxxx, Xxx Xxxx, XX 00000;
(b) if to the Company or to the Operating Partnership, shall be
delivered or sent by mail, telex or facsimile transmission to the
address of the Company set forth in the Registration Statement,
Attention: Xxxxxxx X. Xxxxx (Fax: (000) 000-0000);
PROVIDED, HOWEVER, that any notice to an Underwriter pursuant to Section 9(d)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to the
Representatives, which address will be supplied to any other party hereto by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company and
the Operating Partnership shall be entitled to act and rely upon any request,
consent, notice or agreement given or made on behalf of the Underwriters by
Xxxxxx Brothers Inc. on behalf of the Representatives.
14. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall
inure to the benefit of and be binding upon the Underwriters, the Company and
the Operating Partnership. This Agreement and the terms and provisions hereof
are for the sole benefit of only those persons, except that (A) the
representations, warranties, indemnities and agreements of the Company and the
Operating Partnership contained in this Agreement shall also be deemed to be for
the benefit of the person or persons, if any, who control any Underwriter or the
Independent Underwriter within the meaning of Section 15 of the Securities Act
and (B) the indemnity agreement of the Underwriters
34
contained in Section 9(b) of this Agreement shall be deemed to be for the
benefit of officers, employees and directors of the Company and the Operating
Partnership, (including persons named in the Registration Statement with their
consent as about to become a director of the Company) and any person controlling
the Company within the meaning of Section 15 of the Securities Act. Nothing in
this Agreement is intended or shall be construed to give any person, other than
the persons referred to in this Section 14, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision contained
herein.
15. SURVIVAL. The respective indemnities, representations,
warranties and agreements of the Company, the Operating Partnership and the
Underwriters contained in this Agreement or made by or on behalf on them,
respectively, pursuant to this Agreement, shall survive the delivery of and
payment for the Stock and shall remain in full force and effect, regardless of
any investigation made by or on behalf of any of them or any person controlling
any of them.
16. DEFINITION OF THE TERMS "BUSINESS DAY" AND "SUBSIDIARY." For
purposes of this Agreement, (a) "business day" means any day on which the New
York Stock Exchange, Inc. is open for trading and (b) "subsidiary" has the
meaning set forth in Rule 405 of the Rules and Regulations and, when used in
reference to subsidiaries of the Company or the Operating Partnership, includes
the entities listed on Schedule 4.
17. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICTS OF LAWS THEREOF.
18. COUNTERPARTS. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
19. HEADINGS. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
If the foregoing correctly sets forth the agreement among the Company,
the Operating Partnership and the Underwriters, please indicate your acceptance
in the space provided for that purpose below.
Very truly yours,
ARDEN REALTY GROUP, INC.
By:
Name:
Title:
35
ARDEN REALTY GROUP LIMITED
PARTNERSHIP, the Operating Partnership
By: Arden Realty Group, Inc., its
General Partner
By:
Name:
Title:
Accepted:
XXXXXX BROTHERS INC.
ALEX. XXXXX & SONS INCORPORATED
XXXX XXXXXX XXXXXXXX INC.
X.X. XXXXXXX & SONS, INC.
XXXXX XXXXXX INC.
EVEREN SECURITIES INC.
XXXX XXXXX XXXX XXXXXX INCORPORATED
XXXXXXX XXXXX & ASSOCIATES, INC.
For themselves and as Representatives
of the several Underwriters named
in Schedule 1 hereto
By:
Xxxxxx Brothers Inc.
By:
AUTHORIZED REPRESENTATIVE
36
SCHEDULE 1
Number of
Underwriters Shares
------------ --------
Xxxxxx Brothers Inc.
Alex. Xxxxx & Sons Incorporated
Xxxx Xxxxxx Xxxxxxxx Inc.
X.X. Xxxxxxx & Sons, Inc.
Xxxxx Xxxxxx Inc.
EVEREN Securities, Inc.
Xxxx Xxxxx Xxxx Xxxxxx Incorporated
Xxxxxxx Xxxxx & Associates, Inc.
--------
Total --------
37
SCHEDULE 2
FORMATION DOCUMENTS
1. Cash Option Agreements
(a) Broad Base Investments Two, LLC
(b) CIC Equities, Inc.
(c) LA Office Fund, L.P.
(d) LA Office Properties II, L.P.
(e) TJB Investments, Inc.
(f) Velocity One, Inc.
(g) Xxxxxx Xxxxxxx
(h) Xxxxx Xxxxxxxxxxx
(i) Xxxxxx X. Xxxxxxx
2. Contribution Agreements between the Company and
(a) Xx. Xxxxxxx Xxxxx
(b) Mr. Xxxxxx Xxxxxxx
(c) Arden Realty Group, Inc.
(d) Arden Century Associates
(e) Arden LAOP Two, LLC
(f) Xxxxx Xxxxxxxx Associates
(g) Xxxxxxx Enterprises, Inc.
(h) Xxxxxxx Trust
(i) Intercity Buildings Associates
(j) Metropolitan Falls Partners
(k) Montour Realty Associates
(l) Xxxxx Realty Partners
(m) Xxxxxxx Xxxx
(n) Xxxxxxxx Xxxxxx
3. Property Contribution Agreements between the Company and
(a) Anaheim Properties
(b) Xxxxxxx Trust
4. Agreement of Limited Partnership of the Operating Partnership
5. Mortgage Financing Agreement
6. Miscellaneous Rights Agreement between the Company and the Participants
38
SCHEDULE 3
LIST OF PREDECESSOR ENTITIES
Arden Realty Group, Inc., a California corporation
Xxxxx Xxxxxxxx Associates, LLC, a California LLC
Bristol Encino Associates, LLC, a Nevada LLC
222 Harbor Associates, LLC, a Nevada LLC
Century Center Associates, L.P., a California limited partnership
1950 Xxxxxxxx Associates, L.P., a California limited partnership
5000 Spring Associates, LLC, a Nevada LLC
LAOP IV, LLC, a Nevada LLC
Xxxxxxx Xxxxxxx Associates, L.P., a California limited partnership
LAOP V, LLC, a Nevada LLC
39