Exhibit 1.1
2,000,000 SHARES
AMB PROPERTY CORPORATION
6 3/4% SERIES M CUMULATIVE REDEEMABLE PREFERRED STOCK,
PAR VALUE $.01 PER SHARE
UNDERWRITING AGREEMENT
NOVEMBER 6, 2003
November 6, 2003
MORGAN STANLEY & CO. INCORPORATED
As representative of the several underwriters
1585 Broadway
New York, New York 10036
Dear Sirs and Mesdames:
AMB Property Corporation, a Maryland corporation (the "REIT"), proposes
to issue and sell to the several Underwriters named in Schedule I hereto (the
"UNDERWRITERS") 2,000,000 shares of its 6 3/4% Series M Cumulative Redeemable
Preferred Stock, par value $.01 per share (the "FIRM SHARES"). Morgan Stanley &
Co. Incorporated has agreed to act as representative of the several Underwriters
(in such capacity, the "REPRESENTATIVE") in connection with the offering and
sale of the Shares. As used herein, the "COMPANY" shall include the REIT, AMB
Property, L.P., a Delaware limited partnership (the "OPERATING PARTNERSHIP"),
and each of the subsidiaries of the REIT or the Operating Partnership set forth
on Schedule II hereto (each, a "SUBSIDIARY," and, collectively, the
"SUBSIDIARIES"). The REIT also proposes to issue and sell to the several
Underwriters not more than an additional 300,000 (the "ADDITIONAL SHARES"), if
and to the extent that the Representative shall have determined to exercise, on
behalf of the Underwriters, the right to purchase such shares of preferred stock
granted to the Underwriters in Section 2 hereof. The Firm Shares and the
Additional Shares are hereinafter collectively referred to as the "SHARES".
The REIT and the Operating Partnership have filed with the Securities
and Exchange Commission (the "COMMISSION") a registration statement on Form S-3
(File No. 333-68283), including a prospectus, relating to the Shares. Such
registration statement, including the exhibits thereto, as amended as of the
date hereof is hereinafter referred to as the "REGISTRATION STATEMENT." The REIT
proposes to file with the Commission pursuant to Rule 424 under the Securities
Act, a supplement to the prospectus included in the Registration Statement
relating to the Shares. The prospectus in the form in which it appears in the
Registration Statement is hereinafter referred to as the "BASIC PROSPECTUS." The
term "PROSPECTUS" means the Basic Prospectus together with the prospectus
supplement (the "PROSPECTUS SUPPLEMENT") relating to the Shares, as filed with,
or transmitted for filing to, the Commission pursuant to Rule 424. As used
herein, the terms "BASIC PROSPECTUS" and "PROSPECTUS" shall include in each case
the documents, if any, incorporated by reference therein. The terms
"SUPPLEMENT", "AMENDMENT" and "AMEND" as used herein shall include all documents
deemed to be incorporated by reference in the Prospectus that are filed
subsequent to the date of the Basic Prospectus by the REIT or the Operating
Partnership with the Commission pursuant to the Securities Exchange Act of 1934,
as amended (the "EXCHANGE ACT").
1. REPRESENTATIONS AND WARRANTIES. The REIT and Operating
Partnership, jointly and severally, represent and warrant to and agree with each
of the Underwriters that:
(a) The Registration Statement has become effective; no
stop order suspending the effectiveness of the Registration Statement
is in effect, and no proceedings for such purpose are pending before
or, to the knowledge of the REIT and the Operating Partnership,
threatened by the Commission.
(b) Except for statements in such documents which do not
constitute part of the Registration Statement or Prospectus pursuant to
Rule 412 of Regulation C under the Securities Act of 1933, as amended
(the "SECURITIES ACT"), (i) each document, if any, filed pursuant to
the Exchange Act and incorporated by reference in the Prospectus
complied when filed or will comply when so filed in all material
respects with the Exchange Act and the applicable rules and regulations
of the Commission thereunder, (ii) each part of the Registration
Statement, when such part became or becomes effective, did not contain
any 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, (iii) each part of the Registration Statement
when such part became or becomes effective and the Prospectus when
originally filed complied and, as amended or supplemented, if
applicable, will comply in all material respects with the Securities
Act and the applicable rules and regulations of the Commission
thereunder and (iv) the Prospectus did not contain and, as amended or
supplemented, if applicable, will not contain on the date of filing
with the Commission and at the Closing Date (and any Option Closing
Date) any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, except
that the representations and warranties set forth in this paragraph
1(b) do not apply to statements in or omissions from the Registration
Statement or the Prospectus or any amendment or supplement thereto
based upon and in conformity with information relating to any
Underwriter furnished to the REIT in writing by any Underwriter
expressly for use therein, which information is the information set
forth in Exhibit A hereto.
(c) The REIT has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Maryland, and has all power and authority necessary to own, lease
and operate its properties and to conduct the businesses in which it is
engaged or proposes to engage as described in the Prospectus and to
enter into and perform its obligations under this Agreement. The REIT
is duly qualified or registered as a foreign corporation and is in good
standing in California and is qualified or registered to do business in
each other jurisdiction in which such qualification or registration is
required, whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure so to qualify or be
registered in such other jurisdiction would not result in a material
adverse effect on the consolidated financial position, results of
operations or business of the REIT, the Operating Partnership and their
subsidiaries, taken as a whole (a "MATERIAL ADVERSE EFFECT").
(d) The Operating Partnership is a limited partnership
duly formed and existing under and by virtue of the laws of the State
of Delaware and is in good standing under the Delaware Revised Uniform
Limited Partnership Act with partnership power
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and authority to own, lease and operate its properties, to conduct the
business in which it is engaged or proposes to engage as described in
the Prospectus and to enter into and perform its obligations under this
Agreement. The Operating Partnership is duly qualified or registered as
a foreign partnership and is in good standing in California and is
qualified or registered to do business in each other jurisdiction in
which such qualification or registration is required, whether by reason
of the ownership or leasing of property or the conduct of business,
except where the failure so to qualify or be registered in such other
jurisdiction would not have Material Adverse Effect. The REIT is the
sole general partner of the Operating Partnership and owns the
percentage interest in the Operating Partnership as set forth or
incorporated by reference in the Prospectus.
(e) Each Subsidiary is duly incorporated or organized, as
the case may be, and is validly existing as a partnership, corporation
or limited liability company in good standing under the laws of its
respective jurisdiction of organization, and has the corporate,
partnership or other power and authority to own its property and to
conduct its business as described in the Prospectus. Each Subsidiary is
duly qualified or registered to transact business in each jurisdiction
in which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that the
failure to be so qualified or registered would not have a Material
Adverse Effect; all of the issued shares of capital stock or other
ownership interests of each Subsidiary have been duly and validly
authorized and issued, are fully paid and non-assessable and, except as
set forth or incorporated by reference in the Prospectus, are owned
directly or indirectly by the REIT or the Operating Partnership, free
and clear of all liens, encumbrances, equities or claims. The
Subsidiaries are the only significant subsidiaries (as defined in Rule
405 of Regulation C of the Securities Act) of the REIT and the
Operating Partnership.
(f) Each of the joint venture partnerships or limited
liability companies that are consolidated in consolidated financial
statements of the Company or listed in the REIT's or the Operating
Partnership's annual report on Form 10-K for the year ended December
31, 2002 or quarterly report on Form 10-Q for the quarter ended June
30, 2003 (collectively, the "JOINT VENTURES") has been duly formed and
is validly existing as a limited partnership or limited liability
company in good standing under the laws of its state of organization,
with power and authority to own, lease and operate its properties and
to conduct the business in which it is engaged. Each Joint Venture is
duly qualified or registered as a foreign limited partnership or
limited liability company to transact business in each jurisdiction in
which such qualification or registration is required, whether by reason
of the ownership or leasing of property or the conduct of business,
except where the failure so to qualify or be registered would not have
a Material Adverse Effect. The REIT, the Operating Partnership or a
subsidiary of the REIT or the Operating Partnership owns the percentage
of the partnership or other equity interest in each of the Joint
Ventures as set forth in such financial statements or such reports
hereto (the "JOINT VENTURE INTERESTS"), and each of the Joint Venture
Interests is validly issued and fully paid and free and clear of any
security interest, mortgage, pledge, lien encumbrance, claim or equity.
The REIT and the Operating Partnership have no other interests in joint
ventures, partnerships or limited liability companies in which
unrelated third parties have interests, other than as set forth in such
financial statements or such reports or the Subsidiaries.
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(g) This Agreement has been duly authorized, executed and
delivered by the REIT and the Operating Partnership and constitutes the
valid and binding agreement of each of them, enforceable against them
in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally and general principles of equity.
(h) The REIT has an authorized capitalization as set
forth in the Prospectus, and the authorized capital stock of the REIT
conforms in all material respects to the description thereof contained
in the Prospectus.
(i) All of the issued and outstanding partnership units
of the Operating Partnership (the "UNITS") have been duly and validly
authorized and issued and conform in all material respects to the
description thereof contained or incorporated by reference in the
Prospectus. The Units owned by the REIT are owned directly by the REIT,
free and clear of all liens, encumbrances, equities or claims.
(j) The Shares have been duly authorized and classified
for issuance and sale to the Underwriters pursuant to this Agreement.
On or prior to the Closing Date, the REIT will have executed and filed
with the State Department of Assessments and Taxation of Maryland (the
"SDAT") Articles Supplementary ("ARTICLES SUPPLEMENTARY") to its
Articles of Incorporation establishing the terms of the Shares and,
when the Shares are duly paid for and certificates therefor are duly
countersigned and delivered as provided herein, the Shares will be
validly issued, fully paid and nonassessable. The issuance of the
Shares is not subject to preemptive or similar rights.
(k) The execution and delivery by the REIT and the
Operating Partnership of, and the performance by each of the REIT and
the Operating Partnership of its respective obligations under, this
Agreement and the consummation of the transactions contemplated hereby
and thereby, and the proposed redemption of the Operating Partnership's
8 5/8% Series B Cumulative Redeemable Partnership Units (the "SERIES B
PARTNERSHIP UNITS"), as described in the Prospectus, will not (i)
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, joint venture agreement, partnership
agreement, limited liability company agreement or any other agreement
or instrument to which the Company is a party or by which the Company
is bound or to which any of the property or assets of the Company is
subject, except for such conflicts, breaches or violations which would
not, singly or in the aggregate, have a Material Adverse Effect, (ii)
result in any violation of the provisions of the charter, by-laws,
certificate of limited partnership, partnership agreement or other
organizational documents of the REIT, the Operating Partnership or any
Subsidiary, as the case may be, or (iii) result in any violation of any
statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company, except where such
noncompliance or violation of any such statute, order, rule or
regulation would not, singly or in the aggregate, have a Material
Adverse Effect. No consent, approval, authorization or order of, or
filing or registration with, any such court or governmental agency or
body is required for the execution and delivery by the REIT or the
Operating Partnership of, and the performance by each of the REIT and
the Operating Partnership of its respective obligations under, this
Agreement and the consummation of the transactions
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contemplated hereby and thereby, except for (A) the registration of the
Shares under the Securities Act or the rules and regulations thereunder
and such consents, approvals, authorizations, registrations or
qualifications as may be required under the Securities Act, the
Exchange Act, or the rules and regulations thereunder, and applicable
state and foreign securities laws in connection with issuance, offer
and sale of the Shares, (B) the listing of the Shares on the NYSE, or
(C) consents, approvals, authorizations, orders, filings or
registrations that will be completed on or prior to the Closing Date.
(l) There are no legal or governmental proceedings
pending or, to the knowledge of the REIT and the Operating Partnership,
threatened, to which the Company is a party or to which any of the
properties of the Company is subject that are required to be described
in the Registration Statement or the Prospectus and are not so
described or incorporated by reference, or any statutes, regulations,
contracts or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to
the Registration Statement that are not described, incorporated by
reference or filed as required.
(m) None of the REIT, the Operating Partnership or any
Subsidiary is, and after giving effect to the offering and sale of the
Shares and the application of the proceeds thereof as described in the
Prospectus, none will be, an "investment company" as such term is
defined in the Investment Company Act of 1940, as amended.
(n) Other than as contemplated by the Prospectus, there
are no contracts, agreements or understandings between the REIT and any
person granting such person the right to require the REIT to file a
registration statement under the Securities Act with respect to any
securities of the REIT, other than with respect to a de minimis number
of shares of the common stock, par value $0.01 per share (the "COMMON
STOCK"), of the REIT, or to require the REIT to include such securities
with the Shares registered pursuant to the Registration Statement.
(o) There has not occurred any material adverse change,
or any development involving a prospective material adverse change, in
the condition, financial or otherwise, or in the earnings, business or
operations of the REIT, the Operating Partnership, and their
subsidiaries, taken as a whole, from that set forth or incorporated by
reference in the Prospectus. Subsequent to the respective dates as of
which information is given in the Registration Statement and the
Prospectus, except as described in or contemplated by the Prospectus or
a document incorporated therein by reference, (i) the Company has not
incurred any liability or obligation, direct or contingent, nor entered
into any transaction not in the ordinary course of business that is
material with respect to the REIT, the Operating Partnership and their
subsidiaries, taken as a whole; (ii) the REIT has not purchased any of
its outstanding capital stock other than pursuant to its stock
repurchase program, nor declared, paid or otherwise made any dividend
or distribution of any kind on its capital stock other than the $0.415
per share of Common Stock dividends declared on February 26, 2003, May
15, 2003 and September 18, 2003 and dividends declared on the Company's
6.5% Series L Cumulative Redeemable Preferred Stock on June 27, 2003
and September 18, 2003; (iii) the Operating Partnership has not
purchased any of its outstanding Units, nor declared, paid or otherwise
made any dividend or distribution of any kind on its Units other than
in the normal course of business, other than the
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anticipated redemption by the Operating Partnership of its Series B
Partnership Units and distributions to be paid in connection with such
redemption by the Operating Partnership of the Series B Partnership
Units; and (iv) there has not been any change in the capital stock or
increase in the short-term debt or long-term debt that is, in either
case, material with respect to the Company taken as a whole.
(p) Except as otherwise disclosed or incorporated by
reference in the Prospectus:
(i) as of September 30, 2003, the Company owned
and operated (exclusive of properties that the Company managed
for third parties) 896 industrial buildings and seven retail
and other properties (the "PROPERTIES").
(ii) the Company (directly or indirectly) has
good and marketable fee simple title to the land underlying
the Properties and good and marketable title to the
improvements thereon, other than those improvements located on
land which the Company (directly or indirectly) acts as the
ground lessor (the "TENANT OWNED IMPROVEMENTS"), and all other
assets that are required for the effective operation of such
Properties in the manner in which they currently are operated,
subject, however, to existing mortgages on such Properties, to
utility easements serving such Properties and other immaterial
easements, reciprocal easement agreements and licenses, to
liens of ad valorem taxes and other assessments not
delinquent, to zoning and similar governmental land use
matters affecting such Properties that are consistent with the
current uses of such Properties, to matters of title not
adversely affecting marketability of title to such Properties,
other immaterial statutory liens not due and payable, title
matters that may be material in character, amount or extent
but which do not materially detract from the value, or
interfere with the use of, the Properties or otherwise
materially impair the business operations being conducted or
proposed to be conducted thereon, service marks and trade
names used in connection with such Properties, ownership by
others of certain items of equipment and other items of
personal property that are not material to the conduct of
business operations at such Properties and ownership of
improvements pursuant to certain valid, existing and
enforceable ground leases;
(iii) except as would not have a Material Adverse
Effect, with respect to the Properties held through Joint
Ventures (the "JOINT VENTURE PROPERTIES"), the Joint Ventures
that currently own such Properties have good and marketable
fee simple title to the land underlying such Properties and
good and marketable title to the improvements thereon, other
than the Tenant Owned Improvements, and all other assets that
are required for the effective operation of such Properties in
the manner in which they currently are operated, subject to
the exceptions set forth in clause (ii) above;
(iv) there are no liens, charges, encumbrances,
claims, or restrictions on or affecting any of the Properties
or the assets of the Company that are material to the Company
taken as a whole;
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(v) neither the Company nor, to the knowledge of
the REIT and the Operating Partnership, any tenant of any of
the Properties is in default under any of the leases pursuant
to which the Company, as lessor, leases its Property (and the
Company does not know 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) other than such defaults
that would not result in a Material Adverse Effect;
(vi) any real property and buildings held under
lease by the Company are held by it under valid, subsisting
and enforceable leases with such exceptions as are not
material and do not materially interfere with the use made and
proposed to be made of such property and buildings by the
Company, except as described in or contemplated by the
Prospectus;
(vii) no person has an option or right of first
refusal to purchase all or part of any Property or any
interest therein which is material to the REIT, the Operating
Partnership and their subsidiaries, taken as a whole;
(viii) each of the Properties complies with all
applicable codes, laws and regulations (including, without
limitation, building and zoning codes, laws and regulations
and laws relating to access to the Properties), except if and
to the extent disclosed or incorporated by reference in the
Prospectus and except for such failures to comply that would
not individually or in the aggregate result in a Material
Adverse Effect;
(ix) neither of the REIT or the Operating
Partnership has knowledge of any pending or threatened
condemnation proceedings, zoning change, or other similar
proceeding or action that will in any manner affect the size
of, use of, improvements on, construction on or access to any
of the Properties, except such proceedings or actions that
would not have a Material Adverse Effect; and
(x) except as would not result in a Material
Adverse Effect,
(i) the ground leases under which the
Company (directly or indirectly) or a Joint Venture holds or
uses real property relating to the Properties are in full
force and effect, and
(ii) the Company and, to the knowledge
of the REIT and the Operating Partnership, the Joint Ventures
or other named lessees under such leases (A) are not in
default in respect of any of the terms or provisions of such
leases and (B) have not received notice of the assertion of
any claim by anyone adverse to such person's or entity's
rights as lessees under such leases, or affecting or
questioning such person's or entity's right to the continued
possession or use of the Property under such leases or of a
default under such leases.
(q) Except as disclosed or incorporated by reference in
the Prospectus:
(i) each Property, including, without
limitation, the Environment (as defined below) associated with
such Property, is free of any Hazardous Substance
7
(as defined below) in violation of any Environmental Law (as
defined below) applicable to such Property, except for
Hazardous Substances that would not result in a Material
Adverse Effect;
(ii) the Company has not caused or suffered to
occur any Release (as defined below) of any Hazardous
Substance into the Environment on, in, under or from any
Property, and no condition exists on, in, under or, to the
knowledge of the REIT and the Operating Partnership, adjacent
to any Property that could result in the incurrence of
liabilities or any violations of any Environmental Law
applicable to such Property, give rise to the imposition of
any Lien (as defined below) under any Environmental Law, or
cause or constitute a health, safety or environmental hazard
to any property, person or entity, except in each case that
would not, singly or in the aggregate, have a Material Adverse
Effect;
(iii) neither the Company nor, to the knowledge of
the REIT and the Operating Partnership, any tenant of any of
the Properties has received any written notice of a claim
under or pursuant to any Environmental Law applicable to a
Property or under common law pertaining to Hazardous
Substances on or originating from any Property, except for any
such claims which would not, singly or in the aggregate, have
a Material Adverse Effect;
(iv) neither the Company nor, to the knowledge of
the REIT and the Operating Partnership, any tenant of any of
the Properties has received any written notice from any
Governmental Authority (as defined below) claiming any
violation of any Environmental Law applicable to a Property
that is uncured or unremediated as of the date hereof, except
for any such violations which would not, singly or in the
aggregate, have a Material Adverse Effect;
(v) no Property is included or, to the knowledge
of the REIT and the Operating Partnership, proposed for
inclusion on the National Priorities List issued pursuant to
CERCLA (as defined below) by the United States Environmental
Protection Agency (the "EPA"), nor has the Company received
any written notice from the EPA or any other Governmental
Authority proposing the inclusion of any Property on such
list;
(vi) the Company and, to the knowledge of the
REIT and the Operating Partnership, each tenant at any of the
Properties (i) have received all permits, licenses or other
approvals required of them under applicable Environmental Laws
to conduct their respective businesses and (ii) are in
compliance with all terms and conditions of any such permit,
license or approval, except in each case where such
noncompliance, failure to receive required permits, licenses
or other approvals or failure to comply with the terms and
conditions of such permits, licenses or approvals would not,
singly or in the aggregate, have a Material Adverse Effect;
and
(vii) there are no costs or liabilities associated
with Environmental Laws (including, without limitation, any
capital or operating expenditures required for clean-up,
closure of properties or compliance with Environmental
8
Laws or any permit, license or approval, any related
constraints on operating activities and any potential
liabilities to third parties) which would, singly or in the
aggregate, have a Material Adverse Effect.
As used herein: "HAZARDOUS SUBSTANCE" shall include, without
limitation, any hazardous substance, hazardous waste, toxic or
dangerous substance, pollutant, solid waste or similarly designated
materials, including, without limitation, oil, petroleum or any
petroleum-derived substance or waste, asbestos or asbestos-containing
materials, PCBs, pesticides, explosives, radioactive materials,
dioxins, urea formaldehyde insulation or any constituent of any such
substance, pollutant or waste, including any such substance, pollutant
or waste identified or regulated under any Environmental Law
(including, without limitation, materials listed in the United States
Department of Transportation Optional Hazardous Material Table, 49
C.F.R. Section 172.101, as heretofore amended, or in the EPA's List of
Hazardous Substances and Reportable Quantities, 40 C.F.R. Part 302, as
heretofore amended); "ENVIRONMENT" shall mean any surface water,
drinking water, ground water, land surface, subsurface strata, river
sediment, buildings, structures, and ambient, workplace and indoor air;
"ENVIRONMENTAL LAW" shall mean the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (42 U.S.C.
Section 9601 et seq.) ("CERCLA"), the Resource Conservation and
Recovery Act of 1976, as amended (42 U.S.C. Section 6901, et seq.), the
Clean Air Act, as amended (42 U.S.C. Section 7401, et seq.), the Clean
Water Act, as amended (33 U.S.C. Section 1251, et seq.), the Toxic
Substances Control Act, as amended (15 U.S.C. Section 2601, et seq.),
the Occupational Safety and Health Act of 1970, as amended (29 U.S.C.
Section 651, et seq.), the Hazardous Materials Transportation Act, as
amended (49 U.S.C. Section 1801, et seq.), and all other applicable
federal, state and local laws, ordinances, regulations, rules, orders,
decisions and permits relating to the protection of the environment or
of human health from environmental effects; "GOVERNMENTAL AUTHORITY"
shall mean any federal, state or local governmental office, agency or
authority having the duty or authority to promulgate, implement or
enforce any Environmental Law; "LIEN" shall mean, with respect to any
Property, any mortgage, deed of trust, pledge, security interest, lien,
encumbrance, penalty, fine, charge, assessment, judgment or other
liability in, on or affecting such Property; and "RELEASE" shall mean
any spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, dumping, emanating or
disposing of any Hazardous Substance into the Environment, including,
without limitation, the abandonment or discard of barrels, containers,
tanks (including, without limitation, underground storage tanks) or
other receptacles containing or previously containing any Hazardous
Substance or any release, emission, discharge or similar term, as those
terms are defined or used in any Environmental Law.
(r) The independent auditors of the Company, who have
certified certain financial statements in the Registration Statement,
whose report appears in the Prospectus, are independent public
accountants as required by the Securities Act and the rules and
regulations of the Commission thereunder during the periods covered by
the financial statements on which they reported contained in the
Prospectus.
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(s) The Company is insured by insurers of recognized
financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which it is
engaged; the Company has not been refused any insurance coverage sought
or applied for; and the Company does not have any reason to believe
that it will not be able to renew its existing insurance coverage as
and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business at a cost
that would not have a Material Adverse Effect, except as described in
or contemplated by the Prospectus or in a document incorporated by
reference in the Prospectus.
(t) The Company possesses all certificates,
authorizations and permits issued by the appropriate federal, state or
foreign regulatory authorities necessary to conduct their respective
businesses, except where the failure to possess any such certificates,
authorizations or permits, singly or in the aggregate, would not have a
Material Adverse Effect, and the Company has not received any notice of
proceedings relating to the revocation or modification of any such
certificate, authorization or permit which, singly or in the aggregate,
if the subject of an unfavorable decision, ruling or finding, would
result in a Material Adverse Effect, except as described in or
contemplated by the Prospectus or in a document incorporated by
reference in the Prospectus.
(u) The Company has filed all Federal, state, and local
income tax returns which have been required to be filed and has paid
all taxes required to be paid and any other assessment, fine or penalty
levied against it, to the extent that any of the foregoing is due and
payable, except, in all cases, for any such tax, assessment, fine or
penalty that is being contested in good faith (and except in any case
in which the failure to so file or pay would not have a Material
Adverse Effect).
(v) The financial statements (including the notes
thereto) included or incorporated by reference in the Registration
Statement and the Prospectus present fairly the consolidated financial
position of the REIT, the Operating Partnership and their consolidated
subsidiaries at the respective dates indicated and the consolidated
results of operations for the respective periods specified, and except
as otherwise stated or incorporated by reference in the Registration
Statement and the Prospectus, said financial statements have been
prepared in conformity with generally accepted accounting principles
("GAAP") applied on a consistent basis throughout the periods
specified. The supporting schedules included in the Registration
Statement present fairly the information required to be stated or
incorporated by reference therein. The financial information and data
included in the Registration Statement and the Prospectus present
fairly the information included therein and have been prepared on a
basis consistent with that of the books and records of the respective
entities presented therein. Pro forma financial information included or
incorporated by reference in the Prospectus has been prepared in
accordance with the applicable requirements of Rules 11-01 and 11-02 of
Regulation S-X under the Securities Act, and the necessary pro forma
adjustments have been properly applied to the historical amounts in the
compilation of such information, and, in management's opinion, the
assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the
transactions and circumstances referred to therein.
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(w) The Company is currently in compliance with all
presently applicable provisions of the Americans with Disabilities Act,
except for such noncompliance which would not, singly or in the
aggregate, have a Material Adverse Effect.
(x) The REIT has elected to be taxed as a "real estate
investment trust" under the Internal Revenue Code of 1986, as amended
(the "CODE"), commencing with its taxable year ended December 31, 1997;
the REIT has qualified and expects that it will continue to qualify as
a "real estate investment trust" under the Code beginning with its
taxable year ended December 31, 1997, and will continue to qualify as a
"real estate investment trust" under the Code after consummation of the
transactions contemplated by the Prospectus; and the REIT's present and
contemplated operations, assets and income will enable it to meet the
requirements for qualification as a "real estate investment trust"
under the Code.
(y) Neither the REIT, the Operating Partnership nor any
Subsidiary, nor any of their directors, officers or controlling
persons, has taken or will take, directly or indirectly, any action
designed to cause or result under the Exchange Act, or otherwise in, or
which has constituted or which reasonably might be expected to
constitute, the unlawful stabilization or manipulation of the price of
any security of the REIT to facilitate the sale or resale of the
Shares.
(z) (i) the (a) Revolving Credit Agreement dated as of
May 24, 2000 among the Operating Partnership and the banks listed
therein (the "ORIGINAL REVOLVING CREDIT AGREEMENT") and (b) the
Guaranty of Payment made as of May 24, 2000 between the REIT and
JPMorgan Chase Bank (formerly Morgan Guaranty Trust Company of New
York), as administrative agent for the banks listed on the signature
page of the Revolving Credit Agreement have been superceded in their
entirety by (c) the Amended and Restated Revolving Credit Agreement,
dated as of December 11, 2002, as amended by the Amendment to Amended
and Restated Revolving Credit Agreement, dated as of July 10, 2003, by
and among the Operating Partnership, the banks listed therein, JPMorgan
Chase Bank, as administrative agent, J.P. Morgan Europe Limited, as
administrative agent for alternate currencies, Bank of America, N.A.,
as syndication agent, J.P. Morgan Securities Inc. and Banc of America
Securities LLC, as joint lead arrangers and joint bookrunners, Bank
One, NA, Commerzbank Aktiengesellschaft, New York and Grand Cayman
Branches and Wachovia Bank, N.A., as documentation agents, PNC Bank,
National Association, The Bank of Nova Scotia, acting through its San
Francisco Agency, and Wells Fargo Bank, N.A., as managing agents, and
KeyBank National Association, as co-agent (the "AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT"), and (d) the Guaranty of Payment, dated as
of December 11, 2002, by the REIT for the benefit of JPMorgan Chase
Bank, as administrative agent, and J.P. Morgan Europe Limited, as
administrative agent for alternate currencies, for the banks listed on
the signature page to the Amended and Restated Revolving Credit
Agreement, respectively, and are of no further force and effect; and
(ii) the Revolving Credit Agreement dated as of August 23, 2001, among
AMB Institutional Alliance Fund II, L.P., AMB Institutional Alliance
REIT II, Inc., the banks and financial institutions listed therein,
Bank of America, N.A., as Administrative Agent, Dresdner Bank, AG, as
Syndication Agent, and Bank One, N.A., as Documentation Agent (the
"ALLIANCE FUND II CREDIT AGREEMENT")
11
has been fully paid and the Alliance Fund II Credit Agreement has been
terminated and is of no further force and effect.
2. AGREEMENT TO SELL AND PURCHASE. The REIT hereby agrees to
issue and sell to the several Underwriters, and each Underwriter, upon the basis
of the representations and warranties herein contained and upon the terms and
subject to the conditions herein set forth, agrees, severally and not jointly,
to purchase from the REIT, the respective number of Firm Shares set forth in
Schedule I hereto opposite its name. The purchase price per share of the Shares
to be paid by the several Underwriters to the REIT shall be $24.2125 a share
(the "PURCHASE PRICE").
In addition, REIT hereby agrees to issue and sell to the several
Underwriters, and the Underwriters, upon the basis of the representations and
warranties herein contained and upon the terms and subject to the conditions
herein set forth, shall have a one-time right to purchase, severally and not
jointly, from the REIT any or all of the Additional Shares at the Purchase
Price. If you, on behalf of the Underwriters, elect to exercise such option, you
shall so notify the REIT in writing not later than 30 days after the date of
this Agreement, which notice shall specify the number of Additional Shares to be
purchased by the Underwriters and the date on which such shares are to be
purchased. Such date may be the same as the Closing Date (as defined below) but
not earlier than the Closing Date nor later than ten business days after the
date of such notice. Additional Shares may be purchased as provided in Section 4
hereof solely for the purpose of covering over-allotments made in connection
with the offering of the Firm Shares. If any Additional Shares are to be
purchased, each Underwriter agrees, severally and not jointly, to purchase the
number of Additional Shares (subject to such adjustments to eliminate fractional
shares as you may determine) that bears the same proportion to the total number
of Additional Shares to be purchased as the number of Firm Shares set forth in
Schedule I hereto opposite the name of such Underwriter bears to the total
number of Firm Shares.
The REIT hereby agrees that, without the prior written consent of the
Representative on behalf of the Underwriters, it will not, during the period
commencing on the date hereof and ending 30 days after the date of the
Prospectus, (i) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase, lend or otherwise transfer or dispose of, directly
or indirectly, any shares of 6 3/4% Series M Cumulative Redeemable Preferred
Stock (the "SERIES M PREFERRED STOCK"), or any securities convertible into or
exercisable or exchangeable for Series M Preferred Stock or (ii) enter into any
swap or other arrangement that transfers to another, in whole or in part, any of
the economic consequences of ownership of shares of Series M Preferred Stock,
whether any such transaction described in clause (i) or (ii) above is to be
settled by delivery of Series M Preferred Stock, in cash or otherwise. The
restrictions described in the foregoing sentence shall not apply to the Shares
to be sold hereunder or the Common Stock or prevent the REIT from redeeming or
repurchasing any of its securities.
3. TERMS OF PUBLIC OFFERING. The REIT is advised by you that the
Underwriters propose to make a public offering of their respective portions of
the Shares as soon after this Agreement has become effective as in your judgment
is advisable. The REIT is further advised by you that the Shares are to be
offered to the public initially at $25.00 a share (the "PUBLIC OFFERING PRICE")
plus accrued dividends, if any, to the Closing Date, and to certain dealers
selected by you at a price that represents a concession not in excess of $0.50 a
share under the
12
Public Offering Price, and that any Underwriter may allow, and such dealers may
reallow, a concession, not in excess of $0.45 a share, to any Underwriter or to
certain other dealers.
4. PAYMENT AND DELIVERY. Payment of the aggregate Purchase Price
for the Firm Shares shall be made to the REIT in federal or other funds
immediately available in New York City against delivery of such Firm Shares for
the respective accounts of the several Underwriters at 10:00 A.M., New York City
time, on November 25, 2003, or at such other time on the same or such other date
as shall be agreed to in writing by the REIT and the Representative. The time
and date of such payment are hereinafter referred to as the "CLOSING DATE."
Payment for the Additional Shares shall be made to the REIT in federal
or other funds immediately available in New York City against delivery of such
Additional Shares for the respective accounts of the several Underwriters at
10:00 A.M., New York City time, on the date specified in the notice described in
Section 2 or at such other time on the same or such other date as shall be
agreed to in writing by the REIT and the Representative. The time and date of
such payment are hereinafter referred to as the "OPTION CLOSING DATE."
Certificates for Firm Shares and Additional Shares shall be in
definitive form and registered in such names and in such denominations as you
shall request in writing not later than one (1) full business day prior to the
Closing Date or the Option Closing Date, as the case may be. The certificates
evidencing the Firm Shares and Additional Shares shall be delivered to you on
the Closing Date or the Option Closing Date, as the case may be, for the
respective accounts of the several Underwriters, with any transfer taxes payable
in connection with the transfer of the Shares to the Underwriters duly paid,
against payment of the Purchase Price therefor.
5. CONDITIONS TO THE UNDERWRITERS' OBLIGATIONS. The several
obligations of the Underwriters hereunder are subject to the accuracy of the
representations and warranties on the part of the Company herein, to the
accuracy of the statements of the Company's officers made in each certificate
furnished pursuant to the provisions hereof and to the performance and
observance by the Company of all covenants and agreements herein contained on
its part to be performed and observed and to the following conditions:
(a) Subsequent to the execution and delivery of this
Agreement and prior to the Closing Date:
(i) there shall not have occurred any change, or
any development involving a prospective change, in the
condition, financial or otherwise, or in the earnings,
business or operations of the REIT, the Operating Partnership
and their subsidiaries, taken as a whole, from that set forth
in the Prospectus (exclusive of any amendments or supplements
thereto subsequent to the date of this Agreement) that, in
your judgment, is material and adverse and that makes it, in
your judgment, impracticable to market the Shares on the terms
and in the manner contemplated in the Prospectus; and
(ii) there shall not have occurred any
downgrading, nor shall any notice have been given of any
intended or potential downgrading or of any review for a
possible change that does not indicate the direction of the
possible change, in the rating accorded the REIT, the
Operating Partnership, any of their
13
subsidiaries, any of their respective securities or in the
rating outlook for any of them by any "nationally recognized
statistical rating organization," as such term is defined for
purposes of Rule 436(g)(2) under the Securities Act.
(b) The Underwriters shall have received on the Closing
Date a certificate, dated the Closing Date and signed by an executive
officer of the REIT on behalf of the REIT and in the REIT's capacity as
general partner of the Operating Partnership, to the effect set forth
in subsection (a) and subsection (c) of this Section 5, and to the
effect that:
(i) the representations and warranties of the
REIT and the Operating Partnership contained in this Agreement are true
and correct on the Closing Date, as if made on the Closing Date,
(ii) all of the covenants and agreements
contained herein to be performed on the part of the Company and all
conditions contained herein to be fulfilled or complied with by the
Company at or prior to the Closing Date, shall have been duly
performed, fulfilled or complied with, and
(iii) the executive officer executing such
certificate has examined the Registration Statement and the Prospectus
(including the documents filed under the Exchange Act and deemed to be
incorporated by reference into the Prospectus) and (A) believes that as
of the date of such certificate, such documents are true and correct in
all material respects and do not omit to state a material fact required
to be stated therein or necessary in order to make the statements
therein not true or misleading and (B) does not know of any event that
has occurred as a result of which it is necessary to amend or
supplement the Prospectus in order to make the statements therein not
untrue or misleading and there has been no document required to be
filed under the Exchange Act and the rules and regulations thereunder
that upon such filing would be deemed to be incorporated by reference
into the Prospectus that has not been so filed.
The officer signing and delivering such certificate may rely upon the
best of his or her knowledge as to proceedings threatened.
(c) The Prospectus shall have been filed as required by
this Agreement and no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for
that purposes shall be pending or threatened by the Commission.
(d) The Underwriters shall have received on the Closing
Date an opinion of Latham & Watkins, special counsel for the REIT,
dated the Closing Date, in form and substance reasonably satisfactory
to the Underwriters, as to the matters set forth in Exhibit B attached
hereto.
(e) The Underwriters shall have received on the Closing
Date an opinion of Tamra D. Browne, General Counsel to the REIT, dated
the Closing Date, in form and substance reasonably satisfactory to the
Underwriters, as to the matters set forth in Exhibit C attached hereto.
14
(f) The Underwriters shall have received on the Closing
Date an opinion of Ballard Spahr Andrews & Ingersoll, LLP, special
Maryland counsel for the REIT, dated the Closing Date, in form and
substance reasonably satisfactory to the Underwriters, as to the
matters set forth in Exhibit D attached hereto.
(g) The Underwriters shall have received on the Closing
Date an opinion of Gibson, Dunn & Crutcher LLP, counsel for the
Underwriters, dated the Closing Date, in form and substance reasonably
satisfactory to the Underwriters.
(h) The Underwriters shall have received, on the Closing
Date, a letter(s) dated the Closing Date, in form and substance
reasonably satisfactory to the Underwriters, from
PricewaterhouseCoopers LLP, the Company's independent public
accountants, containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements (provided that it is
understood that such letter(s) will not include tick & tie coverage
with respect to the fiscal year ended December 31, 2001) and certain
financial information contained in the Registration Statement and the
Prospectus.
(i) The Shares shall be qualified for sale in such states
as the Underwriters may reasonably request, and each such qualification
shall be in effect and not subject to any stop order or other
proceeding on the Closing Date.
(j) On the Closing Date, the Company shall have furnished
to the Underwriters such appropriate further information, certificates
and documents as they may reasonably request.
The several obligations of the Underwriters to purchase Additional
Shares hereunder are subject to the delivery to you on the Option Closing Date
of such documents as you may reasonably request with respect to the good
standing of the REIT and the Operating Partnership, the due authorization and
issuance of the Additional Shares and other matters related to the issuance of
the Additional Shares, including, without limitation, (i) a certificate dated
and as of the Option Closing Date to same effect as the certificate described in
paragraph (b) above, (ii) opinions of Latham & Watkins, Tamra D. Browne and
Ballard Spahr Andrews & Ingersoll, LLP dated the Option Closing Date to same
effect as the opinions described in paragraphs (d), (e) and (f) but relating to
the Additional Shares, (iii) an opinion of Gibson, Dunn & Crutcher dated the
Option Closing Date relating to the Additional Shares, and (iv) a letter from
PricewaterhouseCoopers LLP dated the Option Closing Date to same effect as the
described in paragraph (h).
6. COVENANTS OF THE REIT AND THE OPERATING PARTNERSHIP. In
further consideration of the agreements of the Underwriters herein contained,
the REIT and the Operating Partnership covenant with each Underwriter as
follows:
(a) The REIT will advise the Representative promptly of
the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of the institution of
any proceedings for that purpose, and will use their best efforts to
prevent the issuance of any such stop order and to obtain as soon as
possible the lifting thereof, if issued. The REIT and the Operating
Partnership will advise the Representative
15
promptly of any request by the Commission for any amendment of or
supplement to the Registration Statement or the Prospectus or for
additional information, and will not at any time file any amendment to
the Registration Statement or supplement to the Prospectus which shall
not previously have been submitted to the Representatives a reasonable
time prior to the proposed filing or use thereof or to which the
Representatives shall reasonably object or which is not in compliance
with the Securities Act and the rules and regulations thereunder. The
REIT and the Operating Partnership will cause the Prospectus Supplement
to be filed and will advise you promptly when the Prospectus has been
filed pursuant to Rule 424(b) of the Securities Act.
(b) To furnish to you, upon request and without charge, a
signed copy of the Registration Statement (including exhibits thereto)
and for delivery to each other Underwriter a conformed copy of the
Registration Statement (without exhibits thereto) and to furnish to you
in New York City, without charge, prior to 10:00 A.M. New York City
time on the business day next succeeding the date of this Agreement and
during the period mentioned in Section 6(c) below, as many copies of
the Prospectus and any supplements and amendments thereto or to the
Registration Statement as you may reasonably request.
(c) If, during such period after the first date of the
public offering of the Shares, in the opinion of counsel for the
Underwriters, the Prospectus is required by law to be delivered in
connection with sales by an Underwriter or dealer, any event shall
occur or condition exist as a result of which it is necessary to amend
or supplement the Prospectus in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading when the Prospectus is delivered to a purchaser, or if, in
the opinion of counsel for the Underwriters, it is necessary to amend
or supplement the Prospectus to comply with applicable law, forthwith
to prepare, file with the Commission and furnish, at its own expense,
to the Underwriters and to the dealers (whose names and addresses you
will furnish to the REIT and the Operating Partnership) to which Shares
may have been sold by you on behalf of the Underwriters and to any
other dealers upon request, either amendments or supplements to the
Prospectus so that the statements in the Prospectus as so amended or
supplemented will not, in the light of the circumstances under which
they were made, be misleading when the Prospectus is delivered to a
purchaser, or so that the Prospectus, as amended or supplemented, will
comply with law.
(d) To endeavor to qualify the Shares for offer and sale
under the securities or Blue Sky laws and real estate syndication laws
of such jurisdictions as you shall reasonably request.
(e) To make generally available to the REIT's security
holders and to you as soon as practicable (but no event later than the
last day of the fifteenth full calendar month following the end of the
REIT's current fiscal quarter), an earnings statement covering the
twelve-month period beginning after the date upon which the Prospectus
Supplement is filed pursuant to Rule 424 of the Act that satisfies the
provisions of Section 11(a) of the Securities Act and the rules and
regulations of the Commission thereunder.
16
(f) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or
cause to be paid all expenses incident to the performance of its
obligations under this Agreement, including: (i) the fees,
disbursements and expenses of counsel for the Company and the Company's
accountants in connection with the registration and delivery of the
Shares under the Securities Act and all other fees or expenses in
connection with the preparation and filing of the Registration
Statement, any preliminary prospectus, the Prospectus and amendments
and supplements to any of the foregoing, including all printing costs
associated therewith, and the mailing and delivering of copies thereof
to the Underwriters and dealers, in the quantities hereinabove
specified, (ii) all costs and expenses related to the transfer and
delivery of the Shares to the Underwriters, including any transfer or
other taxes payable thereon, (iii) the cost of printing or producing
any Blue Sky or Legal Investment memorandum in connection with the
offer and sale of the Shares under state securities laws and all
expenses in connection with the qualification of the Shares for offer
and sale under state securities laws as provided in Section 6(d)
hereof, including filing fees and the reasonable fees and disbursements
of counsel for the Underwriters in connection with such qualification
and in connection with the Blue Sky or Legal Investment memorandum,
(iv) all filing fees and the reasonable fees and disbursements of
counsel to the Underwriters incurred in connection with the review and
qualification of the offering of the Shares by the National Association
of Securities Dealers, Inc., if any, (v) any fees charged by the rating
agencies for the rating of the Shares, (vi) all fees and expenses in
connection with the preparation and filing of the registration
statement on Form 8-A relating to the Shares, (vii) all costs and
expenses incident to listing the Shares on the New York Stock Exchange,
(viii) the cost of printing certificates representing the Shares, (ix)
the fees and expenses of any transfer agent, registrar or depositary in
connection with the issuance of the Shares, (x) the costs and expenses
of the Company relating to investor presentations on any "road show"
undertaken in connection with the marketing of the offering of the
Shares, including, without limitation, expenses associated with the
production of road show slides and graphics, fees and expenses of any
consultants engaged in connection with the road show presentations with
the prior approval of the REIT, travel and lodging expenses of the
representatives and officers of the REIT and any such consultants, and,
with the prior approval of the REIT, the cost of any aircraft chartered
in connection with the road show and (xi) all other costs and expenses
incident to the performance of the obligations of the REIT and the
Operating Partnership hereunder for which provision is not otherwise
made in this Section. It is understood, however, that except as
provided in this Section, Section 7 entitled "Indemnity and
Contribution" and the last paragraph of Section 9 below, the
Underwriters will pay all of their costs and expenses, including fees
and disbursements of their counsel, stock transfer taxes payable on
resale of any of the Shares by them and any advertising expenses
connected with any offers they may make.
(g) The Company will use the net proceeds received by it
from the sale of the Shares sold by it in the manner specified in the
Prospectus under the caption "Use of Proceeds."
(h) The Company shall have applied to list the Shares,
and the Shares shall have been approved for listing, subject to notice
of issuance, on the New York Stock
17
Exchange (the "NYSE") on or prior to the Closing Date, and the REIT and
the Operating Partnership shall use its best efforts to maintain the
listing of such Shares on the NYSE.
(i) Except for the authorization of actions permitted to
be taken by the underwriters as contemplated herein or in the
Prospectus, neither the REIT nor the Operating Partnership will, within
30 days of the date of the Prospectus, (i) take, directly or
indirectly, any action designed to cause or to result in, or that might
reasonably be expected to constitute, the stabilization or manipulation
of the price of any security of the REIT to facilitate the sale or
resale of the Shares, (ii) sell, bid for or purchase the Shares or pay
any person any compensation for soliciting purchases of the Shares or
(iii) pay or agree to pay to any person any compensation for soliciting
another to purchase any other securities of the REIT, which payment or
agreement is designed to cause or to result in the stabilization or
manipulation of the price of the Shares.
(j) The Company will use its best efforts to enable
Moody's Investor Service, Inc. and Standard and Poor's Rating Services
to provide their respective credit ratings of the REIT, the Operating
Partnership or the Shares, as the case may be.
(k) Prior to the Closing Date the REIT will file the
Articles Supplementary with the Maryland State Department of
Assessments and Taxation establishing and fixing the rights and
preferences of the Shares. The REIT shall first provide the form of
Articles Supplementary to counsel to the Underwriters and shall not
file any form of Articles Supplementary to which counsel to the
Underwriters has objected in good faith.
7. INDEMNITY AND CONTRIBUTION.
(a) The REIT and the Operating Partnership, jointly and
severally, agree to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act, from and
against any and all losses, claims, damages, liabilities and expenses
(including, without limitation, any legal or other expenses reasonably incurred
in connection with defending or investigating any such action or claim) arising
out of or caused by (i) any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment thereof,
any preliminary prospectus or the Prospectus (as amended or supplemented if the
REIT and the Operating Partnership shall have furnished any amendments or
supplements thereto) or in any documents filed under the Exchange Act and deemed
to be incorporated by reference into the Prospectus, or in any application or
other document executed by or on behalf of the Company or based on written
information furnished by or on behalf of the Company filed in any jurisdiction
in order to qualify the Shares under the securities or blue sky laws thereof or
filed with the Commission, or (ii) any omission or alleged omission to state in
such document a material fact required to be stated therein or necessary to make
the statements therein not misleading, except insofar as such losses, claims,
damage, liabilities or expenses are caused by any such untrue statement or
omission or alleged untrue statement or omission based upon information relating
to any Underwriter furnished to the REIT and the Operating Partnership in
writing by such Underwriter through you expressly for use therein and set forth
in Exhibit A hereof; provided, however, that the foregoing indemnity agreement
with respect to any preliminary prospectus shall not inure to the benefit of any
Underwriter from whom the person asserting any such losses, claims, damages,
liabilities or expenses purchased Shares, or any
18
person controlling such Underwriter, if a copy of the Prospectus (as then
amended or supplemented if the REIT and the Operating Partnership shall have
furnished any amendments or supplements thereto) was not sent or given by or on
behalf of such Underwriter to such person, if required by law so to have been
delivered, at or prior to the written confirmation of the sale of the Shares to
such person, and if the Prospectus (as so amended or supplemented) would have
cured the defect giving rise to such losses, claims, damages, liabilities or
expenses, unless such failure is the result of noncompliance by the REIT and the
Operating Partnership with Section 6(b) hereof. This indemnity agreement will be
in addition to any liability that the REIT or the Operating Partnership might
otherwise have.
(b) Each Underwriter agrees, severally and not jointly,
to indemnify and hold harmless the REIT, the Operating Partnership and the
REIT's directors, its officers who sign the Registration Statement and each
person, if any, who controls the REIT or the Operating Partnership within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act to the same extent as the foregoing indemnities from the REIT and the
Operating Partnership to such Underwriter, but only with reference to
information relating to such Underwriter furnished to the REIT in writing by
such Underwriter through you expressly for use in the Registration Statement,
any preliminary prospectus, the Prospectus or any amendments or supplements
thereto, and as set forth in Exhibit A hereto.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to Section 7(a) or 7(b), such person (the
"INDEMNIFIED PARTY") shall promptly notify the person against whom such
indemnity may be sought (the "INDEMNIFYING PARTY") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties and that all such fees
and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by Morgan Stanley & Co. Incorporated, in the case of
parties indemnified pursuant to Section 7(a), and by the REIT or the Operating
Partnership, in the case of parties indemnified pursuant to Section 7(b). The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment. Notwithstanding the foregoing sentence, if at
any time an indemnified party shall have requested an indemnifying party in
writing to reimburse the indemnified party for fees and expenses of counsel as
contemplated by the second and third sentences of this paragraph, the
19
indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 60 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of
each indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
(d) To the extent the indemnification provided for in
Section 7(a) or 7(b) is unavailable to an indemnified party or insufficient in
respect of any losses, claims, damages or liabilities referred to therein, then
each indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the REIT and the Operating Partnership on the one hand and
the Underwriters on the other hand from the offering of the Shares or (ii) if
the allocation provided by clause (i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the REIT and the
Operating Partnership on the one hand and of the Underwriters on the other hand
in connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the REIT and the Operating
Partnership on the one hand and the Underwriters on the other hand in connection
with the offering of the Shares shall be deemed to be in the same respective
proportions as the net proceeds from the offering of the Shares (before
deducting expenses) received by the REIT and the total underwriting discounts
and commissions received by the Underwriters, in each case as set forth in the
table on the cover of the Prospectus, bear to the aggregate Public Offering
Price of the Shares. The relative fault of the REIT and the Operating
Partnership on the one hand and the Underwriters on the other hand shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the REIT or the Operating
Partnership or by the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Underwriters' respective obligations to contribute pursuant to
this Section 7 are several in proportion to the respective number of Shares they
have purchased hereunder, and not joint.
(e) The REIT, the Operating Partnership and the
Underwriters agree that it would not be just or equitable if contribution
pursuant to this Section 7 were determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other method
of allocation that does not take account of the equitable considerations
referred to in Section 7(d). The amount paid or payable by an indemnified party
as a result of the losses, claims, damages and liabilities referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 7, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the
20
Shares underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages that such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 7 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained
in this Section 7 and the representations, warranties and other statements of
the REIT and the Operating Partnership contained in this Agreement shall remain
operative and in full force and effect regardless of (i) any termination of this
Agreement, (ii) any investigation made by or on behalf of any Underwriter or any
person controlling any Underwriter or by or on behalf of the REIT, the Operating
Partnership or the REIT's officers or directors or any person controlling the
REIT or the Operating Partnership and (iii) acceptance of and payment for any of
the Shares.
8. TERMINATION. The obligations of the Underwriters under this
Agreement may be terminated at any time on or prior to the Closing Date, by
notice to the REIT and the Operating Partnership from the Underwriters, without
liability on the part of the Underwriters to the REIT and the Operating
Partnership, if, prior to delivery and payment for the Shares, in the sole
judgment of the Underwriters, (i) trading in any of the equity securities of the
REIT shall have been suspended by the Commission, by an exchange that lists such
equity securities or by the National Association of Securities Dealers Automated
Quotation National Market System, (ii) trading in securities generally on the
New York Stock Exchange shall have been suspended or limited or minimum or
maximum prices shall have been generally established on such exchange, or
additional material governmental restrictions, not in force on the date of this
Agreement, shall have been imposed upon trading in securities generally by such
exchange or by order of the Commission or any court or other governmental
authority, (iii) a general banking moratorium shall have been declared by either
Federal or New York State authorities or (iv) any material adverse change in the
financial or securities markets in the United States or in political, financial
or economic conditions in the United States or any material outbreak or material
escalation of hostilities or declaration by the United States of a national
emergency or war or other material calamity or crisis, including, without
limitation, an act of terrorism, shall have occurred the effect of any of which
is such as to make it, in the judgment of the Underwriters, impracticable or
inadvisable to proceed with the offering, sale or delivery of the Shares on the
terms and in the manner contemplated by the Prospectus.
9. EFFECTIVENESS; DEFAULTING UNDERWRITERS. This Agreement shall
become effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date or the Option Closing Date, as the case may be, any one
or more of the Underwriters shall fail or refuse to purchase Shares that it has
or they have agreed to purchase hereunder on such date, and the aggregate number
of Shares which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase is not more than one-tenth of the aggregate number of the
Shares to be purchased on such date, the other Underwriters shall be obligated
severally in the proportions that the number of Firm Shares set forth opposite
their respective names in Schedule I bears to the aggregate number of Firm
Shares set forth opposite the names of all such non-defaulting Underwriters, or
in such other proportions as you may specify, to purchase the Shares which
21
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase on such date; provided that in no event shall the number of Shares that
any Underwriter has agreed to purchase pursuant to this Agreement be increased
pursuant to this Section 9 by an amount in excess of one-ninth of such number of
Shares without the written consent of such Underwriter. If, on the Closing Date,
any Underwriter or Underwriters shall fail or refuse to purchase Firm Shares and
the aggregate number of Firm Shares with respect to which such default occurs is
more than one-tenth of the aggregate number of Firm Shares to be purchased, and
arrangements satisfactory to you and the REIT for the purchase of such Firm
Shares are not made within 36 hours after such default, this Agreement shall
terminate without liability on the part of any non-defaulting Underwriter or the
REIT. In any such case either you or the REIT shall have the right to postpone
the Closing Date, but in no event for longer than seven days, in order that the
required changes, if any, in the Registration Statement and in the Prospectus or
in any other documents or arrangements may be effected. If, on the Option
Closing Date, any Underwriter or Underwriters shall fail or refuse to purchase
Additional Shares and the aggregate number of Additional Shares with respect to
which such default occurs is more than one-tenth of the aggregate number of
Additional Shares to be purchased, the non-defaulting Underwriters shall have
the option to (i) terminate their obligation hereunder to purchase Additional
Shares or (ii) purchase not less than the number of Additional Shares that such
non-defaulting Underwriters would have been obligated to purchase in the absence
of such default. Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the REIT or the Operating
Partnership to comply with the terms or to fulfill any of the conditions of this
Agreement, or if for any reason the REIT or the Operating Partnership shall be
unable to perform their obligations under this Agreement, the REIT and the
Operating Partnership will, jointly and severally, reimburse the Underwriters or
such Underwriters as have so terminated this Agreement with respect to
themselves, severally, for all out-of-pocket expenses (including the fees and
disbursements of their counsel) reasonably incurred by such Underwriters in
connection with this Agreement or the offering contemplated hereunder.
10. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All
representations, warranties, agreements and covenants of the REIT and the
Operating Partnership herein or in certificates delivered pursuant hereto and
the agreements of the Underwriters in Section 7 herein shall remain operative
and in full force and effect regardless of any investigation made by or on
behalf of any Underwriter or any controlling persons, or the REIT or the
Operating Partnership or any of its officers, trustees, or any controlling
persons, and shall survive (i) termination of this Agreement and (ii) delivery
of and payment for the Shares hereunder.
11. NOTICES. All communications hereunder will be in writing and
effective only on receipt, and, with respect to any party hereto, will be
mailed, delivered or telefaxed and confirmed as follows:
if to the to the Company: AMB Property Corporation
Pier 1, Bay 1
San Francisco, California 94111
22
Attention: General Counsel
Telefax number: (415) 394-9000
with a copy to: Latham & Watkins
505 Montgomery St. Suite 1900
San Francisco, California 94111
Attention: Laura L. Gabriel
Telefax number: (415) 395-8095
if to the Underwriters: Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Telefax number: (212) 761-0783
with a copy to: Gibson, Dunn & Crutcher LLP
One Montgomery Street
One Montgomery Tower, 31st Floor
San Francisco, California 94104
Attention: Douglas D. Smith
Telefax number: (415) 986-5309
12. COUNTERPARTS. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
13. APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.
14. PARTIES. This Agreement has been and is made solely for the
benefit of the Underwriters and the REIT and the Operating Partnership and of
the controlling persons, directors, trustees, and officers referred to in
Section 7, and their respective successors and assigns, and no other person
shall acquire or have any right under or by virtue of this Agreement. The term
"successors and assigns" as used in this Agreement shall not include a
purchaser, as such purchaser, of Shares from the Underwriters.
15. AMENDMENTS. This Agreement may be amended or supplemented if,
but only if, such amendment or supplement is in writing and is signed by the
REIT, the Operating Partnership and the Representative.
16. SEVERABILITY. In case any provision in this Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
17. WAIVER OF TRIAL BY JURY. The REIT and each of the Underwriters
each hereby irrevocably waive any right they may have to a trial by jury in
respect of any claim based upon or arising out of this Agreement or the
transactions contemplated hereby.
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18. HEADINGS. The headings of the sections of this Agreement have
been inserted for convenience of reference only and shall not be deemed a part
of this Agreement.
[Signature Page Follows]
24
Please confirm that the foregoing correctly sets forth the agreement
between the REIT, the Operating Partnership and the Underwriters.
Very truly yours,
AMB PROPERTY CORPORATION
By: /s/ Michael A. Coke
-------------------------------------
Name: Michael A. Coke
Title: Executive Vice President and
Chief Financial Officer
AMB PROPERTY, L.P.
By: AMB PROPERTY CORPORATION,
its General Partner
By: /s/ Michael A. Coke
-------------------------------------
Name: Michael A. Coke
Title: Executive Vice President and
Chief Financial Officer
Accepted as of the date hereof
MORGAN STANLEY & CO. INCORPORATED
Acting on behalf of itself and the
several Underwriters named in Schedule I hereto.
MORGAN STANLEY & CO. INCORPORATED
By: /s/ Harold J. Hendershot III
-------------------------------------
Name: Harold J. Hendershot III
Title: Executive Director
[Signature Page to AMB Underwriting Agreement]
SCHEDULE I
UNDERWRITERS
NUMBER OF FIRM SHARES
UNDERWRITER TO BE PURCHASED
----------- ---------------------
Morgan Stanley & Co. Incorporated....................................... 750,000
Wachovia Capital Markets, LLC........................................... 750,000
Banc of America Securities LLC.......................................... 400,000
A.G. Edwards & Sons, Inc................................................ 25,000
Banc One Capital Markets, Inc........................................... 25,000
Bear, Stearns & Co. Inc................................................. 25,000
Scotia Capital (USA) Inc................................................ 25,000
---------
Total Firm Shares................................................... 2,000,000
---------
SCHEDULE II
SUBSIDIARIES
MATERIAL SUBSIDIARIES OF THE OPERATING PARTNERSHIP
AMB Property II, L.P., a Delaware limited partnership
Long Gate, LLC, a Delaware limited liability company
MATERIAL SUBSIDIARIES OF THE REIT
AMB Property, L.P., a Delaware limited partnership
AMB Property II, L.P., a Delaware limited partnership
Long Gate, LLC, a Delaware limited liability company