SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): October 17, 2006
HOME PROPERTIES, INC.
(Exact name of Registrant as specified in its Charter)
MARYLAND 1-13136 16-1455126
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification Number)
850 Clinton Square, Rochester, New York 14604
www.homeproperties.com
Address of principal executive offices and internet site)
(585) 546-4900
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On October 18, 2006, the Registrant and Home Properties, L.P., a New York
limited partnership of which the Registrant is the sole general partner (the
"Operating Partnership"), entered into a purchase agreement (the "Purchase
Agreement") with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, and Bear, Stearns & Co. Inc. (collectively, the "Initial
Purchasers") relating to the issuance and sale by the Operating Partnership of
$175,000,000 aggregate principal amount of 4.125% exchangeable senior notes due
2026, plus up to an additional $25 million in aggregate principal amount
issuable upon the exercise of an option granted to the Initial Purchasers
(collectively the "Notes") in a private placement to qualified institutional
buyers pursuant to the exemption from the registration requirements of the
Securities Act of 1933, as amended (the "Act"), afforded by Section 4(2) of the
Act and Rule 144A under the Act. The closing of the offering is expected to
occur on October 24, 2006.
Subject to the terms of the indenture pursuant to which the Notes will be
issued, holders may exchange Notes at certain times and upon the occurrence of
certain events for cash in the principal amount and, at the option of the
Operating Partnership, cash or shares of the registrant for the exchange value
in excess of the principal amount of the notes. Notes initially may be exchanged
at a rate of 13.6357 shares of the Registrant's common stock per $1,000
principal amount of Notes (equivalent to an initial exchange price of $73.34 per
share of the Registrant's common stock). Prior to November 6, 2011, the notes
will not be redeemable at the option of the Operating Partnership, except to
preserve the status of the Registrant as a REIT. On or after November 6, 2011,
the Operating Partnership may redeem all or a portion of the notes at a
redemption price equal to the principal amount plus accrued and unpaid interest
(including additional interest), if any.
Note holders may require the Operating Partnership to repurchase all or a
portion of the notes at a purchase price equal to the principal amount plus
accrued and unpaid interest (including additional interest), if any, on the
notes on November 1, 2011, November 1, 2016 and November 1, 2021, or after the
occurrence of certain specified events. The Operating Partnership expects to use
approximately $58 million of net offering proceeds to fund the repurchase by the
Registrant, concurrently with the closing, of shares of the Registrant's common
stock. Approximately $70 million of net proceeds will be used to repay the
outstanding indebtedness under the Registrant's revolving credit facility and
the balance of proceeds will be used for general corporate purposes.
A copy of the Purchase Agreement is filed herewith as Exhibit 1.
ITEM 7.01 REGULATION FD DISCLOSURE.
On October 17, 2006, the Registrant issued a press release relating to the
commencement of the Note offering. A copy of this press release is furnished
herewith as Exhibit 2.
On October 18, 2006, the Registrant issued a press release relating to the
pricing of the Notes. A copy of this press release furnished herewith as Exhibit
3.
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: October 19, 2006 HOME PROPERTIES, INC.
(Registrant)
By /s/ Ann M. McCormick
----------------------------------------
Ann M. McCormick
Executive Vice President,
General Counsel and Secretary
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
c. Exhibits
Exhibit 1. Purchase Agreement, dated October 18, 2006, between Home
Properties, Inc., Home Properties, L.P., Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated and Bear,
Stearns & Co. Inc.
Exhibit 2. Press release dated October 17, 2006.
Exhibit 3. Press release dated October 18, 2006.
EXHIBIT INDEX
Exhibit 1. Purchase Agreement, dated October 18, 2006, between Home Properties,
Inc., Home Properties, L.P., Merrill Lynch & Co., Merrill Lynch, Pierce,
Fenner & Smith Incorporated and Bear, Stearns & Co. Inc.
Exhibit 2. Press release dated October 17, 2006.
Exhibit 3. Press release dated October 18, 2006.
===============================================================================
EXHIBIT 1
HOME PROPERTIES, L.P.
HOME PROPERTIES, INC.
$175,000,000
4/125% Exchangeable Senior Notes due 2026
PURCHASE AGREEMENT
Dated: October 18, 2006
===============================================================================
HOME PROPERTIES, L.P.
HOME PROPERTIES, INC.
$175,000,000
4.125% Exchangeable Senior Notes due 2026
October 18, 2006
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
BEAR, STEARNS & CO. INC.
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
4 World Financial Center
New York, New York 10080
Ladies and Gentlemen:
Home Properties, L.P., a New York limited partnership (the "Operating
Partnership"), and Home Properties, Inc., a Maryland corporation and the sole
general partner of the Operating Partnership (the "Company"), confirm their
agreement with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated and Bear, Stearns & Co. Inc. (collectively, the "Initial
Purchasers"), with respect to the issue and sale by the Operating Partnership
and the Company and the purchase by the Initial Purchasers, acting severally and
not jointly, of the respective principal amounts set forth in Schedule A hereto
of $175,000,000 aggregate principal amount of 4.125% Exchangeable Senior Notes
due 2026 (the "Initial Securities"), and with respect to the grant by the
Operating Partnership and the Company to the Initial Purchasers of the option
described in Section 2(b) hereof to purchase all or any part of an additional
$25,000,000 aggregate principal amount of 4.125% Exchangeable Senior Notes due
2026 solely to cover over-allotments, if any (the "Option Securities" and,
together with the Initial Securities, the "Securities"). The Securities are to
be issued pursuant to the Indenture dated as of October 24, 2006 among the
Company, the Operating Partnership and Wells Fargo Bank, National Association,
as trustee (the "Trustee") (the "Indenture").
The Securities will be fully and unconditionally guaranteed by the Company
(the "Guarantee") and will be exchangeable, subject to certain conditions set
forth in the Indenture, at the option of the holder prior to maturity (unless
previously redeemed or otherwise repurchased by the Operating Partnership) for
cash in the principal amount of the Securities and, at the option of the
Company, cash, shares of Common Stock, par value $0.01 per share, of the Company
("Common Stock"), or a combination of cash and Common Stock, in accordance with
the terms of the Securities and the Indenture, as described in Schedule B
hereto. The shares of Common Stock issued upon exchange of any Securities are
referred to as the "Net Shares."
The Operating Partnership and the Company understand that the Initial
Purchasers propose to make an offering of the Securities on the terms and in the
manner set forth herein and agree that the Initial Purchasers may resell,
subject to the conditions set forth herein, all or a portion of the Securities
to purchasers ("Subsequent Purchasers") at any time after this Agreement has
been executed and delivered. The Securities are to be offered and sold through
the Initial Purchasers without being registered under the Securities Act of
1933, as amended (the "Securities Act"), in reliance upon exemptions therefrom.
Pursuant to the terms of the Securities and the Indenture, investors that
acquire Net Shares may only resell or otherwise transfer such Net Shares of
Common Stock if such Net Shares are hereafter registered for resale under the
Securities Act or may only resell the Securities if an exemption from the
registration requirements of the Securities Act afforded by Rule 144A
("Rule 144A") or Rule 144 of the rules and regulations promulgated under the
Securities Act by the Securities and Exchange Commission (the "SEC") is
available.
The Operating Partnership and the Company have prepared and delivered to
each Initial Purchaser electronic copies of a preliminary offering memorandum
dated October , 2006 (the "Preliminary Offering Memorandum") and have prepared
and will deliver to each Initial Purchaser, on the date hereof or the next
succeeding day, electronic copies of a final offering memorandum dated October
18, 2006 (the "Final Offering Memorandum"), each for use by such Initial
Purchaser in connection with its solicitation of purchases of, or offering of,
the Securities and any Net Shares. "Offering Memorandum" means, with respect to
any date or time referred to in this Agreement, the most recent offering
memorandum (whether the Preliminary Offering Memorandum or the Final Offering
Memorandum, or any amendment or supplement to either such document), including
any documents incorporated therein by reference, which has been prepared and
delivered by the Operating Partnership and the Company to the Initial Purchasers
in connection with their solicitation of purchases of, or offering of, the
Securities and any Net Shares.
Holders (including subsequent transferees) of the Securities and of the
shares of Common Stock, if any, issued upon exchange for the Securities will
have the registration rights set forth in the Registration Rights Agreement, to
be dated as of the Closing Time (the "Registration Rights Agreement"), among the
Operating Partnership, the Company and the Initial Purchasers, for so long as
such shares of Common Stock constitute "Registrable Securities" within the
meaning of the Registration Rights Agreement.
The Operating Partnership and the Company will enter into a Common Stock
Delivery Agreement (the "Common Stock Delivery Agreement"), to be dated as of
the Closing Time, providing for the delivery by the Company of shares of Common
Stock issuable upon exchange of the Securities in accordance with the terms of
the Securities and the Indenture.
All references in this Agreement to financial statements and schedules and
other information which is "disclosed," "contained," "included," "set forth" or
"stated" (or similar expressions) in the Offering Memorandum shall be deemed to
include all such financial statements and schedules and other information which
are incorporated by reference in the Offering Memorandum; and all references in
this Agreement to amendments or supplements to the Offering Memorandum shall be
deemed to mean and include the filing of any document under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") which is incorporated by
reference in the Offering Memorandum.
SECTION 1. Representations and Warranties by the Operating Partnership and the
Company.
(a) Representations and Warranties. The Operating Partnership and the
Company, jointly and severally, represent and warrant to each Initial
Purchaser, as of the date hereof and as of the Closing Time referred
to in Section 2(c) hereof (and as of each Date of Delivery, if any,
referred to in Section 2(c) hereof), and agree with each Initial
Purchaser, as follows:
(i) Disclosure Package and Final Offering Memorandum. As of the
Applicable Time (as defined below), neither (x) the Offering
Memorandum, as of the Applicable Time and as of the Closing Time,
as supplemented by the final pricing term sheet, in the form
attached hereto as Schedule C (the "Pricing Supplement"), that
has been prepared and delivered by the Operating Partnership and
the Company to the Initial Purchasers in connection with their
solicitation of offers to purchase Securities and any Net Shares,
all considered together (collectively, the "Disclosure Package"),
nor (y) any individual Supplemental Offering Material (as defined
below), when considered together with the Disclosure Package,
included any untrue statement of a material fact or omitted to
state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading. "Applicable Time" means 7:00 A.M. (Eastern
time) on October 19, 2006 or such other time as agreed by the
Operating Partnership, the Company and the Initial Purchasers.
"Supplemental Offering Material" means any "written
communication" (within the meaning of the Securities Act
Regulations (as defined below)) prepared by or on behalf of the
Operating Partnership and the Company, or used or referred to the
Company or the Operating Partnership, that constitutes an offer
to sell or a solicitation of an offer to buy the Securities and
any Net Shares other than any notices satisfying the requirements
of Rule 135c under the Securities Act and other than the Offering
Memorandum or amendments or supplements thereto, including,
without limitation, any road show relating to the Securities and
the shares of Common Stock issuable in exchange for the
Securities that constitutes such a written communication.
As of its issue date and as of the Closing Time (and, if any
Option Securities are being issued, at the Date of Delivery), the
Final Offering Memorandum will not include an untrue statement of
a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
The representation and warranties in this subsection shall not
apply to statements in or omissions from the Disclosure Package
or the Final Offering Memorandum made in reliance upon and in
conformity with written information furnished to the Operating
Partnership and the Company by any Initial Purchaser expressly
for use therein.
(ii) Incorporated Documents. The Offering Memorandum as delivered from
time to time prior to the completion of the offering of the
Securities shall incorporate by reference the most recent Annual
Report of the Company on Form 10-K filed with the SEC and each
Quarterly Report on Form 10-Q of the Company, and each Current
Report of the Company on Form 8-K filed with the SEC since the
end of the fiscal year to which such Annual Report relates. The
documents incorporated or deemed to be incorporated by reference
in the Offering Memorandum at the time they were or hereafter are
filed with the SEC (the "Incorporated Documents") complied and
will comply in all material respects with the requirements of the
Exchange Act and the rules and regulations of the SEC thereunder
(the "Exchange Act Regulations"), and, when read together with
the other information in the Offering Memorandum, at the time the
Offering Memorandum was issued and at the Closing Time (and as of
the Date of Delivery, if any Option Securities are being issued),
did not and will not include an untrue statement of a material
fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
(iii) Independent Registered Public Accounting Firm.
PricewaterhouseCoopers LLP, the independent registered public
accounting firm of the Company, which has audited certain
financial statements of the Company and its Subsidiaries (as
defined below), is an independent registered public accounting
firm with respect thereto as required by the Securities Act and
the rules and regulations of the SEC and the Public Company
Accounting Oversight Board.
(iv) Financial Statements. Except as noted therein, the consolidated
financial statements (including the related notes thereto)
incorporated by reference in the Disclosure Package and the Final
Offering Memorandum present fairly, in all material respects, the
consolidated financial condition of the Company and its
Subsidiaries, as of the dates indicated and the results of their
operations and changes in their consolidated cash flows for the
periods specified; such financial statements have been prepared
in conformity with accounting principles generally accepted in
the United States ("GAAP") applied on a consistent basis.
(v) Due Formation, etc. of the Operating Partnership and the Company.
The Operating Partnership has been duly formed and is validly
existing as a limited partnership in good standing under the laws
of the State of New York, with partnership power and authority to
own its properties and conduct its business as described in the
Disclosure Package and the Final Offering Memorandum, and has
been duly qualified or registered as a foreign limited
partnership for the transaction of business and is in good
standing or subsisting under the laws of each other jurisdiction
in which it owns or leases properties or conducts any business so
as to require such qualification or registration except where the
failure to so qualify or register or be in good standing or
subsisting could not reasonably be expected, individually or in
the aggregate, (i) to have a material adverse effect on the
business, properties, management, results of operations or
financial condition or prospects of the Company and its
Subsidiaries (including, without limitation, the Operating
Partnership), taken as a whole, (ii) to have an adverse effect on
the ability to perform on the part of, or the performance by, the
Operating Partnership and the Company of their respective
obligations hereunder and under the Indenture, the Securities,
the Registration Rights Agreement, the Common Stock Delivery
Agreement and the Guarantee, as applicable, or (iii) result in
the delisting of shares of Common Stock from the NYSE
(collectively, a "Material Adverse Effect"); the Company has been
duly incorporated and is validly existing as a corporation in
good standing under the laws of the State of Maryland, with full
corporate power and authority to own, lease and operate its
properties and conduct its business as described in the
Disclosure Package and the Final Offering Memorandum, and the
Company is duly qualified to do business as a foreign corporation
and is in good standing or subsisting in each jurisdiction where
the ownership or leasing of its properties or the conduct of its
business requires such qualification or registration except where
the failure to so qualify or register or be in good standing or
subsisting could not reasonably be expected, individually or in
the aggregate, to have a Material Adverse Effect;
(vi) Due Formation, etc. of the Subsidiaries. The Company has no
subsidiaries (as defined under the Securities Act), other than
those listed on Exhibit 21 of the Company's annual report on Form
10-K for the year ended December 31, 2005 and those which,
individually or in the aggregate, do not constitute a
"significant subsidiary" as such term is defined in Rule 1-02(w)
of Regulation S-X (collectively, the "Subsidiaries"); the
Company, directly or indirectly, owns all of the issued and
outstanding capital stock or other equity interests of each of
the Subsidiaries, other than as described in the Disclosure
Package and the Final Offering Memorandum; other than the capital
stock and other equity interests of the Subsidiaries, and
marketable securities, from time to time, the Company does not
own, directly or indirectly, any shares of stock or any other
equity interests or long-term debt securities of any corporation,
firm, partnership, joint venture, association or other entity;
complete and correct copies of the charters and the bylaws or
other organic document of the Company and each Subsidiary and all
amendments thereto have been made available to the Initial
Purchasers, and no changes therein will be made on or after the
date hereof through and including the time of purchase; each of
the Subsidiaries, including, without limitation, the Operating
Partnership, has been duly incorporated, organized or formed, as
the case may be, and is validly existing in good standing under
the laws of its jurisdiction of incorporation, organization or
formation, as the case may be, with full corporate or other power
and authority to own, lease and operate its properties and to
conduct its business as described in the Disclosure Package and
the Final Offering Memorandum; each Subsidiary is duly qualified
to do business as a foreign corporation, limited liability
company or limited partnership, as the case may be, and is in
good standing in each jurisdiction where the ownership or leasing
of its properties or the conduct of its business requires such
qualification, except where the failure to be so qualified and in
good standing would not, individually or in the aggregate, have a
Material Adverse Effect; all of the outstanding shares of capital
stock or other equity interests of each of the Subsidiaries have
been duly authorized and validly issued, are fully paid and
non-assessable, other than partnership interests held by the
general partner or any Subsidiary that is organized as a general
or limited partnership, as applicable, have been issued in
compliance with all applicable securities laws, were not issued
in violation of any preemptive right, resale right, right of
first refusal or similar right and are owned by the Company
subject to no security interest, other encumbrance or adverse
claims; no options, warrants or other rights to purchase,
agreements or other obligations to issue or other rights to
convert any obligation into shares of capital stock or ownership
interests in the Subsidiaries are outstanding; and the Company
has no "significant subsidiary" as that term is defined in Rule
1-02(w) of Regulation S-X under the Act other than the Operating
Partnership;
(vii) Capitalization. All of the issued partnership interests of the
Operating Partnership have been duly and validly authorized and
issued; the Company has an authorized capitalization as set forth
in the Disclosure Package and the Final Offering Memorandum, and
all of the issued shares of Common Stock of the Company have been
duly and validly authorized and issued and are fully paid except
as set forth in the Disclosure Package and the Final Offering
Memorandum;
(viii) Authorizations. Each of the Operating Partnership and the
Company has the requisite power and authority under its
organizational documents to enter into and perform its
obligations under or contemplated under this Agreement, the
Indenture, the Securities, the Guarantee, the Registration Rights
Agreement and the Common Stock Delivery Agreement, as applicable.
(ix) Indenture. The Indenture has been duly authorized by the
Operating Partnership and the Company and, as of the Closing Time
and each Date of Delivery, if any, the Indenture will constitute
a valid and legally binding instrument enforceable against the
Operating Partnership and the Company in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating
to or affecting creditors' rights and to general equity
principles.
(x) Securities. The Securities have been duly authorized by the
Operating Partnership, and, when such Securities are issued and
delivered pursuant to this Agreement with respect to such
Securities, the Securities will have been duly executed,
authenticated, issued and delivered and will constitute valid and
legally binding obligations of the Operating Partnership
enforceable in accordance with their terms and entitled to the
benefits of the Indenture, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to
general equity principles.
(xi) Guarantee. The Guarantee has been duly authorized by the Company
and, when the Securities are issued and delivered pursuant to
this Agreement, the Guarantee shall have been duly executed,
issued and delivered and shall constitute a valid and legally
binding obligation of the Company enforceable in accordance with
its terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating
to or affecting creditors' rights and to general equity
principles.
(xii) Registration Rights Agreement. The Registration Rights Agreement
has been duly authorized by each of the Operating Partnership and
the Company and, when executed and delivered by the Operating
Partnership, the Company and the Initial Purchasers, will
constitute a valid and binding agreement of each of the Operating
Partnership and the Company, enforceable against each of the
Operating Partnership and the Company in accordance with its
terms, subject, as to enforcement to bankruptcy, insolvency,
reorganization and other laws of general applicability relating
to or affecting creditors' rights and to general equity
principles.
(xiii) Common Stock Delivery Agreement. The Common Stock Delivery
Agreement has been duly authorized by each of the Operating
Partnership and the Company and, when executed and delivered by
the Operating Partnership and the Company, will constitute a
valid and binding agreement of each of the Operating Partnership
and the Company, enforceable against each of the Operating
Partnership and the Company in accordance with its terms,
subject, as to enforcement to bankruptcy, insolvency,
reorganization and other laws of general applicability relating
to or affecting creditors' rights and to general equity
principles.
(xiv) Authorization and Description of the Shares of Common Stock
Issuable in Exchange for the Securities. Upon issuance and
delivery of the Securities in accordance with this Agreement and
the Indenture, the Securities will be exchangeable at the option
of the holder thereof in accordance with the terms of the
Securities and the Indenture into cash in the principal amount of
the Securities and, at the option of the Company cash and/or Net
Shares; the Net Shares have been duly and validly authorized and
any Net Shares, when issued upon such exchange in accordance with
the terms of the Securities and the Indenture, will be duly and
validly issued and will be fully paid and non-assessable; any
such shares of Common Stock will be issued and sold in compliance
with all applicable laws (including, without limitation, federal
and state securities laws) in all material respects; and the
issuance of such shares upon such exchange will not be subject to
the preemptive or other similar rights of any securityholder of
the Company or the Operating Partnership. The Net Shares of
Common Stock conform in all material respects to the description
thereof set forth in the Disclosure Package and the Final
Offering Memorandum.
(xv) Description of the Indenture, the Securities, the Guarantee and
the Registration Rights Agreement and the Common Stock Delivery
Agreement. The Indenture, the Securities, the Guarantee, the
Registration Rights Agreement and the Common Stock Delivery
Agreement conform in all material respects to the respective
statements relating thereto contained in the Disclosure Package
and the Final Offering Memorandum. The certificates for any Net
Shares of Common Stock upon issuance will be due and proper form
and conform in all material respects to the requirements of the
Maryland General Corporation Law.
(xvi) Partnership and Joint Venture Agreements. Each of the
partnership and joint venture agreements to which the Company or
any of the Subsidiaries is a party, and which relates to a
Property described in the Disclosure Package or the Final
Offering Memorandum, has been duly authorized, executed and
delivered by the Company or the applicable Subsidiary (the
"applicable party") and constitutes the valid agreement thereof,
enforceable in accordance with its terms, except as limited by:
(a) the effect of bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect
relating to or affecting the rights or remedies of creditors or.
(b) the effect of general principles of equity, whether
enforcement is considered in a proceeding in equity or at law;
and the execution, delivery and performance of any of such
agreements by the Company or any applicable Subsidiary, did not,
at the time of execution and delivery, and does not constitute a
breach of, or default under, the charter or bylaws of the
applicable party or any material contract, lease or other
instrument to which the applicable party is a party or by which
its properties may be bound or any law, administrative regulation
or administrative or court order or decree.
(xvii) Termination of Contracts. Neither the Company nor any
Subsidiary has sent or received any communication regarding
termination of, or intent not to renew, any of the contracts or
agreements referred to or described in the Disclosure Package or
the Final Offering Memorandum, or referred to or described in, or
filed as an exhibit to, any Incorporated Document, and no such
termination or non-renewal has been threatened by the Company or
any Subsidiary or, to the Company's knowledge, any other party to
any such contract or agreement.
(xviii) Forward-Looking Statements. Each "forward-looking statement"
(within the meaning of Section 27A of the Act or Section 21E of
the Exchange Act) contained or incorporated by reference in the
Disclosure Package or the Final Offering Memorandum has been made
or reaffirmed with a reasonable basis and in good faith.
(xix) Foreign Corrupt Practices Act. Neither the Company nor any of
the Subsidiaries nor, to the Company's knowledge, any employee or
agent of the Company or any Subsidiary has made any payment of
funds of the Company or any Subsidiary or received or retained
any funds in violation of any law, rule or regulation (including,
without limitation, the Foreign Corrupt Practices Act of 1977),
which payment, receipt or retention of funds is of a character
required to be disclosed in the Disclosure Package or the Final
Offering Memorandum.
(xx) Delisting Notice. The Company has not received any notice from
the NYSE regarding the delisting of the Common Stock from the
NYSE.
(xxi) Certain Other Registration Rights. Except as described in the
Disclosure Package or the Final Offering Memorandum: (i) no
person has the right, contractual or otherwise, to cause the
Company to issue or sell to it any shares of Common Stock or
shares of any other capital stock or other equity interests of
the Company, (ii) no person has any preemptive rights, resale
rights, rights of first refusal or other rights to purchase any
shares of Common Stock or shares of any other capital stock of or
other equity interests in the Company from the Company except as
set forth in the limited partnership agreement of the Operating
Partnership and disclosed in the Disclosure Package and the Final
Offering Memorandum and (iii) no person has the right to act as
an underwriter or as a financial advisor to the Company or the
Operating Partnership in connection with the offer and sale of
the Securities; and (iv) no person has the right, contractual or
otherwise, to cause the Company to register under the Securities
any shares of Common Stock or shares of any other capital stock
of or other equity interests in the Company.
(xxii) Absence of Defaults, etc. Neither the Company nor any of its
Subsidiaries (including, without limitation, the Operating
Partnership) is, or with the giving of notice or lapse of time or
both would be, in violation of or in default under its
declaration of trust, charter, by-laws, partnership agreement,
operating agreement or other organizational documents, as
applicable, except where, in the case of any subsidiary that is
not the Operating Partnership or any Significant Subsidiary of
the Operating Partnership or the Company, the violation or
default could not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect, or any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its Subsidiaries
(including, without limitation, the Operating Partnership) is a
party or by which it or any of them or any of their respective
properties is bound, except where the violation or default could
not reasonably be expected, individually or in the aggregate, to
have a Material Adverse Effect.
(xxiii) No Conflicts. The issue and sale of the Securities, the issue
of the Guarantee, the compliance by the Operating Partnership and
the Company with all of the provisions of the Indenture, the
Securities, the Guarantee, the Registration Rights Agreement, the
Common Stock Delivery Agreement and this Agreement and the
consummation of the transactions herein and therein contemplated
will not conflict with, result in any breach or violation of or
constitute a default under (nor constitute any event which, with
notice, lapse of time or both, would result in any breach or
violation of, constitute a default under or give the holder of
any indebtedness (or a person acting on such holder's behalf) the
right to require the repurchase, redemption or repayment of all
or a part of such indebtedness under) (or result in the creation
or imposition of a lien, charge or encumbrance on any property or
assets of the Company or any Subsidiary pursuant to) (A) the
charter or bylaws of the Company or any organizational documents
of the Subsidiaries, or (B) any indenture, mortgage, deed of
trust, bank loan or credit agreement or other evidence of
indebtedness, or any license, lease, contract or other agreement
or instrument to which the Company or any of the Subsidiaries is
a party or by which any of them or any of their respective
properties may be bound or affected, or (C) any federal, state,
local or foreign law, regulation or rule applicable to the
Company or any of its Subsidiaries, or (D) any rule or regulation
of any self-regulatory organization or other non-governmental
regulatory authority (including, without limitation, the rules
and regulations of the NYSE) applicable to the Company or any of
its Subsidiaries, or (E) any decree, judgment or order applicable
to the Company or any of the Subsidiaries or any of their
respective properties; except in the case of clause (B) where
such breach or violation would not have a Material Adverse
Effect.
(xxiv) No Material Adverse Changes. Subsequent to the respective dates
as of which information is given in the Disclosure Package and
the Final Offering Memorandum, in each case excluding any
amendments or supplements to the foregoing made after the
execution of this Agreement, there has not been (i) any material
adverse change, or any development involving a prospective
material adverse change, in the business, properties, management,
financial condition or results of operations of the Company and
the Subsidiaries taken as a whole, (ii) any transaction which is
material to the Company and the Subsidiaries taken as a whole,
(iii) any obligation or liability, direct or contingent
(including any off-balance sheet obligations), incurred by the
Company or any Subsidiary, which is material to the Company and
the Subsidiaries taken as a whole, (iv) any change in the capital
stock or outstanding indebtedness of the Company or any
Subsidiaries other than pursuant to options or rights outstanding
on the date of this Agreement and disclosed in the Disclosure
Package and Final Offering Memorandum, or (v) any dividend or
distribution of any kind declared, paid or made on the capital
stock of the Company or any Subsidiary.
(xxv) No Consents, Approvals, etc. No consent, approval,
authorization, order, registration or qualification of or with
any court or governmental agency or body (including, without
limitation, the NYSE) is required for the issue and sale of the
Securities, the issue of the Guarantee, the compliance by the
Operating Partnership and the Company with all of the provisions
of the Indenture, the Securities, the Guarantee, the Registration
Rights Agreement, the Common Stock Delivery Agreement and this
Agreement and the consummation of the transactions herein and
therein contemplated, except (A) with respect to the Indenture
under the Trust Indenture Act, (B) the registration of resales of
any Net Shares of Common Stock under the Securities Act as
contemplated by the Registration Rights Agreement and the listing
of any Net Shares on the NYSE and (C) such consents, approvals,
authorizations, orders, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection
with the purchase and distribution of the Securities by the
Initial Purchasers.
(xxvi) Absence of Labor Dispute, etc. Neither the Company nor any of
the Subsidiaries is engaged in any unfair labor practice; except
for matters which would not, individually or in the aggregate,
have a Material Adverse Effect, (i) there is (A) no unfair labor
practice complaint pending or, to the Company's knowledge,
threatened against the Company or any of the Subsidiaries before
the National Labor Relations Board, and no grievance or
arbitration proceeding arising out of or under collective
bargaining agreements is pending or, to the Company's knowledge,
threatened, (B) no strike, labor dispute, slowdown or stoppage
pending or, to the Company's knowledge, threatened against the
Company or any of the Subsidiaries and (C) no union
representation dispute currently existing concerning the
employees of the Company or any of the Subsidiaries, (ii) to the
Company's knowledge, no union organizing activities are currently
taking place concerning the employees of the Company or any of
the Subsidiaries and (iii) there has been no material violation
of any federal, state, local or foreign law relating to
discrimination in the hiring, promotion or pay of employees, any
applicable wage or hour laws or any provision of the Employee
Retirement Income Security Act of 1974 ("ERISA") or the rules and
regulations promulgated thereunder concerning the employees of
the Company or any of the Subsidiaries.
(xxvii) Legal Proceedings. There are no actions, suits, claims,
investigations or proceedings pending or, to the Company's
knowledge, threatened or contemplated to which the Company or any
of the Subsidiaries or any of their respective directors or
officers is or would be a party or of which any of their
respective properties is or would be subject at law or in equity,
before or by any federal, state, local or foreign governmental or
regulatory commission, board, body, authority or agency, or
before or by any self-regulatory organization or other
non-governmental regulatory authority (including, without
limitation, the NYSE), except any such action, suit, claim,
investigation or proceeding which, if resolved adversely to the
Company or any Subsidiary, would not, individually or in the
aggregate, have a Material Adverse Effect.
(xxviii) Absence of Manipulation. None of the Operating Partnership,
the Company, any Significant Subsidiary, and any of their
respective directors, officers, general partners or controlling
persons, has taken or will take, directly or indirectly, any
action designed to cause or result, under the Exchange Act or
otherwise, in, or which has constituted or which reasonably might
be expected to constitute, the unlawful stabilization or
manipulation of the price of any security of the Operating
Partnership or the Company to facilitate the sale or resale of
the Securities or the shares of Common Stock issuable in exchange
for the Securities.
(xxix) Possession of Intellectual Property. Each of the Company and
the Subsidiaries owns or possesses all inventions, patent
applications, patents, trademarks (both registered and
unregistered), tradenames, service names, copyrights, trade
secrets and other proprietary information described in the
Disclosure Package or the Final Offering Memorandum as being
owned or licensed by it or which is necessary for the conduct of,
or material to, its businesses (collectively, the "Intellectual
Property"), and the Company is unaware of any claim to the
contrary or any challenge by any other person to the rights of
the Company or any of the Subsidiaries with respect to the
Intellectual Property. To the knowledge of the Company, neither
the Company nor any of the Subsidiaries has infringed or is
infringing the intellectual property of a third party, and
neither the Company nor any Subsidiary has received notice of a
claim by a third party to the contrary.
(xxx) Tax Matters. All tax returns required to be filed by the Company
or any of the Subsidiaries have been timely filed and were
complete and accurate when filed, and all taxes and other
assessments of a similar nature (whether imposed directly or
through withholding) including any interest, additions to tax or
penalties applicable thereto due or claimed to be due from such
entities have been timely paid, other than those being contested
in good faith and for which adequate reserves have been provided,
except as described or incorporated by reference in the
Prospectus or where the failure to file or pay would not have a
Material Adverse Effect.
(xxxi) Possession of Licenses and Permits. The Company and each of its
Subsidiaries (including, without limitation, the Operating
Partnership) has all necessary licenses, authorizations, consents
and approvals and has made all necessary filings required under
any applicable law, regulation or rule, and has obtained all
necessary licenses, authorizations, consents and approvals from
other persons, in order to conduct their respective businesses;
and neither the Company nor any of the Subsidiaries is in
violation of, or in default under, or has received notice of any
proceedings relating to revocation or modification of, any such
license, authorization, consent or approval or any federal,
state, local or foreign law, regulation or rule or any decree,
order or judgment applicable to the Company or any of the
Subsidiaries, except where such failure to obtain or to file, or
such violation, default, revocation or modification would not,
individually or in the aggregate, have a Material Adverse Effect.
(xxxii) Title to Property. (i) each of the Company and each of the
Subsidiaries has good and marketable title to all of the real
property disclosed in the Disclosure Package or the Final
Offering Memorandums being owned by them (the "Properties") and
the assets reflected in the financial statements or otherwise
disclosed in the Disclosure Package or the Final Offering
Memorandum free and clear of all liens, encumbrances, claims,
mortgages, deeds of trust, restrictions, security interests and
defects ("Property Encumbrances"), except for: (A) the leasehold
interests of lessees in the Company's and the Subsidiaries'
properties held under lease (the "Leases"), (B) those Property
Encumbrances set forth in the Disclosure Package or the Final
Offering Memorandum and (C) imperfections in title, liens
encumbrances, claims, mortgages, deeds of trust, restrictions,
security interests and defects existing in the ordinary course of
business of the Company which do not have a Material Adverse
Effect; (ii) all of the leases under which any of the Company or
the Subsidiaries holds or uses real or personal properties or
other assets as a lessee are valid and binding and in full force
and effect, and neither the Company nor any of the Subsidiaries
is in default in respect of any of the terms or provisions of any
of such leases and no claim has been asserted by anyone adverse
to any such party's rights as lessee under any of such leases, or
affecting or questioning any such party's right to the continued
possession or use of the leased property or assets under any such
leases, and all such leases conform to the description thereof
contained in the Disclosure Package or the Final Offering
Memorandum except where the invalidity, default or claim,
individually or in the aggregate, would not have a Material
Adverse Effect; (iii) each of the Leases pertaining to the
Properties is valid and binding against the Company or a
Subsidiary, as applicable, and, to the Company's or such
Subsidiary's knowledge, each other party thereto, and is in full
force and effect, and no lessee of any portion of any of the
Properties is in default under its respective lease and there is
no event which, but for the passage of time or the giving of
notice or both, would constitute a default under any such lease;
(iv) all Property Encumbrances which could materially affect the
use of such Properties by the Company or its Subsidiaries in the
ordinary course of business, on or affecting any Properties of
the Company or any of the Subsidiaries which are required to be
disclosed in the Disclosure Package or the Final Offering
Memorandum are disclosed therein; (v) no person has an option to
purchase all or part of any material Property or any interest
therein, except as described or incorporated by reference in the
Prospectus; (vi) each of the Properties complies with all
applicable codes, laws and regulations (including, without
limitation, building and zoning codes, laws and regulations and
laws relating to access to the properties) and with all
agreements between the Company or any Subsidiary and third
parties relating to the ownership or use of any Property by the
Company or such Subsidiary, except as disclosed in the Disclosure
Package or the Final Offering Memorandum, if any or where the
failure do so comply would not, individually or in the aggregate,
have a Material Adverse Effect; and (vii) there is no pending or
threatened condemnation proceedings, zoning change, or other
similar proceeding or action that will in any material respect
affect the size of, use of, improvements on, construction on or
access to the Properties, which if adversely determined as to the
Company or any Subsidiary would have a Material Adverse Effect.
Title insurance in favor of the mortgagee or the Company and/or
the Subsidiaries is maintained with respect to each material
Property owned by any such entity in an amount at least equal to
(a) the cost of acquisition of such Property or (b) the cost of
construction of such Property (measured at the time of such
construction). The mortgages and deeds of trust encumbering the
properties and assets described in the Disclosure Package or the
Final Offering Memorandum are not convertible nor does any of the
Company or the Subsidiaries hold a participating interest
therein;
(xxxiii) Environmental Laws. (A) The Company and the Subsidiaries and
their respective properties, assets and operations are in
compliance with, and the Company and each of the Subsidiaries
hold all permits, authorizations and approvals required under,
Environmental Laws (as defined below), except to the extent that
failure to so comply or to hold such permits, authorizations or
approvals would not, individually or in the aggregate, have a
Material Adverse Effect; there are no past, present or, to the
Company's knowledge, reasonably anticipated future events,
conditions, circumstances, activities, practices, actions,
omissions or plans that could reasonably be expected to give rise
to any material costs or liabilities to the Company or any
Subsidiary under, or to materially interfere with or prevent
compliance by the Company or any Subsidiary with, Environmental
Laws; except as would not, individually or in the aggregate, have
a Material Adverse Effect, neither the Company nor any of the
Subsidiaries (i) is the subject of any investigation, (ii) has
received any notice or claim, (iii) is a party to or affected by
any pending or, to the Company's knowledge, threatened action,
suit or proceeding, (iv) is bound by any judgment, decree or
order or (v) has entered into any agreement, in each case
relating to any alleged violation of any Environmental Law or any
actual or alleged release or threatened release or cleanup at any
location of any Hazardous Materials (as defined below) (as used
herein, "Environmental Law" means any federal, state, local or
foreign law, statute, ordinance, rule, regulation, order, decree,
judgment, injunction, permit, license, authorization or other
binding requirement, or common law, relating to health, safety or
the protection, cleanup or restoration of the environment or
natural resources, including those relating to the distribution,
processing, generation, treatment, storage, disposal,
transportation, other handling or release or threatened release
of Hazardous Materials, and "Hazardous Materials" means any
material (including, without limitation, pollutants,
contaminants, hazardous or toxic substances or wastes) that is
regulated by or may give rise to liability under any
Environmental Law);
(B) in the ordinary course of their business, the Company and each of the
Subsidiaries conduct periodic reviews of the effect of the
Environmental Laws on their respective businesses, operations and
properties, in the course of which they identify and evaluate
associated costs and liabilities (including, without limitation, any
capital or operating expenditures required for cleanup, closure of
properties or compliance with the Environmental Laws or any permit,
license or approval, any related constraints on operating activities
and any potential liabilities to third parties).
(xxxiv) Accounting Controls and Disclosure Controls. (i) The Company
and each of the Subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with
management's general or specific authorization; (ii) transactions
are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (iii)
access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing
assets at reasonable intervals and appropriate action is taken
with respect to any differences;
(ii) The Company has established and maintains and evaluates
"disclosure controls and procedures" (as such term is defined in
Rule 13a-15 and 15d-15 under the Exchange Act) and "internal
control over financial reporting" (as such term is defined in
Rule 13a-15 and 15d-15 under the Exchange Act); such disclosure
controls and procedures are designed to ensure that material
information relating to the Company, including its consolidated
subsidiaries, is made known to the Company's Chief Executive
Officer and its Chief Financial Officer by others within those
entities, and such disclosure controls and procedures are
effective to perform the functions for which they were
established; the Company's independent auditors and the Audit
Committee of the Board of Directors of the Company have been
advised of: (i) all significant deficiencies, if any, in the
design or operation of internal controls which could adversely
affect the Company's ability to record, process, summarize and
report financial data; and (ii) all fraud, if any, whether or not
material, that involves management or other employees who have a
role in the Company's internal controls; all material weaknesses,
if any, in internal controls have been identified to the
Company's independent auditors; since the date of the most recent
evaluation of such disclosure controls and procedures and
internal controls, there have been no significant changes in
internal controls or in other factors that could significantly
affect internal controls, including any corrective actions with
regard to significant deficiencies and material weaknesses; the
principal executive officers (or their equivalents) and principal
financial officers (or their equivalents) of the Company have
made all certifications required by the Sarbanes-Oxley Act of
2002 (the "Sarbanes-Oxley Act") and any related rules and
regulations promulgated by the Commission, and the statements
contained in each such certification are complete and correct;
the Company, the Subsidiaries and, to the knowledge of the
Company, the Company's directors and officers, are each in
compliance in all material respects with all applicable effective
provisions of the Sarbanes-Oxley Act and the rules and
regulations of the Commission and the NYSE promulgated thereunder
disclosure.
(xxxv) Insurance. The Company and each of the Subsidiaries maintain
insurance covering their respective properties, operations,
personnel and businesses as the Company reasonably deems
adequate; such insurance insures against such losses and risks to
an extent which is adequate in accordance with customary industry
practice to protect the Company and the Subsidiaries and their
respective businesses; all such insurance is fully in force on
the date hereof and will be fully in force at the time of
purchase; neither the Company nor any Subsidiary has reason to
believe that it will not be able to renew any such insurance as
and when such insurance expires.
(xxxvi) Dividends. No Subsidiary is currently prohibited, directly or
indirectly, from paying any dividends to the Company or the
Operating Partnership, from making any other distribution on such
Subsidiary's capital stock, from repaying to the Company or the
Operating Partnership any loans or advances to such Subsidiary
from the Company or the Operating Partnership or from
transferring any of such Subsidiary's property or the Operating
Partnership assets to the Company or the Operating Partnership or
any other Subsidiary of the Company, except as described in the
Disclosure Package or the Final Offering Memorandum.
(xxxvii) Statistical and Market Related Data. The statistical and
market-related data, if any, included in the Preliminary Offering
Memorandum and the Final Offering Memorandum is based on or
derived from sources which the Operating Partnership and the
Company believe, in good faith, to be reliable and accurate in
all material respects.
(xxxviii) Compliance with the Americans with Disabilities Act. The
Company and its Subsidiaries (including, without limitation, the
Operating Partnership) are currently in compliance with all
presently applicable provisions of the Americans with
Disabilities Act, as amended, except for any such non-compliance
that could not reasonably be expected, individually or in
aggregate, to have a Material Adverse Effect.
(xxxix) Taxation as a REIT. The Company has qualified to be taxed as a
real estate investment trust ("REIT") pursuant to Sections 856
through 860 of the Internal Revenue Code of 1986, as amended (the
"Code") commencing with its initial taxable year that ended
December 31, 1994, and its current and proposed method of
operation as described in the Disclosure Package and the Final
Offering Memorandum, will enable the Company to continue to meet
the requirements for qualification and taxation as a real estate
investment trust under the Code for its taxable year ending
December 31, 2006 and thereafter; the Company currently intends
to continue to qualify as a real estate investment trust under
the Code this year and for all subsequent years, and the Company
does not know of any event that would cause or is likely to cause
the Company to fail to qualify as a real estate investment trust
under the Code at any time.
(xl) Domestically Controlled Qualified Investment Entity. The Company
believes that, as of the date hereof, it is a "domestically
controlled qualified investment entity" within the meaning of
Section 897(h) of the Code and the applicable Treasury
Regulations.
(xli) Plan Assets. The minimum funding standard under Section 302 of
the Employee Retirement Income Security Act of 1974, as amended,
and the regulations and published interpretations thereunder
("ERISA"), has been satisfied by each "pension plan" (as defined
in Section 3(2) of ERISA) which has been established or
maintained by the Company and/or one or more of its Subsidiaries
(including, without limitation, the Operating Partnership), and
the trust forming part of each such plan which is intended to be
qualified under Section 401 of the Code is so qualified; each of
the Company and its Subsidiaries (including, without limitation,
the Operating Partnership) has fulfilled its obligations, if any,
under Section 515 of ERISA; except as set in the Disclosure
Package and the Final Offering Memorandum, neither the Company
nor any of its Subsidiaries (including, without limitation, the
Operating Partnership) maintains or is required to contribute to
a "welfare plan" (as defined in Section 3(1) of ERISA) which
provides retiree or other post-employment welfare benefits or
insurance coverage (other than "continuation coverage" (as
defined in Section 602 of ERISA)); each pension plan and welfare
plan established or maintained by the Company and/or one or more
of its Subsidiaries (including, without limitation, the Operating
Partnership) is in compliance in all material respects with the
currently applicable provisions of ERISA; neither the Company nor
any of its Subsidiaries (including, without limitation, the
Operating Partnership) has incurred or could reasonably be
expected to incur any withdrawal liability under Section 4201 of
ERISA, any liability under Section 4062, 4063, or 4064 of ERISA,
or any other liability under Title IV of ERISA; and the assets of
the Company and its Subsidiaries (including, without limitation,
the Operating Partnership) do not, and at the Closing Time (and,
if any Option Securities are being issued, as of the Date of
Delivery), shall not, constitute "plan assets" under ERISA.
(xlii) Regulations G, T, U and X. None of the transactions
contemplated by this Agreement (including, without limitation,
the use of the proceeds from the sale of the Securities) will
violate or result in a violation of Section 7 of the Exchange
Act, or any regulation promulgated thereunder, including, without
limitation, Regulations G, T, U and X of the Board of Governors
of the Federal Reserve System.
(xliii) Partnership Classification. The Operating Partnership and each
of the Significant Subsidiaries that are partnerships are
properly classified as partnerships, and not as corporations or
as associations taxable as corporations, for federal income tax
purposes throughout the period from their respective dates of
formation through the date hereof, or, in the case of any
Significant Subsidiary partnerships that have terminated, through
the date of termination of such Significant Subsidiary
partnerships.
(xliv) Investment Company Act. Neither the Operating Partnership nor
the Company is, and after giving effect to each offering and sale
of the Securities and the shares of Common Stock issuable in
exchange for the Securities is, or will be required to register
as, an "investment company" under the Investment Company Act of
1940, as amended (the "Investment Company Act").
(xlv) Similar Offerings. None of the Operating Partnership, the
Company nor any of their respective affiliates, as such term is
defined in Rule 501(b) under the Securities Act (each, an
"Affiliate"), has, directly or indirectly, solicited any offer to
buy, sold or offered to sell or otherwise negotiated in respect
of, or will solicit any offer to buy, sell or offer to sell or
otherwise negotiate in respect of, in the United States or to any
United States citizen or resident, any security which is or would
be integrated with the sale of the Securities and any Net Shares
of Common Stock issuable in exchange for the Securities in a
manner that would require the offered Securities and shares of
Common Stock issuable in exchange for the Securities to be
registered under the Securities Act.
(xlvi) Rule 144A Eligibility. The Securities are eligible for resale
pursuant to Rule 144A and will not be, at the Closing Time, of
the same class as securities listed on a national securities
exchange registered under Section 6 of the Exchange Act or quoted
in a U.S. automated interdealer quotation system within the
meaning of Rule 144A(d)(3)(i).
(xlvii) No General Solicitation. None of the Operating Partnership,
the Company or any of their respective Affiliates or any person
acting on its or any of their behalf (other than the Initial
Purchasers, as to whom no representation is made) has engaged or
will engage, in connection with the offering of the offered
Securities and any Net Shares in any form of general solicitation
or general advertising within the meaning of Rule 502(c) under
the Securities Act.
(xlviii) No Registration Required. Subject to compliance by the
Initial Purchasers with the representations and warranties of the
Initial Purchasers and the procedures set forth in Section 6
hereof, it is not necessary in connection with the offer, sale
and delivery of the Securities to the Initial Purchasers and to
each Subsequent Purchaser in the manner contemplated by this
Agreement and the Disclosure Package and the Final Offering
Memorandum to register the Securities or any shares of Common
Stock issuable in exchange for the Securities under the
Securities Act or to qualify the Indenture under the Trust
Indenture Act of 1939, as amended.
(b) Officer's Certificates. Any certificate signed by any officer of the
Company, on behalf of the Company for itself and as general partner of
the Operating Partnership, delivered to the Initial Purchasers or to
counsel for the Initial Purchasers shall be deemed a representation
and warranty by the Operating Partnership and the Company to each
Initial Purchaser as to the matters covered thereby.
SECTION 2. Sale and Delivery to Initial Purchasers; Closing.
(a) Initial Securities. On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set
forth, the Operating Partnership agrees to sell to each Initial
Purchaser, severally and not jointly, and each Initial Purchaser,
severally and not jointly, agrees to purchase from the Operating
Partnership, at the price set forth in Schedule B, the aggregate
principal amount of Securities set forth in Schedule A opposite the
name of such Initial Purchaser, plus any additional principal amount
of Securities which such Initial Purchaser may become obligated to
purchase pursuant to the provisions of Section 11 hereof.
(b) Option Securities. In addition, on the basis of the representations,
warranties and agreements herein contained and subject to the terms
and conditions herein set forth, the Operating Partnership hereby
grants an option to the Initial Purchasers solely to cover
over-allotments, if any, to purchase up to an additional $25,000,000
aggregate principal amount of the Option Securities at the same price
per Security set forth in Schedule B for the Initial Securities plus
interest thereon accrued to the relevant Date of Delivery. The option
granted hereby will expire 12 days after the date of this Agreement
and may be exercised in whole or in part from time to time upon notice
by the Initial Purchasers to the Operating Partnership and the Company
setting forth the aggregate principal amount of Option Securities as
to which the Initial Purchasers are then exercising the option and the
time and date of payment and delivery for such Option Securities,
provided however, that the Option Securities may not be issued in
whole or in part after the period which ends 12 days after the date of
issue of the Initial Securities. Any such time and date of delivery
(each, a "Date of Delivery") shall be determined by the Initial
Purchasers, but shall not be later then seven full business days after
the exercise of said option, nor in any event prior to the Closing
Time. If the option is exercised as to all or any portion of the
Option Securities, each of the Initial Purchasers, severally and not
jointly, will purchase that proportion of the total aggregate
principal amount of the Option Securities then being purchased which
the aggregate principal amount of Initial Securities each such Initial
Purchaser has severally agreed to purchase set forth in Schedule A
bears to the total aggregate principal amount of Initial Securities,
plus any additional principal amount of Securities which such Initial
Purchaser may become obligated to purchase pursuant to the provisions
of Section 11 hereof, subject to such adjustments as the Initial
Purchasers, in their discretion, make to eliminate any purchases of
aggregate principal amount of the Option Securities other than in
authorized denominations.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Securities shall be made at the offices of
Skadden, Arps, Slate, Meagher & Flom LLP, 4 Times Square, New York, NY
10036, or at such other place as shall be agreed upon by the Initial
Purchasers and the Operating Partnership and the Company, at 9:30 A.M.
(Eastern time) on October 24, 2006 (unless postponed in accordance
with the provisions of Section 11), or such other time not later than
ten business days after such date as shall be agreed upon by the
Initial Purchasers and the Operating Partnership and the Company (such
time and date of payment and delivery being herein called the "Closing
Time").
In addition, in the event that the Initial Purchasers have exercised
the option to purchase all or any of the Option Securities, payment of
the purchase price for, and delivery of one or more global
certificates for, such Option Securities shall be made at the
above-mentioned offices, or at such other place as shall be agreed
upon by the Initial Purchasers and the Operating Partnership and the
Company, on each Date of Delivery as specified in the notice from the
Initial Purchasers to the Operating Partnership and the Company.
Payment shall be made to the Operating Partnership by wire transfer of
immediately available funds to a bank account designated by the
Operating Partnership, against delivery to the Initial Purchasers for
the respective accounts of the Initial Purchasers of certificates for
the Securities to be purchased by them.
(d) Delivery; Registration. The Securities will be issued in global form
and registered in the name of Cede & Co., as nominee of The Depository
Trust Company ("DTC"). The certificates representing the Securities
shall be made available for examination by the Initial Purchasers in
The City of New York not later than 3:00 P.M. (Eastern Time) on the
last business day prior to the Closing Time or the relevant Date of
Delivery, as the case may be.
SECTION 3. Covenants of the Operating Partnership and the Company. Each of the
Operating Partnership and the Company, jointly and severally, covenants with
each Initial Purchaser as follows:
(a) Offering Memorandum. The Operating Partnership and the Company, as
promptly as possible, will furnish to each Initial Purchaser, without
charge, such number of copies of the Offering Memorandum and any
amendments and supplements thereto and documents incorporated by
reference therein as such Initial Purchaser may reasonably request.
(b) Notice and Effect of Material Events. The Operating Partnership and
the Company will immediately notify each Initial Purchaser, and
confirm such notice in writing, of (x) any filing made by the
Operating Partnership and/or the Company of information relating to
the offering of the Securities with any securities exchange or any
other regulatory body in the United States or any other jurisdiction,
and (y) prior to the completion of the offering of the offered
Securities by the Initial Purchasers as evidenced by a notice in
writing from the Initial Purchasers to the Operating Partnership and
the Company, any Material Adverse Effect which (i) makes any statement
in the Disclosure Package, any Offering Memorandum or any Supplemental
Offering Material false or misleading or (ii) is not disclosed in the
Disclosure Package or the Offering Memorandum. In such event or if
during such time any event shall occur as a result of which it is
necessary, in the reasonable opinion of any of the Operating
Partnership, the Company, counsel for the Operating Partnership and
the Company, the Initial Purchasers or counsel for the Initial
Purchasers, to amend or supplement the Offering Memorandum in order
that the Offering Memorandum not include any untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein not misleading in the light of the
circumstances then existing, the Operating Partnership and the Company
will forthwith amend or supplement the Offering Memorandum by
preparing and furnishing to each Initial Purchaser an amendment or
amendments of, or a supplement or supplements to, the Offering
Memorandum (in form and substance satisfactory in the reasonable
opinion of counsel for the Initial Purchasers) so that, as so amended
or supplemented, the Offering Memorandum will not include an untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances existing at the time it is delivered to a Subsequent
Purchaser, not misleading.
(c) Amendment and Supplements to the Offering Memorandum; Supplemental
Offering Materials. The Operating Partnership and the Company will
advise each Initial Purchaser promptly of any proposal to amend or
supplement the Offering Memorandum and will not effect such amendment
or supplement without the consent of the Initial Purchasers other than
reports required to be made with the SEC in order to comply with the
Exchange Act and the Exchange Act Regulations ("Exchange Act
Filings"), provided that, prior to the completion of the offering of
the Securities, such Exchange Act Filings are first provided to the
Initial Purchasers a reasonable time in advance of the filing thereof.
Neither the consent of the Initial Purchasers, the Initial Purchasers'
delivery of any such amendment or supplement, nor the furnishing to
the Initial Purchasers of any such Exchange Act Filings shall
constitute a waiver of any of the conditions set forth in Section 5
hereof. The Operating Partnership and the Company will prepare the
Disclosure Package, in form and substance satisfactory to the Initial
Purchasers, and shall furnish prior to the Applicable Time to each
Initial Purchaser, without charge, as many physical or electronic
copies of the Disclosure Package as such Initial Purchaser may
reasonably request. Each of the Operating Partnership and the Company,
jointly and severally, represent and agree that, unless it obtains the
prior consent of the Initial Purchasers, it has not made and will not
make any offer relating to the Securities or any Net Shares of Common
Stock issuable in exchange for the Securities by means of any
Supplemental Offering Materials.
(d) Qualification of Securities for Offer and Sale. The Operating
Partnership and the Company will use their best efforts, in
cooperation with the Initial Purchasers, to qualify the Securities and
shares of Common Stock issuable in exchange for the Securities for
offering and sale under the applicable securities laws, including real
estate syndication laws, of such states and other jurisdictions as the
Initial Purchasers may designate and to maintain such qualifications
in effect as long as required for the sale of the Securities and the
shares of Common Stock issuable in exchange for the Securities;
provided, however, that neither the Operating Partnership nor the
Company shall be obligated to file any general consent to service of
process or to qualify as a foreign entity or as a dealer in securities
in any jurisdiction in which it is not so qualified or to subject
itself to taxation in respect of doing business in any jurisdiction in
which it is not otherwise so subject.
(e) DTC. The Operating Partnership and the Company will cooperate with the
Initial Purchasers and use its best efforts to permit the offered
Securities to be eligible for clearance and settlement through the
facilities of DTC.
(f) Use of Proceeds. The Operating Partnership and the Company will use
the net proceeds received by the Operating Partnership from the sale
of the Securities in the manner specified in the Offering Memorandum
under "Use of Proceeds".
(g) Restriction on Sale of Securities. For a period of 30 days after the
date of the Final Offering Memorandum, neither the Operating
Partnership nor the Company will, without the prior written consent of
the Initial Purchasers, issue, offer, sell, contract to sell,
hypothecate, pledge, grant or sell any option, right or warrant to
purchase, or otherwise dispose of, or contract to dispose of, any
shares of Common Stock, any securities substantially similar to the
Securities or shares of Common Stock or any other securities
convertible into or exercisable or exchangeable for shares of Common
Stock or the Securities. However, these restrictions do not apply to
(A) the issuance of shares of Common Stock upon exchange of the
Securities, (B) securities issued in connection with the Company's
employee benefit plans, stock option plans, long-term incentive plan
and/or distribution reinvestment plans existing at the date of this
Agreement, (C) securities issued pursuant to currently outstanding
options, warrants or rights (D) shares of Common Stock issued upon the
conversion or redemption of partnership interests in the Operating
Partnership or (E) units of limited partnership interest in the
Operating Partnership issued in connection with the acquisition of
properties in the ordinary course of business provided that the
recipient of such units shall not be permitted to convert or exchange
such units for any shares of common stock for a period of at least one
year following the date of their issuance.
(h) PORTAL Designation. The Operating Partnership and the Company will use
their reasonable commercial efforts to permit the Securities to be
designated PORTAL securities in accordance with the rules and
regulations adopted by the National Association of Securities Dealers,
Inc. ("NASD") relating to trading in the PORTAL Market.
(i) Listing on Securities Exchange. The Company will use its reasonable
commercial efforts to have the shares of Common Stock issuable in
exchange for the Securities listed on the New York Stock Exchange.
(j) Reporting Requirements. Until completion of the offering of the
Securities, the Operating Partnership and the Company will file all
documents required to be filed with the SEC pursuant to the Exchange
Act within the time periods required by the Exchange Act and the
Exchange Act Regulations.
(k) Notification of Certain Events. Prior to the Closing Time and any Date
of Delivery, each of the Operating Partnership and the Company will
notify the Initial Purchasers in writing immediately if any event
occurs that renders any of the representations and warranties of the
Operating Partnership and the Company contained herein inaccurate or
incomplete in any material respect.
SECTION 4. Payment of Fees and Expenses.
(a) Expenses. The Operating Partnership and the Company, jointly and
severally, will pay all expenses incident to the performance of their
respective obligations under this Agreement, including (i) the
preparation, printing and delivery to the Initial Purchasers of the
Disclosure Package or any Offering Memorandum (including, without
limitation, financial statements and any document incorporated therein
by reference) and of each amendment or supplement thereto or of any
Supplemental Offering Material, (ii) the preparation, printing and
delivery to the Initial Purchasers of this Agreement, any Agreement
among Initial Purchasers, the Indenture, the Registration Rights
Agreement, the Common Stock Delivery Agreement and and such other
documents as may be required in connection with the offering,
purchase, sale, issuance or delivery of the Securities and the shares
of Common Stock issuable in exchange therefor, (iii) the preparation,
issuance and delivery of the certificates for the Securities to the
Initial Purchasers and, upon any issuance of Net Shares, the
certificates for the Net Shares of Common Stock issuable in exchange
therefor, including any transfer taxes, any stamp or other duties
payable upon the sale, issuance and delivery of the Securities to the
Initial Purchasers, the issuance and delivery of the shares of Common
Stock issuable in exchange therefor and any charges of DTC in
connection therewith, (iv) the preparation, printing and filing of the
shelf registration statement contemplated by the Registration Rights
Agreement and of each amendment and supplement thereto, (v) the
preparation, printing and delivery of prospectuses under such shelf
registration statement and of each amendment and supplement thereto,
(vi) the fees and disbursements of the Operating Partnership's and the
Company's counsel, independent registered public accounting firm and
other advisors or agents (including transfer agents and registrars),
(vii) the qualification of the Securities and any Net Shares of Common
Stock under securities laws and real estate syndication laws in
accordance with the provisions of Section 3(d) hereof, including
filing fees and the reasonable fees and disbursements of counsel for
the Initial Purchasers in connection therewith and in connection with
the preparation of a Blue Sky memorandum and any supplement thereto,
(viii) the fees and expenses of the Trustee, including the fees and
disbursements of counsel for the Trustee, (ix) any fees and expenses
payable in connection with the initial and continued designation of
the Securities as PORTAL securities for the PORTAL Market, (x) any
fees and expenses payable in connection any listing of the shares of
Common Stock issuable in exchange for the Securities on the New York
Stock Exchange and (xi) all other costs and expenses incident to the
performance of its obligations hereunder, which are not otherwise
specifically provided for in this Section.
(b) Termination of Agreement. If this Agreement is terminated by the
Initial Purchasers in accordance with the provisions of Section 5 or
Section 10(a)(i) hereof, the Operating Partnership and the Company,
jointly and severally, shall reimburse the Initial Purchasers for all
of their out-of-pocket expenses, including the reasonable fees and
disbursements of counsel for the Initial Purchasers.
SECTION 5. Conditions of Initial Purchasers' Obligations. The obligations of the
several Initial Purchasers hereunder are subject to the accuracy of the
representations and warranties of the Operating Partnership and the Company
contained in Section 1 hereof or in certificates of any officer of the Company
or any of its subsidiaries delivered pursuant to the provisions hereof, to the
performance by the Operating Partnership and the Company of their respective
covenants and other obligations hereunder, and to the following further
conditions:
(a) Opinions of Counsel for the Operating Partnership and the Company. At
the Closing Time, the Initial Purchasers shall have received the
favorable opinions, dated as of the Closing Time, of Nixon Peabody LLP
and general counsel for the Operating Partnership and the Company, in
form and substance satisfactory to counsel for the Initial Purchasers,
together with signed or reproduced copies of such letters for each of
the other Initial Purchasers, in substantially the forms set forth in
Exhibits A-1 and A-2 hereto.
(b) Opinion of Counsel for Initial Purchasers. At the Closing Time, the
Initial Purchasers shall have received an opinion letter and a
negative assurance letter, in each case, dated as of the Closing Time,
of Skadden, Arps, Slate, Meagher & Flom LLP, counsel for the Initial
Purchasers, in form and substance satisfactory to the Initial
Purchasers.
(c) Officers' Certificate. At the Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which
information is given in the Final Offering Memorandum (exclusive of
any amendments or supplements thereto subsequent to the date of this
Agreement), any event which has resulted in a Material Adverse Effect,
and the Initial Purchasers shall have received a certificate of the
chief executive officer of the Company and of the principal financial
or chief accounting officer of the Company or such other officer of
the Company reasonably acceptable to the Initial Purchasers, on behalf
of the Company and as general partner of the Operating Partnership,
dated as of the Closing Time, evidencing compliance with the
provisions of this Section 5(c), stating that (i) there has been no
event which has resulted in a Material Adverse Effect, (ii) the
representations and warranties set forth in Section 1 hereof are
accurate as though expressly made at and as of the Closing Time, and
(iii) the Operating Partnership and the Company have complied with all
agreements and satisfied all conditions in all material respects on
their respective parts to be performed or satisfied hereunder at or
prior to the Closing Time.
(d) Comfort Letters. At the time of the execution of this Agreement, the
Initial Purchasers shall have received from PricewaterhouseCoopers
LLP, the independent registered public accounting firm of the
Operating Partnership and the Company, which has audited the financial
statements of the Operating Partnership and its Subsidiaries and of
the Company and its Subsidiaries, included or incorporated by
reference in the Disclosure Package and the Final Offering Memorandum,
a letter dated such date, in form and substance satisfactory to the
Initial Purchasers, together with signed or reproduced copies of such
letter for each of the Initial Purchasers, containing statements and
information of the type ordinarily included in accountants' "comfort
letters" to Initial Purchasers with respect to the financial
statements and certain financial information contained and/or
incorporated by reference in the Disclosure Package and the Final
Offering Memorandum.
(e) Bring-down Comfort Letters. At the Closing Time, the Initial
Purchasers shall have received from PricewaterhouseCoopers LLP
letters, dated as of the Closing Time, to the effect that they
reaffirm the statements made in the letters furnished pursuant to
Section 5(d) hereof, together with signed or reproduced copies of such
letters for each of the Initial Purchasers, except that the specified
date referred to in such letters shall be a date not more than three
business days prior to the Closing Time.
(f) DTC and PORTAL. At the Closing Time, the Securities shall have been
eligible for clearance and settlement with DTC and designated for
trading on PORTAL.
(g) Lock-up Agreements. Prior to or on the date of this Agreement, the
Initial Purchasers shall have received an agreement substantially in
the form of Schedule E hereto signed by each of the persons listed in
Schedule D hereto (or, to the extent it is impracticable for any such
person to deliver his or her agreement prior to the Closing Time, the
Company agrees not to rescind its current trading policy prohibiting
sales of Common Stock prior to November 6, 2006 until such person
delivers his or her agreement to the Initial Purchasers).
(h) Execution and Delivery of Agreements. At or prior to the Closing Time,
each of the Operating Partnership, the Company and the Initial
Purchasers shall have executed and delivered the Registration Rights
Agreement; and the Operating Partnership and the Company shall have
executed and delivered the Common Stock Delivery Agreement, in each
case in form and substance satisfactory to the Initial Purchasers and
counsel for the Initial Purchasers.
(i) Conditions to Purchase of Option Securities. In the event that the
Initial Purchasers exercise their option provided in Section 2(b)
hereof to purchase all or any portion of the Option Securities, the
several obligations of the Initial Purchasers to purchase such Option
Securities are subject to the accuracy as of each Date of Delivery of
the representations and warranties of the Operating Partnership and
the Company contained in Section 1 or in certificates of any officer
of the Company delivered pursuant to the provisions hereof, to the
performance by the Operating Partnership and the Company of their
respective covenants and other obligations hereunder in all material
respects, and at the relevant Date of Delivery (unless such date is
the Closing Time), the Initial Purchasers shall have received:
(i) Officers' Certificate. A certificate, dated as of such Date of
Delivery, of the chief executive officer and the principal
financial officer or chief accounting officer of the Company,
confirming that the certificate delivered at the Closing Time
pursuant to Section 5(c) hereof remains true and correct as of
such Date of Delivery.
(ii) Opinions of Counsel for the Operating Partnership and the
Company. The favorable opinions, dated as of such Date of
Delivery, of Nixon Peabody LLP and general counsel for the
Operating Partnership and the Company, in form and substance
satisfactory to counsel for the Initial Purchasers, together with
signed or reproduced copies of such letters for each of the
Initial Purchasers, relating to the Option Securities to be
purchased on such Date of Delivery and otherwise substantially to
the same effect as the opinions required by Section 5(a) hereof.
(iii) Opinion of Counsel for Initial Purchasers. The opinion letter
and negative assurance letter, of Skadden, Arps, Slate, Meagher &
Flom LLP, counsel for the Initial Purchasers, in each case, dated
such Date of Delivery, relating to the Option Securities to be
purchased on such Date of Delivery and otherwise to the same
effect as required by Section 5(b) hereof.
(iv) Bring-down Comfort Letters. Letters from PricewaterhouseCoopers
LLP, in form and substance satisfactory to the Initial Purchasers
and dated such Date of Delivery, substantially in the same form
and substance as the letters furnished to the Initial Purchasers
pursuant to Section 5(d) hereof, except that the specified date
referred to in such letters shall be a date not more than three
business days prior to such Date of Delivery.
(j) Additional Documents. At the Closing Time and at any Date of Delivery,
counsel for the Initial Purchasers shall have been furnished with such
documents and opinions as they may require for the purpose of enabling
them to pass upon the issuance and sale of the Securities and the
shares of Common Stock issuable in exchange therefor as herein
contemplated, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the
Operating Partnership and the Company in connection with the issuance
and sale of the Securities and the Common Share issuable in exchange
therefor as herein contemplated shall be in form and substance
reasonably satisfactory to the Initial Purchasers and counsel for the
Initial Purchasers.
(k) Termination of Agreement. If any condition specified in this Section 5
shall not have been fulfilled when and as required to be fulfilled,
this Agreement (or, in the case of any condition to the purchase of
Option Securities, on the Date of Delivery which is after the Closing
Time, the obligations of the Initial Purchasers to purchase the
relevant Option Securities on such Date of Delivery) may be terminated
by the Initial Purchasers by notice to the Operating Partnership and
the Company at any time at or prior to the Closing Time or such Date
of Delivery, and such termination shall be without liability of any
party to any other party except as provided in Section 4 and except
that Sections 1, 7, 8, 9 and 17 shall survive any such termination and
remain in full force and effect.
SECTION 6. Subsequent Offers and Resales of the Securities and Net Shares.
(a) Offer and Sale Procedures. Each of the Initial Purchasers, the
Operating Partnership and the Company hereby establish and agree to
observe the following procedures in connection with the offer and sale
of the Securities and the shares of Common Stock issuable in exchange
therefor:
(i) Offers and Sales. Offers and sales of the Securities and the
shares of Common Stock issuable in exchange therefor shall be
made to such persons and in such manner as is contemplated by the
Offering Memorandum and the Indenture. Each Initial Purchaser
severally agrees that it will not offer, sell or deliver any of
the Securities in any jurisdiction outside the United States.
Each Initial Purchaser shall give the Operating Partnership and
the Company prompt notice in writing of the completion of its
offering of the Securities.
(ii) No General Solicitation. No general solicitation or general
advertising (within the meaning of Rule 502(c) under the
Securities Act) will be used in the United States in connection
with the offering or sale of the Securities.
(iii) Purchases by Non-Bank Fiduciaries. In the case of a non-bank
Subsequent Purchaser of a Security acting as a fiduciary for one
or more third parties, each third party shall, in the judgment of
the applicable Initial Purchaser, be a "qualified institutional
buyer" within the meaning of Rule 144A under the Securities Act
(a "Qualified Institutional Buyer").
(iv) Subsequent Purchaser Notification. Prior to or concurrently with
the purchase of the Securities, each Initial Purchaser will take
reasonable steps to inform, and cause each of its U.S. Affiliates
to take reasonable steps to inform, persons acquiring Securities
from such Initial Purchaser or its Affiliates, as the case may
be, that the Securities and the shares of Common Stock issuable
upon exchange therefor (A) have not been and will not be
registered under the Securities Act, (B) are being sold to them
without registration under the Securities Act in reliance on
Rule 144A or in accordance with another exemption from
registration under the Securities Act, as the case may be, and
(C) may not be offered, sold or otherwise transferred except
(1) to the Operating Partnership or the Company or any of their
respective subsidiaries or (2) (x) in accordance with Rule 144A
to a person whom the seller reasonably believes is a Qualified
Institutional Buyer that is purchasing such Securities for its
own account or for the account of a Qualified Institutional Buyer
to whom notice is given that the offer, sale or transfer is being
made in reliance on Rule 144A, (y) pursuant to another available
exemption from registration under the Securities Act, or (z)
pursuant to an effective registration statement under the
Securities Act.
(v) Minimum Principal Amount. No sale of the Securities to any one
Subsequent Purchaser will be for less than U.S. $1,000 principal
amount and no Security will be issued in a smaller principal
amount. If the Subsequent Purchaser is a non-bank fiduciary
acting on behalf of others, each person for whom it is acting
must purchase at least U.S. $1,000 principal amount of the
Securities.
(b) Covenants of the Operating Partnership and the Company. Each of the
Operating Partnership and the Company, jointly and severally,
covenants with each Initial Purchaser as follows:
(i) Integration. The Operating Partnership and the Company, jointly
and severally, agree that the Operating Partnership and the
Company will not and will cause their respective Affiliates not
to, directly or indirectly, solicit any offer to buy, sell or
make any offer or sale of, or otherwise negotiate in respect of,
securities of the Operating Partnership or the Company of any
class if, as a result of the doctrine of "integration" referred
to in Rule 502 under the Securities Act, such offer or sale would
render invalid (for the purpose of (i) the sale of the Securities
and shares of Common Stock issuable in exchange therefor by the
Operating Partnership and the Company to the Initial Purchasers,
(ii) the resale of the Securities and any Net Shares of Common
Stock issuable in exchange therefor by the Initial Purchasers to
Subsequent Purchasers or (iii) in connection with the offering of
the Securities, the resale of the Securities and any Net Shares
of Common Stock issuable in exchange therefor by such Subsequent
Purchasers to others) the exemption from the registration
requirements of the Securities Act provided by Section 4(2)
thereof or by Rule 144A thereunder or otherwise.
(ii) Rule 144A Information. The Operating Partnership and the Company,
jointly and severally, agree that, in order to render the offered
Securities eligible for resale pursuant to Rule 144A under the
Securities Act, while any of the offered Securities remain
outstanding, the Operating Partnership and the Company will make
available, upon request, to any holder of Securities or
prospective purchasers of Securities the information specified in
Rule 144A(d)(4), unless the Operating Partnership and the Company
furnishes information to the SEC pursuant to Section 13 or 15(d)
of the Exchange Act.
(iii) Restriction on Repurchases. Until the expiration of two years
after the original issuance of the Securities and the Net Shares
issued in exchange therefor, the Operating Partnership and the
Company will not, and will cause their respective Affiliates not
to, acquire any Securities or Net Shares of Common Stock issued
in exchange therefor which are "restricted securities" (as such
term is defined under Rule 144(a)(3) under the Securities Act),
whether as beneficial owner or otherwise (except as agent acting
as a securities broker on behalf of and for the account of
customers in the ordinary course of business in unsolicited
broker's transactions), unless, immediately upon the acquisition
of such Securities or shares of Common Stock, the Operating
Partnership, the Company or Affiliate, as the case may be, shall
submit such Securities to the Trustee, or such shares of Common
Stock to the Company's transfer agent, for cancellation.
(c) Qualified Institutional Buyer. Each Initial Purchaser, severally and
not jointly, represents and warrants to, and agrees with, the
Operating Partnership and the Company that it is a Qualified
Institutional Buyer and an "accredited investor" within the meaning of
Rule 501(a)(1), (2), (3) or (7) under the Securities Act (an
"Accredited Investor").
SECTION 7. Indemnification.
(a) Indemnification of Initial Purchasers. The Operating Partnership and
the Company, jointly and severally, agree to indemnify and hold
harmless each Initial Purchaser, its Affiliates, its directors,
officers, employees and agents and each person, if any, who controls
any Initial Purchaser within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Preliminary Offering Memorandum, the Disclosure Package, the
Final Offering Memorandum (or any amendment or supplement
thereto) or any Supplemental Offering Materials, or the omission
or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission; provided that (subject to Section 7(d) below) any such
settlement is effected with the written consent of the Operating
Partnership and the Company; and
(iii) against any and all expense whatsoever, as incurred (including,
without limitation, the reasonably incurred fees and
disbursements of counsel chosen by the Initial Purchasers),
reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, to
the extent that any such expense is not paid under (i) or (ii)
above; provided, however, that this indemnity agreement shall not
apply to any loss, liability, claim, damage or expense to the
extent arising out of any untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in
conformity with written information furnished to the Operating
Partnership or the Company by any Initial Purchaser expressly for
use in the Preliminary Offering Memorandum, the Disclosure
Package, the Final Offering Memorandum (or any amendment or
supplement thereto) or in any Supplemental Offering Materials.
(b) Indemnification of the Operating Partnership and the Company. Each
Initial Purchaser agrees, severally and not jointly, to indemnify and
hold harmless the Operating Partnership and the Company, each person,
if any, who controls the Operating Partnership and the Company within
the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, and each trustee, officer, employee, agent and Affiliate
of the Operating Partnership and the Company and of each controlling
person, against any and all loss, liability, claim, damage and expense
described in the indemnity contained in subsection (a) of this
Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the
Preliminary Offering Memorandum, the Disclosure Package, the Final
Offering Memorandum (or any amendments or supplements thereto) or any
Supplemental Offering Materials in reliance upon and in conformity
with written information furnished to the Operating Partnership or the
Company by such Initial Purchaser expressly for use therein.
(c) Actions against Parties; Notification. If any action, suit or
proceeding (each, a "Proceeding") is brought against a person (an
"indemnified party") in respect of which indemnity may be sought
against the Company and the Operating Partnership or the Initial
Purchasers (as applicable, the "indemnifying party") pursuant to
subsection (a) or (b) of this Section 7, such indemnified party shall
promptly notify such indemnifying party in writing of the institution
of such Proceeding and such indemnifying party shall assume the
defense of such Proceeding, including the employment of counsel
reasonably satisfactory to such indemnified party and payment of all
fees and expenses; provided, however, that the omission to so notify
such indemnifying party shall not relieve such indemnifying party from
any liability which such indemnifying party may have to any
indemnified party or otherwise, except to the extent that such
indemnifying party is actually materially prejudiced thereby. The
indemnified party or parties shall have the right to employ its or
their own counsel in any such case, but the fees and expenses of such
counsel shall be at the expense of such indemnified party or parties
unless the employment of such counsel shall have been authorized in
writing by the indemnifying party in connection with the defense of
such Proceeding or the indemnifying party shall not have, within a
reasonable period of time in light of the circumstances, employed
counsel to defend such Proceeding or such indemnified party or parties
shall have reasonably concluded that there may be defenses available
to it or them which are different from, additional to or in conflict
with those available to such indemnifying party (in which case such
indemnifying party shall not have the right to direct the defense of
such Proceeding on behalf of the indemnified party or parties), in any
of which events such fees and expenses shall be borne by such
indemnifying party and paid as incurred (it being understood, however,
that such indemnifying party shall not be liable for the expenses of
more than one separate counsel (in addition to any local counsel) in
any one Proceeding or series of related Proceedings in the same
jurisdiction representing the indemnified parties who are parties to
such Proceeding).
(d) Settlement of Proceedings. The indemnifying party shall not be liable
for any settlement of any Proceeding for which the indemnified party
is entitled to indemnification under subsection (a) or (b) of this
Section 7 effected without its written consent but, if settled with
its written consent, such indemnifying party agrees to indemnify and
hold harmless the indemnified party or parties from and against any
loss or liability by reason of such settlement. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified party for
fees and expenses of counsel when such payment would be required by
the second sentence of this Section 7(c), then the indemnifying party
agrees that it shall be liable for any settlement of any Proceeding
for which the indemnified party is entitled to indemnification under
subsection (a) or (b) of this Section 7, as applicable, effected
without its written consent if:
(i) such settlement is entered into more than 45 business days after
receipt by such indemnifying party of the written request for
reimbursement ("Reimbursement Request"), together with reasonable
supporting documentation for the expenses claimed in the request
for reimbursement,
(ii) such indemnified party shall have given the indemnifying party at
least 30 days' prior notice of its intention to settle, and
(iii) such indemnifying party shall have defaulted under this Section
7(c) in reimbursing the indemnified party in accordance with such
request prior to the date of the settlement.
No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened
Proceeding in respect of which any indemnified party is or could have been
a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter
of such Proceeding and does not include an admission of fault or
culpability or a failure to act by or on behalf of such indemnified party.
SECTION 8. Contribution. If the indemnification provided for in Section 7 hereof
is for any reason unavailable to or insufficient to hold harmless an indemnified
party in respect of any losses, liabilities, claims, damages or expenses
referred to therein, then each indemnifying party shall contribute to the
aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Operating
Partnership and the Company on the one hand and the Initial Purchasers on the
other hand from the offering of the Securities pursuant to this Agreement or
(ii) if the allocation provided by clause (i) is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Operating Partnership and the Company on the one hand and of the Initial
Purchasers on the other hand in connection with the statements or omissions
which resulted in such losses, liabilities, claims, damages or expenses, as well
as any other relevant equitable considerations.
The relative benefits received by the Operating Partnership and the Company
on the one hand and the Initial Purchasers on the other hand in connection with
the offering of the Securities pursuant to this Agreement shall be deemed to be
in the same respective proportions as the total net proceeds from the offering
of the Securities pursuant to this Agreement (before deducting expenses)
received by the Operating Partnership and the Company and the total discount
received by the Initial Purchasers, bear to the aggregate initial offering price
of the Securities.
The relative fault of the Operating Partnership and the Company on the one
hand and the Initial Purchasers on the other hand shall be determined by
reference to, among other things, whether any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Operating Partnership and the
Company or by the Initial Purchasers and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Operating Partnership and the Company and the Initial Purchasers agree
that it would not be just and equitable if contribution pursuant to this Section
8 were determined by pro rata allocation (even if the Initial Purchasers were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to above in
this Section 8. The aggregate amount of losses, liabilities, claims, damages and
expenses incurred by an indemnified party and referred to above in this Section
8 shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 8, no Initial Purchaser
shall be required to contribute any amount in excess of the amount by which the
total price at which the Securities purchased and sold by it hereunder exceeds
the amount of any damages which such Initial Purchaser has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 8, each director, officer, employee and agent
of an Initial Purchaser and each person, if any, who controls an Initial
Purchaser within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act and each Initial Purchaser's Affiliates shall have the same
rights to contribution as such Initial Purchaser, and each person, if any, who
controls the Operating Partnership or the Company within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act and each
trustee, officer, employee, agent and Affiliate of the Operating Partnership,
the Company and of each such controlling person shall have the same rights to
contribution as the Operating Partnership or the Company. The Initial
Purchasers' respective obligations to contribute pursuant to this Section are
several in proportion to the principal amount of Securities set forth opposite
their respective names in Schedule A hereto and not joint.
SECTION 9. Representations, Warranties and Agreements to Survive. All
representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company, on its behalf, and as general partner
of the Operating Partnership, on behalf of the Operating Partnership, submitted
pursuant hereto shall remain operative and in full force and effect, regardless
of (i) any investigation made by or on behalf of any Initial Purchaser or its
Affiliates or agents, any person controlling any Initial Purchaser, its officers
or directors or by or on behalf of the Operating Partnership, the Company or any
controlling person and (ii) delivery of and payment for the Securities.
SECTION 10. Termination of Agreement
(a) Termination; General. The Initial Purchasers may terminate this
Agreement, by notice to the Operating Partnership and the Company, at
any time at or prior to the Closing Time or any relevant Date of
Delivery (i) if there has been, since the date of this Agreement since
the respective dates as of which information is given in the
Disclosure Package or the Final Offering Memorandum (exclusive of any
amendments or supplements thereto subsequent to the date of this
Agreement), any event which has had a Material Adverse Effect or
(ii) if there has occurred any material adverse change in the
financial markets in the United States, any outbreak of hostilities or
escalation thereof or other calamity or crisis or any change or
development involving a prospective change in national or
international political, financial or economic conditions, in each
case the effect of which is such as to make it, in the judgment of the
Initial Purchasers, impracticable or inadvisable to market the
Securities or to enforce contracts for the sale of the Securities, or
(iii) if trading in any securities of the Company has been suspended
or materially limited by the SEC or the New York Stock Exchange, or if
trading generally on the New York Stock Exchange, the American Stock
Exchange or in the Nasdaq National Market has been suspended or
materially limited, or minimum or maximum prices for trading have been
fixed, or maximum ranges for prices have been required, by any of said
exchanges or by such system or by order of the SEC, the NASD or any
other governmental authority, or (iv) a material disruption has
occurred in commercial banking or securities settlement or clearance
services in the United States, or (v) if a banking moratorium has been
declared by U.S. federal, New York, Delaware or Maryland authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this Section
10, such termination shall be without liability of any party to any
other party except as provided in Section 4 hereof, and Sections 1, 7,
8 , 9 and 17 shall survive such termination and remain in full force
and effect.
SECTION 11. Default by One or More of the Initial Purchasers. If one or more of
the Initial Purchasers shall fail at the Closing Time or a Date of Delivery to
purchase the Securities which it or they are obligated to purchase under this
Agreement on such date (the "Defaulted Securities"), the non-defaulting Initial
Purchasers shall have the right, within 24 hours thereafter, to make
arrangements for one or more of the non-defaulting Initial Purchasers, or any
other initial purchasers, to purchase all, but not less than all, of the
Defaulted Securities in such amounts as may be agreed upon and upon the terms
herein set forth; if, however, the Initial Purchasers shall not have completed
such arrangements within such 24-hour period, then:
(a) if the aggregate principal amount of Defaulted Securities does not
exceed 10% of the aggregate principal amount of the Securities to be
purchased hereunder on such date, each of the non-defaulting Initial
Purchasers shall be obligated, severally and not jointly, to purchase
the full amount thereof in the proportions that their respective
purchase obligations hereunder bear to the purchase obligations of all
non-defaulting Initial Purchasers, or
(b) if the aggregate principal amount of Defaulted Securities exceeds 10%
of the aggregate principal amount of the Securities to be purchased
hereunder of such date, this Agreement or, with respect to any Date of
Delivery which occurs after the Closing Time, the obligation of the
Initial Purchasers to purchase and of the Operating Partnership and
the Company to sell the Option Securities, shall terminate without
liability on the part of any non-defaulting Initial Purchaser.
No action taken pursuant to this Section shall relieve any defaulting
Initial Purchaser from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement, either the Initial Purchasers or the Operating Partnership and
the Company shall have the right to postpone the Closing Time and any Date of
Delivery for a period not exceeding seven days in order to effect any required
changes in the Offering Memorandum or in any other documents or arrangements. As
used herein, the term "Initial Purchaser" includes any person substituted for an
Initial Purchaser under this Section.
SECTION 12. Tax Disclosure. Notwithstanding any other provision of this
Agreement, immediately upon commencement of discussions with respect to the
transactions contemplated hereby, the Operating Partnership, the Company and
each employee, representative or other agent of the Operating Partnership or the
Company may disclose to any and all persons, without limitation of any kind, the
tax treatment and tax structure of the transactions contemplated by this
Agreement and all materials of any kind (including opinions or other tax
analyses) that are provided to the Operating Partnership or the Company relating
to such tax treatment and tax structure. For purposes of the foregoing, the term
"tax treatment" is the purported or claimed federal income tax treatment of the
transactions contemplated hereby, and the term "tax structure" includes any fact
that may be relevant to understanding the purported or claimed federal income
tax treatment of the transactions contemplated hereby.
SECTION 13. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted by
any standard form of telecommunication. Notices to the Initial Purchasers shall
be directed to Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated at 4 World Financial Center, New York, New York 10080, attention of
Jeffrey Horowitz, Managing Director and to Bear, Stearns & Co. Inc. at 383
Madison Avenue, New York, New York 10179, attention of Paul Rosica, Senior
Managing Director, Equity Transactions Group. Notices to the Operating
Partnership and the Company shall be directed to it at 850 Clinton Square,
Rochester, New York 14604, Attention: Edward J. Pettinella, Director, President,
Chief Executive Officer with a copy to General Counsel.
SECTION 14. No Advisory or Fiduciary Relationship. The Operating Partnership and
the Company acknowledge and agree that (a) the purchase and sale of the
Securities pursuant to this Agreement, including the determination of the
offering price of the Securities and any related discounts and commissions, is
an arm's-length commercial transaction between the Operating Partnership and the
Company, on the one hand, and the several Initial Purchasers, on the other hand,
(b) in connection with the offering contemplated hereby and the process leading
to such transaction each Initial Purchaser is and has been acting solely as a
principal and is not the agent or fiduciary of the Operating Partnership or the
Company, or its stockholders, partners, creditors, employees or any other party,
(c) no Initial Purchaser has assumed or will assume an advisory or fiduciary
responsibility in favor of the Operating Partnership or the Company with respect
to the offering contemplated hereby or the process leading thereto (irrespective
of whether such Initial Purchaser has advised or is currently advising the
Operating Partnership or the Company on other matters) and no Initial Purchaser
has any obligation to the Operating Partnership or the Company with respect to
the offering contemplated hereby except the obligations expressly set forth in
this Agreement, (d) the Initial Purchasers and their respective affiliates may
be engaged in a broad range of transactions that involve interests that differ
from those of each of the Operating Partnership and the Company, and (e) the
Initial Purchasers have not provided any legal, accounting, regulatory or tax
advice with respect to the offering contemplated hereby and the Operating
Partnership and the Company have consulted with their own legal, accounting,
regulatory and tax advisors to the extent the Operating Partnership and the
Company deemed appropriate.
SECTION 15. Integration. This Agreement supersedes all prior agreements and
understandings (whether written or oral) between the Operating Partnership and
the Company and the Initial Purchasers, or any of them, with respect to the
subject matter hereof.
SECTION 16. Parties. This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective successors. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any
person, firm or corporation, other than the Initial Purchasers and the Operating
Partnership and the Company and their respective successors and the controlling
persons and officers, trustees, directors, employees, agents and Affiliates
referred to in Sections 7 and 8 and their successors, heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the parties hereto and their respective successors, and
said controlling persons and officers, trustees and directors and their
successors, heirs and legal representatives, and for the benefit of no other
person, firm or corporation. No purchaser of Securities from any Initial
Purchaser shall be deemed to be a successor by reason merely of such purchase.
SECTION 17. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 18. TIME. TIME SHALL BE OF THE ESSENCE OF THIS AGREEMENT. EXCEPT AS
OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 19. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
SECTION 20. Effect of Headings. The Section headings herein are for convenience
only and shall not affect the construction hereof.
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Operating Partnership and the Company a
counterpart hereof, whereupon this instrument, along with all counterparts, will
become a binding agreement among the Initial Purchasers and the Operating
Partnership and the Company in accordance with its terms.
Very truly yours,
HOME PROPERTIES, L.P.
By: Home Properties, Inc., its General Partner
By: /s/ Edward J. Pettinella
--------------------------------------------
Name: Edward J. Pettinella
Title: President and Chief Executive Officer
HOME PROPERTIES, INC.
By: /s/ Edward J. Pettinella
--------------------------------------------
Name: Edward J. Pettinella
Title: President and Chief Executive Officer
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /s/ Douglas Sesler
------------------------------------------------
Authorized Signatory
BEAR, STEARNS & CO. INC.
By: /s/ Paul S. Rosica
------------------------------------------------
Authorized Signatory
EXHIBIT 2
FOR IMMEDIATE RELEASE
HOME PROPERTIES ANNOUNCES OFFERING OF $175 MILLION OF
EXCHANGEABLE SENIOR NOTES
ROCHESTER, NY, OCTOBER 17, 2006 - Home Properties, Inc. (NYSE:HME) today
announced that it has commenced an offering, subject to market conditions and
other factors, of $175 million aggregate principal amount of exchangeable senior
notes through its subsidiary, Home Properties, L. P. (the "Operating
Partnership") due November 1, 2026. An additional $25 million aggregate
principal amount of notes may be issued, at the option of the initial
purchasers, to cover overallotments, if any, within 12 days of the initial
issuance of the notes. The interest rate, exchange rate and other terms of the
notes will be determined by negotiations between the Company and the initial
purchasers of the notes.
The notes will be senior unsecured obligations of the Operating Partnership and
will be fully and unconditionally guaranteed by Home Properties. The Company
expects to use approximately one-third of the expected $172 million of net
proceeds from the sale of the notes, or $58 million, to repurchase, concurrently
with closing, shares of Home Properties' common stock. Approximately $70 million
of net proceeds will be used to repay the outstanding indebtedness under its
revolving credit facility and the balance of proceeds will be used for other
general corporate purposes.
Upon the occurrence of specified events, the notes will be exchangeable into
cash and, at the Company's option, shares of Home Properties common stock.
The notes will be sold to qualified institutional buyers in accordance with Rule
144A under the Securities Act of 1933. The notes and the shares of Home
Properties common stock issuable upon exchange of the notes, if any, have not
been registered under the Securities Act of 1933, or any state securities laws,
and unless so registered, may not be offered or sold in the United States except
pursuant to an exemption from the registration requirements of the Securities
Act of 1933 and applicable state laws. This release shall not constitute an
offer to sell or the solicitation of an offer to buy any of these securities,
nor shall it constitute an offer, solicitation or sale in any jurisdiction in
which such offer, solicitation or sale is unlawful.
This release contains forward-looking statements. Although the Company believes
expectations reflected in such forward-looking statements are based on
reasonable assumptions, it can give no assurance that its expectations will be
achieved. Factors that may cause actual results to differ include general
economic and local real estate conditions, weather, other conditions that might
affect operating expenses, the timely completion of repositioning activities
within anticipated budgets, the actual pace of future acquisitions and sales,
and continued access to capital to fund growth. The Company assumes no
obligation to update or supplement forward-looking statements that become untrue
because of subsequent events.
Home Properties is a publicly traded apartment real estate investment trust that
owns, operates, acquires and rehabilitates apartment communities primarily in
selected Northeast, Mid-Atlantic and Southeast Florida markets. Currently, Home
Properties operates 142 communities containing 42,878 apartment units. Of these,
39,309 units in 137 communities are owned directly by the Company; 868 units are
partially owned and managed by the Company as general partner, and 2,701 units
are managed for other owners. For more information, visit Home Properties' Web
site at www.homeproperties.com.
###
For further information:
David P. Gardner, Executive Vice President and Chief Financial Officer, (585)
246-4113
EXHIBIT 3
FOR IMMEDIATE RELEASE
HOME PROPERTIES ANNOUNCES PRICING OF $175 MILLION OF
CONVERTIBLE SENIOR NOTES AND REPURCHASE OF
COMMON SHARES
ROCHESTER, NY, OCTOBER 18, 2006 - Home Properties, Inc. (NYSE:HME) today
announced that its subsidiary, Home Properties, L.P. (the "Operating
Partnership"), priced its offering of $175 million aggregate principal amount of
exchangeable senior notes due November 1, 2026 with a coupon of 4.125%. An
additional $25 million aggregate principal amount of notes may be issued, at the
option of the initial purchasers, within 12 days of the original issuance of the
notes.
The Company expects to use approximately one-third of the expected $172 million
of net proceeds from the sale of the notes, or $58 million, to repurchase,
concurrently with closing, shares of Home Properties' common stock.
Approximately $70 million of net proceeds will be used to repay the outstanding
indebtedness under its revolving credit facility and the balance of proceeds
will be used for other general corporate purposes.
Prior to November 1, 2026, upon the occurrence of specified events, the notes
will be convertible into Home Properties common shares, at an initial exchange
rate of 13.6357 shares per $1,000 principal amount of notes (equivalent to an
initial exchange price of approximately $73.34 per common share). The initial
exchange price represents an 18% premium to today's closing common share price
of $62.15. On or after October 1, 2026, the notes will be exchangeable at any
time prior to the second business day prior to maturity at the option of the
holder. Upon an exchange of notes, the Operating Partnership will deliver cash
for the lesser of the exchange value and the principal amount of the notes and,
at the Operating Partnership's option, cash or shares of Home Properties' common
stock for the exchange value in excess of the principal amount of the notes. The
exchange value will be based on the exchange rate and the then-trading price of
the common shares. The initial exchange rate is subject to adjustment in certain
circumstances.
Prior to November 6, 2011, the notes will not be redeemable at the option of the
Operating Partnership, except to preserve the status of Home Properties as a
REIT. On or after November 6, 2011, the Operating Partnership may redeem all or
a portion of the notes at a redemption price equal to the principal amount plus
accrued and unpaid interest (including additional interest), if any.
Note holders may require the Operating Partnership to repurchase all or a
portion of the notes at a purchase price equal to the principal amount plus
accrued and unpaid interest (including additional interest), if any, on the
notes on November 1, 2011, November 1, 2016 and November 1, 2021, or after the
occurrence of a designated event.
The notes will be sold to qualified institutional buyers in accordance with Rule
144A under the Securities Act of 1933. The notes and the Home Properties common
shares issuable upon exchange of the notes, if any, have not been registered
under the Securities Act of 1933, or any state securities laws, and, unless so
registered, may not be offered or sold in the United States except pursuant to
an exemption from the registration requirements of the Securities Act of 1933
and applicable state laws. This release shall not constitute an offer to sell or
the solicitation of an offer to buy any of these securities, nor shall it
constitute an offer, solicitation or sale in any jurisdiction in which such
offer, solicitation or sale is unlawful.
This release contains forward-looking statements. Although the Company believes
expectations reflected in such forward-looking statements are based on
reasonable assumptions, it can give no assurance that its expectations will be
achieved. Factors that may cause actual results to differ include general
economic and local real estate conditions, weather, other conditions that might
affect operating expenses, the timely completion of repositioning activities
within anticipated budgets, the actual pace of future acquisitions and sales,
and continued access to capital to fund growth. The Company assumes no
obligation to update or supplement forward-looking statements that become untrue
because of subsequent events.
Home Properties is a publicly traded apartment real estate investment trust that
owns, operates, acquires and rehabilitates apartment communities primarily in
selected Northeast, Mid-Atlantic and Southeast Florida markets. Currently, Home
Properties operates 142 communities containing 42,878 apartment units. Of these,
39,309 units in 137 communities are owned directly by the Company; 868 units are
partially owned and managed by the Company as general partner, and 2,701 units
are managed for other owners. For more information, visit Home Properties' Web
site at www.homeproperties.com.
###
For further information:
David P. Gardner, Executive Vice President and Chief Financial Officer, (585)
246-4113