SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): October 30, 2001
iSTAR FINANCIAL INC.
(Exact Name of Registrant as Specified in its Declaration of Trust)
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Maryland 1-10150 95-6881527
(State or Other (Commission (IRS Employer
Jurisdiction of File Number) Identification No.)
Incorporation)
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1114 Avenue of the Americas, 27th Floor
New York, New York 10036
(Address of Principal Executive Offices)(Zip Code)
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Registrant's telephone number, including area code:
(212) 930-9400
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
The following exhibits are filed with this Report pursuant to
Regulation S-K Item 601 in lieu of filing the otherwise required exhibits to
the registration statement on Form S-3 of the Registrant, file no. 333-32946,
under the Securities Act of 1933, as amended (the "Registration Statement"),
and which, as this Form 8-K filing is incorporated by reference in the
Registration Statement, are set forth in full in the Registration Statement.
Exhibit
Number Exhibit
------ -------
1.1 Purchase Agreement dated October 30, 2001.
5.1 Opinion of Clifford Chance Rogers & Wells LLP.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.
iSTAR FINANCIAL INC.
Date: November 5, 2001 By: /s/ Spencer B. Haber
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Spencer B. Haber
President and Chief Financial Officer
Page 2
Exhibit 1.1
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iSTAR FINANCIAL INC.
(a Maryland corporation)
16,500,000 Shares of Common Stock
PURCHASE AGREEMENT
Dated: October 30, 2001
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iSTAR FINANCIAL INC.
(a Maryland corporation)
16,500,000 Shares of Common Stock
(Par Value $.001 Per Share)
PURCHASE AGREEMENT
October 30, 2001
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
LEHMAN BROTHERS INC.
BANC OF AMERICA SECURITIES LLC
BEAR, STEARNS & CO. INC.
SALOMON SMITH BARNEY INC.
UBS WARBURG LLC,
as Representatives of the several Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
222 Broadway
New York, New York 10038
Ladies and Gentlemen:
iStar Financial Inc., a Maryland corporation (the "Company"), and the
persons listed in Schedule B hereto (the "Selling Stockholders"), confirm their
respective agreements with each of the 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 Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill
Lynch"), Lehman Brothers Inc., Banc of America Securities LLC, Bear, Stearns &
Co. Inc., Salomon Smith Barney Inc. and UBS Warburg LLC are acting as
representatives (in such capacity, the "Representatives"), with respect to (i)
the sale by the Selling Stockholders, acting severally and not jointly, and the
purchase by the Underwriters, acting severally and not jointly, of the
respective numbers of shares of Common Stock, par value $.001 per share, of the
Company (the "Common Stock") set forth in Schedules A and B hereto and (ii) the
grant by the Selling Stockholders to the Underwriters, acting severally and not
jointly, of the option described in Section 2(b) hereof to purchase all or any
part of 2,475,000 additional shares of Common Stock to cover over-allotments, if
any. The aforesaid 16,500,000 shares of Common Stock (the "Initial Securities")
to be purchased by the Underwriters and all or any part of the 2,475,000 shares
of
Common Stock subject to the option described in Section 2(b) hereof (the "Option
Securities") are hereinafter called, collectively, the "Securities".
The Company and the Selling Stockholders understand that the
Underwriters propose to make a public offering of the Securities as soon as the
Representatives deem advisable after this Agreement has been executed and
delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-32946) covering the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act"), including a related prospectus, which has become effective. The
registration statement (including the exhibits thereto and schedules thereto, if
any) as amended at the time it became effective, or, if a post-effective
amendment has been filed with respect thereto, as amended by such post-effective
amendment at the time of its effectiveness (including in each case the
information (if any) deemed to be part of such registration statement at the
time of effectiveness pursuant to Rule 430A under the 1933 Act), is hereinafter
referred to as the "Registration Statement." The term "Effective Date" shall
mean each date that the Registration Statement and any post-effective amendment
or amendments thereto became or become effective. The term "Base Prospectus"
shall mean the prospectus referred to in Section 1(a)(i) hereof contained in the
Registration Statement at the Effective Date. "Preliminary Prospectus" means the
preliminary prospectus supplement to the Base Prospectus used prior to the
filing of the Prospectus; the term "Prospectus" means the prospectus supplement
to the Base Prospectus first filed with the Commission pursuant to Rule 424(b)
under the Securities Act, together with the Base Prospectus. Any registration
statement filed pursuant to Rule 462(b) under the 1933 Act is herein referred to
as the "Rule 462(b) Registration Statement," and after such filing the term
"Registration Statement" shall include the Rule 462(b) Registration Statement.
Any reference in this Agreement to the Registration Statement, any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and include
the documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the 1933 Act, as of the effective date of the Registration Statement or
the date of such Preliminary Prospectus or the Prospectus, as the case may be
(it being understood that the several specific references in this Agreement to
documents incorporated by reference in the Registration Statement or the
Prospectus are for clarifying purposes only and are not meant to limit the
inclusiveness of any other definition herein). For purposes of this Agreement,
all references to the Registration Statement, any Preliminary Prospectus, or the
Prospectus or any amendment or supplement to any 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" or "stated" in the Registration Statement, any
Preliminary Prospectus 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, any Preliminary Prospectus or the Prospectus, as the case may be.
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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, 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) COMPLIANCE WITH REGISTRATION REQUIREMENTS. The Company
meets the requirements for use of Form S-3 under the 1933 Act and has
filed with the Commission the Registration Statement on such Form,
including a Base Prospectus, for registration under the 1933 Act of the
offering and sale of the Securities, one or more amendments to such
Registration Statement may have been so filed, and the Company may have
used a Preliminary Prospectus. Such Registration Statement, as so
amended, has become effective. Although the Base Prospectus may not
include all the information with respect to the Securities and the
offering thereof required by the 1933 Act and the rules and regulations
of the Commission thereunder (the "1933 Act Regulations") to be
included in the Prospectus, the Base Prospectus includes all such
information required by the 1933 Act and the 1933 Act Regulations to be
included therein as of the Effective Date. After the execution of this
Agreement, the Company will file with the Commission pursuant to Rules
415 and 424(b)(2) or (5) a final supplement to the Base Prospectus
included in such Registration Statement relating to the Securities and
the offering thereof, with such information as is required or permitted
by the 1933 Act and as has been provided to and approved by the
Representatives prior to the date hereof or, to the extent not
completed at the date hereof, containing only such specific additional
information and other changes (beyond that contained in the Base
Prospectus and any Preliminary Prospectus) as the Company has advised
you, prior to the date hereof, will be included or made therein. The
Company may also file a Rule 462(b) Registration Statement with the
Commission for the purpose of registering certain additional
Securities, which registration shall be effective upon filing with the
Commission.
The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus. When any Preliminary
Prospectus was filed with the Commission, it (x) complied as to form in
all material respects with the requirements of the 1933 Act and the
1933 Act Regulations and (y) did not include any untrue statement of a
material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading. When the Registration Statement
or any amendment thereto was or is declared effective, it (I) complied
as to form or will comply in all material respects with the
requirements of the 1933 Act, the Securities Exchange Act of 1934, as
amended (the "1934 Act"), the 1933 Act Regulations and the rules and
regulations of the Commission under the 1934 Act (the "1934 Act
Regulations") and (II) did not or will not contain any untrue statement
of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading. When the Prospectus or any amendment or supplement to the
Prospectus is filed with the Commission pursuant to Rule 424(b) (or, if
the Prospectus or such amendment or supplement is not required to be so
filed, when the Registration Statement or the amendment thereto
containing the
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Prospectus or such amendment or supplement to the Prospectus was or is
declared effective) and at the Closing Time (and, if any Option
Securities are purchased, at the Date of Delivery), the Prospectus, as
amended or supplemented at any such time, (A) complied as to form or
will comply in all material respects with the requirements of, the 1933
Act, the 1934 Act, the 1933 Act Regulations and the 1934 Act
Regulations and (B) did not or will not include any untrue statement of
a material fact or omit to state any material fact necessary in order
to make the statements therein, in the light of the circumstances under
which they were made, not misleading. The foregoing provisions of this
paragraph do not apply to statements or omissions made in any
Preliminary Prospectus, the Registration Statement or any amendment
thereto or the Prospectus or any amendment or supplement thereto in
reliance upon and in conformity with written information furnished to
the Company by any Underwriter through the Representatives specifically
for use therein.
If the Company has elected to rely on Rule 462(b) and the Rule
462(b) Registration Statement is not effective, (x) the Company will
file a Rule 462(b) Registration Statement in compliance with, and that
is effective upon filing pursuant to, Rule 462(b) and (y) the Company
has given irrevocable instructions for transmission of the applicable
filing fee in connection with the filing of the Rule 462(b)
Registration Statement, in compliance with Rule 111 under the 1933 Act,
or the Commission has received payment of such filing fee.
The Company has not distributed and, prior to the later of (x)
the Closing Time (and, if any Option Securities are purchased, the Date
of Delivery) and (y) the completion of the distribution of the
Securities, will not distribute any offering material in connection
with the offering of the Securities pursuant to this Agreement other
than the Registration Statement or any amendment thereto, any
Preliminary Prospectus or the Prospectus or any amendment or supplement
thereto.
(ii) NO MATERIAL LIABILITIES. Subsequent to the respective
dates as of which information is given in the Registration Statement
and the Prospectus (x) the Company and its subsidiaries, taken as a
whole, have not incurred any material liability or obligation, direct
or contingent, nor entered into any material transaction not in the
ordinary course of business; (y) the Company has not purchased any of
its outstanding capital stock; and (z) there has not been any material
change in the capital stock of the Company, or in the short-term or
long-term debt of the Company and its subsidiaries, taken as a whole,
except in each case as described in or contemplated by the Prospectus.
(iii) INCORPORATED DOCUMENTS. Each document, if any, filed or
to be filed pursuant to the 1934 Act and incorporated by reference in
either the Preliminary Prospectus or the Prospectus (or any amendment
or supplement thereto) complied or will comply when so filed in all
material respects with the 1934 Act and the 1934 Act Regulations.
(iv) CAPITALIZATION. The Company has an authorized, issued and
outstanding capitalization as set forth in the Prospectus. All of the
issued shares of capital stock of
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the Company, including the Securities to be purchased by the
Underwriters from the Selling Stockholders, have been duly authorized
and validly issued and are fully paid and non-assessable.
(v) NO REGISTRATION RIGHTS. No holder of securities of the
Company has any right which has not been fully exercised or waived to
require the Company to register the offer or sale of any securities
owned by such holder under the 1933 Act in the offering of the
Securities contemplated by this Agreement.
(vi) NO EQUITY INTERESTS. Except for the shares of capital
stock of each of the subsidiaries owned by the Company and such
subsidiaries, neither the Company nor any such subsidiary owns any
shares of stock or any other equity securities of any corporation or
has any equity interest in any firm, partnership, association or other
entity, except in connection with an investment in its ordinary course
of business, or as otherwise described in or contemplated by the
Prospectus.
(vii) MARKET MANIPULATION. Neither the Company nor any of its
affiliates, nor any person acting on behalf of any of them has,
directly or indirectly, (x) taken any action designed to cause or to
result in, or that has constituted or which might reasonably be
expected to constitute, the stabilization or manipulation of the price
of any security of the Company to facilitate the sale or resale of the
Securities, or (y) since the filing of the Registration Statement (I)
sold, bid for, purchased, or paid anyone any compensation for
soliciting purchases of, the Securities other than as contemplated by
this Agreement or (II) paid or agreed to pay to any person any
compensation for soliciting another to purchase any shares of Common
Stock or any securities convertible into or exchangeable or exercisable
for shares of Common Stock.
(viii) POWER AND AUTHORITY. The Company has been duly
incorporated and is validly existing as a corporation in good standing
under the law of its jurisdiction of incorporation with full power and
authority to own, lease and operate its properties and assets and
conduct its business as described in the Prospectus, is duly qualified
to transact business and is in good standing in each jurisdiction in
which its ownership, leasing or operation of its properties or assets
or the conduct of its business requires such qualification, except
where the failure to be so qualified does not amount to a material
liability or disability to the Company and its subsidiaries, taken as a
whole, and has full power and authority to execute and perform its
obligations under this Agreement; each subsidiary of the Company is a
corporation, limited liability company or limited partnership duly
incorporated or organized, as the case may be, validly existing and in
good standing under the laws of its jurisdiction of incorporation or
organization and is duly qualified to transact business and is in good
standing in each jurisdiction in which its ownership, leasing or
operation of its properties or assets or the conduct of its business
requires such qualification, except where the failure to be so
qualified does not amount to a material liability or disability to the
Company and its subsidiaries, taken as a whole, and each has full power
and authority to own, lease and operate its properties and assets and
conduct its business as described in the Registration Statement and the
Prospectus; all of the issued and outstanding shares of capital stock,
limited liability company interests or
5
partnership interests, as the case may be, of each of the Company's
subsidiaries have been duly authorized and are fully paid and
non-assessable and, except for SFT II, Inc., pledges made in connection
with the Company's $300 million revolving credit facility maturing in
July 2003 and as otherwise set forth in the Prospectus, are owned
beneficially by the Company free and clear of any security interests,
liens, encumbrances, equities or claims. The only subsidiaries of the
Company are the subsidiaries listed on Schedule D hereto.
(ix) AUTHORIZATION OF AGREEMENT. The execution and delivery of
this Agreement have been duly authorized by all necessary corporate
action of the Company, and this Agreement has been duly executed and
delivered by the Company and, assuming due authorization, execution and
delivery by the other parties hereto, will be the valid and binding
agreement of the Company, enforceable against the Company in accordance
with its terms.
(x) ABSENCE OF DEFAULTS AND CONFLICTS. The execution and
delivery by the Company of, and the performance by the Company of its
obligations under, this Agreement, the compliance by the Company with
the provisions of this Agreement and the consummation of the
transactions herein contemplated do not (x) require the consent,
approval, authorization, registration or qualification of or with any
governmental authority, except such as have been obtained or made or
such as may be required by the state securities or Blue Sky laws of the
various states of the United States of America or other U.S.
jurisdictions in connection with the offer and sale of the Securities
by the Underwriters, or (y) conflict with or result in a breach or
violation of any of the terms and provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, lease 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 or any of
their respective properties are bound, or the charter documents or
by-laws of the Company or any of its subsidiaries, or any statute or
any judgment, decree, order, rule or regulation of any court or other
governmental authority or any arbitrator applicable to the Company or
any of its subsidiaries.
(xi) NO VIOLATIONS. Neither the Company nor any of its
subsidiaries is in violation of any term or provision of its charter
documents or by-laws, or in breach of or in default under any statute
or any judgment, decree, order, rule or regulation of any court or
other governmental authority or any arbitrator applicable to the
Company or any of its subsidiaries, the consequence of which violation,
breach or default would have a materially adverse effect on or
constitute a materially adverse change in, or constitute a development
involving a prospective materially adverse effect on or change in, the
condition (financial or otherwise), earnings, properties, business
affairs or business prospects, net worth or results of operations of
the Company or of its subsidiaries, taken as a whole.
(xii) INVESTMENT COMPANY ACT. The Company is not an
"investment company" and, after giving effect to the offering of the
Securities contemplated by this Agreement and the application of the
proceeds therefrom, will not
6
be an "investment company", as such term is defined in the Investment
Company Act of 1940, as amended (the "1940 Act").
(xiii) TITLE TO PROPERTY. The Company and each of its
subsidiaries have good and marketable title in fee simple to all items
of real property and marketable title to all personal property owned by
each of them, in each case free and clear of any security interests,
liens, encumbrances, equities, claims and other defects, except such as
do not materially and adversely affect the value of such property and
do not interfere with the use made or proposed to be made of such
property by the Company or such subsidiary, and any real property and
buildings held under lease by the Company or any such subsidiary are
held under valid, subsisting and enforceable leases, with such
exceptions as are not material and do not interfere with the use made
or proposed to be made of such property and buildings by the Company or
such subsidiary, in each case except as described in or contemplated by
the Prospectus.
(xvi) POSSESSION OF INTELLECTUAL PROPERTY. The Company and its
subsidiaries own or possess, or can acquire on reasonable terms, all
material patents, patent applications, trademarks, service marks, trade
names, licenses, know-how, copyrights, trade secrets and proprietary or
other confidential information necessary to operate the business now
operated by them, and neither the Company nor any such subsidiary has
received any notice of infringement of or conflict with asserted rights
of any third party with respect to any of the foregoing which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling
or finding, would have a materially adverse effect on or constitute a
materially adverse change in, or constitute a development involving a
prospective materially adverse effect on or change in, the condition
(financial or otherwise), earnings, properties, business affairs or
business prospects, stockholders' equity, net worth or results of
operations of the Company or any of its subsidiaries, taken as a whole,
except as described in or contemplated by the Prospectus.
(xv) POSSESSION OF LICENSES AND PERMITS. The Company and its
subsidiaries possess all consents, licenses, certificates,
authorizations and permits issued by the appropriate federal, state or
foreign regulatory authorities necessary to conduct their respective
businesses, and neither the Company nor any such subsidiary has
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 have a materially adverse effect on or
constitute a materially adverse change in, or constitute a development
involving a prospective materially adverse effect on or change in, the
condition (financial or otherwise), earnings, properties, business
affairs or business prospects, net worth or results of operations of
the Company or any of its subsidiaries, taken as a whole, except as
described in or contemplated by the Prospectus.
(xvi) INDEPENDENT ACCOUNTANTS. PricewaterhouseCoopers LLP, who
has certified certain financial statements of the Company and its
consolidated subsidiaries and delivered their report with respect to
the audited consolidated financial statements
7
and schedules included in the Registration Statement and the
Prospectus, are independent public accountants as required by the 1933
Act and the 1933 Act Regulations.
(xvii) FINANCIAL STATEMENTS. The consolidated financial
statements and schedules of the Company and its consolidated
subsidiaries included or incorporated in the Registration Statement and
the Prospectus were prepared in accordance with generally accepted
accounting principles ("GAAP") consistently applied throughout the
periods involved (except as otherwise noted therein) and they present
fairly the financial condition of the Company as at the dates at which
they were prepared and the results of operations of the Company in
respect of the periods for which they were prepared.
(xviii) INTERNAL ACCOUNTING CONTROLS. The Company and each of
its subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurance that (w) transactions are
executed in accordance with management's general or specific
authorizations; (x) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to
maintain asset accountability; (y) access to assets is permitted only
in accordance with management's general or specific authorization; and
(z) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(xix) LITIGATION. No legal or governmental proceedings are
pending or threatened to which the Company or any of its subsidiaries
is a party or to which the property of the Company or any of its
subsidiaries is subject that are required to be described in the
Registration Statement or the Prospectus and are not described therein;
and no statutes, regulations, contracts or other documents that are
required to be described or incorporated in the Registration Statement
or the Prospectus or to be filed as exhibits to the Registration
Statement that are not described or incorporated therein or filed as
required.
(xx) DIVIDENDS AND DISTRIBUTIONS. The Company is not currently
prohibited, directly or indirectly, from paying any dividends or making
any other distribution on its capital stock, except for restrictions
upon the occurrence of a default or failure to meet financial covenants
or conditions under existing agreements.
(xxi) REIT STATUS. The Company is organized in conformity with
the requirements for qualification as a real estate investment trust
("REIT") under Sections 856 through 860 of the Internal Revenue Code of
1986, as amended (the "Code"), and its method of operation as described
in the Prospectus has enabled it since January 1, 1998, and will enable
it to continue, to meet the requirements for taxation as a REIT under
the Code.
(xxii) TAXES. The Company has filed all foreign, federal,
state and local tax returns that are required to be filed or has
requested extensions thereof (except in any case in which the failure
so to file would not have a materially adverse effect on the Company
and its subsidiaries, taken as a whole) and has paid all taxes required
to be paid by it and any other assessment, fine or penalty levied
against it (except in any case in
8
which the failure so to pay would not have a materially adverse effect
on the Company and its subsidiaries, taken as a whole), to the extent
that any of the foregoing is due and payable, except for any such
assessment, fine or penalty that is currently being contested in good
faith or as described in or contemplated by the Prospectus.
(xxiii) INSURANCE. The Company and each of its subsidiaries
are 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 they are engaged; neither the Company nor
any such subsidiary has been refused any insurance coverage sought or
applied for; and neither the Company nor any such subsidiary has 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 materially and adversely affect
the condition (financial or otherwise), earnings, properties, business
affairs or business prospects, net worth or results of operations of
the Company or any of its subsidiaries, taken as a whole, except as
described in or contemplated by the Prospectus.
(xxiv) PENSION PLANS. The Company and each of its subsidiaries
is in compliance in all material respects with all presently applicable
provisions of the Employee Retirement Income Security Act of 1974, as
amended, including the regulations and published interpretations
thereunder ("ERISA"); no "reportable event" (as defined in ERISA) has
occurred with respect to any "pension plan" (as defined in ERISA) for
which the Company would reasonably be expected to have any liability;
the Company has not incurred and does not expect to incur liability
under (x) Title IV of ERISA with respect to termination of, or
withdrawal from, any "pension plan" or (y) Sections 412 or 4971 of the
Code or the regulations and published interpretations thereunder; and
each "pension plan" for which the Company would have any liability that
is intended to be qualified under Section 401(a) of the Code has
received a determination letter from the Internal Revenue Service to
the effect that it is so qualified in all material respects and nothing
has occurred, whether by action or by failure to act, which would cause
the plan to not be adversely affected by such determination.
(xxv) ABSENCE OF LABOR DISPUTE. No labor dispute with the
employees of the Company or any of its subsidiaries exists or is
threatened or imminent that could have a materially adverse effect on
or constitute a materially adverse change in, or constitute a
development involving a prospective materially adverse effect on or
change in, the condition (financial or otherwise), properties,
management, earnings, business affairs or business prospects, net worth
or results of operations of the Company or any of its subsidiaries,
taken as a whole, except as described in or contemplated by the
Prospectus.
(xxvi) ENVIRONMENTAL LAWS. Except as described in or
contemplated by the Prospectus, and except as would not otherwise
reasonably be expected to have a material adverse effect on the
financial condition or results of operations of the Company and its
subsidiaries, taken as a whole, (A) the Company and each of its
subsidiaries is in compliance with and not subject to any known
liability under applicable Environmental Laws (as defined below), (B)
the Company and each of its subsidiaries has made all
9
filings and provided all notices required under any applicable
Environmental Law, (C) there is no civil, criminal or administrative
action, suit, demand, claim, hearing, notice of violation,
investigation, proceeding, notice or demand letter or request for
information pending or, to the best knowledge of the Company,
threatened against the Company or any of its subsidiaries under any
Environmental Law, (D) no lien, charge, encumbrance or restriction has
been recorded under any Environmental Law with respect to any assets,
facility or property owned, operated or leased by the Company or any of
its subsidiaries, (E) neither the Company nor any of its subsidiaries
has received notice that it has been identified as a potentially
responsible party under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended ("CERCLA"), or any
comparable law, (F) no property owned or operated by the Company or any
of its subsidiaries is (i) listed or, to the best knowledge of the
Company, proposed for listing on the National Priorities List under
CERCLA or (ii) listed in the Comprehensive Environmental Response,
Compensation and Liability Information System List promulgated pursuant
to CERCLA, or on any comparable list maintained by any governmental
authority, (G) neither the Company nor any of its subsidiaries is
subject to any order, decree or agreement requiring, or otherwise
obligated or required to perform any response or corrective action
under any Environmental Law, (H) there are no past or present actions,
occurrences or operations which could reasonable be expected to prevent
or interfere with compliance by the Company with any applicable
Environmental Law or to result in liability under any applicable
Environmental Law. For purposes of this Agreement, "Environmental Laws"
means the common law and all applicable foreign, federal, provincial,
state and local laws or regulations, codes, orders, decrees, judgments
or injunctions issued, promulgated, approved or entered thereunder,
relating to pollution or protection of public or employee health and
safety or the environment (including, without limitation, ambient air,
surface water, groundwater, land surface or subsurface strata),
including, without limitation, laws relating to (i) emissions,
discharges, releases or threatened releases of Hazardous Materials into
the environment, (ii) the manufacture, processing, distribution, use,
generation, treatment, storage, disposal, transport or handling of
Hazardous Materials and (iii) underground and aboveground storage tanks
and related piping, and emissions, discharges, releases or threatened
releases therefrom. "Hazardous Material" means any pollutant,
contaminant, waste, chemical, substance or constituent, including,
without limitation, petroleum or petroleum products subject to
regulation or which can give rise to liability under any Environmental
Laws.
(xxvii) OTHER AGREEMENTS. No default exists, and no event has
occurred which, with notice or lapse of time or both, would constitute
a default in the due performance and observance of any term, covenant
or condition of any indenture, mortgage, deed of trust, lease 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 or any of
their respective properties is bound, except any default that would not
have a materially adverse effect on the Company and its subsidiaries,
taken as a whole.
(xxviii) ABSENCE OF MATERIALLY ADVERSE CHANGE. Subsequent to
the respective dates as of which information is given in the
Registration Statement and the Prospectus, neither the Company nor any
of its subsidiaries has sustained any material loss or
10
interference with their respective businesses or properties from fire,
flood, hurricane, accident or other calamity, whether or not covered by
insurance, or from any labor dispute or any legal or governmental
proceeding, and there has been no materially adverse change (including,
without limitation, a change in management or control), or development
involving a prospective materially adverse change, in the condition
(financial or otherwise), management, earnings, property, business
affairs or business prospects, stockholders' equity, net worth or
results of operations of the Company or any of its subsidiaries, taken
as a whole, other than as described in or contemplated by the
Prospectus (exclusive of any amendments or supplements thereto).
(xxix) NO RECEIVER OR LIQUIDATOR. No receiver or liquidator
(or similar person) has been appointed in respect of the Company or any
subsidiary of the Company or in respect of any part of the assets of
the Company or any subsidiary of the Company; no resolution, order of
any court, regulatory body, governmental body or otherwise, or petition
or application for an order, has been passed, made or presented for the
winding up of the Company or any subsidiary of the Company or for the
protection of the Company or any such subsidiary from its creditors;
and the Company has not, and no subsidiary of the Company has, stopped
or suspended payments of its debts, become unable to pay its debts or
otherwise become insolvent.
(xxx) NEW YORK STOCK EXCHANGE LISTING. The Company's Common
Stock is listed on the New York Stock Exchange. The Securities have
been approved for listing on the New York Stock Exchange.
(b) REPRESENTATIONS AND WARRANTIES BY THE SELLING STOCKHOLDERS. Each
Selling Stockholder severally represents and warrants to each Underwriter as of
the date hereof, as of the Closing Time and as of each Date of Delivery (if
any), and agrees with each Underwriter, as follows:
(i) ACCURATE DISCLOSURE. None of the statements made in any
Preliminary Prospectus or the Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written
information furnished to the Company by such Selling Stockholder
expressly for use in such Preliminary Prospectus or the Prospectus (or
any amendment or supplement thereto) includes any untrue statement of a
material fact or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading.
(ii) AUTHORIZATION OF AGREEMENT. Such Selling Stockholder has
partnership or limited liability company right, power and authority, as
the case may be, to enter into this Agreement and to sell, transfer and
deliver the Securities to be sold by such Selling Stockholder
hereunder. The execution and delivery of this Agreement and the sale
and delivery of the Securities to be sold by such Selling Stockholder
and the consummation of the transactions contemplated herein and
compliance by such Selling Stockholder with its obligations hereunder
have been duly authorized by such Selling Stockholder and do not and
will not, whether with or without the giving of notice or passage of
time or both, conflict with or constitute a breach of, or default
under, or result in the creation or
11
imposition of any lien, charge or encumbrance upon the Securities to be
sold by such Selling Stockholder or any property or assets of such
Selling Stockholder pursuant to any contract, indenture, mortgage, deed
of trust, loan or credit agreement, note, license, lease or other
agreement or instrument to which such Selling Stockholder is a party or
by which such Selling Stockholder may be bound, or to which any of the
property or assets of such Selling Stockholder is subject, nor will
such action result in any violation of the provisions of the charter or
by-laws or other organizational instrument of such Selling Stockholder,
if applicable, or any applicable treaty, law, statute, rule,
regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, having
jurisdiction over such Selling Stockholder or any of its properties.
(iii) GOOD AND MARKETABLE TITLE. Such Selling Stockholder will
at the Closing Time and, if any Option Securities are purchased from
such Selling Stockholder, on the Date of Delivery, have good and
marketable title to the Securities to be sold by such Selling
Stockholder hereunder, free and clear of any security interest,
mortgage, pledge, lien, charge, claim, equity or encumbrance of any
kind, other than pursuant to this Agreement; and upon delivery of such
Securities and payment of the purchase price therefor as herein
contemplated, assuming each such Underwriter has no notice of any
adverse claim, each of the Underwriters will receive good and
marketable title to the Securities purchased by it from such Selling
Stockholder, free and clear of any security interest, mortgage, pledge,
lien, charge, claim, equity or encumbrance of any kind.
(iv) DUE EXECUTION AND DELIVERY OF AGREEMENT. Such Selling
Stockholder has duly executed and delivered this Agreement, and
assuming the due authorization, execution and delivery by the other
parties hereto, this Agreement will be the valid and binding agreement
of such Selling Stockholder, enforceable against such Selling
Stockholder in accordance with its terms.
(v) ABSENCE OF MANIPULATION. Such Selling Stockholder has not
taken, and will not take, directly or indirectly, any action which is
designed to or which has constituted or which might reasonably be
expected to cause or result in stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale
of the Securities.
(vi) ABSENCE OF FURTHER REQUIREMENTS. No filing with, or
consent, approval, authorization, order, registration, qualification or
decree of, any court or governmental authority or agency, domestic or
foreign, is necessary or required for the performance by each Selling
Stockholder of its obligations hereunder or in connection with the sale
and delivery of the Securities hereunder or the consummation of the
transactions contemplated by this Agreement, except such as may have
previously been made or obtained or as may be required under the 1933
Act or the 1933 Act Regulations or state securities laws.
(vii) CERTIFICATES SUITABLE FOR TRANSFER. Certificates for all
of the Securities to be sold by such Selling Stockholder pursuant to
this Agreement, in suitable form for
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transfer by delivery or accompanied by duly executed instruments of
transfer or assignment in blank with signatures guaranteed, have been
placed in custody with the Custodian with irrevocable conditional
instructions to deliver such Securities to the Underwriters pursuant to
this Agreement.
(viii) NO ASSOCIATION WITH NASD. Neither such Selling
Stockholder nor any of its affiliates directly, or indirectly through
one or more intermediaries, controls, or is controlled by, or is under
common control with, or has any other association with (within the
meaning of Article I, Section 1(m) of the By-laws of the National
Association of Securities Dealers, Inc. (the "NASD")), any member firm
of the NASD.
(c) OFFICER'S 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; and any
certificate signed by or on behalf of any Selling Stockholder as such and
delivered to the Representatives or to counsel for the Underwriters pursuant to
the terms of this Agreement shall be deemed a representation and warranty by
such Selling Stockholder to the Underwriters as to the matters covered thereby.
SECTION 2. SALE AND DELIVERY TO 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, each of the Selling Stockholders, severally and not jointly, agrees to
sell to each Underwriter, severally and not jointly, and each Underwriter,
severally and not jointly, agrees to purchase from each Selling Stockholder, at
the price per share set forth in Schedule C, that proportion of the number of
Initial Securities set forth in Schedule B opposite the name of such Selling
Stockholder, which the number of Initial Securities set forth in Schedule A
opposite the name of such Underwriter, plus any additional number of Initial
Securities which such Underwriter may become obligated to purchase pursuant to
the provisions of Section 10 hereof, bears to the total number of Initial
Securities, subject, in each case, to such adjustments among the Underwriters as
the Representatives in their sole discretion shall make to eliminate any sales
or purchases of fractional securities.
(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 Selling Stockholders, acting severally and not jointly, hereby
grant an option to the Underwriters, severally and not jointly, to purchase up
to an additional 2,475,000 shares of Common Stock, as set forth in Schedule B,
at the price per share set forth in Schedule C, less an amount per share equal
to any dividends or distributions declared by the Company and payable on the
Initial Securities but not payable on the Option Securities. 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 Representatives to the Selling
Stockholders 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
13
Securities. Any such time and date of delivery (a "Date of Delivery") shall be
determined by the Representatives, but shall not be less than two nor 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 from the Selling Stockholders, on a PRO
RATA basis, 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 the Representatives in
their discretion shall make to eliminate any sales or purchases of fractional
shares.
(c) PAYMENT. Payment of the purchase price for, and delivery of
certificates for, the Initial 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 the Representatives and
the Company and the Selling Stockholders, at 9:00 A.M. (Eastern time) on
November 5, 2001 (unless postponed in accordance with the provisions of Section
10), or such other time not later than ten business days after such date as
shall be agreed upon by the Representatives, the Company and the Selling
Stockholders (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 the Representatives,
the Company and the Selling Stockholders, on each Date of Delivery as specified
in the notice from the Representatives to the Company and the Selling
Stockholders.
Payment shall be made to the Selling Stockholders by wire transfer of
immediately available funds to one or more bank accounts designated by the
Custodian pursuant to each Selling Stockholder's Custody Agreement against
delivery to the Representatives for the respective accounts of the Underwriters
of certificates for the Securities to be purchased by them. It is understood
that each Underwriter has authorized the Representatives, for its account, to
accept delivery of, receipt for, and make payment of the purchase price for, the
Initial Securities and the Option Securities, if any, which it has agreed to
purchase. Either of the Representatives, individually and not as representative
of the Underwriters, may (but shall not be obligated to) make payment of the
purchase price for the Initial Securities or the Option Securities, if any, to
be purchased by any Underwriter whose funds have not been received by the
Closing Time or the relevant Date of Delivery, as the case may be, but such
payment shall not relieve such Underwriter from its obligations hereunder.
(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 Representatives 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
Representatives in The City of New York not later than 10:00 A.M. (Eastern
14
time) on the business day prior to the Closing Time or the relevant Date of
Delivery, as the case may be.
SECTION 3. COVENANTS OF THE COMPANY. The Company covenants with each
Underwriter as follows:
(a) COMPLIANCE WITH SECURITIES REGULATIONS AND COMMISSION REQUESTS. The
Company, subject to Section 3(b), will comply with the requirements of Rule 430A
under the 1933 Act and will notify the Representatives immediately, and confirm
the notice in writing, (A) when any post-effective amendment to the Registration
Statement shall become effective, or any supplement to the Prospectus or any
amended Prospectus shall have been filed, (B) of the receipt of any comments
from the Commission, (C) of any request by the Commission for any amendment to
the Registration Statement or any amendment or supplement to the Prospectus or
for additional information, and (D) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or of any
order preventing or suspending the use of any Preliminary Prospectus, or of the
suspension of the qualification of the Securities for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings for any of
such purposes. The Company will promptly effect the filings necessary pursuant
to Rule 424(b) under the 1933 Act and will take such steps as it deems necessary
to ascertain promptly whether the form of prospectus transmitted for filing
under Rule 424(b) was received for filing by the Commission and, in the event
that it was not, it will promptly file such prospectus. The Company will make
every reasonable effort to prevent the issuance of any stop order and, if any
stop order is issued, to obtain the lifting thereof at the earliest possible
moment.
(b) FILING OF AMENDMENTS. The Company will give the Representatives
notice of its intention to file or prepare any amendment to the Registration
Statement (including any filing under Rule 462(b)) or any amendment, supplement
or revision to either the prospectus included in the Registration Statement at
the time it became effective or to the Prospectus, whether pursuant to the 1933
Act, the 1934 Act or otherwise, will furnish the Representatives with copies of
any such documents a reasonable amount of time prior to such proposed filing or
use, as the case may be, and will not file or use any such document to which the
Representatives or counsel for the Underwriters shall object.
(c) DELIVERY OF REGISTRATION STATEMENTS. The Company has furnished or
will deliver to the Representatives and counsel for the Underwriters, without
charge, signed 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 signed copies of all consents and certificates of
experts, and will also deliver to the Representatives, without charge, a
conformed copy of the Registration Statement as originally filed and of each
amendment thereto (without exhibits) for each of the Underwriters. The copies of
the Registration Statement and each amendment 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.
15
(d) DELIVERY OF PROSPECTUSES. 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.
(e) CONTINUED COMPLIANCE WITH SECURITIES LAWS. The Company will comply
with the 1933 Act and the 1933 Act Regulations and the 1934 Act and 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. 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, in the reasonable opinion of counsel for the Underwriters
or for the Company, to amend the Registration Statement or amend or supplement
the Prospectus in order that the Prospectus will not include any untrue
statements 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, in the reasonable opinion of such counsel, 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,
subject to Section 3(b), 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.
(f) BLUE SKY QUALIFICATIONS. The Company will use its best efforts, in
cooperation with the Underwriters, to qualify, if necessary, the Securities for
offering and sale under the applicable securities laws of such states and other
jurisdictions as the Representatives may designate and to maintain such
qualifications in effect for a period of not less than one year from the later
of the effective date of the Registration Statement and any Rule 462(b)
Registration Statement; provided, however, that the Company shall not be
obligated to file any general consent to service of process or to qualify as a
foreign corporation or as a dealer in securities in any jurisdiction in which it
is not so qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject. In each
jurisdiction in which the Securities have been so qualified, the Company will
file such statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for a period of not less
than one year from the effective date of the Registration Statement and any Rule
462(b) Registration Statement.
(g) 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
16
securityholders 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.
(h) USE OF PROCEEDS. The Company will not receive any net proceeds from
the sale of the Securities.
(i) QUALIFICATION AS A REIT. The Company will use its best efforts to
continue to meet the requirements to qualify as a REIT under the Code, subject
to the fiduciary duties of the Board of Directors of the Company to manage the
business of the Company in the best interest of its stockholders.
(j) RESTRICTION ON SALE OF SECURITIES. During a period of 90 days from
the date of the Prospectus, the Company will not, without the prior written
consent of Merrill Lynch, (i) directly or indirectly, 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 or otherwise
transfer or dispose of any share of Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock or file any registration
statement under the 1933 Act with respect to any of the foregoing or (ii) enter
into any swap or any other agreement or any transaction that transfers, in whole
or in part, directly or indirectly, the economic consequence of ownership of the
Common Stock, whether any such swap or transaction described in clause (i) or
(ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. The foregoing sentence shall not apply to (A)
the Securities to be sold hereunder, (B) any shares of Common Stock issued by
the Company upon the exercise of an option or warrant or the conversion of a
security outstanding on the date hereof and referred to in the Prospectus, (C)
any shares of Common Stock issued or options to purchase Common Stock granted
pursuant to employee benefit plans or employment agreements of the Company
approved by the Board of Directors of the Company, (D) any shares of Common
Stock issued pursuant to any non-employee dividend reinvestment plan, (E) any
shares of Common Stock issued in mergers, acquisitions or other business
combination transactions, (F) the filing of any universal shelf registration
statement under the 1933 Act covering securities of the Company or (G) the
filing of any registration statement under the 1933 Act covering resales of
shares of Common Stock.
(k) REPORTING REQUIREMENTS. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will
file all documents required to be filed with the Commission pursuant to the 1934
Act within the time periods required by the 1934 Act and the 1934 Act
Regulations.
SECTION 4. PAYMENT OF EXPENSES.
(a) EXPENSES. The Selling Stockholders will pay or cause to be paid all
expenses incident to the performance of the obligations of the Company and the
Selling Stockholders under this Agreement, including (i) the preparation,
printing and filing of any amendments to the Registration Statement (including
financial statements and exhibits), (ii) the preparation, printing and delivery
to the Underwriters of this Agreement, any Agreement among Underwriters and such
other documents as may be required in connection with the offering, purchase,
sale or delivery of the Securities, (iii) the
17
preparation and delivery of the certificates for the Securities to the
Underwriters, (iv) the fees and disbursements of the Company's counsel,
accountants and other advisors, (v) the qualification of the Securities under
securities laws in accordance with the provisions of Section 3(f) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriters in connection therewith and in connection with the preparation
of the Blue Sky Survey and any supplement thereto, (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 preparation,
printing and delivery to the Underwriters of copies of the Blue Sky Survey and
any supplement thereto, (viii) the fees and expenses of any transfer agent or
registrar for the Securities and (ix) the fees and expenses incurred in
connection with the listing of the Securities on the New York Stock Exchange, if
any.
(b) EXPENSES OF THE SELLING STOCKHOLDERS. The Selling Stockholders,
severally and not jointly, will pay all expenses incident to the performance of
their respective obligations under, and the consummation of the transactions
contemplated by this Agreement, including (i) any stamp duties, capital duties
or other duties and any stock or other transfer taxes, if any, payable upon the
sale or delivery of the Securities to the Underwriters, and their transfer
between the Underwriters pursuant to an agreement between such Underwriters, and
(ii) the fees and disbursements of their respective counsel.
(c) TERMINATION OF AGREEMENT. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5(o) (to the extent
any condition specified in Section 5(a), (b), (c), (g), (i), (j), (k), (m)(i),
(m)(iii), (m)(iv), (m)(viii) or (n) shall not have been fulfilled when and as
required to be fulfilled) or Section 9(a)(i) hereof, the Company shall reimburse
the Underwriters for all of their out-of-pocket expenses, including the
reasonable fees and disbursements of counsel for the Underwriters. If this
Agreement is terminated by the Representatives in accordance with the provisions
of Section 5(o) (to the extent any condition specified in Section 5(d), (e),
(h), (l), (m)(ii), (m)(v) or (m)(vi) shall not have been fulfilled when and as
required to be fulfilled) or Section 11 hereof, the defaulting Selling
Stockholder(s) shall reimburse the Underwriters for all of their out-of-pocket
expenses, including the reasonable fees and disbursements of counsel for the
Underwriters. If more than one Selling Stockholder is in default pursuant to any
of the Sections set forth in the preceding sentence, then the reimbursement
obligation of each defaulting Selling Stockholder under this Section 4(c) shall
be in the proportion that the amount of Securities proposed to be sold at the
Closing Time (and, if any Option Securities are purchased, at the Date of
Delivery) by such Selling Stockholder bears to the Securities to be sold at such
Closing Time or Date of Delivery, as the case may be, by all defaulting Selling
Stockholders.
(d) ALLOCATION OF EXPENSES. The provisions of this Section shall not
affect any agreement that the Company and the Selling Stockholders shall have
made or may make for the sharing of such costs and expenses.
SECTION 5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of
the several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company and the Selling Stockholders
contained in Section 1 hereof or in certificates of any officer of the Company
or any subsidiary of the Company or on behalf of any
18
Selling Stockholder 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; FILING OF PROSPECTUS
SUPPLEMENT. The Registration Statement, including any Rule 462(b) Registration
Statement, has become effective and at Closing Time no stop order suspending the
effectiveness of the Registration Statement shall have been issued under the
1933 Act or proceedings therefor 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, as supplemented by the prospectus supplement
relating to the offering of the Securities, shall have been filed with the
Commission pursuant to Rule 424(b) under the 1933 Act within the applicable time
period prescribed for such filing by the regulations promulgated under the 1933
Act and in accordance with Section 3(a) hereof.
(b) OPINION OF SPECIAL COUNSEL FOR THE COMPANY. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of Closing
Time, of Clifford Chance Rogers & Wells LLP, special counsel for the Company, in
form and substance 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 A hereto and to such further effect as
counsel to the Underwriters may reasonably request.
(c) OPINION OF MARYLAND COUNSEL FOR THE COMPANY. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of Closing
Time, of Ballard Spahr Andrews & Ingersoll, LLP, Maryland counsel for the
Company, in form and substance satisfactory to counsel for the Underwriters,
together with signed or reproduced copies of such letter for each of the other
Underwriters.
(d) OPINION OF COUNSEL FOR THE SELLING STOCKHOLDERS. At Closing Time,
the Representatives shall have received the favorable opinion, dated as of
Closing Time, of Rinaldi, Finkelstein & Franklin, LLC, counsel for the Selling
Stockholders, in form and substance 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 and to
such further effect as counsel to the Underwriters may reasonably request.
(e) OPINION OF SPECIAL COUNSEL FOR THE SELLING STOCKHOLDERS. At Closing
Time, the Representatives shall have received the favorable opinion, dated as of
Closing Time, of Dechert, special counsel for the Selling Stockholders, in form
and substance 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 C hereto and to such further effect as counsel to
the Underwriters may reasonably request.
(f) OPINION OF SPECIAL COUNSEL FOR UNDERWRITERS. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of Closing
Time, of Skadden, Arps, Slate, Meagher & Flom LLP, special counsel for the
Underwriters, together with signed or reproduced copies of such letter for each
of the other Underwriters, with respect to the Registration Statement and the
Prospectus and such other related matters as the
19
Representatives may reasonably require. In giving such opinion such counsel need
not opine as to matters governed by the laws of jurisdictions other than the law
of the State of New York and the federal law of the United States. Such counsel
may also 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.
(g) 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 the condition, financial
or otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, and the Representatives shall have
received a certificate of the Chief Executive Officer of the Company and of the
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 no proceedings for that purpose have been instituted or are
pending or are contemplated by the Commission.
(h) CERTIFICATES OF SELLING STOCKHOLDERS. At Closing Time, the
Representatives shall have received a certificate of each Selling Stockholder,
dated as of Closing Time, to the effect that (i) the representations and
warranties of such Selling Stockholder contained in Section 1(b) hereof are true
and correct in all respects with the same force and effect as though expressly
made at and as of Closing Time and (ii) such Selling Stockholder has complied in
all material respects with all agreements and all conditions on its part to be
performed under this Agreement at or prior to Closing Time.
(i) ACCOUNTANT'S COMFORT LETTER. At the time of the execution of this
Agreement, the Representatives shall have received from PricewaterhouseCoopers
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.
(j) BRING-DOWN COMFORT LETTER. At Closing Time, the Representatives
shall have received from PricewaterhouseCoopers LLP a letter, dated as of
Closing Time, to the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (i) of this Section, except that the specified
date referred to shall be a date not more than three business days prior to
Closing Time.
(k) APPROVAL OF LISTING. At Closing Time, the Securities shall have
been approved for listing on the New York Stock Exchange.
20
(l) LOCK-UP AGREEMENTS. At the date of this Agreement, the
Representatives shall have received agreements substantially in the form of
Exhibit D hereto signed by the applicable Selling Stockholders listed on
Schedule B hereto.
(m) 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 and the Selling Stockholders contained herein and the statements
in any certificates furnished by the Company, any subsidiary of the Company and
the Selling Stockholders hereunder shall be true and correct as of each Date of
Delivery and, at the relevant Date of Delivery, the Representatives shall have
received:
(i) OFFICERS' CERTIFICATE. A certificate, dated such Date of
Delivery, of the Chief Executive Officer of the Company and of the
Chief Financial Officer of the Company confirming that the certificate
delivered at the Closing Time pursuant to Section 5(g) hereof remains
true and correct as of such Date of Delivery.
(ii) CERTIFICATES OF SELLING STOCKHOLDERS. A certificate,
dated such Date of Delivery, of each Selling Stockholder confirming
that the certificate delivered at Closing Time pursuant to Section 5(h)
remains true and correct as of such Date of Delivery.
(iii) OPINION OF SPECIAL COUNSEL FOR COMPANY. The favorable
opinion of Clifford Chance Rogers & Wells LLP, counsel for the Company,
in form and substance 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 opinion required by Section 5(b) hereof.
(iv) OPINION OF MARYLAND COUNSEL FOR COMPANY. The favorable
opinion of Ballard Spahr Andrews & Ingersoll, LLP, Maryland counsel for
the Company, in form and substance 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 opinion required by Section 5(c) hereof.
(v) OPINION OF COUNSEL FOR THE SELLING STOCKHOLDERS. The
favorable opinion of Rinaldi, Finkelstein & Franklin, LLC, counsel for
the Selling Stockholders, in form and substance 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 opinion required by Section 5(d)
hereof.
(vi) OPINION OF SPECIAL COUNSEL FOR THE SELLING STOCKHOLDERS.
The favorable opinion of Dechert, special counsel for the Selling
Stockholders, in form and substance 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 opinion required by Section 5(e) hereof.
(vii) OPINION OF COUNSEL FOR UNDERWRITERS. The favorable
opinion of Skadden, Arps, Slate, Meagher & Flom LLP, special counsel
for the Underwriters, dated such Date
21
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(f) hereof.
(viii) BRING-DOWN COMFORT LETTER. A letter from
PricewaterhouseCoopers LLP, in form and substance satisfactory to the
Representatives and dated such Date of Delivery, substantially in the
same form and substance as the letter furnished to the Representatives
pursuant to Section 5(j) hereof, except that the "specified date" in
the letter furnished pursuant to this paragraph shall be a date not
more than three business days prior to such Date of Delivery.
(n) 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
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
and the Selling Stockholders in connection with the sale of the Securities as
herein contemplated shall be reasonably satisfactory in form and substance to
the Representatives and counsel for the Underwriters.
(o) 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
several 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 BY THE COMPANY. The Company agrees
to indemnify and hold harmless each Underwriter 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 to the extent and in the manner set forth in clauses
(i), (ii) and (iii) below:
(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;
22
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; provided
that (subject to Section 6(e) below) any such settlement is effected
with the written consent of the Company and the Selling Stockholders;
and
(iii) against any and all expense whatsoever, as incurred
(including the 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 clauses (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).
(b) INDEMNIFICATION OF UNDERWRITERS BY THE SELLING STOCKHOLDERS. Each
Selling Stockholder, severally and not jointly, agrees to indemnify and hold
harmless each Underwriter 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
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 or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by such Selling Stockholder expressly for use in the Registration
Statement (or any amendment thereto) or such Preliminary Prospectus or the
Prospectus (or any amendment or supplement thereto); PROVIDED, that no Selling
Stockholder shall be required to indemnify or hold harmless any person pursuant
to this Section 6(b) for any amount in excess of the portion of the total net
proceeds from the offering of the Securities pursuant to this Agreement (before
deducting expenses) received by such Selling Stockholder.
(c) INDEMNIFICATION OF COMPANY, DIRECTORS AND OFFICERS AND SELLING
STOCKHOLDERS. Each Underwriter severally agrees to indemnify and hold harmless
the Company, its directors, each of its officers who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act, and each Selling
Stockholder and each person, if any, who controls any Selling Stockholder within
the meaning of Section 15 of the 1933 Act or Section 20 of the
23
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 or supplement thereto) in reliance upon and in conformity with written
information furnished to the Company 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 or supplement thereto).
(d) 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 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) or 6(b)
above, counsel to the indemnified parties shall be selected by the
Representatives, and, in the case of parties indemnified pursuant to Section
6(c) 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.
(e) 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, 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 and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
24
(f) OTHER AGREEMENTS WITH RESPECT TO INDEMNIFICATION AND CONTRIBUTION.
The provisions of this Section shall not affect any agreement among the Company
and the Selling Stockholders with respect to indemnification or contribution,
including without limitation, the Amended and Restated Registration Rights
Agreement, dated March 18, 1998, among the Company, Starwood Mezzanine
Investors, L.P., B Holdings, LLC and SOFI-IV SMT Holdings, L.L.C.
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 referred to therein
which is required to indemnify and hold harmless an indemnified party in respect
of any such losses, liabilities, claims, damages or expenses 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 and the
Selling Stockholders 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 and the
Selling Stockholders 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.
The relative benefits received by the Company and the Selling
Stockholders 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 Selling Stockholders and the total underwriting
discount received by the Underwriters, in each case as set forth on the cover of
the Prospectus.
The relative fault of the Company and the Selling Stockholders 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 the Selling Stockholders 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, the Selling Stockholders 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 (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this Section
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
25
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, (i) 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 and (ii) no Selling
Stockholder shall be required to contribute any amount in excess of the portion
of the total net proceeds from the offering of the Securities pursuant to this
Agreement (before deducting expenses) received by such Selling Stockholder.
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 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 director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company or any
Selling Stockholder 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
such Selling Stockholder, as the case may be. The Underwriters' respective
obligations to contribute pursuant to this Section 7 are several in proportion
to the number of Initial Securities set forth opposite their respective names in
Schedule A hereto and not joint.
The provisions of this Section shall not affect any agreement among the
Company and the Selling Stockholders with respect to contribution.
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 or the Selling Stockholders submitted pursuant hereto, shall remain
operative and in full force and effect, regardless of any investigation made by
or on behalf of any Underwriter or controlling person, or by or on behalf of the
Company or the Selling Stockholders, 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 and the Selling Stockholders, 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 the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, 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, any
outbreak of hostilities or escalation thereof or other
26
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 to market the Securities or to enforce contracts
for the sale of the Securities, or (iii) if trading in any securities of the
Company has been suspended or materially limited by the Commission or the New
York Stock Exchange, or if trading generally on the American Stock Exchange or
the New York Stock Exchange or in the Nasdaq National Market has been suspended
or materially limited, or minimum or maximum prices for trading have been fixed,
or maximum ranges for prices have been required, by any of said exchanges or by
such system or by order of the Commission, the NASD or any other governmental
authority, or (iv) if a banking moratorium has been declared by either federal
or New York authorities.
(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. If one or more
of the Underwriters shall fail at Closing Time or a Date of Delivery to purchase
the Securities which it or they are obligated to purchase under this Agreement
(the "Defaulted Securities"), the Representatives shall have the right, within
24 hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, the Representatives shall not have
completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
number of Securities to be purchased on such date, each of the non-defaulting
Underwriters shall be obligated, severally and not jointly, to purchase the full
amount thereof in the proportions that their respective underwriting obligations
hereunder bear to the underwriting obligations of all non-defaulting
Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the number of
Securities to be purchased on such date, this Agreement or, with respect to any
Date of Delivery which occurs after the Closing Time, the obligation of the
Underwriters to purchase and of the Selling Stockholders to sell the Option
Securities to be purchased and sold on such Date of Delivery shall terminate
without liability on the part of any Selling Stockholder or any non-defaulting
Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement or, in the case of a Date of Delivery which is after the
Closing Time, which does not result in a termination of the obligation of the
Underwriters to purchase and the Company to sell the relevant Option Securities,
as the case may be, either (i) the Representatives or (ii) the Company and any
Selling Stockholder shall have the right to postpone Closing Time or the
relevant Date
27
of Delivery, as the case may be, for a period not exceeding seven days in order
to effect any required changes in the Registration Statement or Prospectus or in
any other documents or arrangements. As used herein, the term "Underwriter"
includes any person substituted for an Underwriter under this Section 10.
SECTION 11. DEFAULT BY ONE OR MORE OF THE SELLING STOCKHOLDERS. If a
Selling Stockholder shall fail at Closing Time or at a Date of Delivery to sell
and deliver the number of Securities which such Selling Stockholder or Selling
Stockholders are obligated to sell hereunder, and the remaining Selling
Stockholders do not exercise the right hereby granted to increase, pro rata or
otherwise, the number of Securities to be sold by them hereunder to the total
number to be sold by all Selling Stockholders as set forth in Schedule B hereto,
then the Underwriters may, at option of the Representatives, by notice from the
Representatives to the Company and the non-defaulting Selling Stockholders,
either (i) terminate this Agreement without any liability on the fault of any
non-defaulting party except that the provisions of Sections 1, 4, 6, 7 and 8
shall remain in full force and effect or (ii) elect to purchase the Securities
which the non-defaulting Selling Stockholders have agreed to sell hereunder. No
action taken pursuant to this Section 11 shall relieve any Selling Stockholder
so defaulting from liability, if any, in respect of such default.
In the event of a default by any Selling Stockholder as referred to in
this Section 11, each of the Representatives, the Company and the non-defaulting
Selling Stockholder shall have the right to postpone Closing Time or Date of
Delivery for a period not exceeding seven days in order to effect any required
change in the Registration Statement or Prospectus or in any other documents or
arrangements.
SECTION 12. 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 the Representatives c/o Merrill Lynch, Pierce,
Fenner & Smith Incorporated, at 4 World Financial Center, New York, New York
10080, Attn: Mr. Martin Cicco; notices to the Company shall be directed to it at
1114 Avenue of the Americas, 27th Floor, New York, New York 10036, Attn:
President (with a copy to 1114 Avenue of the Americas, 27th Floor, New York, New
York 10036, Attn: General Counsel); and notices to the Selling Stockholders
shall be directed to Starwood Capital Group, 591 West Putnam Avenue, Greenwich,
Connecticut 06830, Attn: Mr. Jerome C. Silvey, with a copy to Rinaldi,
Finkelstein & Franklin, LLC, 591 West Putnam Avenue, Greenwich, Connecticut
06830, Attn: Ellis Rinaldi, Esq.
SECTION 13. PARTIES. This Agreement shall each inure to the benefit of
and be binding upon the Underwriters, the Company and the Selling Stockholders
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 and the Selling
Stockholders and their respective successors and the controlling persons and
officers and directors 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. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the Underwriters, the Company and the Selling Stockholders
and
28
their respective successors, and said controlling persons and officers and
directors 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 14. 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 15. EFFECT OF HEADINGS. The Article and Section headings herein
are for convenience only and shall not affect the construction hereof.
29
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company and the Selling Stockholders a
counterpart hereof, whereupon this instrument, along with all counterparts, will
become a binding agreement among the Underwriters, the Company and the Selling
Stockholders in accordance with its terms.
Very truly yours,
iSTAR FINANCIAL INC.
By:_________________________
Name: Spencer B. Haber
Title: President and Chief Financial Officer
Starwood Mezzanine Investors, L.P.
By: Starwood CAPITAL GROUP I, L.P.,
its General Partner
By: BSS CAPITAL PARTNERS, L.P.,
its General Partner
By: STERNLICHT HOLDINGS II, INC.,
its General Partner
By:___________________________
Name:
Title:
SOFI-IV SMT HOLDINGS, L.L.C.
By: Starwood Opportunity Fund IV, L.P., its
Sole Member and Manager
By: SOFI IV MANAGEMENT, L.L.C.,
its General Partner
By: STARWOOD CAPITAL GROUP, L.L.C.,
its General Manager
By:___________________________
Name:
Title:
B HOLDINGS, LLC
By: STARWOOD CAPITAL GROUP, L.L.C.,
its General Manager
By:___________________________
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
LEHMAN BROTHERS INC.
BANC OF AMERICA SECURITIES LLC
BEAR, STEARNS & CO. INC.
SALOMON SMITH BARNEY INC.
UBS WARBURG LLC
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:_________________________
Name:
Title:
For themselves and as Representatives of the other Underwriters named in
Schedule A hereto.
SCHEDULE A
Number of
Name of Underwriter Initial Securities
------------------- ------------------
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.................................. 5,544,000
Lehman Brothers Inc................................................ 3,484,800
Banc of America Securities LLC..................................... 1,702,800
Bear, Stearns & Co. Inc............................................ 1,702,800
Salomon Smith Barney Inc........................................... 1,702,800
UBS Warburg LLC.................................................... 1,702,800
Robertson Stephens, Inc. .......................................... 330,000
Wells Fargo Van Kasper, LLC........................................ 330,000
----------
Total.............................................................. 16,500,000
==========
A-1
SCHEDULE B
Number of Initial Maximum Number of Option
Securities to be Sold Securities to be Sold
--------------------- ---------------------
Starwood Mezzanine Investors, L.P... 8,727,241 2,235,645
SOFI-IV SMT Holdings, L.L.C......... 7,227,241 239,355
B Holdings, LLC 545,518 0
---------- ---------
Total...................... 16,500,000 2,475,000
B-1
SCHEDULE C
iSTAR FINANCIAL INC.
16,500,000 Shares of Common Stock
(Par Value $.001 Per Share)
1. The public offering price per share for the
Securities, determined as provided in Section 2, shall be
$23.300.
2. The purchase price per share for the Securities to
be paid by the several Underwriters shall be $22.077, being an
amount equal to the public offering price set forth above less
$1.223 per share.
C-1
SCHEDULE D
SUBSIDIARIES
767 Stars, LLC
ACRE Chandler, LLC
ACRE Dublin, LLC
ACRE HPC, LLC
ACRE Partners, L.L.C.
ACRE Richfield, LLC
ACRE Seymour, LLC
ACRE Simon, L.L.C.
BM Center, LLC
Corporate Technology Centre Associates, LLC
Corporate Technology Centre Associates II, LLC
CTC Associates I, L.P.
CTC Associates II, L.P.
CTC Associates I GenPar, LLC
CTC Associates II GenPar, LLC
CTC I Maryland, Inc.
FMAC StarFund, L.L.P.
FMAC Starfund Preferred, Inc.
F/S Subsidiary, L.L.C.
iStar Asset Receivable Trust
iStar Asset Services, Inc.
iStar Cayman Bonds, Inc.
iStar Cayman Bonds GP, Inc.
iStar CTL I, L.P
iStar CTL I GenPar, Inc.
iStar DB Seller, LLC
iStar D.C., Inc.
iStar /Denver Place, L.L.C.
iStar Financial Preferred, Inc.
iStar Funding, LLC
iStar Merger Co. I
iStar Merger Co. II
iStar Poydras, LLC
iStar Real Estate Services, Inc.
iStar San Jose, LLC
iStar Sunnyvale, LLC
iStar Sunnyvale Partners, L.P.
iStar Ventures, Inc.
iStar Ventures Direct Holdings, L.L.C.
iStar Walden, LLC
LF CP/L Limiteds, Inc.
D-1
LF CP/L Managers, Inc.
MD3 Cayman L.P.
NewPar, LLC
Red Lion GP, Inc.
RLH Partnership, L.P.
SFI I, LLC
SFT I, Inc.
SFT II, Inc.
SFT Bonds A, Inc.
SFT-Ford City, Inc.
SFT-Port Charlotte, Inc.
SFT-Sun Valley, Inc.
SFT/RLH, Inc.
SFT Venturer, LLC
SFT Whole Loans A, Inc.
STARS I Corp.
Starwood Operating, Inc.
TN-CP Venture One
TriNet Concord Farms I Limited Partnership
TriNet Concord Farms II Limited Partnership
TriNet Concord Farms III Limited Partnership
TriNet Corporate Partners I, L.P.
TriNet Corporate Partners II, L.P.
TriNet Corporate Partners III, L.P.
TriNet Corporate Realty Trust, Inc.
TriNet Essential Facilities I, Inc.
TriNet Essential Facilities II, Inc.
TriNet Essential Facilities III, Inc.
TriNet Essential Facilities IV, Inc.
TriNet Essential Facilities V, Inc.
TriNet Essential Facilities VI, Inc.
TriNet Essential Facilities VII, Inc.
TriNet Essential Facilities VIIIR, Inc.
TriNet Essential Facilities X, Inc.
TriNet Essential Facilities XI, Inc.
TriNet Essential Facilities XII, Inc.
TriNet Essential Facilities XIV, Inc.
TriNet Essential Facilities XV, Inc.
TriNet Essential Facilities XVI, Inc.
TriNet Essential Facilities XVIII, Inc.
TriNet Essential Facilities XIX, Inc.
TriNet Essential Facilities XX, Inc.
TriNet Essential Facilities XXI, Inc.
TriNet Essential Facilities XXII, Inc.
TriNet Essential Facilities XXIII, Inc.
TriNet Essential Facilities XXIV, Inc.
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TriNet Essential Facilities XXV, Inc.
TriNet Essential Facilities XXVI, Inc.
TriNet Essential Facilities XXVII, Inc.
TriNet Essential Facilities XXVIII, Inc.
TriNet Essential Facilities XXIX, Inc.
TriNet Essential Facilities XXX, Inc.
TriNet Management Operating Company, Inc.
TriNet Milpitas Associates, LLC
TriNet Property Partners, L.P.
TriNet Realty Capital, Inc.
TriNet Realty Investors I, Inc.
TriNet Realty Investors II, Inc.
TriNet Realty Investors III, Inc.
TriNet Realty Investors IV, Inc.
TriNet Realty Investors V, Inc.
TriNet Realty Ventures, Inc.
TriNet Sunnyvale Partners, L.P.
TriNet XVII Realty Trust
W9/TriNet Poydras, LLC
D-3
EXHIBIT A
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO SECTION 5(b)
(i) The Registration Statement is effective under the 1933
Act; any required filing of the Prospectus pursuant to Rule 424(b) has
been made in the manner and within the time period required by Rule
424(b); and no stop order suspending the effectiveness of the
Registration Statement or any amendment thereto has been issued and, to
the best knowledge of such counsel, no proceedings for that purpose are
pending or threatened by the Commission.
(ii) The Registration Statement and each amendment thereto,
any Rule 462(b) Registration Statement and the Prospectus (in each
case, including the documents incorporated by reference therein but not
including the financial statements and other financial information
contained therein, as to which such counsel need express no opinion)
comply as to form in all material respects with the applicable
requirements of the 1933 Act, the 1934 Act, the 1933 Act Regulations
and the 1934 Act Regulations.
(iii) Such counsel has no reason to believe that (in each
case, other than the financial statements and other financial
information contained therein, as to which such counsel need express no
opinion) (x) the Registration Statement, as of its effective date,
contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading or (y) the Prospectus, as of its date
or the date of such opinion, included or includes any untrue statement
of a material fact or omitted or omits 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.
(iv) The Company and each of its significant subsidiaries have
been duly organized and are validly existing as corporations in good
standing under the laws of their respective jurisdictions of
incorporation and are duly qualified to transact business as foreign
corporations and are in good standing under the laws of all other
jurisdictions where such counsel has been advised that the failure to
be so qualified would amount to a material liability or disability to
the Company and its subsidiaries, taken as a whole; the Company and
each of its significant subsidiaries have full power and authority to
own, lease and operate their respective properties and assets and
conduct their respective businesses as described in the Registration
Statement and the Prospectus, and the Company has corporate power to
enter into the Purchase Agreement and to carry out all the terms and
provisions hereof to be carried out by it; all of the issued and
outstanding shares of capital stock of each of the Company's
significant subsidiaries, except as otherwise set forth in the
Prospectus, are owned beneficially by the Company free and clear of any
perfected security interests or, to the best knowledge of such counsel,
any
A-1
other security interests, liens, encumbrances, equities or claims,
except for pledges of subsidiary stock under debt instruments.
(v) The statements set forth under the heading "Description of
Securities to be Registered--Common Stock" in the Base Prospectus,
insofar as such statements purport to summarize certain provisions of
the Common Stock, provide a fair summary of such provisions; and the
statements set forth under the heading "Federal Income Tax
Considerations" in the Base Prospectus and "Federal Income Tax
Consequences" in the Prospectus, insofar as such statements constitute
a summary of the legal matters, documents or proceedings referred to
therein, have been reviewed by such counsel and fairly present the
information called for with respect to such legal matters, documents
and proceedings in all material respects as required by the 1933 Act,
the 1934 Act, the 1933 Act Regulations and the 1934 Act Regulations.
(vi) The execution and delivery of the Purchase Agreement have
been duly authorized by all necessary corporate action of the Company
and the Purchase Agreement has been duly executed and delivered by the
Company.
(vii) The shares of issued and outstanding capital stock of
the Company, including the Securities to be purchased by the
Underwriters from the Selling Stockholders, have been duly authorized
and validly issued and are fully paid and non-assessable; and none of
the outstanding shares of capital stock of the Company was issued in
violation of the preemptive or other similar rights of any
securityholder of the Company.
(viii) The sale of the Securities by the Selling Stockholders
is not subject to the preemptive or other similar rights of any
securityholder of the Company.
(ix) The form of certificate used to evidence the Common Stock
complies in all material respects with all applicable statutory
requirements, with any applicable requirements of the charter and
by-laws of the Company and the requirements of the New York Stock
Exchange.
(x) No holder of securities of the Company has any right which
has not been fully exercised or waived to require the Company to
register the offer or sale of any securities owned by such holder under
the 1933 Act in the offering of the Securities contemplated by the
Purchase Agreement.
(xi) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, the Purchase
Agreement, the compliance by the Company with the provisions of the
Purchase Agreement and the consummation of the transactions therein
contemplated do not (x) require the consent, approval, authorization,
registration or qualification of or with any governmental authority,
except such as have been obtained or made (and specified in such
opinion) or such as may be required by the securities or Blue Sky laws
of the various states of the United States of America and other U.S.
jurisdictions in connection with the offer and sale of the Securities
by the Underwriters, or (y) conflict with or result in a breach or
violation of any of the terms and
A-2
provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, lease or other material agreement or instrument, known
to such counsel, to which the Company or any of its significant
subsidiaries is a party or by which the Company or any of its
subsidiaries or any of their respective properties are bound, or the
charter documents or by-laws of the Company or any of its subsidiaries,
or any statute or any judgment, decree, order, rule or regulation of
any court or other governmental authority or any arbitrator known to
such counsel and applicable to the Company or its subsidiaries.
(xii) The Company is not an "investment company" and, after
giving effect to the offering of the Securities contemplated by the
Purchase Agreement, will not be an "investment company", as such term
is defined in the 1940 Act.
(xiii) Such counsel does not know of any legal or governmental
proceedings pending or threatened to which the Company or any of its
subsidiaries is a party or to which the property of the Company or any
of its subsidiaries is subject that are required to be described or
incorporated in the Registration Statement or the Prospectus and are
not described or incorporated therein or any statutes, regulations,
contracts or other documents that are required to be described or
incorporated in the Registration Statement or the Prospectus or to be
filed as exhibits to the Registration Statement that are not described
or incorporated therein or filed as required.
(xiv) Commencing with the Company's taxable year ended
December 31, 1998, the Company has been organized in conformity with
the requirements for qualification as a real estate investment trust
("REIT") under the Code, and its method of operation, as described in
the Registration Statement and set forth in the Company's amended and
restated charter, has enabled the Company to meet and, provided that
the Company continues to meet the applicable asset composition, source
of income, shareholder diversification, distribution, record keeping
and other requirements of the Code necessary for a corporation to
qualify as a REIT, will enable it to continue to meet the requirements
for qualification and taxation as a REIT under the Code.
In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Company and public officials and, as to matters involving the
application of laws of any jurisdiction other than the State of New York or the
United States or the General Corporation Law of the State of Delaware, to the
extent satisfactory in form and scope to counsel for the Underwriters, upon the
opinion of Ballard Spahr Andrews & Ingersoll, LLP.
A-3
EXHIBIT B
FORM OF OPINION OF COUNSEL FOR THE SELLING STOCKHOLDERS
TO BE DELIVERED PURSUANT TO SECTION 5(d)
(i) Starwood Mezzanine Investors, L.P. is a limited
partnership duly organized, validly existing and in good
standing as a limited partnership under the laws of the State
of Delaware.
(ii) SOFI-IV SMT Holdings, L.L.C. is a limited
liability company duly organized, validly existing and in good
standing as a limited liability company under the laws of the
State of Delaware.
(iii) B Holdings, LLC is a limited liability company
duly organized, validly existing and in good standing as a
limited liability company under the laws of the State of
Connecticut.
(iv) No filing with, or consent, approval,
authorization, license, order, registration, qualification or
decree of, any United States, Delaware, Connecticut or New
York court or governmental authority or agency (other than
under the 1993 Act, the 1933 Act Regulations, the 1934 Act and
the 1934 Act Regulations and such authorizations, approvals or
consents as may be necessary under state securities laws, as
to which we express no opinion), is necessary or required to
be obtained by the Selling Stockholders for the performance by
each Selling Stockholder of its obligations under the Purchase
Agreement or in connection with the offer, sale or delivery of
the Securities.
(v) The Purchase Agreement has been duly executed and
delivered by each Selling Stockholder.
(vi) The execution, delivery and performance of the
Purchase Agreement and the sale and delivery of the Securities
and the consummation of the transactions contemplated in the
Purchase Agreement and in the Registration Statement and
compliance by each Selling Stockholder with its obligations
under the Purchase Agreement have been duly authorized by all
necessary action on the part of the Selling Stockholders and
do not, whether with or without the giving of notice or
passage of time or both, conflict with or constitute a breach
of, or default under or result in the creation or imposition
of any tax, lien, charge or encumbrance upon the Securities or
any property or assets of the Selling Stockholders pursuant
to, any contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, license, lease or other instrument or
agreement, in each case known to such counsel (after
reasonable inquiry), to which any Selling Stockholder is a
party or by which they may be bound, or to which any of the
property or assets of the Selling Stockholders may be subject
nor will such action result in any violation of the provisions
of the charter or by-laws or other
B-1
organizational instrument of the Selling Stockholders, if
applicable, or any law, administrative regulation, judgment or
order of any governmental agency or body or any administrative
or court decree having jurisdiction over such Selling
Stockholder or any of its properties.
B-2
EXHIBIT C
FORM OF OPINION OF SPECIAL COUNSEL FOR THE SELLING STOCKHOLDERS
TO BE DELIVERED PURSUANT TO SECTION 5(e)
(i) Assuming that none of the Underwriters has notice
of any adverse claims with respect to the Securities then,
upon delivery to one of the Representatives of such Securities
against payment therefor indorsed to such Representative or
indorsed in blank by an effective indorsement, such
Representative will acquire such Securities (and the shares
represented thereby) free of any adverse claims under Section
8-303 of the Uniform Commercial Code as in effect on the date
hereof in the State of New York (the "UCC"). As used herein,
"notice of adverse claim" has the meaning set forth in Section
8-105 of the UCC and includes, without limitation, any adverse
claims which such Representative or any Underwriter would
discover upon any investigation which such person has a duty,
imposed by statute or regulation, to investigate.
In rendering any such opinion, such counsel may assume that the
Underwriters will have purchased the Securities for value in good faith and that
the Underwriters' rights are not limited by subsection (c) of Section 8-302 of
the UCC.
C-1
EXHIBIT D
FORM OF LOCK-UP AGREEMENT
PURSUANT TO SECTION 5(l)
[____________], 2001
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
LEHMAN BROTHERS INC.
BANC OF AMERICA SECURITIES LLC
BEAR, STEARNS & CO. INC.
SALOMON SMITH BARNEY INC.
UBS WARBURG LLC,
as Representatives of the several
Underwriters to be named in the
within-mentioned Purchase Agreement
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Re: Proposed Public Offering by Istar Financial Inc.
------------------------------------------------
Ladies and Gentlemen:
The undersigned, a selling stockholder of iStar Financial Inc., a
Maryland corporation (the "Company"), understands that Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch"), Lehman
Brothers Inc., Banc of America Securities LLC, Bear, Stearns & Co. Inc., Salomon
Smith Barney Inc. and UBS Warburg LLC (collectively, the "Representatives")
propose to enter into a Purchase Agreement (the "Purchase Agreement") with the
Company and the selling stockholders named therein providing for the public
offering of shares (the "Securities") of the Company's common stock, par value
$.001 per share (the "Common Stock"). In recognition of the benefit that such an
offering will confer upon the undersigned as a selling stockholder of the
Company, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the undersigned agrees with each
underwriter to be named in the Purchase Agreement that, during a period of 180
days from the date of the Purchase Agreement, the undersigned will not, without
the prior written consent of Merrill Lynch, directly or indirectly, (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 for
the sale of, or otherwise dispose of or transfer any shares of the Company's
Common Stock or any securities convertible into or exchangeable or exercisable
for Common
D-1
Stock, whether now owned or hereafter acquired by the undersigned or with
respect to which the undersigned has or hereafter acquires the power of
disposition, or file any registration statement under the Securities Act of
1933, as amended, with respect to any of the foregoing or (ii) enter into any
swap or any other agreement or any transaction that transfers, in whole or in
part, directly or indirectly, the economic consequence of ownership of the
Common Stock, whether any such swap or transaction is to be settled by delivery
of Common Stock or other securities, in cash or otherwise. The foregoing
sentence shall not apply to (i) the Securities to be sold pursuant to the
Purchase Agreement and (ii) any Common Stock offered or sold by the undersigned
which is included in a registered primary offering of Common Stock by the
Company. This letter shall lapse and become null and void if the undersigned has
not executed and delivered the Purchase Agreement on or before November 1, 2001
or, if the Representatives have advised the undersigned that a public offering
of the Securities is unlikely or cannot be completed on favorable terms, upon
receipt by Merrill Lynch of notice from the undersigned directing the
Representatives to terminate such public offering.
Very truly yours,
[NAME OF SELLING STOCKHOLDER]
By:___________________________
Name:
Title:
D-2
EXHIBIT 5.1
November 5, 2001
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Lehman Brothers Inc.
Banc of America Securities LLC
Bear, Stearns & Co. Inc.
Salomon Smith Barney Inc.
UBS Warburg LLC,
As Representatives of the several Underwriters
c/o Merrill Lynch, Pierce, Fenner & Smith
Incorporated
222 Broadway
New York, New York 10038
Re: iStar Financial Inc.
Ladies and Gentlemen:
We have acted as counsel to iStar Financial Inc., a Maryland corporation (the
"Company"), in connection with the offer and sale by SOFI-IV SMT Holdings,
L.L.C., Starwood Mezzanine Investors, L.P. and B Holdings, LLC (together, the
"Selling Stockholders"), of an aggregate of 16,500,000 shares of common stock,
par value $.001 per share, of the Company (the "Securities"). This opinion is
given pursuant to Section 5(b) of the Purchase Agreement, dated October 30, 2001
(the "Purchase Agreement"), by and among the Company, the Selling Stockholders
and you. Except as otherwise indicated, terms used in this letter have the
meanings given to them in the Purchase Agreement.
In rendering the opinions expressed below, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of such documents,
corporate records and other instruments as we have deemed necessary, including
executed counterparts of the Purchase Agreement.
We have relied as to all matters of fact upon certificates and written
statements of public officials and of officers, directors, employees and
representatives of, and accountants for, the Company (including the
representations made in the Purchase Agreement).
In examining documents, we have assumed the genuineness of all signatures, the
authenticity of all documents purporting to be originals and the conformity to
the respective originals of all documents purporting to be copies.
Based on the foregoing, and such examination of law as we have deemed necessary,
we are of the opinion that:
November 5, 2001 Page 2
1. The Registration Statement and the Prospectus (in each case, including the
documents incorporated by reference therein but not including the
financial statements and other financial information contained therein, as
to which we express no opinion) comply as to form in all material respects
with the applicable requirements of the 1933 Act and the 1934 Act, and the
respective rules and regulations of the Commission thereunder.
2. The Company and each of its "significant subsidiaries" (as defined in Rule
1.02(w) of Regulation S-X under the 1934 Act) have been duly organized and
are validly existing as a corporation, trust or limited liability company,
as applicable, in good standing under the laws of their respective
jurisdictions of incorporation or formation, as applicable, and are duly
qualified to transact business and are in good standing under the laws of
all other jurisdictions where we have been advised that the failure to be
so qualified would amount to a material liability or disability to the
Company and its subsidiaries, taken as a whole; the Company and each of
its significant subsidiaries have full corporate or other organizational
power and authority to own, lease and operate their respective properties
and assets and conduct their respective businesses as described in the
Registration Statement and the Prospectus, and the Company has corporate
power to enter into the Purchase Agreement and to carry out all the terms
and provisions thereof to be carried out by it; except as otherwise set
forth in the Prospectus, all of the issued and outstanding shares of
capital stock of each of the Company's significant subsidiaries are owned
beneficially by the Company free and clear of any perfected security
interests or, to the best of our knowledge, any other security interests,
liens, encumbrances, equities or claims, except for pledges of stock of
such significant subsidiaries under existing debt instruments.
3. The statements set forth under the heading "Description of Securities to
be Registered - Common Stock" in the Base Prospectus, insofar as such
statements purport to summarize certain provisions of the Common Stock,
provide a fair summary of such provisions; and the statements set forth
under the heading "Federal Income Tax Considerations" in the Base
Prospectus and "Federal Income Tax Consequences" in the Prospectus,
insofar as such statements constitute a summary of the legal matters
referred to therein, have been reviewed by us and fairly present the
information called for with respect to such legal matters in all material
respects as required by the 1933 Act and the 1934 Act and the respective
rules and regulations thereunder.
4. The execution and delivery of the Purchase Agreement have been duly
authorized by all necessary corporate action of the Company and the
Purchase Agreement has been duly executed and delivered by the Company.
5. The shares of issued and outstanding capital stock of the Company,
including the Securities to be purchased by you from the Selling
Stockholders, have been duly authorized and validly issued and are fully
paid and non-assessable; and none of the outstanding shares of capital
stock of the Company was issued in violation of preemptive or other
similar rights of any securityholder of the Company.
November 5, 2001 Page 3
6. The sale of the Securities by the Selling Stockholders is not subject to
the preemptive or other similar rights of any securityholder of the
Company under the charter and by-laws of the Company and Maryland law.
7. The form of certificate used to evidence the Common Stock complies in all
material respects with all applicable statutory requirements, with any
applicable requirements of the charter and by-laws of the Company and the
requirements of the New York Stock Exchange.
8. No holder of Securities of the Company has any right which has not been
fully exercised or waived to require the Company to register the offer and
sale of any securities owned by such holder under the 1933 Act in the
offering of the Securities contemplated by the Purchase Agreement.
9. The execution and delivery by the Company of, and the performance by the
Company of its obligations under, the Purchase Agreement, the compliance
by the Company with the other provisions of the Purchase Agreement and the
consummation by the Company of the transactions therein contemplated do
not (x) require the consent, approval, authorization, registration or
qualification of or with any governmental authority, except as may be
required by the securities or Blue Sky laws of the various states of the
United States of America and other U.S. jurisdictions in connection with
the offer and sale of the Securities by the Underwriters, or (y) conflict
with or result in a breach or violation of any of the terms and provisions
of, or constitute a default under, any indenture, mortgage, deed of trust,
lease or other material agreement or instrument, known to us, to which the
Company or any of its significant subsidiaries is a party or by which the
Company or any of its significant subsidiaries or any of their respective
properties are bound, or the charter documents or by-laws of the Company
or any of its significant subsidiaries, or any statute or any judgment,
decree, order, rule or regulation of any court or other governmental
authority or any arbitrator known to and applicable to the Company or its
significant subsidiaries.
10. The Company is not an "investment company," as such term is defined in the
1940 Act.
11. We do not know of any legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is a party or
to which the property of the Company or any of its subsidiaries is subject
that are required to be described or incorporated in the Registration
Statement or the Prospectus and are not described or incorporated therein
or any statutes, regulations, contracts or other documents that are
required to be described or incorporated in the Registration Statement or
the Prospectus or to be filed as exhibits to the Registration Statement
that are not described or incorporated therein or filed as required.
We have participated in the preparation of the Registration Statement and the
Prospectus and participated in discussions with certain officers, directors and
employees of the Company and the Selling Stockholders, representatives of
PricewaterhouseCoopers LLP, the independent accountants who examined certain of
the financial statements of the Company included or incorporated by reference in
the Registration Statement and the Prospectus, and you and your representatives
and we have reviewed certain corporate records and documents. While we have not
independently verified
November 5, 2001 Page 4
and are not passing upon, and do not assume any responsibility for, the
accuracy, completeness or fairness of the information contained in the
Registration Statement and the Prospectus (except as set forth in paragraph 3
above), on the basis of such participation and review, nothing has come to our
attention that leads us to believe that the Registration Statement (except for
the financial statements and schedules and any other financial data contained or
incorporated by reference therein, as to which we do not express any belief), at
the time the Registration Statement became effective under the 1933 Act,
contained or contains any untrue statement of a material fact or omitted or
omits to state any material fact required to be stated therein or necessary to
make the statements therein not misleading, or that the Prospectus (except for
the financial statements and schedules and any other financial data contained or
incorporated by reference therein, as to which we do not express any belief) as
of its date or the date of this letter contained or contains an untrue statement
of a material fact or omitted or omits to state a material fact necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading.
In addition, we confirm to you that, having made inquiry of the Commission, the
Registration Statement is effective under the 1933 Act; any required filing of
the Prospectus pursuant to Rule 424(b) has been made in the manner and within
the time period required by Rule 424(b); and no stop order suspending the
effectiveness of the Registration Statement or any amendment thereto has been
issued and, to the best of our knowledge, no proceedings for that purpose are
pending or threatened by the Commission.
The opinions set forth in this letter relate only to the federal securities laws
of the United States of America and the laws of the States of New York, Delaware
and Maryland.
To the extent that opinions set forth in this letter relate to Maryland law, we
have relied on the opinion of Ballard Spahr Andrews & Ingersoll, LLP to you
dated November 5, 2001 in expressing such opinions.
The phrase "to the best of our knowledge" and similar expressions as used herein
refer to the actual knowledge of the individual lawyers in the firm who have
participated directly and substantially in the specific transaction to which
this opinion relates.
This letter is given solely for your benefit and may not be relied upon by any
other person for any purpose without our prior written consent in each instance.
Very truly yours,
