EXHIBIT 1.1
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VORNADO REALTY TRUST
(a Maryland real estate investment trust)
6.625% Series I Cumulative Redeemable
Preferred Shares of Beneficial Interest
(Liquidation Preference $25.00 Per Share)
UNDERWRITING AGREEMENT
Dated: August 23, 2005
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TABLE OF CONTENTS
Underwriting Agreement..................................................... 1
SECTION 1. Representations and Warranties................................. 2
(a) Representations and Warranties by the Company.................. 2
(i) Incorporated Documents..................................... 2
(ii) Compliance with Registration Requirements................. 3
(iii) Form S-3 Eligibility..................................... 3
(iv) No Material Adverse Change in Business.................... 3
(v) Good Standing of the Company............................... 4
(vi) Qualification as a REIT................................... 4
(vii) Good Standing of the Operating Partnership............... 4
(viii) Good Standing of Subsidiaries........................... 4
(ix) Capitalization............................................ 5
(x) Authorization and Description of the Preferred Shares...... 5
(xi) Absence of Conflicts and Defaults......................... 5
(xii) Authorization of this Underwriting Agreement............. 6
(xiii) Absence of Proceedings.................................. 6
(xiv) No Violations or Defaults................................ 6
(xv) Accuracy of Certain Descriptions.......................... 6
(xvi) Investment Company Act................................... 6
(xvii) Independent Public Accountants.......................... 6
(xviii) Financial Statements................................... 7
(xix) Title to Property........................................ 7
(xx) Environmental Laws........................................ 8
(xxi) No Stabilizing Actions................................... 8
(xxii) No Fiduciary Duty....................................... 8
(b) Officers' Certificates......................................... 9
SECTION 2. Sale and Delivery to the Underwriters; Closing................. 9
(a) Initial Securities............................................. 9
(b) Option Securities.............................................. 9
(c) Payment........................................................ 9
(d) Denominations; Registration.................................... 10
(e) Offering by the Underwriters................................... 10
SECTION 3. Covenants of the Company....................................... 10
(a) Delivery of Registration Statements............................ 10
(b) Delivery of Prospectus......................................... 11
(c) Continued Compliance with Securities Laws...................... 11
(d) Rule 158....................................................... 11
(e) Use of Proceeds................................................ 11
(f) Listing........................................................ 11
SECTION 4. Payment of Expenses............................................ 11
(a) Expenses....................................................... 11
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(b) Termination of Agreement....................................... 12
SECTION 5. Conditions of Underwriters' Obligations........................ 12
(a) Effectiveness of Registration Statement........................ 12
(b) Opinions of Counsel for the Company............................ 12
(c) Opinion of Special Maryland Counsel for the Company............ 13
(d) Opinion of Counsel for the Underwriters........................ 13
(e) Officers' Certificate.......................................... 13
(f) Accountants' Comfort Letter.................................... 13
(g) Bring-down Comfort Letter...................................... 13
(h) Maintenance of Rating.......................................... 14
(i) Approval of Listing............................................ 14
(j) Conditions to Purchase of Option Securities.................... 14
(i) Officers' Certificate...................................... 14
(ii) Opinions of Counsel for the Company....................... 14
(iii) Opinion of Counsel for the Underwriter................... 14
(iv) Bring-down Comfort Letter................................. 14
(v) No Downgrading............................................. 15
(k) Additional Documents........................................... 15
(l) Termination of Agreement....................................... 15
SECTION 6. Indemnification................................................ 15
(a) Indemnification of Underwriters................................ 15
(b) Indemnification of Company, Operating Partnership, Trustees,
Partners and Officers.......................................... 16
(c) Actions against Parties; Notification.......................... 16
(d) Settlement without Consent if Failure to Reimburse............. 17
SECTION 7. Contribution................................................... 17
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery....................................................... 18
SECTION 9. Termination of Agreement....................................... 19
(a) Termination; General........................................... 19
(b) Liabilities.................................................... 19
SECTION 10. Default by One or More of the Underwriters..................... 19
SECTION 11. Notices........................................................ 20
SECTION 12. Parties........................................................ 20
SECTION 13. Governing Law and Time......................................... 21
SECTION 14. Effect of Headings............................................. 21
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SCHEDULES
Schedule A - List of Underwriters................................ Sch A-1
Schedule B - Terms of Preferred Shares........................... Sch B-1
EXHIBITS
Exhibit A - Form of Opinion of Company's Counsel................. A-1
Exhibit B - Form of Opinion of Special Maryland Counsel to the
Company.............................................. B-1
ANNEX
Annex I - Selling Restrictions................................... Annex I-1
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VORNADO REALTY TRUST
(a Maryland real estate investment trust)
7,000,000 Shares
6.625% Series I Cumulative Redeemable
Preferred Shares of Beneficial Interest
(No Par Value Per Share)
Underwriting Agreement
August 23, 2005
Morgan Stanley & Co. Incorporated
UBS Securities LLC
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
as Representatives of the Several Underwriters
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Ladies and Gentlemen:
Vornado Realty Trust, a Maryland real estate investment trust (the
"Company"), confirms its agreement with Morgan Stanley & Co. Incorporated
("Morgan Stanley"), UBS Securities LLC ("UBS"), Merrill Lynch, Pierce, Fenner &
Smith Incorporated ("Merrill Lynch"), and each of the other Underwriters named
in Schedule A hereto (collectively, the "Underwriters," which term shall also
include any underwriter substituted as hereinafter provided in Section 10
hereof), for whom Morgan Stanley, UBS and Merrill Lynch are acting as
Representatives (in such capacity, the "Representatives"), with respect to the
issue and sale by the Company and the purchase by the Underwriters, acting
severally and not jointly, of the number of 6.625% Series I Cumulative
Redeemable Preferred Shares of Beneficial Interest, no par value per share, of
the Company ("Preferred Shares") set forth above, and with respect to the grant
by the Company to the Underwriters of the option described in Section 2(b)
hereof to purchase all or any part of 1,050,000 additional Preferred Shares to
cover over-allotments, if any. The aforesaid 7,000,000 Preferred Shares (the
"Initial Securities") to be purchased by the Underwriters and all or any part of
the 1,050,000 Preferred Shares subject to the option described in Section 2(b)
hereof (the "Option Securities") are hereinafter called, collectively, the
"Securities."
The Company understands that the Underwriters propose to offer the
Securities (the "Offering") as soon after the execution and delivery hereof as
in the judgment of the Representatives is advisable.
The Company has filed with the Securities and Exchange Commission (the
"Commission") one or more registration statements on Form S-3, including a
prospectus relating to the Preferred Shares and other securities of the Company
for the registration of such securities under the Securities Act of 1933, as
amended (the "1933 Act"). Such registration statements have been declared
effective by the Commission. A prospectus supplement reflecting the terms of the
Securities, the terms of the offering thereof and the other matters set forth
therein has been prepared or will be prepared and will be filed in accordance
with the provisions of paragraph (b) of Rule 424 ("Rule 424(b)") of the rules
and regulations of the Commission under the 1933 Act (the "1933 Act
Regulations"). Such prospectus supplement, in the form first filed after the
date hereof pursuant to Rule 424(b), is hereinafter called the "Prospectus
Supplement." Such registration statements, as amended at the date hereof,
including all documents incorporated or deemed to be incorporated by reference
therein and the exhibits thereto, and schedules thereto, if any, are hereinafter
called the "Registration Statement" and the basic prospectus included therein
and relating to all offerings of securities under the Registration Statement, as
supplemented by the Prospectus Supplement, is hereinafter called the
"Prospectus," except that if such basic prospectus is amended or supplemented on
or prior to the date on which the Prospectus Supplement is first filed pursuant
to Rule 424(b), the term "Prospectus" shall refer to the basic prospectus as so
amended or supplemented and as supplemented by the Prospectus Supplement,
including the documents filed by the Company with the Commission pursuant to the
Securities Exchange Act of 1934, as amended (the "1934 Act"), that are
incorporated by reference therein. For purposes of this Agreement, all
references to the Registration Statement or the Prospectus or any amendment or
supplement to either of the foregoing shall be deemed to include the copy filed
with the Commission pursuant to its Electronic Data Gathering, Analysis and
Retrieval System ("EDGAR").
All references in this Agreement to financial statements and schedules and
other information which is "contained," "included," "stated," "described,"
"discussed" or "set forth" in the Registration Statement or the Prospectus (or
other references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement or the Prospectus, as the case may
be; and all references in this Agreement to amendments or supplements to the
Registration Statement, or the Prospectus shall be deemed to mean and include
the filing of any document under the 1934 Act which is incorporated by reference
in the Registration Statement or the Prospectus, as the case may be.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company represents
and warrants to each Underwriter 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(b) hereof and agrees with each Underwriter, as
follows:
(i) Incorporated Documents. The documents incorporated by reference in
the Registration Statement and the Prospectus, when they became effective
or were filed with the Commission, as the case may be, conformed in all
material respects to the requirements of the 1933 Act or the 1934 Act, as
applicable, and the rules and regulations of the Commission thereunder, and
none of such documents contained an untrue
2
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances under which they were made; and
any further documents so filed and incorporated by reference in the
Registration Statement and the Prospectus or any further amendment or
supplement thereto, when such documents become effective or are filed with
the Commission, as the case may be, will conform in all material respects
to the requirements of the 1933 Act or the 1934 Act, as applicable, and the
rules and regulations of the Commission thereunder and will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances under which they were made;
provided, however, that this representation and warranty shall not apply to
any statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by any Underwriter through
the Representatives expressly for use in the Registration Statement or the
Prospectus, in each case as amended or supplemented, relating to such
Preferred Shares;
(ii) Compliance with Registration Requirements. The Registration
Statement and the Prospectus conform, and any further amendments or
supplements to the Registration Statement or the Prospectus will conform,
in all material respects to the requirements of the 1933 Act and the 1933
Act Regulations and do not and will not, as of the applicable effective
date as to the Registration Statement and any amendment thereto and as of
the applicable filing date as to the Prospectus and any amendment or
supplement thereto, contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make
the statements therein not misleading in light of the circumstances under
which they were made; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in reliance
upon and in conformity with information furnished in writing to the Company
by any Underwriter through the Representatives expressly for use in the
Prospectus as amended or supplemented relating to such Preferred Shares;
(iii) Form S-3 Eligibility. The Company meets the requirements for use
of Form S-3 under the 1933 Act and has filed with the Commission one or
more registration statements on Form S-3, including a prospectus relating
to the Preferred Shares and other securities of the Company for the
registration of such securities under the 1933 Act and such registration
statements have been declared effective by the Commission;
(iv) No Material Adverse Change in Business. Neither the Company nor
any of its subsidiaries has sustained since the date of the latest audited
financial statements included or incorporated by reference in the
Prospectus any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or
from any labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Prospectus; and, since
the respective dates as of which information is given in the Registration
Statement and the Prospectus, except as otherwise stated therein, there has
not been any change in the capitalization or long-term debt of the Company
or any material adverse change in or affecting the condition, financial or
otherwise, or the earnings or business affairs (a "Material Adverse
3
Effect") of the Company and its subsidiaries taken as a whole, otherwise
than as set forth or contemplated in the Prospectus;
(v) Good Standing of the Company. The Company is a real estate
investment trust duly formed and existing under the laws of the State of
Maryland in good standing with the State Department of Assessments and
Taxation of Maryland ("SDAT"), with trust power to own, lease and operate
its properties and to conduct its business substantially as described in
the Prospectus and to enter into and perform its obligations under this
Agreement; and the Company is duly qualified as a foreign organization to
transact business and is in good standing in each jurisdiction in which
such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure to
so qualify would not have a Material Adverse Effect on the Company and its
subsidiaries taken as a whole;
(vi) Qualification as a REIT. The Company is organized and, commencing
with its taxable year ended December 31, 1993, has operated in conformity
with the requirements for qualification as a real estate investment trust
(a "REIT") under the Internal Revenue Code of 1986, as amended (the
"Code"), and currently intends to operate in a manner which allows the
Company to continue to meet the requirements for taxation as a REIT under
the Code;
(vii) Good Standing of the Operating Partnership. Vornado Realty L.P.
(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
Delaware and has partnership power and authority to own, lease and operate
its properties and to conduct its business substantially as described in
the Prospectus and is duly qualified as a foreign organization to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure to so qualify
would not have a Material Adverse Effect on the Operating Partnership; all
of the issued and outstanding limited partnership interests in the
Operating Partnership have been duly authorized and validly issued and are
fully paid and (except for the general partner interest) nonassessable; the
Company is the sole general partner of, and owned an approximately 88.4%
common limited partnership interest in, the Operating Partnership as of
June 30, 2005;
(viii) Good Standing of Subsidiaries. Each subsidiary of the Company,
other than the Operating Partnership, which is covered in paragraph (vii)
above, has been duly formed and is validly existing in good standing under
the laws of the jurisdiction of its organization and has power and
authority to own, lease and operate its properties and to conduct its
business substantially as described in the Prospectus and is duly qualified
as a foreign organization to transact business and is in good standing in
each jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of business,
except where the failure to so qualify would not have a Material Adverse
Effect on the Company and its subsidiaries taken as a whole; all of the
issued and outstanding capital stock of each such subsidiary has been duly
authorized and validly issued, is fully paid and nonassessable and is owned
by the Company or the Operating Partnership, directly or through
subsidiaries, free and clear of any security
4
interest, mortgage, pledge, lien, encumbrance, claim or equity, except as
would not have a Material Adverse Effect on the Company and its
subsidiaries taken as a whole and except as disclosed in the Prospectus;
(ix) Capitalization. The Company has an authorized capitalization as
set forth in its Quarterly Report on Form 10-Q for the quarterly period
ended June 30, 2005 (except for (a) subsequent issuances, if any, pursuant
to this Agreement or pursuant to the terms of reservations, agreements or
employee benefit plans, including, without limitation, dividend
reinvestment plans and employee or director stock option plans or as
otherwise described in the Prospectus or the exercise of options
outstanding on the date hereof and (b) subsequent amendments to its
Declaration of Trust);
(x) Authorization and Description of the Preferred Shares. The
Preferred Shares have been duly authorized, and, when the Initial
Securities are issued and delivered pursuant to this Agreement and, in the
case of any Option Securities, pursuant to over-allotment options with
respect to such Preferred Shares, such Securities will be duly and validly
issued and fully paid and nonassessable; the Preferred Shares conform to
the description thereof contained in the Prospectus under the caption
"Description of Shares of Beneficial Interest of Vornado Realty Trust" and
the Securities will conform to the description thereof contained in the
Prospectus Supplement under the caption "Description of the Series I
Preferred Shares" and such description will conform to the rights set forth
in the Articles Supplementary designating the Securities in each case in
all material respects;
(xi) Absence of Conflicts and Defaults. The issue and sale of the
Preferred Shares and each over-allotment option, if any, and the compliance
by the Company with all of the provisions of this Agreement and each
over-allotment option, if any, and the consummation of the transactions
contemplated herein have been duly authorized by all necessary trust action
of the Company and, except as would not have a Material Adverse Effect on
the Company and its subsidiaries taken as a whole, will not conflict with
or result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company or any of
its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, nor will such action result
in any violation of the provisions of the Amended and Restated Declaration
of Trust, as amended, or Bylaws of the Company or (except as where such
violation would not cause a Material Adverse Effect on the Company and its
subsidiaries taken as a whole or any adverse effect on the Company's
ability to consummate the transactions contemplated hereby) any statute or
any order, rule or regulation of any court or governmental authority,
agency or body having jurisdiction over the Company or any of its
properties; and no consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the issue and sale of the Preferred Shares or the consummation
by the Company of the transactions contemplated by this Agreement or any
over-allotment option, except such as have been, or will have been prior to
the Closing Time and each Date of Delivery (as defined in Section 2(b)
hereof), obtained under the 1933 Act and the 1933 Act Regulations and such
consents, approvals,
5
authorizations, registrations or qualifications as may be required under
state securities or Blue Sky laws in connection with the purchase and
distribution of the Preferred Shares by the Underwriters;
(xii) Authorization of this Underwriting Agreement. This Agreement has
been duly authorized by all necessary trust action of the Company and all
necessary partnership action of the Operating Partnership and has been
executed and delivered by the Company and the Operating Partnership;
(xiii) Absence of Proceedings. Other than as set forth in the
Prospectus, there are no legal or governmental proceedings pending to which
the Company or any of its subsidiaries is a party or of which any property
of the Company or any of its subsidiaries is the subject, which, if
determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a Material Adverse Effect on the
Company and its subsidiaries taken as a whole; and, to the best of the
Company's knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others; and there are no
contracts or documents of the Company or any of its subsidiaries which are
required to be filed as exhibits to the Registration Statement by the 1933
Act or the 1933 Act Regulations which have not been so filed, except where
the failure to file such exhibit would not amount to an untrue statement of
a material fact or omission of a statement of a material fact required to
make the statements in the Registration Statement not misleading in light
of the circumstances under which they were made;
(xiv) No Violations or Defaults. Neither the Company nor any of its
subsidiaries is in violation of its organizational documents or bylaws or
in default in the performance or observance of any material obligation,
agreement, covenant or condition contained in any material indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or
instrument to which it is a party or by which it or any of its properties
or assets may be bound, which default would have a Material Adverse Effect
on the Company and its subsidiaries taken as a whole;
(xv) Accuracy of Certain Descriptions. The statements set forth in the
Prospectus under the captions "Description of Shares of Beneficial Interest
of Vornado Realty Trust," "Description of the Series I Preferred Shares,"
"Federal Income Tax Considerations," "Plan of Distribution" and
"Underwriting," insofar as they purport to describe the provisions of the
laws and documents referred to therein, are accurate, complete and fair
summaries in all material respects;
(xvi) Investment Company Act. Neither the Company nor the Operating
Partnership is subject to registration as an "investment company" under the
Investment Company Act;
(xvii) Independent Public Accountants. Deloitte & Touche LLP, who have
certified certain financial statements and financial statement schedules of
the Company and its subsidiaries included or incorporated by reference in
the Registration Statement,
6
are an independent public accounting firm with respect to the Company as
required by the 1933 Act and the 1933 Act Regulations;
(xviii) Financial Statements. The financial statements and the
financial statement schedules of the Company and its consolidated
subsidiaries included or incorporated by reference in the Registration
Statement and the Prospectus present fairly, in all material respects, the
financial position of the Company and its consolidated subsidiaries as at
the dates indicated, the results of their operations for the periods
specified and the information required to be stated therein; and said
financial statements and financial statement schedules have been prepared
in conformity with generally accepted accounting principles applied on a
consistent basis throughout the periods involved. The selected financial
data included or incorporated by reference in the Prospectus present
fairly, in all material respects, the information shown therein and have
been compiled on a basis consistent with that of the consolidated financial
statements included or incorporated by reference in the Registration
Statement. Any pro forma financial statements and other pro forma financial
information included in the Registration Statement and the Prospectus
comply in all material respects with the applicable requirements of Rule
11-02 of Regulation S-X of the Commission and present fairly the
information shown therein; the pro forma adjustments, if any, have been
properly applied to the historical amounts in the compilation of such
statements, and in the opinion of the Company, the assumptions used in the
preparation thereof are reasonable and the adjustments used therein are
appropriate to give effect to the transactions or circumstances referred to
therein;
(xix) Title to Property. Except as otherwise disclosed in the
Prospectus, and except as would not have a Material Adverse Effect on the
Company and its subsidiaries taken as a whole: (i) each of the Company and
its subsidiaries has good and marketable title to all properties and assets
described in the Prospectus as owned by such party; (ii) all of the leases
under which the Company or any of its subsidiaries holds or uses real
property or assets as a lessee are in full force and effect, and neither
the Company nor any of its subsidiaries is in material 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; (iii) all liens, charges, encumbrances, claims, or
restrictions on or affecting the properties and assets of the Company or
any of its subsidiaries that are required to be disclosed in the Prospectus
are disclosed therein; (iv) neither the Company, any of its subsidiaries
nor, to the knowledge of the Company, any lessee of any portion of any such
party's properties is in default under any of the leases pursuant to which
the Company or any of its subsidiaries leases its properties to third
parties and neither the Company nor any of its subsidiaries knows of any
event which, but for the passage of time or the giving of notice, or both,
would constitute a default under any of such leases; (v) no tenant under
any lease pursuant to which the Company or any of its subsidiaries leases
its properties has an option or right of first refusal to purchase the
premises leased thereunder; (vi) to the best of its knowledge, each of the
properties of the Company or any of its subsidiaries complies with all
applicable codes and zoning laws and regulations; and (vii) neither the
Company nor any of its subsidiaries has knowledge of any pending or
threatened
7
condemnation, zoning change or other proceeding or action that will in any
manner affect the size or use of, improvements or construction on or access
to the properties of the Company or any of its subsidiaries;
(xx) Environmental Laws. Except as otherwise disclosed in the
Prospectus, or as is not reasonably likely to have a Material Adverse
Effect on the Company and its subsidiaries taken as a whole:
A. each of the Company and its subsidiaries is in compliance with
all applicable laws relating to pollution or the discharge of
materials into the environment, including common law standards of
conduct relating to damage to property or injury to persons caused by
such materials ("Environmental Laws"), each of the Company and its
subsidiaries currently holds all governmental authorizations required
under Environmental Laws in order to conduct their businesses as
described in the Prospectus, and neither the Company nor any of its
subsidiaries has any basis to expect that any such governmental
authorization will be modified, suspended or revoked, or cannot be
renewed in the ordinary course of business;
B. there are no past or present actions, activities,
circumstances, conditions, events or incidents, including, without
limitation, the release, threatened release, or disposal of any
material (including radiation and noise), that could reasonably be
expected to form the basis of any claim (whether by a governmental
authority or other person or entity) under Environmental Laws for
cleanup costs, damages, penalties, fines, or otherwise, against any of
the Company or its subsidiaries, or against any person or entity whose
liability for such claim may have been retained by any of the Company
or its subsidiaries, whether by contract or law; and
C. the Company and its subsidiaries have made available to the
Representatives or counsel for the Underwriters all material studies,
reports, assessments, audits and other information in their possession
or control relating to any pollution or release, threatened release or
disposal of materials regulated under Environmental Laws on, at,
under, from or transported from any of their currently or formerly
owned, leased or operated properties, including, without limitation,
all information relating to underground storage tanks and asbestos
containing materials.
(xxi) No Stabilizing Actions. Except as in compliance with Regulation
M, neither the Company nor the Operating Partnership has taken, and neither
the Company nor the Operating Partnership will take, directly or
indirectly, any action designed to, or that might be reasonably expected
to, cause or result in stabilization or manipulation of the price of the
Preferred Shares.
(xxii) No Fiduciary Duty. The Company hereby acknowledges that (a)
each Underwriter is acting as principal and not as an agent or fiduciary of
the Company and (b) the Company's engagement of the Underwriters in
connection with the Offering is as
8
independent contractors and not in any other capacity. Furthermore, the
Company agrees that it is solely responsible for making its own judgments
in connection with the Offering (irrespective of whether any Underwriter
has advised or is currently advising the Company on related or other
matters).
(b) Officers' Certificates. Any certificate signed by any officer of the
Company or any of its subsidiaries delivered to the Representatives or to
counsel for the Underwriters shall be deemed a representation and warranty by
the Company to each Underwriter as to the matters covered thereby.
SECTION 2. Sale and Delivery to the Underwriters; 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
Company agrees to sell to each Underwriter, severally and not jointly, and each
Underwriter, severally and not jointly, agrees to purchase from the Company, at
the price per share set forth in Schedule B, the number of Initial Securities
set forth in Schedule A opposite the name of such Underwriters, plus any
additional number of Initial Securities which such Underwriter may become
obligated to purchase pursuant to the provisions of Section 10 hereof.
(b) Option Securities. In addition, on the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company hereby grants an option to the Underwriters, severally and
not jointly, to purchase up to an additional 1,050,000 Preferred Shares at the
price per share set forth in Schedule B. The option hereby granted will expire
30 days after the date hereof and may be exercised in whole or in part from time
to time only for the purpose of covering over-allotments which may be made in
connection with the offering and distribution of the Initial Securities upon
notice by the Representative to the Company setting forth the number of Option
Securities as to which the several Underwriters are then exercising the option
and the time and date of payment and delivery for such Option Securities. Any
such time and date of delivery for the Option Securities (a "Date of Delivery")
shall be determined by Morgan Stanley on behalf of the Underwriters, but shall
not be later than seven full business days after the exercise of said option,
nor in any event prior to the Closing Time, as hereinafter defined. If the
option is exercised as to all or any portion of the Option Securities, each of
the Underwriters, acting severally and not jointly, will purchase that
proportion of the total number of Option Securities then being purchased which
the number of Initial Securities set forth in Schedule A opposite the name of
such Underwriter bears to the total number of Initial Securities, subject in
each case to such adjustments as Morgan Stanley on behalf of the Underwriters in
its discretion shall make to eliminate any sales or purchases of fractional
sales.
(c) Payment. Payment of the purchase price for, and delivery through the
facilities of The Depository Trust Company ("DTC") of certificates for, the
Securities shall be made at the offices of Skadden, Arps, Slate, Meagher & Flom
LLP, Four Times Square, New York, New York 10036 or at such other place as shall
be agreed upon by Morgan Stanley on behalf of the Underwriters and the Company,
at 9:00 A.M. (Eastern time) on the sixth business day after the date hereof, or
such other time not later than ten business days after such date as shall be
agreed
9
upon by Morgan Stanley on behalf of the Underwriters and the Company (such time
and date of payment and delivery being herein called "Closing Time").
In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option Securities shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by Morgan Stanley on
behalf of the Underwriters and the Company, on each Date of Delivery as
specified in the notice from Morgan Stanley to the Company.
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery
through the facilities of DTC to the Representatives for the respective accounts
of the Underwriters of certificates for the Securities to be purchased by them.
(d) Denominations; Registration. Certificates for the Initial Securities
and the Option Securities, if any, shall be in such denominations and registered
in such names as the Underwriter may request in writing at least one full
business day before the Closing Time or the relevant Date of Delivery, as the
case may be. The certificates for the Initial Securities and the Option
Securities, if any, will be made available for examination and packaging by the
Representative in The City of New York not later than 10:00 A.M. (Eastern time)
on the business day prior to the Closing Time or the relevant Date of Delivery,
as the case may be.
(e) Offering by the Underwriters. It is understood that each Underwriter
proposes to offer the Securities for sale to the public as set forth in the
Prospectus, and each Underwriter hereby represents and warrants to, and agrees
with the Company that it will offer and sell the Securities upon the terms and
conditions set forth in Annex I to this Agreement.
SECTION 3. Covenants of the Company. The Company covenants with each
Underwriter as follows:
(a) Delivery of Registration Statements. The Company has furnished or will
deliver to the Representatives and counsel for the Underwriters, without charge,
copies of the Registration Statement as originally filed and of each amendment
thereto (including exhibits filed therewith or incorporated by reference therein
and documents incorporated or deemed to be incorporated by reference therein)
and copies of all consents and certificates of experts. The copies of the
Registration Statement and each amendment thereto furnished to the
Representatives will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T of the Commission.
During the period when the Prospectus is required by the 1933 Act to be
delivered in connection with sales of the Securities, the Company will inform
the Representatives of its intention to file any amendment to the Registration
Statement or any supplement to the Prospectus; will furnish the Representatives
with copies of any such amendment or supplement a reasonable time in advance of
filing; and will not file any such amendment or supplement in a form to which
the Representatives or counsel to the Underwriters shall reasonably object (it
10
being understood that the terms "amendment" and "supplement" do not include
documents filed by the Company pursuant to the 1934 Act).
(b) Delivery of Prospectus. The Company has delivered to each Underwriter,
without charge, as many copies of each preliminary prospectus as such
Underwriter reasonably requested, and the Company hereby consents to the use of
such copies for purposes permitted by the 1933 Act. The Company will furnish to
each Underwriter, without charge, during the period when the Prospectus is
required to be delivered under the 1933 Act or the 1934 Act, such number of
copies of the Prospectus (as amended or supplemented) as such Underwriter may
reasonably request. The Prospectus and any amendments or supplements thereto
furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR, except
to the extent permitted by Regulation S-T of the Commission.
(c) Continued Compliance with Securities Laws. The Company will comply with
the 1933 Act and the 1933 Act Regulations and the 1934 Act and the rules and
regulations of the Commission thereunder (the "1934 Act Regulations"), so as to
permit the completion of the distribution of the Securities as contemplated in
this Agreement and in the Prospectus, except where the failure to comply will
not adversely affect the distribution of the Securities. If at any time when a
prospectus is required by the 1933 Act to be delivered in connection with sales
of the Securities, any event shall occur or condition shall exist as a result of
which it is necessary for the Company to amend the Registration Statement or
amend or supplement the Prospectus in order that the Prospectus will 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 existing at the time it is delivered to a purchaser, or if it
shall be necessary at any such time to amend the Registration Statement or amend
or supplement the Prospectus in order to comply with the requirements of the
1933 Act or the 1933 Act Regulations, the Company will promptly prepare and file
with the Commission, such amendment or supplement as may be necessary to correct
such statement or omission or to make the Registration Statement or the
Prospectus comply with such requirements, and the Company will furnish to the
Underwriters such number of copies of such amendment or supplement as the
Underwriters may reasonably request.
(d) Rule 158. The Company will timely file such reports pursuant to the
1934 Act as are necessary in order to make generally available to its security
holders as soon as practicable an earnings statement for the purposes of, and to
provide the benefits contemplated by, the last paragraph of Section 11(a) of the
1933 Act.
(e) Use of Proceeds. The Company will use the net proceeds received by it
from the sale of the Securities in the manner specified in the Prospectus under
"Use of Proceeds."
(f) Listing. The Company will use its best efforts to effect the listing of
the Securities on the New York Stock Exchange.
SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay all expenses incident to the performance
of its obligations under this Agreement, including (i) the preparation, printing
and filing of the
11
Registration Statement (including financial statements and exhibits) as
originally filed and of each amendment thereto, (ii) the preparation and
printing of this Agreement, any Agreement among the Underwriters and such other
documents as may be required in connection with the offering, purchase, sale,
issuance or delivery of the Securities, (iii) the preparation, issuance and
delivery of the certificates for the Securities to DTC or its designated
custodian or the Underwriters, including any stock or other transfer taxes and
any stamp or other duties payable upon the sale, issuance or delivery of the
Securities to the Underwriters, (iv) the fees and disbursements of the Company's
counsel and accountants, (v) the qualification, if any, of the Securities under
state securities laws, including filing fees and the reasonable fees and
disbursements of counsel for the Underwriters in connection therewith and in
connection with the preparation of a Blue Sky Survey and any supplement thereto,
if any, (vi) the printing and delivery to the Underwriters of copies of each
preliminary prospectus and of the Prospectus and any amendments or supplements
thereto, (vii) the fees and expenses of any transfer agent or registrar for the
Securities, (viii) the filing fees incident to, and the reasonable fees and
disbursements of counsel to the Underwriters in connection with, the review, if
any, by the National Association of Securities Dealers, Inc. (the "NASD") of the
terms of the sale of the Securities and (ix) the fees and expenses incurred in
connection with the listing of the Securities on the New York Stock Exchange. It
is understood, however, that, except as provided in this Section and Section 6
hereof, each Underwriter will pay all of its own costs and expenses, including
the fees of its counsel, stock or other transfer taxes on resale of any of the
Securities by it, and any advertising expenses connected with any offers of the
Securities such Underwriter may make.
(b) Termination of Agreement. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5 or Section
9(a)(i) hereof, the Company shall reimburse the Underwriters for all reasonable
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The obligations of the
Underwriters hereunder are subject to the accuracy of the representations and
warranties of the Company contained in Section 1 hereof or in certificates of
any officer of the Company or any subsidiary of the Company delivered pursuant
to the provisions hereof, to the performance by the Company of its covenants and
other obligations hereunder, and to the following further conditions:
(a) Effectiveness of Registration Statement. No stop order suspending the
effectiveness of the Registration Statement shall have been issued and shall
continue to be in effect under the 1933 Act or proceedings therefore initiated
or threatened by the Commission, and any request on the part of the Commission
for additional information shall have been complied with to the reasonable
satisfaction of counsel to the Underwriters. The Prospectus shall have been
filed with the Commission pursuant to Rule 424(b) within the applicable time
period prescribed for such filing by the 1933 Act Regulations.
(b) Opinions of Counsel for the Company. At Closing Time, the
Representatives shall have received the opinion and letter, dated as of Closing
Time, of Sullivan & Cromwell LLP, counsel for the Company, in form and substance
reasonably satisfactory to counsel for the
12
Underwriters, together with signed or reproduced copies of such opinion and
letter for each of the other Underwriters, to the effect set forth in Exhibit A
hereto.
(c) Opinion of Special Maryland Counsel for the Company. At Closing Time,
the Representatives shall have received the opinion, dated as of Closing Time,
of Venable, LLP, special Maryland counsel for the Company, in form and substance
reasonably satisfactory to counsel for the Underwriters, together with signed or
reproduced copies of such letter for each of the other Underwriters, to the
effect set forth in Exhibit B hereto.
(d) Opinion of Counsel for the Underwriters. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of Closing
Time, of Skadden, Arps, Slate, Meagher & Flom LLP, counsel for the Underwriters,
together with signed or reproduced copies of such letter for each of the other
Underwriters, with respect to certain legal matters relating to this Agreement
and such other related matters as the Underwriters may request. In giving such
opinion such counsel may state that, insofar as such opinion involves factual
matters, they have relied, to the extent they deem proper, upon certificates of
officers of the Company and its subsidiaries and certificates of public
officials.
(e) Officers' Certificate. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Prospectus, any material adverse change in or affecting the
condition, financial or otherwise, or the earnings or business affairs of the
Company and its subsidiaries taken as a whole, whether or not arising in the
ordinary course of business, and the Representatives shall have received a
certificate of the Chairman or President and the Executive Vice President -
Finance and Administration, Chief Financial Officer of the Company, dated as of
Closing Time, to the effect that (i) there has been no such material adverse
change, (ii) the representations and warranties in Section 1(a) hereof are true
and correct with the same force and effect as though expressly made at and as of
Closing Time, (iii) the Company has complied with all agreements and satisfied
all conditions on its part to be performed or satisfied at or prior to Closing
Time, and (iv) no stop order suspending the effectiveness of the Registration
Statement has been issued and shall be in effect and no proceedings for that
purpose have been instituted or, to the best of such officers' knowledge, are
pending or are contemplated by the Commission.
(f) Accountants' Comfort Letter. At the time of the execution of this
Agreement, the Representatives shall have received from Deloitte & Touche LLP a
letter dated such date, in form and substance satisfactory to the
Representatives, together with signed or reproduced copies of such letter for
each of the other Underwriters, containing statements and information of the
type ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information contained
in the Registration Statement and the Prospectus.
(g) Bring-down Comfort Letter. At Closing Time, the Representatives shall
have received from Deloitte & Touche LLP a letter, dated as of Closing Time, to
the effect that they reaffirm the statements made in the letter furnished
pursuant to subsection (f) of this Section, except that the specified date
referred to shall be a date not more than three business days prior to Closing
Time.
13
(h) Maintenance of Rating. At Closing Time, the Securities shall be rated
at least Baa3 by Moody's Investor's Service and BBB- by Standard & Poor's
Ratings Group, a division of McGraw-Hill, Inc.; and since the date of this
Agreement, there shall not have occurred a downgrading in the rating assigned to
the Securities or any of the Company's other securities by any "nationally
recognized statistical rating agency," as that term is defined by the Commission
for purposes of Rule 436(g)(2) under the 1933 Act, and no such organization
shall have publicly announced that it has under surveillance or review its
rating of the Securities or any of the Company's other securities.
(i) Approval of Listing. At Closing Time, either (i) the Securities shall
have been approved for listing on the New York Stock Exchange, subject only to
official notice of issuance, or (ii) if trading on the New York Stock Exchange
is to be delayed, the Company shall have filed an application for listing of the
Securities on the New York Stock Exchange.
(j) Conditions to Purchase of Option Securities. In the event that the
Underwriters exercise their option provided in Section 2(b) hereof to purchase
all or any portion of the Option Securities, the representations and warranties
of the Company contained herein and the statements in any certificates furnished
by the Company or any subsidiary of the Company hereunder shall be true and
correct as of each Date of Delivery and, at the relevant Date of Delivery, the
Representative shall have received:
(i) Officers' Certificate. A certificate, dated such Date of Delivery,
of the Chairman or President and of the Executive Vice President - Finance
and Administration, Chief Financial Officer of the Company confirming that
the certificate delivered at the Closing Time pursuant to Section 5(e)
hereof remains true and correct as of such Date of Delivery.
(ii) Opinions of Counsel for the Company. The opinion and letter of
Sullivan & Cromwell LLP, counsel for the Company, together with the opinion
of Venable, LLP, special Maryland counsel for the Company, each in form and
substance reasonably satisfactory to counsel for the Underwriters, 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 the opinions
required by Sections 5(b) and 5(c) hereof.
(iii) Opinion of Counsel for the Underwriter. The opinion of Skadden,
Arps, Slate, Meagher & Flom LLP, counsel for the Underwriters, 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 the opinion required
by Section 5(d) hereof.
(iv) Bring-down Comfort Letter. A letter from Deloitte & Touche LLP,
in form and substance satisfactory to the Representative and dated such
Date of Delivery, substantially in the same form and substance as the
letter furnished to the Representative pursuant to Section 5(g) hereof,
except that the "specified date" in the letter furnished pursuant to this
paragraph shall be a date not more than three days prior to such Date of
Delivery.
14
(v) No Downgrading. Subsequent to the date of this Agreement, no
downgrading shall have occurred in the rating accorded the Securities or of
any of the Company's other securities by any "nationally recognized
statistical rating organization," as that term is defined by the Commission
for purposes of Rule 436(g)(2) under the 1933 Act, and no such organization
shall have publicly announced that it has under surveillance or review its
ratings of any of the Company's securities.
(k) Additional Documents. At Closing Time and at each Date of Delivery,
counsel for the Underwriters 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 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 Company in connection with the issuance and sale of the Securities
as herein contemplated shall be reasonably satisfactory in form and substance to
the Representatives and counsel for the Underwriters.
(l) Termination of Agreement. If any condition specified in this Section
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 a Date of Delivery which is after the Closing Time, the obligations of the
Underwriters to purchase the relevant Option Securities, may be terminated by
the Representatives by notice to the Company at any time at or prior to Closing
Time or such Date of Delivery, as the case may be, 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, 6, 7 and 8 shall survive any such termination and
remain in full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of Underwriters. The Company and the Operating
Partnership each agree to indemnify and hold harmless each Underwriter, their
respective officers or directors, and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 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 Registration Statement
(or any amendment thereto), or the omission or alleged omission therefrom
of a material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue statement or
alleged untrue statement of a material fact included in any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto), or
the omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(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,
15
or any such alleged untrue statement or omission; provided that (subject to
Section 6(d) below) any such settlement is effected with the written
consent of the Company; and
(iii) against any and all expense whatsoever, as incurred (including,
subject to Section 6(c) hereof, the reasonable fees and disbursements of
counsel chosen by the Representatives), reasonably incurred in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced
or threatened, or any claim whatsoever based upon any such untrue statement
or omission, or any such alleged untrue statement or omission, to the
extent that any such expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through the Representatives expressly for use in the Registration
Statement (or any amendment thereto), or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto); and provided, further, that
the Company shall not be liable to any Underwriter under the indemnity agreement
in this subsection (a) to the extent that any such loss, claim, damage or
liability of such Underwriter results from the fact that such Underwriter sold
Securities to a person to whom there was not sent or given, at or prior to the
written confirmation of such sale, a copy of the Prospectus or the Prospectus as
then amended or supplemented (excluding documents incorporated by reference) in
any case where such delivery is required by the 1933 Act and the untrue
statement or omission of a material fact contained in the Prospectus, any such
amendment or supplement thereto or any such other document was corrected in the
Prospectus or the Prospectus as then amended or supplemented if the Company has
furnished prior to such confirmation sufficient copies thereof to such
Underwriter.
(b) Indemnification of Company, Operating Partnership, Trustees, Partners
and Officers. Each Underwriter severally agrees to indemnify and hold harmless
the Company, the Operating Partnership, their respective trustees, partners or
officers, including without limitation, each of the officers who signed the
Registration Statement, and each person, if any, who controls the Company or the
Operating Partnership within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act, against any and all loss, liability, claim, damage
and expense described in the indemnity contained in subsection (a) of this
Section, as incurred, but only with respect to untrue statements or omissions,
or alleged untrue statements or omissions, made in the Registration Statement
(or any amendment thereto), or any preliminary prospectus or the Prospectus (or
any amendment thereto) in reliance upon and in conformity with written
information furnished to the Company or the Operating Partnership by such
Underwriter through the Representatives expressly for use in the Registration
Statement (or any amendment thereto) or such preliminary prospectus or the
Prospectus (or any amendment thereto).
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from
16
any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by the Representatives,
and, in the case of parties indemnified pursuant to Section 6(b) above, counsel
to the indemnified parties shall be selected by the Company. An indemnifying
party may participate at its own expense in the defense of any such action;
provided, however, that counsel to the indemnifying party shall not (except with
the consent of the indemnified party) also be counsel to the indemnified party.
In no event shall the indemnifying parties be liable for fees and expenses of
more than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel in accordance with Section
6(a)(iii) hereof, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 6(a)(ii) effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into, (iii) such
indemnifying party, if it has not theretofore paid such reimbursement, is
requested again to pay reimbursement at least five, but not more than ten, days
prior to such settlement being entered into, and (iv) such indemnifying party
shall not have reimbursed such indemnified party in accordance with such request
prior to the date of such settlement.
SECTION 7. Contribution. If the indemnification provided for in Section 6
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Underwriters 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 Company on the one hand and of the Underwriters 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.
17
The relative benefits received by the Company on the one hand and the
Underwriters 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 Company
and the total underwriting discount received by the Underwriters, in each case
as set forth on the cover of the Prospectus Supplement, bear to the aggregate
initial public offering price of the Securities as set forth on such cover.
The relative fault of the Company on the one hand and the Underwriters on
the other hand shall be determined by reference to, among other things, whether
any such untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the
Company or by the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each officer or director, as the case may
be, of each Underwriter and each person, if any, who controls an Underwriter
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
shall have the same rights to contribution as such Underwriter, and each
trustee, partner or officer, as the case may be, of the Company or the Operating
Partnership, including without limitation each officer who signed the
Registration Statement, and each person, if any, who controls the Company or the
Operating Partnership within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as the
Company or the Operating Partnership, as the case may be.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company or any of its subsidiaries submitted
pursuant hereto, shall remain
18
operative and in full force and effect, regardless of any investigation made by
or on behalf of the Underwriters or any controlling person of an Underwriter, or
by or on behalf of the Company or the Operating Partnership or any officer or
trustee or partner or controlling person of the Company or the Operating
Partnership, and shall survive delivery of the Securities to the Underwriters.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Representatives may terminate this Agreement,
by notice to the Company, at any time at or prior to Closing Time (i) if there
has been, since the time of execution of this Agreement or since the respective
dates as of which information is given in the Prospectus, any material adverse
change in or affecting the condition, financial or otherwise, or the earnings or
business affairs of the Company and its subsidiaries taken as a whole, whether
or not arising in the ordinary course of business, or (ii) if there has occurred
any material adverse change in the financial markets in the United States, or
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 Representatives,
impracticable or inadvisable to commence or continue the offering of the
Securities to the public 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 Commission or the New York Stock Exchange, or if
trading generally on the American Stock Exchange or the New York Stock Exchange
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 such exchanges or by order of the Commission or any other governmental
authority, or (iv) if a banking moratorium has been declared by either Federal
or New York authorities or (v) there shall have been any downgrading in the
rating assigned to the Securities or any of the Company's other securities by
any "nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Act) or any notice given of any intended or
potential downgrading in any such rating.
(b) Liabilities. If this Agreement is terminated pursuant to this Section,
such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof, and provided further that Sections 1, 6,
7 and 8 shall survive such termination and remain in full force and effect.
SECTION 10. Default by One or More of the Underwriters.
(a) If any Underwriter shall default in its obligation to purchase the
Securities which it has agreed to purchase under this Agreement, the
Representatives may in their discretion arrange for themselves or another party
or other parties to purchase such Securities on the terms contained herein. If
within thirty-six hours after such default by any Underwriter the
Representatives do not arrange for the purchase of such Securities, then the
Company shall be entitled to a further period of thirty-six hours within which
to procure another party or other parties satisfactory to the Representatives to
purchase such Securities on such terms. In the event that, within the respective
prescribed periods, the Representatives notify the Company that they has so
arranged for the purchase of such Securities, or the Company notifies the
Representatives
19
that it has so arranged for the purchase of such Securities, the Representatives
or the Company shall have the right to postpone the Closing Time for a period of
not more than seven days, in order to effect whatever changes may thereby be
made necessary in the Registration Statement or the Prospectus, or in any other
documents or arrangements, and the Company agrees to file promptly any
amendments or supplements to the Registration Statement or the Prospectus which
in the opinion of the Representatives may thereby be made necessary. The term
"Underwriter" as used in the Agreement shall include any person substituted
under this Section with like effect as if such person had originally been a
party to this Agreement.
(b) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Underwriter or Underwriters by the Representatives or
the Company, or both, as provided in subsection (a) above, the number of
Securities which remains unpurchased does not exceed one-tenth of the number of
the Securities to be purchased on such date, then the Company shall have the
right to require each non-defaulting Underwriter to purchase the full amount of
Securities which such Underwriter agreed to purchase under this Agreement and,
in addition, to require each non-defaulting Underwriter to purchase its pro rata
share (based on the number of Securities which such Underwriter agreed to
purchase under this Agreement) of the Securities of such defaulting Underwriter
or Underwriters for which such arrangements have not been made; but nothing
herein shall relieve a defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Underwriter or Underwriters by the Representatives or
the Company, or both, as provided in subsection (a) above, the number of
Securities which remains unpurchased exceeds one-tenth of the number of the
Securities to be purchased on such date, or if the Company shall not exercise
the right described in subsection (b) above to require non-defaulting
Underwriters to purchase Securities of a defaulting Underwriter or Underwriters,
then this Agreement shall thereupon terminate, without liability on the party of
any non-defaulting Underwriter or the Company, except for the expenses to be
borne by the Company and the Underwriters provided in Section 4 hereof and the
indemnity and contribution agreements in Sections 6 and 7 hereof; but nothing
herein shall relieve a defaulting Underwriter from liability for its default.
SECTION 11. 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
Underwriters shall be directed to Morgan Stanley & Co. Incorporated, 1585
Broadway, 29th Floor, New York, New York 10036, and by facsimile to (212)
507-6954, Attention: Investment Banking Information Center; and notices to the
Company and the Operating Partnership shall be directed to it at 888 Seventh
Avenue, New York, New York 10019, attention of the Executive Vice President -
Finance and Administration, Chief Financial Officer.
SECTION 12. Parties. This Agreement shall inure to the benefit of and be
binding upon the Underwriters, the Company, the Operating Partnership 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 Underwriters, the Company, the Operating Partnership and their
respective successors and the controlling persons and officers, trustees and
partners referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained.
20
This Agreement and all conditions and provisions hereof are intended to be for
the sole and exclusive benefit of the Underwriters, the Company, the Operating
Partnership and their respective successors, and said controlling persons and
officers, trustees and partners and their heirs and legal representatives, and
for the benefit of no other person, firm or corporation. No purchaser of
Securities from any Underwriter shall be deemed to be a successor by reason
merely of such purchase.
SECTION 13. Governing Law and Time. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED TIMES
OF DAY REFER TO NEW YORK CITY TIME.
SECTION 14. Effect of Headings. The Article and Section headings herein and
the Table of Contents are for convenience only and shall not affect the
construction hereof.
21
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement among
the Underwriters, the Company and the Operating Partnership in accordance with
its terms.
Very truly yours,
VORNADO REALTY TRUST
By: /s/ Michael D. Fascitelli
------------------------------------
Name: Michael D. Fascitelli
Title: President
VORNADO REALTY L.P.
By: Vornado Realty Trust,
its General Partner
By: /s/ Michael D. Fascitelli
------------------------------------
Name: Michael D. Fascitelli
Title: President
CONFIRMED AND ACCEPTED,
as of the date first above written.
MORGAN STANLEY & CO. INCORPORATED
UBS SECURITIES LLC
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
For themselves and as Representatives
of the other Underwriters named in
Schedule A hereto.
BY: MORGAN STANLEY & CO. INCORPORATED
By: /s/ Michael Fusco
--------------------------------
Name: Michael Fusco
Title: Executive Director
SCHEDULE A
Name of Underwriters Number of Initial Securities
-------------------- ----------------------------
Morgan Stanley & Co. Incorporated 883,750
UBS Securities LLC 883,750
Merrill Lynch, Pierce, Fenner & Smith
Incorporated 883,750
Bear Stearns & Co. Inc. 883,750
Citigroup Capital Markets Inc. 883,750
Wachovia Capital Markets, LLC 883,750
Deutsche Bank Securities Inc. 350,000
JPMorgan Securities Inc. 350,000
A.G. Edwards & Sons, Inc. 52,500
Banc of America Securities LLC 52,500
BB&T Capital Markets, a division of Scott &
Stringfellow, Inc. 52,500
RBC Dain Rauscher 52,500
H&R Block Financial Advisors, Inc. 52,500
HSBC Securities (USA) Inc. 52,500
KeyBanc Capital Markets, A Division of McDonald
Investments Inc. 52,500
Legg Mason Wood Walker, Incorporated 52,500
Oppenheimer & Co. Inc. 52,500
Piper Jaffray & Co. 52,500
Charles Schwab & Co., Inc. 52,500
TD Waterhouse Investor Services, Inc. 52,500
Wells Fargo Brokerage Services, LLC 52,500
Advest, Inc. 17,500
Robert W. Baird & Co. Incorporated 17,500
William Blair & Company L.L.C. 17,500
D.A. Davidson & Co. 17,500
Davenport & Company LLC 17,500
J.J.B. Hilliard, W.L. Lyons, Inc. 17,500
Janney Montgomery Scott LLC 17,500
McGinn, Smith & Co. Inc. 17,500
Mesirow Financial, Inc. 17,500
Morgan Keegan & Company, Inc. 17,500
Pershing LLC 17,500
Raymond James & Associates, Inc. 17,500
Ryan Beck & Co., Inc. 17,500
Southwest Securities, Inc. 17,500
Stifel, Nicolaus & Company, Incorporated 17,500
SunTrust Capital Markets, Inc. 17,500
Sch A-1
Wedbush Morgan Securities Inc. 17,500
Ziegler Capital Markets Group 17,500
---------
TOTAL 7,000,000
=========
SCHEDULE B
VORNADO REALTY TRUST
6.625% SERIES I CUMULATIVE REDEEMABLE PREFERRED SHARES OF BENEFICIAL INTEREST
TITLE OF DESIGNATED SHARES:
6.625% Series I Cumulative Redeemable Preferred Shares of Beneficial
Interest
NUMBER OF DESIGNATED SHARES:
NUMBER OF FIRM SHARES: 7,000,000
MAXIMUM NUMBER OF OPTIONAL SHARES: 1,050,000
PUBLIC OFFERING PRICE:
$25.00 per Share, plus accrued dividends, if any, from but excluding the
date of original issue, if settlement occurs after that date.
PURCHASE PRICE BY UNDERWRITERS:
$24.2125 per Share, plus accrued dividends, if any, from but excluding the
date of original issue, if settlement occurs after that date.
UNDERWRITING DISCOUNT:
$0.7875 per Share
FORM OF DESIGNATED SHARES:
Book-Entry Only through DTC.
SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:
Wire transfer of same day funds.
TIME OF DELIVERY:
9:00 a.m. (New York City time), August 31, 2005
CLOSING LOCATION:
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square, New York, New York 10036
NAME AND ADDRESS OF DESIGNATED REPRESENTATIVES:
Designated Representatives: Morgan Stanley & Co. Incorporated
Address for Notices, etc.: Morgan Stanley & Co. Incorporated
1585 Broadway, 29th Floor
New York, New York 10036
Facsimile: (212) 507-6954
Attention: Investment Banking Information Center
Sch B-1
DIVIDENDS:
Cumulative at the annual rate of 6.625% per share on the liquidation
preference of the Series I Preferred Shares payable quarterly in arrears on
the first calendar day of January, April, July and October of each year,
commencing October 1, 2005.
LIQUIDATION PREFERENCE:
$25.00 per share, plus an amount equal to accrued and unpaid dividends
(whether or not earned or declared).
RANKING:
The Series I Preferred Shares will rank senior to the Company's common
shares of beneficial interest and any other junior stock that the Company
may issue in the future and equal to the Company's Series A Convertible
Preferred Shares, Series B Preferred Shares, Series C Preferred Shares,
Series D Preferred Shares, Series E Preferred Shares, Series F Preferred
Shares, Series G Preferred Shares, Series H Preferred Shares and any other
parity stock that the Company may issue in the future, in each case with
respect to payment of dividends and amounts upon liquidation, dissolution
or winding up. The Company will acquire Series I Pass-Through Preferred
Units of the Operating Partnership (with terms mirroring the terms of the
Series I Preferred Shares) in exchange for the cash proceeds from the sale
of the Series I Preferred Shares. Series I Pass-Through Preferred Units
will rank senior to all classes of Operating Partnership units and on a
parity with certain other units in the Operating Partnership, with respect
to payment of dividends and amounts upon liquidation, dissolution or
winding up of the Operating Partnership.
CONVERSION RIGHTS:
The Series I Preferred Shares are not convertible or exchangeable for any
property or other securities of the Company.
REDEMPTION AT OPTION OF THE COMPANY:
Except in certain circumstances relating to the preservation of the
Company's status as a REIT, the Series I Preferred Shares are not
redeemable prior to August 31, 2010. On and after August 31, 2010, the
Series I Preferred Shares will be redeemable by the Company at a redemption
price of $25.00 per share, plus any accrued and unpaid dividends through
the date of redemption. The Series I Preferred Shares have no maturity date
and will remain outstanding indefinitely unless redeemed.
VOTING RIGHTS:
Holders of the Series I Preferred Shares generally will have no voting
rights. However, if dividends on the Series I Preferred Shares are in
arrears for six quarterly dividend periods, the holders of the Series I
Preferred Shares (voting separately as a class with holders of all other
series of parity preferred stock upon which like voting rights have been
conferred and are exercisable) will have the right to elect two additional
trustees to serve on the Company's Board of Trustees until such dividend
arrearage is eliminated. In addition, the approval of two-thirds of the
outstanding Series I Preferred Shares (voting separately as a class with
holders of all other series of parity preferred stock upon which like
voting rights have been conferred and are exercisable) is required in order
to amend the Company's Amended and Restated Declaration of Trust and
Articles Supplementary
B-2
to affect materially and adversely the rights, preferences or voting powers
of the holders of the Series I Preferred Shares or such parity shares or to
authorize, create, or increase the authorized amount of, any class of stock
having rights senior to the Series I Preferred Shares with respect to the
payment of dividends or amounts upon liquidation, dissolution or winding
up.
LISTING:
New York Stock Exchange: "VNO Pr I"
CUSIP:
929042877
ISIN:
US9290428773
B-3
Exhibit A
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(i) The Company is a real estate investment trust duly formed and existing
under the laws of the State of Maryland and is in good standing with the State
Department of Assessments and Taxation of Maryland;
(ii) The Company has the trust power to own, lease and operate its
properties and to conduct its business substantially as described in the
Prospectus under the heading "Vornado Realty Trust and Vornado Realty L.P." and
to enter into and perform its obligations under this Agreement;
(iii) The Operating Partnership is a limited partnership existing under the
laws of the State of Delaware and has the partnership power and authority to
own, lease and operate its properties and conduct its business substantially as
described in the Prospectus;
(iv) The Securities have been duly authorized and validly issued and are
fully paid and nonassessable;
(v) This Agreement has been duly authorized, executed and delivered by the
Company and the Operating Partnership;
(vi) The Registration Statement has been declared effective under the 1933
Act, and, to the best of such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings
for that purpose have been instituted or are pending under the 1933 Act;
(vii) All regulatory consents, authorizations, approvals and filings
required to be obtained or made by the Company under the Federal laws of the
United States and the laws of the State of New York for the issuance, sale and
delivery of the Securities by the Company to the Underwriters have been obtained
or made; provided, however, that for purposes of this paragraph (vii), such
counsel need not express any opinion with respect to state securities laws that
may be applicable to the issuance, sale or delivery of the Securities;
(viii) The execution and delivery by the Company and the Operating
Partnership of this Agreement, the issuance of the Securities and the sale of
the Securities by the Company to the Underwriters pursuant to this Agreement do
not, and the performance by the Company of its obligations under this Agreement
and the consummation of the transactions herein contemplated will not (A)
violate the Company's Amended and Restated Declaration of Trust or Bylaws or the
certificate of limited partnership of the Operating Partnership, (B) violate any
Federal or New York State court order or administrative decree known to such
counsel or any Federal law of the United States or law of the State of New York
applicable to the Company or the Operating Partnership, or
A-1
(C) result in a default under or breach of any agreement filed as an exhibit to
the Company's most recent Annual Report on Form 10-K and any subsequent
Quarterly Report on Form 10-Q or Current Report on Form 8-K under Item 601
(b)(10) of Regulation S-K, subject, in the case of clauses (A), (B) and (C) of
this paragraph (viii), to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles; provided,
however, that for purposes of this paragraph (viii), such counsel need not
express any opinion with respect to Federal or state securities laws, other
antifraud laws or fraudulent transfer laws or the Employee Retirement Income
Security Act of 1974 and Related laws;
(ix) Such counsel shall confirm the opinion that, commencing with its
taxable year ending December 31, 1993, the Company has been organized in
conformity with the requirements for qualification as a REIT under the Code, its
manner of operations has enabled it to satisfy the requirements for
qualification as a REIT for taxable years ending on or prior to the date hereof
and its proposed method of operations will enable it to satisfy the current
requirements for qualification and taxation as a REIT for subsequent taxable
years; in providing such opinion, such counsel may rely (i) upon the statements
and representations contained in certificates provided by the Company, Americold
Realty Trust and Two Penn Plaza REIT, Inc., (ii) without independent
investigation, upon statements and representations contained in a certificate
provided by Alexander's, Inc., (iii) without independent investigation, upon an
opinion of Shearman & Sterling concerning the qualification of Alexander's as a
REIT for federal income tax purposes and (iv) upon any other certificates or
opinions of counsel as deemed necessary or appropriate in rendering such opinion
and subject to an analysis of the Code, Treasury Regulations thereunder,
judicial authority and current administrative rulings and such other laws and
facts as deemed relevant and necessary; and
(x) Neither the Company nor the Operating Partnership is an "investment
company" or an entity "controlled" by an "investment company," as such terms are
defined in the Investment Company Act of 1940, as amended.
In giving this opinion, Sullivan & Cromwell LLP may state that such opinion
is limited to the Federal laws of the United States of America, the laws of the
State of New York, the laws of the State of Maryland and the Revised Uniform
Limited Partnership Act of the State of Delaware, such counsel may rely as to
matters of Maryland law on the opinion of Venable, LLP and such counsel express
no opinion as to the effect of the laws of any other jurisdiction; and such
counsel may rely as to certain matters, upon information obtained from public
officials, officers of the Company and its subsidiaries and other sources
believed by them to be responsible. Such counsel may assume that the
certificates for the Securities conform to the specimen thereof examined by them
and have been authenticated, that this Agreement has been duly authorized,
executed and delivered by the Underwriter and that the signatures on all
documents examined by them are genuine, assumptions which such counsel need not
independently verify.
A-2
FORM OF LETTER OF COMPANY'S COUNSEL TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(i) On the basis of the information that was gained in the course of the
performance of the services referred to in their letter considered in the light
of their understanding of the applicable law (including the requirements of Form
S-3 and the character of the prospectus contemplated thereby) and the experience
they have gained through their practice under the 1933 Act, such counsel are of
the opinion that each part of the Registration Statement, when such part became
effective, and the Prospectus, as supplemented by the Prospectus Supplement, as
of the date of the Prospectus Supplement, appeared on their face to be
appropriately responsive, in all material respects relevant to the offering of
the Securities, to the requirements of the 1933 Act and the 1933 Act
Regulations; and that nothing that came to their attention in the course of
their review has caused them to believe that, insofar as relevant to the
offering of Securities, any part of the Registration Statement, when such part
became effective, contained any untrue statement of a material fact or omitted
to state any material fact required to be stated therein or necessary to make
the statements therein not misleading or that the Prospectus, as supplemented by
the Prospectus Supplement, as of the date of the Prospectus Supplement,
contained 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; also, nothing that
has come to such counsel's attention in the course of certain procedures (as
described in such opinion) has caused such counsel to believe that the
Prospectus, as supplemented by the Prospectus Supplement, as of the date and
time of delivery of such letter, contained 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; provided, however, that such opinion may state that the
limitations inherent in the independent verification of factual matters and the
character of determinations involved in the registration process are such that
such counsel does not assume any responsibility for the accuracy, completeness
or fairness of the statements contained in the Registration Statement, the
Prospectus or the Prospectus Supplement, except for those made under the
captions "Description of Shares of Beneficial Interest of Vornado Realty Trust"
and "Federal Income Tax Considerations" in the Prospectus and "Description of
the Series I Preferred Shares" and "Federal Income Tax Considerations" in the
Prospectus Supplement insofar as they relate to the provisions of documents or
United States Federal tax law therein described, and that such counsel need not
express any opinion or belief as to the financial statements or schedules or
other financial data derived from accounting records contained in the
Registration Statement or the Prospectus.
(ii) Such counsel does not know of any litigation or governmental
proceedings instituted or threatened against the Company or any of its
consolidated subsidiaries that would be required to be disclosed in the
Prospectus and is not so disclosed; and, insofar as relevant to the offering of
Securities such counsel does not know of any documents that are required to be
filed as exhibits to the Registration Statement and are not so filed or of any
documents that are required to be summarized in the Prospectus that are not so
summarized.
A-3
Exhibit B
FORM OF OPINION OF
SPECIAL MARYLAND COUNSEL TO THE COMPANY
TO BE DELIVERED PURSUANT TO
SECTION 5(c)
(i) The Company is a real estate investment trust duly formed and existing
under and by virtue of the laws of the State of Maryland and is in good standing
with the State Department of Assessments and Taxation of Maryland;
(ii) The Company has the trust power to own, lease and operate its
properties and to conduct its business substantially as described in the
Prospectus under the heading "Vornado Realty Trust and Vornado Realty L.P." and
to enter into and perform its obligations under this Agreement;
(iii) As of August 22, 2005, the Amended and Restated Declaration of Trust
of the Company authorized the issuance of up to 620,000,000 shares, consisting
of (A) 200,000,000 Common Shares, of which 140,375,337 Common Shares were issued
and outstanding (excluding Common Shares issuable upon the exercise of
outstanding options, the redemption of outstanding units of the Operating
Partnership and the conversion of outstanding $3.25 Series A Convertible
Preferred Shares of Beneficial Interest), (B) 110,000,000 preferred shares of
beneficial interest, no par value per share, of which 23,376,072 were issued and
outstanding, and (C) 310,000,000 excess shares of beneficial interest, par value
$0.04 per share, of which none were issued and outstanding; and all of the
issued and outstanding shares of beneficial interest of the Company have been
duly and validly authorized and issued and are fully paid and nonassessable; and
none of the outstanding shares of beneficial interest of the Company was issued
in violation of any preemptive rights of any shareholder of the Company arising
under Title 8 of the Corporations and Associations Article of the Annotated Code
of Maryland ("Title 8") or the Declaration of Trust or Bylaws of the Company;
(iv) The issuance and sale of the Securities to the Underwriters pursuant
to this Agreement have been duly authorized, and, when issued and delivered by
the Company against payment therefor pursuant to this Agreement and the
resolutions of the Board of Trustees and the duly authorized committee thereof
authorizing their issuance, the Securities will be validly issued, fully paid
and nonassessable;
(v) The statements under the heading "Description of Shares of Beneficial
Interest of Vornado Realty Trust" in the Prospectus and "Description of the
Series I Preferred Shares" in the Prospectus Supplement, to the extent that such
statements purport to summarize or describe matters of Maryland law, summaries
of legal matters, documents or proceedings or legal conclusions, have been
reviewed by such counsel and are correct in all material respects;
B-1
(vi) The Securities conform in all material respects as to matters of
Maryland law to the description thereof contained under the caption "Description
of Shares of Beneficial Interest of Vornado Realty Trust" in the Prospectus and
"Description of the Series I Preferred Shares" in the Prospectus Supplement and
the form of certificate evidencing the Securities is in due and proper form in
accordance with Title 8;
(vii) The issuance of the Securities is not subject to any preemptive or
similar rights arising under Title 8, the Declaration of Trust or the Bylaws of
the Company;
(viii) No authorization, approval, consent or order of any court or
governmental authority or agency of the State of Maryland is required in
connection with the offering, issuance or sale of the Securities to the
Underwriter, except such as may be required under the securities laws or
regulations of any state or other jurisdiction, including the State of Maryland;
(ix) This Agreement has been duly authorized by all necessary trust action
of the Company, executed and, so far as is known to us, delivered by the Company
on its own behalf and in its capacity as General Partner of the Operating
Partnership;
(x) The execution and filing of Articles Supplementary relating to the
Securities (the "Articles Supplementary") have been duly authorized by the
Company and the Articles Supplementary have been executed in accordance with
Title 8 and have been filed with the SDAT; and
(xi) The execution, delivery and performance of this Agreement, the
consummation of the transactions contemplated herein and the compliance by the
Company with its obligations hereunder do not result in any violation of (A) the
provisions of the Amended and Restated Declaration of Trust or Bylaws of the
Company or (B) any applicable Maryland law or administrative regulation or, to
the best knowledge of such counsel, administrative or court decree of the State
of Maryland, except with respect to clause (B), such violations as would not
have a material adverse effect on the general affairs, management, financial
position, shareholders' equity or results of operations of the Company and its
subsidiaries.
In giving these opinions, Venable, LLP may state that such opinions are
limited to the laws of the State of Maryland and may rely (1) as to all matters
of fact, upon certificates and written statements of officers and employees of
and accountants for the Company and (2) as to the qualification and good
standing of the Company or any of its subsidiaries in any other jurisdiction,
upon opinions of counsel in such other jurisdictions and certificates of
appropriate government officials.
B-2
Annex I
SELLING RESTRICTIONS
1. United Kingdom. Each Underwriter represents and agrees that (i) it has only
communicated or caused to be communicated and will only communicate or cause to
be communicated any invitation or inducement to engage in investment activity
(within the meaning of Section 21 of the Financial Services and Markets Act 2000
(the "FSMA")) received by it in connection with the issue or sale of the
Preferred Shares in circumstances in which Section 21(1) of the FSMA does not
apply to the Company and (ii) it has complied and will comply with all
applicable provisions of the FSMA with respect to anything done by it in
relation to the Preferred Shares, from or otherwise involving the United
Kingdom.
2. European Economic Area. Each Underwriter represents and agrees that, in
relation to each Member State of the European Economic Area which has
implemented the Prospectus Directive (each, a "Relevant Member State"), with
effect from and including the date on which the European Union Prospectus
Directive (the "EU Prospectus Directive") is implemented in that Relevant Member
State (the "Relevant Implementation Date"), it has not made and will not make an
offer of Preferred Shares to the public in that Relevant Member State prior to
the publication of a prospectus in relation to the shares which has been
approved by the competent authority in that Relevant Member State or, where
appropriate, approved in another Relevant Member State and notified to the
competent authority in that Relevant Member State, all in accordance with the EU
Prospectus Directive, except that it may, with effect from and including the
Relevant Implementation Date, make an offer of Preferred Shares to the public in
that Relevant Member State at any time:
(a) to legal entities which are authorized or regulated to operate in
the financial markets or, if not so authorized or regulated, whose corporate
purpose is solely to invest in securities;
(b) to any legal entity which has two or more of (1) an average of at
least 250 employees during the last financial year; (2) a total balance sheet of
more than E43,000,000 and (3) an annual net turnover of more than E50,000,000,
as shown in its last annual or consolidated accounts; or
(c) in any other circumstances which do not require the publication by
the issuer of a prospectus pursuant to Article 3 of the EU Prospectus Directive.
For the purposes of this provision, the expression an "offer of Preferred
Shares to the public" in relation to any Preferred Shares in any Relevant Member
State means the communication in any form and by any means of sufficient
information on the terms of the offer and the Preferred Shares to be offered so
as to enable an investor to decide to purchase or subscribe for the Preferred
Shares, as the same may be varied in that Member State by any measure
implementing the EU Prospectus Directive in that Member State and the expression
EU Prospectus Directive means Directive 2003/71/EC and includes any relevant
implementing measure in each Relevant Member State.
Annex I-1