SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Act of 1934
Date of Report (Date of earliest event reported): June 15, 1998
HOME PROPERTIES OF NEW YORK, INC.
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(Exact name of registrant as specified in its charter)
Maryland 1-13136 16-1455126
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File No.) Identification No.)
850 Clinton Square, Rochester, New York 14604
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (716)546-4900
Not Applicable
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(Former name or former address, if changed since last report.)
<PAGE>
Item 5. OTHER EVENTS
On June 15, 1998 Home Properties of New York, Inc. ("Home Properties" or
"Registrant") entered into an underwriting agreement with PaineWebber
Incorporated, BancAmerica Robertson Stephens, CIBC Oppenheimer Corp., Smith
Barney Inc. and Wheat First Union, as representatives of the several
underwriters (the "Underwriters") pursuant to which the Underwriters will
purchase 2,000,000 shares of Home Properties Common Stock at a price of $23.875
per share resulting in aggregate proceeds of $47,750,000 to Home Properties,
before expenses payable by Home Properties (estimated at $350,000). In
addition, Home Properties has granted the Underwriters an option to purchase up
to an additional 300,000 shares on the same terms. If the Option is exercised
by the Underwriters, the aggregate proceeds to Home Properties will be
$54,912,500, before expenses payable by Home Properties are deducted.
A Prospectus Supplement, dated June 16, 1998, with respect to the
transaction described above, was filed by Home Properties on June 16, 1998
supplementing the Home Properties Prospectus, dated May 26, 1998, which forms a
portion of Home Properties Registration Statement (No. 333-52601) covering the
Common Stock. This Report on Form 8-K contains the Underwriting Agreement with
the Underwriters as an exhibit to such Registration Statement.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
a. Financial Statement of Businesses Acquired
None.
b. Pro Forma Financial Information
None.
c. Exhibits
99 Additional Exhibits
.1 Underwriting Agreement dated June 15, 1998, between
Home Properties of New York, Inc. and PaineWebber Incorporated, BancAmerica
Robertson Stephens, CIBC Oppenheimer Corp., Smith Barney Inc. and Wheat First
Union, as representatives of the several underwriters .
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: June 19, 1998 HOME PROPERTIES OF NEW YORK, INC.
(Registrant)
By: /s/ Ann M. McCormick
-------------------------------
Ann M. McCormick,
Vice President
2,000,000 Shares
HOME PROPERTIES OF NEW YORK, INC.
Common Stock
$0.01 Par Value
UNDERWRITING AGREEMENT
June 15, 1998
PAINEWEBBER INCORPORATED
BANCAMERICA ROBERTSON STEPHENS
CIBC OPPENHEIMER CORP.
SMITH BARNEY INC.
WHEAT FIRST UNION
as representatives of the several underwriters,
c/o PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
Dear Ladies and Gentlemen:
Home Properties of New York, Inc., a Maryland corporation (the
"Company"), and Home Properties of New York, L.P., a New York limited
partnership subsidiary of the Company (the "Operating Partnership"),
confirm their agreement with the Underwriters named in SCHEDULE A hereto
(the "Underwriters") for whom PaineWebber Incorporated, BancAmerica
Robertson Stephens, CIBC Oppenheimer Corp., Smith Barney Inc. and Wheat
First Union are acting as representatives, as follows:
1. DESCRIPTION OF SHARES.
(a) The Company proposes to issue and sell to the
Underwriters, severally and not jointly, 2,000,000 shares of common
stock, par value $0.01 per share (the "Common Stock"). Such shares of
Common Stock to be issued and sold by the Company are hereinafter
referred to as the "Firm Shares."
(b) In addition, the Company is granting to the Underwriters
an option to purchase up to an additional 300,000 shares of Common
Stock on the terms and for the purposes set forth in Section 12 hereof
(the "Option Shares" and, together with the Firm Shares, the
"Shares").
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE
OPERATING PARTNERSHIP. The Company and the Operating Partnership represent
and warrant to and agree with the Underwriters that:
(a) A registration statement on Form S-3 (File No.
333-02674) (the "First Registration Statement") and a registration
statement on Form S-3 (File No. 333-52601) (the "Second Registration
Statement"), with respect to the Shares, each including a prospectus,
have been carefully prepared by the Company and the Operating
Partnership in conformity with the requirements of the Securities Act
of 1933, as amended (the "Securities Act"), and the rules and
regulations (the "Securities Act Rules and Regulations") of the
Securities and Exchange Commission (the "Commission") thereunder, have
been filed with the Commission and have been declared effective. Such
registration statements and prospectuses may have been amended or
supplemented prior to the date of this Underwriting Agreement; any
such amendment or supplement was so prepared and filed, and any such
amendment filed after the effective date of such registration
statements has been declared effective. No stop order suspending the
effectiveness of either of such registration statements has been
issued, and no proceeding for that purpose has been instituted or
threatened by the Commission. A prospectus supplement (the
"Prospectus Supplement") setting forth the terms of the offering, sale
and plan of distribution of the Shares and additional information
concerning the Company and its business has been or will be so
prepared and will be filed pursuant to Rule 424(b) of the Securities
Act Rules and Regulations on or before the second business day after
the date hereof (or such earlier time as may be required by the
Securities Act Rules and Regulations). Copies of such registration
statements and prospectuses, any such amendments or supplements and
all documents incorporated by reference therein that were filed with
the Commission on or prior to the date of this Underwriting Agreement
(including one fully executed copy of each registration statement and
of each amendment thereto for the Underwriters and their counsel) have
been delivered to the Underwriters and their counsel. The First
Registration Statement and the Second Registration Statement, as they
may have heretofore been amended, are referred to herein as the
"Registration Statements," and the final form of prospectus included
in the Second Registration Statement, as supplemented by the
Prospectus Supplement, is referred to herein as the "Prospectus." Any
reference herein to the Registration Statements, the Prospectus, any
preliminary prospectus or any amendment or supplement thereto shall be
deemed to refer to and include the documents incorporated by reference
therein, and any reference herein to the terms "amend," "amendment" or
"supplement" with respect to the Registration Statements, the
Prospectus or any preliminary prospectus shall be deemed to refer to
and include the filing after the execution hereof of any document with
the Commission deemed to be incorporated by reference therein. For
purposes of this Underwriting Agreement, all references to the
Registration Statements, the Prospectus, any preliminary prospectus or
to any amendment or supplement thereto shall be deemed to include any
copy filed with the Commission pursuant to its Electronic Data
Gathering Analysis and Retrieval System (EDGAR), and such copy shall
be identical in content to any Prospectus delivered to the
Underwriters for use in connection with the offering of the Shares.
(b) Each part of the Registration Statements, when such part
became or becomes effective, and the Prospectus and any amendment or
supplement thereto, on the date of filing thereof with the Commission
and at the Closing Date (as hereinafter defined) and, if later, at an
Option Closing Date (as hereinafter defined), conformed or will
conform in all material respects with the requirements of the
Securities Act and the Securities Act Rules and Regulations; each part
of the Registration Statements, when such part became or becomes
effective, or when such part was filed with the Commission, did not or
will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading; the Prospectus and any
amendment or supplement thereto, on the date of filing thereof with
the Commission and at the Closing Date, and, if later, at an Option
Closing Date, did not or will not include an untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; except that the foregoing shall not apply
to statements in, or omissions from, any such document in reliance
upon, and in conformity with, written information concerning the
Underwriters that was furnished to the Company and the Operating
Partnership by the Underwriters specifically for use in the
preparation thereof.
(c) The documents incorporated by reference in the
Registration Statements, the Prospectus or any amendment or supplement
thereto, when they became or become effective under the Securities Act
or were or are filed with the Commission under the Securities Act or
the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
as the case may be, conformed or will conform in all material respects
with the requirements of the Securities Act, the Securities Act Rules
and Regulations, the Exchange Act and/or the rules and regulations of
the Commission under the Exchange Act (the "Exchange Act Rules and
Regulations"), as applicable.
(d) The consolidated financial statements of the Company,
together with the related schedules and notes thereto, set forth or
included or incorporated by reference in the Registration Statements
and Prospectus fairly present the financial condition of the Company
and its consolidated subsidiaries as of the dates indicated and the
results of operations, changes in financial position, stockholders'
equity and cash flows for the periods therein specified, in conformity
with generally accepted accounting principles consistently applied
throughout the periods involved (except as otherwise stated therein).
The summary and selected financial and statistical data included or
incorporated by reference in the Registration Statements and the
Prospectus present fairly the information shown therein and, to the
extent based upon or derived from the financial statements, have been
compiled on a basis consistent with the financial statements presented
therein. In addition, the pro forma financial statements of the
Company, and the related notes thereto, included or incorporated by
reference in the Registration Statements and the Prospectus present
fairly the information shown therein, have been prepared in accordance
with the Commission's rules and guidelines with respect to pro forma
financial statements and have been properly compiled on the basis
described therein, and the assumptions used in the preparation thereof
are reasonable and the adjustments used therein are appropriate to
give effect to the transactions and circumstances referred to therein.
Furthermore, all financial statements required by Rule 3-14 of
Regulation S-X ("Rule 3-14") have been included or incorporated by
reference in the Registration Statements and the Prospectus and any
such financial statements are in conformity with the requirements of
Rule 3-14. No other financial statements are required to be set forth
or to be incorporated by reference in the Registration Statements or
the Prospectus under the Securities Act or the Securities Act Rules
and Regulations.
(e) To the best of the Company's and the Operating
Partnership's knowledge, Coopers & Lybrand L.L.P., whose reports are
incorporated by reference in the Registration Statements, are and,
during the periods covered by their reports, were independent public
accountants as required by the Securities Act and the Securities Act
Rules and Regulations.
(f) The Company has been duly formed and is validly
existing as a corporation in good standing under the laws of the State
of Maryland, is duly qualified to do business and is in good standing
in each jurisdiction in which its ownership or lease of property or
the conduct of its business requires such qualification (except where
the failure to be so qualified would not have a material adverse
effect on the earnings, assets, properties, business, results of
operations or condition (financial or otherwise) of the Company, the
Subsidiaries (as hereinafter defined) and the GP Entities (as
hereinafter defined) taken as a whole), and has full corporate power
and authority necessary to own or hold its properties, to conduct the
business in which it is engaged and to enter into and perform its
obligations under this Underwriting Agreement. Except for the
Subsidiaries and the GP Entities, the Company owns no direct or
indirect equity or other beneficial interest in any corporation,
partnership, joint venture or other business entity.
(g) The Operating Partnership has been duly formed and is
validly existing as a limited partnership under the laws of the State
of New York, is duly qualified to do business as a foreign limited
partnership in each jurisdiction in which its ownership or lease of
property or the conduct of its business requires such qualification
(except where the failure to be so qualified would not have a material
adverse effect on the earnings, assets, properties, business, results
of operations or condition (financial or otherwise) of the Company,
the Subsidiaries and the GP Entities taken as a whole), and has all
partnership power and authority necessary to own or hold its
properties and its interests in its subsidiaries, to conduct the
business in which it is engaged and to enter into and perform its
obligations under this Underwriting Agreement. The Company is the
sole general partner of the Operating Partnership. The Second
Restated and Amended Agreement of Limited Partnership of the Operating
Partnership, as amended, (the "Operating Partnership Agreement"), is
in full force and effect, and the aggregate percentage interests of
the Company, Home Properties Trust, a wholly-owned Maryland real
estate trust and qualified REIT subsidiary of the Company (the "QRS"),
and the other limited partners in the Operating Partnership are 1%,
59.1% and 39.9%, respectively. To the extent the Shares are issued in
accordance with this Underwriting Agreement, (i) the percentage
interest of the partners in the Operating Partnership will be adjusted
accordingly and (ii) the Company will contribute the proceeds from the
sale of the Shares to the QRS, which in turn will contribute such
proceeds to the Operating Partnership in exchange for a number of
units of limited partner interest equal to the number of Shares
issued.
(h) The QRS has been duly formed and is validly existing as
a real estate trust under the laws of the State of Maryland, is duly
qualified to do business in each jurisdiction in which its ownership
or lease of property or the conduct of its business requires such
qualification (except where the failure to be so qualified would not
have a material adverse effect on the earnings, assets, properties,
business, results of operations or condition (financial or otherwise)
of the Company, the Subsidiaries and the GP Entities taken as a
whole), and has all power and authority necessary to own or hold its
assets and to conduct the business in which it is engaged.
(i) Each of the subsidiaries (as defined in the Securities
Act Rules and Regulations) of the Company, including the Operating
Partnership and the QRS, are listed on SCHEDULE B hereto
(collectively, the "Subsidiaries"). Each of the Subsidiaries has been
duly incorporated or formed, as the case may be, and is an existing
corporation, general or limited partnership, or other legal entity, as
the case may be, in good standing under the laws of its jurisdiction
of incorporation or formation, as the case may be. Each of the
Subsidiaries has full power (corporate and other) and authority to own
or hold its properties and to conduct the business in which it is
engaged, and is duly qualified or registered to do business in each
jurisdiction in which it owns or leases real property or in which the
conduct of its business requires such qualification or registration,
except where the failure to be so qualified or registered, considering
all such cases in the aggregate, would not have a material adverse
effect on the earnings, assets, properties, business, results of
operations or condition (financial or otherwise) of the Company, the
Subsidiaries and GP Entities taken as a whole.
(j) The Company and the Subsidiaries hold general partner or
other controlling interests in an aggregate of 119 general or limited
partnerships or other entities owning apartment communities and/or
other real estate assets (the "GP Entities"). Each of the GP Entities
has been duly incorporated or formed, as the case may be, and, to the
knowledge of the Company, is an existing corporation, general or
limited partnership, or other legal entity, as the case may be, in
good standing under the laws of its jurisdiction of incorporation or
formation, as the case may be. Each of the GP Entities has full power
(corporate and other) and authority to own or hold its properties and
to conduct the business in which it is engaged, and, to the knowledge
of the Company, is duly qualified or registered to do business in each
jurisdiction in which it owns or leases real property or in which the
conduct of its business requires such qualification or registration,
except where the failure to be so qualified or registered, considering
all such cases in the aggregate, would not have a material adverse
effect on the earnings, assets, properties, business, results of
operations or condition (financial or otherwise) of the Company, the
Subsidiaries and the GP Entities taken as a whole.
(k) All of the issued and outstanding capital stock or
ownership interests of each Subsidiary have been duly authorized and
are validly issued, fully paid and nonassessable and, except as
specified on SCHEDULE C hereto, are wholly-owned by the Company,
directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity. All
of the issued and outstanding capital stock or ownership interests of
each GP Entity have been duly authorized and are validly issued, fully
paid and nonassessable.
(l) The Company has authorized, issued and outstanding
capital stock as set forth under the caption "Capitalization" in the
Prospectus Supplement. All of the issued and outstanding shares of
capital stock of the Company have been duly authorized and are validly
issued, fully paid and nonassessable and conform to the description
thereof in the Registration Statements and the Prospectus. The
stockholders of the Company and the holders of interests in the
Operating Partnership have no preemptive rights with respect to the
issuance of the Shares, except for those preemptive rights which have
been waived.
(m) The Shares will be as of the Closing Date, and the
Option Shares will be as of any Option Closing Date, duly authorized
by the Company for issuance and sale pursuant to this Underwriting
Agreement and, when issued and delivered by the Company pursuant to
this Underwriting Agreement against payment of the consideration
therefor specified herein, will be validly issued, fully paid and
nonassessable. The Shares conform to the description thereof in, or
incorporated by reference into, the Registration Statements and the
Prospectus.
(n) Except as contemplated in the Prospectus, subsequent to
the respective dates as of which information is given in the
Registration Statements and the Prospectus, the Company, the
Subsidiaries and GP Entities have not incurred any liabilities or
obligations, direct or contingent, or entered into any transactions,
not in the ordinary course of business, that are material to the
Company, the Subsidiaries and the GP Entities on a consolidated basis;
and there has not been any material change in the capital stock or
structure, short-term debt or long-term debt of the Company and the
Subsidiaries; and there has not been any adverse material change in
the capital stock or structure, short-term debt or long-term debt of
the GP Entities; or any material adverse change, or any development
that is reasonably likely to involve a prospective material adverse
change, in the condition (financial or other), business, net worth or
results of operations of the Company, the Subsidiaries and the GP
Entities on a consolidated basis; and, except for regular
distributions on the Common Stock, in amounts per share that are
consistent with past practice or the charter documents of the Company,
there has been no dividend or distribution of any kind declared, paid
or made by the Company on any class of its capital stock.
(o) Except as set forth in the Prospectus, there is not
pending or, to the knowledge of the Company, threatened any
litigation, action, suit or proceeding to which the Company, any of
the Subsidiaries or the GP Entities or any of its officers or
directors is a party, or that any of its properties or other assets is
the subject of, before or by any court or governmental agency or body,
that is reasonably likely to result in any material adverse change in
the condition (financial or other), business, net worth or results of
operations of the Company, the Subsidiaries and the GP Entities.
(p) During the period of at least the last 24 calendar
months prior to the date of this Underwriting Agreement, the Company
has timely filed with the Commission all documents and other material
required to be filed pursuant to Sections 13, 14 and 15(d) under the
Exchange Act. During the period of at least the last 36 calendar
months preceding the filing of the Second Registration Statement, the
Company has filed all reports required to be filed pursuant to
Sections 13, 14 and 15(d) under the Exchange Act. Immediately
preceding the filing of the Second Registration Statement, the
aggregate market value of the Company's voting stock held by
nonaffiliates of the Company was equal to or greater than $150
million.
(q) There are no contracts or documents of the Company that
are required to be filed as exhibits to the Registration Statements or
to any of the documents incorporated by reference therein by the
Securities Act or the Exchange Act or by the Securities Act Rules and
Regulations and the Exchange Act Rules and Regulations that have not
been so filed. All of the contracts to which any of the Company, the
Subsidiaries or the GP Entities is a party and which are material to
the business and operations of any of the Company, the Subsidiaries or
the GP Entities (i) have been duly authorized, executed and delivered
by such entity, constitute valid and binding agreements of such entity
and are enforceable against such entity in accordance with the terms
thereof, except as such enforcement may be limited by (A) bankruptcy,
insolvency, reorganization or similar other laws affecting creditors'
rights generally and (B) general equity principles and limitations on
the availability of equitable relief or (ii) in the case of any
contract to be executed on or before the Closing Date, will on the
Closing Date be duly authorized, executed and delivered by the Company
and/or a Subsidiary, and constitute valid and binding agreements of
such entity enforceable against each entity in accordance with the
terms thereof, except as such enforcement may be limited by
(A) bankruptcy, insolvency, reorganization or similar other laws
affecting creditors' rights generally and (B) general equity
principles and limitations on the availability of equitable relief.
(r) The Company and the Operating Partnership have full
power and authority, corporate or otherwise, to enter into this
Underwriting Agreement. This Underwriting Agreement has been duly
authorized, executed and delivered by the Company and the Operating
Partnership.
(s) The execution and performance of this Underwriting
Agreement and the consummation of the transactions contemplated
herein, including the issuance of the Shares, will not result in a
breach or violation of any of the terms and provisions of, or
constitute a default under, (i) any agreement or instrument to which
the Company, the Subsidiaries or the GP Entities is a party or by
which they are bound or to which any of the property or other assets
of the Company, the Subsidiaries or the GP Entities is subject except
where such breach, violation or default would not have a material
adverse effect on the Company, the Subsidiaries and the GP Entities
taken as a whole, (ii) the articles of incorporation, charter, by-
laws, certificate of general or limited partnership, partnership
agreement or other organizational document, as applicable, of the
Company, the Subsidiaries or the GP Entities or (iii) any statute,
order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Company, the Subsidiaries or the GP
Entities or any of their properties or other assets; no consent,
approval, authorization or order of, filing with, or notice to any
court or governmental agency or body is required for the consummation
of the transactions contemplated by this Underwriting Agreement in
connection with the issuance or sale of the Shares by the Company,
except such as may be required under the Securities Act and applicable
state securities, blue sky, or real estate syndication laws, if any,
or pursuant to the listing requirements of the New York Stock Exchange
("NYSE"); and the Company has full power and authority to authorize,
issue and sell the Shares as contemplated by this Underwriting
Agreement.
(t) The Company, the Subsidiaries and the GP Entities have
complied in all material respects with all laws, regulations and
orders applicable to them or their respective businesses; the Company,
the Subsidiaries and the GP Entities are not in default under any
indenture, mortgage, deed of trust, voting trust agreement, loan
agreement, bond, debenture, note agreement or evidence of
indebtedness, lease, contract or other agreement or instrument to
which they are a party or by which they or any of their properties or
other assets are bound, violation of which would individually or in
the aggregate have a material adverse effect on the Company, the
Subsidiaries and the GP Entities on a consolidated basis, and no other
party under any such agreement or instrument to which the Company, the
Subsidiaries or the GP Entities are a party is, to the knowledge of
the Company, in default in any material respect thereunder; and the
Company, the Subsidiaries and the GP Entities are not in violation of
their respective articles of incorporation, charter, by-laws,
certificate of general or limited partnership, partnership agreement
or other organizational documents, as the case may be.
(u) Except as specifically disclosed in the Registration
Statements, Prospectus or any amendment or supplement thereto, there
is no material defect in the condition of any property owned or held
by the Company or the Subsidiaries, the improvements thereon, the
structural elements thereof, or the mechanical systems therein, nor
any material damage from casualty or other cause, nor any soil
condition of any such property that will not support all of the
improvements thereon without the need for unusual or new subsurface
excavations, fill, footings, caissons or other installations, except
for (a) ordinary wear and tear and (b) any such defect, damage or
condition that has been corrected or will be corrected in the ordinary
course of the business of such property as part of the Company's
scheduled annual maintenance and improvement program, and (c) any
defects, damages or conditions that would not have a material adverse
effect on the Company, the Subsidiaries and the GP Entities taken as a
whole.
(v) The Company and each of the Subsidiaries and the GP
Entities have good and marketable title to all properties and assets
owned by them, free and clear of all liens, charges, encumbrances,
claims, restrictions or defects, except such as are (i) described in
the Prospectus, (ii) not material in relation to the business or
operations of the Company, the Subsidiaries and the GP Entities, or
(iii) with respect to the GP Entities, related to, or a consequence
of, any commercially reasonable mortgage indebtedness on the
properties or assets of such GP Entities; the Company, the
Subsidiaries and the GP Entities have valid, subsisting and
enforceable leases for the properties listed on SCHEDULE D hereto as
leased to the Company, the Subsidiaries and the GP Entities, with such
exceptions as are not material and do not interfere with the use made
and proposed to be made of such properties by the Company, the
Subsidiaries and the GP Entities; all liens, charges, encumbrances,
claims or restrictions on or affecting any of the properties or the
assets of the Company, the Subsidiaries and the GP Entities which are
required to be disclosed in the Prospectus are disclosed therein; no
tenant under any of the leases pursuant to which the Company, the
Subsidiaries or the GP Entities lease their properties has an option
or right of first refusal to purchase the premises demised under such
lease; the use and occupancy of each of the properties of the Company,
the Subsidiaries and the GP Entities comply in all material respects
with all applicable codes and zoning laws and regulations; the
Company, the Subsidiaries and the GP Entities have no knowledge of any
pending or threatened condemnation or zoning change that will in any
material respect affect the size of, use of, improvement of,
construction on, or access to any of the properties of the Company,
the Subsidiaries and the GP Entities; and the Company, the
Subsidiaries and the GP Entities have no knowledge of any pending or
threatened proceeding or action that will in any manner materially
affect the size of, use of, improvements or construction on, or access
to any of the properties of the Company, the Subsidiaries or the GP
Entities.
(w) Except for those properties listed on SCHEDULE E hereto,
title insurance in favor of the Company and the Subsidiaries is
maintained with respect to each of the properties described in the
Prospectus in an amount at least equal to the cost of acquisition of
such property.
(x) Except as disclosed in, or incorporated by reference
into, the Registration Statements , Prospectus and any amendment or
supplement thereto, there are no mortgages or deeds of trust
encumbering any of the properties. The mortgages encumbering the
properties are not convertible into any equity securities of the
Company or the Operating Partnership, nor does the Company or any of
the Subsidiaries or the GP Entities hold a participating interest
therein and, except as disclosed in the Registration Statements,
Prospectus and any amendment or supplement thereto, such mortgages are
not cross-defaulted or cross-collateralized to any party other than
the Company and the Subsidiaries.
(y) Except as would not, singularly or in the aggregate,
have a material adverse effect on the earnings, assets, properties,
business, results of operations or condition (financial or otherwise)
of the Company, the Subsidiaries and the GP Entities taken as a
whole, (i) there does not exist on any of the properties described in
the Prospectus any Hazardous Materials (as hereinafter defined) in
unlawful quantities, (ii) there has not occurred on or off such
properties any unlawful spills, releases, discharges or disposal of
Hazardous Materials,\ and (iii) the Company, the Subsidiaries and the
GP Entities have not failed to comply with all applicable local, state
and Federal environmental laws, regulations, ordinances and
administrative and judicial orders relating to the generation,
recycling, sale, storage, handling, transport and disposal of any
Hazardous Materials.
As used herein, "Hazardous Material" shall include, without
limitation, any flammable explosives, radioactive materials, oil,
petroleum, petroleum products, hazardous materials, hazardous wastes,
hazardous or toxic substances, asbestos or any material as defined by
any environmental laws, including, without limitation, the
Comprehensive Environmental Response, Compensation, and Liability Act
of 1980, as amended (42 U.S.C. Section 9601, ET SEQ.) (CERCLA), the
Hazardous Materials Transportation Act, as amended (49 U.S.C. Section
1801, ET SEQ.), the Resource Conservation and Recovery Act, as amended
(42 U.S C. Section 6901, ET SEQ.), and in the regulations adopted
pursuant to each of the foregoing or by any Federal, state or local
governmental authority having jurisdiction over the properties as
described in the Prospectus.
Except for three wholly-owned properties, all of the
properties of the Company and the Subsidiaries have been, and it is
contemplated that all future acquisitions will be, subjected to a
Phase I or similar environmental assessment (which generally includes
a site inspection, interviews and a records review, but no subsurface
sampling). These assessments and follow-up investigations, if any,
(including, as appropriate, asbestos, radon and lead surveys,
additional public record review, subsurface sampling and other
testing) of the properties have not revealed any environmental
liability that the Company believes would have a material adverse
effect on the earnings, assets, properties, business, results of
operations or condition (financial or otherwise) of the Company, the
Subsidiaries and the GP Entities taken as a whole.
(z) The Company has and maintains property and casualty
insurance in favor of the Company and the Subsidiaries with respect to
them and each of the properties, in an amount and on such terms as is
reasonable and customary for businesses of the type proposed to be
conducted by the Company and the Subsidiaries. Neither the Company
nor any of the Subsidiaries or the GP Entities has received from any
insurance company written notice of any material defects or
deficiencies affecting the insurability of any such properties.
(aa) No holder of outstanding shares of capital stock or
units representing rights to acquire shares of capital stock of the
Company has any rights to the registration of shares of capital stock
of the Company which would or could require such securities to be
included in either of the Registration Statements except for those
registration rights which have been waived.
(bb) Subsequent to the respective dates as of which
information is given in the Registration Statements and the
Prospectus, except as described therein, (i) there has not been any
material adverse change in the assets or properties, business, results
of operations, or condition (financial or otherwise) of the Company or
any of the Subsidiaries or the GP Entities whether or not arising from
transactions in the ordinary course of business; (ii) neither the
Company nor any of the Subsidiaries or the GP Entities has sustained
any material loss or interference with its assets, businesses or
properties (whether owned or leased) from fire, explosion, earthquake,
flood or other calamity, whether or not covered by insurance, or from
any labor dispute or any court or legislative or other governmental
action, order or decree; and (iii) neither the Company nor any of the
Subsidiaries or the GP Entities has undertaken any liability or
obligation, direct or contingent, except (1) such liabilities or
obligations undertaken in the ordinary course of business, (2) as
disclosed or incorporated by reference in the Registration Statements,
the Prospectus and any amendment or supplement thereto, or (3) with
respect to the GP Entities, such liabilities or obligations undertaken
in connection with the establishment of commercially reasonable
mortgage indebtedness on the properties or assets of such GP Entities.
(cc) The Company has filed all Federal, state and foreign
income and franchise tax returns required to be filed on or prior to
the date hereof and has paid taxes shown as due thereon, other than
taxes which are being contested in good faith and for which adequate
reserves have been established in accordance with generally accepted
accounting principles; and the Company has no knowledge, after due
inquiry, of any tax deficiency which has been asserted or threatened
against the Company. To the knowledge of the Company, there are no
tax returns of the Company or any of the Subsidiaries or the GP
Entities that are currently being audited by state, local or Federal
taxing authorities or agencies which would have material adverse
effect on the assets, properties, business, results of operations, or
condition (financial or otherwise) of the Company, the Subsidiaries
and the GP Entities taken as a whole.
(dd) Each approval, consent, order, authorization,
designation, declaration or filing by or with any regulatory,
administrative or other governmental body necessary in connection with
the execution and delivery by the Company of this Underwriting
Agreement and the consummation of the transactions herein contemplated
has been obtained or made and is in full force and effect.
(ee) No material labor dispute with the employees of the
Company or any of the Subsidiaries or the GP Entities exists or, to
the knowledge of the Company is imminent or threatened.
(ff) The Company, the Subsidiaries and the GP Entities own,
or are licensed or otherwise have the right to use the material
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks and trade names (collectively, "proprietary
rights") presently employed by them or which are necessary in
connection with the conduct of the business now operated by them, and
neither the Company nor any of the Subsidiaries or the GP Entities has
received any written notice or otherwise has actual knowledge after
due inquiry of any infringement of rights of others or any other
claims with respect to any proprietary rights. The Company and the
Subsidiaries hold all material permits from governmental authorities
which are necessary to conduct their businesses and are in compliance
with the terms and conditions of such permits.
(gg) The Company, the Subsidiaries and the GP Entities are
conducting their respective businesses in material compliance with all
applicable laws, rules and regulations of the jurisdictions in which
they are conducting business, including, without limitation, the
Americans with Disabilities Act of 1990 and all applicable local,
state and Federal employment, truth-in-advertising, franchising and
immigration laws and regulations, except where the failure to be so in
compliance would not have a material adverse effect on the assets,
properties, business, results of operations, or condition (financial
or otherwise) of the Company, the Subsidiaries and the GP Entities
taken as a whole.
(hh) No transaction has occurred between or among the
Company and any of its officers or directors or any affiliate or
affiliates of any such officer or director that is required to be
described in and is not described or incorporated by reference in the
Registration Statements and the Prospectus.
(ii) The Company has not taken, nor will it take, directly
or indirectly, any action designed to or which might reasonably be
expected to cause or result in, or which has constituted or which
might reasonably be expected to constitute, the stabilization or
manipulation of the price of any capital stock of the Company to
facilitate the sale or resale of any of the Shares.
(jj) The Company has continuously been organized and
operated in conformity with the requirements for qualification as a
"real estate investment trust" under Sections 856 through 860 of the
Code (as hereinafter defined) for all taxable years commencing with
its taxable year ended December 31, 1994. The Company has filed an
election to be taxable as a REIT for its taxable year ended December
31, 1997, and such election has not been terminated. The Company's
method of operation will permit it to continue to meet the
requirements for taxation as a real estate investment trust (a "REIT")
under the Code. The Company intends to continue to operate in a
manner which would permit it to qualify as a REIT under the Code. The
Company's method of operation will permit it to meet and to continue
to meet the requirements for taxation as a REIT under the Code. The
Company has no intention of changing its operations or engaging in
activities which would cause it to fail to qualify, or make
economically undesirable its continued qualification, as a REIT.
(kk) Neither the Company nor any Subsidiary is an
"investment company" within the meaning of the Investment Company Act
of 1940, as amended, and the rules and regulations promulgated
thereunder.
(ll) The Shares have been approved for listing on the NYSE,
subject to official notice of issuance.
(mm) The Company, the Subsidiaries and the GP Entities
maintain a system of internal accounting controls which the Company
believes is sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as necessary to
permit the preparation of financial statements in conformity with
generally accepted accounting principles and to maintain
accountability for assets; (iii) access to financial assets is
permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(nn) Neither the Company, nor any of the Subsidiaries or the
GP Entities, nor to the knowledge of the Company, any employee or
agent of the Company or any Subsidiary or GP Entity, has made any
payment of funds of the Company, or any Subsidiary or GP Entity or
received or retained any funds in violation of any law, rule or
regulation or of a character required to be disclosed in the
Prospectus.
(oo) The Company has not distributed and, prior to the later
to occur of (i) the Closing Date or (ii) completion of the
distribution of the Shares, will not distribute any offering material
in connection with the offering and sale of the Shares other than the
Registration Statements, the Prospectus or other materials, if any,
permitted by the Securities Act.
(pp) As of the date of this Underwriting Agreement, the
Company or its Subsidiaries, as the case may be, had entered into
guarantees relating to (1) indebtedness incurred by five GP Entities
in an aggregate amount of $2,258,000, (2) a guarantee of the Low
Income Housing Tax Credit to limited partners in thirty-one
partnerships in an aggregate amount of approximately $22,000,000, (3)
a guarantee of the successful construction of properties under the
Federal government's Low Income Housing Tax Credit Program in the
amount of approximately $14,609,000, and (4) guarantees by the Company
of certain of the Operating Partnership's obligations. Such
guarantees represent the only guarantees entered into by the Company,
any of the Subsidiaries or the GP Entities. The Company has no
knowledge of any conditions that would obligate the Company to make
any payments under any of the guarantees.
(qq) Each property owned or held by the Company, the
Subsidiaries and the GP Entities is served by all utilities necessary
for its use and operation as currently used and fronts on or has
lawful access to a public road or right of way.
3. PURCHASE, SALE AND DELIVERY OF THE FIRM SHARES. On the
basis of the representations, warranties and agreements contained herein,
but subject to the terms and conditions set forth herein, the Company
agrees to issue and sell the Firm Shares, severally and not jointly, to the
several Underwriters, and each of the Underwriters, severally and not
jointly, agrees to purchase from the Company, the number of Firm Shares set
forth opposite that Underwriter's name in SCHEDULE A hereto, at a purchase
price of $23.875 per share (the "Purchase Price").
The Shares to be purchased by the Underwriters will be delivered
by the Company to the office of PaineWebber Incorporated at 1285 Avenue of
the Americas, New York, New York 10019, in accordance with the terms of
this Underwriting Agreement and against payment of the Purchase Price
therefor by wire transfer of same day funds payable to the order of the
Company in the aggregate amount of $47,750,000 at the bank account
designated in writing by the Company at least one business day prior to the
Closing Date, at 10:00 a.m., New York time, on June 19, 1998 (or if the
NYSE or commercial banks in the City of New York are not open on such day,
the next day on which such exchanges and banks are open) (any such day
being a "Business Day"), or at such other time not later than eight full
business days thereafter as the Underwriters and the Company mutually
agree, such time being herein referred to as the "Closing Date." If
requested by the Underwriters, the Shares will be prepared in definitive
form and in such authorized denominations and registered in such names as
the Underwriters may request upon at least two Business Days' prior notice
to the Company and will be made available for checking and packaging at the
office of PaineWebber Incorporated at least one Business Day prior to the
Closing Date.
4. COVENANTS. The Company and the Operating Partnership, as
the case may be, covenant and agree with the Underwriters that:
(a) The Company will cause the Prospectus Supplement to be
filed as required by Section 2(a) hereof (but only if the Underwriters
or their counsel have not reasonably objected thereto by notice to the
Company after having been furnished a copy a reasonable time prior to
filing) and will notify the Underwriters promptly of such filing.
During the period in which a prospectus relating to the Shares is
required to be delivered under the Securities Act or such date which
is 90 days after the Closing Date, whichever is later, the Company
will notify the Underwriters promptly of the time when any subsequent
amendment to the Registration Statements has become effective or any
subsequent supplement to the Prospectus has been filed, or of any
request by the Commission for any amendment or supplement to the
Registration Statements or Prospectus or for additional information;
the Company will prepare and file with the Commission, promptly upon
the Underwriters' request, any amendments or supplements to the
Registration Statements or Prospectus that, in the Underwriters'
opinion, may be necessary or advisable in connection with the
Underwriters' distribution of the Shares; and the Company will file no
amendment or supplement to the Registration Statements or Prospectus
(other than any prospectus supplement relating to the offering of
other securities registered under the Registration Statements or any
document required to be filed under the Exchange Act that upon filing
is deemed to be incorporated by reference therein) to which the
Underwriters or their counsel shall reasonably object by notice to the
Company after having been furnished a copy a reasonable time prior to
the filing.
(b) The Company will advise the Underwriters, promptly after
it shall receive notice or obtain knowledge thereof, of the issuance
by the Commission of any stop order suspending the effectiveness of
the Registration Statements, of the suspension of the qualification or
registration of the Shares for offering or sale in any jurisdiction,
or of the initiation or threatening of any proceeding for any such
purpose; and it will promptly use its best efforts to prevent the
issuance of any stop order or to obtain its withdrawal if such a stop
order should be issued.
(c) The Company will comply with all requirements imposed
upon it by the Securities Act, the Securities Act Rules and
Regulations, the Exchange Act and the Exchange Act Rules and
Regulations as from time to time in force, so far as necessary to
permit the continuance of sales of, or dealings in, the Shares as
contemplated by the provisions hereof and the Prospectus. If during
such period where a prospectus relating to the Shares is required to
be delivered under the Securities Act, any event occurs as a result
of which, in the opinion of the Underwriters' counsel, the
Registration Statements 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 or the
Prospectus as then amended or supplemented contains an untrue
statement of a material fact or omits to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if during
such period it is necessary to amend or supplement the Registration
Statements or Prospectus to comply with the Securities Act, the
Company will promptly notify the Underwriters and will amend or
supplement the Registration Statements or Prospectus (at the expense
of the Company) so as to correct such statement or omission or effect
such compliance.
(d) The Company will furnish to the Underwriters copies of
the Registration Statements, the Prospectus (including all documents
incorporated by reference therein), each preliminary prospectus and
all amendments and supplements to the Registration Statements and
Prospectus that are filed with the Commission during the period in
which a prospectus relating to the Shares is required to be delivered
under the Securities Act or such date which is 90 days after the
Closing Date, whichever is later (including all documents filed with
the Commission during such period that are deemed to be incorporated
by reference therein), in each case as soon as available and in such
quantities as the Underwriters may from time to time reasonably
request.
(e) During the period of five years commencing on the date
upon which the Prospectus Supplement is filed pursuant to Rule 424(b)
under the Securities Act, the Company will furnish the Underwriters
with copies of filings of the Company under the Securities Act and
Exchange Act and with all other financial statements and periodic and
special reports it distributes generally to the holders of any class
of its capital stock.
(f) The Company will make generally available to its
stockholders as soon as practicable, and in the manner contemplated by
Rule 158 of the Securities Act Rules and Regulations but in any event
not later than 15 months after the end of the Company's current fiscal
quarter, an earning statement (which need not be audited) covering a
12-month period beginning after the date upon which the Prospectus
Supplement is filed pursuant to Rule 424(b) under the Securities Act
that shall satisfy the provisions of Section 11(a) of the Securities
Act and Rule 158 of the Securities Act Rules and Regulations and will
advise the Underwriters in writing when such statement has been made
available.
(g) Whether or not the transactions contemplated by this
Underwriting Agreement are consummated or this Underwriting Agreement
is terminated, the Company will pay, or reimburse if paid by the
Underwriters, all costs and expenses incident to the performance of
the obligations of the Company under this Underwriting Agreement,
including but not limited to costs and expenses of or relating to (i)
the preparation, printing and filing of the Registration Statements
and exhibits thereto, each preliminary prospectus, the Prospectus and
any amendment or supplement to the Registration Statements or the
Prospectus, (ii) the preparation and delivery of certificates
representing the Shares, (iii) the printing and reproduction of this
Underwriting Agreement, (iv) the costs incurred by the Company in
furnishing (including costs of shipping, mailing and courier) such
copies of the Registration Statements, the Prospectus and any
preliminary prospectus, and all amendments and supplements thereto, as
may be requested for use in connection with the offering and sale of
the Shares by the Underwriters or by dealers to whom Shares may be
sold, (v) the listing of the Shares on the NYSE, (vi) the registration
or qualification of the Shares for offer and sale under the securities
or blue sky laws of such jurisdictions designated by the Underwriters
or the notification with respect thereto required by any such
jurisdiction, including the fees, disbursements and other charges of
the Underwriters' counsel in connection therewith, and the preparation
and printing of blue sky memoranda; provided, however, that no such
registration or qualification would subject the Company to service of
process or require it to qualify to do business in any such
jurisdiction, (vii) counsel to the Company, (viii) the transfer agent
for the Shares, and (ix) the accountants of the Company.
(h) If this Underwriting Agreement shall be terminated
pursuant to Section 8 hereof or if for any reason the Company shall be
unable to perform its obligations hereunder, the Company will
reimburse the Underwriters for all out-of-pocket expenses (including
the fees, disbursements and other charges of the Underwriters'
counsel) reasonably incurred by the Underwriters in connection
herewith.
(i) The Company will not at any time, directly or
indirectly, take any action designed to, or which might reasonably be
expected to, cause or result in, or which has constituted or which
might reasonably be expected to constitute, the stabilization of the
price of its capital stock to facilitate the sale or resale of any of
the Shares.
(j) The Company and the Operating Partnership will apply the
net proceeds from the sale of the Shares as set forth under the
caption "Use of Proceeds" in the Prospectus Supplement.
(k) The Company, its executive officers and the members of
its Board of Directors will not, directly or indirectly, offer, sell,
contract to sell, pledge, grant any option to purchase or otherwise
dispose of any shares of capital stock, or any securities convertible
into, or exercisable, exchangeable or redeemable for, shares of
capital stock, subject to certain exceptions, for a period of 90 days
from the date of the Prospectus Supplement, without the prior written
consent of PaineWebber Incorporated.
(l) Each of the Company, the Operating Partnership and the
QRS has been organized and operated in conformity with the
requirements for qualification and taxation of the Company as a "real
estate investment trust" under the Code, and each of the Company's,
the Operating Partnership's and the QRS's proposed methods of
operation will enable the Company to continue to meet the requirements
for qualification and taxation as a REIT under the Code for subsequent
taxable years.
5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The Underwriters'
obligation to purchase and pay for the Shares as provided herein shall be
subject to the accuracy, as of the date hereof and the Closing Date (as if
made at the Closing Date), of the representations and warranties of the
Company herein, to the performance by the Company of its obligations
hereunder and to the following additional conditions:
(a) The Registration Statements shall have been declared
effective under the Securities Act; the Prospectus shall have been
filed as required by Section 2(a) hereof; and no stop order suspending
the effectiveness of the Registration Statements shall have been
issued and no proceeding for that purpose shall have been instituted
or, to the Underwriters' knowledge or the knowledge of the Company,
threatened by the Commission, nor has any state securities authority
suspended the qualification or registration of the Shares for offering
or sale in any jurisdiction and any request of the Commission for
additional information (to be included in the Registration Statements
or the Prospectus or otherwise) shall have been complied with to the
satisfaction of the Underwriters and the Underwriters' counsel.
(b) The Underwriters shall not have advised the Company that
the Registration Statements or any amendment thereto contains an
untrue statement of fact that in the opinion of the Underwriters or
the Underwriters' counsel is material or omits to state a fact that in
the opinion of the Underwriters or their counsel is material, and is
required to be stated therein or is necessary to make the statements
therein not misleading, or that the Prospectus, or any amendment or
supplement thereto, contains an untrue statement of fact that in the
opinion of the Underwriters or the Underwriters' counsel is material
or omits to state a fact that in the opinion of the Underwriters or
the Underwriters' counsel is material and is necessary, in the light
of the circumstances under which they were made, to make the
statements therein not misleading.
(c) Except as contemplated in the Prospectus Supplement,
subsequent to the respective dates as of which information is included
or incorporated by reference in the Registration Statements and the
Prospectus, there shall not have been any change, on a consolidated
basis, in the equity capitalization, short-term debt or long-term debt
of the Company, or any material adverse change, or any development
involving a prospective adverse change, in the condition (financial or
other), business, net worth or results of operations of the Company,
the Subsidiaries or the GP Entities or any adverse change in the
rating assigned to any securities of the Company, that, in the
Underwriters' judgment, makes it impractical or inadvisable to offer
or deliver the Shares on the terms and in the manner contemplated in
the Prospectus.
(d) Nixon, Hargrave, Devans & Doyle LLP, counsel for the
Company, shall have furnished to the Underwriters its written opinion,
as counsel to the Company, addressed to the Underwriters and dated
such Closing Date, as to which for matters of Maryland law Rogers &
Wells LLP may rely upon, in form and substance satisfactory to the
Underwriters, to the effect that:
(i) Each of the Company and its Subsidiaries has been
duly incorporated or formed, as the case may be, and is validly
existing as a corporation, general or limited partnership, or
other legal entity, as the case may be, in good standing under
the laws of its jurisdiction of incorporation or formation, as
the case may be, and has full power (corporate or other) and
authority to conduct its business as described in the
Registration Statements and Prospectus, and to enter into and
perform its obligations under this Underwriting Agreement and is
duly qualified or registered to do business in each jurisdiction
in which it owns or leases real property or in which the conduct
of its business requires such qualification or registration,
except, where the failure to be so qualified or registered,
considering all such cases in the aggregate, does not involve a
material risk to the business, properties, financial position or
results of operations of the Company, the Subsidiaries and the GP
Entities taken as a whole;
(ii) The Company has authorized capital stock as set
forth in the Prospectus. The Shares have been duly authorized by
the Company for issuance and sale and when issued and sold
pursuant to this Underwriting Agreement will be duly and validly
issued, fully paid and nonassessable and none of them will have
been issued in violation of any preemptive or other similar right
under the charter documents of the Company or the laws of the
State of Maryland, as the case may be. The issued and
outstanding capital stock of the Company and the Shares conform,
or will conform, in all material respects to the descriptions
thereof contained in, or incorporated by reference into, the
Registration Statements and the Prospectus. The form of
certificate used to evidence the Shares is in due and proper form
and complies with all applicable statutory requirements, with any
applicable requirements of the Company's organizational documents
and with the requirements of the NYSE;
(iii) The Registration Statements have become effective
under the Securities Act, the Prospectus Supplement has been
filed as required by Section 2(a) hereof and, to the best
knowledge of such counsel, after due inquiry, no stop order
suspending the effectiveness of the Registration Statements have
been issued and no proceeding for that purpose has been
instituted or threatened by the Commission;
(iv) Each part of the Registration Statements, when
such part became effective, and the Prospectus and any amendment
or supplement thereto, on the date of filing thereof with the
Commission and at the Closing Date, complied as to form in all
material respects with the requirements of the Securities Act and
the Securities Act Rules and Regulations. Nothing has come to
the attention of such counsel that has caused it to believe that
either (i) any part of the Registration Statements, when such
part became effective or was filed under the Securities Act or
the Exchange Act, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading or (ii) the Prospectus and any amendment or supplement
thereto, on the date of filing thereof with the Commission or at
the Closing Date, included an untrue statement of a material fact
or omitted to state a material fact necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading; it being understood that such
counsel need express no opinion as to the financial statements,
financial schedules or other financial or statistical data
included in, or incorporated by reference into, the Registration
Statements or the Prospectus;
(v) The descriptions in the Registration Statements
and Prospectus of statutes, legal and governmental proceedings,
contracts and other documents are accurate and fairly present the
information required to be shown; and such counsel does not know
of any statutes or legal or governmental proceedings required to
be described in the Prospectus that are not described as
required, or of any contracts or documents of a character
required to be described in the Registration Statements or
Prospectus;
(vi) This Underwriting Agreement has been duly
authorized, executed and delivered by the Company and the
Operating Partnership and constitutes the legal, valid and
binding obligations of the Company and the Operating Partnership
enforceable against them in accordance with its terms, except as
the enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles; the execution,
delivery and performance of this Underwriting Agreement and the
consummation of the transactions contemplated herein will not
result in a breach or violation of any of the terms and
provisions of, or constitute a default under, (a) any statute,
indenture, mortgage, deed of trust, voting trust agreement, loan
agreement, bond, debenture, note agreement or evidence of
indebtedness, lease, contract or other agreement or instrument
known to such counsel to which the Company or its Subsidiaries
are a party or by which they are bound or to which any of the
property or other assets of the Company or the Subsidiaries is
subject except where such breach, violation or default would not
have a material adverse effect on the Company, the Subsidiaries
and the GP Entities taken as a whole, (b) the articles of
incorporation, by-laws, certificate of general or limited
partnership, partnership agreement, or other organizational
document of the Company or any of the Subsidiaries, as
applicable, or (c) except as may be required under any securities
or blue sky laws, any order, rule or regulation known to such
counsel of any court or governmental agency or body having
jurisdiction over the Company or the Subsidiaries or any of their
properties or other assets; and except as may be required under
any securities or blue sky laws, no consent, approval,
authorization, notice to, order of, or filing with, any court or
governmental agency or body is required for the consummation of
the transactions contemplated by this Underwriting Agreement in
connection with the issuance or sale of the Shares by the
Company, except such as have been obtained under the Securities
Act or from the NYSE;
(vii) The Company has continuously been organized and
operated in conformity with the requirements for qualification as
a "real estate investment trust" under Sections 856 through 860
of the Code for all taxable years commencing with its taxable
year ended December 31, 1994. The Company's method of operation,
as described in the Prospectus, will permit it to continue to
meet the requirements for taxation as a REIT under the Code. The
disclosure contained in the Prospectus under the caption "Federal
Income Tax Considerations," to the extent such information
constitutes matters of law, summaries of legal matters or legal
conclusions, has been reviewed by such counsel and are accurate
in all material respects;
(viii) To the best of such counsel's knowledge, there is
no litigation or governmental or other proceeding or
investigation, before any court or before or by any public body
or board pending or threatened against, or involving the assets,
properties or businesses of, the Company or any of the
Subsidiaries, involving the Company's or any of its Subsidiaries'
officers or directors or to which any of the Company's or any of
its Subsidiaries' properties or other assets are subject which
would have a material adverse effect upon the assets or
properties, business, results of operations, or condition
(financial or otherwise) of the Company or the Subsidiaries taken
as a whole; and
(ix) Neither the Company nor any of its Subsidiaries
is an "investment company" within the meaning of the Investment
Company Act of 1940, as amended, and the rules and regulations
thereunder.
(e) Ann M. McCormick, Esq., General Counsel of the Company,
shall have furnished to the Underwriters her written opinion addressed
to the Underwriters and dated such Closing Date, in form and substance
satisfactory to the Underwriters, to the effect that:
(i) Each of the GP Entities has been duly
incorporated or formed, as the case may be, and, to the knowledge
of such counsel, is an existing corporation, general or limited
partnership, or other legal entity, as the case may be, in good
standing under the laws of its jurisdiction of incorporation or
formation, as the case may be, and has full power (corporate and
other) and authority to own or hold its properties and to conduct
the business in which it is engaged, and, to the knowledge of
such counsel, is duly qualified or registered to do business in
each jurisdiction in which it owns or leases real property or in
which the conduct of its business requires such qualification or
registration, except where the failure to be so qualified or
registered, considering all such cases in the aggregate, would
not have a material adverse effect on the earnings, assets,
properties, business, results of operations or condition
(financial or otherwise) of the Company, the Subsidiaries and the
GP Entities taken as a whole;
(ii) The Company has authorized, issued and outstanding
capital stock as set forth under the caption "Capitalization" in
the Prospectus. All of the issued and outstanding shares of
capital stock of the Company have been duly and validly
authorized and issued, and all of the issued and outstanding
shares of capital stock of the Company are fully paid and
nonassessable and none of them was issued in violation of any
preemptive or other similar right under the charter documents of
the Company or the laws of the State of Maryland, as the case may
be. Except as disclosed in the Registration Statements and the
Prospectus, there is no outstanding option, warrant or other
right calling for the issuance of, and, to the knowledge of such
counsel, no commitment, plan or arrangement to issue, any shares
of capital stock of the Company or any security convertible into,
exercisable for, or exchangeable for shares of capital stock of
the Company. No holder of any security of the Company has the
right to have any security owned by such holder included for
registration in the Registration Statements. All of the issued
and outstanding capital stock or ownership interests of each of
the Subsidiaries has been duly authorized and are validly issued,
fully paid and nonassessable and, except as specified on SCHEDULE
B hereto, are wholly owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity;
(iii) The documents incorporated by reference in the
Registration Statements or Prospectus or any amendment or
supplement thereto, when they became effective under the
Securities Act or were filed with the Commission under the
Securities Act or Exchange Act, as the case may be, complied as
to form in all material respects with the requirements of the
Securities Act or the Exchange Act, as applicable, and the rules
and regulations of the Commission thereunder;
(iv) Such counsel does not know of any contracts or
documents of a character (1) to be filed under the Exchange Act
if upon such filing they would be incorporated by reference in
the Registration Statements or the Prospectus or (2) to be filed
as exhibits to the Registration Statements that are not described
and filed as required;
(v) The execution, delivery and performance of this
Underwriting Agreement and the consummation of the transactions
contemplated herein will not result in a breach or violation of
any of the terms and provisions of, or constitute a default
under, (a) any statute, indenture, mortgage, deed of trust,
voting trust agreement, loan agreement, bond, debenture, note
agreement or evidence of indebtedness, lease, contract or other
agreement or instrument known to such counsel to which the GP
Entities are a party or by which they are bound or to which any
of the property or other assets of the GP Entities is subject
except where such breach, violation or default would not have a
material adverse effect on the Company, the Subsidiaries and the
GP Entities taken as a whole, (b) the articles of incorporation,
by-laws, certificate of general or limited partnership,
partnership agreement, or other organizational document of the GP
Entities, or (c) except as may be required under any securities
or blue sky laws, any order, rule or regulation known to such
counsel of any court or governmental agency or body having
jurisdiction over the GP Entities or any of their properties or
other assets;
(vi) To the best of such counsel's knowledge, neither
the Company nor any of the Subsidiaries or the GP Entities is in
violation of any term or provision of their respective articles
of incorporation, charter, by-laws, certificate of general or
limited partnership, partnership agreement or other
organizational document, as applicable, or in violation of or
default under any indenture, mortgage, deed of trust, voting
trust agreement, loan agreement, bond, debenture, note agreement
or evidence of indebtedness, lease, contract, permit, judgment,
decree, order, statute, rule or regulation; where such violation
or default would have a material adverse effect on the Company,
the Subsidiaries and the GP Entities taken as a whole; and
(vii) To the best of such counsel's knowledge, there is
no litigation or governmental or other proceeding or
investigation, before any court or before or by any public body
or board pending or threatened against, or involving the assets,
properties or businesses of, the GP Entities, involving the
Company's or any of its Subsidiaries' officers or directors or to
which any of the Company's or any of its Subsidiaries' properties
or other assets are subject which is reasonably likely to have a
material adverse effect upon the assets or properties, business,
results of operations, or condition (financial or otherwise) of
the Company, the Subsidiaries and the GP Entities taken as a
whole.
(f) The Underwriters shall have received from Rogers & Wells
LLP, the counsel to the Underwriters, such opinion or opinions, dated
the Closing Date, with respect to the validity of the Shares, the
Registration Statements, the Prospectus and other related matters as
the Underwriters reasonably may request, and such counsel shall have
received such papers and information as they request to enable them to
pass upon such matters.
(g) At the time of execution of this Underwriting Agreement
and at the Closing Date, the Underwriters shall have received a
letter, dated the date of delivery thereof, from Coopers & Lybrand
L.L.P., the independent public accountants of the Company, in the form
previously agreed to by the Underwriters.
(h) The Underwriters shall have received from the Company a
certificate, signed by the Chairman, the President, either of the Co-
Chief Executive Officers, the Executive Vice President or a Vice
President and by the principal financial or accounting officer of the
Company, dated the Closing Date, to the effect that, to the best of
their knowledge based upon reasonable investigation:
(i) The representations and warranties of the Company
in this Underwriting Agreement are true and correct in all
material respects, as if made at and as of the Closing Date, and
the Company has complied with all the agreements and satisfied
all the conditions on its part to be performed or satisfied at or
prior to the Closing Date;
(ii) No stop order suspending the effectiveness of the
Registration Statements have been issued, and no proceeding for
that purpose has been instituted or, to such officer's knowledge,
is threatened by the Commission nor has any state securities
authority suspended the qualification or registration of the
Shares for offering or sale in any jurisdiction;
(iii) Since the effective date of the Registration
Statements, there has occurred no event required to be set forth
in an amendment or supplement to the Registration Statements or
Prospectus that has not been so set forth, and there has been no
document required to be filed under the Exchange Act and the
Exchange Act Rules and Regulations of the Commission thereunder
that upon such filing would be deemed to be incorporated by
reference in the Prospectus that has not been so filed;
(iv) Since the respective dates as of which
information is given in the Registration Statements and the
Prospectus, (a) there has not been, and no development has
occurred which could reasonably be expected to result in, a
material adverse change in the general affairs, business,
properties, management, condition (financial or otherwise) or
results of operations of the Company, the Subsidiaries and the GP
Entities, taken as a whole, whether or not arising from
transactions in the ordinary course of business, in each case
other than as set forth in or contemplated by the Registration
Statements and the Prospectus and (b) neither the Company nor any
of the Subsidiaries or the GP Entities has sustained any material
loss or interference with its business or properties from fire,
explosion, flood or other casualty, whether or not covered by
insurance, or from any labor dispute or any court or legislative
or other governmental action, order or decree, which is not set
forth in the Registration Statements and the Prospectus; and
(v) such other matters as the Underwriters or their
counsel may reasonably request.
(i) On or prior to the Closing Date, the Underwriters shall
have received the executed agreements referred to in Section 4(k).
(j) Prior to the Closing Date, the Shares shall have been
duly authorized for listing by the NYSE, subject to official notice of
issuance.
(k) All such opinions, certificates, letters and other
documents will be in compliance with the provisions hereof only if
they are satisfactory in form and substance to the Underwriters or
their counsel. The Company will furnish the Underwriters with such
conformed copies of such opinions, certificates, letters and other
documents as the Underwriters shall reasonably request and the Company
shall furnish to the Underwriters such further certificates and
documents as the Underwriters shall have reasonably requested.
(l) Subsequent to the execution and delivery of this
Underwriting Agreement (i) no downgrading or adverse change shall have
occurred in the rating accorded any security of the Company by any
"nationally recognized statistical rating organization," as that term
is defined by the Commission for purposes of Rule 436(g)(2) of the
Securities Act Rules and Regulations and (ii) no such organization
shall have publicly announced that it has under surveillance or
review, with possible negative implications, its rating of any
security of the Company, that, in either event, makes it impractical
or inadvisable, in the Underwriters' judgment, to offer or deliver the
Shares on the terms and in the manner contemplated by the Prospectus.
6. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company and the Operating Partnership agree to
indemnify and hold harmless the Underwriters, their directors,
officers, employees and agents and each person, if any, who controls
them within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act from and against any and all losses, claims,
liabilities, expenses and damages (including, but not limited to, any
and all investigative, legal and other expenses reasonably incurred in
connection with, and any and all amounts paid in settlement of, any
action, suit or proceeding between any of the indemnified parties and
any indemnifying parties or between any indemnified party and any
third party, or otherwise, or any claim asserted), as and when
incurred to which the Underwriters, or any such person, may become
subject under the Securities Act, the Exchange Act or other Federal or
state statutory law or regulation, at common law or otherwise, insofar
as such losses, claims, liabilities, expenses or damages arise out of
or are based on (i) any untrue statement or alleged untrue statement
of a material fact contained in any preliminary prospectus, the
Registration Statements or the Prospectus or any amendment or
supplement to the Registration Statements or the Prospectus or in any
documents filed under the Exchange Act and deemed to be incorporated
by reference into the Prospectus, or in any application or other
document executed by or on behalf of the Company or based on written
information furnished by or on behalf of the Company filed in any
jurisdiction in order to qualify the Shares under the securities or
blue sky laws thereof or filed with the Commission, (ii) the omission
or alleged omission to state in such document a material fact required
to be stated in it or necessary to make the statements in it, in the
light of the circumstances under which they were made, not misleading
or (iii) any act or failure to act or any alleged act or failure to
act by the Underwriters in connection with, or relating in any manner
to, the Shares 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 neither the Company nor the
Operating Partnership shall be liable under this clause (iii) to the
extent it is finally judicially determined 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 the Underwriters through their gross negligence
or willful misconduct); provided that neither the Company nor the
Operating Partnership will be liable to the extent that such loss,
claim, liability, expense or damage arises from the sale of the Shares
in the public offering to any person and is based on an untrue
statement or omission or alleged untrue statement or omission made in
reliance on and in conformity with information relating to the
Underwriters furnished in writing to the Company by the Underwriters
expressly for inclusion in the Registration Statements or the
Prospectus. The Underwriters confirm to the Company and the Company
acknowledges that only the following information appearing in the
Prospectus with respect to the public offering of the Shares has been
furnished to the Company by the Underwriters for use in the
Prospectus: (i) the names of the Underwriters contained on the front
cover page and back cover page of the Prospectus Supplement; (ii) the
last full paragraph on the front cover page of the Prospectus
Supplement; (iii) the stabilization legend on the inside front cover
page of the Prospectus Supplement; and (iv) the information in the
second, sixth, ninth and tenth paragraphs under the caption
"Underwriting" in the Prospectus Supplement. This indemnity agreement
will be in addition to any liability that the Company or the Operating
Partnership might otherwise have.
(b) The Underwriters will indemnify and hold harmless the
Company and the Operating Partnership, each person, if any, who
controls the Company or the Operating Partnership within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act,
each director of the Company and each officer of the Company who signs
the Second Registration Statement to the same extent as the foregoing
indemnity from the Company and the Operating Partnership to the
Underwriters, but only insofar as losses, claims, liabilities,
expenses or damages arise out of or are based on any untrue statement
or omission or alleged untrue statement or omission made in reliance
on and in conformity with information relating to the Underwriters
furnished in writing to the Company by the Underwriters expressly for
use in the Second Registration Statement or the Prospectus. This
indemnity will be in addition to any liability that the Underwriters
might otherwise have; provided, however, that in no case shall the
Underwriters be liable or responsible for any amount in excess of the
underwriting discounts and commissions received by the Underwriters.
(c) Any party that proposes to assert the right to be
indemnified under this Section 6 will, promptly after receipt of
notice of commencement of any action against such party in respect of
which a claim is to be made against an indemnifying party or parties
under this Section 6, notify each such indemnifying party of the
commencement of such action, enclosing a copy of all papers served,
but the omission so to notify such indemnifying party will not relieve
it from any liability that it may have to any indemnified party under
the foregoing provisions of this Section 6 unless, and only to the
extent that, such omission results in the forfeiture of substantive
rights or defenses by the indemnifying party. If any such action is
brought against any indemnified party and it notifies the indemnifying
party of its commencement, the indemnifying party will be entitled to
participate in and, to the extent that it elects by delivering written
notice to the indemnified party promptly after receiving notice of the
commencement of the action from the indemnified party, jointly with
any other indemnifying party similarly notified, to assume the defense
of the action, with counsel reasonably satisfactory to the indemnified
party, and after notice from the indemnifying party to the indemnified
party of its election to assume the defense, the indemnifying party
will not be liable to the indemnified party for any legal or other
expenses except as provided below and except for the reasonable costs
of investigation subsequently incurred by the indemnified party in
connection with the defense. The indemnified party will have the
right to employ its own counsel in any such action, but the fees,
expenses and other charges of such counsel will be at the expense of
such indemnified party unless (i) the employment of counsel by the
indemnified party has been authorized in writing by the indemnifying
party, (ii) the indemnified party has reasonably concluded (based on
advice of counsel) that there may be legal defenses available to it or
other indemnified parties that are different from or in addition to
those available to the indemnifying party, (iii) a conflict or
potential conflict exists (based on advice of counsel to the
indemnified party) between the indemnified party and the indemnifying
party (in which case the indemnifying party will not have the right to
direct the defense of such action on behalf of the indemnified party)
or (iv) the indemnifying party has not in fact employed counsel to
assume the defense of such action within a reasonable time after
receiving notice of the commencement of the action, in each of which
cases the reasonable fees, disbursements and other charges of counsel
will be at the expense of the indemnifying party or parties. It is
understood that the indemnifying party or parties shall not, in
connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees, disbursements and
other charges of more than one additional firm admitted to practice in
such jurisdiction at any one time for all such indemnified party or
parties. All such fees, disbursements and other charges will be
reimbursed by the indemnifying party promptly as they are incurred. An
indemnifying party will not be liable for any settlement of any action
or claim effected without its written consent (which consent will not
be unreasonably withheld); provided, however, no indemnifying party
shall, without the prior written consent of each indemnified party,
settle or compromise or consent to the entry of any judgment in any
pending or threatened claim, action or proceeding relating to the
matters contemplated by this Section 6 (whether or not any indemnified
party is a party thereto), unless such settlement, compromise or
consent includes an unconditional release of each indemnified party
from all liability arising or that may arise out of such claim, action
or proceeding. Notwithstanding any other provision of this Section
6(c), if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and
expenses of counsel, such indemnifying party agrees that it shall be
liable for any settlement effected without its written consent if (i)
such settlement is entered into more than 45 days after receipt by
such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such
settlement at least 30 days prior to such settlement being entered
into, and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of
such settlement.
(d) In order to provide for just and equitable contribution
in circumstances in which the indemnification provided for in the
foregoing paragraphs of this Section 6 is applicable in accordance
with its terms but for any reason is held to be unavailable from the
Company or the Operating Partnership or the Underwriters, the Company,
the Operating Partnership and the Underwriters will contribute to the
total losses, claims, liabilities, expenses and damages (including any
investigative, legal and other expenses reasonably incurred in
connection with, and any amount paid in settlement of, any action,
suit or proceeding or any claim asserted, but after deducting any
contribution received by the Company or the Operating Partnership from
persons other than the Underwriters, such as persons who control the
Company or the Operating Partnership within the meaning of the
Securities Act, officers of the Company who signed the Registration
Statements and directors of the Company, who also may be liable for
contribution) to which the Company, the Operating Partnership and the
Underwriters may be subject 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. The relative benefits received by the Company and the
Operating Partnership on the one hand and the Underwriters on the
other shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by the
Company bear to the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table
on the cover page of the Prospectus Supplement. If, but only if, the
allocation provided by the foregoing sentence is not permitted by
applicable law, the allocation of contribution shall be made in such
proportion as is appropriate to reflect not only the relative benefits
referred to in the foregoing sentence but also the relative fault of
the Company or the Operating Partnership on the one hand, and the
Underwriters, on the other, with respect to the statements or
omissions which resulted in such loss, claim, liability, expense or
damage, or action in respect thereof, as well as any other relevant
equitable considerations with respect to such offering. Such 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, 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. The
Company, the Operating Partnership and the Underwriters agree that it
would not be just and equitable if contributions pursuant to this
Section 6(d) were to be determined by pro rata allocation 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,
liability, expense or damage, or action in respect thereof, referred
to above in this Section 6(d) shall be deemed to include, for purpose
of this Section 6(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 6(d), the Underwriters shall not be required to
contribute any amount in excess of the underwriting discounts and
commissions received by the Underwriters and no person found guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) will be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. For purposes
of this Section 6(d), any person who controls a party to this
Underwriting Agreement within the meaning of the Securities Act will
have the same rights to contribution as that party, and each officer
of the Company who signed the Registration Statements will have the
same rights to contribution as the Company and the Operating
Partnership, subject in each case to the provisions hereof. Any party
entitled to contribution, promptly after receipt of notice of
commencement of any action against such party in respect of which a
claim for contribution may be made under this Section 6(d), will
notify any such party or parties from whom contribution may be sought,
but the omission so to notify will not relieve the party or parties
from whom contribution may be sought from any other obligation it or
they may have under this Section 6(d). Except for a settlement
entered into pursuant to the last sentence of Section 6(c) hereof, no
party will be liable for contribution with respect to any action or
claim settled without its written consent (which consent will not be
unreasonably withheld).
(e) The indemnity and contribution agreements contained in
this Section 6 and the representations and warranties of the Company
and the Operating Partnership contained in this Underwriting Agreement
shall remain operative and in full force and effect regardless of (i)
any investigation made by or on behalf of the Underwriters, (ii)
acceptance of the Shares and payment therefor or (iii) any termination
of this Underwriting Agreement.
7. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All
representations, warranties and agreements of the Company contained herein
or in certificates delivered pursuant hereto, and the Underwriters'
agreements contained in Sections 4(g) and 6 hereof, shall remain operative
and in full force and effect regardless of any investigation made by or on
behalf of the Underwriters or any controlling persons, or the Company or
any of its officers, directors or any controlling persons, and shall
survive delivery of and payment for the Shares hereunder.
8. TERMINATION. The Underwriters shall have the right by
giving notice as hereinafter specified at any time at or prior to the
Closing Date, to terminate this Underwriting Agreement if (i) the Company
shall have failed, refused or been unable, at or prior to the Closing Date,
to perform any material agreement on its part to be performed hereunder,
(ii) any condition of the Underwriters' obligations specified in Section 5
hereof is not fulfilled when due, (iii) trading on the NYSE shall have been
wholly suspended, (iv) minimum or maximum prices for trading shall have
been fixed, or maximum ranges for prices for the Common Stock shall have
been required, on the NYSE by the NYSE or by order of the Commission or any
other governmental authority having jurisdiction, (v) a banking moratorium
shall have been declared by Federal or New York authorities, or (vi) an
outbreak of major hostilities in which the United States is involved, a
declaration of war by Congress, any other substantial national or
international calamity or any other event or occurrence of a similar
character shall have occurred since the execution of this Underwriting
Agreement that, in the Underwriters' sole judgment, makes it impractical or
inadvisable to proceed with the completion of the sale of and payment for
the Shares. Any such termination shall be without liability of any party
to any other party with respect to Shares not purchased by reason of such
termination except that the provisions of Sections 4(g), 4(h) and 6 hereof
shall at all times be effective. If the Underwriters elect to terminate
this Underwriting Agreement as provided in this Section 8, the Company
shall be notified promptly by the Underwriters by telephone, telex or
telecopy, confirmed by letter.
9. NOTICES. All notices or communications hereunder shall be
in writing and if sent to the Underwriters shall be mailed, delivered,
telexed or telecopied and confirmed to the Underwriters in care of
PaineWebber Incorporated at 1285 Avenue of the Americas, New York, New York
10019, c/o Real Estate Investment Banking, attention: David R. Jarvis (with
copy to Jay L. Bernstein, Esq., c/o Rogers & Wells LLP, 200 Park Avenue,
New York, New York 10166), or if sent to the Company, shall be mailed,
delivered, telexed or telecopied and confirmed to Ann M. McCormick, Esq.,
c/o the Company at 850 Clinton Square, Rochester, New York 14604 (with
copy, which shall not constitute notice, to Deborah McLean Quinn, Esq., c/o
Nixon, Hargrave, Devans & Doyle LLP, 1300 Clinton Square, Rochester, New
York 14604). Any party to this Underwriting Agreement may change such
address for notices by sending to the other party to this Underwriting
Agreement written notice of a new address for such purpose.
10. PARTIES. This Underwriting Agreement shall inure to the
benefit of, and be binding upon, the Company and the Underwriters and their
respective successors and the controlling persons, officers, directors,
employees and representatives referred to in Section 6 hereof, and no other
person will have any right or obligation hereunder.
11. APPLICABLE LAW. This Underwriting Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York.
12. OVER-ALLOTMENT OPTION.
(a) Upon written notice from the Underwriters given to the
Company not more than 30 days subsequent to the date of the public
offering of the Firm Shares, the Underwriters may purchase all or less
than all of the Option Shares at the Purchase Price per share to be
paid for the Firm Shares. Such Option Shares may be purchased by the
Underwriters only for the purpose of covering over-allotments made in
connection with the sale of the Firm Shares. No Option Shares shall
be sold or delivered unless the Firm Shares previously have been, or
simultaneously are, sold and delivered. The right to purchase the
Option Shares or any portion thereof may be surrendered and terminated
at any time upon notice by the Underwriters to the Company. The
"Closing Date" as defined in Section 3 hereof shall be deemed to be
the "Closing Date," and the time for the delivery of, and payment for,
the Option Shares is herein referred to as the "Option Closing Date"
(which may be the Closing Date). The Option Closing Date shall be
determined by the Underwriters but shall be not later than 10 days
after the Underwriters give to the Company written notice of election
to purchase Option Shares. The preparation, registration, checking
and delivery of, and payment for, the Option Shares shall occur or be
made in the same manner as provided in Section 3 hereof for the Firm
Shares, except as the Underwriters and the Company may otherwise
agree.
(b) The conditions to the Underwriters' obligations set
forth in Section 5 shall be deemed to be conditions to the
Underwriters' obligation to purchase and pay for the Shares to be
purchased on each of the Closing Date and the Option Closing Date, as
the case may be; references in that Section and in Sections 2, 8 and
13 hereof to the "Closing Date" shall be deemed to be references to
the Closing Date or the Option Closing Date, as the case may be, and
references to the "Shares" in Section 5 hereof shall be deemed to be
references to the Shares to be purchased at such Closing Date. A
termination of this Underwriting Agreement as to the Option Shares
after the Closing Date will not terminate this Underwriting Agreement
as to the Firm Shares.
13. DEFAULT BY ONE OR MORE OF THE UNDERWRITERS. If, on either
the Closing Date or the Option Closing Date, any Underwriter defaults in
the performance of its obligations under this Underwriting Agreement, the
remaining non-defaulting Underwriters shall be obligated to purchase the
Shares which the defaulting Underwriter agreed but failed to purchase on
such Closing Date in the respective proportions which the number of Firm
Shares set forth opposite the name of each remaining non-defaulting
Underwriter in SCHEDULE A hereto bears to the total number of Firm Shares
set forth opposite the names of all the remaining non-defaulting
Underwriters in SCHEDULE A hereto; provided, however, that the remaining
non-defaulting Underwriters shall not be obligated to purchase any of the
Shares on such Closing Date if the total number of Shares which the
defaulting Underwriter or Underwriters agreed but failed to purchase on
such date exceeds 9.09% of the total number of Shares to be purchased on
such Closing Date, and any remaining non-defaulting Underwriter shall not
be obligated to purchase more than 110% of the number of Shares which it
agreed to purchase on such Closing Date. If the foregoing maximums are
exceeded, the remaining non-defaulting Underwriters, or those other
underwriters satisfactory to the Underwriters 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 Shares to be purchased on such Closing
Date. If the remaining non-defaulting Underwriters or other underwriters
satisfactory to the Underwriters do not elect to purchase the Shares which
the defaulting Underwriter or Underwriters agreed but failed to purchase on
such Closing Date, this Underwriting Agreement (or, with respect to the
Option Closing Date, the obligation of the Underwriters to purchase, and of
the Company to sell, the Option Shares) 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 4(g) and 4(h). As used in this Underwriting
Agreement, the term "Underwriter" includes, for all purposes of this
Underwriting Agreement unless the context requires otherwise, any party not
listed in SCHEDULE A hereto who, pursuant to this Section 13, purchases
Shares 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
Shares of a defaulting or withdrawing Underwriter, either the Underwriters
or the Company may postpone the Closing 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.
<PAGE>
If the foregoing correctly sets forth the understanding among the
Company, the Operating Partnership and the Underwriters, please so indicate
in the space provided below for that purpose, whereupon this letter shall
constitute a binding agreement between the Company, the Operating
Partnership and the Underwriters.
Very truly yours,
HOME PROPERTIES OF NEW YORK, INC.
By: /s/ David P. Gardner
-----------------------------
Name: David P. Gardner
Title: Vice President
HOME PROPERTIES OF NEW YORK, L.P.
By: Home Properties of New York, Inc.,
its general partner
By: /s/ David P. Gardner
--------------------------------
Name: David P. Gardner
Title: Vice President
ACCEPTED as of the date first above
written:
PAINEWEBBER INCORPORATED
By: /s/ Malcolm MacLean
--------------------------
Name: Malcolm MacLean
Title: Vice President
For itself and as representative
of the several Underwriters
named in SCHEDULE A hereto
<PAGE>
SCHEDULE A
NUMBER OF SHARES
UNDERWRITERS TO BE PURCHASED
PaineWebber Incorporated 420,000
CIBC Oppenheimer Corp. 420,000
Smith Barney Inc. 420,000
BancAmerica Robertson Stephens 210,000
Wheat First Securities, Inc. 210,000
Chase Securities Inc. 80,000
Merrill Lynch, Pierce, Fenner &
Smith Incorporated 80,000
Morgan Stanley & Co. Incorporated 80,000
First Albany Corporation 40,000
Friedman, Billings, Ramsey & Co., Inc. 40,000
Total 2,000,000
<PAGE>
SCHEDULE B
SUBSIDIARIES
Home Properties of New York, L.P. New York limited partnership
1% owned by Home Properties of New
York, Inc. ("HME"); 59.1% owned by
Home Properties Trust
Home Properties Trust Maryland real estate trust
100% owned by HME
Home Properties Management, Inc. Maryland Corp. Home Properties
of New York, L.P. ("OP") owns 990
non-voting shares/Nelson and Norman
Leenhouts each own five voting shares
Conifer Realty Corporation Maryland Corp. OP owns 891 non-voting
shares/Nelson Leenhouts, Norman Leenhouts
and Richard Crossed each own three
voting shares
NOTE: The operations of Home Properties
Management, Inc. and Conifer Realty Corporation
are not consolidated with those of the Company.
Valley Park South Partnership NY general partnership,
qualified in PA
99% owned by OP; .10% owned by HME
Home Properties/Olde Mill Partnership NY general partnership
99% owned by OP; .10% owned by HME
Home Properties/Fairways at
Village Green Partnership NY general partnership
99% owned by OP; .10% owned by HME
HME/Fairways at Village Green
Partnership NY general partnership
99% owned by OP; .10% owned by HME
Royal Gardens Associates, L.L.C. NY Limited Liability Company
Qualified in NJ
OP is sole member
Curren Terrace, LLC NY LLC
OP is sole member
Home Properties Country Village LLC Maryland LLC
OP is sole member
Home Properties Strawberry Hill LLC Maryland LLC
OP is sole member
Home Properties Carriage House LLC Maryland LLC
OP is sole member
Home Properties Morningside
Heights LLC Maryland LLC
OP is sole member
Home Properties Morningside
North LLC Maryland LLC
OP is sole member
Home Properties Morningside Six LLC Maryland LLC
OP is sole member
Home Properties Maryland, LLC Maryland LLC
Members: HP Morningside Heights,
LLC, HP Morningside North, LLC,
HP Morningside Six, LLC,
HP Carriage House, LLC
Home Properties Racquet Club
East, LLC NY LLC
OP is sole member
Home Properties Colonies, LLC NY LLC
OP is sole member
<PAGE>
SCHEDULE C
Home Properties Management, Inc. Nelson and Norman Leenhouts each own
five voting shares.
Conifer Realty Corporation Nelson Leenhouts, Norman Leenhouts and
Richard Crossed each own three voting
shares.
<PAGE>
SCHEDULE D
Raintree Island Apartments Buffalo, New York
<PAGE>
SCHEDULE E
Hamlet Court, Rochester, New York 98 Units
Northgate Manor, Rochester, New York 224 Units
Harborside Manor, Syracuse, New York 281 Units
Village Greene, Syracuse, New York 448 Units
Westminster, Syracuse, New York 240 Units
Emerson Square, Buffalo, New York 96 Units
Fairway Apartments, Buffalo, New York 32 Units
Paradise Lane at Raintree, Buffalo, New York 324 Units
1600 East Avenue, Rochester, New York 164 Units
Hill Court South, Rochester, New York 95 Units
Ivy Ridge, Rochester, New York 135 Units
Woodgate Place, Rochester, New York 120 Units
